Clarivate at Oppenheimer Conference: Strategic Review and AI Focus

On Wednesday, 13 August 2025, Clarivate (NYSE:CLVT) participated in the Oppenheimer 28th Annual Technology, Internet & Communications Conference. The company discussed its strategic initiatives, including a potential divestiture and the impact of artificial intelligence on its operations. While Clarivate remains optimistic about achieving long-term growth, challenges such as debt reduction and business complexity were also acknowledged.

Key Takeaways

• Clarivate is considering selling a business unit, with results expected by February.
• Subscription and recurring revenue now constitute 88% of total revenue.
• The company is investing heavily in AI-powered solutions across its segments.
• A major business optimization program has been launched to enhance efficiency.
• Clarivate anticipates mid-single-digit organic growth in the long term.

Financial Results

• Clarivate expects to be in the upper half of its guidance range, approximately 50 basis points.
• The company aims to generate free cash flow in the mid-$300 million range.
• Organic recurring revenue mix excludes disposals, with a full-year estimate of 84%.
• Patent and trademark renewals have returned to growth, aiming for a 3-5% historical growth rate.

Operational Updates

• 88% of revenue is now subscription and recurring, up from 80% last year.
• Clarivate has delivered 10 AI-powered products and completed major changes in its sales organization.
• 75% of Academia & Government (A&G) renewals have been booked, with a 96% renewal rate.
• The company is expanding in North America, Europe, and secondary markets outside the US.

Future Outlook

• Clarivate aims for A&G to grow at 4%, IP at 5%, and Life Sciences & Healthcare (LS&H) at a faster pace.
• The company is not focused on M&A due to the ongoing strategic review.
• AI initiatives include a center of excellence and recognition as a leader among scholarly research organizations.

Q&A Highlights

• CEO Matti Masanovich emphasized confidence in achieving long-term growth through innovation and AI.
• CFO Jonathan Collins discussed the financial strategy, highlighting debt reduction and share repurchases.
• Clarivate is leveraging AI to improve core capabilities and enhance product offerings.

For a deeper dive into Clarivate’s strategic initiatives and financial performance, refer to the full transcript below.

Full transcript - Oppenheimer 28th Annual Technology, Internet & Communications Conference:

Owen Lau, Analyst, Oppenheimer: Alright. Our next session is with Clarivate. So first of all, thank you everyone for joining this session. For those of you who don’t know me, my name is Owen Lau. I cover information services, exchanges, blockchain at Oppenheimer.

Claravay Claravay is a global information and workflow solutions company serving customers in university, pharmaceutical, and also legal area. Today, we’re excited to have CEO, Matti Matti Shantoff, and also CFO, Jonathan Collins joining us. Thank you both of yours for spending time with us today. So let’s get started with our first question. So this is the question we got a lot recently which is about the divestiture.

There was a news article that Clarivay is thinking about selling the IP business. Could you please give us an update on your plan like on this divestiture plan of this plan?

Matti Masanovich, CEO, Clarivate: Well, thank you for attending the conference and thank you for the question. At the end of the first quarter we shared that we were evaluating multiple option to sell a segment or a business unit. We’ve made progress and we have narrowed the option we are currently evaluating. We anticipate that we will complete the review and communicate the outcome with our year end results in February. We announced at the same time, we’ve announced that Maroon Murad will join Clivet as a president of IP segment effective September 8.

He’s joining us from Verisk Analytics where he is the president of a claims solution, division. We are pretty confident that with his leadership and ability to our with his leadership and his abilities, experience, we will be further able to drive the IP business, and we are committed to fostering innovation and growth in the IP business like we do in all of the three different segment we have. So I am not going to give you any more here. Jonathan, do you want to add anything here?

Jonathan Collins, CFO, Clarivate: No. I think those are the key points that we have a lot of work to do, and we are working very hard to complete this in the coming months. We gave ourselves some time to be able to announce it by the end of the year as we pursue this this option that we’re currently evaluating. But rest assured, we’re very eager to complete the work here and come to a conclusion as soon as possible.

Matti Masanovich, CEO, Clarivate: Well, yeah.

Owen Lau, Analyst, Oppenheimer: Got it. Got it. That’s good. And then maybe this is also part of your value creation plan. There are some other things going on other than divestiture.

