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What changed in CCC Intelligent Solutions Holdings Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CCC Intelligent Solutions Holdings Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+418 added−436 removedSource: 10-K (2025-02-25) vs 10-K (2024-02-28)

Top changes in CCC Intelligent Solutions Holdings Inc.'s 2024 10-K

418 paragraphs added · 436 removed · 356 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

96 edited+22 added−14 removed47 unchanged
Biggest changeIn the automotive sector, this is due to several converging factors including, without limitation: • Vehicle parts proliferation : Repairable parts per auto claim have increased 60% since 2010 • Internal technology systems : The average lines of software code per new vehicle doubled from 100 million in 2015 to 200 million in 2020 • Growing connected car capabilities : By 2030, 95% of new vehicles sold globally are expected to be connected • Advanced Driver Assistance Systems (“ADAS”) and diagnostics systems : The number of vehicles receiving a diagnostic scan as part of a collision repair has increased 1,000% since 2017 • Vehicle Electrification and related infrastructure : By 2035, 50% of global car sales are expected to be electrified vehicles • Vehicle damage severity from collisions : Since 2017, the cost to repair vehicles damaged in automotive claims has increased 54% We believe the only way to effectively manage increasing complexity is through digitization.
Biggest changeIn the automotive sector, this is due to several converging factors including, without limitation: • Vehicle parts proliferation : Repairable parts per auto claim have increased more than 50% since 2013 • Internal technology systems : The average lines of software code per new vehicle doubled from 100 million in 2015 to 200 million in 2020 • Advanced Driver Assistance Systems (“ADAS”) and diagnostics systems : The number of vehicles receiving a diagnostic scan as part of a collision repair has increased more than 3,000% since 2017 • Vehicle damage severity from collisions : Since 2019, the cost to repair vehicles damaged in automotive claims has increased 40% • Social inflation : Social inflation describes insurance claims cost increases that exceed inflation due to social, legal, and economic factors that increase the liability of insurers.
CCC’s subrogation solutions can apply to multiple lines of insurance, including automotive, property, and workers' compensation. • CCC Claim Handling : Claim handling is typically performed by claims adjusters who work closely with insured parties who are experiencing a claim to ensure a timely and accurate claim resolution.
CCC’s subrogation solutions can apply to multiple lines of insurance, including automotive, property, and workers’ compensation. • CCC Automotive Claim Handling : Claim handling is typically performed by claims adjusters who work closely with insured parties who are experiencing a claim to ensure a timely and accurate claim resolution.
CCC protects its services through a series of layered security controls and services, including but not limited to strong authentication, privileged access controls, malware detection and prevention controls, enhanced threat detection and response, secure application development controls, controls for data at rest, and in transmission, threat and prevention testing, software vulnerability disclosure program, benchmarking and 24x7 Security Operations Center (“SOC”) monitoring. • Availability and Uptime : CCC’s application environment is designed for high availability utilizing redundant databases, servers, network components, and storage, which maximizes availability through a network architecture designed to compartmentalize web, application, and database layers.
CCC protects its services through a series of layered security controls and services, including but not limited to strong authentication, privileged access controls, malware detection and prevention controls, enhanced threat detection and response, secure application development controls, controls for data at rest, and in transmission, threat and prevention testing, software vulnerability disclosure program, benchmarking and 24x7 Security Operations Center monitoring. • Availability and Uptime : CCC’s application environment is designed for high availability utilizing redundant databases, servers, network components, and storage, which maximizes availability through a network architecture designed to compartmentalize web, application, and database layers.
Our repair procedures provide technicians with a single source for data-driven insights to assist them in conducting thorough, consistent repairs, reducing the need for multiple 9 subscriptions and enabling access to current OEM guidelines and processes. Our checklist solutions enable documentation of standard operating procedures and tracking of performance which allows repair facility managers to identify areas for improvement.
Our repair procedures provide technicians with a single source for data-driven insights to assist them in conducting thorough, consistent repairs, reducing the need for multiple subscriptions and enabling access to current OEM guidelines and processes. Our checklist solutions enable documentation of standard operating procedures and tracking of performance which allows repair facility managers to identify areas for improvement.
Our Technology CCC has been a technology leader in the P&C insurance economy for several decades and has a strong track record of innovation. We were one of the leaders in the transition to cloud services, launching our initial CCC cloud capabilities beginning in 2003. Today, our solutions are powered by our secure multi-tenant public cloud.
Our Technology 10 CCC has been a technology leader in the P&C insurance economy for several decades and has a strong track record of innovation. We were one of the leaders in the transition to cloud services, launching our initial CCC cloud capabilities beginning in 2003. Today, our solutions are powered by our secure multi-tenant public cloud.
Repairers using the solution can share results of vehicle scans and calibrations with consumers and participating insurers within CCC Repair Workflow. • CCC Payments : Our enterprise payments platform enables electronic payment flows via third-party payment processing partners for companies across the P&C insurance economy.
Repairers using the solution can share results of a vehicle scans and calibrations with consumers and participating insurers within CCC Repair Workflow. • CCC Payments : Our enterprise payments platform enables electronic payment flows via third-party payment processing partners for companies across the P&C insurance economy.
Our software integrates seamlessly with both legacy and modern systems alike and enables insurers to rapidly innovate on our platform. Our repair solutions help collision repair facilities achieve better performance throughout the collision repair cycle by digitizing processes to drive business growth, streamline operations, and improve repair quality.
Our software integrates seamlessly with both legacy and modern systems and enables insurers to rapidly innovate on our platform. Our repair solutions help collision repair facilities achieve better performance throughout the collision repair cycle by digitizing processes to drive business growth, streamline operations, and improve repair quality.
Our Estimate – STP solution takes estimate automation to the next level by combining AI, digital workflows, data, and partner connections to automatically 8 initiate and populate detailed estimates within seconds. The outcome is actionable estimates with line-level detail, including parts, labor operations and hours, and taxes.
Our Estimate – STP solution takes estimate automation to the next level by combining AI, digital workflows, data, and partner connections to automatically initiate and populate detailed estimates within seconds. The outcome is actionable estimates with line-level detail, including parts, labor operations and hours, and taxes.
CCC First Look can be used by claims adjusters to capture claim information digitally by ingesting photos from various sources, including consumers and salvage providers. AI is applied to validate photos and inform routing and workflow decisions, including determining total loss and casualty potential.
CCC First Look can be used by automotive claims adjusters to capture claim information digitally by ingesting photos from various sources, including consumers and salvage providers. AI is applied to validate photos and inform routing and workflow decisions, including determining total loss and casualty potential.
We also provide tools that allow repair Multi Store Operators (“MSOs”) to manage performance, metrics, and compliance across their repair facility network. • CCC Repair Workflow : Repair workflow is the industry’s leading repair management tool that enhances productivity and simplifies operations for thousands of repair facilities.
We also provide tools that allow repair Multi Store Operators (“MSOs”) to manage performance, metrics, and compliance across their repair facility network. 9 • CCC Repair Workflow : Repair workflow is the industry’s leading repair management tool that enhances productivity and simplifies operations for thousands of repair facilities.
For example, our configurable carrier workflow allows insurers to design custom workflows that create differentiated experiences and adjust parameters to deliver targeted results. 10 • Innovation : We invest heavily in R&D and continuously bring new innovative solutions to market.
For example, our configurable carrier workflow allows insurers to design custom workflows that create differentiated experiences and adjust parameters to deliver targeted results. • Innovation : We invest heavily in R&D and continuously bring new innovative solutions to market.
Our estimating solutions accelerate auto physical damage estimation to reduce costs and cycle time for our customers. • CCC Total Loss : Total loss solutions enable our insurance customers to identify, value, and resolve total loss automotive claims digitally.
Our estimating solutions accelerate auto physical damage estimation to reduce costs and cycle time for our customers. 8 • CCC Total Loss : Total loss solutions enable our insurance customers to identify, value, and resolve total loss automotive claims digitally.
Insurers are often reliant on legacy on-premise systems to assist with policy and claims adjustments and processing, which can be inflexible and costly to maintain, challenging their ability to innovate and respond to market dynamics. 5 Further complicating matters, the P&C insurance industry is dependent on the P&C insurance economy, an interconnected economy of industries that interact to service, underwrite, finance, and repair insured assets.
Insurers are often reliant on legacy on-premise systems to assist with policy and claims adjustments and processing, which can be inflexible and costly to maintain, challenging their ability to innovate and respond to market dynamics. 5 Further complicating matters, the insurance industry is dependent on the insurance economy, an interconnected economy of industries that interact to service, underwrite, finance, and repair insured assets.
Our cloud architecture creates several benefits for our customers and partners across the P&C insurance economy, including: • Ease of implementation : We are able to implement solutions rapidly and cost-effectively, with average customer implementations taking less than three months. Implementations are performed by CCC’s service operations and training teams, and rarely require the support of external consultants.
Our cloud architecture creates several benefits for our customers and partners across the insurance economy, including: • Ease of implementation : We are able to implement solutions rapidly and cost-effectively, with average customer implementations taking less than three months. Implementations are performed by CCC’s service operations and training teams, and rarely require the support of external consultants.
We are a trusted partner to our clients, which allows us to collaborate and adapt our business based on customer feedback and changing expectations to stay ahead of our competition. • Network access : CCC’s cloud platform is used by more than 35,000 companies, including insurers, repairers, automotive manufacturers, parts suppliers, financial institutions, and others.
We are a trusted partner to our clients, which allows us to collaborate and adapt our business based on customer feedback and changing expectations to stay ahead of our competition. • Network access : CCC’s cloud platform is used by more than 35,000 companies, including insurers, repairers, automotive manufacturers, parts suppliers, and others.
Our network processes more than 500 million interface transactions each year where information is passed from one network participant to another; for example, from an insurer to a repair facility. • Proven R&D engine : We invest heavily in R&D efforts and are committed to delivering market-leading technology for the P&C insurance economy.
Our network processes more than 500 million interface transactions each year where information is passed from one network participant to another; for example, from an insurer to a repair facility. • Proven R&D engine : We invest heavily in R&D efforts and are committed to delivering market-leading technology for the insurance economy.
Sales and Marketing CCC marketing and sales organizations directly engage with decision-makers and industry leaders across the P&C insurance economy to drive software adoption. Our digital marketing provides CCC with a platform to execute highly targeted outreach to tens of thousands of active and prospective clients by customizing communications based on specific client needs or marketplace trends.
Sales and Marketing CCC marketing and sales organizations directly engage with decision-makers and industry leaders across the insurance economy to drive software adoption. Our digital marketing provides CCC with a platform to execute highly targeted outreach to tens of thousands of active and prospective clients by customizing communications based on specific client needs or marketplace trends.
Our software solutions and platform are designed to create value for our customers by boosting efficiency, improving cycle time, increasing innovation potential, and enhancing end-customer experiences. Competition The P&C insurance economy software market is highly competitive and fragmented. This market is subject to changing technology, shifting customer needs, and introductions of new and innovative software solutions.
Our software solutions and platform are designed to create value for our customers by boosting efficiency, improving cycle time, increasing innovation potential, and enhancing end-customer experiences. Competition The insurance economy software market is highly competitive and fragmented. This market is subject to changing technology, shifting customer needs, and introductions of new and innovative software solutions.
As the publisher of Crash Course, a robust industry dataset on Auto Physical Damage and Casualty claims trends, CCC engages clients and prospects with custom content, industry analysis, and unique insights. Monthly reports and trends data underpin our marketing outreach generating awareness in trade journals, industry presentations, and online publications.
As the publisher of Crash Course, a robust industry dataset on Auto Physical Damage and Casualty claims trends, CCC engages clients and prospects with custom content, industry analysis, and unique insights. Quarterly reports and trends data underpin our marketing outreach generating awareness in trade journals, industry presentations, and online publications.
Some of these vendors have supporting ecosystems that enable integration to third parties to facilitate interaction with the supporting P&C insurance economy. • Other ecosystem software vendors: Other established vendors and startups offer software targeting specific needs for certain segments of the P&C insurance economy, such as collision repair facility software solutions and parts e-commerce platforms.
Some of these vendors have supporting ecosystems that enable integration to third parties to facilitate interaction with the supporting insurance economy. • Other ecosystem software vendors: Other established vendors and startups offer software targeting specific needs for certain segments of the insurance economy, such as collision repair facility software solutions and parts e-commerce platforms.
We have prioritized building a leading network around our automotive insurance and collision repair pillars to further digitize interactions and maximize value for our customers. We have tens of thousands of companies on our platform that participate in the insurance economy, including insurers, repairers, parts suppliers, automotive manufacturers, and financial institutions.
We have prioritized building a leading network around our automotive insurance and collision repair pillars to further digitize interactions and maximize value for our customers. We have tens of thousands of companies on our platform that participate in the insurance economy, including insurers, repairers, parts suppliers, and automotive manufacturers.
We work with hundreds of regional carriers, and across all our insurance customers our average contract is approximately three to five years in duration. We have approximately 29,500 automotive collision repair customers, including national MSOs, regional MSOs, independent repair facilities, and automotive dealers that perform collision repair. We partner with all of the national MSOs across the U.S.
We work with hundreds of regional carriers, and across all our insurance customers our average contract is approximately three to five years in duration. We have approximately 30,500 automotive collision repair customers, including national and regional MSOs, independent repair facilities, and automotive dealers that perform collision repair. We partner with all of the national MSOs across the U.S.
Often these in-house technology programs will be supported by large-scale consulting firms. • P&C insurance software vendors : A number of vendors provide software solutions that are specifically designed to meet the needs of the P&C insurance industry, including core systems providers, underwriting data and software providers, and claims software providers.
Often these in-house technology programs will be supported by large-scale consulting firms. • Insurance software vendors : A number of vendors provide software solutions that are specifically designed to meet the needs of the insurance industry, including core systems providers, underwriting data and software providers, and claims software providers.
The key benefits we deliver for our customers include: • Multi-tenant public cloud platform enabling flexibility and innovation : CCC’s platform operates in a secure multi-tenant public cloud environment, with over 648,000 registered users and 5.2 billion database transactions processed per day.
The key benefits we deliver for our customers include: • Multi-tenant public cloud platform enabling flexibility and innovation : CCC’s platform operates in a secure multi-tenant public cloud environment, with over 843,000 registered users and 5.2 billion database transactions processed per day.
Our software solutions are tailored for the Chinese market, and include workflow, estimating, audit and analytics solutions. We are assessing other international market expansion opportunities by evaluating partnerships and acquisitions of strategic assets. Our international solutions represent approximately 1% of our 2023 total revenue, with 100% of that representing software revenue.
Our software solutions are tailored for the Chinese market, and include workflow, estimating, audit and analytics solutions. We are assessing other international market expansion opportunities by evaluating partnerships and acquisitions of strategic assets. Our international solutions represent approximately 1% of our 2024 total revenue, with 100% of that representing software revenue.
Competitive factors in our industry will vary across solution and ecosystem segments. The principal competitive factors include software functionality, performance and value delivery, innovation potential, network breadth, implementation and support, and customer references. We believe that we compete favorably on the basis of each of these factors.
Competitive factors in our industry will vary across solution and ecosystem segments. The principal competitive factors include software functionality, performance and value delivery, innovation potential, network breadth, implementation and support, and customer preferences. We believe that we compete favorably on the basis of each of these factors.
Our network management capability powers insurance DRPs, enabling insurers to seamlessly connect and collaborate with repair facilities and other companies to provide accurate and timely information about a claim flow from the right party at the right time. • CCC Estimating : Our insurance automotive repair estimating solution is built on CCC’s proprietary estimating database that has been cultivated for decades to deliver best-in-class repair estimating data and decisioning.
Our network management capability powers insurance DRPs, enabling insurers to seamlessly connect and collaborate with repair facilities and other companies to provide accurate and timely information about a claim flow from the right party at the right time. • CCC Estimating : Our insurance automotive repair estimating solution is built on CCC’s proprietary estimating database that has been cultivated for decades to deliver best-in-class repair estimating data and decision making.
CCC’s outbound subrogation solutions automate subrogation opportunity identification for carriers by applying AI and Natural Language Processing ("NLP") to claims data. Our outbound solutions digitize subrogation workflows including the creation and distribution of demand packages with third-party carriers that include supporting evidence for subrogation claims.
CCC’s outbound subrogation solutions automate subrogation opportunity identification for carriers by applying AI and Natural Language Processing (“NLP”) to claims data. Our outbound solutions digitize subrogation workflows including the creation and distribution of demand packages with third-party carriers that include supporting evidence for subrogation claims.
The breadth and depth of our platform creates network effects that accelerate the demand for our software solutions.
The breadth and depth of our platform creates 7 network effects that accelerate the demand for our software solutions.
We have customer agreements with more than 300 insurers (including carriers, self-insurers and other entities processing insurance claims), including 27 of the top 30 automotive insurance carriers in the U.S., based on DWP, and hundreds of regional carriers.
We have customer agreements with more than 300 insurers (including carriers, self-insurers and other entities processing insurance claims), including 26 of the top 30 automotive insurance carriers in the U.S., based on DWP, and hundreds of regional carriers.
The key components of our strategy are: • Growing our customer base : Our customers span the P&C insurance economy, and we believe we have significant opportunity to continue to grow our customer base by targeting key new accounts and expanding our sales and marketing capabilities.
The key components of our strategy are: • Growing our customer base : Our customers span the insurance economy, and we believe we have significant opportunity to continue to grow our customer base by targeting key new accounts and expanding our sales and marketing capabilities.
For larger insurance and automotive clients, CCC combines both enterprise and regional account teams with solutions and consulting services to lead marketing and sales efforts. Custom analysis, pilot programs, and highly consultative account teams drive customer software expansion and adoption. As a thought leader across the P&C insurance economy, CCC delivers valued data and perspectives to these industries.
For larger insurance and automotive clients, CCC combines both enterprise and regional account teams with solutions and consulting services to lead marketing and sales efforts. Custom analysis, pilot programs, and highly consultative account teams drive customer software expansion and adoption. 11 As a thought leader across the insurance economy, CCC delivers valued data and perspectives to these industries.
