CCC Intelligent Solutions Holdings Inc. (“CCC” or the “Company”) (NYSE: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended September 30, 2022, and raised revenue and adjusted EBITDA guidance for fiscal year 2022.

“CCC delivered strong third quarter results, highlighted by 13% revenue growth and 39% adjusted EBITDA margin. Our solid performance is a byproduct of CCC’s unique platform that combines an efficient technology framework, close customer relationships, and a multi-sided network benefitting all parties,” said Githesh Ramamurthy, Chairman & CEO of CCC.

“Our efficient financial model enables continuous investment in innovation and we have a long history of developing solutions to solve problems for our customers. As a result, we are well-positioned to provide our customers with digital solutions that help address the macro environment and support our clients in their digital transformation,” continued Ramamurthy.

Third Quarter 2022 Financial Highlights

Revenue

  • Total revenue was $198.7 million for the third quarter of 2022, an increase of 13% from $176.6 million for the third quarter of 2021.

Profitability

  • GAAP gross profit was $145.6 million, representing a gross profit margin of 73%, for the third quarter of 2022, compared with $118.8 million, representing a gross profit margin of 67%, for the third quarter of 2021. Adjusted gross profit was $154.1 million, representing an adjusted gross profit margin of 78%, for the third quarter of 2022, compared with $138.4 million, representing an adjusted gross profit margin of 78%, for the third quarter of 2021.
  • GAAP operating income was $17.1 million for the third quarter of 2022, compared with GAAP operating loss of $189.2 million for the third quarter of 2021. Adjusted operating income was $71.1 million for the third quarter of 2022, compared with adjusted operating income of $62.5 million for the third quarter of 2021.
  • GAAP net income was $9.8 million for the third quarter of 2022, compared with GAAP net loss of $189.8 million for the third quarter of 2021. Adjusted net income was $46.6 million for the third quarter of 2022, compared with $29.7 million for the third quarter of 2021.
  • Adjusted EBITDA was $78.1 million for the third quarter of 2022, compared with adjusted EBITDA of $70.1 million for the third quarter of 2021. Adjusted EBITDA grew 11% in the third quarter of 2022 as compared to the third quarter of 2021.

Liquidity

  • CCC had $248.2 million in cash and cash equivalents and $794.0 million of total debt on September 30, 2022. The Company generated cash from operating activities of $30.8 million in the third quarter of 2022, compared with $36.9 million in the third quarter of 2021. The Company generated free cash flow of $17.4 million in the third quarter of 2022, compared with $25.0 million in the third quarter of 2021.

The information presented above includes non-GAAP financial measures such as “adjusted gross profit,” “adjusted gross profit margin,” “adjusted operating income,” “adjusted net income,” “adjusted EBITDA,” 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.

3rd Quarter and Recent Business Highlights

  • Increased to 14 the total number of insurance carriers using CCC® Estimate - STP, the first touchless line-level estimating experience in the industry that uses advanced AI and insurer-driven rules to automatically initiate and populate detailed and actionable estimates in seconds. These 14 carriers include 7 of the top-10 auto insurers in the U.S. by direct written premium and represent over 50% of U.S. auto insurance claim volume.
  • Over the past few years, CCC has built a robust network of leading providers of diagnostic services, including asTech, AirPro, Opus, and Honda. Last week CCC launched a new optional add-on package to CCC® Diagnostics that simplifies the administration of diagnostics, creating more consistency in reporting, improving verification of scans, and increasing transparency between repairers and insurers. CCC Diagnostics enables repairers to send the results and invoices of completed scans for a particular claim to the relevant insurer directly through CCC ONE®, the leading collision repair platform used by 27,500 repair facilities nationwide.
  • Renewed a top-20 national insurer. This insurer extended their contract with CCC through 2029 (a 7-year extension) and also expanded their relationship to include multiple new solutions. This commitment underscores CCC’s continued role as our customers’ long-term partner of choice for innovation and business transformation.

  • CCC welcomed Mike Silva as the company’s new Chief Commercial and Customer Success Officer. Silva has run multi-billion-dollar U.S. and international operations at multiple companies, including Microsoft, IBM, UnitedHealth and, most recently, Salesforce. Silva has deep experience with enterprise-level sales in SaaS, Cloud and AI across insurance, financial services and other industries. Silva began his career as a Claims Manager at Chubb insurance.

Business Outlook

Based on information as of today, November 4, 2022, the Company is issuing the following financial guidance:

 

Fourth Quarter Fiscal 2022

 

Full Year Fiscal 2022

Revenue

$200 million to $202 million

 

$779 million to $781 million

 

 

 

 

Adjusted EBITDA

$77 million to $79 million

 

$302 million to $304 million

Conference Call Information

CCC will host a conference call today, November 4, 2022, at 8:00 a.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. (NYSE: 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 30,000 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, statements regarding 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; the impact of COVID-19 on our business and results of operations; 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, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnership; 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 officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our financial performance; our ability to expand or maintain its 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, 2021 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.

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
 

September 30,

 

December 31,

2022

 

2021

(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents

248,153

 

182,544

 

Accounts receivable—Net of allowances of $4,690 and $3,791 as of September 30, 2022 and December 31, 2021, respectively

98,194

 

78,793

 

Income taxes receivable

71

 

318

 

Deferred contract costs

15,788

 

15,069

 

Other current assets

33,898

 

46,181

 

Total current assets

396,104

 

322,905

 

SOFTWARE, EQUIPMENT, AND PROPERTY—Net

147,531

 

135,845

 

OPERATING LEASE ASSETS

34,901

 

37,234

 

INTANGIBLE ASSETS—Net

1,143,630

 

1,213,249

 

GOODWILL

1,494,267

 

1,466,884

 

DEFERRED FINANCING FEES, REVOLVER—Net

2,439

 

2,899

 

DEFERRED CONTRACT COSTS

18,818

 

22,117

 

EQUITY METHOD INVESTMENT

10,228

 

10,228

 

OTHER ASSETS

49,999

 

26,165

 

TOTAL

3,297,917

 

3,237,526

 

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable

14,579

 

12,918

 

Accrued expenses

63,873

 

66,691

 

Income taxes payable

17,025

 

7,243

 

Current portion of long-term debt

8,000

 

8,000

 

Current portion of long-term licensing agreement—Net

2,832

 

2,703

 

Operating lease liabilities

3,713

 

8,052

 

Deferred revenues

33,602

 

31,042

 

Total current liabilities

143,624

 

136,649

 

LONG-TERM DEBT—Net

775,770

 

780,610

 

DEFERRED INCOME TAXES—Net

222,370

 

275,745

 

LONG-TERM LICENSING AGREEMENT—Net

31,488

 

33,629

 

OPERATING LEASE LIABILITIES

58,111

 

56,133

 

WARRANT LIABILITIES

39,026

 

62,478

 

OTHER LIABILITIES

2,729

 

5,785

 

Total liabilities

1,273,118

 

1,351,029

 

COMMITMENTS AND CONTINGENCIES (Notes 19 and 20)
MEZZANINE EQUITY:
Redeemable non-controlling interest

14,179

 

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; 620,117,025 and 609,768,296 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively

62

 

61

 

Additional paid-in capital

2,720,695

 

2,618,924

 

Accumulated deficit

(709,018

)

(746,352

)

Accumulated other comprehensive loss

(1,119

)

(315

)

Total stockholders’ equity

2,010,620

 

1,872,318

 

TOTAL

3,297,917

 

3,237,526

 

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(In thousands, except share and per share data)
(Unaudited)
 

For the Three Months Ended

 

For the Nine Months Ended

September 30,

 

September 30,

2022

 

2021

 

2022

 

2021

REVENUES

$

198,734

 

$

176,628

 

$

578,342

 

$

501,205

 

COST OF REVENUES
Cost of revenues, exclusive of amortization of acquired technologies

 

46,379

 

 

51,273

 

 

135,174

 

 

128,218

 

Amortization of acquired technologies

 

6,748

 

 

6,580

 

 

20,193

 

 

19,740

 

Total cost of revenues

 

53,127

 

 

57,853

 

 

155,367

 

 

147,958

 

GROSS PROFIT

 

145,607

 

 

118,775

 

 

422,975

 

 

353,247

 

OPERATING EXPENSES:
Research and development

 

40,273

 

 

67,016

 

 

114,711

 

 

128,894

 

Selling and marketing

 

30,838

 

 

80,382

 

 

88,731

 

 

121,350

 

General and administrative

 

39,376

 

 

142,511

 

 

123,093

 

 

208,745

 

Amortization of intangible assets

 

18,066

 

 

18,078

 

 

54,212

 

 

54,232

 

Total operating expenses

 

128,553

 

 

307,987

 

 

380,747

 

 

513,221

 

OPERATING INCOME (LOSS)

 

17,054

 

 

(189,212

)

 

42,228

 

 

(159,974

)

INTEREST EXPENSE

 

(10,501

)

 

(13,878

)

 

(25,786

)

 

(51,548

)

CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS

 

5,991

 

 

2,007

 

 

5,991

 

 

8,373

 

CHANGE IN FAIR VALUE OF WARRANT LIABILITIES

 

312

 

 

(26,889

)

 

23,452

 

 

(26,889

)

GAIN ON SALE OF COST METHOD INVESTMENT

 

9

 

 

—

 

 

3,587

 

 

—

 

LOSS ON EARLY EXTINGUISHMENT OF DEBT

 

—

 

 

(15,240

)

 

—

 

 

(15,240

)

OTHER INCOME (LOSS)—Net

 

382

 

 

(93

)

 

576

 

 

1

 

PRETAX INCOME (LOSS)

 

13,247

 

 

(243,305

)

 

50,048

 

 

(245,277

)

INCOME TAX (PROVISION) BENEFIT

 

(3,452

)

 

53,523

 

 

(12,714

)

 

54,227

 

NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST

 

9,795

 

 

(189,782

)

 

37,334

 

 

(191,050

)

Less: net income (loss) attributable to non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

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

$

9,795

 

$

(189,782

)

$

37,334

 

$

(191,050

)

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

$

0.02

 

$

(0.34

)

$

0.06

 

$

(0.36

)

Diluted

$

0.02

 

$

(0.34

)

$

0.06

 

$

(0.36

)

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

 

609,421,073

 

 

566,454,782

 

 

606,181,316

 

 

525,877,533

 

Diluted

 

643,582,922

 

 

566,454,782

 

 

642,208,622

 

 

525,877,533

 

COMPREHENSIVE INCOME (LOSS):
Net income (loss) including non-controlling interest

 

9,795

 

 

(189,782

)

 

37,334

 

 

(191,050

)

Other comprehensive income (loss)—Foreign currency translation adjustment

 

(510

)

 

11

 

 

(804

)

 

(18

)

COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST

 

9,285

 

 

(189,771

)

 

36,530

 

 

(191,068

)

Less: comprehensive income (loss) attributable to non-controlling interest

 

—

 

 

—

 

 

—

 

 

—

 

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

$

9,285

 

$

(189,771

)

$

36,530

 

$

(191,068

)

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 

For the Nine Months Ended

September 30,

2022

 

2021

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)

$

37,334

 

$

(191,050

)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization of software, equipment, and property

 

20,155

 

 

18,161

 

Amortization of intangible assets

 

74,405

 

 

73,972

 

Deferred income taxes

 

(53,061

)

 

(66,499

)

Stock-based compensation

 

80,769

 

 

235,413

 

Amortization of deferred financing fees

 

1,424

 

 

3,204

 

Amortization of discount on debt

 

196

 

 

537

 

Change in fair value of derivative instruments

 

