Cannae Posts $68 Million Q3 Revenue, Down 16%, as Pivot to Sports Accelerates

By Amara Osei

Cannae Holdings (NYSE: CNNE) reported third-quarter operating revenue of $68 million, down from $81 million a year earlier, as the investment company pressed ahead with its shift toward sports and entertainment, closed the last of its O'Charley's restaurants, and returned $54 million to shareholders during the quarter.

Operating expenses rose to $95 million from $89 million, a figure that includes $18 million in noncash impairment charges, primarily tied to goodwill at the restaurant group. Interim Chief Financial Officer Brett Correia said the sale of Brasada Ranch alone accounted for $10 million of the revenue decline.

Chief Executive Officer Ryan Caswell framed the quarter around capital returns. Through the date of the earnings call, the company had returned $131 million this year: $111 million spent repurchasing 7.7 million shares, plus $20 million in dividends.

The buyback has not stopped. Cannae repurchased another 1.2 million shares for $19 million in October and November. Caswell said the approach to buybacks had not changed, and that management would keep weighing liquidity and potential investments against capital returns.

What is Black Knight Football delivering?

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.

Asked by an analyst where the money would go, Caswell was specific: the vast majority is earmarked for 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 designed to lift stadium capacity to approximately 17,600. Caswell said the completed project should generate roughly $10 million in additional match-day revenue.

Black Knight's results are reported on a one-quarter lag and are not consolidated into Cannae's financial statements. For the quarter ended June 30, Black Knight generated revenue of $118 million, 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 noted that Exeter's calendar third-quarter results will first appear in Cannae's fourth-quarter reporting because the business is consolidated on a lag.

Why did O'Charley's close?

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 now appears 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 fate of the 99 restaurant business remains unresolved. 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," Caswell told Stephens analyst Oscar Nieves.

Where does the balance sheet stand?

Cannae ended the quarter with $90 million in holding-company cash. 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.

During the quarter, Cannae 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 Ranch
• a $20 million bargain purchase gain on Exeter

These were partly offset by an unrealized mark-to-market loss on SpaceX.

Are expenses coming down?

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 costs and management fees in 2025, Correia said.

He added that Cannae has identified approximately $3 million in further annualized savings from eliminating a lease and a cost-sharing agreement.

Cannae Holdings is a diversified investment company managing a portfolio of operating businesses and strategic investments across restaurants, financial services, payments, and business services, with the stated goal of building long-term value through active ownership and capital allocation.

The takeaway: Cannae is shrinking its restaurant footprint, feeding cash into football clubs and buybacks, and cutting corporate costs to fund both.