Q4 2021 CCC Intelligent Solutions Holdings Inc Earnings Call
Greetings and welcome to the C. C C intelligence solutions fourth quarter and fiscal year 2021 earnings call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your tell.
Phone keypad that's.
A reminder, this conference is being recorded I would now like to turn the conference over to your host Bryan Dan you with ICR. Please go ahead.
Good morning, and thank you for joining us today to review <unk> fourth quarter and fiscal year, 2020 , one financial results, which we announced in our press release issued before the open of market today.
Joining the call today are detached from MRC, Ccc's, chairman and CEO and Brian Herb CCC CFO .
The forward looking statements, we make today about the company's results and plans are subject to risks and uncertainties.
The actual results or they can bring a limitation on the companys plans to vary materially.
These risks are discussed in our earnings release is available on our Investor Relations website under the heading risk factors in our registration statement on form S. One filed with the SEC on September 19th 2021, and our 2021 and annual report on Form 10-K to be filed with the SEC.
Further these comments and the Q&A that follows are copyrighted today by CCC intelligent solutions Holdings incorporated.
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Additionally, while we have approved the publishing of a transcript of this call by a third party.
We take no responsibility for inaccuracy that may appear in that transcript.
Please note that the discussion on today's call include certain non-GAAP financial measures as defined by the SEC.
The company believes these non-GAAP financial measures provide useful information to management and investors regarding certain financial and business trends relating to the company's financial condition and results of operations.
A reconciliation of GAAP to non-GAAP measures is available in our earnings release that is available on our Investor Relations website.
Thank you and now I'll turn it over to attack.
Thanks, Brian and thanks to all of you for joining US today I'm pleased to report at CCC delivered exceptionally strong top and bottom line results in the fourth quarter.
I'd like to start by summarizing our financial results for the fourth quarter and full year.
For the fourth quarter revenue was $187 1 million up 19% adjusted for divestiture last year.
This is ahead of our guidance and our strongest growth performance in years.
Adjusted EBITDA was $75 $7 million, which grew 30% year over year.
This represents a 40% margin up more than 300 basis points from the fourth quarter of 2020.
And for the full year total revenue was $688 3 million up 15%.
Adjusted for divestiture last year.
And adjusted EBITDA was $261 4 million, representing a 38% margin.
Both our revenue and adjusted EBITDA performance.
Well ahead of our initial guidance for the year, reflecting the strong momentum across our business.
I'll first provide some highlights from 'twenty to 'twenty, one which was a strong year for US and then review the fourth quarter in detail.
It was truly exciting this year to see the convergence of many of the fundamental platform decisions. We have made over the years gathered critical mass this year.
C C cloud today sits at the heart of the digital transformation of the P&C insurance economy.
More than 30000 customers across the ecosystem trustee C. C to provide state of the art cloud based solutions that leverage AI and mobile to boost operational efficiency and greatly improve the customer experience.
We believe this is a long term trend that is still in the early days. It gives us great confidence in our ability to drive consistent durable growth and revenue and profitability. While we have delivered organic revenue growth for two decades, our performance in 2020 , one was particularly strong.
Wrong.
We continue to lay the foundation for sustained growth as we delivered more than 1700 product releases on the CCC cloud in 2020 one.
This is up from 1400 releases the prior year.
This equates to an average of more than 30 product releases per week. These.
These included important new launches like CCC estimate S D P and payments as well as significant updates to diagnostics and many other existing solutions, we substantially expanded the breadth and depth of our AI solutions, which have now been used to power.
More than 9 million unique claims using a C. C C deep learning AI solution.
This is up 80% from 2020.
We expanded our platform to support additional aspects of the ecosystem and increase the value of our network for our customers.
We signed a number of key renewals during the year, including four of our largest multi store operators or msos.
And three of the top five insurance carriers.
It was exciting to see that in every case. These customer wins included both multiyear extensions and further expansions of CCC solutions, They will deploy and we successfully returned to the public markets.
