All right, good morning. We will go ahead and get started with the CCC session at the Goldman Sachs Communications and Technology Conference, day two. Thank you all for joining us. I'm Gabriela Borges. I spend time with the vertical software names in our coverage, and I'm delighted to have on stage with me, Githesh, CEO, and Brian, CFO of CCC. Thank you for your time, gents. Thank you. Thanks for having us. Githesh, I thought we would start with some of the more interesting comments you made on the earnings call. And you've been with CCC for multiple decades, and you said there are a couple of things that are different about this AI adoption cycle. Number one, the step up in ROI and the technology transformation that you can see with an AI-driven solution is so dramatic. And number two, the breadth of products in the CCC portfolio is much wider than it has been in the past. Yeah. So maybe let's start here. On the AI piece, tell us a little bit about some of the conversations you're having with customers, and why is this a step function change, not just a continuation of a digital transformation trend that CCC has been driving for 40 years now? Sure. So first of all, thank you for having us. I think. You know, what I mentioned in the call and what we're seeing is that until now, we were moving. There are a lot of different people involved in an auto claim, right? So you've got repairers, towers, lots of different providers involved. And we were providing for many, many years, two very fundamental things: workflow connectivity, where we moved information from one place to another place to be able to process an auto claim efficiently. And the second, we gave you decision-making tools on the front end. Should I use an aftermarket part, a recycled part? Should I total this car, repair this car, and the like. But this is the first time where we are augmenting cognitive capability for people, where you are synthesizing literally dozens and dozens of bits of info, data and information and saying, "This seems like the best recommendation." You still decide, you still choose what you want to do, but this is what we would recommend that you do. That is a game changer for a lot of people. And what we've seen is customers say, "Wow, this is, f irst of all, do I really believe this? Is this, is this really credible?" Because I've had very seasoned people looking at cars, writing estimates and repair. Can an AI really do this? That's taken a couple of years, and we've seen some dramatic acceptance. That's why we started with that problem first. And now people are saying, "Now that I've test piloted this in all, every state, we're now starting to see customers really adopt, like a top 10 carrier that we mentioned, who's now gone to 20% Estimate- STP. We're seeing that with subrogation. We're seeing this with so many other tools." And the second dimension to what you asked is, in previous years, we were delivering one or two new solutions every couple of years. Now, if you look at what we've done over the last three years, we've invested heavily to deliver a slew of new solutions that all work very closely together to provide that step function change. So customers are saying, "If I re-engineer my organization a little bit, redo my process, where I used to have seven different states where this operation was taking place, now I can centralize it because this technology allows me to centralize it, get more efficiency." And so those are the things that we are excited about. There's two different threads here, one on what the customers are doing and then the other on what you are doing internally. So let's do the customers first. So you mentioned these conversations have been happening for two years. And then you mentioned on the last earnings call, because the conversations take time, there could be a little bit of a rollout effect before we see more transformational change. So bring us up to speed. What do you think has to happen at, you know, pick any one of your large customers that would be good adopter -of the broader CCC platform. Walk us through from, maybe we're not at step one, but from step two to or A to Z, how do we- Yeah Get them to the point where they're embracing the technology wholeheartedly so that you're actually seeing it in the numbers? Sure, so first, you know, over the course of time, this is something our customers have always done, which is, everyone has great PowerPoints, right? So everyone they talk to shows up with great PowerPoint solutions, and our customers know some of those PowerPoints will have substance, some won't, so they will then do a lot of homework and say, "We're only going to pilot. We only have bandwidth to pilot and test one or two solutions." And we have, you know, our customers are piloting and testing because that takes substantial effort. Now, once you pilot and test the solutions, sometimes people will start in a state, expand to multiple states, go national. Certain solutions, like subrogation, customers will wait 90 days or a 120 days to see the results of these solutions because they sometimes may have to go through other additional steps. We are seeing consistently across the board, for every single new solution, multiple customers piloting, testing, and the pattern recognition, back to your question of having done this for a long time, is the pattern recognition that I'm seeing and we're seeing is that they're delivering real bottom line results in terms of efficiency, accuracy, claims payment, speed, and that is becoming very real across the board. On this topic of pattern recognition, so at any given time, you have customers that are closer to buying more and others that may be earlier in their life cycle. Yeah. So help us think through, I think this 3 Q and this 4 Q is a little bit different compared to the history that you've had as, as a company. When do you think we get to that normal distribution or that critical mass, where you're back to seeing more consistent revenue growth because you have customers that, the adoption curve, so to speak