Githesh Ramamurthy – Chairman and Chief Executive Officer Brian Herb – Chief Financial Officer Brian Denyeau – ICR.

Greetings and welcome to the CCC Intelligent Solutions Fourth Quarter and Fiscal Year 2021 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad.

As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Brian Daniel with ICR. Please go ahead..

Good morning, and thank you for joining us today to review CCC's fourth quarter and fiscal year 2021 financial results, which we announced in our press release issued before the open of market today. Joining the call today are Githesh Ramamurthy, CCC's Chairman and CEO, and Brian Herb, CCC's CFO.

The forward-looking statements we make today about the company's results and plans are subject to risks and uncertainties that cause the actual results and the implementation on the company's plans to vary materially.

These risks are discussed, and our earnings release is available on our Investor Relations website under the heading Risk Factors in our registration statement on Form S-1, filed with the SEC on September 9th, 2020, and our 2021 annual report on Form 10-K to be filed with the SEC.

Further, these comments and the Q&A that follows are copyrighted today by CCC Intelligent Solutions Holdings Incorporated. Any recording, retransmission, reproduction, or other use of the same for profit or otherwise without prior consent of CCC is prohibited and a violation of United States copyright and other laws.

Additionally, while we have approved the publishing of a transcript of this call by a third-party, we take no responsibility for inaccuracies that may appear in that transcript. Please note the discussion on today's call include certain non-GAAP financial measures as defined by the SEC.

The company believes these non-GAAP financial measures provide useful information of management and investors regarding certain financial and business trends relating to the company's financial condition and results of operations.

A reconciliation of GAAP to non-GAAP measures is available in our earnings release that is available on our Investor Relations website. Thank you, and now I'll turn it over to Githesh..

Thanks, Brian and thanks to all of you for joining us today. I'm pleased to report that CCC delivered exceptionally strong top and bottom line results in the fourth quarter. I'd like to start by summarizing our financial results for the fourth quarter and full year.

For the fourth-quarter, revenue was $187.1 million up 19% adjusted for divestiture last year. This was ahead of our guidance and our strongest growth performance in years. Adjusted EBITDA was $75.7 million, which grew 30% year-over-year. This represents a 40% margin up more than 300 basis points from the fourth quarter of 2020.

And for the full year, total revenue was $688.3 million, up 15% adjusted for divestiture last year. And adjusted EBITDA was $261.4 million, representing a 38% margin. Both our revenue and adjusted EBITDA performance were well ahead of our initial guidance for the year, reflecting the strong momentum across our business.

I will first provide some highlights from 2021, which was a strong year for us and then review the fourth quarter in detail. It was truly exciting this year to see the convergence of many of the fundamental platform decisions we have made over the years gathered critical mass.

The CCC cloud today sits at the heart of the digital transformation of the P&C insurance economy. More than 30,000 customers across the ecosystem trust CCC to provide state of the art cloud-based solutions that leverage AI and mobile to boost operational efficiency and greatly improve the customer experience.

We believe this is a long-term trend that is still in the early days. This gives us great confidence in our ability to drive consistent, durable growth in revenue and profitability. While we have delivered organic revenue growth for two decades, our performance in 2021 was particularly strong.

We continue to lay the foundation for sustained growth as we delivered more than 1,700 product releases on the CCC cloud in 2021, this is up from 1,400 releases the prior year. This equates to an average of more than 30 product releases per week.

These included important new launches, like CCC Estimate-STP and payments, as well as significant updates to diagnostics and many other existing solutions. We substantially expanded the breadth and depth of our AI solutions, which have now been used to power more than 9 million unique claims using a CCC deep learning AI solution.

This is up 80% from 2020. We expanded our platform to support additional aspects of the ecosystem and increased the value of our network for our customers. We signed a number of key renewals during the year, including four of our largest Multi-Store Operators or MSOs, and three of the top five insurance carriers.

It was exciting to see that in every case, these customer wins included both multiyear extensions and further expansions of CCC solutions they will deploy, and we successfully returned to the public markets.

We are extremely proud of the hot and quality shareholder base we have attracted, who have been very supportive of our long-term strategic objectives.

I also want to take this opportunity to thank the CCC team, for all that we have accomplished together in 2021, and the incredible path we have to power, the digital transformation of the P&C insurance economy. I will now provide some of the key highlights from the fourth quarter.

