Okay, go ahead. Take it away. Thank you. First of all, I'm just gonna introduce Jonathan. First of all, my name is Shlomo Rosenbaum. I'm the Business Services Analyst here at Stifel. I want to welcome you all to joining us at the Cross-Sector Insight Conference, circa 2024, and I appreciate all of you staying till what is the last session of the whole conference, and we appreciate that. I thank Jonathan Collins, the CFO of Clarivate, for joining us over here and, you know, also being here at this time. I think, Jonathan, you said you want to go through a few slides before we go into the Q&A? That'd be great. Okay, so go, go right ahead. Well, thank you so much for having me, Shlomo, and thank you everyone for joining. What I'd like to do is just go through a few pages that we have shared within the last few months that provide an overview of our expected organic growth acceleration in each of our three segments over the course of the next few years. So earlier this year, we highlighted the fact that we expect that our business will move from where we were last year, which was just slightly positive organic growth, to organic growth in the range of about 4%-6%, or about 5% at the midpoint. And it's really gonna be driven by a key area of investment within each of our segments. So we put out a series of webinars in March that we shared online, where each of our segment presidents walked through and emphasized the investments that we're making in emergent technologies, particularly AI, generative AI, to build those capabilities into our products, to help really enhance the value propositions of our solutions to our customers. What we've provided, and what you see in front of you, is an example within our A&G business, where we have three subsegments: our research business, our content business, and our workflow business. As we highlighted here over the past few years, growth in our content business has been in line with the market. The growth with workflow has been pretty close. What has held us back from what we believe is the market growth rate on average of about 4%, has been our research segment. We made some pretty significant investments in this product in 2021, 2022, and even into 2023, that have helped to accelerate the growth in this area. So our flagship product here is our Web of Science offering, which provides the Journal Impact Factor for all of the peer-reviewed periodicals, journals around the world. It is a household name for researchers, and it's a great seal of high quality, seal of approval of high quality research for these publications. After we made those investments in the user interface and expanded the coverage of the Web of Science, we saw the business return to growth last year, following really nice usage growth the year before. We expect to continue to make investments on that, and that's really what's going to propel the growth within the A&G segment over the course of the next couple of years, is continued investment in this product. We also highlighted a brand-new AI feature called the Researcher Assistant. It's available on this platform, for our customers that will begin selling, later this year. These capabilities will provide generative AI interaction on the platform and really help to enhance the experience and value for our customers. The second segment is our IP business, so this is our second-largest business. We break down this segment into three areas that cover both patent and trademarks, so all intellectual property are covered in these three: intelligence, management, and maintenance. As you can see, over the course of the last few years, the management business, or you'll hear us call this our IPMS or our software systems, have been growing at market rates. Our maintenance or our services business, where we largely renew patents for customers, has been growing pretty close to market rates, and we certainly saw some softness in the market last year that we expect to begin to recover this year in the next couple of years. But then the last area is intelligence, and this is the one that requires investment similar to what we did into the Web of Science. So we are building four new applications on our unparalleled data set, which is Derwent Innovation. And those products are gonna be in market this year, and we expect to start to see some traction for those next year and the following year. And that's what will really help to lift this segment towards what we believe to be the market growth of about mid-single digits or approximately 5%. And then our final segment, which certainly we believe to have the highest growth potential, in the high single digits, about the 8% range, is our life science and healthcare business. And here we break the business into three component parts. First is our corporate solutions. So this is the early part of the development life cycle. Think strategy, M&A, for what life sciences companies are going to invest in through the research and development process, which includes all of regulatory and safety, all the way to the commercialization of those therapeutics. And across each of these segments, you can see the R&D business has been growing pretty close to market rates. The corporate business has a little bit of room to improve through further investment. But the real area that we're investing behind to accelerate growth is our commercial business. This is helping our customers accelerate the pace of commercialization of their drugs to help drive the growth and revenue for them. In this area, the major investment that