Q2 2025 CCC Intelligent Solutions Holdings Inc Earnings Call

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I'd now like to hand, the conference over to your first Speaker Bill Warmington, Vice President of Investor Relations. Please go ahead.

Thank you operator, good afternoon, and thank you all for joining us today to review <unk> second quarter 2025 financial results, which we announced in the press release issued following the close of the market today.

Joining me on the call are detached from Murphy, Ccc's, Chairman and CEO and Brian Herb Ccc's CFO.

Forward looking statements, we make today about the company's results and plans are subject to risks and uncertainties that may cause the actual results and the implementation of the company's plans to vary materially. These risks are discussed in the earnings releases available on our Investor Relations website and under the heading risk factors in our 2024.

Our annual report on Form 10-K filed with the SEC.

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Please note that the discussion of today's call includes 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 the results of.

<unk>.

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 the call over to good cash.

Thank you Bill and thanks to all of you for joining US today I'm pleased to report the CCC delivered another quarter of strong top and bottom line results, reflecting the predictability and profitability of our business. The second quarter of 2025, CCC total revenue was $260 million.

Growing 12% year over year exceeding our guidance range. Adjusted EBITDA was 108 million also ahead of our guidance range and adjusted EBITDA margin was 42%.

On today's call I'd like to cover three themes the <unk>.

First as a growing success, we are having with larger customers and expanding their adoption of our solutions. The second is a continued focus on balancing operating efficiency and investment in innovation.

And the third is the power of combining our interconnected network with our unique data and AI enabled solutions.

In terms of my first topic as you know customers, particularly our largest and most technologically sophisticated ones undergo lengthy testing and piloting phases when considering new products. This process is critical in validating customer specific ROI identifying internal process.

Improvements that can be made as a result of these new solutions and driving alignment across a company's operations in the second quarter. We began to see early evidence of more of our largest customers progressing past this pilot phase into broader rollouts.

Our solutions across their businesses.

Let's start with emerging solutions in Q2.

Top 10 insurers contracted for multiple AI enabled auto physical damage or Apd solutions that extend our photo AI capabilities beyond estimating to include earlier stages of claim Italy as well as later stages.

Such as audit and review.

These solutions have for example cut the time to identify a total loss in half, resulting in millions of dollars of annual impact with the potential to improve that time and impact even further.

This is a win win win.

Insurers avoid unnecessary fees repair facilities free a base for the repeatable vehicles and consumers get faster and more satisfying claims resolution.

Another example comes from a client at top 10 insurer, who contracted for the same solution in Q2 after seeing a significant increase in operating efficiency from consumers using this solution self service features to document damage select.

Repair facility and schedule an appointment.

Third example is the use of AI to streamline the back and forth between insurers and repair facilities or changes to repair estimates also known as supplements.

Over 60% of estimates now have a supplement or.

Or in many cases multiple supplements.

And this is a byproduct.

Of the growing complexity in our industry. So this is a major pain point for both insurers and repairs.

Our AI based solution can help expedite this process and in some cases auto approve these changes foreign insurers guidelines significantly reducing cycle time and manual effort in Q2 of top five insurer converted from a limited pilot go full rollout for this solution.

As well.

Our AI based subrogation solution is yet another example of growing adoption across insurance economy.

As you have heard me discussed before subrogation is often an expensive paper based manual process that cost insurers more than $2 billion annually to administer.

We are seeing growing interest in our AI based obligation solution and we currently have 25 customers on our subrogation platform, including multiple top 10 insurers on phased production agreements.

This group also includes a top 20 insurer, who after a lengthy trial period entered into a long term agreement with us in Q2 for two key reasons.

The first wasn't attractive six to one ROI driven by a combination of efficiency and accuracy.

Processing demand packages, now literally takes minutes or hours versus days and weeks previously.

Q2 a top 5, insurer converted from a limited pilot to a full rollout for this solution as well.

The second reason was the increase in productivity of employees using our tools.

Our AI based subregion solution is yet, another example of growing adoption across the insurance economy.

As you have heard me discuss before.

Our solutions are intuitive to learn and easy to use and help identify important information quickly, which is especially valuable to insurers as the retirements of an experienced workforce means more new hires with.

Segregation is often an expensive, paper-based manual process that costs insurers more than 2 billion dollars annually to administer.

We are seeing growing interest in our AI based obligation solution.

With Cct's AI based subrogation tools. This insurer's saw a significant acceleration in speed to competency and less experienced workers future proofing them as their workforce evolves decision.

and we currently have 25 customers on our subregion platform, including multiple top 10 insurers on phased, production agreements,

Decision in Q2 by multiple large insurers to contract with us for our AI based Apd solutions underscores the growing market momentum for these tools and strengthens our belief in the long term growth trajectory of our expanding portfolio.

This group also includes a top 20 insurer who after a lengthy trial period entered into a long-term agreement with us in Q2 for 2 key reasons.

The first.

Was an attractive 621 Roi driven by a combination of efficiency and accuracy.

So of AI based solutions.

Processing demand packages. Now literally takes minutes or hours versus days and weeks previously.

Also seeing strength in our established solutions like casualty.

While part of the CCC portfolio for more than a decade.

The second reason was the increase in productivity of employees using our tools.

We have over the last several years essentially rebuilt our casualty offering by completely retooling the tech stack, bringing in new leadership and investing heavily in new product development.

Our Solutions are intuitive to learn easy to use and help identify important information quickly, which is especially valuable to insurers.

With casualty related claims cost rising faster than general healthcare cost customers.

as the retirements of an experienced Workforce means more new hires

Customers are increasingly interested in our platform stability to deliver large tangible impact in this area.

With CCC's AI-based obligation tools, insurers saw a significant acceleration in speed to competency in less experienced workers, future-proofing them as their workforce evolves.

Casualty is a significant growth opportunity for CCC with the very large white space available.

While similar in total market opportunity to auto physical damage our apd gas.

Casualty today only represents about 10% of our revenue.

And our customer count is one fifth that of Apd.

Decision in Q2 by multiple large insurers to contract with us. For our AI based APD Solutions, underscores the growing Market momentum for these tools and strengthens our belief in the long-term growth trajectory of our expanding portfolio, of AI based Solutions.

Fact that our casualty platform already powers, several top 20 insurers, including multiple in the top five reflects the strength and quality of our offering.

We're also seeing strength in our established solutions like casualty.

While part of the CCC portfolio for more than a decade.

We continue to believe.

Casualty has the potential to be multiple times, its current size and overtime, possibly as large or even larger than our current insurance Apd business.

We have over the last several years, essentially rebuilt our casualty offering by completely retooling. The tech stack bringing in new leadership and investing heavily in new product development.

With casualty related claims costs Rising faster than General Health care costs.

In Q2, we had contract renewals and expansions in casualty with a top 10 in the top 20 insurer. In addition.

Customers are increasingly interested in our platforms ability to deliver large tangible impact in this area.

The late April announcement about the integration of evolution Iqs AI powered medical record censuses solution Mega hub into Ccc's casualty suite is generating positive engagement with our auto insurance customers and that solution.

Casualty is a significant growth opportunity for CCC with a very large white space available.

while similar in total Market opportunity to Auto fiscal damage or APD,

We also have strong interest in our next planned expansion of evolution iq's capabilities into auto which is claims guidance with many customers asking to evaluate the solution.

Casualty today, only represents about 10% of our Revenue.

And our customer count is 1/5 that of APD.

As soon as it's ready.

Evolution IQ continues to see solid momentum across its core disability and workers compensation solutions in Q2 evolution IQ renewed and expanded contracts with multiple top 15 disability carriers, including the addition of med hub I will.

The fact that our casualty platform already Powers several top 20 insurers including multiple in the top 5, reflects the strength and quality of our offering.

We continue to believe.

Casualty has the potential.

To be multiple times, its current size and over time, possibly as large or even larger than our current Insurance APD business.

<unk> has a strong and growing pipeline.

Our top 20, P&C insurers for workers' compensation suite as well as met hub auto.

In Q2, we had contract, renewals and expansions and Casualty with a top 10 and a top 20 insurer in addition.

We continue to view evolution IQ is a key strategic asset and a catalyst for cross selling our casualty suite into our <unk> client base of over 300 insurers.

The late April announcement about the integration of evolution iq's. AI powered, medical record synthesis solution, medhub into ccc's. Casualty Suite is generating positive engagement with our auto insurance customers in that solution.

This positive momentum and adoption is not limited to our insurance clients.

We're also seeing strong adoption by repair facilities of both our AI and non AI based solutions and here too positive results from some of our largest customers give us confidence in the long term potential of our newest offerings.

We also have strong interest in our next planned expansion of evolution iq's capabilities into Auto which is claims Guidance with many customers asking to evaluate the solution as soon as it's ready.

For example.

One of the leading multi store operators or Msos is already using our visual AI based estimating solution mobile jumpstart to prepare over 95% of their estimates.

Of medhub.

Evolution IQ has a strong and growing pipeline.

We view this as a leading indicator for adoption in.

Of top 20 PNC insurers for its workers compensation Suite, as well as manhub Auto.

In the industry and an example of how our most sophisticated clients are leveraging our AI based tools to improve operating efficiency and setting the pace of innovation for the industry. Overall. Another example is a continued adoption of bill sheets.

We continue to view Evolution IQ as a key strategic asset, and a catalyst for cross-selling, our casualty Suite into our APD client base of over 300 insurers.

This positive momentum and adoption is not limited to our insurance clients.

Our accuracy enhancing part selection tool, which is now being used at over 5000 repair facilities.

This represents a nearly 20% penetration of a repair facility client base in just one year after launch in July of last year.

We're also seeing strong adoption by repair facilities of both our Ai and non AI based Solutions.

And with diagnostics CCC continues to expand its coverage across diagnostics provider southern network, enabling repair facilities to work with more providers through an integrated workflow that streamlines administration.

And here too positive results from some of our largest customers. Give us confidence in the long-term potential of our newest offerings, for example,

And improved transparency.

1 of the leading multi-store operators or msos is already using our visual AI based estimating solution mobile JumpStart to prepare over 95% of their estimates.

While still early in the adoption cycle. We are encouraged by the success, we've had in the second quarter and increasing customer usage of our newer solutions.

We believe customers are just scratching the surface of deploying AI to increase efficiency and generate a durable competitive advantage in their business.

In the industry. And an example of how, our most sophisticated clients are leveraging. Our AI based tools to improve operating efficiency and setting the pace of innovation for the industry overall.

It will take time for these new contracts to materially contribute to revenue.

But we expect that contribution to build as use cases expand and clients and more volume through these solutions.

Another example is a continued adoption of build sheets. Our accuracy enhancing Parts selection tool which is now being used at over 5,000 repair facilities.

As we have seen in the past.

Our leading early adopter customers set up the next wave of adoption. So the progress we saw in Q2 reinforces our confidence in our long term growth opportunity. My second theme is our continued focus on balancing operational efficiency and investment in innovation.

This represents a nearly 20% penetration base, in just 1 year.

Our recurring revenue subscription model.

Single Unified code base scalable cloud infrastructure and season developing capability combined with our efficient go to market model uses a highly flexible and scalable business model.

Increasing customer usage of our newer Solutions.

This enables us to continually invest in innovation throughout economic cycles.

We Believe customers are just scratching the surface of deploying AI to increase efficiency, and generate a durable competitive advantage in their business.