The first area I would like to highlight is a continued expansion of CCC solutions with our customers. We have a terrific customer base, which includes so many that have been with us over the long term, and they continuing to give us great insight as to the business challenges they would like solved.

The strength of these relationships is foundational to our long-term success and drives our best-in-class retention rates.

A great example of the opportunity in these long-term relationships with a meaningful expansions we secured during the quarter with two of the top five largest P&C insurers as part of signing 5 year contract renewals with each customer.

Each insurer will be meaningfully expanding their spend with CCC as the deploy in number of new solutions, including our suite of mobile AI solutions and Estimate-STP.

As we discussed last quarter, we believe one of the most exciting aspects of the CCC growth story that many investors may not fully appreciate is the opportunity for growth from our broad insurance customer base.

New solutions like Estimate-STP, payments and Total Loss Care, as well as new innovations we plan to introduce in the coming years, are all incremental growth opportunities. Now to give you some perspective on the scale and visibility we have into our future revenue.

At the end of last quarter, we had more than $1 billion of revenue under contract, with our 25 largest insurance customers, and believe we can meaningfully expand our revenue from them, over the long term if they were to deploy more of our solutions. A similar dynamic also exist among our repair facility customers.

During the quarter, we signed a long-term renewal with one of the nation's largest MSOs that will now be deploying our Engage solution to all their locations. We are thrilled with the interest in CCC Engage throughout 2021. In fact, this product has now been adopted by nearly 9,000 of our repair facility customers.

This represents more than 30% of our total repair facility installed base, and is one of the fastest product deployments we have ever had.

During 2021, we signed renewals for five or more years with multiple national MSOs, which highlights the longstanding relationships we have built and our long-term commitment to product innovation and most important to their success.

Finally, we also continue to expand our ecosystem as our investments in areas like parts and total loss provide opportunities to add parts providers, banks, and financial institutions, and other auto insurance economy participants to our platform.

For example, since introducing parts several years ago, we now have signed up more than 4,000 parts suppliers. We had 40% growth in electronic order volume in 2021 and now have 15% of total market GMV being processed on our part solution.

Parts is a great example of how we have built the CCC platform to be a balanced multi-sided network that generates value for all participants for the millions of claims processed each year on the CCC cloud. What is particularly powerful about the expanding adoption of the CCC cloud, is that it is self-reinforcing.

The revenue from new products adoption, provides resources to invest even more in R&D further expanding our offerings, which in turn helps us deliver more revenue and earnings growth of virtual cycle in other words. The second area I want to provide an update on is the early success we're having with some of our recent product innovations.

Our passion for product innovation is what drives our success with customers. At the heart of our product development effort is our vision for straight through processing or STP, which will leverage AI to fully digitize large segments of the P&C insurance economy.

STP, is applicable throughout our network ecosystem, and represents a multiyear innovation journey across a number of use cases. A critical component of our STP vision, was the recent introduction of CCC Estimate-STP.

Our first product that enables a truly touchless trade through processing experience for our customers and a critical step forward for the industry. As a reminder, this solution fully digitizes the estimating process for qualified repairable claims and shortens the estimating process from days to seconds.

Momentum continues to build around Estimate-STP, as customers embrace the increase in accuracy, speed, and efficiency this AI-powered solution brings to the estimation process. So also reducing estimate times from days to seconds. Estimate-STP is a significant opportunity for CCC, and is one that we expect to scale over the next several years.

We continue to see terrific adoption and momentum with our AI innovations. We now have more than 95 U.S. auto insurers that are actively using CCC's AI-powered capabilities. And we are still in the early stages of driving widespread adoption.

A stock I'm particularly proud of is that last year, we grew the number of claims that utilize four or more of our AI applications by a factor of six. This is a great demonstration of the sizable opportunity we have to incorporate AI throughout the claims life cycle.

Finally, we continue to make progress on our payment solution, which is now generally available to customers. We're engaged with a number of customers to refine use cases and to build a pipeline for this product. We're following a three-part approach that has helped us launch and scale new products in the past.

First, we initially roll out with select customers, where we partner together to refine the use case and optimize the workflow. Second, we take those learnings, incorporate them in our solutions, making its value proposition even more powerful.

And then lastly, we move up market and deploy to larger customers, we're looking for new technology that can increase efficiency and profitability. This is a process that takes time, but has yielded consistently strong results for CCC. The third area I'd like to update you on is how we are expanding our market opportunity.

