Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CCC Intelligent Solutions Holdings Inc. Announces Second Quarter 2023 Financial Results By: CCC Intelligent Solutions Inc. via Business Wire August 01, 2023 at 16:05 PM EDT CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NASDAQ: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2023. “CCC delivered strong second quarter results, highlighted by 10% year-over-year revenue growth and 38% adjusted EBITDA margin. The strong performance in the first half of 2023 included multiple large renewals and relationship expansions that reinforce our confidence in our ability to deliver on our strategic and financial objectives,” said Githesh Ramamurthy, Chairman & CEO of CCC. “We estimate that as a result of the continued macro pressures facing our customers, the cumulative annual cycle time for automotive claims in the U.S. increased to more than 2 billion days in 2022,” continued Ramamurthy. “This staggering figure underscores the importance of delivering effective and integrated state-of-the-art capabilities to help our clients in the P&C insurance economy address operational efficiency. Our solutions and use of AI are helping to do just that by helping customers to reduce the cycle time, administrative cost, and environmental impact of the claims process.” Second Quarter 2023 Financial Highlights Revenue Total revenue was $211.7 million for the second quarter of 2023, an increase of 10% from $192.8 million for the second quarter of 2022. Profitability GAAP gross profit was $152.6 million, representing a gross margin of 72%, for the second quarter of 2023, compared with $139.9 million, representing a gross margin of 73%, for the second quarter of 2022. Adjusted gross profit was $162.0 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2023, compared with $148.4 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2022. GAAP operating loss was $73.2 million for the second quarter of 2023, compared with GAAP operating income of $12.5 million for the second quarter of 2022. Adjusted operating income was $71.8 million for the second quarter of 2023, compared with adjusted operating income of $66.7 million for the second quarter of 2022. GAAP net loss was $97.3 million for the second quarter of 2023, compared with GAAP net income of $15.6 million for the second quarter of 2022. Adjusted net income was $47.8 million for the second quarter of 2023, compared with adjusted net income of $37.4 million for the second quarter of 2022. Adjusted EBITDA was $80.9 million for the second quarter of 2023, compared with adjusted EBITDA of $73.4 million for the second quarter of 2022. Adjusted EBITDA grew 10% in the second quarter of 2023 compared with the second quarter of 2022. Liquidity CCC had $403.6 million in cash and cash equivalents and $788.0 million of total debt on June 30, 2023. The Company generated $69.6 million in cash from operating activities and had free cash flow of $55.0 million during the second quarter of 2023, compared with $40.8 million generated in cash from operating activities and $29.6 million in free cash flow in the second quarter of 2022. The information presented above includes non-GAAP financial measures such as “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” and “free cash flow.” Refer to “Non-GAAP Financial Measures” for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure. 2nd Quarter and Recent Business Highlights A top-20 auto insurer and long-time customer of CCC’s Casualty solutions added CCC’s full suite of Automobile Physical Damage (“APD”) solutions in the second quarter of 2023, including CCC® Estimate-STP. The client will be transitioning services from multiple vendors onto CCC’s platform and reflects the significant opportunity and numerous ways available to CCC to expand its solutions with the U.S.’s largest insurers. CCC is a leader in the Casualty solutions market and recently rolled out a new computer vision AI technology for Casualty claims that can predict potential physical injuries to the occupants of a vehicle involved in an accident based on photos of the damaged vehicles. In the second quarter of 2023, CCC added and expanded Casualty relationships with new and existing customers. CCC continued to grow the breadth and depth of its network during the second quarter of 2023 by expanding the participation of 2 leading OEMs and signing a multi-year extension with one of the leading aftermarket parts suppliers. In addition, CCC has added nearly 1,000 repair facilities year to date. CCC’s total customer count now exceeds 35,000 and includes over 29,000 repair facilities, over 4,500 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. By connecting these companies and digitizing processes across the ecosystem, CCC’s platform increases their ability to be productive, reduce leakage, and improve communication throughout the P&C insurance economy – which ultimately can result in claims being resolved faster. Business Outlook Based on information as of today, August 1, 2023, the Company is issuing the following financial guidance: Third Quarter Fiscal 2023 Full Year Fiscal 2023 Revenue $ 215 million to $217 million $ 851 million to $855 million Adjusted EBITDA $ 86 million to $88 million $ 337 million to $341 million Conference Call Information CCC will host a conference call today, August 1, 2023, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and financial guidance. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s website at https://ir.cccis.com, and a replay will be archived on the website as well. About CCC Intelligent Solutions CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS), is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people’s lives moving forward when it matters most. Learn more about CCC at www.cccis.com. Forward Looking Statements This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, future events, goals, plans and projections regarding the Company’s financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, our revenues, the concentration of our customers and the ability to retain our current customers; our ability to negotiate with our customers on favorable terms; our ability to maintain and grow our brand and reputation cost-effectively; the execution of our growth strategy; our projected financial information, growth rate and market opportunity; the health of our industry, claim volumes, and market conditions; changes in the insurance and automotive collision industries, including the adoption of new technologies; global economic conditions and geopolitical events; competition in our market and our ability to retain and grow market share; our ability to develop, introduce and market new enhanced versions of our