Technology
Clarivate Reports Third Quarter 2024 Results
Published
2 years agoon
By
LONDON, Nov. 6, 2024 /PRNewswire/ — Clarivate Plc (NYSE: CLVT) (the “Company” or “Clarivate”), a leading global provider of transformative intelligence, today reported results for the third quarter ended September 30, 2024.
Third Quarter 2024 Financial Highlights
Revenues of $622.2 million decreased 3.9%Organic revenues decreased 2.6%, as an increase in subscription revenues of 0.6% was offset by a decrease in re-occurring revenues of 1.1% and transactional and other revenues of 13.6%Net loss of $65.6 million; Net loss per diluted share of $0.09Adjusted net income(1) of $134.1 million decreased 12.1%; Adjusted diluted EPS(1) of $0.19 decreased 9.5% or $0.02Adjusted EBITDA(1) of $264.4 million decreased 6.0%; Adjusted EBITDA margin(1) of 42.5% decreased 100 basis points primarily due to lower revenuesNet cash provided by operating activities of $202.9 million increased $39.5 million; Free cash flow(1) of $126.3 million increased $24.6 million primarily due to the timing of working capital
Nine Months Ended September 30, 2024 Financial Highlights
Revenues of $1,893.7 million decreased 2.6%Organic revenues decreased 1.5% as an increase in subscription revenues of 1.2% was offset by a decline in re-occurring revenues of 2.3% and transactional and other revenues of 9.3%Net loss of $444.9 million; Net loss per diluted share of $0.69Adjusted net income(1) of $379.8 million decreased 12.8%; Adjusted diluted EPS(1) of $0.52 decreased 11.9% or $0.07Adjusted EBITDA(1) of $775.1 million decreased 5.4%; Adjusted EBITDA margin(1) of 40.9% decreased 120 basis points primarily due to lower revenuesNet cash provided by operating activities decreased $48.0 million to $505.3 million; Free cash flow(1) decreased $76.3 million to $298.4 million primarily due to lower operating income and increased capital expenditures
“Clarivate’s third quarter results are unsatisfactory and reflect an overdependency on fluctuating transactional revenue and areas of the business with low margin characteristics,” said Matti Shem Tov, Chief Executive Officer. “As we look ahead, it is clear the Company has work to do to improve performance. Our Value Creation Plan is designed to increase subscription and re-occurring revenue, improve sales execution, accelerate innovation and continue portfolio solutions rationalization. We will leverage Clarivate’s strong foundation, unique product offerings and talented team to take the necessary actions to improve predictability and drive profitable growth. Alongside the management team and Board, I am invigorated by the opportunities before us and remain focused on successfully executing our strategy to realize Clarivate’s potential.”
Removal of Outlook
As a result of the recent CEO transition and the work being done under the Value Creation Plan, the Company has removed its forward-looking outlook for 2024. All previous outlooks provided by the Company should no longer be relied upon.
Selected Financial Information
Three Months Ended
September 30,
Change
Nine Months Ended
September 30,
Change
(in millions, except percentages and per share data), (unaudited)
2024
2023
$
%
2024
2023
$
%
Revenues
$ 622.2
$ 647.2
$ (25.0)
(3.9) %
$ 1,893.7
$ 1,945.1
$ (51.4)
(2.6) %
Net income (loss)
$ (65.6)
$ 12.3
$ (77.9)
N/M
$ (444.9)
$ (67.3)
$ (377.6)
N/M
Diluted EPS
$ (0.09)
$ (0.01)
$ (0.08)
N/M
$ (0.69)
$ (0.18)
$ (0.51)
N/M
Weighted average ordinary shares, diluted
718.7
670.9
47.8
7.1 %
690.5
673.9
16.6
2.5 %
Adjusted EBITDA(1)
$ 264.4
$ 281.4
$ (17.0)
(6.0) %
$ 775.1
$ 819.0
$ (43.9)
(5.4) %
Adjusted net income(1)
$ 134.1
$ 152.6
$ (18.5)
(12.1) %
$ 379.8
$ 435.7
$ (55.9)
(12.8) %
Adjusted diluted EPS(1)
$ 0.19
$ 0.21
$ (0.02)
(9.5) %
$ 0.52
$ 0.59
$ (0.07)
(11.9) %
Adjusted weighted average ordinary shares, diluted(1)
723.5
731.4
(7.9)
(1.1) %
726.1
733.6
(7.5)
(1.0) %
Net cash provided by operating activities
$ 202.9
$ 163.4
$ 39.5
24.2 %
$ 505.3
$ 553.3
$ (48.0)
(8.7) %
Free cash flow(1)
$ 126.3
$ 101.7
$ 24.6
24.2 %
$ 298.4
$ 374.7
$ (76.3)
(20.4) %
Third Quarter 2024 Commentary
Revenues for the third quarter decreased $25.0 million, or 3.9%, to $622.2 million, primarily due to the divestiture of Valipat in April 2024 and lower transactional sales across all three segments. Organic revenues decreased $16.5 million or 2.6%.