We recently announced our acquisition of safety, an innovative startup InsurTech provider that uses AI, machine learning, and natural language processing to digitize the full subrogation life-cycle.

For those of you not familiar with subrogation, this is a step in the claims process that every insurer has to perform across every P&C line, and refers to the process of protecting consumers and insurers from paying for losses where the insured is deemed not at fault, or only partially at fault.

Subrogation affects tens of billions of dollars in claims every year, and cost insurers over $2 billion in estimated administrative expenses annually. Historically, subrogation has been a highly manual and time intensive process. And digitizing it is a natural extension of our STP vision and platform strategy.

Safe keeps technology uses AI and automated workflows to streamline the entire subrogation process addressing a key pain point that our insurance customers have been asking us to solve.

This gives us an exciting new cross-sell opportunity with our carrier customers and also extends us beyond auto as the safe keep platform addresses subrogation across any P&C line. We are excited to welcome the safety team to CCC.

This acquisition is indicative of the opportunity we have to deliver additional value to our network through new inorganic products deployed on the CCC cloud. As we look ahead to 2022, we believe CCC is in a great position to build upon this success, and work even more closely with all participants in the auto insurance economy.

Our focus is on leveraging and expanding upon our unique and comprehensive cloud platform to fully digitize the P&C insurance economy, by delivering on our STP vision. This includes expanding adoption and use cases for our solutions.

We will be broadening our AI capabilities to allow us to capture more estimate use cases, as well as extending our STP capabilities into new workflows, like subrogation and payments. We're also focused on growing our capabilities and diagnostics to create even more value and drive greater efficiency for our repair facilities and other customers.

We are excited about the opportunity to meaningfully increased adoption of these new solutions over the course of 2022. We will also invest in our people to support our growth objectives. Our employees are the lifeblood of CCC, and our success as a company.

Ensuring that we're developing and supporting our current and future employees is a top priority me and the senior leadership team. To that end, we were thrilled to recently opened our new design center in downtown Chicago.

This state-of-the-art facility that also serves us our new headquarters, is purpose-built to facilitate innovation and collaboration by our employees. We are also increasing our focus on leveraging the increase in remote work opportunities by recruiting highly qualified candidates in new regions around the world.

Finally, we will pursue opportunities to deepen and expand our platform through alliances and target M&A. Our open platform and deep customer relationships make CCC an ideal partner for any technology provider looking to serve the P&C insurance economy.

We believe there are significant opportunities to enhance the value of our platform and increase our network effect by using alliances and M&A to provide new growth opportunities for CCC. Overall, we feel very good about the state of our business and our ability to generate substantial value for our customers and our shareholders.

Now, I'd like to turn the call over to Brian, after which we'll be happy to take your questions..

Thanks, Githesh. Today, I'll review our fourth quarter and fiscal year 2021 results and also provide guidance for the first quarter and full year in 2022, total revenue for the fourth quarter was a $187.1 million, up 19% from the prior year period on an adjusted basis.

We look at growth on an adjusted basis, which excludes from our 2020 revenue, a portion of our casualty product line, clinical professional services, that was divested at the end of 2020. We believe this provides the best view into the underlying growth of the business, so our quarterly performance to be looked at on a like-for-like basis.

From a trend perspective, 19% growth is the 6 sequential quarter of accelerating year-over-year revenue growth. Growth in the quarter was primarily driven by strong cross-sell and up-sell activity, including the impact of several large renewals signed in the quarter, with expanding solution bundles.

And also deals closed earlier in the year, that contained sizable increases in revenue. We also saw continued strength in new logos, largely in part suppliers, and repair facilities. We are pleased with our performance in the quarter and the underlying momentum in the business..

which only had a limited benefit from transactional volume recoveries in the quarter, and only 1% impact on total growth for the full year. I do want to highlight that in the fourth quarter, we had approximately $4 million of non-recurring revenue, which contributed approximately two points of growth, most of which was anticipated in our guidance.

The non-recurring revenue related to items, a Chinese customer renewal that included several months of catch-up revenue, and also some year-end true-ups that happened in Q4 and will reset in 2022. Turning now to our key metrics.

Software, Gross Dollar Retention or GDR, captures the amount of revenue retained from our client base compared to the prior year period. In Q4 '21, it was 98%, which is consistent with our historical levels. We believe that our software GDR reflects the value we provide to our customers and the stickiness of the network effect.