we are making is in our real-world data platform. So we got some great indications earlier this year, selling to a couple top ten pharma, our new pharma-grade data set. And then in the second half of this year, we plan to launch the first couple therapy area-aligned analytical solutions that sit on top of that data, that we'll be able to build each of these once and sell them many times to a broad range of customers. So that's what we expect to help drive the growth in the life sciences segment over the next couple of years and get us from where we are last year and this year at low single-digit growth into the mid-single-digit growth over the next couple of years. Thanks. Maybe I'll just jump in. Right, once you have that slide up, just can you explain to the investors, what does commercialization mean? What are you doing with real world data, and what is your offering to the pharmaceuticals? What's happening? What's new? Absolutely. So we have a very unique and high-quality corpus of information that are effectively claims data, and electronic patient records, that provide information around how therapies are being affected in the real world, hence we call it that term. So you get out of the clinical setting and into the real world, and this evidence around what's happening with these treatments in the real world helps to provide better insights in how to pursue new drugs and potentially commercialize those drugs as they've been developed. So it's a really valuable, set of data. It's hundreds of millions of records that we have, that we have enriched. There are processes to master, de-dupe, and make sure that the information is high quality, so it can be used, and we've done that. And then the next step for us is to take that and help to build an analytical package on top of that around a focused data area, so we can sell this to those who might be looking into a specialized area of treatment. Okay. So, I mean, I cover a company called IQVIA as well, and they have a real world data business. Can you maybe compare and contrast what you're doing? Do you run into them much, or are you doing something different from what that you think they're doing? Yeah, there are a number of companies in the space that have an offering that is similar. Some of us focus on different data sets or different therapy areas that we are concentrated on. But broadly speaking, there are a number of potential solutions where we and others have acquired the information and are building analytics on top of those to help drive insights. We think that we're gonna have a great opportunity to package with some of our existing products, and as we enhance the quality of the data and build these analytics, we think there can be a really attractive value proposition for the customers. Okay, great. And I want to ask you, just in terms of, like, this year, we're talking about the business is often talked about in terms of subscription versus recurring, reoccurring. You know, how should we see the trends in this business, and particularly in the transactional business? You know, it a lot of the transactional stuff in academic and government, you know, the second quarter tends to be a pretty strong quarter for them seasonally. Like, how should we think about that and the trends that investors should expect to see from these businesses, you know, in each of the areas through the rest of the year? Absolutely. So, Shlomo indicated we break our revenue down into three types. The first is subscription, which is about sixty percent of our business. The majority of that are renewal business that we process every year, but we certainly sell new subscriptions as well. The second component we refer to as reoccurring, and this is almost exclusively our business where we renew patents for our IP customers. So as a patent comes up, we make sure that that gets renewed in every jurisdiction around the world, and that's recurring. So we think of both of those order types as coming back to us every year. And then the final is about 20% of the business, the remaining 20% we refer to as transactional, and it varies by segment. But within the academic segment, we make a lot of sales of books and historical periodicals on a digital basis that would be transactional in nature. You're buying a title or an article. In the life sciences business, here we see things associated with providing consulting services or maybe reports or insights that are done on a one-off basis or not recurring. And then finally, in the IP business, we provide a number of services for our customers that other than renewing patents, that tend to be a bit more transactional in nature. We may do search and watch services on their behalf to protect either their patents or their trademarks. So those are the three types in what we do. In terms of how that business is growing and the, the foresight on that, we indicated, and this is all consistent with what I shared at, at Q1 earnings, you know, over a month ago, we expect that the subscription business is gonna continue to grow stably this year at about 2%. We did see and do expect, based on the indication we gave for the second quarter, that the non-subscription businesses will decline in the first half of the year. We have tougher comps in both of those areas compared to last year. We saw a couple of our markets start to soften midway through the year, last year, and we'll lap those tougher comps in the second half. So we would expect the recurring business to grow in the second half of the year, the transactional business to have