Core Insights - Donnelley Financial Solutions, Inc. (DFIN) reported financial results for Q4 and full year 2024, highlighting a shift towards software solutions as a key growth driver [1][4][5]. Financial Performance - Q4 2024 net sales were $156.3 million, a decrease of $20.2 million or 11.4% from Q4 2023, primarily due to reduced capital markets transactional revenue [6]. - Full-year 2024 organic software solutions net sales grew by 13.8%, totaling $329.7 million, which accounted for approximately 42% of total consolidated net sales, up from 37% in 2023 [5][11]. - Q4 2024 net earnings were $6.3 million, or $0.21 per diluted share, compared to $10.6 million, or $0.35 per diluted share in Q4 2023 [7][11]. - Adjusted EBITDA for Q4 2024 was $31.7 million, a decrease of $9.6 million from Q4 2023, with an Adjusted EBITDA margin of 20.3% [8][11]. Software Solutions Growth - The growth in software solutions net sales was led by recurring compliance software products, which saw an aggregate growth of approximately 19% in Q4 2024 [4]. - Software solutions net sales accounted for 52.2% of total Q4 net sales, indicating a strong shift towards software-centric offerings [11]. Cost Management and Profitability - The company achieved strong full-year profitability with $217.3 million in Adjusted EBITDA and a margin of 27.8%, both exceeding 2023 levels despite lower transactional revenue [5][11]. - Cost control initiatives and a favorable sales mix contributed to improved profitability metrics [8]. Cash Flow and Share Repurchase - Q4 2024 operating cash flow was $56.4 million, while free cash flow was $41.3 million [11]. - The company repurchased 281,753 shares for $17.4 million in Q4 2024, with a total of 947,288 shares repurchased for $58.7 million throughout the year [11]. Market Outlook - The company remains optimistic about capturing future opportunities in software solutions, despite uncertainties in transactional offerings [5]. - An uptick in capital markets transactional activity at the start of 2025 is viewed positively [5].

Core Viewpoint - Donnelley Financial Solutions (DFIN) will hold a conference call on February 18, 2025, to discuss its fourth-quarter fiscal year 2024 financial results and provide a business update [1][3]. Group 1: Conference Call Details - The conference call is scheduled for February 18, 2025, at 9:00 a.m. Eastern time [1]. - A live webcast will be available on the Company's investor relations website, and participants are encouraged to register at least fifteen minutes prior to the event [2]. - A replay of the webcast will be accessible after the call, along with the earnings press release and related financial tables [2]. Group 2: Financial Reporting - DFIN's fourth-quarter financial report will be released before the market opens on February 18, 2025, via a filing with the SEC on Form 8-K [3]. Group 3: Company Overview - DFIN is a leading global provider of software and technology-enabled financial regulatory and compliance solutions, offering domain expertise, enterprise software, and data analytics [4]. - The company aims to deliver confidence through its solutions amidst fluctuating markets, evolving regulations, and advancing technology [4].

Core Viewpoint - The article highlights the effectiveness of value investing and identifies Donnelley Financial Solutions (DFIN) as a strong value stock based on its financial metrics and Zacks Rank [2][4][6]. Company Summary - Donnelley Financial Solutions (DFIN) has a Zacks Rank of 2 (Buy) and an A grade for Value, indicating strong potential for value investors [4]. - The stock is currently trading at a P/E ratio of 16.78, which is lower than the industry average of 18.78, suggesting it may be undervalued [4]. - DFIN's Forward P/E has fluctuated between 19.61 and 13.56 over the past 52 weeks, with a median of 16.35, indicating variability in market perception [4]. - The company has a P/CF ratio of 10.50, which is attractive compared to the industry average of 14.45, further supporting the notion of undervaluation [5]. - Over the past year, DFIN's P/CF has ranged from 9.84 to 13, with a median of 11.27, reflecting its solid cash outlook [5]. - Overall, DFIN is positioned as a potentially undervalued stock with a strong earnings outlook, making it an appealing choice for value investors [6].

Core Viewpoint - The article emphasizes the importance of value investing and highlights Donnelley Financial Solutions (DFIN) as a strong candidate for value investors due to its favorable valuation metrics and earnings outlook [2][4][6]. Company Analysis - Donnelley Financial Solutions (DFIN) has a Zacks Rank of 2 (Buy) and a Value grade of A, indicating it is a high-quality value stock [4]. - The stock is currently trading at a P/E ratio of 17.53, which is lower than the industry average of 18.21 [4]. - DFIN's Forward P/E has fluctuated between 19.61 and 13.56 over the past 12 months, with a median of 16.23 [4]. - The company has a P/CF ratio of 10.92, which is also below the industry average of 13.74, suggesting it may be undervalued [5]. - Over the past 52 weeks, DFIN's P/CF has ranged from a high of 13 to a low of 9.84, with a median of 11.32 [5]. - The combination of these metrics indicates that DFIN is likely undervalued and has a strong earnings outlook, making it an attractive investment opportunity [6].

