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 Fourth Quarter and Fiscal Year 2023 Financial Results By: CCC Intelligent Solutions Inc. via Business Wire February 28, 2024 at 16:05 PM EST 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 and year ended December 31, 2023. “CCC delivered another year of strong financial performance, with year-over-year revenue growth in 2023 of 11% and adjusted EBITDA margin of 41% – both above our guidance ranges. We believe our strong performance is the result of a growing interest in advanced digital solutions across the P&C insurance economy and the trust our customers place in us from years of delivering innovation and operational performance,” said Githesh Ramamurthy, Chairman & CEO of CCC. “In 2023, we made significant investments in the business to position CCC for continued growth, including expanding our multi-sided network as well as increasing our growth capacity and capabilities,” continued Ramamurthy. “While making these critical investments to support our customers, we also delivered significant year-over-year margin expansion.” Fourth Quarter 2023 Financial Highlights Revenue Total revenue was $228.6 million for the fourth quarter of 2023, an increase of 12% from $204.1 million for the fourth quarter of 2022. Profitability GAAP gross profit was $172.7 million, representing a gross margin of 76%, for the fourth quarter of 2023, compared with $145.5 million, representing a gross margin of 71%, for the fourth quarter of 2022. Adjusted gross profit was $181.5 million, representing an adjusted gross profit margin of 79%, for the fourth quarter of 2023, compared with $157.2 million, representing an adjusted gross profit margin of 77%, for the fourth quarter of 2022. GAAP operating income was $19.4 million for the fourth quarter of 2023, compared with GAAP operating income of $9.7 million for the fourth quarter of 2022. Adjusted operating income was $90.6 million for the fourth quarter of 2023, compared with adjusted operating income of $72.2 million for the fourth quarter of 2022. GAAP net income was $26.3 million for the fourth quarter of 2023, compared with GAAP net income of $1.1 million for the fourth quarter of 2022. Adjusted net income was $59.0 million for the fourth quarter of 2023, compared with adjusted net income of $44.0 million for the fourth quarter of 2022. Adjusted EBITDA was $100.1 million for the fourth quarter of 2023, compared with adjusted EBITDA of $80.1 million for the fourth quarter of 2022. Adjusted EBITDA grew 25% in the fourth quarter of 2023 compared with the fourth quarter of 2022. Full Year 2023 Financial Highlights Revenue Total revenue was $866.4 million for the full year of 2023, an increase of 11% from $782.4 million for the full year of 2022. Profitability GAAP gross profit was $636.2 million, representing a gross margin of 73% for the full year of 2023, compared with $568.5 million, representing a gross margin of 73% for the full year of 2022. Adjusted gross profit was $672.2 million, representing an adjusted gross profit margin of 78% for the full year of 2023, compared with $604.8 million, representing an adjusted gross profit margin of 77% for the full year of 2022. GAAP operating loss was $23.9 million for the full year of 2023, compared with GAAP operating income of $51.9 million for the full year of 2022. Adjusted operating income was $315.4 million for the full year of 2023, compared with adjusted operating income of $276.7 million for the full year of 2022. GAAP net loss was $90.1 million for the full year of 2023, compared with GAAP net income of $38.4 million for the full year of 2022. Adjusted net income was $210.5 million for the full year of 2023, compared with adjusted net income of $176.4 million for the full year of 2022. Adjusted EBITDA was $353.4 million for the full year of 2023, compared with adjusted EBITDA of $305.4 million for the full year of 2022. Adjusted EBITDA grew 16% in the full year of 2023 compared with the full year of 2022. Liquidity CCC had $195.6 million in cash and cash equivalents and $784.0 million of total debt on December 31, 2023. The Company generated $250.0 million in cash from operating activities and had free cash flow of $195.0 million during the full year of 2023, compared with $199.9 million generated in cash from operating activities and $152.0 million in free cash flow in the full year 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. 4th Quarter and Recent Business Highlights CCC continued to deliver innovative solutions to its customers at scale, touching more claims with more capabilities than ever before. In 2023, CCC processed the highest number of U.S. auto insurance claims in the Company’s history, and increasingly those claims are benefiting from CCC artificial intelligence to help clients make better decisions faster. To date, over 19 million unique claims have been processed using a CCC AI-enabled solution and we have doubled the number of insurers using our AI-based CCC® Estimate-STP to process claims over the past year. CCC continued to expand its network of customers by adding over 1,000 repair facilities and over 500 parts dealers in 2023. In total, CCC has more than 35,000 companies in its network, including approximately 29,500 repair facilities, approximately 5,000 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. Mobile Jumpstart is CCC’s new AI-driven feature within CCC ONE® Estimating-IQ that helps estimators use their mobile phones to reduce the time it takes to prepare estimates. Since its introduction in late Q4, more than 3,000 repair facilities have used Mobile Jumpstart to transform the way repair technicians prepare estimates in the capacity-constrained collision repair industry. In January 2024, Mobile Jumpstart users were able to complete an initial estimate in an average time of less than 2 minutes vs. the traditional industry average of about half an hour. Certain existing shareholders recently completed two secondary offerings of the Company’s common stock. The first offering was of 69,875,000 shares in November 2023. Of this amount, the Company repurchased 32,500,000 shares for $328.5 million. The second offering was of 22,000,000 shares in January 2024. The Company did not receive any proceeds from the sale of shares by the existing stockholders in either offering. Business Outlook Based on information as of today, February 28, 2024, the Company is issuing the following financial guidance: First Quarter Fiscal 2024 Full Year Fiscal 2024 Revenue $ 224.5 million to $226.0 million $ 942.0 million to $950.0 million Adjusted EBITDA $ 90.5 million to $92.0 million $ 387.0 million to $395.0 million Conference Call Information CCC will host a conference call today, February 28, 2024, 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; the impact of public health outbreaks, epidemics or pandemics on our business and results of operations; 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; 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; our reliance on third-party data, technology and intellectual property; changes in our customers’ or the public’s perceptions regarding the use of artificial intelligence; 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, 2023 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 