a little bit of growth as well, too. Getting us to a place on a full year basis where we would anticipate about 1% organic growth for the overall business, 2% on subscription, and then a slight decline on the non-subscription business to get us to about the 1%. And certainly have good line of sight into the subscriptions, the recurring, much better line of sight than we have had in the past, and then have gotten better at predicting the transactional business over the last few quarters as well, too. Now, is academic and government, is that the second quarter, like, a big deal for them? You're spot on. Yeah, I forgot that part. Great point. So, there is a seasonality to our transactional business, so the non-subscription, or excuse me, the subscription and the reoccurring businesses are relatively consistent through the year. But particularly within A&G, the second quarter is a big quarter. Many of the institutions that we serve here in the U.S. and even in Europe have spending that happens at their fiscal year ends around the summer. So, a really important quarter for us in that business. Fourth quarter is also a higher quarter as well, too, but certainly, the second and fourth quarter are higher than the first and third quarters, particularly within academia. And what else? The fourth quarter is usually also a big one, and I think in life sciences, isn't it? Can you-- What's the reason for that? Is also use it or lose it on budget type of stuff? I think that's right. We believe most of the customers that we serve in this segment are corporations that have fiscal year ends that are consistent with the calendar. So you're right, we tend to see more transactional spending within the life science business that skews towards the fourth quarter. Okay. Just a little bit, like, some of the questions I get from investors is just, you know, getting to the growth rates that you talk about, like academic and government and, you know, IP renewals, and they, they just, you know, from, from the face of it, investors view these as kind of sleepy end markets. Mm-hmm. Are they really end markets that the growth could be the levels that you're talking about in order to get to this? How did you build your forecast? You know, maybe talk about where you're focused on and why. You know, people don't normally think of academics and governments getting, being 4% revenue growth. I mean, you'd think they're, you know, maybe a little bit less than that. Yeah, it's, it's a really interesting point. We probably get the question more about A&G than the other segments... Mm-hmm ... from a growth perspective. These tend to be institutions that are very budget-focused, where the other markets may tend to be a bit more value-focused, where the intelligence can help accelerate and drive better profitability by using the tools. But within A&G, what we've highlighted before is the reason we believe the market grows faster than where we've been growing at about that 4% is the parts of the market we serve. So we are a provider of digital content and of software and analytical tools to help manage the library's collections and the research process. So when we think about where our customers tend to spend money, we believe that there is more that is increasingly skewed towards the parts of the budget that we are serving, compared to some of those other alternatives. Mm-hmm. So I think there's a you know, probably a general consensus that it's somewhere in the 3%-4% range, but based on what it is that we are providing, we believe we have the potential to get to about 4%. And again, most of that growth is gonna come from the research and analysis part of the business. What about the IP side and, let's say, the Derwent side of the business? I mean, that's an area where, you know, you have... And I'm sure you're exactly in Derwent, but there's been more. I would, I don't know if you'd call them upstarts, but more... Mm ... competitors that are out there, and I hear about them, and certainly some of them in, you know, here in Boston, actually, in patent renewal businesses. Could you talk about what's been going on in the market there and, you know, are they nipping at your heels? Is there, what's, like, the market dynamics? Yeah, it's a very fair point. So in the intelligence space, over the last five years, there have been a number of newer solutions that have come to market with a modern interface that have helped to provide the more casual IP researcher easier access to information. We have acknowledged that the interface that we had was very complex and built for a specialist, which is why over the last year, we have been building a more modern application for the advanced user, but also building two new platforms for more casual users. So our belief is, with our unparalleled data set in the Derwent World Patents Index, combined with that newer user interface, we will be able to reach back out to some of those users who left for a product that was easier to use, but didn't have the same quality of data that underpinned it. That'll help us to start to get this product to grow, where it's been declining for a few years based on the competitive dynamics. When we think about the management side of the business, this is an area that's grown really nice for us, our IPMSs, over the last few years. We think it'll continue to. Then on the maintenance side, we certainly think the market was softer last year, and we highlighted some of the things that we saw in Europe and in Asia that pulled that back a bit. But we believe that this is a