Q1 2025 Cannae Holdings Inc Earnings Call
Operator: Good afternoon, ladies and gentlemen, and welcome to the Cannae Holdings Inc. first quarter 2025 financial results conference call. During today's presentation, all participants will be in a listen-only mode.
Good afternoon, ladies and gentlemen, and welcome to the NII Holdings, Inc. First quarter 2025 National results Conference call.
During todays presentation, all parties will be in less than a listen only mode. Following the company's prepared remarks. The conference will be opened for questions with instructions to follow at that time.
Operator: Following the company's prepared remarks, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded and the replay is available to 1159 p.m.
As a reminder, this conference call is being recorded and a replay is available to 11 59 P. M. Eastern time on May 26, 2025, but that I would like to turn the call over to Jamie Lillis.
Operator: Eastern Time on May 26, 2025.
Jamie Lillis: With that, I would like to turn the call over to Jamie Lillis of Solvery Strategic Communications. Please go ahead. Thank you, operator, and all of you for joining.
Speaker Change: So when he started a communication. Please go ahead.
Speaker Change: Thank you operator, and all of you for joining us on the call today, we have <unk>, Chief Executive Officer, Ryan Caswell, and Brian Coyne, our Chief Financial Officer.
Jamie Lillis: On the call today, we have Cannae's Chief Executive Officer, Ryan Caswell, and Bryan Coy, our Chief Financial Officer. Before we begin, I would like to remind listeners that this conference call and the Q&A following our remarks may contain forward-looking statements that involve a number of risks and uncertain Statements that are not historical facts, including statements about Cannae's expectations, hopes, intentions, or strategies regarding the future, are forward-looking statements. Forward-looking statements are based on management's beliefs, as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected.
Speaker Change: Before we begin I would like to remind listeners that this conference call and the Q&A. Following our remarks may contain forward looking statements that involve a number of risks and uncertainties statements that are not historical facts, including statements about can I expectations hopes intentions or strategies regarding the future are.
Speaker Change: Looking statements forward looking statements are based on management's beliefs as well as the assumption made by and information currently available to management because such statements are based on expectations as to future financial and operating results and are not statements of fact actual results may differ materially from those.
Speaker Change: As projected.
Jamie Lillis: The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to the risks and other factors detailed in our quarterly shareholder letter which was released this afternoon and in our other filings with the SEC.
Speaker Change: The company undertakes no obligation to update any forward looking statements, whether as a result of new information future events or otherwise the.
Speaker Change: The risks and uncertainties, which forward looking statements are subject to include but are not limited to the risks and other factors detailed quarterly.
Speaker Change: Quarterly shareholder letter, which was released this afternoon and in our other filings with the FCC.
Jamie Lillis: Today's remarks will also include references to non-GAAP financial measures. Additional information including a reconciliation between the non-GAAP financial information to the GAAP financial information is provided in our shareholder letter.
Today's remarks will also include references to non-GAAP financial measures.
Shall I formation, including a reconciliation between the non-GAAP financial information to the GAAP financial information is provided in our shareholder letter I would now like to turn the call over to Ray.
Ryan Caswell: I would now like to turn the call over to Ryan.
Ryan Caswell: Thank you, Jamie. Given the executive management secession announcement from earlier today. I would first like to start by welcoming Bill Foley to his new role as Vice Chairman and Doug Ammerman to his new role as Chairman. More importantly, I want to thank Bill for his mentorship and all that he has provided to Cannae and its portfolio company. Under Bill's leadership, we have made great progress and have significant opportunities in front of us to increase shareholder value. I look forward to continuing to work with Bill and Doug in their new roles and the entire board as we continue to position Cannae for long-term success as a permanent capital vehicle.
Ray: Thank you Jamie.
Ray: Given the executive management and fashion in that announcement from earlier today.
I would first like to start by welcoming beltway to his new role as Vice Chairman, Doug Amarin to his new role as chairman.
Ray: More importantly, I want to thank bill for his Mentorship and all that he has provided to eni and its portfolio of companies.
Ray: Under Bill's leadership, we have made great progress and have significant opportunities in front of us to increase shareholder value.
Ray: I look forward to continuing to work with bill and dug in their new roles and the entire board as we continue to position <unk> for long term success as a permanent capital vehicle.
Ryan Caswell: We remain committed to long term sustainable We remain committed to creating long-term, sustainable shareholder value through the execution of our strategic plan, including 1. Rebalancing the portfolio away from current public investments and opportunistically investing in attractive companies with positive capital. 2, Returning Capital to Shareholders. and three, improving the operational performance of Cannae's portfolio. I am excited to report that we continue to make progress on all fronts. In late March, our largest public investment, Dun & Bradstreet, announced a definitive agreement to be acquired by Clear Lake Capital in an all-cash transaction valuing D&B at $4.1 billion of equity, from which at closing, Cannae will receive $632 million of proceeds.
Ray: We remain committed to long term sustainable excuse.
Ray: We remain committed to creating long term sustainable shareholder value through the execution execution of our strategic plan, including one.
