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Dun & Bradstreet(DNB) - 2023 Q2 - Earnings Call Transcript
2023-08-06 01:40
Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Q2 2023 Earnings Conference Call August 3, 2023 8:30 AM ET Corporate Participants Sean Anthony - Vice President, Corporate Financial Planning and Analysis Anthony Jabbour - Chief Executive Officer Bryan Hipsher - Chief Financial Officer Conference Call Participants John Mazzoni - Wells Fargo Kyle Peterson - Needham Stephanie Moore - Jefferies Heather Balsky - Bank of America Andrew Steinerman - JPMorgan Manav Patnaik - Barclays George Tong - Goldman Sachs Craig Hub ...
Dun & Bradstreet(DNB) - 2023 Q2 - Quarterly Report
2023-08-02 16:00
PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited Q2 2023 financial statements reveal revenue growth, increased net loss, stable operating cash flow, and a slight decrease in total assets and liabilities [Condensed Consolidated Statement of Operations and Comprehensive Income (Loss)](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) The statement shows increased revenue for both periods, but a decline in operating income and a significant widening of net loss attributable to the company | Financial Metric | Three Months Ended June 30, 2023 | Three Months Ended June 30, 2022 | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $554.7M | $537.3M | $1,095.1M | $1,073.3M | | **Operating Income** | $16.5M | $29.7M | $24.4M | $46.1M | | **Net Loss** | ($18.8M) | $0.0M | ($51.6M) | ($29.8M) | | **Net Loss Attributable to D&B** | ($19.4M) | ($1.8M) | ($53.1M) | ($33.1M) | | **Diluted Loss Per Share** | ($0.04) | $0.00 | ($0.12) | ($0.08) | - Revenue **increased** for both the three and six-month periods ending June 30, 2023, compared to the same periods in 2022, while operating income **declined**, and net loss attributable to the company **widened significantly**[9](index=9&type=chunk) [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheet indicates a slight decrease in total assets and total liabilities from December 2022 to June 2023 | Balance Sheet Item | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Total Current Assets** | $690.1M | $703.9M | | **Total Assets** | $9,267.2M | $9,471.9M | | **Total Current Liabilities** | $974.6M | $1,102.6M | | **Long-term Debt** | $3,613.0M | $3,552.2M | | **Total Liabilities** | $5,817.6M | $5,963.5M | | **Total Stockholder Equity** | $3,438.9M | $3,499.3M | - From December 31, 2022, to June 30, 2023, **total assets decreased** from $9.47 billion to $9.27 billion, and **total liabilities decreased** from $5.96 billion to $5.82 billion, primarily due to a reduction in 'Other accrued and current liabilities'[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flow from operations remained stable, while cash used in financing activities increased due to dividend payments and non-controlling interest purchases | Cash Flow Activity (Six Months Ended June 30) | 2023 | 2022 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $214.6M | $216.5M | | **Net cash used in investing activities** | ($81.2M) | ($103.4M) | | **Net cash used in financing activities** | ($88.0M) | ($64.7M) | | **Increase in cash and cash equivalents** | $52.2M | $38.4M | - For the six months ended June 30, 2023, **cash from operations was stable** at $214.6 million, while **cash used in financing activities increased**, primarily due to dividend payments and the purchase of non-controlling interests[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes provide details on the company's operating segments, revenue recognition policies, debt structure, and derivative financial instruments - The company operates through two segments, North America and International, both providing Finance & Risk and Sales & Marketing solutions[27](index=27&type=chunk)[31](index=31&type=chunk) Revenue Recognition (Six Months Ended June 30) | Revenue Recognition (Six Months Ended June 30) | 2023 | 2022 | | :--- | :--- | :--- | | Revenue recognized at a point in time | $443.4M | $423.1M | | Revenue recognized over time | $651.7M | $650.2M | | **Total revenue recognized** | **$1,095.1M** | **$1,073.3M** | - **Total debt** as of June 30, 2023, was $3.646 billion, a **slight increase** from year-end 2022, comprising term loans, a revolving facility, and senior unsecured notes[45](index=45&type=chunk) - The company uses interest rate and cross-currency swaps to manage risks, with the **notional amount of interest rate swaps at $2.75 billion** as of June 30, 2023[90](index=90&type=chunk)[93](index=93&type=chunk)[96](index=96&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Unaudited)) Management reports Q2 2023 revenue growth of 3.2% (3.8% constant currency), but operating income declined and net loss widened, despite a 3.1% increase in Adjusted EBITDA with stable margins [Business Overview](index=31&type=section&id=Business%20Overview) Dun & Bradstreet is a global provider of business decisioning data and analytics, operating through two segments with a highly recurring revenue model - Dun & Bradstreet is a global provider of business decisioning data and analytics, offering Finance & Risk and Sales & Marketing solutions[138](index=138&type=chunk) - The company operates through two segments: North America (United States and Canada) and International (including U.K., Europe, Greater China, India, and Worldwide Network alliances)[144](index=144&type=chunk) - The business model features **highly recurring, diversified revenue**, **significant operating leverage**, **low capital requirements**, and **strong free cash flow**[142](index=142&type=chunk) [Results of Operations](index=36&type=section&id=Results%20of%20Operations) Q2 2023 saw revenue growth across segments, but operating income declined and net loss widened, despite an increase in Adjusted EBITDA Revenue Performance (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | Change | Change (Constant Currency) | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $554.7M | $537.3M | +3.2% | +3.8% | | North America Revenue | $391.6M | $381.3M | +2.7% | +2.8% | | International Revenue | $163.1M | $156.0M | +4.6% | +6.2% | - For Q2 2023, **total organic revenue increased by 3.9%** after excluding divestiture and foreign exchange impacts[175](index=175&type=chunk) - **Operating income for Q2 2023 decreased by 44.5%** to $16.5 million, primarily due to a 12.9% increase in Cost of Services driven by higher data acquisition and processing costs[191](index=191&type=chunk)[192](index=192&type=chunk)[201](index=201&type=chunk) Adjusted EBITDA Performance (Q2 2023 vs Q2 2022) | Metric | Q2 2023 | Q2 2022 | Change | | :--- | :--- | :--- | :--- | | **Adjusted EBITDA** | $206.2M | $200.0M | +3.1% | | **Adjusted EBITDA Margin** | 37.2% | 37.2% | 0 bps | - **Net loss attributable to the company widened** to $19.4 million in Q2 2023, driven by lower operating income and a $13.4 million increase in net interest expense[213](index=213&type=chunk)[221](index=221&type=chunk) [Liquidity and Capital Resources](index=46&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains sufficient liquidity through operating cash flow and credit facilities, with total debt at approximately $3.7 billion as of June 30, 2023 - Primary liquidity sources include cash from operations, cash on hand, and credit facility borrowings, which the company believes are **sufficient to meet short-term needs** for at least the next twelve months[225](index=225&type=chunk)[226](index=226&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash from operating activities | $214.6M | $216.5M | | Net cash used in investing activities | ($81.2M) | ($103.4M) | | Net cash used in financing activities | ($88.0M) | ($64.7M) | - As of June 30, 2023, the company held **cash and cash equivalents of $260.6 million**, with the majority held by foreign operations[228](index=228&type=chunk) - **Total debt stood at approximately $3.7 billion** as of June 30, 2023, with interest rate risk actively managed through swaps[237](index=237&type=chunk)[227](index=227&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks, including currency exchange rates, investment values, and interest rates, have not materially changed since year-end 2022 - The company's main market risks pertain to currency exchange rates, investment market values, and interest rates[240](index=240&type=chunk) - **No material changes** to market risks were reported as of June 30, 2023, compared to the year-end 2022 report[240](index=240&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of June 30, 2023, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective at a reasonable assurance level** as of June 30, 2023[245](index=245&type=chunk) - There were **no changes** during the quarter ended June 30, 2023, that materially affected internal control over financial reporting[246](index=246&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various ordinary course legal and regulatory matters, including two right of publicity class action lawsuits for which no loss is currently probable or estimable - The company is involved in ordinary course litigation, including class action lawsuits and regulatory investigations[64](index=64&type=chunk) - Two class action lawsuits, DeBose v. Dun & Bradstreet and Batis v. Dun & Bradstreet, allege misuse of names on the Hoovers website, for which the company has **not established a financial reserve**[69](index=69&type=chunk)[71](index=71&type=chunk)[72](index=72&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from governmental regulations, including an FTC consent order and inquiry, and the evolving landscape of stringent data privacy laws, leading to compliance challenges and increased operational burdens - The company is subject to a **20-year consent order** with the U.S. Federal Trade Commission (FTC) finalized in April 2022, requiring specific compliance practices[250](index=250&type=chunk) - An **FTC study** of the small business credit reporting industry, initiated in March 2023, could lead to new rulemaking or actions impacting the business[251](index=251&type=chunk) - The company faces risks from a **growing number of U.S. state privacy laws** and **international regulations**, which are becoming more stringent and create **significant compliance expenses and operational burdens**[249](index=249&type=chunk)[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities occurred during the reporting period - No unregistered sales of equity securities or use of proceeds were reported[254](index=254&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities occurred during the reporting period - No defaults upon senior securities were reported[254](index=254&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) No director or officer adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2023 - **No director or officer adopted or terminated** a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement in the second quarter of 2023[255](index=255&type=chunk)
Dun & Bradstreet(DNB) - 2023 Q1 - Earnings Call Transcript
2023-05-06 21:47
Financial Data and Key Metrics Changes - For Q1 2023, total revenues were $540 million, an increase of $4 million or 1% year-over-year, with organic constant currency revenues up 3.2% [21][22] - Net loss for the quarter was $34 million, compared to a net loss of $31 million in the prior year [21] - Adjusted EBITDA was $190 million, flat compared to the prior year, with an adjusted EBITDA margin of 35% [21][22] Business Line Data and Key Metrics Changes - North America revenues were $375 million, up 2%, with Finance & Risk revenues flat at $201 million and Sales & Marketing revenues increasing by 5% to $174 million [22][23] - International revenues decreased by $3 million to $166 million, but organic revenues increased by 5.5% on a constant currency basis [23] - Finance & Risk revenues in the International segment were $111 million, up 2%, while Sales & Marketing revenues decreased by 8% to $55 million [23] Market Data and Key Metrics Changes - The U.K. and Ireland markets showed nearly 10% growth, while Europe grew by 4% [36] - Asia experienced low single-digit growth, attributed to lingering effects from 2022 lockdowns [36] - The company reported strong demand for its modern Finance & Risk solutions across all markets [36] Company Strategy and Development Direction - The company is focusing on transforming underperforming assets and evaluating potential divestitures, with a range of $50 million to $75 million in assets under consideration [6] - There is a strong emphasis on leveraging proprietary data and AI technology to enhance customer insights and operational efficiency [2][39] - The company aims to maintain long-term contracts, with over 50% of contracts now being multiyear [59] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate macroeconomic challenges, citing strong demand for mission-critical solutions [31] - The company maintained its 2023 organic revenue growth guidance of 3% to 4.5%, with expectations for continued momentum [14][26] - Management highlighted the importance of ongoing transformation efforts to offset economic headwinds and drive growth [40] Other Important Information - The company has made significant progress in migrating legacy applications to modern solutions, enhancing customer engagement and satisfaction [1] - The adjusted net income for Q1 was $81 million, down from the prior year due to increased interest expenses [21] - The company is focused on improving its data supply chain and reducing reliance on mainframe hardware by 50% [38] Q&A Session Summary Question: Can you elaborate on the competitive moat regarding AI? - Management emphasized the proprietary data that cannot be scraped, which differentiates the company from competitors using public data [2][72] Question: What is the growth outlook for Hoovers? - Management reported significant improvements in retention rates for Hoovers, with revenues in the range of $90 million to $100 million [50] Question: How is the company addressing divestitures? - Management indicated a strategic approach to divestitures, focusing on non-core assets and evaluating their potential for transformation [6][61] Question: What is the impact of the macro environment on small business customers? - Management noted that while there are headwinds, the company is committed to supporting small businesses through new capabilities and partnerships [76] Question: How is the company leveraging AI in its operations? - Management discussed the integration of AI technologies to enhance data matching and analytics capabilities, driving efficiencies in operations [39][44]
Dun & Bradstreet(DNB) - 2023 Q1 - Quarterly Report
2023-05-03 16:00
