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CLARIVATE PLC

CLARIVATE PLCCLVTEarnings & Financial Report

NYSE · Information Technology · Services-Computer Processing & Data Preparation

Clarivate Plc is a British-American publicly traded analytics company that operates a collection of subscription-based services, in the areas of bibliometrics and scientometrics; business and market intelligence, and competitive profiling for pharmacy and biotech, patents, and regulatory compliance; trademark protection, and domain and brand protection. Clarivate calculates the impact factor of scientific journals, using data from its Web of Science product family, that also includes services...

What changed in CLARIVATE PLC's 10-K — 2022 vs 2023

Top changes in CLARIVATE PLC's 2023 10-K

343 paragraphs added · 657 removed · 58 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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The figure above represents the year-over-year growth in the annual value of our subscriptions as of December 31, 2022, as compared to December 31, 2021. The change in ACV is primarily due to the acquisition of ProQuest in December 2021 and the disposition of MarkMonitor in October 2022, supplemented by organic ACV growth of 2.6%.
(2) The change in ACV is primarily due to the disposition of MarkMonitor in October 2022, supplemented by organic ACV growth of 2.6%. Annual Renewal Rates Our revenues are primarily subscription based, which leads to high revenue predictability.
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Item 1. Business Overview Clarivate is a leading global information, analytics and workflow solutions company. We connect people and organizations to intelligence they can trust to transform their perspective, their work and our world.
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Item 1. Business included in Part I of this annual report. Key Performance Indicators We regularly monitor the following key performance indicators to evaluate our business and trends, measure our performance, prepare financial projections, and make strategic decisions.
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Our subscription and technology-based solutions cover the areas of Academia & Government, Life Sciences & Healthcare, and Intellectual Property (including Professional Services, Consumer Goods, Manufacturing & Technology). Our transformative intelligence connects enriched data, insights, analytics and workflow solutions, infused with deep domain expertise across the spectrum of knowledge, research and innovation.
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Organic revenue growth, Annualized Contract Value, Annual Renewal Rates, Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow are key performance indicators because they are a basis upon which management assesses our performance and we believe they reflect the underlying trends and indicators of our business by allowing management to focus on the most meaningful indicators of our continuous operational performance.
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Our product portfolio includes well-established, market-leading brands and products such as Web of Science™, Derwent™, Cortellis™, CompuMark™, Innography™, ProQuest™, ExLibris™ and Innovative. We serve a large, diverse and global customer base. As of December 31, 2022, we have served over 50,000 customers in approximately 180 countries, including the top 30 pharmaceutical companies and top 20 biotech and medtech companies.
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Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow are financial measures that are not prepared in accordance with U.S. generally accepted accounting principles (“non-GAAP”). Although we believe these measures may be useful to investors for the same reasons described above, these measures are not a substitute for GAAP financial measures or disclosures.
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We believe that the strong value proposition of our content, user interfaces, visualization and analytical tools, combined with the integration of our products and services into customers’ daily workflows, leads to our substantial customer loyalty as evidenced by their high propensity to renew their subscriptions with us.
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Reconciliations of our non-GAAP measures to the corresponding most closely related measures calculated in accordance with GAAP are provided further below. Organic revenue growth We review year-over-year organic revenue growth in our segments as a key measure of our success in addressing customer needs.
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Corporations, government agencies, universities, researchers, libraries, law firms and other professional services organizations around the world depend on our high-value, curated information, analytics and services. Today’s organizations face unprecedented uncertainty fueled by a global pandemic, economic turmoil, societal disruption and rapidly advancing technologies. As a result, competitive landscapes shift constantly, and opportunities can appear in unexpected places.
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We also review year-over-year organic revenue growth by transaction type to help us identify and address broad changes in product mix, and by geography to help us identify and address changes and revenue trends by region. We measure organic revenue growth excluding acquisitions, disposals, and foreign currency impacts.
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At Clarivate, we help move people and organizations forward to success. By bringing clarity to some of the world's most complex problems, we give our customers the confidence to make critical decisions, navigate roadblocks and achieve their potential.
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We define these components as follows: • Organic : Revenue generated from pricing, up-selling, securing new customers, sales of new or enhanced product offerings, and any other revenue change drivers except for changes from acquisitions, disposals, and foreign currency. • Acquisitions : Revenue generated from acquired products and services from the date of acquisition to the first anniversary date of that acquisition. • Disposals : Revenue generated in the prior year comparative period from product lines, services, and/or businesses divested from the date of the sale in the current period presented or included within a disposal group. • Foreign Currency (“FX”) : The difference between current revenue at current exchange rates and current revenue at the corresponding prior period exchange rates.
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Our highly curated, proprietary information created through our sourcing, aggregation, verification, translation and categorization of data has resulted in our solutions being embedded in our customers’ workflow and decision-making processes. This provides the trusted foundation our customers need to redefine their perspective and positively impact their world. For the year ended December 31, 2022, we generated approximately $2,659.8 of revenues.
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Annualized Contract Value Annualized Contract Value (“ACV”), at a given point in time, represents the annualized value for the next 12 months of subscription-based license agreements with our customers, assuming that all expiring license agreements during that period 25 Table of Contents CLARIVATE PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (In millions, except option prices, ratios or as noted) are renewed at their current price level.
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We generated recurring revenues through our subscription-based model and re-occurring revenue transactions, which accounted for 77.5% of our revenues for the year ended December 31, 2022.
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The renewal period for our subscriptions generally starts 90 days before the end of the current subscription period. Our calculation of ACV includes the impact of downgrades, upgrades, price increases, and cancellations during the reporting period.
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In each of the past three years, we have also achieved annual renewal rates in excess of 90% and our ten largest customers represented only 7% of revenues for the year ended December 31, 2022. (For information on annual renewal rates, see Item 7.
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We monitor ACV because it represents a leading indicator of the potential subscription revenues that may be generated from our existing customer base over the upcoming 12-month period. Measurement of subscription revenues as a key operating metric is particularly relevant because a majority of our revenues are generated from subscription-based license agreements.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations - Key Performance Indicators - Annual Renewal Rates).
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Actual subscription revenues that we recognize during any 12-month period are likely to differ from ACV at the beginning of that period, sometimes significantly. This may occur for various reasons, including subsequent changes in annual renewal rates, impacts of price increases (or decreases), cancellations, upgrades and downgrades, and acquisitions and divestitures.
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The following charts illustrate our revenues for the year ended December 31, 2022, by segment, type and geography: Business Segments Our reportable segment structure is comprised of three segments: Academia and Government ("A&G"), Life Sciences and Healthcare ("LS&H"), and Intellectual Property (“IP”).
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We calculate and monitor ACV for each of our segments and use the metric as part of our evaluation of our business and trends.
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This structure enables a sharp focus on cross-selling opportunities 4 Table of Contents within the markets we serve and provides substantial scale. Additional information with respect to business segment results is included in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations, and Item 8.
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The following table presents our ACV as of the dates indicated: December 31, Change 2023 2022 2021 2023 vs. 2022 (1) 2022 vs. 2021 (2) Annualized Contract Value $ 1,591.9 $ 1,581.9 $ 1,611.8 0.6 % (1.9) % (1) The change in ACV was primarily from organic ACV growth of 2.6% attributed to the impact of price increases, offset by changes in FX rates.
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Financial Statements and Supplementary Data - Note 19 to the Consolidated Financial Statements - Segment Information.
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Our ability to retain existing subscription customers is a key performance indicator that helps explain the evolution of our historical results and is a leading indicator of our revenues and cash flows for the subsequent reporting period.
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A&G Segment (48% of revenues for the year ended December 31, 2022) Our A&G segment consists of our Academia & Government product group, which drives research excellence across institutions, empower researchers to tackle today’s global challenges and help academic institutions and libraries improve operational efficiency and effectiveness. Our product portfolio for our A&G segment is summarized below.
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“Annual renewal rate” is the metric we use to determine renewal levels by existing customers across our segments, and is a leading indicator of renewal trends, which impact the evolution of our ACV and results of operations.
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Academia & Government Segment Description Provides products and services to organizations that plan, fund, implement and utilize education and research at a global, national, institutional, and individual level Curated Information Set Database of 2.1B+ citations, 187mm+ indexed records Customers 9,000+ leading academic institutions and governments and research intensive corporations use Web of Science and its Journal Impact Factor Notable Products and Offerings Web of Science™ InCites™ ScholarOne™ EndNote™ Alma™ ProQuest Central™ and eBook Central™ ExLibris™ Innovative Our A&G segment supports academic institutions on their quest to build a better world by connecting students, faculty and staff to transformative intelligence and trusted content that drive research excellence and success. 99% of the world’s top 400 universities rely on Clarivate solutions.
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We calculate the annual renewal rate for a given period by dividing (a) the annualized dollar value of existing subscription product license agreements that are renewed during that period, including the value of any product downgrades, by (b) the annualized dollar value of existing subscription product license agreements that come up for renewal in that period.
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By providing analytics and content unrivaled in breadth, depth and quality alongside powerful workflow tools, we enable institutions to accelerate research from discovery to dissemination, empower student achievement in all learning environments and demonstrate outcomes that foster public trust.
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“Open renewals,” which we define as existing subscription product license agreements that come up for renewal but are neither renewed nor canceled by customers during the applicable reporting period, are excluded from both the numerator and denominator of the calculation.
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We provide comprehensive, aggregated content collections to academic and public libraries in a cost-effective manner and provide them with workflow solutions to manage their resources.
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We calculate the annual renewal rate to reflect the impact of product downgrades but not the impact of product upgrades upon renewal, because upgrades reflect the purchase of additional services. The impact of upgrades, new subscriptions, and product price increases is reflected in ACV, but not in annual renewal rates.
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We also provide data and analytics to allow for global measures of research excellence and university rankings; we support governments and policy makers worldwide in evaluation and assessment programs; and we inform a wide range of sector specific consultation and reporting activities to national and institutional research agencies.
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Our annual renewal rates were 92%, 91%, and 91% for the years ended December 31, 2023, 2022, and 2021, respectively. Adjusted EBITDA and Adjusted EBITDA margin Adjusted EBITDA is presented because it is a basis upon which our management assesses our performance, and we believe it is useful for investors to understand the underlying trends of our operations.
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We believe that the high quality and unique nature of A&G's products and the informed approach of our professional service expertise have resulted in our information, services and workflow tools becoming embedded within the fabric of the education and research community.
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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, mandatory convertible preferred share dividend expense, unrealized foreign currency gains/losses, restructuring expenses, non-operating income and/or expense, the impact of certain non-cash fair value adjustments on financial instruments, legal settlements, impairments, and other items that are included in Net income (loss) for the period that we do not consider indicative of our ongoing operating performance.
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Key products include Web of Science, InCites, ProQuest One, Alma, EndNote, ScholarOne, Esploro, Converis, Pivot, Polaris, eBook Central and Vega. Web of Science (“WOS”), a flagship A&G product, has a long standing and trusted reputation as a source for research information and as such holds a unique and pivotal role in the infrastructure of R&D.
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Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Revenues, net. Our presentation of Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an inference that our future results will be unaffected by any of the adjusted items, or that our projections and estimates will be realized in their entirety or at all.
