What Cannae (CNNE) Said on Its Q3 Earnings Call

Key Points

• Q3 operating revenue fell to $68 million from $81 million, with the Brasada Ranch sale accounting for $10 million of the decline. Expenses rose to $95 million, including $18 million in noncash impairment charges, mainly tied to the restaurant group.
• Cannae invested $22 million in Black Knight Football’s $40 million capital raise, with most proceeds earmarked for AFC Bournemouth’s stadium renovation. Black Knight’s quarterly revenue rose 34% to $118 million, but EBITDA fell sharply to $11.6 million as player-trading profit declined.
• Cannae closed its remaining O’Charley’s locations, a move expected to save about $16 million in annual cash funding, and continues to consider alternatives for 99 Restaurants. It returned $54 million to shareholders during the quarter and had repurchased 7.7 million shares for $111 million year to date through the call.

Cannae NYSE: CNNE reported lower third-quarter revenue as it continued shifting its portfolio toward sports and entertainment, closing O’Charley’s restaurants and returning capital to shareholders through buybacks and dividends.

The investment company reported operating revenue of $68 million, down from $81 million a year earlier. Interim Chief Financial Officer Brett Correia said the sale of Brasada Ranch accounted for $10 million of the decline. Operating expenses rose to $95 million from $89 million, including $18 million in noncash impairment charges, primarily related to goodwill at the restaurant group.

Chief Executive Officer Ryan Caswell said Cannae allocated $54 million to shareholder returns during the quarter. Through the date of the call, the company had returned $131 million this year, including $111 million spent repurchasing 7.7 million shares and $20 million in dividends.

Sports investments and Black Knight Football

Cannae invested $22 million in Black Knight Football during the quarter as part of a $40 million capital raise intended to accelerate the platform’s growth. Caswell said the raise was completed at a 20% premium to Black Knight’s initial capital raise and a 7% premium to shares issued in connection with the FC Lorient transaction in January.

In response to an analyst’s question, Caswell said the vast majority of the funds would go toward AFC Bournemouth and its stadium renovation, with smaller capital needs at FC Lorient and Moreirense FC. Bournemouth has opened the first phase of its renovation; the second phase, expected to open next year, is intended to increase stadium capacity to approximately 17,600. Caswell said the completed project would generate approximately $10 million in additional match-day revenue.

Black Knight Football, whose results are reported on a one-quarter lag and are not consolidated into Cannae’s financial statements, generated revenue of $118 million for the quarter ended June 30, up 34% from $88 million a year earlier. Earnings before interest, taxes, depreciation and amortization fell to $11.6 million from $95.7 million, largely because profit from player trading declined to $5 million from $80 million.

For the 12 months ended June 30, Black Knight revenue rose 32% to $312 million. Bournemouth recorded $287 million in revenue for its fiscal year ended June 30, an increase of 21%, Correia said.

At Exeter Rugby, acquired at the end of June, Caswell said Cannae is working with management to add commercial and marketing experience, expand the fan base and improve facilities. Correia said Cannae would first report Exeter’s calendar third-quarter results in the fourth quarter because the business is consolidated on a lag.

Restaurant closures and asset sales

Cannae closed O’Charley’s remaining restaurants in September after the chain struggled to return to profitability following the COVID-19 pandemic, Caswell said. The business is now reported as a discontinued operation, with prior-period results recast accordingly. Correia said the closure is expected to save approximately $16 million in annual cash funding, based on the first-half 2026 run rate.

The company continues to explore alternatives for the 99 restaurant business. Caswell said a potential transaction has been delayed amid the business’s performance and challenging conditions in casual dining. “We are continuing to look at multiple alternatives,” he told Stephens analyst Oscar Nieves.

During the quarter, Cannae also completed the sale of its 49% stake in Watkins and sold its 87% interest in Brasada Ranch to a company owned by Vice Chairman Bill Foley in exchange for termination of a put right. Correia said recognized gains for the quarter included $15 million from Watkins, $9 million from Brasada and a $20 million bargain purchase gain on Exeter, partly offset by an unrealized mark-to-market loss on SpaceX.

Cash and capital returns

Cannae ended the quarter with $90 million in holding-company cash. Correia said the company received $90 million from the Watkins sale and collected a $45 million federal tax refund during the period. Corporate cash stood at $68 million as of the call.

Caswell said Cannae’s approach to buybacks had not changed, and that management would continue weighing liquidity and potential investments against capital returns. The company repurchased another 1.2 million shares for $19 million in October and November.

Holding-company expenses fell to $7 million in the third quarter from $9 million a year earlier. Year-to-date expenses declined to $25 million from $84 million, helped by cost management and the elimination of management transition and management fees in 2025, Correia said. He added that Cannae had identified approximately $3 million in further annualized savings from eliminating a lease and cost-sharing agreement.

About Cannae (NYSE:CNNE)

Cannae Holdings, Inc is a diversified investment company that manages a portfolio of operating businesses and strategic investments. The company focuses on sectors including restaurants, financial services, payments, and business services, with the goal of building long-term value through active ownership and capital allocation.

Cannae has held interests in a range of companies, including restaurant operators, payment technology businesses, and providers of financial and business services.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.