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022 (In thousands, except share data) December 31, December 31, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 195,572 $ 323,788 Accounts receivable—Net of allowances of $5,574 and $5,339 as of December 31, 2023 and 2022, respectively 102,365 98,353 Income taxes receivable 1,798 4,015 Deferred contract costs 17,900 16,556 Other current assets 32,364 36,358 Total current assets 349,999 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 160,416 146,443 OPERATING LEASE ASSETS 30,456 32,874 INTANGIBLE ASSETS—Net 1,015,046 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,672 2,286 DEFERRED CONTRACT COSTS 22,302 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 43,197 45,911 TOTAL $ 3,051,040 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 16,324 $ 27,599 Accrued expenses 71,478 71,445 Income taxes payable 3,689 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 3,061 2,876 Operating lease liabilities 6,788 5,484 Deferred revenues 43,567 35,239 Total current liabilities 152,907 151,565 LONG-TERM DEBT—Net 767,504 774,132 DEFERRED INCOME TAXES—Net 195,365 241,698 LONG-TERM LICENSING AGREEMENT—Net 27,692 30,752 OPERATING LEASE LIABILITIES 50,796 54,245 WARRANT LIABILITIES 51,501 36,405 OTHER LIABILITIES 6,414 2,658 Total liabilities 1,252,179 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 23 and 24) MEZZANINE EQUITY: Redeemable non-controlling interest 16,584 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; 603,128,781 and 622,072,905 shares issued and outstanding at December 31, 2023 and 2022, respectively 60 62 Additional paid-in capital 2,909,757 2,754,055 Accumulated deficit (1,126,467) (707,946) Accumulated other comprehensive loss (1,073) (884) Total stockholders’ equity 1,782,277 2,045,287 TOTAL $ 3,051,040 $ 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) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 REVENUES $ 228,601 $ 204,106 $ 866,378 $ 782,448 COST OF REVENUES Cost of revenues, exclusive of amortization of acquired technologies 49,370 51,827 203,324 187,001 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Impairment of acquired technologies — — 431 — Total cost of revenues (1) 55,937 58,572 230,219 213,939 GROSS PROFIT 172,664 145,534 636,159 568,509 OPERATING EXPENSES: Research and development (1) 45,215 42,246 173,106 156,957 Selling and marketing (1) 35,779 30,863 140,851 119,594 General and administrative (1) 54,367 44,665 191,844 167,758 Amortization of intangible assets 17,942 18,066 71,972 72,278 Impairment of goodwill — — 77,405 — Impairment of intangible assets — — 4,906 — Total operating expenses 153,303 135,840 660,084 516,587 OPERATING INCOME (LOSS) 19,361 9,694 (23,925) 51,922 INTEREST EXPENSE (16,652) (13,204) (63,577) (38,990) INTEREST INCOME 3,806 908 16,252 908 CHANGE IN FAIR VALUE OF WARRANT LIABILITIES 30,308 2,621 (15,096) 26,073 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,587 OTHER INCOME—Net (3,761) (205) 1,799 6,362 PRETAX INCOME (LOSS) 33,062 (186) (84,547) 49,862 INCOME TAX (PROVISION) BENEFIT (6,770) 1,258 (5,524) (11,456) NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,292 1,072 (90,071) 38,406 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (1,080) — (2,405) — NET INCOME (LOSS) ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC.'S COMMON STOCKHOLDERS $ 25,212 $ 1,072 $ (92,476) $ 38,406 Net income (loss) per share attributable to common stockholders: Basic $ 0.04 $ 0.00 $ (0.15) $ 0.06 Diluted (2) $ (0.01) $ 0.00 $ (0.15) $ 0.06 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 609,387,346 643,941,176 617,889,384 642,841,596 COMPREHENSIVE INCOME (LOSS): Net income (loss) including non-controlling interest 26,292 1,072 (90,071) 38,406 Other comprehensive income (loss)—Foreign currency translation adjustment 85 235 (189) (569) COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,377 1,307 (90,260) 37,837 Less: accretion of redeemable non-controlling interest (1,080) — (2,405) — COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST $ 25,297 $ 1,307 $ (92,665) $ 37,837 (1) Includes stock-based compensation expense as follows (in thousands): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cost of revenues $ 2,207 $ 1,645 $ 8,802 $ 5,812 Research and development 6,634 5,103 25,467 19,536 Sales and marketing 7,940 6,978 33,204 25,309 General and administrative 23,266 15,002 77,045 58,840 Total stock-based compensation expense $ 40,047 $ 28,728 $ 144,518 $ 109,497 (2) The following table sets forth a reconciliation of the numerator and denominator used to compute diluted earnings per share of common stock (in thousands, except for share data): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Numerator Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Accretion of redeemable non-controlling interest (1,080) — (2,405) — Change in fair value of in-the-money warrant liabilities (30,308) — — — Net (loss) income attributable to common stockholders $ (5,096) $ 1,072 $ (92,476) $ 38,406 Denominator Weighted average shares of common stock - basic 609,128,048 612,448,089 617,889,384 607,760,886 Dilutive effect of stock-based awards - 31,493,087 - 35,080,710 Dilutive effect of assumed conversion of warrants 259,298 - - - Weighted average shares of common stock - diluted 609,387,346 643,941,176 617,889,384 642,841,596 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In thousands) Year ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (90,071) $ 38,406 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 36,902 27,933 Amortization of intangible assets 98,436 99,216 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (46,333) (34,401) Stock-based compensation 144,518 109,497 Amortization of deferred financing fees 1,753 1,878 Amortization of discount on debt 233 257 Change in fair value of derivative instruments 5,743 (5,663) Change in fair value of warrant liabilities 15,096 (26,073) Change in fair value of estimated contingent consideration — (100) Loss on early extinguishment of debt — — Non-cash lease expense 1,232 3,697 Gain on divestitures — — Gain on sale of cost method investment — (3,587) Loss on disposal of software, equipment and property 79 2,651 Other 620 104 Changes in: Accounts receivable—Net (4,001) (19,844) Deferred contract costs (1,344) (1,487) Other current assets 4,046 9,792 Deferred contract costs—Non-current (2,141) 1,956 Other assets (3,649) (14,501) Operating lease assets 1,186 3,448 Income taxes 4,984 (10,018) Accounts payable (11,270) 15,516 Accrued expenses 1,041 4,592 Operating lease liabilities (2,145) (7,241) Deferred revenues 8,321 4,196 Extinguishment of interest rate swap liability — — Other liabilities 4,055 (317) Net cash provided by operating activities 250,033 199,907 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (55,032) (47,951) Proceeds from sale of cost method investment — 3,901 Acquisition of Safekeep, Inc., net of cash — (32,242) Purchase of equity method investment — — Purchase of intangible asset — — Net cash used in investing activities (55,032) (76,292) CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: Proceeds from exercise of stock options 25,381 27,693 Proceeds from employee stock purchase plan 4,761 3,197 Principal payments on long-term debt (8,000) (8,000) Payments for employee