10-K: Cannae Holdings Reports Deepening Losses Amid Strategic Shifts

Cannae Holdings, Inc. reported a significant net loss in 2025, driven by a major goodwill impairment at Alight, despite strategic portfolio adjustments and expansion in its sports and investment segments.

Summary

• Net loss attributable to Cannae Holdings, Inc. common shareholders increased to $(513.2) million in 2025, compared to $(304.6) million in 2024.
• Total operating revenues decreased by $28.9 million to $423.6 million in 2025 from $452.5 million in 2024.
• Equity in losses of unconsolidated affiliates dramatically increased to $(223.5) million in 2025 from $(32.9) million in 2024, primarily due to Alight's goodwill impairment.
• Alight, Inc., a 7.7% owned affiliate, reported a net loss of $(3,097.0) million in 2025, which included a $3,124.0 million goodwill impairment charge.
• The sale of Dun & Bradstreet Holdings, Inc. (D&B) was completed on August 26, 2025, generating aggregate proceeds of $540.3 million for Cannae's remaining 59,048,691 shares, after an earlier sale of 10.0 million shares for $89.5 million.
• Cannae acquired an additional 30% ownership interest in JANA Partners on September 2, 2025, for an upfront payment of $67.5 million and potential further payments of $26.0 million, increasing its total ownership to 50.0%.
• Cannae invested $50.0 million in Black Knight Football Club US, LP (BKFC) in 2025, increasing its ownership to 44.7%. BKFC acquired a 70% ownership interest in Moreirense Futebol Clube (MFC) in June 2025.
• In January 2026, BKFC acquired the remaining 60% equity interest in FC Lorient (FCL) for $70.3 million (cash $40.7 million, stock $29.6 million), resulting in 100% ownership of FCL and Cannae's ownership in BKFC adjusting to 42.7%.
• Cannae sold approximately 2.5 million shares of Paysafe common stock in November 2025 for $16.5 million, realizing an $87.3 million tax loss.
• William P. Foley, II transitioned from Chief Executive Officer, Chief Investment Officer, and Chairman of the Board to non-executive Vice Chairman on May 12, 2025, receiving a lump-sum payment of $17.2 million and accelerated equity awards.
• Doug Ammerman was appointed Chairman of the Board and Ryan R. Caswell was appointed Chief Executive Officer, both effective May 12, 2025.
• The Management Services Agreement with Trasimene Capital Management, LLC was terminated effective May 12, 2025, with remaining payments totaling $0.6 million monthly from May to December 2025, $11.4 million on January 1, 2026, $6.7 million on July 1, 2025, and $6.6 million on July 1, 2026.
• Cannae completed its 2022 and 2023 stock repurchase programs, repurchasing 2,295,463 shares for $42.1 million and 10,000,000 shares for $195.2 million, respectively. A new 2025 program authorized up to 10.0 million shares, under which 4,700,913 shares were repurchased for $80.6 million in 2025.
• A material weakness in internal control over financial reporting was identified related to the determination of impairment charges for Right of Use (ROU) and Fixed Assets at the Restaurant Group.
• The Restaurant Group's revenue decreased by $29.1 million, or 6.9%, in 2025, with comparable store sales for 99 Restaurants declining by 0.6% and O'Charley's by 13.4%.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a challenging period for Cannae Holdings, marked by a substantial net loss and significant impairment charges in a key investment (Alight), alongside continued struggles in its Restaurant Group. While strategic portfolio adjustments and expansion in Black Knight Football show long-term vision, the immediate financial performance and identified internal control weakness present considerable concerns.

Positives

• Successful disposition of Dun & Bradstreet, generating significant cash proceeds of $629.8 million in 2025.
• Realized $87.3 million tax loss from the sale of Paysafe shares, which will be used to offset capital gains.
• Expanded its multi-club football model with BKFC acquiring a 70% ownership interest in Moreirense Futebol Clube (MFC) and 100% of FC Lorient (FCL).
• BKFC's total revenue increased by $56.0 million, or 26.5%, in the twelve months ended September 30, 2025, driven by AFCB's higher Premier League placement and increased player loans.
• BKFC's net loss decreased by $106.1 million, or 86.5%, in the twelve months ended September 30, 2025, compared to the prior year, largely due to increased income from player trading of approximately $84.8 million.
• Increased ownership in JANA Partners to 50.0%, indicating confidence in the investment management segment.
• Continued commitment to shareholder returns through active stock repurchase programs and regular quarterly cash dividends.

