CCC Intelligent Solutions Holdings Inc at William Blair Growth Stock Conference Transcript

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

Question: Dylan Becker - William Blair & Company - Analyst : Gentlemen, thank you for joining us today. Bill has slides that he'll be flipping through as well, just as a reference point for context of what we're speaking about today, but maybe as a way to kick it off Githesh for those that aren't as familiar with CCC here in the room today. Can you give us a quick context, what was CCC does? The value proposition you bring to the auto insurance ecosystem? And we'll dig in to the network dynamics and the benefits of that?

Question: Dylan Becker - William Blair & Company - Analyst : Maybe Brian, piggybacking off of that too. We've got close to 40,000 ecosystem players here. What does that equate to from a financial perspective? Obviously, a lot of scale in the business but thinking about the revenue profile, the financial profile, maybe some metrics there, taking that as well? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes. So we are [role 50] company, if you look at the last five years, we've averaged revenue growth on an organic basis, [11%]. Last year, we finished margins over 40%. You go back five years. Margins were [30%]. We've seen 1,000 basis points over five-year period as well. So we've been dealing with top line time. Same time we haven't scaled needed [EBITDA] as well. We operate in a large underpenetrated market. So we think [Western Canada] about $10 billion, our revenue only up to about [$1 billion] or just under 10% penetrated in our [CAM]. When you look at our current solutions that we have in the market are really in the market this year. We look at what happens against covered eye diseases is about [5 billion] new visual [identity] solutions into the market. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 1:40PM, CCCS.OQ - CCC Intelligent Solutions Holdings Inc at William Blair Growth Stock Conference A couple of other metrics you hit on. We very much are a cross-sell story ourselves and we are as a one-way oriented and beyond last year, we have long relationships with our clients and we have very good network and software that are sticky. We have a gross dollar retention of 99% as well. So those are the key metrics that we look at partners across [the business].

Question: Dylan Becker - William Blair & Company - Analyst : That probably drive benefits throughout the [taking] that I'll talks as well, right? How do you think about the scale of the data that you guys aren't getting, what you have to cover to address this complexity and what that means for delivering value automation capabilities and things like (inaudible) you seen it.

Question: Dylan Becker - William Blair & Company - Analyst : With that as well too. That obviously, in turn another big driver of competitive [business]. How you thinking about the competitive landscape of the data? Is this data something that really you guys have only been able to build out? Are there other competitors out there something (inaudible - microphone inaccessible)? without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 1:40PM, CCCS.OQ - CCC Intelligent Solutions Holdings Inc at William Blair Growth Stock Conference

Question: Dylan Becker - William Blair & Company - Analyst : Yeah, [if someone said] like hybrid level (technical difficulty) provider. Brian, you touched on some of the financial metrics, the emphasis on cross-sell. Any [pairing] with the data network, how do we just think about the core solutions that has been built out of the time with more some of the emerging solutions, maybe the contribution that sliding scale? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yes, absolutely. So if you look at the last quarter that we [deliver], we in the [11%] top line growth. You break it down, we had [three points] that came from new logos. We added [eight] points [that came] in cross-sell, upsell. Within the [age] one point was an emerging new solutions. So the new solutions are just starting to contribute and just starting to scale. The way we bring new solution, they will be diagnostics or subrogation solution, [assuming SCP or whether] three flagship, then there's other releases that are have just recently come to market and there'll be more of these economies are in this year. We do expect the emerging solutions platform continues to scale, and we highlighted them, say [one point] of growth and contribution that would continue to have a larger contribution. If you go to the second half of the year, this year we think about more than two points at the end of the year over time is going to look more like [50-50] cross-sell upsell them into emergency rooms versus solutions having established with end markets [in the years].

Question: Dylan Becker - William Blair & Company - Analyst : Whereas customer success fit into the CCC [store as] well, too, because I know net promoter score is a big metric, you guys have done, there should also incentivize willingness for customers to track from these new [solutions]?

Question: Dylan Becker - William Blair & Company - Analyst : [The next] (inaudible). May be Brian, from a financial perspective and hoe you contrast what does a typical customer look like for you guys? How much of the revenue is recurring with the right thinking about financial (inaudible)? Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yeah. So the vast majority of our revenue is subscription based, but 80% subscription based on 20% transactional, but even the transactional part of long-term contracts. And so that is growing revenue, the transactional part as well. [Most of our] deals that are three to five-year deals. So we have really good predictability around the revenue model [since] the cross-sell, upsell story that we're really focused on, the adoption of new solutions is really to build out the revenue going forward. But it is a durable revenue model predictable and it is a -- [has] the cross-sell upsell. It also helps us through margin is going to stay with us.