PART I. FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited condensed consolidated financial statements for Q1 2023, covering operations, balance sheets, cash flows, equity, and detailed notes [Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Unaudited)) Q1 2023 reported a net loss of $32.8 million, with revenue up 0.8% to $540.4 million, and operating income down 51.8% Statement of Operations and Comprehensive Income (Loss) | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Revenue | 540.4 | 536.0 | 4.4 | 0.8% | | Operating Income (Loss) | 7.9 | 16.4 | (8.5) | (51.8%) | | Net Income (Loss) | (32.8) | (29.8) | (3.0) | (10.1%) | | Net Income (Loss) Attributable to D&B | (33.7) | (31.3) | (2.4) | (7.7%) | | Basic EPS | (0.08) | (0.07) | (0.01) | (14.3%) | | Diluted EPS | (0.08) | (0.07) | (0.01) | (14.3%) | [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) As of March 31, 2023, total assets decreased 1.8% to $9,303.3 million, liabilities 2.0% to $5,842.4 million, and equity 1.4% Condensed Consolidated Balance Sheets | Metric | March 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------- | :------------------------------ | :------------------------------- | :-------------------- | :--------- | | Total Assets | 9,303.3 | 9,471.9 | (168.6) | (1.8%) | | Total Liabilities | 5,842.4 | 5,963.5 | (121.1) | (2.0%) | | Total Equity | 3,460.9 | 3,508.4 | (47.5) | (1.4%) | | Cash and Cash Equivalents | 204.1 | 208.4 | (4.3) | (2.1%) | | Accounts Receivable, net | 181.4 | 271.6 | (90.2) | (33.2%) | | Deferred Revenue (Current) | 624.9 | 563.1 | 61.8 | 11.0% | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) Q1 2023 operating cash flow increased 12.2% to $155.7 million, investing decreased 19.8%, and financing increased 139.6% to $122.2 million Condensed Consolidated Statements of Cash Flows | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Net Cash from Operating Activities | 155.7 | 138.8 | 16.9 | 12.2% | | Net Cash from Investing Activities | (39.6) | (49.4) | 9.8 | (19.8%) | | Net Cash from Financing Activities | (122.2) | (51.0) | (71.2) | 139.6% | | Cash and Cash Equivalents, End of Period | 204.1 | 215.8 | (11.7) | (5.4%) | [Condensed Consolidated Statements of Stockholder Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholder%20Equity%20(Unaudited)) Total stockholder equity decreased 1.4% to $3,450.8 million by March 31, 2023, due to a $33.7 million net loss and $21.8 million in dividends Condensed Consolidated Statements of Stockholder Equity | Metric | Balance, January 1, 2023 (Millions USD) | Balance, March 31, 2023 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :-------------------------------------- | :------------------------------------- | :-------------------- | :--------- | | Total Stockholder Equity | 3,499.3 | 3,450.8 | (48.5) | (1.4%) | | Net Income (Loss) | (33.7) | N/A | (33.7) | N/A | | Equity-based Compensation Plans | 14.5 | N/A | 14.5 | N/A | | Dividends Declared | (21.8) | N/A | (21.8) | N/A | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Detailed notes for condensed consolidated financial statements, covering accounting policies, revenue, debt, financial instruments, and segment information [Note 1 -- Basis of Presentation](index=7&type=section&id=Note%201%20--%20Basis%20of%20Presentation) Interim unaudited financial statements conform to GAAP, reflecting management's estimates, with the company operating through North America and International segments - The company operates through **two segments**: **North America** (Finance & Risk, Sales & Marketing in US and Canada) and **International** (Finance & Risk, Sales & Marketing in UK, Ireland, Nordics, DACH, CE, Greater China, India, and WWN alliances)[28](index=28&type=chunk) [Note 2 -- Recent Accounting Pronouncements](index=7&type=section&id=Note%202%20--%20Recent%20Accounting%20Pronouncements) The company adopted ASU No. 2020-04 (Reference Rate Reform) in Q4 2022 with no material impact, and its transition date was extended to December 31, 2024 - Adopted **ASU No. 2020-04 (Reference Rate Reform)** in **Q4 2022**, with no material impact. The transition date was extended to **December 31, 2024**[27](index=27&type=chunk) [Note 3 -- Revenue](index=7&type=section&id=Note%203%20--%20Revenue) Q1 2023 total revenue was $540.4 million, with deferred revenue increasing $75.7 million and accounts receivable decreasing $90.2 million due to securitization Accounts Receivable and Deferred Revenue | Metric | March 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------- | :------------------------------ | :------------------------------- | :-------------------- | :--------- | | Accounts Receivable, net | 181.4 | 271.6 | (90.2) | (33.2%) | | Short-term Deferred Revenue | 624.9 | 563.1 | 61.8 | 11.0% | | Long-term Deferred Revenue | 27.8 | 13.9 | 13.9 | 100.0% | Revenue Recognition Timing | Revenue Recognition Timing | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | | :------------------------- | :------------------------------------------ | :------------------------------------------ | | At a point in time | 215.6 | 208.8 | | Over time | 324.8 | 327.2 | | Total Revenue | 540.4 | 536.0 | [Note 4 -- Restructuring Charges](index=8&type=section&id=Note%204%20--%20Restructuring%20Charges) Restructuring charges for Q1 2023 totaled $4.2 million, a decrease from $5.3 million in Q1 2022, primarily for severance and contract termination costs Restructuring Charges by Component | Restructuring Component | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | | Severance and termination | 3.1 | 2.5 | | Contract termination & other exit costs | 1.1 | 2.8 | | Total Restructuring Charges | 4.2 | 5.3 | [Note 5 -- Notes Payable and Indebtedness](index=10&type=section&id=Note%205%20--%20Notes%20Payable%20and%20Indebtedness) Total debt as of March 31, 2023, was $3,585.7 million, with the company in compliance with all non-financial debt covenants and using interest rate swaps Debt Structure and Interest Rates | Debt Type | Maturity | Principal Amount (March 31, 2023, Millions USD) | Carrying Value (March 31, 2023, Millions USD) | Interest Rate (March 31, 2023) | | :-------------------------- | :--------------- | :---------------------------------------------- | :-------------------------------------------- | :----------------------------- | | 2026 Term loan (short-term) | Feb 8, 2026 | 28.1 | 28.1 | 8.095% | | 2029 Term loan (short-term) | Jan 18, 2029 | 4.6 | 4.6 | 8.042% | | 2026 Term loan (long-term) | Feb 8, 2026 | 2,644.7 | 2,599.2 | 8.095% | | 2029 Term loan (long-term) | Jan 18, 2029 | 450.8 | 444.6 | 8.042% | | Revolving facility | Sep 11, 2025 | 55.0 | 55.0 | 7.828% | | 5.000% Senior unsecured notes | Dec 15, 2029 | 460.0 | 454.2 | 5.000% | | Total Debt | N/A | 3,643.2 | 3,585.7 | N/A | - The company was in compliance with all **non-financial debt covenants** at **March 31, 2023**, and **December 31, 2022**[42](index=42&type=chunk) [Note 6 -- Accounts Receivable Securitization Facility](index=12&type=section&id=Note%206%20--%20Accounts%20Receivable%20Securitization%20Facility) The company derecognized $256.6 million of accounts receivable in Q1 2023 through a securitization facility, incurring $3.1 million in fees - The company derecognized **$256.6 million** of **accounts receivable** through a **securitization facility** in **Q1 2023**[53](index=53&type=chunk) - Fees for the **securitization facility** were **$3.1 million** for **Q1 2023**, recorded in non-operating income (expense) – net[54](index=54&type=chunk) [Note 7 -- Other Assets and Liabilities](index=14&type=section&id=Note%207%20--%20Other%20Assets%20and%20Liabilities) Other accrued and current liabilities significantly decreased by 35.6% to $203.9 million, primarily due to an $85.9 million payment for non-controlling interest Other Assets and Liabilities | Metric | March 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------ | :------------------------------- | :-------------------- | :--------- | | Other Non-Current Assets | 121.3 | 128.2 | (6.9) | (5.4%) | | Other Accrued