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Cision Ltd. (NYSE:CISN)Q4 2018 Earnings Conference CallFeb. 28, 2019, 5:00 p.m. ET
Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:
Operator
Good afternoon. And welcome to Cision Limited Fourth Quarter 2018 Earnings Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded.
Before we get started, we need to remind everyone that in our calls, we'll be making some statements that are not based on historical fact, including statements about management's beliefs or expectations. These statements are forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act and relate to among other things our expected operating results in 2019 outlook.
Our integration of Falcon and TrendKite and the realization of expected benefits from the transactions, our business strategy and other matters relating to our business. These forward-looking statements are intended to be covered by the Safe Harbors created by the federal securities laws. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause our actual operating results, financial position or performance to be materially different from those expressed or implied in our forward-looking statements.
We believe that all forward-looking statements are based upon reasonable assumptions. However, we caution that you should not place undue reliance on these statements. We disclaim any obligation to update these forward-looking statements. For additional information concerning factors that could affect our financial results or cause actual results to differ materially, please refer to the cautionary statements included in our filings with the SEC and the sections entitled risk factors, including the risk factors set forth in our most recent Annual Report on Form 10-K, in which we discuss some important assumptions and business risks that could cause our actual results to differ materially from those in our forward-looking statements.
In addition, please note that on today's call, in our investor presentation and in our press release issued earlier today, we refer to certain non-GAAP financial measures, including EBITDA, adjusted EBITDA and adjusted net income. These measures are reconciled to the most comparable GAAP measures in our financial statements and can be found in the investor presentation posted on our website under the Investors tab. Investors are cautioned that non-GAAP financial measures are not a substitute for GAAP disclosures and our advised not to place undue reliance on non-GAAP information.
I would now like to turn the call over to Kevin Akeroyd, Cision's Chief Executive Officer to begin the call. Kevin?
Kevin Akeroyd -- Chief Executive Officer
Thank you, operator, and welcome, everyone, to Cision's fourth quarter 2018 earnings conference call. This afternoon, I will begin with some brief remarks regarding our Q4 and FY 2018 performance, I will discuss a few of our recent accomplishments and conclude with an update on our key priorities for the remainder of FY 2019. I will then turn the call over to Jack Pearlstein, our CFO, who will discuss our Q4 and FY 2018 financial results and provide an updated outlook for fiscal year 2019. We will then turn it back over to the operator to kick off the question-and-answer session. Both Jack and I will be also working from the investor presentation that has been posted in the Investors section of our website.
To kick us off today and beginning on Slide 2 of the presentation, I return to the theme of momentum that we discuss in each of our last several earnings calls. We continue to see very solid momentum in our financial performance, momentum in adoption of C3 by our customers and the momentum in the adoption of our industry transforming innovation solutions. Most importantly, Cision ID Impact that allows earned media business results attribution for the first time, in particular impact is enjoying incredible momentum.
With respect to Cision Impact momentum, as you know, we use it as a big cross-sell and C3 adoption driver, bundling certain amount of Impact in when clients adopt both monitoring and PR Newswire inside the C3 subscription. The overall adoption of this bundling has a sitting at over 1,200 clients now using this solution. We continue to enjoy adoption of Impact being paid for above and beyond this bundling as well. We ended Q4 with over 70 clients paying above and beyond and in Q4 Impact had bookings in excess of $1 million in ACV for the first time. We exited the year with pipeline for Impact of several million dollars in ACV again over and above the bundling inside our C3 strategy.
Equally exciting Cision ID's audiences had its first real quarter, with great actual results from some of the world's largest advertisers, who ran paid ad campaigns on top Cision Audiences and got great results. As Cision rapidly becomes the only solution provider in the world that can allow the CMO and the CCO to execute campaigns and customer dreams across paid, owned and earned media, these results are encouraging to say the least.
As noted in our earnings release this afternoon, we delivered a very solid fourth quarter of 2018. Our Q4 revenue adjusting for the impact of purchase accounting came in at 164, excuse me, $186.4 million, representing core organic revenue growth of 2% versus the prior year. Excluding the results of our email marketing business, which we divested in Q1 of 2019, core organic revenue growth was 2.9% versus the prior year.
Our Q4 adjusted EBITDA was also strong, coming in at $68 million, up 11.1% versus the prior year. Our adjusted EBITDA margins in Q4 were 36.5% better than expectations for the quarter due to strong cost synergy realization. The strength of the overall business in Q4 provides us with a lot of confidence in our outlook as we move into 2019.
In addition to delivering on the financial side of the business. We also saw continued progress against our innovation priorities and making Cision the transformative cloud technology platform leader for their earned, media and communications markets. Our total number of C3 customers at December 31, 2018 was just over 9,800, a solid end to FY -- excuse me, FY 2018. This rate of adoption continues to be great validation of pent-up demand in the market. As I mentioned above our innovation solutions had a great first year.
I mentioned the Cision ID Impact and Cision ID Audience stellar momentum above Image IQ, which launched this quarter had 256 clients adopt in a little over two months of selling. As a reminder, Image IQ is the technology that allows our clients to do monitoring and analysis on the brands images and logos, not just text and hash tags. In a world where all media, not just earned media becomes increasingly visual and image-based and less and less text based. This will become more important to CMOs and CCOs and Cision's competitors do not have this capability. So we expect this to become increasingly more important differentiation for C3 moving forward.
