CLVT earnings analysis
What we found in CLVT's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Clarivate’s Q2 revenue declined 5.5% year over year to $587.3M, with all segments lower and transactional revenue down 30.1%. Cost discipline lifted gross margin to 68.4% and adjusted EBITDA margin held at 42.1%, but a $221.7M LS&H goodwill impairment produced a $268.6M GAAP net loss and a -34.1% operating margin. Cash generation remained positive, though first-half free cash flow fell 23% to $122.9M, while the planned LS&H divestiture introduces execution and reporting-transition risk.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue declined 5.5%, led by transactions
- Q2 revenue was $587.3M, down $34.1M, or 5.5%, from $621.4M a year earlier. The decline was concentrated in transactional revenue, which fell $32.1M, or 30.1%, to $74.7M.
- Gross margin expanded 120 basis points
- Gross margin expanded to 68.4% from 67.2% a year ago, as cost of revenues fell 9% to $185.5M versus a 5.5% revenue decline. Management attributed the cost reduction to product wind-downs and improved cost management.
- Underlying subscription metrics remained resilient
- Adjusted EBITDA was $247.2M versus $261.6M, while adjusted EBITDA margin held at 42.1%. Organic ACV increased 1.5% year over year and total ACV increased 3.1%, primarily from pricing and FX.
- Cash conversion remained positive despite decline
- Operating cash flow was $233.4M for the first six months, with capital expenditures of $110.5M and free cash flow of $122.9M. Capex represented 9.4% of six-month revenue of $1.173B.
- Debt reduction lowered interest expense
- Clarivate repurchased and retired $117.6M carrying value of notes for $111.1M cash during the first six months, generating a $5.9M net gain on extinguishment. Interest expense declined 9% to $60.4M in Q2.
- LS&H divestiture reshapes reported business
- The company entered an agreement in July 2026 to sell LS&H and anticipates closing by the end of 2026; LS&H will be presented as discontinued operations beginning in Q3 2026.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- LS&H impairment drove substantial GAAP loss
- GAAP operating loss was $200.2M, versus $6.9M of operating income a year ago, after a $221.7M non-cash goodwill impairment in LS&H. Net loss widened to $268.6M from $72.0M.
- All three operating segments declined
- Every segment contracted: A&G fell $18.2M (5.7%) to $300.3M, IP fell $4.2M (2.1%) to $198.3M, and LS&H fell $11.7M (11.7%) to $88.7M. Management cited product-group wind-downs and lower transactional activity.
- Working-capital timing reduced cash flow
- First-half operating cash flow decreased $54.1M (19%) to $233.4M and free cash flow decreased $37.7M (23%) to $122.9M, as seasonal working-capital outflows more than offset improved operating results.
- Leverage remains material
- Debt remained substantial at $4.224B at June 30, 2026, compared with $217.7M of cash. While available revolver capacity was $768.6M, the company requires significant cash resources for debt service, working capital, and product development.
- No formal risk-factor update; sale execution remains
- Item 1A states there were no material changes to risk factors from the December 31, 2025 Form 10-K. However, the announced LS&H sale is expected to close by the end of 2026 and remains subject to regulatory approvals and other customary conditions.
What they reported.
What the company itself reported, taken out of the document.
- Gross margin
- 68.4%
- Operating margin
- -34.1%
- Segment
- Academia & Government (A&G): $300.3M, down $18.2M (5.7%) year over year
- Segment
- Intellectual Property (IP): $198.3M, down $4.2M (2.1%) year over year
- Segment
- Life Sciences & Healthcare (LS&H): $88.7M, down $11.7M (11.7%) year over year
What they said about what is next.
The 10-Q MD&A does not provide quantitative revenue or EPS guidance. Management states it anticipates the LS&H sale will close by the end of 2026, subject to customary conditions, and expects the Value Creation Plan to continue throughout 2026 and into 2027.
The filing reads worse than the one before it.
What came before.
- 10-Q · April 29, 2026
- Clarivate's Q1 2026 results showed a slight revenue decline of 1.4% year-over-year, totaling $585.5 million, while net losses improved to $40.2 million from $103.9 million in the prior year. Despite ongoing…
- 10-K · February 24, 2026
- Clarivate positions itself as a leading provider of AI-enabled, subscription and re-occurring intelligence solutions across Academia & Government, Intellectual Property, and Life Sciences & Healthcare, serving more than…
- 10-Q · July 30, 2025
- Clarivate reported revenue of $621.4M for Q2 (June 30, 2025), a sequential increase from ~$594.0M but down vs. Q2 2024. Operating performance improved materially — income from operations was $6.9M vs an operating loss…
- 10-Q · May 8, 2024
- Clarivate reported Q1 revenue of $621.2M, down modestly from $629.1M a year ago, while GAAP diluted EPS was $(0.14) (net loss $75.0M). Gross profit improved (revenues $621.2M less cost of revenues $217.8M = $403.4M) but…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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