Ray: Rebalancing the portfolio away from current public investment opportunistic opportunistically investing in attractive companies with positive cash.
Ray: To returning capital to shareholders.
Ray: And three improving the operational performance of <unk> portfolio.
Ray: I am excited to report that we continue to make progress on all fronts.
Ray: Yeah.
Ray: Okay.
Ray: In late March our largest public investment, Don and Bradstreet announced a definitive agreement to be acquired by Clearlake capital in an all cash transaction transaction valuing dnb at $4 1 billion of equity.
Ray: From which are closing and I will receive $632 million of proceeds.
Ryan Caswell: This capital provides Cannae with significant flexibility and allows us an ability to return a meaningful amount of capital to our shareholders. As previously announced, post-transaction closing, we expect to use at least $460 million of these proceeds for share repurchases. Dividends and Debt Repayment, of which at least $300 million will be used to repurchase shares. $101,000,000 to repay Cannae's margin loan. and we will retain $60 million to pay future dividends. These actions will provide significant capital to our shareholders and we believe will help close the stock price discount to NAV. We are grateful to the entire D&B team for their hard work since our initial take private of the business and know that they will perform well with their new partners at Clearly.
Ray: This capital provides <unk> with significant flexibility and allows us an ability to return a meaningful amount of capital to our shareholders.
Ray: As previously announced post transaction closing, we expect to use at least $460 million of these proceeds for share repurchases.
Ray: Dividend and debt repayment of which at least $300 million will be used to repurchase shares.
Ray: $101 million to repay can I as margin.
Ray: And we will retain 60 million to pay future dividends.
Ray: These actions will provide significant capital to our shareholders and we believe will help close the stock price discount to NAV.
Ray: We are grateful to the entire D&B team for their hard work since our initial take private of the business and know that they will perform well with their new partners at clear Lake.
Ryan Caswell: The transaction is expected to close in the third quarter of the year. With the expected sale of D&B and the 2024 share sales of Dayforce, Alight, D&B, and Paysafe, We will have sold approximately $1.1 billion of our public portfolio stakes since the beginning of 2024. and expect to utilize approximately $730 million as either a return to shareholders through repurchases and dividends or as a debt repayment. We believe this demonstrates our commitment to our strategy of rebalancing our portfolio and returning a significant amount of capital to our shareholders.
Ray: The transaction is expected to close in the third quarter of this year.
Ray: With the expected sale of Dnb and the 2024 share sales force a light dnb and pacing.
Ray: We will have sold approximately $1 1 billion of our public portfolio stake since the beginning of 2024.
Ray: And expect to utilize approximately 730 million as either a return to shareholders through repurchases and dividends or would be debt repayment.
Ray: We believe this demonstrates our commitment to our strategy of rebalancing our portfolio and returning.
Ray: Amount of capital to our shareholders.
Ryan Caswell: Today we announce the expansion of our strategic relationship with Giana Partners, an investment firm focused on creating value through shareholder engagement. Cannae has entered into an agreement to acquire an additional 30% stake in JANA for $67.5 million with potential further payments of up to $26 million contingent on JANA's future assets under management. post-clothing, Cannae will have total ownership of 50 percent. This additional investment in Janna broadens the scope of our partnership established in February 2024, enhancing and expanding Cannae's ability to allocate capital towards proprietary acquisitions and investment opportunities that complement Janna's strategy and investment activities.
Ray: Today, we announced the expansion of our strategic relationship with Jana partners.
Ray: <unk> firm focused on creating value through shareholder engagement.
Ray: <unk> has entered into an agreement to acquire an additional 30% stake in Jana were $67 $5 million with potential further payments about $226 million.
Ray: Contingent on Janez future assets under management.
Ray: Post closing and I will have total ownership up 50%.
Ray: This additional investment and Jana broadens the scope of our partnership established in February 2024, and.
Enhancing and expanding <unk> ability to allocate capital towards proprietary acquisitions and investment opportunities that complement janas strategy and investment activity.
Ryan Caswell: The widened strategic relationship also provides Cannae with additional ownership and cash distributions from a high-performing private company, and represents another aspect of Cannae's strategy to rebalance its portfolio to attractive companies that produce cash.
Ray: The widened strategic relationship also provides <unk> with additional ownership in cash distributions from our high performing private Congress and represents another aspect of Chennai strategy to rebalance its portfolio to attractive companies that produce cash.
Ryan Caswell: We are excited to continue our partnership with Barry, Scott, and the Janet. The transaction is expected to close in the third quarter.
Ray: We are excited to continue our partnership with Barry Scott and Janet.
Ray: The transaction is expected to close in the third quarter of this year.
Ryan Caswell: Also today, Cannae appointed Bill Roy and Woody Tyler to its board, effective as of June 1st, 2025. Both individuals bring strong track records in investment management, having successfully worked at both public pension and private investment funds, where each oversaw and managed multi-billion dollar portfolios across a variety of strategies. Furthermore, each has extensive experience working with portfolio companies, public and private boards, and other stakeholders to make strategic decisions that drive future value.
