クラリベイト（CLVT）2026年第3四半期決算説明会：リカーリング成長が改善

主要ポイント

• 2026年第3四半期の継続事業からの売上高は4億8200万ドルとなりました。取引ベースの売上高が減少したものの、リカーリング・オーガニック売上高は1.3%増加し、オーガニック売上高全体では0.4%増加しました。
• オーガニックACV（年間契約価値）の成長率は1.8%に達し、前年同期比で30ベースポイント上昇しました。クラリベイトによると、この先行指標は主に価格設定の改善によるものであり、販売数量のトレンドも改善を続けています。
• 調整後希薄化後1株当たり利益（EPS）は前年同期比0.03ドル増の0.21ドルとなりました。フリー・キャッシュ・フローは1億1000万ドルで、年初来の負債削減額は2億9300万ドルに達しました。
• クラリベイトはライフサイエンス＆ヘルスケア部門の売却を完了し、現在は学術・政府機関（Academia & Government）部門および知的財産（Intellectual Property）部門に注力しています。これら2部門を合わせた売上高は約20億ドルで、リカーリング・オーガニック売上高比率は93%に達します。
• 知的財産部門のリカーリング・オーガニック売上高は1%近く増加し、同部門のACVは3年以上ぶりにプラス成長に転じました。
• 経営陣は第4四半期のリカーリング・オーガニック売上高の成長率が2%を超えると予想しており、実現すれば過去3年超で最高の四半期成長率となります。また、2027年のフリー・キャッシュ・フローについては10%〜15%の成長を見込んでいます。

主要財務データ

リカーリング・オーガニック売上高は第3四半期の増収に600万ドル寄与しました。コスト効率化と増収により、1300万ドルのオーガニック利益貢献が生じました。戦略的売却により四半期売上高は4800万ドル減少しましたが、売却対象事業の利益率が相対的に低かったため、利益への影響は抑えられました。

調整後EBITDAマージンは、第3四半期に前年同期比で300ベースポイント以上拡大し、2026年最初の9か月間では200ベースポイント拡大しました。

事業および経営実績

クラリベイトの継続事業は、規模を備えた2つの部門で構成されています。学術・政府機関（Academia & Government）部門は売上高約12億ドルで、リカーリング・オーガニック売上高比率は95%です。知的財産（Intellectual Property）部門は売上高約8億ドルで、リカーリング・オーガニック売上高比率は90%です。

学術・政府機関部門では、5月の提供開始以降、「Web of Science Research Intelligence」が25か国で100を超える機関顧客を獲得しました。クラリベイトは、2026〜2027年のアクティブな商談パイプラインが約2000万ドルに達していると発表しました。また同社はフランスにおいて、クラウドプラットフォーム「Alma」を用いて全国の学術図書館システムを近代化する多年計画プロジェクトに採用されました。

知的財産部門では、リカーリング・オーガニック売上高が1%近く増加し、ACVはプラス成長に転じました。クラリベイトはこの改善要因として、販売組織のフォーカス強化、経営体制の安定化、および新製品の開発を挙げています。

11月の「IP-1」のアーリーアダプター向け提供開始に先立ち、クラリベイトは「フォーチュン・グローバル500」企業15社以上を含む25か国の40以上の開発パートナーと協業していました。アクティブな商談パイプラインには151顧客が含まれています。初期リリースには、10億を超える相互接続されたデータポイントに裏打ちされた特化型AIエージェント5種が含まれる予定です。

全社ベースで、クラリベイトは80を超える市場投入済みのAIエージェント、アシスタント、および機能を備えています。経営陣によると、同社プラットフォーム上でのAI利用量は、前年同期の2.5倍以上に達しました。

業績予想（ガイダンス）

売却されたライフサイエンス＆ヘルスケア部門が非継続事業に分類されたため、クラリベイトは全期間から同部門を除外するように2026年の業績予想を更新しました。

経営陣は、2026年の全体でのオーガニック売上高成長率を約50ベースポイント、調整後EBITDAマージンの拡大を250ベースポイント以上と予想しています。コスト効率化により、約4000万ドルのオーガニック利益成長が寄与する見込みです。

2027年について、クラリベイトの現在の目標には、オーガニックACVおよびリカーリング売上高の成長率拡大、フリー・キャッシュ・フローの10%〜15%増加、純レバレッジ比率の低下が含まれています。2027年通期の詳細な業績予想は2月に発表予定です。