solutions and products; our sales and implementation cycles; the ability of our research and development efforts to create significant new revenue streams; changes in applicable laws or regulations; changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries; currency fluctuations; our reliance on third-party data, technology and intellectual property; our ability to protect our intellectual property; our ability to keep our data and information systems secure from data security breaches; our ability to acquire or invest in companies or pursue business partnerships; our ability to raise financing in the future and improve our capital structure; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to expand or maintain our existing customer base; our ability to service our indebtedness; and other risks and uncertainties, including those included under the header “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”), which can be obtained, without charge, at the SEC’s website (www.sec.gov), and in our other filings with the SEC. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release. Non-GAAP Financial Measures This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), including, but not limited to, “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating expenses,” and “free cash flow” in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP. This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included for these projections. CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, December 31, 2023 2022 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 403,577 $ 323,788 Accounts receivable—Net of allowances of $5,874 and $5,339 as of June 30, 2023 and December 31, 2022, respectively 96,139 98,353 Income taxes receivable 5,830 4,015 Deferred contract costs 16,871 16,556 Other current assets 29,240 36,358 Total current assets 551,657 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 153,539 146,443 OPERATING LEASE ASSETS 31,647 32,874 INTANGIBLE ASSETS—Net 1,064,064 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,979 2,286 DEFERRED CONTRACT COSTS 19,480 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 52,072 45,911 TOTAL $ 3,302,390 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 19,084 $ 27,599 Accrued expenses 54,711 71,445 Income taxes payable 3,509 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 2,967 2,876 Operating lease liabilities 7,049 5,484 Deferred revenues 40,064 35,239 Total current liabilities 135,384 151,565 LONG-TERM DEBT—Net 770,787 774,132 DEFERRED INCOME TAXES—Net 217,907 241,698 LONG-TERM LICENSING AGREEMENT—Net 29,246 30,752 OPERATING LEASE LIABILITIES 52,431 54,245 WARRANT LIABILITIES 55,585 36,405 OTHER LIABILITIES 1,550 2,658 Total liabilities 1,262,890 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 19 and 20) MEZZANINE EQUITY: Redeemable non-controlling interest 14,494 14,179 STOCKHOLDERS’ EQUITY: Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding — — Common stock—$0.0001 par; 5,000,000,000 shares authorized; 631,982,491 and 622,072,905 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 63 62 Additional paid-in capital 2,829,184 2,754,055 Accumulated deficit (803,106) (707,946) Accumulated other comprehensive loss (1,135) (884) Total stockholders’ equity 2,025,006 2,045,287 TOTAL $ 3,302,390 $ 3,350,921 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 REVENUES $ 211,710 $ 192,786 $ 416,630 $ 379,609 COST OF REVENUES Cost of revenues, exclusive of amortization and impairment of acquired technologies 52,047 46,095 102,494 88,795 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Total cost of revenues 59,124 52,845 116,256 102,240 GROSS PROFIT 152,586 139,941 300,374 277,369 OPERATING EXPENSES: Research and development 43,363 38,758 84,359 74,438 Selling and marketing 35,936 31,091 69,467 57,894 General and administrative 46,141 39,509 88,006 83,717 Amortization of intangible assets 18,022 18,066 36,088 36,146 Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Total operating expenses 225,773 127,424 360,231 252,195 OPERATING (LOSS) INCOME (73,187) 12,517 (59,857) 25,174 INTEREST EXPENSE (14,014) (7,944) (27,846) (15,285) INTEREST INCOME 4,023 — 7,282 — CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS 3,613 — 1,009 — CHANGE IN FAIR VALUE OF WARRANT LIABILITIES (20,375) 21,004 (19,180) 23,140 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,578 OTHER INCOME—Net 315 112 368 194 PRETAX (LOSS) INCOME (99,625) 25,689 (98,224) 36,801 INCOME TAX BENEFIT (PROVISION) 2,281 (10,125) 3,064 (9,262) NET (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,344) 15,564 (95,160) 27,539 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (315) — (315) — NET (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,659) $ 15,564 $ (95,475) $ 27,539 Net (loss) income per share attributable to common stockholders: Basic $ (0.16) $ 0.03 $ (0.15) $ 0.05 Diluted $ (0.16) $ 0.02 $ (0.15) $ 0.04 Weighted-average shares used in computing net (loss) income per share attributable to common stockholders: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 621,235,776 639,964,696 618,740,340 640,650,297 COMPREHENSIVE (LOSS) INCOME: Net (loss) income including non-controlling interest (97,344) 15,564 (95,160) 27,539 Other comprehensive income (loss)—Foreign currency translation adjustment (285) (303) (251) (294) COMPREHENSIVE (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,629) 15,261 (95,411) 27,245 Less: accretion of redeemable non-controlling interest (315) — (315) — COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,944) $ 15,261 $ (95,726) $ 27,245 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (95,160) $ 27,539 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 17,966 13,490 Amortization of intangible assets 49,419 49,591 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (23,791) (43,703) Stock-based compensation 64,720 52,047 Amortization of deferred financing fees 851 949 Amortization of discount on debt 111 131 Change in fair value of derivative instruments (1,009) — Change in fair value of warrant liabilities 19,180 (23,140) Non-cash lease expense 1,232 2,152 Loss on disposal of software, equipment and property — 795 Gain on sale of cost method investment — (3,578) Other 115 47 Changes in: Accounts receivable—Net 2,322 (4,027) Deferred contract costs (315) (952) Other current assets 7,116 15,463 Deferred contract costs—Non-current 681 2,248 Other assets (5,267) (9,935) Operating lease assets (5) 1,576 Income taxes 772 13,851 Accounts payable (8,534) 3,204 Accrued expenses (14,975) (7,949) Operating lease liabilities (249) (4,308) Deferred revenues 4,825 2,256 Other liabilities (115) (62) Net cash provided by operating activities 102,632 87,685 