Good morning, and welcome to the Clarivate Analytics Q4 twenty nineteen Earnings Conference Call. All participants will be in listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to your host today, McDonoughue, Senior Vice President and Head of Investor Relations.
Please go ahead.
Thank you, Keith, and good morning, everyone. Thank you for joining us for the Clarivate fourth quarter and full year twenty nineteen earnings conference call. With me today are Jerry Stead, Executive Chairman and Chief Executive Officer Richard Hanks, Chief Financial Officer Huqvar Ahmed, President of Science Group and Jeff Roy, President of the IT Group. All will be available to take your questions at the conclusion of the prepared remarks. As a reminder, this conference call is being recorded and webcast and is copyrighted property of Clarivate Analytics.
Any rebroadcast of this information, in whole or in part, without prior written consent of Clarivate is prohibited. This morning, Clarivate issued a press release announcing our financial results for the period ending December 3139. The release as well as an accompanying supplemental presentation is available on the Investor Relations section of the company's website, clarivate.com, under Events and Presentations. During our call, we may make certain forward looking statements within the meaning of the applicable securities laws. Such forward looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the business or developments in Clarivate's industry to differ materially from the anticipated results, performance achievements or developments expressed or implied by such forward looking statements.
Information about the factors that could cause such actual results to differ materially from anticipated results or performance can be found in Clarivate's filings with the SEC and on the company's website. Our discussion will include non GAAP measures or adjusted numbers, including adjusted revenue and adjusted EBITDA. Clarivate believes non GAAP results are useful in order to enhance an understanding of our ongoing operating performance, but they are a supplement to and should not be considered in isolation from or as a substitute for GAAP financial measures. Reconciliations of these measures to GAAP measures are available on our earnings release and supplemental presentation on our website. And after our prepared remarks, we'll open the call up to your questions.
And with that, it's a pleasure to turn the call over to Jerry.
Thank you, Mark, and thanks to all of you for joining us this morning. 2019 was an extraordinary and highly productive year for Clarivate. I'm so very, very proud of my Clarivate colleagues and the significant progress our team made on both strategic and financial initiatives. Their collective accomplishments were a leading contributor to driving our transformation and driving our growth last year and positioning us for continued success in 2020 and the years beyond. We were last officially with you at our Investor Day in November.
And when I think of what we have gotten done and the multiple priorities we've managed since then, I'm even more grateful for the talented and committed Clarabate team. And we're just getting warmed up. We hit the ground running in 2020 with the acquisition of Decision Resources Group, which we will close within the next few days. More on this strategic acquisition in a minute. And as you know, we have just completed a very successful equity offering.
Our many thanks to all of you for your support. We're announcing very solid results for our fourth quarter and full year 2019, delivering growth on both the sequential and year over year basis. Richard will cover the financials in detail, but before I'll highlight some of our major accomplishments, Now let me provide an overview of our results. Adjusted revenue for the fourth quarter increased 4.2% on a constant currency basis. Adjusted EBITDA was up 11.6% and our adjusted EBITDA margin improved by 200 basis points to 33.2% compared to last year's fourth quarter.
Our growth was driven by pricing and new business across both our science and IP product groups. We also started to see the benefits of our operational cost efficiency initiatives. On a full year basis, 2019 was in line with our full year guidance and improvement over 2018. Adjusted revenue increased 2.5, adjusted EBITDA increased 7.7% and adjusted EBITDA margin improved to 30.2%. Excluding the Mark Monitor divested assets, the sale of which we completed on January one of this year, adjusted revenue increased 3%, adjusted EBITDA increased 8.6% and adjusted EBITDA margins was 32%.
We expect to see our margin continue to improve in 2020 as we will benefit from price increases, improved retention rates and the ongoing cost saving initiatives as well as new product introductions. Subscription revenue in 2019, which represented 82 percent of our total revenues, improved as a result of new business within both groups. As expected, we delivered improved adjusted free cash flow of $100,000,000 in 2019. We are clearly headed in the right direction and expect our adjusted free cash flow to more than double to $220,000,000 to $240,000,000 in 2020. Our solid performance in 2019 is the direct result of executing on strategic actions and financial improvement.
