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Transcript Summary

Clarivate delivered a solid Q1 2026 performance, marking its fifth consecutive quarter of improvement under the Value Creation Plan (VCP). The company reported $586 million in revenue and a 41% adjusted EBITDA margin, driven by a strategic shift to subscription-based models and disciplined cost management. Academia & Government remains a strong growth engine, utilizing AI to improve library workflows, while the Intellectual Property segment is showing recovery signs with improved renewal rates and stabilizing ACV. Management is actively pursuing the sale of the Life Science & Healthcare business to sharpen strategic focus and maximize shareholder value. AI is a primary catalyst for both product innovation and internal cost efficiencies, with new partnerships like Anthropic and the launch of "Nexus Connect" expanding the reach of Clarivate’s proprietary data. Financially, the company reaffirmed its full-year guidance, expecting $400 million in free cash flow for 2026. This cash will be prioritized for debt reduction, with a target to lower net leverage from 4.0x to 2.5x in the coming years. Despite some headwinds in transactional revenue, management remains confident that their shift toward a subscription-first, AI-driven business model is creating a more predictable and profitable organization.

5-year share-count history (top 10 holders by peak, incl. exited) + price

Revenue Segments

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Clarivate PLC: Intangible-Heavy Balance Sheet and Significant Securities Litigation Risks

Full Earnings Call Transcript — Q1 • 2026-04-29

Operator: Ladies and gentlemen, thank you for standing by, and welcome to the Clarivate Q1 2026 Earnings Conference Call. [Operator Instructions]. I will now hand today's call over to Mark Donohue to begin today's conference. Please go ahead, sir.
Mark Donohue: Thank you, and good morning, everyone. Thank you for joining us for the Clarivate First Quarter 2026 Earnings Conference Call. As a reminder, this conference call is being recorded and webcast and is copyrighted property of Clarivate. Any rebroadcast of this information in hold or in part without prior written consent of clarity is prohibited, and the accompanying earnings call presentation is available on the Investor Relations section of the company's website. During our call, we'll make certain forward-looking statements within the meaning of the applicable securities laws. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the business or developments in Clarivate's industry to differ materially from the anticipated results performance, achievements or developments expressed or implied by such forward-looking statements. Information about the factors that cause actual results to differ materially from anticipated results or performance can be found in Clarivate's filings with the SEC and on the company's website. Our discussion will include non-GAAP measures or adjusted numbers. Clarivate believes non-GAAP results are useful in order to enhance understanding of our ongoing operating performance, but they are a supplement to and should not be considered nicely from or as a substitute for GAAP financial measures. Reconciliations of these measures to GAAP measures are available in earnings release and supplemental presentation on our website. With me today are Matti Shem Tov, Chief Executive Officer; and Jonathan Collins, Chief Financial Officer. After our prepared remarks, we'll open up the call to your questions. And with that, it's a pleasure to turn the call over to Matti.