Software GDR is a core tenant of our predictable and resilient revenue model. Software Net Dollar Retention or NDR, captures the amount of cross-sell and up-sell from our existing customers compared to the prior year period. As well as volume movements within our client base. In Q4 '21 software NDR was 115%.

Similar to last quarter, software NDR was above our historical range. The consistently strong NDR we delivered throughout 2021, is a demonstration of the breadth of our cross-sell opportunities, as we benefit from new solutions like Engage, mobile AI, as well as large client renewals, that expanded adoption of some of our more traditional products.

We are well-positioned to drive strong cross-sell and up-sell activities going forward. But it is also important to keep in mind, that as we move throughout 2022, we will face tougher comps against the strong NDR performance, especially in Q3 and Q4.

Software NDR is a key driver of our growth, given that the majority of our subscription revenue comes from our existing client base. Now to review the income statement in more detail, as a reminder unless otherwise noted, all metrics are non-GAAP and we've provided a reconciliation of GAAP to non-GAAP in our press release.

Adjusted gross profit in the quarter was $147 million with adjusted gross profit margin of 79%, compared to an adjusted gross profit margin of 76% in the fourth quarter of last year.

Adjusted gross profit benefited from the increased scale of the business, and the relatively fixed and semi-fixed cost base within our cost of revenue, as well as the $4 million of non-recurring revenue I mentioned earlier. Turning to our operating expenses, non-GAAP operating expenses were $77.7 million.

Our cost base remains somewhat lower than we anticipated due to hiring being below our plan, coupled with lower discretionary costs, like travel due to the ongoing effects of COVID. Adjusted EBITDA for the quarter was $75.7 million with a 40% adjusted EBITDA margin. Adjusted EBITDA grew 30% year-over-year.

This was a strong profitability performance that reflects the revenue over performance in the expense favorability I just referenced. Turning to the balance sheet and cash flow. We ended the quarter with $183 million in cash and cash equivalents and $800 million of debt.

At the end of the quarter, our net leverage was approximately 2.4 times adjusted EBITDA. Free cash flow in the quarter was $17.3 million compared to $30.9 million in the prior year period. Looking at cash flow on an unlevered basis, in 2021 we converted 53% of adjusted EBITDA into unlevered free cash flow.

We did have several one-time items that impacted the cash flow during the year, including transaction costs related to taking the company public and the investments in our new headquarters. If you adjust for these items, cash conversion would've been in the low 60s, and consistent with our historical performance.

Now, I'd like to finish with guidance beginning in the first quarter. We expect total revenue of $182.5 million to a $184.5 million. This represents 16% year-over-year growth at the midpoint, we expect adjusted EBITDA between $70, million to $72 million, which represents a 36% adjusted EBITDA margin at the midpoint.

For the full year 2022, we expect revenue of $760 million to $768 million, which is a 11% year-over-year growth at the midpoint. We expect adjusted EBITDA of $286 million to $292 million, which represents a 38% adjusted EBITDA margin at the midpoint. There are several things that I would keep in mind as you think about guidance for 2022.

It calls for another strong year of growth above our long-term organic revenue target of seven to ten in terms of the revenue plan, our outlook reflects our confidence in the underlying momentum of the business.

When you think about building your models throughout the year, we expect sequentially dollar growth in Q2 through Q4 to be broadly consistent each quarter. Also keep in mind that our revenue growth in the first half of the year benefits from the easier comps compared to the first half of 2021.

In terms of revenue mix, we continue to see gross shift more towards cross-sell and up-sell versus new logos, similar to what we started to see in 2021. This reflects the growing solution portfolio and the amount of innovation that we've introduced into the market. In terms of profitability, we are forecasting similar Adjusted EBITDA margins to 2021.

We've generated out sized margin expansion in recent years, going from 30% Adjusted EBITDA margin at the end of 2019 to 38% Adjusted EBITDA margin at the end of last year. We remain focused on investing in our growth initiatives, including absorbing the cost base in ongoing investment of the safety of acquisition.

At the same time, we do remain confident, we can achieve our long-term targets of 45% adjusted EBITDA margin. Q1 will reflect the continuous investment we are making across the business, as well as the $4 million of non-recurring revenue in Q4, which fell to the bottom line and will not repeat.

We do expect Q2 profitability to be lower than Q1 due to the phasing it costs, and the timing of our annual industry conference. We then expect profitability to grow sequentially, each quarter in the back half of the year. Finally, we believe safe keep is a strong strategic fit and provides good long-term growth opportunity.

