Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Clarivate Second Quarter 2025 Earnings Conference Call. [Operator Instructions] I would now like to turn the call over to Mark Donohue, Vice President of Investor Relations. Please go ahead.

Thank you, Jordan, and good morning, everyone. Thank you for joining us for the Clarivate Second Quarter 2025 Earnings Conference Call. As a reminder, this call is being recorded and webcast and is copyrighted property of Clarivate. Any rebroadcast of this information in whole or in part without prior written consent of Clarivate is prohibited and the accompanying earnings call presentation is available on the Investor-Relations section of the company's website. During our call, we may make certain forward-looking statements within the meaning of the applicable securities laws. Such forward- looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the business or developments in Clarivate's industry to differ materially from the anticipated results, performance, achievements or developments expressed or implied by such forward-looking statements. Information about the factors that cause actual results to differ materially from anticipated results or performance can be found in Clarivate's filings with the SEC and on the company's website. Our discussion will include non-GAAP measures or adjusted numbers. Clarivate believes non-GAAP results are useful in order to enhance understanding of our ongoing operating performance, but they are supplement to and should not be considered in isolation from or as a substitute for GAAP financial measures. Reconciliation of these measures to GAAP measures are available in our earnings release and supplemental presentation on our website. With me today are Matitiahu Shem Tov, Chief Executive Officer; and Jonathan Collins, our Chief Financial Officer. After prepared remarks, we'll open the call up to your questions. And with that, it's a pleasure to turn the call over to Matitiahu.

Good morning, everyone, and thank you for joining us. We reported solid second quarter financial performance and delivered growth in our key metrics. We also made progress on the Value Creation Plan, including the AI-led product innovation improving sales execution and enhancing operational efficiency. On Slide 6. In the second quarter, we demonstrated our strategic positioning within the market. Organic ACV grew 1.3% compared to the prior year period and improved 40 basis points from the end of last year. This was driven by an important improvement in the subscription book due to higher renewal rates and new business wins. Total organic revenue in the second quarter grew 50 basis points, and recurring organic revenue grew almost 1%. Adjusted EBITDA margin for the first half of the year increased 50 basis points to 41%, driven by internal cost efficiencies. Free cash flow continued to be strong as we generated $50 million in the second quarter and $161 million for the first 6 months of this year. I'd like to highlight that all of our segments shown improvement for the first half of the year. Our A&G business delivered 2% organic ACV and subscription revenue growth. IP returned to organic growth in patent annuities and is well positioned to benefit from AI tailwind and Life Science and Health returned to organic ACV growth. With a solid first half, we are reaffirming our full year 2025 outlook. Jonathan will cover the financial results in more detail shortly. On Slide 7. Our Value Creation Plan was launched in the fall of 2024, and it is on track with measurable progress across all key initiatives and KPIs. We have launched all major business optimization program to increase core subscription and reoccurring revenue, which is enhancing sales predictability. We have completed most of the major…

Thank you, Matti. Slide 18 is an overview of our second quarter and first half financial results compared with the same periods from the prior year. Q2 revenue was $621 million, bringing the first half to $1.2 billion. Second quarter change from last year was entirely inorganic as a result of the ScholarOne divestiture and the A&G and LS&H business disposals, partially offset by organic growth in foreign exchange. The second quarter net loss was $72 million. The improvement over Q2 of the prior year is driven by the noncash impairment charge recorded last year that did not recur this year. Adjusted diluted EPS, which excludes items like the impairment, was $0.18. The change over last year is entirely attributed to the divestiture and disposals. Operating cash flow was $116 million in the quarter, the change compared to last year is entirely driven by adjusted EBITDA as an improvement in working capital was offset by higher payments of onetime costs associated with implementing the value creation plan. Please turn with me now to Page 19 for a closer look at the drivers of the second quarter top and bottom line changes from the prior year. I'm pleased to share this morning that the business grew organically for the second quarter in a row and margins remained at approximately 42%. This was driven by four primary factors: First, our recurring organic growth increased 20 basis points sequentially in the second quarter to nearly 1% as our subscription business returned to growth following the inflection in our ACV in the first half of this year. Careful operating expense management amplified the $3 million of total organic growth, which includes the transactional revenue type, resulting in a $6 million increase in adjusted EBITDA. Second, during Q2, we continue to experience the inorganic impact…

[Operator Instructions] Your first question comes from the line of Manav Patnaik from Barclays.

I had a question on the IP business. I know you talked about a rebound in the IP and annuity market. I think you also talked about being excited about the AI opportunities there. So just a few parts to that, just the timing of that rebound how you can capitalize on that AI opportunity? And I think I read somewhere that a lot of the, at least GenAI and new patents, all that kind of activity seems to be more weighted towards China. So just wondering your exposure and capabilities there as well?

Sure, Manav. Thanks for the question. So in principle, as new filings and new patents are awarded, on average, it takes a couple or a few years to work its way into the renewals. It varies by jurisdictions but on average, it's a couple to a few years. So this is a trend that we've started to see over the last year or two and think that it's something that could help put some wind into our sales as we move into next year and the following year. So certainly, there's a clear trend that more patents are being filed related to AI. Overall, this is a good thing for our business. That's what we wanted to highlight and note. To your point, the quantity of patents that have been filed related to AI are a bit disproportionate. Our IP center for innovation research, noted that in some of its recent reportings and we've seen more of it in Asia and particularly in China, but we've certainly seen an uptick in most of the major regions. So we think we'll start to see that benefit around the globe over the course of the next few years.