Matti Shem Tov: Good morning, and thank you for joining us. Today, I will walk through our first quarter performance, progress against our value creation plan and how execution across the business is positioning Clarivate for improve organic revenue growth, margin expansion and stronger free cash flow generation. This is our fifth consecutive quarter of improved performance. We are off to a solid start to the year, and I am pleased to report that our first quarter financial results have us on pace to achieve our full year guidance. Revenues were $586 million, supported by continued [ VCP ] progress and execution across the portfolio. From a growth perspective, the quality composition of our revenue continues to improve. Organic ACV growth was 1.6% with subscription organic revenue growth of 1.7% and reflecting increased adoption of subscription-based solution across Clarivate. We are encouraged by the underlying momentum we are seeing due to stronger alignment between commercial execution and product strategy. Adjusted EBITDA was $241 million, representing a 41% margin, up almost 200 basis points year-over-year, highlighting the benefit of our subscription-first strategy and disciplined cost management. Free cash flow generation was also solid at approximately $79 million which allowed us to retire $143 million of debt during the quarter. Most important, the value creation plan is working. We are seeing positive execution across all pillars, demonstrated by accelerating product adoption, improving sales effectiveness and an expanding cadence of new product introductions. This quarter reinforces our confidence that the actions we put in place are beginning to translate into more predictable performance, expanding margin and strong free cash flow generation. As a reminder, we launched the value creation plan in early 2025 to sharpen focus, accelerate execution and unlock long-term shareholder value. The plan is built around 4 core pillars: business model optimization, improved sales execution, accelerated AI innovation, utilizing our proprietary data assets and portfolio rationalization. You can see these pillars showing up clearly in the numbers through subscription mix, margin expansion and debt reduction. Academia & Government continue to be a strong engine for recurring revenue growth. We are executing well across all 3 pillars of the value creation plan with clear evidence of progress. uses model optimization, we are accelerating the shift towards subscription-based offerings. Adoption of our progress subscription solution remains strong, with over 600 new subscriptions sold in the last 12 months, reinforcing the durability and predictability of our revenue base. Sales execution is also improving, driven by more effective cross-sell execution across content, research and analytics and software solutions. During the quarter, we secured several key wins, including a multiproduct institutional deal with Fuyao University, a new research-oriented university in China. We are expanding our China footprint, and this demonstrates our ability to deliver integrated solutions and address broader customer needs. We are leveraging the power of AI, which is generating real measurable value for customers. Clarivate Academic AI solutions are optimizing key library workflows resulting in 30% to 60% decrease in manual repetitive work and doubling or even quadrupling throughput. This demonstrates how combining AI with climate unique content and extensive domain knowledge leads to a significant operational improvement for customers. Turning to Intellectual Property. Our attention remains firmly on execution and fundamentals. We are seeing encouraging signs that our increased focus on new subscription and renewal discipline is producing results. For the first quarter, renewal rates improved approximately 100 basis points, helping organic ACV trends improved to nearly flat. This represents a clear improvement versus prior trends and support our confidence that the IP business is moving forward and returning to sustainable recurring growth. Sales execution continues to strengthen. For example, with national IP offices, including the U.S. PTO, where we secured major trademark analytics contracts and large-scale digitization programs. This wins or advancing patent and trademark operations globally and reinforce Clarivate's role as long-term strategic partner in IP ecosystem and analytics. During the quarter, we released brand image search, adding advanced AI capabilities such as clustering and multilingual support. This enhancement are expanding our IT professionals uncover insights, assess risk and make faster, more confident decision at a global scale. Overall, the IP segment is operating with greater focus and discipline, and we believe this improvement positions the business to future growth. In Life Science & Health we are seeing steady progress with the value creation plan. The shift from transactional sales to subscription is on track, supported by positive customer feedback and more consistent sales patterns. The successful changes we have made are reflected in an almost 1% rise in organic revenue during the first quarter. Notably, we won a new top 20 global pharmaceutical customer for DRG Fusion, our new real-word data analytics platform. This reinforces the strength of our value proposition with large sophisticated customers. In addition, we secured 6-figure subscription wins with biotech company for OpEx, our platform for preclinical and clinical safety intelligence, demonstrated continued momentum across customer sizes and use cases. On Innovation, we continue to expand access to our trusted regulatory and scientific intelligence through strategic partnerships. During the quarter, we integrated Cortellis regulatory intelligence with Anthropic Cloude Enterprise, combining Clarivate propriety data with advanced AI reasoning to deliver trusted insight directly within customer AI workflows. The collaboration underscores how Clarivate is extending the reach and relevance of this content across the broader AI ecosystem. In February, we announced that we are actively pursuing the sales of the Life Science & Healthcare business as part of our broader portfolio rationalization efforts. This is consistent with our broader strategy to concentrate capital and management attention on areas where we see the highest returns. The process is ongoing. As always, there is no guarantee of the outcome, and we will provide updates as appropriate. Our objective remains clear: maximizing value for shareholders while sharpening strategic focus on our remaining businesses. We have spoken over previous earnings calls about the investments we are making in product innovation. Today, I want to highlight how we are scaling AI enablement across Clarivate to drive efficiency and support acceleration of free cash flow. This is a core enabler of our value creation plan and a key lever for margin expansion as we return to healthier organic growth. Let me provide some color and examples. Across go-to-market function, we are embedding AI within sales and customer care to accelerate revenue growth, streamline customer interaction, enhanced service quality and experience and increase retention. In technology, we are deploying AI throughout software engineering and content operation to accelerate innovation and shorten new product time to market. Within corporate functions, we are leveraging AI across finance, human resources and legal functions to automate workflows and drive scalable efficiencies. We expect the deployment of digital agents will reduce manual effort, improve accuracy and create operating leverage. Taking together, this AI-enabled cost efficiencies reinforce our core messages. As organic growth improves, this AI efficiency give us confidence in sustained margin expansion and growing cash flow. To close, the first quarter demonstrates that the action we put in place through the value creation plan are translating into stronger execution, improving fundamentals and clearer path forward. We are operating with greater focus, strengthening our business model, improving sales effectiveness and delivering innovation that matter to our customers, all while maintaining strong discipline around cost and cash generation. Thank you for your continued support, and we look forward to keeping you updated on our progress. I will now turn the call over to Jonathan for a review of our financial results and outlook.
