Clarivate (NYSE:CLVT) executives told investors the company reached what CEO Matti Shem Tov called a “positive inflection point” after meeting its initial full-year financial guidance for the first time since 2019, while also outlining plans to simplify its portfolio and lean further into AI-enabled products.
Management highlights: guidance delivery, portfolio review, and AI positioning
Shem Tov said Clarivate’s “value creation plan is working,” citing acceleration in organic annual contract value (ACV) and organic recurring revenue, alongside improved free cash flow conversion. He emphasized customer retention rates of 93% and said 97% of company revenue is generated from “proprietary solutions enhanced by AI.”
Management also addressed investor concerns about AI disruption. Shem Tov said Clarivate views AI as “an amplifier” rather than a threat, arguing its customers operate in high-stakes environments where provenance and accuracy are critical. He described the company’s AI approach as “Intelligence Amplified,” centered on:
- AI research assistants providing conversational search and discovery backed by proprietary data
- AI workflow agents embedded in customer workflows to speed execution
- AI ecosystem access through secured integrations, including a product called Nexus intended to bring curated content such as Web of Science into public chat tools
2025 results: organic ACV growth, mix shift, and cash generation
For 2025, Shem Tov said Clarivate delivered nearly 2% organic ACV growth at the high end of its range and improved its organic recurring revenue mix to 88%. He also cited more than $1 billion of adjusted EBITDA and $365 million of free cash flow for the year.
Collins reported fourth-quarter revenue of $617 million and full-year revenue of $2.455 billion. He said revenue changes in the quarter and year were “entirely inorganic” due to businesses disposed of and divested over the last year. Fourth-quarter net income was $3 million, which Collins said reflected a large improvement versus the prior year driven primarily by the absence of prior-year non-cash impairment charges, plus lower taxes and interest expense.
Adjusted diluted EPS for the fourth quarter was $0.20, up $0.02 sequentially, with Collins attributing year-over-year changes to inorganic factors. Operating cash flow was $160 million in the quarter, which he said improved due to working capital and lower interest and taxes.
Segment commentary: A&G resilience, IP turnaround efforts, LS&H inflection
In A&G, management said 2025 performance included 2% organic ACV growth despite U.S. academic funding headwinds. Shem Tov said Clarivate launched 10 AI assistants and AI-native “agentic solutions” now used by more than 4,000 institutions. He also said the segment has shifted away from transactional revenue, pushing organic recurring revenue mix to 93% with “mid-90s” retention rates.
In IP, Shem Tov said a new leadership team is in place and reiterated confidence in returning the segment to growth. He highlighted AI product launches and said the company delivered 270 basis points of year-over-year improvement in annuities revenue, attributing that to stronger execution. In Q&A, executives pointed to newer offerings such as Derwent Patent Search and Derwent Patent Monitor, and also discussed an AI-enabled trademark product called RiskMark. Collins said IP annuities declined by a few percent in 2024 and returned to about flat in 2025, adding that the business often experiences a two- to three-year lag between growth in patents in force and annuity revenue.
In LS&H, Shem Tov described adoption of AI tools, saying 11,000 global active users are using AI research assistants and workflow agents. He said Clarivate expects to release more than 10 additional AI solutions during the year and stated that Cortellis, DRG, and MetaX showed consistent quarterly ACV growth. Based on pipeline visibility, he said the company expects a return to organic revenue growth in LS&H in 2026, even as the segment is being pursued for a potential sale.
Capital allocation and leverage: buybacks, debt retirement, and a shift toward deleveraging
Collins said fourth-quarter free cash flow was $89 million, bringing the 2025 total to $365 million, toward the high end of guidance. He said lower working capital spending, interest, and taxes more than offset lower adjusted EBITDA and higher one-time costs.
He also detailed capital deployment during 2025, including $225 million of share repurchases and calls of $200 million of bonds due later in 2025 (with the final $100 million called in January 2026). Collins said the company maintained net leverage at approximately four times while retiring 56 million shares, or 7% of shares outstanding.
On capital allocation priorities for 2026, Collins said Clarivate expects to lean more toward deleveraging despite what he characterized as an attractive free cash flow yield for the stock, noting the company has no maturities for the next couple of years and will continue to monitor market conditions.
2026 outlook: accelerating ACV, margin expansion, and $400 million free cash flow target
For 2026, management guided to 2% to 3% organic ACV growth and 1% to 2% recurring organic revenue growth (about 1.5% at the midpoint, according to Collins). Collins said revenue is expected to decline to roughly $2.36 billion at the midpoint due entirely to the wind-down of disposed businesses, while the organic recurring revenue mix is projected to improve to 88% to 90%.
Collins said adjusted EBITDA is expected to grow modestly, with profit margin rising to nearly 43% at the midpoint. Adjusted diluted EPS is projected to grow about 9% to $0.75 at the midpoint, which he attributed largely to share repurchases completed in 2025. Free cash flow is expected to increase about 10% to $400 million at the midpoint.
In Q&A, Collins said price realization has been “pretty consistent” over the last couple of years and that improvements in ACV and recurring organic growth have been driven more by volume—higher renewal rates and new subscription sales—than by pricing. He added the company sees opportunities to monetize product investments, including AI, through pricing over time.
About Clarivate (NYSE:CLVT)
Clarivate plc is a global information and analytics company that provides insights and workflow solutions to accelerate the pace of innovation. The company delivers proprietary data, analytics, and expertise to support research and development in the life sciences, intellectual property management, academic institutions, government agencies, and corporations. Its core offerings include citation and patent databases, drug pipeline analytics, trademark research tools, regulatory compliance solutions, and market intelligence platforms.
Originally part of Thomson Reuters’ Intellectual Property & Science division, Clarivate was established as an independent entity in 2016 following a spin-off transaction.
