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Item 7. Management’s Discussion and Analysis

2025-02-19 compared with 2024-02-27 · 197 added, 249 removed, 160 unchanged (74% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion should be read in conjunction with our Consolidated Financial Statements, including the notes thereto, included elsewhere in this annual report.

The following discussion should be read in conjunction with our financial statements and related notes included elsewhere in this annual report on Form 10-K.

Certain statements in this section are forward-looking statements as described in the Cautionary Note Regarding Forward-Looking Statements of this annual report.

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Risk Factors of this annual report.

We are a leading global information services provider.

We connect people and organizations to intelligence they can trust to transform their world.

We bring together enriched data, analytics and insights, workflow software, and expert services, grounded in deep domain expertise across the spectrum of knowledge, research, and innovation.

Our subscription and technology-based solutions cover the Academia & Government (“A&G”), Intellectual Property (“IP”), and Life Sciences & Healthcare (“LS&H”) markets.

The following section generally discusses the years ended December 31, 2024 and 2023 financial results and year-to-year analysis between these years.

Discussions related to the year ended December 31, 2022 financial results and year-to-year analysis between the years ended December 31, 2023 and 2022 that are not included in this annual report can be found under Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report on Form 10-K for the year ended December 31, 2023, which was filed with the SEC on February 27, 2024.

We are a leading global provider of transformative intelligence.

We support the entire innovation lifecycle, from cultivating curiosity to protecting the world’s critical intellectual property assets.

Whether it’s providing insights to advance an industry or accelerating the delivery of a critical drug, our vision at Clarivate is to fuel the world’s greatest breakthroughs by harnessing the power of human ingenuity.

We offer enriched data, insights & analytics, workflow solutions, and expert services to our customers in the Academia & Government (“A&G”), Intellectual Property (“IP”), and Life Sciences & Healthcare (“LS&H”) end markets, which form the basis of our reportable segment structure.

Within each of our three segments, we provide the following:

• Enriched data.

Curated, up-to-date content collections validated by skilled data scientists and domain experts with real-world experience.

• Insights & analytics.

Predictive analytics powered by a unique combination of AI-enabled software paired with human insights, developed and interpreted by PhD level experts.

• Workflow solutions.

Automated, flexible software tools complemented by our enriched data sets and expert analysis tailored to meet specific needs.

• Expert services.

We are home to industry specialists, consultants, and data scientists with deep subject-matter expertise and global experience.

For further information about our business, customers, segments, and people, see Item 1.

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Key Performance Indicators

We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections, and make strategic decisions.

Organic revenue growth, Annualized Contract Value, Annual Renewal Rates, Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow are key performance indicators because they are a basis upon which management assesses our performance and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most meaningful indicators of our continuous operational performance.

We regularly monitor organic revenue growth, annualized contract value, annual renewal rates, Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow as key performance indicators that we use to evaluate our business and trends, measure performance, prepare financial projections, and make strategic decisions.

Adjusted EBITDA, Adjusted EBITDA margin, and Free cash flow are financial measures that are not prepared in accordance with U.S.

generally accepted accounting principles (“non-GAAP”).

Although we believe these measures may be useful to investors for the same reasons described above, these measures are not a substitute for GAAP financial measures or disclosures.

Reconciliations of our non-GAAP measures to the corresponding most closely related measures calculated in accordance with GAAP are provided further below.

Although we believe these measures may be useful to investors in evaluating our business, these measures are not a substitute for GAAP financial measures or disclosures.

Reconciliations of our non-GAAP measures to the most directly comparable GAAP measures are provided further below.

Organic revenue growth

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We also review year-over-year organic revenue growth by transaction type to help us identify and address broad changes in product mix, and by geography to help us identify and address changes and revenue trends by region.

We measure organic revenue growth excluding acquisitions, disposals, and foreign currency impacts.

We define these components as follows:

We define the components of revenue growth as follows:

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions or as otherwise noted)

Revenue generated from pricing, up-selling, securing new customers, sales of new or enhanced product offerings, and any other revenue change drivers except for changes from acquisitions, disposals, and foreign currency.

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Revenue generated from acquired products and services from the date of acquisition to the first anniversary date of that acquisition.

• Disposals :

Revenue generated in the prior year comparative period from product lines, services, and/or businesses divested from the date of the sale in the current period presented or included within a disposal group.

Revenue generated in the comparative prior year period from product lines, services, and/or businesses divested from the date of the sale in the current period presented or included within a disposal group.

• Foreign Currency (“FX”).

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Annualized contract value

Annualized Contract Value (“ACV”), at a given point in time, represents the annualized value for the next 12 months of subscription-based license agreements with our customers, assuming that all expiring license agreements during that period

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

are renewed at their current price level.

The renewal period for our subscriptions generally starts 90 days before the end of the current subscription period.

Our calculation of ACV includes the impact of downgrades, upgrades, price increases, and cancellations during the reporting period.

We monitor ACV because it represents a leading indicator of the potential subscription revenues that may be generated from our existing customer base over the upcoming 12-month period.

Measurement of subscription revenues as a key operating metric is particularly relevant because a majority of our revenues are generated from subscription-based license agreements.

Actual subscription revenues that we recognize during any 12-month period are likely to differ from ACV at the beginning of that period, sometimes significantly.

This may occur for various reasons, including subsequent changes in annual renewal rates, impacts of price increases (or decreases), cancellations, upgrades and downgrades, and acquisitions and divestitures.

We calculate and monitor ACV for each of our segments and use the metric as part of our evaluation of our business and trends.

The following table presents our ACV as of the dates indicated:

December 31, Change

2023 2022 2021 2023 vs.

Annualized Contract Value $ 1,591.9 $ 1,581.9 $ 1,611.8 0.6 % (1.9) %

(1) The change in ACV was primarily from organic ACV growth of 2.6% attributed to the impact of price increases, offset by changes in FX rates.

(2) The change in ACV is primarily due to the disposition of MarkMonitor in October 2022, supplemented by organic ACV growth of 2.6%.

Annual Renewal Rates

Our revenues are primarily subscription based, which leads to high revenue predictability.

Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for the subsequent reporting period.

“Annual renewal rate” is the metric we use to determine renewal levels by existing customers across our segments, and is a leading indicator of renewal trends, which impact the evolution of our ACV and results of operations.

We calculate the annual renewal rate for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements that come up for renewal in that period.

“Open renewals,” which we define as existing subscription product license agreements that come up for renewal but are neither renewed nor canceled by customers during the applicable reporting period, are excluded from both the numerator and denominator of the calculation.

We calculate the annual renewal rate to reflect the impact of product downgrades but not the impact of product upgrades upon renewal, because upgrades reflect the purchase of additional services.

Our annualized contract value (“ACV”), at any point in time, represents the annualized value of all active customer subscription-based license agreements for the next 12 months, assuming those coming up for renewal during the measurement period are renewed at their current price level.

We use ACV as a key indicator of the health and trajectory of our core business as well as to assist in the evaluation of underlying sales execution and customer engagement trends.