Jonathan Collins: Thank you, Matti. Slide 14 is an overview of our first quarter results compared with the same period last year. Q1 revenue was $586 million, change over the prior year was due to the inorganic disposals, partially offset by organic growth and a favorable foreign exchange impact. First quarter net loss was $40 million. The $64 million improvement over the prior year was driven by a foreign exchange benefit as well as lower restructuring, income tax and interest expenses. . Adjusted diluted EPS was up nearly 30% or $0.04 over the prior year to $0.18. The increase was attributed to adjusted EBITDA growth, lower interest expense, lower tax expense and a lower share count due to last year's repurchases, which each contributed about $0.01 to growth. Operating cash flow was $135 million in the quarter. The change compared to last year was driven by higher working capital due to incentive compensation payments, partially offset by higher adjusted EBITDA. Please turn with me now to Page 15 for a closer look at the drivers of the first quarter top and bottom line changes from the prior year. The changes over the prior year were driven by 3 primary factors: First, Organic revenues grew modestly as subscription growth of nearly 2% was partially offset by lower recurring and transactional revenues. We delivered a strong profit conversion on the growth as operating expenses were lower than the prior year despite the higher revenues as we achieved cost efficiencies across the business. Second, the businesses we are disposing decreased revenue by $24 million, but was almost entirely offset by cost reductions due to the wind downs yielding a net $3 million reduction in adjusted EBITDA. And finally, the U.S. dollar remained relatively weaker against the basket of foreign currencies compared to the first quarter of last year, which caused a foreign exchange tailwind on the top line. The mid-teens profit conversion is due to transaction gains last year that did not recur this year. In total, disciplined cost management led to an adjusted EBITDA margin expansion of nearly 200 basis points, which is in line with our full year guidance. Please turn with me now to Page 16 for a look at how the adjusted EBITDA converted to free cash flow and how we allocated the capital. Free cash flow was $79 million in the first quarter, which was $31 million lower than the prior year. The change was due to higher working capital as a result of incentive compensation payments, partially offset by the adjusted EBITDA growth. We used the free cash flow and excess cash on hand to redeem the remaining $100 million of bonds that were due later this year, repurchased $43 million of bonds due in '28 and '29 at a blended discount of about 10% and repurchased 7 million shares of stock to offset the dilutive impact of stock compensation investing. Please turn with me now to Page 17 for a look at our full year financial guidance, which remains entirely unchanged from February. Today, we are reaffirming our full year financial guidance for all metrics. Beginning at the top of the page, we anticipate the acceleration of our organic annual contract value last year will continue in 2026 resulting in growth of between 2% and 3%, representing continued steady progress and an increase of about 0.75 percentage point at the midpoint of the range. We expect recurring organic growth of about 1.5% at the midpoint of our range, which is an improvement of nearly 1 percentage point over last year. Due entirely to the wind down of the businesses we are disposing, we expect revenue to decline by about $100 million at the midpoint of the range to $2.36 billion and that our organic recurring revenue mix, which excludes the impact of the disposals will improve to between 88% and 90%. Moving down the page, we expect adjusted EBITDA will grow modestly despite the lower revenue, increasing our profit margin to nearly 43% at the midpoint of the range. We anticipate adjusted diluted EPS will grow about 9% at the midpoint of the range to $0.75, largely due to the share repurchases we completed last year. Finally, free cash flow is expected to grow by about 10% to $400 million at the midpoint of the range. Please turn with me now to Page 18 for a reminder of the full year top and bottom line changes we are expecting compared to last year. We expect adjusted EBITDA margin will expand by about 200 basis points at the midpoint of our ranges driven by a return to organic growth, continued cost discipline and completing the disposals. We anticipate organic growth of about 1%, led by subscription revenue growth from continued ACV acceleration. We have plans in place to achieve cost efficiencies to fully offset inflation, resulting in a full flow-through of the approximately $25 million of revenue growth to profit. This will account for about 1/3 of the profit margin expansion. The inorganic disposals are expected to lower revenue this year by approximately $130 million, and we are reducing operating expenses by more than $100 million which yields a