CCC Intelligent Solutions Holdings Inc. Q2 FY2025 earnings call

• Growing success with larger customers: Larger customers are moving past pilot phases into broader rollouts of AI-enabled solutions like auto fiscal damage (APD) and subrogation, showing strong ROI and operational efficiency benefits. For example, AI-based APD solutions cut time to identify total loss in half, and subrogation solutions offer 6:1 ROI.
• Balancing operating efficiency and innovation: Utilizes a recurring revenue subscription model, scalable cloud infrastructure, and AI internally to drive efficiency while investing in innovation. Investments in AI help save time, reduce errors, and enhance hiring processes.
• Power of interconnected network and data/AI solutions: The IX Cloud enables network connectivity and AI-based actions, facilitating digital transformation in the auto insurance economy. The interconnected network of over 35,000 businesses supports the delivery of AI-enabled solutions.

In the second quarter of 2025, CCC's total revenue was $260 million, growing 12% year-over-year. Emerging Solutions contributed approximately 4% of total revenue. Casualty, a significant growth opportunity, currently represents about 10% of revenue with a large white space. EvolutionIQ contributed around 4 percentage points to growth.

• Q3 2025 revenue expected: $263 million to $266 million (10%-12% Y/Y growth).
• Full-year 2025 revenue expected: $1.046 billion to $1.056 billion (11% Y/Y growth midpoint).
• Adjusted EBITDA for Q3 expected: $104 million to $107 million. Full-year adjusted EBITDA expected: $420 million to $428 million.
• EvolutionIQ revenue delayed due to implementation delays in signed contracts moving to production. Core CCC expected to show margin expansion, excluding EvolutionIQ impact.

• Delays in EvolutionIQ implementation impacting revenue timing.
• Cyclical nature of claims volume decline affecting transactional revenue (industry claim volumes declined 8% Y/Y in Q2).
• Competitive threats from horizontal SaaS players entering the insurance market.

Q: Congrats on the upside in the quarter. I wanted to start with the full year EBITDA guide reiterated...

A: Brian Herb discussed timing of costs, EvolutionIQ implementation delays, and margin progression.

Q: This is Callie on for Gabriela. I would love to dig a bit deeper into the technical changes you talked about in the casualty platform...

A: Githesh Ramamurthy discussed modernized rules engine, simulation capabilities, analytics, and customer-specific enhancements.

Q: Again, congrats on a good quarter. Maybe first, Brian, I just -- I don't know if I caught the tail end of what you said to the prior question. What are you assuming specifically on volume trends?

A: Brian Herb explained claims volume decline impact on growth, with 1 point drag baked into guidance for the second half.

Q: Maybe Githesh on kind of the dimensions you called out with large customers kind of moving from pilot to production...

A: Githesh Ramamurthy discussed solutions solving big problems, ROI, and gradual volume expansion as customers gain comfort with solutions.

Q: I wanted to go back to the commentary you had just around -- it sounds like maybe some green shoots in Emerging Solutions as things move from pilot into production...

A: Githesh Ramamurthy elaborated on multiyear contracts, broad applicability of solutions, and volume expansion post-contract.

Q: A lot of questions have been answered, but I wanted to just ask you, is the EvolutionIQ, you kind of channel down the revenue attainment this year, is it still going to impact margins, adjusted EBITDA margins by about 200 basis points?

A: Brian Herb stated EvolutionIQ's impact on margins, with core CCC showing margin expansion excluding EvolutionIQ.