However, this is an early-stage business and does not have meaningful recurring revenue, and its immaterial to our revenue guidance for 2022. So to wrap up, 2021 was a strong year for CCC, with revenue growth and profitability exceeding our guidance for the year.

We have a robust product development road map that we're investing in, and we believe will drive additional value for our customers as they continue to invest, to digitize their operations. Overall, CCC is performing at a high level.

And we believe the combination of attractive growth and high profitability can deliver long-term value for our shareholders. With that Operator, we're now ready to take questions..

Thank you. At this time, we'll be conducting a question-and-answer session. In the interest of time, we ask that you each keep to one question and one follow-up. Thank you. Our first question comes from the line of Bhavan Suri with William Blair. Please proceed with your question..

Hey, guys. Good morning. Congrats on the results. It's still on for Bhavan. I wanted to maybe start on the STTPs and maybe how they serves as an easy on-ramp for some of the AI tools you kind of talked about as well here.

But maybe how should we be thinking about the market potential and STP, is it a share of maybe some of the savings you're driving for customers? How can Safe Keep maybe plays into this and maybe some of the long-term initiatives for the STP and AI components?.

Sure. This is Githesh. It's really -- you have to think about it in 2 parts. What we've introduced first is Estimate-STP. So Estimate-STP, is a component of the overall STP or straight-through processing capability.

As we mentioned before, each claim leads to a hundreds of different activities or transactions, so one of the hardest steps is really taking the estimate from the accident and the photo and to what is this going to cost to repair, and that's really what Estimate-STP does.

What we've done with several and many other components, is this also gives us an entry point, a demonstration to customers that we've been able to deliver, Estimate-STP, which is one of the hardest AI problems to solve at scale, and it gives us great ability to deliver other components of STP, hence the several acquisition of safety.

Does that help?.

Yes. That's very helpful, I guess to maybe building off of that, and maybe this is a little bit more of a longer-term kind of potential opportunity here. But thinking about some of the fraud dynamics that take place across the claims life-cycle as well. You have a lot of data running across your platform here. Insights, maybe from the AI pieces.

But thinking, I guess, maybe, how are carriers here thinking and analyzing the fraud dynamics and the value that you derive to better address the fraud that they're seeing across their solutions as well? Thanks..

Yes, we do we do some of that already. For example, our platforms are connected real-time to National Insurance Crime Bureau. We have a large volume of trillion dollars of historical data to look at claims that have been reported across carrier opportunities.

So as the technology evolves, clearly there are opportunities to help protect against that, and we do see that as a key component of our overall STP vision..

Got it. Thank you, guys. Thanks for taking the questions, and nice job..

Thank you..

Thank you. Our next question comes from the line of Chris Moore with CJS Securities. Please proceed with your question..

Hey, good morning, guys. Thanks for taking a couple of questions. Just with the organic growth for the quarter. 19%. Software NDR was 115%.

Is it too simple to say the new logos are probably 4% or so in the quarter?.

Hey, Chris. Brian here. Yes, that's right. If you break down the 19 NDR was 115 and new logos was about 4%. So that is the math for the quarter..

Got it. In terms of the '22 guide, how much trend -- and you may have said this, I may have missed it how much transactional kind of volume recovery is incorporated in there..

Yes, there is not much. I mean, we talked about in '21 having one point of recovery from volume and that's where we ended up in our 21 position as we look forward on the guidance, we have less than that going into 22, so it's less than a point. So we're not expecting -- we're not baking into the plan of further recovery.

We do expect recovery to come back, but we don't know the timing or the phasing and so what that looks like coming back in. So we have not assumed further recovery in our plan..

Got it. And last one for me would probably get a little spoiled for you guys level and precision of guidance. 2021 is should be '22's 11%, your normal range is 7% to 10% from where we're sitting today, '23 is probably best to look at from that normal range..

Yes, that's right. We're not adjusting anything beyond where we are today. So I would say, as we think beyond '22, we're very focused on our organic revenue guidance that we've provided of 7 to 10..

Got it. I appreciate it. I'll jump back in line..

Thank you, our next question comes from the line of Jackson Ader with JPMorgan, please proceed with your question..

Hi, this is Maya for Jackson.

So talking about some of the large multiyear renewals, when do you typically see large customers engaging with you, and are their typical renewal cycles that you can forecast?.