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It is a research platform that provides access to an unrivaled breadth of the world’s leading scholarly literature which has been rigorously selected from across the natural sciences, social sciences, and arts and humanities. It also reveals meaningful connections - between past and current research, between collaborators, between funding and research impact in order to uniquely discover new intelligence.
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In addition, because of these limitations, Adjusted EBITDA should not be considered as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations. 26 Table of Contents CLARIVATE PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (In millions, except option prices, ratios or as noted) Free Cash Flow We use Free Cash Flow in our operational and financial decision-making and believe Free Cash Flow is useful to investors because similar measures are frequently used by securities analysts, investors, ratings agencies, and other interested parties to measure the ability of a company to service its debt.
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A key indicator is the Journal Impact Factor (JIF)™ - a widely used and well-established metric used by researchers, funding agencies, publishers and institutions to help evaluate the relative importance and impact of the landscape of scientific journals by field of research across the whole of the Web of Science core collection.
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Our presentation of Free Cash Flow should not be construed as a measure of liquidity or discretionary cash available to us to fund our cash needs, including investing in the growth of our business and meeting our obligations. We define Free Cash Flow as Net cash provided by (used for) operating activities less Capital expenditures.
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Example Use Cases • A library, university, or research institution looking to improve the quality or scope of its content, discovery solutions, or related software applications can use Alma, ProQuest Central, and eBook Central to manage their collections and provide their users with access to high-value structured content. • A physics professor planning a research program and preparing a proposal for grant funding could utilize the Web 5 Table of Contents of Science in many ways: to reveal emerging research trends by discipline and gaps in the current literature where further research is needed, understand the competitive landscape and to identify potential collaborators.
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For further discussion on free cash flow, including a reconciliation to cash flows provided by (used for) operating activities, refer to Liquidity and Capital Resources - Cash Flows below.
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Research funders use its analytical capabilities to help expand their view of a researcher’s expertise and career when evaluating a grant proposal. • A university provost interested in evaluating the chemistry department at her institution can use the Web of Science and its associated analytical tool InCites to measure research performance of the team and individuals using indicators of impact and collaboration; benchmark the strength of the university’s research output comparative to other global institutions; evaluate faculty productivity to assist in making decisions on promotion, tenure and hiring and inform strategic planning and resource allocation.
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Critical Accounting Policies and Estimates The preparation of the consolidated financial statements in accordance with GAAP requires management to make significant judgments and estimates that affect the amounts reported in the consolidated financial statements.
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LS&H Segment (17% of revenues for the year ended December 31, 2022) Our LS&H segment consists of our Life Sciences & Healthcare product group, which includes products and solutions that provide insight and foresight across the drug and device lifecycle, empowering life science and healthcare organizations to create a healthier tomorrow.
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We base our estimates on historical experience and various other assumptions that we believe are reasonable under the circumstances, and we review these estimates on an ongoing basis.
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The combined effect of our comprehensive intelligence, data technology, and expertise give our customer contextualized insight to lead in environments which are constantly evolving. Our product portfolio for our LS&H segment is summarized below.
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We consider the following accounting policies and associated estimates to be critical to understanding our financial statements because the application of these policies requires management’s subjective or complex judgments about the effects of matters that are inherently uncertain.
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Life Sciences & Healthcare Segment Description Empowering life sciences and healthcare organizations to create a healthier tomorrow Curated Information Set 89,000 + drug program records, 549,000 clinical trial records, 300 million longitudinally covered lives Customers Trusted by the top 30 pharmaceutical companies and hundreds of research groups Notable Products and Offerings Cortellis Competitive Intelligence™ Cortellis Regulatory Intelligence™ Cortellis Drug Discovery Intelligence™ Cortellis Generics Intelligence™ Real World Data Dialog™ Drug Safety Triager™ Healthcare and Data Solutions Cortellis™, a flagship LS&H product, is used by strategy, business development, drug development, medical affairs and clinical professionals at pharmaceutical and biotechnology companies to support research, market intelligence and competitive monitoring in connection with the development and commercialization of new drugs.
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These significant judgments could have a material impact on our financial statements if actual performance should differ from historical experience or from our initial estimates, or if our assumptions were to change.
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Our customers use the database to access and evaluate scientific data, drug pipeline data, clinical trial information, drug monographs, pharmaceutical M&A data and regulatory information, all of which have been aggregated, curated and classified by our team of scientific experts who evaluate and select data for inclusion in the database from a wide array of sources.
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For further information about our significant accounting policies, including the policies discussed below, see Note 1 - Nature of Operations and Summary of Significant Accounting Policies included in Part II, Item 8 of this annual report. Revenue Recognition Most of our products and services are provided under agreements containing standard terms and conditions.
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In addition, our team of experts creates high-value content from this data, such as analytics, abstracts, conference summaries and regulatory reports. As of December 31, 2022, our data included more than 89,000 drug program records and more than 549,000 clinical trial records.
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The majority of our revenue is derived from subscription arrangements, which generally are initially deferred and then recognized ratably over the contract term. These arrangements typically do not require any significant judgments or estimates about when revenue should be recognized. A limited number of re-occurring and transaction agreements contain multiple performance obligations.
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Our Real World Data product includes more than 300 million longitudinally covered lives, 2 million healthcare providers and 98% of payers in the United States, with visibility into more than 120 million linked claims and electronic health records.
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We apply judgment in identifying the separate performance obligations to be delivered under the arrangement and allocating the transaction price based on the estimated standalone selling price of each performance obligation. Business Combinations We apply the acquisition method of accounting to our business combinations.
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Specialty pharmacy claims data covers more than 500 specialty drugs, broadening our existing coverage of high-cost medications and providing valuable insights into the patient’s treatment journey in chronic, complex, and rare diseases.
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Substantially all of the assets acquired, liabilities assumed, and contingent consideration are allocated based on their estimated fair values, which requires significant management judgment. Our estimates of fair value are based upon assumptions we believe to be reasonable, but which are inherently uncertain and unpredictable.
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Specialty pharmacy claims data is linked using anonymized patient tokens to claims and electronic health records, allowing a holistic analysis of complex clinical profiles, reducing the need for additional data mapping or processing.
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We estimate the fair value of customer relationships intangible assets through a discounted cash flow (“DCF”) model using the multi-period excess earnings method, which involves the use of significant estimates and assumptions related to projected revenue growth rates, EBITDA margins, projected cash flows, royalty rates, tax rates, discount rates, tax amortization benefits, and customer attrition rates, among other items.
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Our data analysts, therapy experts and project managers are committed to providing custom views and accurate insights from real world data to answer life science teams' hardest questions.
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We estimate the fair value of technology, databases, and trade name intangible assets through a DCF model using the relief-from-royalty method, which involves the use of significant estimates and assumptions related to projected revenue growth rates, royalty rates, tax rates, discount rates, tax amortization benefits, and obsolescence rates.
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Healthcare and Data Solutions ("HDS") is a portfolio of LS&H offerings that primarily include the legacy Decision Resources Group ("DRG") solutions which provide healthcare analytics, data and insight products and services to the 6 Table of Contents world’s leading pharmaceutical, biotech and medical technology companies.
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Significant estimates and assumptions used in determining the fair value of intangible assets may change during the finalization of the purchase price allocation as additional information about assets at the date of acquisition becomes available; as a result, we may make adjustments to the initial provisional amounts recorded for intangible assets acquired in the year following acquisition.
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Subject matter experts in epidemiology, oncology, pharmacy benefit managers, medtech and revenue cycle generate products and services used by commercial, business development and business intelligence, medical science liaisons, consulting and investment companies to understand market share, market value and identify access, launch and commercialization opportunities.
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When a business combination involves contingent consideration, we record a liability for the estimated cost of such contingencies when expenditures are probable and reasonably estimable. A significant amount of judgment is required to estimate and quantify the potential liability in these matters.
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Example Use Case • An analyst at a pharmaceutical firm who is evaluating several potential R&D programs will access the Cortellis database to assess competitive products in the drug development pipeline, review clinical trial data, and summarize regulatory information. • An analyst at a pharmaceutical firm seeking to benchmark forecasts using data on the total potential and addressable market will utilize real world data to corroborate forecasts and validate investments using bottom-up forecasting. • An analyst at a pharmaceutical company responsible for commercializing drugs or devices uses HDS products to understand treatment pathways, analyze markets, and determine which payers, providers, or patients to target.
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We engage outside experts as deemed necessary or appropriate to assist in the calculation of the liability; however, management is responsible for evaluating the estimate.
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IP Segment (35% of revenues for the year ended December 31, 2022) Our IP segment consists of our Patent Intelligence, Brand IP Intelligence, and IP Lifecycle Management product groups, which enable customers to establish, protect and manage their intellectual property and inform critical business decisions while also mitigating risk and improving efficiencies.
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We reassess the estimated fair value of the contingent consideration at the end of each quarter and record any changes in value as necessary. 27 Table of Contents CLARIVATE PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (In millions, except option prices, ratios or as noted) Goodwill and Indefinite-Lived Intangible Assets Goodwill We perform goodwill impairment testing during the fourth quarter of each year, or more frequently if events or changes in circumstances indicate that carrying value may not be recoverable.
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Our product portfolio for our Intellectual Property segment is summarized below.
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In assessing whether a potential impairment event has occurred, we evaluate various factors, many of which are subjective and require significant judgment. Examples of such factors include significant negative industry or economic trends, persistent declines in our market value, significant changes in regulatory requirements or the legal environment, and segment changes.
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Intellectual Property Segment Description Accelerating informed decision-making for patents, building and protecting strong brands and effectively managing IP and collaborating with networks Curated Information Set Database of 103 million + patent filings across 50+ patent offices; 180+ patent and trademark offices; Database of 3.5 million patent and trademark renewals performed annually with over 200+ patent and trademark offices across the world Customers Used by 50+ patent offices, large R&D organizations of Fortune 1000 companies and various universities ( including 47 out of 50 top R&D spenders globally); 65 industrial databases, 70 Pharma in-use databases; 12,000 direct and indirect customers Notable Products and Offerings Derwent™ Innography™ IncoPat Compumark Watch™ SAEGIS™ SAEGIS Custom Search™ Renewals Foreign Filing Patent Search Services Asset Management and Workflow Solutions Patent Intelligence Group Our Patent Intelligence product group enables customers to evaluate the novelty of potential new products, confirm freedom to operate with respect to their product design, help them secure patent protection, assess the competitive technology landscape and ensure that their products comply with required industry standards.
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We estimate the fair value of a reporting unit using a DCF model. Our DCF model relies significantly on our internal forecasts of future cash flows and long-term growth rates. Significant judgments and estimates made in this analysis include projected revenue growth rates and EBITDA margins, tax rates, terminal values, and discount rates.
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We provide a range of analytics capabilities and data visualization tools to improve the efficiency and accuracy of IP-driven decisions. Key products include Derwent Innovation™, Innography and IP Professional Services. Derwent, a flagship Patent Intelligence product, is used by R&D professionals and lawyers to monitor patent filings, search existing patents and analyze data to support R&D decision-making.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

35 edited+97 added−32 removed30 unchanged
In addition, the principal customers for certain of the products and services are universities and government agencies, which fund purchases of these products and services from limited budgets that are sensitive to changes in private and governmental sources of funding. Recession, economic uncertainty or austerity have contributed, and may in the future contribute, to reductions in spending by such sources.