リスクと注視点

取引ベースの売上高の減少が、リカーリング売上高の改善の一部を引き続き相殺しました。またクラリベイトは、主に知的財産部門において売上全体の約1%を占める規模の小さい低利益率の取引ベース製品複数について、縮小・終了（ワインドダウン）することを決定しました。この縮小・終了は1〜2年かけて行われる見込みです。

為替変動が売上高に与えた影響は限定的でしたが、主要通貨バスケットに対する米ドル安や実現取引損失により、利益に対してはより大きな逆風となりました。

第3四半期のキャッシュ・フローは、増税および回収・支払時期に関連する運転資本要件の影響を受けました。クラリベイトはまた、主にインセンティブ報酬の支払いにより、2026年に約3500万ドルの運転資本の減少（使用）を見込んでいます。

アナリスト質疑応答のハイライト

ACVの成長について、経営陣は第3四半期の1.8%増の主因は価格設定であったと述べました。クラリベイトは3%前後またはそれ以上の価格上昇を目標としており、販売数量も改善を続けています。同社は2026年末時点で約2%のACV成長を達成し、2027年にはさらなる改善を実現することを目指しています。

知的財産部門の回復について、経営陣は事業管理の徹底、販売組織のフォーカス強化、および「IP-1」の展開計画を強調しました。決算説明会の時点では同プラットフォームのアーリーアダプター向け提供開始の前でしたが、クラリベイトはIP-1が新規ACVとサブスクリプション維持率の両方を後押しすると期待しています。

負債削減について、経営陣はライフサイエンス＆ヘルスケア部門の売却益を充てて、2028年および2029年満期社債の一部を買い戻す計画であると述べました。配分額は、利用可能なディスカウント、満期時期、受取現金、フリー・キャッシュ・フローに応じて決定されます。同社は2026年通期で約8億7500万ドルの負債削減を見込んでいます。

決算説明会の全文文字起こし

決算説明会の完全なトランスクリプト

経営陣による説明

Operator

Hello, everyone. Thank you for joining us, and welcome to the Clarivate Third Quarter 2026 Earnings Conference Call. [Operator Instructions]

I will now hand the conference over to Mark Donohue, Vice President, Investor Relations. Mark, please go ahead.

Mark Donohue

Thank you, and good morning, everyone. Thank you for joining us for the Clarivate's Third Quarter 2026 Earnings Conference Call.

As a reminder, this conference is call is being recorded and webcast and is copyrighted property of Clarivate. Any rebroadcast of this information in whole or in part without prior written consent of Clarivate prohibited. The accompanying earnings call presentation is available on the Investor Relations section of the company's website.

During our call, we may make certain forward-looking statements within the meaning of 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 business 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 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. Clarivate believes non-GAAP results are useful in order to enhance the 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.

Reconciliation of these measures to GAAP measures are available in our earnings release and supplemental presentation on our website.

With me today are Matti Shem Tov, Chief Executive Officer; and Michael Easton, Chief Financial Officer. After our prepared remarks, we'll open up the call to your questions.

And with that, it's a pleasure to turn the call over to Matti.

Matti Shem Tov

Thank you, Mark, and thank you, everyone, for joining us. The third quarter marks a major milestone in Clarivate's continued transformation. We completed the strategic sale of Life Science and Healthcare segment ahead of schedule. This positions Clarivate as a more focused, higher quality recurring business center on two scaled market-leading segments, academia and government and IP.

Both segments are driving commercial traction and customer validation from our AI-led innovation. Webscience Research Intelligence and IP-1 are strong examples of that innovation in practice. I will discuss this in more detail later. In Q2, we said that we had a building blocks in place to accelerate organic growth. The progress we made this quarter is a proof that we delivered on our commitments.

Today's message is straightforward. We have a clear path to accelerating sustained organic growth expanding free cash flow and reducing leverage, all of which will continue to create long-term value for shareholders.

Q3 results reflect improving recurring revenue strong profitability and cash generation, continued debt reduction and meaningful customer validation of our technology and AI capabilities. Organic ACV growth was 1.8%, up 30 basis points year-over-year.

As a reminder, this KPI is our leading indicator for future organic revenue growth. Recurring organic revenue improved to 1.3%, an increase of 110 basis points year-over-year. Within AMG, organic ACV and subscription revenue growth was approximately 12%. We are excited that in France, our best selected climate to modernize its national academic average system. This multiyear agreement will replace legacy systems with a unified Alma cloud-based platform that combines AI-powered discovery and library services across thousands of academic varies and institutions.