Subscription revenues for the third quarter increased $3.0 million, or 0.7%, to $411.1 million. Organic subscription revenues increased 0.6%, driven by price increases, partially offset by lower net volume in IP and LS&H.
Re-occurring revenues for the third quarter decreased $0.1 million, or 0.1%, to $106.7 million. Organic re-occurring revenues decreased 1.1%, primarily due to lower IP patent renewal volume.
Transactional and other revenues for the third quarter decreased $27.9 million, or 21.1%, to $104.4 million. Organic transactional and other revenues decreased 13.6%, due to lower sales across all three segments.
Balance Sheet and Cash Flow
As of September 30, 2024, cash and cash equivalents of $388.5 million increased $17.8 million compared to December 31, 2023.
The Company’s total debt outstanding as of September 30, 2024 was $4,711.5 million, a decrease of $58.8 million compared to December 31, 2023, driven by an accelerated debt repayment.
Net cash provided by operating activities of $505.3 million for the nine months ended September 30, 2024 decreased $48.0 million compared to the prior year period, primarily due to lower operating results, partially offset by timing differences in working capital. Free cash flow(1) for the nine months ended September 30, 2024 was $298.4 million, a decrease of $76.3 million compared to the prior year period.
Notes to press release
(1) Non-GAAP measure. Please see “Reconciliations to Certain Non-GAAP Measures” in this release for important disclosures and reconciliations of these financial measures to the most directly comparable GAAP measure. These terms are defined elsewhere in this press release.
N/M – Represents a change approximately equal or in excess of 100% or not meaningful.
Conference Call and Webcast
Clarivate will host a conference call and webcast today to review the results for the third quarter at 9:00 a.m. Eastern Time. The webcast is open to all interested parties and may include forward-looking information.
The live webcast of the earnings call will be accessible through the investor relations section of the Company’s website. To join the webcast please visit https://events.q4inc.com/attendee/495058600.
Interested parties may access the live audio broadcast. U.S. participants may call 800-715-9871; international participants may call +1 646-307-1963 (long-distance charges will apply). The conference ID number is 5907538.
A replay of the webcast will also be available on https://ir.clarivate.com beginning two hours after the conclusion of the live call and will remain available for one year.
Use of Non-GAAP Financial Measures
Non-GAAP results are financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and are presented only as a supplement to our financial statements based on GAAP. Non-GAAP financial information is provided to enhance the reader’s understanding of our financial performance, but none of these non-GAAP financial measures are recognized terms under GAAP. They are not measures of financial condition or liquidity, and should not be considered as an alternative to profit or loss for the period determined in accordance with GAAP or operating cash flows determined in accordance with GAAP. As a result, you should not consider such measures in isolation from, or as a substitute for, financial measures or results of operations calculated or determined in accordance with GAAP.
We use non-GAAP measures in our operational and financial decision-making. We believe that such measures allow us to focus on what we deem to be a more reliable indicator of ongoing operating performance and our ability to generate cash flow from operations, and we also believe that investors may find these non-GAAP financial measures useful for the same reasons. Non-GAAP measures are frequently used by securities analysts, investors, and other interested parties in their evaluation of companies comparable to us, many of which present non-GAAP measures when reporting their results. These measures can be useful in evaluating our performance against our peer companies because we believe the measures provide users with valuable insight into key components of GAAP financial disclosures. However, non-GAAP measures have limitations as analytical tools and because not all companies use identical calculations, our presentation of non-GAAP financial measures may not be comparable to other similarly titled measures of other companies.
Definitions and reconciliations of non-GAAP measures, such as Adjusted EBITDA, Adjusted EBITDA margin, Adjusted net income, Adjusted diluted EPS, and Free cash flow to the most directly comparable GAAP measures are provided within the schedules attached to this release. Our presentation of non-GAAP measures should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that any projections and estimates will be realized in their entirety or at all.
Forward-Looking Statements
This communication includes statements that express our opinions, expectations, beliefs, plans, objectives, assumptions, or projections regarding future events or future results and therefore are, or may be deemed to be, “forward-looking statements” within the meaning of the “safe harbor provisions” of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will,” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts, and include statements regarding our intentions, beliefs, or current expectations concerning, among other things, anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies, and the markets in which we operate. Such forward-looking statements are based on available current market material and management’s expectations, beliefs, and forecasts concerning future events impacting us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks and uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in Item 1A. Risk Factors of our annual report on Form 10-K. Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. Please consult our public filings with the SEC or on our website at www.clarivate.com.