We are extremely proud of the high quality shareholder base, we have attracted who have been very supportive of our long term strategic objectives.
I also wanted to take this opportunity to thank the CCC team for all that we have accomplished together in 2021 and incredible path, we have to power the digital transformation of the P&C insurance economy.
I will now provide some of the key highlights from the fourth quarter.
The first area I'd like to highlight is the continued expansion of CCC solutions with our customers.
We have a terrific customer base, which includes so many that have been with us over the long term.
And they continue to give us great insight as to the business challenges they would like solved.
The strength of these relationships is foundational to our long term success and drives our best in class retention rates.
A great example of the opportunity in these long term relationships with the meaningful expansions, we secured during the quarter with two of the top five largest P&C insurers as part of signing five year contract renewals with each customer.
Each insurer.
We'll be meaningfully expanding their spend with C. C. C is to deploy a number of new solutions, including our suite of mobile AI solutions and estimate S. D. P. As we discussed last quarter. We believe one of the most exciting aspects of the CCC growths.
Corey.
Many investors may not fully appreciate is the opportunity for growth from a broad insurance customer base.
New solutions like estimate S D b.
Payments and total loss care as well as new innovations, we plan to introduce in the coming years are all incremental growth opportunities.
Now to give you some perspective on the scale and visibility we have into our future revenue.
At the end of last quarter, we had more than $1 billion silver revenue under contract with our 25 largest insurance customers and believe we can meaningfully expand our revenue from them over the long term if they were to deploy more of our solutions a similar dynamic also is.
This among a repair facility customers.
During the quarter, we signed a long term renewal with one of the nation's largest msos that will now be deploying our engage solution to all their locations. We are thrilled with the interest in CCC engage throughout 2020 . One in fact this product has now been adopted by nearly 9000 of our repair.
So the customers.
This represents more than 30% of our total repair facility installed base and is one of the fastest product deployments we have ever had.
During 2021 we signed renewals for five or more years with multiple national Msos.
Which highlights the long standing relationships, we have built and our long term commitment to product innovation and most important to their success.
Finally, we also continue to expand our ecosystem.
As our investments in areas like parts and total loss provide opportunities to add parks providers banks and financial institutions and other auto insurance economy participants to our platform.
For example, since introducing parts several years ago, we now have signed up more than 4000 parts suppliers.
We had 40% growth in electronic order volume in 2020 one.
And now have 15% of total market G M b being processed on our part solution.
Parks is a great example of how we have built the CCC platform to be a balanced multi sided network that generates value for all participants for the millions of claims processed each year on the C. C C cloud.
What is particularly powerful about the expanding adoption of the CCC cloud is that it is self reinforcing.
Revenue from new product adoption provides resources to invest even more in R&D further expanding our offerings, which in turn helps us deliver more revenue and earnings growth a virtuous cycle in other words.
The second area I wanted to provide an update on is the early success, we're having with some of our recent product innovations.
Our passion for product innovation is what drives our success with customers or.
The heart of our product development effort is our vision for straight through processing our S. T E P.
Which will leverage AI to fully digitize large segments of the P&C insurance economy.
S. T. P is applicable throughout our network ecosystem and represents a multiyear innovation journey across a number of use cases.
A critical component of our S. T. P vision was the recent introduction of CCC estimate S. P. P. Our first product that enables a truly touchless trade through processing experience for our customers and a critical step forward for the industry.
As a reminder, this solution fully digitizes.
The estimating process for qualified repairable claims and shortens the estimating process from days to seconds.
Momentum continues to build around estimate STP as customers embrace the increase in accuracy speed and efficiency. This AI powered solutions brings to the estimation process.
It's also reducing estimate times from days to seconds.
Estimate S. D. P is a significant opportunity for CCC and is one that we expect to scale over the next several years.
We continue to see terrific adoption and momentum with our AI innovations.
