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CCC Intelligent Solutions Holdings Inc. Announces Second Quarter Fiscal Year 2022 Financial Results and Raises 2022 Guidance

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CHICAGO, August 04, 2022--(BUSINESS WIRE)--CCC Intelligent Solutions Holdings Inc. ("CCC" or the "Company") (NYSE: CCCS), a leading SaaS platform for the P&C insurance economy, today announced its financial results for the three months ended June 30, 2022, and raised revenue and adjusted EBITDA guidance for fiscal year 2022.

"CCC delivered strong second quarter results, highlighted by 16% revenue growth and 22% adjusted EBITDA growth. Our performance reflects the durability of CCC’s business model and end markets as we help our customers become more operationally efficient through our AI-based solutions and connected network," said Githesh Ramamurthy, Chairman & CEO of CCC.

"The growing momentum of CCC® Estimate – STP with insurance carriers and the increased use of our diagnostics-related capabilities by repair shops are just two examples of how our continued focus on innovation is helping our clients address the macro headwinds of inflation, supply chain issues, labor shortages, and vehicle complexity," continued Ramamurthy.

Second Quarter 2022 Financial Highlights

Revenue

  • Total revenue was $192.8 million for the second quarter of 2022, an increase of 16% from $166.8 million for the second quarter of 2021.

Profitability

  • GAAP gross profit was $139.9 million, representing a gross profit margin of 73%, for the second quarter of 2022, compared with $121.3 million, representing a gross profit margin of 73%, for the second quarter of 2021. Adjusted gross profit was $148.4 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2022, compared with $128.0 million, representing an adjusted gross profit margin of 77%, for the second quarter of 2021.

  • GAAP operating income was $12.5 million for the second quarter of 2022, compared with GAAP operating income of $22.0 million for the second quarter of 2021. Adjusted operating income was $66.7 million for the second quarter of 2022, compared with adjusted operating income of $54.8 million for the second quarter of 2021.

  • GAAP net income was $15.6 million for the second quarter of 2022, compared with GAAP net income of $3.8 million for the second quarter of 2021. Adjusted net income was $37.4 million for the second quarter of 2022, compared with $26.3 million for the second quarter of 2021.

  • Adjusted EBITDA was $73.4 million for the second quarter of 2022, compared with adjusted EBITDA of $60.1 million for the second quarter of 2021. Adjusted EBITDA grew 22% in the second quarter of 2022 as compared to the second quarter of 2021.

Liquidity

  • CCC had $227.6 million in cash and cash equivalents and $796.0 million of total debt on June 30, 2022. The Company generated cash from operating activities of $40.8 million in the second quarter of 2022, compared with $21.6 million in the second quarter of 2021. The Company generated free cash flow of $29.6 million in the second quarter of 2022, compared with $13.1 million in the second quarter of 2021.

The information presented above includes non-GAAP financial measures such as "adjusted gross profit," "adjusted gross profit margin," "adjusted operating income," "adjusted net income," "adjusted EBITDA," and "free cash flow." Refer to "Non-GAAP Financial Measures" for a discussion of these measures and reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure.

2nd Quarter and Recent Business Highlights

  • Increased to 11 the total number of insurance carriers using CCC® Estimate - STP, the first touchless line-level estimating experience in the industry that uses advanced AI and insurer-driven rules to automatically initiate and populate detailed and actionable estimates in seconds. These 11 carriers include the majority of the top-10 auto insurers in the US by direct written premium and therefore represent a sizeable portion of US auto insurance claim volume. Notably, these 11 carriers made their decisions within 8 months of our initial customer win in November 2021 and are at various stages of rollout.

  • Announced that AirPro Diagnostics, a leading service provider of remote scanning, diagnostics, programming and ADAS calibration solutions to the auto body collision industry, has become part of the CCC® Diagnostics network. CCC® Diagnostics simplifies the process of importing the diagnostic report and provider invoice directly into CCC ONE® as part of the repair shop’s workflow. AirPro Diagnostics joins Opus, asTech, and Honda in integrating their diagnostics solutions directly into CCC ONE®, the leading collision repair platform used by 27,500 repair facilities nationwide.

