8-K
0001818201false00018182012023-08-012023-08-01

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 01, 2023

 

 

CCC Intelligent Solutions Holdings Inc.

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware

001-39447

98-1546280

(State or Other Jurisdiction
of Incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

 

 

 

 

 

167 N. Green Street, 9th Floor

 

Chicago, Illinois

 

60607

(Address of Principal Executive Offices)

 

(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (800) 621-8070

 

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class

 

Trading
Symbol(s)

 


Name of each exchange on which registered

Common stock, par value $0.0001 per share

 

CCCS

 

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 


Item 2.02 Results of Operations and Financial Condition.

Attached hereto as Exhibit 99.1 and incorporated by reference into this Item 2.02 is a copy of the press release, date August 1, 2023, announcing the financial results of CCC Intelligent Solutions Holdings Inc. for the quarter ended June 30, 2023, including, among other things, unaudited financial results for that period.

 

The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be incorporated by reference into any registration statement or other document filed pursuant to the Securities Act of 1933, as amended, or the Exchange Act, except as otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

 

 

 

Exhibit Number

Description

99.1

Press release, dated August 1, 2023

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

CCC INTELLIGENT SOLUTIONS HOLDINGS INC.

 

 

 

 

Date:

August 1, 2023

By:

/s/ Brian Herb

 

 

Name:

Title:

Brian Herb
Executive Vice President, Chief Financial and Administrative Officer

 


EX-99.1

Exhibit 99.1

CCC Intelligent Solutions Holdings Inc. Announces Second Quarter 2023 Financial Results

August 1, 2023 - CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NASDAQ: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2023.

“CCC delivered strong second quarter results, highlighted by 10% year-over-year revenue growth and 38% adjusted EBITDA margin. The strong performance in the first half of 2023 included multiple large renewals and relationship expansions that reinforce our confidence in our ability to deliver on our strategic and financial objectives,” said Githesh Ramamurthy, Chairman & CEO of CCC.

“We estimate that as a result of the continued macro pressures facing our customers, the cumulative annual cycle time for automotive claims in the U.S. increased to more than 2 billion days in 2022,” continued Ramamurthy. “This staggering figure underscores the importance of delivering effective and integrated state-of-the-art capabilities to help our clients in the P&C insurance economy address operational efficiency. Our solutions and use of AI are helping to do just that by helping customers to reduce the cycle time, administrative cost, and environmental impact of the claims process.”

Second Quarter 2023 Financial Highlights

Revenue

Total revenue was $211.7 million for the second quarter of 2023, an increase of 10% from $192.8 million for the second quarter of 2022.

Profitability

GAAP gross profit was $152.6 million, representing a gross margin of 72%, for the second quarter of 2023, compared with $139.9 million, representing a gross margin of 73%, for the second quarter of 2022. Adjusted gross profit was $162.0 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2023, compared with $148.4 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2022.
GAAP operating loss was $73.2 million for the second quarter of 2023, compared with GAAP operating income of $12.5 million for the second quarter of 2022. Adjusted operating income was $71.8 million for the second quarter of 2023, compared with adjusted operating income of $66.7 million for the second quarter of 2022.
GAAP net loss was $97.3 million for the second quarter of 2023, compared with GAAP net income of $15.6 million for the second quarter of 2022. Adjusted net income was $47.8 million for the second quarter of 2023, compared with adjusted net income of $37.4 million for the second quarter of 2022.
Adjusted EBITDA was $80.9 million for the second quarter of 2023, compared with adjusted EBITDA of $73.4 million for the second quarter of 2022. Adjusted EBITDA grew 10% in the second quarter of 2023 compared with the second quarter of 2022.

Liquidity

CCC had $403.6 million in cash and cash equivalents and $788.0 million of total debt on June 30, 2023. The Company generated $69.6 million in cash from operating activities and had free cash flow of $55.0 million during the second quarter of 2023, compared with $40.8 million generated in cash from operating activities and $29.6 million in free cash flow in the second quarter of 2022.

