CCCS - Earnings call 4 2023 | CCC Intelligent Solutions Holdings Inc.

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Operator

Good day, and thank you for standing by. Welcome to the CCC Intelligent Solutions Fourth Quarter Fiscal 2023 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Bill Warmington, Vice President of Investor Relations.

William Warmington

Thank you, operator. Good afternoon, and thank you all for joining us today to review CCC's fourth quarter 2023 financial results, which we announced in the press release issued following the close of the market today.

and call Herb, Ramamurthy, we may CCC's about materially. company's the CEO; Chairman make cause on to company's the Brian subject plans and and CFO. The results of the me actual are uncertainties the CCC's Githesh and today risks results Joining and are implementation that the plans forward-looking vary statements to in our our the comments Investor discussed follows Annual the risks in earnings heading CCC release by Risk available with the are Solutions copyrighted are Form Factors website Relations and on Holdings, on XXXX and Report that today XX-K Inc. under These is today Intelligent the filed Q&A these SEC. Further, without prior of prohibited retransmission, of States a is reproduction United consent violation other and recording, and the or otherwise other same laws. copyright of CCC Any or use for profit

that to these non-GAAP measures Githesh. and is financial the call non-GAAP company's available reconciliation over GAAP turn transcript you. And the to take measures provide on transcript of the of our Additionally, the we party, A today's is of call a company as call we now Release management, that on website. certain provide Thank financial this defined The that inaccuracies to call financial results trends transcripts. Please available relating and publishing information our measures financial of of believes while the the note investors certain by we've non-GAAP discussion condition a appear business Investor regarding useful the may and no SEC. for portions in responsibility I'll and third approved a to includes of Relations Earnings operations. will this by in

Githesh Ramamurthy

top to to for year bottom and today. and in record quarter Bill, strong XXXX. line report of you, joining us all I'm to you another performance delivered CCC another complete that pleased thanks Thank of

initial Adjusted of EBITDA EBITDA year quarter million, $XXX and of was quarter our for adjusted million, well and $XXX range. ahead $XXX fourth full our Revenue up both million, the range. total also above Adjusted those full year-over-year XXXX of the end up believe our was initial CCC's the of guidance year-over-year, adjusted was the ahead EBITDA our across is up the and XX% and for range. We result margin XX% year-over-year the performance economy guidance P&C range. fourth was well XXXX end high For our XXXX, high in XX%, advanced XX% of XXXX strong of customers the revenue was interest digital guidance guidance the trust growing EBITDA a million, innovations. insurance year and to XX%, deliver was for $XXX margin above place also our in us solutions

X.X X organically, XX%, by $XXX to QX rate as in Over of run over entirely years, million XXXX $XXX our company, million have almost a we million. grown over revenue publicly XXXX the past traded in from a $XXX with

XX% EBITDA a done adjusted XXXX. I time, focus we in CCC Over what in XXX% our on million, to million in the the QX want $XXX delivered XXXX. have $XXX than into a have same growth we continued we to million adjusted time first head we for quarter. Today, as more $XXX margin EBITDA a in XXXX, XX% by was grown margin, from position to

The solutions. our is for meet first innovation AI-enabled delivering demand accelerating clients' to

the accelerating third margins. My past demand AI growth expand is I've capabilities are capacity months. continuing investing clients while our delivering for clients' to solutions. is to first few in innovation our conversation and continuing CCC's a multisided significant with to we in topic noticed meet the is change second The my grow and network, over

insurance our turnover smaller, which experienced P&C even between result for that from with are is they most end this is decade. clients workforce. Making rising loss be in X/X customers of retirement across and a What means of attention will of higher they of decades their inflation less the this the the shortage to repair repair that likely increasingly the and worrisome and cost taking workforces. hearing most the the continues expect What before experienced accelerating turning retire workers claims to to place economy a are situation labor rapidly X/X concern, of we're While more institutional is knowledge, complexity. clients is their facing simultaneously their vehicle that

new solutions claims closing driving in and unique In additional help a across advancement with XX XX-year are XXXX existing base. other solution positioned As solution. a basis, company's we cumulative using the insurers been a adoption XXXX, These the of year. over history. in skill interest in client a the CCC And using result, number doubled processed number highest AI-enabled Estimate-STP portfolio XXXX, our now AI-driven quickly. AI since have for we workers CCC and our On well forward customers across challenges processed AI-based million need over gap our step accelerating and last auto took and XXXX. are claims the of have the large our of