Core Viewpoint - Donnelley Financial Solutions (DFIN) has received a Zacks Rank 1 (Strong Buy) upgrade due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][4]. Earnings Estimates and Ratings - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - Changes in earnings estimates are a significant factor influencing stock price movements, making the Zacks rating system valuable for investors [3][5]. Impact of Institutional Investors - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [5]. Business Improvement Indicators - The rising earnings estimates for Donnelley Financial suggest an improvement in the company's underlying business, which is expected to drive the stock price higher [6]. Importance of Earnings Estimate Revisions - Empirical research shows a strong correlation between earnings estimate revisions and near-term stock movements, highlighting the importance of tracking these revisions for investment decisions [7]. Zacks Rank System Performance - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. Current Earnings Estimates for Donnelley Financial - Donnelley Financial is projected to earn $3.23 per share for the fiscal year ending December 2024, reflecting a year-over-year change of -1.2%. However, the Zacks Consensus Estimate has increased by 7% over the past three months [9]. Conclusion on Zacks Rating - The upgrade to Zacks Rank 1 places Donnelley Financial in the top 5% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [10][11].

Financial Data and Key Metrics Changes - The company reported net sales of $179.5 million, a decrease of $0.5 million or 0.3% on a reported basis, but an increase of 0.2% on an organic basis from Q3 2023 [25][6] - Adjusted EBITDA was $43.2 million, a decrease of $6.2 million from Q3 2023, with an adjusted EBITDA margin of 24.1%, down approximately 330 basis points year-over-year [29][6] - Free cash flow improved to $67.3 million, an increase of $6 million compared to Q3 2023, driven by better working capital performance [51] Business Line Data and Key Metrics Changes - Software solutions net sales grew by 13.6% on an organic basis, representing approximately 46% of total net sales, the highest level achieved to date [7][6] - Capital Markets Software Solutions segment net sales were $53.3 million, an increase of 16.8% on an organic basis, driven by strong performance in Venue, which saw approximately 27% sales growth [30][10] - Capital Markets Compliance and Communications Management segment net sales decreased by $6.6 million or 9.4% from Q3 2023, primarily due to lower capital markets transactional revenue [38][6] Market Data and Key Metrics Changes - The capital markets transactional environment remains soft, with an 8% reduction in transactional revenue [6] - IPO activity in Q3 was higher than last year, with an increased number of priced IPOs raising over $100 million, but the overall deal environment remains below historical averages [39][40] - The company maintained a historical high market share in completed IPO and M&A transactions despite the soft market conditions [40] Company Strategy and Development Direction - The company is focused on transforming its business mix towards higher-margin software solutions, evidenced by the growth in SaaS offerings [5][6] - Continued investment in tailored shareholder reports is expected to yield $11 million to $12 million in incremental recurring software revenue, with half recognized in 2024 [11][74] - The company plans to balance capital deployment between organic investments, share repurchases, and net-debt reduction [55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to perform well in varying market conditions, with expectations for continued growth in software solutions [61] - The outlook for Q4 2024 anticipates consolidated net sales in the range of $165 million to $175 million, with adjusted EBITDA margins in the low 20% range [56] - Management noted that the capital markets transactional sales are expected to be down approximately $2 million from last year's fourth quarter [56] Other Important Information - The effective tax rate for the quarter was 43.5%, influenced by non-recognizable losses and unfavorable discrete tax adjustments [21][95] - The company repurchased approximately 208,000 shares for $13.3 million during Q3, with $108.7 million remaining on its stock repurchase authorization [54] Q&A Session Summary Question: Can you discuss EBITDA margins and Q4 guidance assumptions? - Management noted a $4 million benefit in Q3 2023 and a $2 million incremental expense in Q3 2024 affecting year-over-year comparisons, with Q4 guidance consistent with last year's margins [65][69] Question: Update on tailored shareholder reports and expected benefits? - The company expects $11 million to $12 million in recurring software revenue from tailored shareholder reports, with half realized in 2024 [74] Question: Impact of lower de-SPAC merger transactions on capital markets revenue? - Management acknowledged that while the overall market was up, larger deals in 2023 affected revenue comparisons, and the IPO market remains uncertain [76][80] Question: Insights on Venue's growth and competitive dynamics? - Management indicated that while growth was strong, tougher comps are expected, and they believe they are gaining market share despite competitive pressures [86][87] Question: Clarification on tax impact in Q3? - The tax rate was affected by non-recognizable losses and discrete tax adjustments, leading to a significant impact on the effective tax rate [95]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 1-37728 | --- | --- | |-------------------------------------------------------------------------------------------------|------------------------------------------| | | | | ...

Donnelley Financial Solutions (DFIN) came out with quarterly earnings of $0.48 per share, missing the Zacks Consensus Estimate of $0.78 per share. This compares to earnings of $0.72 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -38.46%. A quarter ago, it was expected that this financial communications and data services provider would post earnings of $1.59 per share when it actually produced earnings of $1.66, delivering a s ...

