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Clarivate Reports Third Quarter 2024 Results

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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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Best AI Tools for Small Business Marketing (2026): CapCut Featured for Creating Professional Video and Visual Content by Expert Consumers

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NEW YORK, Oct. 25, 2026 /PRNewswire/ — Expert Consumers has recognized CapCut in its 2026 coverage of the best AI tools for small business marketing, highlighting the platform’s collection of AI-powered features for creating and editing video, images, audio, and other visual content. The recognition reflects growing interest in tools that support practical marketing activities, including campaign development, promotional content production, and adapting creative assets for different digital channels.

Best AI Marketing Tools

Seedance 2.0 – an AI video generation model that creates videos from text prompts or imagesSeedream – an AI image generation model that creates high-quality visuals from text prompts

Small businesses face growing pressure to maintain an active digital presence while managing limited time and resources. From product photography and promotional videos to social media graphics and campaign materials, effective marketing depends on a steady supply of relevant, engaging content. Artificial intelligence is creating new ways to simplify these tasks and help businesses turn creative ideas into usable marketing assets.

CapCut provides a range of AI-assisted capabilities that support several stages of content production. These include prompt-based video generation, AI image creation, background removal, image expansion, music generation, and photo animation. For small businesses managing marketing internally, these functions offer options for developing creative assets without relying entirely on manual production processes.

AI Video Generation Supports Promotional Campaigns

Video is an important format for demonstrating products, explaining services, and introducing new offerings. Small businesses can use video across social media, websites, digital advertisements, and online product pages. Producing content regularly, however, can require considerable planning and editing.

CapCut’s Seedance 2.0 AI video generator offers a prompt-based approach to video creation. Users can describe a creative concept and generate video content that serves as a starting point for further editing.

For a small retailer preparing a product promotion, AI-generated video can help explore different visual approaches before a final concept is selected. A service provider could use the same process to develop ideas for an explainer or an introductory campaign.

Prompt-based generation can reduce the effort involved in developing initial concepts. Generated material still requires review to ensure the finished video accurately represents the business, communicates the intended message, and follows relevant brand guidelines.

AI Image Creation Helps Develop Marketing Materials

Visual content plays a central role in how businesses present products and services online. Promotional graphics, campaign imagery, and social media visuals need to communicate a clear message while maintaining a recognizable style.

CapCut’s Seedream AI image generator enables users to generate images from text prompts. The tool can support concept drafts, campaign planning, and experimentation with different visual directions before final assets are prepared.

For example, a small business planning a seasonal campaign could explore different visual themes and compositions during the early planning stage. These drafts can help establish a creative direction before additional time is spent refining the final materials.

CapCut’s GPT Image 2 provides another option for generating images from natural language instructions. The feature can support the development of promotional imagery, marketing graphics, and other visual assets.

AI image generation gives businesses more opportunities to test creative ideas during campaign development. However, generated images should be checked for visual errors, accurate product representation, and consistency with the intended brand identity before publication.

Image Editing Simplifies Content Preparation

Creating new marketing assets is only part of the production process. Existing photographs and graphics often need adjustments before they are suitable for different platforms.

CapCut’s AI background removal tool helps isolate subjects from their original backgrounds. This can simplify the preparation of product photographs, promotional graphics, and other images that require a different visual setting.

For a small retailer, background removal can make it easier to prepare product images for online listings or promotional materials. Separated subjects can be incorporated into new compositions without recreating the entire image.

The AI Image Extender addresses a separate challenge: adapting images to different dimensions. The tool generates additional visual content beyond an image’s original boundaries, helping users adjust compositions without relying entirely on cropping or stretching.

A campaign may require square graphics for social media, vertical visuals for mobile viewing, and horizontal banners for a website. Image expansion provides another option for adapting existing assets to those formats.

These editing capabilities can help reduce repetitive production work while supporting a more consistent presentation across marketing channels.

AI Audio and Photo Animation Expand Creative Options

Marketing content often combines visuals, movement, and sound. Music can establish a mood, support storytelling, and help create a more complete video presentation.