About Clarivate
Clarivate™ is a leading global provider of transformative intelligence. We offer enriched data, insights & analytics, workflow solutions and expert services in the areas of Academia & Government, Intellectual Property and Life Sciences & Healthcare. For more information, please visit www.clarivate.com.
Condensed Consolidated Balance Sheets (Unaudited)
(In millions)
September 30,
2024
December 31,
2023
ASSETS
Current assets:
Cash and cash equivalents, including restricted cash
$ 388.5
$ 370.7
Accounts receivable, net
771.8
908.3
Prepaid expenses
97.7
88.5
Other current assets
81.1
68.0
Assets held for sale
—
26.7
Total current assets
1,339.1
1,462.2
Property and equipment, net
47.3
51.6
Other intangible assets, net
8,726.7
9,006.6
Goodwill
1,736.8
2,023.7
Other non-current assets
71.8
60.8
Deferred income taxes
50.8
46.7
Operating lease right-of-use assets
58.1
55.2
Total assets
$ 12,030.6
$ 12,706.8
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$ 126.5
$ 144.1
Accrued compensation
111.7
126.5
Accrued expenses and other current liabilities
375.1
315.2
Current portion of deferred revenues
890.2
983.1
Current portion of operating lease liability
22.1
24.4
Liabilities held for sale
—
6.7
Total current liabilities
1,525.6
1,600.0
Long-term debt
4,632.5
4,721.1
Non-current portion of deferred revenues
21.6
38.7
Other non-current liabilities
52.5
41.9
Deferred income taxes
227.0
249.6
Operating lease liabilities
57.9
63.2
Total liabilities
6,517.1
6,714.5
Commitments and contingencies
Shareholders’ equity:
Preferred Shares, no par value; 14.4 shares authorized; 5.25% Mandatory Convertible Preferred Shares, Series A, zero and 14.4 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
—
1,392.6
Ordinary Shares, no par value; unlimited shares authorized; 710.3 and 666.1 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively
13,069.0
11,740.5
Accumulated other comprehensive loss
(433.8)
(495.3)
Accumulated deficit
(7,121.7)
(6,645.5)
Total shareholders’ equity
5,513.5
5,992.3
Total liabilities and shareholders’ equity
$ 12,030.6
$ 12,706.8
Condensed Consolidated Statements of Operations (Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
(In millions, except per share data)
2024
2023
2024
2023
Revenues
$ 622.2
$ 647.2
$ 1,893.7
$ 1,945.1
Operating expenses:
Cost of revenues
210.1
220.6
641.5
674.8
Selling, general and administrative costs
169.7
171.9
546.8
559.3
Depreciation and amortization
177.2
176.8
541.0
527.5
Goodwill and intangible asset impairments
13.8
—
316.6
135.2
Restructuring and other impairments
4.0
3.7
14.2
25.3
Other operating expense (income), net
25.7
(13.0)
46.9
(30.5)
Total operating expenses
600.5
560.0
2,107.0
1,891.6
Income (loss) from operations
21.7
87.2
(213.3)
53.5
Fair value adjustment of warrants
—
(12.6)
(5.2)
(14.4)
Interest expense, net
72.2
71.9
213.5
218.5
Income (loss) before income taxes
(50.5)
27.9
(421.6)
(150.6)
Provision (benefit) for income taxes
15.1
15.6
23.3
(83.3)
Net income (loss)
(65.6)
12.3
(444.9)
(67.3)
Dividends on preferred shares
—
18.9
31.3
56.3
Net income (loss) attributable to ordinary shares
$ (65.6)
$ (6.6)
$ (476.2)
$ (123.6)
Per share:
Basic
$ (0.09)
$ (0.01)
$ (0.69)
$ (0.18)
Diluted
$ (0.09)
$ (0.01)
$ (0.69)
$ (0.18)
Weighted average shares used to compute earnings per share:
Basic
718.7
670.9
690.5
673.9
Diluted
718.7
670.9
690.5
673.9
Condensed Consolidated Statements of Cash Flows (Unaudited)
Nine Months Ended September 30,
(In millions)
2024
2023
Cash Flows From Operating Activities
Net income (loss)
$ (444.9)
$ (67.3)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization
541.0
527.5
Share-based compensation
48.9
97.1
Restructuring and other impairments, including goodwill
314.5
138.9
Gain on legal settlement
—
(49.4)
Deferred income taxes
(28.8)
(51.3)
Amortization of debt issuance costs
11.1
12.9
Other operating activities
36.1
2.4
Changes in operating assets and liabilities:
Accounts receivable
148.2
110.3
Prepaid expenses
(8.5)
(10.6)
Other assets
(9.8)
19.5
Accounts payable
(16.5)
(2.4)
