CHICAGO, Feb. 3, 2026 /PRNewswire/ -- Donnelley Financial Solutions (NYSE: DFIN) will hold a conference call and webcast on Tuesday, February 17, 2026, at 9:00 a.m. Eastern time to discuss its fourth-quarter fiscal year 2025 financial results, provide a general business update and respond to analyst questions. A live webcast of the call will also be available on the Company's investor relations website. Please visit investor.dfinsolutions.com at least fifteen minutes prior to the start of the event to regi ...

Summary of Donnelley Financial Solutions (NYSE:DFIN) FY Conference Call Company Overview - Donnelley Financial Solutions specializes in helping clients comply with SEC regulations, serving public corporations, pre-IPO corporations, mutual funds, ETFs, and regulated insurance companies [2][4] - The company has transitioned to a business model where nearly 50% of its revenue comes from software solutions, with the remainder from tech-enabled services [2][7] Core Business Segments Compliance and Transactions - The business is divided into compliance (e.g., 10-Ks, 10-Qs, proxy statements) and transactions, with compliance now accounting for 75% of revenue [4][5] - Event-driven revenue is approximately 25% of the overall business, indicating a strong recurring revenue base [4] Software Products - Key software products include: - **ActiveDisclosure**: Focused on corporate compliance - **Venue**: A data room solution for completing deals - **ArcSuite**: Targeted at mutual funds and ETFs for financial reporting [4][5] Tech-Enabled Services - This segment involves providing traditional services where the company prepares compliance and transactional documents for clients, which remains a competitive advantage [9][10] Print and Distribution - Print services now account for about 15% of total revenue, down from 40% in 2016, with gross margins improving from low 20% to mid-40% [12][13] Market Dynamics and Growth Opportunities - The company aims to derive 60% of total sales from software solutions by 2028, with ongoing market share growth and price increases as key strategies [7][8] - The capital markets activity is expected to rebound, potentially increasing revenue by over $100 million, with incremental margins projected at 50%-60% [16][17] Regulatory Changes - Recent regulations, such as the Tailored Shareholder Reports, have positively impacted revenue, with ongoing opportunities from new SEC regulations [20][21] Artificial Intelligence Integration - The company is leveraging AI to enhance product offerings and internal operations, with a balanced approach to opportunities and risks [23][24] - AI initiatives include the Active Intelligence tool for benchmarking and document management [24] Margin Improvement - EBITDA margins have increased from mid-teens to nearly 30%, with a long-term goal of exceeding 30% [28][29] - Factors contributing to margin improvement include a shift towards software, disciplined cost management, and pricing strategies [30][32] Capital Allocation Strategy - The company maintains a balanced approach to capital allocation, focusing on organic investments while remaining open to M&A opportunities that align with strategic goals [33][34] Future Outlook - Excitement surrounds the transition to sustained growth, with a focus on expanding capabilities and addressing new market opportunities, particularly in private markets [36][38] - The company is well-positioned to benefit from larger clients and regulatory changes, enhancing its value proposition [45][46] Key Takeaways - Donnelley Financial Solutions is transitioning towards a software-centric business model, with significant growth potential in compliance and capital markets - The integration of AI and a disciplined approach to cost management are expected to drive future profitability - The company is strategically positioned to capitalize on regulatory changes and market dynamics, with a focus on sustainable growth and client relationships

Core Insights - Donnelley Financial Solutions (DFIN) will participate in the 28th Annual Needham Growth Conference in New York on January 13, 2026, with CEO Dan Leib and CFO Dave Gardella scheduled for a fireside chat at 8:45 AM EST [1]. Company Overview - DFIN is a leading global provider of compliance and regulatory software and services, addressing the end-to-end regulatory compliance needs of investment companies, complex capital markets transactions, and essential financial reporting throughout the corporate lifecycle [3]. - The company's mission is to empower clients with necessary software and support to manage public company filings, investment company filings, private reporting, and beneficial owner reporting, while enhancing workflow efficiency [3]. - DFIN emphasizes its deep expertise in driving transparency and collaboration, built on confidence and reliability [3].