AI-based For technology, cases. XXXX but and greater computer usage, channels insurers, expanded in saw just in Estimate-STP use growth vision not input in our

further tow field adjuster enable even designed First, insurers Look, salvage First process. the broadened additional appraisal sources, in to across And claims the handling and comprehensively we consumer leverage extend mobile flexibly trucks, to photos of to more they our AI channel. analyze and including we ingest from and self-service from with introduction solution more QX, a can and that the AI providers so

vehicle per year our impact triage adjustment vision momentum claims based expense. new and potential in based a more their casualty highly in insurer we year generated requesting QX. each the in of introduced and Tens from billion AI-enabled Subrogation applications. Significant capabilities subrogated X a accurate investment also predict dollars severity another activities, and leverages our among on claim. in insurer XXXX. earlier solution as insurers on costing other loss payment of for using insurer process, process Subrogation rules, improvements significant are billions AI in We in has manual start in of subrogation solution Impact of Dynamics multiple enabling also computer from we is damage photos, the Subrogation liability which strong have recoveries Customers customers added efficiency seen paper-based over $X Subrogation of to claims

For repairs, XXXX solutions. of AI-based new X photo saw the introduction

The consumers. to range first was repairs Predictor, repair predicted Repair enables collision provide cost Cost which quickly to a

Mobile are this traditional already advancing with complete entire cycle network XXX was and solution supply our industry estimator for repair. At time as multisided processed and from Mobile claims of CCC simply hour the XXXX, while initial allow for repair X,XXX time. My positions over expanded our claims time Jumpstart and introduction, first topic industry of to since adding in we theirs. And and late reduce In transformation for that X,XXX The of the our more automate we continued auto our or collision life all multisided AI an dealers, initial we takes network a an the than average like the second than growth collision through ever and chain, by with X notice reducing of minutes time These parts uses process. its Subrogation, to in an transformational of using which steps waste, it estimate. enable expanding more. providing We clients' the an an and Eliminating QX. key half repair cycle industry-leading our our customers versus the scalable more customers solutions for multi-tenant dramatically us innovations a over that is be more partner claim of AI, fusion several to automotive Jumpstart, relationships launched way CCC, by used believe platform our estimate digitization goal loss our and OEMs. over the is facilities have more choice capacity-constrained generate digitize average of of are network. solutions improving repairs the to to which the second digital satisfaction of deep less to customers and

X,XXX scheduled from roll of physical We several XXXX, CCC well new a suppliers a QX as insurers. parts casualty facilities multiple carrier including XX,XXX network. damage to relationships, full the We suite of are approaching insurer auto top as XX and in renewed solutions that's now and expanded out repair

transparency each categories, also the of additional collision advanced to about rapidly into quick more a this to add innovation in participant diagnostics, repair collision to XXXX. connecting to CCC streamline calibration of to have a is network. And become technology of the the across its plan business scans leading in administration with introducing the broader the increase in volume ecosystem great through and CCC the power our our helped network platform XXXX, that Diagnostics vehicles we navigate has expanded going benefit and and and an in add new scanning a grows entire to CCC We network, scanning trust course, thing technology as also network. multisided calibration a by the is resolving these common and The value Diagnostics network. value year-over-year throughout join validated while diagnostics, by increasingly process. This designed in solutions see the ecosystem existing repair. Everyone and activity to have interest service quality is the CCC increasingly of of enable helping continue total CCC participants participants in increase moving multisided who involved we example CCC providers the XX% categories of action. tasks, Since the good a

made final customers this of that continuing a enhanced in and do growth value and CCC's capacity to ability and infrastructure XXXX have and point beyond. My while in and capabilities in key and Our to margins. enhanced IT for capabilities have to investments is expand the third growth we our we is AI significantly enabler invested is

X dimensions of enable invested to our business multiple I company. necessary of multibillion revenue the During a dollar XXXX, scale highlight growth components. we to across will into components these the

AI is elastic public growth. capacity and new to for scalability after centers a we increasing One cloud and already in and thousands GPUs be installing of Over the doing an introductions. position and we infrastructure product XX% compensation. In resulted capacity R&D terms, in accelerated years, product to excluding increased the has our last tens stock-based over new have from XXXX, of data spend approximately seen completed teams. longer needed provides CCC for dollar increased for rapid critical AI data a in and science have buying product deployment. design, significantly the servers of In redundancy million development our velocity expanded This XXXX product clouds. that pipeline We to private no decade. compute product transition the $XXX support benefit inference our This to also our continued of have and business by we X management, need of

XX% year-over-year as these component is customers' their position even innovation XXXX. with Score, CCC Net third Choice leg as while margin believe is also reflected critical and our for our XXXX, year The we us XXXX. next in customers growth. to to XX our to closely improved these and XX understand market-facing in GDR the our solutions. in which importantly, position our to industry-leading train for evolving able in This has add leaders make resulted of help well functions. We we Promoter expansion were believe significant from Partner delivering new associates And We that our investments continued working for as that investments during new of test our and needs in more

our on after as significant plan public of our execute shares. base made our liquidity going the company. X.X to and continue and in shareholder We we years broadening have progress public, increasing strategic a mature