We continue to drive customers down as overall solution past. We use C3 as the communications technology platform, Cision Impact is there analytics and business results attribution and Cision Audiences not only improved performance of the much larger paid known budgets, but also to execute integrated campaigns across paid, owned and earned media with Cision ID as the backbone. We remain confident, this strategy will enable us to continue to consolidate share in existing TAM, plus it's growing into the much larger adjacent marketing advertising TAMs. We also believe that this integrated platform attribution and data solution create stickiness is critical for improved revenue retention rates and increased ARPU. This has been our core strategy for the last two years and the exciting progress made this quarter has further validated that strategy.
Slide 3, Cision's number one strategic priority continues to be accelerating organic growth rate across the business. Organic growth in 4Q was driven by strong performance in the Americas, up 3.8% and APAC, up 13.9%. Offset by weakness in EMEA, which was down 5.9% on declines in volume-based media monitoring, with the exception of our EMEA region, we made measurable progress on this front in 2018, by driving bundled sales of software analysis and distribution to both new and renewal customers. Our core Americas business grew 4.4% in 2018, excluding our email marketing business, which is our strongest rate of growth in four years in that region.
Distribution revenues were strong in 2018, as our cross-sell bookings of software distribution and insights. Our APAC region was up 19% organically on a consistent currency basis in 2018. Turning in another very solid year performance across software distribution and insights. We had the best cross-selling bookings quarter-to-date in the US, posting $5.4 million in booked ACV, up 55.1% increase versus Q4 2017. The lone area of (ph) weakness was our EMEA region, which was down 2.2% on a constant currency basis in 2018, as volume based transactional media monitoring weakness in the UK and France, offset solid performance in the Nordics and the rest of the region. We began to get good traction on the execution of our strategy of migrating monitoring customers in the UK and France to subscription agreements from variable arrangements and with our recent additions of Peter Low and Keir Fawcus from Kantar, we expect to see these two markets turn around quickly for us in 2019.
Shifting to Slide 4, subscription customer growth in Q4 was approximately 4.2% versus the prior year, driven both by strong new business wins and steady conversions of transaction contracts to subscription contracts. ARPU per subscription customer declined slightly by approximately 1.3% due to the robust performance by shifting transactional PR Newswire customers to subscription customers. This is very good for the business. But unfortunately those come at lower ARPU and when you combine that with pricing incentives you used to convert transactional monitoring contracts to subscription in the UK and France, this metric took a slight hit. Transaction trends remained as expected and for our strategy, with a number of customers transacting with us during the quarter declining, the transaction revenue per customer during the quarter increasing substantially, much more than the number of customer decline.
Our second priority is to further differentiate our category-leading product and service offering, we continue to add features and integration to Cision Communications Cloud or C3 that include enhanced social analytics, sophisticated image monitoring and analytics, streamlined workflows, superior content discovery and deeper integration back into paid known systems, our clients have invested in the marketing and advertising fronts. We remain committed to ensuring Cision has the most feature-rich platform for PR and corporate comms professionals in the industry, and we will continue to devote significant development resources to enhance our category leading product and service offering that should result in an ever improving customer experience.
Cision ID and the continued rollout of Cision ID derivative products such as Cision Impact and Audiences, is our third strategic priority. Impact, to remind everyone, is our offering that allows clients to show the validated reach, engagement, audience data and actual sales conversion data from customers exposed to earned media, press release content. Cision Audiences is to remind everybody is our offering that allows clients to match Cision ID based data which is individual customer profile through identity resolution and integrate across their paid, owned and earned media campaigns. We continue to make significant progress rolling this offering out and getting in our customer hands.
As I highlighted earlier in the call, we have over 1,200 clients using Impact with a significant number of them being Fortune 500 clients. We continue to experience solid traction across both our sales organization and with our customers and expect to realize meaningful revenue from these products over the next several quarters.
On to Slide 5. Last month represented an extremely fast start to the year for us, but when we believe was truly transformative. In early January we completed our acquisition of Falcon, which meaningful enhances our Earned Media Management with modern social media management and engagement capabilities. In the third week of January, we completed our acquisition with TrendKite, which further extends our leadership position in media monitoring, measurement and attribution. Our current plan is to integrate the best of the C3 platform with the innovative technology, advanced measurement and AI capabilities with the TrendKite platform, thereby creating a new C3.
Lastly, on the transformational front, we sold our email marketing assets to strategic buyer in the third week of January. The sale of the email marketing assets resulted from a detailed review of our long-term business strategy and desire to focus on our industry-leading communications cloud platform. Email marketing business has long been a drag on our top-line performance for the past several years, 70 basis points drag in 2018 and a 90 basis point drag in 2017. The combination of these moves changes our overall growth trajectory, brings in a wealth of new management talent and puts us in a better position than we've ever been to deliver unmatched value in the public relations and marketing communications industry.
So, in summary, an extremely solid fourth quarter 2018, a great end to fiscal year 2018 and we're positioned extremely well to capture the growth opportunities in front of us.
I'll now turn it over to Jack Pearlstein, our CFO, who will provide and discuss our Q4 and FY 2018 financial results and provide an updated outlook for fiscal year 2019. Jack?
Jack Pearlstein -- Executive VP And Chief Financial Officer
Thanks, Kevin. I'll begin with a review of our fourth quarter and fiscal year 2018 financial performance and conclude with an updated outlook for fiscal 2019. A number of the non-GAAP financial measures that I plan to reference have been provided in this afternoon's fourth quarter and FY'18 earnings release, along with our underlying calculations and definitions.