Core Thesis - Donnelley Financial Solutions, Inc. (DFIN) is facing significant challenges in its software-led growth strategy, with deteriorating retention rates and competitive pressures impacting its revenue projections [2][5][6] Financial Performance - As of December 1st, DFIN's share price was $47.98, with a trailing P/E ratio of 43.80 [1] - The company's stock price has depreciated approximately 19.27% since a previous bullish coverage due to unmet software targets [6] Software and Revenue Challenges - DFIN has repeatedly pushed out its long-term software revenue targets from 2026 to 2028, indicating a weakening core software business [2] - The company is projected to see a shift in its revenue mix to 60% software, which is increasingly deemed unrealistic due to declining gross and net retention rates [2][3] Customer Retention and Competition - DFIN is experiencing structurally worsening churn, losing recurring 10-K clients to competitors like Workiva, which retains customers at significantly higher rates [4] - The customer base primarily consists of sub-$100 million market-cap companies, leading to increased attrition driven by bankruptcies [4] Margin and Investment Trade-offs - Management faces a trade-off between preserving margins through limited R&D investment or accelerating investment at the cost of margin pressure [3] - Recent margin gains have been primarily driven by price hikes, which are nearing exhaustion, indicating limited future pricing power [3][5] Future Outlook - With regulatory tailwinds fading and retention deteriorating, software growth is expected to decelerate sharply, leading to a potential compression of DFIN's valuation multiple [5] - The company’s ability to achieve its original $500 million software revenue goal appears increasingly unattainable, raising concerns about its future performance [3][5]

Financial Performance - Total net sales for Q3 2025 were $175.3 million, a decrease of 2.3% compared to $179.5 million in Q3 2024[20] - Software solutions revenue increased to $90.7 million in Q3 2025, up 10.3% from $82.2 million in Q3 2024[20] - Tech-enabled services revenue decreased to $68.6 million in Q3 2025, down 8.8% from $75.2 million in Q3 2024[20] - Net loss for Q3 2025 was $40.9 million, compared to net earnings of $8.7 million in Q3 2024[20] - Comprehensive income for the nine months ended September 30, 2025, was $89.2 million, compared to $87.1 million for the same period in 2024[23] - For the nine months ended September 30, 2025, total net sales were $594.5 million, a decrease from $625.6 million in the same period of 2024, representing a decline of about 5.0%[50] - Net earnings for the nine months ended September 30, 2025, were $26.2 million, a decrease from $86.1 million in 2024, representing a decline of 69.6%[27] - The company reported a loss before income taxes of $57.9 million for the three months ended September 30, 2025, compared to earnings before income taxes of $15.4 million in the same period of 2024[90] Assets and Liabilities - Total assets decreased to $816.3 million as of September 30, 2025, from $841.6 million as of December 31, 2024[25] - Cash and cash equivalents decreased to $22.7 million as of September 30, 2025, down from $57.3 million at the end of 2024[25] - Total liabilities decreased to $393.2 million as of September 30, 2025, from $405.5 million at the end of 2024[25] - Total debt as of September 30, 2025, was $154.7 million, an increase from $124.7 million as of December 31, 2024[68] Cash Flow and Expenditures - Net cash provided by operating activities for the nine months ended September 30, 2025, was $105.1 million, down from $114.7 million in 2024, a decrease of 8.5%[27] - Capital expenditures for the nine months ended September 30, 2025, were $45.2 million, compared to $50.8 million in 2024, reflecting a reduction of 10.9%[27] - Capital expenditures for the three months ended September 30, 2025, were $15.2 million, compared to $19.1 million in the same period of 2024, indicating a decrease of approximately 20.4%[94] Pension and Settlement Charges - The company incurred a pension plan settlement charge of $82.8 million in Q3 2025[20] - The company recognized a non-cash settlement charge of $82.8 million during the three and nine months ended September 30, 2025, due to the Plan Settlement[66] - The net pension plan expense for the three months ended September 30, 2025, was $0.4 million, compared to a net income of $0.2 million for the same period in 2024[64] - The company made a $12.5 million cash contribution to fully fund the pension plan obligations during the three months ended September 30, 2025[65] Shareholder Activities - The weighted average number of diluted shares outstanding decreased to 28.5 million in the nine months ended September 30, 2025, from 30.1 million in the same period in 2024[20] - Common stock repurchases for the three months ended September 30, 2025, amounted to $35.5 million, with 659,367 shares repurchased at an average price of $53.79 per share[78] - The company’s treasury share repurchases amounted to $123.1 million for the nine months ended September 30, 2025, compared to $64.4 million in 2024, an increase of 91.5%[27] - As of September 30, 2025, the remaining authorized amount for stock repurchases was $114.5 million[76] Segment Performance - The company operates through four reportable segments, focusing on software solutions and compliance management for capital markets and investment companies[84] - The Capital Markets segment provides software solutions and tech-enabled services to assist clients with SEC compliance, including initial public offerings and mergers[85] - The Investment Companies segment offers a comprehensive suite of cloud-based solutions for mutual fund companies and other investment entities to comply with SEC regulations[87] - Segment Adjusted EBITDA for the three months ended September 30, 2025, was $61.3 million, compared to $52.4 million for the same period in 2024, representing a year-over-year increase of 16.9%[90] - Total Segment Adjusted EBITDA for the nine months ended September 30, 2025, was $222.9 million, compared to $212.2 million for the same period in 2024, showing an increase of 5.5%[92] Revenue Recognition and Estimates - Revenue recognition is based on the transfer of control of promised services or products, with significant judgment required for arrangements with multiple performance obligations[48] - Contract assets increased to $18.8 million as of September 30, 2025, from $13.8 million at December 31, 2024, with revenue recognized exceeding prior estimates by approximately $8.6 million for Q3 2025[52] - Unbilled receivables rose to $26.8 million at September 30, 2025, compared to $24.1 million at December 31, 2024, reflecting the company's assessment of realizable selling price[53] - Contract liabilities increased to $63.8 million as of September 30, 2025, from $52.9 million at December 31, 2024, with $46.1 million of revenue recognized during the nine months ended September 30, 2025, that was included in deferred revenue[54] - Future estimated revenue related to unsatisfied performance obligations is approximately $175 million, with about 50% expected to be recognized over the next twelve months[55]

