CCC Intelligent Solutions Holdings Inc

Previous wording

We have processed more than $1 trillion of historical data across our network, allowing us to build proprietary data assets that leverage insurance claims, vehicle repair, automotive parts and other vehicle-specific information. We believe we are uniquely positioned to provide data-driven insights, analytics and AI-enhanced workflows that strengthen our solutions and improve business outcomes for our customers. 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 8,000 U.S. collision repairers actively using AI-powered solutions in production environments.

Current wording

We have processed more than $1 trillion of historical data across our network, allowing us to build proprietary data assets that leverage insurance claims, vehicle repair, automotive parts and other vehicle-specific information. We believe we are uniquely positioned to provide data-driven insights, analytics and AI-enhanced workflows that strengthen our solutions and improve business outcomes for our customers. 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 11,000 U.S. collision repairers actively using AI-powered solutions in production environments.

Previous wording

Revenues increased by $20.9 million to $232.6 million, or 9.9%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The Company's software subscription revenues accounted for $223.0 million and $202.9 million, or 96% of total revenue during the three months ended June 30, 2024 and 2023.

Current wording

Revenues increased by $17.3 million to $238.5 million, or 7.8%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The Company's software subscription revenues accounted for $229.4 million and $212.5 million, or 96% of total revenue during the three months ended September 30, 2024 and 2023.

Previous wording

The increase in revenue was primarily a result of 7% growth from existing customer upgrades and expanding solution offerings to these existing customers as well as 3% growth from new customers.

Current wording

The increase in revenue was primarily a result of 5% growth from existing customer upgrades and expanding solution offerings to these existing customers as well as 3% growth from new customers.

Previous wording

Cost of revenues decreased by $3.8 million to $55.3 million, or 6.4%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023.

Current wording

Cost of revenues decreased by $3.0 million to $55.1 million, or 5.1%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023.

Previous wording

Cost of revenues, exclusive of amortization and impairment of acquired technologies, increased by $1.2 million to $53.2 million, or 2.3%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was primarily due to a $1.4 million increase in third party fees and direct costs associated with our revenue growth and a $0.8 million increase in depreciation expense related to additional investments in platform and customer solution enhancements, partially offset by a $1.1 million decrease in information technology ("IT") related costs.

Current wording

Cost of revenues, exclusive of amortization of acquired technologies, increased by $3.4 million to $54.9 million, or 6.7%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to a $1.4 million increase in information technology ("IT") related costs, a $1.2 million increase in third party fees and direct costs associated with our revenue growth, and a $1.0 million increase in personnel-related costs, including stock-based compensation.

Previous wording

Amortization of acquired technologies decreased $4.6 million, or 68.6%, to $2.1 million for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The decrease was due to certain acquired technology intangible assets reaching the end of their useful life during the three months ended June 30, 2024.

Current wording

Amortization of acquired technologies decreased $6.4 million to $0.2 million for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The decrease was due to certain acquired technology intangible assets reaching the end of their useful life in April 2024.

Previous wording

Gross profit increased by $24.7 million to $177.3 million, or 16.2%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. Our gross profit margin was 76.2% for the three months ended June 30, 2024, compared to 72.1% for the three months ended June 30, 2023. The increase in gross profit and gross profit margin was due to increased software subscription revenues, economies of scale resulting from fixed cost arrangements and lower amortization of acquired technologies.

Current wording

Gross profit increased by $20.3 million to $183.4 million, or 12.4%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. Our gross profit margin was 76.9% for the three months ended September 30, 2024, compared to 73.8% for the three months ended September 30, 2023. The increase in gross profit and gross profit margin was due to increased software subscription revenues, economies of scale resulting from fixed cost arrangements, and lower amortization of acquired technologies.

Previous wording

Research and development expense increased by $5.9 million to $49.3 million, or 13.6%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was primarily due to a $4.9 million increase in stock-based compensation and a $1.8 million increase in IT related costs, partially offset by a $0.8 million decrease in personnel and resource costs.