January, almost X about in to shares, offerings XX outstanding, significant November and secondary in shares million the a XX% by in our just has improvement free increased Following liquidity of months. float

approximately we're to shares to of the balance million cash. addition, repurchase sheet of using in our X% $XXX improve In efficiency targeted able outstanding

by accomplished me conclude proud incredibly saying our we Let in of team XXXX. that are what

Brian, what who we strategic now to to call objectives. I and are through remain the our continue planned will for our in will We financial results. over walk excited have our on you confident turn ability deliver about to XXXX and

Brian Herb

Thanks, Githesh.

outlook. are CCC's delivering highlighted, momentum our meet capabilities, growth and our driving for and in Githesh growth positive accelerating confidence clients' in business to AI-enabled capacity solutions we long-term reinforcing our growing the investing demand in the across network, by As innovation multisided

We top are between reflects growth and line and which balance a pleased in discipline. initiatives investment bottom performance, margin our with

points X new logos, shop the in X emerging contracts. of on solutions true-up review and digital adoption up Now $XXX.X Diagnostics our and came the year as repair items mostly of including fiscal in fiscal also our we ongoing highlight client cross-sell, facilities incremental was quarter mainly million, that to X of to contractual points our provide turn and year parts growth solutions results like Estimate-STP. X was repair X was from subscription year-end from points driven upgrades, revenue Total of An and in then of I'd growth upsell revenue XX% we base and numbers, from and strength across saw revenue XXXX. continued onetime guidance above full the XXXX. Total solutions, point casualty for for quarter first $XXX.X about growth XXXX prior QX year million, period. fourth year fourth the our and for and I XXXX in our from suppliers. the adoptions our contribution by point want package our and XX% QX Approximately the commitments of from parts. About up revenue our came quarter to

to Now metrics. key our turning

Software or that the between XX%. client to been from And retained significant prior the GDR accrue QX broader our period. GDR, quarter captures believe last has the that customers provide year has quarter. revenue shop benefits the repair was XX% note GDR from compared our first industry down, We CCC of XXXX Please which In and the primarily to our driven by base or we rounded XXXX, churn. in and Retention amount Gross from up Dollar up modestly reflects GDR our since network. was the participating XX%, our value XX% software

tenet predictable and our core revenue a of resilient is GDR strong model. Our

of Software physical from base. the prior In Net the auto to NDR up from and our the captures in XXXX, existing or well cross-sell was customers damage XXX% as upsell QX Retention, couple NDR, of as volume Dollar period compared XXX%, in amount last our year client our quarters. movements

I'll in more income review statement the Now detail.

all are noted, non-GAAP. As a otherwise reminder, metrics unless

$XXX.X of We of profit and adjusted year-over-year up profit quarter in scalability to incremental and operating good the provided ability the business target have profit margin on stronger leverage last gross reconciliation was adjusted revenue. and we long-term the primarily a Adjusted quarter the margin reflects against non-GAAP leverage fourth deliver gross gross XX%, in feel of about gross in our was quarter The XX% the Overall, of model profit to operating margin our our GAAP press release. Adjusted million. XX% from XX%. XXXX.

X% $X EBITDA adjusted In in expenses, margin driven a with adjusted the year-over-year XXXX higher million In benefited quarter, of $XX.X This by terms QX reimbursement. functions year-over-year. our XX%. of up million, also up insurance quarter onetime an was we the investments IT-related claim mainly was costs. for operating $XXX.X as million, customer-facing expense XX% in from Adjusted as EBITDA well was

the $XX.X million, equivalents compared debt. the and million year Now the was prior in turning cash Free leverage cash the ended quarter of was flow in year-over-year. full quarter, and to up flow At sheet year flow. end our cash with period. net was for QX XXXX cash balance to We million in X.Xx $XXX million of the adjusted the $XXX cash $XXX million Free XX% EBITDA. $XX.X and

free to flow in Unlevered XXXX in compared of XX%, Our XX% free or XX% flow EBITDA. cash approximately million in our was QX margin adjusted was cash $XX XXXX.

a reported XX% free cash basis. on our EBITDA adjusted the For unlevered XXXX flow million, was of year $XXX full

continue XXXX. While finish vary the flow guidance average now range our our QX can level in mid-XX% to it of like adjusted quarter-to-quarter, beginning with to expect free will we cash in EBITDA. I'd of out

which $XXX.X of growth million, to XX% expect million We represents total revenue $XXX year-over-year.