taxes withheld upon vesting of equity awards (16,715) (5,015) Repurchase of common stock (328,453) — Proceeds from issuance of long-term debt, net of fees paid to lender — — Net proceeds from equity infusion from the Business Combination — — Payment of fees associated with early extinguishment of long-term debt — — Dividends to CCCIS stockholders — — Deemed distribution to CCCIS option holders — — Proceeds from issuance of common stock — — Tax effect of Business Combination transaction costs — — Net cash (used in) provided by financing activities (323,026) 17,875 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (191) (246) NET CHANGE IN CASH AND CASH EQUIVALENTS (128,216) 141,244 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 195,572 $ 323,788 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 2,044 $ 100 Leasehold improvements acquired by tenant improvement allowance $ — $ — Fair value of assumed Public Warrants exercised $ — $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 61,367 $ 36,636 Cash paid for income taxes—Net $ 42,948 $ 55,697 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Gross Profit $ 172,664 $ 145,534 $ 636,159 $ 568,509 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Stock-based compensation and related employer payroll tax 2,223 1,712 9,129 6,090 Impairment of acquired technologies — — 431 — Contract termination costs — 3,248 — 3,248 Business combination transaction costs — — — — Adjusted Gross Profit $ 181,454 $ 157,239 $ 672,183 $ 604,785 Gross Profit Margin 76% 71% 73% 73% Adjusted Gross Profit Margin 79% 77% 78% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 153,303 $ 135,840 $ 660,084 $ 516,587 Amortization of intangible assets (17,942) (18,066) (71,972) (72,278) Stock-based compensation expense and related employer payroll tax (38,001) (27,279) (138,578) (105,775) Goodwill and intangible asset impairment charges — — (82,311) — Plaintiff litigation costs (1,150) (894) (5,068) (894) M&A and integration costs (3,372) (11) (3,372) (1,772) Business combination transaction and related costs, including secondary offering costs (2,031) (174) (2,031) (1,330) Lease abandonment — (4,915) — (6,137) Lease overlap costs — — — (1,338) Change in fair value of contingent consideration — 100 — 100 Income related to divestiture, net — 459 — 877 Adjusted operating expenses $ 90,807 $ 85,060 $ 356,752 $ 328,040 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating income (loss) $ 19,361 $ 9,694 $ (23,925) $ 51,922 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Adjusted operating income $ 90,647 $ 72,179 $ 315,431 $ 276,745 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Interest expense 16,652 13,204 63,577 38,990 Interest income (3,806) (908) (16,252) (908) Income tax provision (benefit) 6,770 (1,258) 5,524 11,456 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Depreciation and amortization related to software, equipment and property 2,046 2,327 8,577 10,161 Depreciation and amortization related to software, equipment and property—Cost of revenue 6,831 5,451 28,325 17,772 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Income from derivative instruments (2,016) — (6,460) — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Gain on sale of cost method investment — — — (3,587) Income related to divestiture, net — (459) — (877) Adjusted EBITDA $ 100,053 $ 80,080 $ 353,415 $ 305,377 Adjusted EBITDA Margin 44% 39% 41% 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Gain on sale of cost method investment — — — (3,587) Tax effect of adjustments (14,584) (17,302) (59,638) (51,495) Adjusted net income $ 58,992 $ 43,962 $ 210,486 $ 176,411 Adjusted net income per share attributable to common stockholders Basic $ 0.10 $ 0.07 $ 0.34 $ 0.29 Diluted $ 0.09 $ 0.07 $ 0.32 $ 0.27 Weighted average shares outstanding Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 649,260,826 643,941,176 651,587,360 642,841,596 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 86,895 $ 81,469 $ 250,033 $ 199,907 Less: Purchases of software, equipment and property (11,845) (9,107) (55,032) (47,951) Free Cash Flow $ 75,050 $ 72,362 $ 195,001 $ 151,956 View source version on businesswire.com: https://www.businesswire.com/news/home/20240226271984/en/Contacts Investor Contact: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media Contact: 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 Fourth Quarter and Fiscal Year 2023 Financial Results By: CCC Intelligent Solutions Inc. via Business Wire February 28, 2024 at 16:05 PM EST 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 and year ended December 31, 2023. “CCC delivered another year of strong financial performance, with year-over-year revenue growth in 2023 of 11% and adjusted EBITDA margin of 41% – both above our guidance ranges. We believe our strong performance is the result of a growing interest in advanced digital solutions across the P&C insurance economy and the trust our customers place in us from years of delivering innovation and operational performance,” said Githesh Ramamurthy, Chairman & CEO of CCC. “In 2023, we made significant investments in the business to position CCC for continued growth, including expanding our multi-sided network as well as increasing our growth capacity and capabilities,” continued Ramamurthy. “While making these critical investments to support our customers, we also delivered significant year-over-year margin expansion.” Fourth Quarter 2023 Financial Highlights Revenue Total revenue was $228.6 million for the fourth quarter of 2023, an increase of 12% from $204.1 million for the fourth quarter of 2022. Profitability GAAP gross profit was $172.7 million, representing a gross margin of 76%, for the fourth quarter of 2023, compared with $145.5 million, representing a gross margin of 71%, for the fourth quarter of 2022. Adjusted gross profit was $181.5 million, representing an adjusted gross profit margin of 79%, for the fourth quarter of 2023, compared with $157.2 million, representing an adjusted gross profit margin of 77%, for the fourth quarter of 2022. GAAP operating income was $19.4 million for the fourth quarter of 2023, compared with GAAP operating income of $9.7 million for the fourth quarter of 2022. Adjusted operating income was $90.6 million for the fourth quarter of 2023, compared with adjusted operating income of $72.2 million for the fourth quarter of 2022. GAAP net income was $26.3 million for the fourth quarter of 2023, compared with GAAP net income of $1.1 million for the fourth quarter of 2022. Adjusted net income was $59.0 million for the fourth quarter of 2023, compared with adjusted net income of $44.0 million for the fourth quarter of 2022. Adjusted EBITDA was $100.1 million for the fourth quarter of 2023, compared with adjusted EBITDA of $80.1 million for the fourth quarter of 2022. Adjusted EBITDA grew 25% in the fourth quarter of 2023 compared with the fourth quarter of 2022. Full Year 2023 Financial Highlights Revenue Total revenue was $866.4 million for the full year of 2023, an increase of 11% from $782.4 million for the full year of 2022. Profitability GAAP gross profit was $636.2 million, representing a gross margin of 73% for the full year of 2023, compared with $568.5 million, representing a gross margin of 73% for the full year of 