We streamlined and simplified our business by consolidating into two product groups. We completed significant product improvements across our portfolio as we continue to build on delivering an exceptional experience to our customers, which will increase our price yields as well as retention rates. We also initiated two customer delight surveys, which provided us with actionable items that will help us improve our retention rates into the mid-90s range and improve our interaction with customers and drive price increases into the 4% to 5% range over the next few years. We'll be launching our first '20 '20 survey during the second quarter and look forward to sharing the results with you. We started to optimize our portfolio through a series of tuck in acquisitions, including Dartz IP and SequenceBase and divested our non core brand protection assets within Mark Monitor.
We took a series of steps to improve our margins and cash flow through organizational efficiency initiatives, actions which will deliver 70,000,000 to $75,000,000 of annual run rate cost savings exiting 2020. We completed the buyout of the tax receivable agreement resulting in a significant savings of cash over many years and we wrapped up the transition services agreement with Thomson Reuters six months ahead of the schedule. Our capital structure was enhanced by refinancing our debt to improve the weighted average cost and lower interest expense by approximately $18,000,000 We completed two secondary offerings in 2019, culminating in the sale of more than 89,000,000 ordinary shares previously held by private equity. There was a lot of work to be done and we accomplished a lot, placing us in a much stronger position both financially and strategically compared to this time last year. We will exit 2020 in an even better position as we realize the benefits of these actions as well as the addition of DRG.
The strategic acquisition of DRG more than doubles the size of our life science business. The business is a complementary fit with our life sciences group and creates the leading information insight solutions provider industry. By combining Clarivate's leading preclinical products with DRG's commercialization solutions, we are positioned to deliver a complete data driven solution across the entire life sciences, drug, device and medical technology value change. DRG brings more than $200,000,000 in annual revenue and $77,000,000 in adjusted EBITDA, including our expected cost reductions and synergies of $30,000,000 over the next eighteen months. Our sales organization is very excited about the cross selling opportunities in high growth international markets.
We will leverage our global footprint to maximize the benefits of this acquisition. We were very pleased at the overwhelming interest in our recent equity offering to fund part of the $900,000,000 cash portion of the acquisition price. We thank our shareowners for their support. We issued 27,600,000.0 shares in total, realizing net proceeds of $540,000,000 We also secured $360,000,000 of funds through a senior secured term loan B issued at par with interest rates consistent with our existing term loan facility. Last week, we announced we will redeem all of the outstanding public warrants.
Prior to the announcement, approximately $24,000,000 public warrants were exercised, each entitling the holder to one ordinary share of Clarivate and yielding exercise premium proceeds to us for approximately $276,000,000 We will use the cash to provide the best return possible to our shareholders. Turning to our updated 2020 outlook, which includes contribution from DRG and excludes the Mark Monitor assets that were divested on January one of this year are adjusted revenue in the range of $1,160,000,000 to $1,190,000,000 adjusted EBITDA in the range of $395,000,000 to $420,000,000 adjusted EBITDA margins of approximately 34% to 35% and adjusted free cash flows in the range of $220,000,000 to $240,000,000 We added a new metric, adjusted EPS with the range of $0.53 to $0.59 per diluted share. Our target tax at twenty twenty will be 6.8% organic revenue growth and adjusted EBITDA margins of 38% to 40%. As a result of the virus, we may experience some modest fluctuations in revenues in the first half of the year due to the timing of new businesses and our renewals in China. We currently believe our business in the country will improve during the second half of the year and will have a minimal impact on our full year revenues.