CapCut’s SeedMusic AI audio generator supports AI-assisted music creation based on prompts. The feature can help develop audio for promotional videos, product demonstrations, and social media content.

Generated music offers a starting point for matching audio to a campaign’s intended atmosphere. Before publication, businesses should review the output and confirm that the applicable usage terms cover the intended commercial application.

CapCut also provides a Photo-to-3D tool that transforms still images into more dynamic visual presentations. This capability can help repurpose existing photography for promotional videos, social posts, and digital campaigns.

For small businesses with an existing collection of product images, adding movement can provide another way to present familiar assets. The approach also expands the range of creative formats available without requiring every campaign to begin with new photography.

Connecting AI Tools to Everyday Marketing Workflows

The practical value of AI-powered creative tools depends on how effectively they address specific marketing needs. Small businesses do not necessarily need every available feature for every campaign. Selecting tools according to content requirements can help keep production focused.

A retailer might begin with Seedream to explore campaign concepts, then use GPT Image 2 to generate supporting visuals. Background removal can help prepare product photography, while AI Image Extender can adapt selected assets to different layouts. Seedance 2.0 can support video concept development, with SeedMusic offering an option for accompanying audio.

A service-based business might prioritize short promotional videos, explanatory graphics, and social media content instead. The same collection of tools can support different production requirements depending on the business model and campaign objectives.

Using AI does not remove the need for creative direction or quality control. Content should be checked for factual accuracy, appropriate product representation, brand consistency, and compliance with advertising requirements. Human review also helps ensure that generated assets serve a clear marketing purpose rather than adding unnecessary material to a campaign.

AI-Assisted Marketing for Small Businesses

Interest in the best AI tools for small business marketing reflects the need for practical ways to produce and adapt digital content. Businesses must balance the demand for regular campaign updates with the resources available for creative production.

Expert Consumers’ recognition of CapCut highlights the platform’s range of AI-assisted functions for video generation, image creation, editing, audio production, and photo animation. These capabilities offer small businesses several options for developing marketing materials across digital channels.

As AI becomes more integrated into content production, effective use will depend on matching the right tools to specific tasks. With clear campaign objectives, careful editing, and appropriate review, CapCut’s creative features can help businesses develop marketing assets while reducing some of the repetitive work involved in preparing content for publication.

Visit the Expert Consumers site for the full review.

About CapCut

CapCut is an AI-powered photo and video editing platform designed to make high-quality video creation accessible across devices. The platform supports creators, businesses, and everyday users with tools for video editing, AI video generation, captions, templates, audio, and visual editing. CapCut is available across mobile, web, desktop, and iPad experiences, helping users create, edit, and prepare video content for social media, marketing, education, and personal projects.

About Better Business Advice: Better Business Advice covers the news and strategies driving modern business success. The information provided by Better Business Advice does not, and is not intended to, constitute legal advice; instead, all information, content, and materials are for general informational purposes only. As an affiliate, Better Business Advice may earn commissions from services mentioned in the links provided.

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Beyond GRC: DigitalXForce Pioneers AI-Powered Risk Operations with Global X-ROC™ Rollout

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Enterprise TRiSCM™ innovator advances Continuous Control Assurance, cyber risk quantification and real-time Risk Operations across global enterprises, transforming traditional GRC into proactive Digital Trust

DALLAS, Oct. 25, 2026 /PRNewswire/ — DigitalXForce, the AI-native Enterprise Trust, Risk, Security and Compliance Management (TRiSCM™) platform, today announced the continued global rollout of X-ROC™ (XForce Risk Operations Center), its AI-powered approach to continuous enterprise risk operations.

The expansion builds on DigitalXForce’s recognition as a Leader in two IDC MarketScape assessments, its 2026 Cyber Defense Magazine innovation honors, and increasing enterprise demand for automated, continuous approaches to managing cybersecurity, governance, risk and compliance.

