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Cannae Holdings, Inc. (CNNE)·Q2 2025 Earnings Summary

Executive Summary

  • CNNE reported Q2 2025 total operating revenues of $110.2M, down 6.6% year-over-year, and EPS (continuing operations, diluted) of -$3.75, driven by a non-cash impairment at Alight flowing through equity method results; revenue slightly beat consensus, while EPS was a significant miss . Revenue estimate was $109.95M vs actual $110.2M; EPS estimate was -$0.275 vs actual -$3.75 (miss due to Alight’s $983M goodwill impairment and CNNE’s related book value reduction) .*
  • Capital return accelerated: 7.6M shares repurchased through Aug 8 (~11.9% of shares), $149M returned; quarterly dividend raised 25% to $0.15 per share .
  • Portfolio rebalancing progressed: sale of Dun & Bradstreet closed Aug 26; CNNE receiving $630M, with at least $500M earmarked for $300M buybacks, margin loan repayment ($141M), and $60M for dividends; annual meeting set for Dec 12, 2025 .
  • BKFC momentum continues: AFC Bournemouth record points, double-digit revenue growth, ~$120M player sales; stadium renovation phased plan targeting mid-teens unlevered returns; new majority stake in Moreirense FC .

What Went Well and What Went Wrong

What Went Well

  • “We made significant progress on each of our three strategic priorities…rebalancing our portfolio…investing opportunistically…and returning capital to our shareholders.” — CEO Ryan Caswell .
  • Revenue beat: Q2 revenue modestly exceeded consensus ($110.2M vs $109.95M), while cost control actions at Ninety Nine helped relative performance vs casual dining benchmarks .*
  • Capital returns and dividend increase: repurchased 7.6M shares ($149M) and raised quarterly dividend to $0.15, reinforcing commitment to closing discount to NAV .

What Went Wrong

  • EPS miss: EPS (continuing dilution) of -$3.75 missed consensus (-$0.275) due to Alight’s $983M non-cash goodwill impairment and CNNE’s related recognized and equity-method losses .*
  • Operating margin compression: operating loss widened to -$60.9M; operating margin fell to -55.3%, reflecting higher personnel and other operating expenses including asset impairments .
  • O’Charley’s headwinds: double-digit same-store sales decline and lower guest counts prompted closures of six low-performing locations and operational fixes (menu engineering, back-of-house changes) .

Financial Results

MetricQ2 2024Q1 2025Q2 2025
Total Operating Revenues ($USD Millions)$118.0 $103.2 $110.2
Operating Income (Loss) ($USD Millions)$(23.0) $(21.4) $(60.9)
Net Loss Attributable to CNNE Common ($USD Millions)$(155.0) $(113.0) $(238.8)
EPS (Continuing Ops, Diluted, $)$(2.39) $(0.59) $(3.75)
EPS (Total, Diluted, $)$(2.49) $(1.81) $(3.93)
Operating Margin %-19.5% (calc from )-20.7% (calc from )-55.3% (calc from )
Net Loss Margin %-131.4% (calc from )-109.5% (calc from )-216.6% (calc from )

Segment breakdown (consolidated operating):

SegmentQ2 2024Q1 2025Q2 2025
Restaurant Revenue ($USD Millions)$107.6 $99.1 $101.9
Other Operating Revenue ($USD Millions)$10.4 $4.1 $8.3
Total Operating Revenues ($USD Millions)$118.0 $103.2 $110.2

KPIs (Restaurant brands, Q2 2025):

KPINinety NineO’Charley’s
Same-Store Sales YoY“Down less than 1%” Double-digit decline
Guest Counts YoY-2.5% Decline (not quantified)
Average Check YoY+1.7% N/A

Comparison to consensus (S&P Global):

MetricConsensus (Q2 2025)Actual (Q2 2025)Surprise
Revenue ($USD Millions)$109.95*$110.2 +0.2% (beat)
EPS (Continuing Ops, Diluted, $)-$0.275*-$3.75 -$3.48 (miss)

Forward estimates snapshot:

MetricQ3 2025 Consensus
Revenue ($USD Millions)$104.8*
EPS (Continuing Ops, Diluted, $)-$0.295*
# of Estimates (Rev/EPS)2 / 2*

Values with asterisks are retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per ShareQuarterly$0.12 $0.15 (payable Sep 30, 2025) Raised
Share Repurchases Plan2025At least $300M post DNB close Continuing; 7.6M shares repurchased $149M through Aug 8 Maintained (execution ongoing)
Margin Loan Repayment2025 (post DNB close)Repay $101M Repay $141M outstanding under margin loan Raised repayment amount
Use of DNB ProceedsQ3 2025$630M gross proceeds $630M received; at least $500M to $300M buybacks, $141M margin loan, $60M dividends Implemented
Alight RevenueFY 2025$2.32–$2.39B $2.28–$2.33B (lowered) Lowered
Alight Adjusted EBITDAFY 2025$620–$645M $620–$645M Maintained
Alight Free Cash FlowFY 2025$250–$285M $250–$285M Maintained
Watkins Adjusted EBITDAFY 2025N/A~$20M, high single-digit YoY growth New