The information presented above includes non-GAAP financial measures such as “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” and “free cash flow.” Refer to “Non-GAAP Financial Measures” for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

2nd Quarter and Recent Business Highlights

A top-20 auto insurer and long-time customer of CCC’s Casualty solutions added CCC’s full suite of Automobile Physical Damage (“APD”) solutions in the second quarter of 2023, including CCC® Estimate-STP. The client will be transitioning services from multiple vendors onto CCC’s platform and reflects the significant opportunity and numerous ways available to CCC to expand its solutions with the U.S.’s largest insurers.
CCC is a leader in the Casualty solutions market and recently rolled out a new computer vision AI technology for Casualty claims that can predict potential physical injuries to the occupants of a vehicle involved in an accident based on photos of the damaged vehicles. In the second quarter of 2023, CCC added and expanded Casualty relationships with new and existing customers.

CCC continued to grow the breadth and depth of its network during the second quarter of 2023 by expanding the participation of 2 leading OEMs and signing a multi-year extension with one of the leading aftermarket parts suppliers. In addition, CCC has added nearly 1,000 repair facilities year to date. CCC’s total customer count now exceeds 35,000 and includes over 29,000 repair facilities, over 4,500 parts suppliers, more than 300 insurers, and 13 of the top-15 automotive OEMs. By connecting these companies and digitizing processes across the ecosystem, CCC’s platform increases their ability to be productive, reduce leakage, and improve communication throughout the P&C insurance economy – which ultimately can result in claims being resolved faster.

Business Outlook

Based on information as of today, August 1, 2023, the Company is issuing the following financial guidance:

 

Third Quarter Fiscal 2023

Full Year Fiscal 2023

 

Revenue

$215 million to $217 million

$851 million to $855 million

Adjusted EBITDA

 $86 million to $88 million

 $337 million to $341 million

Conference Call Information

CCC will host a conference call today, August 1, 2023, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and financial guidance. A live webcast of this conference call will be available on the “Investor Relations” page of the Company’s website at https://ir.cccis.com, and a replay will be archived on the website as well.

About CCC Intelligent Solutions

CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc. (NASDAQ: CCCS), is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people’s lives moving forward when it matters most. Learn more about CCC at www.cccis.com.

Forward Looking Statements

This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, future events, goals, plans and projections regarding the Company’s financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, our revenues, the concentration of our customers and the ability to retain our current customers; our ability to negotiate with our customers on favorable terms; our ability to maintain and grow our brand and reputation cost-effectively; the execution of our growth strategy; our projected financial information, growth rate and market opportunity; the health of our industry, claim volumes, and market conditions; changes in the insurance and automotive collision industries, including the adoption of new technologies; global economic conditions and geopolitical events; competition in our market and our ability to retain and grow market share; our ability to develop, introduce and market new enhanced versions of our solutions and products; our sales and implementation cycles; the ability of our research and development efforts to create significant new revenue streams; changes in applicable laws or regulations; changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries; currency fluctuations; our reliance on third-party data, technology and intellectual property; our ability to protect our intellectual property; our ability to keep our data and information systems secure from data security breaches; our ability to acquire or invest in companies or pursue business partnerships; our ability to raise financing in the future and improve our capital structure; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our ability to expand or maintain our existing customer base; our ability to service our indebtedness; and other risks and uncertainties, including those included under the header “Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022 filed with the Securities and Exchange Commission (“SEC”), which can be obtained, without charge, at the SEC’s website (www.sec.gov), and in our other filings with the SEC. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.


Non-GAAP Financial Measures

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”), including, but not limited to, “adjusted EBITDA,” “adjusted net income,” “adjusted operating income,” “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating expenses,” and “free cash flow” in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies.

The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.

This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included for these projections.

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. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

 

ASSETS

 

 

 

 

 

 

CURRENT ASSETS:

 

 

 

 

 

 

Cash and cash equivalents

 

$

403,577

 

 

$

323,788

 

Accounts receivable—Net of allowances of $5,874 and $5,339 as of June 30, 2023 and
   December 31, 2022, respectively

 

 

96,139

 

 

 

98,353

 

Income taxes receivable

 

 

5,830

 

 

 

4,015

 

Deferred contract costs

 

 

16,871

 

 

 

16,556

 

Other current assets

 

 

29,240

 

 

 

36,358

 

Total current assets

 

 

551,657

 

 

 

479,070

 

SOFTWARE, EQUIPMENT, AND PROPERTY—Net

 

 

153,539

 

 

 

146,443

 

OPERATING LEASE ASSETS

 

 

31,647

 

 

 

32,874

 

INTANGIBLE ASSETS—Net

 

 

