CCC Intelligent Solutions Holdings Inc. [CCCS] Filings

10-Q 1 cccs-20230930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

CCC INTELLIGENT SOLUTIONS HOLDINGS INC.

(Exact name of registrant as specified in its charter)

Delaware

001-39447

98-1546280

(State or other jurisdiction 
of incorporation or organization)

(Commission 
File Number)

(IRS Employer 
Identification No.)

167 N. Green Street, 9th Floor
Chicago, Illinois 
(Address Of Principal Executive Offices)

60607 
(Zip Code)

(800) 621-8070

Registrant’s telephone number, including area code

Not Applicable

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.0001 per share	CCCS	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of October 31, 2023, 634,879,578 shares of common stock, $0.0001 par value per share, were issued and outstanding.

CCC INTELLIGENT SOLUTIONS HOLDINGS INC.

Form 10-Q

For the Quarter Ended September 30, 2023

Table of Contents


		Page
PART I. FINANCIAL INFORMATION`

	Cautionary Statement Regarding Forward-Looking Statements	3
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	5
	Unaudited Condensed Consolidated Statements of Operations and Comprehensive (Loss) Income for the three and nine months ended September 30, 2023 and 2022	6
	Unaudited Condensed Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the three and nine months ended September 30, 2023 and 2022	7
	Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2023 and 2022	10
	Notes to Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	44
Item 4.	Controls and Procedures	44

PART II. OTHER INFORMATION



Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds from Registered Securities	46
Item 3.	Defaults Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	46

FORWARD-LOOKING STATEMENTS

The section titled "Management’s Discussion and Analysis of Financial Condition and Results of Operations" as well as other parts of this Quarterly Report on Form 10-Q contain "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, including those relating to the future financial performance and business strategies and expectations for our business. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "contemplate," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "will," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may include information concerning our possible or assumed future results of operations, client demand, business strategies, technology developments, financing and investment plans, competitive position, our industry and regulatory environment, potential growth opportunities and the effects of competition.

Important factors that could cause actual results to differ materially from our expectations include:

•

our revenues, the concentration of our customers and the ability to retain our current customers;

•

our ability to negotiate with our customers on favorable terms;

•

our ability to maintain and grow our brand and reputation cost-effectively;

•

the execution of our growth strategy;

•

the impact of public health outbreaks, epidemics or pandemics, including the global COVID-19 pandemic, on our business and results of operations;

•

our projected financial information, growth rate and market opportunity;

•

the health of our industry, claim volumes, and market conditions;

•

changes in the insurance and automotive collision industries, including the adoption of new technologies;

•

global economic conditions and geopolitical events;

•

competition in our market and our ability to retain and grow market share;

•

our ability to develop, introduce and market new enhanced versions of our solutions;

•

our sales and implementation cycles;

•

the ability of our research and development efforts to create significant new revenue streams;

•

changes in applicable laws or regulations;

•

changes in international economic, political, social and governmental conditions and policies, including corruption risks in China and other countries;

•

our reliance on third-party data, technology and intellectual property;

•

our ability to protect our intellectual property;

•

our ability to keep our data and information systems secure from data security breaches;

•

our ability to acquire or invest in companies or pursue business partnerships;

•

our ability to raise financing in the future and improve our capital structure;

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors;

•

our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;

•

our ability to expand or maintain our existing customer base; and

•

our ability to service our indebtedness.

The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed

or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described above and under the heading "Risk Factors." Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. There may be additional risks that we consider immaterial or which are unknown. It is not possible to predict or identify all such risks. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)


