CCC Intelligent Solutions (CCCS) 30 Jul 242024 Q2 Earnings call transcript

Good day, and thank you for standing by. Welcome to the CCC Intelligent Solutions Second Quarter Fiscal 2024 Earnings Conference 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. Please go ahead, sir.

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

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

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

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

The our last $XXX EBITDA of guidance was revenue and second up the range. our over also up ahead Adjusted of and guidance was ahead quarter of XX% $XX XX% XXXX, year year-over-year million, total range. million,

Our today's adjusted EBITDA margin that I was customers, themes a are like generational highlight how X performance. change helping operating call, would we in XX%. On ushering to underpin our

The first business is CCC's durable model.

over is The this of customers as the transition our into created adoption is engine, CCC generation XXX CCC's which of first and core pace is second next to AI a at solutions. My third business innovation models its has view unique the model. durable topic

performance of solid financial in was wins, expansions. continued renewals new and QX a result contract Our business

rollout repair number We the as top on across for our XX,XXX base. We've [ to half transition multiple facilities added over CCC platform. pushed us full insurer also clients, completed vendors APD business, first of from of the XX successful has auto the or year a In us multiple suite solutions, renew add CCC damage, the seen platform. this physical on-schedule insurance over of they our so repair variety major our across [ of logos We across ] new new in ] now have a growth customer products XXX of a facilities This also far milestone. XXXX. and a incremental

infrastructure XX% significant Because solutions foundation way model us multisided durable our This margin build Our competitive have that of the have deep network continue model to customers as Net profile create and and has address us invest to to range we well in the hallmark deep have of we experience for our us Score expansion. across with mission-critical their served the design, and tangible delivering believe has and solutions, decades diverse develop AI-enabled customers. of points base, vision broad predictability place relationships implement growing they well we problems in is Promoter that innovation. with both in decade-plus XX. customer to enablers solve balanced solutions customer-focused building GDR day-to-day have in revenue of performance, served understand future. helped business an model AI are a the ramp. To and most AI of scale our our our be claims have culture And innovation to believe new of deployment principles these tangible and economic using millions industry-leading a the AI-enabled as efficiency We customer unique key SaaS top-tier and of of business the scale portfolio. pain development the our trust AI the business customers' date, And These lasting our model help to advantage CCC customers and their are businesses. our to volumes ability to A the that a and that will is solution. rest economic them similar of our processed problems. We and a is solutions profile efficiency tremendous of coupled pathway is provides pressing and facing best tens

the While can can around long over predictions vary, to And what on the have portfolio precisely critical launches conviction successful our ROI delivery solutions topic, leads amount what we're found while gain quarter-to-quarter for seeing of to tangible time innovation. term, we achieving this the sometimes mass consistently confidence to second me that is runways it value make takes with for game-changing long our the different key gives is us is of innovation. This adoption in across that the challenging, solutions my demonstrable growth. of invest to and new solutions product

all performance it approach Innovation mark $X innovation. revenue, this growth come important has operating billion segments. from our to almost is of in substantially we annual note that improved the customer that As for

runways largest long decades incremental And CCC that of pipeline the in of good and platform, contributes Leveraging have them. of And we which used ONE, solutions from the computing, our history. launch everyone, for the years foundation with exciting for of change transformational laying years, and we time, estimating operators. $XXX meant innovation new many shop ONE found independents CCC of is added believe annual example over of today that yields revenue. to over cloud evolution is improvements that to a series critically, our power and our million platform modest innovations automotive portfolio any repair our over over management a reinvent investments this to the customers. an As have serves have this to growth. A the transformational are at multi-store deliver single-store industry-leading time in we look We depth for solutions last not greater we the to forward, created believe of X breadth than

