Cannae Holdings, Inc. Q2 FY2026 earnings call

Capital Allocation & Shareholder Returns

• Returned $7 million to shareholders via quarterly dividend in Q2 2026; year-to-date through July 2026, total returns to shareholders hit $58 million, split between $44 million in share buybacks and $14 million in dividends
• No share buybacks were completed in Q2 2026 due to pending transactions; management remains committed to opportunistic buybacks in H2 2026, supported by proceeds from non-core asset sales
• Allocated $45 million to new and existing investments in Q2 2026, bringing year-to-date investment allocation to $54 million; all investments are vetted against long-term returns relative to buying back Kenai stock
• Added an attractive new investment in Exeter Rugby, which has a strong established brand, proven fan base, attractive valuation, and geographic proximity to AFC Bournemouth to enable commercial and operational synergies; the same revenue growth playbook developed for AFC Bournemouth will be deployed at Exeter

Non-Core Asset Monetization

• Completed two key non-core asset sales in Q2 2026: sold the 49% stake in Watkins Company for $90 million on July 30, delivering a 1.2x multiple on invested capital and ~10% IRR in less than two years of ownership
• Closed the sale of 87% ownership of Versada Ranch to vice chairman Bill Foley's company in exchange for termination of Foley's put right, which monetized the non-core asset, eliminated the associated put liability, freed up ~$47 million in capital, removed future CapEx obligations, and demonstrates Foley's support for Kenai; the transaction was unanimously approved by the independent Related Person Transaction Committee and full board
• The strategic review process for the Restaurant Group is ongoing and taking longer than originally anticipated; management aims to complete a transaction that generates sale proceeds and eliminates the segment's ongoing negative cash flow to Kenai

Sports & Entertainment Portfolio (Core Strategy)

• Core strategic focus remains building a leading sports and entertainment multi-club platform; AFC Bournemouth (under Black Knight Football) achieved a club-record 6th place finish in the Premier League, qualifying for the UEFA Europa League for the first time in the club's 127-year history, following relegation battle in 2022
• European qualification will meaningfully boost AFC Bournemouth's broadcast revenue, commercial opportunities, and global brand relevance, coming off two transfer windows where key players were sold for over $350 million
• Phase 1 of AFC Bournemouth's stadium redevelopment will open in late August 2026, adding 1,000 seats and doubling hospitality capacity, with full build-out to 17,600 total capacity on track for the 2027/2028 season
• Management continues to build out the multi-club model to capture cross-club synergies

Holding Company Improvements

• Significant progress has been made reducing corporate holding company costs, which are down ~76% year-over-year, reflecting strong cost discipline from the board and management
• Governance has been strengthened with a new, publicly posted Related Person Transaction Committee policy to improve review and approval of related-party deals
• Brett Correia was appointed Interim CFO during the quarter

For Q2 2026, Kenai Holdings reported total consolidated operating revenue of $102 million, down from $110 million in the prior-year period. The decline was driven by lower revenue at the Restaurant Group, due to reduced customer traffic and O'Charlie's store closures. Total operating expenses were $159 million in Q2 2026, down from $171 million in Q2 2025, including $45 million in non-cash impairment charges on the Restaurant Group this year, compared to $1 million last year. Corporate holding company operating expenses were just under $9 million in Q2 2026, an 85% decrease from $59 million in Q2 2025; year-to-date 2026 corporate expenses are $18 million, a 76% decrease from $75 million year-to-date 2025. A $83.4 million mark-to-market gain was recorded in Q2 2026 from the SpaceX stake following the company's IPO. Black Knight Football (reported on a one-quarter lag, not consolidated into Kenai's results) reported total revenue of $89 million for the quarter ended March 31 2026, a 45% increase from $61 million in the prior-year period, driven by growth in TV rights and sponsorship at Mormith, plus inclusion of FC Lorient and Moravence revenue post-acquisition. Black Knight Football EBITDA was $80 million for the quarter (compared to $8 million year prior), with adjusted EBITDA excluding player trading profit at $34 million (compared to $8 million year prior).

• Management expects to continue opportunistic share buybacks in the second half of 2026, supported by $124 million in current corporate cash and the upcoming $45 million federal tax refund expected in 2026, providing ample flexibility for both buybacks and new investments
• Exeter Rugby, acquired at the end of Q2 2026, will begin full quarter P&L consolidation in Q4 2026 (reporting third quarter 2026 results), due to standard lagged consolidation for new acquisitions
• Directionally, the materially reduced corporate holding company cost run rate achieved in H1 2026 is expected to continue for the remainder of 2026, with only minor minor variability from seasonality and one-time items
• Management expects to complete the Restaurant Group strategic review and transaction within the third quarter of 2026
• Mark-to-market earnings variability is expected going forward as the SpaceX investment is revalued each reporting period post-IPO

• Forward-looking statements about future results, capital allocation, and transaction timelines are inherently uncertain, and actual outcomes may differ materially from projections due to identified and unforeseen risks, detailed in Kenai's SEC filings and quarterly shareholder letter
• The Restaurant Group strategic process is taking longer than originally anticipated due to delays in financing for potential transactions, creating ongoing negative cash burn for Kenai while the process continues
• Earnings will experience variability going forward due to the required mark-to-market accounting for the publicly traded SpaceX investment post-IPO
• All share buybacks and investment returns are dependent on market conditions and valuation, with no guarantee of repurchase volume or projected returns

Q: Analyst Kenneth Lee asked management to quantify potential share buyback volume for H2 2026 and outline available excess capital for repurchases. / A: Management reaffirmed its commitment to opportunistic share buybacks to return capital to shareholders. As of after the two recent asset sales, Kenai holds $124 million in cash, which provides plenty of excess capital for both share repurchases and new investment opportunities in H2 2026. Management did not provide a fixed repurchase target.

Q: Lee followed up asking why the Restaurant Group strategic review is taking longer than expected, and what activity is currently ongoing. / A: Management confirmed discussions with potential counterparties for the restaurant brands are continuing. The primary delay stems from difficulties securing third-party financing for a potential transaction. Management noted a clear path forward exists and expects to complete the process within the next quarter.

Q: Lee also asked how the $40 million enterprise value for Brasada Ranch compares to the asset's prior fair value marking on Kenai's balance sheet. / A: After accounting for $17 million in debt on the business, the transaction implied $23 million in total equity value for Brasada. Kenai's 87% ownership stake equated to roughly $20 million in equity value, which matched the carrying value of the put-related liability on Kenai's balance sheet prior to the transaction.

Q: Analyst Oscar Nieves asked about the SpaceX share lockup timeline and management's long-term plan for the stake, which is now marked-to-market post-IPO. / A: The SpaceX stake is subject to a tiered 180-day lockup, with the first tranche of shares already released. Management reviews all balance sheet assets quarterly to determine the optimal timing and path for liquidity to maximize shareholder returns, and this process will be applied to the SpaceX stake alongside all other investments.

Q: Nieves asked whether the $32 million goodwill impairment on the restaurant business changes the timeline for the Restaurant Group strategic review. / A: Management confirmed the goodwill impairment does not change the existing strategic review timeline, and the charge was tied to ongoing process aspects rather than a material shift in the segment's outlook or strategic plans.