In the automotive insurance sector, which represents nearly half of the U.S. P&C insurance industry, processing a single event, such as a claim, can require hundreds of micro-transactions across its supporting economy, involving consumers, lenders, collision repair facilities, automotive manufacturers, dealers, parts suppliers, medical providers, vehicle auctions, and others.
In the automotive insurance sector, which represents nearly half of the U.S. P&C insurance industry, processing a single event, such as a claim, can require hundreds of micro-transactions across the insurance economy, involving consumers, lenders, collision repair facilities, automotive manufacturers, dealers, parts suppliers, medical providers, vehicle tow providers, vehicle auctions, and others.
We have more than 300 insurers on our network, connecting with approximately 29,500 repair facilities through our multi-tenant cloud platform. We believe our software is the architectural backbone of insurance DRP systems and is a primary driver of material revenue for our collision shop customers and a source of material efficiencies for our insurance carrier customers.
We have more than 300 insurers on our network, connecting with more than 30,500 repair facilities through our multi-tenant cloud platform. We believe our software is the architectural backbone of insurance DRP systems and is a primary driver of material revenue for our collision repair shop customers and a source of material efficiencies for our insurance carrier customers.
Our technology investments are focused on digitizing complex processes and interactions across our ecosystem, and we believe we are well positioned to power the P&C insurance economy of the future with our data, network, and platform.
Our technology investments are focused on digitizing complex processes and interactions across our ecosystem, and we believe we are well positioned to power the insurance economy of the future with our data, network, and platform.
The complexity seen in one auto claim grows exponentially more difficult to manage at scale, and complexity is continuing to increase across the P&C insurance economy.
The complexity seen in one auto claim grows exponentially more difficult to manage at scale, and complexity is continuing to increase across the insurance economy.
In addition, we invest in new solutions that expand the breadth of our software offerings and create new capabilities for our customers, leveraging current technologies. Our research and development efforts are intended to help our customers improve their operations; drive greater digital engagement with their customers and business partners; and gather, store, and analyze data to improve business decisions.
In addition, we invest in new solutions that expand the breadth of our software offerings and create new capabilities for our customers, leveraging current technologies. Our research and development efforts are intended to help our customers improve their operations; drive improved digital experience with their customers and business partners; and gather, store, and analyze data to improve business decisions.
We believe we have become a leading insurance and repair SaaS provider in the U.S. by increasing the depth and breadth of our SaaS offerings over many years. Our insurance solutions help insurance carriers manage mission-critical workflows across the claims lifecycle, while building smart, dynamic experiences for their own customers.
We believe we have become a leading insurance and repair SaaS provider in the U.S. by increasing the depth and breadth of our SaaS offerings over many years. Our insurance solutions help insurance carriers manage mission-critical workflows across the claims lifecycle, while building intelligent experiences for their customers.
For our insurance partners, cycle time is costly, which is one reason why, as of 2023, CCC’s platform is relied upon by 27 of the top 30 auto insurers based on DWP in the U.S. to digitize complexity and improve business outcomes.
For our insurance partners, cycle time is costly, which is one reason why, as of 2024, CCC’s platform is relied upon by 26 of the top 30 auto insurers in the U.S. based on DWP to digitize complexity and improve business outcomes.
Since January 2019, CCC’s systems have achieved 99.94% uptime on average, giving our customers the confidence to depend on CCC’s performance. We have dedicated implementation and training teams, and have proven success in implementing solutions for leading insurance carriers and thousands of small businesses.
Since January 2020, CCC’s systems have achieved 99.91% uptime on average, giving our customers the confidence to depend on CCC’s performance. We have dedicated implementation and training teams, and have proven success in implementing solutions for leading insurance carriers and thousands of small businesses.
Our Growth Strategy We intend to extend our position as the leading provider of SaaS solutions for the P&C insurance economy.
Our Growth Strategy We intend to extend our position as the leading provider of SaaS solutions for the insurance economy.
Our Board has delegated responsibility for developing and implementing goals regarding environmental, social, and governance and sustainability matters to the Nominating and Corporate Governance Committee and has also directed that the Human Capital and Compensation Committee participate and provide oversight and guidance on social and culture areas affecting ESG-related matters.
Our Board of Directors (the “Board”) has delegated responsibility for developing and implementing goals regarding ESG and sustainability matters to the Nominating and Corporate Governance Committee and has also directed that the Human Capital and Compensation Committee participate and provide oversight and guidance on social and culture areas affecting ESG-related matters.
While our position in the P&C insurance economy is grounded in the automotive insurance sector, the largest insurance sector in the U.S. representing nearly half of Direct Written Premiums (“DWP”), we believe our integrations and cloud platform are capable of driving innovation across the entire P&C insurance economy.
While our position in the insurance economy is grounded in the automotive insurance sector, the largest Property & Casualty (P&C) insurance sector in the U.S. representing nearly half of P&C Direct Written Premiums (“DWP”), we believe our integrations and cloud platform are capable of driving innovation across the broader insurance economy.
P&C Insurance Economy P&C insurance is one of the largest global industries. The U.S. P&C insurance industry alone serviced approximately $775 billion in DWP in 2022. Insurance is a necessity for the majority of businesses and consumers, and, as a result, the P&C insurance industry has seen steady long-term growth.
Insurance Economy Insurance is one of the largest global industries. The U.S. P&C insurance industry alone serviced approximately $850 billion in DWP in 2023. Insurance is a necessity for the majority of businesses and consumers, and, as a result, the insurance industry has seen steady long-term growth.
We continuously enhance existing solutions and bring new solutions to market, deploying more than 1,400 software releases in 2023. • Deep domain expertise : With decades of experience serving the insurance economy, we have developed a deep understanding of the industries and ecosystem we serve.
We continuously enhance existing solutions and bring new solutions to market, deploying more than 1,900 software releases in 2024. • Deep domain expertise : With decades of experience serving the insurance economy, we have developed a deep understanding of the industries and ecosystem we serve.
We continuously update and enhance our software, deploying more than 1,400 releases in 2023, with a software release quality success rate averaging more than 96% since 2019. • Security and Quality : CCC’s software suite is provided as SaaS hosted in multiple geographically diverse hosting locations with data replication between primary hosting locations and secondary locations in near real-time.
We continuously update and enhance our software, deploying more than 1,900 releases in 2024, with a software release quality success rate averaging more than 96% since 2020. • Security and Quality : CCC’s software suite is provided as SaaS hosted in multiple geographically diverse hosting locations with data replication between primary hosting locations and secondary locations in near real-time.
Item 1. Business . Founded in 1980, CCC is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences.
Item 1. Business . Founded in 1980, CCC is a leading Software-as-a-Service (SaaS) platform for the multi-trillion-dollar insurance economy powering operations for insurers, repairers, automakers, part suppliers, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences.
We have more than 35,000 total customers, including approximately 29,500 automotive collision repair facilities (including repairers and other entities that estimate damaged vehicles), approximately 5,000 parts suppliers, 13 of the top 15 automotive manufacturers, based on new vehicle sales, and numerous other companies that participate in the P&C insurance economy.
We have more than 35,000 total customers, including more than 30,500 automotive collision repair facilities (including repairers, and other entities that estimate damaged vehicles), more than 5,500 parts suppliers, 12 of the top 15 automotive manufacturers, based on new vehicle sales, and numerous other companies that participate in the insurance economy.
Our AI solutions increase automation across existing insurance and repair processes including vehicle damage detection, claim triage, claim handling, casualty claim processing, repair estimating, intelligent claim review, and claim subrogation. We deliver real-world AI with more than 100 U.S. auto insurers and more than 1,000 U.S. collision repairers actively using AI-powered solutions in production environments.
Our AI solutions streamline existing insurance and repair processes including vehicle damage detection, claim triage, claim handling, repair estimating, intelligent claim review, and claim subrogation. We deliver real-world AI with more than 100 U.S. auto insurers and more than 10,000 U.S. collision repairers actively using AI-powered solutions in production environments.
Intellectual Property We own or have pending patents and patent applications, which generally apply to our software. As of December 31, 2023, we owned 30 issued U.S. patents, which are scheduled to expire between April 2026 and December 2040, and 12 patent applications pending for examination in the U.S.
Intellectual Property We own or have pending patents and patent applications, which generally apply to our software. As of December 31, 2024, we owned 30 issued U.S. patents, which are scheduled to expire between December 2025 and December 2040, and 14 patent applications pending for examination in the U.S.
In 2023, our R&D spend was 20% of revenue; however, including the impact of capitalized time related 7 to internal use software, our total spend was 25% of revenue on R&D with a primary focus on technology leadership and continuous innovation.
In 2024, our R&D spend was 21% of revenue; however, including the impact of capitalized time related to internal use software, our total spend was 26% of revenue on R&D with a primary focus on technology leadership and continuous innovation.
Collision repairers use our platform to connect with the industry’s leading network of partners and suppliers across the insurance and repair ecosystem. Our repair solutions represented approximately 44% of our 2023 total revenues, with 99% of that representing software revenue and 1% representing other revenue.
Collision repairers use our platform to connect with the industry’s leading network of partners and suppliers across the insurance and repair ecosystem. Our repair solutions represented approximately 44% of our 2024 total revenues, with nearly 100% of that representing software revenue.
Other ecosystem solutions represent approximately 6% of our 2023 total revenue, with 92% of that representing software revenue and 8% representing other revenue.
Other ecosystem solutions represent approximately 7% of our 2024 total revenue, with 92% of that representing software revenue and 8% representing other revenue.
Our Customers We believe we have strong customer relationships across the more than 35,000 total customers in the end markets we serve, and these relationships are a key component of our success given the long-term nature of our contracts and interconnectedness of our network. 11 We have more than 300 total insurance customers in the U.S., comprised of national carriers and regional carriers.
Our Customers We believe we have strong customer relationships across the more than 35,000 total customers in the end markets we serve, and these relationships are a key component of our success given the long-term nature of our contracts and interconnectedness of our network.
Insurance carriers invest in data, systems, services and partnerships to manage the many required collaboration points across these industries. To deliver end-to-end digital workflows and improved customer experiences, technology needs to extend beyond insurance organizations and include its supporting economy, in order to enable the many interactions and handoffs required to process insurance events.
Insurance carriers invest in data, systems, services and partnerships to manage the many required collaboration points across these industries. To deliver end-to-end digital workflows and intelligent experiences, intuitive technology that extends beyond insurance organizations and include its supporting economy is critical in order to enable the many interactions and handoffs required to process insurance events.
Our average repair facility contract is approximately 3 years in duration, though MSO customers can have longer contract terms. In addition to insurance and repair, our customers include approximately 5,000 parts suppliers, 13 of the top 15 automotive manufacturers as of 2023, and other companies that participate in the P&C insurance economy.
Our average repair facility contract is approximately three years in duration, though MSO customers can have longer contract terms. In addition to insurance and repair, our customers include approximately 5,500 parts suppliers, 12 of the top 15 automotive manufacturers as of 2024, and other companies that participate in the insurance economy.
CCC's inbound subrogation solutions apply AI and NLP, along with historical CCC estimate data, to incoming subrogation demands. Our inbound solutions enable insurance carriers to rapidly ingest, respond, and settle demands with other carriers.
CCC Inbound Subrogation applies AI and NLP, along with historical CCC estimate data, to incoming subrogation demands. Our inbound solution enables insurance carriers to rapidly ingest, respond, and settle demands with other carriers.
One of the primary obstacles facing the P&C insurance economy is increasing complexity. Complexity in the P&C insurance economy is driven by technological advancements, IoT data, new business models, supply-chain disruption, and changing consumer expectations. We believe digitization plays a critical role in managing this growing complexity while meeting consumer expectations.
One of the primary obstacles facing the insurance economy is increasing complexity which is driven by technological advancements, supply-chain disruption, social inflation, medical inflation, and Internet-of-Things (IOT) data. We believe digitization plays a critical role in managing this growing complexity while meeting consumer expectations.
Through the DAC, we continued to organize several unique cultural/heritage events in 2023 to celebrate and honor the diversity of our team members and support employee-driven employee resource groups (“ERGs”) – the African American Alliance, the Women’s Network, and the Growing Professionals ERG.
Through the DAC, we continued to organize several unique cultural/heritage events in 2024 to celebrate and honor the diversity of our team members and support employee-driven employee resource groups (“ERGs”) – the African American Alliance, the Women’s Network, the Growing Professionals ERG and PROUD, made up of employees who identify as LGBTQ+ and their allies.
Today, CCC has developed more than 300 AI models, some of which are in use across more than 100 insurers, including 27 of the top 30 U.S. automotive insurers based on DWP. • Proprietary data assets : CCC’s platform has processed more than $1 trillion of historical data, enabling us to deliver unique analytics and insights for our customers leveraging our deep proprietary data assets.
Today, CCC has developed more than 300 AI models, some of which are in use across more than 100 insurers, and more than 10,000 repair facilities. • Proprietary data assets : CCC’s platform has processed more than $1 trillion of historical data, enabling us to deliver unique analytics and insights for our customers leveraging our deep proprietary data assets.
Our casualty solutions automate and expedite casualty claims processing by applying intelligent rules based on insurer-specific parameters to process casualty claims data quickly and segment payment-ready bills from those that the insurer wants to review.
Our casualty solutions automate and expedite casualty claims processing by applying intelligent rules based on insurer-specific parameters to process casualty claims data quickly and segment payment-ready bills from those that the insurer wants to review. CCC Negotiation Solutions allows carriers to seamlessly refer medical bills through integrated, third-party supported, negotiation services.
In recent years, our innovation efforts have focused on Mobile and AI technology, and we have released several new solutions incorporating Mobile and AI that have experienced rapid industry adoption as our customers look to improve customer experience and enable automation. We deploy real-world AI solutions at enterprise scale.
In recent years, our innovation efforts have focused on Cloud and AI technology, and we have released several new solutions incorporating AI to deliver intelligent customer experiences and enable automation. We deploy real-world AI solutions at enterprise scale.
P&C insurers face a number of challenging market dynamics in today’s environment, including increasing customer expectations, competition from new entrants and business models, emerging technologies, labor shortages, and cost pressures.
Insurers face a number of challenging market dynamics in today’s environment, including increasing customer expectations, social inflation, medical inflation, emerging technologies, labor shortages, and other cost pressures.
CCC Diagnostics is a two-part solution that connects repairers to a network of industry leading diagnostic service providers, and enables repairers to properly document and bill diagnostic operations based on repairer-defined rules. The combined solution simplifies service initiation, documentation, and reporting with integrated functionality that creates transparency for insurers to validate completed service events.
CCC Diagnostics is a two-part solution that connects repairers to a network of industry leading diagnostic service providers, and enables repairers to properly document and bill diagnostic operations based on repairer-defined rules.
For example, CCC's acquisition of Safekeep in February 2022 added subrogation solutions that can span insurance lines including automotive, property, and worker's compensation. We have strong customer relationships in the end-markets we serve, and these relationships are a key component of our success given the long-term nature of our contracts and the interconnectedness of our network.
For example, CCC’s acquisition of EvolutionIQ in January 2025 added claims solutions in disability and workers’ compensation insurance lines to CCC's solution suite. We have strong customer relationships in the end-markets we serve, and these relationships are a key component of our success given the long-term nature of our contracts and the interconnectedness of our network.
We enable the integration of up-to-date OEM repair methods and diagnostics trouble codes into our platform to give our network of repair facilities and technicians the tools to execute a proper repair. Our automotive telematics solutions can enable new use cases across CCC’s integrated ecosystem, including connected safety and vehicle diagnostics solutions.
We enable the integration of up-to-date OEM repair methods and diagnostics trouble codes into our platform to give our network of repair facilities and technicians the tools to execute a proper repair.
CCC Insurance Solutions CCC’s solutions help insurers digitize processes, from customer intake to claim resolution, while building smart, dynamic experiences for their customers. Many of our solutions leverage the power of the CCC network by facilitating ecosystem interactions required to complete insurer processes. All of our insurance solutions are cloud-based SaaS solutions that power critical carrier workflows.
Our SaaS solutions are sold individually or in packages, depending on the specific solution and end-market. CCC Insurance Solutions CCC’s solutions help insurers digitize processes, from customer intake to claim resolution, while building intelligent experiences for their customers. Many of our solutions leverage the power of the CCC network by facilitating ecosystem interactions required to complete insurer processes.
We intend to extend our network of companies, including customers and ecosystem partners, to enhance our value proposition and create new market growth opportunities. • Growing our geographic footprint : We believe there is significant opportunity for our solutions outside of the U.S.
We intend to extend our network of companies, including customers and ecosystem partners, to enhance our value proposition and create new market growth opportunities. • Growing our geographic footprint : We believe there is significant opportunity outside of the U.S by expanding our solutions in other markets across the world, which we expect to pursue over time. • Pursuing acquisitions : We have acquired and integrated numerous businesses throughout CCC’s history.
Our network creates tremendous value for our customers, is not easily replicated, and sets us apart from other vertical software companies. We believe that integrating to the insurance economy is the only way to deliver full end-to-end digital workflows across insurance processes. Today we enable more than 500 million interface transactions each year.
We believe that integrating to the insurance economy is the only way to deliver full end-to-end digital workflows across insurance processes. Today we enable more than 500 million interface transactions each year.
In 2022, our national carrier customers included 27 of the top 30 automotive insurers based on DWP, with average customer relationships spanning more than 10 years, and numerous exclusive arrangements. Our national carrier customers also represent 27 of the top 30 overall P&C insurers in the U.S based on DWP.
We have more than 300 total insurance customers (including carriers, self-insurers and other entities processing insurance claims) in the U.S., including national and regional carriers. In 2024, our national carrier customers included 26 of the top 30 automotive insurers based on DWP, with average customer relationships spanning more than 10 years, and numerous exclusive arrangements.
Environmental, Social and Governance (“ESG”) At CCC, we are committed to conducting our business in a responsible and sustainable manner. Our ESG approach is designed to align with our corporate strategy and our mission to keep people’s lives moving forward when it matters most.
Our ESG approach is designed to align with our corporate strategy and our mission to keep people’s lives moving forward when it matters most.
Our Approach Serving as the platform for the P&C insurance economy is a significant challenge that CCC is uniquely positioned to address. We believe our proprietary data and network assets, combined with our track record of innovation on our cloud platform, differentiates us from other potential P&C platform companies.