Our more. operating the state-of-the-art releases XX,XXX thousands CCC for is and ONE the facilities parts repair trusted economy. our enabling and of to broader customer pushed repair over opportunity collision across P&C across we larger much Today, the is platform than investments diagnostics, estimating, decade-plus platform United in more now AI insurance system the decade management, States. The the ordering, communications ONE gateway see has an software even CCC past growth

the challenge. has increasing address managing customers this common and rapidly in our challenge is in the of each to they is share this the industry way become norm leading that CCC different, complexity a investing in While

high invested help clients decade, our develop innovations. management with And them ROI to year-to-date and of we closely $X that the realize work our integrate navigate XXXX is powerful benefits also needed we rapidly of the innovations to new sometimes change fully the solutions these XX% new for R&D, have in Over and $XXX about revenue including our billion million to XXXX customers. over past in

repairable example, vehicles, For the from deployed first November that XX XXXX, a full on a line-level estimate solution. have AI over we seconds. photo today, production in pre-populate this Estimate-STP, using qualified And world's insurers can we

inherent unnecessary and make approach deploy X% annual their solutions is a model, portfolio, the rate production way recently Predictor for the we for economy. to purpose-built on like variety our and this Jumpstart. The P&C Cloud overlays IX basis complexity transformation process Intelligent to partner and claims, and across the entire step-level CCC CCC XX% through easier First clients This is will delays use it number applications, solutions helped new address The administrative Subrogation CCC still repairable onto of journey Reinspection, and Cloud AI to insurance ways to IX solutions IX Impact claims change Cost is economy to in customers' customer systems. revenue-generating Look, from embedded from of annually that event-driven the digital a other Repair to our the new inefficiency. provides also Cloud, top have CCC's across in existing introduced to dollars engagement or architecture Experience short, designed of together. Tens wide AI-enabled solutions XX can Mobile a on are insurance nearly solve for like of microservices-based customer is solutions volume and CCC designed through The customers insurance track of due Intelligent to is a faster carrier cloud workflows just forms customers While inefficiency, this technology. in one Cloud now a multiple of run leakage. be repair-focused of billions P&C and accelerate of increase deep Dynamics wasted

members point providers, than facilities, and of insurers, May. conference multisided past customer product XXX validation heard more annual network. represent important Atlanta recent customers CCC's firsthand of parts OEMs our in Another from our for this other was We portfolio repair automotive

the across the XXX partners showed. we the discuss the the reinforce sharing areas. The I IX into can feedback our thought product CCC positive from We how confidence demos I'll in new help in also making, representatives innovations Cloud from extend customers had and X ecosystem, platform exciting of our we we're investments received

the year, vehicles noted the requires we complexity more Intelligent first this quickly claim. they place possible. with shop-written AI helps while fall step-change rules the efficient, CCC review Reinspection, the tools insurers specific millions With review so the is I seamless these those the solutions Reinspection, to The their prioritize estimates, earlier. flagging shop in added as estimates line several to of Intelligent outside AI of theme make normal Insurers of process that the by each can receive continues items and engage have as which individual and make resolve of

fewer potentially from this of Build customers that make Sheets accurate so adoption chrome, can of model as part of all an estimate detection, about because more is the of replacement CCC impacting negatively facility Build accurately XXX-degree can customers. My they possible second returns, solutions. CCC estimate. part ONE to getting of and CCC and the individual accuracy. as ago, and fewer gotten installed have filter dozens add-on launched reduced combinations. CCC been a repaired. We creates during possible manufactured Today, options choices paint the unheated, mirror spot That access solutions data of for having you early correct to the first vehicle supplements exact example. dozens cycle estimate heated The number the third has means blind This final means creation, side available color. driver as Ten with to is these interest camera. exact topic of complexity the an denote the years while of is the a I've repair estimator Build was part Sheets writing an color a strong they're Both vehicle to versus includes replacement from options the a matrix them online worry on time ordering writing had part versus paint and being for versions Sheets. time. Take view recently auto-folding, an Vehicle factory point is

demand We solutions growth emerging in of discussed out to emerging contributions solutions conversion But revenue point customer to about XXXX. solutions XXXX, pilot we're in-year of materially our solutions XXXX. also should points of for solutions pilots our one see in playing continue to our X growth and for of that revenue. Last We duration call, in we contribute solutions QX emerging to contribute now seeing with growth expect emerging continue more and year, convert levels take contributed growth expectation new in earnings for including base, these the of one strong point engagement our longer anticipated than high solutions. about our across to customer into