This metric is particularly important to us because the majority of our revenues are generated from subscription-based license agreements.

Actual subscription revenues that we recognize during any 12-month period are likely to differ from ACV at the beginning of that period, sometimes significantly, due to subsequent changes in volume (including upgrades, downgrades, new business, and cancellations) and price, acquisitions and divestitures, and changes in FX.

Our organic ACV grew 0.9% in 2024, compared to 2023, primarily driven by price increases.

Our total ACV for 2024, compared to 2023, declined 1.1% primarily due to the ScholarOne divestiture in November 2024.

Annual renewal rate

Our annual renewal rate, at any point in time, represents (a) the annualized value of all active customer subscription-based license agreements renewed during the measurement period (including the value of any product downgrades), divided by (b) the annualized value of all active subscription-based license agreements that were up for renewal during the measurement period.

“Open renewals,” which we define as active customer subscription-based license agreements that were up for renewal during the measurement period but were neither renewed nor canceled, are excluded from both the numerator and denominator of the calculation.

Additionally, the impact from product downgrades upon renewal is reflected in the annual renewal calculation, but the impact from product upgrades is not, because upgrades reflect the purchase of additional products and services.

The impact of upgrades, new subscriptions, and product price increases is reflected in ACV, but not in annual renewal rates.

Our annual renewal rates were 92%, 91%, and 91% for the years ended December 31, 2023, 2022, and 2021, respectively.

As the majority of our revenues are generated from subscription-based license agreements, we use the annual renewal rate as a key indicator of our ability to retain existing customers, evaluate the execution of our sales strategy and customer engagement trends, and to help analyze our historical results and prepare financial projections.

Our annual renewal rate for the years ended December 31, 2024 and 2023 was 92% and 92%, respectively.

Adjusted EBITDA and Adjusted EBITDA margin

Adjusted EBITDA is presented because it is a basis upon which our management assesses our performance, and we believe it is useful for investors to understand the underlying trends of our operations.

Adjusted EBITDA represents Net income (loss) before the Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude acquisition and/or disposal-related transaction costs, share-based compensation, mandatory convertible preferred share dividend expense, unrealized foreign currency gains/losses, restructuring expenses, non-operating income and/or expense, the impact of certain non-cash fair value adjustments on financial instruments, legal settlements, impairments, and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing operating performance.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues, net.

We use Adjusted EBITDA as a basis for evaluating our ongoing operating performance, and we believe it is useful for investors to understand the underlying trends of our operations.

Adjusted EBITDA represents Net income (loss) before the Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude acquisition and/or disposal-related transaction costs, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, unrealized foreign currency gains/losses, legal settlements, and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing operating performance.

Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.

Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety or at all.

In addition, because of these limitations, Adjusted EBITDA should not be considered as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations.

For a reconciliation of Adjusted EBITDA and Adjusted EBITDA margin to Net income (loss) and Net income (loss) margin, refer to Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measures) below.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

(In millions or as otherwise noted)

Free cash flow

We use Free Cash Flow in our operational and financial decision-making and believe Free Cash Flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies, and other interested parties to measure the ability of a company to service its debt.

Our presentation of Free Cash Flow should not be construed as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations.

We define Free Cash Flow as Net cash provided by (used for) operating activities less Capital expenditures.

For further discussion on free cash flow, including a reconciliation to cash flows provided by (used for) operating activities, refer to Liquidity and Capital Resources - Cash Flows below.

We use Free cash flow in our operational and financial decision-making and believe it is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies, and other interested parties to measure the ability of a company to service its debt.

Our presentation of Free cash flow should not be considered as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations.

We define Free cash flow as Net cash provided by operating activities less Capital expenditures.

For further discussion related to Free cash flow, including a reconciliation to Net cash provided by operating activities, refer to Liquidity and Capital Resources - Cash Flows below.

Critical Accounting Policies and Estimates

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Substantially all of the assets acquired, liabilities assumed, and contingent consideration are allocated based on their estimated fair values, which requires significant management judgment.

Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable.

We estimate the fair value of customer relationships intangible assets through a discounted cash flow (“DCF”) model using the multi-period excess earnings method, which involves the use of significant estimates and assumptions related to projected revenue growth rates, EBITDA margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits, and customer attrition rates, among other items.

Our estimates of fair value are based upon assumptions we believe are reasonable, but which are inherently uncertain and unpredictable.

We estimate the fair value of customer relationship intangible assets through a discounted cash flow (“DCF”) model using the multi-period excess earnings method, which involves the use of significant estimates and assumptions related to projected revenue growth rates, EBITDA margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits, and customer attrition rates, among other items.

We estimate the fair value of technology, databases, and trade name intangible assets through a DCF model using the relief-from-royalty method, which involves the use of significant estimates and assumptions related to projected revenue growth rates, royalty rates, tax rates, discount rates, tax amortization benefits, and obsolescence rates.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

(In millions or as otherwise noted)

Goodwill and Indefinite-Lived Intangible Assets

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Examples of such factors include significant negative industry or economic trends, persistent declines in our market value, significant changes in regulatory requirements or the legal environment, and segment changes.

We estimate the fair value of a reporting unit using a DCF model.

We engage outside experts as deemed necessary to assist in estimating the fair value of a reporting unit using a DCF model.

Our DCF model relies significantly on our internal forecasts of future cash flows and long-term growth rates.

Significant judgments and estimates made in this analysis include projected revenue growth rates and EBITDA margins, tax rates, terminal values, and discount rates.

Changes in these estimates and assumptions could materially affect the determination of estimated fair value and we could be required to record additional impairment charges.

In 2023, we performed our annual goodwill impairment assessment in the fourth quarter using a quantitative approach.

The annual assessment coincided with a change in our reporting units wherein the legacy ProQuest and Web of Science Group reporting units were combined into a single reporting unit, A&G.

The goodwill impairment assessment included an analysis of the impacted reporting units immediately before and immediately after the change and concluded there was no impairment in either scenario.

Based on the quantitative analysis, we determined that the carrying value of the IP and LS&H segment reporting units exceeded their respective fair values, resulting in a goodwill impairment charge of $844.7.

The impairment charge recorded for the IP reporting unit represented a total write-off of the associated goodwill.

The impairments were primarily due to worsening macroeconomic and market conditions.

In completing the annual quantitative goodwill impairment assessment, we used weighted average cost of capital (“WACC”) discount rate assumptions of 9.5%, 10%, and 11% for the A&G, LS&H, and IP reporting units, respectively.

The use of a different set of assumptions and estimates could result in materially different results.

Between 2022 and 2024, we have performed the following goodwill impairment assessments, with the associated results of each assessment:

Type of assessment

Quantitative,

Goodwill impairment:

A&G $ (1,745.8) $ — $ — $ — $ —

IP (2,662.1) — (582.2) — —

LS&H — — (265.5) (302.8) (149.1)

Total $ (4,407.9) $ — $ (847.7) $ (302.8) $ (149.1)

(1) The impairments were primarily due to worsening macroeconomic and market conditions and sustained declines in our share price.

