Cannae(CNNE) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Cannae's total operating revenue for Q1 2025 was $103 million, a 7$7 million in Q1 2025, compared to $5 million in the prior year [27] - Cannae's equity in earnings and losses of unconsolidated affiliates posted a$2 million net loss in Q1 2025, compared to an $18 million gain in the prior year [28] Business Line Data and Key Metrics Changes - CNB reported revenue of$580 million, representing 3.6% constant currency organic growth compared to the prior year's first quarter [13] - Alight reported total revenue from continuing operations of $548 million for Q1 2025, a 2$118 million, a $2 million increase compared to the prior year [14] Market Data and Key Metrics Changes - Cannae's largest public investment, Dun and Bradstreet, is being acquired for$4.1 billion, from which Cannae will receive $632 million upon closing [7][9] - The company expects to utilize approximately$730 million from public portfolio sales for shareholder returns and debt repayment [10] Company Strategy and Development Direction - Cannae is focused on rebalancing its portfolio away from public investments and investing in companies with positive cash flows [7] - The company aims to return capital to shareholders and improve operational performance of its portfolio companies [7] - Cannae announced an agreement to acquire an additional 30% stake in JANNA Partners for 67.5 million, enhancing its ability to allocate capital towards proprietary acquisitions [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strategic relationship with JANNA Partners and the potential for future investments [32] - The company believes there remains significant embedded value in its portfolio and upside in stock price as it executes its strategic plan [50] Other Important Information - Cannae appointed Bill Royan and Woody Tyler to its board, both bringing strong investment management experience [12] - The company is undergoing significant changes in its Restaurant Group, including management restructuring and cost-cutting measures [26] Q&A Session Summary Question: Can you discuss the revenue and earnings profile of JANNA Partners? - Management indicated that JANNA has significantly higher assets under management than initially invested, exceeding 2 billion, and is performing well financially [31][32] Question: Are there plans to increase ownership in JANNA Partners? - Currently, there are no plans to increase ownership percentage as the existing structure is deemed effective [35] Question: Can you elaborate on the Vitality Stadium acquisition? - Management believes the redevelopment of the stadium is financially attractive, projecting mid-teens returns on the investment [42][43] Question: How does Cannae plan to deploy incremental capital for M&A? - In the short term, the focus will be on returning capital to shareholders, but the company remains open to opportunistic investments that can deliver attractive returns [46][47]