This is a powerful validation of both the scale of our platform and the critical role target plays in the global research ecosystem. In IP, reoccurring organic revenue grew nearly 1% and ACV return to positive growth for the first time in over 3 years.

In terms of IP wins, the U.S. PTO, selected Clarivate to power image search across the U.S. trademark register placing our image recognition capabilities within a core trademark workflow. This reinforces the value of combining truster proprietary data, deeply embedded workflow solution and AI to solve the mission critical needs of our customers.

Clarivate is now a scaled focused and highly recurring business with $2 billion of revenue and 93% recurring organic revenue mix. Our solutions span 3 complementary models. Intelligent Solutions representing 50% of revenue, workflow solution representing 25% and technology-enabled services representing 25%. This combination provides trusted decision support, embedded software and expert-led services that customers rely on to execute critical work globally.

AI is enhancing the value across these offerings. We now have more than 80 in-market AI agents, assistance and capabilities supporting our customers at an increasing pace. Our platform has handled more than $465 million AI API costs, which is more than 2.5x the volume compared to this time last year.

This demonstrates the scale at which AI is already deployed across Clarivate, but scale of deployment is only part of the story. Clarivate's ability to apply AI to trusted content and establish workflows while still maintaining trust, governance and quality is what matters to customers. This is further evidence of why we believe AI is strongly positive for our business.

Let me turn to our 2 segments, starting with academia and government and the strength of our position across the global research ecosystem. ANG is approximately $1.2 billion franchise with 95% recurring organic revenue and a deeply embedded position across the global research ecosystem.

Our reach is significant. 99% of the world's top 400 universities use our solutions. More than 120 million students and researcher rely on our products to enhance the outcomes and our data powers 75% of national and regional research assessments.

Our solutions are deeply embedded across research, [which can be] learning, funding decision and Lavie operations. Our advantage comes from bringing together scholarly content and institutional workflows as well as research intelligence in a proprietary ecosystem. These assets support a resilient recurring revenue stream and creates the opportunity to build new AI-enabled products.

Web of Science Research Intelligence is a good example of what I just outlined. Following its launch in May, the platform has now secured more than 100 institutional wills across 25 countries. Importantly, we have developed an active sales pipeline for 2026 to 2027 of approximately $20 million, which we expect to continue to grow.

The platform uses agentic AI, 12 institutions address complex questions around Clarivate's strategy impact and funding with output grounded in Clarivate created totted data. This matter because the decisions being made using our platform requires the highest level of provenance expendability and trust.

Early global customer traction support our confidence in market adoption. So the next step is clear: convert that customer interest and pipeline into recurring revenue at scale. We believe these revenue opportunities are both incremental and support even stronger retention for webcams.

Turning to intellectual property. IP is our other scale segment with $800 million of revenues and 90% recurring organic revenues supporting the global IP ecosystem. 90% of the top 100 R&D investors use our solutions. More than 15,000 IP customers well on Clarivate to manage and protect their portfolios and 40 patent and trademark offices, including the 5 largest in the world use our solutions.

The work we support is nondiscretionary and no deferrable. Customers depend Clarivate to create, protect, manage and commercialize intellectual property globally and to save down billions of dollars of intangible value with certainty and continuity. Importantly, the fundamentals of this business are improving. Reoccurring organic revenue grew nearly 1% in Q3 and ACV returned to positive growth.

This represents continued progress and true that we are delivering on our commitments. Our competitive advantage comes from the combination of our IP management software creative patents and trade bank data life cycle services and one of the largest teams of IT specialists in the industry. It also gives us a stronger foundation to introduce the next generation of AI agented platform.

IP-1 brings that strategy to life. IP-1 is becoming an AI-native intelligence layer across the IP life cycle, combining specialized agent, Clarivate proprietary data and trusted intelligence. It is granted in customers' proprietary IP data helped within Clarivate software and inaccessible to general-purpose AI.

We believe that IP-1 can become the intelligence and agenting foundation across the IP life cycle. Ahead of the November early adopter launch, we are working with more than 40 development partners, it was 25 countries, including more than 15 Fortune Global 500 companies. We have established an active sales pipeline of 151 customers, which we expect to increase in the coming months.

The initial release is expected to include 5 purpose-built AI agents and a growing library of agentic workflow skills. They are grounded in more than 1 billion interconnected data points that Clarivate has developed and enriched over decades, supported by our IP domain experts.