And our clients understand that a significant portion of the fees. They pay us is reinvested into future innovation that ultimately benefits now.

It will take time for these new contracts to materially contribute to revenue.

In order to maintain this virtuous cycle, we are constantly focused on identifying new ways to improve ccc's operating efficiency.

But we expect that contribution to build as use cases, expand, and clients, send more volume through these Solutions.

as we have seen in the past,

Our leading early adopter customers.

Over the past few years, we have made investments that have significantly improved the scalability of our business.

Including building out the IX cloud architecture, streamlining our product development process and driving synergies across our proprietary datasets more recently like our customers. We are starting to see the benefits from leveraging AI internally.

Set up the next wave of adoption. So the progress we saw in Q2 reinforces our confidence in our long-term growth opportunity. My second thing is, our continued focus on balancing operational, efficiency and investment in innovation.

our recurring Revenue subscription model,

To help drive the next phase of Ccc's operational efficiency.

Single unified, codebase, scalable Cloud infrastructure, and seasoned development capability, combined with our efficient go-to market model.

Gives us a highly flexible and scalable business model.

We're using AI to save time reduce errors and to do things faster and smarter.

This enables us to continually invest in innovation throughout economic cycles.

From helping to write code and protect systems to helping hire the right people.

CCC has always been at the forefront of AI and we see these initiatives as a continuation of that trend. These investments further strengthen the scalability of our business model and improve our ability to deliver better solutions to more customers faster.

And our clients understand that a significant portion of the fees they pay us is reinvested into future Innovation. That ultimately benefits them

In order to maintain this virtual cycle, we are constantly focused on identifying new ways to improve ccc's operating efficiency.

Decreasing their time to value and increasing their ROI.

All while continuing to increase our annual investments and innovation.

My third and final theme.

Githesh Ramamurthy: And we've made it more recently. Like our customers, we are starting to see the benefits from leveraging AI internally to help drive the next phase of CCC's operational efficiency. We're using AI to save time, reduce errors, and to do things faster and smarter, from helping to write code and protect systems to helping hire the right people. CCC has always been at the forefront of AI, and we see these initiatives as a continuation of that trend. These investments further strengthen the scalability of our business model and improve our ability to deliver better solutions to more customers, faster, decreasing their time to value, and increasing their ROI, all while continuing to increase our annual investments in innovation. My third and final theme is the power of combining our interconnected network with our unique data and AI-enabled solutions.

Is the power of combining our interconnected network with our unique data and AI enabled solutions.

It is this combination.

That enables us to address our clients' current and future operational challenges.

More recently like our customers, we are starting to see the benefits from leveraging AI internally to help Drive the next phase of ccc's operational efficiency.

And the value of this combination was very evident to me at our recent customer conference in Frisco, Texas.

We're using AI to save time, reduce errors and to do things faster and smarter.

From helping to write code and protect systems to helping hire the right people.

Three day event that was attended by over 300 customers.

The foundation of our business is our interconnected network of over 35000 businesses, we have built over the long term.

One of my favorite parts of our customer conference.

Is seeing this network in action at the advisory councils, which brings together about 100 senior executives from across the auto insurance ecosystem.

CCC has always been at the Forefront of AI, and we see these initiatives as a continuation of that Trend these Investments further, strengthen the scalability of our business model and improve our ability to deliver better solutions to more customers faster, decreasing, their time to value and increasing their Roi.

All while continuing to increase our annual investments in innovation.

Including auto physical damage or Apd and casualty professionals.

My third and final theme.

Ms Subrogation teams and repair facilities.

These leaders convened to share operational challenges and offer feedback on CCC solutions, which we use to help inform our R&D priorities and address their evolving needs.

Githesh Ramamurthy: It is this combination that enables us to address our clients' current and future operational challenges. And the value of this combination was very evident to me at a recent customer conference in Frisco, Texas, a three-day event that was attended by over 300 customers. The foundation of our business is our interconnected network of over 35,000 businesses that we have built over the long term. One of my favorite parts of our customer conference is seeing this network in action at the Advisory Council, which brings together about 100 senior executives from across the auto insurance ecosystem, including auto physical damage, or APD, and casualty professionals, OEMs, subrogation teams, and repair facilities. These leaders convene to share operational challenges and offer feedback on CCC solutions, which we use to help inform our R&D priorities and address their evolving needs.

Is the power of combining our interconnected network with our unique data and AI-enabled solutions?

It is this combination.

That enables us to address our clients current and future operational challenges.

What was clear from my interaction with clients during the conference.

And the value of this combination was very evident to me at a recent customer conference in Frisco, Texas.

Was it the operational challenges you've heard me talk about in the past rising complexity of vehicle technology labor shortages geopolitical uncertainty continue to get more challenging and our clients are looking to CCC to help them navigate this once in a generation.

A 3-day event that was attended by over 300 customers.

The foundation of our business is our interconnected network of over 35,000 businesses. We have built over the long term.

1 of my favorite parts of our customer conference.

Digital transformation of the auto insurance economy.

One example of the combination of our interconnected network and our AI enabled solutions is the IX cloud.

Our event based architecture with enables the over 35000 businesses on our network to set up and manage notifications for relevant business events and configure actions based on those events using AI.

Is seeing this network in action at The Advisory councils which brings together about 100 senior Executives from across the auto insurance, ecosystem including Auto physical damage, or APD and Casualty professionals.

Oems subrogation teams and repair facilities.

We expect the IX cloud to facilitate a stair step increase in connectivity across our network and to help create more continuity across the claims ecosystem.

Githesh Ramamurthy: What was clear from my interaction with clients during the conference was that the operational challenges you heard me talk about in the past, the rising complexity of vehicle technology, labor shortages, and geopolitical uncertainty continue to get more challenging. And our clients are looking to CCC to help them navigate this once-in-a-generation digital transformation of the auto insurance economy. One example of the combination of our interconnected network and our AI-enabled solutions is the IX Cloud. Our event is a key portion of the lifecycle of claims and repairs. Before I finish, let me provide an update on our board of directors. I'd like to welcome new independent board member, Barack Ailam. Barack is the former CEO of Knight Systems and has over two decades of experience in enterprise software, AI, and customer engagement technologies.

These leaders convene to share operational challenges and offer feedback on CCC Solutions, which we use to help inform our R&D priorities and address the evolving needs.

what was clear from my interaction with clients during the conference,

Was it the operational challenges you heard me talk about in the past?

This will make the network faster and easier for customers to deploy new CCC solutions and for customers to use multiple CCC solutions together.

Rising complexity of vehicle. Technology, labor, shortages, geopolitical uncertainty continue to get more challenging.

As these solutions work together there are benefits are amplified.

And our clients are looking to CCC to help them navigate this once in a generation digital transformation of the auto insurance economy.

We believe the combination of our industry, leading AI scalable multi tenant platform and deep multi sided network position us as the partner of choice for this digital transformation.

1 example of the combination of our interconnected Network and our AI enabled Solutions is the IX cloud.

Over time, we believe <unk> solutions will be able to help manage an increasing portion of the lifecycle of claims and repairs.

Before I finish let me provide an update on our board of directors.

Our event based architecture that enables the other 5,000 businesses.

I'd like to welcome New Independent Board member Barack I alone.

<unk> is the former CEO of nice systems and has over two decades of experience in enterprise software AI and customer engagement technologies is proven ability to scale organizations and champion customer centric innovation will be a great help in our next phase of growth.

I also wish to thank Chris Egan of advent International will step down from the board earlier this year.

We are deeply grateful for Chris's guidance leadership and support since joining the board in 2017 as part of advance investment in CCC.

Let me conclude by reiterating the strength of our performance in the second quarter and how we are positioned for success going forward.

Increasing portion of the life cycle of claims and repairs.

Every day, our customers face the challenge of helping over 50000 people affected by auto accidents.

Before I finish, let me provide an update on our board of directors.

<unk> plays a critical role in delivering continuous innovation that enables our customers to better serve their customers. We believe there is an enormous opportunity in front of us to help our customers reduce cycle times increased operational efficiency and <unk>.

I'd like to welcome new independent board members. Barack ham.

Githesh Ramamurthy: His proven ability to scale organizations and champion customer-centric innovation will be a great help in our next phase of growth. I also wish to thank Chris Eakin.

Barack is the former CEO of night systems and has over 2 Decades of experience. In Enterprise software Ai and customer engagement Technologies.

Prove consumer experience.

Would be a great help in our next phase of growth.

Across the auto insurance economy.

Callie Valenti: On the board earlier this year.

I will now turn the call over to Brian will walk you through our results in more detail.

Githesh Ramamurthy: We are deeply grateful for Chris's guidance, leadership, and support since joining the board in 2017 as part of Advent's investment in CCC. Let me conclude by reiterating the strength of our performance in the second quarter and how we are positioned for success going forward. Every day, our customers face the challenge of helping over 50,000 people affected by auto accidents. CCC plays a critical role in delivering.

I also wish to thank Chris Eden of African International for his respect on the board earlier this year.

Thanks catastrophe as could test highlighted Q2 was a strong quarter that included meaningful renewals and contract expansions.

We are deeply grateful for Chris's guidance leadership and support.

Reflecting positive momentum in the core business as well as our newer solutions now, let's turn to the numbers of late.

since joining the board in 2017, as part of advent's investment in CCC,

Our second quarter 2025 results and then provide guidance for the third quarter and the full year 2025 total revenue in the second quarter was $260 5 million, which is up 12% from the prior year period in the second quarter of 2025, approximately five percentage points of our growth is driven by cross sell upsell and adoption of new solutions across our.

let me conclude by reiterating the strength of our performance in the second quarter, and how we are positioned for Success going forward.

Client base, including repair shop upgrades. The continued expansion of our merchant solution casualty and other ecosystem customers approximately three points of growth came from new logos, mostly from the repair facilities and part suppliers and about four percentage points of growth came from evolution Iq.

Callie Valenti: Thanks.

Githesh Ramamurthy: Increase operational efficiency and improve consumer experience across the auto insurance economy. I will now turn the call over to Brian, who will walk you through our results in more detail.

In the quarter contributions from emerging solutions continued to expand.

Every day, our customers face the challenge of helping over 50,000, people affected, by auto accidents, CCC placed a critical role in delivering. Continuous innovation, that enables our customers to better time, increase operational, efficiency, and improve consumer experience across the auto insurance economy.

Rounding up to two points of growth mainly from diagnostics build seats awesome, STP and subrogation emerging solutions represent about four percentage points of our total revenue in Q2 of 2025 and these solutions continue to be the fastest growing portion of our portfolio outside of evolution Iq.

Brian Herb: Thanks, Gitesh. As Gitesh highlighted, Q2 was a strong quarter that included meaningful renewals and contract expansions, reflecting positive momentum in the core business as well as our newer solutions. Now let's turn to the numbers. I'd like to review our second quarter of 2025 results and then provide guidance for the third quarter in the full year of 2025. Total revenue in the second quarter was $260.5 million, which is up 12% from the prior year period. In the second quarter of 2025, approximately five percentage points of our growth was driven by cross-sell, upsell, and adoption of new solutions across our client base, including repair shop upgrades, the continued expansion of emerging solutions, casualty, and other ecosystem customers. Approximately three points of growth came from new logos, mostly from the repair facilities and client base.

I will now turn the call over to Brian. We'll walk you through our results in more detail.