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (29,084) (25,469) Acquisition of Safekeep, Inc., net of cash acquired — (32,242) Proceeds from sale of cost method investment — 3,892 Net cash used in investing activities (29,084) (53,819) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 20,827 15,511 Proceeds from employee stock purchase plan 1,326 — Payments for employee taxes withheld upon vesting of equity awards (11,539) — Principal payments on long-term debt (4,000) (4,000) Net cash provided by financing activities 6,614 11,511 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (373) (281) NET CHANGE IN CASH AND CASH EQUIVALENTS 79,789 45,096 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 403,577 $ 227,640 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 550 $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 26,946 $ 14,153 Cash paid for income taxes—Net $ 19,954 $ 38,946 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT (In thousands, except profit margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except percentages) 2023 2022 2023 2022 Gross Profit $ 152,586 $ 139,941 $ 300,374 $ 277,369 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Stock-based compensation and related employer payroll tax 2,358 1,680 4,473 2,613 Adjusted Gross Profit $ 162,021 $ 148,371 $ 318,609 $ 293,427 Gross Profit Margin 72% 73% 72% 73% Adjusted Gross Profit Margin 77% 77% 76% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 225,773 $ 127,424 $ 360,231 $ 252,195 Amortization of intangible assets (18,022) (18,066) (36,088) (36,146) Impairment of goodwill (77,405) — (77,405) — Impairment of intangible assets (4,906) — (4,906) — Stock-based compensation expense and related employer payroll tax (33,706) (26,973) (62,799) (50,695) Plaintiff litigation costs (1,537) — (2,523) — M&A and integration costs — (348) — (1,756) Lease overlap costs — — — (1,222) Lease abandonment — — — (1,338) Business Combination transaction and related costs — (324) — (1,056) Net costs related to divestiture — 6 — (53) Adjusted operating expenses $ 90,197 $ 81,719 $ 176,510 $ 159,929 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating (loss) income $ (73,187) $ 12,517 $ (59,857) $ 25,174 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Plaintiff litigation costs 1,537 — 2,523 — M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Adjusted operating income $ 71,824 $ 66,652 $ 142,099 $ 133,498 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands, except for EBITDA margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Interest expense 14,014 7,944 27,846 15,285 Interest income (4,023) — (7,282) — Income tax (benefit) provision (2,281) 10,125 (3,064) 9,262 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Depreciation and amortization of software, equipment and property 2,187 2,444 4,414 5,407 Depreciation and amortization of software, equipment and property—Cost of revenue 6,573 4,239 13,552 8,083 EBITDA (56,206) 65,132 (10,275) 115,167 Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Adjusted EBITDA $ 80,899 $ 73,447 $ 160,433 $ 147,182 Adjusted EBITDA Margin 38% 38% 39% 39% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED NET INCOME (In thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Tax effect of adjustments (16,587) (11,287) (30,633) (22,867) Adjusted net income $ 47,842 $ 37,408 $ 94,334 $ 86,278 Adjusted net income per share attributable to common stockholders: Basic $ 0.08 $ 0.06 $ 0.15 $ 0.14 Diluted $ 0.07 $ 0.06 $ 0.15 $ 0.13 Weighted average shares outstanding: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 651,427,506 639,964,696 648,887,781 640,650,297 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 69,554 $ 40,820 $ 102,632 $ 87,685 Less: Purchases of software, equipment, and property (14,560) (11,189) (29,084) (25,469) Free Cash Flow $ 54,994 $ 29,631 $ 73,548 $ 62,216 View source version on businesswire.com: https://www.businesswire.com/news/home/20230731741923/en/Contacts Investor: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media: Michelle Hellyar Senior Director, Public Relations, CCC Intelligent Solutions Inc. mhellyar@cccis.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CCC Intelligent Solutions Holdings Inc. Announces Second Quarter 2023 Financial Results By: CCC Intelligent Solutions Inc. via Business Wire August 01, 2023 at 16:05 PM EDT CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NASDAQ: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2023. “CCC delivered strong second quarter results, highlighted by 10% year-over-year revenue growth and 38% adjusted EBITDA margin. The strong performance in the first half of 2023 included multiple large renewals and relationship expansions that reinforce our confidence in our ability to deliver on our strategic and financial objectives,” said Githesh Ramamurthy, Chairman & CEO of CCC. “We estimate that as a result of the continued macro pressures facing our customers, the cumulative annual cycle time for automotive claims in the U.S. increased to more than 2 billion days in 2022,” continued Ramamurthy. “This staggering figure underscores the importance of delivering effective and integrated state-of-the-art capabilities to help our clients in the P&C insurance economy address operational efficiency. Our solutions and use of AI are helping to do just that by helping customers to reduce the cycle time, administrative cost, and environmental impact of the claims process.” Second Quarter 2023 Financial Highlights Revenue Total revenue was $211.7 million for the second quarter of 2023, an increase of 10% from $192.8 million for the second quarter of 2022. Profitability GAAP gross profit was $152.6 million, representing a gross margin of 72%, for the second quarter of 2023, compared with $139.9 million, representing a gross margin of 73%, for the second quarter of 2022. Adjusted gross profit was $162.0 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2023, compared with $148.4 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2022. GAAP operating loss was $73.2 million for the second quarter of 2023, compared with GAAP operating income of $12.5 million for the second quarter of 2022. Adjusted operating income was $71.8 million for the second quarter of 2023, compared with adjusted operating income of $66.7 million for the second quarter of 2022. GAAP net loss was $97.3 million for the second quarter of 2023, compared with GAAP net income of $15.6 million for the second quarter of 2022. Adjusted net income was $47.8 million for the second quarter of 2023, compared with adjusted net income of $37.4 million for the second quarter of 2022. Adjusted EBITDA was $80.9 million for the second quarter of 2023, compared with adjusted EBITDA