  • In May 2022, CCC resumed its annual in-person customer conference spanning insurers, repair facilities, OEMs, parts suppliers, and more. Over 300 clients attended this 4-day event in Colorado Springs. The event included industry-based Advisory Council meetings, product demos in the Tech Showcase, and presentations from industry thought leaders.

Business Outlook

Based on information as of today, August 4, 2022, the Company is issuing the following financial guidance:

Third Quarter Fiscal 2022

Full Year Fiscal 2022

Revenue

$194 million to $196 million

$773 million to $777 million

Adjusted EBITDA

$72 million to $74 million

$294 million to $298 million

Conference Call Information

CCC will host a conference call today, August 4, 2022, at 5:00 p.m. (Eastern Time) to discuss the Company’s financial results and financial guidance. A live webcast of this conference call will be available on the "Investor Relations" page of the Company’s website at https://ir.cccis.com, and a replay will be archived on the website as well.

About CCC Intelligent Solutions

CCC Intelligent Solutions Inc., a subsidiary of CCC Intelligent Solutions Holdings Inc. (NYSE: CCCS), is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 30,000 businesses digitizing mission-critical workflows, commerce, and customer experiences. A trusted leader in AI, IoT, customer experience, network and workflow management, CCC delivers innovations that keep people’s lives moving forward when it matters most. Learn more about CCC at www.cccis.com.

Forward Looking Statements

This press release contains forward-looking statements that are based on beliefs and assumptions and on information currently available. In some cases, you can identify forward-looking statements by the following words: "may," "will," "could," "would," "should," "expect," "intend," "plan," "anticipate," "believe," "estimate," "predict," "project," "potential," "continue," "ongoing" or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Forward-looking statements in this press release include, but are not limited to, statements regarding future events, goals, plans and projections regarding the company’s financial position, results of operations, market position, product development and business strategy. Such differences may be material. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward looking statements are subject to a number of risks and uncertainties, including, among others, our revenues, the concentration of our customers and the ability to retain our current customers; our ability to negotiate with our customers on favorable terms; our ability to maintain and grow our brand and reputation cost-effectively; the execution of our growth strategy; the impact of COVID-19 on our business and results of operations; our projected financial information, growth rate and market opportunity; the health of our industry, claim volumes, and market conditions; changes in the insurance and automotive collision industries, including the adoption of new technologies; global economic conditions and geopolitical events; competition in our market and our ability to retain and grow market share; our ability to develop, introduce and market new enhanced versions of our solutions and products; our sales and implementation cycles; the ability of our research and development efforts to create significant new revenue streams; changes in applicable laws or regulations; changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries; currency fluctuations; our reliance on third-party data, technology and intellectual property; our ability to protect our intellectual property; our ability to keep our data and information systems secure from data security breaches; our ability to acquire or invest in companies or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnership; our ability to raise financing in the future and improve our capital structure; our success in retaining or recruiting, or changes required in, our officers, key employees or directors; our officers and directors allocating their time to other businesses and potentially having conflicts of interest with our business; our estimates regarding expenses, future revenue, capital requirements and needs for additional financing; our financial performance; our ability to expand or maintain its existing customer base; our ability to service our indebtedness; and other risks and uncertainties, including those included under the header "Risk Factors" in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the Securities and Exchange Commission ("SEC"), which can be obtained, without charge, at the SEC’s website (www.sec.gov), and in our other filings with the SEC. The forward-looking statements in this press release represent our views as of the date of this press release. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Non-GAAP Financial Measures

This press release includes certain financial measures not presented in accordance with generally accepted accounting principles in the U.S. ("GAAP"), including, but not limited to, "adjusted EBITDA," "adjusted net income," "adjusted operating income," "adjusted gross profit," "adjusted gross profit margin," "adjusted operating expenses," and "free cash flow" in each case presented on a non-GAAP basis, and certain ratios and other metrics derived therefrom. These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing the Company’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to other measures of profitability, liquidity or performance under GAAP. You should be aware that the Company’s calculation of these non-GAAP measures may not be comparable to similarly-titled measures used by other companies.