2022. Adjusted gross profit was $672.2 million, representing an adjusted gross profit margin of 78% for the full year of 2023, compared with $604.8 million, representing an adjusted gross profit margin of 77% for the full year of 2022. GAAP operating loss was $23.9 million for the full year of 2023, compared with GAAP operating income of $51.9 million for the full year of 2022. Adjusted operating income was $315.4 million for the full year of 2023, compared with adjusted operating income of $276.7 million for the full year of 2022. GAAP net loss was $90.1 million for the full year of 2023, compared with GAAP net income of $38.4 million for the full year of 2022. Adjusted net income was $210.5 million for the full year of 2023, compared with adjusted net income of $176.4 million for the full year of 2022. Adjusted EBITDA was $353.4 million for the full year of 2023, compared with adjusted EBITDA of $305.4 million for the full year of 2022. Adjusted EBITDA grew 16% in the full year of 2023 compared with the full year of 2022. Liquidity CCC had $195.6 million in cash and cash equivalents and $784.0 million of total debt on December 31, 2023. The Company generated $250.0 million in cash from operating activities and had free cash flow of $195.0 million during the full year of 2023, compared with $199.9 million generated in cash from operating activities and $152.0 million in free cash flow in the full year 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. 4th Quarter and Recent Business Highlights CCC continued to deliver innovative solutions to its customers at scale, touching more claims with more capabilities than ever before. In 2023, CCC processed the highest number of U.S. auto insurance claims in the Company’s history, and increasingly those claims are benefiting from CCC artificial intelligence to help clients make better decisions faster. To date, over 19 million unique claims have been processed using a CCC AI-enabled solution and we have doubled the number of insurers using our AI-based CCC® Estimate-STP to process claims over the past year. CCC continued to expand its network of customers by adding over 1,000 repair facilities and over 500 parts dealers in 2023. In total, CCC has more than 35,000 companies in its network, including approximately 29,500 repair facilities, approximately 5,000 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. Mobile Jumpstart is CCC’s new AI-driven feature within CCC ONE® Estimating-IQ that helps estimators use their mobile phones to reduce the time it takes to prepare estimates. Since its introduction in late Q4, more than 3,000 repair facilities have used Mobile Jumpstart to transform the way repair technicians prepare estimates in the capacity-constrained collision repair industry. In January 2024, Mobile Jumpstart users were able to complete an initial estimate in an average time of less than 2 minutes vs. the traditional industry average of about half an hour. Certain existing shareholders recently completed two secondary offerings of the Company’s common stock. The first offering was of 69,875,000 shares in November 2023. Of this amount, the Company repurchased 32,500,000 shares for $328.5 million. The second offering was of 22,000,000 shares in January 2024. The Company did not receive any proceeds from the sale of shares by the existing stockholders in either offering. Business Outlook Based on information as of today, February 28, 2024, the Company is issuing the following financial guidance: First Quarter Fiscal 2024 Full Year Fiscal 2024 Revenue $ 224.5 million to $226.0 million $ 942.0 million to $950.0 million Adjusted EBITDA $ 90.5 million to $92.0 million $ 387.0 million to $395.0 million Conference Call Information CCC will host a conference call today, February 28, 2024, 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; the impact of public health outbreaks, epidemics or pandemics on our business and results of operations; 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; 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; our reliance on third-party data, technology and intellectual property; changes in our customers’ or the public’s perceptions regarding the use of artificial intelligence; 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, 2023 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 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022 (In thousands, except share data) December 31, December 31, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 195,572 $ 323,788 Accounts receivable—Net of allowances of $5,574 and $5,339 as of December 31, 2023 and 2022, respectively 102,365 98,353 Income taxes receivable 1,798 4,015 Deferred contract costs 17,900 16,556 Other current assets 32,364 36,358 Total current assets 349,999 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 160,416 146,443 OPERATING LEASE ASSETS 30,456 32,874 INTANGIBLE ASSETS—Net 1,015,046 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,672 2,286 DEFERRED CONTRACT COSTS 22,302 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 43,197 45,911 TOTAL $ 3,051,040 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 16,324 $ 27,599 Accrued expenses 71,478 71,445 Income taxes payable 3,689 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 3,061 2,876 Operating lease liabilities 6,788 5,484 Deferred revenues 43,567 35,239 Total current liabilities 152,907 151,565 LONG-TERM DEBT—Net 767,504 774,132 DEFERRED INCOME TAXES—Net 195,365 241,698 LONG-TERM LICENSING AGREEMENT—Net 27,692 30,752 OPERATING LEASE LIABILITIES 50,796 54,245 WARRANT LIABILITIES 51,501 36,405 OTHER LIABILITIES 6,414 2,658 Total liabilities 1,252,179 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 23 and 24) MEZZANINE EQUITY: Redeemable non-controlling interest 16,584 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; 603,128,781 and 622,072,905 shares issued and outstanding at December 31, 2023 and 2022, respectively 60 62 Additional paid-in capital 2,909,757 2,754,055 Accumulated deficit (1,126,467) (707,946) Accumulated other comprehensive loss (1,073) (884) Total stockholders’ equity 1,782,277 2,045,287 TOTAL $ 3,051,040 $ 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) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 REVENUES $ 228,601 $ 204,106 $ 866,378 $ 782,448 COST OF REVENUES Cost of revenues, exclusive of amortization of acquired technologies 49,370 51,827 203,324 187,001 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Impairment of acquired technologies — — 431 — Total cost of revenues (1) 55,937 58,572 230,219 213,939 GROSS PROFIT 172,664 145,534 636,159 568,509 OPERATING EXPENSES: Research and development (1) 45,215 42,246 173,106 156,957 Selling and marketing (1) 35,779 30,863 140,851 119,594 General and administrative (1) 54,367 44,665 191,844 167,758 Amortization of intangible assets 17,942 18,066 71,972 72,278 Impairment of goodwill — — 77,405 — Impairment of intangible assets — — 4,906 — Total operating expenses 153,303 135,840 660,084 516,587 OPERATING INCOME (LOSS) 19,361 9,694 (23,925) 51,922 INTEREST EXPENSE (16,652) (13,204) (63,577) (38,990) INTEREST INCOME 3,806 908 16,252 908 CHANGE IN FAIR VALUE OF WARRANT LIABILITIES 30,308 2,621 (15,096) 26,073 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,587 OTHER INCOME—Net (3,761) (205) 1,799 6,362 PRETAX INCOME (LOSS) 33,062 (186) (84,547) 49,862 INCOME TAX (PROVISION) BENEFIT (6,770) 1,258 (5,524) (11,456) NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,292 1,072 (90,071) 38,406 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (1,080) — (2,405) — NET INCOME (LOSS) ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC.'S COMMON STOCKHOLDERS $ 25,212 $ 1,072 $ (92,476) $ 38,406 Net income (loss) per share attributable to common stockholders: Basic $ 0.04 $ 0.00 $ (0.15) $ 0.06 Diluted (2) $ (0.01) $ 0.00 $ (0.15) $ 0.06 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 609,387,346 643,941,176 617,889,384 642,841,596 COMPREHENSIVE INCOME (LOSS): Net income (loss) including non-controlling interest 26,292 1,072 (90,071) 38,406 Other comprehensive income (loss)—Foreign currency translation adjustment 85 235 (189) (569) COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,377 1,307 (90,260) 37,837 Less: accretion of redeemable non-controlling interest (1,080) — (2,405) — COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST $ 25,297 $ 1,307 $ (92,665) $ 37,837 (1) Includes stock-based compensation expense as follows (in thousands): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cost of revenues $ 2,207 $ 1,645 $ 8,802 $ 5,812 Research and development 6,634 5,103 25,467 19,536 Sales and marketing 7,940 6,978 33,204 25,309 General and administrative 23,266 15,002 77,045 58,840 Total stock-based compensation expense $ 40,047 $ 28,728 $ 144,518 $ 109,497 (2) The following table sets forth a reconciliation of the numerator and denominator used to compute diluted earnings per share of common stock (in thousands, except for share data): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Numerator Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Accretion of redeemable non-controlling interest (1,080) — (2,405) — Change in fair value of in-the-money warrant liabilities (30,308) — — — Net (loss) income attributable to common stockholders $ (5,096) $ 1,072 $ (92,476) $ 38,406 Denominator Weighted average shares of common stock - basic 609,128,048 612,448,089 617,889,384 607,760,886 Dilutive effect of stock-based awards - 31,493,087 - 35,080,710 Dilutive effect of assumed conversion of warrants 259,298 - - - Weighted average shares of common stock - diluted 609,387,346 643,941,176 617,889,384 642,841,596 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In thousands) Year ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (90,071) $ 38,406 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 36,902 27,933 Amortization of intangible assets 98,436 99,216 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (46,333) (34,401) Stock-based compensation 144,518 109,497 Amortization of deferred financing fees 1,753 1,878 Amortization of discount on debt 233 257 Change in fair value of derivative instruments 5,743 (5,663) Change in fair value of warrant liabilities 15,096 (26,073) Change in fair value of estimated contingent consideration — (100) Loss on early extinguishment of debt — — Non-cash lease expense 1,232 3,697 Gain on divestitures — — Gain on sale of cost method investment — (3,587) Loss on disposal of software, equipment and property 79 2,651 Other 620 104 Changes in: Accounts receivable—Net (4,001) (19,844) Deferred contract costs (1,344) (1,487) Other current assets 4,046 9,792 Deferred contract costs—Non-current (2,141) 1,956 Other assets (3,649) (14,501) Operating lease assets 1,186 3,448 Income taxes 4,984 (10,018) Accounts payable (11,270) 15,516 Accrued expenses 1,041 4,592 Operating lease liabilities (2,145) (7,241) Deferred revenues 8,321 4,196 Extinguishment of interest rate swap liability — — Other liabilities 4,055 (317) Net cash provided by operating activities 250,033 199,907 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (55,032) (47,951) Proceeds from sale of cost method investment — 3,901 Acquisition of Safekeep, Inc., net of cash — (32,242) Purchase of equity method investment — — Purchase of intangible asset — — Net cash used in investing activities (55,032) (76,292) CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: Proceeds from exercise of stock options 25,381 27,693 Proceeds from employee stock purchase plan 4,761 3,197 Principal payments on long-term debt (8,000) (8,000) Payments for employee taxes withheld upon vesting of equity awards (16,715) (5,015) Repurchase of common stock (328,453) — Proceeds from issuance of long-term debt, net of fees paid to lender — — Net proceeds from equity infusion from the Business Combination — — Payment of fees associated with early extinguishment of long-term debt — — Dividends to CCCIS stockholders — — Deemed distribution to CCCIS option holders — — Proceeds from issuance of common stock — — Tax effect of Business Combination transaction costs — — Net cash (used in) provided by financing activities (323,026) 17,875 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (191) (246) NET CHANGE IN CASH AND CASH EQUIVALENTS (128,216) 141,244 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 195,572 $ 323,788 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 2,044 $ 100 Leasehold improvements acquired by tenant improvement allowance $ — $ — Fair value of assumed Public Warrants exercised $ — $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 61,367 $ 36,636 Cash paid for income taxes—Net $ 42,948 $ 55,697 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Gross Profit $ 172,664 $ 145,534 $ 636,159 $ 568,509 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Stock-based compensation and related employer payroll tax 2,223 1,712 9,129 6,090 Impairment of acquired technologies — — 431 — Contract termination costs — 3,248 — 3,248 Business combination transaction costs — — — — Adjusted Gross Profit $ 181,454 $ 157,239 $ 672,183 $ 604,785 Gross Profit Margin 76% 71% 73% 73% Adjusted Gross Profit Margin 79% 77% 78% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 153,303 $ 135,840 $ 660,084 $ 516,587 Amortization of intangible assets (17,942) (18,066) (71,972) (72,278) Stock-based compensation expense and related employer payroll tax (38,001) (27,279) (138,578) (105,775) Goodwill and intangible asset impairment charges — — (82,311) — Plaintiff litigation costs (1,150) (894) (5,068) (894) M&A and integration costs (3,372) (11) (3,372) (1,772) Business combination transaction and related costs, including secondary offering costs (2,031) (174) (2,031) (1,330) Lease abandonment — (4,915) — (6,137) Lease overlap costs — — — (1,338) Change in fair value of contingent consideration — 100 — 100 Income related to divestiture, net — 459 — 877 Adjusted operating expenses $ 90,807 $ 85,060 $ 356,752 $ 328,040 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating income (loss) $ 19,361 $ 9,694 $ (23,925) $ 51,922 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Adjusted operating income $ 90,647 $ 72,179 $ 315,431 $ 276,745 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Interest expense 16,652 13,204 63,577 38,990 Interest income (3,806) (908) (16,252) (908) Income tax provision (benefit) 6,770 (1,258) 5,524 11,456 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Depreciation and amortization related to software, equipment and property 2,046 2,327 8,577 10,161 