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Cannae Holdings, Inc. (CNNE)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 consolidated results: total operating revenue of $109.9M and diluted EPS of $(0.74), with operating loss $(22.0)M; revenue declined 7.9% year over year and 3.5% sequentially, while EPS improved YoY from $(0.83) .
  • Portfolio highlights: D&B posted Q4 revenue of $631.9M and Adjusted EBITDA of $260.0M (41.2% margin) and provided 2025 guidance; Alight Q4 revenue $680M and Adjusted EBITDA $217M with 170 bps margin expansion; Paysafe announced a business divestiture and a 2025 outlook; Restaurant Group revenue declined YoY with AEBITDA $1.4M .
  • Balance sheet/capital return: corporate cash $108M, net debt ~$60M, NAV per share $29.78 (shares closed at $19.19 on call date, ~36% discount); ~12M shares remain authorized for repurchase; quarterly CNNE dividend declared at $0.12 per share .
  • Management catalysts: ongoing D&B strategic process expected to have an outcome in Q1 2025; CNNE prioritizes buybacks funded by monetizations of public stakes and emphasizes rebalancing into private assets .
  • Estimates context: S&P Global consensus could not be retrieved at time of analysis; beat/miss vs Street not assessed due to data unavailability.*

What Went Well and What Went Wrong

What Went Well

  • “We will prioritize using our capital for share buybacks… we continue to think that the stock is cheap,” with ~12M shares remaining on authorization and a stated intent to monetize public stakes to fund repurchases .
  • D&B delivered consistent organic growth for FY 2024 (3.0% organic constant currency) and reduced net leverage to 3.6x; set 2025 guidance with revenue $2.44B–$2.50B and AEBITDA $955M–$985M .
  • Alight Q4 Adjusted EBITDA increased to $217M with margin of 31.9% (+170 bps YoY); net leverage improved to 2.8x following divestiture proceeds, and a quarterly dividend was initiated .

What Went Wrong

  • Consolidated CNNE Q4 revenue fell to $109.9M (from $119.3M YoY); Restaurant Group revenue declined YoY, with Adjusted EBITDA down to $1.4M (from $2.4M) as value-focused pricing pressured guest checks and mix .
  • Recognized losses, net, of $(22.9)M in Q4 reflect portfolio actions (including sales of Alight and Paysafe shares to harvest tax losses), contributing to consolidated net loss attributable to common shareholders of $(46.1)M .
  • Paysafe Q4 Adjusted EBITDA estimated at $103M (−16% YoY) reflecting elevated credit losses ($23M total credit losses, +$16M YoY), despite revenue up 1% (or +4% ex-disposed business) .

Financial Results

Consolidated Results vs Prior Periods and Prior Year

MetricQ2 2024Q3 2024Q4 2024Q4 2023
Total Operating Revenue ($USD Millions)$118.0 $113.9 $109.9 $119.3
Operating (Loss) ($USD Millions)$(23.0) $(18.1) $(22.0) $(24.7)
EPS – Diluted ($USD)$(2.49) $(0.22) $(0.74) $(0.83)
Recognized (Losses)/Gains, Net ($USD Millions)$(145.1) $23.4 $(22.9) $37.0

Segment / Key Operating Investments (Q4 snapshot and trends)

Segment/InvestmentQ2 2024Q3 2024Q4 2024Q4 2023
Restaurant Group Revenue ($USD Millions)$107.6 $102.1 $103.4 $111.1
Restaurant Group Adjusted EBITDA ($USD Millions)$5.4 $0.1 $1.4 $2.4
D&B Revenue ($USD Millions)$576.2 $609.1 $631.9 $630.4
D&B Adjusted EBITDA ($USD Millions)$217.9 $247.4 $260.0 $260.6
Alight Revenue (Continuing Ops) ($USD Millions)$538.0 $555.0 $680.0 $682.0
Alight Adjusted EBITDA (Continuing Ops) ($USD Millions)$105.0 $118.0 $217.0 $206.0
Paysafe Revenue ($USD Millions)$417.7 (Q1) $439.9 (Q2) ~$420.0 (Q4, prelim) $414.5 (Q4)
Paysafe Adjusted EBITDA ($USD Millions)$111.9 (Q1) $119.0 (Q2) ~$103.0 (Q4, prelim) $121.7 (Q4)

KPIs and Balance Sheet

KPIQ3 2024Q4 2024
Corporate Cash & Short-term Investments ($USD Millions)$40 $108
Net Debt ($USD Millions)~$160 total debt outstanding at Q3; margin loan undrawn capacity $49M ~$60 net debt (margin loan $101M, FNF note $60M, weighted avg 7.35%)
NAV per Share (After-tax) ($USD)$34.29 (at Q3 close) $29.78 (at Q4 call date)
Share Price ($USD)$21.63 (Q3 close reference) $19.19 (call date)
Repurchase Authorization (Shares)~12M remaining ~12M remaining
Dividend (CNNE)$0.12 declared (payable 12/31/2024) $0.12 declared (payable 3/31/2025)

