CCC Intelligent Solutions Holdings Inc at Bank of America Global Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Mike Funk - BofA Securities, Inc. - Analyst : Of course. And we have a couple of standard questions this week that we're asking all management teams, maybe less applicable to you. But can you give us your view on how the macro is impacting the business today versus, say, 6 or 12 months ago?

Question: Mike Funk - BofA Securities, Inc. - Analyst : And then to kind of segue into the next one that you mentioned, you are looking to gain, efficiency, labor shortage. I think that connects pretty well into next year. And a question which is really the AI opportunity, for example, it seems kind of a softball for you guys given the product that you have in the market today, but maybe remind the audience about your AI products, market opportunity and even the traction that you're seeing?

Question: Mike Funk - BofA Securities, Inc. - Analyst : And just to quantify for us in STP, everyone's not familiar, I believe you're charging. What is it $20 clearly? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes, I mean, there's different price points on some came in at an introductory price points and they're piloting price points versus full roll out. Full rollout is around $15 on a blended rate, is the way to think about it you take the $15 with the claims and units going through Estimate ¡ STP and that gives you kind of a rough rough size of the revenue.

Question: Mike Funk - BofA Securities, Inc. - Analyst : Okay. So we've got a lot of work and a I internally and we actually report last year looking at 13 different factors across our entire universe for who would be advantaged in AI? And two of those were data and domain expertise that you could test you are you already touched on the data. We know the domain expertise, how difficult would it be for somebody else to replicate the data that CCC has the domain expertise to launch a similar or comparable products?

Question: Mike Funk - BofA Securities, Inc. - Analyst : You just mentioned subrogation that my next question, actually, I'm thinking about of the incremental revenue opportunity. I wanted to ask Estimate ¡ STP, subrogation is another market that could present tremendous revenue opportunity for CCC. Can you talk a bit about that from a minute?

Question: Mike Funk - BofA Securities, Inc. - Analyst : And you just hosted your from your customer conference and analyst day two weeks ago on Atlanta. Are there any key takeaway is the one of the audience to have from that maybe just a condensed down the Analyst Day and conference center a few bullet points.

Question: Mike Funk - BofA Securities, Inc. - Analyst : If you think about the growth algorithm for the business, the one differentiator vis-a-vis software is that very, very sticky customer base, right? GRR is like 98, 99 today, like that. So very low churn -- very balanced growth right across, new products on net new customer additions, pricing. But within that, Brian, how should we think about the emerging products and their role in driving growth for the next 3 to 5 years that you mentioned Estimate ¡ STP, subrogation attached, you mentioned kind of a much deeper bench of new AI driven products. How important are those to driving that on that growth algorithm? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes, absolutely. So emerging products, cohort of solutions that have recently been put into market over the last couple of years. It also reflect on new solutions that are going to come into the market in through '24 as well. So that's kind of our labeling for kind of new product performance. In Q1, we had one point of contribution from these emerging solutions. We also highlighted that we are seeing momentum around these. We are expecting that to have a larger contribution in the second half of the year. When we look at the full year of this year, emerging will be more like two points of contribution of overall growth. Over time we expect these new solutions, the emerging solutions to be about half our cross-sell and upsell growth. So moving from a pretty small part of growth contribution, it reflects about half of the cross-sell upsell growth opportunity over time. So they become a very meaningful part of the overall growth equation.

Question: Mike Funk - BofA Securities, Inc. - Analyst : And presumably there are seeing solid ROI based shipping CCC solutions well than on buying. It is buying casino fiber, a lot of it based on replacing the human capital, improving velocity of their claims management, right?

Question: Mike Funk - BofA Securities, Inc. - Analyst : Githesh, you mentioned it earlier the innovation with AI related products, obviously subrogation not a new area for you, but I think one that represents a tremendous growth opportunity. So as you think about our future growth initiatives and investments, either through R&D or even acquisition, where do you see incremental opportunity?

Question: Mike Funk - BofA Securities, Inc. - Analyst : Is IX Cloud unique in your industry? Does anyone else have a similar on integrated solution? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JUNE 05, 2024 / 3:40PM, CCCS.OQ - CCC Intelligent Solutions Holdings Inc at Bank of America Global Technology Conference

Question: Mike Funk - BofA Securities, Inc. - Analyst : I wanted to jump a bit because in the last year, it's been a large shift in the on the share ownership structure.

Question: Mike Funk - BofA Securities, Inc. - Analyst : I think there's been four or five different instances of sponsors offering, offering shares. So Brian will work attached, but could one of you help us think about how that shifted, improve liquidity and how we should think about the on the continuation of what we've seen last year. Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes, I can start and then you can add. So if you go back to November of last year, private equity ownership is about 70% of the outstanding shares. If you look at it today after about five secondaries that happened from November of last year, too, recently, they've come down to about 30% of outstanding. So a substantial shift in ownership and putting liquidity into the market. We're seeing very positive feedback on that liquidity kind of moving in the supply and demand getting getting met. I mean the share price, absorbing that supply and coming back to up to a reasonable position. So we're happy with the momentum Advent has been in that position, who is the largest private equity holder. They came in in April of 17 as they've been in that position for a while. They are going through a very thoughtful way of shifting ownership on a more into into the public. And we're really happy with the investors that have come into the position. Some of them have been in and been able to size up their position. We've also had new investors come in. So it's been a very positive natural transition from private equity ownership to public. So I would say we expect of further activity. We can't really highlight the pacing of that activity, but we do expect further activity going forward.

Question: Mike Funk - BofA Securities, Inc. - Analyst : And I mentioned are really stand-alone in North America and in my opinion, at least but no less exposure, really no exposure internationally when you speak out. How do you think about international as an opportunity -- is the opportunity do you want to expand into Europe and Asia or are you happy remaining more North American focus?

Question: Mike Funk - BofA Securities, Inc. - Analyst : And what are the challenges in [Nuvera] nationally or other different system than data you have to accumulate to offer the same quality of service through what are the gating factors?

Question: Mike Funk - BofA Securities, Inc. - Analyst : Okay. And that's right through our very helpful and really connect Next question for both of you on how should we think about -- I don't want caught terminal on the hobbyists who I know terminal growth rate, but longer-term growth and margin. And as I said, both of you because I know detaching it, you have to invest in innovation and R&D is large because a large part of that. So you get the R&D component as well. How should we think about term top line growth, margin, R&D for exponential revenue? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes, I can start. I mean, so on the long term growth, the long-term framework is 7% to 10% revenue growth in organic -- that is a US metric, and

Question: Mike Funk - BofA Securities, Inc. - Analyst : In R&D percentage of revenue is where do they run? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer It's around 16%, 17%.

Question: Mike Funk - BofA Securities, Inc. - Analyst : Okay. And then what is what is the debate and the conclusion on capital allocation, but also launch choices even without you are deep into M&A and return capital to shareholders? What is the debate and what the conclusions that argument?

Question: Mike Funk - BofA Securities, Inc. - Analyst : That's a great place to end it guys. Thank you so much for the time. Really appreciate it. Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes. Thanks, Mike.