Question: Dylan Becker - William Blair & Company - Analyst : Where does this transition, you've called out to the [tidy night] cloud, help you unlock and enable the connectivity of that?

Question: Dylan Becker - William Blair & Company - Analyst : So Brian, you touched on where the historical operating model has been and where we can, you know, some of these new solutions introduced this policy was there were maybe thinking about long-term financial profile out of these (inaudible - microphone inaccessible). Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Yeah. So we -- our long-term target that we put out there is [7% to 10%] that is an organic revenue number. We've broken down as the shift goes from where we've been to the sort of 30% new of those [30%] lower, 70% cross-sell upsell. So it will transition over time or 20% will be coming from new logos [except] up [80%] will be cross-sell upsell. And then what we're saying is within the cross-sell, upsell, half of it will be these emerging solutions there and more recently come to market. And half of that growth will come from [yourselves] solutions have been marked offer period of time. So that on the revenue side. On the margin side, as was the overall profile, we're expecting about 100 basis points of margin improvement per year. So we ended last year at 41% margin. We're targeting mid 40s in our guide. There isn't a ceiling on our margin. We're just pleased to guide in the market, that sets up target that we feel [comfortable] and [whoever admirer competitive] time. And in the third is gross profit margins are moving to [48%] as well. So those are some of the metrics that we put out as part of the (inaudible - microphone inaccessible). without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 1:40PM, CCCS.OQ - CCC Intelligent Solutions Holdings Inc at William Blair Growth Stock Conference

Question: Dylan Becker - William Blair & Company - Analyst : And maybe for both you as well as the brand. I think you mentioned $5 billion of readily addressable there and why there are a lot of room to deliver value and innovation across the ecosystem. It may be picked up the last few years, but what's the right way of thinking about the future and immediate customer, and they're coming to you with challenge attack your product are? Yes. Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer Also, we look at $10 billion, as we said, the five address solutions than we have in the market or we have we also look at the $5 billion that is really driving on how we can help clients be more efficient code to help clients with accuracy in leakage out of the claims and also how we see to scale the business across the broader business. So our roadmap really well informed by solutions on the cloud and data that is now point billion. We feel we have the right type of advisory council housing impact.

Question: Dylan Becker - William Blair & Company - Analyst : Yes, maybe a question. We get fairly often producing and selling more, but what's the right way of thinking about the comments, correct on DRAM, is that kind of opportunity for you? That's size complexity? How should we think about that?

Question: Dylan Becker - William Blair & Company - Analyst : So we see positive data sets and the claim frequency, as you see the change in G&A and maybe a certain amount of that in the in vehicles on the road continues to get older.

Question: Dylan Becker - William Blair & Company - Analyst : Sir, that is definitely helpful, Brian, maybe if we go back to kind of cash generation profitability from a high touch on a very, very high-quality. And how should we think about sources and uses of capital within that as well in that we're going to expand into other DMD lines come into play. Obviously, you have been saying, I think, from an international credit M&A anyway, you know, yes. Brian Herb - CCC Intelligent Solutions Holdings Inc - Executive Vice President, Chief Financial and Administrative Officer So we have a very efficient balance sheet were 2 times levered on a net debt on. We think we see really capital or M&A is a big focus area, and we've got a price five engines, subrogation assessment in which we're really excited about the market and how we acquire a business on that platform or subrogation solution on the small business through product extension that we see or look at our cross-sell into our installed base. without the prior written consent of Thomson Reuters. 'Thomson Reuters' and the Thomson Reuters logo are registered trademarks of Thomson Reuters and its affiliated companies. JUNE 04, 2024 / 1:40PM, CCCS.OQ - CCC Intelligent Solutions Holdings Inc at William Blair Growth Stock Conference I think when we look at other adjacency in the M&A, you may argue that we also think for an international play, I mean, a review of our so we do expect M&A to be a larger player in. So it's more than it has historically. And certainly our balance sheet as a plus or minus 19 count. We're going to do what we said and we said if you can guide us in our band division.

Question: Dylan Becker - William Blair & Company - Analyst : And the key Duration one that if I am right in saying that nevertheless, from a margin on the question gets to obviously a I think what we are investing in is coming online, but here's how we're thinking about it kind of shedding light on leverage immediately is that because we are in existing workflows already, we've been able to introduce the AI inside those work.