Earnings Call Themes & Trends

TopicQ4 2024 (prior)Q1 2025 (prior)Q2 2025 (current)Trend
Portfolio Rebalancing & Capital ReturnsPlanned buybacks/dividend; internalization; focus on monetizations Expanded JANA stake; intent to use DNB proceeds for buybacks/debt/dividends DNB sale closing, buybacks, dividend hike implemented Execution progressing positively
Discount to NAV36% discount highlighted Continuing focus on closing gap 26.6% discount near narrowest in 3+ years Improving
Restaurant OpsCost control; menu rationalization Ninety Nine near-flat SSS; O’Charley’s pressure Ninety Nine <1% SSS decline; O’Charley’s double-digit decline; closures and operational fixes Mixed; remediation underway
BKFC (AFC Bournemouth, stadium, transfers)Evaluating stadium options; strong on-field performance Stadium acquisition plans; performance center opened Record points; ~$120M transfers; phased stadium renovation with mid-teens returns; Moreirense stake Strengthening
Governance & Proxy ContextInternalization and alignment Board refresh; JANA partnership expanded Annual meeting timing clarified post DNB close; activist questions noted externally Active engagement
AlightOperational simplification; mid/high single-digit EBITDA growth outlook Q1 beat vs consensus; guidance affirmed Q2 adjusted EBITDA up; revenue guidance lowered; $983M goodwill impairment Mixed: margin/FCF strong, revenue cautious

Management Commentary

  • “We made significant progress on each of our three strategic priorities…rebalancing our portfolio…investing opportunistically…and returning capital to our shareholders.” — Ryan Caswell (CEO) .
  • “From a capital returns perspective, since May, Cannae has repurchased 7,600,000 shares…returning $150,000,000 to our shareholders.” — Ryan Caswell .
  • “Upon closing, Cannae will have received an aggregate $630 Million in cash proceeds…we expect to utilize approximately $501 Million…repurchase at least $300 Million…repay all $141 Million…retain $60 Million for future quarterly dividends.” — Shareholder letter .
  • “Aggregate operating expenses were $171,000,000…driven by the previously announced management transition…Nearly the entirety relates to the non-cash impairment charge of our investment in Alight…” — Bryan Coy (CFO) .

Q&A Highlights

  • Capital return approach: Management favors ongoing open-market buybacks; may consider a tender later but has been effective buying from “third party shareholders” to date .
  • Portfolio monetization: Continuing to peel off remaining public stakes over time; DNB proceeds provide near-term capital for returns and selective investments .
  • JANA partnership: Expect closing of additional 30% stake (to 50% total) and see proprietary opportunities emerging from collaboration .
  • BKFC capital uses: Funds allocated to stadium acquisition/renovation (£10M + £30–35M phase one), operations, and measured team investments (e.g., Moreirense structure: $4M upfront, $14M called over time) .
  • Annual meeting timing: To be set after DNB close to allow shareholders full information; later confirmed as Dec 12, 2025 via press release .

Estimates Context

  • Revenue modest beat: $110.2M actual vs $109.95M consensus (+0.2%) supported by slightly higher restaurant revenue and other operating revenue .*
  • EPS large miss: -$3.75 actual vs -$0.275 consensus due to non-cash effects from Alight’s $983M goodwill impairment and CNNE’s recognized and equity-method losses; underlying non-cash drivers suggest estimate models should incorporate impairment/mark-to-book effects during periods of portfolio company write-downs .*
  • Forward look: Q3 consensus points to ~$104.8M revenue and -$0.295 EPS; with DNB proceeds deployment and cost actions in the restaurant group, directional improvement in underlying cash metrics may not fully translate to GAAP EPS absent further portfolio volatility [GetEstimates].*

Values with asterisks are retrieved from S&P Global.

Key Takeaways for Investors

  • The quarter’s EPS miss was driven by non-cash impairment at Alight and CNNE’s consequent equity-method and recognized losses; revenue was slightly above consensus, but operating margin deterioration warrants attention to cost structure and portfolio mark impacts .
  • Capital return is the near-term catalyst: $630M DNB proceeds with at least $500M earmarked for buybacks/dividends/debt repayment and a 25% dividend increase should help narrow the NAV discount (now ~26.6%) .
  • BKFC is a bright spot: AFC Bournemouth’s on-field and commercial momentum, sizable player sale profits, and phased stadium investments with targeted mid-teens returns support asset value growth potential .
  • Restaurant portfolio is mixed: Ninety Nine resilient; O’Charley’s undergoing restructuring and closures; monitoring SSS and operating expense trajectory is key for margin recovery .
  • Alight’s lowered revenue guide but stronger adjusted EBITDA/FCF indicates margin discipline; CNNE’s exposure requires continued vigilance on potential non-cash effects to CNNE GAAP EPS .
  • Expect continued portfolio rebalancing and opportunistic investments via JANA; governance events (annual meeting) and activist scrutiny remain part of the narrative and may influence stock volatility .
  • Near-term trading: Stock may respond to ongoing buybacks/dividend clarity and DNB proceeds deployment; medium-term thesis hinges on executing portfolio improvements, reducing GAAP P&L volatility from equity-method impacts, and realizing asset value creation in BKFC and other private holdings .