CCC Intelligent Solutions Holdings Inc. (NYSE:CCCS) Q2 2023 Earnings Call Transcript

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Githesh Ramamurthy: Yes. So, I would not say that there’s been a substantial change other than, as I mentioned in the call, we have expanded the use of generative AI from self-service channel to other channels, for example, for staff, for repair facilities, and we expanded that capability to casualty. So, I would say, across the board, the interest level remains very high, and we’ve had tons of conversations since the conference, and a lot of the conversations tend to be around not why, but how and when in terms of usage, deployment and the like.

Tyler Radke: Thank you.

Githesh Ramamurthy: Thank you, Tyler.

Operator: Thank you. Our next question comes from the line of Jeremy [Indiscernible] of Jefferies. Your line is now open.

Unidentified Analyst: Hey guys. This is Jeremy on for Samad Samana. Thanks for taking the questions. So, first, another question on parts. So, you guys recently announced that Toyota selected CCC promote for parts marketing to US dealerships. I guess, can you talk about maybe what is the uplift of the win like that? And kind of what are the economics when a customer chooses to add like that CCC promo module?

Githesh Ramamurthy: Sure. We — first of all, we don’t comment on any particular customer or the economics from any one customer. And so I’ll give you kind of in a macro sense. So, we have a number of OEMs that are actually customers on our platform. And what they do is that they make pricing, that provide simpler capabilities in terms of how their parts program can be more streamlined and adopted by repair facilities who are buying the parts and for insurance, so they might put packages together. So, essentially, we work with all OEMs in some way, shape or form. And Toyota is one where we happen to actually make a formal announcement, but there are several others that we actually work with as well.

Unidentified Analyst: Okay, got it. And then someone else mentioned, it’s good to see that point of growth from emerging products. I guess how should we think about maybe the incremental investment required, whether that’s kind of to develop these products further or to take them to market?

Githesh Ramamurthy: Yes, I would say this is what we saw if you roll the clock back, I would say, four quarters, right? So, if you roll the clock back four quarters, we start to see that we have some unique competitive advantages with generative AI with the platform, with the network, and so we started increasing our development spend starting about four quarters ago and added 20% more capacity. And the beauty of that is a lot of those people are now up to speed, contributing very productively. And so this capability is being applied in really a whole range of areas, for example, in subrogation, in diagnostics, in broader STP, in casualty. So, we’re really starting to see that ability to come on stream. And if you look at second half of the year, the goal is not to add that kind of capacity because we now need to digest and make sure these releases are being used by customers and tested and the like. And we feel very good about the capacity and the capability we have.

Unidentified Analyst: Got it. Thanks for taking my questions.

Githesh Ramamurthy: Welcome.

Operator: Thank you. Our next question comes from the line of Chris Moore of CJS Securities. Your line is now open.

Chris Moore: Hey guys. Thanks for taking our questions. So, Githesh, you had mentioned this in your prepared remarks and you touched on it a few times also. But you talked about the CCC expanding the use case for Estimate-STP’s AI-based computer vision technology into the repair facility, field adjuster channels. Can you maybe talk a little bit more about how that works and how soon products would actually come to market there?

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