We now have more than 95 U S auto insurers that are actively using ccc's AI powered capabilities and we're still in the early stages of driving widespread adoption.
A stat that I'm, particularly proud of is that last year. We grew the number of claims that utilized four or more of our AI applications by a factor of six.
This is a great demonstration of the sizeable opportunity we have to incorporate AI throughout the claims lifecycle.
Finally, we continue to make progress on our payment solution, which is now generally available to customers.
We're engaged with a number of customers to refine use cases and to build the pipeline for this product.
We're following a three part approach that has helped us launch and scale new products in the past.
First we initially rollout with select customers, where we partner together grew find the use case and optimize the workflow.
Second we take those learnings and corporate Devin our solutions, making its value proposition even more powerful.
And then lastly, we move upmarket and deployed to larger customers. We're looking for new technology that can increase efficiency and profitability.
This is a process that takes time, but as the yielded consistently strong results for C. C C.
The third area I'd like to update you on is how we're expanding our market opportunity.
We recently announced our acquisition of safety.
And innovative startup in short tech provider that uses AI machine learning and natural language processing.
The digitized the full subrogation lifecycle.
For those of you not familiar with subrogation.
This is a step in the claims process that every insurer has to perform across every P&C line and refers to the process of protecting consumers and insurers from painful losses, where the insured is deemed not at fault or only partially at fault.
Subrogation effects tens of billions of dollars in claims every year and costs insurers over $2 billion.
<unk> estimated administrative expenses annually.
Historically subrogation, that's been a highly manual and time intensive process and digitizing. It is a natural extension of our STP vision and platform strategy.
Save keeps technology uses AI and automated workflows to streamline the entire subrogation process addressing a key pain point.
Our insurance customers I've been asking us to solve.
This gives us an exciting new cross sell opportunity with our carrier customers and also extends us beyond auto.
As the say keep platform addresses subrogation across Amy PNC loan.
We are excited to welcome the safe keep team to C. C C.
This acquisition is indicative of the opportunity we have to deliver additional value to our network through new inorganic products deployed on the C. C C cloud.
As we look ahead to 2020 two we believe C. C. C is in a great position to build upon this success and work even more closely with all participants in the auto insurance economy.
Our focus is.
He is a leveraging and expanding upon our unique and comprehensive cloud platform.
To fully digitize, the P&C insurance economy by delivering on our S. P. P vision.
This includes expanding adoption and use cases for our solutions.
We will be broadening our AI capabilities to allow us to capture more estimate use cases, as well as extending our STB capabilities into new workflows like subrogation payments.
We're also focused on growing our capabilities and diagnostics to create even more value and drive greater efficiency for our repair facilities and other customers.
We are excited about the opportunity to meaningfully increase adoption of these new solutions over the course of 2020 two.
We will also invest in our people to support our growth objectives.
Our employees are the lifeblood of CCC and our success as a company.
Ensuring that we are developing and supporting our current and future employees.
Is a top priority for me and the senior leadership team.
Do that and we were thrilled to recently opened a new design center in downtown Chicago.
This state of the art facility that also serves as our new headquarters is purpose built to facilitate innovation and collaboration by our employees.
We're also increasing our focus on leveraging the increase in remote work opportunities by recruiting highly qualified candidates in new regions around the world.
Finally, we will pursue opportunities to deepen and expand our platform through alliances and targeted M&A.
Our open platform and deep customer relationships.
C C C and ideal partner for any technology provider looking to serve the P&C insurance economy.
We believe there are significant opportunities to enhance the value of our platform and increase our network effect by using alliances and M&A to provide new growth opportunities for C. C C.
Overall, we feel very good about the state of our business and our ability to generate substantial value for our customers and our shareholders.
Now I'd like to turn the call over to Brian After which we'll be happy to take your questions.
Thanks catastrophe today, I'll review, our fourth quarter and fiscal year 2021 results.
So provide guidance for the first quarter and full year of 2022 .