In addition, the principal customers for certain of our products and services are universities and government agencies, which fund purchases of these products and services from limited budgets that are sensitive to changes in private and governmental sources of funding. Recession, economic uncertainty or austerity have contributed, and may in the future contribute, to reductions in spending by such sources.
Our indebtedness could have significant consequences on our future operations, including: • making it more difficult for us to satisfy our debt obligations and our other ongoing business obligations, which may result in defaults; • events of default if we fail to comply with the financial and other covenants contained in the agreements governing our debt instruments, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses; 24 Table of Contents • sensitivity to interest rate increases on our variable rate outstanding indebtedness, which could result in increased interest under our credit facilities which could cause our debt service obligations to increase significantly; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industries in which we operate, and the overall economy; • placing us at a competitive disadvantage compared to any of our competitors that have less debt or are less leveraged; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • if we receive a downgrade of our credit ratings, our cost of borrowing could increase, negatively affecting our ability to access the capital markets on advantageous terms, or at all.
Our indebtedness could have significant consequences on our future operations, including: • making it more difficult for us to satisfy our debt obligations and our other ongoing business obligations, which may result in defaults; • events of default if we fail to comply with the financial and other covenants contained in the agreements governing our debt instruments, which could result in all of our debt becoming immediately due and payable or require us to negotiate an amendment to financial or other covenants that could cause us to incur additional fees and expenses; • sensitivity to interest rate increases on our variable rate outstanding indebtedness, which could result in increased interest under our credit facilities which could cause our debt service obligations to increase significantly; • reducing the availability of our cash flow to fund working capital, capital expenditures, acquisitions and other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; • limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, the industries in which we operate, and the overall economy; • placing us at a competitive disadvantage compared to any of our competitors that have less debt or are less leveraged; • increasing our vulnerability to the impact of adverse economic and industry conditions; and • if we receive a downgrade of our credit ratings, our cost of borrowing could increase, negatively affecting our ability to access the capital markets on advantageous terms, or at all.
Our future success depends to a large extent on the continued service of our employees, including our experts in research and analysis and other areas, as well as colleagues in sales, marketing, product development, critical operational roles, and management, including our executive officers.
Our future success depends to a large extent on the continued service of our employees, including our experts in research and analysis, as well as colleagues in sales, marketing, product development, critical operational roles, and management, including our executive officers.
The Company will continue to adjust the liability for changes in fair value until the earlier of exercise or expiration of the warrants. The volatility introduced by changes in fair value on earnings may have an adverse effect on the market price of our ordinary shares.
We will continue to adjust the liability for changes in fair value until the earlier of exercise or expiration of the warrants. The volatility introduced by changes in fair value on earnings may have an adverse effect on the market price of our ordinary shares.
If we are unable to successfully execute on our strategies to achieve our growth objectives, drive operational efficiencies, realize our anticipated cost or revenue synergies or if we experience higher than expected operating costs that cannot be adjusted accordingly, our growth rates and profitability could be adversely affected, and the market price of our ordinary shares may decline.
If we are unable to successfully execute on our strategies to achieve our growth objectives, drive operational efficiencies, realize our anticipated cost or revenue synergies or if we 18 Table of Contents experience higher than expected operating costs that cannot be adjusted accordingly, our growth rates and profitability could be adversely affected, and the market price of our ordinary shares may decline.
If our products and services do not maintain and/or achieve broad market acceptance, or if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards, macroeconomic market conditions and changing regulatory requirements, our revenues could be adversely affected. Our business is characterized by rapidly changing technology, evolving industry standards and changing regulatory requirements.
If our products and services do not maintain and/or achieve broad market acceptance, or if we are unable to keep pace with or adapt to rapidly changing technology, evolving industry standards, macroeconomic market conditions and changing regulatory requirements, our revenues could be adversely affected.
Our business could also be affected by macroeconomic factors beyond our control and our ability to keep pace with technology and business and regulatory changes is subject to a number of risks, including that we may find it difficult or costly to: • update our products and services and develop new products and services quickly enough to meet our customers’ needs; • make some features of our products work effectively and securely or with new or changed operating systems; and • update our products and services to keep pace with business, evolving industry standards, regulatory requirements and other developments in the markets in which our customers operate.
Our business could also be affected by macroeconomic factors beyond our control and our ability to keep pace with technology and business and regulatory changes is subject to a number of risks, including that we may find it difficult or costly to: 16 Table of Contents • update our products and services and develop new products and services quickly enough to meet our customers’ needs; • leverage AI, including generative AI, in our existing or newly developed products and services; • make some features of our products work effectively and securely or with new or changed operating systems; and • update our products and services to keep pace with business, evolving industry standards, regulatory requirements and other developments in the markets in which our customers operate.
We generate a significant percentage of our revenues from recurring subscription-based arrangements and highly predictable re-occurring transactional ("re-occurring") arrangements. If we are unable to maintain a high annual renewal rate, our results of operations could be adversely affected. For the year ended December 31, 2022, approximately 78% of our revenues were subscription-based and re-occurring based.
We generate a significant percentage of our revenues from recurring subscription-based arrangements and highly predictable re-occurring transactional (“re-occurring”) arrangements. If we are unable to maintain a high annual renewal rate, our results of operations could be adversely affected. For the year ended December 31, 2023, approximately 79% of our revenues were subscription-based and re-occurring based.
Although we have implemented policies and procedures that are designed to ensure compliance with applicable laws, rules and regulations, if our privacy or data security measures fail to comply with applicable current or future laws and regulations, including, without limitation, the EU ePrivacy Regulation, the California Consumer Privacy Act, and the California Privacy Rights Act, we will likely be required to modify our data collection or processing practices and policies in an effort to comply with such laws and regulations, and we could be subject to increased costs, fines, litigation, regulatory investigations, and enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business.
Although we have implemented policies and procedures that are designed to ensure compliance with applicable privacy and data security laws, rules and regulations, the efficacy and longevity of these policies and procedures remains uncertain, and if our privacy or data security measures fail to comply with applicable current or future laws and regulations, including, without limitation, the EU ePrivacy Regulation, GDPR, UK GDPR and CCPA as well as those of other countries such as India’s Digital Personal Data Protection Act 2023, we will likely be required to modify our data collection or processing practices and policies in an effort to comply with such laws and regulations, and we could be subject to increased costs, fines, litigation, regulatory investigations, and enforcement notices requiring us to change the way we use personal data or our marketing practices or other liabilities such as compensation claims by individuals affected by a personal data breach, as well as negative publicity and a potential loss of business.
This, coupled with the fact that we cannot easily switch our computing operations to another provider, means that any disruption of or interference with our use of our current third party cloud computing service could disrupt our operations and our business could be adversely impacted.
This, coupled with the fact that we cannot easily switch our computing operations and other computer systems to other service providers, means that any disruption of or interference with our use of our current third-party cloud computing service, or the services provided by our other vendors, service providers, contractors, and consultants could disrupt our operations, and our business could be adversely impacted.
Any fraudulent, malicious or accidental breach of data security could result in unintentional disclosure of, or unauthorized access to, customer, vendor, employee or other confidential or sensitive data or information, which could potentially result in additional costs to our company to enhance security or to respond to occurrences, lost sales, violations of privacy or other laws, notifications to individuals, penalties or litigation.
Any fraudulent, malicious, or accidental breach of our computer systems or data security protections (including due to malicious insiders or inadvertent employee errors) could result in unintentional disclosure of, or unauthorized access to, customer, vendor, employee, or our own confidential, proprietary sensitive data or other protected information, which could potentially result in additional costs to enhance security or to respond to such incidents, lost sales, violations of privacy or other laws, notifications to individuals, penalties, or litigation.
Any failure of our systems, significant disruption to our operations or unauthorized access to our systems or those of third parties (or “cloud” computing service providers) we contract with to host our computing could result in significant expense to repair, replace or remediate systems, equipment or facilities, a loss of customers, legal or regulatory claims, and proceedings or fines and adversely affect our business and results of operations.
Any failure of our computer systems, disruption to our operations, or unauthorized access to any of our computer systems or those of third parties upon whom we rely or with whom we partner, including our cloud computing and other service providers, vendors, contractors, and consultants, could result in, among other things, significant expense to repair, replace, or remediate such systems, equipment, or facilities, a loss of customers, legal or regulatory claims, and proceedings or fines and adversely affect our business and results of operations.
Competition from such free or lower cost sources may also require us to reduce the price of some of our products 22 Table of Contents and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins).
Competition from such free or lower cost sources may also require us to reduce the price of some of our products and services (which may result in lower revenues) or make additional capital investments (which might result in lower profit margins). Demand could also be reduced as a result of cost-cutting, reduced spending or reduced activity by customers.
In the event we are required to record an additional non-cash impairment charge to our goodwill, other intangibles, and/or long-lived assets, such a non-cash charge could have a material adverse effect on our consolidated statements of operations and balance sheets in the reporting period in which we record the charge.
In the event we are required to record additional non-cash impairment charges to our goodwill, other intangible assets, or long-lived assets, such a charge could have a material adverse effect on our financial condition and results of operations.
Moreover, we may not be able to integrate the assets acquired in any such acquisition or achieve our expected cost synergies without increases in costs or other difficulties.
Moreover, we may not be able to integrate the assets acquired in any such acquisition or achieve our expected cost synergies without increases in costs or other difficulties. Furthermore, future acquisitions may not be completed on acceptable terms, and we may ultimately divest unsuccessful acquisitions or investments.
We do not have control over the operations of the facilities of the third party cloud computing service that we use.
We do not have control over the operations of the facilities of the third-party cloud computing service or other key vendors, service providers, contactors, and consultants that we use.
Our international operations are subject to the following risks, among others: • political instability; • international hostilities (including the ongoing war between Russia and Ukraine and related sanctions and negative economic impacts), military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics (including a prolonged and delayed recovery from COVID-19), and infrastructure disruptions; • differing economic cycles and adverse economic conditions; • unexpected changes in regulatory environments and government interference in the economy and the possibility that the U.S. could default on its debt obligations; • increasing inflationary pressures and rising interests rates; • varying tax regimes, including with respect to the imposition of withholding taxes on remittances and other payments by our partnerships or subsidiaries and the possibility that a U.S. person treated as owning at least 10% of our ordinary shares could be subject to adverse U.S. federal income tax consequences; • differing labor regulations in locations where we have a significant number of employees; • foreign exchange controls and restrictions on repatriation of funds; • fluctuations in currency exchange rates; • insufficient protection against product piracy and differing protections for IP rights; • varying attitudes towards censorship and the treatment of information service providers by foreign governments, particularly in emerging markets; • various trade restrictions (including trade and economic sanctions and export controls prohibiting or restricting transactions involving certain persons and certain designated countries or territories) and anti-corruption laws (including the U.S.