So could you please give us an update on your overall value creation plan? How does it fare so far compared to your initial expectations? Is it on track and where are the remaining works?

Matti Masanovich, CEO, Clarivate: So first of all, we are very pleased with the progress and with the plan. We’ve launched the plan in the 2024. We are on track, and we are making some concrete specific measurable progress across all the key initiatives. We launched the major business optimization program to increase cost subscription and reoccurring revenue, which is enhancing the scale, the sales predictability. As we announced at the end of the second quarter, we’re making progress.

ACV is going up. Renewal rate is going up. The number of also the percentage, the mix is getting better. 88% is now subscription and reoccurring, so we are on track on the business optimization. We also completed some major changes within our sales organization with industry segments, changing some setup, bringing some new management team as well, improve improvement on customer engagement and retention.

So we are on track, and we have completed most of the operational changes within the sales organization. And we’re also super proud of the fact that we have delivered 10 cutting edge products, AI powered with AI powered capabilities. I’m a product person. This is my roots, and I’m so pleased with the pace of the constant innovation, both going into the existing customer base or existing product base, AI enablement of existing product. At the same time, we are also being pretty aggressive introducing AI born new products across the three segments.

And as we talked also, we are making a progress on the strategic move. So we are very pleased with the progress of the VCP so far on track and continue to implement more and more products over the next year and obviously for years to come as well. So that’s the progress on the VCP. Got it. Yeah.

Owen Lau, Analyst, Oppenheimer: Got it. And then, Marty, you just talked about the 88% organic with revenue mixed, in the first half of this year. It was up from 80% last year, but I think you only expect the full year to be, I think, 84%. Is that right? What is driving that?

Matti Masanovich, CEO, Clarivate: Jonathan, can can you take this one?

Jonathan Collins, CFO, Clarivate: Sure. They’re just two different metrics. So the organic recurring revenue mix excludes the disposals. So even though we still have revenue with those, if you take those out or assume they’re already gone, we’re at 88%. As of right now we still have some of those revenues, and they’ll be bleeding off this year and into early next year, so if you still include those, we’re at 84.

So once those get to zero, we’ll be at 88%, and we just added that metric of organic recurring revenue mix to show what it looks like without the disposals.

Owen Lau, Analyst, Oppenheimer: Got it. So we shouldn’t compare that 88% versus 84% number. Right?

Jonathan Collins, CFO, Clarivate: Yeah. The 84 is heading to the 80, and if you exclude those now today, it would be at 88%. So as Motti indicated, the real emphasis here is continuing to invest behind the products that are subscription or reoccurring in nature. We’re referring to those as our recurring revenues. That’s where we’re getting a lot of the investment in the transactional business that will stay behind the roughly 12%, that business are the types of services and products that help enable the growth of the recurring revenue.

So think some consulting services, implementation services of software, we feel like those are good business to be in going forward. But the emphasis is we’re becoming more predictable and the revenue quality improves as that recurring revenue mix

Owen Lau, Analyst, Oppenheimer: inches towards 90%. Got it. Okay. 90%. Okay.

So that’s a pretty good number. Thank you for that clarification. And then when I look at the other matches, which is the recurring organic growth, I think it was point six percent sixty basis point in the first quarter, 80 basis point in the second quarter of this year. I think you guided to upper end of the guidance range, which some people interpret this as, you know, point 5% or 50 basis point, but that means it is below what you had in the first half of this year. Does it mean this isn’t a deceleration of recurring organic growth in the second half?

Is that is that what you meant?

Jonathan Collins, CFO, Clarivate: No. I I I don’t think we intend to be that precise. What we were looking to illustrate on the page is that we expect to be in the upper half of the range, and the upper the midpoint of the upper half of the range would be approximately 50 basis points. But, you know, to the substance of your question, our aim from here on out is to continue to make progress every quarter. That’s what we’re really targeting.

That’s what we expect on the ACV. As an example, we can have some timing issues quarter to quarter, so there may be some ups and downs as we go, but broadly speaking, the intent is to continue to accelerate the ACV, which will drive improved subscription revenue growth. And we were really encouraged by what we saw in the first half of the year. There was some lumpiness quarter to quarter, but our annuity business, our patent and trademark renewals that we do around the world for our customers, returned to growth in the first half of the year. We believe that’s largely driven by the market improvement.