is smoothing out? Yeah, I mean, on these emerging solutions that we're talking about, over time, we expect them to be delivering three or four points of growth, and we've set that out in our long-term guidance range. As we're sitting here today, we're seeing more about one point of growth contribution coming from these emerging solutions. As Githesh said, the engagement around the emerging solutions, the number of clients that are piloting, but also the breadth of the emerging solutions, so we're not focused on just one or two of these emerging solutions. There's a handful of them, and they have continued to roll out, so we feel good on just the portfolio of the opportunity that we have on emerging solutions. We also see the engagement. So we expect it to continue to build as we think about this year being one point of contribution, a glide path being more like three to four points over time. It will continue to ramp and get towards the long-term growth rate. So there is this glass half full, glass half empty view to look at more growth coming from emerging products, which is you have your long-term growth rate. Right. If I subtract a greater percentage of emerging products, that implies it would be slowing. So, maybe just help us on think about that remaining. Well, it's not really remaining, it's the core. Yeah, and the way we set it up is when we look at the white space that's out there for both the established solutions, which means solutions that we've had in market for several years, we look at that set of solutions, which is roughly about $1 billion of runway, because that's where our revenue comes from today. There's another $2 billion of open space for us to sell into on the established. When we think about the emerging opportunity, it's about $2 billion of opportunity of white space on the emerging. So it's more like top-down. We look at both sets and saying these are. We have equal opportunity in both established and emerging. We think our cross-sell, upsell will be about half from established, half from emerging. We're just setting up the framework that way because we have ample opportunity on both solutions that have been in market for years, and there's a new set of solutions. And the other linkage to what Brian just said, Gabriela, is that for our existing customers who are already using many of our solutions, the fact that we have a roadmap for next year, the year after, to improve their performance, makes them even more comfortable about our current solution set. Do you see what I'm saying? Absolutely, and I think that's particularly relevant to Estimate-STP, so maybe we can talk a little bit about the success that you've had to date, but more importantly, I've always gotten the sense that this is phase one of what's going to be a broader vision that you have for the industry, so share with us a little bit about how Estimate-STP, how the roadmap there progresses over the next couple of years. Sure. Let me start maybe first with your broader vision question, and then I'll fit Estimate- STP in the context of the vision, right? So when you look at the industry as a whole, you've got roughly between $260 billion and $270 billion- $300 billion being spent on auto claims. Of that, if you think about the average physical damage claim of being about $6,700, call it $7,000 on average, between totals and repairables, and you've got another similar amount per claim on medical claims, although the frequency is about 1/5. When you look at the aggregate, about $250 billion-$300 billion in the U.S. And on top of this, you've got $2 billion. 2 billion days, sorry, not dollars. 2 billion days of elapsed time that are actually being spent on all of these disconnected workflows and the like. So what we are trying to solve for is, at a very macro level, this complexity. So when you think about the vision, which is by using IX Cloud that we announced, so IX Cloud is our integrating metaphor for really bringing all of these pieces together. So you could take. So when you look at this down the road, what we expect people to be doing is managing exceptions and really helping our customers manage those high-stress situations with their policyholders, and try to remove as much of the mundane work that they're doing. So IX Cloud takes this entire framework, all of these different people we've connected up, and makes it work. Let me give you a practical example. So what we saw early on is you might have an example where a crash is detected, photos are taken, and now it's not just the photo from the consumer. First Look allows you to take photos from the consumer, the repair facility, the salvage yard, the tower, anyone. But instead of all of this work moving sequentially from one place to the next place, IX Cloud can really monitor all of these events in parallel and broadcast and say, this, you know, this car scheduled into a repair facility, the parts can be ordered if it is. So all of these things can happen in parallel. And that's really what we're seeing, is that more and more moving towards exception management. And the fact that we have all of these things linked together, the IX Cloud architecture connects it, and then AI really becomes very powerful to stitch all of these things together. So we think this has a pretty dramatic impact on performance, and our customers are starting to see it with these pilots. And many of our customers are saying, "Hey, rather than just put the solution in place, I'm going to reorganize my function a little better, so I can take advantage of this solution." So we're seeing that as well. So that's our broader vision, and Estimate- STP fits as one of the key steps in that broad vision. Remind us, Brian, please. Yeah, I was just gonna say, I mean, Estimate-STP was kind of the flagship launch, so that was back in the second half of 2021. It was using AI, computer vision AI, to detect the damage and help policyholders. Carriers would send it out to policyholders. Policyholders would use this through their, their mobile device, be able to take photos of