Technology

Clarivate Reports Fourth Quarter and Full Year 2024 Results

Published

2 years ago

February 19, 2025

— Accelerates transition from transactional to subscription and re-occurring revenue —

— Launches new product innovation for Academia & Government and Life Sciences & Healthcare —

— Repurchased $200 million ordinary shares and pre-paid $198 million of debt in 2024 as part of balanced capital allocation strategy —

— Initiates review of strategic alternatives including potential divestitures —

— Provides 2025 Outlook —

LONDON, Feb. 19, 2025 /PRNewswire/ — Clarivate Plc (NYSE: CLVT) (the “Company” or “Clarivate”), a leading global provider of transformative intelligence, today reported results for the fourth quarter and full year ended December 31, 2024.

Total revenue for the fourth quarter of 2024 was $663.0 million, compared to total revenue of $683.7 million in the fourth quarter of 2023. Organic revenues for the fourth quarter of 2024 decreased 0.7%, as an increase in subscription and transactional revenues was offset by lower re-occurring revenues, compared to the fourth quarter of 2023.

Net loss for the fourth quarter of 2024 was $191.8 million, or $0.27 per diluted share, an improvement compared to a net loss of $843.9 million, or $1.30 per diluted share, in the fourth quarter of 2023. Adjusted net income for the fourth quarter of 2024 was $145.5 million, or $0.21 per diluted share, compared to $163.4 million, or $0.23 per diluted share, for the fourth quarter of 2023. Adjusted EBITDA was $285.3 million for the fourth quarter of 2024, compared to Adjusted EBITDA of $298.2 million for the fourth quarter of 2023.

Total revenue for the full year of 2024 was $2.56 billion, compared to total revenue of $2.63 billion for the full year of 2023. Organic revenues decreased 1.4%, as an increase in subscription revenues was offset by lower transactional and re-occurring revenues.

Net loss for the full year of 2024 was $636.7 million, or $0.96 per diluted share, an improvement compared to a net loss of $911.2 million, or $1.47 per diluted share, for the full year of 2023. Adjusted net income for the full year of 2024 was $525.3 million, or $0.73 per diluted share, compared to $599.1 million, or $0.82 per diluted share, for the full year of 2023. Adjusted EBITDA was $1,060.4 million for the full year of 2024, compared to Adjusted EBITDA of $1,117.2 million for the full year of 2023.

Clarivate generated $357.5 million of free cash flow for the full year of 2024 and repurchased $200.0 million of ordinary shares and pre-paid $198.1 million of term-loan debt. In December 2024, the Board of Directors authorized a new share repurchase program of up to $500.0 million of the Company’s outstanding ordinary shares through open-market purchases for a period of two years, from January 1, 2025 through December 31, 2026.

“We are committed to reinvigorating our business to deliver healthy organic growth and build for the future,” said Matti Shem Tov, Chief Executive Officer. “Last year we released a string of AI-powered product enhancements, and as part of our Value Creation Plan (VCP), we recently launched new subscription-based solutions including ProQuest e-Books, ProQuest Digital Collections and DRG Fusion. We are focused on driving subscription and re-occurring revenue growth and plan to discontinue sales of certain low-margin transactional products in 2025 and 2026, which will improve our revenue predictability.”

Mr. Shem Tov continued: “Under our VCP initiatives, we are improving our sales execution by enhancing key leadership roles, realigning account management models around specialist areas, and investing in customer success teams. We are harnessing the power of technology and AI to accelerate product innovation and drive development velocity through customer collaboration. We believe the steps we are taking will improve our financial performance and operational efficiency.”

Selected Financial Information

Three Months Ended
December 31,

Change

Year Ended

December 31,

Change

(in millions, except percentages and per
share data), (unaudited)

2024

2023

2024

2023

Revenues

$ 663.0

$ 683.7

$ (20.7)

(3.0) %

$ 2,556.7

$ 2,628.8

$ (72.1)

(2.7) %

Net income (loss)

$ (191.8)

$ (843.9)

$ 652.1

77.3 %

$ (636.7)

$ (911.2)

$ 274.5

30.1 %

Adjusted net income(1)

$ 145.5

$ 163.4

$ (17.9)

(11.0) %

$ 525.3

$ 599.1

$ (73.8)

(12.3) %

Adjusted EBITDA(1)

$ 285.3

$ 298.2

$ (12.9)

(4.3) %

$ 1,060.4

$ 1,117.2

$ (56.8)

(5.1) %

Diluted EPS

$ (0.27)

$ (1.30)

$ 1.03

79.2 %

$ (0.96)

$ (1.47)

$ 0.51

34.7 %

Adjusted diluted EPS(1)

$ 0.21

$ 0.23

$ (0.02)

(8.7) %

$ 0.73

$ 0.82

$ (0.09)

(11.0) %

Net cash provided by operating
activities

$ 141.3

$ 190.9

$ (49.6)

(26.0) %

$ 646.6

$ 744.2

$ (97.6)

(13.1) %

Free cash flow(1)

$ 59.1

$ 127.0

$ (67.9)

(53.5) %

$ 357.5

$ 501.7

$ (144.2)

(28.7) %

Fourth Quarter 2024 Commentary

Revenues for the fourth quarter decreased $20.7 million, or 3.0%, to $663.0 million, primarily due to IP and A&G product group divestitures completed in 2024. Organic revenues decreased $5.0 million or 0.7%.

Subscription revenues for the fourth quarter decreased $3.8 million, or 0.9%, to $407.0 million. Organic subscription revenues increased 0.1%.

Re-occurring revenues for the fourth quarter decreased $7.1 million, or 6.0%, to $112.0 million. Organic re-occurring revenues decreased 5.4%, primarily due to lower IP patent renewal volume.

Transactional revenues for the fourth quarter decreased $9.8 million, or 6.4%, to $144.0 million. Organic transactional revenues increased 0.6%, primarily due to higher A&G sales.

Full Year 2024 Commentary

Revenues for the full year 2024 decreased $72.1 million, or 2.7%, to $2,556.7 million, primarily due to lower transactional sales across all three segments and the IP product group divestiture. Organic revenues decreased $35.9 million, or 1.4%.

Subscription revenues for the full year 2024 increased $8.7 million, or 0.5%, to $1,626.8 million. Organic subscription revenues increased 0.9%, driven by price increases, partially offset by lower net volume in IP and LS&H.

Re-occurring revenues for the full year 2024 decreased $14.8 million, or 3.3%, to $429.8 million. Organic re-occurring revenues decreased 3.1%, primarily due to lower IP patent renewal volume.

Transactional revenues for the full year 2024 decreased $66.0 million, or 11.7%, to $500.1 million. Organic transactional revenues decreased 6.6%, primarily due to lower A&G and LS&H sales.