EBITDA of midpoint margin XX% EBITDA million in the at million, adjusted adjusted to expect QX. We $XX.X $XX

to of represents $XXX which XX% million to full For million, $XXX we XXXX, year growth. year-over-year X% expect revenue the

million adjusted We adjusted to expect represents which $XXX margin of EBITDA XX% million, the midpoint. $XXX EBITDA at

first X points quarter mind year in you full to keep guidance as our in So about XXXX. and think

This above can first broad-based contractual QX that across from last our commitments. including saw insurance is The we point strength quarter-to-quarter. revenue in vary year,

result, dollars. XX% be down we this to sequentially expect up absolute growth XXXX year-over-year but is As QX revenue a in total

growth second growth and X solutions expect contributor be these of emerging The XXXX, the which contribution of larger of scale. upsell the from and solutions, continue in to solutions XXXX as to emerging that of point we that point cross-sell these in about contributed is level a

in years, EBITDA is point levels adjusted year-over-year first third our experienced in The half. margin seasonality that, the prior we as second half above the some with being

the administration consumers' to is insurance and The well have while the durable the claim costs in to point underlying by the cost in benefit expenses advanced We $X revenue our position employee-related and absence insurance expect business. of in XXXX in cycle and with network the our the positioned and be year. We, in our economy, of XXXX in with our us our in last consistent combination reset to both EBITDA insurance profitability margins being the conference, throughout process. The of first constrained the interconnected the term. strong year-over-year relationship the digitization the reduced expansion improving business P&C P&C customers for solution QX model, solution that margin million with capabilities, to along puts half continues their therefore, across pattern, seeing margin and year CCC starting reinforces XX%. confidence of industry AI strength we adoption broad of growth economy times and trends the this against the durable drive our the recognized Overall, help the expansions the new full of near need renewals, see accelerate, a experience unique of the and adjusted long we're of

X% and and We've of delivered basis the XX% expansion target against growth and years expanding to forward. in will to X last X,XXX We growth confident investments while ability margin continue innovation of over EBITDA our margins investing in to revenue in long-term mid-XXs. points expansions to support going adjusted are we ambitions, in margin our the deliver our organic balance

continue questions. generate to Thank on you. our and execute significant we our our take customers we As to are that, operator, we shareholders. With we will strategic value for believe priorities, both ready

Operator

Instructions] [Operator comes from Our Gogolev first Alexei question with JPMorgan.

Alexei Gogolev

congratulations what and if any that XX%. high record was have I've items that great gross were the had quarter on margin 'XX? revenue maybe quarter fourth in you similar fourth perhaps the in to of results. Githesh I nonrecurring wondering Brian, there delivered margin, of you gross noticed the boosted Brian, the

Brian Herb

the stronger each we on that have do true-ups yes, the gross the point highlight Alexei, year-end profit, to happen year.

volumes our contractual of that is So commitments exceed the clients.

And in They're so we together said, recognize driven really gross the revenue the drives total and the that's that we're business. to in across operating a year, off not see can excess and within material volume. come the that but QX that with progress they happy we're the and profit, profit That do stronger being number. seeing on gross position, leverage you largely the

Alexei Gogolev

the Okay. the considered components? in of logical wondering evolution? side. your in Perfect. was have ecosystem automotive, presence you sense for you've P&C dominate step a into, example, you expanding make high beyond in if And And considered expanding Obviously, market supplier does insurance Githesh, strong Have facilities. repair I terms Obviously, very your in existing you share the that dealerships? automotive the in

Githesh Ramamurthy

like. repairers have at lot drive introductions further as we've the we're a and capabilities and connect will insurers, expanding along with looking of product that for And broader at the the First expand deep to are ecosystem. number introductions, got know, And doing Alexei, network. existing like And we've partners. still the parts they a something the the more continuously those be the room as help the expansions. ecosystem dealers, that that we then these things feel our with we lines with and of of connect product is into solutions runways to additional is to with expansion right we a But with look now with you will also, built, presence Look, that all we OEM of we pretty customers bring one continue of new of

Operator

with Samad from Our Samana next comes Jefferies. question

Samad Samana

when first Great have you know what offered guys on the it scope AI-enabled the is AI level, several to and like products usage I willing close Githesh, But interest the strong to your to years. solutions. AI maybe customers see it comes maybe expanding. think are about of for to XXXX. sounds

products should So increased think how maybe And I like First the path the the given just that for know about additional customers? Impact like new as Dynamics Look. product well? there's But clear and you monetization mentioned we there -- velocity guys to you from is pretty several interest