Negatives

• Net loss attributable to common shareholders significantly increased to $(513.2) million in 2025 from $(304.6) million in 2024.
• Equity in losses of unconsolidated affiliates dramatically increased to $(223.5) million in 2025 from $(32.9) million in 2024, primarily due to Alight's substantial goodwill impairment.
• Alight, a key investment, reported a net loss of $(3,097.0) million in 2025, including a $3,124.0 million goodwill impairment charge, indicating a significant deterioration in its valuation.
• The Restaurant Group experienced a revenue decline of 6.9% and an increased operating loss of $(27.9) million in 2025, with negative comparable store sales for both 99 Restaurants (-0.6%) and O'Charley's (-13.4%).
• A material weakness was identified in internal control over financial reporting related to impairment charges for Right of Use and Fixed Assets at the Restaurant Group.
• Total assets decreased significantly from $2,228.9 million in 2024 to $1,320.7 million in 2025, and total equity decreased from $1,815.3 million to $990.9 million.
• Alight's fair value of ownership interest ($78.9 million) remains close to its book value ($73.8 million) after a significant impairment, with potential for future impairment if fair value declines further.

Risks

• Conflicts of interest may arise from executive officers and directors allocating time to other businesses, potentially affecting resource allocation to Cannae's affairs.
• The Restaurant Group faces intense competition, sensitivity to consumer tastes, economic conditions, and rising commodity and labor costs, which could negatively impact sales and profit margins.
• Negative customer experiences or publicity related to food quality, safety, or service in the Restaurant Group could adversely affect brand reputation and sales.
• Alight's business is highly dependent on complex information technology systems and networks, making it vulnerable to cybersecurity attacks, data breaches, and system disruptions.
• Alight is subject to extensive and evolving global legal and regulatory oversight, including data privacy, healthcare, pension reform, and AI/ML usage, which could increase compliance costs and liabilities.
• Black Knight Football's revenue and success are highly dependent on the on-field performance and popularity of its football clubs, with relegation from top leagues posing a significant financial risk.
• BKFC's ability to attract and retain key personnel, including talented players and coaching staff, is critical and subject to intense competition in global markets.
• The negotiation, pricing, and terms of key media contracts for BKFC's domestic leagues are outside its direct control, posing a risk to a significant revenue stream.
• Cannae's structure as a holding company could potentially subject it to regulation under the Investment Company Act of 1940, leading to significant compliance costs and operational restrictions.
• Conflicts of interest could arise due to certain directors and executive officers holding positions with other entities, potentially affecting transaction terms or business opportunities.
• The accuracy and timeliness of Cannae's financial reporting depend on its unconsolidated affiliates' financial reporting and internal controls, with deficiencies potentially impacting Cannae's ability to report accurately.
• The due diligence process for new acquisitions may not reveal all relevant facts, and anticipated benefits from past or future acquisitions may not be realized.
• Acquisitions in new lines of business or geographic areas may divert management's attention and expose Cannae to unfamiliar operational risks.
• Cannae and its businesses are involved in legal proceedings and regulatory matters, with unfavorable outcomes potentially resulting in substantial payments or reputational harm.
• The illiquidity of certain of Cannae's ownership interests may make it difficult to sell positions quickly or at favorable prices, potentially leading to losses.
• Anti-takeover provisions in Nevada law and Cannae's Articles of Incorporation could discourage or prevent a change of control, potentially depressing the stock price.
• Estimates and assumptions used in preparing consolidated financial statements, particularly for fair value measurements and income taxes, may differ materially from actual results.
• Global operations of some ownership interests (e.g., Alight, BKFC) expose Cannae to political, financial, social instability, geopolitical events, and adverse macroeconomic or regulatory environments.
• Changing rules and stakeholder expectations on environmental, social, and corporate governance (ESG) matters create risks, including increased compliance costs, reputational harm, and potential 'anti-ESG' scrutiny.

Future Outlook

Cannae Holdings plans to continue its strategy of managing and operating its diversified businesses for long-term growth and pursuing significant, active ownership stakes in new businesses. Alight aims to be the pre-eminent employee experience partner by leveraging AI/ML for actionable insights. Black Knight Football Club intends to drive on-field and financial success of its clubs and expand its network through strategic acquisitions and partnerships. JANA Partners will focus on identifying undervalued companies and driving value-accretive change through shareholder engagement. The Restaurant Group will concentrate on enhancing the guest experience and team member engagement, while navigating competitive and economic pressures. Alight will replace its cash dividend with other capital allocation activities, including deleveraging and share repurchases. Cannae is committed to implementing remediation measures in 2026 to address the identified material weakness in internal control over financial reporting at the Restaurant Group.