The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. Please refer to the reconciliations of these measures below to what the Company believes are the most directly comparable measures evaluated in accordance with GAAP.

This press release also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, the Company is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included for these projections.

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

June 30,

December 31,

2022

2021

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

227,640

182,544

Accounts receivable—Net of allowances of $4,296 and $3,791 for June 30, 2022 and
December 31, 2021, respectively

82,816

78,793

Income taxes receivable

71

318

Deferred contract costs

16,021

15,069

Other current assets

30,640

46,181

Total current assets

357,188

322,905

SOFTWARE, EQUIPMENT, AND PROPERTY—Net

143,629

135,845

OPERATING LEASE ASSETS

33,615

37,234

INTANGIBLE ASSETS—Net

1,168,449

1,213,249

GOODWILL

1,494,267

1,466,884

DEFERRED FINANCING FEES, REVOLVER—Net

2,593

2,899

DEFERRED CONTRACT COSTS

19,869

22,117

EQUITY METHOD INVESTMENT

10,228

10,228

OTHER ASSETS

35,739

26,165

TOTAL

3,265,577

3,237,526

LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

15,350

12,918

Accrued expenses

60,641

66,691

Income taxes payable

20,847

7,243

Current portion of long-term debt

8,000

8,000

Current portion of long-term licensing agreement—Net

2,788

2,703

Operating lease liabilities

4,137

8,052

Deferred revenues

33,298

31,042

Total current liabilities

145,061

136,649

LONG-TERM DEBT—Net

777,384

780,610

DEFERRED INCOME TAXES—Net

231,728

275,745

LONG-TERM LICENSING AGREEMENT—Net

32,213

33,629

OPERATING LEASE LIABILITIES

55,849

56,133

WARRANT LIABILITIES

39,338

62,478

OTHER LIABILITIES

2,859

5,785

Total liabilities

1,284,432

1,351,029

COMMITMENTS AND CONTINGENCIES (Notes 19 and 20)

MEZZANINE EQUITY:

Redeemable non-controlling interest

14,179

14,179

STOCKHOLDERS’ EQUITY:

Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding

Common stock—$0.0001 par; 5,000,000,000 shares authorized; 615,501,951 and
609,768,296 shares issued and outstanding at June 30, 2022 and December 31,
2021, respectively

62

61

Additional paid-in capital

2,686,326

2,618,924

Accumulated deficit

(718,813

)

(746,352

)

Accumulated other comprehensive loss

(609

)

(315

)

Total stockholders’ equity

1,966,966

1,872,318

TOTAL

3,265,577

3,237,526

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except share and per share data)

(Unaudited)

For the Three Months Ended

For the Six Months Ended

June 30,

June 30,

2022

2021

2022

2021

REVENUES

$

192,786

$

166,789

$

379,609

$

324,578

COST OF REVENUES

Cost of revenues, exclusive of amortization of acquired technologies

46,095

38,932

88,795

76,945

Amortization of acquired technologies

6,750

6,580

13,445

13,160

Total cost of revenues

52,845

45,512

102,240

90,105

GROSS PROFIT

139,941

121,277

277,369

34,473

OPERATING EXPENSES:

Research and development

38,758

31,253

74,438

61,877

Selling and marketing

31,091

21,551

57,894

40,968

General and administrative

39,509

28,394

83,717

66,233

Amortization of intangible assets

18,066

18,078

36,146

36,155

Total operating expenses

127,424

99,276

252,195

205,233

OPERATING INCOME

12,517

22,001

25,174

9,240

INTEREST EXPENSE

(7,944

)