of are my emerging the more products. Live accounts and XX-plus believe opportunity that is customers the solutions of multiple we scale. In the dollars growth always a our transformational we is a early of today, having seeing subrogation at I or to aimed and similar results. come in-year in and nearly slower of have engagement significant more example, greatest value newer, the of evaluating than solutions. customers with the and I solutions adoption these also customers Estimate-STP experiencing Workflow. Though performance. Each by at solutions at delivery are of top in change rate solution now the top transformational from a the tens confidence millions in pursued With number cusp many Within insurance most in impacts active customers introduced solutions were Our one from see on have these which alone, realized one have or our seen. pilots. of piloting opportunities with XX and more positive for at of continued all is solutions contracted long-term We're fully contribute using except Diagnostics solutions being value our also using in years we these Subrogation, for insurers customers based on place evaluated to of impact double-digit XX CCC, exciting these revenue contracted nature the we are activities as progress that industry inbound of anticipated more strong the new management recently the for ever change. transformative been have has maximizing aggregate, larger-than-expected already

allow term. I'll detail. them to our accordingly and also deliver to capitalize call turn you customers our us as believe and doing more opportunity our who help position against our generational Brian, strategic confident near over and and through benefits the are navigate the financial We investing in are to will deliver so of choice walk to trusted over customers' this our in journey. partner this We will substantial results on objectives to now long

Thanks, Githesh.

are engagement across we strong highlighted, has solution our Githesh and seeing As innovation client set.

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

base, XXXX. Total XX% and review from XXXX guidance by Now we in adoption to provide as new second the X% upsell in results was quarter and prior $XXX.X mostly adjacent from mainly casualty our ongoing came shop X and points growth of repair our including quarter period. year Estimate-STP suppliers. our I'd quarter third emerging our upgrades, parts. one About and like growth year facilities and growth solutions our driven the QX client then Approximately point and of logos, our continued parts and across the turn strength up second of revenue the digital our Diagnostics, solutions. was repair of our adoption numbers, in solutions solutions, for came Approximately to full of from QX cross-sell, in new the casualty million,

to turning our Now key metrics.

from value churn. accrue in CCC participating network. up and XX% by the XX% our Software which is amount reflects our or was customers the GDR has and XXXX, first either been Note our captures gross our or primarily is compared down, broader our in In rounded period. base benefits last XXXX, the from shop the retention, dollar line between GDR repair since year with of industry and revenue client GDR, quarter. driven that QX significant that to we GDR to believe We retained quarter the XX%, provide prior the

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

is and in captures XXXX. [ Software XXXX In of our to customers net average line our the amount well damage compared QX consistent our physical prior XXX% and which as the dollar retention, year volume upsell period XXXX, ], movements was base. our with client from NDR, auto in NDR as QX or across with cross-sell existing

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

and The reflects gross business the our incremental and profit of margin against adjusted our the our profit gross adjusted revenue. Overall, noted, was We year-over-year up the quarter we XX%, flat margin against reminder, metrics is leverage press on to leverage operating profit $XXX in a stronger QX XXXX. good was XX%. profit million, release. a operating the adjusted of model provide of primarily feel to gross deliver ability about As non-GAAP metrics XX% are which sequentially gross and long-term target otherwise in unless of all Adjusted reconciliation GAAP non-GAAP. in the scalability

higher operating EBITDA up was $XX driven of is X% as costs of year-over-year This XXXX our terms Adjusted for customer-facing margin up functions. adjusted million, as mainly by expense in In expenses, was XX% million, IT-related the year-over-year. with adjusted XX%. an quarter investment was QX which EBITDA in well $XX

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

free XX%. adjusted in of from XX% or margin as QX XX-month That flow cash $XX free approximately was EBITDA. of flow a as is QX XX% year was trailing cash Unlevered XXXX of Our million QX our ago. up

can May, While flow our it quarter-to-quarter, awards. to X.X in an average to sponsor the helped we EBITDA our issued in forward. The cash vary continue transaction level simplify we adjusted range of million on free expect shares million of capital basis. In mid-XX our XX.X annual out private going structure redeem to

in call, completed our In since secondary private owners equity addition, X million last million in and shares our earnings July. May XX shares XX offerings

by now the last float, October is outstanding. shares up of a QX in free as currently in in Bloomberg, over from beginning guidance liquidity XX% That's X stock Our significant cover about measured improvement months. I'll XX% over XXXX.