Management Comments

• William P. Foley, II, Vice Chairman of the Board, emphasized the importance of integrity and ethical conduct, stating: 'This Code of Business Conduct and Ethics is a resource for applying our values and ensuring a consistent understanding of what Cannae expects of you and what our customers, business partners, and shareholders expect of us. It is intended to help resolve compliance and ethics issues by providing you with the information, tools, and resources necessary to make good, ethical decisions. However, no code can provide answers for every situation that may arise. In the end, we rely on you to use sound judgment to make the right decision and to do the right thing.'
• Ryan R. Caswell, Chief Executive Officer, certified that the annual report fairly presents the financial condition, results of operations, and cash flows, and affirmed responsibility for disclosure controls and internal control over financial reporting, while also disclosing the identified material weakness.

Industry Context

StockSavvy.ai notes that Cannae's strategy of acquiring and actively managing diverse operating companies positions it as a unique holding company, contrasting with traditional investment firms by emphasizing long-term operational involvement. The significant goodwill impairment at Alight highlights the challenges in the technology-enabled services sector, particularly in human capital management, where rapid technological shifts (like AI/ML) and intense competition demand continuous innovation and adaptation. The expansion of Black Knight Football into a multi-club model aligns with a broader trend in global sports, where media rights values and player development pathways are key drivers of value, reflecting the increasing financialization and global reach of professional football. The Restaurant Group's struggles with declining comparable store sales and increased operating losses reflect the ongoing pressures in the casual dining segment, which faces intense competition from various food service providers and is highly sensitive to macroeconomic conditions and changing consumer preferences.

Comparison to Industry Standards

• The $3.1 billion goodwill impairment at Alight is a significant event, indicating a substantial re-evaluation of its business value. This contrasts with more stable valuations seen in some established, less volatile segments of the human capital management industry. For example, ADP (Automatic Data Processing) or Paychex, while facing competition, generally exhibit more consistent financial performance and less dramatic asset revaluations due to their mature market positions and diversified service offerings. Alight's focus on AI/ML integration is a necessary response to industry trends, but the impairment suggests challenges in translating these innovations into sustained financial performance or market valuation.
• The acquisition of Moreirense Futebol Clube and FC Lorient, expanding into Portuguese and French leagues, positions BKFC within the growing multi-club ownership trend in global football. This strategy, aimed at player development and commercial synergies, is comparable to models adopted by groups like City Football Group (Manchester City, NYCFC, etc.) or Red Bull Football (RB Leipzig, Red Bull Salzburg). While these larger groups have established extensive global networks and robust player trading revenues, BKFC's recent acquisitions indicate a similar strategic direction, albeit on a smaller scale. The reported increase in BKFC's revenue and decrease in net loss, partly driven by player trading, suggests a successful initial phase of this strategy, aligning with the potential for significant returns seen in well-managed multi-club operations.
• The decline in comparable store sales for 99 Restaurants (-0.6%) and O'Charley's (-13.4%) in 2025 is worse than the broader U.S. casual dining industry, which, while facing headwinds, has shown more resilience or even modest growth in some segments. For instance, Darden Restaurants (Olive Garden, LongHorn Steakhouse) has generally reported more stable or positive comparable sales, often leveraging scale, brand recognition, and effective cost management. The increased operating loss for Cannae's Restaurant Group, coupled with asset impairments, indicates a more pronounced struggle compared to industry leaders who have better navigated inflationary pressures and shifting consumer habits.

Management Changes

Corporate Governance

Legal Proceedings

• DeBose v. Dun & Bradstreet Holdings, Inc.: A class action lawsuit alleging unauthorized use of names/personas was dismissed with prejudice on March 7, 2025.
• Batis v. Dun & Bradstreet Holdings, Inc.: A class action lawsuit alleging unauthorized use of names/personas had a settlement finalized on August 1, 2025, contingent on court approval. D&B has accrued a reserve for this matter.
• FTC Matter: D&B received a notice from the FTC in November 2024 regarding alleged violations of a Consent Order. D&B is discussing a potential resolution and has accrued a reserve for this matter.
• New England Teamsters Pension Fund and Daniel Clark v. William P. Foley II, Anthony M. Jabbour, Thomas M. Hagerty, Douglas K. Ammerman, and Cannae Holdings, Inc.: A putative class action lawsuit filed on October 23, 2025, in Delaware Court of Chancery, alleges breach of fiduciary duties by individual defendants in connection with the D&B sale and aiding and abetting by Cannae. Cannae filed a motion to dismiss on January 12, 2026, and intends to vigorously defend against the claims.