Depreciation and amortization related to software, equipment and property—Cost of revenue 6,831 5,451 28,325 17,772 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Income from derivative instruments (2,016) — (6,460) — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Gain on sale of cost method investment — — — (3,587) Income related to divestiture, net — (459) — (877) Adjusted EBITDA $ 100,053 $ 80,080 $ 353,415 $ 305,377 Adjusted EBITDA Margin 44% 39% 41% 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Gain on sale of cost method investment — — — (3,587) Tax effect of adjustments (14,584) (17,302) (59,638) (51,495) Adjusted net income $ 58,992 $ 43,962 $ 210,486 $ 176,411 Adjusted net income per share attributable to common stockholders Basic $ 0.10 $ 0.07 $ 0.34 $ 0.29 Diluted $ 0.09 $ 0.07 $ 0.32 $ 0.27 Weighted average shares outstanding Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 649,260,826 643,941,176 651,587,360 642,841,596 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 86,895 $ 81,469 $ 250,033 $ 199,907 Less: Purchases of software, equipment and property (11,845) (9,107) (55,032) (47,951) Free Cash Flow $ 75,050 $ 72,362 $ 195,001 $ 151,956 View source version on businesswire.com: https://www.businesswire.com/news/home/20240226271984/en/Contacts Investor Contact: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media Contact: 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 and year ended December 31, 2023. “CCC delivered another year of strong financial performance, with year-over-year revenue growth in 2023 of 11% and adjusted EBITDA margin of 41% – both above our guidance ranges. We believe our strong performance is the result of a growing interest in advanced digital solutions across the P&C insurance economy and the trust our customers place in us from years of delivering innovation and operational performance,” said Githesh Ramamurthy, Chairman & CEO of CCC. “In 2023, we made significant investments in the business to position CCC for continued growth, including expanding our multi-sided network as well as increasing our growth capacity and capabilities,” continued Ramamurthy. “While making these critical investments to support our customers, we also delivered significant year-over-year margin expansion.” Fourth Quarter 2023 Financial Highlights Revenue Total revenue was $228.6 million for the fourth quarter of 2023, an increase of 12% from $204.1 million for the fourth quarter of 2022. Profitability GAAP gross profit was $172.7 million, representing a gross margin of 76%, for the fourth quarter of 2023, compared with $145.5 million, representing a gross margin of 71%, for the fourth quarter of 2022. Adjusted gross profit was $181.5 million, representing an adjusted gross profit margin of 79%, for the fourth quarter of 2023, compared with $157.2 million, representing an adjusted gross profit margin of 77%, for the fourth quarter of 2022. GAAP operating income was $19.4 million for the fourth quarter of 2023, compared with GAAP operating income of $9.7 million for the fourth quarter of 2022. Adjusted operating income was $90.6 million for the fourth quarter of 2023, compared with adjusted operating income of $72.2 million for the fourth quarter of 2022. GAAP net income was $26.3 million for the fourth quarter of 2023, compared with GAAP net income of $1.1 million for the fourth quarter of 2022. Adjusted net income was $59.0 million for the fourth quarter of 2023, compared with adjusted net income of $44.0 million for the fourth quarter of 2022. Adjusted EBITDA was $100.1 million for the fourth quarter of 2023, compared with adjusted EBITDA of $80.1 million for the fourth quarter of 2022. Adjusted EBITDA grew 25% in the fourth quarter of 2023 compared with the fourth quarter of 2022. Full Year 2023 Financial Highlights Revenue Total revenue was $866.4 million for the full year of 2023, an increase of 11% from $782.4 million for the full year of 2022. Profitability GAAP gross profit was $636.2 million, representing a gross margin of 73% for the full year of 2023, compared with $568.5 million, representing a gross margin of 73% for the full year of 2022. Adjusted gross profit was $672.2 million, representing an adjusted gross profit margin of 78% for the full year of 2023, compared with $604.8 million, representing an adjusted gross profit margin of 77% for the full year of 2022. GAAP operating loss was $23.9 million for the full year of 2023, compared with GAAP operating income of $51.9 million for the full year of 2022. Adjusted operating income was $315.4 million for the full year of 2023, compared with adjusted operating income of $276.7 million for the full year of 2022. GAAP net loss was $90.1 million for the full year of 2023, compared with GAAP net income of $38.4 million for the full year of 2022. Adjusted net income was $210.5 million for the full year of 2023, compared with adjusted net income of $176.4 million for the full year of 2022. Adjusted EBITDA was $353.4 million for the full year of 2023, compared with adjusted EBITDA of $305.4 million for the full year of 2022. Adjusted EBITDA grew 16% in the full year of 2023 compared with the full year of 2022. Liquidity CCC had $195.6 million in cash and cash equivalents and $784.0 million of total debt on December 31, 2023. The Company generated $250.0 million in cash from operating activities and had free cash flow of $195.0 million during the full year of 2023, compared with $199.9 million generated in cash from operating activities and $152.0 million in free cash flow in the full year 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. 4th Quarter and Recent Business Highlights CCC continued to deliver innovative solutions to its customers at scale, touching more claims with more capabilities than ever before. In 2023, CCC processed the highest number of U.S. auto insurance claims in the Company’s history, and increasingly those claims are benefiting from CCC artificial intelligence to help clients make better decisions faster. To date, over 19 million unique claims have been processed using a CCC AI-enabled solution and we have doubled the number of insurers using our AI-based CCC® Estimate-STP to process claims over the past year. CCC continued to expand its network of customers by adding over 1,000 repair facilities and over 500 parts dealers in 2023. In total, CCC has more than 35,000 companies in its network, including approximately 29,500 repair facilities, approximately 5,000 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. Mobile Jumpstart is CCC’s new AI-driven feature within CCC ONE® Estimating-IQ that helps estimators use their mobile phones to reduce the time it takes to prepare estimates. Since its introduction in late Q4, more than 3,000 repair facilities have used Mobile Jumpstart to transform the way repair technicians prepare estimates in the capacity-constrained collision repair industry. In January 2024, Mobile Jumpstart users were able to complete an initial estimate in an average time of less than 2 minutes vs. the traditional industry average of about half an hour. Certain existing shareholders recently completed two secondary offerings of the Company’s common stock. The first offering was of 69,875,000 shares in November 2023. Of this amount, the Company repurchased 