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

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

new EBITDA in to million range million For range revenue million. the million previous adjusted to X% versus million $XXX X.X% of $XXX our adjusted expect $XXX The total range XXXX, $XXX XX%. midpoint million to $XXX and revenue growth a our full million. $XXX $XXX year-over-year about we in margin of of represents $XXX reduction X.X% million increase year previous And to of of versus EBITDA to to our

So X things about our you third year for think to keep quarter and in guide mind XXXX. full as

solutions increase in second X year point his our that, Githesh versus their growth first we contribution growth one about full emerging referenced to as and points percentage revenue of to up is point expected the in The make half XXXX. remarks, XXXX contribution revenue in

forecasted. than While emerging to be to continues revenue solutions longer is convert strong, our originally to client it engagement pilots around had very we taking

about As for a solutions will medium- result, said, long-term these we growth are remain changed. at contributions solutions That of our from XXXX. to now contribution X% emerging the from expecting view has the not

point and items. second as our we that, is One percentage had in we in year earnings on from year-over-year QX of a came QX point one with benefit nonrecurring point discussed solutions came and from The from a contract revenue can true-ups one last percentage one last Note in last a QX onetime call our point and revenue catch-up in items of components. year, QX timing point volume impacted contract by subscription be year-end in growth year. that benefit in

The bps by in was the will cost half. the XXX XX.X% is year. phasing impacted third our The year-over-year. of up of expected, margin initially of largely Margin the benefit about second in this second EBITDA stronger the in and hiring pace half QX of first because be the year, of cost of half of point phasing that adjusted increase than was

network in administration the help our reduce the a while AI throughout business half advanced about renewals, confidence expansion to the to year solution in XX% year-over-year of a in the around position in set improving of their capabilities, underlying experiences year costs us durable points sequentially to customers we're half. Overall, the and reinforces for process. new unique and trends XXX full engagement of P&C in their margins puts of cycle seeing margin first economy the our expansion we our margins expect about interconnected strong the strength broad second the solutions and insurance model, relationship the expand of combination The business. over For XXXX, claims times consumer basis and

execute mid-XX% in ready our confident target revenue organic generate significant take are ability of both margin our to our Thank to strategic XX% long-term are now We that, growth and as questions. on against and we for we adjusted priorities deliver value to continue operator, our EBITDA to our you. and customers X% shareholders. With

of is [Operator Becker Dylan Instructions] from to line with come Our question first going Blair. William the

it about implications management and that called starting and platform sounds more term unlock maybe are you decisioning guys thinking business that. playing Maybe but healthy aspect called get near-term like the there, with capacity opportunity you've for kind out elongation of over the that for wondering for Brian, maybe and change to long with the you out pipeline the also there's is that maybe of means adopt that out time? the Githesh I you that's here. what of driving incremental how to some the

Brian. Yes, start then sure. can Githesh Dylan, add. it's I'll and

the X emerging points confident scaling is still we position long and how they still position. over talked about term to We about And not the towards medium good We've X and that and time. over we're solutions the target. feel about to long-term growth that that, to very that believe move the talked is within target, long-term the that growth strong target. of we'll changing. a them So about to contribute We will confident

to add you look I XX testing is as think, at we Yes. customers, that whether they're carriers, The would evaluating, our solutions. I or number multiple of the out, thing one if top one pointed

more spending. seeing very, important solutions are of that the the healthy than So substantial. the terms and we're very in in that customers more even it's ROI our But perhaps are is energy impact these

the And see what even can about you more where significant change I impact. some we putting customers so is to see point focus saying, management, made

advantage to changes I process solutions. of maybe take more or So the make changes

is a that little longer. bit taking So

and on what really not of Okay. called here, out engine acceleration seems notice too, hard kind be to for here the to innovation you helpful. Maybe Githesh continued That's rollouts. Great. product of kind

guys potential of tangible perspective? white and as And product much well? think Given adoption, you out do spaces how there's pretty room offer kind there that that we it's that more are road continued solve and so you digitize about how value from can workflow or should much potentially map for

the about step increase So you continues continue effort, profitability our that X and if continue make to perform, to we X ago, increase of solutions. recall, velocity that as a from business started to years back you the business. is core But a may delivery ago. said we we'll would building and this of the started new at of And our sure to same we capability up lot said we've AI time, it decade stemming core

see we last these billion solutions call it TAM years, what the from So that in we've the the introduced, whether last these in is range. months, for X solutions you $X X