market, when we look back over time, that grows very stably in the mid-single digits and think there's plenty of room for us to continue to augment our service and be able to achieve rates that are more consistent with what we've seen in the past. When will those products be at market so that you're gonna be able to aggressively go back to clients? And then also maybe talk about how long are those contracts? Like, if someone has left you a year ago, how long is it gonna take till their contract comes up with a competitor? It's a great point. Most of the business that we compete for in this space is up on annual contracts, so there's certainly plenty of room every year, by the time the renewal date comes around, to demonstrate the new capabilities that we've built into the product and look to get someone to move, to our solution. So this is a business that, we believe, as we launch the four modules. So all four modules will be in market this year, at various levels. The search service is out, and in front of customers now. Watch will be out very soon. And then the, R&D and the, the business product, Innography, will be refreshed in the second half of this year. So we think next year's renewal cycle and next year's upsell cycle represents a great opportunity to take improved usage data and proven use cases to customers to drive those discussions to increase ACV and revenue in 2025. Is your sales team, like, in position, as these things are coming out, to really understand it and understand to what they need to point out to clients to try and get yourselves back into some of those clients and potentially sell new clients? It's a great point. We spend a lot of our time talking about building these new products, but our sales enablement teams are also heavily focused on equipping those account managers, those product specialists, with what has changed, how it works, what new capabilities are there, to make sure we have those discussions. And there's a very natural point for us in this business, related to the annual renewal cycle, because most of these customers are buying one or multiple solutions from us. This creates a great opportunity to say, "Take a look at the new Derwent Search capability or the new Derwent Watch service, and what it can offer your organization. Okay. Maybe you could shift a little just into AI. A couple of questions. One is, where are you using it, and how is it helping the business? The other one is the question I get from investors is that, is there a threat in the business from AI, you know, potentially, you know, cannibalizing some of the business? You know, obviously, where you have proprietary data, it's much harder to go and do something like that, but I know that you know, the company does do some, you know, trademark web scrapes and stuff like that. Maybe you could talk about the potential over there and why you think that it's probably not as easy to do as people think. You got it. So there are really two aspects of AI that we think about, where we are leveraging tools to make us more efficient internally and where we are taking new generative AI capabilities and building them into our products. So as it relates to the former, we do think this is going to be a great opportunity for us over the next couple of years, and have started to make investments in tools that will make us more efficient in our content ingestion and product development, activities that we're managing internally. The benefit for us can either be potential margin expansion down the road or the ability to provide more innovation or more features into our products at the same level of investment. The second one is really what's more exciting for us. Because we are an information services and a software business, leveraging LLMs and generative AI capabilities provides us the opportunity to take our customers further in their discovery, research, and innovation process than we have with conventional products. So I would encourage everyone, if you haven't had a chance to take a look at those webinars that we put out in March, where each of our presidents gave a couple of demos of how we're using AI, I'll pick one of them that that I can explain reasonably well. And that's the new Researcher Assistant that's in the Web of Science product. So this is a new interactive tool that takes the search that someone is doing and helps to provide prompts and different information, and asks and answers questions associated with the research journey that that person is on. It's built in really interesting visualization tools that help to navigate you through that process. So rather than just typing something into a search box and getting some interactive results, you ask a question, you get an answer, you get a prompt, you get more information to go look at, and this is a feature that the A&G team is rolling out onto the Web of Science platform as we speak. So we think there is a great opportunity there to augment our data. In that example, AI helps to leverage the Journal Impact Factor and the Journal Citation Report, which is proprietary content. You can't get that anywhere else in the world, and that's why we think there's such attractive returns for us in the long run to make investments in this technology. Because freely available information that doesn't have the editorial enrichment and the metadata around it is harder to find and harder to surface in a relevant way when the LLM is seeking to answer that question. So we do believe, and we actually outlined this at your conference a year ago when this