Total revenue for the fourth quarter was $187 1 million up 19% from the prior year period on an adjusted basis, we look at growth on an adjusted basis, which excludes from our 'twenty 'twenty revenue a portion of our casualty product line clinical profession.
<unk> services that was divested at the end of 2020.
We believe this provides the best view into the underlying growth of the business. So our quarterly performance can be looked at on a like for like basis from a trend perspective, 19% growth is the sixth sequential quarter of accelerating year over year revenue growth.
Growth in the quarter was primarily driven by strong cross sell and upsell activity, including the impact of several large renewals signed in the quarter with expanding solution bundles and also deals closed earlier in the year that contains sizable increases in revenue.
We also saw continued strength in new logos, largely in part suppliers and repair facilities.
We are pleased with our performance in the quarter and the underlying momentum in the business, which only had a limited benefit from transactional volume recoveries in the quarter and only 1% impact on total growth for the full year.
I do want to highlight that in the fourth quarter, we had approximately $4 million of nonrecurring revenue, which contributed approximately two points of growth most of which was anticipated in our guidance.
The nonrecurring revenue related to items, our Chinese customer renewal that included several months of catch up revenue and also some year end true ups that happened in Q4 and will reset in 2022.
Turning now to our key metrics software gross dollar retention or G. D. R captures the amount of revenue retained from our client base compared to the prior year period in Q4, 'twenty. One it was 98% which is consistent with our historical levels, we believe that.
Our software G. D. R reflects the value we provide to our customers and the stickiness of the network effect software GDR as a core tenant of our predictable and resilient revenue model.
Software net dollar retention or N D. R captures the amount of cross selling upsell from our existing customers compared to the prior year period as well as volume movements within our client base in Q4, 'twenty one software N D. R was 115%.
Similar to last quarter software N D. R was above our historical range.
Insistently strong N D. R. We deliberate throughout 2021 is a demonstration of the breadth of our cross sell opportunities as we benefit from new solutions like engage mobile AI as well as large client renewals that expanded adoption of some of our more traditional products.
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We are well positioned to drive strong cross selling upsell activities going forward.
But it is also important to keep in mind that as we move throughout 2022, we will face tougher comps against the strong N D. Our performance, especially in Q3 and Q4.
Software MTR is a key driver of our growth given that the majority of our subscription revenue comes from our existing client base.
Now to review the income statement in more detail as a reminder, unless otherwise noted all metrics are non-GAAP and we've provided a reconciliation of GAAP to non-GAAP in our press release.
Adjusted gross profit in the quarter was 147 million with adjusted gross profit margin of 79% compared to an adjusted gross profit margin of 76% in the fourth quarter of last year adjusted.
Adjusted gross profit benefited from the increased scale of the business and the relatively fixed and semi fixed cost base within our cost of revenue as.
As well as the $4 million of nonrecurring revenue I mentioned earlier.
Turning to our operating expenses non-GAAP operating expenses were $77 7 million.
Our cost base remains somewhat lower than we anticipated due to hiring being below our plan coupled with lower discretionary costs like travel due to the ongoing effects of COVID-19 .
Adjusted EBITDA for the quarter was $75 7 million with a 40% adjusted EBITDA margin adjusted EBITA grew 30% year over year. This was a strong profitability performance that reflects the revenue over performance and the expense favorability I just referenced.
Turning to the balance sheet and cash flow, we ended the quarter with $183 million in cash and cash equivalents.
And 800 million of debt.
At the end of the quarter, our net leverage was approximately 2.4 times adjusted EBITDA free cash flow in the quarter was $17 3 million compared to $30 9 million in the prior year period.
Looking at cash flow on a unlevered basis in 2020 , one we converted 53% of adjusted EBITDA into Unlevered free cash flow.
We did have several onetime items that impacted the cash flow during the year, including transaction costs related to taking the company public.
And the investment in our new headquarters.
If you adjust for these items cash conversion would have been in the low sixty's inconsistent with our historical performance.