Githesh Ramamurthy

Yes, the -- customers on seeing pointed out something the that, take very example. retire, trend on time, and update as as are quick an is the same we're level our the a increases as call what that that seeing turnover I just like -- Subrogation the people at skill

You built decisions can might make analyze. matter somebody specific help what and extract very with seconds get AI a the XXX-page document time literally has them are see, literally the that to to minutes. right information, reduce we've that we capabilities the hours a documents or And from that those of we to to

So that and using. testing in actually these have these existing people using already it, when also be start are people to workflows built the capabilities

deliver, and like they also the deliver ROI. we seeing across have we greater every are other solution board. So But to acceptance greater

-- repairers very IP more appetite Impact as Cost with with customers we continue that visual AI be the you have the along Repair give very, to well. interested. have what done a Look of -- in I'd range so Jumpstart, the So like Subro more is AI also insurers, built and solutions, we capabilities, for we've First and photo expanded deep both the the Dynamics, then Predictor, to But capabilities

Samad Samana

anything at is due being way of you've Brian, guess, ask expected could that modest more to else a was that for the starting starting either it about to I X the built up? the year. year, could think starting thought was last how was to newer this follow-up point the change I Or point the just about there question. is at guidance primarily guidance guidance And if I XX And looking any then maybe and more? products we up? contribution it build slightly

Brian Herb

Yes. sure. Yes,

of So looking XX. you we're as at X the we X the would The XX. and year suggest, just established seeing progress end across at the with is of to the the solutions range, the the range in we I as to momentum guide we're upper and emerging solutions. long-term that start both the business, say are

So in the quarter, linked points we did true-ups, in did XX QX, a half. growth of growth these really exceptional of second of the in X which points point although We XX are the that bit quarter. growth was within to

So it's across year QX full really and then the that XX% the for progress set both guide the velocity and the position. gives at solution confidence, the us

Operator

Our next Borges Gabriela Sachs. Goldman question with comes from

Unknown Analyst

is Kelly [indiscernible] for [ ] on Gabriela. This

kind kind do with continued you relative group about CCC always growth? of products. are And just limits of longer goals at having a where of vendor? shots are about willing and versus that much pay you me of you emerging to one able on those the have invest how to single But is other other First think such now a support this sit vendors? customers talk to lot for products kind insurers ramping just that of spend term, how You of you has to start

Githesh Ramamurthy

lines almost the those remember X all last perspective, historical Most of $XXX the of we give products some reported long revenue time, I from you Kelly, other. revenue today, having most or that being right. point a at for the here quick first, million we deliver at been a or to close me year, revenue let

problems us unique sort that ROI analytics. very deliver, solutions and on So customers their way, with additional of supported that to history we workflows, incredible taught deploy, that service long easy as existing to and can our with long to very we has high a use, solves the into it as quick in integrated deliver

formula to like have push I well build when we and customers develop. terms us the some that very really of who these they solutions, need worked and fantastic blessed what with are they for benefit in what has think we we of actually would -- new hard actually us us,

So solutions these in many customers. closely working with are actually built of very

and us confidence what we that's grow So to gives continue build. in can that

Unknown Analyst

a see contracts you ton causing a you me. it makes And next are that higher? have to true-ups in just volume for through That going year XQ the the seems follow-up of Do customers expand like then for maybe sense. when their

Brian Herb

Kelly. budget Yes. They true-ups. prefer there to in as I volatility. the true-ups close day, I it, to minimize way. where there's end the mix of can want look some at yes, to at they linear mean, But the we get elements mean clients the in more pen, is kind as the the of to a even

just So especially get customer volatility to trying mix. is it of expect to level in really year around the the we at set, when volume, the closest is contracts they still go. each natural there But it where set have that true-up happens that

a part of is the it So business.

a together look before, part immaterial. comes material As just overall the much revenue at it's at true-ups said you It I are, it's the how very when and not year-end.

Unknown Analyst

Congrats.

Operator

from Kirk comes Materne next ISI. Our with question Evercore

Peter Burkly

quarter. Peter congrats a I'll strong on This is for actually Kirk. on echo my Burkly

one on but me. topic solutions, emerging the sort to want the stick of Estimate-STP. for just of So I specifically

about last talked and it just XX% sort of expanding self-serve the a move started facility channel TAM repair channels. to beyond I into adjuster where So strategic you expand believe it you've and expanding that quarter, for made mobile the Estimate-STP, field

solutions? next seeing from Estimate-STP the guide light higher for today? pace And curious, sort maybe contribution evolution you're you can option broader like the in product, terms of in maybe for discuss emerging that year sort plays the an I'm So of a of just that of into just how implied continued of what seems of