1,064,064

 

 

 

1,118,819

 

GOODWILL

 

 

1,417,724

 

 

 

1,495,129

 

DEFERRED FINANCING FEES, REVOLVER—Net

 

 

1,979

 

 

 

2,286

 

DEFERRED CONTRACT COSTS

 

 

19,480

 

 

 

20,161

 

EQUITY METHOD INVESTMENT

 

 

10,228

 

 

 

10,228

 

OTHER ASSETS

 

 

52,072

 

 

 

45,911

 

TOTAL

 

$

3,302,390

 

 

$

3,350,921

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

 

 

 

 

 

 

CURRENT LIABILITIES:

 

 

 

 

 

 

Accounts payable

 

$

19,084

 

 

$

27,599

 

Accrued expenses

 

 

54,711

 

 

 

71,445

 

Income taxes payable

 

 

3,509

 

 

 

922

 

Current portion of long-term debt

 

 

8,000

 

 

 

8,000

 

Current portion of long-term licensing agreement—Net

 

 

2,967

 

 

 

2,876

 

Operating lease liabilities

 

 

7,049

 

 

 

5,484

 

Deferred revenues

 

 

40,064

 

 

 

35,239

 

Total current liabilities

 

 

135,384

 

 

 

151,565

 

LONG-TERM DEBT—Net

 

 

770,787

 

 

 

774,132

 

DEFERRED INCOME TAXES—Net

 

 

217,907

 

 

 

241,698

 

LONG-TERM LICENSING AGREEMENT—Net

 

 

29,246

 

 

 

30,752

 

OPERATING LEASE LIABILITIES

 

 

52,431

 

 

 

54,245

 

WARRANT LIABILITIES

 

 

55,585

 

 

 

36,405

 

OTHER LIABILITIES

 

 

1,550

 

 

 

2,658

 

Total liabilities

 

 

1,262,890

 

 

 

1,291,455

 

COMMITMENTS AND CONTINGENCIES (Notes 19 and 20)

 

 

 

 

 

 

MEZZANINE EQUITY:

 

 

 

 

 

 

Redeemable non-controlling interest

 

 

14,494

 

 

 

14,179

 

STOCKHOLDERS’ EQUITY:

 

 

 

 

 

 

Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding

 

 

 

 

 

 

Common stock—$0.0001 par; 5,000,000,000 shares authorized; 631,982,491 and
   622,072,905 shares issued and outstanding at June 30, 2023 and December 31,
   2022, respectively

 

 

63

 

 

 

62

 

Additional paid-in capital

 

 

2,829,184

 

 

 

2,754,055

 

Accumulated deficit

 

 

(803,106

)

 

 

(707,946

)

Accumulated other comprehensive loss

 

 

(1,135

)

 

 

(884

)

Total stockholders’ equity

 

 

2,025,006

 

 

 

2,045,287

 

TOTAL

 

$

3,302,390

 

 

$

3,350,921

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In thousands, except share and per share data)

(Unaudited)

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

REVENUES

 

$

211,710

 

 

$

192,786

 

 

$

416,630

 

 

$

379,609

 

COST OF REVENUES

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues, exclusive of amortization and impairment of acquired technologies

 

 

52,047

 

 

 

46,095

 

 

 

102,494

 

 

 

88,795

 

Amortization of acquired technologies

 

 

6,646

 

 

 

6,750

 

 

 

13,331

 

 

 

13,445

 

Impairment of acquired technologies

 

 

431

 

 

 

 

 

 

431

 

 

 

 

Total cost of revenues

 

 

59,124

 

 

 

52,845

 

 

 

116,256

 

 

 

102,240

 

GROSS PROFIT

 

 

152,586

 

 

 

139,941

 

 

 

300,374

 

 

 

277,369

 

OPERATING EXPENSES:

 

 

 

 

 

 

 

 

 

 

 

 

Research and development

 

 

43,363

 

 

 

38,758

 

 

 

84,359

 

 

 

74,438

 

Selling and marketing

 

 

35,936

 

 

 

31,091

 

 

 

69,467

 

 

 

57,894

 

General and administrative

 

 

46,141

 

 

 

39,509

 

 

 

88,006

 

 

 

83,717

 

Amortization of intangible assets

 

 

18,022

 

 

 

18,066

 

 

 

36,088

 

 

 

36,146

 