it. Computer AI would then write a line item estimate that gives a specific repairable estimate for both the policyholder and the carrier. So that was kind of the initial launch of AI that we brought in, in driving real revenue. Today, about 3% of our claims run through Estimate-STP. But over time, we expect significantly more to go through. And so we're, we're really excited about it. Maybe just contextualize for us the significance of IX Cloud and the microservices architecture. I think especially with vertical software companies that have many years of history under their belt, you typically see a middle stage, which is single-tenant SaaS, and now with multi-tenant SaaS. How important, technically, was the launch of IX Cloud, and how much did, how much does it unlock as product? Yeah, I would say, you know, we've been, o ur tech stack has been pretty clean for a very long time, right? We moved to the cloud 20+ years ago, so we've had a multi-tenant tech stack. What we did in the last couple of years is move all of our infrastructure to public cloud. So we were running on private cloud, so that's given us substantial capacity, capacity, security, a whole bunch of things. You know, 10 years ago, we used to buy a lot years ago. Today, we don't need to buy hardware. There's enough places where we can just use the cloud. We can also instantaneously flex capacity as needed. So that infrastructure's really, really been great from a tech stack standpoint. I'll give you a tangible example of what we just saw a few weeks ago with IX Cloud, with one of our first customers. So one of our customers was piloting First Look. First Look is the ability for our customers to take photos from anywhere and make decisions around the claim. So this car had ended up in a salvage yard. So people looked at the car and said, "This car is clearly totaled. I need to send it to a salvage yard." It went off. Our AI looked at the picture in the salvage yard and said, "Time out. This car should not be totaled. It should be repaired." That car was moved literally within a matter of hours to a repair facility and repaired. IX Cloud, because of the way the microservices architecture moves these events quickly, was able to take this decision, move it to the right person inside the carrier, get the right, you know, the vehicle moved into a repair facility, and that was it. So if you think about the dollar decisions between should I repair the car? Should I, and we've seen it the other way as well. Cars ending up in a repair facility that should have been in a salvage yard, and sort of sitting in a repair facility for weeks and costing everybody a lot of money and time, and energy. So that's just a micro example of how IX Cloud, which can now broadcast and work across all of these different events, coupled with AI that makes decisions, is helpful. Just to clarify, with the right CCC product, that decision could have been made earlier, before- That, that too. The total. Okay. If you had had the consumer send the photos. There are many instances where you can't even get the consumer to get the photos. Got it. You're dead right. That's it. It should have been made much earlier, but 40%-50% of the time, you cannot even get consumers to take pictures. Maybe just remind us. There's a consistent theme here on the breadth of the portfolio, the cadence of product releases having gone up, microservices architecture. What has changed over the last three to five years that has leveled you up to a higher R&D cadence or a higher product innovation cadence? Yeah. So I would say there are really two dimensions. First, we gained a lot of confidence after six, seven years of doing AI work, where in the early years, we didn't really. We saw a lot of investment, a lot of work. But then in November 2021, there's a Wall Street Journal article when we first released this with a client, we really started to feel that this was compelling. Our customers felt it was compelling. So we felt we now had enough AI, enough expertise, to deliver tangible solutions to customers. At the same time, as we went public, we also increased our development capacity by over 20%. I think, Brian, we did that in, what? 2022? Yeah, that's correct. 2022 or so. We said, we are seeing all of these opportunities, so let's significantly increase our development capacity of our revenue growth rate, which we did. So that allowed us to muscle through the private to public cloud and really get a lot of different solutions in parallel. So we have now solutions for repair facilities like build sheets, like diagnostics, you know, there's a long payroll. We just launched payroll for repair facilities, right? Because our customers are processing $20 billion+ of payroll, right? So that was a very deliberate decision on our part, seeing the opportunities in front of us, and it fits directly into the TAM map Brian was just walking through. We also think as a company that's been growing for a very long time, we need to make these investments to continue to deliver for our customers and to drive growth for us over the next four or five years. We spent the first half of this conversation on the product side. Commensurate with the product side, you also have to have breadth in the sales force, and more specifically, the training and enablement that allows them to sell the array of emerging products, so talk to us about how you're upleveling your salespeople, and for us, from the outside, when we look at the website and we see the 40+ different products that you have, it's a lot of products. So how do you gear up your sales force to the path of least resistance to be able to sell the expanded portfolio? Yeah, I mean, we have a sales organization that's set up against our end customer groups. So we have a direct sales organization that supports the carriers. We have a direct sales organization that supports the repair facilities. We have 30,000 repair facility clients. We have a sales organization that supports our parts. So we've had that. We continue to support that team, but the thing that