Our international operations are subject to the following risks, among others: • political instability; • international hostilities (including the ongoing war between Russia and Ukraine and related sanctions, the ongoing war between Israel and Hamas, the renewed tensions between Serbia and Kosovo, and related negative economic impacts), military actions, terrorist or cyber-terrorist activities, natural disasters, pandemics, and infrastructure disruptions; • China’s domestic policy and increased preference for nationalized content; • differing economic cycles and adverse economic conditions; • unexpected changes in regulatory environments and government interference in the economy and the possibility that the U.S. could default on its debt obligations; • high inflationary pressures and consistently high interest rates; • differing labor regulations in locations where we have a significant number of employees; • foreign exchange controls and restrictions on repatriation of funds; • fluctuations in currency exchange rates; • insufficient protection against product piracy and differing protections for IP rights; • varying regulatory and legislative frameworks regarding the use and implementation of AI; • varying attitudes towards censorship and the treatment of information service providers by foreign governments, particularly in emerging markets; • various trade restrictions (including trade and economic sanctions and export controls prohibiting or restricting transactions involving certain persons and certain designated countries or territories) and anti-corruption laws (including the U.S.
It also significantly increased penalties for noncompliance, including where we act as a data processor. Data security and data protection laws and regulations are continuously evolving and there are currently a number of legal challenges to the validity of EU mechanisms for adequate data transfers such as the Privacy Shield Framework and the Standard Contractual Clauses.
Data security and data protection laws and regulations are continuously evolving and there are currently a number of legal challenges to the validity of EU mechanisms for adequate data transfers such as the EU-US Data Privacy Framework and the European Commission’s Standard Contractual Clauses.
We are dependent on third parties, including public sources, for data, information and other services, and our relationships with such third parties may not be successful or may change, which could adversely affect our results of operations.
In such case, the trading price of our ordinary shares would likely decline, and you may lose all or part of your investment. We are dependent on third parties, including public sources, for data, information, and other services, and our relationships with such third parties may not be successful or may change, which could adversely affect our results of operations.
Our collection, storage and use of personal data are subject to applicable data protection and privacy laws, and any failure to comply with such laws may harm our reputation and business or expose us to fines and other enforcement action. 21 Table of Contents In the ordinary course of business, we collect, store, use and transmit certain types of information that are subject to different laws and regulations.
Our collection, storage, and use of confidential, sensitive, or personal information or data are subject to applicable data protection and privacy laws, and any failure to comply with such laws may harm our reputation and business or expose us to fines and other enforcement action.
Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, could adversely impact our business. 20 Table of Contents Our reputation and ability to attract, retain and serve our customers is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations to collect, store and use public records, IP and sensitive data.
Our reputation and ability to attract, retain, and serve our customers is dependent upon the reliable performance and security of our computer systems and those of third parties that we utilize in our operations to collect, store, use, and otherwise process public records, IP, and proprietary, confidential, and sensitive data, including personal data.
The private placement warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized as a component of change in fair value as of the end of each period for which earnings are reported.
As described in our financial statements included in this annual report, we account for our private placement warrants as liabilities at fair value on the balance sheet. The private placement warrants are subject to remeasurement at each balance sheet date and any change in fair value is recognized in the income statement in each period for which earnings are reported.
We have incurred impairment charges for our goodwill and may incur further impairment charges for our goodwill and other intangible assets, which would negatively impact our operating results.
We have incurred impairment charges for our goodwill and may incur further impairment charges for our goodwill and other intangible assets, which would negatively impact our operating results. In both 2023 and 2022, we recorded goodwill impairment charges that arose primarily due to worsening macroeconomic and market conditions.
If we are not able to manage the risks related to our international operations, our business, financial condition and results of operations may be materially affected. In addition, the international scope of our business operations subjects us to multiple overlapping tax regimes that can make it difficult to determine what our obligations are in particular situations.
In addition, the international scope of our business operations subjects us to multiple overlapping tax regimes that can make it difficult to determine what our obligations are in particular situations, and relevant tax authorities may interpret rules differently over time.
Our brand and reputation are key assets and competitive advantages of our company, and our business may be affected by how we are perceived in the marketplace. Our ability to attract and retain customers is affected by external perceptions of our brand and reputation.
Furthermore, acquisitions may subject us to new types of risks to which we were not previously exposed. Our brand and reputation are key assets and competitive advantages of our company, and our business may be affected by how we are perceived in the marketplace.
We also compete with smaller and sometimes newer companies, some of which are specialized with a narrower focus than our company, and with other Internet services companies and search providers. New and emerging technologies can also have the impact of allowing start-up companies to enter the market more quickly than they would have been able to in the past.
We also compete with smaller and sometimes newer companies, some of which are specialized with a narrower focus than our company, and with other Internet services companies and search providers.
Our growth and success depend upon our ability to keep pace with such changes and developments and to meet changing customer needs and preferences.
Our business is characterized by rapidly changing technology, evolving industry standards and changing regulatory requirements, including, but not limited to, with respect to AI. Our growth and success depend upon our ability to keep pace with such changes and developments and to meet changing customer needs and preferences.
Poor representation of our products and services by agents, or entities acting without our permission, could have an adverse effect on our brands, reputation and our business. The international scope of our operations may expose us to increased risk, and our international operations and corporate and financing structure may expose us to potentially adverse tax consequences.
The international scope of our operations may expose us to increased risk, and our international operations and corporate and financing structure may expose us to potentially adverse tax consequences.
Demand could also be reduced as a result of cost-cutting, reduced spending or reduced activity by customers. Our results of operations could be adversely affected if our customers choose to use these public sources as a substitute for our products or services.
Our 11 Table of Contents results of operations could be adversely affected if our customers choose to use these public sources as a substitute for our products or services. We operate in a highly competitive industry, and we may be adversely affected by competition and other changes in our markets.
We have implemented certain systems and processes to thwart hackers and protect our data and systems; however, these systems and processes may not be effective, particularly given the increasingly sophisticated tools and methods used by hackers, organized cyber criminals, and cyber terrorists, and, similar to many other global multinational companies, we experience cyber-threats, cyber-attacks and other attempts to breach the security of our systems.
We have implemented certain systems and processes designed to thwart such threat actors and otherwise protect our computer systems and proprietary, confidential, or sensitive data, including personal data; however, the systems and processes we have adopted may not be effective, and, similar to many other global multinational companies, we have experienced and may continue to experience cyber-threats, cyberattacks and other attempts to breach the security of our systems or gain unauthorized access to our proprietary, confidential or sensitive data, including personal data.
Failure to protect the reputation of our brands may adversely impact our credibility as a trusted source of content and may have a negative 23 Table of Contents impact on our business. In addition, in certain jurisdictions we engage sales agents in connection with the sale of certain of our products and services.
Our ability to attract and retain customers is affected by external perceptions of our brand and reputation. Failure to protect the reputation of our brands may adversely impact our credibility as a trusted source of content and may have a negative impact on our business.
We must maintain our ability to attract, motivate, and retain highly qualified colleagues in order to support our customers and achieve business results.
We must maintain our ability to attract, motivate, and retain highly qualified employees in our respective segments in order to support our customers and achieve business results. In addition, as the world evolves in the wake of the COVID-19 pandemic, we have begun to adopt and implement return to office plans for our workforce.
We review goodwill for impairment at least annually in the fourth quarter of the year or more frequently if indicators of impairment arise, and should market conditions or macroeconomic conditions continue to deteriorate, including a rise in inflationary pressures and interest rates, or a decline in our results of operations, the result of such review may indicate a decline in the fair value of goodwill requiring additional impairment charges for the former Patent reporting unit or additional reporting units.
We review goodwill for impairment at least annually in the fourth quarter, or more frequently if events or changes in circumstances indicate that carrying value may not be recoverable. If we continue to experience adverse or worsening macroeconomic or market conditions or if we experience other indicators of potential impairment, we may need to record additional impairment charges.
In particular, data security and data protection laws and regulations that we are subject to often vary significantly by jurisdiction, such as the privacy requirements of the Health Insurance Portability and Accountability Act and the stringent operational requirements for processors and controllers of personal data implemented by the EU-wide General Data Protection Regulation.
In the ordinary course of business, we collect, store, use, and transmit certain types of information that are subject to different laws and regulations. In particular, data security and data protection laws and regulations that we are subject to often vary significantly by jurisdiction.
Our computer systems and those of third parties we use in our operations may be vulnerable to cybersecurity risks, including cyber-attacks from state-sponsored entities and individual activity, such as computer viruses, denial of service attacks, physical or electronic break-ins and similar disruptions.
We expend significant resources to develop and secure our computer systems, IP, and proprietary, confidential, or sensitive data, including personal data, but they may be subject to damage or interruption from natural disasters, terrorist attacks, power loss, Internet and telecommunications failures, and cybersecurity risks such as cyberattacks, ransomware attacks, social engineering (including phishing attacks), computer viruses, denial of service attacks, physical or electronic break-ins, and similar disruptions from foreign governments, state-sponsored entities, hackers, organized cybercriminals, cyber terrorists, and individual threat actors (including malicious insiders), any of which may see their effectiveness further enhanced in the future by the use of AI.
Removed
In such case, the trading price of our ordinary shares would likely decline, and you may lose all or part of your investment.
Added
Any of the foregoing risks may be exacerbated by our use of AI, or that of our competitors or third-party service providers.
Removed
We expend significant resources to develop and secure our systems, but they may be subject to damage or interruption from natural disasters, terrorist attacks, power loss, Internet and telecommunications failures and cybersecurity risks.
Added
New and emerging technologies, including without limitation, AI, can also have the impact of allowing start-up companies to enter the market more quickly than they would have been able to in the past.
Removed
Furthermore, acquisitions may subject us to new types of risks to which we were not previously exposed. We operate in a highly competitive industry, and we may be adversely affected by competition and other changes in our markets.
Added
Our introduction and use of AI, and the integration of AI with our products and services, may not be successful and may present business, compliance, and reputational challenges which could lead to operational or reputational damage, competitive harm, and additional costs, any of which could adversely affect our business, financial condition, and results of operations.
Removed
For example, we have been advised that we should be able to deliver the Merger Shares, consistent with our obligations under the Sponsor Agreement, to the recipients thereof without withholding for U.K. employment and related taxes.
Added
We have incorporated, and may continue to incorporate, AI in our products and services and this incorporation of AI in our business and operations may become more significant over time.
Removed
However, it is possible that His Majesty’s Revenue and Customs (“HMRC”) could dispute our position and proceed against us for the amount of such taxes, which could be significant and, if sustained, could adversely affect our cash flows and financial position.
Added
The use of generative AI, a relatively new and emerging technology in the early stages of commercial use, exposes us to additional risks, such as damage to our reputation, competitive position, and business, and additional costs.
Removed
Although we believe we would ultimately prevail in any such a proceeding, there can be no assurance that we would not be required to pay a significant amount in settlement of any such a claim brought by HMRC. Our indebtedness could adversely affect our business, financial condition, and results of operations.
Added
While generative AI may help provide more tailored or personalized experiences or output, if the content, analyses, or recommendations produced by any of our products or services that use or incorporate generative AI are, or are perceived to be, deficient, inaccurate, biased, unethical, or otherwise flawed, our reputation, competitive position, and business may be materially and adversely affected.
Removed
As described in our financial statements included in Part II, Item 8, to this Annual Report on Form 10-K, the Company accounts for its outstanding private placement warrants as liabilities at fair value on the balance sheet.