32,500,000 shares for $328.5 million. The second offering was of 22,000,000 shares in January 2024. The Company did not receive any proceeds from the sale of shares by the existing stockholders in either offering. Business Outlook Based on information as of today, February 28, 2024, the Company is issuing the following financial guidance: First Quarter Fiscal 2024 Full Year Fiscal 2024 Revenue $ 224.5 million to $226.0 million $ 942.0 million to $950.0 million Adjusted EBITDA $ 90.5 million to $92.0 million $ 387.0 million to $395.0 million Conference Call Information CCC will host a conference call today, February 28, 2024, 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; the impact of public health outbreaks, epidemics or pandemics on our business and results of operations; 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; 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; our reliance on third-party data, technology and intellectual property; changes in our customers’ or the public’s perceptions regarding the use of artificial intelligence; 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, 2023 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 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2023 AND 2022 (In thousands, except share data) December 31, December 31, 2023 2022 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 195,572 $ 323,788 Accounts receivable—Net of allowances of $5,574 and $5,339 as of December 31, 2023 and 2022, respectively 102,365 98,353 Income taxes receivable 1,798 4,015 Deferred contract costs 17,900 16,556 Other current assets 32,364 36,358 Total current assets 349,999 479,070 SOFTWARE, EQUIPMENT, AND PROPERTY—Net 160,416 146,443 OPERATING LEASE ASSETS 30,456 32,874 INTANGIBLE ASSETS—Net 1,015,046 1,118,819 GOODWILL 1,417,724 1,495,129 DEFERRED FINANCING FEES, REVOLVER—Net 1,672 2,286 DEFERRED CONTRACT COSTS 22,302 20,161 EQUITY METHOD INVESTMENT 10,228 10,228 OTHER ASSETS 43,197 45,911 TOTAL $ 3,051,040 $ 3,350,921 LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $ 16,324 $ 27,599 Accrued expenses 71,478 71,445 Income taxes payable 3,689 922 Current portion of long-term debt 8,000 8,000 Current portion of long-term licensing agreement—Net 3,061 2,876 Operating lease liabilities 6,788 5,484 Deferred revenues 43,567 35,239 Total current liabilities 152,907 151,565 LONG-TERM DEBT—Net 767,504 774,132 DEFERRED INCOME TAXES—Net 195,365 241,698 LONG-TERM LICENSING AGREEMENT—Net 27,692 30,752 OPERATING LEASE LIABILITIES 50,796 54,245 WARRANT LIABILITIES 51,501 36,405 OTHER LIABILITIES 6,414 2,658 Total liabilities 1,252,179 1,291,455 COMMITMENTS AND CONTINGENCIES (Notes 23 and 24) MEZZANINE EQUITY: Redeemable non-controlling interest 16,584 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; 603,128,781 and 622,072,905 shares issued and outstanding at December 31, 2023 and 2022, respectively 60 62 Additional paid-in capital 2,909,757 2,754,055 Accumulated deficit (1,126,467) (707,946) Accumulated other comprehensive loss (1,073) (884) Total stockholders’ equity 1,782,277 2,045,287 TOTAL $ 3,051,040 $ 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) Three months ended December 31, Year ended December 31, 2023 2022 2023 2022 REVENUES $ 228,601 $ 204,106 $ 866,378 $ 782,448 COST OF REVENUES Cost of revenues, exclusive of amortization of acquired technologies 49,370 51,827 203,324 187,001 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Impairment of acquired technologies — — 431 — Total cost of revenues (1) 55,937 58,572 230,219 213,939 GROSS PROFIT 172,664 145,534 636,159 568,509 OPERATING EXPENSES: Research and development (1) 45,215 42,246 173,106 156,957 Selling and marketing (1) 35,779 30,863 140,851 119,594 General and administrative (1) 54,367 44,665 191,844 167,758 Amortization of intangible assets 17,942 18,066 71,972 72,278 Impairment of goodwill — — 77,405 — Impairment of intangible assets — — 4,906 — Total operating expenses 153,303 135,840 660,084 516,587 OPERATING INCOME (LOSS) 19,361 9,694 (23,925) 51,922 INTEREST EXPENSE (16,652) (13,204) (63,577) (38,990) INTEREST INCOME 3,806 908 16,252 908 CHANGE IN FAIR VALUE OF WARRANT LIABILITIES 30,308 2,621 (15,096) 26,073 GAIN ON SALE OF COST METHOD INVESTMENT — — — 3,587 OTHER INCOME—Net (3,761) (205) 1,799 6,362 PRETAX INCOME (LOSS) 33,062 (186) (84,547) 49,862 INCOME TAX (PROVISION) BENEFIT (6,770) 1,258 (5,524) (11,456) NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,292 1,072 (90,071) 38,406 LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST (1,080) — (2,405) — NET INCOME (LOSS) ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC.'S COMMON STOCKHOLDERS $ 25,212 $ 1,072 $ (92,476) $ 38,406 Net income (loss) per share attributable to common stockholders: Basic $ 0.04 $ 0.00 $ (0.15) $ 0.06 Diluted (2) $ (0.01) $ 0.00 $ (0.15) $ 0.06 Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 609,387,346 643,941,176 617,889,384 642,841,596 COMPREHENSIVE INCOME (LOSS): Net income (loss) including non-controlling interest 26,292 1,072 (90,071) 38,406 Other comprehensive income (loss)—Foreign currency translation adjustment 85 235 (189) (569) COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST 26,377 1,307 (90,260) 37,837 Less: accretion of redeemable non-controlling interest (1,080) — (2,405) — COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST $ 25,297 $ 1,307 $ (92,665) $ 37,837 (1) Includes stock-based compensation expense as follows (in thousands): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Cost of revenues $ 2,207 $ 1,645 $ 8,802 $ 5,812 Research and development 6,634 5,103 25,467 19,536 Sales and marketing 7,940 6,978 33,204 25,309 General and administrative 23,266 15,002 77,045 58,840 Total stock-based compensation expense $ 40,047 $ 28,728 $ 144,518 $ 109,497 (2) The following table sets forth a reconciliation of the numerator and denominator used to compute diluted earnings per share of common stock (in thousands, except for share data): Three months ended December 31, Year Ended December 31, 2023 2022 2023 2022 Numerator Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Accretion of redeemable non-controlling interest (1,080) — (2,405) — Change in fair value of in-the-money warrant liabilities (30,308) — — — Net (loss) income attributable to common stockholders $ (5,096) $ 1,072 $ (92,476) $ 38,406 Denominator Weighted average shares of common stock - basic 609,128,048 612,448,089 617,889,384 607,760,886 Dilutive effect of stock-based awards - 31,493,087 - 35,080,710 Dilutive effect of assumed conversion of warrants 259,298 - - - Weighted average shares of common stock - diluted 609,387,346 643,941,176 617,889,384 642,841,596 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In thousands) Year ended December 31, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ (90,071) $ 38,406 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization of software, equipment, and property 36,902 27,933 Amortization of intangible assets 98,436 99,216 Impairment of goodwill and intangible assets 82,742 — Deferred income taxes (46,333) (34,401) Stock-based compensation 144,518 109,497 Amortization of deferred financing fees 1,753 1,878 Amortization of discount on debt 233 257 Change in fair value of derivative instruments 5,743 (5,663) Change in fair