Our Q4 2018 revenue came in at $186.4 million, a 10.3% increase over our Q4 2017 revenue of $169 million. After adjusting for the reduction of GAAP revenue due to purchase accounting, our Q4 2018 revenue was up 9.8% versus the prior year. Core PR revenue on a pro forma and constant currency basis was up approximately 2% versus the prior year fourth quarter. As Kevin mentioned at the top of the call, our strong organic revenue growth in the quarter was driven by exceptional performance in the US, Canada, the Nordics and across our APAC region. We saw solid growth in subscription revenues, transaction revenues and cross-sell bookings during the fourth quarter.
After adjusting for the impact of currency, pro forma organic revenue growth in our Asia-Pac business was up approximately 13.9% in Q4 versus the prior year period. This was a bit slower than last quarter's growth rate, which was expected as we work through the remaining headwinds related to our divestiture of the vintage filings business. We continue to see strong momentum in the region with recent launches of sales efforts in South Korea, Japan and Australia.
After adjusting for both the impact of currency and non-core revenues, pro forma organic revenue growth in the Americas was up approximately 3.8% in Q4 versus the prior year period. As mentioned earlier in the call, we were positively impacted by strong cross-selling, a rebound in transactional revenues and solid sales execution.
After adjusting for the impact of currency, pro forma organic revenue growth in our EMEA business was down approximately 5.9% in Q4 versus the prior year period. The decline was essentially flat from last quarter's decline, the result of continued weakness in our French and UK transactional media monitoring businesses. Our average number of subscription customers in 4Q 2018, excluding email marketing customers was approximately 42,300, roughly 4.2% higher than the average number of subscription customers in the same period a year ago.
The average annualized revenue per subscription customer during 4Q 2018 was approximately $11,100, a 1.3% decline over the prior year period. As Kevin mentioned earlier in the call, this decline was primarily due to a strong PRN transaction to subscription quarter and the pricing incentives used to convert transaction contracts to subscription contracts.
On the transactional side excluding email marketing, we had approximately 39,200 customers transact with us during 4Q 2018, roughly 6% below the same period a year ago. A portion of this decline relates to the conversion of transaction customers to subscription customer. Average revenue for the quarter from customers that transacted with us came in very strong and at approximately $1,530, roughly 8.6% higher than the same period a year ago.
For those of you following along with the online presentation, I'm now going to kick off on slide six, which is cost excluding acquisition costs, intangibles amor and other. Gross margin for 4Q 2018 was 64.3%, included in our cost of revenue for the fourth quarter was approximately $6 million of amortization related to acquired intangibles and approximately $3.5 million impact acquisition related costs and expenses. Excluding these two items, gross margin for 4Q 2018 would have been 69.4%.
For comparative purposes, gross margin for 4Q 2017 was 68.5%, included in our cost of revenue for the fourth quarter of 2017 was approximately $6.5 million of amortization related to acquired intangibles and approximately $0.3 million of acquisition-related costs and expenses. Excluding these two items, gross margin for 4Q 2017 would have been 72.6%.
Acquisition-related costs and expenses during 4Q 2018 were roughly $12.7 million, approximately $3.5 million of these costs were included within cost of revenue, approximately $0.5 million were included within sales and marketing, approximately $0.1 million were included within research and development and approximately $8.6 million were included within G&A.
Acquisition-related costs and expenses during the prior year fourth quarter were $16.7 million, approximately $0.3 million of these costs were included within cost of revenue, roughly $0.5 million were included within sales and marketing, approximately $0.8 million were included within R&D, $14.7 million were included within G&A and approximately $4.4 million were included in other income.
In Q4, as Kevin mentioned, we delivered another solid quarter of adjusted EBITDA, which came in at $68 million. Our focus on overall cost controls and our continued efforts to further drive synergies in the business will continue to be a priority. Adjusted EBITDA margins were 36.5% for the fourth quarter of 2018, a 50-basis-point increase over adjusted EBITDA margins in the prior year period. Adjusted net income for the fourth quarter of 2018 was $31.4 million, a 36.7% increase over the prior year period. Adjusted net income per diluted share for 4Q of 2018 came in at $0.24, a 25.6% increase over the prior year adjusted net income per diluted share of $0.19.
Now on to our updated outlook for fiscal year 2019 in slide seven in the presentation. Due to the many moving pieces and parts involved in the two recent acquisitions and the divestiture of the email marketing business, we are providing guidance this time for both Q1 of 2019 in addition to the full year 2019 in order to help everyone that is running the model. The 2019 and Q1 2019 outlook assume the inclusion of results from our acquisitions of Falcon and TrendKite from the date of their respective acquisitions through December 31, 2019 and the inclusion of results from our email marketing assets from January 1, 2019, till the date of divestiture.
As highlighted in our earnings release this afternoon, we expect full-year revenue of between $775 million and $785 million and Q1 revenue of between $185 million and $190 million. Excluding the impact from purchase accounting, we expect full-year revenue between $782 million and $792 million and Q1 revenue of between $187 million and $192 million.
For FY 2019, the bottom end of the revenue guidance range represents approximately 5% organic revenue growth and the top end of the revenue guidance range represents a bit better than 6% organic revenue growth. For Q1 2019, the bottom end of the revenue guidance range represents a bit better than 4% organic revenue growth and the top end of the revenue range represents a bit better than 6% organic revenue growth.
On Slide 8 of the presentation, we put together a pro forma constant currency core organic revenue growth chart to illustrate the change to our overall growth trajectory after the acquisitions and the divestiture of the email marketing business. Cision on a stand-alone basis, excluding the email marketing businesses do grew 2.4% in 2017 and 3.1% in 2018, a solid improvement of roughly 70 basis points. Including the acquisitions of both Falcon and TrendKite, and again excluding the email marketing business, Cision would have grown approximately 4.4% in 2017 and approximately 5.6% in 2018.