Added
Additionally, if any of our employees, contractors, vendors, or service providers use any third-party software incorporating AI in connection with our business or the services they provide to us, it may lead to the inadvertent disclosure or incorporation of our confidential, sensitive, or proprietary information into publicly available training sets which may impact our ability to realize the benefit of, or adequately maintain, protect, and enforce our intellectual property or sensitive or confidential information, harming our competitive position and business.
Removed
In connection with the preparation of our financial statements for the quarter ended September 30, 2022, we performed an interim quantitative goodwill impairment assessment over our reporting units due to possible impairment indicators including worsening market considerations and macroeconomic conditions, such as increasing inflationary pressures and rising interest rates, and sustained declines in the Company’s share price during the period.
Added
Our ability to mitigate risks associated with disclosure of our proprietary, sensitive, or confidential information, including in connection with the use of AI, will depend on our implementation, maintenance, monitoring, and enforcement of appropriate technical and administrative safeguards, policies, and procedures governing the use of AI in our business.
Removed
As a result of the assessment, we recorded a goodwill impairment charge as of September 30, 2022 of $4,407.9 related to our ProQuest reporting unit, our former IP Management reporting unit and our former Patent reporting unit.
Added
Any output created by us using generative AI may not be subject to copyright protection, which may adversely affect our or our customers’ intellectual property rights in, or ability to commercialize or use, any such content. In addition, the use of AI may result in cybersecurity incidents that implicate the personal data of users of our AI tools or technologies.
Removed
The impairment charge recorded for the ProQuest reporting unit and the former IP Management reporting unit represented a total write-off of the goodwill associated with these respective reporting units.
Added
Furthermore, our competitors, customers, or other third parties may 12 Table of Contents incorporate AI into their products more quickly or more successfully than us, which could impair our ability to compete effectively.
Removed
For additional information, see Part I, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies, Estimates and Assumptions-Goodwill and Indefinite-Lived Intangible assets.” 25 Table of Contents Our Board has adopted a Tax Benefits Preservation Plan, which may not protect the future availability of the Company’s tax assets in all circumstances and which could delay or discourage takeover attempts that some shareholders may consider favorable.
Added
If any third-party AI tools are trained using or otherwise leverage any of our proprietary data or data sets, our competitive advantage may be impaired, and our ability to commercialize our own AI tools or such data and data sets may be undermined, damaging our operations and business.
Removed
As of December 31, 2022, we had U.S. federal net operating losses (“NOLs”) and interest expense carryforwards totaling approximately $1,636.9, and comparable U.S. state carryforwards of approximately $495.0. Pursuant to Section 382 of the U.S.
Added
The increasing use of generative AI by third parties may also negatively impact the integrity of our own proprietary data, data sets, and content databases if and to the extent that any invalid, inaccurate, biased, or otherwise flawed data produced by any such AI systems may inadvertently be incorporated in our proprietary data, data sets, or content databases, negatively affecting our reputation, relationship with publishers, and the value of our proprietary data, data sets, or content databases.
Removed
Internal Revenue Code of 1986, as amended, and the Treasury Regulations issued thereunder, a corporation that undergoes an “ownership change” is subject to limitations on its use of its existing NOL and interest expense carryforwards and certain other tax attributes (collectively, “Tax Assets”), which can be utilized in certain circumstances to offset future U.S. tax liabilities.
Added
As generative AI and other AI tools are relatively new, sophisticated and evolving quickly, we cannot predict all of the risks that may arise from our current or future use of AI in our business.
Removed
A corporation generally undergoes an “ownership change” for purposes of Section 382 if one or more “5% shareholders” (as determined under Section 382) increase their ownership of the corporation’s stock by more than 50 percentage points over a rolling three-year period.
Added
We expect that the incorporation of AI in our business will require additional resources, including the incurrence of additional costs, to develop and maintain our AI-related products and services, to minimize potentially harmful or unintended consequences, to maintain or extend our competitive position, and to address any ethical, reputational, technical, operational, legal, or competitive issues which may arise and our customers may not accept or be able to pay a premium for advanced AI capabilities in certain of the markets in which we operate.
Removed
In the event of such an “ownership change,” Section 382 imposes an annual limitation on the amount of post-change taxable income a corporation may offset with pre-change Tax Assets. Similar rules apply in various U.S. state and local jurisdictions. A small portion of our Tax Assets are currently subject to limitations under Section 382.
Added
Any of the foregoing and any similar issues, whether actual or perceived, could negatively impact our customers’ experience and diminish the perceived quality and value of our products and services. As a result, the challenges presented with our use of AI could adversely affect our business, financial condition, and results of operations.
Removed
However, with respect to the substantial majority of our Tax Assets, while we have in recent years experienced significant changes in the ownership of our stock, we do not believe we have undergone an “ownership change” that would limit our ability to use these Tax Assets.
Added
Regulatory and legislative developments related to the use of AI could adversely affect our use of such technologies in our products, services, and business and expose us to litigation and other legal and regulatory risks. We use AI, including machine learning and generative AI, in our business.
Removed
However, there can be no assurance that the Internal Revenue Service will not challenge this position. On December 22, 2022, the Board of Directors adopted the Tax Benefits Preservation Plan (the “Tax Benefits Preservation Plan”) to help protect the future availability of the Company’s Tax Assets.
Added
To the extent that we do not have sufficient rights to use any data or other material or content produced by generative AI in our business, if we inadvertently expose third-party data or other material or content to AI, or if we experience cybersecurity incidents in connection with our use of AI, it could adversely affect our reputation and expose us to legal liability or regulatory risk, including with respect to third-party intellectual property, privacy, publicity, contractual, or other rights.
Removed
The Tax Benefits Preservation Plan is intended to reduce the likelihood of such an “ownership change” at the Company by deterring any person or group that would be treated as a 5% shareholder from acquiring beneficial ownership, as determined for purposes of the Tax Benefits Preservation Plan, of either (i) 4.9% or more of the outstanding Ordinary Shares of the Company or (ii) 4.9% or more (by value) of the Company’s capital stock.
Added
The regulatory framework for AI and similar technologies, and automated decision making, is changing rapidly.
Removed
It also deters existing shareholders who currently meet or exceed this ownership threshold from acquiring additional Company stock. See “Note 16 - Income Taxes” of our financial statements included in Part II, Item 8, to this Annual Report on Form 10-K for additional information on the terms and operation of the Tax Benefits Preservation Plan.
Added
New laws and regulations, or the interpretation of existing laws and regulations, in any of the jurisdictions in which we operate may affect our ability to leverage AI and may expose us to legal and regulatory risks, government enforcement, or civil suits and may result in increases in our operational and development expenses that impact our ability to develop, earn revenue from, or utilize any products or services incorporating AI.
Removed
However, there can be no assurance that the Tax Benefits Preservation Plan will prevent an “ownership change” from occurring for purposes of Section 382, and events outside of our control and which may not be subject to the Tax Benefits Preservation Plan, such as sales of our stock by certain existing shareholders, may result in such an “ownership change” in the future.
Added
As the regulatory framework for machine learning technology, generative AI, and automated decision making evolves, our business, financial condition, and results of operations may be adversely affected.
Removed
While we currently have a full valuation allowance against our NOLs and other historic Tax Assets for financial accounting purposes, if we have undergone or in the future undergo an ownership change that applies to our Tax Assets, our ability to use these Tax Assets could be substantially limited after the ownership change, and this limit could have a substantial adverse effect on our cash flows and financial position.
Added
It is possible that new laws and regulations will be adopted in both U.S. and non-U.S. jurisdictions, such as the European Union’s (“EU”) proposed Artificial Intelligence Act, which, if enacted, would have a material impact on the way AI is regulated in the EU, including significant fines for violations related to offering prohibited AI systems or data governance, high-risk AI systems and for supplying incorrect, incomplete, or misleading information to EU and member state authorities.
Removed
While the Tax Benefits Preservation Plan is not principally intended to prevent a takeover, it may have an anti-takeover effect because an “acquiring person” thereunder may be diluted upon the occurrence of a triggering event.
Added
It is also possible that existing laws and regulations may be interpreted in ways that would affect the operation of our business, including our data analytics products and services and the way in which we use AI and similar technologies in our business.
Removed
Accordingly, the Tax Benefits Preservation Plan may complicate or discourage a merger, tender offer, accumulations of substantial blocks of our stock, or assumption of control by a substantial holder of our securities. The Tax Benefits Preservation Plan should not interfere with any merger or other business combination approved by the Board of Directors.

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Item 2. Properties

Properties — owned and leased real estate

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Item 2. Properties Our corporate headquarters are located in the leased premises located at 70 St. Mary Axe, London EC3A 8BE, United Kingdom. We lease office facilities at 66 locations; 27 are in the U.S. In addition, we own real property in one location outside of the US.
Item 2. Properties. Our corporate headquarters is located in the leased premises located at 70 St. Mary Axe, London EC3A 8BE, United Kingdom. We lease office facilities at 56 locations; 24 are in the U.S. We believe that our facilities, generally used across each of our segments, are well maintained and are suitable and adequate for our current needs.
Removed
Our properties consist primarily of office space used by each of our segments. We believe that all our facilities are well maintained and are suitable and adequate for our current needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations or cash flows. For additional discussion of legal proceedings, see Item 8.
While the outcomes of these matters are uncertain, management does not expect that the ultimate costs to resolve these matters will have a material adverse effect on our consolidated financial position, results of operations, or cash flows. For additional discussion of legal proceedings, see Note 17 - Commitments and Contingencies included in Part II, Item 8 of this annual report.
Financial Statements and Supplementary Data - Notes to the Consolidated Financial Statements - Note 20 in this Report. Item 4. Mine Safety Disclosures Not applicable. PART II
Item 4. Mine Safety Disclosures. Not applicable. 22 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Item 4. Mine Safety Disclosures 28 Part II 28 Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 28 Item 6. [Reserved ] 31 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 32 Item 7A.
Item 4. Mine Safety Disclosures 22 P ART II 23 Item 5. Market for Registrant ’ s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. [Reserved ] 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 38 Item 8.
Removed
Quantitative and Qualitative Disclosures About Market Risk 63 Index to Financial Statements 65 Item 8. Financial Statements and Supplementary Data 65

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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A substantially greater number of holders of our ordinary shares are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividends We did not pay any dividends to ordinary shareholders during the year ended December 31, 2022.
A substantially greater number of holders of our ordinary shares are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions. Dividends We did not pay any dividends to ordinary shareholders during the year ended December 31, 2023.
We presently intend to retain our earnings for use in business operations and, accordingly, we do not anticipate that our board will declare dividends related to ordinary shares in the foreseeable future. In addition, the terms of our credit facilities and the indenture governing our secured notes due 2026 include restrictions that may impact our ability to pay dividends.
We presently intend to retain our earnings for use in business operations and, accordingly, we do not anticipate that our board will declare dividends related to ordinary shares in the foreseeable future. In addition, the terms of our credit facilities and the indentures governing our secured notes include restrictions that may impact our ability to pay dividends.
(3) The weighted-average exercise price is reported for the outstanding stock options reported in the first column. There are no exercise prices for the restricted share units or performance share units. (4) The total number of securities available to be issued under the 2019 Incentive Award Plan.