Ray: Also today can I appointed Bill ROI and Woody Tyler to its board effective as of June <unk> 2025.
Ray: Both individuals bring strong track records.
Ray: Asset management, having successfully worked at the public pension and private investment funds, where each oversight and managed multibillion dollar portfolios across a variety of strategies.
Ray: Furthermore, each has extensive experience working with portfolio companies public and private boards and other stakeholders to make strategic decisions that drive future value.
Ryan Caswell: We expect that Bill Royan will serve on Cannae's Corporate Governance and Nominating Committee and Related Person Transaction Committee, and Woody will serve on Cannae's Related Person Transaction Committee. We are delighted to have them both and believe that they will add significant value to Canada.
Speaker Change: We expect that Bill Ryan will serve on Kenai is corporate governance, and nominating committee unrelated person transaction Committee and what he will serve on tonight's related person transaction Committee.
Ray: We are delighted to have them, both and believe that they will add significant value.
Speaker Change: Mhm.
Ryan Caswell: I would now like to go through a few of our portfolio covers. CNB reported revenue of $580 million, which represents 3.6% constant currency organic growth compared to the prior year's first quarter. Adjusted EBITDA was $211 million for the first quarter of 2025. $9.6 million above the prior year's first. Notably, both revenue and adjusted EBITDA were above consensus expectations. Also, the company's adjusted EBITDA margin increased 70 basis points to 36.4% in the first quarter of 2025.
Speaker Change: I would now like to go through a few of our portfolio companies.
Speaker Change: Dnb reported revenue of $580 million, which represents three 6% constant currency organic growth compared to the prior year's first quarter adjusted EBITDA was $211 million for the first quarter of 2025.
Speaker Change: $9 $6 million above the prior year's first quarter, notably both revenue and adjusted EBITDA were above consensus expectations.
Speaker Change: Also the company's adjusted EBITDA margin increased 70 basis points to 36.
Speaker Change: 4% in the first quarter of 2025.
Ryan Caswell: Alight reported total revenue from continuing operations of $548 million for the first quarter of 2025, a 2% decrease from the first quarter of 2024. Adjusted EBITDA was $118 million for the first quarter, a $2 million increase compared to the first quarter of 2024. Both of these results were ahead of consensus at Management also affirmed their previous guidance for the full year 2025 with the midpoint for revenue of $2.36 billion and adjusted EBITDA of $633 million.
Speaker Change: <unk> reported total revenue from continuing operations of $548 million for the first quarter of 2025% to 2% decrease from the first quarter of 2024.
Speaker Change: Adjusted EBITDA was $118 million for the first quarter, a $2 million increased compared to the first quarter of 2024.
Speaker Change: Both of these results were ahead of consensus estimates.
Speaker Change: Management also affirmed their previous guidance for the full year 2025, with the midpoint for revenue up to $3 6 billion and adjusted EBITDA of $633 million.
Ryan Caswell: My life's leverage now sits at 3.1 times EBITDA. The company also has their investor day and management provided midterm targets of four to 6% organic revenue growth and 30% adjusted EBITDA margins by 2027. while expecting $1 billion of cumulative free cash flow generation between 2025 and 2027. We were excited to see these financial targets and are hopeful that as the light continues to show operational improvements and delivers on guidance, the market will recognize the embedded value in them.
Speaker Change: Our lives leverage now sits at three one times EBITDA come.
Speaker Change: The company also had their Investor day, and management provided mid term target of 4% to 6% organic revenue growth at 30% adjusted EBITDA margins by 2027.
Speaker Change: While expecting $1 billion of cumulative free cash flow generation between 2025 and 2020, we were excited to see these financial targets and are hopeful that as the light continues to show operational improvements and delivers on guidance the market will recognize embedded value in the business.
Ryan Caswell: Turning to Black Knights football, we made significant progress over the quarter. Starting with the holding company, Black Knights Football Club raised approximately $133 million of new capital in the first quarter, half of which has already been funded, and the other half will be funded later this year. As part of the capital raise, Cannae will contribute $50 million, of which $25 million has already been funded. And the remaining capital will come from Bill and a group of third-party investors. This capital provides Black Knight with significant strategic flexibility as we look to continue investments in the team, infrastructure, and holding company.
Speaker Change: Turning to Black Knight's football, we made significant progress over the quarter.
Speaker Change: Starting with the holding company Black Night Football club raised approximately $133 million of new capital in the first quarter half of which has already been funded and the other half will be funded later this year.
Speaker Change: As part of the capital raise can I will contribute $50 million of which $25 million has already been funded and the remaining capital will come from Bill and a group of third party investors.
Speaker Change: This capital provides black Knight with significant strategic flexibility as we look to continue investments in the team infrastructure and holding company.
Ryan Caswell: During the quarter, we continued to build out the management team data capabilities and connectivity between the holding company and the respective clubs with the goal of optimizing player development and pathways and commercial opportunities amongst our teams. While we are still in the early stages, we are excited about the progress to date and the potential impact.
Speaker Change: During the quarter, we continued to build out our management team data capabilities and connectivity between the holding company and respect and the respective parts with the goal of optimizing player development pathway and commercial opportunities amongst our teams.