So, in summary, our organic revenue growth guidance for FY 2019 is roughly in line with 2018's overall pro forma growth rate after making these adjustments. We expect adjusted EBITDA of between $270 million and $275 million for FY 2019 and our Q1 adjusted -- Q1 2019 adjusted EBITDA being between $61 million and $63 million. We expect adjusted EBITDA to continue to pick up throughout the remainder of the year, as we realize synergies from the Falcon and TrendKite deals, a significant portion of which we completed last week and as the predominantly subscription-based businesses of the two acquisitions continue to ramp. We expect FY adjusted net income of between $122 million and $125 million, and Q1 2019 adjusted net income of between $28 million and $30 million. We expect FY 2019 adjusted net income per share of between $0.82 and $0.85, and Q1 2019 adjusted net income per share of between $0.19 and $0.20.
Additionally, within the earnings release furnished this afternoon, we provided an updated full-year outlook for a number of other financial items, including depreciation expense, amortization expense, interest expense, cash interest expense, stock-based comp income and CapEx. The outlook items provided on this call, as well as those included in today's earnings release assume exchange rates of 1.29, 1.14 and 0.76, respectively, for the British pound, the euro and the Canadian dollar to the US dollar. Additionally, our outlook for the fiscal year 2019 excludes any additional acquisitions, divestitures for other unanticipated events.
That concludes our prepared remarks. So I'll now turn it back over to the operator to begin the question-and-answer session. Operator?
Questions and Answers:
Operator
We will now begin the question-and-answer session. (Operating Instructions) Our first question comes from Bob Labick with CJS Securities. Please go ahead.
Robert James Labick -- CJS Securities, Inc. -- Analyst
Good afternoon and thanks for taking my questions. Just wanted to start with the -- you talked about this already, but the annualized revenue per subscription customer dipped modestly due to the transition from PR Newswire customers. Could you tell us a little bit about how we should think about that going forward into 2019 and what the drivers of that ARPU will be?
Jack Pearlstein -- Executive VP And Chief Financial Officer
Yeah. Bob, just to recap, right. We put very aggressive subscription versus transactional packages together at the UK and France problem child, right, there was a slight dip and then we had a very strong quarter and finally getting a lot of PR Newswire customers that where transaction was to switch. So again that's extremely good for the business. Because getting that transactional revenue down, down, down and getting the subscription revenue up is good for every reason. But obviously it will be coming at lower ARPUs. So that was -- that's the description. We do not believe that this is going to be in any way a sustained drag on ARPU. We believe that ARPU will go -- continue to go up materially, the way it has the last seven quarters. It's going to have a really nice year this year and will continue to go up even if we continue to have good momentum, driving lower ARPU PRN subscribers over this transaction. So we think we're going to do both and the ARPU is going to go up despite the PRN impact.
Robert James Labick -- CJS Securities, Inc. -- Analyst
Okay. Great. That's helpful. And then kind of bigger picture, between Cision ID and Trendkite, about how many of your subs are now using attribution and then -- of your 42,000 or so how many is attribution applicable to?
Jack Pearlstein -- Executive VP And Chief Financial Officer
So between Trendkite and Cision, it's almost 1,500 now. They're using it. So it's a big number of customers. That's a good underscore, that says, hey, the market was really ready for PR attribution, it wasn't just a good idea, when the companies came out with it, the customers starting to get adopting it, Bob. And quite frankly, that's a universal need. Even if I'm a 50 person shop, let's say, we see that (ph) company, if I can go in and if I'm a B2B buyer and I can go in and show my CFO and CMO and CEO, and I can track pipeline to PR or I can track e-commerce revenue the articles being written. That's pretty universal, Bob. So if universally needed for just about everybody that's on a subscription base, there is a price point issue, right. So it's going to be some subset of that. But for the most part, you should start seeing this scale very, very aggressively, because it's not a limited to small, medium, large, it's not limited to B2B or B2C, it's not limited to a certain vertical industry, it's not limited to a certain geography. This is something that the entire industries need. So we think this thing is going to scale and it's got a very high ceiling.
Robert James Labick -- CJS Securities, Inc. -- Analyst
Great. I'll get back in queue. Thank you.
Kevin Akeroyd -- Chief Executive Officer
Thank you, Bob.
Operator
Our next question comes from Michael Turrin with Deutsche Bank. Please go ahead.
Michael James Turrin -- Deutsche Bank AG -- Analyst
Good afternoon. Thanks. First, on the organic revenue growth side, I think you provided some useful details here around 5% to 6% for next year. It sounds like even maybe above 6% and then 4% to 6% for the range in Q1. Is there any additional color you are able to provide around expected seasonality of that trajectory throughout the year. Is it fair for us to assume that continues to step up or how would you think about it from our perspective?
Jack Pearlstein -- Executive VP And Chief Financial Officer
I think, just given the sheer size of the distribution business still under the hood, you're still likely to see bigger quarters in Q2 and Q4, and smaller quarters in Q1 and Q3. I think, the impact of that seasonality gets a little bit muted. As you think about the two businesses that we just acquired. They are really kind of 100% SaaS businesses, very focused on MRR and those should continue to step up month-to-month and quarter-to-quarter. So I still think you'll see a little seasonality, as I described, but it will be somewhat muted versus sort of prior years.
Michael James Turrin -- Deutsche Bank AG -- Analyst
Perfect. That's helpful. And then, maybe -- can you walk us through where you are today post-Trendkite and Falcon from a leverage ratio perspective? I mean, how much optionality do you still have left and how are you thinking about the balance sheet and capital allocation going forward?