Current wording

Research and development expense increased by $6.0 million to $49.5 million, or 13.8%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to a $5.8 million increase in stock-based compensation and a $2.4 million increase in IT related costs, partially offset by a $2.2 million decrease in personnel and resource costs.

Previous wording

General and administrative expense increased by $20.3 million to $108.3 million, or 23.1%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to a $16.9 million increase in personnel-related costs, including a $13.2 million increase in stock-based compensation, a $2.2 million increase in IT related costs and a $1.3 million increase in professional service costs.

Current wording

General and administrative expense increased by $3.4 million to $52.9 million, or 7.0%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to a $2.7 million increase in professional service costs and a $0.9 million increase in IT related costs.

Previous wording

Amortization of intangible assets was $17.9 million and $18.0 million for the three months ended June 30, 2024 and 2023, respectively.

Current wording

Amortization of intangible assets was $17.9 million for the three months ended September 30, 2024 and 2023, respectively.

Previous wording

Interest expense increased by $2.6 million to $16.6 million, or 18.5%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was primarily due to higher variable interest rates during the three months ended June 30, 2024.

Current wording

Interest expense increased by $1.7 million to $16.4 million, or 11.9%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The increase was primarily due to higher variable interest rates during the three months ended September 30, 2024.

Previous wording

Interest income decreased by $1.4 million to $2.6 million, or 34.8%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023, due to lower average balances on interest earning deposits and money market funds during the three months ended June 30, 2024.

Current wording

Interest income decreased by $1.8 million to $3.3 million, or 35.3%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023, due to lower average balances on interest earning deposits and money market funds during the three months ended September 30, 2024.

Previous wording

We recognized income of $16.0 million from a change in fair value of warrant liabilities for the three months ended June 30, 2024, compared to expense of $20.4 million for the three months ended June 30, 2023. The change in fair value of warrant liabilities was primarily due to changes in the price of the Company's common stock during each respective period. During the three months ended June 30, 2024, the Company redeemed the outstanding warrants and as of June 30, 2024, no warrants remain outstanding.

Current wording

Due to the redemption of all outstanding warrants in May 2024, the Company did not recognize any income or expense as a change in fair value of warrant liabilities during the three months ended September 30, 2024. We recognized an expense of $26.2 million for the three months ended September 30, 2023. The change in fair value of warrant liabilities was primarily due to changes in the price of the Company's common stock during the reporting period.

Previous wording

We recognized other income—net of $1.3 million for the three months ended June 30, 2024 compared to other income—net of $3.9 million for the three months ended June 30, 2023. The change was primarily due to the change in fair value of the interest rate cap derivative instruments during each period, driven by changes in the forward yield curves and time to maturity, and the income recognized from the interest rate cap derivative instruments during the three months ended June 30, 2024.

Current wording

We recognized other expense—net of $2.6 million for the three months ended September 30, 2024 compared to $0.3 million for the three months ended September 30, 2023. The change was primarily due to the change in fair value of the interest rate cap derivative instruments during each period, driven by changes in the forward yield curves and time to maturity, and the income recognized from the interest rate cap derivative instruments during the three months ended September 30, 2024.

Previous wording

The Company recognized an income tax provision of $0.1 million and an income tax benefit of $3.1 million for the six months ended June 30, 2024 and 2023, respectively. The income tax provision during the six months ended June 30, 2024 was due to the tax provision related to pre-tax book income, primarily offset by the tax benefit related to stock-based compensation.

Current wording

The Company recognized an income tax provision of $8.9 million and $1.8 million for the three months ended September 30, 2024 and 2023, respectively. The income tax provision during the three months ended September 30, 2024 was primarily due to the Company's pre-tax book income. The income tax provision for the three months ended September 30, 2023 was primarily due to the tax treatment of the loss on the change in the fair value of warrant liabilities.