started to come out, that we think the combination of our proprietary content, the critical nature of the use cases that our customers are delivering that can't afford hallucinations, position us really well to deliver these answers as people are moved through the innovation life cycle. Do you think there's a threat from, let's say, the trademarks business from AI, from someone else coming up with a product and saying, "You know, this is pretty cool," and, you know, we're comparing a customer's trademark versus something else that might pop up? You know, how hard would it be for someone to create that? So we launched a product like that last year at one of the major trademark shows midyear. We got great receptivity. There are a couple in the market, but there's a visual recognition tool powered by AI that we use to augment our existing search services. We think this is going to be an area that is going to help protect assets for our customers. And we think the advantage that we have in our history here, the great data that we have, and all of our metadata around images that we already have, will help continue to make us a really formidable player in this place, leveraging new technology, even with some new entrants that have come to the space. Well, how does the existing data help with something like that? Maybe you can just explain to us, like, if you're making comparisons in terms of visuals and stuff like that, where does historical data help differentiate you? Yeah. That's. It's largely, metadata and descriptions of images that are existing out there already that could help to clarify, what the image picks up. So we think there's a great opportunity to take all of the different forms that we have and historical evidence, and, you know, have these LLMs build in the capability to accurately predict when something is likely to infringe, versus just coming up to that line, as an example. Okay. I'm gonna shift a little into some financials. The company, you know, is right now in a, call it an investment phase. Not that the investment phase should stop, but I guess at some point, the revenue we're hoping is gonna catch up to the investment phase. And at what point in time does the revenue—what kind of revenue do you need to start seeing more operating leverage in the business? Like, what kind of growth do you need to have before you could start dropping stuff down to the bottom line? We've broadly indicated in the past, and this remains true, that once we start to see our organic growth pretty consistently in the low single-digit range, call it 3% or 4%, we believe we can start to see margin accretion. Once we move on to that, into the mid-single digits, where we think will be our resting point in a few years, we certainly think that there's clear margin accretion, and even more at that point. To your point, we made a conscious decision last year that over about a three-year period, we were gonna invest about an additional $100 million-$150 million between capital expenditures and operating expenses to really fuel the innovation in those areas that I highlighted, making sure that we're building these new AI capabilities into the product, like I just talked about in Web of Science, building the new applications for Derwent, building the new real-world data platform. So we think that cycle, which we started last year, will run through this year and through next year. And we believe there's potential for that to start to abate in 2026 as growth starts to inflect. But we remain committed this year. We'll still have margins that are attractive, albeit a little bit lower than what we saw last year. We're taking our CapEx this year up to about 10% of sales, which is the highest that is, revenue, that it's ever been. And we believe those choices are gonna start to provide innovation into the products that'll help drive the growth. And to your point, once we get past about that 3% marker and start moving up, we think there's a nice opportunity for margins to tick up in the coming years. Now, what if you were to decide to spend more into investments? Would that accelerate the revenue growth faster? Would it give you more, or, or, is there, kind of from a practical perspective, from a business cadence, like, there's not, you can't really do more than that, because what's most, I think the biggest focus on investors' minds is how do you get the revenue growth going? Yeah. Is that, is that something that can be done faster if you invested more? You just don't wanna really do more than that, or is this like, "Hey, there's a limit to how much you can run the engine? I think it's a bit more of the latter. We believe that, practically and from an execution perspective, we have the right pace of investments that's going into the products. We don't believe we are unnecessarily restraining any of the segments of business, at the pace that they can build high-quality products that our users will accept within the marketplace. That said, we are constantly looking at new opportunities for innovation that the teams are bringing forward. Each of the three division presidents have a good innovation flywheel moving in their businesses, and as those come forward, we look at opportunities for incremental funding. And of course, just as any responsible business does, we're always looking for ways to become more efficient in what we do today to help fund some of those incremental elements. So I do think, we're at the right cadence and pace, and we'll continue to focus on executing on that in the next couple of years. So