Speaker Change: While we are still in the early stages. We are excited about the progress to date and the potential impact.
Ryan Caswell: Moving to the individual. At ASC Bournemouth, we made significant progress in the quarter from an infrastructure perspective. First, we opened our new world-class performance center for the first team in the academy. The facility is over 66,000 square feet with four new grass pitches, one full-size outdoor artificial pitch, and a full-size indoor artificial pitch. We believe this facility is one of the best in the world, highlights our ambitions as a club, and will be a critical tool for player development and recruiting, which in turn is critical for AFC Boardman's continued success on the field.
Speaker Change: Moving to the individual teams.
Speaker Change: At AFC Bornemann, we made significant progress in the quarter from an infrastructure perspective.
Speaker Change: First we opened our new World Class performance Center for the first team in Chicago.
Speaker Change: The facility is over 66000 square feet with four new grass pitches, one full size outdoor artificial pitch and a full site indoor artificial pitch.
Speaker Change: We believe this facility is one of the best in the World highlights our ambitions at the cloud and it will be a critical tool for player development and recruiting which in turn is critical for AFC Boardman continued success on the field.
Ryan Caswell: Second, on April 25th, we announced the signing of an agreement to acquire Vitality Stadium, AFCB's home since 1910. This transaction is expected to close later this week, and we are far along in working on expansion and redevelopment plans. We are currently looking at a two-phase approach that, when complete, will nearly double capacity at Vitality to approximately $20,000. We are looking at modular construction, which will provide a significant upgrade to the stadium, but do so in a cost-effective way with higher returns on capital.
Speaker Change: Second on April 25th we announced the signing of an agreement to acquire vitality Stadium AFC Asb's home 19, Pat.
Speaker Change: This transaction is expected to close later this week and we are far along in working on expansion and redevelopment plans. We are currently looking at a two phased approach that when complete will nearly double capacity vitality.
Speaker Change: Proximately 20000 seats.
Speaker Change: We are looking at modular construction, which would provide a significant upgrade to the stadium, but do so in a cost effective way with higher returns on capital.
Ryan Caswell: We will provide updates as we move forward and the plans are finalized.
Speaker Change: We will provide updates as we move forward and the plans are finalized.
Speaker Change: Yeah.
Ryan Caswell: AFCB also continues to perform well on the pitch as they have set a new points record in the Premier League with 53 points and have two matches to go. The Cherries were selected to be one of four teams to represent the Premier League in the U.S. in the 2025 Summer Series and will play matches in New York, Chicago, and Atlanta between July 26th and August 10th. Additionally, AFC Bournemouth will field a team in the TST Soccer Tournament that takes place in North Carolina in June. We believe these global opportunities demonstrate the improving brand and commercial opportunities at AFC Board.
Speaker Change: <unk> also continues to perform well on the pitch and they have set a new points record in the Premier League with 53 points and have two matches took out.
Speaker Change: The Jerry's were selected to be one of four teams to represent the Premier League in the U S. In the 2025 summer CRE claim matches in New York, Chicago and Atlanta between July 26 in August.
Speaker Change: Additionally, as seaborne met will feel the team in Gst's soccer tournament that takes place in North Carolina in June.
Speaker Change: We believe these global opportunities demonstrate the improving brand and commercial opportunities at AFC Barnett.
Ryan Caswell: Lastly, we are excited to note that for the first time ever, AFC Boardman was recognized in Sportico's list of the world's 50 most valuable soccer clubs. Sportico valued ASB Board of Investors at $630 million U.S. The valuation utilized for this 2023 season revenue of $203 million, and it represents a 3.11 times multiple of revenue. The Sportico valuation represents equity appreciation of more than 40% when compared to the total amount of capital BKFC has invested in AFC board members today.
Speaker Change: Lastly, we are excited to note that for the first time ever asked seaborne met was recognized in sport coats list of the world's 50, most valuable soccer clubs.
Speaker Change: Portico valued <unk> at 630 million U S dollars.
Speaker Change: The valuation utilized four in mid 2023 season revenue up $203 million and represents a 311 times multiple of revenue.
Speaker Change: This portico valuation represents equity appreciation of more than 40% when compared to the total amount of capital.
Speaker Change: <unk> has invested in AST seaborne met today.
Ryan Caswell: Turning to SU Orients, last Saturday the team was crowned champions of League 2 and earned promotion back to League 1, the highest division in French football. This is a significant accomplishment for SC Laureate, and with the team returning to League One, it provides significantly more strategic value to Black Knights. I would also like to note that one of the key players responsible for their success was Eli Jr. Krupe, who ASC Boardman acquired in January and kept on loan at FC Lorient for the remainder of the season. This player transaction between clubs again demonstrates the value of multiple teams and player pathways within the club.
Speaker Change: Turning to ask you Oread last Saturday the team was crowned champions of lead to an earned promotion back to Lee what the highest division in French football.
Speaker Change: This is a significant accomplishment, perhaps you lorean and with the team returning to league one it provides significantly more strategic value to black Knight.