Previous wording

Comparison of the six months ended June 30, 2024 to the six months ended June 30, 2023

Current wording

Comparison of the nine months ended September 30, 2024 to the nine months ended September 30, 2023

Previous wording

Revenues increased by $43.2 million to $459.9 million, or 10.4%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The Company's software subscription revenues accounted for $441.1 million and $399.1 million, or 96% of total revenue during the six months ended June 30, 2024 and 2023.

Current wording

Revenues increased by $60.6 million to $698.3 million, or 9.5%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The Company's software subscription revenues accounted for $670.3 million and $611.6 million, or 96% of total revenue during the nine months ended September 30, 2024 and 2023.

Previous wording

Cost of revenues decreased by $1.6 million to $114.7 million, or 1.3%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023.

Current wording

Cost of revenues decreased by $4.5 million to $169.8 million, or 2.6%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023.

Previous wording

Cost of revenues, exclusive of amortization and impairment of acquired technologies, increased by $3.5 million to $106.0 million, or 3.5%, for the six months ended June 30, 2024 compared to the six months ended June 30, 2023. The increase was primarily due to a $2.9 million increase in third party fees and direct costs associated with our revenue growth, a $1.4 million increase in depreciation expense related to additional investments in platform and customer solution enhancements, and a $0.8 million increase in personnel-related costs, including stock-based compensation, partially offset by a $1.9 million decrease in IT related costs.

Current wording

Cost of revenues, exclusive of amortization and impairment of acquired technologies, increased by $7.0 million to $160.9 million, or 4.5%, for the nine months ended September 30, 2024 compared to the nine months ended September 30, 2023. The increase was primarily due to a $4.2 million increase in third party fees and direct costs associated with our revenue growth, a $1.7 million increase in personnel-related costs, including stock-based compensation, and a $1.6 million increase in depreciation expense related to additional investments in platform and customer solution enhancements, partially offset by a $0.6 million decrease in IT related costs.

Previous wording

Amortization of acquired technologies decreased by $4.7 million, or 35.1%, to $8.7 million for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The decrease was due to certain acquired technology intangible assets reaching the end of their useful life during the six months ended June 30, 2024.

Current wording

Amortization of acquired technologies decreased by $11.1 million to $8.8 million for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The decrease was due to certain acquired technology intangible assets reaching the end of their useful life in April 2024.

Previous wording

There was no impairment charge recognized during the six months ended June 30, 2024. Impairment of acquired technologies was $0.4 million for the six months ended June 30, 2023 due to an impairment charge recognized as a result of a downward revision of projected earnings and cash flows of our China reporting unit.

Current wording

There was no impairment charge recognized during the nine months ended September 30, 2024. Impairment of acquired technologies was $0.4 million for the nine months ended September 30, 2023 due to an impairment charge recognized as a result of a downward revision of projected earnings and cash flows of our China reporting unit.

Previous wording

Gross profit increased by $44.8 million to $345.2 million, or 14.9%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. Our gross profit margin was 75.1% for the six months ended June 30, 2024, compared to 72.1% for the six months ended June 30, 2023. The increase in gross profit and gross profit margin was due to increased software subscription revenues and economies of scale resulting from fixed cost arrangements.

Current wording

Gross profit increased by $65.1 million to $528.6 million, or 14.0%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. Our gross profit margin was 75.7% for the nine months ended September 30, 2024, compared to 72.7% for the nine months ended September 30, 2023. The increase in gross profit and gross profit margin was due to increased software subscription revenues, economies of scale resulting from fixed cost arrangements and lower amortization of acquired technologies.

Previous wording

Research and development expense increased by $14.4 million to $98.7 million, or 17.0%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to an $11.2 million increase in personnel-related costs, including a $10.1 million increase in stock-based compensation, and a $5.1 million increase in IT related costs, partially offset by a $1.0 million decrease in consulting costs and a $0.6 million increase in the amount of capitalized time on platform and customer solution enhancements.