Unlike traditional Governance, Risk and Compliance (GRC) platforms that primarily document risks and manage periodic assessments, DigitalXForce’s X-ROC combines Continuous Control Assurance (CCA), Continuous Control Monitoring (CCM), Cyber Risk Quantification (CRQ), AI-powered risk intelligence and remediation orchestration into an integrated risk operations model.

The objective is to help enterprises move beyond knowing whether controls are documented to continuously understand whether controls are operating effectively, which exposures matter most, and what action should be taken next.

New Research Reveals Why Traditional Security Scores Are Not Enough

The company’s DigitalXForce Security Posture Benchmark 2026, analyzing published security control responses from 2,112 companies, reveals a significant disconnect between high-level compliance scores and underlying security exposure.

Key findings include:

98.9% median control implementation: The median company reported 98.9% of applicable security controls in place, yet significant control gaps remained.54.9% reported data protection gaps: More than half of companies reported at least one missing control in the Data Protection and Encryption domain.52.0% reported encryption and key management gaps: Among 2,098 companies responding, 52.0% reported at least one control not in place.42.3% reported configuration and asset management gaps: Demonstrating continued exposure in foundational security practices.26.7% reported full control implementation: More than one-quarter reported all applicable controls in place under the benchmark’s assessment model.

The benchmark evaluated responses against DigitalXForce’s proprietary model of 94 controls across 12 domains, with mappings to NIST SP 800-53, NIST Cybersecurity Framework 2.0 and CIS Controls v8.1.

These findings highlight an important enterprise risk challenge: a high security or compliance score does not necessarily reveal which remaining control failures could create the greatest business impact.

DigitalXForce developed X-ROC to address this challenge by connecting control failures and changing risk conditions with supporting evidence, quantified business impact and accountable remediation workflows.

Read the research: https://digitalxforce.com/research/security-posture-benchmark-2026/

X-ROC: Bringing Operational Intelligence to Enterprise Risk

A Risk Operations Center (ROC) is an operating model designed to continuously identify, assess, prioritize, monitor and reduce enterprise risk.

While a traditional Security Operations Center (SOC) focuses on security threats and incidents, a Risk Operations Center focuses on the organization’s broader exposure, control effectiveness, business impact and risk remediation.

DigitalXForce X-ROC™ brings these capabilities together through an integrated operating model:

1. Continuous Risk Discovery and Monitoring

X-ROC ingests security posture changes, control failures, third-party risk events and other enterprise risk signals, connecting them with the underlying evidence.

2. Continuous Control Assurance and Automation

DigitalXForce CCA continuously validates control effectiveness through evidence collection, automated testing and ongoing monitoring. CCM provides the monitoring capability within CCA, tracking control conditions and associated risk signals.

3. AI-Powered Risk Intelligence

DigitalXForce’s proprietary AI engines, AI JedAI and XForce GPT, analyze risk signals, correlate related findings, support prioritization and generate business-oriented risk narratives and executive reporting, with analyst review.

4. Cyber Risk Quantification

Rather than prioritizing findings solely by technical severity, X-ROC incorporates quantified financial exposure and business impact to help organizations identify which risks deserve attention first.

5. Remediation Orchestration and Validation

X-ROC assigns risk ownership, tracks remediation against defined timelines and supports integration with enterprise workflow platforms such as ServiceNow and Jira.

Findings are validated through control retesting before closure, creating an evidence-based approach to risk reduction.

6. Executive Digital Trust Intelligence

X-ROC connects operational risk findings with broader enterprise trust, security, compliance and resilience reporting, helping CISOs, CROs, compliance leaders and boards understand the organization’s changing risk posture.

CEO Perspective: Redefining Enterprise Risk Operations

“X-ROC is redefining enterprise risk operations. By combining AI, continuous control assurance and risk intelligence, we’re helping global enterprises move from reacting to risk to staying ahead of it.”

— Lalit Ahluwalia, Founder & CEO, DigitalXForce

Global Enterprise Adoption of Continuous Risk Operations

DigitalXForce is advancing the adoption of X-ROC across its international enterprise customer ecosystem, supporting organizations seeking to consolidate fragmented governance, cybersecurity, compliance and risk management operations.