Maya, first of all, great to have you on, I would just say that many of our customers, if not most of our customers, have been customers for 20 plus years, so yes, there is a pattern of renewals like some of the contracts indicated, we're five-year renewals, so yes, some of those renewals will come up five years from now, but what also happens in our business is that customers, as we introduce new solutions.

Many of our customers are adopting those new solutions. And as part of adopting additional bundles, additional solutions, sometimes there's, "Hey, would love the predictability of actually extending the contract for the route while we adapted solutions. " So it can happen both ways.

People just adopt new solutions, or people adopt new solutions and say, "I'm going to extend it a little further. " And sometimes it comes based on contract cycles. This one of the reasons I wanted to call the top 25 carriers a lone, we have about a billion dollars some visibility for the next few years in contracted revenue..

Got it. That's really helpful.

And then just going off of that in terms of having high visibility for this year, how does that compare to some of the revenue coverage that you have had going in the previous years?.

I would not say it as anything particularly unusual. This is just -- this is a normal pattern that we've seen for 20, 25 plus years, and is a fundamental reason we maintain a net promoter score of 80, which as you know for enterprise software is leading hedge.

That means customers will really deliver great solutions for customers, drive a really great NPS, and that's really important to these long-term relationships..

Got it. Thank you.

Thanks, Maya..

Thank you. Our next question comes from the line of Kirk Materne with Evercore ISI. Please proceed with your question..

Yeah. Thanks very much, and congrats on the good finish to the year. Githesh, can you talk a little bit, actually going back into those bigger contracts. When you're talking to those customers about up sells or cross out in this case, I guess.

Is that competitive, are there other solutions that they're baking you off against? Is it more of a just an ability for them to be at the point where they can start thinking through the process changes required to take on this technology? And just kind of curious, if there's any gating factors or it's just sort of working through the sales process with them?.

Yeah. I mean, look, there are always competitive issues, right? That's always a given. But the fundamental difference between what we offer versus Single Point Solutions is that we offer a truly end-to-end solution.

So all the way from connecting to your consumers, all the way through thousands of your employees, making hundreds and hundreds of decisions per day, all the way through to repair facilities, parts providers. So we provide a seamless end-to-end integration. And so that's a huge differentiation for CCC.

Second, because our cloud is already deeply integrated into customers platforms, it makes it easier for customers to start testing, piloting, and really lighting up and testing out new solutions.

So as customers pilot, light up, and test new solutions that are fully integrated, it becomes more of a hey, did the solution have the impact that we were hoping it would have. Oh, yes, it had the impact. We are really thrilled with it.

So a lot of customers, for example, when I talked about Estimate-STP, lot of people said this has never been done in the world before, can it really happen? When they tested it and used it, in fact, one customer comments to another customer, it actually works better than CCC advertised it.

So it's really a matter of piloting and testing and getting it up and running. So those are really the issues..

That's helpful.

And then Brian, when we think about these up-sell opportunities with your customers, did just the revenue base automatically revert higher to the extent they're buying your products from you? Or is this something safer, one of the bigger -- the top five -- or the two of the top of that you up-sold this quarter? Will that revenue from these new products blend in over time? I'm just trying to get a sense on how those contracts work from a rev rec perspective..

Yes, it's a bit of both. So some of the deals, they'll bring in products like Engage and for the MSO and roll it out across their base. And that will just start to be in the base going forward. Other products like STP, where we've cross-sold, we'll build over time, as they continue to adopt that technology.

So it's not a pure one way or the other, some of it will step up immediately and be part of the base and some will build over time. So we see both varieties..

Thank you all..

Great. Thank you..

Thank you. Our next question comes from the line of Gary Prestopino with Barrington Research. Please proceed with your question..

Good morning, everyone. Hey, Githesh or Brian, can you give us some idea of what your software, NDR was two or three years ago versus where it is now? And then, I have another one I want to ask on safety..

Yes, that's fine. yes, if you look at where NDR was, a couple of years back and kind of go beyond COVID year, it was around 106, 107, that's kind of our historical trend. We clearly are trending over those historical rates in the NDRs that we've delivered in '21..

In terms of if it's 106 and you are what, 115, so we're talking about 900 basis points of growth and a lot of that I assume is really going to be from new uptake of new products and higher-priced products, etc.

Is that correct?.

Yes, it is. There's a few things that are going on.