Through the IP-1 introduction, we expect to create new revenue streams and improved subscription retention. Let me bring this together. We have taken deliberate actions to improve the quality and performance of Clarivate. Our strategy is working.

We have increased the recurring revenue mix of the business, improved our commercial execution, accelerated product innovation, simplified the portfolio and reduce debt. And increasingly, we are seeing these actions reflected in our KPIs.

Recurring revenue growth is improving IP/ACV has returned to growth, and our new AI-led platforms are tracking customers and building commercial pipelines. Given the sale of life science and health care, we wanted to provide an early look at 2027. The current target is to achieve higher organic ACV and recurring revenue growth alongside increasing free cash flow and lowering net leverage.

We look forward to providing full 2027 guidance in February. I want to leave you with one point. Clarivate today is a different company from the one that began this transformation when I joined as CEO 2 years ago.

With that, Michael will review our financial results in more detail.

Michael Easton

Thank you, Matti. We continue to drive progress towards growth while focusing our portfolio on scaled recurring revenue products. We are excited that IP has returned to positive recurring organic revenue growth in the quarter, and we continue to see organic subscription revenue growth in A&G.

Slide 14 is an overview of our third quarter and year-to-date results compared with the same periods last year. As a reminder, the third quarter and year-to-date financial results were impacted by the sale of the LSM segment in October 2026. And the resulting presentation of the ESN results as discontinued operations for all periods presented.

On the waterfall schedules in the earnings presentation, we have shown the discontinued operations separately to provide visibility of our continuing operations performance and comparability to previously reported numbers. Q3 revenue from continuing operations was $482 million bringing year-to-date to nearly $1.5 billion. The change in the quarter over the prior year was due to inorganic disposals, and the year-to-date over prior year decline of 5% was due entirely to inorganic disposals, specifically the A&G Books business.

As a reminder, this wind down was completed in the second quarter this year, so we will anniversary this impact in the back half of 2027. The third quarter loss from continuing operations was $26 million, essentially flat year-over-year and adjusted EBITDA was flat for the year-to-date and nearly flat for the quarter despite impact from the disposals.

Adjusted diluted EPS in the third quarter was up $0.03 over the prior year to $0.21, bringing the year-to-date to $0.59, which is a 20% increase over the same period last year. Operating cash flow was $166 million in the quarter. The change compared to last year was driven by lower adjusted EBITDA from disposals, higher taxes and working capital requirements due to timing of receipts and disbursements partially offset by lower interest expense.

Please turn you now to Page 15 for a closer look at the drivers of the third quarter comp and bottom line changes from the prior year term. The continuing operations changes over the prior year were driven by 3 primary factors. First, recurring organic revenues grew by $6 million or 1.3%. Offset by decline in transactional revenues, resulting in total organic revenue growth of $2 million or 0.4%. This is our highest recurring revenue growth in over a year, and keeps us on track to improve this metric by 100 basis points from H1 to H2.

The revenue growth, along with cost efficiencies resulted in organic flow through to profit of $13 million. Second, the businesses we are disposing decreased revenue by $48 million with a 25% impact on profit, almost entirely from the wide not A&T books business.

In Q3, we also decided to wind down a couple of smaller, low-margin transactional products, mostly in the IP segment, approximating 1% of total revenues with a negligible amount of profit, which wind down will occur over the next 1 to 2 years.

And finally, while the top line was only nominally impacted due to foreign exchange, we experienced more profit impact due to the weakening in the U.S. dollar against a basket of foreign currencies and realized transaction loss. In summary, a return to organic revenue growth, strategic disposals and disciplined cost management allowed us to expand our adjusted EBITDA margin over 300 basis points versus the same period last year.

Please turn with me now to Page 16 for the same analysis for the first 3 quarters of the year. While year-to-date recurring organic revenue growth of $12 million or nearly 1% has been mostly offset by transactional revenue performance as discipline has completely mitigated this impact, resulting in organic contribution of $23 million of adjusted EBITDA.

The disposals have lowered revenue by $85 million, but due to the low margin results in only a $13 million reduction in adjusted EBITDA. For the comparable period in the prior year, the U.S. dollar was weaker against the basket of foreign currencies, which caused a foreign exchange benefit to revenue but resulted in a profit headwind from foreign currency fluctuations on costs and transaction gains last year that did not recur this year.