Financial Performance - Record third-quarter software solutions net sales of $82.2 million, an increase of 12.3% year-over-year, accounting for 45.8% of total net sales[1] - Total net sales of $179.5 million, a decrease of 0.3% from the third quarter of 2023, with a 0.2% increase on an organic basis[2] - Net earnings of $8.7 million, or $0.29 per diluted share, compared to $18.1 million, or $0.60 per diluted share, in the third quarter of 2023[3] - Adjusted EBITDA of $43.2 million, a decrease of $6.2 million year-over-year, with an Adjusted EBITDA margin of 24.1%, down approximately 330 basis points[4] - Total net sales for the three months ended September 30, 2024, were $179.5 million, a slight decrease of 0.3% compared to $180.0 million in the same period of 2023[18] - Tech-enabled services generated $75.2 million in sales for the three months ended September 30, 2024, down from $80.4 million in the same period of 2023, representing a decline of 4.0%[18] - Software solutions sales increased to $82.2 million for the three months ended September 30, 2024, up 12.3% from $73.2 million in the same period of 2023[18] - Net earnings for the three months ended September 30, 2024, were $8.7 million, a decrease of 52.0% from $18.1 million in the same period of 2023[18] - The company reported an operating margin of 10.1% for the three months ended September 30, 2024, down from 16.6% in the same period of 2023[19] - Non-GAAP net earnings were $14.3 million, or $0.48 per diluted share, compared to $21.7 million, or $0.72 per diluted share, in the third quarter of 2023[5] Cash Flow and Liquidity - Operating cash flow of $86.4 million and free cash flow of $67.3 million, improvements of $5.9 million and $6.0 million, respectively, from the third quarter of 2023[1] - Cash and cash equivalents increased to $33.6 million as of September 30, 2024, from $23.1 million as of December 31, 2023[17] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $114.7 million, significantly higher than $49.2 million in 2023[28] - Cash and cash equivalents at the end of the period on September 30, 2024, were $33.6 million, up from $11.7 million at the end of September 2023[28] - The company maintained $300.0 million in availability under its revolving credit facility, with no borrowings outstanding as of September 30, 2024[43] Shareholder Actions - The company repurchased 208,254 shares for approximately $13.3 million at an average price of $63.96 per share[1] Market Conditions - Capital markets deal activity remained soft, with transactional revenue down nearly 8% year-over-year[1] - The eBrevia disposition negatively impacted net organic sales change by 2.2% for the three months ended September 30, 2024[33] Adjustments and Non-GAAP Measures - Total non-GAAP adjustments for the three months ended September 30, 2023, amounted to $18.2 million, leading to an adjusted non-GAAP net income of $91.9 million, or $3.05 per diluted share[21] - Non-GAAP income from operations for Q3 2024 was $26.0 million, compared to $29.8 million in Q3 2023, reflecting a decrease of approximately 12.7%[25] - Adjusted EBITDA for Q3 2024 was $43.2 million, down from $49.4 million in Q3 2023, indicating a decline of about 12.5%[25] - Total non-GAAP adjustments for Q3 2024 amounted to $7.8 million, compared to $5.2 million in Q3 2023, reflecting an increase of approximately 50%[25] - Total non-GAAP adjustments for the nine months ended September 30, 2024, amounted to $12.9 million, compared to $24.7 million in 2023, indicating a reduction in adjustments[26] Asset and Liability Management - Total liabilities decreased to $399.1 million as of September 30, 2024, compared to $404.7 million as of December 31, 2023[17] - Total assets increased to $843.6 million as of September 30, 2024, from $806.9 million as of December 31, 2023[17] - The company reported a total debt of $124.5 million, a decrease from $165.9 million in the previous quarter[42] Growth and Strategic Initiatives - The company aims to invest in generating a more favorable recurring revenue mix and capture opportunities from regulatory changes[1] - Non-GAAP income from operations for the nine months ended September 30, 2024, was $140.2 million, compared to $124.9 million in 2023, reflecting a 12.6% increase[26] - Adjusted EBITDA for the nine months ended September 30, 2024, was $185.6 million, up from $166.1 million in 2023, indicating an increase of 11.4%[26] - The operating margin for the nine months ended September 30, 2024, improved to 20.3%, compared to 16.1% in the same period of 2023[26] - The company experienced a provision for expected losses on accounts receivable of $14.3 million for the nine months ended September 30, 2024, up from $10.8 million in 2023[28]

CHICAGO, Oct. 31, 2024 /PRNewswire/ -- Donnelley Financial Solutions, Inc. (NYSE: DFIN) (the "Company" or "DFIN") today reported financial results for the third quarter of 2024.Highlights for the third quarter of 2024: Record third-quarter software solutions net sales of $82.2 million, an increase of 12.3%, or 13.6% on an organic basis(a), from the third quarter of 2023; Software solutions net sales accounted for 45.8% of total net sales, up from 40.7% in the third quarter of 2023. Total net sales of $179.5 ...