Speaker Change: I would also like to note that one of the key players are responsible for their success with Eli Junior Crupi, who asks the bornemann acquired in January and kept on loan at Ft. Laurie at for the remainder of the season.
Speaker Change: This player transaction between clubs again demonstrates the value of multiple teams and player pathways within the group.
Ryan Caswell: Hibernian FC has also achieved great results as they currently sit in third place in the Scottish Premier League, which would allow them entry into European competition. During the year, Hibernian went on an 18-game streak, where they were unbeaten in 17 of the 18 matches, equalling a 77-year-old club record.
Speaker Change: Hibernia NFC also achieved great results as they currently sit in third place and the Scottish Premier League, which would allow them entry into European competition. During the year Hibernia and went on an 18 game Street, where they were unbeaten and 17 of the 18 matches equal equaling a 77 year olds.
Speaker Change: Club record.
Ryan Caswell: Lastly, earlier in the month, BKFC announced a strategic affiliation with Orlando City SC of the MLS. This partnership gives BKFC its first direct connection to professional soccer in North America.
Speaker Change: Lastly earlier in the month, <unk> announced a strategic affiliation Orlando City.
Speaker Change: The MLS.
Speaker Change: This partnership gives PK FC its first direct connection professional soccer in North America.
Ryan Caswell: This agreement will benefit BKSC by giving it another player development pathway, an additional scouting channel, and expanded commercial opportunities to offer sponsors. of BKFC Club.
Speaker Change: This agreement will benefit <unk> by giving it another player development pathway and additional scouting channel and expanded commercial opportunities to offer sponsors.
Speaker Change: <unk> plus.
Bryan Coy: I'll now turn the call over to Bryan to touch on our... Thanks, Ryan. Cannae's first quarter total operating revenue of $103 million was 7% lower than the prior year on lower restaurant revenue. Notably, there were five fewer stores or 3% in the 2025 period compared to prior. Although the aggregate same-store sales were down, this was almost entirely attributable to the Old Charlies. The same store sales for the 99 restaurants brand were nearly even at a 0.3% drop. This is a big testament to the 99 brand, as the casual dining industry experienced a very tough quarter from several weather incidents and unstable macroeconomic conditions.
Speaker Change: I'll now turn the call over to Brian to touch on our financial position.
Speaker Change: Thanks, Brian.
Speaker Change: First quarter total operating revenue of $103 million was 7% lower than the prior year on lower restaurant revenues, notably there were five fewer stores were 3% in 2025.
Speaker Change: Although the aggregate same store sales were down this was almost entirely attributable to the other Charlie's brand same store sales for the 99 restaurants brand were nearly even robust 3% drop.
Speaker Change: This is a big Testament to the 99 brand as the casual dining industry experienced a very tough quarter.
Speaker Change: Weather incidents unstable macroeconomic conditions.
Bryan Coy: On a same-store basis, the 99 brand has equaled or outperformed the Barrett Casual Dining Index in each of the last 16 four-week periods. At the operating expense level, aggregate operating expenses were $125 million in the first quarter of 2025, or $27 million below the prior year. Restaurant Group reduced quarterly expenses by $7 million reflecting the drop in top line and attention to corporate and brand support expenses. A significant portion of the decrease also relates to $10 million of ISF payments in the prior year period, as well as $5 million lower management costs. The remaining improvement represents lower corporate operating expenses.
Speaker Change: On a same store basis, 99 brand is equal or outperformed casual dining index in each of the last 16 four week periods.
At the operating expense level aggregate operating expenses were 125 million in the first quarter of 2025 or 27 million below the prior year.
Speaker Change: Restaurant group reduced quarterly expenses by $7 million, reflecting the drop in top line and attention to corporate branch support expense a significant portion of the decrease also relates to device payment.
Speaker Change: Payments in the prior year.
Speaker Change: Well as $5 million lower manager.
Speaker Change: The remaining improvement represents lower corporate operating expenses.
Bryan Coy: Specifically, with regard to the operating expenses of the restaurant group, we have continued to make significant changes. The O'Charley's brand implemented a significant SKU reduction last month, along with other store-level improvements aimed at reducing labor and enhancing the guest experience. We also have a new president, a new chief operating officer, and a new chief financial officer in place. Next month, the restaurant group will move from its longtime headquarters to a new location that's approximately 20% the size of the current. This change alone will cut more than seven figures annually from the restaurant group's support costs.
Speaker Change: Specifically with regard to the operating expenses the restaurants, we've continued to make significant changes Charlie's brand implemented a significant SKU reductions last month, along with other store level improvements aimed at reducing labor and enhancing the guest experience.
Speaker Change: We also have a new president a new chief operating officer, a new Chief financial officer in place.
Speaker Change: Next month, the restaurant group will movements longtime headquarters to a new location that is approximately 20%. Besides the current space. This change alone will cut more than seven figures annually from the restaurant group support costs.
