Clarivate Plc

Ladies and gentlemen, thank you for standing by and welcome to the Clarevent Q1 2026 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, press star, followed by the number one on your telephone keypad. If you'd like to withdraw your question, press star, then the number one. I will now hand today's call over to Mark Donahue to begin today's conference. Please go ahead, sir.

Thank you and good morning everyone. Thank you for joining us for the Clarivate first quarter 2026 earnings conference call. As a reminder, this conference call is being recorded and webcast and is copyrighted property of Clarivate. Any rebroadcast of this information in whole or in part without prior written consent of Clarivate is prohibited and the accompanying earnings call presentation is available on the investor relations section of the company's website. During our call, we'll make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements of the business or developments in Clarivate's industry to differ materially from the anticipated results, performance, achievements, or developments expressed or implied by such forward-looking statements. Information about the factors that cause actual results to differ materially from anticipated results or performance can be found in Clarivate's filings with the SEC and on the company's website. Our discussion will include non-GAAP measures or adjusted numbers. Clarivate believes non-GAAP results are useful in order to enhance understanding of our ongoing operating performance, but they are supplement to and should not be considered in isolation from or substitute for GAAP financial measures. Reconciliations of these measures to GAAP measures are available in earnings release and supplemental presentation on our website. With me today are Mahdi Shemtov, Chief Executive Officer, and Jonathan Collins, Chief Financial Officer. After our prepared remarks, we'll open up the call to your questions. And with that, it's a pleasure to turn the call over to Mahdi.