Accrued expenses and other current liabilities
22.1
(33.8)
Deferred revenues
(102.3)
(56.9)
Operating leases, net
(7.8)
(6.2)
Other liabilities
2.0
(77.4)
Net cash provided by operating activities
505.3
553.3
Cash Flows From Investing Activities
Capital expenditures
(206.9)
(178.6)
Payments for acquisitions, net of cash acquired
(32.0)
(2.3)
Proceeds from divestitures, net of cash divested
(19.2)
10.5
Net cash provided by (used for) investing activities
(258.1)
(170.4)
Cash Flows From Financing Activities
Principal payments on term loans
(58.1)
(150.0)
Payment of debt issuance costs and discounts
(20.1)
0.1
Repurchases of ordinary shares
(100.0)
(100.0)
Cash dividends on preferred shares
(37.7)
(56.7)
Payments related to finance lease
(0.7)
(0.8)
Payments related to tax withholding for share-based compensation
(13.9)
(14.8)
Net cash provided by (used for) financing activities
(230.5)
(322.2)
Effects of exchange rates
1.1
(10.3)
Net change in cash and cash equivalents, including restricted cash
17.8
50.4
Cash and cash equivalents, including restricted cash, beginning of period
370.7
356.8
Cash and cash equivalents, including restricted cash, end of period
$ 388.5
$ 407.2
Supplemental Revenues Information
Annualized contract value (“ACV”) represents the annualized value for the next 12 months of subscription-based client license agreements, assuming that all expiring license agreements during that period are renewed at their current price level. Our ACV was $1,596.4 and $1,579.2 as of September 30, 2024 and 2023, respectively, which corresponds to an increase of 1.1%. The increase in ACV was primarily due to the impact of price increases, partially offset by volume declines.
The following tables present our revenues by type and by segment for the periods indicated, as well as the drivers of the variances between periods, including as a percentage of such revenues.
Three Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Subscription revenues
$ 411.1
$ 408.1
$ 3.0
0.7 %
0.2 %
— %
(0.1) %
0.6 %
Re-occurring revenues
106.7
106.8
(0.1)
(0.1) %
— %
— %
1.0 %
(1.1) %
Transactional and other revenues
104.4
132.3
(27.9)
(21.1) %
0.5 %
(8.1) %
0.1 %
(13.6) %
Revenues
$ 622.2
$ 647.2
$ (25.0)
(3.9) %
0.2 %
(1.6) %
0.1 %
(2.6) %
Nine Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Subscription revenues
$ 1,219.8
$ 1,207.3
$ 12.5
1.0 %
0.1 %
— %
(0.3) %
1.2 %
Re-occurring revenues
317.8
325.5
(7.7)
(2.4) %
— %
— %
(0.1) %
(2.3) %
Transactional and other revenues
356.1
412.3
(56.2)
(13.6) %
0.2 %
(4.5) %
— %
(9.3) %
Revenues
$ 1,893.7
$ 1,945.1
$ (51.4)
(2.6) %
0.1 %
(1.0) %
(0.2) %
(1.5) %
Three Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Academia & Government
$ 321.3
$ 327.2
$ (5.9)
(1.8) %
— %
— %
(0.1) %
(1.7) %
Intellectual Property
199.8
211.7
(11.9)
(5.6) %
0.1 %
(4.6) %
0.7 %
(1.8) %
Life Sciences & Healthcare
101.1
108.3
(7.2)
(6.6) %
0.9 %
(0.7) %
(0.3) %
(6.5) %
Revenues
$ 622.2
$ 647.2
$ (25.0)
(3.9) %
0.2 %
(1.6) %
0.1 %
(2.6) %
Nine Months Ended
September 30,
Change
% of Change
(In millions, except percentages); (unaudited)
2024
2023
$
%
Acquisitions
Disposals
FX
Organic
Academia & Government
$ 983.5
$ 983.9
$ (0.4)
— %
— %
— %
(0.1) %
0.1 %
Intellectual Property
602.3
637.1
(34.8)
(5.5) %
— %
(2.6) %
(0.2) %
(2.7) %
Life Sciences & Healthcare
307.9
324.1
(16.2)
(5.0) %
0.5 %
(0.6) %
(0.5) %
(4.4) %
Revenues
$ 1,893.7
$ 1,945.1
$ (51.4)
(2.6) %
0.1 %
(1.0) %
(0.2) %
(1.5) %
Reconciliations to Certain Non-GAAP Measures
Adjusted EBITDA and Adjusted EBITDA Margin
Adjusted EBITDA represents Net income (loss) before the Provision (benefit) for income taxes, Depreciation and amortization, and Interest expense, net, adjusted to exclude acquisition and/or disposal-related transaction costs, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, unrealized foreign currency gains/losses, legal settlements, and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing operating performance. Net income (loss) margin is calculated by dividing Net income (loss) by Revenues. Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues.