Balance Sheet and Cash Flow

As of December 31, 2024, cash and cash equivalents of $295.2 million decreased $75.5 million compared to December 31, 2023.

The Company’s total debt outstanding as of December 31, 2024 was $4,571.1 million, a decrease of $199.2 million compared to December 31, 2023, driven by accelerated debt repayments.

Net cash provided by operating activities of $646.6 million for the year ended December 31, 2024 decreased $97.6 million compared to the prior year period, primarily due to lower operating results and higher working capital requirements due to timing of payments. Free cash flow for the year ended December 31, 2024 was $357.5 million, a decrease of $144.2 million compared to the prior year period.

Review of Strategic Alternatives
Clarivate also announced that it has initiated the exploration of strategic alternatives including potential divestitures. The Company, in consultation with financial and legal advisors, will review and consider a full range of options focused on maximizing shareholder value, including divesting business units or an entire segment.

The Company intends to be diligent and thorough in reviewing its options and completing its review in a timely manner, but does not intend to comment until the process is concluded or it is otherwise determined that further disclosure is necessary or appropriate. There can be no assurance that the review process will result in any transaction or any other strategic change or outcome, or as to the timing of any of the foregoing.

Morgan Stanley & Co. LLC and Moelis & Company LLC are serving as financial advisors to the Company.

Outlook for 2025 (forward-looking statement)
“Our 2025 outlook includes the disposal of specific Academia & Government and Life Sciences & Healthcare transactional products, which are expected to be completed by the end of 2026,” said Jonathan Collins, Executive Vice President and Chief Financial Officer. “We currently expect recurring organic revenues (subscription and re-occurring revenues combined) to be flat, at the mid-point in 2025. We will continue to aggressively manage our cost structure and currently expect a balanced approach to capital allocation in 2025.”

The full year outlook presented below assumes no further acquisitions, divestitures, or unanticipated events.

2025 Outlook

Organic ACV

1.0% to 2.0%

Recurring Organic Revenue Growth

(1.0)% to 1.0%

Revenues

$2.28B to $2.40B

Adjusted EBITDA(1)

$940M to $1.00B

Adjusted EBITDA Margin(1)

40.5% to 42.5%

Adjusted Diluted EPS(1)(2)

$0.60 to $0.70

Free Cash Flow(1)

$300M to $380M

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.

(2) Adjusted diluted EPS for 2025 is calculated based on approximately 696 million fully diluted adjusted weighted average ordinary shares outstanding.

Conference Call and Webcast

Clarivate will host a conference call and webcast today to review the results for the fourth quarter and full year 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/673591630.

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 8621261.

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 under the caption “Risk Factors” in our annual report on Form 10-K, along with our other filings with the U.S. Securities and Exchange Commission (“SEC”). 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.

Consolidated Balance Sheets (Unaudited)

As of December 31,

(In millions)

2024

2023

ASSETS

Current assets:

Cash and cash equivalents, including restricted cash

$ 295.2

$ 370.7

Accounts receivable, net

798.3

908.3

Prepaid expenses

85.9

88.5

Other current assets

65.2

68.0

Assets held for sale

—

26.7

Total current assets

1,244.6

1,462.2

Property and equipment, net

53.5

51.6

Other intangible assets, net

8,441.2

9,006.6

Goodwill

1,566.6

2,023.7

Other non-current assets

82.2

60.8

Deferred income taxes

48.5

46.7

Operating lease right-of-use assets

53.6

55.2

Total assets

$ 11,490.2

$ 12,706.8

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$ 124.5

$ 144.1

Accrued compensation

119.2

126.5

Accrued expenses and other current liabilities

310.1

315.2

Current portion of deferred revenues

859.1

983.1

Current portion of operating lease liability

20.6

24.4

Liabilities held for sale

—

6.7

Total current liabilities

1,433.5

1,600.0

Long-term debt

4,518.7

4,721.1

Non-current portion of deferred revenues

16.6

38.7

Other non-current liabilities

55.9

41.9

Deferred income taxes

273.3

249.6

Operating lease liabilities

53.2

63.2

Total liabilities

6,351.2

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 December 31, 2024 and
December 31, 2023, respectively

—

1,392.6

Ordinary Shares, no par value; unlimited shares authorized; 691.4 and 666.1 shares issued and
outstanding as of December 31, 2024 and December 31, 2023, respectively

12,978.8

11,740.5

Accumulated other comprehensive loss

(526.3)

(495.3)

Accumulated deficit

(7,313.5)

(6,645.5)

Total shareholders’ equity

5,139.0

5,992.3

Total liabilities and shareholders’ equity

$ 11,490.2

$ 12,706.8

Consolidated Statements of Operations (Unaudited)

Three Months Ended December 31,

Year Ended December 31,

(In millions, except per share data)

2024

2023

2024

2023

Revenues

$ 663.0

$ 683.7

$ 2,556.7

$ 2,628.8

Operating expenses:

Cost of revenues

227.7

231.6

869.2

906.4

Selling, general and administrative costs

180.8

180.4

727.6

739.7

Depreciation and amortization

186.0

180.8

727.0

708.3

Goodwill and intangible asset impairments

224.1

844.7

540.7

979.9

Restructuring and other impairments

5.4

14.7

19.6

40.0

Other operating expense (income), net

(98.7)

19.7

(51.8)

(10.8)

Total operating expenses

725.3

1,471.9

2,832.3

3,363.5

Income (loss) from operations

(62.3)

(788.2)

(275.6)

(734.7)

Fair value adjustment of warrants

—

(1.5)

(5.2)

(15.9)

Interest expense, net

69.9

75.2

283.4

293.7

Income (loss) before income taxes

(132.2)

(861.9)

(553.8)

(1,012.5)

Provision (benefit) for income taxes

59.6

(18.0)

82.9

(101.3)

Net income (loss)

(191.8)

(843.9)

(636.7)

(911.2)

Dividends on preferred shares

—

19.1

31.3

75.4

Net income (loss) attributable to ordinary shares

$ (191.8)

$ (863.0)

$ (668.0)

$ (986.6)

Per share:

Basic

$ (0.27)

$ (1.30)

$ (0.96)

$ (1.47)

Diluted

$ (0.27)

$ (1.30)

$ (0.96)

$ (1.47)

Weighted average shares used to compute earnings per
share:

Basic

702.8

665.0

693.6

671.6

Diluted

702.8

665.0

693.6

671.6

Consolidated Statements of Cash Flows (Unaudited)

Year Ended December 31,

(In millions)

2024

2023

Cash Flows From Operating Activities

Net income (loss)