Before turning it over to Richard, I do want to thank again my colleagues at Clarivate for their continued hard work, dedication and commitment and their sense of urgency. I also want to thank our shareholders for their continued support. We have many additional important initiatives underway that will move us closer to our vision of improving the way the world creates, protects and advances innovation by focusing on our four strategic goals this year of continuing to improve our colleague engagement score, further increasing our customer delight score, delivering strong top and bottom line growth and providing superior investor returns. We will continue to drive improvement in our execution, our financial performance and our shareholders' return. 2020 will be, in fact is, another exciting year for our company.
We look forward to sharing our progress with you. Richard? Thank you, Gerry. Clarivate had a very solid fourth quarter, closing out our first year as a new publicly traded company on a high note. Reported revenues for
the fourth quarter of twenty nineteen increased by $10,000,000 or 4% to $255,000,000 compared to the prior year period. This represents growth of 4.2% on a constant currency basis. For the fourth quarter, '70 '9 percent of our revenues were US dollar denominated and there was minimal impact from foreign exchange as compared to prior year. In November 2019, we announced the divestiture of several Mark Monitor assets and completed the divestiture on January one of this year. Excluding the divested products, revenues for the fourth quarter increased 4.9 on a reported basis and were up 5.1% at constant currency.
Turning now to our revenue profile. Firstly, when looking at revenue by geography for the fourth quarter, we have a consistent balance across the regions with 46% in The Americas, 30 1 Percent in Europe, Middle East and Africa, and 23% in Asia Pacific. Secondly, and moving on to revenue by type, adjusted subscription revenues increased by $11,800,000 or 6% to $209,500,000 for the fourth quarter. The increase in subscription revenues was driven in part by price increases as well as new business with the largest dollar increases in the quarter coming from the Web of Science, Life Sciences, CompuMark and TechStreet product lines. Subscription revenues accounted for 82% of total revenues in the quarter compared to 80% in the prior year period.
Annual contract value or ACV of subscription based contracts at the end of twenty nineteen represented growth of 3.5% at constant currency compared to same period last year. Excluding Mark Monitor brand protection, as I said, divested with effect from January the first of this year, the year over year growth in ACV on a pro form a basis was 4.5%. Transactional revenues, which represented approximately 18% of total revenues in this year's fourth quarter, decreased by $2,200,000 or 4,600,000.0 to $45,600,000 for the quarter. TechStreet delivered another strong transactional quarter, but was offset by a decrease in backfile sales within Web of Science, lower search volumes within Comdiumark and lower IP services revenues. Looking now at revenue performance across our two product groups.
Science group revenues increased to $146,500,000 a growth of 6.4% as reported. The increase in Science group revenues was driven by subscription revenue growth due to new subscription business and price increases. The Science Group accounted for 57% of revenue in the quarter with its weighting increasing by 130 basis points from the prior year period. Intellectual Property Group revenues increased to $108,600,000 in the quarter, resulting in growth of approximately 1%. IP Group revenues were driven primarily by subscription revenue increases at Techstreit and CompuMark as well as transactional revenue growth at Techstreit, partially offset by lower transactional revenues and other products.
Excluding the divested Monterey assets, IP Group revenues increased by 2.9% compared to last year's fourth quarter. Turning now to adjusted EBITDA, which increased by $8,800,000 or 11.6% to $84,600,000 in the fourth quarter of twenty nineteen, which compared to $75,800,000 in the prior year period. The increase reflects higher revenues, which converts to strong flow through of revenue growth to EBITDA of 90% during the fourth quarter. Adjusted EBITDA margin was 33.2% in the fourth quarter compared to 30.9% in last year's fourth quarter, an increase of two thirty basis points. Expenses in the fourth quarter were essentially flat to prior year as we see the benefits of our cost optimization programs flowing through and contributing to improved margins.
Excluding the divested Mark Monitor assets, adjusted EBITDA increased by 13.9% for the fourth quarter adjusted EBITDA margin in the fourth quarter was 35.2%. As Gerry mentioned, we are focused on improving margins and expect to see them to continue to improve in 2020 as we deliver on our revenue targets and realize the benefits of our cost saving initiatives. Our adjusted net income was $42,000,000 for the fourth quarter, an increase of 31% compared to the prior year period. Weighted average diluted shares outstanding used to calculate adjusted EPS were $330,000,000 shares in this year's fourth quarter compared to $219,000,000 shares in last year's fourth quarter as a result of the merger with Churchill Capital Corp. May twenty nineteen.