of $73.4 million for the second quarter of 2022. Adjusted EBITDA grew 10% in the second quarter of 2023 compared with the second quarter of 2022. Liquidity CCC had $403.6 million in cash and cash equivalents and $788.0 million of total debt on June 30, 2023. The Company generated $69.6 million in cash from operating activities and had free cash flow of $55.0 million during the second quarter of 2023, compared with $40.8 million generated in cash from operating activities and $29.6 million in free cash flow in the second quarter of 2022. The information presented above includes non-GAAP financial measures such as “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” and “free cash flow.” Refer to “Non-GAAP Financial Measures” for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure. 2nd Quarter and Recent Business Highlights A top-20 auto insurer and long-time customer of CCC’s Casualty solutions added CCC’s full suite of Automobile Physical Damage (“APD”) solutions in the second quarter of 2023, including CCC® Estimate-STP. The client will be transitioning services from multiple vendors onto CCC’s platform and reflects the significant opportunity and numerous ways available to CCC to expand its solutions with the U.S.’s largest insurers. CCC is a leader in the Casualty solutions market and recently rolled out a new computer vision AI technology for Casualty claims that can predict potential physical injuries to the occupants of a vehicle involved in an accident based on photos of the damaged vehicles. In the second quarter of 2023, CCC added and expanded Casualty relationships with new and existing customers. CCC continued to grow the breadth and depth of its network during the second quarter of 2023 by expanding the participation of 2 leading OEMs and signing a multi-year extension with one of the leading aftermarket parts suppliers. In addition, CCC has added nearly 1,000 repair facilities year to date. CCC’s total customer count now exceeds 35,000 and includes over 29,000 repair facilities, over 4,500 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. By connecting these companies and digitizing processes across the ecosystem, CCC’s platform increases their ability to be productive, reduce leakage, and improve communication throughout the P&C insurance economy – which ultimately can result in claims being resolved faster. Business Outlook Based on information as of today, August 1, 2023, the Company is issuing the following financial guidance: Third Quarter Fiscal 2023 Full Year Fiscal 2023 Revenue $ 215 million to $217 million $ 851 million to $855 million Adjusted EBITDA $ 86 million to $88 million $ 337 million to $341 million Conference Call Information CCC will host a conference call today, August 1, 2023, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and financial guidance. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s website at https://ir.cccis.com, and a replay will be archived on the website as well. About CCC Intelligent Solutions CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS), is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people’s lives moving forward when it matters most. Learn more about CCC at www.cccis.com. Forward Looking Statements This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, future events, goals, plans and projections regarding the Company’s financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, our revenues, the concentration of our customers and the ability to retain our current customers; our ability to negotiate with our customers on favorable terms; our ability to maintain and grow our brand and reputation cost-effectively; the execution of our growth strategy; our projected financial information, growth rate and market opportunity; the health of our industry, claim volumes, and market conditions; changes in the insurance and automotive collision industries, including the adoption of new technologies; global economic conditions and geopolitical events; competition in our market and our ability to retain and grow market share; our ability to develop, introduce and market new enhanced versions of our solutions and products; our sales and implementation cycles; the ability of our research and development efforts to create significant new revenue streams; changes in applicable laws or regulations; changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries; currency fluctuations; our reliance on third-party data, technology and intellectual property; our ability to protect our intellectual property; our ability to keep our data and information systems secure from data security breaches; our ability to acquire or invest in companies or pursue business partnerships; our ability to raise financing in the future and improve our capital structure; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to expand or maintain our existing customer base; our ability to service our indebtedness; and other risks and uncertainties, including those included under the header “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”), which can be obtained, without charge, at the SEC’s website (www.sec.gov), and in our other filings with the SEC. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release. Non-GAAP Financial Measures This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), including, but not limited to, “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating expenses,” and “free cash flow” in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP. This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included for these projections. CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, December 31, 2023 2022 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 403,577 $ 323,788 Accounts receivable—Net of allowances of $5,874 and $5,339 as of June 30, 2023 and December 31, 2022, respectively 96,139 98,353 Income taxes receivable 5,830 4,015 Deferred contract costs 16,871 16,556 Other current assets 29,240 36,358 Total current assets 551,657 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 153,539 146,443 OPERATING LEASE ASSETS 31,647 32,874 INTANGIBLE ASSETS—Net 1,064,064 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,979 2,286 DEFERRED CONTRACT COSTS 19,480 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 52,072 45,911 TOTAL $ 3,302,390 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 19,084 $ 27,599 Accrued expenses 54,711 71,445 Income taxes payable 3,509 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 2,967 2,876 Operating lease liabilities 7,049 5,484 Deferred revenues 40,064 35,239 Total current liabilities 135,384 151,565 LONG-TERM DEBT—Net 770,787 774,132 DEFERRED INCOME TAXES—Net 217,907 241,698 LONG-TERM LICENSING