Your next question comes from the line of Toni Kaplan from Morgan Stanley.

I think earlier this week, we saw a headline that the Department of Commerce is considering changes to the fee structure and filing patents in the U.S. And I know there's a lot of moving parts, and it's not totally settled yet, but I just wanted to understand maybe the potential impacts to your business from sort of the potential change in fee structure and how that plays out?

So first, we've seen this as well. It's very early days. And obviously, there's no definite decision and no definite view on our side. But let's just remind ourselves that we've been in the IP ecosystem for more than 2 or 3 decades. So we are an integral part of the ecosystem, including collaborating with patent offices worldwide, collaboration with law firm and with corporate. In a way, we are sitting in the intersection and supporting those institutions. So any change that will be we are very well positioned to support this change and somehow even take advantage of this changes. This market may be changing and maybe not changing, but we've been there for the last 20, 30 years and even more. And we are very well positioned and close to our customers. So we'll track it, we will continue to -- as it continues to evolve, and we will be collaborating with our customers and partners on this transition.

Next question comes from the line of Owen Lau from Oppenheimer.

So for university funding cuts, which is still a hot topic, I saw that 75% of your 2025 subscriptions have already been renewed in July, which is good. But could you please give us more color on your conversation with your clients about the current situation so far and the outlook for renewal in the second half and going into 2026.

I'll start and then Jonathan may continue. So we are looking good on A&G despite of all the concerns that we collectively have. So 93% of the thing of A&G revenue is now recurring. We have 96% renewal rate. As you mentioned, 75% of the book is already in- house. We don't have anything out of the ordinaries with our customers, but let's just remind ourselves a few things. One, our A&G products are central and mission-critical to the organization. I cannot imagine a decent university today without Web of Science and some of the surrounding problem. Any university will need to have an Alma-type solutions, so we're in a pretty good shape on the Web of Science and the ERP Alma things. With regards to the content, as I mentioned in my discussion, we were forward looking, taking away the discretionary onetime expenditure, and this served us very, very well these days, and we see the uptake of customers who were initially complaining about taking away the onetime purchases are now buying more and more of our subscription businesses, the PQ ebook, the PQ Digital Collection, which actually serves them very, very well in this in this kind of economic climate. So we are pretty confident that going ahead, we will continue to see a good and decent renewal rates and uptake of the different A&G offering. Thank you.

Your next question comes from the line of Ashish Sabadra.

This is Will Qi on for Ashish Sabadra. Congrats on the quarter. Last quarter you guys initiated a new sales incentive plan with a refocus on subscription and recurring revenue. It's been great to kind of see that progress with the real tick up. Curious if you could provide any updates on how that sales momentum has been continuing and any outlook from here?

I think we've taken away a lot of hassle from the sales organization. We are very, very focused these day, subscription, reoccurring renewal price, bringing back new business. So customer -- I've just attended a sales meeting last week in London, and people are very excited. They are very focused at just two subscription reoccurring as opposed to do subscription, onetime, onetime eBooks, it's just complicated. The focus we're taking -- we took away a lot of complexity out of the organization and focusing the sales organization. We have a great sales organization. We have done some changes which I have spoken about. Very upbeat about going forward for the rest of the year and for next year as well. So yes.

[Operator Instructions] Your next question comes from the line of George Tong from Goldman Sachs.

Your Life Sciences & Healthcare business saw organic revenue growth positively inflect. Can you give a little bit more color around end market dynamics that you're seeing and how conversations with pharma and biotech companies have evolved?

Yes. Thanks for the question, George. And to be clear, what we saw in the second quarter is the subscription business within Life Sciences & Healthcare, return to positive organic ACV growth, which is a really good leading indicator for where we would expect subscription revenue for that business to be in the second half of the year. To your point, just a little color on the market. We primarily serve R&D and then the commercialization efforts of our life sciences customers. On the R&D side, that market continues to be stable. Spending on our types of solutions has been solid. We attribute the improvement largely to the investments that we have made, primarily in the Cortellis suite of products. So over the course of the last 6 to 12 months, we've made some really nice strides. Matti touched on a couple of those new capabilities that have gone into the products. We've embedded AI, made investments in the workflow capabilities of those solutions, and we've seen nice usage and nice retention improvements on those products, and we attribute that to the improvement that we've seen in this area. The commercialization part of that market continues to be relatively soft, and that's reflected in the results of our commercialization business. But certainly, stable in R&D. That's where we're really starting to see the traction based on the investments that we've made. So thanks for the question, George.

Your final question comes from the line of Shlomo Rosenbaum from Stifel.

This is Adam on for Shlomo. Why are disposals taking longer than expected? Is this a customer service focus, shift towards trying to sell some of the assets or something else?

It's pretty straightforward. I mean there's 1 out of the 3 disposals. One is taking longer because we simply had some interaction with our customers and they ask us to extend because it took them longer than we expected to get settled with alternative offering. So we just extended by 6 months and it reflects on the selling that specifically on the onetime e-Books, they ask for more time to get organized, and that's the reason. Nothing behind this.

Thank you very much. That concludes our call for today. If you have any follow-up questions, you can reach out to Investor Relations. Thank you very much.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.