X-ROC supports two operating models:

Enterprise-operated Risk Operations Center: Organizations operate X-ROC directly using DigitalXForce’s platform, workflows, integrations and risk intelligence capabilities.Managed Risk Operations: DigitalXForce operates the risk operations layer as a managed service, providing continuous monitoring, prioritization and reporting while customers retain ownership of remediation actions.

The platform supports cloud and hybrid deployment architectures, enabling organizations to address enterprise security, operational and regional data residency requirements.

This flexibility is particularly relevant to multinational organizations managing complex regulatory requirements, multiple business units, distributed technology environments and third-party ecosystems.

Independent Industry Recognition Reinforces DigitalXForce’s Momentum

DigitalXForce’s X-ROC strategy builds on broader industry recognition of the company’s Enterprise TRiSCM™ platform and AI-powered risk management innovation.

Dual IDC MarketScape Leader Recognition

DigitalXForce was positioned as a Leader in:

IDC MarketScape: Worldwide Governance, Risk, and Compliance Software Vendor Assessment, 2025 (Doc #US53615325, June 2025).IDC MarketScape: Worldwide Third-Party Risk Management Software 2026 Vendor Assessment (Doc #US53007725, September 2026).

These assessments evaluated vendor capabilities and strategies in their respective markets.

DigitalXForce’s recognition across both GRC and Third-Party Risk Management reflects its positioning across interconnected enterprise risk disciplines, supported by a unified platform architecture.

Cyber Defense Magazine Innovation Honors

DigitalXForce has also received recognition through the 2026 Cyber Defense Magazine Global InfoSec Awards, including innovation honors associated with AI TRiSCM, Automated GRC with Continuous Control Assurance, and X-ROC.

These recognitions contribute to DigitalXForce’s growing industry profile as it advances AI-powered governance, risk management and continuous assurance.

From GRC to Enterprise TRiSCM™: One Platform for Digital Trust

DigitalXForce’s Enterprise TRiSCM™ platform integrates 15 modules on a unified data layer, supporting more than 50 compliance frameworks and 250 technology integrations.

The architecture enables security, compliance, audit, risk and third-party risk teams to work from connected controls, shared evidence and continuously updated risk information rather than isolated tools and periodic assessments.

The platform is designed to enable five fundamental shifts:

From Periodic GRC → Continuous Control Assurance

From Fragmented Security Tools → Unified Enterprise Risk Intelligence

From Technical Severity → Quantified Business Risk

From Manual Remediation Tracking → Evidence-Based Risk Operations

From Compliance Reporting → Continuous Digital Trust

X-ROC serves as the operational layer of this strategy, connecting enterprise risk signals with prioritization, accountability and validated remediation.

Building the Future of AI-Powered Risk Operations

As enterprises accelerate adoption of cloud services, AI, autonomous technologies and complex third-party ecosystems, risk exposure is becoming increasingly dynamic.

DigitalXForce believes enterprise risk management must evolve accordingly.

The company’s vision is to make risk management a continuous operational capability rather than a periodic reporting exercise.

Through X-ROC, Continuous Control Assurance, AI-powered analysis and cyber risk quantification, DigitalXForce is working to establish a new operating model in which enterprises can identify emerging exposures, prioritize them based on business impact and verify that corrective actions are effective.

The SOC manages security incidents. X-ROC manages enterprise risk.

The future of GRC is not another dashboard. It is continuous, intelligent Risk Operations

About DigitalXForce — We Stop Risk Before It Strikes.

DigitalXForce, Industry’s first AI-Powered Enterprise TRiSCM (Trust, Risk, Security and Compliance Management) Platform, is pioneering the next generation of Automated GRC with Continuous Trust Assurance by converging AI, cybersecurity, compliance, operational resilience, and posture management into one unified Risk Intelligence platform. Designed with a modular and composable architecture, DigitalXForce delivers an integrated suite of capabilities spanning automated GRC, Enterprise Security Risk Posture Management (ESRPM), Third-Party Risk Management, Cyber Resilience, and Regulatory Compliance.

