Total Operating Revenue: $103 million, a 7% decrease from the prior year. Same-Store Sales: Nearly even for Ninety Nine Restaurant brand with a 0.3% drop; decline attributed to O'Charley's brand. Operating Expenses: $125 million, $27 million lower than the prior year. Net Recognized Gains: $7 million in Q1 2025 compared to $5 million in the prior year. Equity in Earnings and Losses of Unconsolidated Affiliates: $2 million net loss in Q1 2025 compared to $18 million gain in the prior year. Corporate Cash and Short-term Investments: $188 million, offset by $149 million of debt. Dun & Bradstreet Revenue: $580 million, 3.6% constant currency organic growth. Dun & Bradstreet Adjusted EBITDA: $211 million, $9.6 million above the prior year's first quarter. Alight Revenue: $548 million, a 2% decrease from the first quarter of 2024. Alight Adjusted EBITDA: $118 million, a $2 million increase compared to the first quarter of 2024. Alight Leverage: 3.1x EBITDA. Black Knight Football Capital Raise: $133 million, with Cannae contributing $50 million. AFC Bournemouth Valuation: $630 million, based on 2023 season revenue of $203 million.

Warning! GuruFocus has detected 7 Warning Signs with CNNE.

Release Date: May 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Cannae Holdings Inc (NYSE:CNNE) announced a significant capital return plan, including $460 million from the sale of Dun & Bradstreet, with $300 million allocated for share repurchases. The company expanded its strategic relationship with JANA Partners, acquiring an additional 30% stake, enhancing its investment capabilities. Cannae Holdings Inc (NYSE:CNNE) reported strong financial performance from its portfolio companies, with Dun & Bradstreet and Alight exceeding consensus expectations. The company made significant progress in its Black Knight Football investments, including infrastructure improvements and strategic partnerships. Cannae Holdings Inc (NYSE:CNNE) demonstrated commitment to rebalancing its portfolio by selling approximately $1.1 billion of public portfolio stakes since 2024.

Negative Points

Cannae Holdings Inc (NYSE:CNNE) experienced a 7% decline in total operating revenue for the first quarter, primarily due to lower restaurant revenue. The O'Charley's brand underperformed, contributing to a decrease in same-store sales, impacting overall restaurant performance. The company reported a net loss of $2 million in equity earnings from unconsolidated affiliates, compared to an $18 million gain in the prior year. Cannae Holdings Inc (NYSE:CNNE) faced challenges in the casual dining industry, with unstable macroeconomic conditions affecting performance. The company has significant debt, with $149 million offsetting its $188 million in corporate cash and short-term investments.

Story Continues

Q & A Highlights

Q: Congrats, Ryan, on your new role. Could you talk more about the revenue and earnings profile of JANA Partners now that Cannae plans to be a 50% owner? A: Thank you, Ken. While I won't delve into specific revenue and earnings figures, I can say that JANA Partners has significantly higher assets under management (AUM) than when we initially invested, now exceeding $2 billion. The business is performing well financially, and we are optimistic about future investments with JANA that could be impactful for Cannae.

Q: Are there any longer-term plans to potentially increase the ownership percentage of JANA Partners? A: Currently, there are no plans to increase our ownership percentage in JANA Partners. We believe the existing structure works well.

Q: Have there been any recent discussions with Carnot Capital, and what are your thoughts on recent actions taken there? A: Publicly available information can provide insights into our dialogue. We are committed to our strategic plan and remain open to discussions with Carnot Capital or other investors about creating shareholder value.

Q: Could you elaborate on the Vitality Stadium acquisition and its economic implications? A: While the deal hasn't closed yet, we believe the stadium investment and redevelopment are attractive propositions. We opted for redevelopment over a new stadium due to compelling financial analysis. The redevelopment will enhance the stadium's brand and capacity, offering a mid-teens return on investment.

Q: How are you thinking about deploying incremental capital for M&A, particularly regarding Black Knight and other potential acquisitions? A: In the short term, Black Knight won't be a focus for capital beyond the $25 million mentioned. We are returning significant capital from the D&B transaction through share repurchases and dividends. However, we remain open to opportunistic investments that promise attractive returns, while prioritizing stock buybacks.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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