Current wording

Research and development expense increased by $20.4 million to $148.3 million, or 15.9%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to a $15.9 million increase in stock-based compensation, and a $7.5 million increase in IT related costs, partially offset by a $1.1 million decrease in consulting and professional service costs, a $0.9 million decrease in personnel and resource costs, and a $0.5 million increase in the amount of capitalized time on platform and customer solution enhancements.

Previous wording

Selling and marketing expense increased by $2.4 million to $71.9 million, or 3.5%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to a $4.2 million increase in personnel-related costs, including sales incentives and travel costs, a $0.9 million increase in marketing and event related expenses, and a $0.3 million increase in consulting costs, partially offset by a $3.5 million decrease in stock-based compensation.

Current wording

Selling and marketing expense increased by $1.2 million to $106.3 million, or 1.1%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to a $6.4 million increase in personnel-related costs, including sales incentives and travel costs and a $0.9 million increase in marketing related expenses, partially offset by a $6.1 million decrease in stock-based compensation.

Previous wording

General and administrative expense increased by $5.1 million to $51.3 million, or 11.1%, for the three months ended June 30, 2024, compared to the three months ended June 30, 2023. The increase was primarily due to a $2.5 million increase in personnel-related costs, including a $1.3 million increase in stock-based compensation, a $1.6 million increase in professional service costs, and a $1.0 million increase in IT related costs.

Current wording

General and administrative expense increased by $23.8 million to $161.2 million, or 17.3%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to a $16.3 million increase in personnel-related costs, including a $12.5 million increase in stock-based compensation, a $3.9 million increase in professional service costs and a $3.0 million increase in IT related costs.

Previous wording

There was no impairment charge recognized during the three months ended June 30, 2024. We recorded impairment charges of goodwill and intangible assets of $77.4 million and $4.9 million, respectively, for the three months ended June 30, 2023. The impairment charges were the result of lower forecasted earnings and cash flows for the Company’s China reporting unit.

Current wording

There was no impairment charge recognized during the nine months ended September 30, 2024. We recorded impairment charges of goodwill and intangible assets of $77.4 million and $4.9 million, respectively, for the nine months ended September 30, 2023. The impairment charges were the result of lower forecasted earnings and cash flows for the Company’s China reporting unit.

Previous wording

Interest expense increased by $5.2 million to $33.1 million, or 18.7%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023. The increase was primarily due to higher variable interest rates during the six months ended June 30, 2024.

Current wording

Interest expense increased by $7.0 million to $49.4 million, or 16.4%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase was primarily due to higher variable interest rates during the nine months ended September 30, 2024.

Previous wording

Interest income decreased by $2.2 million to $5.1 million, or 30.1%, for the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to lower average balances on interest earning deposits and money market funds during the six months ended June 30, 2024.

Current wording

Interest income decreased by $4.0 million to $8.4 million, or 32.2%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, due to lower average balances on interest earning deposits and money market funds during the nine months ended September 30, 2024.

Previous wording

We recognized income of $14.4 million from a change in fair value of warrant liabilities for the six months ended June 30, 2024, compared to expense of $19.2 million for the six months ended June 30, 2023. The change in fair value of warrant liabilities was primarily due to changes in the price of the Company's common stock during each respective period. During the six months ended June 30, 2024, the Company redeemed the outstanding warrants and as of June 30, 2024, no warrants remain outstanding.

Current wording

We recognized income of $14.4 million from a change in fair value of warrant liabilities for the nine months ended September 30, 2024, compared to expense of $45.4 million for the nine months ended September 30, 2023. The change in fair value of warrant liabilities was primarily due to changes in the price of the Company's common stock during each respective period. In May 2024, the Company redeemed the outstanding warrants and as of September 30, 2024, no warrants remain outstanding.