The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the three and nine months ended September 30, 2024 and 2023 and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same periods:
Three Months Ended
September 30,
Nine Months Ended
September 30,
(In millions, except percentages); (unaudited)
2024
2023
2024
2023
Net income (loss)
$ (65.6)
$ 12.3
$ (444.9)
$ (67.3)
Provision (benefit) for income taxes
15.1
15.6
23.3
(83.3)
Depreciation and amortization
177.2
176.8
541.0
527.5
Interest expense, net
72.2
71.9
213.5
218.5
Transaction related costs
6.1
2.7
13.6
5.1
Share-based compensation expense
15.4
25.4
49.7
97.1
Goodwill and intangible asset impairments
13.8
—
316.6
135.2
Restructuring and other impairments
4.0
3.7
14.2
25.3
Fair value adjustment of warrants
—
(12.6)
(5.2)
(14.4)
Other(1)
26.2
(14.4)
53.3
(24.7)
Adjusted EBITDA
$ 264.4
$ 281.4
$ 775.1
$ 819.0
Net income (loss) margin
(10.5) %
1.9 %
(23.5) %
(3.5) %
Adjusted EBITDA margin
42.5 %
43.5 %
40.9 %
42.1 %
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.
Adjusted net income and Adjusted diluted EPS
Adjusted net income represents Net income (loss), adjusted to exclude acquisition and/or disposal-related transaction costs, amortization related to acquired intangible assets, share-based compensation, restructuring expenses, impairments, the impact of certain non-cash fair value adjustments on financial instruments, unrealized foreign currency gains/losses, legal settlements, and other items that are included in net income (loss) for the period that we do not consider indicative of our ongoing operating performance and the associated income tax impact of such adjustments.
Adjusted diluted EPS is calculated by dividing Adjusted net income by Adjusted diluted weighted average shares. The Adjusted diluted weighted average shares calculation assumes that all instruments in the calculation are dilutive.
The following tables present our calculation of Adjusted net income and Adjusted diluted EPS for the three and nine months ended September 30, 2024 and 2023 and reconciles these non-GAAP measures to our Net income (loss) and diluted EPS for the same periods:
Three Months Ended September 30,
2024
2023
(In millions, except per share amounts); (unaudited)
Amount
Per Share
Amount
Per Share
Net income (loss) and EPS
$ (65.6)
$ (0.09)
$ 12.3
$ 0.02
Transaction related costs
6.1
0.01
2.7
—
Share-based compensation expense
15.4
0.02
25.4
0.04
Amortization related to acquired intangible assets
138.7
0.19
141.9
0.21
Goodwill and intangible asset impairments
13.8
0.02
—
—
Restructuring and other impairments
4.0
0.01
3.7
0.01
Fair value adjustment of warrants
—
—
(12.6)
(0.02)
Other(1)
26.2
0.04
(14.4)
(0.04)
Income tax impact of related adjustments
(4.5)
(0.01)
(6.4)
(0.01)
Adjusted net income and Adjusted diluted EPS
$ 134.1
$ 0.19
$ 152.6
$ 0.21
Adjusted weighted average ordinary shares, diluted
723.5
731.4
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance.
Nine Months Ended September 30,
2024
2023
(In millions, except per share amounts); (unaudited)
Amount
Per Share
Amount
Per Share
Net income (loss) and EPS
$ (444.9)
$ (0.64)
$ (67.3)
$ (0.10)
Transaction related costs
13.6
0.02
5.1
0.01
Share-based compensation expense
49.7
0.07
97.1
0.14
Amortization related to acquired intangible assets
416.9
0.60
429.8
0.64
Goodwill and intangible asset impairments
316.6
0.46
135.2
0.20
Restructuring and other impairments
14.2
0.02
25.3
0.04
Fair value adjustment of warrants
(5.2)
(0.01)
(14.4)
(0.02)
Other(1)
53.3
0.05
(24.7)
(0.10)
Income tax impact of related adjustments
(34.4)
(0.05)
(150.4)
(0.22)
Adjusted net income and Adjusted diluted EPS
$ 379.8
$ 0.52
$ 435.7
$ 0.59
Adjusted weighted average ordinary shares, diluted
726.1
733.6
(1) Primarily reflects the net impact of unrealized foreign currency gains and losses, as well as other items that do not reflect our ongoing operating performance. For the nine months ended September 30, 2024, the amount includes a $14.8 loss on divestiture and for the nine months ended September 30, 2023, the amount includes a $49.4 gain on legal settlement.