(5,991

)

 

(8,373

)

Change in fair value of warrant liabilities

 

(23,452

)

 

26,889

 

Loss on early extinguishment of debt

 

—

 

 

15,240

 

Non-cash lease expense

 

3,076

 

 

5,029

 

Loss on disposal of software, equipment and property

 

795

 

 

—

 

Gain on sale of cost method investment

 

(3,587

)

 

—

 

Other

 

101

 

 

54

 

Changes in:
Accounts receivable—Net

 

(19,532

)

 

(8,332

)

Deferred contract costs

 

(719

)

 

(1,916

)

Other current assets

 

12,321

 

 

(4,673

)

Deferred contract costs—Non-current

 

3,299

 

 

(4,504

)

Other assets

 

(18,227

)

 

(3,221

)

Operating lease assets

 

1,623

 

 

5,133

 

Income taxes

 

10,029

 

 

(2,846

)

Accounts payable

 

2,466

 

 

1,399

 

Accrued expenses

 

(2,664

)

 

17,051

 

Operating lease liabilities

 

(4,687

)

 

(5,935

)

Deferred revenues

 

2,557

 

 

2,861

 

Extinguishment of interest rate swap liability

 

—

 

 

(9,987

)

Other liabilities

 

(192

)

 

(882

)

Net cash provided by operating activities

 

118,438

 

 

96,725

 

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of software, equipment, and property

 

(38,844

)

 

(25,022

)

Acquisition of Safekeep, Inc., net of cash acquired

 

(32,242

)

Purchase of equity method investment

 

—

 

 

(10,228

)

Proceeds from sale of cost method investment

 

3,901

 

Purchase of intangible asset

 

—

 

 

(49

)

Net cash used in investing activities

 

(67,185

)

 

(35,299

)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options

 

22,814

 

 

503

 

Proceeds from employee stock purchase plan

 

3,197

 

 

—

 

Payments for employee taxes withheld upon vesting of equity awards

 

(5,005

)

 

—

 

Principal payments on long-term debt

 

(6,000

)

 

(1,336,154

)

Deemed distribution to CCCIS option holders

 

—

 

 

(9,006

)

Net proceeds from equity infusion from the Business Combination

 

—

 

 

763,300

 

Proceeds from issuance of long-term debt, net of fees paid to lender

 

—

 

 

789,927

 

Proceeds from issuance of common stock

 

—

 

 

1,007

 

Payment of fees associated with early extinguishment of long-term debt

 

—

 

 

(3,320

)

Dividends to CCCIS stockholders

 

—

 

 

(269,174

)

Net cash provided by (used in) financing activities

 

15,006

 

 

(62,917

)

NET EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS

 

(650

)

 

(162

)

NET CHANGE IN CASH AND CASH EQUIVALENTS

 

65,609

 

 

(1,653

)

CASH AND CASH EQUIVALENTS:
Beginning of period

 

182,544

 

 

162,118

 

End of period

$

248,153

 

$

160,465

 

NONCASH INVESTING AND FINANCING ACTIVITIES:
Noncash purchases of software, equipment, and property

$

—

 

$

4,054

 

Leasehold improvements acquired by tenant improvement allowance

$

—

 

$

10,556

 

Contingent consideration related to business acquisition

$

200

 

$

—

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid for interest

$

24,150

 

$

47,312

 

Cash paid for income taxes—Net

$

55,526

 

$

15,119

 

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
September 30,

 

Nine Months Ended
September 30,

(amounts in thousands, except percentages)

2022

 

2021

 

2022

 

2021

Gross Profit

$

145,607

 

$

118,775

 

$

422,975

 

$

353,247

 

Amortization of acquired technologies

 

6,748

 

 

6,580

 

 

20,193

 

 

19,740

 

Business combination transaction costs

 

—

 

 

905

 

 

—

 

 

905

 

Stock-based compensation and related employer payroll tax

 

1,765

 

 

12,169

 

 

4,378

 

 