Despite a 31% increase in our adjusted net income in the fourth quarter, our adjusted diluted EPS was $0.13 per diluted share compared to last year's fourth quarter at $0.15 due to the higher share count. If normalized, the results for the fourth quarter of twenty eighteen would reflect $0.10 per diluted share. In addition, excluding the divested Mark Monitor assets, adjusted fully diluted EPS in the fourth quarter of twenty nineteen was zero one four dollars As we did last quarter, we will continue to provide you with a slide in the earnings supplement explaining the diluted share count to assist you with your analysis. Please see the Investor Relations section of our website to find a copy of the supplemental presentation. Turning now to our full year results.
On a full year basis, adjusted revenues in excluding the impact of deferred revenue adjustments and revenues for the IPM product line, which we divested in October 2018 increased $23,600,000 or 2.5% on a reported basis and 3.1% for the year on a constant currency basis. The increase was driven by a 3.7% increase in subscription revenues due to price increases and new business, particularly within the Science Group. Adjusted EBITDA for 2019 of $294,000,000 increased $21,000,000 or almost 8%. Adjusted diluted EPS was $0.53 per share compared to $0.58 in 2018, While adjusted net income in 2019 increased 22% compared to 2018, our full year EPS was impacted by a 32% increase in weighted average common shares used in the calculation. If normalized, results for the full year 2018 would reflect $0.43 of adjusted EPS.
In addition, and excluding the divested Mark Monitor assets, adjusted fully diluted EPS for the full year twenty nineteen was $0.56 per share. We're required to report standalone adjusted EBITDA on a trailing twelve month basis pursuant to the reporting covenants contained in our credit agreement and indenture. Standalone adjusted EBITDA takes adjusted EBITDA and includes three permitted add backs. Firstly, an adjustment for standalone expenses. Secondly, it includes the impact of pro form a cost savings we have implemented.
And thirdly, the impact of foreign exchange. Standalone adjusted EBITDA increased 8.1% to $336,000,000 for the full year 2019 compared to $3.00 $9,000,000 for the full year 2018, an increase of $25,000,000 Turning now to cash flows. Our cash flows from operations for the full year 2019 increased $118,000,000 which compared to a use of cash of $26,000,000 in 2018. The significant turnaround in operating cash flows was driven by firstly, a lower operating loss, which included the impact of a €39,000,000 gain on legal settlement reported in the third quarter of twenty nineteen. Secondly, a decrease of $47,000,000 in transition, integration and other related expenses as a result of completing the carve out from Thomson Reuters and the establishment of standalone company infrastructure.
And thirdly, better management of working capital, with this being a source of cash in 2019 of $4,000,000 as compared to a use of cash in 2018 of $27,000,000 Capital expenditures for the full year 2019 were almost $70,000,000 up from $45,000,000 in last year's same period. The increase is partially due to a shift in focus to new product development, whereas prior year activities focused on carve out and separation activities. We also saw an increase in capital purchase in the fourth quarter. During 2019, '8 million was spent on capital projects within the mark monitor divested businesses. These funds can now be targeted towards the growth segments of our business.
Free cash flow improved to $48,000,000 for the full year 2019, up from a negative $72,000,000 use of cash in the prior year period, driven by a turnaround in operating cash flow. Adjusted free cash flow, which excludes the transition, transformation, integration and transaction related costs and the legal settlement increased 23% to $101,000,000 compared to 2018. Turning to the balance sheet, cash and cash equivalents were $76,100,000 at year end 2019 compared to $25,600,000 at year end 2018. Our total debt outstanding at the end of twenty nineteen was approximately $1,700,000,000 which included a £65,000,000 draw on our revolving credit facility during the fourth quarter to fund the Darts IP acquisition that has been subsequently repaid in the first quarter of twenty twenty. Accordingly, our net leverage ratio at the end of twenty nineteen was 4.7 times, an improvement from 6.4 times at the end of twenty eighteen.