profit impact of about $25 million, delivering the remaining 2/3 of the profit margin expansion. As a reminder, our financial guidance for this year assumes we will own the LS&H business for the entire year and if an agreement is reached to sell the business, a revision to our guidance for this potential divestiture may be necessary later this year. We continue to anticipate a modest foreign exchange translation benefit to the top and bottom lines of $10 million and $5 million, respectively, most of which we already experienced in the first quarter. Please turn with me now to Page 19 to step through the expected seasonality of our revenues and profits this year, which we have refined based on our first quarter results. We continue to expect to make steady progress on the top and bottom lines as we move through the year. As we projected in February, we experienced a slight sequential pullback in our annual contract value organic growth in Q1 but anticipate steady acceleration through the balance of the year to arrive near the midpoint of our range. Recurring organic revenue growth in Q1 of 1% was higher than we expected due largely to the timing of patent renewals. We do expect a slight pullback in Q2 as a result of this phasing, leading to accelerated growth in the second half of the year. We expect revenue will remain relatively stable over the next couple of quarters and then tick up in Q4 due to the normal seasonality of reoccurring and transactional revenues. We do anticipate profit margins will continue to expand as we move through the remainder of the year due to the organic growth and the impact of the disposals. Please turn with me now to Page 20 to review how we expect the more than $1 billion of adjusted EBITDA will convert to about $400 million of free cash flow and how we plan to allocate this capital. At the midpoint of our range, we expect free cash flow to grow about $35 million or 10% over last year. Onetime costs are expected to abate primarily on lower restructuring costs. As noted a couple of pages ago, our guidance does not contemplate the sale of the LS&H segment. If we reach an agreement, this is an area we would update later this year. We expect cash interest to improve by about $20 million over the prior year as a result of the debt we prepaid last year and last quarter. Additional debt we plan to prepay the remainder of this year and some savings associated with the projected forward base rate curve. Cash taxes are expected to be $5 million to $10 million higher than last year, due largely to the new corporate tax in Jersey. We anticipate the change in working capital this year will be a use of approximately $20 million primarily due to the incentive compensation payments in Q1. We're also expecting a $10 million benefit associated with lower impaired contractual costs. And while we remain committed to investing in product innovation, the disposals and cost efficiencies will improve capital spending by about $15 million. From a capital allocation perspective, we plan to use the free cash flow we generate in the remainder of the year for debt reduction. Please turn with me now to Page 21 for more specifics on our deleveraging plan this year and beyond. The chart at the top of the page outlines our debt maturity profile. As you can see, we have a favorable runway with no near-term maturities. Over the past 3 years, '23 through '25, we generated $1.2 billion of cumulative free cash flow, just over $100 million per quarter on average. As I highlighted on the prior page, we expect to generate approximately $400 million this year at the midpoint of our range and we expect to generate at least this amount next year and the following. This outlook results in a similar average quarterly rate of about $100 million. Given the current debt market conditions, we plan to use our free cash flow moving forward towards the early retirement of our bonds. Over the next 9 quarters, we expect to retire our secured notes in their entirety before their maturity in July of '28. Once those have been redeemed, we plan to use our quarterly free cash flow to begin to retire the '29 notes leaving only $0.5 billion of the $1.8 billion of mid-term maturities to be refinanced in the next few years. It's worth noting that as with all of our forward-looking guidance, this outlook includes our LS&H business. If the potential sale does materialize, we expect it would eliminate the need for a future bond refinancing. We anticipate these debt reduction actions will lower our net leverage from 4 turns at the end of Q1 of this year to approximately 2.5 turns in a few years. We continue to be very encouraged by the improved results we are delivering as we implement the value creation plan and the durable cash flows we generate. I'd like to finish by thanking all of you for listening in this morning. I'll now turn the call back over to the operator to take your questions. [Operator Instructions]
Operator: [Operator Instructions] Your first question is from the line of Toni Kaplan with Morgan Stanley.