I'm gonna ask you a question that I had talked to Jonathan Gear about a couple of years ago when he initially joined. So, we were talking about the complexity of doing business with Clarivate, and he said one of the issues that he saw when he came in is the business was built through acquisitions, that those acquisitions themselves had been built through other acquisitions. There's a lot of business systems that were out there that needed to be simplified and consolidated. Where are you in that journey? And is that an ongoing process that's going on in terms of shrinking down the amount of business services to fewer and making it easier? So let's say, you know, your CRM systems between the different products or, you know, your salespeople don't have to go to different ones and just the back office stuff. Maybe you can, as a CFO, you could tell us what's going on behind the scenes. Sure. So, it's a great point. The good news is, you talked to Jonathan, you had that conversation with him right as he was joining shortly after the ProQuest acquisition, and we've made a lot of progress since then. So with his new operating model, where we're focused on dedicated resources to each of the three segments, the primary focus in the last year and a half has been moving toward a common or a primary system within each of the businesses. So you picked a great example, on the CRM. So we just moved our A&G segment, the last major group of products, onto the common CRM for them. So now the account managers within the A&G space have the ability to get all the major products that they're selling within one CRM instance. So we're making progress on examples like that in each of the segments. I think probably when you asked the question initially under the one Clarivate model, the hypothesis was we would move towards one. We now, under this model, think that we're at a point where we're moving towards a major or a primary one for each of the businesses. And the good news is we've made quite a bit of progress on that since you last asked. Okay, I've got other questions, but I wanna make sure I get a chance. If anyone in the room wants to ask a question, just kind of raise your hand or, you know, let us know. If not, I will just continue for the last... Okay, there we go. Got someone. You talked about spending $100 [audio distortion]. Can you kind of give us a little more of a profile, like, going forward? You got it. So yeah, we started last year, and moved into this year, ramped up a little bit. I think we'll hit the peak spending towards the end of this year and moving into next year. And what we've indicated is once we make these major investments that are required to overhaul some of those legacy platforms, we think there's an opportunity to pull back and get some efficiencies on both the operating expenses and the capital expenditures, you know, once we get into the 2026 timeframe. So I think we'll continue to remain committed to that investment. We do expect to see growth start to improve next year and into the following year, which will help to cover some of those investments. I think there'll be the opportunity to be able to pull back to maybe a bit more normal levels beyond that, but more to come on that as we continue to make progress this year and next year. Thank you. Any other questions that, anyone has here? Go ahead. [audio distortion] So we laid out about a year ago that we would like to get to about three turns of leverage over the course of the next few years. We made progress on that last year. We used about three quarters of our available cash flow to deleverage. We did a bit more deleveraging in the first quarter when we refinanced our term loan and extended that maturity out to 2031. So we do expect over the next few years to make progress on that. I think, you know, given where our stock price is right now, similar to what we did last year, we may choose to use a portion of this year's capital to do some buybacks. We used about a quarter of last year's available cash flow to do that, so, we have some optionality there. But the longer-term message is that over the course of the next few years, this business has a very attractive cash flow profile. We expect to be able to use a meaningful portion of that to bring the leverage closer to and eventually below three turns. Okay. Thank you. Anybody else have any other questions? Go ahead. Get the last one. Yeah, I think for us is having the expectations be a bit more muted in the near term certainly has helped. I think the product expectation that we're really focused on is taking some of the solutions that have been provided in a more, transactional nature and making the investments to sell them in a more recurring or a subscription fashion. So I think one of the things we're focused on here is what we're doing with our real-world data platform. Great opportunity to move away from delivering a data set to delivering information inside of a product that has feature functionality and capabilities that can be sold as a subscription. So I think a combination of having people that are in positions a bit longer, more familiar, division presidents that have a year under their belts, combined with some of the product investments to migrate towards more recurring revenue-type solutions, both of those, I think, will continue to help. Great. Thank you, Jonathan. I wanna thank you very much for being here, and I wanna thank you all for attending, and I hope you enjoyed what is the final session of the Cross-Sector Insight Conference for 2024. Thank you.