(2) The impairments were primarily due to sustained declines in our share price.

Consistent with all of our quantitative goodwill impairment assessments, we used a DCF model in our interim and annual 2024 assessments to estimate the fair value of our segment reporting units.

We then compared the estimated fair value to the carrying value for both of the reporting units carrying a goodwill balance (our IP reporting unit was previously fully impaired in 2023).

Based on these assessments, while the estimated fair value decreased for all reporting units, we concluded that the estimated fair value of the A&G reporting unit was still substantially in excess of its carrying value.

For the LS&H reporting unit, we determined the carrying value exceeded its fair value in both assessments;

consequently, we recorded total goodwill impairment charges of $451.9 for 2024.

In completing our most recent goodwill impairment assessment in the fourth quarter of 2024, we used weighted average cost of capital (“WACC”) discount rate assumptions of 10.5% and 9% for the A&G and LS&H reporting units, respectively.

The discount rates were derived using a capital asset pricing model and analyzing published rates for industries relevant to each reporting unit to estimate the cost of equity financing.

We used discount rates we believe to be commensurate with the risks and uncertainty inherent in the respective reporting units and in our internally developed forecasts.

The use of a different set of assumptions and estimates could have resulted in materially different results.

For our LS&H reporting unit, a 50 basis point increase in the discount rate would result in an incremental impairment charge of less than $90.0.

In September 2022, we performed a quantitative goodwill impairment test that resulted in a goodwill impairment charge of $4,407.9 across three of our four reporting units at the time;

the impairment charge resulted in a full goodwill write-off for two of the four reporting units.

Similar to our 2023 analysis, our 2022 analysis utilized discount rates derived from a capital asset pricing model and an analysis of published rates for industries relevant to each reporting unit.

For those reporting units whose estimated fair values exceeded their carrying values, we applied a hypothetical sensitivity analysis by increasing the discount rate by 100 basis points and, in a separate test, by reducing the fair value of those reporting units by 10%.

As a result of either scenario, the IP reporting unit’s fair value was approximately equal to its carrying value.

All other reporting units evaluated under either scenario reflected fair values well in excess of carrying values by at least 40%.

We subsequently performed our annual goodwill impairment test by applying a qualitative assessment, in which we considered factors such as those described above, as well as the historical significant level of headroom.

We did not identify any additional impairment charge requirements as a result of the annual test performed in the fourth quarter of 2022.

If any of our DCF assumptions or estimates fall short of our projections, we could experience additional impairment events in the future.

A 50 basis point increase in the discount rate would have resulted in an incremental impairment charge of approximately $62 for the LS&H reporting unit and the fair value of the A&G reporting unit would be approximately 14% in excess of its carrying value.

Continued sustained declines in our share price, other adverse developments in economic or market conditions, or shortfalls in our projections or estimates could require additional impairment charges in the future.

Indefinite-Lived Intangible Assets

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In 2024, 2023, and 2022, we used a qualitative assessment to evaluate events and circumstances that might impact the value of each trade name.

In 2021, we performed a quantitative assessment using the relief-from-royalty method that indicated that the fair value of our trade names was significantly in excess of carrying value.

We did not identify any impairments of our indefinite-lived intangible assets in 2024, 2023, or 2022.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

(In millions or as otherwise noted)

Long-Lived Assets (including Other Intangible Assets)

We evaluate long-lived assets, including property and equipment, definite-lived intangible assets, and right-of-use lease assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Upon such an occurrence, we assess recoverability by comparing the carrying amount of the asset to our estimate of the future undiscounted cash flows expected to be generated by the asset over its remaining life.

Upon such an occurrence, we assess recoverability by comparing the carrying amount of the asset group to our estimate of the future undiscounted cash flows expected to be generated by the asset group over its remaining life.

We exercise judgment in selecting the appropriate assumptions to use in the estimated future undiscounted cash flows analysis.

If the carrying amount of the asset exceeds its estimated future cash flows, we recognize an impairment charge equal to the amount by which the carrying amount of the asset exceeds its fair value.

If the carrying amount of the asset group exceeds its estimated future cash flows, we recognize an impairment charge equal to the amount by which the carrying amount of the asset group exceeds its fair value.

Share-Based Compensation

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Significant judgments and estimates are required in determining the consolidated income tax expense for financial statement purposes.

In assessing the realizability of deferred tax assets, we consider all available positive and negative evidence factors.

Evidence considered includes historical and projected future taxable income by tax jurisdiction, character and timing of income or loss, and prudent and feasible tax planning strategies.

In assessing the realizability of deferred tax assets, we consider all available positive and negative evidence factors, including historical and projected future taxable income by tax jurisdiction, character and timing of income or loss, and prudent and feasible tax planning strategies.

We record a valuation allowance to reduce our deferred tax assets to an amount that is more likely than not to be realized.

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Recently Issued Accounting Pronouncements

We do not believe that any recently issued accounting pronouncements will have a material impact on our financial condition or results of operations.

For additional information related to recently issued and adopted accounting pronouncements, see Note 1 - Nature of Operations and Summary of Significant Accounting Policies included in Part II, Item 8 of this annual report.

For a discussion related to recently issued and adopted accounting pronouncements, see Note 1 - Nature of Operations and Summary of Significant Accounting Policies included in Part II, Item 8 of this annual report.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

(In millions or as otherwise noted)

Results of Operations

Year Ended December 31, Change

(in millions)

2023 2022 2021 23 vs ’22 22 vs ’21

Revenues, net $ 2,628.8 $ 2,659.8 $ 1,876.9 (1)% 42%

Revenues $ 2,556.7 $ 2,628.8 (72.1) (3)%

Operating expenses:

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Depreciation and amortization 727.0 708.3 18.7 3%

Goodwill and intangible asset impairments 979.9 4,449.1 — (78)% N/M

Goodwill and intangible asset impairments 540.7 979.9 (439.2) (45)%

Restructuring and other impairments 19.6 40.0 (20.4) (51)%

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Income (loss) from operations (275.6) (734.7)

Fair value adjustment of warrants (15.9) (206.8) (81.3) (92)% N/M

Fair value adjustment of warrants (5.2) (15.9) 10.7 (67)%

Interest expense, net 283.4 293.7 (10.3) (4)%

Income (loss) before income tax (553.8) (1,012.5)

Provision (benefit) for income taxes (101.3) (28.9) 12.3 N/M N/M

Provision (benefit) for income taxes 82.9 (101.3) 184.2 N/M

Net income (loss) (636.7) (911.2)

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Net income (loss) attributable to ordinary shares $ (668.0) $ (986.6)

N/M - Represents a change approximately equal or in excess of 100% or not meaningful.

N/M - Represents a change approximately equal to or in excess of 100% or is not meaningful.