Financial Data and Key Metrics Changes - The company reported total net sales of $175.3 million for Q3 2025, a decrease of $4.2 million or 2.3% from Q3 2024 [17] - Adjusted EBITDA was $49.5 million, an increase of $6.3 million or 14.6% from the previous year, with an adjusted EBITDA margin of 28.2%, up approximately 410 basis points [21] - Free cash flow for the quarter was $59.2 million, $8.1 million lower than Q3 2024, primarily due to unfavorable working capital and a one-time cash contribution related to the pension plan settlement [31] Business Line Data and Key Metrics Changes - Software solutions net sales grew by 10.3% year-over-year, accounting for approximately 52% of total sales in the quarter [5][17] - ActiveDisclosure, a recurring compliance software product, saw sales growth of approximately 26%, marking the third consecutive quarter of double-digit growth [7][22] - Venue's sales increased by approximately 3% year-over-year, benefiting from stable demand across public and private companies [9][23] Market Data and Key Metrics Changes - Capital markets transactional revenue was recorded at $41.8 million, down $3.5 million from last year's Q3, despite a 25% year-over-year increase in U.S. IPO activity [25][26] - Compliance revenue decreased by $2.8 million or 15.4% compared to Q3 2024, driven by lower volume of compliance work [26] Company Strategy and Development Direction - The company is focused on transforming into a software-centric business, aiming to derive approximately 60% of total sales from software solutions by 2028 [6] - Continued investments in modernization and innovation of software products are expected to drive future growth [11] - The company is preparing its 2026 operating plan and extending its long-range plan through 2030, with an emphasis on growing the software solutions portfolio [37] Management's Comments on Operating Environment and Future Outlook - The ongoing U.S. government shutdown has impacted capital markets deal activity, delaying many transactions [12][13] - Despite the shutdown, the company remains well-positioned to capture latent demand when market activity normalizes [14][37] - The company expects Q4 2025 consolidated net sales in the range of $150 million to $160 million, reflecting a slight reduction compared to the previous year [33] Other Important Information - The company completed the termination of its primary defined benefit pension plan, resulting in a non-cash pre-tax settlement charge of $82.8 million [15][16] - The company repurchased approximately 659,000 shares of common stock during Q3 for $35.5 million [32] Q&A Session Summary Question: Impact of government shutdown on Q4 margins - Management indicated that the lower transactional revenue would negatively impact margins, but a recovery from healthcare expenses would help offset this [42][43] Question: SEC reporting frequency changes - Management is monitoring developments regarding the proposal to reduce reporting frequency and believes their subscription model provides insulation from potential impacts [50][52] Question: Resurgence of SPAC IPOs and DFIN's participation - Management noted a decline in market share due to the nature of recent SPAC deals but emphasized participation in quality deals [55][56] Question: Venue performance and timing of M&A deals - Management expressed optimism about Venue's performance and indicated that while the government shutdown has delayed some M&A deals, underlying activity remains strong [62][64] Question: Capital allocation strategy - Management reiterated that maintaining financial flexibility and being opportunistic with share repurchases are top priorities [76]