Overall, the recurring revenue growth strategic disposals and disciplined cost management drove margin expansion of 200 basis points in the first 3 quarters of the year, an improving trend we expect to continue in the fourth quarter of the year.

Please turn with me now to Page 17 to see how our adjusted EBITDA converted to free cash flow and how we continue to out hit our capital in a disciplined manner to further strengthen the balance sheet. Free cash flow was $110 million in third quarter which was $5 million lower than the same period last year. The change was due to higher taxes and working capital, largely due to the timing of collections and payments, partially offset by lower interest in capital spending.

We used the free cash flow to repurchase another $75 million of notes due in 2028 at a discount of about 2%, bringing the debt reduction year-to-date to $293 million.

Please turn with me now to Page 18 for a look at our full year financial guidance ranges. As discussed in the second quarter of exposing the divestiture, we are updating guidance to account for LS&H no longer being included in our financial results. Our updated guidance ranges for revenue and adjusted EBITDA and related indicators no longer include LS&H's results for any periods this year as they are now treated as discontinued operations.

As a reminder, when we announced the agreement to sell Ellison Agent early July 2026, we provided full year 2026 estimates for this segment of $370 million of revenue and $120 million of adjusted EBITDA, which similar to prior years was seasonally weighted to the fourth quarter. We are also narrowing the full year guidance ranges as 3 quarters of the year are now complete.

Additionally, to more clearly present the ongoing business we have provided guidance ranges for the fourth quarter of the year in the earnings release. We expect our organic ACV to range from 1.75% to 2.25% and note that our IP segment ACV has now returned a positive organic rate.

We expect recurring organic revenue growth to range from 1% to 1.5% for the full year, and importantly, for Q4 to exceed 2%. Our Revenue range is now expected to be $1.965 billion to $1.985 billion, down from the prior year due entirely from the strategic wind-down of A&G Books business.

With that wind down completed in the second quarter of 2026, entering 2020 27, we anticipate favorable year-over-year comparisons in the back half of the year on total revenue. Importantly, our organic revenue mix we now be in a range of 92% to 94%. We now expect that adjusted EBITDA will show positive growth for the full year in the range of $865 million to $885 million. This profit growth will all come in the fourth quarter.

Adjusted EBITDA margin is expected to be about 44% half the midpoint of the range. We still expect adjusted EPS will grow about 9% at the midpoint of the range to $0.75.

Finally, free cash flow guidance is updated to a range of $320 million to $340 million as we have now incurred all transaction costs approximately $30 million to close the divestiture and will not have a seasonally stronger line free cash flow in the fourth quarter. Our 2027 perspective on free cash flow anticipates growth of 10% to 15%.

Please turn with me now to Page 19 for a review of the full year top and bottom line changes we are expecting compared to last year. We expect adjusted EBITDA margin will expand over 250 basis points, driven by a return to organic growth continued cost discipline and completion of the strategic disposals. We anticipate total organic revenue growth of about 50 basis points, led by subscription revenue growth from continued ACV acceleration.

We have executed on plan to achieve cost efficiencies resulting in $40 million of organic growth. This will account for a majority of the margin expansion. The Intermac disposals are expected to lower revenue this year by approximately $110 million, and we are reducing operating expenses by about $90 million, which yield a profit impact of about $20 million with the remainder of the full year revenue and profit impact being driven by changes in foreign currency exchange rates.

Please turn with me now to Page 20 to step through the expected improvement of our revenue and margin this year, which we have updated based on our year-to-date results. Our quarterly performance continues to build momentum and as discussed in our second quarter earnings we still expect recurring organic revenue growth in H2 to see an improvement from H1 of 100 basis points.

Our expectation for recurring organic growth is above 2% in Q4. This will be the highest quarterly performance in over 3 years and positions us well into 2027. The organic growth implemented cost efficiencies and the benefit of the strategic disposals should maintain profit margins above 45% in Q4, and total revenue will be higher in Q4 due to the normal cadence of patent and trademark renewals and improving organic ACV and recurring revenue growth.

Please turn with me now to Page 21 to review how we expect the adjusted EBITDA will convert to free cash flow and how we plan to allocate this capital along with the proceeds from the divestiture to reduce our debt this year by about $875 million. We now expect free cash flow to approximate $33 million this year as we have now incurred all transaction costs to close divestiture, and we will not have the seasonally stronger LSA free cash flow for the fourth quarter.