Industry claim volumes in Q2 declined 8% year over year, a slight improvement from Q1, two 9% decline. The trend continues to represent approximately one percentage point headwind of growth consistent with the impact that we saw in Q1.

Thanks Kesh as Kesh highlighted Q2 with a strong quarter. That included, meaningful renewals, and contract expansions reflecting positive momentum in the core business as well as our newer Solutions. Now, let's turn to the number so like, uh, review our second quarter of 2025 results and then provide guidance for the third quarter and the full year of 2025

Total revenue in the second quarter was 260.5 Million which is up 12% from the prior year period.

The headwind was largely offset by the phasing of revenue through timing of the contract renewals turning to our key metrics of software gross dollar retention of GTR in software net dollar retention of endear. Please note that both of these metrics now include evolution IQ and we are using annualized software revenue on a combined basis for the prior year to.

A prior year baseline for annualized revenue growth GDR captures the amount of revenue retained from our client base compared to the prior year period. In Q2, 2025, <unk> is 99%, which is in line with the last six quarters. We believe that <unk> reflects the value, we provide and the significant benefits that accrue to our customers.

From participating in the broader CCC network, our GDR as a core tenant of our predictable and resilient revenue model.

<unk> captures the amount of cross selling upsell from our existing client base compared to the prior year period as well as volume movements in our auto physical damage client base in Q2, 2025 or <unk> was 107. That's in line with the 107 in Q1 in 2025 in Q2 of 2020 for evolution IQ contributed approximately one point and Dr.

In the quarter now.

Now I'd like to turn to the income statement in more detail as a reminder, unless otherwise noted all metrics are non-GAAP, we provide a reconciliation of GAAP to non-GAAP metrics in our press release adjusted gross profit in the quarter was 203 million adjusted gross profit margin was 78%, which is up from 77% last quarter.

Githesh Ramamurthy: We are using annualized software revenue on a combined basis for the prior year to provide a prior year baseline for annualized revenue growth. GDR captures the amount of revenue retained from our client base compared to the prior year period. In Q2 2025, GDR was 99%, which is in line with the last six quarters. We believe that GDR reflects the value we provide and the significant benefits that accrue to our customers from participating in the broader CCC network. Our GDR is a core tenet of our predictable and resilient revenue model. NDR captures the amount of cross-sell and upsell from our existing client base compared to the prior year period, as well as volume movements in our auto physical damage client base. In Q2 2025, our NDR was 107. That's in line with the 107 in Q1 of 2025.

In the second quarter of 2025 approximately 5 percentage points of our growth was driven by cross sell upsell and Adoption of new Solutions across our client base including repair shop upgrades that continued expansion of emerging Solutions, casualty and other ecosystem customers, approximately 3 points of growth came from new logos. Mostly from the repair facility and part 4, we are using

And flat with Q2 of 2020 for the flat adjusted gross profit margin versus last year, primarily reflects an increase in depreciation expense from capitalized project recently put into service, which is offset by modest accretion from evolution Iq.

Annualized, software revenue on a combined basis, for the prior year to provide a prior Baseline for annualized, Revenue growth. Gdr captures the amount of Revenue retained from our client base compared to the prior year period in Q2 20225. Gdr was 99%, which is in line with the last 6 quarters, we believe that gdr reflects the value. We provide in the sign,

Overall, we feel good about the leverage and scalability of the business.

Significant benefits that occur to our customers from participating in the broader CCC. Network, our gdr is a core tenant of our predictable and resilient Revenue model.

And making progress towards our long term target of 80% over time, but we will see the percentage move around a bit quarter to quarter.

In terms of expenses adjusted operating expense in Q2, 2025 was $108 million, which is up 13% year over year, including the acquisition of evolution IQ, excluding evolution IQ adjusted operating expenses declined 1% year over year, primarily driven by lower it related costs, partially offset by higher resource related expenses.

Callie Valenti: And Q2 was 107.

Adjusted EBITDA for the quarter was $108 million up 13% year over year with an adjusted EBITDA margin of 42%. This was above the high end of the range, which was <unk> $99 million to $101 million, reflecting the revenue that flowed through in the quarter and approximately 2 million one time benefit associated from an exit of a vendor.

Our relationship and the phasing of expenses now turning to the balance sheet and cash flow. We ended the quarter with $55 million in cash and cash equivalents and $996 million of debt at the end of the quarter. Our net leverage was two three times adjusted EBITDA.

Free cash flow in Q2 was $27 million compared to $36 million in the prior year, which reflects the timing of working capital as well as the operating losses from evolution IQ free cash flow on a trailing 12 month basis was $226 million, which is up about 15% year over year, our trailing 12 months free cash flow.

Githesh Ramamurthy: Q2 2025 was 108 million, which is up 13% year over year, including the acquisition of EvolutionIQ. Excluding EvolutionIQ, adjusted operating expenses declined 1% year over year, primarily driven by lower IT-related costs, partially offset by higher resource-related expenses. Adjusted EBITDA for the quarter was 108 million, up 13% year over year, with an adjusted EBITDA margin of 42%. This was above the high end of the range, which was 99 to 101 million, reflecting the revenue that flowed through in the quarter and approximately 2 million one-time benefit associated from an exit of a vendor relationship and the phasing of expenses. Now turning to the balance sheet and cash flow, we ended the quarter with 55 million in cash and cash equivalents and 996 million in debt. At the end of the quarter, our net leverage was 2.3 times adjusted EBITDA.

Margin in Q2 of 2025 was 23% up from 22% in Q2 of 2024 as far as the use of free cash flow I did want to highlight that we completed a open market repurchase of 11 million shares with CCC stock for $100 million in Q2 year to date, we've purchased 18.

Thank you. For 2025, revenue was $108 million, which is up 13% year-over-year, including the acquisition of Evolution IQ. Excluding Evolution IQ, adjusted operating expenses declined 1% year-over-year, primarily driven by lower IT-related costs, partially offset by higher resource-related expenses.

<unk> shares for about 172 million under our previously announced 300 million share repurchase program.

I'll now turn to guidance beginning in Q3 2025, we expect revenue between $263 million to 266 million, which represents 10% to 12% growth year over year, we expect adjusted EBITDA of $104 million to $107 million, a 40% adjusted EBITDA margin at <unk>.

Githesh Ramamurthy: Pre-cash flow in Q2 was 27 million, compared to 36 million in the prior year, which reflects the timing of working capital, as well as the operating losses from EvolutionIQ. Pre-cash flow on a trailing 12-month basis was 226 million, which is up about 15% year over year. Our trailing 12-month pre-cash flow margin in Q2 of 2025 was 23%, up from 22% in Q2 of 2024. As far as the use of free cash flow, I did want to highlight that we completed an open market repurchase of 11 million shares of CCC stock for $100 million in Q2. Year to date, we've purchased 18 million shares for about $172 million under our previously announced $300 million share repurchase program. I'll now turn to guidance. Beginning in Q3 2025, we expect revenue between $263 million to $266 million, which represents 10% to 12% growth year over year.

But just to leave it out for the quarter was 108 million up, 13% year-over-year with an adjusted e butt down margin of 42%. This was above the high end of the range, which was 99 to 101 million, reflecting the revenue that flowed through in the quarter and approximately 2 million, 1-time, benefit Associated from an exit of a vendor relationship in the phasing of expenses now, turning to the balance sheet and cash flow. We ended the quarter with 55 million in cash and cash, equivalents and 9996 million in debt. At the end of the quarter, our net leverage was 2.3 times adjusted by the

Midpoint for the full year 2025, we are maintaining our full year revenue and adjusted EBITDA positions. We expect revenue of 1.046 billion to 1.0, $5 6 billion, which is 11% year over year growth at the midpoint and 12% at the high end of the range for adjusted EBITDA, We expect.

<unk> 420 <unk>.

Two 428, Million% to 40% adjusted EBITDA margin at the midpoint and 41% margin at the high end of the range, which includes absorbing a moderate EBITDA loss from evolution IQ.

free cash flow in Q2 was 27 million compared to 36 million in the prior year, which reflects the timing of working capital, as well as the operating losses from Evolution IQ pre-cast flow and a trailing 12-month basis was 226 million which is up about 15% year-over-year our trailing 12-month. Free cash flow margin in Q2 of 2025 was 23% up from 22% in Q2 of 2024. As far as the use of free cash flow, I did want to highlight that we completed a open market repurchase of 11 million shares of CCC stocks for 100.

So three points to keep in mind as we think about Q3 and the full year Guide first core CCC is in line with our second half revenue guidance expectations that we've previously discussed the strength in Q2 was driven by the phasing of revenue and timing of contract renewals that benefited the quarter, but does not drive incremental impact in the second half of the year.

Million dollars in Q2 year to date. We've purchased 18 million shares for about 172 million under our previously announced 300 million share repurchase program

Githesh Ramamurthy: We expect an EBITDA of 104 to 107 million, a 40% adjusted EBITDA margin at the midpoint. For the full year 2025, we are maintaining our full-year revenue and adjusted EBITDA positions. We expect revenue of $1.046 billion to $1.056 billion, which is 11% year over year growth at the midpoint and 12% at the high end of the range. For adjusted EBITDA, we expect $420 million to $428 million, a 40% adjusted EBITDA margin at the midpoint and a 41% margin at the high end of the range, which includes absorbing a moderate EBITDA loss from EvolutionIQ. So, three points to keep in mind as we think about Q3 and the full-year guide. First, core CCC is in line with our second half revenue guidance expectations that we previously discussed.

<unk>, we expect to come in at the lower end of the previous $45 million to $50 million guide for evolution IQ due to delays in implementation on signed contracts moving to production, which is impacting the timing of revenue.

We feel good about the full year, adjusted EBITDA position, which delivers a 100 basis points of margin expansion, excluding the impact of evolution IQ keep in mind Q2 had a onetime benefit of $2 million related to a exit from a vendor relationship. We do expect second half expenses to be higher than first half driven by the phasing of hiring.

I'll now turn to guidance beginning in Q3 2025. We expect revenue between 263 million to 266 million which represents 10 12% for the rest of the year of 104 to 107. Million is 40% adjusted. Even down margin at the midpoint for the full year. 2025, we are maintaining our full year revenue and adjusted the adopt positions. We expect revenue of 1.046 billion to 1.056 billion which is 11% year-over-year growth at the midpoint, and 12% at the high end of the range for adjusted even without we expect 420.

Incremental professional services. The third point is stock based compensation in Q2 stock based compensation was 18% of revenue, which is down from 24% of revenue in Q1, we do expect share based compensation as a percent of revenue to continue to trend down and reach high single digits in 2027.

Million to 428 million, a 40% adjusted, but that margin at the midpoint and 41% margin at the high end of the range which includes absorbing a moderate EBA loss from Evolution IQ.

Githesh Ramamurthy: The strength in Q2 was driven by the phasing of revenue and timing of contract renewals that benefited the quarter, but does not drive incremental impact to the second half of the year. We expect to come in at the lower end of the previous $45 to $50 million guide for EvolutionIQ due to delays in implementation on signed contracts moving to production, which is impacting the timing of revenue. Second, we feel good about the full-year adjusted EBITDA position, which delivers 100 basis points of margin expansion, excluding the impact of EvolutionIQ. Keep in mind, Q2 had a one-time benefit of $2 million related to an exit from a vendor relationship. We do expect second half expenses to be higher than first half, driven by the phasing of hiring and some incremental professional services. The third point is stock-based compensation.