we've done more recently is we've launched product sellers across as a bit of a horizontal, supporting them. So areas like subrogation, areas like casualty, that are technical sales, we're bringing in specialists that work across the account teams to make sure that we're setting those solutions up for the customer needs. And so this product specialty that we've recently launched and invested in is really helping, especially move into these newer solutions that are more technical than some of the historical solutions. That really allows our sales organization to bring this broad portfolio into their client and not necessarily need to be an expert on every single end solution that we have. To your point on the volume of solutions, making sure that we both have kind of the vertical support, but also the horizontal product support across the sales organization. And that's also, if you think about how our clients are structured, they have multiple departments and functions. So to Brian's point, the specialization we have, we have people with deep expertise in subro, deep expertise in casualty, so they're working with those pieces of the organization, but at the same time, we're also working at a higher level to connect all the pieces together. I want to stay on the topic of casualty for a few minutes. Sure. One of the amazing things about your market segment is how sticky it is. It's very difficult for a competitor to displace CCC in property. The inverse could be true, arguably, in casualty, where you have incumbents in the casualty side of the business that have been there for decades as well. So talk to us about how you initiate those conversations, how you drive success in casualty, and perhaps what the limiting factor is to you being able to take more share on that half of the business. Sure. So I think what we saw is that, you know, one in five physical damage accidents has casualty. We also looked at a very unique differentiation that we bring to the table, and that differentiation is the physics of the accident and the way it informs your downstream casualty decisions. So when you have visibility and access to the physics of the accident, so things like Impact Dynamics, that looks at the photo of the accident and then looks at the physics of the accident and can make a number of determinations as to how you work this downstream, those are examples where of very high differentiation. On top of that, we've also completely spent a substantial amount of energy and effort on the tech stack under casualty. That's taken us about three, four years, where we've completely revamped the tech stack on our casualty solutions. We've substantially added to the leadership in casualty. What this has resulted in over the last, just even the last 12 months, we've added probably, what, 10+ casualty customers into CCC, and we're engaged in a number of conversations. The example of Impact Dynamics, well, this was a customer that did not use us in any way, shape, or form for casualty, but adopted Impact Dynamics because they saw that as a unique game-changing solution. Put that 10+ statistic into context for us. How big a deal is it, winning 10+ new customers in casualty? Yeah, I mean, we haven't gone through kind of the economics. It clearly depends on the size of the casualty or the size of the client. I would say casualty continues to grow faster than the total company. It's added about a point of growth for the first half of the year. As Githesh said, it is about 10% of revenue. When you look at the auto physical damage side of the business, that's about $300 million+ of revenue. Carriers spend similar levels between casualty and APD. So if we get to scale and have similar market leadership position in casualty, that's a $300 million+ business. So it's a significant opportunity as we think about growing our established portfolio. And there's a lot of momentum, not only on the tech stack, but some of the newer solutions that we're putting around the tech stack, which we believe gives us a differentiated offering. Absolutely. I want to spend a couple of minutes on payments as well. So I think there's been a number of success stories in vertical software with payments. There's also been a number of failures. In any case, the pace of adoption tends to be a little bit like pulling teeth. So talk to us about your learning curve on payments. How is it going? Is there anything that stands out to you as, okay, we need to do this thing differently to be able to level up the level of adoption? Yeah, I would say, you know, we've processed about $1 billion of payments already on the repair facility side. What we've learned on the carrier side is that it was important that we have a broad payment solution because our customers are saying, "I don't want to just do payments for this particular piece. I've got to be able to do payments across all of these different things." So what we ended up doing with partnerships, development, is we have that broader set of solutions and are engaged with a number of customers. And, the problem hasn't been solved yet, right? The customers are still having the same number of issues and the like. So we've had to broaden that solution, and we are now starting to see that that is actually working, and we are in the early phases as we are working with some customers. We haven't announced, you know, anything publicly yet, but that is really starting to work. It has been slower, for sure, but we also think the problem is as big as we ever anticipated it to be. Absolutely. Let me pause for a moment. Questions from the audience? All right, let's... Oh, please. Yeah, I mean, when you look at what we've recently launched, it could be payroll, it could be our diagnostics workflow solution, it could be Amplify, which is helping shops build their website. We have CRM tools. Each of these SKUs can be a couple of hundred dollars a month as an opportunity. You then just put that against the 30,000 shop clients and then an adoption curve on it. So it's a very large market from, you know, overall 