The improvement in leverage was driven by the debt pay down in the second quarter as a result of the merger with Churchill Capital Corp. A couple of weeks ago, in conjunction with funding the DRG acquisition, we also raised $360,000,000 under an incremental Term Loan B facility due 2026 with an interest rate of LIBOR plus three twenty five basis points. In addition to the strategic and financial benefits of the DRG acquisition, we also expect it to be leverage neutral. On a pro form a basis, including DRG's adjusted EBITDA contribution of $77,000,000 our net leverage ratio would still be 4.7 times. In summary, twenty nineteen was a year of growth and significant operational improvements and we are on a mission to continue to deliver improving financial results for our investors.
With that, I'll now turn the call back over to Gerry.
Thank you, Richard. This concludes our prepared remarks. We are very well positioned for success and really excited about the opportunities ahead of us to continue to profitably grow our business. Please do join us for our twenty twenty Investor Day to be webcast on May 19, when we will be sharing a thorough review of Clarivate and our growth strategies. We're now ready to take your questions.
As a reminder, please limit yourself to one question then return to the queue. Operator, please.
Yes, thank you. We will now begin the question and answer session. And the first question comes from Andrew Nicholas with William Blair.
Hi, thanks for taking my question. Wanted to walk through first the changes to 2020 guidance. It looks to me like at the midpoint, you added about $215,000,000 or so to the top line guide, which if I'm doing the math correctly, imply, you know, 20%, twenty five % growth at DRG in 2020 if I annualize its revenue impact. So I guess my question is, can you confirm that DRG is the only change to your guidance in 2020? And then second, if that is the case, what gives you confidence in that level of growth acceleration this year?
Yes.
Good question. Just as Richard will pick up in just a second. But remember, we've only got ten months built into the guidance for DRG. As I said, we expect to close in the next few days. We've assumed ten months.
But Richard, just pick up the rest because it's a good analysis. Exactly right. So we've
got ten months of DRG included in 2020, and we also have a full year of contribution from the Dartz IP transaction that we completed at the November 2019. So those are the primary drivers of the year on year growth or the year on year change in consensus year on year change in guidance given in November.
Okay. So I do I
No. Go ahead because you're gonna ask part b. Right? Well,
yeah, I know I know that we're we're limited to one here. I just I'm just trying to understand, you know, what how you get to, you know, that such a strong growth rate. Obviously, I think you had said that DRG was growing upper single digits or 9% in '19, and I don't think Dart's IP is a particularly large, contributor. So I'm just just interested in what makes you so confident in that strong of growth or what are the underlying drivers at DRG that gives you that confidence?
And if you go back and look at what we gave you guidance earlier for our base business at Clarivate, that's strong growth too. What I thought you were going to say, so I'll make it up for you, is question B is really strong growth in adjusted EBITDA. It's about 38% year over year. And that's three things. One, our commitment that we told you we would deliver as we've gone through all the cost reductions in 2019 and through 2020, as Richard talked about, where we'll exit 2020 with $75,000,000 in total on that.
It includes a small part. I think we publicly announced it would be 10,000,000 with DRG for the first year and a balance of 20,000,000 more, 30,000,000 in 2021. So it's got a lot of growth. If we can figure out a way to do that every year, we would, but let's do it for 2020. Thank you.
Next question.
Yes, again, that comes from Shlomo Rosenbaum with Stifel.
Hi, thank you very much for taking my questions. Hey, Richard, guidance is really strong, particularly on the EBITDA side as well. But in the fourth quarter, I would say the EBITDA just seemed kind of lighter than expected. You guys came out for the full year towards the lower end of the adjusted EBITDA guidance expectation that you guys provided. Could you just walk through like what were some of the puts and takes?
What were some of the things that happened with divestitures? And how did that kind of track through the year and then since the third quarter?