AGREEMENT—Net 29,246 30,752 OPERATING LEASE LIABILITIES 52,431 54,245 WARRANT LIABILITIES 55,585 36,405 OTHER LIABILITIES 1,550 2,658 Total liabilities 1,262,890 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 19 and 20) MEZZANINE EQUITY: Redeemable non-controlling interest 14,494 14,179 STOCKHOLDERS’ EQUITY: Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding — — Common stock—$0.0001 par; 5,000,000,000 shares authorized; 631,982,491 and 622,072,905 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 63 62 Additional paid-in capital 2,829,184 2,754,055 Accumulated deficit (803,106) (707,946) Accumulated other comprehensive loss (1,135) (884) Total stockholders’ equity 2,025,006 2,045,287 TOTAL $ 3,302,390 $ 3,350,921 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 REVENUES $ 211,710 $ 192,786 $ 416,630 $ 379,609 COST OF REVENUES Cost of revenues, exclusive of amortization and impairment of acquired technologies 52,047 46,095 102,494 88,795 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Total cost of revenues 59,124 52,845 116,256 102,240 GROSS PROFIT 152,586 139,941 300,374 277,369 OPERATING EXPENSES: Research and development 43,363 38,758 84,359 74,438 Selling and marketing 35,936 31,091 69,467 57,894 General and administrative 46,141 39,509 88,006 83,717 Amortization of intangible assets 18,022 18,066 36,088 36,146 Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Total operating expenses 225,773 127,424 360,231 252,195 OPERATING (LOSS) INCOME (73,187) 12,517 (59,857) 25,174 INTEREST EXPENSE (14,014) (7,944) (27,846) (15,285) INTEREST INCOME 4,023 — 7,282 — CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS 3,613 — 1,009 — CHANGE IN FAIR VALUE OF WARRANT LIABILITIES (20,375) 21,004 (19,180) 23,140 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,578 OTHER INCOME—Net 315 112 368 194 PRETAX (LOSS) INCOME (99,625) 25,689 (98,224) 36,801 INCOME TAX BENEFIT (PROVISION) 2,281 (10,125) 3,064 (9,262) NET (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,344) 15,564 (95,160) 27,539 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (315) — (315) — NET (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,659) $ 15,564 $ (95,475) $ 27,539 Net (loss) income per share attributable to common stockholders: Basic $ (0.16) $ 0.03 $ (0.15) $ 0.05 Diluted $ (0.16) $ 0.02 $ (0.15) $ 0.04 Weighted-average shares used in computing net (loss) income per share attributable to common stockholders: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 621,235,776 639,964,696 618,740,340 640,650,297 COMPREHENSIVE (LOSS) INCOME: Net (loss) income including non-controlling interest (97,344) 15,564 (95,160) 27,539 Other comprehensive income (loss)—Foreign currency translation adjustment (285) (303) (251) (294) COMPREHENSIVE (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,629) 15,261 (95,411) 27,245 Less: accretion of redeemable non-controlling interest (315) — (315) — COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,944) $ 15,261 $ (95,726) $ 27,245 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (95,160) $ 27,539 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 17,966 13,490 Amortization of intangible assets 49,419 49,591 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (23,791) (43,703) Stock-based compensation 64,720 52,047 Amortization of deferred financing fees 851 949 Amortization of discount on debt 111 131 Change in fair value of derivative instruments (1,009) — Change in fair value of warrant liabilities 19,180 (23,140) Non-cash lease expense 1,232 2,152 Loss on disposal of software, equipment and property — 795 Gain on sale of cost method investment — (3,578) Other 115 47 Changes in: Accounts receivable—Net 2,322 (4,027) Deferred contract costs (315) (952) Other current assets 7,116 15,463 Deferred contract costs—Non-current 681 2,248 Other assets (5,267) (9,935) Operating lease assets (5) 1,576 Income taxes 772 13,851 Accounts payable (8,534) 3,204 Accrued expenses (14,975) (7,949) Operating lease liabilities (249) (4,308) Deferred revenues 4,825 2,256 Other liabilities (115) (62) Net cash provided by operating activities 102,632 87,685 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (29,084) (25,469) Acquisition of Safekeep, Inc., net of cash acquired — (32,242) Proceeds from sale of cost method investment — 3,892 Net cash used in investing activities (29,084) (53,819) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 20,827 15,511 Proceeds from employee stock purchase plan 1,326 — Payments for employee taxes withheld upon vesting of equity awards (11,539) — Principal payments on long-term debt (4,000) (4,000) Net cash provided by financing activities 6,614 11,511 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (373) (281) NET CHANGE IN CASH AND CASH EQUIVALENTS 79,789 45,096 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 403,577 $ 227,640 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 550 $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 26,946 $ 14,153 Cash paid for income taxes—Net $ 19,954 $ 38,946 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT (In thousands, except profit margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except percentages) 2023 2022 2023 2022 Gross Profit $ 152,586 $ 139,941 $ 300,374 $ 277,369 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Stock-based compensation and related employer payroll tax 2,358 1,680 4,473 2,613 Adjusted Gross Profit $ 162,021 $ 148,371 $ 318,609 $ 293,427 Gross Profit Margin 72% 73% 72% 73% Adjusted Gross Profit Margin 77% 77% 76% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 225,773 $ 127,424 $ 360,231 $ 252,195 Amortization of intangible assets (18,022) (18,066) (36,088) (36,146) Impairment of goodwill (77,405) — (77,405) — Impairment of intangible assets (4,906) — (4,906) — Stock-based compensation expense and related employer payroll tax (33,706) (26,973) (62,799) (50,695) Plaintiff litigation costs (1,537) — (2,523) — M&A and integration costs — (348) — (1,756) Lease overlap costs — — — (1,222) Lease abandonment — — — (1,338) Business Combination transaction and related costs — (324) — (1,056) Net costs related to divestiture — 6 — (53) Adjusted operating expenses $ 90,197 $ 81,719 $ 176,510 $ 159,929 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating (loss) income $ (73,187) $ 12,517 $ (59,857) $ 25,174 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Plaintiff litigation costs 1,537 — 2,523 — M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Adjusted operating income $ 71,824 $ 66,652 $ 142,099 $ 133,498 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands, except for EBITDA margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Interest expense 14,014 7,944 27,846 