Githesh Ramamurthy

point, to originally, QX, roughly claim using significantly only consumer Sure. that's the even we AI working Peter, continue we mobile And and -- self-service that said hard first is and our we in starting more started models. XX%. now mobile at focusing right the the have is phone, foremost, we what added been rev a that And insurers. what we to in where improve there, processing on is, we Estimate-STP channel, see the a was manner the models,

on carriers network repair X aggregate still now work are terms experience of a the repair making in a estimate way, a the And seen it small On Jumpstart, excitement. It's of are for taking And in first we of see minutes. that write it's very have By and we sure final, through But for in write an can some vehicle. are direct requires are but final instead anecdotally, managed. amount estimate, and writes an and to a using we example, today. And tweaking major states. maybe how an form. and It facilities claims minutes small, so carriers volumes change more roughly we facility month. who the fraction the it's how estimate seen, have maybe of XX in are reminder, put initial coming seeing significant there, repair run about a repair literally a more couple already market, stream, an repair having so, facilities. a out And out of XX%, to thousand more in then rolling or are basis, are few low weeks months just relatively several percentages we've even for as facilities still it

a more any salvage revs we're process. pieces fact, we solution from whether photos very tow feel is very which are the we've the or improvements expanded good newer channel, to that First a the we and feel truck of take made, -- that inform about about we and it's now have can in good Look, We actually technology. the so literally a And that seeing

good. -- so line very we bottom we is So feel

Brian Herb

question, Peter, about you the your of Emerging Solutions. from And asked contribution second the part

percent. continue the So forward. going was to growth of this to do total X expect step We up year, to it then and scale point that 'XX, in

long-term over talked So target, time, within XX% solutions. coming growth about of our we the emerging from

So we X continue saw long-term and from will continues the targets. towards last -- scale to year, to point that those move

Operator

Tyler from comes question Radke Citi. next with Our

Unknown Analyst

had This to just is Radke. one Tyler the question regards Peter line on I renewals. in for here

been have guys at price just that's terms of top the looking vehicles, motor approach your and customers? what leverage like contract? in terms you say insurance negotiating end repair the your the list. I'm had the contract in for Would premiums there's Just back you the [indiscernible] curious with trended of few more renewals on costs of of at last negotiating

Githesh Ramamurthy

there we These these for with that mean are mission-critical and relationships. solutions, customers. are add difference any each is long-standing straightforward as customers, we our and our have with say how material not formula customers for our would in an I I pretty is worked worked ROI. decades, we them tools has of new

there's way would I any or So that the other. change say not been material one

Brian Herb

value. at we're offerings industry, said, that customers the the mean, Yes, ROI I continue we And the sure make that to consider we the as from the benefits balancing take add. also think across in packages would fair our has we and and our just solution Githesh getting as those we packages. consider, felt we do that package get look the share and been the inflation customers. the Obviously, pricing about to I and we're within

Unknown Analyst

to way follow-up is how emerging of any and that quantify a -- to solutions fiscal would established much there going be you larger Is as 'XX. growth of upsell like then be said a And versus just contribution in to a solutions? cross-sell from

Brian Herb

in several what and been then Well, will then market comes the that X say emerging logos. come talk from for we've in cross-sell half the -- established about the is we've we And say upsell. half the will And years said we from solutions. from growth that half so guide. broken will balance that about guide and in we've these to We XX% the solutions of long-term have long-term is of come come organic and other done XX from talked and that new that

and out to continue we've term, longer-term those how long the towards metrics. that's broken we'll it progress over So

Operator

Kalia with Our comes Saket question next Barclays. from

Saket Kalia

from Nicely call mind done. bigger that driver margin of Brian, to of asked, Maybe the the just maybe business, the Great the make just are that what part with I'll a perspective? emerging the Like that keep you. of a in hear things start emerging be there that any part are XXXX. a significantly in is question growth to should different core than becomes product as on bigger I'll margins is sure going the portfolio? we to

Brian Herb

Saket. question, Good Yes.

have solutions we and will scale the when over mature, today. the have they are So emerging established get characteristics to solutions margin of similar time,

So they don't will have drop-through. very differences. We high see really

There out they're cost. margin they support just come is just as I get to We into dilution them scale. amortize starting now, rolled they and think right as to as the start market.