Good to hear you, Slomo. Actually, was a very strong fourth quarter in EBITDA, the highest EBITDA margin quarter that this company has ever had. Even stronger with an EBITDA margin if you exclude the pieces of Mark Monitor that we sold. So sorry if you felt it was light, but it was not. It was right on the button we expected.
And it sets us up well as we move into 2020. Richard?
I think that's right. Q4 was essentially 85,000,000 of adjusted EBITDA. That was up nearly 12% year on year. We kept costs essentially flat year over year for the quarter. We had great momentum on top line, particularly in subscription revenues, which were up 6%.
So all in all, we our view is we closed out the year strongly, and the we're starting we're seeing the benefits of the cost optimization program coming through. And I would add that the governance we have around cost management is very high. And so we are excited about 2020 and continuing to drive margins upwards. Richard. I'm
just comparing to February that versus the February to 03/10. That's what I'm comparing over there.
Understood. And
let me just add to that, Soma, because it's a fair question for sure. That guidance was given on January fourteen of twenty nineteen. And we put that together about six hours before we announced the deal. And so I am very proud of what we actually delivered inside the range of both cases. So I understand your question, that's exactly what happened.
As I said, if you look back, you'll see that it was our best quarter in history. But more exciting is what you said about 2020. It's strong guidance and we look forward to delivering against that. Thanks, Lomo. Next question.
Yes. Thank And that comes from George Tong with Goldman Sachs.
Hi, thanks. Good morning. Your 2020 EBITDA margin guidance does imply material margin expansion from 2019 levels of 30%. You had cited pricing increases, improved retention rates and cost efficiencies of drivers of the margin expansion. Can you just elaborate on these factors, where you expect to see the most contribution to margin improvement?
And what going forward might cause the rate of margin expansion to potentially moderate from what you expect to see this year? Thank you.
Two quick comments. I said that our goal when we exit 2021 was 38% to 40%. So don't expect this to moderate at this point because that's our goal, George. But great question. Richard, pick up the pieces, please.
Yes.
I mean the key for 2020 is continuing to deliver improved top line performance, and that's really going to be driven by the strong momentum that we see coming to 2020 from the subscription book of business, the expectation and plans that we have around improving renewal rates, given the product improvements that we've made over the last eighteen months and complementing that with additional price increases, again associated with improving renewal rates. So the objective is to continue to drive the Clarivate core business revenues upwards in the way that we've demonstrated sequentially during 2019. Allied to that is keeping, as I referenced earlier, a very tight grip on expenses. So as we know as you know, we have very strong protocols around weekly headcount approvals. Headcounts and headcount related costs represent two thirds of our expense base.
We have a very formal PMO in place that is focused on cost the cost optimization programs that we have across the business, technology, content, facilities. We're continuing to execute well against that program. And that program will wrap up pretty much at the end of this year other than in the technology space, where during the first quarter of twenty twenty one, we'll be rounding out the insourcing of application development activity. As you know, nearly 50% of application development work is done by third parties who are expensive. And so we want to bring that work in house.
And so we will close out the execution of the cost optimization program for Clarivate Core Q1, early Q2 twenty twenty one. And then as Gerry referenced earlier, we'll be completing the DRG transaction in the next few days. And we have an integration team lined up that will be focused on cross selling to continue to drive top line growth. We're tremendously excited about the assets which DRG brings to our Life Sciences business. And in addition, we've identified through our rigorous due diligence process some interesting and attractive expense synergies that we'll be executing during the next twelve, eighteen months.
So combination of top line growth and very strong professional management financial management of the business.
Thanks, Richard. Thanks, George. Next question, please.
Again, that's Seth Weber with RBC Capital Markets.
Hey, guys. Good morning.
Good morning. How are you?
Doing doing doing well. Thanks. How about yourself? Always good. Hey.