Impairment of goodwill

 

 

77,405

 

 

 

 

 

 

77,405

 

 

 

 

Impairment of intangible assets

 

 

4,906

 

 

 

 

 

 

4,906

 

 

 

 

Total operating expenses

 

 

225,773

 

 

 

127,424

 

 

 

360,231

 

 

 

252,195

 

OPERATING (LOSS) INCOME

 

 

(73,187

)

 

 

12,517

 

 

 

(59,857

)

 

 

25,174

 

INTEREST EXPENSE

 

 

(14,014

)

 

 

(7,944

)

 

 

(27,846

)

 

 

(15,285

)

INTEREST INCOME

 

 

4,023

 

 

 

 

 

 

7,282

 

 

 

 

CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS

 

 

3,613

 

 

 

 

 

 

1,009

 

 

 

 

CHANGE IN FAIR VALUE OF WARRANT LIABILITIES

 

 

(20,375

)

 

 

21,004

 

 

 

(19,180

)

 

 

23,140

 

GAIN ON SALE OF COST METHOD INVESTMENT

 

 

 

 

 

 

 

 

 

 

 

3,578

 

OTHER INCOME—Net

 

 

315

 

 

 

112

 

 

 

368

 

 

 

194

 

PRETAX (LOSS) INCOME

 

 

(99,625

)

 

 

25,689

 

 

 

(98,224

)

 

 

36,801

 

INCOME TAX BENEFIT (PROVISION)

 

 

2,281

 

 

 

(10,125

)

 

 

3,064

 

 

 

(9,262

)

NET (LOSS) INCOME INCLUDING NON-CONTROLLING
   INTEREST

 

 

(97,344

)

 

 

15,564

 

 

 

(95,160

)

 

 

27,539

 

LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST

 

 

(315

)

 

 

 

 

 

(315

)

 

 

 

NET (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT
   SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS

 

$

(97,659

)

 

$

15,564

 

 

$

(95,475

)

 

$

27,539

 

Net (loss) income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.16

)

 

$

0.03

 

 

$

(0.15

)

 

$

0.05

 

Diluted

 

$

(0.16

)

 

$

0.02

 

 

$

(0.15

)

 

$

0.04

 

Weighted-average shares used in computing net (loss) income per share
   attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

621,235,776

 

 

 

605,948,628

 

 

 

618,740,340

 

 

 

604,534,589

 

Diluted

 

 

621,235,776

 

 

 

639,964,696

 

 

 

618,740,340

 

 

 

640,650,297

 

COMPREHENSIVE (LOSS) INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income including non-controlling interest

 

 

(97,344

)

 

 

15,564

 

 

 

(95,160

)

 

 

27,539

 

Other comprehensive income (loss)—Foreign currency translation
   adjustment

 

 

(285

)

 

 

(303

)

 

 

(251

)

 

 

(294

)

COMPREHENSIVE (LOSS) INCOME INCLUDING
   NON-CONTROLLING INTEREST

 

 

(97,629

)

 

 

15,261

 

 

 

(95,411

)

 

 

27,245

 

Less: accretion of redeemable non-controlling interest

 

 

(315

)

 

 

 

 

 

(315

)

 

 

 

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CCC
   INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS

 

$

(97,944

)

 

$

15,261

 

 

$

(95,726

)

 

$

27,245

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

 

 

 

For the Six Months Ended

 

 

 

June 30,

 

 

 

2023

 

 

2022

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

Net (loss) income

 

$

(95,160

)

 

$

27,539

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization of software, equipment, and property

 

 

17,966

 

 

 

13,490

 

Amortization of intangible assets

 

 

49,419

 

 

 

49,591

 

Impairment of goodwill and intangible assets

 

 

82,742

 

 

 

 

Deferred income taxes

 

 

(23,791

)

 

 

(43,703

)

Stock-based compensation

 

 

64,720

 

 

 

52,047

 

Amortization of deferred financing fees

 

 

851

 

 

 

949

 

Amortization of discount on debt

 

 

111

 

 

 

131

 

Change in fair value of derivative instruments

 

 

(1,009

)

 

 

 

Change in fair value of warrant liabilities

 

 

19,180

 

 

 

(23,140

)

Non-cash lease expense

 

 

1,232

 

 

 

2,152

 

Loss on disposal of software, equipment and property

 