value of warrant liabilities 15,096 (26,073) Change in fair value of estimated contingent consideration — (100) Loss on early extinguishment of debt — — Non-cash lease expense 1,232 3,697 Gain on divestitures — — Gain on sale of cost method investment — (3,587) Loss on disposal of software, equipment and property 79 2,651 Other 620 104 Changes in: Accounts receivable—Net (4,001) (19,844) Deferred contract costs (1,344) (1,487) Other current assets 4,046 9,792 Deferred contract costs—Non-current (2,141) 1,956 Other assets (3,649) (14,501) Operating lease assets 1,186 3,448 Income taxes 4,984 (10,018) Accounts payable (11,270) 15,516 Accrued expenses 1,041 4,592 Operating lease liabilities (2,145) (7,241) Deferred revenues 8,321 4,196 Extinguishment of interest rate swap liability — — Other liabilities 4,055 (317) Net cash provided by operating activities 250,033 199,907 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of software, equipment, and property (55,032) (47,951) Proceeds from sale of cost method investment — 3,901 Acquisition of Safekeep, Inc., net of cash — (32,242) Purchase of equity method investment — — Purchase of intangible asset — — Net cash used in investing activities (55,032) (76,292) CASH FLOWS (USED IN) PROVIDED BY FINANCING ACTIVITIES: Proceeds from exercise of stock options 25,381 27,693 Proceeds from employee stock purchase plan 4,761 3,197 Principal payments on long-term debt (8,000) (8,000) Payments for employee taxes withheld upon vesting of equity awards (16,715) (5,015) Repurchase of common stock (328,453) — Proceeds from issuance of long-term debt, net of fees paid to lender — — Net proceeds from equity infusion from the Business Combination — — Payment of fees associated with early extinguishment of long-term debt — — Dividends to CCCIS stockholders — — Deemed distribution to CCCIS option holders — — Proceeds from issuance of common stock — — Tax effect of Business Combination transaction costs — — Net cash (used in) provided by financing activities (323,026) 17,875 NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS (191) (246) NET CHANGE IN CASH AND CASH EQUIVALENTS (128,216) 141,244 CASH AND CASH EQUIVALENTS: Beginning of period 323,788 182,544 End of period $ 195,572 $ 323,788 NONCASH INVESTING AND FINANCING ACTIVITIES: Noncash purchases of software, equipment, and property $ 2,044 $ 100 Leasehold improvements acquired by tenant improvement allowance $ — $ — Fair value of assumed Public Warrants exercised $ — $ — Contingent consideration related to business acquisition $ — $ 200 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid for interest $ 61,367 $ 36,636 Cash paid for income taxes—Net $ 42,948 $ 55,697 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Gross Profit $ 172,664 $ 145,534 $ 636,159 $ 568,509 Amortization of acquired technologies 6,567 6,745 26,464 26,938 Stock-based compensation and related employer payroll tax 2,223 1,712 9,129 6,090 Impairment of acquired technologies — — 431 — Contract termination costs — 3,248 — 3,248 Business combination transaction costs — — — — Adjusted Gross Profit $ 181,454 $ 157,239 $ 672,183 $ 604,785 Gross Profit Margin 76% 71% 73% 73% Adjusted Gross Profit Margin 79% 77% 78% 77% CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating expenses $ 153,303 $ 135,840 $ 660,084 $ 516,587 Amortization of intangible assets (17,942) (18,066) (71,972) (72,278) Stock-based compensation expense and related employer payroll tax (38,001) (27,279) (138,578) (105,775) Goodwill and intangible asset impairment charges — — (82,311) — Plaintiff litigation costs (1,150) (894) (5,068) (894) M&A and integration costs (3,372) (11) (3,372) (1,772) Business combination transaction and related costs, including secondary offering costs (2,031) (174) (2,031) (1,330) Lease abandonment — (4,915) — (6,137) Lease overlap costs — — — (1,338) Change in fair value of contingent consideration — 100 — 100 Income related to divestiture, net — 459 — 877 Adjusted operating expenses $ 90,807 $ 85,060 $ 356,752 $ 328,040 CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME (In thousands) (Unaudited) Three months ended December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Operating income (loss) $ 19,361 $ 9,694 $ (23,925) $ 51,922 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Adjusted operating income $ 90,647 $ 72,179 $ 315,431 $ 276,745 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Interest expense 16,652 13,204 63,577 38,990 Interest income (3,806) (908) (16,252) (908) Income tax provision (benefit) 6,770 (1,258) 5,524 11,456 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Depreciation and amortization related to software, equipment and property 2,046 2,327 8,577 10,161 Depreciation and amortization related to software, equipment and property—Cost of revenue 6,831 5,451 28,325 17,772 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Income from derivative instruments (2,016) — (6,460) — Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Gain on sale of cost method investment — — — (3,587) Income related to divestiture, net — (459) — (877) Adjusted EBITDA $ 100,053 $ 80,080 $ 353,415 $ 305,377 Adjusted EBITDA Margin 44% 39% 41% 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net income (loss) $ 26,292 $ 1,072 $ (90,071) $ 38,406 Amortization of intangible assets 17,942 18,066 71,972 72,278 Amortization of acquired technologies—Cost of revenue 6,567 6,745 26,464 26,938 Stock-based compensation expense and related employer payroll tax 40,224 28,991 147,707 111,865 Goodwill and intangible asset impairment charges — — 82,742 — Change in fair value of warrant liabilities (30,308) (2,621) 15,096 (26,073) Change in fair value of derivative instruments 6,306 328 5,743 (5,663) Plaintiff litigation costs 1,150 894 5,068 894 M&A and integration costs 3,372 11 3,372 1,772 Business combination transaction and related costs, including secondary offering costs 2,031 174 2,031 1,330 Lease abandonment — 4,915 — 6,137 Contract termination costs — 3,248 — 3,248 Lease overlap costs — — — 1,338 Change in fair value of contingent consideration — (100) — (100) Income related to divestiture, net — (459) — (877) Gain on sale of cost method investment — — — (3,587) Tax effect of adjustments (14,584) (17,302) (59,638) (51,495) Adjusted net income $ 58,992 $ 43,962 $ 210,486 $ 176,411 Adjusted net income per share attributable to common stockholders Basic $ 0.10 $ 0.07 $ 0.34 $ 0.29 Diluted $ 0.09 $ 0.07 $ 0.32 $ 0.27 Weighted average shares outstanding Basic 609,128,048 612,448,089 617,889,384 607,760,886 Diluted 649,260,826 643,941,176 651,587,360 642,841,596 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 December 31, Year ended December 31, (dollar amounts in thousands) 2023 2022 2023 2022 Net cash provided by operating activities $ 86,895 $ 81,469 $ 250,033 $ 199,907 Less: Purchases of software, equipment and property (11,845) (9,107) (55,032) (47,951) Free Cash Flow $ 75,050 $ 72,362 $ 195,001 $ 151,956 View source version on businesswire.com: https://www.businesswire.com/news/home/20240226271984/en/
Investor Contact: Bill Warmington VP, Investor Relations, CCC Intelligent Solutions Inc. 312-229-2355 IR@cccis.com Media Contact: Michelle Hellyar Senior Director, Public Relations, CCC Intelligent Solutions Inc. mhellyar@cccis.com