CCC Intelligent Solutions Holdings Inc.

Good day, and thank you for standing by. Welcome to the CCC Intelligence Solutions first quarter fiscal 2025 earnings call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. We kindly ask that you limit yourself to one question and one follow-up. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Bill Warmington, Vice President of Investor Relations. Please go ahead.

Thank you, Operator. Good morning, and thank you all for joining us today to review CCC's first quarter 2025 financial results, which we announced in the press release issued before the open of the market today. Joining me on the call are Gitesh Ramamurthy, CCC's chairman and CEO, and Brian Herb, CCC's CFO. The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that may cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the earnings releases available on our investor relations website and under the heading risk factors in our 2024 annual report on Form 10-K filed with the SEC. Further, these comments in the Q&A that follows are copyrighted today by CCC Intelligent Solutions Holdings Incorporated. Any recording or retransmission or reproduction or other use of the same for profit or otherwise without prior consent of CCC is prohibited and a violation of United States copyright and other laws. Additionally, while we will provide a transcript of portions of this call and we've approved the publishing of the transcript of this call by a third party, we take no responsibility for inaccuracies that may appear in the transcripts. Please note that the discussion on today's call includes certain non-GAAP financial measures as defined by the SEC. The company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the company's financial condition and the results of operations. A reconciliation of GAAP to non-GAAP measures is available in our earnings release that is available on our investor relations website. Thank you. And now I'll turn the call over to Kitesh.