12,563

 

Adjusted Gross Profit

$

154,120

 

$

138,429

 

$

447,546

 

$

386,455

 

Gross Profit Margin

 

73

%

 

67

%

 

73

%

 

70

%

Adjusted Gross Profit Margin

 

78

%

 

78

%

 

77

%

 

77

%

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP OPERATING EXPENSES TO ADJUSTED OPERATING EXPENSES

(In thousands)

(Unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollar amounts in thousands)

2022

 

2021

 

2022

 

2021

Operating expenses

$

128,553

 

$

307,987

 

$

380,747

 

$

513,221

 

Stock-based compensation expense and related employer payroll tax

 

(27,800

)

 

(207,707

)

 

(78,496

)

 

(222,850

)

Lease abandonment

 

—

 

 

(438

)

 

(1,222

)

 

(3,181

)

Lease overlap costs

 

—

 

 

(924

)

 

(1,338

)

 

(1,848

)

Net income (costs) related to divestiture

 

471

 

 

(338

)

 

418

 

 

(2,605

)

Business combination transaction and related costs

 

(101

)

 

(5,516

)

 

(1,156

)

 

(10,471

)

M&A and integration costs

 

(6

)

 

—

 

 

(1,761

)

 

—

 

Amortization of intangible assets

 

(18,066

)

 

(18,078

)

 

(54,212

)

 

(54,232

)

Adjusted operating expenses

$

83,051

 

$

74,986

 

$

242,980

 

$

218,034

 

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

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

(In thousands)

(Unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

 

 

 

(dollar amounts in thousands)

2022

 

2021

 

2022

 

 

2021

Operating income (loss)

$

17,054

 

$

(189,212

)

$

42,228

 

$

(159,974

)

Stock-based compensation expense and related employer payroll tax

 

29,565

 

 

219,876

 

 

82,874

 

 

235,413

 

Lease abandonment

 

—

 

 

438

 

 

1,222

 

 

3,181

 

Lease overlap costs

 

—

 

 

924

 

 

1,338

 

 

1,848

 

Net (income) costs related to divestiture

 

(471

)

 

338

 

 

(418

)

 

2,605

 

Business combination transaction and related costs

 

101

 

 

5,516

 

 

1,156

 

 

10,471

 

M&A and integration costs

 

6

 

 

—

 

 

1,761

 

 

—

 

Amortization of intangible assets

 

18,066

 

 

18,078

 

 

54,212

 

 

54,232

 

Amortization of acquired technologies—Cost of revenue

 

6,748

 

 

6,580

 

 

20,193

 

 

19,740

 

Adjusted operating income

$

71,069

 

$

62,538

 

$

204,566

 

$

167,516

 

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

RECONCILIATION OF GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA

(In thousands, except for EBITDA margin percentage data)

(Unaudited)

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollar amounts in thousands)

2022

 

2021

 

2022

 

2021

Net income (loss)

$

9,795

 

$

(189,782

)

$

37,334

 

$

(191,050

)

Interest expense

 

10,501

 

 

13,878

 

 

25,786

 

 

51,548

 

Income tax provision (benefit)

 

3,452

 

 

(53,523

)

 

12,714

 

 

(54,227

)

Amortization of intangible assets

 

18,066

 

 

18,078

 

 

54,212

 

 

54,232

 

Amortization of acquired technologies—Cost of revenue

 

6,748

 

 

6,580

 

 

20,193

 

 

19,740

 

Depreciation and amortization of software, equipment and property

 

6,665

 

 

7,694

 

 

20,155

 

 

18,161

 

EBITDA

 

55,227

 

 

(197,075

)

 

170,394

 

 

(101,596

)

Change in fair value of derivative instruments

 

(5,991

)

 

(2,007

)

 

(5,991

)

 

(8,373

)

Change in fair value of warrant liabilities

 

(312

)

 

26,889

 

 

(23,452

)

 

26,889

 

Loss on early extinguishment of debt

 

—

 