So as we wrap up I would say that I am encouraged by the growing adoption of our newer solutions among our largest client which is validating our role as a partner in their digital transformation the momentum across emerging solutions continued to improve strengthening our confidence in delivering against our long term growth targets I'm also proud of our <unk>.

So 3 points to keep in mind, as we think about Q3 and the full year guide. First Corps CCC is in line with our second half Revenue, guidance, expectations, that we previously discussed the strength in Q2 was driven by the phasing of Revenue and timing of contracts. Renewals that benefited the quarter, but does not drive incremental impact to the second half of the year, we expect to come in at the lower end of the previous 45.

Disciplined balance between operating efficiency and investment in innovation. This is a cornerstone of our durable business model, which enables us to support our clients evolution, while also delivering long term value to our shareholders. As a result, we remain confident in our strategy the execution and the ability to deliver sustainable.

To 50 million guide for evolution IQ due to delays in implementation on signed contracts, moving to production, which is impacting the timing of Revenue.

Growth so with that operator, we're now ready to take questions. Thank you.

Githesh Ramamurthy: In Q2, stock-based compensation was 18% of revenue, which is down from 24% of revenue in Q1. We do expect share-based compensation as a percent of revenue to continue to trend down and reach high single digits in 2027.

Okay.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

We ask that you limit yourselves to one question and one follow up question.

Second, we feel good about the full year, Jesse's position, which delivers 100 basis points of margin expansion, excluding the impact of Evolution IQ. Keep in mind, Q2 had a one-time benefit of $2 million related to an exit from a vendor relationship. We do expect second half expenses to be higher than first half, driven by the phasing of hiring and some incremental professional services. The third point is stock-based compensation in Q2; stock-based compensation was 18% of revenue, which is down from 24% of revenue in Q1. We do expect share-based compensation as a percent of revenue to continue to trend down and reach high single digits in 2027.

To withdraw your question. Please press star one one again.

Please standby, while we compile the Q&A roster.

Our first question comes from the line of John.

Josh Baer.

From Morgan Stanley.

Your line is now open.

Great Congrats on the upside in the quarter.

Wanted to start with the full year EBITDA guide reiterated I know, you're just kind of walk through some of the items 2 million benefit.

In the quarter, but even without that there was a lot of upside maybe you could give a little more commentary around the expenses and the shifting in professional services like what those investments are and ultimately.

To improve operating, efficiency and investment and Innovation. This is a closed form.

Why the full year.

Just reiterate it.

Yeah, sure Hey, Josh it's Brian here, So I would say overall.

Operator: We ask that you limit yourself to one question and one follow-up question. To withdraw your question, please press star one-one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Josh Bair from Morgan Stanley. Your line is now open.

Cost base is really a function of timing. So the cost position is consistent with what we talked about in our previous guide and I'd also say that when we look at the quarter, we're not overly focused on managing the margin in individual quarter. So a lot of this just comes down to facing a couple of things to call.

We ask that you limit yourself to one question and one follow-up question.

To withdraw your question. Please press star 1 1 again.

Please stand by while we compile the Q&A roster.

Our first question comes from the line of Josh Baer.

From Morgan Stanley.

All out we.

Josh Bair: Great. Congrats on the upside in the quarter. I wanted to start with the full-year EBITDA guide. Reiterated, I know you just kind of walked through some of the items, $2 million benefit in the quarter, but even like without that, there was a lot of upside. Maybe you could give a little more commentary around the expenses and the shifting and professional services, like what those investments are and ultimately why the full year is just reiterated.

Your line is now open.

Of the one time item that played into Q2, which was a $2 million benefit in the quarter.

That doesn't play through in the second half of the year. We also have hiring that's up in the second half. So hiring was lower in the first half it's going to pick up in the second half. So that's playing into it cost of revenue will pick up as well in the second half as we scale revenue and then as I mentioned before in the prepared remarks, we do have some.

Great. Uh congrats on the upside in the quarter um wanted to start with the full year.

Incremental investment in professional fees some of that is attached to recruiting. We also have some project linked to investment initiatives.

Brian Herb: Yeah, sure. Hey, Josh. It's Brian here. So I would say overall, the cost base is really a function of timing. So the cost position is consistent with what we talked about in our previous guide. I'm managing the margin in the individual quarter. So a lot of this just comes down to phasing. A couple of things to call out. We have the one-time item that played into Q2, which was a $2 million benefit in the quarter that doesn't play through in the second half of the year. We also have hiring that's up in the second half. So hiring was lower in the first half. It's going to pick up in the second half. So that's playing into it. Cost of revenue will pick up as well in the second half as we scale revenue.

Ibida guide. Um reiterated. I know you just kind of walked through some of the items 2 million benefits uh, in the quarter. But even like without that there was a lot of upside, maybe you could give a little more commentary around uh the expenses and the shifting and Professional Services, like what those Investments are. And, and ultimately uh why the full year is uh, is just reiterated.

So those are some of the factors that are playing into the step up in the second half when you think about the cost run rate coming out of the year. We are comfortable with the expected margin progression that we talk about over time and so we will expect to see that play through in 2006 and beyond.

Okay really helpful color, Brian and then on <unk> just wondering.

As far as coming in more at the low end and around some of the delays.

Yeah, sure. Hey Josh, um, it's Brian here. Um so I I would say overall the the cost basis is really a function of timing. Um, so the cost position is consistent with what we talked about, in our previous guide. I'll just say that when we look at the corner managing the margin and individual quarter. Um, so a lot of this just comes down to phasing, uh, a couple things to, to call out. Uh, we have the, the 1-time item that played into Q2, which was a million dollar.

What is really causing that and what steps can you take to.

Improve on that motion. Thank you.

Yeah sure. So what I would say is a few of the signed deals which are significant deals size wise.

Brian Herb: And then, as I mentioned before in the prepared remarks, we do have some incremental investment in professional fees. Some of that is attached to recruiting. We also have some project linked to investment initiatives. So those are some of the factors that are playing into the step up in the second half. When you think about the cost run rate coming out of the year, we are comfortable with the expected margin progression that we talk about over time. And so we'll expect to see that play through in '26 and beyond.

The implementation timeline is getting pushed out a bit which means that production. Starting later in the year, which is impacting time to revenue.

The revenue delay is really an impact in 2025, and we don't expect it to play through or impact the outer years.

The implementation in NICU is a bit different than our solution.

Solutions and has some variability and we are getting smarter on that is as we go forward when you step back and use zoom out on the impact of revenue in 2025, we feel really good about the evolution IQ business.

Josh Bair: Okay. Really helpful caller, Brian. And then on EIQ, just wondering, as far as coming in more at the low end and around some of the delays, what is really causing that and what steps can you take to improve on that motion? Thank you.

Benefit in the quarter. Um that doesn't play through in the second half of the year. We also have hiring that's up, um, in the second half so hiring was lower in the first half. It's going to pick up in the second half so that's playing into it. Cost of Revenue will pick up as well in the second half as we scale revenue. And then as I mentioned before, in in the prepared remarks, we do have some incremental investment in professional fees. Some of that is attached to recruiting. We also have some project linked to investment initiatives. Um so those are some of the factors that are playing into the step up in the second half. When you think about the costs run rate coming out of the year, we are comfortable with the expected margin progression that we talked about over time and so we'll expect to see that play through in 26 and Beyond.

<unk> pipeline good engagement with clients and we are starting to see some real meaningful opportunities to cross sell the solutions into our casualty client base. So we feel really good about the strategic fit of the business going forward and I have also personally had a chance to go visit with many of our customers.

Okay, really helpful caller Brian. And then on eiq, uh, just wondering as far as coming in more at the low end and and around some of the delays. Um what is really causing that and what steps can you take to? Um,

Brian Herb: Yeah, sure. So what I would say is a few of the signed deals, which are significant deals size-wise, the implementation timeline is getting pushed out a bit, which means that production is starting later in the year, which is impacting time to revenue. The revenue delay is really an impact in 2025.

You know, improve on that motion. Thank you.

At evolution IQ they remain excited.

Pipeline is strong core disability is strong workers' compensation, we're seeing a lot of opportunities as well as med hub, the new solution, we announced a <unk>.

Getting a lot of receptivity from.

Yeah, sure. So what I would say is a few of the sign deals which are significant deals size-wise. The implementation timeline is getting pushed out of it, which means that production starting later, in the year, which is impacting time to revenue.

<unk>.

Traditional IQ customers as well as traditional CCC customer.

Great.

The revenue delay is really an impact in 2025 and we don't expect it to play through or impact the out of years I think.

Thanks, Josh.

Our next question comes from the line of Kelly <unk>.

Goldman Sachs.

Your line is now open.

Hi, This is Kelly on for Gabrielle and first one from me I would love to dig a bit deeper into the technical changes you talked about in the casualty platform. What did you focused on focus on most one improving the product and are there one or two key pieces of functionality. You added that you think are now contributing to a lot of it.

Callie Valenti: For opportunities to cross-sell.

Brian Herb: The solutions into our casualty client base. So we feel really good about the strategic fit of the business going forward.

Githesh Ramamurthy: And I've also personally had a chance to go visit with many of our customers at EvolutionIQ. They remain excited. Pipeline is strong. Core disability is strong. Workers' compensation, we're seeing a lot of opportunities, as well as MedHub, the new solution we announced, are getting a lot of receptivity from both traditional EIQ customers as well as traditional CCC customers.

The success you're seeing.

Hey, Kelly good cash yes, there is really several things we've done with our platform one modernized and really put in a state of the arts rules engine simulation capabilities, where you can see the impact and changes of different regulations by state. So we have those capabilities substantially.

Actually improve the analytics by which our customers manage the overall process.

That that solution you step back for opportunities to cross out the solutions into our casualty client base. So we feel really good about the Strategic fit of the business going forward. And I've also personally had a chance to go visit, but many of our customers, uh, in at Evolution IQ, they remain excited pipeline is strong. Core disability is strong workers. Compensation, we're seeing a lot of opportunities, as well as medhub. The new solution, we announced are getting a lot of receptivity from both uh traditional eiq customers as well as traditional CCC customer.

As well as some very specific customer specific enhancements and as a result of these changes and the leadership changes we've had put in place we're continuing to see strong growth as well as momentum and pipeline continue to build out.

Question question.

Okay. Thank you and then just one more from me.

Last quarter, you discussed kind of additional conservatism in guidance given the macro uncertainty and just curious how do you feel now versus then and then especially given the upside in the quarter, but maintained full year guidance I understand that piece of that is evolution IQ and some other things you called out but curious on how you feel from a conservatism standpoint.

Yes, Kelly, we feel good on the second half guide.

Core is consistent with the previous position. So we made no changes in the organic or the core position, we talked about the evolution IQ and the timing of implementations and impact on revenue we've seen about a point of growth impact on claim declined in the first half.

We're assuming that similar level in the second half so that's baked in as well.

So as we said we're feeling good on what we delivered in Q2 and we feel good on the second half and how it stacks up against the guide that's in the market.

Continue.

Operator: Great. Thank you. And then just one more from me. Last quarter, you discussed kind of additional conservatism and guidance given the macro uncertainty. And just curious, how do you feel now versus then, and especially given the upside in the quarter, but maintained full-year guidance? Understand a piece of that is EvolutionIQ and then some other things you called out, but curious on how you feel from a conservatism standpoint.

Great. Thank you.

Thanks Kelly.