(2) The weighted-average exercise price is reported for the outstanding stock options reported in the first column. There are no exercise prices for the restricted share units or performance share units. (3) The total number of securities available to be issued under the 2019 Incentive Award Plan (excluding securities reflected in column (a)).
Issuer Purchases of Equity Securities The following table sets forth the total number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during each month during the year ended December 31, 2022. 29 Table of Contents Period Total Number of Shares Purchased (1) Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs (2) Approx.
Issuer Purchases of Equity Securities The following table sets forth the total number of shares purchased, the average price paid per share, the total number of shares purchased as part of publicly announced programs, and the approximate dollar value of shares that may yet be purchased under the programs during the three months ended December 31, 2023.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Price of Ordinary Shares Our ordinary shares are traded on the NYSE under the symbol CLVT. Holders As of December 31, 2022, there were 113 holders of record of ordinary shares.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities. Market Information Our ordinary shares are traded on the New York Stock Exchange under the symbol “CLVT.” Holders As of December 31, 2023, there were 101 holders of record of ordinary shares.
As of December 31, 2022, the Company had approximately $825.0 of availability remaining under this program.
As of December 31, 2023, we had approximately $400.0 of availability remaining under this program.
(2) In February 2022, the Company's Board of Directors approved the purchase of up to $1,000.0 of the Company's ordinary shares through open-market purchases, to be executed through December 31, 2023. During the year ended December 31, 2022, the Company purchased 10.7 million shares for a total of $175.0.
(2) In February 2022, our Board of Directors approved the repurchase of up to $1,000.0 of our ordinary shares through open-market purchases, to be executed through December 31, 2023. In May 2023, our Board of Directors approved the extension of the share repurchase authorization through December 31, 2024, and reduced the authorization from $1,000.0 to $500.0.
Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information as of December 31, 2022, with respect to compensation plans under which equity securities are authorized for issuance. 28 Table of Contents Equity Compensation Plan Information: (a) (b) (c) Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a) ) Equity Compensation Plans Approved by Security Holders 2019 Incentive Award Plan 19,170,774 (2) $ 13.12 (3) 29,725,671 (4) Equity Compensation Plans Not Approved by Security Holders (1) Total 19,170,774 $ 13.12 29,725,671 (1) See Item 11.
Plan Category (a) Number of securities to be issued upon exercise of outstanding options, warrants, and rights (b) Weighted-average exercise price of outstanding options, warrants, and rights Number of securities remaining available for issuance under equity compensation plans Equity Compensation Plans Approved by Security Holders 2019 Incentive Award Plan 16,625,898 (1) $ 13.41 (2) 26,783,017 (3) Equity Compensation Plans Not Approved by Security Holders N/A N/A N/A Total 16,625,898 $ 13.41 26,783,017 (1) Includes (a) 3,084,218 stock options, (b) 10,765,638 restricted share units, and 2,776,042 performance share units at target performance levels that were granted with no exercise price or other consideration.
Removed
Executive Compensation - Compensation Committee Interlocks and Insider Participation. See Item 8. Financial Statements and Supplementary Data - Notes to the Consolidated Financial Statements - Note 14 - Shareholders’ Equity for information regarding the Warrants.
Added
Securities Authorized for Issuance Under Equity Compensation Plans The following table sets forth information as of December 31, 2023, with respect to compensation plans under which equity securities are authorized for issuance.
Removed
(2) Includes 3,713,883 of stock options, 13,391,214 restricted share units that were issued with no exercise price or other consideration, and 2,065,677 p erformance share units at grant that were issued with no exercise price or other consideration, and may not ultimately vest based on achievement of certain performance and market conditions.
Added
Period Total Number of Shares Purchased (1) Average Price Paid Per Share Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under Plans or Programs ( 2) October 1, 2023 - October 31, 2023 8,705 $ 6.77 — $ 400 November 1, 2023 - November 30, 2023 604,463 $ 6.63 — $ 400 December 1, 2023 - December 31, 2023 32,430 $ 8.48 — $ 400 Total 645,598 — 23 (1) Consists of shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying stock options and restricted share units under the 2019 Incentive Award Plan.
Removed
Dollar value of shares that may Yet Be Purchased Under Plans or Programs January 1, 2022 - January 31, 2022 9,580 $ 18.00 — $ — February 1, 2022 - February 28, 2022 7,825 $ 16.78 — $ 1,000 March 1, 2022 - March 31, 2022 4,559,871 $ 16.10 4,106,285 $ 934 April 1, 2022 - April 30, 2022 6,718,312 $ 16.44 6,611,994 $ 825 May 1, 2022 - May 31, 2022 257,078 $ 14.36 — $ 825 June 1, 2022 - June 30, 2022 20,413 $ 13.51 — $ 825 July 1, 2022 - July 31, 2022 73,053 $ 13.90 — $ 825 August 1, 2022 - August 31, 2022 110,382 $ 13.62 — $ 825 September 1, 2022 - September 30, 2022 20,478 $ 10.83 — $ 825 October 1, 2022 - October 31, 2022 28,651 $ 9.29 — $ 825 November 1, 2022 - November 30, 2022 31,128 $ 10.50 — $ 825 December 1, 2022 - December 31, 2022 149,148 $ 9.28 — $ 825 Total 11,985,919 $ 16.09 10,718,279 (1) Includes shares withheld to satisfy tax withholding obligations on behalf of employees that occur upon vesting and delivery of outstanding shares underlying stock options and restricted stock units under the 2019 Incentive Award Plan.
Added
To enable the buybacks under the Board’s authorization, we obtained shareholder approval on July 27, 2023 to permit us to conduct open-market purchases of up to 100.0 million of our ordinary shares from time to time as approved by the Board of Directors at a minimum purchase price of $1 per share and maximum purchase price of $35 per share.
Removed
The following graph is not filed but is furnished pursuant to Regulation S-K Item 201(e), Instruction 7. 30 Table of Contents Recent Sales of Unregistered Equity; Use of Proceeds from Registered Offerings In March 2017, the Company adopted the management incentive plan under which certain employees of the Company may be eligible to purchase shares of the Company.
Removed
In exchange for each share purchase subscription, the purchaser is entitled to a fully vested right to an ordinary share. Additionally, along with a subscription, employees received a corresponding number of options to acquire additional ordinary shares subject to five year vesting. The vesting of these options was accelerated on November 30, 2020.
Removed
The Company did not receive any subscriptions during the years ended December 31, 2022, 2021 and 2020. As of December 31, 2022, 2021 and 2020, respectively, there were 125,760, 125,760, and 127,060 shares issued and outstanding under the management incentive plan. None of the foregoing transactions involved any underwriters, underwriting discounts or commissions or any public offering.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

0 edited+48 added−370 removed0 unchanged
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with our Consolidated Financial Statements, including the notes thereto, included elsewhere in this annual report. Certain statements in this section are forward-looking statements that involve risks and uncertainties, such as statements regarding our plans, objectives, expectations and intentions.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations , and Note 16 - Segment Information in Part II, Item 8 of this annual report.
Removed
Our future results and financial condition may differ materially from those we currently anticipate as a result of the factors we describe under Item 1A. Risk Factors. Certain income statement amounts discussed herein are presented on an actual and on a constant currency basis.
Added
A&G Segment (50% of revenues for the year ended December 31, 2023) Our A&G segment’s mission is to help our customers educate the world by advancing research excellence and student success to accelerate real-world outcomes. We help academic and government institutions advance knowledge to build a better world.
Removed
We calculate constant currency by converting the non-U.S. dollar income statement balances for the most current year to U.S. dollars by applying the average exchange rates of the preceding year. Certain amounts that appear in this section may not sum due to rounding.
Added
Within the A&G segment, we provide Research and Analytics, Content Aggregation, and Workflow Software solutions in striving to accomplish our mission.
Removed
Overview We offer a global portfolio of high quality, market leading data, insights, analytics and workflow products and solutions through our Academia and Government ("A&G") segment, Life Sciences and Healthcare ("LS&H") segment, and Intellectual Property (“IP”) segment, which are also our reportable segments.
Added
Research and Analytics Content Aggregation Workflow Software Description Analyze and explore the academic research landscape and manage research information Provide comprehensive content collections to institutions in a cost-effective manner Manage academic resources and services, connect users, and support research publication Notable Solutions and Products Web of Science InCites ProQuest One Ebook Central Alma Polaris Curated Information Set Database of 7+ billion digital pages, 2.4+ billion bibliographic records, 2+ billion citations, 245+ million journal articles, 5+ million dissertations, and 1.8+ million E-books A significant portion of our product development efforts is focused on leveraging AI to drive enhanced value for our A&G segment customer-base.
Removed
Our A&G segment consists of our Academia and Government product group, which provides products and services to organizations that plan, fund, implement and utilize education and research at a global, national, institutional, and individual level.
Added
For example, we use AI to identify academic journals within the Web of Science that show outlier characteristics, to ensure our customers are confident that they can trust all indexed journals and continue to deliver gold-standard content.
Removed
Our LS&H segment consists of our Life Sciences & Healthcare product group, which includes products and solutions that provide insight and foresight across the drug and device lifecycle, empowering life science and healthcare organizations to create a healthier tomorrow.
Added
Trained machine learning algorithms flag these journals to our in-house editors who conduct a thorough analysis of the journal and whether it continues to meet our standards.
Removed
Our IP segment consists of our Patent Intelligence, Brand IP Intelligence and IP Lifecycle Management product groups, which help customers establish, protect and manage their intellectual property. For further information regarding an overview of our business and certain related trends and uncertainties, refer to Part I - Item 1. Business.
Added
We also have integrated generative AI, LLMs, and other AI tools and technology into our A&G solutions, which provide students, faculty, and researchers with rapid access to detailed and contextual information and relevant recommendations.
Removed
Objective The objective of the Management Discussion and Analysis is to detail material information, events, uncertainties and factors impacting the Company and provide investors an understanding from "Management's perspective". In Item 7.
Added
Example Use Cases • A physics professor planning a research program and preparing a proposal for grant funding could utilize the Web of Science to reveal emerging research trends by discipline and gaps in the current literature where further research is needed, understand the competitive landscape, and identify potential collaborators. • A university provost interested in evaluating the chemistry department at her institution can use the Web of Science and its associated analytical tool, InCites, to measure research performance of the team and individuals using indicators of impact and collaboration, benchmark the strength of the university’s research output compared to other global institutions, and evaluate faculty productivity to assist in strategic planning and resource allocation. • A library, university, or research institution looking to improve the quality or scope of its content, discovery solutions, or related software applications can use Alma , Polaris , ProQuest One , and Ebook Central to manage its collections and provide its users with access to high-value curated content.
Removed
Management's Discussion and Analysis of Financial Condition and Results of Operations, Management highlights the critical areas for evaluating the Company's performance which includes a discussion of reportable segment information. In addition, refer to Item 1. Business for Management's discussion of forward looking transformational strategy and initiatives including operational improvements, revenue growth and pursuit of acquisition opportunities.
Added
IP Segment (33% of revenues for the year ended December 31, 2023) Our IP segment’s mission is to enable organizations worldwide to unlock innovation, establish strong brands, and effectively protect critical IP assets through our trusted IP data, software, and expertise. We help customers establish, 7 Table of Contents protect, and manage their intellectual property.