Now I'd like to finish with guidance beginning in the first quarter. We expect total revenue of 182.5 to $184 5 million. This represents 16% year over year growth at the midpoint we.
We expect adjusted EBITDA between 70 to 72 million, which represents a 36% adjusted EBITDA margin at the midpoint for.
For the full year 2022, we expect revenue of 762 $768 million, which is 11% year over year growth at the midpoint.
We expect adjusted EBITDA of 286 to 292 million, which represents a 38% adjusted EBITDA margin at the midpoint.
There are several things that I would keep in mind as you see.
About our guidance for 2022.
It calls for another strong year of growth above our long term organic revenue target of seven to 10.
In terms of the revenue plan our outlook reflects.
Our confidence in the underlying momentum of the business when.
When you think about building your models throughout the year, we expect sequential dollar growth in Q2 through Q4 to be broadly consistent each quarter.
Also keep in mind that our revenue growth in the first half of the year benefits from the easier comps compared to the first half of 2021 .
In terms of revenue mix, we continue to see grow shift more towards cross selling upsell versus new logos similar.
Similar to what we started to see in 2020 . One this reflects the growing solution portfolio and the amount of innovation that we've introduced into the market.
In terms of profitability, we are forecasting similar adjusted EBITDA margins to 2021 .
We've generated outsized margin expansion in recent years going from 30% adjusted EBITDA margin at the end of 2019% to 38% adjusted EBITDA margin at the end of last year, we remain focused on investing in our growth initiatives, including absorbing the cost base and ongoing.
The investment of the safe keep acquisition.
At the same time, we do remain confident we can achieve our long term targets of 45% adjusted EBITDA margin.
Q1 will reflect the continuous investment, we're making across the business as well as the $4 million of nonrecurring revenue in Q4, which fell to the bottom line and will not repeat we.
We do expect Q2 profitability to be lower than Q1 due to the phasing of cost and the timing of our annual industry Conference. We then expect profitability to grow sequentially each quarter in the back half of the year.
Finally, we believe <unk> is a strong strategic fit and provides good long term growth opportunity.
However, this is a early stage business and does not have meaningful recurring revenue and is immaterial to our revenue guidance for 2022.
So to wrap up 2021 was a strong year for C. C C with revenue growth and profitability exceeding our guidance for the year.
We have a robust product development roadmap that we are investing in and we believe will drive additional value for our customers as they continue to invest to digitize their operations.
Overall C. C. C is performing at a high level and we believe the combination of attractive growth and high profitability can deliver long term value for our shareholders.
With that operator, we're now ready to take questions.
Thank you at this time, we'll be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question. Kim You May press star two if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before.
Pressing the star keys.
In the interest of time, we ask that you each keep to one question and one follow up thank you.
Our first question comes from the line of advanced <unk> with William Blair. Please proceed with your question.
Hey, guys. Good morning, Congrats on the results it's still in on for Bob Bob I wanted to maybe start on the.
The S T P pes.
And maybe how this serves as an easy on ramp for for some of the the AI tools, you've kind of talked about as well here, but maybe how should we be thinking about the market potential and S. T. P is it is it a share of maybe some of the savings you're driving.
For customers, how can I save keep maybe plays into this and maybe some of the long term initiatives for that for the F. C. P NII components.
Sure. This is good tests you know, it's really you have to think about it in two parts. What we've introduced first is estimate S. T. P. So estimate S. T. P is a component.
The overall STP, our straight through processing capability.
As we've mentioned before each claim leads to you know hundreds of different activities our transactions.
So one of the hardest steps is really taking the estimate from the accident and the photo.
And two what is this going to cost to repair and that's really what estimate S. T. P dos.
So.
What we've done with sub rural and many other components is this also gives us an entry point or a demonstration to customers that we've been able to deliver estimate STP, which is one of the hardest AI problems to solve.
At scale.
And it gives us great ability to deliver other components of STP, hence the <unk>.