As discussed below and in the notes to the financial statements, the following factors had a significant impact on the comparability of our results of operations between the periods presented and may affect the comparability of our results of operations in future periods:

• In December 2024, our Board approved the wind-down of three product groups within the LS&H and A&G segments, which is expected to reduce revenues and profit by less than 10% and 5%, respectively.

• In November 2024, we completed the sale of our ScholarOne business within our A&G segment.

• In 2023 and 2024, we recognized substantial goodwill impairments.

• On October 31, 2022, we completed the sale of the MarkMonitor Domain Management business within our IP segment.

• On December 1, 2021, we completed the acquisition of ProQuest, reported primarily within our A&G segment.

• In 2021, we completed public equity and debt offerings.

• In 2021 and 2022, we implemented a number of restructuring programs to integrate acquisitions and to simplify and optimize operations.

Revenues, net

The tables below present the changes in revenues by transaction type, segment, and by geographic region, as well as the components driving the changes between periods.

The tables below present the changes in revenues by transaction type, segment, and geography, as well as the components driving the changes between periods.

Revenues by transaction type

Change % of Change

2024 2023 $ % Acquisitions Disposals FX Organic

$ 1,626.8 $ 1,618.1 $ 8.7 0.5 % 0.1 % (0.3) % (0.2) % 0.9 %

429.8 444.6 (14.8) (3.3) % — % — % (0.2) % (3.1) %

Recurring revenues

$ 2,056.6 $ 2,062.7 $ (6.1) (0.3) % 0.1 % (0.2) % (0.3) % 0.1 %

Transactional

500.1 566.1 (66.0) (11.7) % 0.2 % (5.3) % — % (6.6) %

Revenues $ 2,556.7 $ 2,628.8 $ (72.1) (2.7) % 0.1 % (1.3) % (0.1) % (1.4) %

Subscription revenues increased primarily due to organic growth driven by price increases, partially offset by lower net volume in IP and LS&H.

Re-occurring revenues decreased primarily due to lower IP patent renewal volume.

Transactional revenues decreased primarily due to lower A&G and LS&H sales, as well as the IP product group divestiture.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

Revenues by transaction type

December 31, Change

Acquisitions Disposals

Subscription revenues $ 1,618.1 $ 1,618.8 $ (0.7) — % — % (3.7) % 1.3 % 2.4 %

Re-occurring revenues 444.6 441.9 2.7 0.6 % — % — % 0.4 % 0.2 %

Transactional and other revenues 566.1 599.1 (33.0) (5.5) % — % (0.7) % 0.6 % (5.4) %

Revenues, net $ 2,628.8 $ 2,659.8 $ (31.0) (1.2) % — % (2.4) % 0.9 % 0.3 %

Acquisitions Disposals

Subscription revenues $ 1,618.8 $ 1,030.4 $ 588.4 57.1 % 59.7 % (1.1) % (4.9) % 3.4 %

Re-occurring revenues 441.9 453.2 (11.3) (2.5) % — % — % (7.7) % 5.2 %

Transactional and other revenues 599.1 393.3 205.8 52.3 % 58.3 % (0.2) % (3.1) % (2.7) %

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

Subscription revenues decreased primarily due to the divestiture of the MarkMonitor business partially offset by organic growth driven by price increases, reflecting a trend consistent with the increase in our ACV between periods, and an FX benefit.

Transactional and other revenues decreased primarily due to lower LS&H real world data sales and IP trademarks transactional volumes and patent search & analytics revenue.

Subscription revenues increased primarily due to the acquisition of ProQuest, further supplemented by organic growth driven by price increases and the benefit of net installations, reflecting a trend consistent with the increase in our ACV between periods.

Re-occurring revenues decreased due to FX headwinds, partially offset by strong organic growth driven by increases in patent renewal volumes and improvements in yield per case.

Transactional and other revenues increased due to the acquisition of ProQuest, partially offset by FX headwinds and lower trademark transactional volumes and patent filing revenue.

(In millions or as otherwise noted)

Revenues by segment

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Acquisitions Disposals

Academia & Government $ 1,323.3 $ 1,280.1 $ 43.2 3.4 % — % — % 1.2 % 2.2 %

Intellectual Property 862.7 927.1 (64.4) (6.9) % — % (6.9) % 0.7 % (0.7) %

Life Sciences & Healthcare 442.8 452.6 (9.8) (2.2) % — % — % 1.0 % (3.2) %

Revenues, net $ 2,628.8 $ 2,659.8 $ (31.0) (1.2) % — % (2.4) % 0.9 % 0.3 %

Acquisitions Disposals

Academia & Government $ 1,280.1 $ 489.4 $ 790.7 161.6 % 164.7 % — % (4.9) % 1.8 %

Intellectual Property 927.1 974.3 (47.2) (4.8) % 0.3 % (1.3) % (6.1) % 2.3 %

Life Sciences & Healthcare 452.6 413.2 39.4 9.5 % 8.6 % — % (3.2) % 4.1 %

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

A&G segment revenues increased from organic growth, primarily related to subscription revenues driven by price increases, reflecting a trend consistent with the increase in our ACV between periods.

IP segment revenues decreased primarily due to the divestiture of the MarkMonitor business with organic decline due to lower trademarks transactional volumes and patent search & analytics revenue.

LS&H segment revenues decreased primarily due to lower LS&H real world data sales.

A&G revenues increased primarily due to the acquisition of ProQuest, further supplemented by organic growth driven by increased subscription revenues from price increases and the benefit of net installations.

IP segment revenues decreased primarily due to FX headwinds that weren’t fully offset by organic growth driven by increases in patent renewal volumes and improvements in yield per case.

LS&H segment revenues increased primarily due to the acquisition of ProQuest, further

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

supplemented by organic growth driven by increased subscription revenues from price increases, the benefit of net installations, and increases in custom data sales.

$ 1,326.4 $ 1,323.3 $ 3.1 0.2 % — % (0.4) % (0.1) % 0.7 %

811.4 862.7 (51.3) (5.9) % 0.1 % (3.1) % (0.2) % (2.7) %

418.9 442.8 (23.9) (5.4) % 0.6 % (0.8) % (0.4) % (4.8) %

Revenues $ 2,556.7 $ 2,628.8 $ (72.1) (2.7) % 0.1 % (1.3) % (0.1) % (1.4) %

A&G segment revenues increased modestly, as subscription growth driven by price increases was offset by a decline in transactional volume and the ScholarOne divestiture.

IP segment revenues decreased primarily due to the Valipat divestiture, lower subscription revenues, and lower IP renewal volume primarily within patents.

LS&H segment revenues decreased primarily due to lower transactional and subscription revenues.

Revenues by geography

2 unchanged sentences

Americas $ 1,381.4 $ 1,405.5 $ (24.1) (1.7) % 0.2 % (0.5) % (0.2) % (1.2) %

Europe/Middle East/Africa 707.5 698.3 9.2 1.3 % — % (1.3) % 1.9 % 0.7 %

Asia Pacific 515.8 499.2 16.6 3.3 % — % (0.5) % 1.5 % 2.3 %

Revenues, net $ 2,628.8 $ 2,659.8 $ (31.0) (1.2) % — % (2.4) % 0.9 % 0.3 %

Acquisitions Disposals

Americas $ 1,462.3 $ 924.7 $ 537.6 58.1 % 57.8 % (1.1) % (2.1) % 3.5 %

Europe/Middle East/Africa 698.3 555.8 142.5 25.6 % 35.5 % (0.3) % (8.3) % (1.3) %

Asia Pacific 499.2 396.4 102.8 25.9 % 28.3 % (0.2) % (7.9) % 5.7 %

Revenues, net $ 2,659.8 $ 1,876.9 $ 782.9 41.7 % 45.0 % (0.7) % (5.2) % 2.6 %

Americas revenues decreased primarily due to the divestiture of the MarkMonitor business and from organic decline, due to lower LS&H real world data and IP re-occurring and transactional revenue.

EMEA revenues organic growth was driven by A&G subscription and IP re-occurring revenue.

APAC revenues organic growth was driven primarily by A&G subscription revenue.

In all regions, revenues increased primarily due to the acquisition of ProQuest, partially offset by FX headwinds and reductions from the divestiture of the MarkMonitor business.

Americas organic growth of 3.5% was driven by improved subscription and re-occurring revenues and APAC’s organic growth of 5.7% was led by A&G and LS&H subscription revenues increases.

667.8 707.5 (39.7) (5.6) % — % (3.4) % 0.5 % (2.7) %

507.5 515.8 (8.3) (1.6) % — % (0.6) % (1.1) % 0.1 %

Revenues $ 2,556.7 $ 2,628.8 $ (72.1) (2.7) % 0.1 % (1.3) % (0.1) % (1.4) %

Americas revenues decreased primarily due to lower contributions from A&G and LS&H.

EMEA (Europe/Middle East/Africa) revenues decreased primarily due to the IP product group divestiture and lower IP contribution.

APAC (Asia Pacific) revenues decreased due to a stronger dollar against APAC currencies and the IP product group divestiture.

Cost of revenues

Cost of revenues consists of costs related to the production, servicing, and maintenance of our products and are composed primarily of related personnel costs, data center services and licensing costs, and costs to acquire or produce content including royalty fees.

The decrease of 5.0% compared to 2022 was primarily driven by effective contractor spend management and the divestiture of the MarkMonitor business, partially offset by product-related agent costs.

The decrease of 4.1% compared to 2023 was primarily driven by a reduction in share-based compensation expense, reduced product-related agent and content costs, and the Valipat divestiture.

As a percentage of revenues, Cost of revenues decreased by 0.5% from the prior year.

The increase of 52.4% compared to 2021 was primarily driven by the acquisition of ProQuest, partially offset by a reduction in product and people-related costs driven by our cost-savings and margin improvement restructuring programs.

As a percentage of revenues, Cost of revenues increased by 2.5% from the prior year.

Selling, general and administrative costs

Selling, general and administrative costs (“SG&A”) include nearly all business costs not directly attributable to the production, servicing, and maintenance of our products and are composed primarily of related personnel costs, third-party professional services fees, facility costs like rent and utilities, technology costs associated with our corporate infrastructure, and transaction expenses associated with acquisitions, divestitures, and capital market activities including advisory, legal, and other professional and consulting costs.

The increase of 1.3% compared to 2022 was primarily attributed to increased technology costs associated with increased technology costs to support the business.

The increase of 13.5% compared to 2021 was primarily driven by our acquisition of ProQuest, partially offset by reductions in outside services, share-based compensation, legal, rent, and other miscellaneous business operating expenses.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

Selling, general and administrative costs (“SG&A”) include nearly all business costs not directly attributable to the production, servicing, and maintenance of our products and are composed primarily of personnel costs, third-party professional services fees, facility costs like rent and utilities, technology costs associated with our corporate infrastructure, and transaction expenses associated with acquisitions, divestitures, and capital market activities including advisory, legal, and other professional and consulting costs.

The decrease of 1.6% compared to 2023 was primarily driven by a reduction in share-based compensation expense.

As a percentage of revenues, SG&A costs increased by 0.4% from the prior year.

Depreciation and amortization

Depreciation expense relates to our fixed assets, including mainly computer hardware and leasehold improvements, furniture and fixtures.

Amortization expense relates to our definite-lived intangible assets, including mainly technology and content, customer relationships, internally generated computer software, and trade names.

2023 was consistent with 2022.

Depreciation expense relates to our fixed assets, including computer hardware, leasehold improvements, and furniture and fixtures.

Amortization expense relates to our definite-lived intangible assets, including customer relationships, technology and content, internally developed computer software, and trade names.

The increase of 2.6% compared to 2023 was primarily driven by increased investment in internally developed computer software and content assets.

As a percentage of revenues, Depreciation and amortization increased by 1.5% from the prior year.

The increase of 32.1% compared to 2021 was primarily driven by the additional amortization from the intangible assets acquired from the ProQuest acquisition.

As a percentage of revenues, Depreciation and amortization decreased by 2.0% from the prior year.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions or as otherwise noted)

Goodwill and intangible asset impairments

In both 2023 and 2022, we completed quantitative goodwill impairment assessments using a DCF analysis to estimate the fair value of each of our reporting units.

Based on these quantitative analyses performed, we recorded a total goodwill impairment charge of $844.7 and $4,449 in 2023 and 2022, respectively.

Additionally, during the year ended December 31, 2023, in connection with intangible assets classified as assets held-for-sale as of December 31, 2023, we recorded an impairment charge of $132.2 and a $3.0 goodwill impairment charge associated with the disposal group’s allocated portion of the IP segment reporting unit’s goodwill balance.

We recorded goodwill impairment charges of $465.7 and $847.7 in 2024 and 2023, respectively, primarily due to sustained declines in our share price and worsening macroeconomic and market conditions

In December 2024, our Board approved the wind-down of three product groups within the LS&H and A&G segments in connection with the Value Creation Plan and we recorded an intangible assets impairment charge of $75.0 to write down the carrying values of the associated intangibles, primarily technology and content assets, to their respective estimated net book values.

In 2023, in connection with intangible assets classified as assets held-for-sale as of December 31, 2023, we recorded an intangible assets impairment charge of $132.2.

For additional information regarding our recent goodwill and intangible asset impairments, see Note 6 - Other Intangible Assets, Net and Goodwill included in Part II, Item 8 of this annual report.

Restructuring and other impairments

Restructuring and impairment expense includes costs associated with involuntary termination benefits provided to employees under the terms of a one-time benefit arrangement, ongoing benefit arrangements, certain contract termination costs, other costs associated with an exit or disposal activity and impairment charges associated with right-of-use assets in which we’ve ceased the use of during the period.

We’ve incurred total lifetime costs of approximately $302 related to approved restructuring plans to streamline operations within targeted areas of our business dating back to 2019, primarily related to acquisition integration programs.

As of December 31, 2023, we expect to incur approximately $20 of additional restructuring costs associated with the Segment Optimization Program, which we expect to incur primarily within 2024.

Restructuring and other impairments also includes write-downs associated with equity investments of $6.1 in 2023.

Restructuring and other impairment expense includes costs associated with certain involuntary termination benefits, contract terminations, and other exit or disposal activities, as well as impairment charges primarily associated with right-of-use assets.

Restructuring charges during the year ended December 31, 2024 were primarily associated with the Segment Optimization Program, which began in the second quarter of 2023 and is now substantially complete.

Restructuring and impairment charges for the year ended December 31, 2023 were primarily associated with the ProQuest Acquisition Integration Program, which was substantively completed in 2023, as well as a $6.1 write-off related to the impairment of two equity investments.

As of December 31, 2024, the Value Creation Plan is our only active restructuring program.

We expect to incur approximately $30 of additional restructuring costs associated with this program, primarily during 2025.

For further information regarding each of our restructuring initiatives and impairment impacts, see Note 13 - Restructuring and Other Impairments included in Part II, Item 8 of this annual report.

The decrease of 40.0% compared to 2022 was driven by the wind-down of expenses associated with the ProQuest Acquisition Integration and OneClarivate Program, partially offset by an increase to expenses incurred related to the Segment Optimization Program and the impact of the equity investment write-downs.

The decrease of 48.5% compared to 2021 was driven by the wind-down of expenses associated with the CPA Global Acquisition Integration and Optimization Program, DRG Acquisition Integration Program, and Operation Simplification and Optimization Program, partially offset by increased expenses incurred related to the One Clarivate and ProQuest Acquisition Integration Program.

Other operating expense (income), net

The change of $314.0 in 2023 compared to 2022 was driven by a $278.5 gain on sale from the divestiture of the MarkMonitor business in the prior year, and, to a lesser extent, a net loss on foreign exchange remeasurement in 2023 compared to a net gain in the prior year with the largest impact derived from transactions denominated in GBP.

These factors were partially offset by a gain on legal settlement of $49.4 in 2023.

The change of $352.3 in 2022 compared to the $27.5 net expense in 2021 was driven by a $278.5 gain on sale from the divestiture of the MarkMonitor business, and, to a lesser extent, a net gain on foreign exchange remeasurement compared to a net loss in the prior year with the largest impacts derived from transactions denominated in GBP.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

The increased income of $41.0 compared to 2023 was primarily driven by the $34.7 reduction in net loss associated with the net impact of realized and unrealized gains and losses on foreign currency transactions, with the largest impacts derived from transactions denominated in GBP.

In addition, we recognized a net gain on sale of $54.7 from divestitures completed in 2024, which did not contribute to the comparative change as significantly due to a gain of $49.4 recognized in 2023 related to a legal settlement.

Fair value adjustment of warrants

We account for our outstanding private placement warrants as liabilities at fair value on the balance sheet, which are subject to remeasurement at each balance sheet date and any change in fair value is recognized as of the end of each period for which earnings are reported.

The adjustments in fair value, resulting in a gain in the current and comparative years, was driven primarily by changes in the risk-free rate, our share price, and the impact of those changes as key inputs to the Black-Scholes option valuation model.

The adjustment in fair value, resulting in gains in the current and comparative prior year periods, was driven primarily by decreases in our share price and the remaining exercise period, both of which reduce the warrant value in the option valuation model.

In May 2024, all remaining private placement warrants expired unexercised.

Interest expense, net

The increase of 8.7% compared to 2022 was primarily driven by higher floating interest rates on borrowings under the Term Loan Facility, partially offset by gains under our interest rate swap program and debt prepayments.

The increase of 7.0% compared to 2021 was primarily driven by higher floating interest rates on borrowings under the Term Loan Facility and from our private placement offerings and subsequent exchange offers of the Senior Secured Notes due 2028 and Senior Notes due 2029, which took place in the second and third quarter of 2021, respectively.

The decrease of 3.5% compared to 2023 was primarily driven by lower outstanding borrowings on our new term loan facility.

Provision (benefit) for income taxes

The increased benefit in 2023 compared to 2022 was primarily due to one-time tax benefits recorded in the year ended December 31, 2023, offset by one-time tax benefits recorded in 2022.

In 2023, we recorded a tax benefit from settlement of an open tax dispute, a tax benefit associated with the impairment of intangible assets, a tax benefit relating to the partial release of valuation allowance recorded against certain U.S.

tax attributes, and a tax benefit resulting from goodwill impairment.

In 2022, we recorded tax benefits from the release of a valuation allowance upon the execution of an internal legal entity restructuring, and from the release of an uncertain tax position that was favorably resolved.

The income tax provision of $82.9 in 2024 was primarily driven by a $53.9 expense related to a new 15% corporate income tax enacted by a tax law change in Jersey, Channel Islands, a $10.2 expense to establish valuation allowances, and expenses from the mix of tax jurisdictions in which pre-tax profits and losses were recognized.

These were partially offset by benefits of $16.6 and $14.2 associated with the impairment of intangible assets and goodwill, respectively.

The income tax benefit of $101.3 in 2023 was primarily driven by a $70.4 benefit recorded on the settlement of an open tax dispute, benefits of $33.0 and $22.7 associated with the impairment of intangible assets and goodwill, respectively, and a $21.2 benefit relating to the partial release of valuation allowances.

These were partially offset by expenses from the mix of tax jurisdictions in which pre-tax profits and losses were recognized.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions or as otherwise noted)

In December 2021, the Organization for Economic Co-operation and Development (“OECD”) issued model rules for a new global minimum tax framework under its “Pillar Two” initiative, and various governments around the world have issued, or have announced that they plan to issue, legislation consistent with the OECD model rules.

We are within the scope of the OECD Pillar Two model rules.

During Q3 2023, the United Kingdom enacted legislation consistent with the OECD model rules, which will be effective beginning January 1, 2024.

We are in the process of assessing the impact of legislation enacting global minimum tax rules in various jurisdictions.

Based on our most recent tax filings, country-by-country reporting, and financial information available, we believe that most of the jurisdictions in which we operate will meet the requirements for transitional safe harbor relief.

Therefore, we do not expect the global minimum tax to have a material impact in 2024.

However, future legislation or changes in our financial results could materially increase our global minimum tax expense in future years.

The benefit in 2022 compared to the provision in 2021 was driven by one-time tax benefits from the release of a valuation allowance upon the execution of an internal legal entity restructuring effective December 31, 2022, and from the release of an uncertain tax position that was favorably resolved.

These benefits were partially offset by tax expense accruals on a significant fair value adjustment gain on our outstanding private placement warrants and on an increase in taxable income in tax-paying jurisdictions.

During the third quarter of 2023, the United Kingdom enacted legislation consistent with the OECD model rules, which became effective January 1, 2024.

Based on our most recent tax filings, country-by-country reporting, and financial information available, we believe that most jurisdictions where we operate will qualify for transitional safe harbor relief.

Although future legislation or changes in our financial results could materially increase our global minimum tax expense, this legislation did not have a direct material impact in 2024.

During the fourth quarter of 2024, Jersey, Channel Islands, enacted legislation referred to as the Multinational Corporate Income Tax (“MCIT”), effective for accounting periods beginning January 1, 2025.

Although the MCIT is designed to align with certain elements of the OECD model rules, it is distinct legislation that enacted a new 15% corporate income tax, which qualifies as a regular corporate income tax under ASC 740.

Consequently, we recorded a deferred tax liability and deferred tax expense of $53.9 for the year ended December 31, 2024.

Dividends on preferred shares

Dividends on our mandatory convertible preferred shares are calculated at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

We may pay declared dividends on March 1, 2024 and June 1, 2024 prior to the automatic conversion of these shares.

Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measure)

The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the years ended December 31, 2023, 2022, and 2021, and reconciles these measures to our Net income (loss) for the same periods:

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

Dividends on our mandatory convertible preferred shares (“MCPS”) were calculated and accrued at an annual rate of 5.25% of the liquidation preference of $100.00 per share.

In June 2024, all outstanding MCPS automatically converted into 55.3 million ordinary shares at a conversion rate of 3.8462 ordinary shares per MCPS share.

All accumulated preferred dividends were paid prior to the conversion, and as a result of the conversion, no further dividends will be accrued or paid.

Adjusted EBITDA and Adjusted EBITDA margin (non-GAAP measures)

The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the years ended December 31, 2024 and 2023, and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same periods:

Year Ended December 31,

2023 2022 2021

Net income (loss) attributable to ordinary shares $ (986.6) $ (4,035.6) $ (312.0)

Dividends on preferred shares 75.4 75.4 41.5

Net income (loss) $ (636.7) $ (911.2)

2 unchanged sentences

Interest expense, net 283.4 293.7

Transaction related costs (1)

8.2 14.2 46.2

Share-based compensation expense 60.6 108.9

Gain on sale from divestitures

Goodwill and intangible asset impairments 540.7 979.9

1 unchanged sentence

Fair value adjustment of warrants (5.2) (15.9)

6.6 (25.9) 34.3

Transaction related costs

Adjusted EBITDA $ 1,060.4 $ 1,117.2

Net income (loss) margin

(24.9)% (34.7)%

Adjusted EBITDA margin 41.5% 42.5%

(1) Includes costs incurred to complete business combination transactions, including acquisitions, dispositions, and capital market activities, and includes advisory, legal, and other professional and consulting costs.

2021 also includes the mark-to-market adjustment (gains) on the contingent stock consideration associated with the CPA Global and DRG acquisitions.

(2) Primarily reflects the net impact of foreign exchange gains and losses related to the remeasurement of balances and other items that do not reflect our ongoing operating performance.

2023 also includes a $49.4 gain on legal settlement (for further information, see Note 17 - Commitments and Contingencies included in Part II, Item 8 of this annual report).

(1) Includes the net impact of unrealized foreign currency gains and losses and other items that do not reflect our ongoing operating performance.

This amount includes a net gain on sale of $54.7 from divestitures in 2024 and a gain of $49.4 related to a legal settlement in 2023.

See Note 2 - Acquisitions and Divestitures and Note 17 - Commitments and Contingencies for further details.

Liquidity and Capital Resources

We finance our operations primarily through cash generated by operating activities and through borrowing activities.

As of December 31, 2023, we had $370.7 of cash and cash equivalents and $740.8 of available borrowing capacity under our revolving credit facility.

As of December 31, 2024, we had $295.2 of cash and cash equivalents (including restricted cash of $10.5) and $692.3 of available borrowing capacity under our revolving credit facility.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions or as otherwise noted)

We have historically generated significant cash flows from our operating activities.

Our subscription-based revenue model provides a steady and predictable source of revenue and cash flow for us, as we typically receive payments from our customers at the start of the subscription period (usually 12 months) and recognize revenue ratably throughout that period.

Our high customer renewal rate, stable margins, and efforts to improve operating efficiencies and working capital management also contribute to our ability to generate solid operating cash flows, The following table discloses our consolidated cash flows by activity for the periods presented:

Year Ended December 31,

2023 2022 2021

Net cash provided by (used for) operating activities $ 744.2 $ 509.3 $ 323.8

Our high customer renewal rate, stable margins, and efforts to improve operating efficiencies and working capital management also contribute to our ability to generate solid operating cash flows.

The following table discloses our consolidated cash flows by activity for the periods presented:

Year Ended December 31, Change

Net cash provided by operating activities $ 646.6 $ 744.2 $ (97.6) (13) %

Net cash provided by (used for) investing activities $ (236.7) $ (237.4) $ 0.7 — %

Net cash provided by (used for) financing activities $ (470.1) $ (496.5) $ 26.4 (5) %

Cash Flows Provided by (Used for) Operating Activities

The increase of $234.9 in 2023 was primarily due to materially lower one-time costs as acquisition integration is complete, as well as improvements in working capital.

The increase of $185.5 in 2022 was primarily due to higher earnings excluding the non-cash goodwill impairment charge, as well as working capital timing.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

Cash Flows Provided by (Used for) Investing Activities

The $(294.7) change in 2023 was primarily due to the proceeds received in the prior year from the sale of the MarkMonitor business and increased capital spending to fuel product innovation.

The $4,101.8 change in 2022 was driven by the significant level of cash paid for business acquisitions in 2021, and from the proceeds of $285.0 from the sale of the MarkMonitor business.

Cash Flows Provided by (Used for) Financing Activities

The $262.7 change in 2023 was primarily driven by uses of cash in the prior year that were not repeated.

We had no outstanding balance on our Revolving Credit Facility after using $175.0 in the prior year to repay the outstanding balance and we used $100.0 to repurchase our ordinary shares, which was $75.0 less than the amount used in the prior year.

The $(4,791.4) change in 2022 was driven by the equity and debt offerings completed during 2021 to raise cash to finance the purchase price of the ProQuest acquisition in December 2021.

In addition, during 2022, we made a prepayment of $300.0 on our Term Loan Facility, we repaid the $175.0 balance on our Revolving Credit Facility that was borrowed in 2021, and we repurchased $175.0 of our ordinary shares.

The decrease in net cash provided by operating activities was driven by lower operating results and higher working capital requirements primarily due to timing of payments.

Net cash used for investing activities was stable compared to 2023, as higher capital spending was offset by an increase in net proceeds from acquisitions and divestitures.

The decrease in net cash used for financing activities was primarily driven by lower payments on our MCPS dividends.

During the years ended December 31, 2024 and 2023, we repurchased $200.0 and $100.0 of our ordinary shares, respectively, and made prepayments of $198.1 and $300.0 on our term loans.

Free cash flow (non-GAAP measure)

The following table reconciles our non-GAAP Free Cash Flow measure to Net cash provided by (used for) operating activities:

The following table reconciles our non-GAAP Free cash flow measure to Net cash provided by operating activities:

Year Ended December 31,

2023 2022 2021

Net cash provided by (used for) operating activities $ 744.2 $ 509.3 $ 323.8

Net cash provided by operating activities $ 646.6 $ 744.2

Capital expenditures (289.1) (242.5)

Free cash flow $ 357.5 $ 501.7

The increase in Free Cash Flow in 2023 and 2022, as compared to the respective prior year, was driven by significant increases in cash generated from operating activities, partially offset by increased capital expenditures.

Our capital expenditures in 2023, 2022, and 2021 consisted primarily of capitalized labor, contract services, and other costs associated with product and content development.

The decrease in Free cash flow was due to lower operating results, higher working capital requirements, and increased capital spending to drive product innovation.

Our capital expenditures in both periods presented consisted primarily of capitalized labor, contract services, and other costs associated with product and content development.

As of December 31, 2024, we had $4,541.8 of outstanding borrowings under our notes and credit facilities.

1 unchanged sentence

Our contingent liabilities consist primarily of letters of credit and performance bonds and other similar obligations in the ordinary course of business.

In January 2024, we refinanced our existing credit facilities to provide improved financial flexibility, including extending our debt maturities and lowering our annual cash interest costs.

We amended our $750.0 revolving credit facility by reducing it to a $700.0 facility (with a letter of credit sublimit of $77.0) and extending the maturity date to January 31, 2029.

We also made a prepayment of $47.4 on our existing term loans due in 2026 and then refinanced the remaining term loans with a new $2,150 tranche of term loans maturing in 2031.

The interest rate margin for the new term loan facility decreased from 300 to 275 basis points per annum in the case of loans bearing interest by reference to Term SOFR.

The term loans amortize in equal quarterly installments (the first installment was paid on June 28, 2024) equivalent to a rate of 1.00% per annum, with the balance due at maturity.

Any optional prepayments are applied against the scheduled quarterly installments of principal in the direct order of maturity.

We paid the first and second quarterly installments and, during the fourth quarter of 2024, made prepayments of $140.0.

For further discussion related to our outstanding borrowings, see Note 9 - Debt included in Part II, Item 8 of this annual report.

In January 2024, we refinanced our existing Term Loan Facility and extended the maturity date of our Revolving Credit Facility.

We refinanced all of our existing term loans with a new $2,150 tranche of term loans maturing in 2031, with an interest rate margin of 275 basis points per annum in the case of loans bearing interest by reference to term SOFR.

The new term loan facility effectively extended the maturity of our existing term loans by approximately 5 years.

The new term loans amortize in equal quarterly installments equivalent to 1.00% per annum, with the balance due at maturity.

Concurrently, we refinanced our Revolving Credit Facility with a replacement $700 million facility, which effectively extends the maturity of the revolving credit facility from 2027 to 2029.

The strategic refinancing provides improved financial flexibility, including extending our debt maturities and lowering our annual cash interest costs.

Commitments and Contingencies

In addition to the scheduled future debt repayments that we will need to make, we also have commitments and plans related to our mandatory convertible preferred shares (“MCPS”), share repurchase program, and capital expenditures.

Our MCPS will convert to ordinary shares on June 1, 2024 and we will accrue approximately $35 of dividends in 2024 prior to conversion.

For additional information related to our MCPS, see Note 10 - Shareholders' Equity included in Part II, Item 8 of this annual report.

CLARIVATE PLC

Management’s Discussion and Analysis of Financial Condition and Results of Operations

(In millions, except option prices, ratios or as noted)

As of December 31, 2023, we had approximately $400.0 of availability remaining under our share repurchase program.

The share repurchase authorization is valid through December 31, 2024.

For additional information related to our share repurchase program, see Note 10 - Shareholders' Equity included in Part II, Item 8 of this annual report.

(In millions or as otherwise noted)

Commitments and Contingencies

In addition to the scheduled future debt repayments that we will need to make, we also have commitments and plans related to our share repurchase program and capital expenditures.

The authorization for the share repurchase program in effect during 2024 terminated on December 31, 2024.

In December 2024, our Board of Directors authorized a new share repurchase program of up to $500.0 of our ordinary shares for a period of two years, from January 1, 2025 through December 31, 2026.

The new share repurchase program does not obligate us to repurchase any set dollar amount or number of shares and may be modified, suspended, or terminated at any time without prior notice.

Under the new share repurchase program, we are authorized to conduct open-market purchases of our ordinary shares from time to time through any method or program, including through Rule 10b5-1 trading plans or the use of other techniques as permitted by our shareholder authorization, approved by our Board of Directors or a designated committee thereof, and subject to availability of ordinary shares, price, market conditions, alternative uses of capital, and applicable regulatory requirements, at management’s discretion.

We estimate capital expenditures to be approximately $255 during 2025.

We also expect to incur approximately $195 of primarily cloud computing services and software license costs in 2025.

Any amounts for which we are currently liable are reflected in our Consolidated Balance Sheets as Accounts payable or Accrued expenses and other current liabilities.

The Company is engaged in various legal proceedings and claims that have arisen in the ordinary course of business.

We have taken what we believe to be adequate reserves related to the litigation and threatened claims.

We maintain appropriate insurance policies in place, which are likely to provide some coverage for these liabilities or other losses that may arise from litigation matters.

These expenditures are primarily for product and content development, as well as for ongoing support of our existing business operations, and we expect to fund such expenditures primarily through cash flows from operations.

Any amounts for which we are presently liable are reflected in our Consolidated Balance Sheets as Accounts payable or Accrued expenses and other current liabilities.

In addition, we are engaged in various legal proceedings and claims that have arisen in the ordinary course of business and have taken what we believe to be adequate reserves related to the litigation and threatened claims.

We maintain appropriate insurance policies, which are likely to provide some coverage for these liabilities or other losses that may arise from litigation matters.

For additional information about our legal proceedings and claims, see Note 17 - Commitments and Contingencies included in Part II, Item 8 of this annual report.

We require and will continue to need significant cash resources to, among other things, meet our debt service requirements, fund our working capital requirements, make capital expenditures (including product development), and expand our business through acquisitions.

Based on our forecasts, we believe that cash flow from operations, available cash on hand and borrowing capacity, and access to capital markets will be adequate to service debt, meet liquidity needs, and fund capital expenditures and other business plans for both the next 12 months and the foreseeable future.

We require and will continue to need significant cash resources to, among other things, meet our debt service requirements, fund our working capital requirements, make capital expenditures (including product and content development), and expand our business through acquisitions.

Based on our forecasts, we believe that cash flow from operations, available cash on hand, borrowing capacity, and access to capital markets will be adequate to service debt, meet liquidity needs, and fund capital expenditures and other business plans for both the next 12 months and the foreseeable future.

Our future capital requirements will depend on many factors, including the number of future acquisitions and the timing and extent of spending to support product development efforts.

2 unchanged sentences

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What changed 10-K

Item 7. Management’s Discussion and Analysis