and Current Liabilities | 203.9 | 316.8 | (112.9) | (35.6%) | | Accrued liability for NCI purchase | 10.4 | 93.7 | (83.3) | (88.9%) | | Other Non-Current Liabilities | 139.5 | 126.8 | 12.7 | 10.0% | - A payment of **$85.9 million** was made in **February 2023** for the purchase of **non-controlling interest**, resulting in a foreign exchange loss of **$2.6 million**[56](index=56&type=chunk) [Note 8 -- Contingencies](index=14&type=section&id=Note%208%20--%20Contingencies) The company is involved in class action lawsuits but management believes these will not materially affect its financial condition, with no loss reserves established - The company is facing **two class action lawsuits** (DeBose v. Dun & Bradstreet Holdings, Inc. and Batis v. Dun & Bradstreet Holdings, Inc.) alleging unauthorized use of names/personas for product promotion[63](index=63&type=chunk)[65](index=65&type=chunk) - Management does not believe current legal proceedings will materially adversely affect financial condition; no loss reserves have been established as outcomes are not probable or estimable[61](index=61&type=chunk)[64](index=64&type=chunk)[66](index=66&type=chunk) [Note 9 -- Income Taxes](index=15&type=section&id=Note%209%20--%20Income%20Taxes) The effective tax rate for Q1 2023 was 26.0% (tax benefit of $11.8 million on a pre-tax loss of $45.4 million), up from 23.4% in Q1 2022 Income Tax Metrics | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Effective Tax Rate | 26.0% | 23.4% | | Pre-tax Loss (Millions USD) | (45.4) | (39.8) | | Tax Benefit (Millions USD) | (11.8) | (9.3) | [Note 10 -- Pension and Postretirement Benefits](index=15&type=section&id=Note%2010%20--%20Pension%20and%20Postretirement%20Benefits) Net periodic pension cost for Q1 2023 was a benefit of $4.1 million, an increase from a benefit of $10.4 million in Q1 2022, due to higher interest cost and lower expected return on assets Net Periodic Pension and Postretirement Cost (Income) | Component of Net Periodic Cost (Income) | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | | :-------------------------------------- | :------------------------------------------ | :------------------------------------------ | | Service cost | 0.4 | 0.8 | | Interest cost | 16.0 | 8.8 | | Expected return on plan assets | (19.9) | (20.0) | | Amortization of prior service cost (credit) | — | — | | Amortization of actuarial loss (gain) | (0.6) | — | | Net periodic cost (income) (Pension plans) | (4.1) | (10.4) | | Net periodic cost (income) (Postretirement) | (0.1) | (0.1) | [Note 11 -- Stock Based Compensation](index=17&type=section&id=Note%2011%20--%20Stock%20Based%20Compensation) Total stock-based compensation expense increased 91.6% to $20.5 million in Q1 2023, driven by higher restricted stock and unit grants Stock-Based Compensation Expense | Stock-Based Compensation Expense | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Restricted stock and units | 15.8 | 7.4 | 8.4 | 113.5% | | Stock options | 4.7 | 1.0 | 3.7 | 370.0% | | Incentive units | — | 2.3 | (2.3) | (100.0%) | | Total Compensation Expense | 20.5 | 10.7 | 9.8 | 91.6% | - Unrecognized compensation cost for **stock options** was **$16.9 million** (expected over **2.1 years**) and for **restricted stock/units** was **$107.1 million** (expected over **2.4 years**) as of **March 31, 2023**[73](index=73&type=chunk)[75](index=75&type=chunk) [Note 12 -- Earnings (Loss) Per Share](index=18&type=section&id=Note%2012%20--%20Earnings%20(Loss)%20Per%20Share) Basic and diluted EPS were a loss of $0.08 for Q1 2023, with 429.6 million weighted average shares outstanding, and a $0.05 quarterly dividend declared Earnings (Loss) Per Share Metrics | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :------------------------------------------------ | :---------------------------- | :---------------------------- | | Net Income (Loss) Attributable to D&B (Millions USD) | (33.7) | (31.3) | | Basic EPS | (0.08) | (0.07) | | Diluted EPS | (0.08) | (0.07) | | Weighted Average Shares Outstanding - Basic (Millions) | 429.6 | 428.8 | | Weighted Average Shares Outstanding - Diluted (Millions) | 429.6 | 428.8 | - A quarterly cash dividend of **$0.05 per share** was declared on **February 9, 2023**, payable on **March 16, 2023**[81](index=81&type=chunk) [Note 13 -- Financial Instruments](index=19&type=section&id=Note%2013%20--%20Financial%20Instruments) The company uses derivatives like interest rate swaps ($2,750 million notional) and cross-currency interest rate swaps ($375 million notional) to manage market risks - The company uses **interest rate swaps** and **cross-currency interest rate swaps** to manage interest rate and foreign currency risks, with notional amounts of **$2,750 million** and **$375 million** respectively as of **March 31, 2023**[51](index=51&type=chunk)[87](index=87&type=chunk)[94](index=94&type=chunk) Derivative Financial Instruments | Derivative Type | March 31, 2023 (Millions USD) | December 31, 2022 (Millions USD) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Asset Derivatives | 53.7 | 69.2 | | Total Liability Derivatives | 22.0 | 17.4 | [Note 14 -- Accumulated Other Comprehensive Income (Loss)](index=23&type=section&id=Note%2014%20--%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive loss increased to $187.5 million at March 31, 2023, primarily due to negative impacts from cash flow hedge derivatives and pension plans Accumulated Other Comprehensive Income (Loss) | Component | Balance, January 1, 2023 (Millions USD) | Balance, March 31, 2023 (Millions USD) | Change (Millions USD) | | :-------------------------------- | :-------------------------------------- | :------------------------------------- | :-------------------- | | Foreign currency translation adjustments | (172.3) | (166.0) | 6.3 | | Net investment hedge derivative | 2.0 | (0.4) | (2.4) | | Defined benefit pension plans | (58.1) | (58.8) | (0.7) | | Cash flow hedge derivative | 48.4 | 37.7 | (10.7) | | Total Accumulated OCI (Loss) | (180.0) | (187.5) | (7.5) | [Note 15 -- Goodwill and Intangible Assets](index=24&type=section&id=Note%2015%20--%20Goodwill%20and%20Intangible%20Assets) Goodwill increased slightly to $3,435.7 million, while other intangibles decreased 2.3% to $4,218.6 million, both primarily due to foreign currency fluctuations Goodwill and Intangible Assets | Asset Type | January 1, 2023 (Millions USD) | March 31, 2023 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------- | :----------------------------- | :---------------------------- | :-------------------- | :--------- | | Computer Software | 631.8 | 642.8 | 11.0 | 1.7% | | Goodwill | 3,431.3 | 3,435.7 | 4.4 | 0.1% | | Other Intangibles | 4,320.1 | 4,218.6 | (101.5) | (2.3%) | - Changes in **goodwill** and **other intangibles** were primarily influenced by **foreign currency fluctuations**[108](index=108&type=chunk) [Note 16 -- Segment Information](index=25&type=section&id=Note%2016%20--%20Segment%20Information) North America revenue increased 2.0% to $374.7 million, while International revenue decreased 1.8% to $165.7 million, resulting in consolidated total revenue of $540.4 million for Q1 2023 Segment Revenue | Segment Revenue | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :---------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | North America | 374.7 | 367.3 | 7.4 | 2.0% | | International | 165.7 | 168.7 | (3.0) | (1.8%) | | Consolidated Total | 540.4 | 536.0 | 4.4 | 0.8% | Segment Adjusted EBITDA | Segment Adjusted EBITDA | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | North America | 150.5 | 153.3 | (2.8) | (1.8%) | | International | 55.6 | 55.1 | 0.5 | 1.0% | | Corporate and other | (16.1) | (18.3) | 2.2 | 12.0% | | Consolidated Total | 190.0 | 190.1 | (0.1) | (0.1%) | [Note 17 -- Related Parties](index=29&type=section&id=Note%2017%20--%20Related%20Parties) The Investor Consortium maintains significant voting influence, and the company has ongoing agreements with related parties Black Knight and Paysafe - The **Investor Consortium** (Bilcar, THL, Cannae Holdings, Black Knight, CC Capital) retains significant voting influence over the company[118](index=118&type=chunk) - The company has a **five-year agreement with Black Knight** (data license fees of **$24M**, services from Black Knight of **$34M**) and a **10-year agreement with Paysafe** (data license and risk management services)[121](index=121&type=chunk) Related Party Transactions | Related Party Transaction | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | | :------------------------ | :------------------------------------------ | :------------------------------------------ | | Operating expenses with Black Knight | 0.5 | 0.5 | | Revenue from Paysafe | 1.7 | 0.9 | [Note 18 -- Subsequent Event](index=29&type=section&id=Note%2018%20--%20Subsequent%20Event) On April 26, 2023, the Board of Directors declared a quarterly cash dividend of $0.05 per share, payable on June 15, 2023 - A quarterly cash dividend of **$0.05 per share** was declared on **April 26, 2023**, payable on **June 15, 2023**[122](index=122&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Unaudited)) Management's discussion and analysis of Q1 2023 financial condition and results, including business overview, recent developments, key performance components, and liquidity [Business Overview](index=30&type=section&id=Business%20Overview) Dun & Bradstreet is a leading global provider of business decisioning data and analytics, offering Finance & Risk and Sales & Marketing solutions to over 240,000 clients - **Dun & Bradstreet** is a leading global provider of **business decisioning data and analytics**, with a mission to deliver a global network of trust[126](index=126&type=chunk) - The company's solutions include **Finance & Risk** (commercial credit decisioning, supply chain risk, collections) and **Sales & Marketing** (CRM data cleansing, prospect targeting)[127](index=127&type=chunk)[128](index=128&type=chunk) - As of **December 31, 2022**, the company had over **240,000 global clients** across various industries and geographies, characterized by highly recurring revenue, strong operating leverage, and low capital requirements[129](index=129&type=chunk)[130](index=130&type=chunk) [Segments](index=31&type=section&id=Segments) The company manages its financial results through two primary segments: North America (US and Canada) and International (UK, Europe, Greater China, India, and Worldwide Network alliances) - The company's **two reporting segments** are **North America** (US and Canada) and **International** (UK, Ireland, Nordics, DACH, CE, Greater China, India, and WWN alliances)[132](index=132&type=chunk) [Recent Developments](index=31&type=section&id=Recent%20Developments) Recent developments include a new accounts receivable securitization facility, the purchase of non-controlling interest in China operations, and ongoing macroeconomic impacts - The company received a net cash benefit of **$31.9 million** from its **accounts receivable securitization facility** in **Q1 2023**[132](index=132&type=chunk) - A payment of **$85.9 million** was made in **February 2023** to purchase the **non-controlling equity interest in China operations**[133](index=133&type=chunk) - **Macroeconomic conditions** (inflation, rising interest rates, foreign currency fluctuations) and the **Russia/Ukraine conflict** negatively impacted reported revenue in **Q1 2023**, particularly due to a strengthening U.S. dollar[134](index=134&type=chunk)[135](index=135&type=chunk) [Key Components of Results of Operations](index=32&type=section&id=Key%20Components%20of%20Results%20of%20Operations) Revenue is primarily subscription-based for data and analytics, with key expenses including cost of services, selling and administrative, depreciation and amortization, and non-operating items - Revenue is primarily **subscription-based**, offering **Finance & Risk** and **Sales & Marketing** solutions[138](index=138&type=chunk)[139](index=139&type=chunk)[140](index=140&type=chunk) - Key expense categories include **Cost of Services** (data acquisition, technology), **Selling and Administrative** (sales, corporate, professional services), **Depreciation and Amortization** (PP&E, software, intangibles), and **Non-Operating Income/Expense** (interest, debt costs, derivatives)[141](index=141&type=chunk)[142](index=142&type=chunk)[143](index=143&type=chunk)[144](index=144&type=chunk) [Key Metrics](index=33&type=section&id=Key%20Metrics) The company uses non-GAAP financial measures like organic revenue, adjusted EBITDA, and adjusted net income to assess performance, adjusting for specific items to reflect underlying operations - **Non-GAAP metrics** include **organic revenue**, **adjusted EBITDA**, **adjusted EBITDA margin**, **adjusted net income**, and **adjusted net earnings per diluted share**[146](index=146&type=chunk) - Adjustments typically exclude **acquisition/divestiture costs**, **restructuring charges**, **equity-based compensation**, and **incremental amortization from purchase accounting** to better reflect ongoing operating performance[150](index=150&type=chunk)[151](index=151&type=chunk) [Results of Operations](index=35&type=section&id=Results%20of%20Operations) For Q1 2023, total revenue increased 0.8% to $540.4 million, but operating income decreased 51.5% to $7.9 million, while adjusted EBITDA remained flat at $190.0 million Key Financial Results | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Total Revenue | 540.4 | 536.0 | 4.4 | 0.8% | | Operating Income (Loss) | 7.9 | 16.4 | (8.5) | (51.5%) | | Net Income (Loss) Attributable to D&B | (33.7) | (31.3) | (2.4) | (7.7%) | | Adjusted EBITDA | 190.0 | 190.1 | (0.1) | (0.1%) | | Adjusted EBITDA Margin | 35.2% | 35.5% | (0.3%) | (30 bps) | | Adjusted Net Income | 80.5 | 94.1 | (13.6) | (14.5%) | | Adjusted EPS | 0.19 | 0.22 | (0.03) | (13.6%) | [Revenue](index=38&type=section&id=Results%20of%20Operations%20-%20Revenue) Total revenue increased 0.8% to $540.4 million (3.2% organic growth), with North America revenue up 2.0% and International revenue down 1.8% Segment and Solution Revenue | Segment/Solution Revenue | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | North America Total | 374.7 | 367.3 | 7.4 | 2.0% | | North America Finance & Risk | 201.2 | 202.2 | (1.0) | (0.5%) | | North America Sales & Marketing | 173.5 | 165.1 | 8.4 | 5.1% | | International Total | 165.7 | 168.7 | (3.0) | (1.8%) | | International Finance & Risk | 110.8 | 109.0 | 1.8 | 1.6% | | International Sales & Marketing | 54.9 | 59.7 | (4.8) | (8.0%) | | Total Revenue | 540.4 | 536.0 | 4.4 | 0.8% | - **Organic revenue** increased by **3.2%**, excluding a **$1.3 million divestiture impact** and a **$10.7 million negative foreign exchange impact**[161](index=161&type=chunk) - **North America Finance & Risk revenue** decreased due to a government contract expiration and **FTC Consent Order** impact on Small Business solutions, partially offset by Third-Party and Supply Chain Risk solutions[164](index=164&type=chunk) [Expenses](index=39&type=section&id=Results%20of%20Operations%20-%20Expenses) Cost of services increased 10.8% to $195.9 million, while selling and administrative