	September 30,			December 31,
	2023			2022
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	448,733		$	323,788
Accounts receivable—Net of allowances of $5,052 and $5,339 as of September 30, 2023 and December 31, 2022, respectively		117,799			98,353
Income taxes receivable		407			4,015
Deferred contract costs		16,994			16,556
Other current assets		29,814			36,358
Total current assets		613,747			479,070
SOFTWARE, EQUIPMENT, AND PROPERTY—Net		158,189			146,443
OPERATING LEASE ASSETS		31,061			32,874
INTANGIBLE ASSETS—Net		1,039,555			1,118,819
GOODWILL		1,417,724			1,495,129
DEFERRED FINANCING FEES, REVOLVER—Net		1,825			2,286
DEFERRED CONTRACT COSTS		19,579			20,161
EQUITY METHOD INVESTMENT		10,228			10,228
OTHER ASSETS		49,875			45,911
TOTAL	$	3,341,783		$	3,350,921
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable	$	18,235		$	27,599
Accrued expenses		61,005			71,445
Income taxes payable		9,537			922
Current portion of long-term debt		8,000			8,000
Current portion of long-term licensing agreement—Net		3,013			2,876
Operating lease liabilities		6,879			5,484
Deferred revenues		41,885			35,239
Total current liabilities		148,554			151,565
LONG-TERM DEBT—Net		769,136			774,132
DEFERRED INCOME TAXES—Net		200,913			241,698
LONG-TERM LICENSING AGREEMENT—Net		28,475			30,752
OPERATING LEASE LIABILITIES		51,669			54,245
WARRANT LIABILITIES		81,808			36,405
OTHER LIABILITIES		2,246			2,658
Total liabilities		1,282,801			1,291,455
COMMITMENTS AND CONTINGENCIES (Notes 19 and 20)
MEZZANINE EQUITY:
Redeemable non-controlling interest		15,504			14,179
STOCKHOLDERS’ EQUITY:
Preferred stock—$0.0001 par; 100,000,000 shares authorized; no shares issued or outstanding		—			—
Common stock—$0.0001 par; 5,000,000,000 shares authorized; 634,633,179 and 622,072,905 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively		63			62
Additional paid-in capital		2,868,881			2,754,055
Accumulated deficit		(824,308	)		(707,946	)
Accumulated other comprehensive loss		(1,158	)		(884	)
Total stockholders’ equity		2,043,478			2,045,287
TOTAL	$	3,341,783		$	3,350,921

See notes to condensed consolidated financial statements.

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(In thousands, except share and per share data)

(Unaudited)


	For the Three Months Ended						For the Nine Months Ended
	September 30,						September 30,
	2023			2022			2023			2022
REVENUES	$	221,147		$	198,734		$	637,777		$	578,342
COST OF REVENUES
Cost of revenues, exclusive of amortization and impairment of acquired technologies		51,459			46,379			153,954			135,174
Amortization of acquired technologies		6,567			6,748			19,897			20,193
Impairment of acquired technologies		—			—			431			—
Total cost of revenues		58,026			53,127			174,282			155,367
GROSS PROFIT		163,121			145,607			463,495			422,975
OPERATING EXPENSES:
Research and development		43,532			40,273			127,891			114,711
Selling and marketing		35,605			30,838			105,072			88,731
General and administrative		49,471			39,376			137,477			123,093
Amortization of intangible assets		17,942			18,066			54,030			54,212
Impairment of goodwill		—			—			77,405			—
Impairment of intangible assets		—			—			4,906			—
Total operating expenses		146,550			128,553			506,781			380,747
OPERATING INCOME (LOSS)		16,571			17,054			(43,286	)		42,228
INTEREST EXPENSE		(14,633	)		(10,501	)		(42,480	)		(25,786	)
INTEREST INCOME		5,165			—			12,447			—
CHANGE IN FAIR VALUE OF DERIVATIVE INSTRUMENTS		(446	)		5,991			563			5,991
CHANGE IN FAIR VALUE OF WARRANT LIABILITIES		(26,223	)		312			(45,403	)		23,452
GAIN ON SALE OF COST METHOD INVESTMENT		—			9			—			3,587
OTHER INCOME—Net		182			382			551			576
PRETAX (LOSS) INCOME		(19,384	)		13,247			(117,608	)		50,048
INCOME TAX (PROVISION) BENEFIT		(1,818	)		(3,452	)		1,246			(12,714	)
NET (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST		(21,202	)		9,795			(116,362	)		37,334
LESS: ACCRETION OF REDEEMABLE NON-CONTROLLING INTEREST		(1,010	)		—			(1,325	)		—
NET (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS	$	(22,212	)	$	9,795		$	(117,687	)	$	37,334
Net (loss) income per share attributable to common stockholders:
Basic	$	(0.04	)	$	0.02		$	(0.19	)	$	0.06
Diluted	$	(0.04	)	$	0.02		$	(0.19	)	$	0.06
Weighted-average shares used in computing net (loss) income per share attributable to common stockholders:
Basic		624,976,557			609,421,073			620,841,922			606,181,316
Diluted		624,976,557			643,582,922			620,841,922			642,208,622
COMPREHENSIVE (LOSS) INCOME:
Net (loss) income including non-controlling interest		(21,202	)		9,795			(116,362	)		37,334
Other comprehensive (loss) income—Foreign currency translation adjustment		(23	)		(510	)		(274	)		(804	)
COMPREHENSIVE (LOSS) INCOME INCLUDING NON-CONTROLLING INTEREST		(21,225	)		9,285			(116,636	)		36,530
Less: accretion of redeemable non-controlling interest		(1,010	)		—			(1,325	)		—
COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO CCC INTELLIGENT SOLUTIONS HOLDINGS INC. COMMON STOCKHOLDERS	$	(22,235	)	$	9,285		$	(117,961	)	$	36,530