$ (636.7)

$ (911.2)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

727.0

708.3

Share-based compensation

59.9

109.0

Restructuring and other impairments, including goodwill

540.3

986.2

Fair value adjustment of warrants

(5.2)

(15.9)

Gain on sale from divestitures

(54.7)

—

Gain on legal settlement

—

(49.4)

Deferred income taxes

21.2

(78.4)

Amortization of debt issuance costs

16.4

18.2

Other operating activities

3.3

37.8

Changes in operating assets and liabilities:

Accounts receivable

92.6

(25.5)

Prepaid expenses

1.5

1.7

Other assets

(0.8)

35.1

Accounts payable

(15.0)

41.2

Accrued expenses and other current liabilities

3.8

(44.4)

Deferred revenues

(106.2)

20.3

Operating leases, net

(9.6)

(8.0)

Other liabilities

8.8

(80.8)

Net cash provided by operating activities

646.6

744.2

Cash Flows From Investing Activities

Capital expenditures

(289.1)

(242.5)

Payments for acquisitions, net of cash acquired

(32.0)

(5.4)

Proceeds from divestitures, net of cash divested

84.4

10.5

Net cash provided by (used for) investing activities

(236.7)

(237.4)

Cash Flows From Financing Activities

Principal payments on term loans

(198.1)

(300.0)

Repayments of revolving credit facility

—

Payment of debt issuance costs and discounts

(20.1)

0.1

Repurchases of ordinary shares

(200.0)

(100.0)

Cash dividends on preferred shares

(37.7)

(75.5)

Payments related to tax withholding for share-based compensation

(15.6)

(20.6)

Other financing activities

1.4

(0.5)

Net cash provided by (used for) financing activities

(470.1)

(496.5)

Effects of exchange rates

(15.3)

3.6

Net change in cash and cash equivalents, including restricted cash

(75.5)

13.9

Cash and cash equivalents, including restricted cash, beginning of period

370.7

356.8

Cash and cash equivalents, including restricted cash, end of period

$ 295.2

$ 370.7

Supplemental Cash Flow Information:

Cash paid for interest

$ 265.3

$ 273.5

Cash paid for income tax

$ 52.9

$ 42.9

Supplemental Revenues Information

Annualized contract value (“ACV”), at any point in time, represents the annualized value of all active customer subscription-based license agreements for the next 12 months, assuming those coming up for renewal during the measurement period are renewed at their current price level. Our organic ACV grew 0.9% in 2024, compared to 2023, primarily driven by price increases. Our total ACV for 2024, compared to 2023, declined 1.1% primarily due to the ScholarOne divestiture in November 2024.

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
December 31,

Change

% of Change

2024

2023

Acquisitions

Disposals

Organic

Subscription

$ 407.0

$ 410.8

$ (3.8)

(0.9) %

0.2 %

(1.2) %

— %

0.1 %

Re-occurring

112.0

119.1

(7.1)

(6.0) %

— %

(0.6) %

(5.4) %

Recurring revenues

$ 519.0

$ 529.9

$ (10.9)

(2.1) %

0.1 %

(0.9) %

(0.2) %

(1.1) %

Transactional

144.0

153.8

(9.8)

(6.4) %

0.3 %

(7.3) %

— %

0.6 %

Revenues

$ 663.0

$ 683.7

$ (20.7)

(3.0) %

0.2 %

(2.4) %

(0.1) %

(0.7) %

Year Ended

December 31,

Change

% of Change

2024

2023

Acquisitions

Disposals

Organic

Subscription

$ 1,626.8

$ 1,618.1

$ 8.7

0.5 %

0.1 %

(0.3) %

(0.2) %

0.9 %

Re-occurring

429.8

444.6

(14.8)

(3.3) %

— %

(0.2) %

(3.1) %

Recurring revenues

$ 2,056.6

$ 2,062.7

$ (6.1)

(0.3) %

0.1 %

(0.2) %

(0.3) %

0.1 %

Transactional

500.1

566.1

(66.0)

(11.7) %

0.2 %

(5.3) %

— %

(6.6) %

Revenues

$ 2,556.7

$ 2,628.8

$ (72.1)

(2.7) %

0.1 %

(1.3) %

(0.1) %

(1.4) %

Three Months Ended
December 31,

Change

% of Change

2024

2023

Acquisitions

Disposals

Organic

Academia & Government

$ 342.9

$ 339.4

$ 3.5

1.0 %

— %

(1.4) %

0.1 %

2.3 %

Intellectual Property

209.1

225.6

(16.5)

(7.3) %

0.2 %

(4.5) %

(0.3) %

(2.7) %

Life Sciences & Healthcare

111.0

118.7

(7.7)

(6.5) %

0.7 %

(1.2) %

(0.2) %

(5.8) %

Revenues

$ 663.0

$ 683.7

$ (20.7)

(3.0) %

0.2 %

(2.4) %

(0.1) %

(0.7) %

Year Ended

December 31,

Change

% of Change

2024

2023

Acquisitions

Disposals

Organic

Academia & Government

$ 1,326.4

$ 1,323.3

$ 3.1

0.2 %

— %

(0.4) %

(0.1) %

0.7 %

Intellectual Property

811.4

862.7

(51.3)

(5.9) %

0.1 %

(3.1) %

(0.2) %

(2.7) %

Life Sciences & Healthcare

418.9

442.8

(23.9)

(5.4) %

0.6 %

(0.8) %

(0.4) %

(4.8) %

Revenues

$ 2,556.7

$ 2,628.8

$ (72.1)

(2.7) %

0.1 %

(1.3) %

(0.1) %

(1.4) %

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 share-based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial instruments, acquisition and/or disposal-related transaction costs, 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 fourth quarter and full year of 2024 and 2023, respectively, and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same periods:

Three Months Ended
December 31,

Year Ended

December 31,

(In millions, except percentages); (unaudited)

2024

2023

2024

2023

Net income (loss)

$ (191.8)

$ (843.9)

$ (636.7)

$ (911.2)

Provision (benefit) for income taxes

59.6

(18.0)

82.9

(101.3)

Depreciation and amortization

186.0

180.8

727.0

708.3

Interest expense, net

69.9

75.2

283.4

293.7

Share-based compensation expense

10.9

11.8

60.6

108.9

Goodwill and intangible asset impairments

224.1

844.7

540.7

979.9

Restructuring and other impairments

5.4

14.7

19.6

40.0

Fair value adjustment of warrants

—

(1.5)

(5.2)

(15.9)

Transaction related costs

4.3

3.1

17.9

8.2

Other(1)

(83.1)

31.3

(29.8)

6.6

Adjusted EBITDA

$ 285.3

$ 298.2

$ 1,060.4

$ 1,117.2

Net income (loss) margin

(28.9) %

(123.4) %

(24.9) %

(34.7) %

Adjusted EBITDA margin

43.0 %

43.6 %

41.5 %

42.5 %

(1) Includes the net impact of unrealized foreign currency gains and losses and other items that do not reflect our ongoing operating performance. The fourth quarter and full year 2024 amount includes a gain of $69.5 and a net gain of $54.7, respectively, from the divestitures completed in 2024. The full year 2023 amount includes a gain of $49.4 related to a legal settlement.