Free cash flow
Free cash flow represents Net cash provided by (used for) operating activities less Capital expenditures. The following table reconciles this non-GAAP measure to Net cash provided by operating activities:
Three Months Ended September 30,
Nine Months Ended September 30,
(In millions); (unaudited)
2024
2023
2024
2023
Net cash provided by operating activities
$ 202.9
$ 163.4
$ 505.3
$ 553.3
Capital expenditures
(76.6)
(61.7)
(206.9)
(178.6)
Free cash flow
$ 126.3
$ 101.7
$ 298.4
$ 374.7
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Technology
Haloid Poll: Majority of Public Safety and Commercial Radio Administrators Would Consider Starlink Integration With LMR Two-Way Radio Networks, but Disruption Unlikely
Published
11 minutes agoon
October 26, 2026By
STONY BROOK, N.Y., Oct. 25, 2026 /PRNewswire/ — Following Starlink’s announced entry into the mobile communications space, Haloid’s consulting team polled government and business land mobile radio (LMR) administrators on whether Starlink could replace, or complement, their LMR systems. We found that most radio administrators were receptive to the nascent technology but did not see it as a replacement for their LMR networks.
Sixty-seven percent of radio administrators said they would be willing to integrate Starlink technology if it allowed them to expand coverage or lower infrastructure costs. When asked whether Starlink could completely replace their LMR networks, fewer than 15 percent said yes; the vast majority believed Starlink is not as reliable as the custom networks they have built. Among administrators who already use two-way radio over cellular (also known as push-to-talk over cellular, or PoC), however, nearly 80 percent said that Starlink’s satellite coverage, combined with its newly acquired cellular spectrum, would make it more desirable than the industry’s wireless incumbents because it could eliminate dead spots where cellular does not reach.
In the U.S., hundreds of thousands of radio users rely on traditional cellular carriers for push-to-talk communications, and that number grows each year. While the migration to two-way radio over cellular has affected the LMR industry, it has not replaced it. Many public safety agencies never made the switch, citing the risk that cellular networks could go down during weather events, power outages, or cyberattacks and jeopardize emergency communications.
In fact, during recent cellular outages, Starlink was used to provide emergency communications to affected areas, because its satellite connectivity does not depend on cell towers. But Starlink’s integration with the 800 MHz cellular spectrum — “Starlink 2.0,” as some experts are calling it — exposes it to some of the same vulnerabilities as traditional wireless carriers.
While Starlink’s satellite service might still function if local cell towers go down, a critical portion of an agency’s communications might rely on local towers using the 800 MHz spectrum, leaving the agency vulnerable in a storm or outage.
Expect evolution, not disruption
“Just like cellular didn’t replace LMR, we don’t see Starlink as an existential risk,” said Jeremy Alicandri, President of Haloid Solutions. He expects Starlink to accelerate the industry’s evolution toward shared communications infrastructure, also known as hybrid LMR. “We have public safety customers already using Starlink in their vehicles to extend the coverage of their radios. This trend will continue as Starlink devices become more ubiquitous.”
The stock prices of Verizon, T-Mobile, and AT&T were affected by Starlink’s recent announcement. LMR stocks such as L3Harris, JVCKENWOOD, and BK Technologies, maker of the Bendix King brand, have been unaffected, as Wall Street views Starlink as unlikely to replace LMR technology for the same reasons cellular did not. “But it may be too early to predict the industry’s winners and losers,” Alicandri added. “The cellular incumbents have many advantages, including low-cost devices, existing infrastructure, and their own satellite ambitions.”
About Haloid Solutions Research
Haloid’s Starlink poll drew on respondents to its LMR brand loyalty study, which measures radio administrators’ sentiment toward the ownership and after-sales experience. Haloid’s LMR research is sponsored by investors in the mission-critical communications space.
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SOURCE HALOID SOLUTIONS
Technology
Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming
Published
11 minutes agoon
October 26, 2026By
HONG KONG, Oct. 26, 2026 /PRNewswire/ — Recently, Newborn Town’s game-oriented social platform TopTop has launched “Slap Showdown”, an AI-powered 3D interactive mini-game developed in collaboration with Viggle, a company specializing in physics-native world models. The launch brings world model technology into social gaming, offering users a more personalized and engaging interactive experience.
Developed by TopTop and powered by Viggle’s self-developed Joint Space-Time (JST) world model, “Slap Showdown” lets users turn uploaded photos into customized 3D characters and take them straight into the game.
Launched in September, “Slap Showdown” has gained particular traction in Japan, among Spanish-speaking users in North America, and across the Middle East. It is now available in multiple countries and regions worldwide.
From Better Gameplay to a Richer Ecosystem: How World Models Could Redefine Social Gaming on TopTop
In terms of gameplay, “Slap Showdown” combines AI-generated 3D characters with multiplayer interaction. Players can simply upload a photo from their phone and generate a personalized 3D character in around 30 seconds, whether it’s an anime protagonist, a cyberpunk cyborg, or a LEGO minifigure. They can then bring their custom characters into the game and face off against other players in fun, interactive battles.