Thank you and our next question comes from the line of Matt.

Simona.

Jefferies.

Your line is now open.

Great Good evening.

Brian Herb: Yeah, Kelly, we feel good on the second half guide. The core is consistent with the previous position. So we made no changes in the organic or the core position. We talked about the EvolutionIQ and the timing of improvements.

Hey, Thanks, Congrats on a good quarter, maybe first Brian I, just I don't know if I caught the tail end of what you said to the prior question. What are you assuming specifically on volume trends I know, Dave Dave Oscillated, but how are you thinking about what is baked into guidance for the rest of the year are you assuming that eight level holds I know that.

Great, thank you and then just 1 more from me. Um last quarter you discussed kind of additional conservatism and guidance given the macro uncertainty and just curious, how do you feel now versus then and especially given the upside in the quarter but maintain so your guidance um, understand a piece of that is evolution IQ and and some other things you called out. But but curious on how you feel from a conservatism standpoint

It's bounced around on you but.

What are you assuming and what did you see in the month of July and then I have I have one follow up question.

Yes sure.

So first of all I would just remind you that we have 80% of our revenue is subscription based.

Which isn't moving with volumes about 20% is transactional that does does fluctuate with with volumes.

Yeah. Kelly we we feel good on on the second half guide. Um, the core is consistent with the, the previous position. So we made no changes in the organic or the core position. We talked about the evolution IQ and and, and the timing of implementation and impact on Revenue. We've seen our points of most Department as well to do with regard on the second half of how it is.

And so overall the claim volumes doesn't have a material impact on the growth rate I'm, sorry, just kind of start there what we've seen to date is claims were down 9% in Q1. It had a one point drag on growth.

Thank you, please.

Claims around.

In Q2, they were down 8% and then also had a one point drag on growth, while we're factoring in for the second half and which was in the previous position is that one point of drag continues in the second half of the year, So kind of what we're seeing playing out through the balance of the year. We're.

We're not necessarily modeling is claims down nine percentage of down 8% as at seven I'm really modeling out. This one point of decline related to claim volumes claim through the balance of the year.

Good evening, how are you doing? What are you saying? And what you see

Understood and then just.

It's good to see the the pilot phases, turning into broader rollouts for some of the newer solutions I know that we shouldnt assume near term revenue does but.

Could you maybe just help us understand.

How that kit what at the.

Timeline has looked like historically for one a broader rollout happens too when it turns into revenue and just as you think about.

The broader rollout.

That happened are those fallen scope or is there more room for expansion in those as well to get to kind of full revenue contribution.

So, 20% transaction.

Sure I'll start with a broader answer right. So we've been developing many of these solutions.

A couple of years or more.

And we really have been spending a lot of time looking at really three fundamental things for each of these solutions.

One do they solve a really big problem that is real significant is the ROI is strong is it sustainable meaning if you didn't use this solution their results revert back. The answer is this is really the fundamentals of what some of our most sophisticated customers had been.

Of what we're seeing is you know, 25% of the percent of the 7% of the year.

Testing for some period of time.

And then you roll even further back when you look at estimating or insurance workflow or automotive business. These all started by answering these fundamental questions and over a period of five years 10 years 20 years, those are growing to multi $100 million businesses.

Josh Bair: The spiral that have happened, are those full in scope, or is there more room for expansion in those as well to get to kind of full revenue contribution?

So when we look at these solutions, we look at it over the long that long arc of time and there are really two dimensions very specific to your question. The first dimension is customers are still not putting all their volume through these solutions, even the ones that have contracted for it.

Githesh Ramamurthy: Sure. I'll start with a broader answer, right? So we've been developing many of these solutions for a couple of years or more. And we really have been spending a lot of time looking at really three fundamental things for each of these solutions. One, do they solve a really big problem that is real significant? Is the ROI strong? Is it sustainable? Meaning, if you didn't use this solution, do your results revert back? The answer is, you know, this is really the fundamentals of what some of our most sophisticated customers have been testing for some period of time. And they can improve their volume through these solutions, even the ones that are contracted for it. They're gradually increasing the volume as they've contracted. And because the results are good, they're getting more comfortable with it. So even post-contract, we see expansion within existing.

Is there more room for expansion in those as well? To get to kind of full revenue contribution.

We're gradually increasing the volume as they've contracted and because the results are good they're getting more comfortable with it so even post contract we see expansion within existing customers that contracted in Q2, we will continue to expand at the same time.

As the confidence in these solutions grow and the reference ability of these solutions grow.

And other customers start to get more comfortable and more excited about what they are.

Seeing we feel that we will be able to bring on more and more customers. So both those two dimensions are really important to scaling within existing customers and bringing on more customers.

Rentals or what some of our most sophisticated customers have been testing for some period of time. And further back when you look at estimating license workflow on my business, these are all started with answering me from your questions.

Great. Thank you so much I appreciate it.

Thank you. Our next question comes from the line of Aleksey.

<unk> labs.

J P. Morgan your line is now open.

All their volume through these Solutions, even the ones that I've contracted for it.

Hi, This is bill on for Alexia, Thanks for taking our question.

How long do you expect the claims weakness cycled philosophy on 2025 and would you say there is anything unique about this cycle compared to past periods of weakness and as a follow up what macro indicators with give you out of this dynamic interesting.

Githesh Ramamurthy: The customers that contracted in Q2 will continue to expand. At the same time, as the confidence in these solutions grows and the referenceability of these solutions grows and other customers start to get more comfortable and more excited about what they're seeing, we feel that we will be able to bring on more and more customers. So both those two dimensions are really important to scaling within existing customers and bringing on more customers.

Yes, I would say a couple of things right. When you look at our data.

We.

We see a disconnect between underlying accident frequency and what is really filed claims.

And based on our view of this.

Why we believe this is cyclical and the difference between this cycle than previous cycles is that premiums have been up 50%. Since March of 2020, we have not seen the cycle in the last 20 plus years, where over a short period of time insurance premiums went up 50% so whats <unk>.

Brian Herb: Great. Thank you so much. Appreciate it.

They're gradually increasing the volume as they've contracted and because the results are good, they're getting more comfortable with it. So even post-contract, we see expansion within existing the customers that contracted in Q2 will continue to expand at the same time as the confidence in these Solutions grow and the reference ability of these Solutions grow and other customers start to get more comfortable and more excited about what we what they're seeing we feel that we will be able to bring on more and more customers. So both those 2 dimensions are really important to scaling within existing customers and bringing on more customers.

Great. Thank you so much. Appreciate it.

Operator: Thank you. Our next question comes from the line of Alexi Gogolev of JP Morgan. Your line is now open.

Thank you. Our next question comes from the line of Alexei.

We're seeing our customers are seeing is a lot of consumers are adjusting their behavior by increasing deductibles, reducing coverage in order to vehicles, avoiding nonessential filing nonessential claims to prevent hikes in premiums.

Gov of JP Morgan. Your line is now open.

Bella (for Alexei Gogolev): Hi. This is Bella on for Alexi. Thanks for taking our question. How long do you expect the claims weakness cycle to last beyond 2025? And would you say there's anything unique about this cycle compared to past periods of weakness? And as a follow-up, what macro indicators would give you hope of this dynamic improving?

Hi, this is Bela on for Alexei. Thanks for taking our question.

And so this is really the underlying pattern that we're seeing.

Githesh Ramamurthy: Yeah, I would say a couple of things, right? When you look at our data, we see a disconnect between underlying accident frequency and what is really filed claims. And based on our view of this, that's why we believe this is cyclical. And if you the difference between this cycle and previous cycles is that premiums have been up 50% since March of 2020. We have not seen a cycle in the last 20-plus years where, over a short period of time, insurance premiums went up 50%. So what we are seeing, our customers are seeing, is a lot of consumers are adjusting their behavior by increasing deductibles, reducing coverage on older vehicles, avoiding non-essential, filing non-essential claims to prevent hikes in premiums. And so this is really the underlying pattern that we're seeing.

How long do you expect the claims weakness cycle to last beyond 2025, and would you say there's anything you need about this cycle, compared to past periods of weakness? And as a follow-up, what macro indicators would give you hope to send in proving

And then to answer your question about timing, while we are not sure we can be sure about.

Yeah, I would say a couple of things, right? When you look at our data.

From underlying factors I would say are the following.

First repair costs are starting to moderate.

we we we see a disconnect between underlying accident frequency and what is really filed claims

So in terms of repair costs those costs are starting to moderate premium increases are also starting to moderate.

And.

So that's really what we've started to see over the last couple of quarters.

The underlying Delta is really filed claims versus the underlying frequency of accidents does that help.

Yes, that's very helpful. Thanks for taking the question.

And based on, you know, our view of this, that's why we believe this is cyclical. The difference between this cycle and previous cycles is that premiums have been up 50% since March of 2020. We've not seen a cycle in the last 20 plus years where, over a short period of time, insurance premiums went up 50%. So what we are seeing, and our customers are seeing, is that a lot of consumers are adjusting their behavior.

You're welcome.

Thank you. Our next question comes from the line Shlomo Rosenbaum.

From Stifel. Your line is now open.

Githesh Ramamurthy: And then to answer your question about timing, while we're not sure, we can't be sure about underlying factors, I would say are the following. First, repair costs are starting to moderate. So in terms of repair costs, those costs are starting to moderate. Premium increases are also starting to moderate. And so that's really what we've started to see over the last couple of quarters. And you know the underlying delta is really filed claims versus the underlying frequency of accidents. Does that help?

Hi, Thank you very much.

Last quarter, you talked about.

Expectations for elongation of the sales momentum and implementation cycles and is this are we seeing things tracking along your expectation or.

By increasing deductibles reducing coverage and Order Vehicles. Avoiding non-essential filing non-essential claims to prevent, you know, hikes in premiums. And so the this is really the underlying pattern that we're seeing and then to answer your question about timing while we're not sure we can be sure about EX

Have things improved at all since we talked last quarter.

Underlying factors. I would say are the following first repair costs are starting to moderate.

Im assuming youre talking about are we really talking about really three buckets right there's emerging solutions.

Our core solutions, our core solutions, and then <unk> Iq.

I think for our emerging solutions. It is now to a point where.

The ROI that.

<unk> changed management the comfort with the AI has reached a point where customers start now.

Bella (for Alexei Gogolev): Yeah, that's really helpful. Thanks for taking the question.

So, in terms of repair costs, those costs are starting to moderate. Premium increases are also starting to moderate. And, um, so that's really what we've started to see over the last couple of quarters and, you know, the underlying Delta is really filed claims versus the underlying frequency of accidents. Does that help?

Githesh Ramamurthy: You're welcome.

Yeah, that's really helpful. Thanks for taking the question.

You're welcome.

Aching decisions moving from pilot to contract so we feel very.

Operator: Okay. I see a line of SloMo Rosenbaum from Spiefel. Your line is now open.

Very good about that transition.

Lot of that happened in Q2 and that makes us feel very very good because we've seen this pattern.

Thank you. My next question comes from the line of slow-mo Rosen bomb.

Gary Prestopino: Hi. Thank you very much. Last quarter, you talked about you know expectations for an elongation of the sales momentum and implementation cycles. And is this, are we seeing things tracking along your expectation, or you know have things improved at all since we talked last quarter?

From stifel. Your line is now open.

20, plus years when people get comfortable with the solution.

That part so nothing really material human subrogation, we can be up and running so that feels good that we've kind of started to solve that issue.