Adjusted net income and Adjusted diluted EPS

Adjusted net income represents Net income (loss), adjusted to exclude amortization related to acquired intangible assets, share-based compensation, impairments, restructuring expenses, the impact of certain non-cash fair value adjustments on financial instruments, acquisition and/or disposal-related transaction costs, 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 fourth quarter and full year of 2024 and 2023, respectively, and reconciles these non-GAAP measures to our Net income (loss) and Diluted EPS for the same periods:

Three Months Ended December 31,

2024

2023

(In millions, except per share amounts); (unaudited)

Amount

Per Share

Amount

Per Share

Net income (loss) and Diluted EPS

$ (191.8)

$ (0.27)

$ (843.9)

$ (1.27)

Amortization related to acquired intangible assets

137.2

0.20

134.5

0.20

Share-based compensation expense

10.9

0.02

11.8

0.02

Goodwill and intangible asset impairments

224.1

0.32

844.7

1.27

Restructuring and other impairments

5.4

0.01

14.7

0.02

Fair value adjustment of warrants

—

(1.5)

—

Transaction related costs

4.3

0.01

3.1

—

Other(1)

(83.1)

(0.13)

31.3

0.04

Income tax impact of related adjustments

38.5

0.05

(31.3)

(0.05)

Adjusted net income and Adjusted diluted EPS

$ 145.5

$ 0.21

$ 163.4

$ 0.23

Adjusted weighted average ordinary shares, diluted

707.7

724.4

(1) Includes the net impact of unrealized foreign currency gains and losses and other items that do not reflect our ongoing operating performance. The fourth quarter 2024 amount includes a gain of $69.5 from the ScholarOne divestiture.

Year Ended December 31,

2024

2023

(In millions, except per share amounts); (unaudited)

Amount

Per Share

Amount

Per Share

Net income (loss) and Diluted EPS

$ (636.7)

$ (0.92)

$ (911.2)

$ (1.36)

Amortization related to acquired intangible assets

554.1

0.80

564.3

0.84

Share-based compensation expense

60.6

0.09

108.9

0.16

Goodwill and intangible asset impairments

540.7

0.78

979.9

1.46

Restructuring and other impairments

19.6

0.03

40.0

0.06

Fair value adjustment of warrants

(5.2)

(0.01)

(15.9)

(0.02)

Transaction related costs

17.9

0.03

8.2

0.01

Other(1)

(29.8)

(0.08)

6.6

(0.06)

Income tax impact of related adjustments

4.1

0.01

(181.7)

(0.27)

Adjusted net income and Adjusted diluted EPS

$ 525.3

$ 0.73

$ 599.1

$ 0.82

Adjusted weighted average ordinary shares, diluted

721.5

731.3

(1) Includes the net impact of unrealized foreign currency gains and losses and other items that do not reflect our ongoing operating performance. The 2024 amount includes a net gain of $54.7 from divestitures and the 2023 amount includes a gain of $49.4 related to a legal settlement.

Free cash flow

Free cash flow represents Net cash provided by operating activities less Capital expenditures. The following table reconciles this non-GAAP measure to Net cash provided by operating activities for the same periods:

Three Months Ended December 31,

Year Ended December 31,

(In millions); (unaudited)

2024

2023

2024

2023

Net cash provided by operating activities

$ 141.3

$ 190.9

$ 646.6

$ 744.2

Capital expenditures

(82.2)

(63.9)

(289.1)

(242.5)

Free cash flow

$ 59.1

$ 127.0

$ 357.5

$ 501.7

Reconciliations to Certain Non-GAAP Measures – 2025 Outlook

Adjusted EBITDA and Adjusted EBITDA Margin

The following table presents our calculation of Adjusted EBITDA and Adjusted EBITDA margin for the 2025 outlook and reconciles these non-GAAP measures to our Net income (loss) and Net income (loss) margin for the same period:

Year Ending December 31, 2025

(Forecasted)

(In millions, except percentages); (unaudited)

Low

High

Net income (loss)

$ (203)

$ (127)

Provision (benefit) for income taxes

Depreciation and amortization

697

687

Interest expense, net

262

252

Share-based compensation expense

Restructuring and other impairments(1)

Transaction related costs

Other

Adjusted EBITDA

$ 940

$ 1,000

Net income (loss) margin

(8.9) %

(5.3) %

Adjusted EBITDA margin

40.5 %

42.5 %

(1) Reflects restructuring costs expected to be incurred in 2025 associated with the Value Creation Plan.

Adjusted diluted EPS

The following table presents our calculation of Adjusted diluted EPS for the 2025 outlook and reconciles this non-GAAP measure to our per share Net income (loss) for the same period:

Year Ending December 31, 2025

(Forecasted)

(Unaudited)

Low

High

Net income (loss)

(0.28)

(0.18)

Amortization related to acquired intangible assets

0.75

Share-based compensation expense

0.12

Restructuring and other impairments(1)

0.04

Transaction related costs

0.01

Other

0.01

Income tax impact of related adjustments

(0.05)

Adjusted diluted EPS

$ 0.60

$ 0.70

Adjusted weighted-average ordinary shares (diluted)(2)

696 million

(1) Reflects restructuring costs expected to be incurred in 2025 associated with the Value Creation Plan.

(2) For the purposes of calculating adjusted diluted EPS, we have assumed the “if-converted” method of share dilution on a full year basis.

Free cash flow

The following table presents our calculation of Free cash flow for the 2025 outlook and reconciles this non-GAAP measure to our Net cash provided by operating activities for the same period:

Year Ending December 31, 2025

(Forecasted)

(In millions); (unaudited)

Low

High

Net cash provided by operating activities

$ 555

$ 635

Capital expenditures

(255)

Free cash flow

$ 300

$ 380

View original content to download multimedia:https://www.prnewswire.com/news-releases/clarivate-reports-fourth-quarter-and-full-year-2024-results-302379625.html

SOURCE Clarivate Plc

Technology

Sandbox VR Expands in Miami Area with Second Location at The Falls, Opening October 30

Published

3 minutes ago

October 27, 2026

Sandbox VR brings the ‘best virtual reality experience on the planet’ to The Falls

MIAMI, Oct. 27, 2026 /PRNewswire/ — Sandbox VR, the world’s premier venue for virtual reality experiences, will open its second location in the Greater Miami area on October 30 at The Falls. The more than 4,100-square-foot venue at 8888 SW 136th Street, Unit 407A, will be operated by Immersa Entertainment LLC and franchise operators Carolina Brost and William Santiago. Guests who book online by October 29 can save 25% on tickets at https://sandboxvr.com/miami/the-falls.