I wanted to go back on the pricing commentary a little bit. It sounded like in the prepared remarks, it's stronger on the science business versus the IP. I just wanted to kind of flush out if that's the right message that you're trying to give. And I think previously, you had talked about pricing for 2020 being up in the kind of like low 3% range. Is that still the right way to think about it?
Yes.
No, Zedd, let me just pick up, and then I'll have Richard take the rest of the piece. But we as we've said consistently, almost no price increase in 2018 to 2.1% in 2019, planned 3.1% to 3.2% in 2020. So you're right. We also said in our remarks that we expect in the years ahead to see 4% to 5% pricing power as we sell value in the future. But Richard, just pick up on the split question that Zeph had.
Yes. I think in terms of yields, what we see is the price increases we're able to enjoy are slightly higher in the Web of Science portfolio because that is the suite of products that has the highest retention rate, and there's a correlation between our ability to get price yield and retention rates. So as the retention rates on our other across the rest of the portfolio improve due to the significant application development work we've done, very focused on client experience UIUX, we will expect to see yields price yields from the other products also start to pick up. And that's the principal driver across the improvement in price yields we've planned for in 2020. As Gerry referenced, average price yields 2.1% in 2019, looking to add at least 100 basis points to that in 2020.
Thanks, Seth. Good question. Thank you. Next?
Yes. And our next question comes from Zach Cummins with B. Riley FBR.
Hi, Yes. Hi, good morning.
I just had a question around your organic business. I mean, just given some of the concerns that you laid out here in the first half of the year, what's your confidence in really reaching that 4% to 6% organic growth target for this year?
Well, we build it into the plan, and I don't miss plans. So our confidence level is very high, Zac. What we were just to be I'm sorry, Zach. What we were saying just to be clear is with the uncertainty going on, particularly in China right now, that we may see a shaft of some of the renewals into second half of this year from the first half. What's really important though, it's amazing.
We've had our entire China team and remember, we don't sell product of hardware, etcetera. We've had our entire team working out of their homes. And it's remarkable, without forecasting q one. We've done a remarkable job at this point of of the renewals taking place, new sales, etcetera. So I feel really good.
Our only caution was it's a bit of an unknown. What we emphasized though was the second half, we expect to pick all of that up plus. But your question's a great one. Our confidence level of delivering and you're right, we said way back when, January of last year, Richard and I said we'd do 4% to 6% exiting 2020. And we said we'd do 33 to
no. 35 to 38.
30 five to 38, thank you, of EBITDA. And I would tell you our confidence level on both of those is very, very high. And that's why we gave you our not guidance, but our goals of the 6% to 8% exiting 2020 on revenue growth 2021. '20 '20 '1, thank you. And our 38% to 40% exiting 2021 on EBITDA.
And we told you, and we've said this consistently, this just becomes a mid forties business with time. So our target clearly is to try to exit 2021 with a four in front of it. Thank you. Good question.
Next, please. Thank you. And we have Paul from Stolmer Rosenbaum with Stifel.
Let me back in. No, I'm just kidding with you. I want to just ask you a little bit about some of the new product development that you're doing. This is clearly a shift from the historical trajectory of the business and there's a lot more focus in it. Can you just talk about what's gaining the most traction right now?
What do you see kind of gaining more traction through the year? And then just as an aside, Richard, maybe you can just tell us how much revenue actually comes from China so people can just pine and put a box around that in their mind. Thanks.
I'll help you with that. We don't, Slo Mo. We don't disclose the revenue by country. But I'm happy to have Jeff start and Mukhtar pick up on your question because it's a great question. We've got more new product being delivered, having been delivered in 2020 than this company's had in probably, I don't know, ten, twelve years.
So Jeff, you start. You've got a lot to say. And then, Mukhtar, you pick it up, please.
Yeah. Sure. Thanks, Jerry. I mean, I guess what I would start with is saying that there's three real themes here. I mean, one, continuing the theme that Richard talked about regarding the customer experience.