Bryan Coy: New management has also performed a detailed review of all locations and has identified changes that we expect to improve store level and regional operations. Cannae had net recognized gains of $7 million in the first quarter of 2025 compared to five in the prior year. The current quarter figure includes non-cash, fair value losses on Paysafe and Rapid7, offset by gains from the sale of WineDirect's e-commerce . On that, our initial investment of $10 million in Wines Direct was in 2017 and with this year's sale of their e-commerce division, Cannae realized a $15 million gain in Q1, received $14 million in cash, and still holds its interest in the remaining fulfillment.
Speaker Change: Management has also performed a detailed review of all locations.
Speaker Change: Identified changes that we expect to improve store level and regional operating costs.
Speaker Change: And I had net recognized gains of 7 million in the first quarter of 2025 compared to $5.
Speaker Change: The current quarter figure includes noncash fair value losses on page seven.
Speaker Change: Seven offset by gains from the sale of wind direct e-commerce.
Speaker Change: On that our initial investment of $10 million of wines reps in 2017 and with this year's sale of their ecommerce division and I realize the $15 million gain in Q1 received $14 million of cash still holds its interest in the remaining building.
Speaker Change: Yes.
Bryan Coy: A significant change in our financial statements presentation is that Dun & Bradstreet is no longer included in equity investments on the balance sheet and earnings from unconsolidated affiliates on our P&L. The signing of the agreement to be acquired by Clearlake and Cannae's entry into a voting and support agreement, GAAP requires us to present them as assets of discontinued operations on the balance. and their results as lost and discontinued operations in the P&L and statement of cash flow. All prior period balances were reclassified to conform to this presentation. Our equity in earnings and losses of unconsolidated facilities posted a $2 million net loss in Q1 2025 compared to $18 million in gain in the prior year.
Speaker Change: A significant change in our financial statement presentation that Dun <unk> Bradstreet is no longer included in equity method investments on the balance sheet and earnings non consolidated affiliates on our P&L.
Speaker Change: The signing of the agreement to be acquired by Clearlake inventory into a voting and support agreement GAAP requires us to present them as assets.
Speaker Change: Turning to operations on the balance sheet and their results as loss from discontinued operations in our P&L and statement of cash.
Speaker Change: All prior period balances were reclassified onto this presentation.
Speaker Change: Our equity and earnings or losses, among consolidated affiliates posted a 2 million net loss in Q1, 2025 compared to $18 million gain right.
Bryan Coy: The 2024 figure included a large gain from CSI offset by losses posted by a light site Unlike most of our investments, the CSI partnership has marked a fair value once per year, and their growth this year resulted in an additional $16 million gain in the fair value of our holdings, and follows the $41 million gain reported last year in the first quarter. This means Cannae has received $37 million of cash distributions and its remaining ownership has a fair value. This is 120% of Cannae's original investment. After our sale last week of 9 million shares of D&D for $81 million, Cannae has $188 million in corporate cash and short-term investments, offset by $149 million of debt.
Speaker Change: The 2024 figure included a large gain from CSI offset by losses.
Speaker Change: Posted by licensed site.
Speaker Change: Unlike most of our investments CSI partnerships mark to fair value once per year and their growth. This year resulted in an additional $16 million gain in the fair value of our holdings and follows the $41 million gain reported last year.
Speaker Change: This means deny has received $37 million of cash distributions and its remaining ownership has a fair value of the 100.
Speaker Change: One 8% up a nice regional investment.
Speaker Change: After our sale last week of 9 million shares of Dnb for $81 million and I had $188 million corporate cash and short term investments offset by $149 million of debt.
Bryan Coy: On that, during the quarter, we amended our FNF to retain $12.2 million, lowering the interest rate by 200 basis points and extending the maturity to 2030.
Speaker Change: On that during the quarter, we amended our epinephrine repaying $12 2 million lowering the interest rate by 200 basis points and extended the maturity to 2013.
Bryan Coy: That concludes our prepared remarks and we'll be happy to take your questions now. Thank you.
Speaker Change: That concludes our prepared remarks, we'll be happy to take your questions now.
Speaker Change: Thank you.
Operator: We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then 2.
Speaker Change: And the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys. The Vitale a question. Please press Star then two.
Kenneth Lee: The first question comes from Kenneth Lee with RBC Capital Markets. Please go ahead. Hey, good afternoon.
Kenneth Lee: The first question comes from Kenneth Lee with RBC capital markets. Please go ahead.
Speaker Change: Hey, good afternoon. Thanks for taking my question and congrats Brian on your new role.
Ryan Caswell: Thanks for taking my question and congrats, Ryan, on your new role. Just one on the JANA partners, now that there's a plan to... Can you talk a little bit more about the the revenue and file the business and perhaps also as well just remind us again the assets under management.
Speaker Change: Just one on on the Jana partners.
Speaker Change: Now that Theres, a plan to be a 50% owner could you talk a little bit more about the the revenue and earnings profile of the business and perhaps also as well just remind us again the assets under management of the business. Thanks.