Toni Kaplan: Thank you you've talked about your new AI capabilities that you've launched and reducing some of the manual repetitive work through AI efficiencies. I was hoping you could talk about the traction of the new AI products, the reception from customers, how much growth you're getting from them at this point. And similarly, any ability to quantify the efficiency benefits that you can get from AI as well? That would be great. .
Matti Shem Tov: Thank you, Toni. I'll start and Jonathan will continue. So first of all, we are intensifying our investment in the last 15, 18 months, we invest more and more into AI. And it goes 2 ways. The first one that we started was a major product introduction and innovation around the 3 segments. And then now we are shifting or moving also to internal cost efficiencies is AI. So as with internal cost efficiencies, our opportunities in go-to-market customer support, sales operations, there are opportunities in technology to help us innovate and develop products faster with support of AI. There are also opportunities around the corporate to rationalize some of our corporate costs, whether it's going to be financed a general legal. So there's a lot of opportunities internally. Externally, the product and this [indiscernible] patient, is delivering innovation to our customer what it really matter. So 3 buckets of product innovation that we have on AI. One is the first wave of product that we have improved or AI assistant. So product by product, many of our products, we have implemented -- we have implemented a research assistant. We have implemented in different products in ANG and then in life science, and we are doing the same with IP. That was Wave 1. Wave 2 was agent. We are implementing AI agent capabilities across our product where it matters. And then just coming back from some of the feedback we get from some measurement that we've done in implementing agentic AI within our Alma Prime lab reporter. So basically, we have managed to reduce the manpower or to quadruple the throughput of some of our customers using agentic AI capability and it's just a start. And the third wave is ecosystem implementation. Ecosystem implementation. We all know that this generation, especially student researchers, but also life science scientists and IT professionals are consuming AI through the major LLM providers. So we have started the journey. We announced about a month ago that we are collaborating with Anthropic to provide AI capabilities within Anthropic Enterprise Customers. Taking the CRI proprietary products that we have or CRI proprietary data that we have in collaboration with Anthropic, we are enabling the consumption of this data in Anthropic environment in a way, we are turning the LLM to our sales agent, meaning our customers where they are. On top of this, we as -- yesterday, we have announced another product from the ANG called Nexus Connect, if you think about universities, they subscribe to a lot of different content. And again, students, researchers are consuming this content through different type of LLM and Nexus Connect is our new offering from ANG that brings the data into ChatGPT, copilot whatever you designated LLM using our technology will bring the content -- our content but also other people content very close to our customers. So overall, a lot of energy going into and a lot of resources going into AI innovation. And you know that we've just been awarded from outside recognition that we are the fund leader in terms of AI innovation in the academic ecosystem. There's been a long answer for that, but I'll move it over to Jonathan to talk a little bit about the financials.
Jonathan Collins: Yes. I appreciate the part of the question, Toni, with respect to the opportunity size in the AI efficiency internally. We outlined the areas that we're focusing on there. And at this point, we are confident that the opportunity set here gives us a really good opportunity to continue to expand our margins and grow our cash flows. I think we're likely going to look to further dimension this probably later this year. .
Operator: Your next question is from the line of Manav Patnaik with Barclays.