And will start so get the today. and like once mature, have to ahead margin will as established scale some solutions the of to scale. to we be cost of said, look revenue characteristics the I the they they until get But

Saket Kalia

casualty among do maybe That I Got bit. see to bit? how enviable the into APD little you you makes it sense? gears talk maybe cross-sell the of XXXX? particular, casualty into in do XX position it. could of just in a a that view it. what you top of for if base? Githesh, Got And about for carriers, wondering pipeline top sort that Does switch with going XX make was sense. such you, little an sort business sort There's more

Githesh Ramamurthy

Yes. No.

relatively a addition number Just is a in APD With customers that still we -- customers. our small. customers our quick you solution of had QX, in saw to of using that casualty a are casualty casualty number even give We said, of the number the XXXX. of

accident from claims our And have So potential and also solutions which is which we Dynamics, seeing the to -- customers. uptake -- first-of-its-kind provides takes like continued imputes casualty like. then need warning also solutions. we the Impact early XD to and attention expand the and physics what's what of an see We're may accident of injury physics for an good more industry-leading

that also does exist those at in that is all. market being not received. Again, well So something the are

as as terms AI. casualty in traditional casualty well both solutions solutions completely So with state-of-the-art new of

So long-term see about adoption. Feel we're continuing good prospects. to the good

Operator

Becker with William next question Dylan from comes Our Blair.

Dylan Becker

Really how of how nice drive incentivizes to some high initiatives auto of insurance job impacting the for maybe unlock their here. market, hardening capacity about business or data-driven just that of Maybe means and opportunities? from thinking or the and what of implications kind they factors kind that and a carriers, complexity think for X kind incremental investment about Githesh, digital around level,

Githesh Ramamurthy

Yes.

the we in increased system saw of parts labor, I to costs cycle in that seen the and XXXX that we have think what of time shock terms increases. is

last significant than drove so we've over increases the decade. more that So anything seen

So and and those extreme that what we in we 'XX late increases increases than if 'XX, while are then 'XX 'XX. took a those place saw in towards little moderate the saw more

to that -- are so They horizon. term. our there tend things have And customers while challenges long over some the short don't now yes, in also customers looked capability at a view and

ways their Our next also conversations years, and see customers years process technology new things new using differently. very X see different and over our to operations and many and the the with to X who technology fundamentally of of configuring we've many had change customers, do

I a our adopt, appetite see change so there's think especially when significant processes, do stronger we And from customers to you that see improvements.

Dylan Becker

more Got APD Okay. connecting casualty And sense. about those makes obviously a thinking in attach to cross-seller independently well? carriers play early-stage That the kind longer-term good kind more Impact of those in maybe a workflows of and of as that about and then as lines you creating are those segue of data how the it. think into by that's Dynamics operated seeing thinking maybe are maybe of ton the convergence that some but solutions opportunity that you convergence about blurring of coming offering past,

Githesh Ramamurthy

of Impact traditional for In the Well, Dynamics any work yes. are over is the short answer casualty solutions term, the long term, using. customer what can regardless

really like So manage something quicker -- from the these workflows. through where increasing ecosystem loss from together entire way are I we Dynamics. I the more settlement. of think let would to claim And differentiate in notice -- to for loss can ramp in linkages a all probably ourselves we components end from work the that end, a are those the say first that you that of the Impact of And there's that's

We ecosystem. have we've heavily, and the to continued artificial applied intelligence out very build

of that's we it So how kind out. see playing

Operator

question Morgan Josh next Stanley. comes Our with Baer from

Josh Baer

than the The adjusting after quarter upside for higher was in typical the true-ups. even

So surprised wondering, in to this you specific with I call your expectations, like that with your anything out results was the or plan? versus adjustment positively internal line were just

Brian Herb

happy the with so were Brian. really quarter. Yes, it's the in performance we Josh, Yes.

So one-off the and when XX revenue, year-end true-ups that points you even and a point. the was normalize

So in it it out say it was was And than the had stronger you XX. we a put I'd broad-based. guidance. in lot came as said,

facility packages. casualty. ASG We upgrades strength and into saw our in many in strength upsells, of So across very saw APD strength we saw clients. repair parts, the We good on

really the So set the portfolio. It across a one of for very highlight was as there's results kind nothing really of driver area the to overperformance. broad-based

are pleased overall. performance So we the with

Josh Baer

repair And but ask like are as -- more a facility that a base, less wondering is of they to year context Just the repair new about coming back into going that repair the the on penetration wanted far profile Obviously, facility? lot one more from? per What's are Are customers your like sell And think good number forward? new X,XXX for there. or Great. spending some about those they still opportunity. facilities. if Like more to than average? can as where you

Githesh Ramamurthy

of couple A Yes. things.