 

 

 

 

795

 

Gain on sale of cost method investment

 

 

 

 

 

(3,578

)

Other

 

 

115

 

 

 

47

 

Changes in:

 

 

 

 

 

 

Accounts receivable—Net

 

 

2,322

 

 

 

(4,027

)

Deferred contract costs

 

 

(315

)

 

 

(952

)

Other current assets

 

 

7,116

 

 

 

15,463

 

Deferred contract costs—Non-current

 

 

681

 

 

 

2,248

 

Other assets

 

 

(5,267

)

 

 

(9,935

)

Operating lease assets

 

 

(5

)

 

 

1,576

 

Income taxes

 

 

772

 

 

 

13,851

 

Accounts payable

 

 

(8,534

)

 

 

3,204

 

Accrued expenses

 

 

(14,975

)

 

 

(7,949

)

Operating lease liabilities

 

 

(249

)

 

 

(4,308

)

Deferred revenues

 

 

4,825

 

 

 

2,256

 

Other liabilities

 

 

(115

)

 

 

(62

)

Net cash provided by operating activities

 

 

102,632

 

 

 

87,685

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

Purchases of software, equipment, and property

 

 

(29,084

)

 

 

(25,469

)

Acquisition of Safekeep, Inc., net of cash acquired

 

 

 

 

 

(32,242

)

Proceeds from sale of cost method investment

 

 

 

 

 

3,892

 

Net cash used in investing activities

 

 

(29,084

)

 

 

(53,819

)

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

20,827

 

 

 

15,511

 

Proceeds from employee stock purchase plan

 

 

1,326

 

 

 

 

Payments for employee taxes withheld upon vesting of equity awards

 

 

(11,539

)

 

 

 

Principal payments on long-term debt

 

 

(4,000

)

 

 

(4,000

)

Net cash provided by financing activities

 

 

6,614

 

 

 

11,511

 

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

 

(373

)

 

 

(281

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

 

79,789

 

 

 

45,096

 

CASH AND CASH EQUIVALENTS:

 

 

 

 

 

 

Beginning of period

 

 

323,788

 

 

 

182,544

 

End of period

 

$

403,577

 

 

$

227,640

 

NONCASH INVESTING AND FINANCING ACTIVITIES:

 

 

 

 

 

 

Noncash purchases of software, equipment, and property

 

$

550

 

 

$

 

Contingent consideration related to business acquisition

 

$

 

 

$

200

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:

 

 

 

 

 

 

Cash paid for interest

 

$

26,946

 

 

$

14,153

 

Cash paid for income taxes—Net

 

$

19,954

 

 

$

38,946

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT

(In thousands, except profit margin percentage data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(amounts in thousands, except percentages)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Gross Profit

 

$

152,586

 

 

$

139,941

 

 

$

300,374

 

 

$

277,369

 

Amortization of acquired technologies

 

 

6,646

 

 

 

6,750

 

 

 

13,331

 

 

 

13,445

 

Impairment of acquired technologies

 

 

431

 

 

 

 

 

 

431

 

 

 

 

Stock-based compensation and related employer payroll tax

 

 

2,358

 

 

 

1,680

 

 

 

4,473

 

 

 

2,613

 

Adjusted Gross Profit

 

$

162,021

 

 

$

148,371

 

 

$

318,609

 

 

$

293,427

 

Gross Profit Margin

 

 

72

%

 

 

73

%

 

 

72

%

 

 

73

%

Adjusted Gross Profit Margin

 

 

77

%

 

 

77

%

 

 

76

%

 

 

77

%

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(dollar amounts in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating expenses

 

$

225,773

 

 

$

127,424

 

 

$

360,231

 

 

$

252,195

 

Amortization of intangible assets

 

 

(18,022

)

 

 

(18,066

)

 

 

(36,088

)

 

 

(36,146

)

Impairment of goodwill

 

 

(77,405

)

 

 

 

 

 

(77,405

)

 

 

 

Impairment of intangible assets

 

 

(4,906

)

 

 

 

 

 

(4,906

)

 

 

 

Stock-based compensation expense and related employer payroll tax

 

 

(33,706

)

 

 

(26,973

)

 

 

(62,799

)

 

 

(50,695

)

Plaintiff litigation costs

 

 

(1,537

)

 

 

 

 

 

(2,523

)

 

 

 

