Clarivate Powers Through Volatile Markets, Reaffirming 2025 Outlook
Clarivate, a leading provider of research and innovation insights, has demonstrated its resilience in the face of market volatility, delivering strong results for the first quarter of 2025. In a recent earnings conference call, company executives highlighted the firm's ability to execute on its long-term strategy despite challenging conditions.
CEO Matitiahu Shem Tov kicked off the call by thanking employees around the world for their dedication and hard work in implementing the company's value creation plan. This initiative has led to improved sales execution and accelerated innovation, resulting in a strong Q1 performance. Organic annual contract value (ACV) grew sequentially from last year's fourth quarter, driven by higher renewal rates and new business wins.
The total organic revenue for the first quarter increased for the first time in more than a year, with recurring organic revenue growing nearly 1%. Renewal rates across Clarivate's subscription base also improved over the past year, with a notable increase of percentage point. The company's recurring revenue mix now stands at 83%, an improvement of 200 basis points compared to last year's first quarter.
Adjusted EBITDA margin saw a significant increase due to internal cost efficiency, and free cash flow remained strong, reaching $110 million. These results have led Clarivate to reaffirm its full-year 2025 outlook.
Shem Tov highlighted three key takeaways from the quarter: the company's offerings remain mission-critical for customers worldwide; its solutions translate into new logo wins and expansion within existing customer bases; and its value creation plan is on track, despite a volatile macro environment. These points were underscored by the company's performance across segments, including accelerating ACV growth, improving renewal rates, and enhanced utilization of AI features in key products.
Clarivate's AI-powered research assistant has seen significant adoption, with over 3,000 customers across more than 90 countries utilizing its capabilities to enhance research, learning, and library management. The company is also seeing early success in its new Web of Science commercial model, which has resulted in customers extending annual renewals into multiyear deals worth over $80 million.
While addressing the recent events involving U.S. government funding, Shem Tov noted that these sales represent a small portion of Clarivate's total revenues.