See notes to condensed consolidated financial statements.

CCC INTELLIGENT SOLUTIONS HOLDINGS INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY

(In thousands, except number of shares)

(Unaudited)


	Redeemable
	Non-Controlling		Preferred Stock—Issued and Outstanding				Common Stock—Issued and Outstanding										Accumulated
	Interest										Additional						Other			Total
			Number of		Par		Number of		Par		Paid-In			Accumulated			Comprehensive			Stockholders’
			Shares		Value		Shares		Value		Capital			Deficit			Loss			Equity
BALANCE—December 31, 2022	$	14,179		—	$	—		622,072,905	$	62	$	2,754,055		$	(707,946	)	$	(884	)	$	2,045,287
Stock-based compensation expense		—		—		—		—		—		28,930			—			—			28,930
Exercise of stock options		—		—		—		3,214,093		1		8,242			—			—			8,243
Issuance of common stock under employee stock purchase plan		—		—		—		179,338		—		1,326			—			—			1,326
Issuance of common stock upon vesting of RSUs—net of tax		—		—		—		2,217,379		—		(11,449	)		—			—			(11,449	)
Foreign currency translation adjustment		—		—		—		—		—		—			—			34			34
Net income		—		—		—		—		—		—			2,184			—			2,184
BALANCE—March 31, 2023		14,179		—		—		627,683,715		63		2,781,104			(705,762	)		(850	)		2,074,555
Stock-based compensation expense		—		—		—		—		—		35,900			—			—			35,900
Exercise of stock options—net of tax		—		—		—		3,996,713		—		12,585			—			—			12,585
Issuance of common stock upon vesting of RSUs—net of tax		—		—		—		302,063		—		(90	)		—			—			(90	)
Foreign currency translation adjustment		—		—		—		—		—		—			—			(285	)		(285	)
Accretion of redeemable non-controlling interest		315		—		—		—		—		(315	)		—			—			(315	)
Net loss		—		—		—		—		—		—			(97,344	)		—			(97,344	)
BALANCE—June 30, 2023		14,494		—		—		631,982,491		63		2,829,184			(803,106	)		(1,135	)		2,025,006
Stock-based compensation expense		—		—		—		—		—		39,751			—			—			39,751
Exercise of stock options—net of tax		—		—		—		912,124		—		2,411			—			—			2,411
Issuance of common stock under employee stock purchase plan		—		—		—		462,353		—

CCC Intelligent Solutions Holdings Inc. [CCCS] Filings
10-Q	[2023-11-06]
10-Q	[2023-08-01]
10-Q	[2023-05-02]
10-K	[2023-03-01]
10-Q	[2022-11-04]
10-Q	[2022-08-05]
10-Q	[2022-05-06]
10-K	[2022-03-01]
10-Q	[2021-11-12]
S-1	[2021-08-27]
10-Q	[2021-07-29]
10-Q	[2021-05-25]
10-K	[2021-03-29]
10-Q	[2020-11-16]
S-1	[2020-07-24]