At the core of DigitalXForce is its AI-powered engine, which leverages intelligent agents, machine learning models, and a dynamic control library to autonomously monitor controls, map evidence, assess risks, and generate real-time insights. Trusted by global enterprises across healthcare, finance, critical infrastructure, and technology sectors, DigitalXForce delivers measurable value by reducing manual effort, accelerating audit readiness, and improving organizational resilience in today’s fast-evolving threat and compliance landscape.

Learn more about DigitalXForce at https://digitalxforce.com

Additional Resources

X-ROC Platform: https://digitalxforce.com/products/ai-powered-xforce-risk-operations-center/2026 Security Posture Benchmark: https://digitalxforce.com/research/security-posture-benchmark-2026/What Is a Risk Operations Center: https://digitalxforce.com/what-is-a-risk-operations-center/

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Best Protective iPhone Cases for 2026: Top Slim and Drop-Protection Options for iPhone 18 Pro & iPhone 18 Pro Max Recommended by Consumer365

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NEW YORK, Oct. 25, 2026 /PRNewswire/ — Consumer365 has recognized TORRAS in its review of the best iPhone cases for 2026, highlighting the Ostand Q3 Air and Ostand Q3 Air Pro as two options designed for iPhone 18 Pro & iPhone 18 Pro Max users seeking a balance between slim everyday usability and impact protection. The review examines documented features including case thickness, weight, grip, raised edges, magnetic support, corner protection, and drop-testing information.

Best iPhone Cases:

TORRAS – offers slim and protection-focused iPhone cases with air-cushioning, raised screen and camera edges, magnetic accessory support, textured grip, and built-in rotating stands, giving iPhone 18 Pro and iPhone 18 Pro Max users options for balancing everyday portability with impact protection.

The feature evaluates several factors that can affect real-world case performance, including thickness, weight, grip, raised edges, corner design, magnetic accessory support, documented drop testing, and overall handling. Rather than treating protection as a single specification, the review highlights the trade-offs involved in choosing between a thinner case and a more protection-focused design.

TORRAS addresses those different priorities through the Q3 Air series. The Ostand Q3 Air emphasizes a slimmer and lighter profile while retaining protective features, magnetic support, and an integrated rotating stand. The Ostand Q3 Air Pro places greater emphasis on impact management through a dual-layer airbag structure designed to help manage force during accidental drops.

TORRAS Q3 Air Focuses on Slim Everyday Protection

The TORRAS Ostand Q3 Air is designed for buyers seeking protective coverage without moving into a heavily built case. According to documented specifications reviewed by Consumer365, the Q3 Air measures 3.35 mm thick and weighs between 46 g and 53.7 g, depending on configuration.

Those dimensions help define the Q3 Air’s role within the series. The case is intended to retain a relatively streamlined profile while adding cushioning around areas that may be exposed during daily handling.

TORRAS lists an 8 ft protection rating for the Q3 Air. Raised edges provide another layer of separation between the device and flat surfaces, with documented measurements of 1.2 mm around the screen and 0.55 mm around the camera.

Grip is another part of the design. A dot-matrix texture is intended to improve handling, particularly during one-handed use. Better grip can play an important role in protection because reducing the likelihood of a drop can be as relevant as managing impact after a fall occurs.

The case also incorporates an 18N magnetic hold for compatible magnetic charging and accessories. Its built-in stand rotates through 360 degrees and supports portrait and landscape positioning for video calls, streaming, hands-free viewing, and desk work without requiring a separate stand attachment.

The combination positions the Q3 Air as a case for buyers who place significant value on portability, handling, and everyday functionality while still looking for documented protective features.

Q3 Air Pro Places More Emphasis on Impact Management

The TORRAS Ostand Q3 Air Pro takes a more protection-focused approach. The main distinction is the Air² Pro Tech construction, which TORRAS describes as a sealed dual-layer airbag system.

The structure uses two layers with different roles during impact. The outer layer is designed to receive the initial force, while the inner layer helps disperse remaining energy. This approach concentrates protective engineering around impact management rather than relying only on additional bulk.