Our acquisition of safety.
Help.
Yeah, Yeah, that's very helpful. I guess to maybe building off of that and maybe this is a little bit more of a longer term kind of potential opportunity here, but thinking about.
And some of the fraud dynamics that take place across kind of the claims lifecycle as well you have a lot of data kind of running across your platform here.
Insights maybe from the AI pieces, but the thinking I guess, maybe what Howard carriers, yeah, thinking and analyzing kind of maybe the fraud dynamics and the value that you can drive to better address.
The fraud that they're saying across their solutions as well. Thanks, Yeah. We do we do some of that already for example, our platforms are connected real time to Nashville insurance Crime Bureau, we have.
You know a large volume of trillion dollars of historical data to look at claims that have been reported across the cross carrier opportunities. So as you know the technology balls are clearly there are opportunities to help protect against that and we do see that as a key component of our overall.
Stupid vision.
Got it. Thank you guys. Thanks for taking my questions and nice job.
Thank you.
Thank you. Our next question comes from the line of Chris Moore with CJS Securities. Please proceed with your question.
Hey, good morning, guys. Thanks for taking a couple of questions.
Just the organic growth for the quarter was 19%.
So far in July was 115% is it too simple to say the new logos are probably 4% or so in the quarter.
Hey, Chris It's Brian Yeah, that's right. So if you break down the 19 and Dr was 115, and new logos was about 4%. So that is the math for the quarter.
Got it.
In terms of the 22 guide you know how much you may have said this I may have missed it how much transactional.
You know kind of volume recovery is incorporated in there.
Yeah, there there's not much I mean, we talked about in 'twenty, one having one point of a recovery from volume and that that's where we ended up in our 'twenty one position as we look forward on on the guidance I'm, we have less than that going into 'twenty. Two so it's less than a point.
So we're not expecting Oh, we're not baking into the plan a further recovery, we do expect recovery to come back, but we don't know the timing or the phasing and so what that looks like coming back in so we have not assumed a further.
Further recovery in our plan.
Got it and last one for me you know probably will get a little spoiled you guys level and precision of guidance.
'twenty one is she'd be 'twenty two's, 11% your normal range is 7% to 10% from from where we're sitting today.
'twenty three it's probably best to look at from that normal range.
Yeah, that's right I mean, we're not adjusting anything beyond where we are today. So I would say you know as we think beyond 'twenty. Two you know we're very focused on our organic revenue guidance that we've provided a seven to 10.
Got it I appreciate it I'll jump back in line. Thanks.
Right.
Thank you. Our next question comes from the line of Jackson Ader with Jpmorgan. Please proceed with your question.
Hi, This is my own for Jackson, and so you're talking about some of the large multiyear renewals.
When do you when do you typically see large customers.
John Rockier than ours or their typical renewal cycle is that you can forecast.
You know Mike.
First of all great to have you won I would just say that many of our customers if not most of our customers have been customers for 20 plus years. So yes. There is a pattern of renewals like some other contracts I indicated where five year renewals. So yes. Some of those renewals will come up five years from now but what also.
It happens in our business is that customers as we introduce new solutions. Many of our customers are adopting those new solutions and that's part of adopting additional bundles additional solutions, sometimes they say hey, we'd love the predictability of actually extending the contract for the route are widely adopt the solution.
So it can happen both ways.
People, just adopt new solutions or people adopt new solutions, and say I'm gonna extended a little further.
And sometimes it comes based on contract cycles, but this is one of the reasons I wanted to call. The top 25 carriers alone we have about $1 billion of visibility over the next few years and contracted revenue.
Got it that's really helpful. And then just going off of that.
In terms of having high visibility for this year.
How does that compare to some of the revenue.
Hi branch.
Dan one of the previous years.
I would not say, there's anything particularly unusual AR. This is just you know this is just a normal pattern.