Good morning, and thank you for joining us. Today, I will walk through our first quarter performance. progress against our value creation plan, and how execution across the business is positioned in Clarivate for improved organic revenue growth, margin expansion, and stronger free cash flow generation. This is our fifth consecutive quarter of improved performance. We are off to a solid start to the year, and I am pleased to report that our first quarter financial results have us on pace to achieve our full-year guidance. Revenues were $586 million, supported by continued VCP progress and execution across the portfolio. From a growth perspective, the quality composition of our revenue continued to improve. Organic ACV growth was 1.6%, with subscription organic revenue growth of 1.7%, reflecting increased adoption of subscription-based solution across Clarivate. We are encouraged by the underlying momentum we are seeing due to stronger alignment between commercial execution and product strategy. Adjusted EBITDA was $241 million, representing a 41% margin, up almost 200 basis points year over year highlighting the benefit of our subscription-first strategy and disciplined cost management. Free cash flow generation was also solid at approximately $79 million, which allowed us to retire $143 million of debt during the quarter. Most important, the value creation plan is working. We are seeing positive execution across all pillars, demonstrated by accelerating product adoption, improving sales effectiveness, and an expanding cadence of new product introductions. This quarter reinforces our confidence that the actions we put in place are beginning to translate into more predictable performance, expanding margin, and strong free cash flow generation. As a reminder, we launched the value creation plan in early 2025 to sharpen focus, accelerate execution, and unlock long-term shareholder value. The plan is built around four core pillars, business model optimization, improved sales execution, accelerated AI innovation utilizing our proprietary data assets, and portfolio rationalization. You can see these pillars showing up clearly in the numbers through subscription mix, margin expansion, and debt reduction. Academia and government continue to be a strong engine for recurring revenue growth. We are executing well across all three pillars of the value creation plan with clear evidence of progress. With this model optimization, we are accelerating the shift towards subscription-based offering. Adoption of our ProQuest subscription solution remains strong with over 600 new subscriptions sold in the last 12 months, reinforcing the durability and predictability of our revenue base. Sales execution is also improving, driven by more effective cross-sell execution across content, research and analytics, and software solution. During the quarter, We secured several key wins, including a multi-product institutional deal with FIO University, a new research-oriented university in China. We are expanding our China footprint, and this demonstrates our ability to deliver integrated solution and address broader customer needs. We are leveraging the power of AI, which is generating real measurable value for customers. Climate academic AI solutions are optimizing key library workflows resulting in 30 to 60% decrease in manual repetitive work and doubling or even quadrupling throughput. This demonstrates how combining AI with climate unique content and extensive domain knowledge leads to a significant operational improvement for customers. Turning to intellectual property. our attention remains firmly on execution and fundamentals. We are seeing encouraging signs that our increased focus on new subscription and renewal discipline is producing results. For the first quarter, renewal rates improved approximately 100 basis points, helping organic HCV trends improve to nearly flat. This represents a clear improvement versus prior trends and support our confidence that the IP business is moving forward and returning to sustainable recurring growth. State execution continues to strengthen. For example, with national IP offices, including the USPTO, where we secured major trademark analytics contracts and large-scale digitization programs. These wins are advancing patent and trademark operation globally and reinforce Clarivate's role as long-term strategic partner in IP ecosystem and analytics. During the quarter, we released brand image search, adding advanced AI capabilities such as clustering and multilingual support. These enhancements are expanding how IP professionals uncover insights, assess risk, and make faster, more confident decisions at a global scale. Overall, the IP segment is operating with greater focus and discipline, and we believe this improvement positions the business to future growth. In life science and health, we are seeing steady progress with the value creation plan. The shift from transactional sales The subscription is on track, supported by positive customer feedback and more consistent sales patterns. The successful changes we have made are reflected in an almost 1% rise in organic revenue during the first quarter. Notably, we want a new top 20 global pharmaceutical customer for DRG Fusion, our new real world data analytics platform. This reinforces the strength of our value proposition with large, sophisticated customers. In addition, we secured six-figure subscription win with biotech company for Ophex, our platform for preclinical and clinical safety intelligence. Demonstrated continued momentum across customer sizes and use cases. On innovation, We continue to expand access to our trusted regulatory and scientific intelligence through strategic partnership. During the quarter, we integrated Cortelis regulatory intelligence with Anthropic Cloud Enterprise, combining cloud-based proprietary data with advanced AI reasoning to deliver trusted insight directly within customer AI workflows. The collaboration underscores how Clarivate is extending the reach and relevance of its content across the broader AI ecosystem. In February, we announced that we are actively pursuing the sales of the life science and healthcare business as part of a broader portfolio rationalization effort. This is consistent with our broader strategy to concentrate capital and management attention on areas where we see the highest returns. The process is ongoing. As always, there is no guarantee of the outcome, and we will provide updates as appropriate. Our objective remains clear, maximizing value for shareholders while sharpening strategic focus on our remaining businesses. We have spoken over previous earnings calls about the investment we are making in AI product innovation. Today, I want to highlight how we are scaling AI enablement across climate to drive efficiency and support acceleration of free cash flow. This is core enabler of a value creation plan and a key lever for margin expansion as we return to healthy organic growth. Let me provide some color and examples. Across go-to-market function, we are embedding AI within sales and customer care to accelerate revenue growth, streamline customer interaction, enhance service quality and experience, and increase retention. In technology, we are deploying AI throughout software engineering and content operation to accelerate innovation and shorten new product time to market. Within corporate functions, we are leveraging AI across finance, human resources, and legal function to automate workflows and drive scalable efficiencies. We expect the deployment of digital agents will reduce manual effort, improve accuracy, and create operating leverage. Taking together, this AI-enabled cost efficiencies reinforce our core messages. As organic growth improves, this AI efficiency gives us confidence in sustained margin expansion and growing cash flow. To close, The first quarter demonstrate that the action we put in place through the evaluation plan are translating into stronger execution, improving fundamentals, and clearer path forward. We are operating with greater focus, strengthening our business model, improving sales effectiveness, and delivering innovation that matter to our customers, all while maintaining strong discipline around cost and cash generation. Thank you for your continued support, and we look forward to keeping you updated on our progress. I will now turn the call over to Jonathan for a review of our financial results and outlook.