Related Party Transactions

• Cannae incurred $17.1 million in management fee expenses and $9.9 million in termination fee expenses with Trasimene Capital Management, LLC (the Manager), which is majority-owned by William P. Foley, II, Cannae's Vice Chairman.
• William P. Foley, II, Cannae's Vice Chairman, is the general partner of Black Knight Football Club US, LP (BKFC), in which Cannae invested $50.0 million in 2025.
• Entities affiliated with William P. Foley, II are the general partner of Minden Mill, in which Cannae invested an additional $5.1 million in 2025 through a note receivable.
• CSI LP, managed by entities affiliated with Frank Martire (a member of Cannae's Board), distributed $20.5 million to Cannae in 2025.
• Cannae's FNF Revolver is with Fidelity National Financial (FNF). In 2025, Cannae sold real estate to FNF for a $12.2 million reduction of outstanding principal under the FNF Revolver.
• Cannae has a 'Put Right' agreement to repurchase half of a director's common stock (2,421,174 shares) at a specified price, exercisable from January 1, 2026, accounted for as a fair value liability.
• D&B recognized revenue of $2.1 million (Q2 2025) and $4.7 million (H1 2025) from Paysafe, an investment held by Cannae Holdings where Anthony Jabbour (Cannae's CEO) is a director.

Stakeholder Impact

• Shareholders: Experienced a significant net loss and a substantial decrease in total equity, but benefited from ongoing stock repurchase programs and quarterly dividends. Legal proceedings and asset impairments could further impact shareholder value.
• Employees: Management changes and restructuring programs (Alight's Transformation Program and Post-Separation Plan) may lead to job eliminations, though severance payments are provided. Stock-based compensation plans are in place.
• Customers: Alight's focus on technology-enabled solutions and AI/ML aims to improve employee experience. The Restaurant Group is focused on enhancing the guest experience.
• Football Authorities: BKFC's operations and acquisitions are subject to approval and compliance with Football Club Rules, ensuring regulatory oversight.
• Creditors: Debt obligations and credit facilities are in place, with Alight noting deleveraging as a capital allocation activity. The 2020 Margin Facility was paid off in 2025.

Next Steps

• Cannae will continue to manage and operate its diversified businesses for long-term growth and pursue significant, active ownership stakes in new businesses.
• Alight aims to be the pre-eminent employee experience partner, leveraging AI/ML for actionable insights.
• BKFC aims to drive on-field and financial success of its clubs and expand its network.
• JANA seeks to identify undervalued companies and drive value-accretive change through shareholder engagement.
• Cannae's Restaurant Group will focus on enhancing guest experience and team member engagement.
• Cannae will implement remediation measures in 2026 to address the material weakness in internal control over financial reporting at the Restaurant Group.
• Alight will replace its cash dividend with other capital allocation activities, including deleveraging and share repurchases.
• The D&B Batis v. Dun & Bradstreet Holdings, Inc. settlement is contingent on court approval.
• D&B is discussing a potential resolution with the FTC regarding alleged violations of the Consent Order.
• Cannae's Board declared cash dividends of $0.15 per share, payable on March 31, 2026.
• Cannae repurchased additional 385,000 shares under the 2025 Repurchase Program from January 1, 2026, through January 16, 2026.
• BKFC purchased the remaining 60% equity interest in FC Lorient (FCL) in January 2026.
• Alight executed Amendment No. 5 to extend the Wipro agreement through August 31, 2029.
• FASB ASU 2024-03, 2025-05, 2025-06, 2025-11 will become effective in future fiscal years.

Key Dates

Recommendation

Cannae Holdings presents a mixed picture for investors. The significant net loss and the substantial goodwill impairment at Alight are major concerns, indicating challenges in its core investment portfolio. The Restaurant Group's continued underperformance and the identified material weakness in internal controls add to the downside risk. However, the successful disposition of Dun & Bradstreet, the expansion of Black Knight Football into a multi-club model with improving financial performance, and increased stake in JANA Partners demonstrate active portfolio management and potential for future value creation. The company's commitment to shareholder returns through repurchases and dividends, alongside efforts to address internal control issues, suggests a proactive management. Given the blend of significant headwinds and strategic initiatives, a 'Hold' recommendation is appropriate, advising investors to monitor the effectiveness of remediation efforts and the performance of key investments before making further commitments.

Keywords

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