We're how And in to towards XXXX, even a that clicking I facilities XX,XXX solutions. or years of when them. had -- only or XX,XXX solutions, So about Today, few we at facilities our back probably more repair X of many using later, X used using just of half back, back our look one more say, we half about X, a would even our then now are repair as close see pretty you our had of repair facilities I look first, of right, we years facilities. solutions, when two facilities. far repair or repair X

help deliver new as base installed to we and really trying with large to continue capacity a as they have issues for and solutions there's efficiencies. them So their business more that look

about to facilities part the is to grow. continuing your question, rate continue overall. the So probably which ways still second add to facilities do rate think at which is there there's one you at to repair important estimate of repair roughly our your very And we in path. Back good saw, XX,XXX industry the to that's really go feel we at

Operator

of with comes question Mike Bank America. next from Our Funk

Matthew Bullock

with I with it? quantify of Estimate-STP. so, Funk. material fine-tune had and seeing models? sort a customers can flywheel you for has on Brian, as Mike in is and if Matt a volumes have to quick this one Estimate-STP those a Are then help And secondarily, adoption? functionality And led Bullock continue Githesh you us on you ramped this improvement to

Githesh Ramamurthy

I restricted We it to private restricted vehicles. impacts, say, passenger then added impacts. trucks, Yes. initially, front then would we we it way back back to had pickup

for more impacts. all damage. obvious We've up Now it We're predictions, is we've side parts damage making across accuracy subtle better. more it extended The significantly very versus opened models. subtle,

So as through, set and that's of the photos both the scale allowed in has the loop repairs us size with have, to they've improve and other as the states customers quality we to really to expand. we have estimates coming really substantially. data been feedback the helped and flowing loop reference with feedback references expand And great to customers continuing more and continue well more a standpoint, from and to of

And happen. of... terms in to continuing adoption that see just we So

Brian Herb

Yes.

Brian it's So I mean, here. the as far -- as

existing still low those we rates. even with and So claim we're expansion as far volume, we're still as at the though the as progress making on of -- clients, said, new clients are Githesh

about the kind in if But claims we're we total we about single-digit talked long here as today, for overall term feel percentages. we've the coming about that the through, still in and think sit we think opportunity as medium Estimate-STP. you the good So really opportunity the of are about that

Githesh Ramamurthy

sets, across the growth how long level around this look solution a we that solutions of you our if have deliver that have products that and from runways different much for all we is And time. QX, even of came been at

new long So fairly see in have to developing these we of terms of growth. we're solutions all runways

Operator

Chris question CJS with Moore next comes from Securities. Our

Unknown Analyst

seems from quickly into adjusted you mid-XXs [indiscernible] about increased XXXX year. Chris cash metric color Moore. beyond? in for the XXXX. on Will XX.X% heading Free Congrats And great it XX.X% to in on a more margin has think and us 'XX range. on on to flow to based any be in EBITDA give is this guidance, This Can your how

Brian Herb

seen mid-XXs. about you're it mean, is -- that our the the progress the year. it thinking cash flow of to we've free at from last the and strong which I flow just When out, get EBITDA did you generating to unlevered Yes. the free it do cash is guidance flow cash EBITDA, you we've mid-XXs Good way. that question. in we're you roughly right Yes, and given free math look XX%, you XX% unlevered

and you're free continue as revenue So the certainly the strong math right. grow. doing cash flow the the that We're scales just seeing this will to

us of that feel we front so good it. and performance with the And on opportunity really in

Operator

Our next question with comes from Shlomo Rosenbaum Stifel.

Adam Parrington

bit specific Subrogation complexity the little Parrington adoption for around payments progressing? higher-than-expected and on is how bit a just general talk customer those mentioned now? This was to Estimate-STP? slower is kind the of how Given trending. Adam thoughts are And just on use build-out of Are cases. build-out complete I little a you tracking payments about Could you believe adoption Shlomo. last than quarter,

Githesh Ramamurthy

seeing. Yes. that mix because slower I other This solutions is of a the a say set adoption the would of we we it products have rates have just you're why broad that portfolio we the is very payments of in have problems are of what doing and fundamental saw solved. with is But work with not we're vary. process level, the customers will the the we that claims many at been than seeing

take a breadth complexities built we of the think will And so the just has we've there, improved, and product problems the what our longer. are improved, and it has little

Operator

turn closing now would to Ramamurthy like I remarks. Githesh you. the Thank call for back to over

Githesh Ramamurthy

for for we very you thank broader forward about opportunities opportunity they as confidence CCC. the want our in to forward. joining, incredible forward. everybody in go And and we we and us trust interest for front XXXX in excited to CCC updates the have would giving look like the all go opportunity just delivery and take again, thank of also take thank I their team to customers you to your the in remain And we the for I as us. to

Operator

for participation. you Thank your

now disconnect. may You

CCC Intelligent Solutions (CCCS) 28 Feb 242023 Q4 Earnings call transcript