Ryan Caswell: Hey Ken, this is Ryan. First off, thank you. I'm just trying to think what. I think at a high level, I don't want to get into kind of revenue and and and earning figures, but I think at a high level, the business has, you know, significantly higher AUM than we originally invested. It's it's north of two billion dollars, and it's been performing very well from a, you know, from a, from a financial profile. So we are, we are very excited about the investment. And, you know, I think when we, we look at the deal value, you know, we think it's at an attractive price and we're really optimistic around what we can do with Jana going forward.
Brian: Hey, Ken This is Brian first off.
Speaker Change: Okay. Thank you.
Speaker Change: I'm just trying to think what.
Speaker Change: I think at a high level.
Speaker Change: I want to get into kind of revenue.
Speaker Change: Okay and earnings figures, but I think at a high level the business has.
Speaker Change: Significantly higher AUR that we originally in basket, it's north of $2 billion.
Speaker Change: <unk> been performing very well.
Speaker Change: From a from a from a financial profile.
Speaker Change: We are we are very excited about two batsmen.
I think when we look at the deal value.
Speaker Change: We think it's at an attractive price.
Speaker Change: And we're really optimistic around what we can do with G&A going forward.
Ryan Caswell: And I think it shows kind of how we're trying to that. We will try and prioritize new investments with them that we think could be very impactful with can I, in addition to our investment in their business, which we think is, we think is also. You know, we'll be, we'll be very positive for the company. Gotcha.
Speaker Change: It shows kind of how we're trying to well that we will try and prioritize new investments with them that we think could be very impactful with can I. In addition to our investment in their business, which we think is we think is also.
Speaker Change: You know, we'll be it will be very positive for the company.
Speaker Change: Gotcha.
Ryan Caswell: And then just a brief follow-up here. Is there, are there any long-term, longer-term plans to... Time down the line.
Speaker Change: And then just just a brief follow up here.
Speaker Change: Is there are there any long term longer term plans to potentially increase the the ownership percentage of Jana partners sometime down the line. Thanks.
Ryan Caswell: Dang. There are no, at the current time, there are no plans to increase the ownership percentage. We think the structure that we have today works very well. Okay, very helpful there.
Speaker Change: There are no.
Speaker Change: The current time there are no plans to increase your ownership percentage. We think we think the structure that we have today today works very well.
Speaker Change: Okay very helpful. There.
Ryan Caswell: And just one more follow-up, if I may. Have there been any subsequent or recent discussions with the investor Carnot Capital and its shareholders? Um You know, in terms of the dialogue, you know, I think that you can look publicly and see what's what's out there. You know, I, you know, we obviously have a view of what we are doing and our strategic plan, and we continue to move forward on that plan. And, you know, we're open to, you know, discussions with them or any other any other investors as we move forward about how we create shareholder value.
Speaker Change: And just one.
Speaker Change: One more follow up if I may.
Speaker Change: Have there been any subsequent or recent discussions with the investor a car not capital and any kind of thoughts around some of the some of the recent actions that you've taken there. Thanks.
Speaker Change:
Speaker Change: In terms of the dialogue.
Speaker Change: I think that you can look publicly and see what's what's out there.
Speaker Change: We obviously have a view of.
Speaker Change: What we are doing in our strategic plan.
Speaker Change: We continue to move forward on that plan.
Speaker Change: And we're open to.
Speaker Change: Discussions with them or any other any other investors as we move forward about how we create shareholder value.
Ryan Caswell: Gotcha.
Speaker Change: Got you very helpful. There. Thanks again.
Ryan Caswell: Very helpful there.
Kenneth Lee: Thanks again.
Operator: Once again, if you have a question, please press star, then 1.
Speaker Change: Once again, if you have a question. Please press Star then one.
Ian Zaffino: The next question comes from Ian Zaffino with Oppenheimer. Please go ahead. Hi, thank you very much.
Speaker Change: Your next question comes from Embassy now with Oppenheimer. Please go ahead.
Speaker Change: Hi, Thank you very much so I just wanted to delve a little bit into the the vitality C acquisition.
Ryan Caswell: So I just wanted to delve a little bit into the Vitality Stadium acquisition, you know, help us understand the opportunity there, some of the economics there, and what's kind of going on. Thank you. Of course.
Speaker Change: Help us understand the opportunity there some of the economics there.
Speaker Change: What's currently going on thank you.
Speaker Change: Of course.
Ryan Caswell: The deal hasn't closed yet, so I want to be sensitive around some of the specific financial metrics, but I, you know, at a high level, we think that it's a very attractive, you know, the state of investment and redevelopment is an incredibly attractive proposition for the team. First off, as we talked about on the last call, we've been looking at, you know, whether we do a new stadium or whether we do a redevelopment. And as we looked at the financial analysis, we believe that it was much more compelling from a financial perspective to do a redevelopment.
Speaker Change: The deal hasn't closed yet so I wanna be sensitive around some of the specific financial metrics, but I.
Speaker Change: At a high level.
Speaker Change: We think that it's a it's a very attractive.
Speaker Change: You know.
Speaker Change: The stadium investment in redevelopment.
Speaker Change: <unk> is an incredibly attractive proposition for the team.
Speaker Change: First off as we talked about on the last call we've been looking at.