Coming out of COVID, there were a couple years where, you know, excluding domestic China patent filings, the rest of the world was relatively flat for a couple years, so we really didn’t see volume growth for the couple of years following that period. But we think we’re in the early innings of starting to see a nice recovery in patent renewal volumes, and we would expect that to continue to help us in the second half of the year and beyond. That’s a business that historically has grown at a nice healthy rate in the 3%, 4%, 5% range. So we’ve got some room to run before we’re back to that level, but we saw a nice move in that direction in the first half of the year and are anticipating that continuing as we move into next year.

Owen Lau, Analyst, Oppenheimer: Got it. That’s helpful. Maybe we should maybe we can dive into, like, each business one by one. So let’s talk about ANG first. Marty and Jonathan, there has been a lot of focus on how universe defending cut could impact ANG.

I know you have been answering this question for quite some time, but could you please still give us an update on what you have seen so far this year on ANG contract discussion?

Matti Masanovich, CEO, Clarivate: So we remain optimistic about the A and G for the rest of the year. Let’s look, dive in a little bit on the details. We’ve done a decision to dispose certain A and G transactional products. It was a wise decision. So now 98 93% of the A and G business is recurring, and it’s has 96% renewal rate.

This is one. Second, I wanna reiterate that we have 75% of the as of July, we have 75% of the A and G renewals already booked, Very similar to what we had last year, so no changes. So no changes there. And then let’s talk a little bit about the product that we carry on A and G. Those products specifically, let’s talk about web of science.

Web of science is critical for the research in universities. This is also critical for faculty. We continue to sell new license for for for for web of science, both in prime market and secondary market as well. Alma is very is also very essential to run the library. People cannot do without without an Alma.

So these two products are big part of the A and G business is the science must have and the armor must have product in in any universities. We are market market leader in both of them. And then the third part of A and G is the content side of the house. And in fact, the introduction, of some of our economic subscription based product line, like progress ebooks and digital collections that are changing the way we used to sell on one time basis, actually helping universities and faculty in this difficult time so people find it much more attractive to buy relatively economic price price priced ebooks subscription as opposed to buying the ebooks by themselves. So this give us a lot of confidence that we will continue to see solid growth within A and G subscription business as we move forward through the remainder of the year.

So we’re pretty optimistic about the rest of the year for A and G.

Owen Lau, Analyst, Oppenheimer: Got it. And then, I think ANG has just signed a multiyear partnership contract with Canadian research knowledge network. Could you please talk about the opportunities for ANG outside The US? How do you think about the TAM of these new logo opportunities?

Matti Masanovich, CEO, Clarivate: So we we do have, you know, opportunities both in North America, Europe, and secondary market. So we have this phenomena that we’re still selling. We’re still selling our prime products into the main market. That’s a good let’s take a good example. We just closed over a million dollar deal with a British library selling Alma.

Okay? So we and we saw we’re constantly selling Web of Science in North America as well. On top of that that, we have secondary markets like Asia, Latin America, some countries in Europe are still being still selling those prime product of us. On top of that, we’re not staying still, and we have a constant influx of new products that we introduce, Web of Science research intelligence, whether it’s Alma Spector Alma Spector, whether it’s gonna be new progress ebooks or there’s a constant flow of new product as well, which we sell both in developed countries and in developing countries as well. It’s a it’s a mix, and they’re all fueled by constant innovation, a lot of AI releases and changes to all of our our energy product.

So constantly increasing the that that growing ANG is certainly something we will see in years going forward. Yeah. Let’s let’s go to the next one. Yeah.

Owen Lau, Analyst, Oppenheimer: Yeah. And then so when we combine all these together, how should investors think about the long term growth algorithm for ENG? I know you had the the math before, but can you can you still drive mid single digit organic growth longer term?

Matti Masanovich, CEO, Clarivate: Well, I believe ENG’s market is growing three or 4%, and I believe we should get our fair share of this. It take it’ll take a few more years, but we are certainly going back to 4% growth rate on energy, which is the market. We are not gonna tell you when, but we are definitely the fact that we have eliminated a lot of the complexities with A and G, like the onetime business, the fact that we are constantly fueling the market with more and more product and protecting the existing product with air innovation makes us believe that we can do the 3% or 4% AMG market growth in the coming years.