M&A and integration costs

 

 

 

 

 

(348

)

 

 

 

 

 

(1,756

)

Lease overlap costs

 

 

 

 

 

 

 

 

 

 

 

(1,222

)

Lease abandonment

 

 

 

 

 

 

 

 

 

 

 

(1,338

)

Business Combination transaction and related costs

 

 

 

 

 

(324

)

 

 

 

 

 

(1,056

)

Net costs related to divestiture

 

 

 

 

 

6

 

 

 

 

 

 

(53

)

Adjusted operating expenses

 

$

90,197

 

 

$

81,719

 

 

$

176,510

 

 

$

159,929

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP OPERATING (LOSS) INCOME TO ADJUSTED OPERATING INCOME

(In thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(dollar amounts in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating (loss) income

 

$

(73,187

)

 

$

12,517

 

 

$

(59,857

)

 

$

25,174

 

Amortization of intangible assets

 

 

18,022

 

 

 

18,066

 

 

 

36,088

 

 

 

36,146

 

Amortization of acquired technologies—Cost of revenue

 

 

6,646

 

 

 

6,750

 

 

 

13,331

 

 

 

13,445

 

Impairment of acquired technologies—Cost of revenue

 

 

431

 

 

 

 

 

 

431

 

 

 

 

Impairment of goodwill

 

 

77,405

 

 

 

 

 

 

77,405

 

 

 

 

Impairment of intangible assets

 

 

4,906

 

 

 

 

 

 

4,906

 

 

 

 

Stock-based compensation expense and related employer payroll tax

 

 

36,064

 

 

 

28,653

 

 

 

67,272

 

 

 

53,308

 

Plaintiff litigation costs

 

 

1,537

 

 

 

 

 

 

2,523

 

 

 

 

M&A and integration costs

 

 

 

 

 

348

 

 

 

 

 

 

1,756

 

Lease overlap costs

 

 

 

 

 

 

 

 

 

 

 

1,222

 

Lease abandonment

 

 

 

 

 

 

 

 

 

 

 

1,338

 

Business Combination transaction and related costs

 

 

 

 

 

324

 

 

 

 

 

 

1,056

 

Net costs related to divestiture

 

 

 

 

 

(6

)

 

 

 

 

 

53

 

Adjusted operating income

 

$

71,824

 

 

$

66,652

 

 

$

142,099

 

 

$

133,498

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED EBITDA

(In thousands, except for EBITDA margin percentage data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(dollar amounts in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(97,344

)

 

$

15,564

 

 

$

(95,160

)

 

$

27,539

 

Interest expense

 

 

14,014

 

 

 

7,944

 

 

 

27,846

 

 

 

15,285

 

Interest income

 

 

(4,023

)

 

 

 

 

 

(7,282

)

 

 

 

Income tax (benefit) provision

 

 

(2,281

)

 

 

10,125

 

 

 

(3,064

)

 

 

9,262

 

Amortization of intangible assets

 

 

18,022

 

 

 

18,066

 

 

 

36,088

 

 

 

36,146

 

Amortization of acquired technologies—Cost of revenue

 

 

6,646

 

 

 

6,750

 

 

 

13,331

 

 

 

13,445

 

Depreciation and amortization of software, equipment and property

 

 

2,187

 

 

 

2,444

 

 

 

4,414

 

 

 

5,407

 

Depreciation and amortization of software, equipment and property—Cost of revenue

 

 

6,573

 

 

 

4,239

 

 

 

13,552

 

 

 

8,083

 

EBITDA

 

 

(56,206

)

 

 

65,132

 

 

 

(10,275

)

 

 

115,167

 

Stock-based compensation expense and related employer payroll tax

 

 

36,064

 

 

 

28,653

 

 

 

67,272

 

 

 

53,308

 

Impairment of acquired technologies—Cost of revenue

 

 

431

 

 

 

 

 

 

431

 

 

 

 

Impairment of goodwill

 

 

77,405

 

 

 

 

 

 

77,405

 

 

 

 

Impairment of intangible assets

 

 

4,906

 

 

 

 

 

 

4,906

 

 

 

 

Change in fair value of derivative instruments

 

 

(3,613

)

 

 

 

 

 

(1,009

)

 

 

 

Plaintiff litigation costs

 

 

1,537

 

 

 

 

 

 

2,523

 

 

 

 

Change in fair value of warrant liabilities

 

 

20,375

 

 

 

(21,004

)

 

 

19,180

 

 

 

(23,140

)

M&A and integration costs

 

 

 

 

 

348

 

 

 

 

 

 

1,756

 

Lease overlap costs

 

 

 

 

 

 

 

 

 

 

 

1,222

 

Lease abandonment

 

 

 

 

 

 

 

 

 

 

 

1,338

 

Business Combination transaction and related costs

 

 

 

 

 

324

 

 

 

 

 

 

1,056

 

Net costs related to divestiture

 

 

 

 

 

(6

)

 

 

 

 

 

53

 

Gain on sale of cost method investment

 

 

 

 

 

 

 

 

 

 

 

(3,578

)

Adjusted EBITDA

 

$

80,899

 

 

$

73,447

 

 

$

160,433

 

 

$

147,182

 

Adjusted EBITDA Margin

 

 

38

%

 

 

38

%

 

 

39

%

 

 

39

%

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET (LOSS) INCOME TO ADJUSTED NET INCOME

(In thousands, except share and per share data)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(dollar amounts in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net (loss) income

 

$

(97,344

)

 

$

15,564

 

 

$

(95,160

)

 

$

27,539

 

Amortization of intangible assets

 

 

18,022

 

 

 

18,066

 

 

 

36,088

 

 

 

36,146

 

Amortization of acquired technologies—Cost of revenue

 

 

6,646

 

 

 

6,750

 

 

 

13,331

 

 

 

13,445

 

Impairment of acquired technologies—Cost of revenue

 

 

431

 

 

 

 

 

 

431

 

 

 

 

Impairment of goodwill

 

 

77,405

 

 

 

 

 

 

77,405

 

 

 

 

Impairment of intangible assets

 

 

4,906

 

 

 

 

 

 

4,906

 

 

 

 

Stock-based compensation expense and related employer payroll tax

 

 

36,064

 

 

 

28,653

 

 

 

67,272

 

 

 

53,308

 

Change in fair value of derivative instruments

 

 

(3,613

)

 

 

 

 

 

(1,009

)

 

 

 

Plaintiff litigation costs

 

 

1,537

 

 

 

 

 

 

2,523

 

 

 

 

Change in fair value of warrant liabilities

 

 

20,375

 

 

 

(21,004

)

 

 

19,180

 

 

 

(23,140

)

M&A and integration costs

 

 

 

 

 

348

 

 

 

 

 

 

1,756

 

Lease overlap costs

 

 

 

 

 

 

 

 

 

 

 

1,222

 

Lease abandonment

 

 

 

 

 

 

 

 

 

 

 

1,338

 

Business Combination transaction and related costs

 

 

 

 

 

324

 

 

 

 

 

 

1,056

 

Net costs related to divestiture

 

 

 

 

 

(6

)

 

 

 

 

 

53

 

Gain on sale of cost method investment

 

 

 

 

 

 

 

 

 

 

 

(3,578

)

Tax effect of adjustments

 

 

(16,587

)

 

 

(11,287

)

 

 

(30,633

)

 

 

(22,867

)

Adjusted net income

 

$

47,842

 

 

$

37,408

 

 

$

94,334

 

 

$

86,278

 

Adjusted net income per share attributable to common stockholders:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.08

 

 

$

0.06

 

 

$

0.15

 

 

$

0.14

 

Diluted

 

$

0.07

 

 

$

0.06

 

 

$

0.15

 

 

$

0.13

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

621,235,776

 

 

 

605,948,628

 

 

 

618,740,340

 

 

 

604,534,589

 

Diluted

 

 

651,427,506

 

 

 

639,964,696

 

 

 

648,887,781

 

 

 

640,650,297

 

 


CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF NET CASH FLOW FROM OPERATING ACTIVITIES TO FREE CASH FLOW

(In thousands)

(Unaudited)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

(dollar amounts in thousands)

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Net cash provided by operating activities

 

$

69,554

 

 

$

40,820

 

 

$

102,632

 

 

$

87,685

 

Less: Purchases of software, equipment, and property

 

 

(14,560

)

 

 

(11,189

)

 

 

(29,084

)

 

 

(25,469

)

Free Cash Flow

 

$

54,994

 

 

$

29,631

 

 

$

73,548

 

 

$

62,216