Speaker Change: Whether we do a new stadium or whether we do a redevelopment.
Speaker Change: And as we looked at the financial analysis, we believe that it was much more compelling from a from a financial perspective could you do a redevelopment.
Ryan Caswell: Look at the fans have been in the stadium since 1910, so there's an identity with the stadium, but we're also able to significantly improve the, you know, the brand, the look of the stadium to be able to get a lot more fans in there. But we think that, you know, just looking at the return on assets will be, you know, from the total investment to EBITDA that can generate and through both phases, as I mentioned in my prepared marks, there'll be a phase one and phase two, but it'll be, you know, kind of a mid-teens type return without thinking of any financing or other ways.
Look at the fans have been in the stadiums and 1910. So there was an identity with the stadium.
Speaker Change: But we're also able to significantly improve.
Speaker Change: The the brand the look of the stadium to be able to get a lot more fans in there, but we think that you know just looking at the return on assets will be.
Speaker Change: The total investment to EBITDA, they can generate and what through both phases as I mentioned in my prepared remarks, there will be a phase one and phase two but it'll be you know kind of mid teens type return without thinking of any financing or other ways. So we.
Ryan Caswell: So it's, you know, we think it's both a great opportunity for the club, the brand, and we think it's attractive financially as well.
Speaker Change: It's both a great opportunity for the club the brand and we think it's attractive financially as well.
Ian Zaffino: Okay, thank you.
Speaker Change: Okay. Thank you and then also you know when you think about the incremental capital that you plan to deploy going forward on M&A.
Ryan Caswell: And then also, you know, when you think about like incremental capital that you plan to deploy going forward on M&A, how are you thinking about that? Because I know you talk a lot about Black Knight being a big kind of source of maybe some acquisitions you could do or something else. But is that kind of how you're thinking about it now in that you want to create more of these kind of network effects of owning multiple teams? Or do you think we're kind of done with that and we're going to deploy capital elsewhere? Well, I mentioned on the call that Black Knight raised a bunch of capital that Cannae participated in.
Speaker Change: How are you thinking about back saying I know you can talk a lot about black Knight being a big kind of source of maybe some acquisitions, you could do or something else, but is that kind of how you're thinking about it now.
Speaker Change: And that you want to create more of these kind of network effects of owning multiple teams or do you think we're kind of done with that and we're going to deploy capital elsewhere. Thanks.
Speaker Change: Well I mentioned on the call that Black Knight raised a bunch of capital of that debt.
Speaker Change: <unk> can I participated in.
Ryan Caswell: I think in the short term... That's not going to be a focus of capital, but for the additional $25 million that I referenced on the call, I think, look, I think it a deal like the JANA deal is obviously an area that we've invested some capital. We obviously looked at Watkins last year, but how we're thinking about capital more broadly is we've obviously are returning a significant amount of capital related to the DNV transaction and share repurchases, dividends, and then paying down some of the margin loan. But at the same time, we need to also be mindful of there will be opportunistically make investments in businesses or situations that we think can deliver an attractive return.
Speaker Change: I think in the in the in the short term.
Speaker Change: That's not going to be a focus of capital, but for the additional $25 million that I referenced on the call.
Speaker Change: Look I think at eight.
Speaker Change: Deal like the Janet deal is obviously an area that we're we've puts that we've invested some capital. We obviously looked at Watkins last year, but but how we're thinking about capital more broadly is we've obviously are returning a significant amount of capital.
Speaker Change: Related to the Dnb transaction and share repurchases.
Speaker Change: And then and then paying down some of the margin loan but at the same time, we need to also be mindful of there will be up we will opportunistically make investments in businesses or situations that we think can deliver an attractive return.
Ryan Caswell: But clearly, in the short term, we're using the majority of our capital to buy back stocks.
Speaker Change: But clearly in the short term, where we're using the majority of our capital to buy back stock.
Ian Zaffino: All right, thank you very much.
Speaker Change: Alright, Thank you very much.
Operator: This concludes the question and answer session.
Speaker Change: This concludes the question and answer session I would like to turn the conference back over to Ryan Campbell for any closing remarks. Please go ahead.
Ryan Caswell: I would like to turn the conference back over to Ryan Caswell for any closing remarks. Please go ahead. Thank you.
Speaker Change: Thank you.
Ryan Caswell: In conclusion, we believe there remains significant embedded value in Cannae's portfolio and upside in our stock price as we continue to execute on our strategic plan and position Cannae for long-term success as a permanent capital vehicle.
Speaker Change: In conclusion, we believe there remains significant embedded value in <unk> portfolio and upside in our stock price as we continue to execute on our strategic plan and position NII for long term success as a permanent capital vehicle.
Ryan Caswell: Thank you for your time.
Speaker Change: Thank you for your time.
Speaker Change: Okay.
Operator: The conference is now concluded.
Speaker Change: The conference has now concluded thank you goodbye presentation.
Operator: Thank you for attending today's presentation.
Operator: You may now disconnect. © The Ultimate Parody Site!
Speaker Change: You may now disconnect.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: [music].
Speaker Change: Okay.