Sandbox VR Opens October 30 at The Falls in Greater Miami: Celebrate with 25% Off When You Book by October 29

The Falls is a 55-acre open-air shopping, dining and entertainment destination in South Florida. Sandbox VR’s new venue includes four private holodecks where groups of up to six guests suit up with headsets, haptic vests, and motion trackers for full-body immersion. The technology allows players to see and physically interact with one another, creating the feeling of living inside the action together. After each session, guests receive personalized highlight videos to relive and share their adventure.

“As local business owners, we believe entertainment should be more than just an activity – it should be an opportunity to bring people together, create lasting memories, and strengthen our community. Opening our second entertainment venue with a franchise of Sandbox VR is an exciting next chapter in our commitment to delivering exceptional experiences. Our priority has always been to provide a safe, fun, and welcoming environment where families, friends, and colleagues can enjoy innovative, high-quality entertainment. We are proud to bring this world-class immersive experience to The Falls and look forward to continuing to serve the South Florida community that has supported us throughout our journey,” said Carolina Brost and William Santiago, Owners, Sandbox VR The Falls.

Sandbox VR operates both corporate-owned locations and a robust franchise program, and recently hit $300M in lifetime sales while scaling to 100 global locations across five continents and 13 countries since launching in 2016. The company is redefining group entertainment with immersive experiences that transform any outing into lasting memories. Built by a team of veteran developers from EA, Sony, and Ubisoft, Sandbox VR delivers full-body immersion through exclusive content and original experiences, including the recently launched Stranger Things: Catalyst, in collaboration with Netflix, and the new Age of Dinosaurs experience in partnership with the Natural History Museum of London and leading dinosaur experts.

Sandbox VR provides an unparalleled entertainment experience with over 250,000 five-star reviews from guests worldwide. With over 6 million lifetime tickets sold across five continents, the company has established itself as the global leader in location-based virtual reality. Sandbox VR is backed by Andreessen Horowitz, Alibaba Entrepreneurs Fund, Gobi Partners, Craft, and Stanford University, along with individuals such as Kevin Durant, Justin Timberlake, and Katy Perry.

To learn more or book an experience at Sandbox VR The Falls, visit https://sandboxvr.com/miami/the-falls.

ABOUT SANDBOX VR
Sandbox VR is the world’s premier destination for location-based virtual reality experiences. Operating across 100 venues around the globe through a franchise and corporate-owned model, Sandbox VR attracts over 150,000 guests each month. Sandbox VR gives guests the opportunity to step out of everyday reality into unforgettable adventures through group-play immersive experiences. Using a proprietary full-body VR platform, the company develops original and licensed content, including exclusive experiences like Stranger Things: Catalyst and Squid Game Virtuals in collaboration with Netflix, and the Sandbox VR original Deadwood series. With over 6 million tickets sold worldwide, Sandbox VR has become a leader in immersive entertainment, combining premium technology with emotionally engaging storytelling. Recognized as one of Fast Company’s Most Innovative Companies and a two-time honoree on the Inc. 5000 list of America’s fastest-growing private companies, Sandbox VR is headquartered in San Francisco with offices in Hong Kong and Vancouver. The company has raised over $70 million from investors, including Andreessen Horowitz, Alibaba Entrepreneurs Fund, Gobi Partners and Craft, with individual backers including Justin Timberlake, Kevin Durant, and Will Smith.

Media Contact:
Carolina Brost, Owner
Immersa Entertainment LLC
dba Sandbox VR The Falls
(786) 530-2020
sandboxvr.thefalls@gmail.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/sandbox-vr-expands-in-miami-area-with-second-location-at-the-falls-opening-october-30-302921236.html

SOURCE Sandbox VR

Technology

10x Genomics to Participate in the 2026 Jefferies Global Healthcare Conference

Published

4 minutes ago

October 27, 2026

PLEASANTON, Calif., Oct. 27, 2026 /PRNewswire/ — 10x Genomics, Inc. (Nasdaq: TXG), the life science technology leader focused on accelerating science and advancing human health, announced today that members of its management team will participate in a fireside chat at the 2026 Jefferies Global Healthcare Conference in London on Tuesday, November 17, at 4:30 p.m. Greenwich Mean Time.

Interested parties may access a live webcast of the fireside chat on the “Investors” section of the company’s website at: https://investors.10xgenomics.com/. The webcast will be archived and available for replay for at least 30 days after the event.

About 10x Genomics

10x Genomics is a life science technology company building products to accelerate the mastery of biology and advance human health. Our integrated research solutions include instruments, consumables and software for single cell and spatial biology, which help academic and translational researchers and biopharmaceutical companies understand biological systems at a resolution and scale that matches the complexity of biology. Our products are behind breakthroughs in oncology, immunology, neuroscience and more, fueling powerful discoveries that are transforming the world’s understanding of health and disease. To learn more, visit 10xgenomics.com or connect with us on LinkedIn, X, Facebook, Bluesky or YouTube.

Disclosure Information

10x Genomics uses filings with the Securities and Exchange Commission, our website (www.10xgenomics.com), press releases, public conference calls, public webcasts and our social media accounts as means of disclosing material non-public information and for complying with our disclosure obligations under Regulation FD.

Contacts

Investors: investors@10xgenomics.com

Media: media@10xgenomics.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/10x-genomics-to-participate-in-the-2026-jefferies-global-healthcare-conference-302921150.html

SOURCE 10x Genomics, Inc.

Technology

Ultra Clean Reports Third Quarter 2026 Financial Results

Published

4 minutes ago

October 27, 2026

HAYWARD, Calif., Oct. 27, 2026 /PRNewswire/ — Ultra Clean Holdings, Inc. (Nasdaq: UCTT), today reported its financial results for the third quarter ended September 25, 2026.

Highlights for the Third Quarter 2026 were as follows:

Record revenue of $759 million, up 18% compared to Q2 2026 and up 49% compared to Q3 2025.GAAP gross margin of 16.9% and non-GAAP gross margin of 17.3%.GAAP EPS of $0.85 and non-GAAP EPS of $1.15.