Previous wording

We recognized other income—net of $4.2 million for the six months ended June 30, 2024 compared to other income—net of $1.4 million for the six months ended June 30, 2023. The change was primarily due to the change in fair value of the interest rate cap derivative instruments during each period, driven by changes in the forward yield curves and time to maturity, and the income recognized from the interest rate cap derivative instruments during the six months ended June 30, 2024.

Current wording

We recognized other income—net of $1.6 million for the nine months ended September 30, 2024 compared to $1.1 million for the nine months ended September 30, 2023. The change was primarily due to the change in fair value of the interest rate cap derivative instruments during each period, driven by changes in the forward yield curves and time to maturity, and the income recognized from the interest rate cap derivative instruments during the nine months ended September 30, 2024.

Previous wording

The Company recognized an income tax provision of $4.3 million and an income tax benefit of $2.3 million for the three months ended June 30, 2024 and 2023, respectively. The income tax provision during the three months ended June 30, 2024 was due to the tax provision related to pre-tax book income.

Current wording

The Company recognized an income tax provision of $9.0 million and an income tax benefit of $1.2 million for the nine months ended September 30, 2024 and 2023, respectively. The income tax provision during the nine months ended September 30, 2024 was primarily due to Company's pre-tax book income.

Previous wording

The following table reconciles Gross Profit to Adjusted Gross Profit for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles Gross Profit to Adjusted Gross Profit for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table reconciles operating expenses to Adjusted Operating Expenses for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles operating expenses to Adjusted Operating Expenses for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table reconciles operating income (loss) to Adjusted Operating Income for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles operating income (loss) to Adjusted Operating Income for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table reconciles net income (loss) to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table reconciles net income (loss) to Adjusted Net Income and Adjusted Earnings per Share for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles net income (loss) to Adjusted Net Income and Adjusted Earnings per Share for the three and nine months ended September 30, 2024 and 2023:

Previous wording

The following table reconciles net cash provided by operating activities to Free Cash Flow for the three and six months ended June 30, 2024 and 2023:

Current wording

The following table reconciles net cash provided by operating activities to Free Cash Flow for the three and nine months ended September 30, 2024 and 2023:

Previous wording

We have financed our operations with cash flows from operations. The Company generated $107.0 million of cash flows from operating activities during the six months ended June 30, 2024. As of June 30, 2024, the Company had cash and cash equivalents of $237.9 million, a working capital surplus of $262.3 million and an accumulated deficit totaling $1,105.6 million. As of June 30, 2024, the Company had $780.0 million aggregate principal outstanding on its term loan.

Current wording

We have financed our operations with cash flows from operations. The Company generated $170.2 million of cash flows from operating activities during the nine months ended September 30, 2024. As of September 30, 2024, the Company had cash and cash equivalents of $286.3 million, a working capital surplus of $320.9 million and an accumulated deficit totaling $1,101.5 million. As of September 30, 2024, the Company had $778.0 million aggregate principal outstanding on its term loan.

Previous wording

As of June 30, 2024, the amount outstanding on the Term B Loan was $780.0 million, of which, $8.0 million is classified as current.

Current wording

As of September 30, 2024, the amount outstanding on the Term B Loan was $778.0 million, of which, $8.0 million is classified as current.

Previous wording

During May 2023, the Company entered into Amendment No. 1 to the 2021 Credit Agreement (the "Amendment") to establish the Secured Overnight Financing Rate ("SOFR") as the benchmark rate for determining the applicable interest rate, replacing the London Interbank Offer Rate ("LIBOR"). No other terms, including the amount of borrowings, required payments or maturity date, were changed as a result of the Amendment.

Current wording

In May 2023, the Company entered into Amendment No. 1 to the 2021 Credit Agreement (the "First Amendment") to establish the Secured Overnight Financing Rate ("SOFR") as the benchmark rate for determining the applicable interest rate, replacing the London Interbank Offer Rate ("LIBOR"). No other terms, including the amount of borrowings, required payments or maturity date, were changed as a result of the First Amendment.