Jack Pearlstein -- Executive VP And Chief Financial Officer
Yeah. I mean, I think, we're still in the mid 4s, right. When you look at net debt-to-EBITDA. We provided a little bit of color on that in the earnings press release, just so everybody could see how we finance the transactions and where debt sits today. Given, the free cash flow in the business, we think we'll continue to delever throughout the year. We still think that there's a chance to end the year at something with a three on the front in terms of net debt-to-EBITDA versus a 4, if not, it's probably a quarter delayed, given the acquisitions from what we've previously talked about with folks on the call. And in terms of capital allocation, I think, our focus right now is squarely on organic growth continuing to work through the synergies in front of us. And I think acquisitions are really often the future for us, we've got lots to do and lots on our plate to execute.
Michael James Turrin -- Deutsche Bank AG -- Analyst
Got it. I appreciate you taking the question. Thanks.
Operator
Our next question comes from Dan Hedberg with RBC Capital Markets. Please go ahead.
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Okay. Thanks. Actually it's Dan Bergstrom for Matt Hedberg. So little jumbled there. But, hey, another question on organic revenue growth rate and thanks for the additional color on seasonality that you just provided there. Thinking through kind of the guided range for the year, what could get you to the upper end of the range.
Jack Pearlstein -- Executive VP And Chief Financial Officer
What could have us wind up at the top of the range?
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Yeah.
Jack Pearlstein -- Executive VP And Chief Financial Officer
Or over the top of the range?
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Sure.
Jack Pearlstein -- Executive VP And Chief Financial Officer
Yeah. I mean, look, we've had some pretty good success as of late with cross-sell. We've had some nice sizable transactions with respect to cross-sell. We've continued to make progress on retention rates improving and we bought some nice businesses here that we think are going to play well with the customer base. So I would say, if we execute, I think, we certainly have a chance to continue the momentum and hit the top end of the guidance range and who knows, maybe even exceed it.
Kevin Akeroyd -- Chief Executive Officer
I would add one thing there and that is, we have the Cision ID Impact attribution in the audiences, to remind everybody to listen the story for a little bit. This is basically what happened in digital advertising. It just finally happening over here in earned media. And there is going to be an inflection point and Jack and I have not counted on that inflection point hitting in 2019 at all. We've got that out in the next decade and I think we're planning properly conservatively.
But right the budgets, when all the sudden you become a revenue-driving function instead of a cost center, which is what impact that. And when all the sudden Cision IDs are driving double-digit improvements in performance on the much larger ad budgets. That's a feels it could give it (ph). Again, we're not forecasting it in the guidance, but when you want to look at where high deltas are and big, big pockets of money in the buying audiences. That's the other variable that could fall materially for us if that adoption rate gets faster and bigger than what we got into the plan.
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Great. And then with the start to the new calendar year here in a couple new assets. Just curious if you've changed anything from a sales force perspective.
Kevin Akeroyd -- Chief Executive Officer
Just rapid integration, right? I didn't need the Trendkite and Cision rep count in the same accounting here (4400) area code 212 or area code 415 or area code, right, you name it. So, right, the large sales organizations we had duplicative management and we had duplicative rep coverage across especially US and Canada and London. So streamlining and elimination of redundancy and collapsing the two awards that we head into March with one sales org not two. That's right sized, while still maintaining the appropriate level of coverage.
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Great.
Robert James Labick -- CJS Securities, Inc. -- Analyst
2018 part of the synergy exercise that Jack referenced last week. We got a large chunk of it out already and that was a non-attributable part of it.
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
Thank you.
Operator
Our next question comes from Dan Salmon with BMO Capital Markets. Please go ahead.
William Lowden -- BMO Capital Markets -- Analyst
Hi, everyone. This is William on for Dan. Thanks for taking the question. Two from me. First, following up on the attribution Cision ID, could you go in a little more detail around when it's being paid for on a stand-alone basis and exactly how that works, I always thought of that is more of being bundled in with C3, but it sounds like you've got 70 stand-alone paying clients? And then, second, to the extent you can -- can you quantify how much EBITDA your email business generated last year and how much -- what you're losing this year? Thanks.
Kevin Akeroyd -- Chief Executive Officer
I'll take the first and I'll let Jack take the second one. Again, a reminder to everybody on the call, impact is basically based on how much earned media a customer wants to track. So if I'm a large customer, the amount of Impact we're bundling in essentially approximates about 5,000 articles or press releases a year. So that if you want to track, right, the validated reach, the demographic B2B or the demographic B2C or firmographics B2B audiences and track that all the way down to a website visit or e-commerce purchase or B2B pipeline are closed one sale, that's the amount of articles.
For large companies, they obviously get way more coverage in that, right. We've got customers that get a million hits a year, not 5,000 in the year. So for our customers that say, gosh, we love the bundle, thank you for including that, but I'm going to burn through those 5,000 articles in about three weeks and I don't want to limit the impact, I need to track impact for my entire year. That's the example of the customer that's saying thank you for it, I'll take it, but I wanted for my entire universe, I don't want to for three weeks' worth and when customers get the value properly, they want it for everything, not just a 5,000 that's included in the bundle, that's when they go ahead and open up the purse strings and those are the 70 people that are paying the full subscription rate and why it had such a nice bookings quarter last quarter. Hopefully, that makes sense.
William Lowden -- BMO Capital Markets -- Analyst
That makes perfect sense.