We believe our proprietary data and network assets, combined with our track record of innovation on our cloud platform, differentiates us from other potential platform companies. Our approach is to continue to innovate and expand our solutions to create value for the insurance economy. CCC’s foundation for innovation is built upon decades of data and extensive network assets.
In 2023, we launched offerings that expanded the breadth and depth of our solutions across a number of areas including claim handling with CCC First Look and Casualty Impact Dynamics, digital website building with CCC Amplify, repair estimating with AI capabilities within CCC ONE Estimating-IQ, and subrogation with CCC Inbound Subrogation, among others. • Broadening our network ecosystem : We have a large network of companies on our platform that are dependent on the P&C insurance economy and derive value from connecting to others across the ecosystem through CCC.
In 2024, we launched offerings that expanded the depth and breadth of our solutions across several areas including repair estimating with CCC Build Sheets, repair estimating reinspection with CCC Intelligent Reinspection, and repair back office with CCC Payroll. • Broadening our network ecosystem : We have a large network of companies on our platform that are dependent on the insurance economy and derive value from connecting to others across the ecosystem through CCC.
As of year-end 2023, we processed more than 275 terabytes of network traffic and execute nearly 5.2 billion database transactions each day. We have invested in hyperscale infrastructure, enabling us to effectively process and store extremely large amounts of information, photos, videos, and driving data. For example, we receive, process, and store nearly 800 million photos each year.
We have invested in hyperscale infrastructure, enabling us to effectively process and store extremely large amounts of information, photos, videos, and driving data. For example, we receive, process, and store nearly 800 million photos each year. Our application layer delivers solutions to a base of more than 843,000 registered users.
Our Solutions We provide an integrated suite of software applications built on our cloud platform to serve the P&C insurance economy, including insurance, repair, and other end-markets. Our SaaS solutions are sold individually or in packages, depending on the specific solution and end-market.
We intend to continue to pursue targeted acquisition opportunities to accelerate our business strategy and growth through solution, market, or geographic expansion. Our Solutions We provide an integrated suite of software applications built on our cloud platform to serve the insurance economy, including insurance, repair, and other end-markets.
The Board and the Audit Committee oversee our governance and risk management activities. We have a cross-functional ESG working group responsible for integrating sustainability, responsible practices, and stakeholder engagement into our operations, and have conducted an ESG issues assessment and performed a greenhouse gas emissions assessment.
The Board and the Audit Committee oversee our 12 governance and risk management activities. We have a cross-functional ESG working group responsible for integrating sustainability, responsible practices, and stakeholder engagement into our operations. Human Capital Management As of December 31, 2024, we had approximately 2,310 employees and 560 contingent employees.
We deliver valuations representing a vehicle’s fair market value based on CCC’s market-driven valuation methodology and provide insurers with information to make total loss determinations. Once a total loss has been identified, we support our carrier customers in managing lender payoff requests, letters of guarantee, lien and title resolution, and signature collection.
We deliver valuations representing a vehicle’s fair market value based on CCC’s market-driven valuation methodology and provide insurers with information to make total loss determinations.
Our application layer delivers solutions to a base of more than 648,000 registered users. CCC applications power end-to-end customer experiences, digital workflows, AI, network management, and telematics capabilities across the markets we serve. Our AI approach is based on automated deep learning and parallel processing of mathematical models.
CCC applications power end-to-end customer experiences, digital workflows, AI, network management, and telematics capabilities across the markets we serve. Our AI approach is based on automated deep learning and parallel processing of mathematical models. This comprehensive approach to data science allows us to continuously improve the accuracy of existing models and release new models that automate time consuming workloads.
Our AI solutions combine our data assets with proprietary machine learning and analytics frameworks to automate processes so as to reduce processing costs and leakage for our customer base.
Our AI solutions combine our data assets with proprietary frameworks to improve user experiences and workflows, resulting in reduced processing costs and leakage for our customer base.
Human Capital Management As of December 31, 2023, we had approximately 2,325 employees and 600 contingent employees. As of December 31, 2023, we had approximately 2,210 employees in the U.S. and approximately 115 employees internationally. None of our employees are represented by a labor union and we have not had any work stoppages.
As of December 31, 2024, we had approximately 2,225 employees in the U.S. and approximately 85 employees internationally. None of our employees are represented by a labor union and we have not had any work stoppages. We have continued to prioritize the health and safety of our employees, offering a flexible work model that balances business requirements and employee preferences.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFor a description of our 2021 Credit Facilities (as defined below) see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Debt.” If we cannot generate sufficient cash flow from operations to service the 2021 Credit Facilities, we may need to refinance the 2021 Credit Facilities, dispose of assets, or issue equity to obtain necessary funds; we do not know whether we will be able to take any such actions on a timely basis or on terms satisfactory to us or at all. 29 Our leverage and the covenant restrictions under the 2021 Credit Agreement could have important consequences, including, without limitation: • making it more difficult for us to make payments on outstanding principal and interest owed under the 2021 Credit Agreement; • increasing our vulnerability to general economic and market conditions and to changes in the industries in which we compete; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest owed under the Credit Agreement, thereby reducing our ability to use our cash flow to fund our operations, future working capital, capital expenditures, investments or acquisitions, future strategic business opportunities, or other general corporate requirements; • restricting us from making acquisitions or causing us to make divestitures or similar transactions; • limiting our ability to obtain additional financing for the purpose of funding working capital, capital expenditures, debt service requirements, investments, acquisitions, and general corporate purposes; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged; and • increasing our cost of borrowing.
Biggest changeOur leverage and the covenant restrictions under the 2021 Credit Agreement could have important consequences, including, without limitation: 29 • making it more difficult for us to make payments on outstanding principal and interest owed under the 2021 Credit Agreement; • increasing our vulnerability to general economic and market conditions and to changes in the industries in which we compete; • requiring a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest owed under the Credit Agreement, thereby reducing our ability to use our cash flow to fund our operations, future working capital, capital expenditures, investments or acquisitions, future strategic business opportunities, or other general corporate requirements; • restricting us from making acquisitions or causing us to make divestitures or similar transactions; • limiting our ability to obtain additional financing for the purpose of funding working capital, capital expenditures, debt service requirements, investments, acquisitions, and general corporate purposes; • limiting our ability to adjust to changing market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged; and • increasing our cost of borrowing.
Macroeconomic factors impacting the principal industries we serve could adversely affect adoption, usage, or average selling prices of our solutions. We expect to continue to derive most of our revenue from solutions and additional services we provide to the P&C insurance industry, the automotive collision industry, and the P&C insurance economy generally, including the automotive industry.
Macroeconomic factors impacting the principal industries we serve could adversely affect adoption, usage, or average selling prices of our solutions. We expect to continue to derive most of our revenue from the solutions and additional services we provide to the P&C insurance industry, the automotive collision industry, and the P&C insurance economy generally, including the automotive industry.
For example, we may find it necessary to establish alternative systems to collect, use, share, retain and safeguard personal information originating from the European Economic Area and caught by the extra-territorial reach of the GDPR, which may involve substantial expense and may cause us to divert resources from other aspects of our business, all of which may adversely affect our results from operations.
For example, we may find it necessary to establish alternative systems to collect, use, share, retain and safeguard personal information originating from the European Economic Area and caught by the extra-territorial reach of the GDPR, which may involve substantial expense and may cause us to divert resources from other aspects of our business, all of which may adversely affect our results of operations.
Additionally, the FASB and the SEC are focused on the integrity of financial reporting, and our accounting policies are subject to scrutiny by regulators and the public. We cannot predict the impact of future changes to accounting principles or our accounting policies on our financial statements going forward.
Additionally, FASB and the SEC are focused on the integrity of financial reporting, and our accounting policies are subject to scrutiny by regulators and the public. We cannot predict the impact of future changes to accounting principles or our accounting policies on our financial statements going forward.
If we are not able to successfully adopt to new accounting requirements, or if changes to our go-to-market strategy create new risks, then we may experience greater volatility in our quarterly and annual results, which may cause our stock price to decline.
If we are not able to successfully adopt new accounting requirements, or if changes to our go-to-market strategy create new risks, then we may experience greater volatility in our quarterly and annual results, which may cause our stock price to decline.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our board of directors or taking other corporate actions, including effecting changes in our management.
These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members of our Board or taking other corporate actions, including effecting changes in our management.
Among other things, our governing documents include provisions regarding: • the ability of our board of directors to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; 33 • removal of the ability of our stockholders to take action by written consent in lieu of a meeting unless such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office; • the requirement that a special meeting of stockholders may be called only by a majority of our entire board of directors, which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of board of directors and stockholder meetings; • the ability of our board of directors to amend our bylaws, which may allow our board of directors to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our board of directors or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our board of directors, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
Among other things, our governing documents include provisions regarding: • the ability of our Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of, and the indemnification of, our directors and officers; • removal of the ability of our stockholders to take action by written consent in lieu of a meeting unless such action has been recommended or approved pursuant to a resolution approved by the affirmative vote of all of the directors then in office; • the requirement that a special meeting of stockholders may be called only by a majority of our entire Board , which could delay the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of Board and stockholder meetings; • the ability of our Board to amend our bylaws, which may allow our Board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to our Board or to propose matters to be acted upon at a stockholders’ meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in our Board, and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of us.
The share price of our common stock may fluctuate due to a variety of factors, including, without limitation: • changes in the industries in which we and our customers operate; • variations in our operating performance and the performance of our competitors in general; • material and adverse impact of pandemics and similar events on the markets and the broader global economy; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or industry; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; • commencement of, or involvement in, litigation; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of our shares of common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, inflation, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.
The share price of our common stock may fluctuate due to a variety of factors, including, without limitation: • changes in the industries in which we and our customers operate; • variations in our operating performance and the performance of our competitors in general; • material and adverse impact of pandemics and similar events on the markets and the broader global economy; • actual or anticipated fluctuations in our quarterly or annual operating results; • publication of research reports by securities analysts about us or our competitors or industry; • the public’s reaction to our press releases, other public announcements and filings with the SEC; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations affecting our business; 32 • commencement of, or involvement in, litigation; • changes in our capital structure, such as future issuances of securities or the incurrence of additional debt; • the volume of our shares of common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, inflation, fuel prices, foreign currency fluctuations, international tariffs, social, political and economic risks and acts of war or terrorism.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees, agents or stockholders to us or our stockholders, or any claim for aiding or abetting such an alleged breach; (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, or to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; (iv) any action asserting a claim against us or any of our current or former directors, officers, employees, agents or stockholders, whether arising under the DGCL, our certificate of incorporation or our bylaws, or such actions as to which the DGCL confer jurisdiction on the Delaware Court of Chancery; or (v) any action asserting a claim against us or any of our current or former directors, officers, employees, agents or stockholders governed by the internal affairs doctrine.
Our certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware shall be the sole and exclusive forum for state law claims for (i) any derivative action or proceeding brought on 33 behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our current or former directors, officers, employees, agents or stockholders to us or our stockholders, or any claim for aiding or abetting such an alleged breach; (iii) any action asserting a claim arising pursuant to any provision of the DGCL or our certificate of incorporation or bylaws, or to interpret, apply, enforce or determine the validity of our certificate of incorporation or bylaws; (iv) any action asserting a claim against us or any of our current or former directors, officers, employees, agents or stockholders, whether arising under the DGCL, our certificate of incorporation or our bylaws, or such actions as to which the DGCL confer jurisdiction on the Delaware Court of Chancery; or (v) any action asserting a claim against us or any of our current or former directors, officers, employees, agents or stockholders governed by the internal affairs doctrine.
As a software business, we face risks of cyber-attacks, including ransomware and phishing attacks, social engineering attacks, computer break-ins, theft, fraud, misappropriation, misuse, denial-of-service attacks, and other improper activity that could jeopardize the performance of our platform and solutions and expose us to financial and reputational impact and legal liability, especially with regards to regulators such as the Federal Trade Commission, which has become increasingly aggressive in prosecuting alleged failure to secure personal data as unfair and deceptive acts or practices under the Federal Trade Commission Act.
As a software business, we face risks of cyber-attacks, including ransomware and phishing attacks, social engineering attacks, computer break-ins, theft, fraud, misappropriation, misuse, denial-of-service attacks, and other improper activity that could jeopardize the performance of our platform and solutions and expose us to financial and reputational impact and legal liability, especially with regards to regulators such as the Federal Trade Commission (the “FTC”), which has become increasingly aggressive in prosecuting alleged failure to secure personal data as unfair and deceptive acts or practices under the Federal Trade Commission Act.
If one or more of our licenses are terminated, if our licenses are subject to material price increases, if we are unable to renew one or more of these licenses on favorable terms or at all, or if one or more licensor becomes subject to allegations of breach of third-party intellectual property rights with respect to the materials licensed by us, we may be unable to access the licensed materials without incurring additional costs or, for instance in the case of materials licensed from sole-service suppliers, unable to access alternative sources that would provide comparable materials.
If one or more of our licenses are terminated, if our licenses are subject to material price increases, if we are unable to renew one or more of these licenses on favorable terms or at all, or if one or more licensor becomes subject to allegations of breach of third-party intellectual 20 property rights with respect to the materials licensed by us, we may be unable to access the licensed materials without incurring additional costs or, for instance in the case of materials licensed from sole-service suppliers, unable to access alternative sources that would provide comparable materials.
As a result, we may overpay for, or otherwise not achieve some or any of the benefits, including anticipated synergies or accretion to earnings, that we 24 expect to achieve in connection with our acquisitions, we may not accurately anticipate the fixed and other costs associated with such acquisitions, or the business may not achieve the performance we anticipated, any of which may materially adversely affect our business, prospects, financial condition, results of operations, cash flows, as well as our stock price.
As a result, we may overpay for, or otherwise not achieve some or any of the benefits, including anticipated synergies or accretion to earnings, that we expect to achieve in connection with our acquisitions, we may not accurately anticipate the fixed and other costs associated with such acquisitions, or the business may not achieve the performance we anticipate, any of which may materially adversely affect our business, prospects, financial condition, results of operations, cash flows, as well as our stock price.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors or board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
These reporting requirements, rules and regulations, coupled with the increase in potential litigation exposure associated with being a public company, could also make it more difficult for us to attract and retain qualified persons to serve on our Board or Board committees or to serve as executive officers, or to obtain certain types of insurance, including directors’ and officers’ insurance, on acceptable terms.
By virtue of our serving customers in China that are at least partially owned or controlled by the government, there is also an increased risk of running afoul of the FCPA and other laws and regulations concerning anti-bribery and anti-corruption, including local Chinese laws, particularly given that China is perceived to present a heightened risk from an anti-corruption perspective.
By virtue of our serving customers in China that are at least partially owned or controlled by the government, there is also an increased risk of running afoul of the 19 FCPA and other laws and regulations concerning anti-bribery and anti-corruption, including local Chinese laws, particularly given that China is perceived to present a heightened risk from an anti-corruption perspective.
If adequate funds are not available or are not available on acceptable terms, when we desire them, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our solutions, invest in future growth opportunities or otherwise respond to competitive pressures would be significantly limited. Any of these factors could adversely impact our results of operations.
If adequate funds are not available or are not available on acceptable terms, when we desire them, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our solutions, invest in future growth opportunities or otherwise respond to competitive pressures could be significantly limited. Any of these factors could adversely impact our results of operations.
Uncertainty around new and emerging AI technologies may require additional investment in the development and maintenance of proprietary datasets and machine learning models, development of new approaches and processes to provide related to the collection and use of training data, and development of appropriate protections and safeguards for handling the use of customer data with AI technologies, which may be costly and could impact our expenses.
Uncertainty around new and emerging AI technologies may require additional investment in the development and maintenance of proprietary datasets and machine learning models, development of new approaches and processes to provide related to the collection and use of training data, and development of appropriate protections and safeguards for handling the use of customer data with AI technologies, which may be 23 costly and could impact our expenses.
We typically collect revenue and incur costs in the currency of the location in which we provide our solutions and services, but our contracts with our customers are long-term in nature so it is difficult to predict if our operating activities will provide a natural hedge in the future or as we expand internationally.
We typically collect revenue and incur costs in the currency of the location in which we provide our solutions and services, but our contracts with our customers are long-term in nature so it is difficult to predict if our operating activities will provide a hedge in the future or as we expand internationally.
Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, and may be difficult to detect for long periods of time, we or these third parties may be unable to 22 anticipate these techniques or to implement adequate preventative measures.
Because the techniques used to obtain unauthorized access, or to sabotage systems, change frequently and generally are not recognized until launched against a target, and may be difficult to detect for long periods of time, we or these third parties may be unable to anticipate these techniques or to implement adequate preventative measures.
Moreover, acts of terrorism or war could cause disruptions to our business or our customers’ businesses or the economy as a whole. The risks associated with natural catastrophes, war and terrorism are inherently unpredictable, and it is difficult to forecast the timing of such events or estimate the amount of losses they will generate.
Moreover, acts of terrorism or war could cause disruptions to our business or our customers’ businesses or the economy as a whole. The risks associated with catastrophes, natural disasters, war and terrorism are inherently unpredictable, and it is difficult to forecast the timing of such events or estimate the amount of losses they will generate.
This may increase our costs more than we anticipate and may adversely impact our results of operations. Our current and potential competitors may also establish cooperative relationships among themselves or with third parties to further enhance their resources and offerings. Current or potential competitors may be acquired by other vendors or third parties with greater available resources.
This may increase our costs more than we anticipate and may adversely impact our results of operations. Our current and potential competitors may also establish cooperative relationships among themselves, with our customers, or with third parties to further enhance their resources and offerings. Current or potential competitors may be acquired by other vendors or third parties with greater available resources.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of The Nasdaq Stock Market LLC ("Nasdaq"), and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, the rules of the SEC, the listing requirements of The Nasdaq Stock Market LLC (“Nasdaq”), and other applicable securities rules and regulations impose various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance practices.
As a result, our transactional revenue can be adversely affected by factors outside of our control, including but not limited to, industry trends, market events, customer-specific usage changes. The transactional portion of the business also presents more challenges to accurately forecasting future revenues.
As a result, our transactional revenue can be adversely affected by factors outside of our control, including but not limited to, industry trends, market events, and customer-specific usage changes. The transactional portion of the business also presents more challenges to accurately forecasting future revenues.