So if that TAM you think for solutions in about billion range. opportunity the these expansion is $X

JPMorgan. comes Our with the from Gogolev of next line question Alexei

already elaborate realized I your can would you are how impacted from is CrowdStrike that And but on CCC impact some clients from direct you there no the event? issues you that arms ones outage, of companies agree mentioned don't big customer infrastructure? outage your this have your base? their that around issues trigger in the broader Do are the their industry having biggest are that for think can you that

as thank And we're for also question. you say would do you the as not public been pointed on no our exactly there's I because you use CrowdStrike. in Alexei, out, that the know, business we cloud. impact

the provider problem. incident the that with we from had that one about, we disconnected So who one talked immediately

And so the disconnected we interfaces. all

most are parts repair our I XX% whatsoever. systems. impact would that by so of almost some caused done of dealers for ordering. out there -- is caused, minimal the our also weeks owned parts dealer facilities -- several from a So management the no for part, the impact that of to disruption little impacted for say as for dealers, It customers, insurance about some ordering honestly bit and it of was

your the Alexei. answer that's question, to So

you, are Githesh. Have because IX CCC you of seen more incremental on Cloud, i.e., operations connectivity? this growth of increased from Thank any placing customers their

ability that seeing customers Cloud more that IX implement now solutions together. are more solutions. integrate working to to are more accelerates We

multiple are you can if First helps work so working seeing at example, excited customers and working where IX closer Cloud Dynamics, we examples Estimate-STP, and with that, solutions these solutions about with better like Look, together, Impact For and with that. also look are

of question with comes Samad the Jefferies. next Our Samana from line

from track as the that to just conversion. Brian, assume long line. guess, longer, to well I first, taking would to assume recalibrate conversion as Maybe then closer we'll long-term lower end it's to question we this longer maybe solutions as on to pilot my pilot target rest go-forward the how just the be what something go range year, on should basis, that of not emerging over Straightforward time that the as to is us this just is trying view it should want transitory? you think I'm but taking we of for about or you a assume just time there,

Yes.

and on think in Yes. expecting material more we next the Thanks contribution reset for mean guide half it's we When and the about we're second emerging So Brian. emerging. year, a on the the setting are I confident the on the based time. question. of year in 'XX, off place comfortable we're

we've So long-term with the not continuing to out next going year. in We're into guide, see we it to step put that market. are the comfortable range going but we within very do the up specific get

Githesh, maybe then a for And Great. you. follow-up

the of benefit ROI would processing you? their more kind contract defining some one looks their volume. us big give that to a was you on I And then solutions. you it's change any customer? been number, of like the and there economics there -- they're seeing rate versus percentage consequent are how by And of XX% Just the claims referenced basis has if I customer of a that high a they what information maybe it processing in of that run could seeing that typical of the CCCS using terms that's guess one AI

Sure.

me about talk first themselves. just So customer the let

its actually XXXX. That's So Estimate-STP, they this started. in implemented our late AI, when customer precursor really and

about then and things complexity X AI, more the few AI then XX and the were it expand states. And is and of to handling accuracy precision, and going multiple out continued more to about the states So the consistency they states the with vehicle to types solution in. multiple that the importantly, got they a and new as started vehicles expanded and move solution comfortable and coming was of doing and the most to

mixes were So that distribution got many apply good. their terms continue but really I different in curve, dealing and it. states narrower to solution to get instances, And start they see to to the a they're the across of hate in starting book how the results with you've to they different on bell much mathematical you, of be

and now in tracking customer is are on a of that basis, carrier a X XX%, this run tracking now obviously, revenue excited is is don't that customers, deployed. there's in the now comes aggregate towards So out about terms contracts, of results. solution entire this and an tracking But XX%. that X%, break as top base they towards rate you being has we they're years it then know. towards incremental XX but amount -- is but individual And fully experience who very of And out of our any