expenses decreased 0.6% to $187.0 million, and restructuring charges decreased 19.7% to $4.2 million Operating Expenses | Expense Category | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Cost of services (excl. D&A) | 195.9 | 176.7 | 19.2 | 10.8% | | Selling and administrative expenses | 187.0 | 188.2 | (1.2) | (0.6%) | | Depreciation and amortization | 145.4 | 149.4 | (4.0) | (2.7%) | | Restructuring charges | 4.2 | 5.3 | (1.1) | (19.7%) | | Total Operating Costs | 532.5 | 519.6 | 12.9 | 2.5% | - **Cost of services** increased primarily due to **$24 million higher data and data processing costs**, partially offset by lower net personnel costs and favorable foreign exchange impact[170](index=170&type=chunk) - **Selling and administrative expenses** decreased due to lower data processing costs, partially offset by higher net personnel costs driven by **equity-based compensation**[171](index=171&type=chunk) [Operating Income (Loss)](index=40&type=section&id=Results%20of%20Operations%20-%20Operating%20Income%20(Loss)) Consolidated operating income decreased 51.5% to $7.9 million for Q1 2023, primarily due to higher data and data processing costs Operating Income | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :--------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Operating Income | 7.9 | 16.4 | (8.5) | (51.5%) | [Adjusted EBITDA and adjusted EBITDA margin by segment](index=40&type=section&id=Results%20of%20Operations%20-%20Adjusted%20EBITDA%20and%20adjusted%20EBITDA%20margin%20by%20segment) Consolidated adjusted EBITDA was $190.0 million, a slight decrease of 0.1%, with adjusted EBITDA margin at 35.2% (down 30 bps) Segment Adjusted EBITDA | Segment Adjusted EBITDA | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :---------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | North America | 150.5 | 153.3 | (2.8) | (1.8%) | | International | 55.6 | 55.1 | 0.5 | 1.0% | | Corporate and other | (16.1) | (18.3) | 2.2 | 11.6% | | Consolidated Total | 190.0 | 190.1 | (0.1) | (0.1%) | Segment Adjusted EBITDA Margin | Segment Adjusted EBITDA Margin | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | Change (bps) | | :----------------------------- | :---------------------------- | :---------------------------- | :----------- | | North America | 40.2% | 41.7% | (150) | | International | 33.6% | 32.6% | 100 | | Consolidated Total | 35.2% | 35.5% | (30) | [Interest Income (Expense) — Net](index=41&type=section&id=Results%20of%20Operations%20-%20Interest%20Income%20(Expense)%20—%20Net) Net interest expense increased 14.9% to $53.9 million for Q1 2023 due to higher interest rates, while interest income significantly increased 366.7% to $1.4 million Interest Income (Expense) – Net | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Interest income | 1.4 | 0.3 | 1.1 | 366.7% | | Interest expense | (55.3) | (47.2) | (8.1) | (17.2%) | | Interest income (expense) – net | (53.9) | (46.9) | (7.0) | (14.9%) | [Other Income (Expense) — Net](index=41&type=section&id=Results%20of%20Operations%20-%20Other%20Income%20(Expense)%20—%20Net) Other income (expense) – net shifted from a $9.3 million expense in Q1 2022 to a $0.6 million income in Q1 2023, primarily due to the absence of a prior-year debt redemption premium Other Income (Expense) – Net | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :-------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Non-operating pension-related income | 4.6 | 11.3 | (6.7) | (59.3%) | | Early debt redemption premium | — | (16.3) | 16.3 | NA | | Miscellaneous other income (expense) – net | (4.0) | (4.3) | 0.3 | 7.0% | | Other income (expense) – net | 0.6 | (9.3) | 9.9 | 106.5% | [Provision for Income Taxes](index=41&type=section&id=Results%20of%20Operations%20-%20Provision%20for%20Income%20Taxes) The effective tax rate for Q1 2023 was 26.0% (tax benefit of $11.8 million on a pre-tax loss of $45.4 million), compared to 23.4% in Q1 2022 Income Tax Provision | Metric | 3 Months Ended March 31, 2023 | 3 Months Ended March 31, 2022 | | :-------------------------------- | :---------------------------- | :---------------------------- | | Effective Tax Rate | 26.0% | 23.4% | | Pre-tax Loss (Millions USD) | (45.4) | (39.8) | | Tax Benefit (Millions USD) | (11.8) | (9.3) | [Net Income (Loss)](index=42&type=section&id=Results%20of%20Operations%20-%20Net%20Income%20(Loss)) Net loss attributable to Dun & Bradstreet Holdings, Inc. increased by $2.4 million to $33.7 million for Q1 2023, resulting in a loss per share of $0.08 Net Income (Loss) Attributable to D&B | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :----------------------------------- | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Net Income (Loss) Attributable to D&B | (33.7) | (31.3) | (2.4) | (7.7%) | | Loss Per Share | (0.08) | (0.07) | (0.01) | (14.3%) | [Adjusted Net Income and Adjusted Diluted Earnings Per Share](index=42&type=section&id=Results%20of%20Operations%20-%20Adjusted%20Net%20Income%20and%20Adjusted%20Diluted%20Earnings%20Per%20Share) Adjusted net income decreased by $13.6 million to $80.5 million, and adjusted diluted EPS decreased by $0.03 to $0.19 for Q1 2023, primarily due to higher interest expense and depreciation Adjusted Net Income and Adjusted Diluted EPS | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2023 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Adjusted Net Income | 80.5 | 94.1 | (13.6) | (14.5%) | | Adjusted Diluted EPS | 0.19 | 0.22 | (0.03) | (13.6%) | [Liquidity and Capital Resources](index=42&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity, supported by operating cash flows, cash on hand, and short-term borrowings, is sufficient for short-term needs, with active management of market risks [Overview](index=42&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Overview) Primary liquidity sources are operating cash flows, cash, and short-term borrowings, used for working capital, investments, and debt service, deemed sufficient for short-term needs - Primary liquidity sources are **operating cash flows**, **cash and cash equivalents**, and **short-term borrowings** from the senior secured credit facility[189](index=189&type=chunk) - Liquidity is used for **working capital**, **capital investments**, **debt service**, business acquisitions, and general corporate purposes[189](index=189&type=chunk) - Management believes current liquidity is sufficient for short-term needs, actively managing interest rate exposure through debt reduction and interest rate swaps[190](index=190&type=chunk)[191](index=191&type=chunk)[197](index=197&type=chunk) [Cash Flow Overview](index=42&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Cash%20Flow%20Overview) As of March 31, 2023, cash and cash equivalents totaled $204.1 million, with $188.1 million held by foreign operations, and a $31.9 million net cash benefit from securitization Cash and Cash Equivalents | Metric | March 31, 2023 (Millions USD) | | :-------------------------- | :---------------------------- | | Cash and Cash Equivalents | 204.1 | | Cash held by foreign operations | 188.1 | | Cash held in China and India | 42.8 | - A net cash benefit of **$31.9 million** was received from the **accounts receivable securitization facility** in **Q1 2023**[194](index=194&type=chunk) [Cash Provided by (Used in) Operating Activities](index=44&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Cash%20Provided%20by%20(Used%20in)%20Operating%20Activities) Net cash provided by operating activities increased 12.2% to $155.7 million in Q1 2023, driven by securitization benefits and lower tax payments, partially