Kevin Akeroyd -- Chief Executive Officer
And Jack, why don't you take the second part?
And EBITDA.
Jack Pearlstein -- Executive VP And Chief Financial Officer
Yeah. I would say, after adjusting for shared costs, it's probably in the neighborhood of $8 million.
William Lowden -- BMO Capital Markets -- Analyst
Perfect. Thanks so much guys.
Operator
Our next question comes from George Tong with Goldman Sachs. Please go ahead.
George Tong -- Goldman Sachs -- Analyst
Hi. Thanks. Good afternoon. You're now one quarter in integrating Falcon and Trendkite, can you discuss early traction you've had in bundling and cross-selling these products with your C3 platform?
Kevin Akeroyd -- Chief Executive Officer
A partial quarter, right. One of them closed early January, one of them close at the end of January, so hasn't been quite a full quarter. But, yeah, we've been really busy. Again, as Jack mentioned, we got extremely aggressive and we have done very, very quickly a very large part of the synergies to make sure that we get the cost out and to maintain the EBITDA percentages that are in the guidance, while buying businesses basically didn't deliver a very good the business. So that was huge number one.
Number two is the organizational alignment, we literally have completed globally the entire organizational structure, not just in sales, but across the Board. So all what we design has done virtually all the synergy, not, almost all the synergy has done and now it's about integration. So integration tends to go like this. You get integrated bundles out before you can actually write the code do integration. So Phase 1 which you are already doing is offering promotions and advantaged bundles of offerings pre-technical integration by both sales teams, so there's immediate benefit to the client base. Phase II will obviously be integrated offerings and Phase III will be, hey, it's just all in one platform, so it requires R&D and actually code to be written, an integration to be get done for Phase II and III, which you can't get done in two months. However, we're already market with Phase 1, which is aggressive bundled offerings for customers on both sides to give immediate benefit for Falcon and Cision and Trendkite all to be in the same family and that's in market now.
George Tong -- Goldman Sachs -- Analyst
Very helpful. And as a follow-up, you've indicated that you are seeing weakness in the French and UK region still with your transaction revenues. Can you talk about when you expect some of these headwinds to subside?
Kevin Akeroyd -- Chief Executive Officer
Yeah. Again to remind everybody that is, those are the two markets left for people literally by a radio clip or TV clip or newspaper clip by the drink, right? They literally pay per article per clip. That is where we saw the softness as people's willingness to go, they either buying 100 newspapers or the clips instead of 400 newspapers now and they're buying the top 50 TV stations and radio stations instead of the top 500 TV and radio stations to get out of that variable expense.
As Jack and I mentioned on the call, we have seen significant momentum, we got some good adoption on the subscription packages, which -- and again, which is part of why, right, the ARPU did what it did. The PR Newswire impact was a bigger impact in this. But we got real traction. It just takes a little while for it to flow through the P&L. So that was a long-winded answer.
The short answer is, it would might take nice slow improving steps over the next four quarters and we expect to get it out of the system this fiscal year, but it won't come all the way out of the system in Q1.
George Tong -- Goldman Sachs -- Analyst
Got it. Very helpful. Thank you.
Kevin Akeroyd -- Chief Executive Officer
Yeah.
Operator
Our next question comes from Rob Oliver with Baird. Please go ahead.
Matthew Steven Lemenager -- Robert W. Baird & Co. Incorporated -- Analyst
Great. Thanks. It's Matt Lemenager on for Rob. I have -- Kevin, I have a question on Cision Impact. I appreciate all the color you've given so far. So the -- well, I'm curious of the 70 clients about $1 million in bookings. Is it fair to think about it as kind of that like $14,000 on average for that ARPU when the customer takes the full subscription, or is that not the right way to think about it? And then how could that ARPU kind of change or trend over time?
Kevin Akeroyd -- Chief Executive Officer
Well, it is. And again, I don't need to do the simple algebra for everybody, boy, if we could just scale that 14K on top of the 11K that more than doubled the ARPU, which is a huge part of the strategy. So everybody should be excited about that number. In reality, it's a bit lumpier than that. Because again it's predicated on, again, the largest airplane manufacturer in the industry doesn't get as much coverage as the largest CPG player in the industry even though they are about Fortune 10 companies. So there's a little bit of variability there based on what kind of business I'm in and then, therefore, how much coverage I need to track, but you are on the right track. So it's going to -- the sausage is making a little lumpier than that, but is it going to average out of the scales to be at least that kind of ARPU impact on top of the 11K, the answer is yes, and fingers crossed that it will be even higher.
Matthew Steven Lemenager -- Robert W. Baird & Co. Incorporated -- Analyst
Got it. Thank you. I'll jump back in the queue.
Kevin Akeroyd -- Chief Executive Officer
Yeah.
Operator
Our next question comes from Tim McHugh with the William Blair & Company. Please go ahead.
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
Hi. Good afternoon. It's actually Trevor Romeo on for Tim. Thanks for taking the call. Just wanted to ask on Europe. So, obviously, you've called out the specific issue with the France and UK monitoring. But...
Kevin Akeroyd -- Chief Executive Officer
Yeah.
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
...given the some of the softening economic data we've seen out of Europe lately, could you give us some color on the trends you're seeing in the rest of Europe and what's the near-term outlook for that region going forward beside the monitoring issues?