Any significant violations of data privacy could result in the loss of business, litigation, regulatory fines or investigations, loss of customers, and penalties that could damage our reputation and adversely affect the growth of our business. In addition, we maintain liability insurance coverage, including coverage for cyber-liability.
Any significant violations of data privacy 22 could result in the loss of business, litigation, regulatory fines or investigations, loss of customers, and penalties that could damage our reputation and adversely affect the growth of our business. In addition, we maintain liability insurance coverage, including coverage for cyber-liability.
We may incur substantial expense in complying with the new obligations to be imposed by new regulations and we may be required 26 to make significant changes to our solutions and expanding business operations, all of which may adversely affect our business, results of operations or financial condition.
We may incur substantial expense in complying with the new obligations to be imposed by new regulations and we may be required to make significant changes to our solutions and expanding business operations, all of which may adversely affect our business, results of operations or financial condition.
Our governing documents and the Delaware General Corporation Law (the “DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our board of directors and therefore depress the trading price of our common stock.
Our governing documents and the Delaware General Corporation Law (the “DGCL”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition deemed undesirable by our Board and therefore depress the trading price of our common stock.
The competitors we face in any sale opportunity may change depending on, among other things, the line of business making the purchase, the solutions(s) being sold, the geography in which the customer is operating, and the size of the customer to which we are selling.
The competitors we face in any sale opportunity may change depending on, among other things, the line of business making the purchase, the solutions(s) being sold, the geography in which the customer is operating, and the size of the 16 customer to which we are selling.
A substantial downturn in the insurance industry may cause firms to react to worsening conditions by reducing their capital expenditures, reducing their spending on information technology, delaying or canceling information technology projects, or seeking to lower their costs by renegotiating vendor contracts.
A substantial downturn in the insurance industry may cause firms to react to worsening conditions by reducing their capital expenditures, reducing their spending on information technology (“IT”), delaying or canceling information technology projects, or seeking to lower their costs by renegotiating vendor contracts.
Our inability to attract and retain diverse and qualified personnel, or delays in hiring required personnel, including attrition, retention and delay issues due to macroeconomic and other factors beyond our control, may adversely impact our business, results of operations and financial condition.
Our inability to attract and retain qualified personnel, or delays in hiring required personnel, including attrition, retention and delay issues due to macroeconomic and other factors beyond our control, may adversely impact our business, results of operations and financial condition.
If our insurance company customers fail to comply with new or existing insurance regulations, including those applicable to our software and services, they could lose their certifications to provide insurance and/or reduce their usage of our software and services, either of which would reduce our revenues.
If our insurance company customers fail to comply with new or existing insurance regulations, including those applicable to our software and services, they could lose their certifications to provide insurance and/or reduce 18 their usage of our software and services, either of which would reduce our revenues.
We may fail to comply with the rules that apply to public companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would adversely impact our business.
We may fail to comply with the rules that apply to public 31 companies, including Section 404 of the Sarbanes-Oxley Act, which could result in sanctions or other penalties that would adversely impact our business.
Similarly, our profitability depends on our ability to effectively utilize personnel with the right mix of skills and experience to perform services for our customers, including our ability to transition employees to new assignments on a timely basis.
Similarly, our profitability depends on our ability to effectively utilize personnel with the right mix of skills and experience to perform services for our customers, including our ability to transition employees to new assignments on a timely 28 basis.
Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of the Company's and its subsidiaries' consolidated first lien net indebtedness to the Company’s and its subsidiaries’ consolidated EBITDA for applicable periods specified in the 2021 Credit Facilities.
Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of the Company’s and its subsidiaries’ consolidated first lien net indebtedness to the Company’s and certain of its subsidiaries’ consolidated EBITDA for applicable periods specified in the 2021 Credit Facilities.
Following an acquisition or the establishment of an alliance offering new solutions, we may be required to defer the recognition of revenue that we receive from the sale of solutions that we acquired or that result from the alliance, or from the sale of a bundle of solutions that includes such new solutions.
Following an acquisition or the establishment of an alliance offering new solutions, we may be 24 required to defer the recognition of revenue that we receive from the sale of solutions that we acquired or that result from the alliance, or from the sale of a bundle of solutions that includes such new solutions.
Even 21 if we are successful in defending our claims, litigation could result in substantial costs and diversion of resources and could negatively affect our business, reputation, results of operations and financial condition.
Even if we are successful in defending our claims, litigation could result in substantial costs and diversion of resources and could negatively affect our business, reputation, results of operations and financial condition.
Our sales efforts involve educating our customers about the use and benefits of our solutions, including in the technical capabilities and the potential cost savings achievable by organizations using our solutions. For larger business opportunities, such as converting a new P&C insurance customer, customers undertake a rigorous pre-purchase decision-making and evaluation process which typically involves due diligence and reference checks.
Our sales efforts involve educating our customers about the use and benefits of our solutions, including in the technical capabilities and the potential cost savings achievable by organizations using our solutions. For larger business opportunities, such as converting a new insurance customer, customers undertake a rigorous pre-purchase decision-making and evaluation process which typically involves due diligence and reference checks.
As a result, the market price of our common stock could decline, or stockholders might not receive a premium over the then-current market price of our common stock upon 31 a change in control.
As a result, the market price of our common stock could decline, or stockholders might not receive a premium over the then-current market price of our common stock upon a change in control.
The Chinese economy differs from the economies of most developed countries in many respects, including the degree of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Accordingly, our business, prospects, financial condition and results of operations may be affected to a significant degree by political, economic and social conditions in China generally.
The Chinese economy differs from the economies of most developed countries in many respects, including the degree of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Accordingly, our business, prospects, financial condition and results of operations may be affected to a significant degree by the general political, economic and social conditions in China.
Even if the 2021 Credit Agreement is terminated, any additional debt that we incur in the future could subject us to similar or additional covenants.
Even if the 30 2021 Credit Agreement is terminated, any additional debt that we incur in the future could subject us to similar or additional covenants.
If we are unable to internally develop or acquire suitable alternatives to such developments or otherwise deploy competitive offerings our business and growth opportunities may be challenged. Additionally, certain P&C insurance ecosystem customers may seek to develop internal solutions which could potentially compete with related offerings from us in whole or part.
If we are unable to internally develop or acquire suitable alternatives to such developments or otherwise deploy competitive offerings our business and growth opportunities may be challenged. Additionally, certain insurance ecosystem customers may seek to develop internal solutions which could potentially compete with related offerings from us in whole or part.
Some of our customers include the largest P&C insurers and auto collision repair organizations in the U.S. These customers have significant bargaining power when negotiating new licenses or subscriptions or renewals of existing agreements and have the ability to buy similar solutions from other vendors or develop such systems internally.
Some of our customers include the largest insurers and auto collision repair organizations in the U.S. These customers have significant bargaining power when negotiating new licenses or subscriptions or renewals of existing agreements and have the ability to buy similar solutions from other vendors or develop such systems internally.
If our customers and potential customers experience financial hardship as a result of a weakened economy, industry consolidation, or other factors, the overall demand for our solutions could decrease. If economic conditions worsen, our business, results of operations, and financial condition could be adversely impacted. Consolidation in the P&C insurance industry may result in reduced overall spending on our solutions.
If our customers and potential customers experience financial hardship as a result of a weakened economy, industry consolidation, or other factors, the overall demand for our solutions could decrease. If economic conditions worsen, our business, results of operations, and financial condition could be adversely impacted. Consolidation in the insurance industry may result in reduced overall spending on our solutions.
Additionally, any such violations could materially damage our reputation, brand, international expansion efforts, ability to attract and retain employees, and our business, prospects, operating results and financial condition. Responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant defense costs and other professional fees.
Additionally, any such violations could materially damage our reputation, brand, international expansion efforts, ability to attract and retain employees, and our business, prospects, operating results and financial condition. Responding to any enforcement action may result in a significant diversion of management’s attention and resources and significant legal costs and other professional fees.
Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in tax laws, including impacts of the Tax Cuts and Jobs Act (the “Tax Act”) enacted in December 2017, the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”) of 2020 and the Inflation Reduction Act of 2022 (the "Inflation Reduction Act").
Our future effective tax rates and the value of our deferred tax assets could be adversely affected by changes in tax laws, including impacts of the Tax Cuts and Jobs Act enacted in December 2017, the Coronavirus Aid, Relief, and Economic Security Act (also known as the “CARES Act”) of 2020 and the Inflation Reduction Act of 2022 (the “Inflation Reduction Act”).
We may not be able to compete effectively and competitive pressures may prevent us from acquiring and maintaining the customer base necessary for us to increase our revenue and profitability. In addition, the P&C insurance economy is evolving rapidly, and we anticipate the market for cloud-based solutions will become increasingly competitive.
We may not be able to compete effectively and competitive pressures may prevent us from acquiring and maintaining the customer base necessary for us to increase our revenue and profitability. In addition, the insurance economy is evolving rapidly, and we anticipate the market for cloud-based solutions will become increasingly competitive.
Technologies such as enhanced modeling, artificial intelligence and machine learning technology may offer certain firms, including insurance carriers, the opportunity to make rapid advancements in the development of tools which may impact the industry broadly. New solutions utilize and will continue to be based on AI technologies in the future.
Technologies such as enhanced modeling, AI and machine learning technology may offer certain firms, including insurance carriers, the opportunity to make rapid advancements in the development of tools which may impact the industry broadly. New solutions utilize and will continue to be based on AI technologies in the future.
If we are unsuccessful in delivering innovative SaaS solutions, it could adversely impact our results of operations and financial condition. To address demand trends across the P&C insurance economy, we have focused on and plan to continue focusing on the growth and expansion of our SaaS business.
If we are unsuccessful in delivering innovative SaaS solutions, it could adversely impact our results of operations and financial condition. To address demand trends across the insurance economy, we have focused on and plan to continue focusing on the growth and expansion of our SaaS business.
We may acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnerships.
We have, and may in the future, acquire or invest in companies, or pursue business partnerships, which may divert our management’s attention or result in dilution to our stockholders, and we may be unable to integrate acquired businesses and technologies successfully or achieve the expected benefits of such acquisitions, investments or partnerships.
If we are not able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, or if our existing information technology systems and infrastructure becomes, or is perceived as being, outdated or less sophisticated than our competitors’, we may not be able to retain existing customers and attract new customers necessary to sustain and grow our business.
If we are not able to adapt to changing technologies or meet customer demands for new processes or technologies in a timely and cost-effective manner, or if our existing IT systems and infrastructure becomes, or is perceived as being, outdated or less sophisticated than our competitors’, we may not be able to retain existing customers and attract new customers necessary to sustain and grow our business.
As technology continues to develop at a rapid pace, both within the P&C insurance economy and more broadly across the insurance ecosystem, the possibility of the development of technological advancements made by other firms will increase.
As technology continues to develop at a rapid pace, both within the insurance economy and more broadly across the insurance ecosystem, the possibility of the development of technological advancements made by other firms will increase.
We may also experience hesitancy, reluctance, refusal or other challenges engaging with European or multi-national customers due to the potential risk exposure, cost, or difficulty in demonstrating to our customers that the Company is in compliance with various regulatory requirements. Furthermore, the Fair Credit Reporting Act (“FCRA”) may one day limit how we use consumer information.
We may also experience hesitancy, reluctance, refusal or other challenges engaging with European or multi-national customers due to the potential risk exposure, cost, or difficulty in demonstrating to our customers that the Company is in compliance with various regulatory requirements. Furthermore, the Fair Credit Reporting Act (“FCRA”) may in the future limit how we use consumer information.
This could include new competitors, or new offerings from existing competitors, that utilize artificial intelligence based tools. To compete effectively we will likely be required to increase our investment in research and development, as well as the personnel and third-party services required to improve reliability and lower the cost of delivery of our cloud-based solutions.
This could include new competitors, or new offerings from existing competitors, that utilize AI-based tools. To compete effectively we will likely be required to increase our investment in research and development, as well as the personnel and third-party services required to improve reliability and lower the cost of delivery of our cloud-based solutions.
In addition, investors, particularly institutional investors, use these scores to benchmark companies against their peers and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions, or take other actions, to hold these corporations and their boards of directors accountable.
In addition, some investors use these scores to benchmark companies against their peers and if a company is perceived as lagging, these investors may engage with such company to improve ESG disclosure or performance and may also make voting decisions, or take other actions, to hold these corporations and their boards of directors accountable.
Our revenue is dependent on customers in the P&C insurance and automotive collision industries, and historically a relatively small number of customers have accounted for a significant portion of our revenue. There were no customers which individually accounted for more than 10% of our total revenue during the year ended December 31, 2023.
Our revenue is primarily dependent on customers in the P&C insurance and automotive collision industries, and historically a relatively small number of customers have accounted for a significant portion of our revenue. There were no customers which individually accounted for more than 10% of our total revenue during the year ended December 31, 2024.
We rely on independent third parties to provide certain services to us. The state of the law regarding independent contractor status varies and is subject to change based on court decisions, legislation, and regulation. For example, at the federal level, the DOL published a final rule in January 2024 on independent contractor status.
We rely on independent third parties to provide certain services to us. The state of the law regarding independent contractor status varies and is subject to change based on court decisions, legislation, and regulation. For example, at the federal level, the Department of Labor published a final rule in January 2024 on independent contractor status.
The Company was not subject to the first lien leverage test as of December 31, 2023. 30 We cannot guarantee that we will be able to maintain compliance with these covenants or, if we fail to do so, that we will be able to obtain waivers from the Administrative Agent and/or the required lenders and/or amend the covenants.
The Company was not subject to the first lien leverage test as of December 31, 2024. We cannot guarantee that we will be able to maintain compliance with these covenants or, if we fail to do so, that we will be able to obtain waivers from the Administrative Agent and/or the required lenders and/or amend the covenants.
Many investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision.
Certain investment funds focus on positive ESG business practices and sustainability scores when making investments and may consider a company’s ESG or sustainability scores as a reputational or other factor in making an investment decision.
In the ordinary course of business, our information technology systems will continue to require modification and refinements to address growth and changing business requirements, including technological advancement that could result in our solutions being run less expensively on a different platform or could accelerate obsolescence of our existing systems and infrastructure.
In the ordinary course of business, our IT systems will continue to require modification and refinements to address growth and changing business requirements, including technological advancement that could result in our solutions being run less expensively on a different platform or could accelerate obsolescence of our existing systems and infrastructure.
(n/k/a CCC Intelligent Solutions Holdings Inc.) and the stockholders party thereto, dated as of February 2, 2021 (the "Shareholder Rights Agreement"), the Advent Investor has the right to designate for election or appointment as directors (i) six individuals for so long as it owns at least 50% of the shares it held as of closing of the Business Combination, (ii) four individuals for so long as it owns at least 25% of the shares it held as of closing of the Business Combination and (iii) two individuals for so long as it owns at least 10% of the shares it held as of closing of the Business Combination.
(n/k/a CCC Intelligent Solutions Holdings Inc.) and the stockholders party thereto, dated as of February 2, 2021 (the “Shareholder Rights Agreement”), the Advent Investor has the right to designate for election or appointment as directors (i) six individuals for so long as it owns at least 50% of the shares it held as of closing of the Business Combination, (ii) four individuals for so long as it owns at least 25% of the shares it held as of closing of the Business Combination and (iii) two individuals for so long as it owns at least 10% of the shares it held as of closing of the Business Combination.
Compliance with new or changing laws, regulations or industry standards relating to AI may impose significant operational costs and may limit our ability to develop, deploy or use AI technologies.
Compliance with new or changing laws, regulations, industry standards or customer requirements relating to AI may impose significant operational costs and may limit our ability to develop, deploy or use AI technologies.
A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our ordinary shares from consideration by certain investors who may elect to invest with our competition instead. Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks.
A low ESG or sustainability rating by a third-party rating service could also result in the exclusion of our common stock from consideration by certain investors who may elect to invest with our competition instead. Ongoing focus on corporate responsibility matters by investors and other parties as described above may impose additional costs or expose us to new risks.
Data privacy legislation, enforcement and policy activity are rapidly expanding around the world and creating a complex data privacy compliance environment that poses greater compliance risks and costs, as well as the potential for high profile negative publicity in the event of any data breach.
Data privacy laws and regulation, as well as proposed legislation, enforcement and policy activity are rapidly expanding around the world and creating a complex data privacy compliance environment that poses greater compliance risks and costs, as well as the potential for high profile negative publicity in the event of any data breach.
We use machine learning and artificial intelligence (AI) technologies in our solutions and business, and we are making investments in expanding the use of AI solutions, including ongoing deployment and improvement of features using AI technologies.
We use machine learning and AI technologies in our solutions and business, and we are making investments in expanding the use of AI solutions, including ongoing deployment and improvement of features using AI technologies.
Pursuant to our certificate of incorporation, to the fullest extent permitted by law, the doctrine of corporate opportunity will not apply to any of our directors who is not an employee of us or any affiliate of such non-employee director (including any entity of which such non-employee director serves as a director, manager, officer, employee, agent or other representative, and any direct or indirect partner, stockholder, member, manager or other representative of, or investment vehicle or other entity controlling, controlled by or under common control with, such an entity), and pursuant to the Shareholder Rights Agreement, to the fullest extent permitted by law, the doctrine of corporate opportunity and any analogous doctrine will not apply to (i) Dragoneer Growth Opportunities Holdings, a Cayman Islands limited liability company (“Sponsor”), the Advent Investor, the OH Investor or the TCV Investor, (ii) any of our directors or officers who is not our or our subsidiaries’ full-time employee or (iii) any affiliate, partner, advisory board member, director, officer, manager, member or shareholder of Sponsor, the Advent Investor, the OH Investor or the TCV Investor who is not our or our subsidiaries’ full-time employee (any such person described in the foregoing sentence being referred to herein as an “ External Party” ).