We've seen for you know 2025 plus years and is a fundamental reason, we maintain a net promoter score of 80, which as you know for an enterprise software is leading edge that means our customers really deliver great solutions for our customers drive a really great M. P S and.
That's really important to these long term relationships.
Got it thank you.
Thanks, Mike.
Thank you. Our next question comes from the line of Kirk <unk> with Evercore ISI. Please proceed with your question.
Yeah, Thanks, very much and congrats on a good finish to the year get tests can you just talk a little bit actually going back into those bigger contracts when you're talking to those customers about Upsells cross sells in this case I guess.
Is that competitive or are there other solutions that they're taking you off against it or is it more than just the ability for them to.
We at the point, where they can start thinking through the process changes required to take all of those technologies I'm just I'm curious.
What sort of you know if there's any gating factors or it's just sort of working through the sales process with them.
Yeah, I mean look there are.
Always a competitive issues right, that's always to give us, but the fundamental difference between what we offer.
Versus single point solutions is that we offer a truly end to end solution. So all the way from connecting to your consumers all the way through.
I was in some of your employees, making hundreds and hundreds of decisions on our you know per day, all the way through to repair facilities parts providers. So we provide a seamless end to end integration.
And so that's so that's a huge differentiation for CCC second because our cloud is already deeply integrated into customers' platforms. It makes it easier for customers to start testing piloting and really lighting up and testing out new solutions, so as customer.
Pilot light up and test new solutions that are fully integrated.
It becomes more I'll say, hey did the solution have the impact that we were hoping it would have oh, yes. It had the impact we're really thrilled with it. So a lot of customers. For example that I talked about estimate S. D. P. A lot of people said this has never been done in the world before Ken It really happen when they tested it and used.
It in fact, one customer common to another customer actually works better than so you said you advertise it.
So, it's really a matter of piloting and testing and getting it up and running so those are really the issues.
That's helpful and then Brian when we think about these these upsell opportunities with your customers you just the revenue base sort of automatically revert higher too to the extent, they're buying your products from you or is this something safer one of the bigger near the top.
The two of the top up that you that you have sold this quarter well that revenue from these new products.
Blend in over time, I'm, just trying to get a sense of how those contracts work from a from a Rev Rec perspective.
Yeah, it's a bit of both so there's some of the deals that they'll bring in products like engage in and hurt the MSL and roll it out across their base and that that will just start to be in the base going forward.
Other products like S. T P, where we've cross sold will build over time as they continue to adopt that technology. So it's not it's not a pure one way or the other some of it will step up immediately and kind of be part of the base and some will build overtime.
We see both varieties.
Thank you all.
Alright, thank you.
Thank you. Our next question comes from the line of Gary <unk> with <unk>.
Banking research. Please proceed with your question.
Good morning, everyone, Hey, detached or Brian can you give us some idea.
What your software N D. R was two or three years ago.
Versus where it is now and then I have another one I wanted to ask on safety.
Yeah. That's fine so yeah, if you look at where N D or was a couple years back and kind of go beyond Covid year. It was around 106, one O. Seven so that's kind of our historical trends. So we clearly are a trending over those historical rates in the N D hours that we've.
<unk> delivered in 'twenty one.
So and in terms of if its one O six and you were at what 115. So we're talking about 900 basis points of growth and a lot of that I assume it's really going to be from new uptake of new products and higher priced products et cetera is that correct.
Yeah. It is.
It is I mean, there's a few things that are that are going on right. So if you look at the blended rate over the four quarters of N D. R.
Now 111 is kind of what we average across 21. There is there's a few things going on in that I mean, one is these large expansion deals that we've talked about they set a foundation for this accelerated rate.
Across the top carriers, we've signed in the top Msos. We also have seen good mobile AI.
I engage adoption system of our digital solutions, we're seeing adoption across the broad client base and then we're also seeing pickup and upsell at the repair facilities and seeing that and that upsell at the client base. So all of those are contributing the other factor that you need to note is we have highlighted that.