offset by higher interest payments Net Cash from Operating Activities | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Net Cash from Operating Activities | 155.7 | 138.8 | 16.9 | 12.2% | - Operating cash flow increase was driven by a **$31.9 million net cash benefit** from the **accounts receivable securitization facility** and **$17 million lower net tax payments**, partially offset by **$4 million higher interest payments**[196](index=196&type=chunk) [Cash Provided by (Used in) Investing Activities](index=44&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Cash%20Provided%20by%20(Used%20in)%20Investing%20Activities) Net cash used in investing activities decreased 19.8% to $39.6 million in Q1 2023, mainly due to higher foreign currency contract settlements and lower capital expenditures Net Cash from Investing Activities | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Net Cash from Investing Activities | (39.6) | (49.4) | 9.8 | (19.8%) | - Investing cash flow improvement was due to **$7.8 million higher net cash proceeds** from **foreign currency contract settlements** and **$1.8 million lower capital expenditures and software development**[198](index=198&type=chunk) - Expected **capital expenditures for 2023** are in the range of **$160 million to $180 million**[198](index=198&type=chunk) [Cash Provided by (Used in) Financing Activities](index=44&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Cash%20Provided%20by%20(Used%20in)%20Financing%20Activities) Net cash used in financing activities significantly increased 139.6% to $122.2 million in Q1 2023, primarily due to prior-year debt issuance proceeds, non-controlling interest payment, and dividend payments Net Cash from Financing Activities | Metric | 3 Months Ended March 31, 2023 (Millions USD) | 3 Months Ended March 31, 2022 (Millions USD) | Change (Millions USD) | Change (%) | | :------------------------------------------ | :------------------------------------------ | :------------------------------------------ | :-------------------- | :--------- | | Net Cash from Financing Activities | (122.2) | (51.0) | (71.2) | 139.6% | - Key drivers for increased cash used in financing activities include **$452.6 million higher net debt issuance proceeds** in prior year, **$85.9 million payment for non-controlling interest**, and **$21.5 million dividend payment** in current year[199](index=199&type=chunk) [Capital Resources and Debt](index=44&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Capital%20Resources%20and%20Debt) Total debt as of March 31, 2023, was $3,585.7 million, with $32.7 million classified as short-term, comprising various term loans, a revolving facility, and senior unsecured notes Total Debt Structure | Debt Type | Maturity | Principal Amount (March 31, 2023, Millions USD) | Carrying Value (March 31, 2023, Millions USD) | | :-------------------------- | :--------------- | :---------------------------------------------- | :-------------------------------------------- | | Total short-term debt | N/A | 32.7 | 32.7 | | Total long-term debt | N/A | 3,610.5 | 3,553.0 | | Total debt | N/A | 3,643.2 | 3,585.7 | [Contractual Obligations](index=45&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Contractual%20Obligations) Information regarding the company's operating leases, pension obligations, and vendor commitments is incorporated by reference from the 2022 Annual Report on Form 10-K - Details on **operating leases**, **pension obligations**, and **vendor commitments** are available in the **2022 Annual Report on Form 10-K**[202](index=202&type=chunk) [Off-Balance Sheet Arrangements](index=45&type=section&id=Liquidity%20and%20Capital%20Resources%20-%20Off-Balance%20Sheet%20Arrangements) The company has no off-balance sheet arrangements other than foreign exchange forward contracts, interest rate swaps, and cross-currency swaps, as detailed in Note 13 - The company has no **off-balance sheet arrangements** other than **foreign exchange forward contracts**, **interest rate swaps**, and **cross-currency swaps**[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's market risks primarily involve currency exchange rates, investment market values, and interest rates, with no material changes reported as of March 31, 2023 - Primary **market risks** include **foreign exchange rates**, **investment market values**, and **interest rates** on borrowing costs[204](index=204&type=chunk) - No material changes in **market risks** were reported as of **March 31, 2023**, compared to the **2022 Annual Report on Form 10-K**[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2023, the CEO and CFO concluded that disclosure controls and procedures were effective, with no material changes in internal control over financial reporting - **CEO and CFO** concluded that **disclosure controls and procedures** were effective as of **March 31, 2023**[208](index=208&type=chunk) - No material changes in **internal control over financial reporting** occurred during **Q1 2023**[209](index=209&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=46&type=section&id=Item%201.%20Legal%20Proceedings) Information regarding the company's legal proceedings is incorporated by reference from Note 8 – Contingencies in Part I, Item 1 of this Quarterly Report on Form 10-Q - **Legal proceedings information** is incorporated by reference from **Note 8 – Contingencies**[210](index=210&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors were reported since the 2022 Annual Report on Form 10-K, except for an update on governmental regulations, including a new FTC inquiry - No material changes to **risk factors**, except for an update on **governmental regulations**[211](index=211&type=chunk) - The company is subject to various **governmental regulations**, including a **20-year FTC Consent Order** and new state privacy laws (**CPRA, CDPA**)[212](index=212&type=chunk)[213](index=213&type=chunk)[216](index=216&type=chunk) - A recent **FTC 6(b) Order** initiated an inquiry into the **small business credit reporting industry**, which could potentially lead to new **FTC rules or actions** impacting the business[214](index=214&type=chunk)[215](index=215&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=47&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds were reported for the period - No **unregistered sales of equity securities** or use of proceeds were reported[218](index=218&type=chunk) [Item 3. Defaults Upon Senior Securities](index=47&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities were reported for the period - No **defaults upon senior securities** were reported[218](index=218&type=chunk) [Item 4. Mine Safety Disclosures](index=47&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - **Mine Safety Disclosures** are not applicable[218](index=218&type=chunk) [Item 5. Other Information](index=47&type=section&id=Item%205.%20Other%20Information) No other information was reported for the period - No other information was reported[218](index=218&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including various agreements, certifications (CEO, CFO), and XBRL data - The exhibits include various agreements (e.g., restricted stock awards), **CEO and CFO certifications** (Sarbanes-Oxley Act), and **XBRL financial data**[219](index=219&type=chunk)
Dun & Bradstreet(DNB) - 2022 Q4 - Annual Report
2023-02-22 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-39361 Dun & Bradstreet Holdings, Inc. (Exact name of registrant as specified in its charter) | Delaware | 83-2008699 | | --- | --- | | (State of incorporation) | (I.R.S. ...