“UCT delivered another strong quarter of growth and solid operational performance, as we responded with speed and agility to scale production and meet accelerating customer demand,” said James Xiao, CEO. “We are positioning UCT to capture more value from this next phase of AI-driven industry expansion by co-innovating with our customers, developing more advanced solutions, and executing with focus and discipline. Through UCT 3.0, we are building a more agile and efficient company that is well positioned to anticipate customer needs, accelerate innovation, and translate industry growth into lasting shareholder value.”

Third Quarter 2026 GAAP Financial Results
Total revenue was $759.0 million. Products contributed $681.9 million and Services added $77.1 million. Total gross margin was 16.9%, operating margin was 7.1%, and net income was $39.1 million or $0.85 per diluted share. This compares to total revenue of $644.9 million, gross margin of 16.1%, operating margin of 4.6%, and net income of $8.7 million or $0.19 per diluted share, in the prior quarter.

Third Quarter 2026 Non-GAAP Financial Results
On a non-GAAP basis, gross margin was 17.3%, operating margin was 9.0%, and net income was $53.2 million or $1.15 per diluted share. This compares to gross margin of 16.7%, operating margin of 7.0%, and net income of $32.3 million or $0.70 per diluted share, in the prior quarter.

Fourth Quarter 2026 Outlook
The Company expects revenue in the range of $800 million to $860 million. The Company expects GAAP diluted net income per share to be between $1.02 and $1.26, and non-GAAP diluted net income per share to be between $1.11 and $1.35.

Conference Call
The call will take place at 1:45 p.m. PT and can be accessed by dialing 1-800-836-8184 or 1-646-357-8785. No passcode is required. A replay of the call will be available by dialing 1-888-660-6345 or 1-646-517-4150 and entering the confirmation code 33664#. The Webcast will be available on the Investor Relations section of the Company’s website at http://uct.com/investors/events/.

About Ultra Clean Holdings, Inc.
Ultra Clean Holdings, Inc. is a leading developer and supplier of critical subsystems, components, parts, and ultra-high purity cleaning and analytical services, primarily for the semiconductor industry. Under its Products division, UCT offers its customers an integrated outsourced solution for major subassemblies, improved design-to-delivery cycle times, design for manufacturability, prototyping, and high-precision manufacturing. Under its Services Division, UCT offers its customers tool chamber parts cleaning and coating, as well as micro-contamination analytical services. Ultra Clean is headquartered in Hayward, California. Additional information is available at www.uct.com.

Use of Non-GAAP Measures
In addition to providing results that are determined in accordance with Generally Accepted Accounting Principles in the United States of America (“GAAP”), management uses non-GAAP gross margin, non-GAAP operating margin and non-GAAP net income to evaluate the Company’s operating and financial results. We believe the presentation of non-GAAP results is useful to investors for analyzing our core business and business trends and comparing performance to prior periods, along with enhancing investors’ ability to view the Company’s results from management’s perspective. The presentation of this additional information should not be considered a substitute for results prepared in accordance with GAAP. Tables presenting reconciliations from GAAP results to non-GAAP results are included at the end of this press release.

The Company defines non-GAAP net income as net loss before amortization of intangible assets, stock-based compensation, restructuring charges, debt refinancing costs, legal-related costs, unrealized loss (gain) on foreign exchange, VAT settlement, and the tax effects of the foregoing adjustments.

A reconciliation of our guidance for non-GAAP net income per diluted share for the subsequent quarter is not available due to fluctuations in the geographic mix of our earnings from quarter to quarter, which impacts our tax rate and cannot be reasonably predicted or determined. As a result, such reconciliation is not available without unreasonable efforts and we are unable to determine the probable significance of the unavailable information.

Safe Harbor Statement
The foregoing information contains, or may be deemed to contain, “forward-looking statements” (as defined in the US Private Securities Litigation Reform Act of 1995) which reflect our current views with respect to future events and financial performance. We use words such as “anticipates,” “projection,” “outlook,” “forecast,” “believes,” “plan,” “expect,” “future,” “intends,” “may,” “will,” “estimates,” “see,” “predicts,” “should” and similar expressions to identify these forward-looking statements. Forward looking statements included in this press release include our expectations about the semiconductor capital equipment market and outlook. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, the Company’s actual results may differ materially from the results predicted or implied by these forward-looking statements. These risks, uncertainties and other factors also include, among others, those identified in “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 10-K for the year ended December 26, 2025, as filed with the Securities and Exchange Commission. Ultra Clean Holdings, Inc. undertakes no obligation to publicly update or review any forward-looking statements, whether as a result of new information, future developments or otherwise unless required by law.

Contact:
Rhonda Bennetto
SVP Investor Relations
rbennetto@uct.com

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited; in millions, except per share data)

Three Months Ended

Nine Months Ended

September 25, 2026

September 26, 2025

September 25, 2026

September 26, 2025

Revenues:

Products

$ 681.9

$ 445.0

$ 1,720.3

$ 1,356.9

Services

77.1

65.0

217.3

190.4

Total revenues

759.0

510.0

1,937.6

1,547.3

Cost of revenues:

Products

575.7

380.4

1,465.2

1,163.9

Services

54.9

47.4

155.9

137.8

Total cost of revenues

630.6

427.8

1,621.1

1,301.7

Gross profit

128.4

82.2

316.5

245.6

Operating expenses:

Research and development

8.8

7.8

26.1

23.2

Sales and marketing

15.9

15.1

47.8

45.5

General and administrative

50.0

48.7

148.1

144.1

Impairment of goodwill

—

151.1

Total operating expenses

74.7

71.6

222.0

363.9

Income (loss) from operations

53.7

10.6

94.5

(118.3)

Interest income

1.4

1.1

3.8

3.0

Interest expense

(1.5)

(9.9)

(9.8)

(29.9)

Other expense, net

(2.5)

(1.2)

(3.2)

(2.5)

Income (loss) before provision for income taxes

51.1

0.6

85.3

(147.7)

Provision for income taxes

10.3

8.7

47.5

23.3

Net income (loss)

40.8

(8.1)

37.8

(171.0)

Less: Net income attributable to noncontrolling interests

1.7

2.8

7.9

6.9

Net income (loss) attributable to UCT

$ 39.1

$ (10.9)

$ 29.9

$ (177.9)

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

Basic

$ 0.86

$ (0.24)

$ 0.66

$ (3.93)

Diluted

$ 0.85

$ (0.24)

$ 0.65

$ (3.93)

Shares used in computing net income (loss) per share:

Basic

45.4

45.3

45.2

Diluted

46.2

45.4

46.2

45.2

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited; in millions)

September 25,
2026

December 26,
2025

ASSETS

Current assets:

Cash and cash equivalents

$ 270,9

$ 311,8

Accounts receivable, net of allowance for credit losses

272,4

208,8

Inventories

723,3

390,9

Prepaid expenses and other current assets

67,6

48,2

Total current assets

1 334,2

959,7

Property, plant and equipment, net

344,4

324,6

Goodwill

114,2

Intangible assets, net

136,4

156,8

Deferred tax assets, net

4,1

3,5

Operating lease right-of-use assets

156,3

157,2

Other non-current assets

14,8

13,0

Total assets

$ 2 104,4

$ 1 729,0

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities:

Current portion of long-term debt

$ —

$ 9,9

Accounts payable

335,2

194,9

Accrued compensation and related benefits

63,3

51,1

Operating lease liabilities

22,3

20,2

Other current liabilities

57,8

24,6

Total current liabilities

478,6

300,7

Long-term debt

635,1

467,0

Deferred tax liabilities

13,7

13,8

Operating lease liabilities

152,7

156,6

Other liabilities

11,0

6,8

Total liabilities

1 291,1

944,9

Equity:

UCT stockholders’ equity:

Common stock

0,1

Additional paid-in capital

601,6

578,7

Common shares held in treasury

(88,7)

(48,4)

Retained earnings

219,1

189,2

Accumulated other comprehensive loss

(4,6)

(8,6)

Total UCT stockholders’ equity

727,5

711,0

Noncontrolling interests

85,8

73,1

Total equity

813,3

784,1

Total liabilities and equity

$ 2 104,4

$ 1 729,0

ULTRA CLEAN HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited; in millions)

Nine Months Ended

September 25,
2026

September 26,
2025

(In millions)

Cash flows from operating activities:

Net income (loss)

$ 37.8

$ (171.0)

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization

37.5

35.5

Amortization of intangible assets

20.4

21.2

Stock-based compensation

17.2

14.4

Amortization of debt issuance costs

2.5

2.1

Loss on extinguishment of debt

3.4

—

Loss on disposal of property, plant and equipment

1.2

0.7

Impairment of goodwill

—

151.1

Change in the fair value of financial instruments

—

(0.1)

Deferred income taxes

(0.6)

0.4

Changes in assets and liabilities:

Accounts receivable

(63.6)

41.6

Inventories

(332.4)

(1.2)

Prepaid expenses and other current assets

(16.0)

(6.3)

Other non-current assets

0.0

(1.0)

Accounts payable

131.1

(22.8)

Accrued compensation and related benefits

12.2

(0.6)

Income taxes payable

3.3

(12.1)

Operating lease right-of-use assets and operating lease liabilities

(0.9)

10.2

Other liabilities

30.2

(4.6)

Net cash provided by (used in) operating activities

(116.7)

57.5

Cash flows from investing activities:

Purchases of property, plant and equipment

(45.3)

(40.2)

Proceeds from sale of equipment

0.1

3.2

Net cash used in investing activities

(45.2)

(37.0)

Cash flows from financing activities:

Proceeds from the issuance of common stock under at-the-market offering, net of commissions and fees

34.0

—

At-the-market offering costs for the issuance of common stock

(0.1)

—

Proceeds from the issuance of convertible notes

600.0

—

Borrowings on revolving credit facility

50.0

—

Proceeds from bank borrowings

—

59.3

Extinguishment of bank borrowings

—

(59.3)

Proceeds from issuance of common stock

1.1

Payment of debt issuance costs

(17.4)

(0.6)

Repurchase of common stock

(40.0)

(3.4)

Payment for capped call transactions

(25.1)

—

Principal payments on bank borrowings

(481.5)

(18.2)

Employees’ taxes paid upon vesting of restricted stock units

(4.3)

(1.1)

Payments of dividends to a joint venture shareholder

(0.1)

Net cash provided by (used in) financing activities

116.6

(22.3)

Effect of exchange rate changes on cash and cash equivalents

4.4

2.0

Net increase (decrease) in cash and cash equivalents

(40.9)

0.2

Cash and cash equivalents at beginning of period

311.8

313.9

Cash and cash equivalents at end of period

$ 270.9

$ 314.1

ULTRA CLEAN HOLDINGS, INC.

REPORTABLE SEGMENTS

GAAP TO NON-GAAP RECONCILIATION

(Unaudited; dollars in millions)

GAAP

Non-GAAP

Three Months Ended

September 25, 2026

Products

Services

Consolidated

Products

Services

Consolidated

Revenues

$ 681.9

$ 77.1

$ 759.0

$ 681.9

$ 77.1

$ 759.0

Gross profit

$ 106.2

$ 22.2

$ 128.4

$ 108.3

$ 23.2

$ 131.5

Gross margin

15.6 %

28.8 %

16.9 %

15.9 %

30.1 %

17.3 %

Income from operations

$ 46.7

$ 7.0

$ 53.7

$ 58.1

$ 10.5

$ 68.6

Operating margin

6.8 %

9.1 %

7.1 %

8.5 %

13.6 %

9.0 %

Three Months Ended

September 25, 2026

Products

Services

Consolidated

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)

Reported gross profit on a GAAP basis

$ 106.2

$ 22.2

$ 128.4

Amortization of intangible assets (1)

1.3

1.0

2.3

Stock-based compensation expense (2)

0.6

—

0.6

Restructuring charges (3)

0.2

—

0.2

Non-GAAP gross profit

$ 108.3

$ 23.2

$ 131.5

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

15.6 %

28.8 %

16.9 %

Amortization of intangible assets (1)

0.2 %

1.3 %

0.3 %

Stock-based compensation expense (2)

0.1 %

— %

0.1 %

Restructuring charges (3)

0.0 %

— %

0.0 %

Non-GAAP gross margin

15.9 %

30.1 %

17.3 %

Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)

Reported income from operations on a GAAP basis

$ 46.7

$ 7.0

$ 53.7

Amortization of intangible assets (1)

3.9

2.9

6.8

Stock-based compensation expense (2)

6.3

0.6

6.9

Restructuring charges (3)

0.6

0.0

0.6

Legal-related costs (4)

0.6

—

0.6

Non-GAAP income from operations

$ 58.1

$ 10.5

$ 68.6

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

6.8 %

9.1 %

7.1 %

Amortization of intangible assets (1)

0.6 %

3.8 %

0.8 %

Stock-based compensation expense (2)

0.9 %

0.7 %

0.9 %

Restructuring charges (3)

0.1 %

— %

0.1 %

Legal-related costs (4)

0.1 %

— %

0.1 %

Non-GAAP operating margin

8.5 %

13.6 %

9.0 %

Amortization of intangible assets related to the Company’s business acquisitions

Represents compensation expense for stock granted to employees and directors

Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures

Represents estimated costs related to certain legal proceedings and a cybersecurity incident