So we're continuing to invest in the Durban innovation, interface. We expect that to drive growth and retention. We had a release earlier, this year around the analysis tools in the CompuMark business, which solves a lot of customer experience problems that were historically associated with the CompuMark business. We are working very, very hard around integration activities, particularly around, the CompuMark and Derwent business with the Darts IP content. That was a phenomenal acquisition of content that we think is gonna help us, expand revenue into both the trademark and and patent space.
And then lastly, I would say there's a fair amount of effort that we're focused on, around analytics and what I would call the IP cloud. I think our our products, as Jerry's mentioned in the past, are based on a phenomenal set of really difficult to replicate data assets, and our intent is to decouple those data assets from, the the legacy products in such a way that it allows our customers to have more flexibility in terms of how they solve business problems with the data. So as we integrate our content, streamline, our applications to solve more customer use use cases and then obviously focus on on completing the integration promises we made with the Dart's IP acquisition, we expect that to start to accelerate growth in the IP space.
Thanks, Jeff. Mukhtar?
Yeah. Just just to pick up on this. There's there's there's really sort of two themes here, new products and then, investment in some of our core products, which, you know, have, you know, real real recognition, as premier products within, within the markets that we serve. And, you know, just if we look at, 02/2019, particularly q three, q '4, we released a series of, of of new products, and enhancements for Cortellis Cortellis Digital Health. You know, we launched the new version of our, integrity preclinical product, under Cortellis.
We also launched our content as a service offering, which is, you know, essentially a data as a service offering for the marketplace. On our Web of Science platform, you know, we released a number of key offerings, publisher analytics, particularly, for the the publishing market through our ScholarOne product and so forth. And and all of those releases, we expect, traction and further adoption of those during the course of 2020. And in addition to that, we, you know, we do have planned, you know, a series of new products that we'll announce during the course of 2020 that really focus on, going deeper with our existing customers, and actually also, perhaps being attracted to some adjacent markets that are extremely relevant to us.
Thanks, Mukhtar. Great. Thanks, both of you guys. Next question, please.
Yes. That's another follow-up from Seth Weber from RBC Capital Markets.
Hi. Thanks for taking the follow-up. I just on the back of that question, I just wanted to kind of maybe, Jerry, get your sense for where you think you are in the kind of the sales force restructuring. Do you feel like you're most of the way through? You guys have the team has good footing, good traction at this point?
Or do you think that that kind of which inning are we in, in the sort of the sales force restructuring and going to having the team being fully loaded going to market? Thanks.
No, great question, Seth. That's two steps to this question. We go into 2020 with a great sales force set up. We've been in all three of the regional sales kickoffs, energy levels great. We've got great we delivered commission plans and quota plans on January year.
Everybody at every meeting had them. So I feel really good about that. And we've come a long, long way. Flip side is, as you know, we are setting up three global centers of inside sales. And that is in process and will close out as we go into 2021.
That will be the next huge step Because we'll take about 80% of our customers, a little less than 20% of our revenue, and bring that into inside sales. Once we do that, we'll see retention rates increase and that's long, long tail significantly. And most importantly, our existing field sales team will be able to focus as we start to put in global account teams based on industrial markets that we sell into. So that biggest impact will hit in 2021. So think about it as a two piecer.
Feel really good about where we're kicking off the year. I know Jeff, Mukhtar, Richard and I all feel great about that. And then as the year transitions, we'll move more and more to where we give the load, if you will, of the smaller customer to inside sales. And we will see a positive impact in 2021 because of that, which is part of the reason we said the 6% to 8% organic growth at the end of 2021. Great question.
Thank you.
Thank you, guys.
Next question.
Okay. You. Actually, that concludes our question and answer session. I would like to turn
the conference just close with saying thank you all very, very much. When we said we're excited, we are. The progress is so fun to see. We're eager to close RBC. I forgot to tell you that, Jeff.
You weren't even aware of that, were you, Bogdan? So we will close the acquisition in the next couple days, but I'm very eager to see you all on May 19. It will be a great day. We'll do is say, here's what we said in November 12, and here's where we are and here's where we're going to go. Thanks, everybody, very much.
Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.