15,285 Interest income (4,023) — (7,282) — Income tax (benefit) provision (2,281) 10,125 (3,064) 9,262 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Depreciation and amortization of software, equipment and property 2,187 2,444 4,414 5,407 Depreciation and amortization of software, equipment and property—Cost of revenue 6,573 4,239 13,552 8,083 EBITDA (56,206) 65,132 (10,275) 115,167 Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Adjusted EBITDA $ 80,899 $ 73,447 $ 160,433 $ 147,182 Adjusted EBITDA Margin 38% 38% 39% 39% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED NET INCOME (In thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Tax effect of adjustments (16,587) (11,287) (30,633) (22,867) Adjusted net income $ 47,842 $ 37,408 $ 94,334 $ 86,278 Adjusted net income per share attributable to common stockholders: Basic $ 0.08 $ 0.06 $ 0.15 $ 0.14 Diluted $ 0.07 $ 0.06 $ 0.15 $ 0.13 Weighted average shares outstanding: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 651,427,506 639,964,696 648,887,781 640,650,297 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 69,554 $ 40,820 $ 102,632 $ 87,685 Less: Purchases of software, equipment, and property (14,560) (11,189) (29,084) (25,469) Free Cash Flow $ 54,994 $ 29,631 $ 73,548 $ 62,216 View source version on businesswire.com: https://www.businesswire.com/news/home/20230731741923/en/Contacts Investor: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media: Michelle Hellyar Senior Director, Public Relations, CCC Intelligent Solutions Inc. mhellyar@cccis.com
CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NASDAQ: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2023. “CCC delivered strong second quarter results, highlighted by 10% year-over-year revenue growth and 38% adjusted EBITDA margin. The strong performance in the first half of 2023 included multiple large renewals and relationship expansions that reinforce our confidence in our ability to deliver on our strategic and financial objectives,” said Githesh Ramamurthy, Chairman & CEO of CCC. “We estimate that as a result of the continued macro pressures facing our customers, the cumulative annual cycle time for automotive claims in the U.S. increased to more than 2 billion days in 2022,” continued Ramamurthy. “This staggering figure underscores the importance of delivering effective and integrated state-of-the-art capabilities to help our clients in the P&C insurance economy address operational efficiency. Our solutions and use of AI are helping to do just that by helping customers to reduce the cycle time, administrative cost, and environmental impact of the claims process.” Second Quarter 2023 Financial Highlights Revenue Total revenue was $211.7 million for the second quarter of 2023, an increase of 10% from $192.8 million for the second quarter of 2022. Profitability GAAP gross profit was $152.6 million, representing a gross margin of 72%, for the second quarter of 2023, compared with $139.9 million, representing a gross margin of 73%, for the second quarter of 2022. Adjusted gross profit was $162.0 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2023, compared with $148.4 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2022. GAAP operating loss was $73.2 million for the second quarter of 2023, compared with GAAP operating income of $12.5 million for the second quarter of 2022. Adjusted operating income was $71.8 million for the second quarter of 2023, compared with adjusted operating income of $66.7 million for the second quarter of 2022. GAAP net loss was $97.3 million for the second quarter of 2023, compared with GAAP net income of $15.6 million for the second quarter of 2022. Adjusted net income was $47.8 million for the second quarter of 2023, compared with adjusted net income of $37.4 million for the second quarter of 2022. Adjusted EBITDA was $80.9 million for the second quarter of 2023, compared with adjusted EBITDA of $73.4 million for the second quarter of 2022. Adjusted EBITDA grew 10% in the second quarter of 2023 compared with the second quarter of 2022. Liquidity CCC had $403.6 million in cash and cash equivalents and $788.0 million of total debt on June 30, 2023. The Company generated $69.6 million in cash from operating activities and had free cash flow of $55.0 million during the second quarter of 2023, compared with $40.8 million generated in cash from operating activities and $29.6 million in free cash flow in the second quarter of 2022. The information presented above includes non-GAAP financial measures such as “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” and “free cash flow.” Refer to “Non-GAAP Financial Measures” for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure. 2nd Quarter and Recent Business Highlights A top-20 auto insurer and long-time customer of CCC’s Casualty solutions added CCC’s full suite of Automobile Physical Damage (“APD”) solutions in the second quarter of 2023, including CCC® Estimate-STP. The client will be transitioning services from multiple vendors onto CCC’s platform and reflects the significant opportunity and numerous ways available to CCC to expand its solutions with the U.S.’s largest insurers. CCC is a leader in the Casualty solutions market and recently rolled out a new computer vision AI technology for Casualty claims that can predict potential physical injuries to the occupants of a vehicle involved in an accident based on photos of the damaged vehicles. In the second quarter of 2023, CCC added and expanded Casualty relationships with new and existing customers. CCC continued to grow the breadth and depth of its network during the second quarter of 2023 by expanding the participation of 2 leading OEMs and signing a multi-year extension with one of the leading aftermarket parts suppliers. In addition, CCC has added nearly 1,000 repair facilities year to date. CCC’s total customer count now exceeds 35,000 and includes over 29,000 repair facilities, over 4,500 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. By connecting these companies and digitizing processes across the ecosystem, CCC’s platform increases their ability to be productive, reduce leakage, and improve communication throughout the P&C insurance economy – which ultimately can result in claims being resolved faster. Business Outlook Based on information as of today, August 1, 2023, the Company is issuing the following financial guidance: Third Quarter Fiscal 2023 Full Year Fiscal 2023 Revenue $ 215 million to $217 million $ 851 million to $855 million Adjusted EBITDA $ 86 million to $88 million $ 337 million to $341 million Conference Call Information CCC will host a conference call today, August 1, 2023, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and financial guidance. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s website at https://ir.cccis.com, and a replay will be archived on the website as well. About CCC Intelligent Solutions CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS), is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people’s lives moving forward when it matters most. Learn more about CCC at www.cccis.com. Forward Looking Statements This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, future events, goals, plans and projections regarding the Company’s financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, our revenues, the concentration of our customers and the ability to retain our current customers; our ability to negotiate with our customers on favorable terms; our ability to maintain and grow our brand and reputation cost-effectively; the execution of our growth strategy; our projected financial information, growth rate and market opportunity; the health of our industry, claim volumes, and market conditions; changes in the insurance and automotive collision industries, including the adoption of new technologies; global economic conditions and geopolitical events; competition in our market and our ability to retain and grow market share; our ability to develop, introduce and market new enhanced versions of our solutions and products; our sales and implementation cycles; the ability of our research and development efforts to create significant new revenue streams; changes in applicable laws or regulations; changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries; currency fluctuations; our reliance on third-party data, technology and intellectual property; our ability to protect our intellectual property; our ability to keep our data and information systems secure from data security breaches; our ability to acquire or invest in companies or pursue business partnerships; our ability to raise financing in the future and improve our capital structure; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to expand or maintain our existing customer base; our ability to service our indebtedness; and other risks and uncertainties, including those included under the header “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”), which can be obtained, without charge, at the SEC’s website (www.sec.gov), and in our other filings with the SEC. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release. Non-GAAP Financial Measures This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), including, but not limited to, “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating expenses,” and “free cash flow” in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP. This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included for these projections. CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share data) June 30, December 31, 2023 2022 (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 403,577 $ 323,788 Accounts receivable—Net of allowances of $5,874 and $5,339 as of June 30, 2023 and December 31, 2022, respectively 96,139 98,353 Income taxes receivable 5,830 4,015 Deferred contract costs 16,871 16,556 Other current assets 29,240 36,358 Total current assets 551,657 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 153,539 146,443 OPERATING LEASE ASSETS 31,647 32,874 INTANGIBLE ASSETS—Net 1,064,064 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,979 2,286 DEFERRED CONTRACT COSTS 19,480 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 52,072 45,911 TOTAL $ 3,302,390 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 19,084 $ 27,599 Accrued expenses 54,711 71,445 Income taxes payable 3,509 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 2,967 2,876 Operating lease liabilities 7,049 5,484 Deferred revenues 40,064 35,239 Total current liabilities 135,384 151,565 LONG-TERM DEBT—Net 770,787 774,132 DEFERRED INCOME TAXES—Net 217,907 241,698 LONG-TERM LICENSING AGREEMENT—Net 29,246 30,752 OPERATING LEASE LIABILITIES 52,431 54,245 WARRANT LIABILITIES 55,585 36,405 OTHER LIABILITIES 1,550 2,658 Total liabilities 1,262,890 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 19 and 20) MEZZANINE EQUITY: Redeemable non-controlling interest 14,494 14,179 STOCKHOLDERS’ EQUITY: Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding — — Common stock—$0.0001 par; 5,000,000,000 shares authorized; 631,982,491 and 622,072,905 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively 63 62 Additional paid-in capital 2,829,184 2,754,055 Accumulated deficit (803,106) (707,946) Accumulated other comprehensive loss (1,135) (884) Total stockholders’ equity 2,025,006 2,045,287 TOTAL $ 3,302,390 $ 3,350,921 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except share and per share data) (Unaudited) For the Three Months Ended For the Six Months Ended June 30, June 30, 2023 2022 2023 2022 REVENUES $ 211,710 $ 192,786 $ 416,630 $ 379,609 COST OF REVENUES Cost of revenues, exclusive of amortization and impairment of acquired technologies 52,047 46,095 102,494 88,795 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Total cost of revenues 59,124 52,845 116,256 102,240 GROSS PROFIT 152,586 139,941 300,374 277,369 OPERATING EXPENSES: Research and development 43,363 38,758 84,359 74,438 Selling and marketing 35,936 31,091 69,467 57,894 General and administrative 46,141 39,509 88,006 83,717 Amortization of intangible assets 18,022 18,066 36,088 36,146 Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Total operating expenses 225,773 127,424 360,231 252,195 OPERATING (LOSS) INCOME (73,187) 12,517 (59,857) 25,174 INTEREST EXPENSE (14,014) (7,944) (27,846) (15,285) INTEREST INCOME 4,023 — 7,282 — CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS 3,613 — 1,009 — CHANGE IN FAIR VALUE OF WARRANT LIABILITIES (20,375) 21,004 (19,180) 23,140 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,578 OTHER INCOME—Net 315 112 368 194 PRETAX (LOSS) INCOME (99,625) 25,689 (98,224) 36,801 INCOME TAX BENEFIT (PROVISION) 2,281 (10,125) 3,064 (9,262) NET (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,344) 15,564 (95,160) 27,539 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (315) — (315) — NET (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,659) $ 15,564 $ (95,475) $ 27,539 Net (loss) income per share attributable to common stockholders: Basic $ (0.16) $ 0.03 $ (0.15) $ 0.05 Diluted $ (0.16) $ 0.02 $ (0.15) $ 0.04 Weighted-average shares used in computing net (loss) income per share attributable to common stockholders: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 621,235,776 639,964,696 618,740,340 640,650,297 COMPREHENSIVE (LOSS) INCOME: Net (loss) income including non-controlling interest (97,344) 15,564 (95,160) 27,539 