Owen Lau, Analyst, Oppenheimer: That’s good. Like, 3% to 4%, it’s a good number. But I guess the question is, I think maybe, Martin, you mentioned that you mentioned AI. I guess the question is still, what does it take to take market shares away from your competitors and sign new clients going forward? I think both locally and also internationally.

Matti Masanovich, CEO, Clarivate: No. This is this is what we’ve been doing. You know, as you know, I have been in energy environment for over twenty years. We have a unique DNA, which is coming from the exubera side, propo side, and side. We are innovative.

We are disruptors. So we disrupted the market with Alma. We disrupted them. We are now disrupting the market with AI innovation. We are recognized AMG was recognized as a leader with in in the app in in leader in agentic AI.

What we have introduced, the literature review functionality in Web of Science. So it’s a combination of constant innovation pushing the envelope, thinking out of the box, maybe thinking like there is no box. It’s all with filled with a lot of energy and sales execution. We are winning new customers even for the product who’s been with us for for many, many years, including World of Science and Alma, and then the new new product offering as well, say. So it’s all of the above.

It help us that makes us very confident we will continue that we will continue to grow A and G to the three or 4% number.

Owen Lau, Analyst, Oppenheimer: Got it. Got it. I do want to touch on AI in specific maybe later after we cover all these individual business. So let’s move on to the IP business. Can you please give us an update on that?

It looks like some of the transactional revenue came back in the first quarter. I think Jonathan mentioned about China, but it reversed in the second quarter. So what are what are the drivers of that volatility? What and also what’s the outlook for that?

Jonathan Collins, CFO, Clarivate: Jonathan? Yeah. So this is in reference to our reoccurring reoccurring revenue type, which is our patent and trademark annuity business where we renew patents and trademarks for our customers around the world. We’re truly a global provider with a very high quality service that can be relied upon in this area. Pairs very importantly with our IPMS or our intellectual property management systems, where we help them manage that same workflow from taking an idea through to being patented and then continuing that protection through the renewal process.

So in the first half of this year, that revenue type, which we call out specifically and is entirely the IP business, had about 1.5% growth in the first half of the year. Olin, as you noted, it was around 5% in the first quarter, and it was negative 2% in Q2. The primary timing item there was just the lumpiness of renewing some of the patents in The U. S. Given the price increases that came in in Q1.

So some of those were renewed in Q1 that were renewed in the second quarter of the prior year. If you adjust for that, Q1 would have been a few percent of growth and Q2 would have been about flat. In that, we don’t expect that the annual growth rate will be identical by quarter. There’s a little bit of lumpiness between jurisdictions and customers quarter to quarter, but we think the first half growth between one to 2% is a good indication of where we started to see recovery in that market. As I noted in the past under Clarivate’s ownership, this part of the business has grown mid single digits.

Over the longer term, it’s definitely, you know, somewhere in the three, four, 5% range very durably. And that’s why we made the point at earnings that it’s really encouraging to see the impact that AI is having on broader innovation. So not just how we’re adopting AI in our products or in our middle and back office to become more efficient, but we see companies around the world innovating around AI, whether it’s the models themselves or the computing that’s required to operate these models. We see a lot of inventions that are now seeking protection, so we’re looking at that very closely. And Mahdi drew attention to this in earnings.

This is a great secular growth trend, we believe, for our patent renewals business in the long run. You know, if you look over, you know, the number of decades in the past when you see a boom in innovation, whether it was the .com era, you see patent filings increase and the amount of patents available to renew goes up in the following decade. So we think this is a really good trend that we’re keeping a close eye on. So the upshot here is we’re getting some good progress, starting to see recovery in patent and trademark renewals, and we think the overall signals for the longer term growth trend for this business are good. We think AI is gonna be a nice contributor to that.

Owen Lau, Analyst, Oppenheimer: Yeah. Can I dive into that point, Jonathan? Because when we talk about AI, we always think, oh, you add AI capabilities into your product. But what what you just said is there’s an AI adoption trend around the world that can support your IP business. Can you like, you you explained a little bit already.

Can you maybe give us some example, like, why that can benefit your IP when we see, like, faster I or, like, faster IP sorry, faster AI adoption?