30,000. The number of the breadth of the portfolio we're bringing out to the shops continues to increase. It's not necessarily about one individual like payroll per se. It's really around how do we just help them drive digitization across their operations. And so we really think about that as kind of this broader bundle of cross-sell and upsell opportunities. And we're seeing, you know, early days, good adoption on these, but also gives us conviction on additional solutions that we can bring into market, really to help SMBs just run their business, versus historically, been much more focused on helping them with the repair of the car. We've now started to move into the back office and helping them just run their operations. You're talking about a payroll amount that's in the $20 billion-$30 billion range, right? For customers. Today, CCC ONE actually calculates all of the details for your employees. A piece rate, that's a very unique attributes of how people get paid. All those calculations are done within CCC ONE, except customers were then taking that file, importing it into some other solution, keeping that in sync, and a lot of customers said: "Could you please just solve this problem for us? So we put a lot of effort into it, and we have several customers up and running, and the early result has been, "Oh my God, this is so much easier now because I'm already in CCC ONE, eight hours a day, nine hours a day, and you can simply now just handle this process for me." So that, again, to Brian's point, it opens up another, you know, wide opportunity. Back to, I think, Gabriela's question, why we continue to expand our product suite. Can I just ask the question around just kind of autonomous and even short of kind of L5? It seems like there's been a lot of progress in even kind of L2, L3 solutions. And you look at something like Tesla's FSD, which is the accident rate is well below human-operated cars. Could you just talk about kind of what that means for your business over a kind of five to 10 year timeframe, assuming some reasonable level of adoption where just accident rates go down? Yeah. I would say, we know we've been monitoring this very closely, not just FSD, because remember, we get all the data comes. You know, we see a massive amount of data on a daily basis. And what we have, you know, there's several technologies, AEB, automatic emergency braking, there's a bunch of these technologies. What our customers are seeing and what we're seeing, it's still early, is that there's not been a significant shift in frequency because there are other things like texting and distracted driving that seems to be offsetting some of this. But by and large, what we see is for the next 10 years, we expect this will have some impact on the frequency. But at the same time, what we are doing is expanding our solutions to a much broader set of the claims capability, where we think we can continue to grow all of those capabilities. And as you look at this five to 10 year time horizon, we'll also extend beyond what we do in auto to other parts and other components of insurance as well. Even a year kind of revenue per claim, if you think is always going to go up. Because we're expanding the solution set. I wanna end connecting the product and this go-to-market side one more time, and it's a little bit of a question on pricing and margins. So as you think about the pace of innovation, I would argue that your risk of competition and your barrier to entry goes down and up respectively. So your risk of competition goes down, your barrier to entry goes up. And I know how closely you work with your customers to figure out the right pricing model and to make sure that you're delivering value for the pricing that you ask for. Yeah. So put all of this together, how do you think about bundling and offering incentives for customers to adopt? And how do you think about the appropriate place to drive margins over the long term, given how differentiated your data set is and some of the work you're doing on the innovation side? Yeah, do you want to take the price? I can take the margin. Yeah. I would just say from a pricing standpoint, you know, the formula that has worked very, very well for a long period of time is that the value proposition that we provide to our customers is compelling. A 7:1, 5:1 in terms of if you're spending x with CCC, you're getting 5x-7x the return. In some instances, it's a lot bigger than that. When you look at the aggregate spend, it's 20-30 basis points of what it costs you to manage an entire claim. So we're still a very, very small amount on the, in terms of the total claim spend, but we are providing tremendous value to managing the entire auto claim. So that feels very good, and that formula has worked well for our customers. There's also an implicit understanding that our customers have with us, which is that we will drive growth through innovation. We will solve more problems for them, additional problems for them. So that is something we've taken very seriously. And that we think that will continue to drive growth for years to come. In terms of margins. Yeah, I mean, we have a really efficient business model, and so, you know, as we continue to grow and scale the revenue, we'll see substantial flow-through all the way down to EBITDA. If you look at the past four years, we've added about a thousand basis points of margin. We're modeling and suggesting about, think about a hundred basis points per year going forward, getting to the mid-forties. The mid-forties is not necessarily a ceiling, it's just a medium-term modeling target, but really efficient business model with a lot of areas of leverage opportunities. We'll see gross profits go up from 78 closer to 80, and we see leverage in both G&A and sales and marketing. So we feel good on the margin progression at the same time of continuing to invest in the business. Excellent. Please join me in thanking Brian and Githesh for their time. Thank you. Gabriela, thank you as always. Yeah. I'm sure you have a lot of these to do today.