Barclays. comes next line Our Kalia with the Saket question of from

time? more for the Like any go emerging part Great. and level which the time. Or rec. specific maybe aggregate, the pretty customers maybe of and solutions sounds was portfolio, emerging longer of terms emerging level kind just you Can that maybe a in deeper example, like timing talk about saw were it Estimate-STP, maybe speak Diagnostics around one rev or It Githesh, scrutiny? one it whether for explanation was was with in evaluating of could that maybe but was you, you to maybe to additional seeing deeper it of straightforward the start Subrogation? solutions was and go

Yes.

differences the them slight slightly are one given between of there are different, think I nuances. each

one I'll to example, pick Subrogation you. than on pick example rather as them, an an just for as and through I'll of go all So

literally double-digit Subrogation fully And with out. at have, we cycle where seeing in that an is in proposition, inbound is that we what back subrogation saw XX% So value rolled one subrogation. contract. decrease time. is not the noticed outbound for is I stage, this we're This customers to Subrogation, still

has accuracy on millions of dollars how or dollars in So of XX% they're demand tens somewhere the and how that and and that these subrogation. customers processed of of dollars this And XX%. tens of increase responding, inbound have improvement the is and for been impact between millions seen are coming have

time substantial cycle significant impact, So improvements.

about the So where we're this customers excited what we example said, are seeing. is have an

we Sometimes, to of distributor execute. change teams. capture the but centralize us. can more it we've there can in that we front with decentralized had this we is the [ There's are that more of can teams ] And or reorganizing management training, solution, some level opportunities requires do,

solution different this example just picking nuances. and one slightly an of each one has is So

also we references to and So long these the have list testing by customer base, the of in also -- early piloting, and double-digit a way, customers from addition evaluating, the customers.

helping of some early newer are and might but even public, who think the I references customers the also customers with is this from be testing. piloting

your very question? Does So that. answer we that about good feel

Yes, growth, gives does. Brian, the does. us it point solutions still clearly, of mean, for scaling. definitely It It follow-up more one maybe you. I the color. At are emerging

how about But course, maybe solutions ask. unfair adjusted even to the be Maybe anecdotally, an And so to just just versus a differences the bit. see this EBITDA is extent just the a emerging between established to between question think getting guide margin with scale can? the to sort little differences bit, revenue talk of you it to do guide, little good of the because, up go the emerging versus you was established big margin maybe going

will similar seeing profile would they When have we I products solutions, a say established mature and we're start we going these absolutely. margin the are the -- and to get efficiency as and Yes, scale, AI. in they're core where our to. are when at

that at our level nothing when there's will than a get they scale. So different to today look current really solutions margin

that early will costs scale. We they different be before seeing them on stage are

to We up we when the the come cost amortization have starts through costs, set product, of revenue and it's GA. for open launch

that profile gets CCC. of is So then cost of broader front the and some revenue. to point, there once the margin consistent to scale And be get profile tipping will with the a in revenue the gets margin

So about we're are. to think it. I how in margins just that's say happy would with where general,

XXX to a improvement. full points margin half The points XXX And guiding first around basis of margin close we're year of had improvement. basis to of

with Secure. is the question Borges Goldman line going to next of Our Gabriela from come

products. and that At your argument in the established Githesh, I could the have years, last the any time is made emerging here. XX newer split products perspective welcome would we portfolio between more

what's Are adoption and different established more So products? about thinking understand, and time, portfolio just how us that to the costing the you time you this in your emerging thinking you're help full given ramping? of any at a between have mix

Gabriela, sure.

almost right, of the of this in revenue acquisition. at $X So of we XX% up right? perspective, little has just reported, reported billion to very through we're revenue this started As you revenue imagine can my and come we X, XX% from

perspective, products So back to of we from your have XX-year have X. -- all come almost essentially these

fundamental some recognition seen we unlike which really differences pattern core is seeing? So we with a seen to are what the of have years what this we've -- I about very also, this here is So question is pointed are the as out, between some over impact? things, where What the around What's what your we've are ROI? very, we XX is handful today.