Jonathan Collins, CFO, Clarivate: Yeah. I mean, there are some there are some great third party sources for this data. One that we often look to is WIPO or the World Intellectual Property Organization that publishes patents in force. This is data that we look at, and, you know, we saw coming out of COVID, was a period of time where in the primary markets we operate, those are relatively flat. In 2023, they return to a healthy growth level.

And a few years later, that’ll translate into, you know, growth in patent renewals. So that’s the overall trend that we see that’s encouraging. But the other point is when we look out into the future and try to project what we think will happen with respect to patents enforced, we’re encouraged by as of late in the last year or so, the number of IP discoveries, inventions that or AI inventions and discoveries where they’re seeking protection via patent has gone up, and that is encouraging. We think that could be a nice a nice growth trend for our IP business. As you noted, the IP or the AI adoption is great for our ANG business as an example.

Mahdi talked about the researcher assistant that we’ve put on our platforms, and now the agentic capabilities in the literature review that we’ve put onto the Web of Science platform. But a lot of companies are doing this, and that’s good for patent protection, which is which is a big piece of what we do in our IP sector.

Owen Lau, Analyst, Oppenheimer: Got it. So more AI innovation, they need the protection. That’s why they will need more of your product to get the patent or maybe do the renewal. Got it. And then another one for AI, I think you’re I think you will also release some new AI features for Derwin, right, which is think the name is Derwin AI pattern watch solution.

And, could you please talk more about the revenue model for these new products? Can you sell them separately, or it mainly helps you from a price increase standpoint?

Jonathan Collins, CFO, Clarivate: Yeah. I’d be happy to. There there are two things here. The first is we are leveraging AI capabilities to improve the core Derwent capabilities on the Derwent innovation platform, which is search. So we launched AI powered search late last year, and we’ve seen really good receptivity from the core users of that platform in the form of of higher usage and more searches being conducted, which is a great indicator in reviving the value proposition platform.

We think that underlying Derwent World Patent Index data, which can be accessed via a number of sources, great dataset and with great tools on our search platform, Derwent Innovation, we expect that to help that product improve as we move into next year. And I think that generally falls into the bucket of AI innovation that will be a part of the overall value proposition of that tool. Derwent Patent Watch is a new workflow service that helps our customers navigate the process of evaluating and investigating potential infringement. So when there’s a flag that’s raised, we’ve now built a tool that helps to automate the workflow to get that through to the right people in the organization to figure out if there’s some type of enforcement action that might be required to protect the patent. This falls in the bucket of a tool we’re leveraging AI where this will be a new offering.

We will charge for it discreetly, so we’re really excited about that. We’ve got some more announcements that’ll come on that product at some trade events in the second half of this year. But those are two great examples of leveraging AI to enhance our value prop. One will help improve renewal rates, help shore up, you know, price increases because we’re providing more valuable value to customers. The second is an entirely new offering that solves a problem that’s currently being done in emails and SharePoint sites that we can now automate on a platform.

Owen Lau, Analyst, Oppenheimer: Got it. That’s very helpful. Then maybe we can move on to another segment, which is the life science and and health care segment. Could you please talk about your traction in LS and H? I think you just expanded a long term multimillion dollar partnership with a top 15 global pharmaceutical company.

How do you see the outlook for for this segment in the second half of this year?

Jonathan Collins, CFO, Clarivate: Yeah. I’d be happy to touch on LS and H. So we did highlight one of our major customers that we’re getting traction with, and and what we’ve seen in life sciences, our view is stability in spending in r and d with our major customer base. So that’s been pretty decent the last couple of years. I think the pressure that we saw within r and d in our business was the demand from the market for more innovation, and that’s why we’re so encouraged that this part of our business has improved in the first half of this year.

So we highlighted the fact that Q1 and Q2 earnings that our Cortella suite of products have seen really nice improvements in their renewal rates in 2025. We’re starting to get more upselling like this customer where we had an example of at earnings, and that’s a sign of investments that we’ve made in the product. So we took those same researcher assistant capabilities that we developed and put into the products in A and G, and those have now come to the r and d segment within life sciences and health care. And we’re seeing better usage, more value, fewer cancellations and downgrades, and and an inflection in new subscription sales. So really encouraged by what we’re doing there.