Other comprehensive income (loss)—Foreign currency translation adjustment (285) (303) (251) (294) COMPREHENSIVE (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST (97,629) 15,261 (95,411) 27,245 Less: accretion of redeemable non-controlling interest (315) — (315) — COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS $ (97,944) $ 15,261 $ (95,726) $ 27,245 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (95,160) $ 27,539 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 17,966 13,490 Amortization of intangible assets 49,419 49,591 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (23,791) (43,703) Stock-based compensation 64,720 52,047 Amortization of deferred financing fees 851 949 Amortization of discount on debt 111 131 Change in fair value of derivative instruments (1,009) — Change in fair value of warrant liabilities 19,180 (23,140) Non-cash lease expense 1,232 2,152 Loss on disposal of software, equipment and property — 795 Gain on sale of cost method investment — (3,578) Other 115 47 Changes in: Accounts receivable—Net 2,322 (4,027) Deferred contract costs (315) (952) Other current assets 7,116 15,463 Deferred contract costs—Non-current 681 2,248 Other assets (5,267) (9,935) Operating lease assets (5) 1,576 Income taxes 772 13,851 Accounts payable (8,534) 3,204 Accrued expenses (14,975) (7,949) Operating lease liabilities (249) (4,308) Deferred revenues 4,825 2,256 Other liabilities (115) (62) Net cash provided by operating activities 102,632 87,685 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (29,084) (25,469) Acquisition of Safekeep, Inc., net of cash acquired — (32,242) Proceeds from sale of cost method investment — 3,892 Net cash used in investing activities (29,084) (53,819) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from exercise of stock options 20,827 15,511 Proceeds from employee stock purchase plan 1,326 — Payments for employee taxes withheld upon vesting of equity awards (11,539) — Principal payments on long-term debt (4,000) (4,000) Net cash provided by financing activities 6,614 11,511 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (373) (281) NET CHANGE IN CASH AND CASH EQUIVALENTS 79,789 45,096 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 403,577 $ 227,640 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 550 $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 26,946 $ 14,153 Cash paid for income taxes—Net $ 19,954 $ 38,946 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT (In thousands, except profit margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except percentages) 2023 2022 2023 2022 Gross Profit $ 152,586 $ 139,941 $ 300,374 $ 277,369 Amortization of acquired technologies 6,646 6,750 13,331 13,445 Impairment of acquired technologies 431 — 431 — Stock-based compensation and related employer payroll tax 2,358 1,680 4,473 2,613 Adjusted Gross Profit $ 162,021 $ 148,371 $ 318,609 $ 293,427 Gross Profit Margin 72% 73% 72% 73% Adjusted Gross Profit Margin 77% 77% 76% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 225,773 $ 127,424 $ 360,231 $ 252,195 Amortization of intangible assets (18,022) (18,066) (36,088) (36,146) Impairment of goodwill (77,405) — (77,405) — Impairment of intangible assets (4,906) — (4,906) — Stock-based compensation expense and related employer payroll tax (33,706) (26,973) (62,799) (50,695) Plaintiff litigation costs (1,537) — (2,523) — M&A and integration costs — (348) — (1,756) Lease overlap costs — — — (1,222) Lease abandonment — — — (1,338) Business Combination transaction and related costs — (324) — (1,056) Net costs related to divestiture — 6 — (53) Adjusted operating expenses $ 90,197 $ 81,719 $ 176,510 $ 159,929 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Operating (loss) income $ (73,187) $ 12,517 $ (59,857) $ 25,174 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Plaintiff litigation costs 1,537 — 2,523 — M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Adjusted operating income $ 71,824 $ 66,652 $ 142,099 $ 133,498 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED EBITDA (In thousands, except for EBITDA margin percentage data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Interest expense 14,014 7,944 27,846 15,285 Interest income (4,023) — (7,282) — Income tax (benefit) provision (2,281) 10,125 (3,064) 9,262 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Depreciation and amortization of software, equipment and property 2,187 2,444 4,414 5,407 Depreciation and amortization of software, equipment and property—Cost of revenue 6,573 4,239 13,552 8,083 EBITDA (56,206) 65,132 (10,275) 115,167 Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Adjusted EBITDA $ 80,899 $ 73,447 $ 160,433 $ 147,182 Adjusted EBITDA Margin 38% 38% 39% 39% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED NET INCOME (In thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net (loss) income $ (97,344) $ 15,564 $ (95,160) $ 27,539 Amortization of intangible assets 18,022 18,066 36,088 36,146 Amortization of acquired technologies—Cost of revenue 6,646 6,750 13,331 13,445 Impairment of acquired technologies—Cost of revenue 431 — 431 — Impairment of goodwill 77,405 — 77,405 — Impairment of intangible assets 4,906 — 4,906 — Stock-based compensation expense and related employer payroll tax 36,064 28,653 67,272 53,308 Change in fair value of derivative instruments (3,613) — (1,009) — Plaintiff litigation costs 1,537 — 2,523 — Change in fair value of warrant liabilities 20,375 (21,004) 19,180 (23,140) M&A and integration costs — 348 — 1,756 Lease overlap costs — — — 1,222 Lease abandonment — — — 1,338 Business Combination transaction and related costs — 324 — 1,056 Net costs related to divestiture — (6) — 53 Gain on sale of cost method investment — — — (3,578) Tax effect of adjustments (16,587) (11,287) (30,633) (22,867) Adjusted net income $ 47,842 $ 37,408 $ 94,334 $ 86,278 Adjusted net income per share attributable to common stockholders: Basic $ 0.08 $ 0.06 $ 0.15 $ 0.14 Diluted $ 0.07 $ 0.06 $ 0.15 $ 0.13 Weighted average shares outstanding: Basic 621,235,776 605,948,628 618,740,340 604,534,589 Diluted 651,427,506 639,964,696 648,887,781 640,650,297 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW (In thousands) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 69,554 $ 40,820 $ 102,632 $ 87,685 Less: Purchases of software, equipment, and property (14,560) (11,189) (29,084) (25,469) Free Cash Flow $ 54,994 $ 29,631 $ 73,548 $ 62,216 View source version on businesswire.com: https://www.businesswire.com/news/home/20230731741923/en/
Investor: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media: Michelle Hellyar Senior Director, Public Relations, CCC Intelligent Solutions Inc. mhellyar@cccis.com