Cannae Holdings, Inc. Q1 FY2026 earnings call

Capital Allocation

• In Q1 2026, Kenai returned ~$51 million to shareholders via a combination of share buybacks and regular dividends, representing 86% of total capital allocated for the year-to-date period, up from 70% shareholder return in the prior year period.
• Year-to-date, 3.4 million shares (7.3% of outstanding shares) have been repurchased for $43 million. The board expanded the repurchase authorization to 14.9 million shares during the quarter to enable continued opportunistic buybacks.
• Management views repurchasing Kenai's own equity as the highest returning available investment at current valuations, and will continue ongoing analysis to balance capital returns and new investments to maximize shareholder value. The regular dividend currently provides a 4.2% yield.

Black Knight Football (Multi-Club Sports Platform)

• Black Knight Football is Kenai's largest portfolio asset, with significant upside; core club AFC Bournemouth currently sits 6th in the Premier League, which would be the club's highest ever finish and first qualification for European competition if maintained, a result that would materially improve the club's commercial, branding, and financial profile.
• Over the past 18 months, Black Knight has sold top players for ~$360 million in transfer fees while still improving on-field results, demonstrating the success of the multi-club investment and operating strategy.
• The platform's value is illustrated by the development of 19-year-old player Eli Jr. Krupe: he was developed at Kenai-owned FC Lorient, transferred to AFC Bournemouth (another Kenai-owned club) at the optimal development time, and is currently Bournemouth's leading scorer, holding the record for most goals in a single Premier League season by a teenager. All parties (both clubs, the player) benefit economically and competitively from this structure.

Non-Core Asset Monetization

• The strategic review process for the non-core restaurant group is ongoing; the board's position remains unchanged: the restaurant business is non-core, and Kenai's focus is to monetize the asset to maximize proceeds, with capital to be redeployed to higher-return investments growing net asset value (NAV) or to additional share buybacks. A substantive update is expected on the next earnings call.
• The board reviews the entire portfolio quarterly to identify additional non-core assets for sale; investors should expect continued portfolio repositioning, with details provided at the appropriate time.

Holding Company Governance and Cost Reduction

• Holding company costs are down ~45% year-over-year in Q1 2026, reflecting disciplined cost-cutting by the board and management; the reduced annual run rate is expected to continue for the remainder of 2026.
• Kenai terminated its corporate margin loan during Q1, reducing annual commitment and custody fees by ~$350,000.
• Governance enhancements are ongoing; the board refreshed committee composition in Q1 to include the four new directors elected in the prior year, bringing new perspective to deliberations.

Portfolio Strategy

• Kenai is executing a strategic plan to concentrate its portfolio in sports and entertainment-related assets, while monetizing non-core assets, returning capital opportunistically to shareholders at prices below intrinsic value, improving portfolio company performance, increasing transparency, and reducing holding costs to close the NAV discount and grow NAV.

1. Kenai Holdings Corporate (Holding Company): Holding company operating expenses totaled $8.9 million in Q1 2026, a 45% ($7.2 million) year-over-year decrease from $16.1 million in Q1 2025. This is the only holding company segment, with no separate revenue contribution from holding company operations. At quarter end, corporate-level cash was $123 million, falling to ~$90 million post-quarter buybacks; outstanding corporate debt is $48 million of 5% fixed-rate term debt maturing in over four years.
2. Restaurant Group: Total Q1 2026 consolidated operating revenue for Kenai was $96 million, down 7% year-over-year, with the entire decline attributable to the restaurant group. The decline stemmed from closure of 8 O'Charlie's locations and lower traffic across both restaurant brands. Higher average checks at 99 nearly offset traffic declines, while pricing at O'Charlie's recovered roughly half of the traffic drop. Bursada Ranch revenue was approximately flat quarter-over-quarter. Restaurant operating expenses were flat year-over-year: a $7 million cost decrease from lower volume was offset by $8 million in non-cash impairments to restaurant right-of-use, fixed assets.
3. Black Knight Football (Equity Method Investment): For the 12 months ending December 31, 2025, Black Knight Football total revenue grew 19% year-over-year to $274 million, driven by strong on-field performance at AFC Bournemouth, higher commercial revenue, and inclusion of Morense for a half-year period. Full-year 2025 EBITDA grew to $136 million from $12 million in 2024, driven by a fourfold increase in player trading profits from $30 million (2024) to $113 million (2025). Adjusted EBITDA (excluding player trading profits) improved from negative $5 million (2024) to positive $21 million (2025) on improved operating leverage, net of higher player wages.

• No formal full-year financial guidance was provided in the call. Management noted that the reduced 45% lower holding company cost run rate achieved in Q1 2026 is expected to continue throughout the remainder of 2026.
• Management expects to provide a substantive update on the restaurant group strategic monetization process on the next quarterly earnings call.
• An updated investor deck with additional detail on potential new investment pipeline will be released later the same day as the call.

• Forward-looking statements included in the call are subject to inherent risks and uncertainties that could cause actual results to differ materially from projections, including risk factors detailed in Kenai's quarterly shareholder letter and SEC filings. Kenai undertakes no obligation to update forward-looking statements after the call.
• The restaurant segment faces ongoing headwinds from lower customer traffic, which has pressured revenue despite partial offset from pricing increases.
• All capital allocation decisions are subject to uncertainty around future valuation of Kenai shares, availability of attractive new investment opportunities, and timing of non-core asset monetization proceeds.

Q: Given Kenai's long-term shift to sports and media investments, is the plan to monetize all existing non-Black Knight assets such as Janet Partners and Watkins? / A: Management confirmed the strategic shift to sports and entertainment assets, but stated the firm likes all current investments for their attractive attributes. The full portfolio is reviewed quarterly with the board to assess divestment opportunities, and any conclusions will be disclosed publicly when finalized, similar to the process followed for the restaurant group. This maintains flexibility rather than committing to a blanket monetization of all non-core assets.

Q: What is the framework for sizing buybacks, what is the bar for new investments, and what types of assets does Kenai target? / A: Buyback sizing is based on 6-12 month liquidity projections, which also account for expected timing of non-core asset sales. Management and the board prioritize growing NAV over time, and transitioning the portfolio to sports and entertainment assets will create the most long-term shareholder value, so new investments will focus exclusively on this sector. Investments are vetted for size, liquidity, valuation, and future performance before approval, with no commitment to deploy capital to new deals if buybacks remain more attractive.

Q: Is Kenai considering another large tender offer like the 2024 transaction, given the current expanded buyback authorization and potential restaurant sale proceeds? / A: Management stated the firm is currently focused on open market buybacks. While a tender offer remains an option if open market purchases cannot deliver desired volume or pricing, the 2024 tender was executed at a premium and the share price subsequently traded down, so open market purchases remain the near-term priority.

Q: How will the expected $45 million tax refund be allocated between buybacks and new core investments? / A: The refund will be evaluated under the same existing capital allocation framework used for all other balance sheet liquidity: management will select the use case that maximizes shareholder value at the time the refund is received, based on prevailing stock price and available investment opportunities. In Q1 2026, 86% of all allocated capital went to buybacks and dividends, so the current bias remains toward returning capital to shareholders.