We think the market’s good. We’re making the right investments, and there’s some good traction there. I would say the other part of our life science business commercialization is is okay. It hasn’t been a good couple of years in our view. I think we may see some early signs that it’s it’s getting a bit better there, and we’re making some of those same investments in innovation there.

So we’re really excited to start delivering some traction on our new fusion platform in the second half of this year. So we stepped away from effectively brokering or reselling real world data, and we’re getting back to our roots in this part of the business where we take that data and we turn it into insights and analytics, We’re leveraging new AI capabilities to do that. The market there, we think, is okay. We see some potential signs of improvement, but we’re really encouraged by early indications of how the new products and solutions we also talked about our new MedTech three sixty offering that’s coming into market, and we’re starting to see some traction there for med device companies. So a couple of examples where that investment in the early days appears like it’s headed in the right direction.

Owen Lau, Analyst, Oppenheimer: Got it. So let’s go back to AI. Again, like you mentioned that you have launched some AI new product, and then you will also launch more AI product for the rest of this year. I think my first question is, what is the feedback so far? Like, what what have you heard from your customers?

Are they are they ready for this product?

Matti Masanovich, CEO, Clarivate: Owen, yeah. Yes. Yeah. Certainly. But with your permission, I wanna mention something that one of the better one of the great surprises that I had coming back to Clarivate is this notion that A and G has built a AI innovation up center of excellence.

So we have a group of people who is helping us to deploy AI innovate AI innovation across A and G. And what I’ve done coming in, I’ve looked at this and how well those guys are this team is actually implementing AI innovation structure way, very smart way in each and every one of the A and G products. So we actually then we have implemented the same methodologies, the same technology in life science as well, and we will be looking to implement some of these technologies in IP as well. So there is quite a significant center of excellence within the company implementing, AI capabilities, adopting and implementing and pushing the envelope. And just take ENGIE for an example.

We have to as of today, we have almost 5,408 4,800 academic institution that use our AI solution. So this is an amazing number. It’s we get people are very enthusiastic about it, and we have a history and a culture at Clivere that we work with our customers to develop innovation, and AI is no no difference. So we’re working with AI, with our customers. Obviously, we have some ongoing requests from companies and some of their pharma customers are we’re working with the pharma customers and with some of the leading, you know, corporates to develop AI around the IP as well.

So very well received, very well distributed. Thousands of our customers are already using AI solution. And as I mentioned before, Outsell, a leading research and advisory firm in, you know, b to b technology data and information services, recognized climate as AI leadership among the major scholarly research organization, underscoring our position as as a forefront at the forefront of developing user facing AI, but not just AI, agentic AI. So this is a huge recognition to what we’re doing this, and this momentum is all over the segment. And he’s kind of leading it.

Life science and IMP are also implementing it. So pretty satisfied how we turn over this two years ago. Everybody also said this is a threat. In fact, this is a huge opportunity for us to continue innovate and strengthen the base of our company. Thank you for your time.

Owen Lau, Analyst, Oppenheimer: So I wanna get your number right. You said around 5,400 academic institutions. Is that the number? 4,800. Sorry.

4,800. Got it. 4,800.

Matti Masanovich, CEO, Clarivate: At least 4,800 academic institutions are currently using our a our AI powered solution. I’m sure the number is even greater, but this is our official number. And then we have a lot of customers on that. They want innovation, some on on life science as well. We are gonna issue a press release soon about releasing CRI AI innovation as well.

So there’s a lot of momentum coming in the company, which is derived from this AI center of excellence within the company. And we’re pretty, you know, we’re pretty upbeat and confident that we will see more and more AI in the forms of GenAI, but more and more agentic agentic AI feature. And by the way, not only on the product side, also some internal processes. We’re now looking at some opportunities to rationalize some of the internal costs with some AI capabilities. This is early days.

No guarantees here, but this is another avenue that we will be pursuing.

Owen Lau, Analyst, Oppenheimer: You you mentioned Agenic AI a couple of times. I think people are still catching up the curve. Any any quick example you can give us what Agenic AI solutions or capabilities you have?

Matti Masanovich, CEO, Clarivate: Jonathan, we can talk about a bit about what we’re doing in the web of specifically on Web of Science. Jonathan?