Regarding the core solutions that.

Githesh Ramamurthy: I'm assuming you're talking about our, we really talk about really three buckets, right? There's emerging solutions, our core solutions, and then EIQ. I think for emerging solutions, it is now to a point where the ROI, the change management, the comfort with the AI has reached a point where customers are now making decisions, moving from pilot to contract. So we feel very good about that transition. And a lot of that happened in Q2. And that makes us feel very, very good because we've seen this pattern over 20-plus years when people get comfortable with the solution, that's that part. So nothing really material, even subrogation. We can be up and running. So that feels good that we've kind of started to solve that issue. regarding the core solutions, you know that is standard.

As standard we've been doing those whether it's casualty or a core solution that's been going on for a while and then for <unk>, specifically and just repeat the answer Brian gave earlier, which is we've seen a couple of instances where.

Hi, thank you very much. Uh, last quarter, you talked about, um, you know, expectations for elongation of the sales, momentum, and implementation cycles. And is this, are we seeing things tracking along your expectation or, you know, have things? Uh, improved at all uh, since uh, we talked last quarter,

Uh, I'm assuming you're talking about our we really talked about really 3 bucks, right? There's emerging Solutions.

our core solution, our core Solutions, and then eiq

Sizable customers have signed contracts and are taking a little more time to put it into production.

I think for emerging Solutions, it is now to a point where

For IQ, but.

On the flip side the <unk>.

<unk> the activity and what we're seeing in terms of really strong interest from customers.

As bullish about the IQ business as of the date, we entered into the transaction.

So there is nothing changing in the core business in terms of just the.

The cadence of sales or implementation.

Point where customers are now: making decisions moving from pilot to contract. So we feel very good about that transition. A lot of that happened in Q2, and that makes us feel very, very good because we've seen this pattern over 20-plus years. When people get comfortable with the solution, uh, that's that part.

First is your expectations and I understand you talked a little bit about the pilot moving and then the IQ moving but in terms of the just the overall business and the cadence avoid things, but that's been the same.

So nothing really material even segregation. We can be up and running so that feels good that we kind of start to solve that issue.

Githesh Ramamurthy: We've been doing those, whether it's casualty or our core solutions, that's been going on for a while. And then for EIQ specifically, I just repeat the answer Brian gave earlier, which is we've seen a couple of instances where you know sizable customers have signed contracts and are taking a little more time to put into production for EIQ. But on the flip side, the pipeline, the activity, and what we're seeing in terms of really strong interest from customers makes us as bullish about the EIQ business as the day we entered into the transaction.

If anything in Q2, we start to see us slight acceleration, especially on our emerging solutions.

Got it and then just one thing for Brian.

You take out that $2 million.

Exit revenue.

And then go in a kind of pull out 4% growth. It seems like it's like 7% underlying organic growth is that the right way to look at it as a kind of rounding up a little bit better than it did last quarter when I exclude the <unk>.

Uh, regarding the core Solutions, you know, that is standard. We've been doing those for the casualty or our core Solutions has been going on for a while and then for eiq specifically. I just repeat the answer Brian gave earlier, which is we've seen a couple of instances where, you know, sizeable customers have signed contracts and had taken a little more time to put into production.

For the quarter.

<unk> is that the question you're into 12% it was broken down <unk> evolution, and <unk>, 4% that leaves the balance about 8% in the quarter.

Gary Prestopino: So there's nothing changing in the core business in terms of just the, you know, the cadence of sales or implementation versus your expectations. I understand you talked a little bit about the pilot moving and then the EIQ moving. But in terms of just the overall business and the cadence of the way things move, that's been the same?

For EIQ, but on the flip side, the pipeline, the activity, and what we’re seeing in terms of really strong interest from customers makes us as bullish about the EIQ business as the day we entered into the transaction.

Within that 8%, we had two points of growth from emerging so that's kind of how the quarter breaks down.

Right Im talking about the $2 million from the exit I'm, just trying to get out there hasnt been thoughts yeah. So I would just to that was a cost item that played through EBITDA was not a revenue item. So it was a one time.

Githesh Ramamurthy: If anything, in Q2, we started to see a slight acceleration, especially on our emerging solutions.

So there's nothing changing in the core business, in terms of just the, um, you know, the Cadence of sales or implementation versus your expectations. I, I understand you talked a little bit about the pilot moving and then the eiq moving. But in terms of the, just the overall business and the Cadence of the way things, but that's that's been the same

Cost benefit when we exited a vendor relationship it was in a client specific point it wasn't a revenue point.

Gary Prestopino: Got it. And then just one thing for Brian. If I take out that 2 million of exit revenue and then go and I kind of pull out 4% growth, it seems like it's like 7% underlying organic growth. Is that the right way to look at it? Is it kind of rounding up a little bit better than it did last quarter when I excluded EIQ?

Uh, if anything in Q2, we start to see a slight acceleration, especially on our emerging solutions.

Okay. Okay.

Okay, clarifying all 8% number that yes, yes.

8% revenue core the $2.2 million I'm referencing thats playing through the EBITDA was a cost benefit in the quarter, that's not playing through in the second half of the year.

Got it thank you.

Brian Herb: For the quarter?

Yep.

Got it. And then just to 1, uh, think for Brian. If I take out that 2 million of of exit Revenue, uh, and then go and I kind of pull out 4% growth. It, it seems like it's like 7% underlying organic growth. Is that the right way to look at it, is it kind of rounding up a little bit better than it did last quarter when I excluded ei2

Gary Prestopino: Yes.

Brian Herb: SloMo, was that the question? Yeah. In 12%, it was broken down. EIQ, EvolutionIQ was 4%. That leaves the balance about 8% in the quarter. Within that 8%, we had two points of growth from emerging. So that's kind of how the quarter breaks down.

For the quarter.

Once again, if you would like to ask a question. Please press star one one on your telephone and wait for your name to be announced.

Our next question comes from the line of Bill Mcnamara from Evercore ISI. Your line is now open.

Gary Prestopino: And I'm talking about the 2 million from the exit. I'm just trying to get that.

Yes. 1 was that the question? Yeah. In 12%. It it was broken down. Eiq Evolution IQ is 4%. Uh, that leaves the balance about 8% in the quarter. Um within that 8%. We had 2 points of growth from emerging so that's kind of how how the quarter breaks down

Hi, This is bill on for Kirk and Thanks for taking my question can you talk to any of the free cash flow dynamics experience for the corner.

Brian Herb: No, that was a cost. Yeah, SloMo just did. That was a cost item that played through EBITDA. It was not a revenue item. So it was a one-time cost benefit when we exited a vendor relationship. It wasn't a client-specific point. It wasn't a revenue point.

Yeah, Hey, Bill.

Happy to yes free cash flow was a little lighter this quarter.

But I'm talking about the $2 million from the exit. I'm just trying to get that was the cost. Yeah. So just to, um, that was a cost item that played through. EVA was not a revenue item, so it was a one-time.

And then we've seen there is really nothing notable to highlight.

Gary Prestopino: Okay. Okay.

There was just some timing on on working capital and collections.

Githesh Ramamurthy: So the revenue was 8% under that.

Cost benefit when we exited a vendor relationship; it was in a client-specific point. It wasn't a revenue point.

Brian Herb: Yeah. So yeah, 8% revenue core. The two point, the 2 million I'm referencing that's playing through the EBITDA was a cost benefit in the quarter that's not playing through in the second half of the year.

We're a little lighter in the quarter were also absorbing the losses from evolution IQ when you look at it on a 12 month rolling basis. It was about 23% of revenue that's slightly up from the prior year 12 month basis up 22%.

Gary Prestopino: Got it. Thank you.

Okay, okay, yeah, so, so yeah, 8% revenue growth. The $2 million I'm referencing that's playing through the EBIT was a cost benefit in the quarter that's not playing through in the second half of the year.

Brian Herb: Yep.

Got it. Thank you.

Yep.

Operator: Once again, if you would like to ask a question, please press star one-one on your telephone and wait for your name to be announced. Our next question comes from the line of Bill McNamara from Evercore ISI. Your line is now open.

So although the quarter itself was a little bit lighter on cash there's nothing really notable to highlight or to call out.

Okay and then.

Once again, if you would like to ask a question, please press star, 1, 1, 1 on your telephone and wait for your name to be announced.

Is there any further insight you can provide us about the rollout of your pay workflow tool and I guess.

What has been the feedback from customers and just particularly lengthy sales process to convince customers to switch.

Brian Herb: Hi. This is Bill on for Kirk, and thanks for taking my question. Can you talk through any of the free cash flow dynamics experienced for the quarter?

Our next question comes from the line of Bill mcnamera from evercore isi. Your line is now open.

Hi.

Gary Prestopino: Yeah. Hey, Bill. Yeah, happy to. Yeah. Free cash flow was a little lighter this quarter than we've seen. There's really nothing notable to highlight. There was just some timing on working capital and collections that were a little lighter in the quarter. We're also absorbing the losses from EvolutionIQ. When you look at it on a 12-month rolling basis, it was about 23% of revenue. That's slightly up from the prior year 12-month basis of 22%. So although the quarter itself was a little bit lighter on cash, there's nothing real notable to highlight or to call out.

We have started to implement customers. They like this solution a lot.

Hi. This is Bill on for Kirk, and thanks for taking my question. Can you talk to any of the free cash flow dynamics experienced for the quarter?

We think.

We're still early days.

Significant amount of runway in terms of the solution.

Especially for many of the multi store operators are interested we've looked at early implementation the feedback has been good.

So nothing I would say one way or the other to report I mean, we've got a pretty broad suite of solutions for the automotive market.

And they will run a different basis right for example.

Yeah. Hey Bill. Um yeah happy to yeah, free cash flow was a little lighter this quarter um than we've seen uh there's really nothing notable to highlight. Um there was just some timing on on working capital and collections uh that were a little lighter in the quarter. We're also absorbing the losses from Evolution IQ. When you look at it on a 12-month rolling basis, it was about 23% of Revenue. That's slightly up from the prior year, 12 month basis of 22%.

When you look at diagnostics or you look at Bill sheets.

Running a little faster because of the little less complicated. This one has a little more.

Brian Herb: Okay. And then, you know, is there any further insight you can provide us about the rollout of your pay workflow tool? And I guess, you know, like what has been the feedback from customers? And is this a particularly lengthy sales process to convince customers to switch? You know.

Um, so although the quarter itself was a little bit lighter on cash, there's nothing real notable the the highlighter to call out.

Complexity to it so it runs a little slower and especially it's very early days.

Okay. Thanks for my questions.

You're welcome.

Our next question comes from the line of Dylan Becker.

Okay, and then uh you know is there any further Insight you can provide us about the roll out of your pay workflow tool and I guess, you know like what has been the feedback from customers and is this a particularly lengthy sales process to convince customers to switch?

Githesh Ramamurthy: We have started to implement customers. They like the solution a lot. We think, you know, we're still early days, a significant amount of runway in terms of the solution, especially for many of the multi-store operators who are interested. We've looked at early implementation. The feedback's been good. So nothing, I would say, one way or the other to report. I mean, we've got a pretty broad suite of solutions for the automotive market. And you know, they will run at different paces, right? For example, you know, when you look at diagnostics or you look at bill sheets, they run a little faster because they're a little less complicated. This one has a little more complexity to it, so it runs a little slower, and especially it's very early days.