 

15,240

 

 

—

 

 

15,240

 

Stock-based compensation expense and related employer payroll tax

 

29,565

 

 

219,876

 

 

82,874

 

 

235,413

 

Business combination transaction and related costs

 

101

 

 

5,516

 

 

1,156

 

 

10,471

 

Lease abandonment

 

—

 

 

438

 

 

1,338

 

 

3,181

 

Lease overlap costs

 

—

 

 

924

 

 

1,222

 

 

1,848

 

Net (income) costs related to divestiture

 

(471

)

 

338

 

 

(418

)

 

2,605

 

M&A and integration costs

 

6

 

 

—

 

 

1,761

 

 

—

 

Gain on sale of cost method investment

 

(9

)

 

—

 

 

(3,587

)

 

—

 

Adjusted EBITDA

$

78,116

 

$

70,139

 

$

225,297

 

$

185,678

 

Adjusted EBITDA Margin

 

39.3

%

 

39.7

%

 

39.0

%

 

37.0

%

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

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

(In thousands, except share and per share data)

(Unaudited)

 

 

 

 

 

 

 

Three Months Ended
September 30,

 

Nine Months Ended
September 30,

(dollar amounts in thousands)

2022

 

2021

 

2022

 

2021

Net income (loss)

$

9,795

 

$

(189,782

)

$

37,334

 

$

(191,050

)

Amortization of intangible assets

 

18,066

 

 

18,078

 

 

54,212

 

 

54,232

 

Amortization of acquired technologies—Cost of revenue

 

6,748

 

 

6,580

 

 

20,193

 

 

19,740

 

Change in fair value of derivative instruments

 

(5,991

)

 

(2,007

)

 

(5,991

)

 

(8,373

)

Change in fair value of warrant liabilities

 

(312

)

 

26,889

 

 

(23,452

)

 

26,889

 

Loss on early extinguishment of debt

 

—

 

 

15,240

 

 

—

 

 

15,240

 

Stock-based compensation expense and related employer payroll tax

 

29,565

 

 

219,876

 

 

82,874

 

 

235,413

 

Business combination transaction and related costs

 

101

 

 

5,516

 

 

1,156

 

 

10,471

 

Lease abandonment

 

—

 

 

438

 

 

1,222

 

 

3,181

 

Lease overlap costs

 

—

 

 

924

 

 

1,338

 

 

1,848

 

Net (income) costs related to divestiture

 

(471

)

 

338

 

 

(418

)

 

2,605

 

M&A and integration costs

 

6

 

 

—

 

 

1,761

 

 

—

 

Gain on sale of cost method investment

 

(9

)

 

—

 

 

(3,587

)

 

—

 

Tax effect of adjustments

 

(10,894

)

 

(72,360

)

 

(34,193

)

 

(89,134

)

Adjusted net income

$

46,604

 

$

29,730

 

$

132,449

 

$

81,062

 

Adjusted net income per share attributable to common stockholders:
Basic

$

0.08

 

$

0.05

 

$

0.22

 

$

0.15

 

Diluted

$

0.07

 

$

0.05

 

$

0.21

 

$

0.15

 

Weighted average shares outstanding:
Basic

 

609,421,073

 

 

566,454,782

 

 

606,181,316

 

 

525,877,533

 

Diluted

 

643,582,922

 

 

599,675,416

 

 

642,208,622

 

 

554,818,300

 

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

September 30,

 

Nine Months Ended

September 30,

(dollar amounts in thousands)

2022

 

2021

 

2022

 

2021

Net cash provided by operating activities

$

30,753

 

$

36,905

 

$

118,438

 

$

96,725

 

Less: Purchases of software, equipment, and property

 

(13,375

)

 

(11,864

)

 

(38,844

)

 

(25,022

)

Less: Purchase of intangible assets

 

—

 

 

—

 

 

—

 

 

(49

)

Free Cash Flow

$

17,378

 

$

25,041

 

$

79,594

 

$

71,654