Jonathan Collins, CFO, Clarivate: Yeah. I think the the two examples that we cited that are in the market are the researcher assistant, which now exists on multiple platforms within a and g. We started with the web of science, but, you know, this is that fundamental or basic capability that we’ve now all become accustomed to with with GPT and other like tools where, know, you can ask a question, you can get prompts, you can go deeper deeper in an area. So it takes that, you know, initial discovery experience from putting in terms and going through links to a more conversational. And that’s so important in our business as, you know, we’re not a casual search business.

These are serious scholarly researchers, people that are doing drug development, and people that are protecting very valuable IP. So the adoption of this tool is important to do in a measured and careful way. And I think, as Modi mentions, the teams have done a really nice job in building those capabilities in. I think the second example is the the agentic capability that we just outlined on the platform, which is the the researcher assistance, so the ability to do or excuse me, the literature review. The ability to now take information, synthesize to still, you know, something that took humans hours and hours, you know, the the tools give us the ability to do it almost instantaneously.

So that capability is now available on that platform. You know, some of the greatest scholarly researchers on the planet use our tool to evaluate where to go to get information around where they’re researching, and now they have ability to have these agents help accelerate the pace of research, which ultimately lead to innovation. So really encouraged by both of those examples. And as Modi said, it’s great to hear it from our customers. It’s also nice to hear it from, you know, publications in the industry that compare these side by side, and we really think we’ve we’re off to a really good start in adopting the technology in a value enhancing and careful way.

Owen Lau, Analyst, Oppenheimer: Got it. So Clarivate generate a lot of cash, So could you please give us an update on your capital allocation strategy? How much cash will be allocated to debt repayment, probably m and a, and also buyback? How should we think about that?

Jonathan Collins, CFO, Clarivate: Yeah. As you noted, we’ll generate in the mid three hundreds of free cash flow that’ll be available to either repurchase stock, repay debt, or or if we wanted to do some m and a. I think what we’ve highlighted is right now in the midst of the strategic review, we’re really not focused on m and a. We’ve really been focused on putting our capital in other places. Last year we were pretty equally balanced between share repurchases and reducing debt.

So far this year we’ve done a bit more on share repurchases. We will continue to have the flexibility as we move through the second half of the year. We’ve acknowledged over time we want to bring our leverage down. We’re not you know, there’s nothing urgent or comfortable at these levels, but over time we’d like to bring that down. And right now we obviously think that our stock represents a very attractive value, so we did a bit more in buybacks in the first half of the year.

I would note we’ve just got that flexibility, and as you noted, we’ve got an attractive cash flow, which puts us at a pretty attractive cash flow yield based on where the the stock price is right now.

Owen Lau, Analyst, Oppenheimer: Got it. And then maybe longer term, my last question is, like, without getting any numb like, specific numbers, how should we think about the organic ASP growth and recurring organic growth longer term? Do you expect it can reaccelerate further from here to more like the industry growth rate?

Matti Masanovich, CEO, Clarivate: Maybe I’ll and Jonathan can answer this. We we believe, you know, as I mentioned, A and G can grow 4%. This is the market, and we certainly can do this as well. We believe IP is growing the market is growing 5%. We believe we can get so as well.

And life science is growing in either faster pace, and I believe we can just go there as well over time. Cannot give you, you know, exact day. Johnson, you do wanna add?

Jonathan Collins, CFO, Clarivate: Well, I think that’s right. Spot on. And I think as you noted in the question, Owen, it’s really gonna be driving that subscription growth to those levels as that now makes up a larger proportion of the business. And as we see our reoccurring revenue via the the patent and trademark annuity business, the market recover on that, we think that’s going to help as well too in the coming years. So the combination of those things, which make up almost 90% of our business now, are really going to help get us to a more healthy growth rate.

So as Mahdi noted, we don’t have a commitment on the time frame yet but we do believe that we’re making the right steps to return to healthy organic growth. We think we’re in healthy growth markets and we’ll continue on that path.

Owen Lau, Analyst, Oppenheimer: Got it. That’s super helpful. I think we are about time. Thank you again, Marty and Jonathan, for your time. We appreciate you participating in this conference.

Matti Masanovich, CEO, Clarivate: Thank you for inviting us.

Owen Lau, Analyst, Oppenheimer: Thanks a lot. Alright. Have a good day. See you. Bye bye.

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