0001193125-25-257514
SEC filingQ3 revenue grew 12% YoY to $267M, driven by existing customer expansions and EvolutionIQ, but gross margin fell 470 bps.
For the three months ended September 30, 2025, CCC Intelligent Solutions reported revenue of $267.1 million, up 12.0% from $238.5 million in the prior-year quarter. The increase was primarily driven by 5% growth from existing customer upgrades and expanding solution offerings, 4% from the acquisition of EvolutionIQ, and 3% from new customers. Software subscription revenues accounted for 96% of total revenue in both periods.
Gross profit grew 5.2% to $193.0 million, but gross margin contracted 470 basis points to 72.2% from 76.9%. The decline was due to higher cost of revenues, including a $6.7 million increase in depreciation (partly from an add-on solution discontinuance), $3.8 million in higher IT costs, and $4.2 million in additional amortization of acquired technologies from the EvolutionIQ acquisition.
Operating income increased 4.5% to $30.0 million, as revenue growth and lower general and administrative expenses (down 10.6% due to lower stock-based compensation) partially offset higher selling and marketing costs (up 28.7%) and R&D (up 6.9%). Net loss attributable to common stockholders was $(2.0) million compared to net income of $2.8 million in the prior year, driven by a higher income tax provision ($15.4 million vs. $8.9 million) and increased interest expense.
CCC operates as a single reporting segment, providing SaaS platforms for the insurance economy. The company does not disclose separate segment financials. However, the MD&A highlights strength in auto physical damage solutions, which account for most revenue, and notes the contribution from the EvolutionIQ acquisition, which added claims solutions for disability and workers' compensation. Network effects remain a key competitive advantage, with over 35,000 customers including more than 300 insurers and 30,500 repair facilities.
Management did not provide explicit forward guidance but emphasized strategic priorities including expanding solutions across the automotive claims lifecycle and into adjacent insurance lines. The integration of EvolutionIQ is expected to continue, with the acquisition contributing 4% to revenue growth. The company's capital allocation priorities include debt repayment, share repurchases ($212.5 million in the nine months), and organic investment. Liquidity remains strong with $97.1 million in cash and $993.5 million in term loan debt. Free cash flow generation improved to $149.6 million year-to-date, supporting investments and debt service.
As of September 30, 2025, CCC held $97.1M in cash and cash equivalents, down from $399.0M at December 31, 2024, primarily due to the EvolutionIQ acquisition and share repurchases. Total debt (carrying value) stood at $981.2M, including a $993.5M Term Loan net of discount and fees. The company has a $250M revolving credit facility with $248.9M available, providing ample near-term liquidity. Stockholders' equity increased to $2.13B from $2.00B, aided by stock issuances for the acquisition and stock-based compensation.
Remaining performance obligations (RPO) totaled $1.74B as of September 30, 2025, with $752M expected to be recognized in the next twelve months. Deferred revenue was $78.1M. Purchase commitments were noted as not materially changed from December 31, 2024, but no specific amounts were disclosed in this interim filing. The company also has operating lease liabilities of $60.5M (current and non-current) and a $24.4M promissory note payable to a minority investor.
Year-to-date, CCC repurchased 22.8M shares for $217.2M under its $300M buyback program, with $82.8M remaining. The company also completed a $225M incremental term loan in January 2025 to fund the EvolutionIQ acquisition, and made $7.5M in mandatory principal payments. Capital expenditures for software, equipment, and property totaled $46.7M. No dividends were paid or declared.
CCC operates in one reportable segment (Domestic, primarily US) and a small China segment. For the three months ended September 30, 2025, Domestic revenue was $265.4M (99.4% of total), while China contributed $1.7M. The company's CODM uses net income to assess segment performance, with segment-level adjusted expenses broken out but segment profit not separately reported. Geographically, US revenue was $265.4M and China $1.7M, with long-lived assets nearly entirely in the US.
Despite a net loss of $6.4M in 9M FY2025 (vs net income of $25M in prior period), operating cash flow improved to $196.3M from $170.2M, reflecting strong non-cash adjustments (depreciation & amortization of $113M, stock-based comp of $146M) and favorable working capital inflows (deferred revenues +$10.1M, accounts payable +$3.8M). However, income taxes paid of $30.7M and a large increase in accounts receivable (-$33.7M) partially offset.
Capex of $46.7M was nearly unchanged from $45.1M, resulting in a capex-to-CFO ratio of ~24%, indicating moderate capital intensity. Free cash flow is not explicitly provided but implied to be ~$149.6M (CFO minus capex).
The investing outflow of -$457.1M was dominated by the $410M acquisition of EvolutionIQ, funded partly via $225M in new long-term debt. Financing activities included $212.5M in share repurchases, $48.3M in tax withholdings on equity awards, and $7.5M in principal debt repayments. Net cash declined $301.8M to $97.1M.
Overall, cash generation remains solid, but the combination of acquisition spending and aggressive buybacks has reduced liquidity markedly.