(18,903

)

(15,285

)

(37,669

)

CHANGE IN FAIR VALUE OF INTEREST RATE SWAPS

3,089

6,366

GAIN ON SALE OF COST METHOD INVESTMENT

3,578

CHANGE IN FAIR VALUE OF WARRANT LIABILITIES

21,004

23,140

OTHER INCOME — Net

112

4

194

91

PRETAX INCOME (LOSS)

25,689

6,191

36,801

(1,972

)

INCOME TAX (PROVISION) BENEFIT

(10,125

)

(2,375

)

(9,262

)

704

NET INCOME (LOSS) INCLUDING NON-CONTROLLING
INTEREST

15,564

3,816

27,539

(1,268

)

Less: net income (loss) attributable to non-controlling interest

NET INCOME (LOSS) ATTRIBUTABLE TO CCC INTELLIGENT
SOLUTIONS HOLDINGS INC.

$

15,564

$

3,816

$

27,539

$

(1,268

)

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

Basic

$

0.03

$

0.01

$

0.05

$

(0.00

)

Diluted

$

0.02

$

0.01

$

0.04

$

(0.00

)

Weighted-average shares used in computing net income (loss) per share
attributable to common stockholders:

Basic

605,948,628

505,430,380

604,534,589

505,252,635

Diluted

639,964,696

523,687,498

640,650,297

505,252,635

COMPREHENSIVE INCOME (LOSS):

Net income (loss) including non-controlling interest

15,564

3,816

27,539

(1,268

)

Other comprehensive income (loss)—Foreign currency translation
adjustment

(303

)

(36

)

(294

)

(29

)

COMPREHENSIVE INCOME (LOSS) INCLUDING
NON-CONTROLLING INTEREST

15,261

3,780

27,245

(1,297

)

Less: comprehensive income (loss) attributable to non-controlling
interest

COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CCC
INTELLIGENT SOLUTIONS HOLDINGS INC.

$

15,261

$

3,780

$

27,245

$

(1,297

)

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

For the Six Months Ended

June 30,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss)

$

27,539

$

(1,268

)

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

Depreciation and amortization of software, equipment, and property

13,490

10,472

Amortization of intangible assets

49,591

49,315

Deferred income taxes

(43,703

)

(11,068

)

Stock-based compensation

52,047

15,537

Amortization of deferred financing fees

949

2,321

Amortization of discount on debt

131

392

Change in fair value of interest rate swaps

(6,366

)

Change in fair value of warrant liabilities

(23,140

)

Non-cash lease expense

2,152

3,667

Loss on disposal of software, equipment and property

795

Gain on sale of cost method investment

(3,578

)

Other

47

34

Changes in:

Accounts receivable—Net

(4,027

)

(7,749

)

Deferred contract costs

(952

)

(765

)

Other current assets

15,463

(1,937

)

Deferred contract costs—Non-current

2,248

(1,597

)

Other assets

(9,935

)

1,699

Operating lease assets

1,576

3,410

Income taxes

13,851

(43

)

Accounts payable

3,204

3,613

Accrued expenses

(7,949

)

4,031

Operating lease liabilities

(4,308

)

(3,900

)

Deferred revenues

2,256

2,303

Other liabilities

(62

)

(2,281

)

Net cash provided by operating activities

87,685

59,820

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of software, equipment, and property

(25,469

)

(13,158

)

Acquisition of Safekeep, Inc., net of cash acquired

(32,242

)

Purchase of equity method investment

(10,189

)

Proceeds from sale of cost method investment

3,892

Purchase of intangible asset

(49

)

Net cash used in investing activities

(53,819

)

(23,396

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Principal payments on long-term debt

(4,000

)

(6,923

)

Proceeds from issuance of common stock

1,007

Proceeds from exercise of stock options

15,511

503

...