TORRAS documents controlled internal drop testing for the Q3 Air Pro at heights up to 5 meters, or 16.4 feet. Such testing provides a useful reference point when comparing protective phone cases, although controlled testing should not be interpreted as a guarantee against damage in every real-world accident. Drop angle, surface material, device condition, and other variables can affect the result of an impact.

The Q3 Air Pro also includes textured sides intended to support a more secure grip. A microfiber interior creates a softer contact surface between the case and device. A 1.45 mm raised screen edge provides added separation from flat surfaces, while raised camera protection helps protect another key contact area.

Magnetic functionality remains part of the design. The Q3 Air Pro carries an 18N magnetic hold and includes a stand that rotates through 360 degrees and opens up to 180 degrees. The adjustable design supports portrait and landscape viewing for video calls, streaming, filming, and desk work.

Consumer365’s review presents the Q3 Air Pro as the more protection-oriented option within the two-product comparison, while the Q3 Air is positioned around a lighter and slimmer everyday experience.

Understanding the Slim Versus Protective Case Trade-Off

The review also examines why case selection should extend beyond broad terms such as “thin” or “protective.” Case thickness can affect pocketability and hand feel, but thickness alone does not establish impact performance. Likewise, a higher documented drop-test height does not describe every aspect of daily usability.

A useful comparison begins with several separate criteria.

Thickness and weight help indicate how significantly a case changes the physical feel of a phone. Published measurements can make slim-case comparisons more transparent.

Grip and corner construction affect both prevention and impact management. Textured surfaces can reduce slipping, while cushioning around corners addresses areas commonly exposed during falls.

Raised screen and camera edges can reduce direct contact when a device is placed on a flat surface. Exact measurements are particularly useful when available.

Magnetic support matters for charging, mounts, wallets, and other compatible accessories. Magnetic strength and alignment can influence how securely accessories remain attached.

Documented testing provides context for protective claims. Controlled test results are more useful when accompanied by clear conditions and should be considered alongside case construction rather than treated as a guarantee.

For the Q3 Air and Q3 Air Pro, these criteria create two different decision paths. A preference for lower bulk and published weight and thickness specifications points toward the Q3 Air. Greater emphasis on impact management and the dual-layer airbag design points toward the Q3 Air Pro.

Choosing Between the TORRAS Q3 Air and Q3 Air Pro

Case selection ultimately depends on how the phone is used throughout the day. Frequent pocket storage, extended one-handed use, commuting, travel, desk use, and reliance on magnetic accessories can each change which features deserve the most attention.

The Q3 Air combines a documented 3.35 mm profile with air cushioning, raised edges, textured grip, an 18N magnetic hold, and a 360-degree rotating stand. Those characteristics support a balance between protection and a slimmer carrying experience.

The Q3 Air Pro shifts the balance toward impact protection through the sealed dual-layer airbag structure and documented controlled drop testing. Magnetic support, textured grip, interior cushioning, raised screen and camera protection, and a 360-degree rotating stand remain part of the design.

Consumer365’s review recognizes TORRAS for offering both approaches within the Q3 Air series rather than treating protection and slimness as identical priorities. The comparison gives iPhone 18 Pro and iPhone 18 Pro Max users a clearer framework for considering protective construction, portability, grip, magnetic functionality, and documented testing before selecting a case.

For shoppers evaluating protective iPhone cases in 2026, the central question is not simply how much protection a case claims to provide. A more practical evaluation considers how that protection is achieved, how much bulk is introduced, and whether the case remains comfortable and functional during everyday use.

The full review is available at the Consumer365 website.

About TORRAS

TORRAS creates technology accessories that combine protection, thoughtful engineering, and practical everyday function. Across the Q3 Air, Q3 Air Pro, and Ostand series, TORRAS challenges the idea that better protection must mean more bulk, while using Ostand to make hands-free use and spontaneous content capture part of daily life.

About Consumer365.org: Consumer365 provides consumer news and industry insights. As an affiliate, Consumer365 may earn commissions from sales generated using links provided.

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