Financial Data and Key Metrics Changes - The company reported total net sales of $175.3 million for Q3 2025, a decrease of $4.2 million or 2.3% from Q3 2024 [17] - Adjusted EBITDA was $49.5 million, an increase of $6.3 million or 14.6% from the previous year, with an adjusted EBITDA margin of 28.2%, up approximately 410 basis points from Q3 2024 [21] - Free cash flow for the quarter was $59.2 million, $8.1 million lower than Q3 2024, primarily due to unfavorable working capital and a one-time cash contribution related to the pension plan settlement [31] Business Line Data and Key Metrics Changes - Software solutions net sales grew by 10.3% year-over-year, accounting for approximately 52% of total sales in the quarter [5][17] - ActiveDisclosure saw a significant sales growth of approximately 26%, while ArcSuite's growth was more modest at around 10% due to overlapping benefits from previous regulatory changes [7][9] - Venue's sales increased by approximately 3% compared to the same quarter last year, benefiting from stable demand across public and private companies [9][10] Market Data and Key Metrics Changes - The capital markets transactional revenue was reported at $41.8 million, down $3.5 million from Q3 2024, primarily due to lower foreign issuer transaction volumes [25][26] - The company experienced a 25% year-over-year increase in U.S. IPO activity, although this was offset by a soft market for foreign issuance transactions [25][26] - The ongoing government shutdown has impacted capital markets deal activity, delaying many planned transactions [12][13] Company Strategy and Development Direction - The company is focused on transforming into a software-centric business, aiming to derive approximately 60% of total sales from software solutions by 2028 [6] - Continued investments in modernization and innovation of software products are expected to drive future growth [11] - The company is preparing its 2026 operating plan and extending its long-range plan through 2030, with an emphasis on growing software solutions and operational transformation [37] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to perform well despite the uncertainty caused by the government shutdown, highlighting strong client relationships and market leadership [14][37] - The outlook for Q4 2025 includes expected consolidated net sales in the range of $150 million to $160 million, reflecting a slight reduction compared to the previous year [33] - Management anticipates that the government shutdown will lead to a temporary softening in capital markets transactional revenue, with expectations for recovery once operations resume [34][36] Other Important Information - The company completed the termination of its primary defined benefit pension plan, resulting in a non-cash pre-tax settlement charge of $82.8 million [15][16] - The company repurchased approximately 659,000 shares of common stock during Q3 for $35.5 million, with $114.5 million remaining on its current stock repurchase authorization [32] Q&A Session Summary Question: Impact of government shutdown on Q4 margins - Management indicated that the lower transactional revenue would negatively impact margins, but a healthcare recovery would help offset this [42][43] Question: SEC reporting frequency changes - Management is monitoring developments regarding potential changes to SEC reporting frequency and believes their subscription model provides insulation from most impacts [50][52] Question: Resurgence of SPAC IPOs - Management noted a decline in share of SPAC deals due to increased competition and a focus on quality deals [55][56] Question: Venue performance and timing of M&A deals - Management expressed optimism about Venue's performance and indicated that while the government shutdown has delayed some M&A deals, underlying activity remains strong [62][64] Question: Capital allocation priorities - Management reiterated that maintaining financial flexibility and being opportunistic with share repurchases are top priorities [76]