Manav Patnaik: Matti, I was hoping you could just give us an update on how you see the competitive environment out there? Presumably they are using AI and enhancing their products as well -- and just curious if you've seen any change or way to compare your initiatives versus what you're seeing in the market? .
Matti Shem Tov: I think I've just mentioned that outside this recognize us as AI innovator, we see a great adoption for our AI product across the 3 different segments. We mentioned this. We have -- in ANG, we have more than institution using academic KI solution, I mentioned Nexus Connect, Lab Science over 10,000 researchers and users are using some of our -- some of our AI product innovation, including -- I mean, recently announced the Claude Anthropic collaboration. We're doing well with IT as well with the recent brand image that we have introduced. So we look -- we always look forward. We're trying to set the scene as opposed to look at our competition, but we feel good about our product innovation. We come from a background of products and engineering, many of us, and I say we see a lot of improvement and created from our customers across the different segments.
Operator: Your next question is from the line of Scott Wurtzel with Wolfe Research.
Scott Wurtzel: Matti, I think in your prepared remarks, you talked about sort of the China opportunity and expanding there. I'm wondering if you can maybe just talk about that China sort of ANG space more broadly in the port that presents to you guys?
Matti Shem Tov: Yes. China is a great contributor to our AI -- to our ANG capabilities and performance has been the -- we just came back from the meeting with some of our Chinese top sales executive. We have sold 15 new web science deals in China last year. So there's a lot of great momentum going for ANG in China, specifically in web science and more recently, also in [indiscernible] science research intelligence, some development and collaboration, we do. We feel very good about our ANG prospect in China, not only ANG also Life Science and IP. We have different ideas that we are currently contemplating, we see more than 1 we have, but we feel good about both the China market.
Operator: [Operator Instructions] Your next question is from the line of Ashish Sabadra with RBC Capital Markets.
Unknown Analyst: This is Phil Chi on for Ashish Sabadra. Great to see kind of the continued sequential improvements on the organic sales metrics. I think IP kind of continues to execute in a bit of a more muted environment. I think you guys have noted in the past that there are some expectations for that to improve maybe in the back half of '26 into early '27 as some of those historical batch renewal cycles come back -- is that the general kind of trend that you expect for that segment? And you guys have had kind of great wins as well. How do you kind of combine all those together?
Matti Shem Tov: I'll start and then I'll ask Jonathan to add. So just a reminder that we are the market leader in IP. We tend to forget this. And we are the only company -- and this has been a lot of my focus and a lot of my discussion has been around. We are the only company that have all the 3 or 4 sub offering that we have in IP. We are very big in on OT. We have great IPMS products, and we have great intelligence products, both for the trademark and for the patent as well. We brought in a new management team [indiscernible] new manager, and we have an enhanced focused, very strong focus in 2 things. sales execution. We've gone through some kind of changes or some changes into our sales organization, renewals, territory alignment and other things that we've done. -- in the self-execution is much stronger and much better focus and then AI innovation, very strong AI innovation momentum that we are building with the management of -- with the management team of IP, risk Mark, was one product we mentioned. We're now talking about brand image search, as I mentioned as well, we are confident in the return for IP back to future growth. And Jonathan, if you can give some more color here?
Jonathan Collins: Yes. As Matti highlighted, the continued investment in AI, we helped -- we expect to help accelerate growth in our subscription products there. So we noted that we've made some steady progress. We saw slight improvement in renewal rates in the first quarter, and we've got an organic ACV that it's getting pretty close to flat after a few years of decline. So steady progress based on the investments that we're making there. The biggest part of the IP business, the reoccurring revenue stream, which is our patent renewal business, that's a business that 2 years ago, declined a few percent last year was flat. First half of this year due to the comps and some timing from the first half of last year will be down slightly. We do expect that business to return to growth in the second half of this year and a good trajectory heading into next year. Market conditions there, the patent stock growth has improved over the last few years, which is a good leading indicator. And the team, as Matti said, has done a very good job on sales execution, improving our competitive position in that part of the market. So continued progress, and we look forward to a better performance from IP in the coming quarters and into next year. Thanks for the question, Will.