Pursuant to our certificate of incorporation, to the fullest extent permitted by law, the doctrine of corporate opportunity will not apply to any of our directors who is not an employee of us or any affiliate of such non-employee director (including any entity of which such non-employee director serves as a director, manager, officer, employee, agent or other representative, and any direct or indirect partner, stockholder, member, manager or other representative of, or investment vehicle or other entity controlling, controlled by or under common control with, such an entity), and pursuant to the Shareholder Rights Agreement, to the fullest extent permitted by law, the doctrine of corporate opportunity and any analogous doctrine will not apply to (i) Dragoneer Growth Opportunities Holdings, a Cayman Islands limited liability company (“Sponsor”), the Advent Investor and certain other investors, (ii) any of our directors or officers who is not our or our subsidiaries’ full-time employee or (iii) any affiliate, partner, advisory board member, director, officer, manager, member or shareholder of Sponsor, the Advent Investor, or certain other investors who are not our or our subsidiaries’ full-time employee (any such person described in the foregoing sentence being referred to herein as an “External Party”).
Certain trends in the automotive industry, including adoption of artificial intelligence solutions, the continued adoption of semi-autonomous or autonomous vehicles and the advent of improved automotive safety features, may potentially impact the future market for, and operations of, the P&C insurance and automotive collision industries.
Certain trends in the automotive industry, including adoption of AI solutions, the continued adoption of semi-autonomous or autonomous vehicles and the advent of improved automotive safety features, may potentially impact the future market for, and operations of, the P&C insurance and automotive collision industries.
Changes in, or violations by us or our customers of, applicable government regulations could reduce demand for or limit our ability to provide our solutions and services in those jurisdictions. Our P&C insurance industry customers are subject to extensive government regulations, mainly at the state level in the United States and at the country level in our non-U.S. markets.
Changes in, or violations by us or our customers of, applicable government regulations could reduce demand for or limit our ability to provide our solutions and services in those jurisdictions. Our insurance industry customers are subject to extensive government regulations, mainly at the state level in the U.S. and at the country level in our non-U.S. markets.
See "Item 3 —Legal Proceedings." Reliance on Third Parties and Key Personnel Risk Factors If we are unable to retain our personnel and hire and integrate additional skilled personnel, we may be unable to achieve our goals and our business may suffer.
See “Item 3 —Legal Proceedings.” Reliance on Third Parties and Key Personnel Risk Factors If we are unable to retain our personnel and hire and integrate additional skilled personnel, we may be unable to achieve our goals and our business may suffer.
To the extent a public health outbreak, epidemic or pandemic, including a resurgence in the COVID-19 pandemic, adversely affects our business and financial results, it may also have the effect of heightening other risks described in this “Risk Factors” section, such as those relating to our liquidity.
To the extent a public health outbreak, epidemic or pandemic adversely affects our business and financial results, it may also have the effect of heightening other risks described in this “Risk Factors” section, such as those relating to our liquidity.
Also, we are subject to direct regulation in some markets, and our failure to comply with these regulations could significantly reduce our revenues or subject us to government sanctions. Sales to customers or operations outside the United States may expose us to risks inherent in international sales.
Also, we are subject to direct regulation in some markets, and our failure to comply with these regulations could significantly reduce our revenues or subject us to government sanctions. Sales to customers or operations outside the U.S. may expose us to risks inherent in international sales.
These conditions may be impacted by macroeconomic or geopolitical factors beyond our control, including any deterioration in the political and trade relationship between the U.S. and China.
These conditions may be impacted by macroeconomic or geopolitical factors beyond our control, including any deterioration in the political and trade relationship between the U.S. and China or the imposition of tariffs.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our board of directors or management.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in our Board or management.
We therefore may find ourselves in competition with the External Parties, and we may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business or prospects.
We therefore may find ourselves in competition with the External Parties, and we may not have knowledge of, or be able to pursue, transactions that could potentially be beneficial to us. Accordingly, we may lose a corporate opportunity or suffer competitive harm, which could negatively impact our business or prospects. The share price of our common stock may be volatile.
As of December 31, 2023, our total debt outstanding under the 2021 Credit Agreement (as defined below) was $784.0 million under our Term B Loan (as defined below) and we had additional unused borrowing capacity under our 2021 Revolving Credit Facility (as defined below) of $249.3 million.
As of December 31, 2024, our total debt outstanding under the 2021 Credit Agreement (as defined below) was $776.0 million under our Term B Loan (as defined below) and we had additional unused borrowing capacity under our 2021 Revolving Credit Facility (as defined below) of $249.3 million.
Cypress Investor Holdings, L.P., GPE VIII CCC Co-Investment (Delaware) Limited Partnership and Advent International GPE VIII-C Limited Partnership (collectively, the “Advent Investor”) owns approximately 43.62% of our common stock based on the number of shares outstanding as of February 21, 2024. Under the Amended and Restated Registration and Shareholder Rights Agreement by and among Dragoneer Growth Opportunities Corp.
Cypress Investor Holdings, L.P., GPE VIII CCC Co-Investment (Delaware) Limited Partnership and Advent International GPE VIII-C Limited Partnership (collectively, the “Advent Investor”) owns approximately 21.22% of our common stock based on the number of shares outstanding as of February 18, 2025. Under the Amended and Restated Registration and Shareholder Rights Agreement by and among Dragoneer Growth Opportunities Corp.
Any interruptions or delays in our service, whether as a result of third-party error, our own error, fire, floods, earthquakes, acts of terrorism, power loss, telecommunications failures, break-ins and similar events, or security breaches, whether accidental or willful, could impair our ability to deliver our solutions to our customers, resulting in customer dissatisfaction, damage to our reputation, loss of customers and adverse impact to our operations and our business and could cause our revenue to decrease and/or our expenses to increase.
Any interruptions or delays in our service, whether as a result of third-party error, our own error, extreme weather or natural disasters, acts of terrorism, power loss, telecommunications failures, break-ins and similar events, or security breaches, whether accidental or willful, could impair our ability to deliver our solutions to our customers, resulting in customer dissatisfaction, damage to our reputation, loss of customers and adverse impact to our operations and our business and could cause our revenue to decrease and/or our expenses to increase.
With respect to the 2021 Revolving Credit Facility, beginning with the fiscal quarter ending March 31, 2022, the Company is subject to a springing first lien leverage test, tested each fiscal quarter, only if a minimum of 35.0% of the 2021 Revolving Credit Facility is (subject to certain exclusions set forth in the 2021 Credit Agreement) drawn at the end of such fiscal quarter.
With respect to the 2021 Revolving Credit Facility, the Company is subject to a springing first lien leverage test, tested each fiscal quarter, only if a minimum of 35.0% of the 2021 Revolving Credit Facility is (subject to certain exclusions set forth in the 2021 Credit Agreement) drawn at the end of such fiscal quarter.
We are currently in the process of migrating certain core information technology systems and customer-facing applications to third-party cloud providers.
We are currently in the process of migrating certain core IT systems and customer-facing applications to third-party cloud providers.
These responses could result in global business disruptions that adversely affect workforces, organizations, economies, and financial markets globally, leading to an economic downturn, increased market volatility, or other adverse macroeconomic conditions, any of which could impact our results of operations.
These responses could result in global business disruptions that adversely affect workforces, organizations, economies, and financial markets globally, leading to an economic downturn, increased market volatility, or other adverse macroeconomic conditions, any of which could impact our results of operations. Outbreaks, epidemics or pandemics may require modifications to our business.
Any of these events could materially impact our business, results of operations and financial condition. A downturn in the P&C insurance and automotive collision industries, claim volumes, or supporting economy, which are outside of our control, could adversely impact our results of operations.
Any of these events could materially impact our business, results of operations and financial condition. 15 A downturn in the insurance or automotive collision industries, claim volumes, or supporting economies, which are outside of our control, could adversely impact our results of operations.
The emerging availability of "off-the-shelf" artificial intelligence models may increase the ability of existing and new competitors to develop technology and applications which may compete with our solutions. Continuing intense competition could result in increased pricing pressure, increased sales and marketing expenses, and greater investments in research and development, each of which could negatively impact our profitability.
The emerging availability of “off-the-shelf” AI models may increase the ability of existing and new competitors to develop technology and applications which may compete with our solutions. Continuing intense competition could result in increased pricing pressure, increased sales and marketing expenses, and greater investments in research and development, each of which could negatively impact our profitability.
The impact of a public health outbreak, epidemic or pandemic, including a resurgence in the COVID-19 pandemic, on the global economy could decrease technology spending by our existing and prospective customers and adversely affect their demand for our solutions.
The impact of a public health outbreak, epidemic or pandemic on the global economy could decrease technology spending by our existing and prospective customers and adversely affect their demand for our solutions.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties . Our corporate headquarters are located at 167 N. Green Street, Chicago, Illinois, where we occupy approximately 141,000 square feet of office space pursuant to a lease that expires in 2037. We maintain additional leased office spaces in various locations in the United States and China pursuant to leases that expire between 2024 and 2029.
Biggest changeItem 2. Properties . Our corporate headquarters are located at 167 N. Green Street, Chicago, Illinois, where we occupy approximately 141,000 square feet of office space pursuant to a lease that expires in 2037. We maintain additional leased office spaces in various locations in the United States and China pursuant to leases that expire between 2025 and 2029.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeSee Note 24 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. Item 4. Mine Safety Disclosures . Not applicable. 35 PART II
Biggest changeSee Note 23 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information. Item 4. Mine Safety Disclosures . Not applicable. 35 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeOur board of directors may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our shareholders or by our subsidiaries to us and such other factors as our board of directors may deem relevant.
Biggest changeOur Board may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions and implications on the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as our Board may deem relevant.
The graph assumes an initial investment of $100 in Dragoneer’s Class A ordinary shares at the market close on October 6, 36 2020. Such returns are based on historical results and are not intended to suggest future performance. Data for the NASDAQ Composite Index and S&P 500 Index assume reinvestment of dividends. Item 6. Reserved. 37
The graph assumes an initial investment of $100 in Dragoneer’s Class A ordinary shares at the market close on October 6, 2020. Such returns are based on historical results and are not intended to suggest future performance. Data for the NASDAQ Composite Index and S&P 500 Index assume reinvestment of dividends. Item 6. Reserved. 36
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933 or the Exchange Act.
Stock Performance Graph This performance graph shall not be deemed “soliciting material” or to be “filed” with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act or the Exchange Act.
Dividends We have no current plans to pay cash dividends. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our board of directors.
Dividends We have no current plans to pay cash dividends. The declaration, amount and payment of any future dividends on shares of our common stock will be at the sole discretion of our Board.
The following graph shows a comparison of the cumulative total return for our common stock, the NASDAQ Composite Index, and the Standard & Poor’s (S&P) 500 Index for the period from October 6, 2020, the first day Dragoneer’s Class A ordinary shares were traded on a stand-alone basis following its initial public offering through December 31, 2023.
The following graph shows a comparison of the cumulative total return for our common stock, the NASDAQ Composite Index, and the Standard & Poor’s (S&P) 500 Index for the period from October 6, 2020, the first day Dragoneer’s Class A ordinary shares were traded on a stand-alone basis following its initial public offering through December 31, 2024.
For the period between October 6, 2020 through July 30, 2021 the figures relate to Dragoneer’s Class A ordinary shares, and for the period between July 30, 2021 through December 31, 2023, the figures relate to CCC’s common stock.
For the period between October 6, 2020 through July 30, 2021 the figures relate to Dragoneer’s Class A ordinary shares, and for the period between July 30, 2021 through December 31, 2024, the figures relate to CCC’s common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Secur ities. Securities Our common stock is listed on Nasdaq under the symbol “CCCS”. As of February 21, 2024, we had 33 holders of record of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Secur ities. Securities Our common stock is listed on Nasdaq under the symbol “CCCS”. As of February 18, 2025, we had 164 holders of record of our common stock.
Removed
Purchases of Equity Securities by the Issuer The table below presents our purchases of common stock during the three months ended December 31, 2023: Period Total Number of Shares Purchased Average Purchase Price per Share (1) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 2023 — — — — November 2023 32,500,000 $ 10.10625 — — December 2023 — — — — 32,500,000 $ 10.10625 — — (1) Excludes any fees, commissions or other expenses associated with the share repurchases.
Added
Purchases of Equity Securities by the Issuer None.
Removed
See Note 19 Capital Stock – Common Stock – Secondary Offering and Stock Repurchase to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.

Item 7. Management's Discussion & Analysis

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

119 edited+17 added−41 removed85 unchanged
Biggest changeWe expect to maintain this full valuation allowance for the foreseeable future. 42 Results of Operations Comparison of Fiscal Year Ended December 31, 2023 to Fiscal Year Ended December 31, 2022 Year Ended December 31, Change (dollar amounts in thousands, except share and per share data) 2023 2022 $ % Revenues $ 866,378 $ 782,448 $ 83,930 10.7 % Cost of revenues, exclusive of amortization and impairment of acquired technologies 203,324 187,001 16,323 8.7 % Amortization of acquired technologies 26,464 26,938 (474 ) -1.8 % Impairment of acquired technologies 431 — 431 NM Cost of revenues (1) 230,219 213,939 16,280 7.6 % Gross profit 636,159 568,509 67,650 11.9 % Operating expenses: Research and development (1) 173,106 156,957 16,149 10.3 % Selling and marketing (1) 140,851 119,594 21,257 17.8 % General and administrative (1) 191,844 167,758 24,086 14.4 % Amortization of intangible assets 71,972 72,278 (306 ) -0.4 % Impairment of goodwill 77,405 — 77,405 NM Impairment of intangible assets 4,906 — 4,906 NM Total operating expenses 660,084 516,587 143,497 27.8 % Operating (loss) income (23,925 ) 51,922 (75,847 ) NM Other (expense) income, net: Interest expense (63,577 ) (38,990 ) (24,587 ) -63.1 % Interest income 16,252 908 15,344 NM Change in fair value of warrant liabilities (15,096 ) 26,073 (41,169 ) NM Gain on sale of cost method investment — 3,587 (3,587 ) -100.0 % Other income, net 1,799 6,362 (4,563 ) -71.7 % Total other (expense) income, net (60,622 ) (2,060 ) (58,562 ) -2842.8 % Pretax (loss) income (84,547 ) 49,862 (134,409 ) NM Income tax provision (5,524 ) (11,456 ) 5,932 51.8 % Net (loss) income including non-controlling interest $ (90,071 ) $ 38,406 $ (128,477 ) NM Less: accretion of redeemable non-controlling interest (2,405 ) — (2,405 ) NM Net (loss) income attributable to CCC Intelligent Solutions Holdings Inc.'s Common Stockholders $ (92,476 ) $ 38,406 $ (130,882 ) NM Net (loss) income per share attributable to common stockholders: Basic $ (0.15 ) $ 0.06 Diluted $ (0.15 ) $ 0.06 Weighted-average shares used in computing net (loss) income per share attributable to common stockholders: Basic 617,889,384 607,760,886 Diluted 617,889,384 642,841,596 NM—Not Meaningful (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2023 2022 Cost of revenues $ 8,802 $ 5,812 Research and development 25,467 19,536 Sales and marketing 33,204 25,309 General and administrative 77,045 58,840 Total stock-based compensation expense $ 144,518 $ 109,497 Revenues Revenue increased by $83.9 million to $866.4 million, or 10.7%, for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Biggest changeResults of Operations Comparison of Fiscal Year Ended December 31, 2024 to Fiscal Year Ended December 31, 2023 Year Ended December 31, Change (dollar amounts in thousands, except share and per share data) 2024 2023 $ % Revenues $ 944,800 $ 866,378 $ 78,422 9.1 % Cost of revenues, exclusive of amortization and impairment of acquired technologies 221,997 203,324 18,673 9.2 % Amortization of acquired technologies 9,000 26,464 (17,464 ) -66.0 % Impairment of acquired technologies — 431 (431 ) NM Cost of revenues (1) 230,997 230,219 778 0.3 % Gross profit 713,803 636,159 77,644 12.2 % Operating expenses: Research and development (1) 201,493 173,106 28,387 16.4 % Selling and marketing (1) 142,217 140,851 1,366 1.0 % General and administrative (1) 218,220 191,844 26,376 13.7 % Amortization of intangible assets 71,768 71,972 (204 ) -0.3 % Impairment of goodwill — 77,405 (77,405 ) NM Impairment of intangible assets — 4,906 (4,906 ) NM Total operating expenses 633,698 660,084 (26,386 ) -4.0 % Operating income (loss) 80,105 (23,925 ) 104,030 NM Other (expense) income—net: Interest expense (64,608 ) (63,577 ) (1,031 ) -1.6 % Interest income 12,203 16,252 (4,049 ) -24.9 % Change in fair value of warrant liabilities 14,378 (15,096 ) 29,474 NM Other income—net 2,236 1,799 437 24.3 % Total other (expense) income—net (35,791 ) (60,622 ) 24,831 41.0 % Pretax income (loss) 44,314 (84,547 ) 128,861 NM Income tax provision (13,074 ) (5,524 ) (7,550 ) -136.7 % Net income (loss) including non-controlling interest $ 31,240 $ (90,071 ) $ 121,311 NM Less: accretion of redeemable non-controlling interest (5,095 ) (2,405 ) (2,690 ) -111.9 % Net income (loss) attributable to CCC Intelligent Solutions Holdings Inc.'s Common Stockholders $ 26,145 $ (92,476 ) $ 118,621 NM Net income (loss) per share attributable to common stockholders: Basic $ 0.04 $ (0.15 ) Diluted $ 0.04 $ (0.15 ) Weighted-average shares used in computing net income (loss) per share attributable to common stockholders: Basic 610,761,424 617,889,384 Diluted 641,875,525 617,889,384 NM—Not Meaningful (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2024 2023 Cost of revenues $ 9,342 $ 8,802 Research and development 47,191 25,467 Sales and marketing 28,083 33,204 General and administrative 86,422 77,045 Total stock-based compensation expense $ 171,038 $ 144,518 Revenues 42 Revenue increased by $78.4 million to $944.8 million, or 9.1%, for the year ended December 31, 2024, compared to the year ended December 31, 2023.
See our reconciliation of net (loss) income to Adjusted EBITDA within the section titled “Non-GAAP Financial Measures.” Basis of Presentation The Company’s consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K include the accounts of the Company and its consolidated subsidiaries and were prepared in accordance with GAAP.
See our reconciliation of net income (loss) to Adjusted EBITDA within the section titled “Non-GAAP Financial Measures.” Basis of Presentation The Company’s consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K include the accounts of the Company and its consolidated subsidiaries and were prepared in accordance with GAAP.
Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in selling and marketing expenses on the consolidated statements of operations and comprehensive (loss) income.
Sales commissions for renewal contracts are deferred and then amortized on a straight-line basis over the related contractual renewal period. Amortization expense is included in selling and marketing expenses on the consolidated statements of operations and comprehensive income (loss).
Our Software NDR includes carriers and shops who subscribe to our auto physical damage solutions, which account for most of the Company’s revenue, and excludes revenue from smaller emerging solutions with international subsidiaries or other ecosystem solutions, such as parts suppliers and other automotive manufacturers, and also excludes CCC casualty solutions which are largely usage and professional service based.
Our Software NDR includes carriers and shops who subscribe to our auto physical damage solutions, which account for most of the Company’s revenue, and excludes revenue from smaller emerging solutions with international subsidiaries or other ecosystem solutions, such as parts suppliers and other automotive manufacturers, and excludes CCC casualty solutions which are largely usage and professional service based.
Sales commissions for initial contracts are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to generally be between three and five years. We determined the period of benefit by taking into consideration our customer contracts, our technology, 53 and other factors.
Sales commissions for initial contracts are deferred and then amortized on a straight-line basis over a period of benefit that we have determined to generally be between three and five years. We determined the period of benefit by taking into consideration our customer contracts, our technology, and other factors.
We expect research and development expenses, excluding stock-based compensation, to increase in absolute dollars as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions. Selling and Marketing Our selling and marketing expenses consist primarily of personnel-related costs for our sales and marketing functions, including sales commissions and stock-based compensation.
We expect research and development expenses to increase in absolute dollars as we continue to dedicate substantial resources to develop, improve and expand the functionality of our solutions. Selling and Marketing Our selling and marketing expenses consist primarily of personnel-related costs for our sales and marketing functions, including sales commissions and stock-based compensation.
Significant non-cash adjustments include stock-based compensation expense of $144.5 million, depreciation and amortization of $135.3 million, impairment of goodwill and intangible assets of $82.7 million, change in fair value of warrant liabilities of $15.1 million, change in fair value of derivative instruments of $5.7 million and deferred income tax benefits of ($46.3) million.
Significant non-cash adjustments include stock-based compensation expense of $144.5 million, depreciation and amortization of $135.3 million, impairment of goodwill and intangible assets of $82.7 million, change in fair value of warrant liabilities of $15.1 million, change in fair value of derivative instruments of $5.7 million and deferred income tax benefits of ($46.3) 49 million.
Our software integrates seamlessly with both legacy and modern systems alike and enables insurers to rapidly innovate on our platform. Our repair solutions help collision repair facilities achieve better performance throughout the collision repair cycle by digitizing processes to drive business growth, streamline operations, and improve repair quality.
Our software integrates seamlessly with both legacy and modern systems and enables insurers to rapidly innovate on our platform. Our repair solutions help collision repair facilities achieve better performance throughout the collision repair cycle by digitizing processes to drive business growth, streamline operations, and improve repair quality.
Operating expenses Operating expenses are categorized as follows: Research and Development Our research and development expenses consist primarily of personnel-related costs, including stock-based compensation, and costs of external development resources involved in the engineering, design and development of new solutions, as well as expenses associated with significant ongoing improvements to existing solutions.
Operating expenses 40 Operating expenses are categorized as follows: Research and Development Our research and development expenses consist primarily of personnel-related costs, including stock-based compensation, and costs of external development resources involved in the engineering, design and development of new solutions, as well as expenses associated with significant ongoing improvements to existing solutions.
The calculation excludes: (a) changes in estimates related to the timing of one-time revenue and other revenue, including professional services, and (b) annualized 39 software revenue for smaller customers with annualized software revenue below the threshold of $100,000 for carriers and $4,000 for shops.
The calculation excludes: (a) changes in estimates related to the timing of one-time revenue and other revenue, including professional services, and (b) annualized software revenue for smaller customers with annualized software revenue below the threshold of $100,000 for carriers and $4,000 for shops.
Impairment 41 Impairment consists of impairment charges recognized on our China reporting unit's goodwill and intangible assets during the year ended December 31, 2023. Non-operating income (expense) Non-operating income (expense) is categorized as follows: Interest Expense Interest expense comprises interest incurred on our indebtedness.
Impairment Impairment consists of impairment charges recognized on our China reporting unit’s goodwill and intangible assets during the year ended December 31, 2023. Non-operating income (expense) Non-operating income (expense) is categorized as follows: Interest Expense Interest expense comprises interest incurred on our indebtedness.
Most often with larger customers, a new contract or amended master agreement will not include a renewal period that requires assessment of whether the new business and renewal business commissions are commensurate.
Most often with larger customers, a new contract or amended master agreement will not include a renewal period that requires 50 assessment of whether the new business and renewal business commissions are commensurate.
Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Cautionary Note Regarding Forward-Looking Statements and Risk Factors” and “Risk Factors” as set forth elsewhere in this Annual Report on Form 10-K.
Our actual results could differ materially from the forward-looking statements included herein. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the section titled “Special Note Regarding Forward-Looking Statements and Risk Factors” and “Risk Factors” as set forth elsewhere in this Annual Report on Form 10-K.
For the years ended December 31, 2023, 2022 and 2021, the impact on revenue recognized in the respective period, from performance obligations partially or fully satisfied in the previous period, was not significant. Determine the amortizable life of contract assets Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer.
For the years ended December 31, 2024, 2023 and 2022, the impact on revenue recognized in the respective period, from performance obligations partially or fully satisfied in the previous period, was not significant. Determine the amortizable life of contract assets Sales commissions earned by our sales force are considered incremental and recoverable costs of obtaining a contract with a customer.
Quarter Ending 2023 2022 2021 Software GDR March 31 99% 99% 98% June 30 99% 99% 98% September 30 98% 99% 98% December 31 99% 99% 98% Key Factors Affecting Operating Results The following are key factors affecting our operating results in the years ending December 31, 2023, 2022 and 2021: • Conversion and implementation of new customers: We focus significant resources on attracting and onboarding new customers across the various segments of the P&C insurance economy we serve.
Quarter Ending 2024 2023 2022 Software GDR March 31 99% 99% 99% June 30 99% 99% 99% September 30 99% 98% 99% December 31 99% 99% 99% Key Factors Affecting Operating Results The following are key factors affecting our operating results in the years ending December 31, 2024, 2023 and 2022: • Conversion and implementation of new customers: We focus significant resources on attracting and onboarding new customers across the various segments of the P&C insurance economy we serve.
We have prioritized building a leading network around our automotive insurance and collision repair pillars to further digitize interactions and maximize value for our customers. We have tens of thousands of companies on our platform that participate in the insurance economy, including insurers, repairers, parts suppliers, automotive manufacturers, and financial institutions.
We have prioritized building a leading network around our automotive insurance and collision repair pillars to further digitize interactions and maximize value for our customers. We have tens of thousands of companies on our platform that participate in the insurance economy, including insurers, repairers, parts suppliers, and automotive manufacturers.
When a principal prepayment is required, the prepayment offsets the future quarterly principal payments of the same amount. As of December 31, 2023 and 2022, the Company's leverage ratio did not exceed the 3.5 threshold and the Company was not subject to the annual excess cash flow calculation, and as such, not required to make a prepayment of principal.
When a principal prepayment is required, the prepayment offsets the future quarterly principal payments of the same amount. As of December 31, 2024 and 2023, the Company’s leverage ratio did not exceed the 3.5 threshold and the Company was not subject to the annual excess cash flow calculation, and as such, not required to make a prepayment of principal.
While our position in the P&C insurance economy is grounded in the automotive insurance sector, the largest insurance sector in the U.S. representing nearly half of DWP, we believe our integrations and cloud platform are capable of driving innovation across the entire P&C insurance economy.
While our position in the insurance economy is grounded in the automotive insurance sector, the largest P&C insurance sector in the U.S. representing nearly half of P&C DWP, we believe our integrations and cloud platform are capable of driving innovation across the broader insurance economy.
Contractual Obligations and Commitments Our estimated future contractual obligations and commitments as of December 31, 2023 consist of: • Principal payments related to our long-term debt and related periodic interest payments; • Routine tax payments; • Operating lease liabilities; • Long-term licensing agreement; and • Other contractual purchase obligations.
Contractual Obligations and Commitments Our estimated future contractual obligations and commitments as of December 31, 2024 consist of: • Principal payments related to our long-term debt and related periodic interest payments; • Routine tax payments; • Operating lease liabilities; • Long-term licensing agreement; and • Other contractual purchase obligations.
Our solutions create value for each of these parties by enabling them to connect to our vast network to collaborate with other companies, streamline operations, and reduce processing costs and dollars lost through claims management inefficiencies, or claims leakage. Expanding our platform has added new layers of network effects, further accelerating the adoption of our software solutions.
Our solutions create value for each of these parties by connecting them with our vast network to collaborate with other companies, streamline operations, and reduce processing costs and dollars lost through claims management inefficiencies, or claims leakage. Expanding our platform has added new layers of network effects, further accelerating the adoption of our software solutions.
We have more than 300 insurers on our network, connecting with approximately 29,500 repair facilities through our multi-tenant cloud platform. We believe our software is the architectural backbone of insurance DRP systems and is a primary driver of material revenue for our collision shop customers and a source of material efficiencies for our insurance carrier customers.
We have more than 300 insurers on our network, connecting with more than 30,500 repair facilities through our multi-tenant cloud platform. We believe our software is the architectural backbone of insurance DRP systems and is a primary driver of material revenue for our collision repair shop customers and a source of material efficiencies for our insurance carrier customers.
Our technology investments are focused on digitizing complex processes and interactions across our ecosystem, and we believe we are well positioned to power the P&C insurance economy of the future with our data, network, and platform.
Our technology investments are focused on digitizing complex processes and interactions across our ecosystem, and we believe we are well positioned to power the insurance economy of the future with our data, network, and platform.
Business Overview Founded in 1980, CCC is a leading SaaS platform for the multi-trillion-dollar P&C insurance economy powering operations for insurers, repairers, automakers, part suppliers, lenders, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences.
Business Overview Founded in 1980, CCC is a leading SaaS platform for the multi-trillion-dollar insurance economy powering operations for insurers, repairers, automakers, part suppliers, and more. CCC cloud technology connects more than 35,000 businesses digitizing mission-critical workflows, commerce, and customer experiences.
On May 19, 2023, the Company entered into Amendment No. 1 to the 2021 Credit Agreement (the “Amendment”) to establish SOFR as the benchmark rate for determining the applicable interest rate, replacing LIBOR. No other terms, including the amount of borrowings, required payments or maturity date, were changed as a result of the Amendment.
In May 2023, the Company entered into Amendment No. 1 to the 2021 Credit Agreement (the “Amendment”) to establish SOFR as the benchmark rate for determining the applicable interest rate, replacing LIBOR. No other terms, including the amount of borrowings, required payments or maturity date, were changed as a result of the Amendment.
See Note 6 to our consolidated financial statements for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the fair value of our Private Warrants. Some of these assumptions involve inherent uncertainties and the application of significant judgment.
See Note 5 and Note 21 to our consolidated financial statements for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model to determine the fair value of our Private Warrants. Some of these assumptions involve inherent uncertainties and the application of significant judgment.
Our platform is designed to solve the "many-to-many" problem faced by the insurance economy. There are numerous internally and externally developed insurance software solutions in the market today, with the vast majority of applications focused on insurance-only use cases and not on serving the broader insurance ecosystem.
Our platform is designed to solve the “many-to-many” problem faced by the insurance economy. There are numerous internally and externally developed insurance software solutions in the market today, with the vast majority of applications focused on insurance-only use cases and not on serving the broader insurance ecosystem.
We have customer agreements with more than 300 insurers (including carriers, self-insurers and other entities processing insurance claims), including 27 of the top 30 automotive insurance carriers in the U.S., 38 based on DWP, and hundreds of regional carriers.
We have customer agreements with more than 300 insurers (including carriers, self-insurers and other entities processing insurance claims), including 26 of the top 30 automotive insurance carriers in the U.S., based on DWP, and hundreds of regional carriers.
We believe we have become a leading insurance and repair SaaS provider in the U.S. by increasing the depth and breadth of our SaaS offerings over many years. Our insurance solutions help insurance carriers manage mission-critical workflows across the claims lifecycle, while building smart, dynamic experiences for their own customers.
We believe we have become a leading insurance and repair SaaS provider in the U.S. by increasing the depth and breadth of our SaaS offerings over many years. Our insurance solutions help insurance carriers manage mission-critical workflows across the claims lifecycle, while building intelligent experiences for their customers.
In 2023, our national carrier customers included 27 of the top 30 automotive insurers based on DWP, with average customer relationships spanning more than 10 years, as evidenced by our historical Software GDR of 98%-99%. • Expansion of solution adoption from existing customers: A central part of our strategy is expanding solution adoption across our existing customer base.
In 2024, our 39 national carrier customers included 26 of the top 30 automotive insurers based on DWP, with average customer relationships spanning more than 10 years, as evidenced by our historical Software GDR of 98%-99%. • Expansion of solution adoption from existing customers: A central part of our strategy is expanding solution adoption across our existing customer base.
We expect our general and administrative expenses, excluding stock-based compensation, to increase in absolute dollars as we continue to expand our operations, hire additional personnel, and incur costs to support the growth of our business. Amortization of Intangible Assets Our amortization of intangible assets consists of the capitalized costs of customer relationships in connection with business acquisitions.
We expect our general and administrative expenses to increase in absolute dollars as we continue to expand our operations, hire additional personnel, and incur costs to support the growth of our business. Amortization of Intangible Assets Our amortization of intangible assets consists of the capitalized costs of customer relationships in connection with business acquisitions.
There was no impairment charge recorded during the years ended December 31, 2022 and 2021. Stock-based Compensation The Company accounts for stock-based compensation plans in accordance with ASC 718, Compensation—Stock Compensation , which requires the recognition of expense measured based on the grant date fair value of the stock-based awards.
There was no impairment charge recorded during the year ended December 31, 2022. Stock-based Compensation The Company accounts for stock-based compensation plans in accordance with ASC 718, Compensation—Stock Compensation , which requires the recognition of expense measured based on the grant date fair value of the stock-based awards.
Quarter Ending 2023 2022 2021 Software NDR March 31 106% 114% 106% June 30 107% 111% 110% September 30 107% 110% 113% December 31 108% 106% 115% Software GDR We believe that Software GDR provides our management and our investors with insight into the value our solutions provide to our customers as represented by our ability to retain our existing customer base.
Quarter Ending 2024 2023 2022 Software NDR March 31 107% 106% 114% June 30 107% 107% 111% September 30 106% 107% 110% December 31 105% 108% 106% Software GDR We believe that Software GDR provides our management and our investors with insight into the value our solutions provide to our customers as represented by our ability to retain our existing customer base.
We believe that maintaining our software solution leadership is imperative to our growth plan. As a result, we intend to continue making significant investments in research and development to improve and expand our software solutions. Our research and development expenses totaled $173.1 million, $157.0 million and $166.0 million in the years ended December 31, 2023, 2022 and 2021, respectively.
We believe that maintaining our software solution leadership is imperative to our growth plan. As a result, we intend to continue making significant investments in research and development to improve and expand our software solutions. Our research and development expenses totaled $201.5 million, $173.1 million and $157.0 million in the years ended December 31, 2024, 2023 and 2022, respectively.
The increase in revenue was primarily a result of an 8% growth from existing customer upgrades and expanding solution offerings to these existing customers as well as 3% growth from new customers.
The increase in revenue was primarily a result of 6% growth from existing customer upgrades and expanding solution offerings to these existing customers as well as 3% growth from new customers.
The estimates and assumptions requiring significant judgment under our revenue recognition policy in accordance with ASC 606, Revenue from Contracts with Customers , are as follows: Determine the transaction price The transaction price is determined based on the consideration to which we expect to be entitled in exchange for services to the customer.
The estimates and assumptions requiring significant judgment under our revenue recognition policy in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , are as follows: Determine the transaction price The transaction price is determined based on the consideration to which we expect to be entitled in exchange for services to the customer.
Adjusted Gross Profit is defined as gross profit adjusted for amortization of acquired technologies, stock-based compensation and related employer payroll tax, impairment of acquired technologies, contract termination costs, and Business Combination transaction and related costs.
Adjusted Gross Profit is defined as gross profit adjusted for amortization of acquired technologies, stock-based compensation and related employer payroll tax, impairment of acquired technologies and contract termination costs.
Additional expenses include advertising costs, marketing costs and event costs, including the Company’s annual industry conference. We expect our selling and marketing expenses, excluding stock-based compensation, to increase in absolute dollars as we continue to increase investments to support the growth of our business.
Additional expenses include advertising costs, marketing costs and event costs, including the Company’s annual industry conference. We expect our selling and marketing expenses to increase in absolute dollars as we continue to increase investments to support the growth of our business.
Debt On September 21, 2021, CCC Intelligent Solutions Inc., an indirect wholly owned subsidiary of the Company, together with certain of the Company’s subsidiaries acting as guarantors entered into a credit agreement (the "2021 Credit Agreement").
Debt On September 21, 2021, CCC Intelligent Solutions Inc., an indirect wholly owned subsidiary of the Company, together with certain of the Company’s subsidiaries acting as guarantors entered into a credit agreement (as subsequently amended, the “2021 Credit Agreement”).
Beginning with fiscal year ended December 31, 2022, if the Company's leverage ratio, as defined in the 2021 Credit Agreement is greater than 3.5, the Term B Loan requires a prepayment of principal, subject to certain exceptions, in connection with the receipt of proceeds from certain asset sales, casualty events, and debt issuances by the Company, and up to 50% of annual excess cash flow, as defined in and as further set forth in the 2021 Credit Agreement.
If the Company’s leverage ratio, as defined in the 2021 Credit Agreement is greater than 3.5, the Term B Loan requires a prepayment of principal, subject to certain exceptions, in connection with the receipt of proceeds from certain asset sales, casualty events, and debt issuances by the Company, and up to 50% of annual excess cash flow, as defined in and as further set forth in the 2021 Credit Agreement.
