Cannae (CNNE) Q4 2024 earnings summary

Executive summary

• Strategic plan focused on increasing NAV, improving portfolio company performance, making new private investments, and returning capital to shareholders.

• Actions included the $1.2B sale of Alight's payroll division, new investments in JANA Partners and Watkins Company, and significant share repurchases.

• Internalized management and aligned compensation with shareholder interests; Bill Foley returned as CEO.

Financial highlights

• Q4 2024 total operating revenue was $110M, down 8% year-over-year, mainly due to lower restaurant revenue.

• Restaurant operating expenses were $107M, 81% of total operating expenses, down 300 bps from Q4 2023.

• Cost of restaurant revenue improved by 20 bps year-over-year and 200 bps sequentially.

• Net losses from equity method investments were $12M, a material reduction from the prior year.

• Aggregate NAV is approximately $1.9B, or $2,978 per share after-tax; shares closed at $19.19, a 36% discount to NAV.

Outlook and guidance

• Alight expects mid- to high single-digit adjusted EBITDA growth and double-digit free cash flow growth in 2025.

• Watkins Company expects improved results in 2025 after mid-single digit sales and high single-digit EBITDA growth in 2024.

• Minden Mill Distilling anticipates significant sales growth in 2025 as new products gain market traction.