Clarivate (CLVT) Q2 FY26 earnings call: guidance and Q&A

Are renewal timing or longer sales cycles impacting ACV growth, and should this persist in H2?

Management stated Q2 results were in line with expectations, with ACV progress not always linear. They do not see an elongation of the renewal cycle and expect ACV and recurring organic revenue to inflect in H2, with good line of sight (75% of A&G business in the bag by end of July).

“No, we don't think it's an elongation of the renewal cycle and the organic ACV growth of about 1.5% in the end of June is generally in line with our first half organic growth versus subscription revenues at about 1.2%.”

asked by Scott Wurtzel · answered by Jonathan Collins

Discuss the MCP opportunity, client types, growth contribution, and if it's an upcharge or included in subscription.

Matti explained that AI innovation focuses on 19 initiatives, with AI-enabled products driving new logos, improved retention, and AI-specific pricing. Customers either consume data directly or embed Clarivate's capabilities into their corporate AI products (e.g., ChatGPT, Claude). New products like Web of Science Research Intelligence, IP-One, and Nexus Connect are new revenue streams, with some offering AI-specific pricing.

“We see the AI enablement of our existing product, it's a source for revenue for new logos, new products, improving retention. And I think also to allow us to have some AI specific pricing for new products.”

asked by Toni Kaplan · answered by Matti Shem Tov

Elaborate on the expectation for organic growth acceleration, differentiating between AMG and IP, and the outlook for 2027.

Matti expressed optimism for both segments. IP is expected to improve faster with Simon Webster's return, leveraging existing assets and AI innovation (RiskMark, IP-One). AMG momentum is also building with new products like Web of Science Research Intelligence and Nexus Connect. The company believes both segments will contribute to accelerated growth.

“So we do believe IP will be -- will be turn around faster with Simon in place and with the great assets, annuity software and intelligence that we have with the AI innovation I've mentioned, I mentioned RiskMark as a product which was all and I also update about IP-One.”

asked by Manav Patnaik · answered by Matti Shem Tov

Are transactional revenue declines due to industry factors or idiosyncratic execution, and what gives confidence in improvement?

Matti stated the VCP aims to move away from transactional business, with some divested (e.g., one-time books) and others being transformed to subscription (e.g., Web of Science text files). Jonathan added that LS&H transactional revenue saw headwinds, and other businesses were lumpy in Q2 but expected to ameliorate in H2. Full-year transactional revenue is expected to be slightly down.

“But the divestiture of life science, we're also giving away -- some of the life science was a little bit higher on transaction. There's still a portion of transactional business that will stay with us and is supporting the onetime business we have.”

asked by George Tong · answered by Matti Shem Tov

Were there client losses impacting LS&H revenue declines, and could Q2 performance trigger a MAC clause in the divestiture deal?

Jonathan stated there were no discrete or specific client losses to highlight, with the emphasis being on migrating transactional business to subscription alternatives. He confirmed that the Q2 performance was not at a level to trigger a Material Adverse Change (MAC) clause, and the divestiture process is moving as expected towards closing by year-end.

“No. Certainly, this is nothing to that level. And that process is moving exactly as we would expect to work through the process to reach an agreement and all of the approvals that are required or customary, and we expect those to occur in the coming months that we expect this to go toward the end of the year.”

asked by Adam Parrington · answered by Jonathan Collins