The vast majority of the onetime cost of about $70 million will not recur next year. We now expect cash interest will be lower by about $25 million compared to last year due to the debt repaid last year and this year. We anticipate the change in working capital this year, this will be a use of approximately $35 million, primarily due to incentive compensation payments. And while we remain committed to investing in product innovation, the divestiture of SNH October 26, the disposals and cost efficiencies will improve capital spending by about $35 million.

From a capital allocation perspective, we planned use of proceeds from the SNA divestiture to repurchase at a discount, a portion of the notes 2 in 2028 and 2029. Q3 was a significant quarter for us as we completed an important step to focus on our 2 scaled segments and continue to make progress on our BCP plan, driving growth, improving cash flow, strengthening our capital structure and creating value for our shareholders.

Operator, we will now move to Q&A.

Operator

[Operator Instructions] Your first question comes from the line of Manav Patnaik with Barclays.

質疑応答

Manav Patnaik

This is Brandon Cohen on for Manav Patnaik. On ACV, you've called out pricing as a primary driver of the 1.8% growth this quarter. would you be able to please unpack the price versus volume dynamic a bit? And what exactly needs to happen for retention and new subscription sales to become a bigger driver of the acceleration into 4Q and into 2027?

Michael Easton

Yes. Thanks, Brandon, for the question. We're pleased with the performance of the ACV this quarter raising 1.8%, and one of the primary drivers of that is our pricing. Our pricing talked about that in the past that we strive to get above or around 3% pricing, but pricing has been consistent and strong this year and then volumes are continuing to see improvement there on an overall basis.

We are now timing to exit the year at 2% ACV growth. So another improvement from Q3 into Q4 and then further to improve as we move to 2027, as Matti said.

Operator

Your next question comes from the line of George Tong with Goldman Sachs.

.

Unknown Analyst

This is Alex Blacker on for George Tom. ACV returned to positive growth for the first time in more than 3 years, while total segment organic revenue declined 0.4%. But can you discuss what's driving the ACV improvement and how you see that translating into organic revenue growth from here?

Matti Shem Tov

So first of all, just remind ourselves about the strength of the IP business. We are supporting nondiscussion nondeferrable work. This is -- we are part of larger IP ecosystem. We've gone through a lot in IP. We now have stabilized the management much more focused sales organization in reoccurring revenue growth we return to ACV positive growth.

We have Simon, which is now running the business in a tighter way and we are very, very pleased also with our positioning around IP-1, a very confident that IP 1 is the right new aria agentic AI level will help us not only converting having new ACV, but also helping us to -- on the retention side for the recurring revenue side.

So we're very -- we learned a lot in IP to go with transition of the management, we are introducing new products and the type of sales organization, very positive to believe IP is coming by.

Operator

[Operator Instructions] We have now reached the end of the Q&A session. I will turn the call back to Matti Shem Tov, CEO, for closing remarks.

Oh, we do have one more question from 1 -- with Bank of America, I will take this question now. Your line is open, Avega.

Unknown Analyst

You kind of mentioned that you were going to use the LSNH proceeds to repay the '28 to '29 at a discount. Could you maybe describe how you're going to go about doing that?

Matti Shem Tov

Yes, thanks for the question. tothe course of this year, as you disclose we bought back about $290 million of debt so far year-to-date, that has been in a range of 2% to 3% discount in the second quarter and the third quarter. in our plan for the fourth quarter review to approach it to seeing that we've done the buybacks in the third quarter and the second quarter. So really no change from that, and we'll look for the right opportunity to start the process and to compete on a relatively short order here in the after quarter.

Unknown Analyst

I guess, how do you weigh buying back the 28 versus the 29s just given the timing difference of when they come due? And maybe how do you think about longer term your capital structure?

Matti Shem Tov

Yes. No, you're right. There's good delineation between the 2 to the 2 near-term notes. And so you really just balance the opportunity there with when those notes are coming due, what we think is the right approach for a capital allocation between the 2 and obviously, look to our cash proceeds and the free cash flow to be able to pay those off in due course before they arrive or become current.

Operator

We have now reached the end of the Q&A session. I will now turn the call back to Matti Shem Tov, CEO, for closing remarks.

Matti Shem Tov

And let me just close by saying that we are proud of the progress and confidence in the future. Our focus is now execution, translating that foundation into accelerating and sustaining organic growth at spending free cash flow and reducing our leverage, and thank you for joining us today.

Operator

This concludes today's call. Thank you for attending. You may now disconnect.