Thank you, Bill, and thanks to all of you for joining us today. I'm pleased to report a solid start to 2025. CCC delivered another quarter of strong top and bottom line results, reflecting the predictability and profitability of our business. In the first quarter of 2025, CCC's total revenue was $252 million, growing 11% year over year, exceeding our guidance range and crossing the $1 billion revenue run rate threshold for the first time. Adjusted EBITDA was $99 million, also ahead of our guidance range, and adjusted EBITDA margin was 39%. On today's call, I would like to cover three themes. The first is how we help our clients manage complexity in an increasingly uncertain world. The second is how our clients are increasingly committing to CCC as their core long-term innovation platform. And third, the continued progress and proof points in adoption of our newer solutions. In terms of my first topic, you heard me speak on prior calls about the many operational challenges that rising complexity poses for our customers. There are numerous examples of this, including growing vehicle complexity, labor and skill shortages, medical cost inflation, natural disasters, changing regulations, and more. Fundamentally, our solutions help our customers navigate these complexities so they can efficiently operate and grow their businesses and provide a seamless consumer experience. We do this by leveraging real-time hyperlocal data, a highly interconnected ecosystem, and deeply integrated AI-powered workflows powering our customers' operations. We also maintain an intense focus on customer engagement so we can advise our customers on the latest trends. A good illustration of this is the current macroeconomic environment. For example, While each customer is unique, they all share a common challenge in navigating the increased complexity arising from heightened volatility and uncertainty in vehicle and parts pricing and availability. Our recent client meetings show that there's an even greater intensity with which they are seeking tools, data, and insights to help them effectively manage these rapidly changing variables that impact their near and long-term decisions and operations. We believe CCC is uniquely able to deliver this support. That starts by providing visibility to real-time, hyper-local data on fluctuating prices, parts availability, used vehicle values, and many other decision inputs across the entire country and even down to a single claim. Using that intelligence, customers can use our platform to rapidly and flexibly shift their operations with their partners in the CCC ecosystem, staying in sync. And they can do this in line with their existing systems and operations with AI-enabled workflows driving increased efficiency and productivity so they can stay ahead of the curve. And through our unique Industry-wide benchmarking data, they can make sure they really are. This dynamic creates a virtuous cycle where increased customer collaboration drives demand for additional solutions and is just one example of how we're helping our customers navigate the increasing complexity in the insurance economy. Another is the ongoing economic sensitivity of the U.S. consumer and the cumulative impact of inflation which has contributed to a more than 50% increase in auto insurance premiums since March of 2020. Across multiple dimensions, we have seen consumers seek to lower their costs and avoid potential future rate increases. They are raising deductibles and reducing coverage. Smaller claims are going unfiled and insurance shopping is up. This puts even more pressure on insurers and repairers to deliver a modern, best-in-class customer experience, but also creates the risk of unrelated prior damage showing up in future claims and repairs. Both areas that we believe CCC is uniquely positioned to address. These factors, combined with falling consumer confidence overall, contributed to a continued decline in filed auto fiscal damage or APD claims in Q1, down 9% year over year. As Brian will discuss shortly, we expect this dynamic to keep claim volumes under pressure for the remainder of 2025. While this will have a modest near-term impact on our revenue, we have seen this pattern of up and down fluctuation followed by normalization, play out in various forms over the past two decades. My second theme is how our clients are increasingly committing to CCC as their core long-term innovation platform. This is leading to continued strength and growth opportunities in our established solutions. For multiple decades, we have invested ahead of the technology curve to drive innovation in our market-leading solutions. Our core established products deliver proven bottom line results that customers rely on as the basis for their claims and repair operations. These solutions have significant white space for growth and importantly form a seamless, highly scalable foundation for our emerging products. are increasingly demonstrating their trust in CCC as their long-term innovation platform because of the strength of our established solutions and the gateway they provide to additional next-generation capabilities. The renewal and expansion of our long-term contract with Caliber Collision last month is a good example of our strategic role within the auto insurance economy and how our core established solutions continue to create growth opportunities for both ccc and our clients since its founding in 1997 caliber has been very forward thinking in its application of new technologies and was an early adopter of ccc's workflow and direct repair solutions caliber is the largest multi-store operator in the united states with over 1800 locations across 41 states and on a strong growth trajectory. Caliber has been a terrific partner and we are excited to provide them with additional capabilities to support their future growth. In addition to extending their overall use of the CCC One platform, Caliber will also be adding CCC diagnostics workflow and CCC bill sheets to help streamline operations, and enhanced services across its repair facilities. In Q1, we also signed a large new account, an OEM with a captive insurance business and a leading marketing position in EVs. It's important to note that this new relationship is with both the insurance and the collision repair sides of the business, reflecting the value of our multi-sided network. We think this OEM's decision to embrace CCC as its long-term innovation platform by rolling out our core solutions is significant because it is a proof point that new, disruptive business models are choosing to partner with us due to the strength and functionality of the CCC platform. In addition to the use of our tools in its captive insurance operation, this OEM is also has several hundred repair facilities in its certified repair program. We believe the caliber renewal and the OEM win demonstrate the continued foundational value of CCC solutions for leading industry players and the long runway for growth of our core solutions in our existing markets. Within insurance overall, we completed multiple renewals and expansions with existing clients in auto fiscal damage, along with multiple new contracts and renewals in casualty in the first quarter. We continue to believe casualty is one of our biggest growth opportunities with the potential to be multiple times its current size and over time, possibly as large or even larger than our current insurance APD business. Casualty costs are climbing across the board and outpacing general healthcare costs due to notable increases in outpatient surgeries and diagnostic procedures such as CT scans and MRIs. Our platform, as well as the insights and connectivity to the physical damage side of the accident, only CCC can deliver provide unique capabilities to help our customers manage these complexities. We also continue to see durable expansion and growth in our automotive business as we continue to add new repair facilities and expand the depth of our CCC-1 cross-sell. The volume of electronic parts ordering through CCC-1 is also continuing to rise. with 10% year-over-year growth in the first quarter, with a significant remaining portion of order volume yet to be converted. My third theme is a continued progress and proof points in the adoption of our new solutions. In addition to a strong ongoing demand for our established solutions, we continue to see solid demand and progress in the adoption of our newer solutions that reinforces our confidence in the market opportunity for these new products. We have multiple top 20 insurers seeing significant improvements in their operating efficiency using our intelligent APD suite and also have multiple top 20 insurers starting to generate revenue using our AI-powered subrogation solution. Now moving to Evolution IQ, the integration of our newest AI-powered business is going well. When we announced the acquisition in December, a key part of our investment thesis was the opportunity to add Evolution IQ's AI-powered injury claims resolution capabilities to our auto-casualty suite, positioning us to build on our already strong momentum in casualty. Last week, due to the tremendous dedication and collaboration of our teams since the acquisition, We are pleased to announce the faster than expected introduction of MedHub for auto casualty, which we plan to launch in the third quarter. MedHub will be integrated into CCC's casualty suite of solutions with the aim of providing faster, better informed claims decisions and is the first of several planned innovations with Evolution IQ. MedHub is Evolution IQ's AI-powered medical synthesis technology that is able to help claims professionals make sense of complex medical documentation. MedHub has built an impressive track record of success in other lines of insurance with customers reporting more efficient review processes, more accurate summarization output, and better targeted use of specialists on claims. AI-powered medical record synthesis is particularly well suited to third-party casualty because casualty insurers typically receive a large demand package, including hundreds or even thousands of pages with continuous updates. And a given claim professional may be juggling hundreds of such claims. We believe that by leveraging Evolution IQ's AI-based technologies in medical summarization and in the future best next action recommendation engine, we can deliver a step change impact in casualty the way we have in autophysical damage and Evolution IQ has in disability. Evolution IQ continues to see strong momentum in its core disability business and is also seeing robust adoption of its workers' compensation suite. Seven of the top 10 workers' compensation PNC insurers are also existing CCC auto insurance clients. And we believe those existing relationships combined with the bottom line results Evolution IQ's workers' compensation customers are experiencing provide another large and attractive runway for growth. Let me conclude by saying that we are excited about the opportunity to help our clients navigate the rising complexity in their business and by their growing commitment to CCC as their core innovation platform for established and emerging solutions. We remain confident that the global insurance economy is still at the early stages of a generational digital upgrade cycle. and that CCC is well-positioned to help our customers navigate this transition. I will now turn the call over to Brian, who will walk you through our results in more detail. Thanks, Kitesh.