Removed
Factors Affecting the Comparability of Our Results of Operations The following factors have affected the comparability of our results of operations between the periods presented in this annual report and may affect the comparability of our results of operations in future periods.
Added
Within the IP segment, we provide IP Maintenance, IP Intelligence, and IP Management solutions in striving to accomplish our mission.
Removed
Strategic Acquisitions Acquisition of ProQuest On December 1, 2021, we acquired 100% of ProQuest, a leading global software, data and analytics provider to academic, research and national institutions, and its subsidiaries from Cambridge Information Group (“CIG”), Atairos and certain other equity holders (collectively, the “Seller Group”).
Added
IP Maintenance IP Intelligence IP Management Description Support paralegal and admin tasks throughout the patent and trademark protection and maintenance process Support critical decisions around patent and trademark protection, risk, and value creation throughout the innovation and brand lifecycle Create a structured environment for the effective protection and management of global patent and trademark assets Notable Solutions and Products Patent and Trademark Renewals CompuMark Derwent IPFolio Foundation IP Curated Information Set 150+ million patent documents; 26,000 unique classifications of structured patent insights; 140+ million trademark records; 9+ million IP law cases A significant portion of our product development efforts are focused on leveraging AI to drive enhanced value for our IP segment customer-base.
Removed
The aggregate consideration in connection with the closing of the ProQuest acquisition was $5,002.3, net of $52.5 cash acquired. The aggregate consideration was composed of (i) $1,094.9 from the issuance of 46.9 million ordinary shares to the Seller Group and (ii) approximately $3,959.9 in cash, including approximately $917.5 to fund the repayment of ProQuest debt.
Added
For example, the CompuMark Naming Tool uses generative AI to automate the process of brainstorming new brand names, simultaneously analyzing them for potential usability. Trained on US, EU, and Pharma In-Use databases, our proprietary AI algorithm generates creative name suggestions based on customer criteria in seconds, simultaneously analyzing them against existing domain names and social media handles.
Removed
Acquisition of CPA Global On October 1, 2020, we acquired 100% of the assets, liabilities and equity interests of CPA Global, a global leader in intellectual property software and tech-enabled services. Clarivate acquired all of the outstanding shares of CPA Global in a cash and stock transaction.
Added
Example Use Case • An employee developing a new product or idea (e.g., a chemical engineer or a product designer) will access the Derwent database of patents to evaluate the novelty and determine the patentability of the new product or idea. • An attorney for a large law firm helps clear a trademark for use by its corporate customer as part of a new product launch.
Removed
The aggregate consideration in connection with the closing of the CPA Global acquisition was $8,540.9, net of $102.7 cash acquired, including an equity hold-back consideration of $46.5.
Added
The attorney first conducts a “knock-out” search as part of a preliminary screening process using our Trademark Searching tool and then later orders an analyst curated “Full Search” report by CompuMark to ensure the availability of the proposed trademark in the markets in which the customer will be operating.
Removed
The aggregate consideration was composed of (i) $6,565.5 from the issuance of up to 218.2 million ordinary shares to Redtop Holdings Limited, a 32 Table of Contents CLARIVATE PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (In millions, except share and per share data, option prices, ratios or as noted) portfolio company of Leonard Green & Partners, L.P., representing approximately 35% pro forma fully diluted ownership of Clarivate and (ii) approximately $2,078.1 in cash to fund the repayment of CPA Global's parent company outstanding debt of $2,055.8 and related interest swap termination fee of $22.3.
Added
In this way, the attorney can clear both the word and image mark for use by the client.
Removed
Of the 218.3 million ordinary shares issuable in the acquisition, Clarivate issued 210.4 million ordinary shares on October 1, 2020. There were 6.3 million shares that were transferred to Clarivate to fund an Employee Benefit Trust established for the CPA Global Equity Plan. Accordingly, these shares were excluded from purchase price consideration.
Added
The attorney will then subscribe to CompuMark’s Trademark Watching services solution to continually ensure that none of their customers’ valuable trademarks are being infringed upon. • A law firm partnership uses Foundation IP to provide renewal and validation of IP rights on behalf of a customer.
Removed
In conjunction with the closing of the transaction, the Company incurred an incremental $1,600.0 of term loans under our term loan facility and used the net proceeds from such borrowings, together with cash on hand, to fund the transaction.
Added
LS&H Segment (17% of revenues for the year ended December 31, 2023) Our LS&H segment’s mission is to empower our customers to deliver treatments that improve patient lives and create a healthier tomorrow.
Removed
Acquisition of Decision Resources Group On February 28, 2020, we acquired 100% of the assets, liabilities and equity interests of Decision Resources Group ("DRG"), a premier provider of high-value data, analytics and insights products and services to the healthcare industry, from Piramal Enterprises Limited ("PEL"), which is a part of global business conglomerate Piramal Group.
Added
Our intelligence solutions, transformative data and technology equip our customers with the insight and foresight needed across all of their initiatives from early-stage drug discovery right through commercialization and beyond. Within the LS&H segment, we provide Research and Development, Regulatory and Safety, and Commercialization solutions in striving to accomplish our mission.
Removed
The acquisition helps us expand our core businesses and provides us with the potential to grow in the LS&H segment.
Added
Research and Development Regulatory and Safety Commercialization Description Support the development of new drugs and medical devices from discovery to clinical trials Efficiently monitor drug safety issues and adhere to the latest global regulatory protocols Effectively inform commercial launch strategy and set pricing for optimal reimbursement Notable Solutions and Products Cortellis Competitive Intelligence Cortellis Drug Discovery Intelligence Cortellis Regulatory Intelligence OFF-X Real World Data (“RWD”) Optimize Curated Information Set 48+ billion patient claims & EHR records; proprietary disease insights covering 200+ diseases and biomarkers across 45+ countries and 3,500+ patient segments; A significant portion of our product development efforts are focused on leveraging AI to drive enhanced value for our LS&H segment customer base.
Removed
The aggregate consideration paid in connection with the closing of the DRG acquisition was $965.0, composed of $900.0 of base cash plus $6.1 of adjusted closing cash paid on the closing date and up to 2.9 million of the Company's ordinary shares valued at $58.9 on the closing date.
Added
For example, to speed up drug development and better ensure that the right medicines reach the right patients, we are drawing on our connected data in Cortellis and using machine learning to predict clinical trials progression, regulatory approvals and even valuations on merger and acquisition candidates. 8 Table of Contents Example Use Case • A researcher at a pharmaceutical company who is evaluating several potential R&D programs will access the Cortellis database to assess competitive products in the drug development pipeline, review clinical trial data, and summarize regulatory information. • A data analyst at a biopharma company seeking to benchmark forecasts using data on the total potential and addressable market will utilize RWD to corroborate forecasts and validate investments using bottom-up forecasting. • An analyst at a medical technology company responsible for commercializing drugs or devices uses Optimize products to analyze markets and determine which payers, providers, or patients to target.
Removed
The contingent stock consideration was revalued at each period end until its issuance to PEL in March 2021 for a total of $61.6.
Added
Our Competition We believe the principal competitive factors in our business include the depth, breadth, timeliness, and accuracy of database content and analysis, the ease of use related to content delivery platforms and management software, and value for price. We believe we compete favorably with respect to each of these factors.
Removed
Dispositions Disposition of MarkMonitor Domain Management On October 31, 2022, the Company completed the sale of the MarkMonitor Domain Management business within the IP segment to Newfold Digital, a leading web presence solutions provider, for a total purchase price of $296.1.
Added
Although we face competition in specific markets and with respect to specific offerings, including related to developing and implementing AI, we do not believe that we have a direct competitor across all of the markets we serve due to the depth and breadth of our offerings.
Removed
A gain of $278.5 was recognized in the Consolidated Statements of Operations within Other operating (income) expense, net during the year ended December 31, 2022. Disposition of Techstreet On November 6, 2020, the Company completed the sale of certain assets and liabilities of certain non-core assets and liabilities within the IP segment for a total purchase price of $42.8.
Added
Intellectual Property We own and generate a significant amount of intellectual property, including registered trademarks, trademark applications, domain names, patents (both granted and pending), and expertly curated, interconnected data assets. We also own certain proprietary software, including AI products and services.
Removed
A gain of $28.1 was recognized in the Consolidated Statements of Operations within Other operating (income) expense, net during the year ended December 31, 2020.
Added
In addition, we are licensed to use certain third-party software and we obtain significant content and data through third-party licensing arrangements with content providers.
Removed
Public Ordinary and Mandatory Convertible Preferred Share Offerings In June 2021, we completed an underwritten public offering of 44.2 million of our ordinary shares at a share price of $26.00, of which 28.8 million ordinary shares were issued and sold by Clarivate and 15.4 million ordinary shares were sold by selling shareholders (which included 5.8 million ordinary shares that the underwriters purchased pursuant to their option to purchase additional shares).
Added
We consider our trademarks, service marks, data assets, software, and other IP to be proprietary, and we rely on a combination of statutory (e.g., copyright, trademark, trade secret, and patent), contractual, and technical safeguards to protect our IP rights.
Removed
See Note 1 - Background and Nature of Operations for further details on the public ordinary share offerings.
Added
We believe that the IP we own and license is sufficient to permit us to carry on our business as presently conducted. Our agreements with our customers and business partners place certain restrictions on the use of our IP.
Removed
Concurrently with the June 2021 Ordinary Share Offering, we completed an underwritten public offering of 14.4 million of our 5.25% Series A Mandatory Convertible Preferred Shares ("MCPS") (which included 1.9 million of our MCPS that the underwriters purchased pursuant to their option to purchase additional shares).
Added
As a general practice, employees, contractors, and other parties with access to our proprietary information sign agreements that prohibit the unauthorized use or disclosure of our IP and confidential information. Our People At Clarivate, we have prioritized enhancing our colleague experience and creating a work environment that attracts and retains top talent from around the world.
Removed
Private Placement Notes Offering 2021 Senior Secured Notes and Senior Notes Offering In June 2021, we issued $1,000.0 in aggregate principal amount of Senior Secured Notes due June 30, 2028 (the "Old Secured Notes") and $1,000.0 in aggregate principal amount of Senior Notes due June 30, 2029 (the "Old Unsecured Notes" and, together with the Old Secured Notes, the "Old Notes") bearing interest at a rate of 3.875% and 4.875% per annum, respectively.
Added
Our overarching goal is to create a strong foundation on which we can build for the future to ensure we have career pathways and development opportunities for our talented workforce. We continue to promote a work environment where we can be our authentic selves – respecting and celebrating our differences.
Removed
The interest was payable semi-annually to holders of record on June 30 and December 30 of each year, commencing on December 30, 2021.
Added
We foster a values-led culture that begins with our vision that we fuel the world’s greatest breakthroughs by harnessing the power of human ingenuity. Our mission is to advance the success of people and organizations through transformative intelligence and trusted partnership.