Financial Data and Key Metrics Changes - Total net sales for Q3 2025 were $175.3 million, a decrease of $4.2 million or 2.3% from Q3 2024 [16] - Adjusted EBITDA was $49.5 million, an increase of $6.3 million or 14.6% from Q3 2024, with an adjusted EBITDA margin of 28.2%, up approximately 410 basis points from the previous year [19] - Free cash flow in the quarter was $59.2 million, $8.1 million lower than Q3 2024, primarily due to unfavorable working capital and a one-time cash contribution related to the pension plan settlement [29] Business Line Data and Key Metrics Changes - Software solutions net sales grew by 10.3% year-over-year, accounting for approximately 52% of total sales in the quarter [5][16] - Capital markets software solution segment net sales were $59 million, an increase of $5.7 million or 10.7% from the previous year, driven by ActiveDisclosure, which saw a 26% sales growth [20][21] - Net sales in the capital markets compliance and communications management segment decreased by $6.3 million or 9.9% from Q3 2024, primarily due to lower transactional revenue [22] Market Data and Key Metrics Changes - Event-driven transactional revenue declined by $4.4 million year-over-year, primarily due to lower volume for foreign issuer transactions on U.S. exchanges, partially offset by stronger U.S. IPO volume [17][23] - The government shutdown has impacted capital markets deal activity, delaying many planned transactions [12][13] Company Strategy and Development Direction - The company continues to focus on transforming into a software-centric business, aiming to derive approximately 60% of total sales from software solutions by 2028 [5] - The launch of new products like Venue and ArcFlex is part of the strategy to modernize and expand offerings in the marketplace [10][11] - The company is preparing its 2026 operating plan and extending its long-range plan through 2030, focusing on growing its software solutions portfolio and operational transformation [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to capture latent demand once market activity normalizes post-government shutdown [13][35] - The outlook for Q4 2025 anticipates consolidated net sales in the range of $150 million to $160 million, reflecting a reduction compared to the previous year due to lower print and distribution sales [31] - The company expects capital markets transactional revenue to be temporarily soft due to the government shutdown, estimating net sales in this segment to be between $30 million to $40 million [32] Other Important Information - The company completed the termination of its primary defined benefit pension plan, resulting in a non-cash pre-tax settlement charge of $82.8 million [14][15] - The company repurchased approximately 659,000 shares of common stock during Q3 for $35.5 million, with $114.5 million remaining on its current stock repurchase authorization [30] Q&A Session Summary Question: Impact of government shutdown on Q4 margins - Management indicated that the margin impact of lower transactional revenue has been contemplated in their guidance, expecting a 300 basis point increase in margins compared to last year [38][39] Question: SEC reporting frequency changes - The company is monitoring developments related to the proposal to reduce corporate reporting frequency, noting that most of its 10-Qs are on ActiveDisclosure, which operates as a subscription business [46][47] Question: Resurgence of SPAC IPOs and DFIN's participation - Management acknowledged a decline in market share in SPAC deals due to increased competition and the nature of the deals, but emphasized participation in quality SPAC and D-SPAC deals [49][50] Question: Venue performance and product impact - Management noted that the growth in Venue is primarily driven by sales execution, with expectations for more significant impacts from the new product in future quarters [60][62] Question: Capital allocation strategy - The company maintains a focus on financial flexibility, prioritizing strategic transformation and being opportunistic with share repurchases while considering organic and inorganic investments [64]

October 2025 DFINsolutions.com © 2025 DFIN. All rights reserved Investor Presentation This presentation is the intellectual property of DFIN. The ideas expressed in it may not be adopted or reproduced without prior permission from and compensation to DFIN. Forward Looking Statements and Use of Non-GAAP Financial Measures USE OF FORWARD-LOOKING STATEMENTS This presentation includes certain "forward-looking statements" within the meaning of, and subject to the safe harbor created by, Section 21E of the Securi ...

Financial Results - Donnelley Financial Solutions, Inc. reported financial results for Q3 2025, focusing on the completion of the pension plan termination[5]. - The report was issued on October 23, 2025, detailing the company's operational and financial condition[5]. Company Information - The company is listed on the NYSE under the symbol DFIN[4].