Kevin Akeroyd -- Chief Executive Officer
It's very -- yeah. It's very ironic. Because when you look at the rest of the business, the inside piece, the software piece, C3 adoption Europe, et cetera. The rest of the units like the Nordics, like Germany, right, and some of the other geographies. Europe is pretty healthy. But unfortunately the UK and France are very big, right markets, they are a big part of the legacy revenue and this is the way they buy. So you are seeing an impact it's outsized vis-a-vis the rest of the performance of the Europe, I guess, the answer of the question. Lots and lots and lots of pockets are healthy. Overcome right now by too large, disproportionately large pockets of unhealthy and on-demand.
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
Okay. Great. That's helpful. And then, so a number of C3 customers continues to grow nicely, but quarter-over-quarter maybe it grew at a slightly slower pace. Do you see a growth in C3 adoption moderating from here a little bit, just given the larger base you're starting from now or conversely do you see the addition of TrendKite and Falcon accelerating that growth?
Kevin Akeroyd -- Chief Executive Officer
I actually think it's going to accelerate again. We're going to do a couple of things. And some of you've heard we say this on previous earnings calls, 2019 is the year that we're going to begin end of lifeing legacy applications like the artist formerly known as Cision back from 2014, early artist formerly known as Gorkana back in 2015. So there will be an accelerated migration off of legacy applications for the first time, which is going to be a very important milestone. And then when we continue to do what we did with impact, right. You can't get impact without C3 and we're going to put all the goodies when you blend TrendKite, Falcon and C3 together, it's only going to be on that application. So the utility value, integration value and just what you can get, if you buy C3 1 not only from a new customer -- from versus our competitors on the new business front, then versus staying on legacy applications from an installed base front, all of those factors should make C3 adoption be awfully healthy in 2019.
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
Okay. Great.
Kevin Akeroyd -- Chief Executive Officer
And again to reiterate, we're going to put the artist formerly known as TrendKite and the artist formerly known as C3 together as fast as humanly possible, right. And that merger will be the new C3 and that's obviously going to accelerate as well.
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
Got it. All right. Thank you very much.
Kevin Akeroyd -- Chief Executive Officer
Okay. Yeah.
Operator
Our next question comes from Tom Champion with Cowen. Please go ahead.
Thomas Steven Champion -- Cowen & Co. -- Analyst
Hi. Good afternoon, guys. Thanks for the context around that the C3 customer growth. I think in prior calls you talked about the potential for price hikes among tenured customers in that group. And just kind of curious how you felt about that possibility exiting the year relative to maybe Q2 and Q3 timeframe? And then, Kevin, a moment ago when you were talking about the guidance on the revenue side for 2019, you talked about an attribution driven inflection point and you spoke about that being maybe more than one year out, why is that, what do you think needs to happen for the industry to kind of hit that inflection point? Thank you.
Kevin Akeroyd -- Chief Executive Officer
Yeah. No problem. Well -- and again, two part, I'll answer the second part first. On the second question, just -- I think, you said it, but just for clarity, right. I said that we do not have a hockey stick inflection point baked into the model. The question was what could allow us to exceed the model and that was my answer is that one of the ones that is a candidate for that, but we don't. And the honest answer here is, I think, that the executive team here, myself included, has been through this transformation multiple times. I mean I went through this with CRM and salesforce, I went through this with the marketing and ad tech, when I was running Oracle Marketing Cloud. 25 years of experience in these transformative software efforts means that you can only lead the water -- the horse to water right so fast and even when you deliver the technology you are disrupting 50 years of buyer behavior, right, and status quo.
And that's not a tech problem, that's not a, right, a regulation problem, that's not a pricing and packaging problem, that's a -- you're introducing an industry to capability sets that they've never had before. And just like it took a CMO about 10 years to 12 years to really get sophisticated and make marketing and ad tech right mainstream, which is why Adobe's and Google's and Salesforce marketing clouds in the world are doing so well now. It took several years to get that inflection point hitting. So it's basically that realization that no matter how good it is, there's only so much you can change an entire line of business and an entire industries buying behavior. You can't change in five quarters efforts in one way for 50 years. That not a very sexy answer, but it really is the answer. And I'm not giving us any credit to be able to do at Cision, where we couldn't do at Salesforce or where we couldn't do at Oracle.
And in the first part is, yeah, just to reiterate. The C3 ARPU price increases and again we're chasing that second, third and fourth product for the spend more than we're chasing a proceed ASP increase, that's core to the model. It was actually healthy this quarter. Again, masked by having a really good PR Newswire, subscription quarter a low ARPU, but even if I just use the data point I did on the previous question, if you can get $14,000 or so for impact, never mind, right, somebody up-sell to cross and if I do (5814), we still think that we are in the very early innings in ARPU expansion that continues to be the core of the strategy and it will absolutely continue to be the core organic growth driver going forward.
It won't be a perceived increase, it will be getting that second, third, fourth products sold into the existing installed base and getting new business in the door, they are buying three products out of the gates instead of one product out of the gate. So ARPU increases is level one, two and three in this business for the next years to come.
Thomas Steven Champion -- Cowen & Co. -- Analyst
Thanks, Kevin.
Kevin Akeroyd -- Chief Executive Officer
Yeah.
Operator
Our next question comes from Tyler Radke with Citi. Please go ahead.
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Hey, guys. Good evening. Thanks for taking my questions. The first question I wanted to ask you, Kevin, is, when you talk about those 70 customers that are paying an extra for additional Cision ID task. I guess are you surprised that the total bookings was around $1 million. Are you surprised that wasn't higher, I mean, obviously, you're playing the long game here, but it would just seem like it, if those customers are already using it in excess of what you're giving them that perhaps the value you're providing should be higher than that million spread across 70 customers.