From William Blair I appreciate your line is.

Thank you.

Maybe get cash on kind of the dimensions, you called out with large customers kind of moving from pilot to production I Wonder.

If there is any kind of additional granularity you can kind of go into is it something that hey, it's validation and confidence in the value afforded by these systems thats, allowing them to maybe push forward a little bit faster here.

Store operators are interested. We've looked at early implementation, and the feedback's been good.

We've got our internal teams in place. So now we're more comfortable to kind of lean and maybe help me think through some of the puts and takes that are that are pushing forward and how maybe that correlates to some of the trends you've seen in the past given you've had kind of a multiple of these cycles over time as well.

Yes, it's a great question, so I would say.

At the heart of it.

Brian Herb: Okay. Thanks for my question.

So, nothing I would say one way or the other to report. I mean, we've got a pretty broad suite of solutions for the automotive market. And, you know, they will run at different paces, right? For example, you know, when you look at diagnostics or you look at build sheets, they will run a little faster because they're a little less complicated. This one has a little more complexity to it, so it runs a little slower, and especially it's very early days.

Is that.

Githesh Ramamurthy: You're welcome.

AI is fundamentally different from anything else we've ever built right. It's it's probably stick in terms of the outcomes and it took a little bit of time for people to get really comfortable with.

Thanks for my question.

You're welcome.

Operator: Our next question comes from the line of Dylan Becker from William Blair.

Our next question comes from the line of Dylan Becker.

Gary Prestopino: Appreciate it.

Operator: Your line is now open.

Brian Herb: Thank you. Maybe Gitesh, on kind of the dimensions you called out with large customers kind of moving from pilot to production, I wonder if there's any kind of additional granularity you can kind of go into. Is it something that, hey, it's validation and confidence in the value afforded by these systems that's allowing them to maybe push forward a little bit faster here? Is it we've got our internal teams in place, so now we're more comfortable to kind of lean in? Maybe help me think through some of the puts and takes that are pushing forward and how maybe that correlates to some of the trends you've seen in the past, given you've had kind of multiple of these cycles over time as well.

From William Blair, appreciate it. Your line is follow.

What the AI delivers in terms of output and the like so.

So so there is a significant increase in the reliability of the quality and people are getting much more comfortable I would say the second and probably more important thing is that the.

Roy is real so when customers use the solution. They get one set of results. This stop the solution. Those results materially are not there. So you had the benefits of what I would call the a b testing.

And customers are really seeing great benefits.

Githesh Ramamurthy: Yeah, I think it's a great question. So I would say, you know, at the heart of it is that, you know, AI is fundamentally different from anything else we've ever built, right? It's probabilistic in terms of the outcomes, and it took a little bit of time for people to get really comfortable with what the AI delivers in terms of output and the like. So there's a significant increase in the reliability, the quality, and people are getting much more comfortable. I would say the second and probably more important thing is that the ROI is real. So when customers use the solution, they get one set of results. If they stop the solution, those results materially are not there. So you had the benefits of what I would call the A/B testing, and customers are really seeing great benefits.

And then there is also what I call second order benefits like some of that I mentioned in the call, where hey, I can't get my.

Thank you. Um, maybe catch on kind of the dimensions you called out with large customers kind of moving from pilot to production. Wonder, uh, if there's any kind of additional granularity you can kind of go into. Is it something that, hey, it's validation and confidence in the value of these systems that's allowing them to maybe push forward a little bit faster? Or is it, we've got our internal teams in place, uh, so now we're more comfortable to kind of lean in? Maybe help me think through some of the puts and takes that are pushing forward and how maybe that correlates to some of the trends you've seen in the past, given you've had kind of multiple of these cycles, uh, over time as well.

<unk> had turnover.

Ryan a lot of new people and with your AI and we'd be solutions. They are coming up to speed, so much faster and quicker than some of our more experienced 15 2030 year.

People. So we're seeing some of those benefits so but at the heart of it. It is the results they are delivering tangible fundamental results that our customers know field.

Very good about and these are very sophisticated customers.

Yeah, I I it's a great question. So I would say, you know, at the heart of it is that you know, AI is fundamentally different from anything else we've ever built, right? It's it, it it's probabilistic in, in terms of the outcomes and it took a little bit of time for people to get really comfortable with the with the, with what the AI delivers in terms of uh, output and the like so. So, so there's a significant increase in the reliability, the quality and people are getting much more comfortable.

And that's why they're moving to contract.

That's what makes us feel good.

Okay now thats great I appreciate the depth there and then maybe on the.

Casualty side of the equation, we've kind of called out significant interest with Matt hub and maybe some of the key components as well too I wonder.

Githesh Ramamurthy: And then there's also what I call second-order benefits, like some of that I mentioned in the call, where, hey, I can get my, you know, I've had turnover. I brought in a lot of new people. And with your AI and with these solutions, they are coming up to speed so much faster and quicker than some of our more experienced, you know, 15, 20, 30-year people. So we're seeing some of those benefits. So, but at the heart of it, it is the results. They are delivering tangible, fundamental results that our customers now feel very good about. And these are very sophisticated customers, and that's why they're moving to contract. That's what makes us feel good.

I would say the second, and probably more important thing, is that the ROI is real. So when customers use the solution, they get one set of results. If they stop the solution, those results materially are not there. So you have the benefits of what I would call the A/B testing, and customers are really seeing great benefits.

Within that universe, there's a lot of inflation in severity on the claims side that helps historically kind of drive a lot of adoption on the IPD business.

During if you kind of maybe if you can make any parallels there as maybe the casualty side is starting to see maybe more of that claims pressure, which is really emphasizing kind of carriers to digitize and get more efficient. Thanks.

You are absolutely right because what we are seeing and our customers more importantly are seeing.

And then there's also what I call second order benefits. Like some of that I mention in the call where hey I can get my you know I've had turnover I brought in a lot of new people and with your AI and with these solutions they are coming up to speed so much faster and quicker than some of our more experienced. You know, 15 20 30 year uh uh people so we're seeing some of those benefits.

Is that the inflation in casualty.

Is much higher on the casualty claims than in general healthcare.

General healthcare as a category is high and what people are seeing in casualty claims is even higher so as a result of many of the things we have helped our customers accomplish.

So, at the heart of it, it is the results. They are delivering tangible, fundamental results that our customers now feel very good about. These are very sophisticated customers, and that's why they're moving to contract.

Brian Herb: Okay. No, that's great. I appreciate the depth there. And then maybe on the casualty side of the equation, we've kind of called out significant interest with MedHub and maybe some of the EIQ components as well, too. I wonder, within that universe, there's a lot of inflation and severity on the claims side that helped historically kind of drive a lot of adoption on the APD business. Wondering if you're kind of making parallels there, as maybe the casualty side is starting to see maybe more of that claims pressure, which is really emphasizing kind of carriers to digitize and get more efficient. Thanks.

That's what makes us feel good.

Over time on an auto physical damage, we are now able to deliver many of these capabilities on the casualty side.

The number of customers that are either new coming onto the platform or expanding the usage of our tools or new completely new to the platform. We're seeing all of those activities.

But it is becoming a significant issue.

Sure. Thanks catastrophe I appreciate it.

Githesh Ramamurthy: You are absolutely right because what we are seeing, and our customers more importantly are seeing, is that the inflation in casualty is much higher on the casualty claims than in general healthcare. So general healthcare as a category is high, and what people are seeing in casualty claims is even higher. So as a result of many of the things we have helped our customers accomplish over time on auto physical damage, we are now able to deliver many of these capabilities on the casualty side. Hence, the number of customers that are either new coming onto the platform or expanding the usage of our tools or new, completely new to the platform, we're seeing all of those activities. But it is becoming a significant issue.

Okay. No, that's great. I see the depth there and then maybe on the, um, casualty side of the equation, we we've kind of called out significant interest with medhub and maybe some of the eiq components as well, too. I wonder, um, within that Universe, there's a lot of inflation in severity, uh, on the claims side that helped historically kind of drive a lot of it. Uh, adoption on the APD business wondering, if you're kind of make, if you can make any parallels there, as maybe the casualty side is, is starting to see maybe more of that claims pressure, which is really emphasizing kind of carriers to digitize and get more efficient. Thanks.

Our next question comes from the line of Tyler Radke.

Uh, you are absolutely right. Because what we are seeing...

From Sydney.

And our customers more importantly are seeing is that the inflation in casualty?

Your line is now open.

Okay. Thank you very much for taking the question.

Wanted to go back to the commentary you had just around.

It sounds like some maybe some green shoots emerging solutions as things move from pilot and into production.

is much higher on the casualty claims than in general healthcare. So, general healthcare as a category is high. And what people are seeing in casualty claims is even higher.

So, as a result of many of the things we have helped our customers accomplish,

Could you just clarify are you seeing that show up in terms of multiyear contracts. It sounds like you have better visibility, but maybe if you could just be a little bit more specific in terms of.

Over time on auto fiscal damage, we are now able to deliver many of these capabilities on the casualty side. Hence,

The types of deals like are these ramps structures, where you expect people to be.

<unk> the stuff in 2026 2027.

The number of customers that are either new to the platform, expanding their usage of our tools, or completely new to the platform is increasing. We're seeing all of those activities.

How many of your your top clients did you see this that would be helpful.

Brian Herb: Sure. Thanks, Gitesh. Really appreciate it.

Sure. Take the test. I really appreciate it.

Yes, let me start with maybe the last part of your question first.

Operator: Our next question comes from the line of Tyler Radke from CITI. Your line is now open.

So one of the things we've done is that the.

Our next question comes from the line of Tyler Radkey.

The solutions that we've taken a lot of time to develop we think they apply across our entire customer base. So these are not solutions that only apply to a certain segment of our customers or other segments. So these are broader solutions on which.

from City.

Josh Bair: Okay. Thank you very much for taking the question. I wanted to go back to the commentary you had just around, sounds like maybe some green shoots in emerging solutions as things move from pilot into production. Could you just clarify, are you seeing that show up in terms of multi-year contracts? It sounds like you have better visibility, but maybe if you could just be a little bit more specific in terms of, you know, the types of deals, like are these ramp structures where you expect people to be, you know, layering the stuff in in 2026, 2027? You know, how many of your top clients did you see this at? That would be helpful.

Your line is now open.

Okay, thank you very much for taking the question. Um, I wanted to go back to the commentary you had just around.

There is just very very broad applicability.

Many of these many of our customers who use some of our previous solutions have been using more.

And these are all in the contracts, we're talking about are multiyear contracts.

And what we are seeing is that when customers contract.

They believe they will put a certain amount of volume through and what we're already starting to see is customers are starting to expand beyond the volume of contracts putting in so as we look at 25 zero to 26% 27 volumes from those customers will continue to increase.

Githesh Ramamurthy: Yeah. Let me start with maybe the last part of your question first. So one of the things we've done is that the solutions that we've taken a lot of time to develop, we think they apply across our entire customer base. So these are not solutions that only apply to a certain segment of our customers or other segments. So these are broader solutions on which there's just very, very broad applicability. And many of these, many of our customers who've used some of our previous solutions have been using, you know, and these are all, and the contracts we're talking about are multi-year contracts. And what we are seeing is that when customers contract, they believe they'll put a certain amount of volume through. And what we're already starting to see is customers are starting to expand beyond the volume of contracts putting in.