As players use controls such as press-and-hold, tap, and drag, the 3D characters respond with realistic, physics-based movements. This takes AI-generated characters beyond visual customization, integrating them directly into the gameplay experience.
According to TopTop’s operations team, “Slap Showdown” has attracted a growing base of highly engaged, high-spending-potential players in its first month since launch. The game has recorded a 97% match completion rate, while its game-start rate has also exceeded the platform-wide average.
The depth of user engagement is further illustrated by individual player activity. One player in Japan completed 1,041 matches over 22 days, reaching a daily peak of 151 matches and averaging one match every 9.5 minutes. Another particularly avid player in Eastern Europe completed 735 matches in just 11 days, averaging 66.8 matches per day and peaking at 126 matches in a single day.
For a UGC-driven social gaming platform such as TopTop, mini-games serve as entry points and traffic drivers, while social features underpin retention and monetization. Personalized 3D avatars add another dimension to that experience. Beyond their visual appeal, they give users new ways to express themselves, interact with friends and share memorable moments. In turn, richer gameplay and more meaningful social interactions can help improve retention, attract new users and strengthen engagement across the platform.
“Slap Showdown” marks a successful step in TopTop’s efforts to deepen its application of AI technology, as well as a starting point for using world models to enhance gaming and social experiences. TopTop’s operations team said future game releases could make greater use of AI-powered 3D generation, extending beyond avatars to include customized environments. Existing games could also be revitalized by the introduction of new gameplay features, potentially driving stronger retention and user acquisition.
Beyond enriching gameplay, world model capabilities could also reshape social interaction itself, enabling more immersive, face-to-face experiences in virtual spaces. “We’re constantly exploring how AI can transform gaming and social interaction, while bringing new energy and capabilities to our UGC ecosystem,” TopTop’s operations team said.
Viggle Unveils Physics-Native Model JST-2, Setting Its Sights on Becoming the Infrastructure Layer for Physical AI
The world model technology powering “Slap Showdown” is provided by Viggle.
Founded in 2022, Viggle has focused on developing physics-native world foundation models. Its self-developed JST model can generate 3D characters, motion and environments directly, providing a foundation for gaming and a growing range of AI applications.
Viggle previously attracted widespread attention with Meme Maker, its AI-powered video creation product. The tool enables users to animate static characters and generate videos by applying specified movements, making AI character animation and video creation more accessible. In August 2024, Viggle raised USD 19 million in a Series A funding round led by Silicon Valley venture capital firm Andreessen Horowitz (a16z).
However, video creation was an early application of this technology. Viggle’s longer-term ambition is to make JST a foundational technology for AI-powered experiences across gaming, social platforms and other applications.
Viggle is now further expanding its technological boundaries. On 19 October, Viggle launched JST-2 in full, likening its significance for world models to GPT-2’s role in the evolution of language models.
Unlike many world models that infer physical structure indirectly from pixels, JST-2 is built around a physics-native architecture designed to learn the structure and dynamics of the 3D world directly. Its underlying representation consists of units resembling digital “atoms.” Each has a defined position in three-dimensional space, along with physical properties such as material, color and mass, and information describing how it moves and responds to forces. This allows the model to do more than generate convincing images. It can represent and generate 3D characters, motion and scenes with an underlying understanding of their physical properties.
To support this approach, Viggle has developed an integrated technology stack spanning tokenization, model architecture, data engine, pre-training and post-training. After four years of research and development, JST-2 can generate characters, motion and scenes within a single unified architecture.
Compared with other approaches, JST-2 also demonstrates cost efficiency. JST-2 can generate a 3D scene in seconds, at an inference cost of less than one US cent. Once created, the content can be rendered locally without repeatedly running the foundation model to generate each frame.
It is noteworthy that world model technology remains at an early stage, but Viggle is already working toward more advanced capabilities.
Its next-generation model, JST-3, is intended to become a comprehensive world simulator. Such a system could underpin future game and graphics engines, while also serving as a virtual training environment for robotics and other forms of physical AI.
The longer-term goal is for JST-3 to learn the physical rules governing its simulated world directly from data, rather than relying on rules explicitly written by developers.
For Newborn Town, its investment in and partnership with Viggle represents an important step in exploring how advanced AI can reshape social gaming, promoting a deep integration of AI technology with its business operations.
As a leading global social entertainment company, Newborn Town has continued to deepen the use of AI across key areas in recent years, including product R&D, social recommendation systems, intelligent operations, safety and risk management, and marketing and user acquisition, supporting ongoing business growth.