Removed
The Old Secured Notes and the Old Unsecured Notes were issued by Clarivate Science Holdings Corporation (the "Issuer"), an indirect wholly-owned subsidiary of Clarivate. 33 Table of Contents CLARIVATE PLC Management’s Discussion and Analysis of Financial Condition and Results of Operations (In millions, except share and per share data, option prices, ratios or as noted) In August 2021, we (i) exchanged all of the outstanding, validly tendered and not withdrawn 3.875% Senior Secured Notes due 2028 (the “Old Secured Notes”) for the newly-issued 3.875% Senior Secured Notes due 2028 (the “New Secured Notes”), and (ii) exchanged all of the outstanding, validly tendered and not withdrawn 4.875% Senior Unsecured Notes due 2029 (the “Old Unsecured Notes” and, together with the Old Secured Notes, the “Old Notes”) for the Issuer’s newly-issued 4.875% Senior Notes due 2029 (the “New Unsecured Notes” and, together with the New Secured Notes, the “New Notes”).
Added
Our values help us achieve our goals with ambition (“We aim for greatness”), integrity (“We own our actions”), and respect for the people around us (“We value every voice”). We provide a variety of colleague-oriented programs and benefits to attract, retain, and develop a productive and engaged workforce.
Removed
The initial aggregate principal amount of New Notes is equal to the aggregate principal amount of Old Notes that were validly tendered and not validly withdrawn for exchange, and that were accepted by the Issuer.
Added
As of December 31, 2023, we had more than 12,000 employees located in 42 countries around the world. The following charts illustrate our employees by segment and by geography: 9 Table of Contents Inclusion and Diversity Treating one another with fairness, dignity, and respect are fundamental to our purpose and mission.
Removed
The offers to exchange are referred to herein as the “Exchange Offers.” Pursuant to the Exchange Offers, the aggregate principal amounts of the Old Notes set forth as follows were validly tendered and not validly withdrawn, and were accepted by the Issuer and subsequently cancelled: (i) $921.2 aggregate principal amount of Old Secured Notes; and (ii) $921.4 aggregate principal amount of Old Unsecured Notes.
Added
We believe that people coming together from different cultures and backgrounds, with different life experiences, is essential to sparking new ideas and accelerating our progress. We know that colleagues who feel engaged and included will be the most proactive and productive.
Removed
Following such cancellation, (i) $78.8 aggregate principal amount of Old Secured Notes remained outstanding; and (ii) $78.6 aggregate principal amount of Old Unsecured Notes remained outstanding.
Added
Our goal is to weave these principles into the fabric of our culture to become a recognized global employer of choice. Diversity is an integral part of our principles of corporate governance, and the Board believes that its membership should be composed of highly qualified directors from diverse backgrounds.
Removed
The Issuer redeemed such remaining outstanding Old Secured Notes and Old Unsecured Notes at 100% of the principal amount thereof plus accrued and unpaid interest from June 24, 2021, to the redemption date in August 2021.
Added
As such, the Nominating and Governance Committee actively considers diversity (including gender, age, ethnicity, and geographic background) in the recruitment of directors. We have initiated a Council for Inclusion and Diversity at Clarivate, chaired by the CEO.
Removed
In connection with the settlement of the Exchange Offers, the Issuer (i) issued $921.2 aggregate principal amount of its New Secured Notes; and (ii) issued $921.4 aggregate principal amount of its New Unsecured Notes. The interest is payable semi-annually to holders of record on June 30 and December 30 of each year, commencing on December 30, 2021.
Added
The council focuses on a five-pillar framework of Leadership and Strategy, Culture, Workplace Practices, Business Integration, and Community Impact to guide our inclusion and diversity efforts. For example, some of our initiatives include providing non-bias training and education, increasing colleague resource group activities and participation, and supporting diversity throughout our supply chain and in our communities.
Removed
The exchange was treated as a debt modification in accordance with Accounting Standards Codification 470, Debt ("ASC 470").
Added
This year, Clarivate received a score of 80 (out of 100) on the Human Rights Campaign Foundation’s 2023-2024 Corporate Equality Index, the nation’s foremost benchmarking survey and report measuring corporate policies and practices related to LGBTQ+ workplace equality. Clarivate improved our score to 80 from 75 last year, demonstrating our commitment and progress to an inclusive workplace culture.
Removed
Concurrently with the settlement of the Exchange Offers, the Issuer deposited (or caused to be deposited) an amount in cash equal to the aggregate principal amount of the New Notes of each series into segregated escrow accounts until the date that certain escrow release conditions (the “Escrow Release Conditions”) including the consummation of the ProQuest acquisition, were satisfied.
Added
Attraction, Development, and Retention We have a dedicated talent acquisition team whose priority is to attract the best, most suitable candidates using such channels as proactive sourcing, connecting through universities, ad campaigns, and referrals. Their goal is to identify a diverse, qualified candidate pool and to provide a positive candidate experience throughout the interview and hiring process.
Removed
On December 1, 2021, the Escrow Release Conditions were satisfied, and the escrow proceeds were released from the escrow accounts and used to fund a portion of the purchase price of the ProQuest acquisition and to pay related fees and expenses.
Added
Current colleagues also are a key source of talent, and we have a number of opportunities enabling colleagues to thrive and advance their careers. We recently launched a new approach to our internal mobility process with the goal of making it easier for our colleagues to grow their career internally rather than seeking an opportunity with another employer.
Removed
In connection with the closing of the ProQuest acquisition on December 1, 2021, the New Notes are guaranteed on a joint and several basis by each of Clarivate’s indirect subsidiaries that is an obligor or guarantor under Clarivate’s existing credit facilities and senior secured notes due 2026.
Added
Our learning and development philosophy is about bringing our values, diverse culture, and opportunities to life. It’s about empowering each colleague to bring their best self to work every day and providing a range of opportunities to help them develop the knowledge and skills they need to be successful.
Removed
The New Secured Notes are secured on a first-lien pari passu basis with borrowings under the existing credit facilities and senior secured notes, and the New Unsecured Notes are the Issuer’s and such guarantors’ unsecured obligations. Restructuring One Clarivate Program During the second quarter of 2021, the Company approved restructuring actions to streamline operations within targeted areas of the Company.
Added
We encourage colleagues to take advantage of the more than 5,000 self-paced eLearning resources available on our Learning Management System platform as well as the many live and virtual training sessions we offer regularly throughout the year. We align our training offerings to our competency model, building a foundation for career development and advancement.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+0 added−3 removed2 unchanged
For the revolving credit facility, the base interest rate is at Term SOFR, plus a 0.1% SOFR adjustment, plus 3.25% per annum (or 2.75% per annum, based on first lien leverage ratios) or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.
For borrowings under the revolving credit facility, the base interest rate is at Term SOFR, plus a 0.1% SOFR adjustment, plus 3.25% per annum (or 2.75% per annum, based on first lien leverage ratios) or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.
The purpose of these derivative instruments is to help manage the Company’s exposure to foreign exchange rate risks within the acquired CPA Global business. These contracts generally do not exceed 180 days in duration.
The purpose of these derivative instruments is to help manage our exposure to foreign exchange rate risks within the acquired CPA Global business. These contracts generally do not exceed 180 days in duration.
The interest rate margins under our credit facilities will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement). Of the total debt outstanding under our credit facilities, we hedged $1,222.2 of our principal amount of our floating rate debt using interest rate swaps.
The interest rate margins under our credit facilities will decrease upon the achievement of certain first lien net leverage ratios (as the term is used in the Credit Agreement). Of the total debt outstanding under our credit facilities, we hedged $1,112.4 of our principal amount of our floating rate debt using interest rate swaps.
These currencies may continue to fluctuate, in either direction, especially as a result of central bank responses to inflation, concerns regarding future economic growth and other macroeconomic factors, and such fluctuations will affect financial statement line item comparability. The Company periodically enters into foreign currency contracts.
These currencies may continue to fluctuate, in either direction, especially as a result of central bank responses to inflation, concerns regarding future economic growth and other macroeconomic factors, and such fluctuations will affect financial statement line item comparability. We periodically enter into foreign currency contracts.
The Company accounts for these foreign currency contracts at fair value and recognizes the associated realized and unrealized gains and losses in Other operating income, net in the Consolidated Statements of Operations, as the contracts are not designated as accounting hedges under the applicable sections of ASC Topic 815.
We account for these foreign currency contracts at fair value and recognize the associated realized and unrealized gains and losses in Other operating expense (income), net in the Consolidated Statements of Operations, as the contracts are not designated as accounting hedges under the applicable sections of ASC Topic 815.
As a result, $1,275.2 of our outstanding borrowings effectively bore interest at floating rates. A 0.125 basis point increase or decrease in the applicable base interest rate under our credit facilities would have an impact of $1.5 on our cash interest expense for the year ended December 31, 2022.
As a result, $1,085.0 of our outstanding borrowings effectively bore interest at floating rates. A 0.125 basis point increase or decrease in the applicable base interest rate under our credit facilities would have an impact of $1.8 on our cash interest expense during the year ended December 31, 2023. 38 Table of Contents
Revenues denominated in currencies other than U.S. dollars amounted to $757.9, or approximately 28.0%, of our total revenues for the year ended December 31, 2022 . A significant majority of this amount was denominated in euros, British pounds and Japanese yen.
Revenues denominated in currencies other than U.S. dollars amounted to $767.7, or approximately 29.2%, of our total revenues for the year ended December 31, 2023. A significant majority of this amount was denominated in Euros and British pounds.
Borrowings under our credit facilities are subject to floating base interest rates, plus a margin. As of December 31, 2022, we had $2,497.4 of floating rate debt outstanding under our credit facilities, consisting of borrowings under the revolving and term loan facilities.
Borrowings under our credit facilities are subject to floating interest rates, plus a SOFR adjustment and a margin. As of December 31, 2023, we had $2,197.4 of floating rate debt outstanding under our Term Loan Facility.
A 5% increase or decrease in the value of the euro, British pound and Japanese yen relative to the U.S. dollar would have caused our revenues for the year ended December 31, 2022, to increase or decrease by $33.0.
A 5% increase or decrease in the value of the Euro and British pound relative to the U.S. dollar would have caused our revenues for the year ended December 31, 2023, to increase or decrease by $31.0. Interest Rate Risk Our interest rate risk arises primarily from our borrowings at floating interest rates.
For the term loan facility, the base rate is one-month LIBOR (subject to a floor of 0.00% for $1,094.0 and 1.00% for $1,403.4), which was at 4.39% at December 31, 2022, or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.
For our Term Loan Facility, the interest rate is one-month Term SOFR plus a SOFR adjustment of 0.11% (subject to a floor of 0.00% for $962.6 and 1.00% for $1,234.8), or Prime plus a margin of 2.25% per annum, as applicable depending on the borrowing.
Removed
The following table presents the average of the weighted average exchange rates of the currencies, which have the most significant impact on our business: Rate for 1 USD Year Ended December 31, Currency: 2022 2021 Percentage Change GBP $ 0.81 $ 0.73 11 % EUR 0.95 0.85 12 % JPY 131.49 109.83 20 % Interest Rate Risk Our interest rate risk arises primarily from our borrowings at floating interest rates.
Removed
Credit Risk We are not currently exposed to market instruments, except for the effective interest rate hedges discussed above.
Removed
We are, however, exposed to credit risk on our accounts receivable, and we maintain an allowance for potential credit losses. 63 Table of Contents Further, given our subscription-based revenues model, where a significant portion of customer obligations are payable to us upfront, and our credit control procedures, we believe that our exposure to customer credit risk is currently limited. 64 Table of Contents

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