Margins vs Estimates

MetricQ2 2024Q3 2024Q4 2024
Net Income Margin %—*—*—*

Values marked with * retrieved from S&P Global; consensus margin data unavailable due to tool constraints at time of request.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
D&B Revenue ($USD Billions)FY 2025N/A$2.44–$2.50New
D&B Organic Revenue Growth (%)FY 2025N/A3.0–5.0%New
D&B Adjusted EBITDA ($USD Millions)FY 2025N/A$955–$985New
Alight Revenue ($USD Billions)FY 2025N/A$2.32–$2.39New
Alight Adjusted EBITDA ($USD Millions)FY 2025N/A$620–$645New
Paysafe Revenue Growth (%)FY 2025N/A6.5–8.0%New
Paysafe Adjusted EBITDA Margin (%)FY 2025N/A27.1–27.6%New
CNNE Dividend per Share ($USD)Q1 2025$0.12 (Q4 2024) $0.12Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Capital returns (buybacks/dividends)Dutch auction (9.7M shares), dividend initiation; focus on returns $243M returned YTD; dividend sustained Prioritize buybacks funded by monetizations; ~12M shares remaining; dividend maintained Increasing emphasis on buybacks
Portfolio rebalancing (public → private)Plan to redeploy from public to private; JANA partnership announced; Sightline impairment Continued rebalancing; Watkins acquisition Reiterate rebalancing and buybacks; active JANA pipeline Ongoing execution
D&B strategic reviewReceived inbound interest; retained advisors Board evaluating inquiries; no further comment Outcome expected in Q1 2025 per management remarks Approaching catalyst
Restaurant Group opsCost cuts; AEBITDA improved QoQ Guest counts strategy; cost reductions ongoing Value focus improved guest counts QoQ; YoY revenue/AEBITDA down; early lease termination gain Mixed, margin actions ongoing
Alight transformationDivested payroll/PS; leverage down; ASR; margin targets ARR bookings growth; dividend initiated; margin expansion Q4 margin +170 bps; leverage 2.8x; 2025 guide; term loan repricing Improving profitability/cash
Paysafe portfolio actionsBuilding direct sales; reiterated FY24 guide Raised FY24 growth guide; CFO change Divested direct marketing biz; prelim Q4 lower AEBITDA due to credit losses; 2025 guide Portfolio reshaping; credit loss headwind
Black Knight FootballBKFC build-out; Bournemouth revenue growth Record transfer; strong start; synergies plan Strong on-field/commercial performance; possible capital for players/infra; stadium decision timing Positive momentum; cap allocation

Management Commentary

  • “Going forward, we plan to… prioritize share buybacks as a use of capital… pay down outstanding debt and invest… in new and existing portfolio companies… to drive growth in NAV.”
  • “Our aggregate net asset value of approximately $1.9 billion equates to $29.78 per Cannae share… shares closed at $19.19 today or a 36% discount to NAV.”
  • On Bournemouth/Black Knight Football: “We think showing the trajectory and the ability to play in European competition… lends credibility… and we think has a lot more value than what we've paid… we’re really excited.”
  • On buybacks: “We will prioritize using our capital for share buybacks. We continue to think that the stock is cheap.”

Q&A Highlights

  • Capital allocation: Management emphasized prioritizing buybacks, contingent on monetizations of public stakes; acknowledged current dividend plus operating expenses not yet fully covered by holding-company cash flows, but improving .
  • D&B strategic review: Outcome expected in Q1 2025; no further details provided .
  • Black Knight Football funding: Potential incremental capital primarily for player transfers and infrastructure; stadium decision (redevelop vs new) targeted by next call .
  • Alight positioning: Board/management changes viewed positively; company well-positioned for standalone success; leverage reduced, dividend initiated, 2025 outlook provided .
  • JANA partnership: Active pipeline with “very specific targets”; potential for material transaction for CNNE .

Estimates Context

  • S&P Global consensus estimates could not be retrieved at time of analysis; therefore, we cannot assess beat/miss versus Street for CNNE consolidated EPS or revenue in Q4 2024.*

Where estimates may need to adjust:

  • D&B’s 2025 guidance (revenue and AEBITDA ranges) may prompt upward/ downward revisions depending on strategic process outcome and the timing impacts cited by management .
  • Alight’s 2025 revenue and AEBITDA guidance and margin repricing could support upward revisions to EBITDA and FCF forecasts .
  • Paysafe’s 2025 revenue growth and margin outlook, coupled with elevated credit losses in Q4, may drive mixed revisions—revenue upward and AEBITDA margin tempered by credit costs .

Key Takeaways for Investors

  • CNNE’s stated priority is to deploy monetization proceeds into share repurchases; with ~36% discount to NAV, buybacks are likely the near-term value-accretive lever and potential stock support catalyst .
  • Watch for D&B strategic review outcome in Q1 2025; a transaction could unlock value for CNNE’s ~16% stake and fund buybacks/deleveraging .
  • Alight’s improved margins, leverage reduction, dividend initiation, and 2025 guidance indicate strengthening fundamentals; CNNE’s stake remains a potential liquidity source and value lever .
  • Restaurant Group execution on cost rationalization and menu strategy is ongoing; value pricing boosted traffic but pressured checks—expect continued margin work-through into 2025 .
  • Paysafe’s portfolio pruning and 2025 margin targets signal focus on higher-quality growth; monitor credit loss normalization and whether divestiture benefits materialize in margin expansion .
  • Balance sheet capacity (cash and undrawn margin loan) plus listed securities provide optionality for opportunistic buybacks and private investments; debt costs manageable at ~7.35% .
  • Near-term trading: stock could be sensitive to any D&B headlines, announced monetizations/buybacks, and additional clarity on BKFC stadium/European competition prospects .

*Estimates/metrics marked with an asterisk are values retrieved from S&P Global; consensus data was unavailable due to retrieval limits at time of request.