Kevin Akeroyd -- Chief Executive Officer
Yeah. Tyler to be honest, I'm actually really tickled pink to be completely candid with you. The fact that we didn't even start selling this. This wasn't even available until April, right. So it's had nine months to sell. We gave them a try before he buy, right, for free as a way to paste it, do not have to pay it and the fact that 70 very large Fortune 500, Fortune 1000 customers decided to open up the pocketbooks and spend non-trivial money against it. Not just for impact but then, again, some of them are spending ad dollars on top of Cision Audiences and while it doesn't seem a lot something that never existed in the industry ever before, something that you couldn't even buy until April and for us to kind of in the quarter that way by in its third quarter in existence in the industry, never mind inside Cision already cracking the $1 million ACV threshold. We're actually kind of high-fiving about that over here. We're not down on it. We think it's a positive sign, not a negative sign.
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Okay. And maybe a follow-up on that. Where do you think that, that could go as we go through 2019 and then I just have a quick one for Jack, but I let you (ph) answer that?
Kevin Akeroyd -- Chief Executive Officer
Yes, yes, and again, I think, if people -- I hope people don't get to stick these analogies, but I am -- but it's the perfect one. This is history repeating itself all over again, just like the advertising market did, right. Digital advertising came along, you can measure it, right. You could track that digital ad all the way to the shopping cart, right. And therefore, advertising went from non-measurable to measurable. And in the last 12 years, digital paid advertising has gone from $15 billion to $150 billion, because it now can get attractive revenue rather than just OpEx.
We're doing the exact same thing in earned media, which is why this is such a big deal. But if you go back and look at, right, all of the digital ad players and you look at the adoption curve, it didn't happen, right, in the first four or five or six quarters either. It was kind of a slow steady ramp and then it kind of hit an inflection point and then we really do think that that is going to happen here too. We just don't think it's going to happen in 2019. It did in e-commerce, it did in web, it did in impact digital paid and it probably won't digital earned. It'll be huge in the future. There's no reason to expect some hockey stick to happen right in its second year, in existence here, when it didn't happen in other -- in any of the other peer categories. Hopefully, Tyler, that makes sense?
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Okay. Yeah.
Kevin Akeroyd -- Chief Executive Officer
Yeah.
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
So you are keeping expectations low and not factoring in much for this year.
Kevin Akeroyd -- Chief Executive Officer
Yeah. Just having lived through this before and all these other aforementioned...
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Yeah.
Kevin Akeroyd -- Chief Executive Officer
... haven't lived through it in e-commerce, haven't live through it in web, haven't lived through it in advertising. As I've seen this movie three times or four times before, I know how it plays out and that's why I'm so incredibly bullish in the mid long-term, that's why I am incredibly realistic in the near-term.
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Right. Okay. And then for Jack, maybe you could you give us a sense of how your -- you approach 2019 guidance? Maybe walk us through kind of the thought process. The reason I ask is, obviously, you've had a number of kind of a headwinds pop up, whether it was transactional business in Europe and now you have these two assets, you're working through the integration plans and there's a lot of complexity in that, like maybe walk us through the process, what have you learned, are you applying an extra layer of conservatism just given the higher risk of uncertainty?
Jack Pearlstein -- Executive VP And Chief Financial Officer
I think we try and approach it like we do always, which is a bottoms up build to as great a level of detail as is possible. So I think we've got a pretty good handle on what the pieces and parts look like and how they fit together and how they're going to sort of evolved and rolled throughout the year. So, I think, we put forth a Q1 to sort of help everybody out, because I don't think if you just took the full-year guidance and divided by 4, you'd wind up in anywhere near the right place. So we did take some extra time to think carefully about how to at least stage Q1, as well as the back three quarters of the year. In terms of conservatism, it's pretty hard for us to comment on something like that. I would say short of something back in 2017. I think we've been pretty consistent in terms of where we guided and where we actually came in and I would expect us to continue to sort of work in that same general (ph) as we move forward into 2019.
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
Okay. Thank you.
Operator
(Operator Instructions) At this time, there are no questions in the question queue. I would now like to turn the conference back over to Kevin for some brief closing remarks. Kevin?
Kevin Akeroyd -- Chief Executive Officer
Thanks. Yeah. Thank you, operator. And in closing, I'd like to say that Cision management team remains truly excited about the opportunities in front of us to continue to drive revenue and margin growth globally, deliver innovation to our customers and create value for our shareholders. We believe the acquisitions of Falcon and TrendKite and the divestiture of our email marketing assets puts us in an even stronger position to capitalize on those opportunities. And lastly, I want to thank everyone for joining us on the call this afternoon and spending your time with us. Thank you.
Operator
The conference has now concluded. Thank you for attending today's presentation and you may now disconnect.
Jack Pearlstein -- Executive VP And Chief Financial Officer
Thank you, everyone.
Duration: 56 minutes
Call participants:
Kevin Akeroyd -- Chief Executive Officer
Jack Pearlstein -- Executive VP And Chief Financial Officer
Robert James Labick -- CJS Securities, Inc. -- Analyst
Michael James Turrin -- Deutsche Bank AG -- Analyst
Daniel Robert Bergstrom -- RBC Capital Markets, LLC -- Analyst
William Lowden -- BMO Capital Markets -- Analyst
George Tong -- Goldman Sachs -- Analyst
Matthew Steven Lemenager -- Robert W. Baird & Co. Incorporated -- Analyst
Trevor Romeo -- William Blair & Company L.L.C. -- Analyst
Thomas Steven Champion -- Cowen & Co. -- Analyst
Tyler Maverick Radke -- Citigroup Inc. -- Analyst
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