So if you look at the blended rate over the four quarters of NDR, it's about 111 is kind of what we averaged across '21, there is a few things going on in that, one is these large expansion deals that we've talked about, this had a foundation for the accelerated rate across the top carriers we've signed in the top MSOs.

We also have seen good mobile AI Engage adoptions for some of our digital solutions, we're seeing adoption across the broad client base, and then we're also seeing pickup in up-sell at the repair facilities, and seeing that and that up-sell at the client base. So all of those are contributing.

The other factor that you'd need to note is we have highlighted that cross-sell will be a larger proportion of our growth going forward. So if you look back historically, cross-sell has been about two-thirds of our growth.

We've been highlighting that that's going to move to more like 80% of our total growth going forward, and we're starting to see that play out in '21 and expect that trend to continue in '22 and beyond. So that's another factor that's playing through..

Okay. And then very quickly, Githesh. The safe keep acquisition sounds interesting. But I guess, you kind of alluded to that it was a newer technology that hadn't really been deployed in the market. What do you have to do, if anything to tweak it, to get it to where you want it to be.

And was the fact that it wasn't out there in the market, that it was just a single-point solution, and they just could not compete?.

Hey Gary. I would say, fundamentally, what we saw with safety is that they had solved some really hard problems, right? Subrogation is the process by which you're saying who is at fault? Where should I collect money from etc.? And there's a lot of complexity. The team has done a fabulous job of understanding, building the technology.

And frankly, when we went around talking to a lot of their customers, early customers that they had who were in pilot and early test and the feedback was just simply outstanding. It’s one of those things where we could say, look, we can take a few years, or we could really go with the solution and best of all, we love the team.

Jeff, the CEO, the leadership team, fabulous team and then when you put that capability on our platform, where you had now can deliver to customers an end-to-end solution, we feel we can really accelerate the movement of this technology through, and it fits exactly into our STP overall STP Division..

Okay, Thank you..

Thanks Giving Gary..

Thank you. Our next question comes from the line of Yitchuin Wong with Citi. Please proceed with your question..

Hi. Good morning, guys. Thanks for taking my question. Good to see you guys doing the call in the morning here. Githesh, I think you talked about the meaningful expansion with 2 of your top 10 P&C clients.

I'm wondering, are those expansion like, came in in regards to what you are expecting on -- before? And then, also what are some other products that was added or products that was not added as surprise this year? Can you give us a little more detail there?.

Yes. So first of all, I would say, there were no surprises. Because we worked with our core customers for a very long time, both our repair customers, our multi-store operator customers, our insurance customers. We're also working well ahead of time in piloting, testing, seeing the results. So there's really no surprises.

It's that the timing sometimes on these larger complex things, sometimes it takes a few months, sometimes it can take a year, sometimes can take longer, so no real surprises, as such..

Okay. I guess how much of that expansion is kind of into AI mobile area.

I mean, if it's small to begin with, do you see that percentage growing bigger towards the later stage of the contract?.

Yes. We do see that element, especially on the carrier side, especially that element of AI Estimate-STP. And there was a number of new solutions somewhere already established products we had.

And then as more customers adopt mobile AI, as well as in some instances, existing solutions that they have not rolled out in previous years, they saw the benefit of rolling those solutions out. So it's a mix of new solutions, as well as existing solutions.

And some of these solutions will ramp over time as the mix continues to change and more and more AI and other solutions could adopt it..

Great. Thanks..

Thank you..

Thank you. Ladies and gentlemen, that concludes our question-and-answer session. I will turn the floor back to Mr. Ramamurthy for any final comments..

Thanks to everybody for joining us, and we really appreciate our shareholders being on the call and I look forward to giving you an update. So to wrap up, I'd just tell you that we are thrilled with how CCC performed in 2021. Super excited about the opportunities in front of us in '22 and beyond.

We -- as we came out to the public markets, we set up some very clear objectives that we wanted to make sure we deliver, and hopefully everyone feels good about what we're doing in that area.

I would also say that we're seeing positive demand trends across each of our product -- key product and customer segments, and as a result, we are seeing that the importance of investing in cloud-based digital technologies continues to grow among our customers, and as we've said, and we continue to reiterate, innovation, huge, huge part of what we're doing as we continue to deliver new solutions that help drive growth.

And I also want to take this opportunity to wrap up and shout-out a huge thank you to all the CCC - errs over the years, and particularly, the last year make all this happen. So we look forward to giving you further updates and thanks everybody for joining..

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