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP ADJUSTED RESULTS

Three Months Ended

September 25,
2026

September 26,
2025

June 26,
2026

Reconciliation of GAAP Net Income (Loss) to Non-GAAP Net Income (in millions)

Reported net income (loss) attributable to UCT on a GAAP basis

$ 39.1

$ (10.9)

$ 8.7

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Debt refinancing costs expensed (4)

—

1.1

0.7

Legal-related costs (5)

0.6

0.2

—

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

VAT settlement (7)

—

(0.2)

—

Income tax effect of non-GAAP adjustments (8)

(3.5)

(4.0)

(2.9)

Income tax effect of valuation allowance (9)

0.1

8.6

12.1

Non-GAAP net income attributable to UCT

$ 53.2

$ 11.0

$ 32.3

Reconciliation of GAAP Income from operations to Non-GAAP Income from operations (in millions)

Reported income from operations on a GAAP basis

$ 53.7

$ 10.6

$ 29.5

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Legal-related costs (5)

0.6

0.2

—

VAT settlement (7)

—

(0.2)

—

Non-GAAP income from operations

$ 68.6

$ 29.2

$ 45.1

Reconciliation of GAAP Operating margin to Non-GAAP Operating margin

Reported operating margin on a GAAP basis

7.1 %

2.1 %

4.6 %

Amortization of intangible assets (1)

0.8 %

1.3 %

1.0 %

Stock-based compensation expense (2)

0.9 %

1.3 %

Restructuring charges (3)

0.1 %

1.4 %

0.1 %

Legal-related costs (5)

0.1 %

0.0 %

— %

VAT settlement (7)

— %

0.0 %

— %

Non-GAAP operating margin

9.0 %

5.7 %

7.0 %

Reconciliation of GAAP Gross profit to Non-GAAP Gross profit (in millions)

Reported gross profit on a GAAP basis

$ 128.4

$ 82.2

$ 103.7

Amortization of intangible assets (1)

2.3

Stock-based compensation expense (2)

0.6

0.5

1.5

Restructuring charges (3)

0.2

2.1

0.1

VAT settlement (7)

—

(0.2)

—

Non-GAAP gross profit

$ 131.5

$ 86.9

$ 107.6

Reconciliation of GAAP Gross margin to Non-GAAP Gross margin

Reported gross margin on a GAAP basis

16.9 %

16.1 %

Amortization of intangible assets (1)

0.3 %

0.4 %

Stock-based compensation expense (2)

0.1 %

0.2 %

Restructuring charges (3)

0.0 %

0.4 %

0.0 %

VAT settlement (7)

— %

0.0 %

— %

Non-GAAP gross margin

17.3 %

17.0 %

16.7 %

Reconciliation of GAAP Other income (expense), net to Non-GAAP Other income (expense), net (in millions)

Reported Other income (expense), net on a GAAP basis

$ (2.5)

$ (1.2)

$ 0.6

Debt refinancing costs expensed (4)

—

1.1

0.7

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

Non-GAAP Other income (expense), net

$ 0.1

$ (2.5)

$ (0.6)

Reconciliation of GAAP Income (Loss) Per Diluted Share to Non-GAAP Earnings Per Diluted Share

Reported net income (loss) on a GAAP basis

$ 0.85

$ (0.24)

$ 0.19

Amortization of intangible assets (1)

0.15

Stock-based compensation expense (2)

0.15

0.10

0.18

Restructuring charges (3)

0.01

0.16

0.01

Debt refinancing costs expensed (4)

—

0.02

0.01

Legal-related costs (5)

0.01

0.00

—

Unrealized loss (gain) on foreign exchange (6)

0.06

(0.05)

(0.04)

VAT settlement (7)

—

0.00

—

Income tax effect of non-GAAP adjustments (8)

(0.08)

(0.09)

(0.06)

Income tax effect of valuation allowance (9)

0.00

0.19

0.26

Impact of dilutive shares

0.00

Non-GAAP net earnings

$ 1.15

$ 0.24

$ 0.70

Weighted average number of diluted shares (in millions) on a non-GAAP basis (10)

46.2

45.6

46.0

ULTRA CLEAN HOLDINGS, INC.

UNAUDITED RECONCILIATION OF GAAP TO NON-GAAP EFFECTIVE INCOME TAX RATE

Three Months Ended

September 25,
2026

September 26,
2025

June 26,
2026

Provision for income taxes on a GAAP basis

$ 10.3

$ 8.7

$ 18.1

Income tax effect of non-GAAP adjustments (8)

3.5

4.0

2.9

Income tax effect of valuation allowance (9)

(0.1)

(8.6)

(12.1)

Non-GAAP provision for income taxes

$ 13.7

$ 4.1

$ 8.9

Income before income taxes on a GAAP basis

$ 51.1

$ 0.6

$ 30.0

Amortization of intangible assets (1)

6.8

6.9

6.8

Stock-based compensation expense (2)

6.9

4.6

8.1

Restructuring charges (3)

0.6

7.1

0.7

Debt refinancing costs expensed (4)

—

1.1

0.7

Legal-related costs (5)

0.6

0.2

—

Unrealized loss (gain) on foreign exchange (6)

2.6

(2.4)

(1.9)

VAT settlement (7)

—

(0.2)

—

Non-GAAP income before income taxes

$ 68.6

$ 17.9

$ 44.4

Effective income tax rate on a GAAP basis

20.2 %

1450.0 %

60.3 %

Non-GAAP effective income tax rate

20.0 %

22.9 %

20.0 %

1 Amortization of intangible assets related to the Company’s business acquisitions

2 Represents compensation expense for stock granted to employees and directors

3 Represents costs associated with employee separation, severance, retention, and other expenses related to facility closures

4 Represents certain third party transaction costs related to the amended credit agreement and the previously capitalized costs of extinguished debt

5 Represents estimated costs related to certain legal proceedings and a cybersecurity incident

6 Represents unrealized foreign exchange gains and losses arising from the remeasurement of monetary assets and liabilities

7 Represents impact of value added tax ruling

8 Tax effect of items (1) through (7) above based on the non-GAAP tax rate

9 The Company’s GAAP tax expense is generally higher than the Company’s non-GAAP tax expense, primarily due to losses in the U.S. with full federal and state valuation allowances. The Company’s non-GAAP tax rate and resulting non-GAAP tax expense considers the tax implications as if there was no federal or state valuation allowance position in effect

10 Non-GAAP diluted weighted-average common shares are adjusted to reflect the dilutive impact of our convertible note based on the capped call cap price instead of the initial conversion price

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SOURCE Ultra Clean Holdings, Inc.