-- Some are have AI on different using solutions fundamental years or that we and deliver of execution development. can XX of now software differences. development through our the and One, we solutions traditional about could very are X from ever X we delivered deterministic AI range

solutions is ROI are different in the So The strong. nature. very themselves

Dynamics, our the terms the facility breadth is and The different. if our that where same other is the in a our we recall to second solutions, First new the with have to Look, Subrogation, look new very thing with point solutions' of fundamentally that's would customers, of I delivered is impact, I -- and greater to insurance Reinspection, we've in whole breadth abilities each at Intelligent work at customers, that Impact you have extensions thing we thing of solutions second the repair Estimate-STP then for series casualty deliver of where our is say from different cannot products, what history, -- any insurance and

would that shock in is thing is say 'XX, exogenous the different I time 'XX The third our customers went frame. through an

profitability, customers' were customers fairly early that to parts, and from challenges. tough at broader, profitability, repeats you changes, and looked is costs problem. we a saying through 'XX 'XX and some substantial, seeing it And we say our then 'XX like or claims when in inflation started a insurance So 'XX cost we're went inflation, changes making that -- our where to itself, years they're set make to incremental that would terms of is many what and bigger into ready incremental rather were our of opposed then get our XXXX, correct changes especially go is real because situation changes in customers itself as bigger as of customers' of for a

the to changes leaning bolder that's actually are question? excited top undergone them -- we them one our changes, Gabriela, did testing carriers now. us why have this your broader about, almost and multiple also said is that bigger So solutions causing our which think of customers and customers, one that is are right we and every XX also with and or answer

time saying. upon longer-term which needing me, bigger not Githesh, the to talk what much. is that tied longer-term to also frame consistent about Very We're when you ] seems transformational you're be [ perhaps to about with just technology iterated more. changes, signals yes. changes, Yes,

a from is these to that we products looks even standpoint, saying, now. extent road see particular to potential what like have. it customer a from we're what map well, see a So year But can enthusiastic the more

little a as us bit understand well? So Help maybe is dynamic. that of [indiscernible] creating that a

that parse question would differently. I slightly Yes.

are we why this Subrogation what example. I the So gave seeing,

we're from like possible first the dramatically start skepticism, very cycle a new integration, in time, blunt, we're days increase out what an is those of and we that says XX% And How in tools be of using it So decrease numbers cloud-based. because people to you is what literally what do -- when is differently times people all, it's we a it it, right? before. whole is because to seeing results initially, that need in see that been AI have XX% see set longer not it XX% possible accuracy, putting prove and very there can XX things has have to can

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the question Stifel. Shlomo comes line next our And with of from Rosenbaum

or about call about excuse I guys whether of liabilities we're you is for majority trajectory everything maybe the confirm, guess, are working the terms And getting anything on. sheet creep? environment just emerging Just maybe what you talk of and balance in the you affects could or it legacy, all you here Are that solutions. vast the me, -- cycles changes then there at to any that market in I off of the the sales afterwards, of the with that them warrant share -- on a did bit Brian, talking little business terms the

straightforward. converted I'll the It's we remaining first. Yes, one Yes. the cover -- Shlomo, just warrant warrants.

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And so table. that cap the cleaned up

table. and able with on So the to be we're door happy warrants close in having cap that the

question the On your the half. half the that, through second position second that's reducing guide look the first the kind is the at change is the consistent of when the what regarding the solutions only you is with highlighting, prior established in numbers second of the in guide. emerging half -- core, Outside solutions playing

solutions. established feeling So the we're good on

strong pipeline have We and momentum. good

core. happy performance with we're And overall, so in the the

next Securities. comes from with Moore of Our Chris the question CJS line

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down rate the rate. happened quarter, is pushing to TSRs from the runs was expect that last one in change, do through we XX% that that is down run out so When we get to We and and to million modification The and impact the a look there's the going QX runs year. that's about year, end and about Yes, which move thing largely QX. a Brian. it's P&L this continue like it XX% that will year, be there Chris, on as at XX% Yes. it's to that normalized with slightly to the is year. up through of next run a more $XX into go

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the of from Prestopino comes Research. line question next Barrington The with Gary

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about are to talking you Sheets? Build Just clarify,

Sheets. Build Yes.