Sounds like some maybe some green shoots uh in in emerging Solutions is things move from uh pilot and into production. Um could you just clarify are you seeing that show up in terms of multi-year contracts? It sounds like you have better visibility but maybe if you could just be a little bit more specific in terms of um you know the the the types of deals like are these ramp structures where you you expect people to be, you know layering the stuff in and in 2026 2027. Um you know how many of your your top clients? Did you see this? That would be helpful.

Yeah, let me start with maybe the last part of your question first.

As they start putting more and more volume through but at the same time, we now have enough reference reference customers.

So, one of the things we've done is that...

The solutions that we've taken a lot of time to develop, we think they apply across our entire customer base.

Who are now other our other customers look too I would also say Wow. This solution is now in production I can start using it and get a lot of value.

So these are not solutions that only apply to a certain segment of our customers or other segments. These are broader solutions on which...

Yes, the bottom line. These are multimillion dollar contracts for each new product.

There's just very, very broad applicability.

and,

Hopeful and.

Follow up just on the competitive landscape, we've seen some of the horizontal.

Many of these many of our customers who use some of our previous Solutions have been using mult you know, and these are all and the contracts we're talking about are multi-year contracts.

SaaS and workflow players sort of announce industry specific solutions for the insurance market, whether that's service now.

And what we are seeing is that when customers contract,

Just just curious are you.

Githesh Ramamurthy: So as we look at '25, as we go into '26 and into '27, volumes from those customers will continue to increase as they start putting more and more volume through. But at the same time, we now have enough reference customers who are now, who our other customers look to and also say, "Wow, this solution is now in production. I can start using it and get a lot of value." And yes, and at the bottom line, these are multi-million dollar contracts for each new product.

Seeing any attempts from sort of the horizontal folks kind of getting more into the claims processing.

And your side of the market, but just be great to get your thoughts on that.

They believe they'll put a certain amount of volume through. What we're already starting to see is that customers are beginning to expand beyond the volume of contracts they're putting in. So as we look at 2025 and go into 2026 and then into 2027, volumes from those customers will continue to increase as they start putting more and more volume through.

The potential threat if at all from some of the the horizontal players.

I won't provide the name, but I did have one of the largest horizontal providers in my office earlier today, and we spent about an hour.

But at the same time, we now have enough reference customers.

A good bit of time.

And they really.

<unk> is a great example of them, saying we are in a very horizontal.

Uh, who are now? Other customers look to say, "Wow, this solution is now in production. I can start using it and get a lot of value." And yes, at the bottom line, these are multi-million dollar contracts for each new product.

<unk> ability and what CCC, what we're doing is extraordinarily extraordinary depth of vertical.

Brian Herb: Helpful. And follow up just on the competitive landscape. We've seen some of the horizontal, you know, SaaS and workflow players sort of announce industry-specific solutions for the insurance market, whether that's, you know, ServiceNow. Just curious, are you seeing any attempts from sort of the horizontal folks kind of getting more into the claims processing, you know, in your side of the market? It would just be great to get your thoughts on, you know, the potential threat, if at all, from some of the horizontal players.

Give you a very simple example, the example that we use is photo capability, having trained the AI around the cars around the parts and photo capabilities.

So very very deep vertical solutions and as Ed mentioned, the ecosystem and the network that we have.

Helpful and follow up just on the competitive landscape. We've seen some of the horizontal, uh, you know, SAS and and workflow players sort of announced industry specific solutions for the insurance Market. Whether that's, you know, service now, um, just just curious, are you?

Is an extraordinarily broad ecosystem.

In many places we will play with existing infrastructures customers have but we feel very very good about our solution.

Githesh Ramamurthy: I won't provide the name, but I did have one of the largest horizontal providers in my office earlier today, and we spent about an hour, you know, a good bit of time. And they really, you know, this is a great example of them saying, "We are in a very horizontal capability, and what CCC, what we're doing is extraordinarily depth of vertical." I'll give you a very simple example. The example that we use is photo capability, having trained the AI around the cars, around the parts, and photo capabilities to then solve very, very deep vertical solutions. And as I had mentioned, the ecosystem and the network that we have is an extraordinarily broad ecosystem. So in many places, you know, we will play with existing infrastructures customers have, but we feel very, very good about our solution.

Seeing, uh, any attempts, um, from sort of the horizontal folks kind of getting more into the claims processing, uh, you know, in your side of the market, uh, it would just be great to get your thoughts on, you know, the potential threat, uh, if at all, from some of the horizontal players.

Great to hear thank you.

Welcome.

Thank you. Our next question comes from the line of Gary Pasta P&L from Barrington. Your line is now open.

I, I, I won't provide the name, but I did have one of the largest horizontal providers in my office earlier today, and we've spent about 40 minutes— you know, a good bit of time.

Good afternoon, everyone a lot of questions have been answered, but I wanted to just ask you is.

The evolution of IQ <unk> kind of channel down the revenue.

Payment. This year is it still going to impact margins adjusted EBITDA margins by about 200 basis points.

Yeah, Hey, Gary it's Brian.

And they really, you know, this is a great example of them saying we are in a very horizontal capability, and what CCC is doing is extraordinarily deep in verticals. Uh, give you a very simple example. The example that we use is photo capability—having trained the AI around the cars, around the parts, and photo capabilities to then solve very, very deep vertical solutions.

Yeah evolution Iq.

If you strip out.

The impact and look at core CCC, excluding evolution IQ, we're making about 100 basis points of margin progression for the year. So evolution IQ is the difference between that.

And as I had mentioned, the ecosystem and the network that we have is an extraordinarily broad ecosystem.

So, in many places, you know, we will play with the existing infrastructures customers have.

The moderate loss. They have is that we talked about last quarter is in a relative range of what we're expecting to see so.

But we feel very, very good about our solutions.

Brian Herb: Great to hear. Thank you.

Githesh Ramamurthy: You're welcome.

Great to hear. Thank you.

Operator: Thank you. Our next question comes from the line of Gary Prostopino from Barrington. Your line is now open.

You're welcome.

Consistent from that perspective, but strip out evolution IQ and we're looking at about 100 basis points of margin progression for core.

Gary Prestopino: Hi. Good afternoon, everyone. A lot of questions have been answered, but I wanted to just ask you, is the EvolutionIQ, you kind of channeled down the revenue attainment this year, is it still going to impact margins, adjusted EBITDA margins by about 200 basis points?

Thank you. Our next question comes from the line of Gary Prosta Pino from Berrington. Your line is now open.

Okay, and then just in terms of.

When you look at the overall business.

We're seeing claims volume decline there is a lot of reasons for that.

A lot of it mostly economic but how much of that claims volume decrease in European Union is really coming from more Adas proliferating through the car Park.

Brian Herb: Yeah. Hey, Gary. It's Brian. Yeah, EvolutionIQ, you know, if you strip out the impact and look at core CCC, excluding EvolutionIQ, we're making about 100 basis points of margin progression for the year. So EvolutionIQ is the difference between that. The moderate loss they have is that we talked about last quarter is in the relative range of what we're expecting to see. So kind of consistent from that perspective. But strip out EvolutionIQ, and we're looking at about 100 basis points of margin progression for core.

The Evolution IQ. You kind of channel down the revenue attainment this year. It's still going to impact margins, adjusted EBITDA margins, by about 200 basis points.

Yeah.

Gary.

That's the.

A question that is really not very clear in terms of the answer but by and large our fundamental belief is that this is the underlying frequency of claims we have not seen a material change because every car of every type goes through our platform in one way shape or form.

And what we think what we believe is a very fundamental difference between accident frequency and claims being filed for economic reasons.

Gary Prestopino: Okay. And then just in terms of when you look at the overall business, you know, we're seeing claims volume decline. You know, there's a lot of reasons for that. A lot of it mostly economic, but how much of that claims volume decrease, in your opinion, is really coming from more ADAS proliferating through the car park?

Yeah. Hey hey Gary it's it's Brian. Um yeah. Evolution IQ the the you know if you strip out the impact and look at Corps CCC, excluding Evolution IQ, we're making about a 100 basis, points of margin progression for the year. So Evolution IQ is is the difference between that, uh, the moderate loss. They have, is it that we talked about last quarter is, is it a relative range of of what we're expecting to see? So, uh, kind of consistent from from that perspective, but, but strip out Evolution IQ, and we're looking at about a 100 basis points of margin progression for core,

That we think is the fundamental cause and by the way. There's a lot of third party data that supports that view as well.

Okay. And then just in terms of...

When you look at the overall business,

Okay. Thank you.

Okay.

Thanks Kerry.

I'm showing no further questions at this time I would now like to turn it back to catastrophe Murphy for any further closing remarks.

Well I would like to on behalf of all of US say, thank you for joining us we're very optimistic about the outlook for the business and we remain confident in our ability to deliver on our strategic and financial objectives, while helping our customers with their digital transformation.

In Q2, you know, we're seeing claims volume decline, and you know, there's a lot of reasons for that. A lot of it is mostly economic, but how much of that claims volume decrease, in your opinion, is really coming from more ADAS proliferating through the car park?

Githesh Ramamurthy: Gary, that's a question that is really not very clear in terms of the answer. But by and large, our fundamental belief is that this is the underlying frequency of claims. We have not seen a material change because every car of every type goes through our platform in one way, shape, or form. And what we think, what we believe is a very fundamental difference between accident frequency and claims being filed for economic reasons. That we think is the fundamental cause. And by the way, there's a lot of third-party data that supports that view as well.

I'd also like to take this opportunity to say, thank you to our customers for their trust and confidence in us and I also like to thank the CCC team and our shareholders for their support we remain excited about the opportunities in front of us and look forward to updating you on our next quarterly call.

Gary, that's a question that is really not very clear in terms of the answer. But by and large, our fundamental belief is that this is the underlying frequency of claims. We have not seen a material change because every car of every type goes through our platform in one way, shape, or form.

Thank you for your participation in today's conference. This does conclude the program you may now disconnect.

Brian Herb: Okay. Thank you.

And what we think, what we believe, is a very fundamental difference between accident frequency and claims being filed for economic reasons that we think is the fundamental cause. And, by the way, there's a lot of third-party data that supports that view as well.

Githesh Ramamurthy: You're welcome.

Okay, thank you.

Gary Prestopino: Thanks, Gary.

Okay.

Thanks Jerry.

Operator: I'm showing no further questions at this time. I would now like to turn it back to Gitesh from Marthi for any further closing remarks.

Githesh Ramamurthy: Well, I would like to, on behalf of all of us, say thank you for joining us. We're very optimistic about the outlook for the business, and we remain confident in our ability to deliver on our strategic and financial objectives while helping our customers with their digital transformation. I'd also like to take this opportunity to say thank you to our customers for their trust and confidence in us. And I'd also like to thank the CCC team and our shareholders for their support. We remain excited about the opportunities in front of us and look forward to updating you on our next quarterly call.

I'm showing no further questions at this time. I would now like to turn it back to Kitezh from Mercy for any further closing remarks.

Well, I would like to do, on behalf of all of us, say thank you for joining us. We are very optimistic about the outlook for the business, and we remain confident in our ability to deliver on our strategic and financial objectives while helping our customers with their digital transformation.

I would also like to take this opportunity to thank our customers for their trust and confidence in us. I would also like to thank the CCC team and our shareholders for their support. We remain excited about the opportunities in front of us and look forward to updating you on our next quarterly call.

Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Thank you for your participation. In today's conference, this does conclude the program. You may now disconnect.