Meanwhile, the company also continued to invest across the AI ecosystem, backing projects in areas including world models, AI companionship, AI Agents and AI interactive gaming. These investments have further enriched its AI application ecosystem, with Viggle among the AI companies previously backed by Newborn Town.
“Slap Showdown” represents an early step in bringing world models into social gaming. For Newborn Town and Viggle, the next challenge is to turn increasingly sophisticated AI capabilities into experiences that users find genuinely engaging — and compelling enough to keep coming back.
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SOURCE Newborn Town
Technology
HKICEC Launches First-Ever Global Mobile Exchange Pavilion at Mobile Electronics Show
Published
11 minutes agoon
October 26, 2026By
Charting a New Milestone with Outstanding Achievements
HONG KONG, Oct. 26, 2026 /PRNewswire/ — The Hong Kong International Communications Electronic Chamber (HKICEC) made a landmark debut at the Global Sources Mobile Electronics Show, held from October 18-21, 2026, with the inaugural launch of the HKICEC Global Mobile Exchange Pavilion. Spanning 600 square meters, the pavilion brought together nearly 60 industry leaders from mainland China, Hong Kong, India, Japan, the UAE, the US and the UK. As the largest themed pavilion in the mobile electronics sector and a premier highlight of the exhibition, this event marks a new developmental milestone for HKICEC. The pavilion underscores the chamber’s dedication to bridging global markets and serving the communications and electronics industry, injecting vital new momentum into the synergy between Hong Kong’s technology sector and international trade.
The grand opening ceremony on October 18 marked the official launch of the first B2B pavilion in Hong Kong and Asia dedicated exclusively to mobile communications equipment. The milestone event was officiated by a distinguished lineup of devices global business, including Dr. the Hon. Starry Lee Wai King, GBS, JP, Member of the Standing Committee of the National People’s Congress and President of the Legislative Council; Mr. Zhu Xiaodong, Director of the Kowloon Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR; Dr. the Hon. Horace Cheung Kwok Kwan SBS JP, Deputy Secretary for Justice, HKSAR; Mr. Liu Maozhou, Level 1 Bureau Rank Official, the Economic and Financial Department II, Liaison Office of the Central People’s Government in the HKSAR; Mr. Ho Lap Ki, Denny, JP, District Officer (Kwun Tong), Home Affairs Department; Mr James Liu, CEO of Global Sources; and Mr. Jacky Tse, Chairman of HKICEC, alongside HKICEC Management team. Together, they witnessed the official launch of the first B2B pavilion in Hong Kong and Asia dedicated to mobile communications equipment. The ceremony drew over a hundred political and business leaders, industry representatives, international exhibitors, and major media outlets, reflecting the event’s importance and the industry’s green trading development. Following the inauguration, officials toured the pavilion for high-level discussions with global exhibitors, signaling robust institutional backing for the industry and HKICEC’s strategic expansion.
During the four-day exhibition, the pavilion experienced a continuous flow of visitors. Communications and electronics suppliers and global buyers from overseas visited specifically for business matchmaking and negotiations, unlocking numerous commercial opportunities. Notably, the pavilion also featured a retrospective exhibit of 16 classic mobile phones, tracing the industry’s evolution from early ‘brick’ devices to Mainland China’s first official Apple release, the iPhone 3GS. The historical display proved to be a standout attraction, gathering large crowds throughout the event.
Beyond the exhibition floor, the chamber partnered with Global Sources to co-host an international forum on October 19. Under the theme ” From New Devices to New Life: Building a Global Mobile Device Lifecycle Ecosystem”, the event gathered experts from ecoATM, PCS Wireless, Cenwood, Our Hong Kong Foundation, and the Global Mobile Association. They engaged in profound discussions on cutting-edge topics including the global economic landscape, inventory management, ESG development, the circular ecology of new and used devices, and AI technology. Attended by over 200 international representatives, the forum successfully catalyzed cross-border collaboration and established a new standard for sustainability discourse in the global mobile industry.
As a capstone to the comprehensive four-day events, HKICEC convened over 500 industry leaders, VIPs, and exhibitors for a high-profile networking banquet designed to accelerate cross-border business alliances. The gathering provided a premier platform for delegates to solidify collaborative ties and exchange strategic insights initiated from the pavilion. Ahead of the exhibition’s conclusion, a special ” Pearl Of The Orient • Victoria Harbour Cruise Party” was organized to showcase Hong Kong’s unique charm as a cosmopolitan city to global guests, providing a memorable networking experience against Hong Kong’s iconic skyline to formally cap off the week’s successes.
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SOURCE The Hong Kong International Communications Electronic Chamber (HKICEC)
Haloid Poll: Majority of Public Safety and Commercial Radio Administrators Would Consider Starlink Integration With LMR Two-Way Radio Networks, but Disruption Unlikely
Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming
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