Our cost of revenues is primarily comprised of personnel costs, including stock-based compensation and costs of external resources used in the delivery of services to customers, including software configuration, integration services, and customer support activities, third party costs related to hosting the Company's software for its customers, internal support of production infrastructure, information technology (“IT”) security and production environment expenses, depreciation expense, cost of software production, and license and royalty fees paid to third parties.
Our cost of revenues is primarily comprised of personnel costs, including stock-based compensation and costs of external resources used in the delivery of services to customers, including software configuration, integration and implementation services, and customer support activities, third party costs related to hosting the Company’s software for its customers, internal support of production infrastructure, IT security and production environment expenses, depreciation expense, cost of software production, and professional service, license and royalty fees paid to third parties.
Free Cash Flow is defined as net cash provided by operating activities less cash used for the purchases of software, equipment and property, and purchase of intangible assets.
Free Cash Flow is defined as net cash provided by operating activities less cash used for the purchases of software, equipment and property.
Our AI solutions increase automation across existing insurance and repair processes including vehicle damage detection, claim triage, claim handling, repair estimating, intelligent claim review and claim subrogation. We deliver real-world AI with more than 100 U.S. auto insurers and more than 1,000 U.S. collision repairers actively using AI-powered solutions in production environments.
Our AI solutions streamline existing insurance and repair processes including vehicle damage detection, claim triage, claim handling, repair estimating, intelligent claim review, and claim subrogation. We deliver real-world AI with more than 100 U.S. auto insurers and more than 10,000 U.S. collision repairers actively using AI-powered solutions in production environments.
Management's Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2022, filed on March 1, 2023, for the discussion of the comparison of the year ended December 31, 2022 to the year ended December 31, 2021, the earliest of the three fiscal years presented in the consolidated financial statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations located in our Annual Report on Form 10-K for the year ended December 31, 2023, filed on February 28, 2024, for the discussion of the comparison of the year ended December 31, 2023 to the year ended December 31, 2022, the earliest of the three fiscal years presented in the consolidated financial statements.
As a result of adverse macroeconomic impacts due to changes in market conditions and increases in interest rates, which contributed to downward revisions to future projected earnings and cash flows, we performed an interim quantitative goodwill test of our China reporting unit during the three months ended June 30, 2023.
During May 2023, as a result of adverse macroeconomic impacts due to changes in market conditions and increases in interest rates, which contributed to downward revisions to future projected earnings and cash flows, we performed an interim quantitative goodwill test of our China reporting unit.
The income tax provision for the year ended December 31, 2023 was primarily due to the Company's taxable income, after the effect of permanent differences related to stock-based compensation expense and the impairment of certain intangible assets. The income tax provision for the year ended December 31, 2022 was due to the Company's pretax income.
The income tax provision for the year ended December 31, 2023 was primarily due to the Company’s taxable income, after the effect of permanent differences related to stock-based compensation expense and the impairment of certain intangible assets. Comparison of Fiscal Year Ended December 31, 2023 to Fiscal Year Ended December 31, 2022 Refer to Item 7.
Change in Fair Value of Warrant Liabilities We recognized expense of $15.1 million from a change in fair value of warrant liabilities for the year ended December 31, 2023, compared to income of $26.1 million for the year ended December 31, 2022.
Change in Fair Value of Warrant Liabilities We recognized income of $14.4 million from a change in fair value of warrant liabilities for the year ended December 31, 2024, compared to expense of $15.1 million for the year ended December 31, 2023.
Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of the Company’s and its subsidiaries’ consolidated first lien net indebtedness to the Company’s and its subsidiaries’ consolidated EBITDA for applicable periods specified in the 2021 Credit Agreement.
Borrowings under the 2021 Credit Facilities bear interest at rates based on the ratio of CCC Intelligent Solutions Inc. and certain of its subsidiaries’ consolidated first lien net indebtedness to consolidated EBITDA for applicable periods specified in the 2021 Credit Agreement.
Net cash used in financing activities was due to a $328.5 million repurchase of common stock, $16.7 million of payroll tax payments related to the net share settlement of equity awards, and $8.0 million of long-term debt payments, partially offset by $25.4 million of proceeds from stock options exercises and $4.8 million of proceeds from shares purchased through the Company's Employee Stock Purchase Plan. 2022 Net cash provided by operating activities was $199.9 million for the year ended December 31, 2022.
Net cash used in financing activities was due to a $328.5 million repurchase of common stock, $16.7 million of payroll tax payments related to the net share settlement of equity awards, and $8.0 million of long-term debt payments, partially offset by $25.4 million of proceeds from stock options exercises and $4.8 million of proceeds from shares purchased through the Company's Employee Stock Purchase Plan.
Some of these assumptions involve inherent uncertainties and the application of significant judgment. As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation could be materially different. Valuation of Warrant Liabilities We account for our Private Warrants in accordance with the guidance contained in ASC 815-40.
As a result, if factors or expected outcomes change and we use significantly different assumptions or estimates, our stock-based compensation could be materially different. Valuation of Warrant Liabilities We account for our Private Warrants in accordance with the guidance contained in ASC 815-40.
Adjusted EBITDA is defined as net (loss) income adjusted for interest, taxes, amortization, depreciation, stock-based compensation expense and related employer payroll tax, goodwill and intangible asset impairment charges, change in fair value of warrant liabilities, change in fair value of derivative instruments, change in fair value of interest rate swap agreements, litigation costs in legal matters in which the Company is the plaintiff, M&A and integration costs, Business Combination transaction and related costs, including secondary offering costs, income from derivative instruments, lease abandonment charges, contract termination costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, change in fair value of contingent consideration, (income) costs related to divestiture, net, gain on sale of cost method investment, and loss on early extinguishment of debt.
Adjusted EBITDA is defined as net income (loss) adjusted for interest, taxes, amortization, depreciation, stock-based compensation expense and related employer payroll tax, costs associated with the acquisition and integration of completed and potential M&A, litigation costs in legal matters in which we are the plaintiff and related antitrust matters, equity transaction and related costs, including secondary offering costs, change in fair value of contingent consideration, change in fair value of warrant liabilities, change in fair value of derivative instruments, income from derivative instruments, goodwill and intangible asset impairment charges, lease abandonment charges, contract termination costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, gain on sale of cost method investment and income related to divestiture, net.
Adjusted Operating Income is defined as operating (loss) income adjusted for amortization, stock-based compensation expense and related employer payroll tax, goodwill and intangible asset impairment charges, lease abandonment charges, contract termination costs, M&A and integration costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, Business Combination transaction and related costs, including secondary offering costs, litigation costs in legal matters in which the Company is the plaintiff, change in fair value of contingent consideration and (income) costs related to divestiture, net. 46 The following table reconciles operating (loss) income to Adjusted Operating Income for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, (dollar amounts in thousands) 2023 2022 2021 Operating (loss) income $ (23,925 ) $ 51,922 $ (144,675 ) Amortization of intangible assets 71,972 72,278 72,358 Amortization of acquired technologies—Cost of revenue 26,464 26,938 26,320 Stock-based compensation expense and related employer payroll tax 147,707 111,865 261,995 Goodwill and intangible asset impairment charges 82,742 — — Plaintiff litigation costs 5,068 894 — M&A and integration costs 3,372 1,772 — Business combination transaction and related costs, including secondary offering costs 2,031 1,330 12,385 Lease abandonment — 6,137 2,582 Contract termination costs — 3,248 — Lease overlap costs — 1,338 3,697 Change in fair value of contingent consideration — (100 ) — (Income) costs related to divestiture, net — (877 ) 2,177 Adjusted operating income $ 315,431 $ 276,745 $ 236,839 Adjusted EBITDA We believe that Adjusted EBITDA, as defined below, is useful in evaluating our operational performance distinct and apart from financing costs, certain expenses that may not be indicative of our recurring core business operating results and non-operational expenses.
Adjusted Operating Income is defined as operating income (loss) adjusted for amortization, stock-based compensation expense and related employer payroll tax, costs associated with the acquisition and integration of completed and potential M&A, litigation costs in legal matters in which we are the plaintiff and related antitrust matters, equity transaction and related costs, including secondary offering costs, change in fair value of contingent consideration, goodwill and intangible asset impairment charges, lease abandonment charges, contract termination costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease and income related to divestiture, net. 45 The following table reconciles operating income (loss) to Adjusted Operating Income for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (dollar amounts in thousands) 2024 2023 2022 Operating income (loss) $ 80,105 $ (23,925 ) $ 51,922 Amortization of intangible assets 71,768 71,972 72,278 Amortization of acquired technologies—Cost of revenue 9,000 26,464 26,938 Stock-based compensation expense and related employer payroll tax 177,808 147,707 111,865 M&A and integration costs 9,193 3,372 1,772 Litigation costs 4,455 5,068 894 Equity transaction costs, including secondary offering costs 1,938 2,031 1,330 Change in fair value of contingent consideration (100 ) — (100 ) Goodwill and intangible asset impairment charges — 82,742 — Lease abandonment — — 6,137 Contract termination costs — — 3,248 Lease overlap costs — — 1,338 Income related to divestiture, net — — (877 ) Adjusted operating income $ 354,167 $ 315,431 $ 276,745 Adjusted EBITDA We believe that Adjusted EBITDA, as defined below, is useful in evaluating our operational performance distinct and apart from financing costs, certain expenses that may not be indicative of our recurring core business operating results and non-operational expenses.
The Adjusted Gross Margin is defined as Adjusted Gross Profit divided by Revenue. 45 The following table reconciles Gross Profit to Adjusted Gross Profit for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, (amounts in thousands, except percentages) 2023 2022 2021 Gross Profit $ 636,159 $ 568,509 $ 492,633 Amortization of acquired technologies 26,464 26,938 26,320 Stock-based compensation and related employer payroll tax 9,129 6,090 13,644 Impairment of acquired technologies 431 — — Contract termination costs — 3,248 — Business combination transaction and related costs — — 905 Adjusted Gross Profit $ 672,183 $ 604,785 $ 533,502 Gross Profit Margin 73 % 73 % 72 % Adjusted Gross Profit Margin 78 % 77 % 78 % Adjusted Operating Expenses We believe that Adjusted Operating Expenses, as defined below, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.
The Adjusted Gross Margin is defined as Adjusted Gross Profit divided by Revenue. 44 The following table reconciles Gross Profit to Adjusted Gross Profit for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (amounts in thousands, except percentages) 2024 2023 2022 Gross Profit $ 713,803 $ 636,159 $ 568,509 Amortization of acquired technologies 9,000 26,464 26,938 Stock-based compensation and related employer payroll tax 9,943 9,129 6,090 Impairment of acquired technologies — 431 — Contract termination costs — — 3,248 Adjusted Gross Profit $ 732,746 $ 672,183 $ 604,785 Gross Profit Margin 76 % 73 % 73 % Adjusted Gross Profit Margin 78 % 78 % 77 % Adjusted Operating Expenses We believe that Adjusted Operating Expenses, as defined below, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.
The following table reconciles operating expenses to Adjusted Operating Expenses for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, (dollar amounts in thousands) 2023 2022 2021 Operating expenses $ 660,084 $ 516,587 $ 637,308 Amortization of intangible assets (71,972 ) (72,278 ) (72,358 ) Stock-based compensation expense and related employer payroll tax (138,578 ) (105,775 ) (248,351 ) Goodwill and intangible asset impairment charges (82,311 ) — — Plaintiff litigation costs (5,068 ) (894 ) — M&A and integration costs (3,372 ) (1,772 ) — Business combination transaction and related costs, including secondary offering costs (2,031 ) (1,330 ) (11,480 ) Lease abandonment — (6,137 ) (2,582 ) Lease overlap costs — (1,338 ) (3,697 ) Change in fair value of contingent consideration — 100 — Income (costs) related to divestiture, net — 877 (2,177 ) Adjusted operating expenses $ 356,752 $ 328,040 $ 296,663 Adjusted Operating Income We believe that Adjusted Operating Income, as defined below, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.
The following table reconciles operating expenses to Adjusted Operating Expenses for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (dollar amounts in thousands) 2024 2023 2022 Operating expenses $ 633,698 $ 660,084 $ 516,587 Amortization of intangible assets (71,768 ) (71,972 ) (72,278 ) Stock-based compensation expense and related employer payroll tax (167,865 ) (138,578 ) (105,775 ) M&A and integration costs (9,193 ) (3,372 ) (1,772 ) Litigation costs (4,455 ) (5,068 ) (894 ) Equity transaction costs, including secondary offering costs (1,938 ) (2,031 ) (1,330 ) Change in fair value of contingent consideration 100 — 100 Goodwill and intangible asset impairment charges — (82,311 ) — Lease abandonment — — (6,137 ) Lease overlap costs — — (1,338 ) Income related to divestiture, net — — 877 Adjusted operating expenses $ 378,579 $ 356,752 $ 328,040 Adjusted Operating Income We believe that Adjusted Operating Income, as defined below, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.
Adjusted Operating Expenses is defined as operating expenses adjusted for amortization of intangible assets, stock-based compensation expense and related employer payroll tax, goodwill and intangible asset impairment charges, litigation costs in legal matters in which the Company is the plaintiff, merger and acquisition ("M&A") and integration costs, Business Combination transaction and related costs, including secondary offering costs, lease abandonment charges, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, change in fair value of contingent consideration and income (costs) related to divestiture, net.
Adjusted Operating Expenses is defined as operating expenses adjusted for amortization of intangible assets, stock-based compensation expense and related employer payroll tax, costs associated with the acquisition and integration of completed and potential mergers and acquisitions (“M&A”), litigation costs in legal matters in which we are the plaintiff and related antitrust matters, equity transaction and related costs, including secondary offering costs, change in fair value of contingent consideration, goodwill and intangible asset impairment charges, lease abandonment charges, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease and income related to divestiture, net.
Key Performance Measures and Operating Metrics In addition to our GAAP and non-GAAP financial measures, we rely on Software Net Dollar Retention Rate (“Software NDR”) and Software Gross Dollar Retention Rate (“Software GDR”) to measure and evaluate our business to make strategic decisions.
The Swap Agreements expire on July 31, 2027. 38 Key Performance Measures and Operating Metrics In addition to our GAAP and non-GAAP financial measures, we rely on Software Net Dollar Retention Rate (“Software NDR”) and Software Gross Dollar Retention Rate (“Software GDR”) to measure and evaluate our business and to make strategic decisions.
The following table reconciles net (loss) income to Adjusted EBITDA for the years ended December 31, 2023, 2022 and 2021: 47 Year ended December 31, (dollar amounts in thousands) 2023 2022 2021 Net (loss) income $ (90,071 ) $ 38,406 $ (248,919 ) Interest expense 63,577 38,990 58,990 Interest income (16,252 ) (908 ) — Income tax provision (benefit) 5,524 11,456 (26,000 ) Amortization of intangible assets 71,972 72,278 72,358 Amortization of acquired technologies—Cost of revenue 26,464 26,938 26,320 Depreciation and amortization related to software, equipment and property 8,577 10,161 12,511 Depreciation and amortization related to software, equipment and property—Cost of revenue 28,325 17,772 11,940 Stock-based compensation expense and related employer payroll tax 147,707 111,865 261,995 Goodwill and intangible asset impairment charges 82,742 — — Change in fair value of warrant liabilities 15,096 (26,073 ) 64,501 Change in fair value of derivative instruments 5,743 (5,663 ) — Change in fair value of interest rate swap agreements — — (8,373 ) Income from derivative instruments (6,460 ) — — Plaintiff litigation costs 5,068 894 — M&A and integration costs 3,372 1,772 — Business combination transaction and related costs, including secondary offering costs 2,031 1,330 12,385 Lease abandonment — 6,137 2,582 Contract termination costs — 3,248 — Lease overlap costs — 1,338 3,697 Change in fair value of contingent consideration — (100 ) — Gain on sale of cost method investment — (3,587 ) — (Income) costs related to divestiture, net — (877 ) 2,177 Loss on early extinguishment of debt — — 15,240 Adjusted EBITDA $ 353,415 $ 305,377 $ 261,404 Adjusted EBITDA Margin 41 % 39 % 38 % Adjusted Net Income and Adjusted Earnings Per Share We believe that Adjusted Net Income, as defined below, and Adjusted Earnings Per Share are useful in evaluating our operational performance distinct and apart from certain expenses that may not be indicative of our recurring core business operating results.
The following table reconciles net income (loss) to Adjusted EBITDA for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (dollar amounts in thousands) 2024 2023 2022 Net income (loss) $ 31,240 $ (90,071 ) $ 38,406 Interest expense 64,608 63,577 38,990 Interest income (12,203 ) (16,252 ) (908 ) Income tax provision 13,074 5,524 11,456 Amortization of intangible assets 71,768 71,972 72,278 Amortization of acquired technologies—Cost of revenue 9,000 26,464 26,938 Depreciation and amortization related to software, equipment and property 8,774 8,577 10,161 Depreciation and amortization related to software, equipment and property—Cost of revenue 34,134 28,325 17,772 Stock-based compensation expense and related employer payroll tax 177,808 147,707 111,865 M&A and integration costs 9,193 3,372 1,772 Litigation costs 4,455 5,068 894 Equity transaction costs, including secondary offering costs 1,938 2,031 1,330 Change in fair value of contingent consideration (100 ) — (100 ) Change in fair value of warrant liabilities (14,378 ) 15,096 (26,073 ) Change in fair value of derivative instruments 5,233 5,743 (5,663 ) Income from derivative instruments (7,167 ) (6,460 ) — Goodwill and intangible asset impairment charges — 82,742 — Lease abandonment — — 6,137 Contract termination costs — — 3,248 Lease overlap costs — — 1,338 Gain on sale of cost method investment — — (3,587 ) Income related to divestiture, net — — (877 ) Adjusted EBITDA $ 397,377 $ 353,415 $ 305,377 Adjusted EBITDA Margin 42 % 41 % 39 % 46 Adjusted Net Income and Adjusted Earnings Per Share We believe that Adjusted Net Income, as defined below, and Adjusted Earnings Per Share are useful in evaluating our operational performance distinct and apart from certain expenses that may not be indicative of our recurring core business operating results.
One of the primary obstacles facing the P&C insurance economy is increasing complexity. Complexity in the P&C insurance economy is driven by technological advancements, IoT data, new business models, supply chain disruption and changing consumer expectations. We believe digitization plays a critical role in managing this growing complexity while meeting consumer expectations.