Okay.

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a product on need you ] to significant become you I feel fairly the mean [ this repair side? do that the has potential

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gives do then over Or you you've just the last product. in-house And Build these from that I the data, that one the you question the manufacturers? kind Sheets? accumulating on it ability get mean this this been is years to data of the produce

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of line the Baer from Morgan with comes question next Stanley. Josh Our

these the would room I of helpful. durability is through full kind where just Great. expansion slightly. This the looking kind revenue on strong in even Baer. down the move margins. in the lens, QX there tonight areas leverage for quarter seeing of margin previous the year see it was more up across kind in as And the Just further to year coming low margins. to guess, of EBITDA this on model, philosophically is most leverage? being against looking those areas? that point upside are relates Maybe with Katie messaging you ahead, Hughes to for you be Impressive speaking for for on these Josh in

we position, on your business. which the us benefited To in feel the the offset and strength sequential some or the take have half. within the we midpoint that absolutely. did cost updated the phasing we some point the No, seasonal and the on we're seeing has components, position second in Yes. the helped that EBITDA really up good Yes, in on did margin, guide

we bit, strengthen of have cost so guide year. did that's We little moved the but HX, see leverage HX the full the around across a for to And why margins revenue.

profit We XX%. about expect right now, gross is

in G&A. leverage solutions. over we are to fastest-growing the cost as across continue be leverage to like will efficiency over we scale will Revenue and over good as XX% move seeing those AI grow still And sales but And cost see that expect our there category we marketing well. time. we time, there's We more and areas. R&D believe

on And out margins so playing time will that over helpful be the as well.

comes next Tyler the from with of Citi. Our Radke question line

is Radke. Tyler This Peter line the on for

are condition trend you and So changes. changes Could that a large is called give what and P&C? that like slowing are solution those that why strong you little emerging down architecture the undertaking more a bit a pace adoption, insurers on the had into given are then in market out of current detail transformative pricing

what are more operational These about. much These are efficient. architecture really changes. to we're Yes. That's not talking become changes more

on to Okay. for just to you solution of idea looking on play CCC curve that Intelligent us new And give interested how then Reinspection, the customers expect out, you new to adopt your stacks could like and adoption then solutions? up importance this an where

Sure.

the lot the nuances and and do to of and quicker not be give because those up -- of speed this does up up this And facilities look and So think today, tens whole is are doing dollars out working a the what there collision networks. and helping looks can approvals at AI of quite speed actually that I of a insurers repair what there's the of of AI that detailed solution process release lot things. -- ] billions it is [ of up on carriers' reviews rules their a is the a at literally and repair repairs for does speeds can lot process hold essentially

the facilities, repairs completed, that going dollars heart it, got being getting assignments, repair so of you've of to of repair made. being And of payments billions tens between

So back . going [indiscernible] you've got of all that

thing customers be have this the been So that's solution is essentially period there in right testing some of early change it to can who a And is previous in has a from can people existing step implemented nice solution our it. the function customers time. we solution with of away about for integration workflows, a no it are version of are are who start workflows, and been this change feedback the the And immediately. and largest line This fantastic. absolutely no using long existing these it very and to change testing

for CEO, remarks. Githesh you. Thank to to like now would Ramamurthy, I conference back the closing turn

today. joining remain us through, confident you see, our model deliver you to business on our Thank of our ability strategic And all for to probably can the durability we in come objectives. as and financial and continues

important helping the the same in transformative our a and customers milestone truly a public marks And journey to as journey our the time, this at While anniversary in Thank also going public this to customers, our forward. markets, and our X-year much. of CCCers I'd very company, our returning do really in and to updated. take look to forward so you tremendous thank keeping out, for shareholders opportunity and the you day we our work all like to week day

for This concludes conference today's you call. Thank participating.

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