Operator: Your next question is from the line of George Tong with Goldman Sachs. .
Keen Fai Tong: Transactional revenues were down this quarter because of lower A&G activity. Can you talk a little bit more about what you're seeing there and what would need to happen for A&G activity to rebound?
Jonathan Collins: Yes. Thanks for the question, George. Look, our transaction revenues were down a couple of percent in Q1. As you noted, ANG was the primary driver in the quarter. I will start by saying we do expect on a full year basis, our guidance does contemplate that the transactional business will be down slightly compared to the prior year. So it was as expected. In the quarter, some of that in AMG was due to the timing of software implementations. That can be a little lumpy quarter-to-quarter. And then on a full year basis, as we continue to have success in Life Sciences, with the migrations to subscription, we will expect to see a little bit of a headwind there on the transactional side. But Q1's slight decline was in line with what we expected. -- and is in line with what we expect for the full year. As we move into next year, continue to build that sales pipeline -- on the software products, there's some opportunity to improve that heading into next year. But that was the primary driver in Q1.
Operator: Your next question is from the line of Andrew Nicholas with William Blair.
Andrew Nicholas: I was hoping to hone in a little bit more on AMG growth -- that's been a segment that's hung in there pretty well over the past handful of quarters. Within that 2% organic growth and the expectation for improvement in -- are there -- is research analytics and content aggregation kind of leading the way there? Or is it a software-led growth? Or are they all kind of around that 2% number? Just curious if there's an underlying kind of subsegment there, where you have more expectation for growth acceleration.
Jonathan Collins: Yes. Thanks for the question, Andrew. I think the bright spot for us as of late in A&G from an organic growth contribution standpoint, has been the success in our research and analytics category, which is led by our flagship product, [indiscernible]. As Matti touched on in his comments around AI innovation. This is where we've seen a lot of the new innovation come into the product. So very encouraged by the adoption of the research assistant last year, some of the agents that we've deployed that we're getting great feedback on such as the literature review agent. And then we're also very thrilled about this year's growth that will help to be driven from the web science research intelligence platform. So that's the new AI native multi-agent platform that helps to measure research success across the university ecosystem. So really encouraged by what we've seen there. The content business is held in that usually grows at or slightly below the average for AMG. And then the software business is doing well, very high renewal rates. We've got some new product innovation happening there that can help to catalyze further growth there. But those are the 3 main areas and really the strong performance has been in our research and analytics category. Thanks for the question, Andrew.
Operator: Our last question comes from the line of Adam Parrington with Stifel.
Adam Parrington: Calling on fish [indiscernible]. I apologize if I missed this, but in the slide deck, life sciences and health care, progressing ahead of schedule and the ship subscription -- what is the current subscription mix of the business? And how should this shift move organic move organic growth through the year? .
Jonathan Collins: Yes, Adam, thanks for the question. This is our segment that has the highest proportion of transactional revenue. So just as a reminder, our consulting practice for commercialization, which sits in the Life Sciences business. is an important part of the go-to-market motion for this, but it creates a lower organic recurring revenue mix within Life Sciences. What Matti touched on Slide 10 is that we have continued to invest in product innovation to migrate some of these solutions to a subscription. We started to see progress on that last year that continues into this year, and we expect to continue to make steady progress, making that business more predictable with a higher renewal base every year to help accelerate and return it to growth. So it's a combination of the commercial motion, where we're focused in the marketplace and the product innovation that's helping to lead that. So we expect to see continued traction there. And as Matti touched on before, over time, we think we can see the recurring revenue mix get into the low 90s and life science will be a leader there. Thanks for the question, Adam.
Matti Shem Tov: Maybe just the last few words of wrap up, just as I mentioned over the call the BCP plan is working. This is the fifth quarter of improvement. Our subscription mix has gone to 89%. We have better execution on sales execution, and we are industry innovator in terms of. We're very pleased to be here today, and thank you for your time.
Mark Donohue: Thank you all for your time today. That concludes our call, and we look forward to speaking to you with any follow-up questions in the coming days. Thank you. .
Operator: This does conclude today's call. Thank you for joining. You may now disconnect your lines.