One of the primary obstacles facing the insurance economy is increasing complexity which is driven by technological advancements, supply-chain disruption, social inflation, medical inflation, and IOT data. We believe digitization plays a critical role in managing this growing complexity while meeting consumer expectations.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities comprises fair value adjustments of the Public Warrants and Private Warrants assumed in connection with the Business Combination. In December 2021, we redeemed all of our outstanding Public Warrants and none were outstanding as of December 31, 2021 or during subsequent periods.
Change in Fair Value of Warrant Liabilities Change in fair value of warrant liabilities comprises fair value adjustments of the private warrants assumed in connection with the Business Combination. In May 2024, we redeemed all of our outstanding private warrants and none were outstanding as of December 31, 2024.
Our stock-based awards have service-based vesting, performance-based vesting and performance-based vesting subject to a market condition. 54 The grant date fair value of our service-based awards, excluding RSUs, is determined using the Black-Scholes option-pricing model. The fair value of each service-based and performance-based RSU is determined using the fair value of the underlying common stock on the date of grant.
The grant date fair value of our service-based awards, excluding RSUs, is determined using the Black-Scholes option-pricing model. The fair value of each service-based and performance-based RSU is determined using the fair value of the underlying common stock on the date of grant.
The increase in both gross profit and gross profit margin was primarily due to increased software subscription revenues and economies of scale resulting from fixed cost arrangements, partially offset by the increase in depreciation expense related to additional investments in platform and customer solution enhancements.
The increase in both gross profit and gross profit margin was primarily due to increased software subscription revenues, economies of scale resulting from fixed cost arrangements and lower amortization of acquired technologies, partially offset by the increase in depreciation expense related to additional investments in new and enhanced customer solutions and platform development.
Interest Rate Swaps —In June 2017, the Company entered into three floating to fixed interest rate swap agreements (“Swap Agreements”) to reduce its exposure to the variability from future cash flows resulting from interest rate risk related to its floating rate long-term debt.
Interest Rate Swaps In February 2025, the Company entered into two floating to fixed interest rate swap agreements (the "Swap Agreements") to reduce its exposure to the variability from future cash flows resulting from interest rate risk related to its floating rate long-term debt.
Net cash provided by financing activities was due to $27.7 million of proceeds from stock option exercises and $3.2 million of proceeds from shares purchased through the Company's Employee Stock Purchase Plan, partially offset by $8.0 million of principal payments of long-term debt and $5.0 million of tax payments related to the net share settlement of employee equity awards. 2021 Net cash provided by operating activities was $127.3 million for the year ended December 31, 2021.
Net cash used in financing activities was primarily due to $57.8 million of payments for employee tax liabilities related to the net share settlement of employee equity awards and $8.0 million of long-term debt payments, partially offset by $33.5 million of proceeds from stock option exercises and $5.7 million of proceeds from shares purchased through the Company’s Employee Stock Purchase Plan. 2023 Net cash provided by operating activities was $250.0 million for the year ended December 31, 2023.
Net cash provided by operating activities consists of net income of $38.4 million, adjusted for $175.4 million of non-cash items, $2.7 million for changes in working capital and ($16.7) million for the effect of changes in other operating assets and liabilities.
Net cash provided by operating activities consists of net income of $31.2 million, adjusted for $257.6 million of non-cash items, $(7.3) million for changes in working capital and $2.3 million for the effect of changes in other operating assets and liabilities.
The following table reconciles net cash provided by operating activities to Free Cash Flow for the years ended December 31, 2023, 2022 and 2021: Year ended December 31, (dollar amounts in thousands) 2023 2022 2021 Net cash provided by operating activities $ 250,033 $ 199,907 $ 127,335 Less: Purchases of software, equipment, and property (55,032 ) (47,951 ) (38,321 ) Less: Purchase of intangible assets — — (49 ) Free Cash Flow $ 195,001 $ 151,956 $ 88,965 Liquidity and Capital Resources We have financed our operations with cash flows from operations.
The following table reconciles net cash provided by operating activities to Free Cash Flow for the years ended December 31, 2024, 2023 and 2022: Year ended December 31, (dollar amounts in thousands) 2024 2023 2022 Net cash provided by operating activities $ 283,886 $ 250,033 $ 199,907 Less: Purchases of software, equipment, and property (53,012 ) (55,032 ) (47,951 ) Free Cash Flow $ 230,874 $ 195,001 $ 151,956 Liquidity and Capital Resources We have financed our operations with cash flows from operations.
The increase was due to an $11.1 million increase in IT related costs, an $8.5 million increase in personnel-related costs, including $5.9 million of stock-based compensation, and an $8.3 million increase in consulting and other professional service costs, partially offset by a $11.7 million increase in the amount of capitalized time on new and enhanced customer solutions and platform development.
The increase was primarily due to a $21.7 million increase in stock-based compensation, a $6.2 million increase in IT related costs, and a $3.3 million decrease in the amount of capitalized time on new and enhanced customer solutions and platform development, partially offset by a $1.9 million decrease in consulting and professional service costs.
The decrease was primarily due to an $11.4 million difference in the change in fair value of the interest rate cap derivative instruments, partially offset by a $6.5 million increase in income from the interest rate cap derivative instruments.
The increase was primarily due to a $0.7 million increase in income from the interest rate cap derivative instruments and a $0.5 million difference in the change in fair value of the interest rate cap derivative instruments, partially offset by a $0.8 million decrease in other income.
Year ended December 31, (dollar amounts in thousands) 2023 2022 2021 Net (loss) income $ (90,071 ) $ 38,406 $ (248,919 ) Amortization of intangible assets 71,972 72,278 72,358 Amortization of acquired technologies—Cost of revenue 26,464 26,938 26,320 Stock-based compensation expense and related employer payroll tax 147,707 111,865 261,995 Goodwill and intangible asset impairment charges 82,742 — — Change in fair value of warrant liabilities 15,096 (26,073 ) 64,501 Change in fair value of derivative instruments 5,743 (5,663 ) — Change in fair value of interest rate swap agreements — — (8,373 ) Plaintiff litigation costs 5,068 894 — M&A and integration costs 3,372 1,772 — Business combination transaction and related costs, including secondary offering costs 2,031 1,330 12,385 Lease abandonment — 6,137 2,582 Contract termination costs — 3,248 — Lease overlap costs — 1,338 3,697 Change in fair value of contingent consideration — (100 ) — (Income) costs related to divestiture, net — (877 ) 2,177 Gain on sale of cost method investment — (3,587 ) — Loss on early extinguishment of debt — — 15,240 Tax effect of adjustments (59,638 ) (51,495 ) (73,684 ) Adjusted net income $ 210,486 $ 176,411 $ 130,279 Adjusted net income per share attributable to common stockholders Basic $ 0.34 $ 0.29 $ 0.24 Diluted $ 0.32 $ 0.27 $ 0.23 Weighted average shares outstanding Basic 617,889,384 607,760,886 543,558,222 Diluted 651,587,360 642,841,596 575,619,243 Free Cash Flow We believe that Free Cash Flow, as defined below, provides meaningful supplemental information regarding our ability to generate cash and fund our operations and capital expenditures.
Year ended December 31, (dollar amounts in thousands) 2024 2023 2022 Net income (loss) $ 31,240 $ (90,071 ) $ 38,406 Amortization of intangible assets 71,768 71,972 72,278 Amortization of acquired technologies—Cost of revenue 9,000 26,464 26,938 Stock-based compensation expense and related employer payroll tax 177,808 147,707 111,865 M&A and integration costs 9,193 3,372 1,772 Litigation costs 4,455 5,068 894 Equity transaction costs, including secondary offering costs 1,938 2,031 1,330 Change in fair value of contingent consideration (100 ) — (100 ) Change in fair value of warrant liabilities (14,378 ) 15,096 (26,073 ) Change in fair value of derivative instruments 5,233 5,743 (5,663 ) Goodwill and intangible asset impairment charges — 82,742 — Lease abandonment — — 6,137 Contract termination costs — — 3,248 Lease overlap costs — — 1,338 Gain on sale of cost method investment — — (3,587 ) Income related to divestiture, net — — (877 ) Tax effect of adjustments (58,086 ) (59,638 ) (51,495 ) Adjusted net income $ 238,071 $ 210,486 $ 176,411 Adjusted net income per share attributable to common stockholders Basic $ 0.39 $ 0.34 $ 0.29 Diluted $ 0.37 $ 0.32 $ 0.27 Weighted average shares outstanding Basic 610,761,424 617,889,384 607,760,886 Diluted 641,875,525 651,587,360 642,841,596 Free Cash Flow We believe that Free Cash Flow, as defined below, provides meaningful supplemental information regarding our ability to generate cash and fund our operations and capital expenditures.
Borrowings under the 2021 Revolving Credit Facility did not exceed 35% of the aggregate commitments and the Company was not subject to the leverage test during the years ended December 31, 2023 and 2022. First Lien Credit Agreement —In April 2017, the Company entered into the First Lien Credit Agreement.
Borrowings under the 2021 Revolving Credit Facility did not exceed 35% of the aggregate commitments and the Company was not subject to the leverage test during the years ended December 31, 2024 and 2023.
As of December 31, 2023, the Company had an accumulated deficit totaling $1,126.5 million and $784.0 million principal outstanding on our term loan.
As of December 31, 2024, the Company had an accumulated deficit totaling $1,095.2 million and $776.0 million principal outstanding on our term loan.
Therefore, we used an expected dividend yield of zero. See Note 21 to our consolidated financial statements for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model and Monte Carlo simulation method to determine the estimated fair value of our stock-based awards with service vesting and performance vesting.
See Note 20 to our consolidated financial statements for more information concerning certain of the specific assumptions we used in applying the Black-Scholes option pricing model and Monte Carlo simulation method to determine the estimated fair value of our stock-based awards with service vesting and performance vesting. Some of these assumptions involve inherent uncertainties and the application of significant judgment.
The proceeds of the 2021 Credit Agreement were used to repay all outstanding borrowings under the First Lien Credit Agreement. 2021 Credit Agreement —The 2021 Credit Agreement consists of the $800.0 million term loan (the "Term B Loan") and a revolving credit facility for an aggregate principal amount of $250.0 million (the "2021 Revolving Credit Facility" and together with the Term B Loan, the "2021 Credit Facilities").
The proceeds of the 2021 Credit Agreement and cash on hand were used to repay all outstanding borrowings under the Company’s previous credit agreement. 2021 Credit Agreement —The 2021 Credit Agreement consists of an $800.0 million term loan (the “Term B Loan”) and a revolving credit facility for an aggregate principal amount of $250.0 million (the “2021 Revolving Credit Facility” and together with the Term B Loan, the “2021 Credit Facilities”).
The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment regarding estimates of the future cash flows associated with each asset.
The original estimate of an asset’s useful life and the impact of an event or circumstance on either an asset’s useful life or carrying value involve significant judgment regarding estimates of the future cash flows associated with each asset. There was no impairment charge recorded during the year ended December 31, 2024.
Adjusted Net Income is defined as net (loss) income adjusted for the after-tax effects of amortization, stock-based compensation expense and related employer payroll tax, income from derivative instruments, change in fair value of interest rate swap agreements, goodwill and intangible asset impairment charges, change in fair value of warrant liabilities, change in fair value of derivative instruments, litigation costs in legal matters in which the Company is the plaintiff, M&A and integration costs, Business Combination transaction and related costs, including secondary offering costs, lease abandonment charges, contract termination costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, change in fair value of contingent consideration, (income) costs related to divestiture, net, gain on sale of cost method investment, and loss on early extinguishment of debt. 48 The following table reconciles net (loss) income to Adjusted Net Income and Adjusted Earnings per Share for the years ended December 31, 2023, 2022 and 2021.
Adjusted Net Income is defined as net income (loss) adjusted for the after-tax effects of amortization, stock-based compensation expense and related employer payroll tax, costs associated with the acquisition and integration of completed and potential M&A, litigation costs in legal matters in which we are the plaintiff and related antitrust matters, equity transaction and related costs, including secondary offering costs, change in fair value of contingent consideration, change in fair value of warrant liabilities, change in fair value of derivative instruments, goodwill and intangible asset impairment charges. lease abandonment charges, contract termination costs, lease overlap costs for the incremental expenses associated with the Company’s new corporate headquarters prior to termination of its then existing headquarters’ lease, gain on sale of cost method investment and income related to divestiture, net.
Our stock-based awards include stock options, restricted stock units (“RSUs”), shares issued through our employee stock purchase program, and phantom shares. Stock-based payment awards that are settled in cash are accounted for as liabilities.
Our stock-based awards include stock options, restricted stock units (“RSUs”) and shares issued through our employee stock purchase program. Stock-based payment awards that are 51 settled in cash are accounted for as liabilities. Our stock-based awards have service-based vesting, performance-based vesting and performance-based vesting subject to a market condition.
Other Income-Net Other income-net consists primarily of changes in fair value of our interest rate cap derivative instruments and income received from our interest rate cap derivative instruments, as well as foreign currency transaction gains and losses related to the impact of transactions denominated in a foreign currency.
Other Income-Net Other income-net consists primarily of changes in fair value of our interest rate cap derivative instruments and income received from our interest rate cap derivative instruments, as well as foreign currency transaction gains and losses related to the impact of transactions denominated in a foreign currency. 41 Income Tax Provision Income tax provision consists of U.S. federal and state income taxes and income taxes in certain foreign jurisdictions in which we conduct business.
Other Income-Net Other income-net decreased $4.6 million to $1.8 million for the year ended December 31, 2023 compared to $6.4 million for the year ended December 31, 2022.
Other Income-Net Other income-net increased $0.4 million to $2.2 million for the year ended December 31, 2024 compared to $1.8 million for the year ended December 31, 2023.
We have more than 35,000 total customers, including approximately 29,500 automotive collision repair facilities (including repairers and other entities that estimate damaged vehicles), approximately 5,000 parts suppliers, 13 of the top 15 automotive manufacturers based on new vehicle sales, and numerous other companies that participate in the P&C insurance economy.
We have more than 35,000 total customers, including more than 30,500 automotive collision repair facilities (including repairers and other entities that estimate damaged vehicles), more than 5,500 parts suppliers, 12 of the top 15 automotive manufacturers based on new vehicle sales, and numerous other companies that participate in the insurance economy. 37 We generate revenue through the sale of software subscriptions and other revenue, primarily from professional services.
The change in working capital was primarily a result of an increase in other current assets of $12.3 million due to timing of payments for prepaid and other deferred costs, an increase in accounts receivable of $4.7 million due to revenue growth and an increase in the current portion of deferred contract costs of $3.1 million due to higher employee sales incentives, partially offset by an increase in accrued expenses of $8.3 million due to timing of payments, an increase in 52 deferred revenue of $4.5 million due to revenue growth and timing of customer payments and an increase in income taxes of $3.8 million due to timing of payments.
The change in working capital was primarily a result of a $7.1 million change in income taxes due to timing of payments, a $4.5 million increase in deferred contract costs due to amounts deferred on new contracts and a $4.2 million increase in accounts receivable due to revenue growth, partially offset by a $4.3 million decrease in other current assets due to timing of payments for prepaid and other deferred costs and an increase in accounts payable of $2.1 million.
Intercompany transactions and balances are eliminated in consolidation. The consolidated financial statements include 100% of the accounts of wholly-owned and majority-owned subsidiaries. The ownership interest of the minority investor is recorded as a non-controlling interest in a subsidiary. The Company operates in one operating segment. The chief operating decision maker for the Company is the chief executive officer.
Intercompany transactions and balances are eliminated in consolidation. The consolidated financial statements include 100% of the accounts of wholly-owned and majority-owned subsidiaries. The ownership interest of the minority investor is recorded as a non-controlling interest in a subsidiary. The Company organizes its segments around its operations by geographic region and operates in one reportable segment.
The impairment charges were the result of lower forecasted earnings and cash flows for the Company’s China reporting unit. There was no impairment charge recognized during the year ended December 31, 2022. See Note 12 to the consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
Impairment of acquired technologies was $0.4 million for the year ended December 31, 2023 due to an impairment charge recognized as a result of lower forecasted earnings and cash flows for the Company’s China reporting unit. See Note 11 to the consolidated financial statements included elsewhere in the Annual Report on Form 10-K for additional information.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThese market risks result primarily from changes in SOFR or prime rates. 55 Interest rate fluctuations can affect the fair value of our floating rate debt, as well as earnings and cash flows. If market interest rates rise, our earnings and cash flows could be adversely affected by an increase in interest expense.
Biggest changeInterest rate fluctuations can affect the fair value of our floating rate debt, as well as earnings and cash flows. If market interest rates rise, our earnings and cash flows could be adversely affected by an increase in interest expense. In contrast, lower interest rates may reduce our borrowing costs and improve our operational results.
Although we have experienced and will continue to experience fluctuations in our net (loss) income as a result of transaction gains (losses) related to transactions denominated in currencies other than the U.S. dollar, we believe that a 10% change in foreign exchange rates would not have a material impact on our results of operations. 56
Although we have experienced and will continue to experience fluctuations in our net income (loss) as a result of transaction gains and losses related to transactions denominated in currencies other than the U.S. dollar, we believe that a 10% change in foreign exchange rates would not have a material impact on our results of operations. 52
In contrast, lower interest rates may reduce our borrowing costs and improve our operational results. We continuously monitor our interest rate exposure and have elected to use derivative instruments to manage interest rate risk associated with floating rate debt. As of December 31, 2023, a 100-basis point increase in interest rates would increase annual interest expense by $7.8 million.
We continuously monitor our interest rate exposure and have elected to use derivative instruments to manage interest rate risk associated with floating rate debt. As of December 31, 2024, a 100-basis point increase in interest rates would increase annual interest expense by $7.8 million.
Interest Rate Risk We are exposed to market risk related to changes in interest rates on $784.0 million of borrowings at December 31, 2023 that are floating rate obligations.
Interest Rate Risk We are exposed to market risk related to changes in interest rates on $776.0 million of borrowings at December 31, 2024 that are floating rate obligations. These market risks result primarily from changes in SOFR or prime rates.

Other CCC 10-K year-over-year comparisons