Cross sell will be a larger proportion of our growth going forward. So if you look back historically cross sell its been about two thirds of our growth we've been highlighting that that's going to move to more like 80% of our total growth going forward and we're starting to see that play out in 'twenty, one and expect that trend to continue in 'twenty.
Two and beyond so that's another factor that's playing through.
Okay, and then very quickly attached.
The safe keep acquisition sounds interesting.
But you know I guess, you kind of alluded to that it was a newer technology that hadn't really been deployed in the market.
I mean, what do you have to do if anything to tweak it to get it to where you want it to be and was the fact that it wasn't out there in the market that it was just a single point solution and you know they just could not compete.
Hey, Gary I would say you know fundamentally what we saw with safety is that they had solve some really hard problems right. So subrogation is a process by which you you're saying who is at fault, where should I collect money from et cetera.
There's a lot of complexity. So the team has done a fabulous job of understanding building the technology and.
Frankly, when we went around and talking to a lot of their customers early customers. They had were in pilot in early test.
And the feedback was just simply outstanding.
It's one of those things, where we could say look we can take a few years.
Or we could really go with the solution and best of all we love the team.
Jeff you know the CEO leadership team Fabulous team and then when you put that capability on our platform, where you had now can deliver to customers an end to end solution. We feel we can really accelerate.
The movement of this technology through and it fits exactly into our STP overall STP.
Yeah.
Okay. Thank you.
Thanks, Gary.
Gary.
Thank you. Our next question comes from the line of 18 Wong with Citi. Please proceed with your question.
Hi, Good morning, guys. Thanks for taking my question good to see you guys doing a coin.
I think you talk about the meaningful expansion in week two of your top 10 P&C clients I'm wondering are those expansion kind of came in.
As to what you are expecting on.
Before and then also what are some of the products that was product that was not a surprise. This year could you give us a little more.
Yeah.
Yeah. So first of all I would say there were no surprises because you know we work with our core customers for a very long time in both our repair customers are multi store operator customers. Our insurance customers. We're also working well ahead of time in.
Piloting testing seeing their results so there's really no surprises there.
Timing, sometimes you know on these larger complex thing sometimes it takes a few months, sometimes it can take a year, sometimes can take longer.
So no real surprises as such.
Okay, I guess, how much of that expansion is kind of in the AI mobile area. I mean small to begin with do you see that sandridge time growing towards the later stages of the contract.
Yes, we do see that you know that element, especially on the carrier side, especially that element of.
AI estimate S. T P and there was a number of new solutions. Some are already established products. We had and then as more customers adopt mobile AI as well as in some instances existing solutions that they have not ruled out in previous years.
Saw the benefit of rolling those solutions out so it's a mix of new solutions as well as existing solutions and some of these solutions will ramp.
Over time as a you know as the mix continues to change and more and more AI and other solutions get adopted.
Great. Thanks.
Thank you.
Thank you, ladies and gentlemen that concludes our question and answer session I'll turn the floor back to Mr. Miller for any final comments.
Thanks to everybody for joining us and we really appreciate our shareholders being on the call and.
I look forward to giving you an update so to wrap up I'd. Just tell you that we are thrilled with how CCC performed in 2020 one.
Super excited about the opportunities in front of us in 'twenty, two and beyond.
We as we came out to the public markets, we set up some very clear objectives that'd be wanted to make sure we deliver and hopefully everyone feels good about what we're doing in that area.
I would also say that we're seeing positive demand trends across each of our product key product and customer segments.
And and as a result, we are seeing that the importance of investing in cloud based digital technologies continues to grow among our customers.
And as you said and we continue to reiterate innovation huge huge part of what we're doing as we continue to deliver new solutions that help drive growth and I also wanted to take this opportunity to wrap up and shout out a huge thank you to all the CCC yours, well over the years and particularly the last year.
<unk> made it help make all this happen.
So we look forward to giving you further updates and thanks everybody for joining.
Thank you. This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation.