Clarivate Plc

Q2 revenue was $587 million, with first-half revenue nearly $1.2 billion. Q2 net loss was $269 million, driven entirely by a non-cash impairment charge tied to the definitive agreement to divest Life Sciences & Healthcare. Adjusted diluted EPS was $0.19 in Q2, up $0.01 year over year, and $0.38 for the first half, up 19% year over year. Operating cash flow was $99 million in Q2 and free cash flow was $44 million, down $6 million year over year. Organic ACV growth was 1.5%, and management said profit margin expanded to more than 42%. For the full year, management now expects revenue just below the midpoint of the range at $2.35 billion, adjusted EBITDA at just over $1 billion, adjusted diluted EPS of $0.75 at the midpoint, and free cash flow at the low end of the range. They still expect about 1% organic growth for the year, about 1.5% recurring organic growth near the midpoint, and around 200 bps of adjusted EBITDA margin expansion. Management said the business should accelerate organically in the second half, revenue should be seasonally lower in Q3 and higher in Q4, and the LS&H divestiture is expected to close by year-end.

Matti Shem Tov framed the quarter as evidence that the value creation plan is working and that Clarivate now has the “building blocks” to accelerate organic growth. He emphasized AI-enabled product launches, a more recurring subscription mix, disciplined cost management, and the planned sale of Life Sciences & Healthcare as steps toward a more focused, higher-quality business. His tone was constructive and confident, repeatedly saying the company is moving with urgency and expects momentum to build into 2027.

Jonathan Collins focused on the numbers behind the quarter and the updated guidance. He highlighted Q2 revenue of $587 million, adjusted diluted EPS of $0.19, operating cash flow of $99 million, and free cash flow of $44 million, with the quarter affected by disposals, lower organic transactional revenue, and FX. He said disciplined cost management preserved adjusted EBITDA margins, first-half margin expanded by nearly a full point, and the company repurchased another $75 million of 2028 bonds at about a 3% discount, bringing first-half debt reduction to $218 million. For the full year, he said debt reduction is expected to total about $900 million, free cash flow should be flat versus last year due to nearly $70 million of one-time divestiture costs, and cash interest should improve by about $20 million.

Analysts pressed on whether Q2 ACV softness reflected longer sales cycles, and management said it did not; Jonathan Collins said the quarter was in line with expectations, renewal timing can be lumpy, and second-half ACV and recurring organic revenue should inflect. Questions also focused on AI/MCP monetization, with Matti Shem Tov saying larger customers want embedded MCP capabilities while smaller customers may use Clarivate’s environment, and that AI can create new revenue streams and AI-specific pricing. On transactional revenue, management said declines were partly due to a deliberate shift toward subscription, plus some headwinds in Life Sciences and lapping prior-quarter items; they said there was no single discrete client issue and no MAC-style concern around the LS&H sale.