Dun & Bradstreet(DNB) - 2022 Q4 - Earnings Call Transcript
2023-02-16 18:39
Financial Data and Key Metrics Changes - In Q4 2022, total revenues were $595 million, a decrease of 1% year-over-year, but an increase of 3% before the effect of foreign exchange [38] - For the full year 2022, revenues were $2,225 million, an increase of 3% or 6% before the effect of foreign exchange [39] - Adjusted EBITDA for Q4 was $250 million, an increase of 3%, while full year adjusted EBITDA was $864 million, an increase of 2% [40][72] - Full year adjusted net income was $472 million, or adjusted diluted earnings per share of $1.10, unchanged from 2021 [42] Business Line Data and Key Metrics Changes - Financial risk solutions grew 5.2% in 2022, with North America finance and risk revenues increasing 8% when excluding government revenues [44][45] - Sales and marketing revenues for North America increased by 8% to $720 million, driven by acquisitions [75] - International segment revenues for 2022 were $638 million, a decrease of 5%, but an increase of 5% before foreign exchange effects [47] Market Data and Key Metrics Changes - North America revenues for 2022 were $1,587 million, an increase of 6% from the prior year, while international organic revenues increased by 5.4% [25][44] - The international finance and risk revenues for the full year were $419 million, a decrease of 3%, but a 6% increase before foreign exchange [78] Company Strategy and Development Direction - The company plans to continue optimizing its solution set and maximize value extraction from current and future customers [13] - There is a focus on migrating clients to modern solutions and enhancing product offerings, particularly in supply chain and third-party risk [15][64] - The company aims to deepen its penetration in the small and micro business segment while continuing to expand relationships with large enterprises [62][118] Management's Comments on Operating Environment and Future Outlook - Management noted a challenging macro environment but expressed confidence in the company's ability to drive growth within its existing client base [13][55] - The company expects total revenues in 2023 to be in the range of $2,260 million to $2,300 million, reflecting a growth of 1.6% to 3.4% [51] - Management highlighted the importance of digitalization and innovation as key opportunities for growth [34][66] Other Important Information - The company ended 2022 with total debt principal of $3,647 million and a leverage ratio of 4.0 times [80] - Adjusted EBITDA margin for the full year was 39%, a decrease of 20 basis points compared to the prior year [42] Q&A Session Summary Question: What is the impact of the GSA on the first quarter? - The first quarter is expected to be most impacted by the GSA, with a headwind of approximately 110 basis points [57] Question: What is the outlook for free cash flow in 2023? - Free cash flow is expected to improve as restructuring and M&A costs decrease, despite increased interest expenses [58][90] Question: Was the slowdown in December broad-based? - The slowdown was primarily isolated to sales and marketing, particularly in master data management, but has since normalized [60][93] Question: How is pricing evolving in 2023? - Pricing is expected to improve as clients migrate to modern platforms, allowing for better cross-selling opportunities [99] Question: What is the expected growth between North America and International in 2023? - A tougher backdrop is anticipated in 2023, with growth expected to be more challenging compared to previous years [103]
Dun & Bradstreet(DNB) - 2022 Q3 - Earnings Call Transcript
2022-11-05 02:25
Financial Data and Key Metrics Changes - Adjusted revenues for the total company grew 2.7% or 6.6% before the effects of foreign currency, with organic constant currency growth at 3.9% [6][44] - Third quarter revenues were $556 million, an increase of $14 million or 3% compared to the prior year quarter, with net income at $8 million [44][45] - Adjusted EBITDA for the total company was $223 million, an increase of $3 million or 1%, with an adjusted EBITDA margin of 40% [46][47] Business Line Data and Key Metrics Changes - In North America, revenues for the third quarter were $404 million, an increase of 8%, with organic revenues increasing 3.8% [48] - Finance and Risk revenues in North America were $224 million, an increase of 5%, driven by strong growth in third-party and supply chain risk management solutions [49] - Sales and Marketing revenues in North America were $180 million, an increase of 12%, primarily driven by marketing solutions [50] - International segment revenues were $153 million, a decrease of 9%, but an increase of 3% on a constant currency basis, with organic revenues increasing 4.3% [52] Market Data and Key Metrics Changes - North America segment grew 4% overall, while International markets had consistent growth of 4% on an organic constant currency basis [8][11] - European and Asian businesses are focusing on tightening credit and compliance standards due to current geopolitical and financial conditions [11] Company Strategy and Development Direction - The company aims to innovate solutions and localize throughout the world, increase wallet share with strategic clients, and monetize the small business channel [12] - The focus is on delivering long-term value through product innovation, with significant progress in the rollout of new solutions [13][14] - The company is expanding its data cloud to over 500 million DUNS, enhancing its capabilities in ESG data and risk analytics [18][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's resiliency amid deteriorating macroeconomic conditions, highlighting a defensible growth profile [7] - The company anticipates continued organic growth and margin expansion, with a focus on driving increased value to clients [62] - The outlook for 2022 includes expected total adjusted revenues to increase by 5.5% to 6.5% on a constant currency basis [58] Other Important Information - The company has a strong balance sheet with cash and cash equivalents of $204 million and total debt of $3,651 million [55] - The weighted average interest rate was 4.8% as of September 30, 2022, with a leverage ratio of 4.0 times on a net basis [57] Q&A Session Summary Question: Comments on sales cycle and pricing pushback - Management noted a slight elongation of the sales cycle by about 10 days for smaller clients, but overall sales cycles remain stable [65] - Pricing discussions have focused more on quality rather than pushback, with 51% of revenue under multiyear contracts with built-in price escalators [66][67] Question: Margin expansion expectations - Management expects EBITDA margins to expand in both North America and International segments in Q4, driven by organic growth and the full-year impact of new acquisitions [68] Question: Impact of foreign exchange on costs - The company has a natural hedge due to international operations, which helps offset the impact of a strengthening US dollar on revenue [71][72] Question: Capital return plans - The company is focused on organic growth and M&A opportunities but is open to share repurchases if liquidity allows [74][75] Question: New product introductions and cross-sell success - Management highlighted positive feedback from clients regarding new innovations and is focused on building pipeline rather than closing deals at this stage [78] Question: ESG data opportunity - ESG is becoming a significant focus for clients, with the company seeing early sales and a large pipeline in this area [87][88] Question: Guidance for Q4 and 2023 - Management is confident in maintaining growth expectations for Q4, with a focus on executing against the original roadmap for mid-single-digit growth [94][111]
Dun & Bradstreet(DNB) - 2022 Q3 - Quarterly Report
2022-11-02 16:00
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | --- | --- | --- | |----------------------------------------------------------------------------------------|--------------------------------------------------------|------------------ ...
Dun & Bradstreet(DNB) - 2022 Q2 - Earnings Call Transcript
2022-08-06 14:50
Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Q2 2022 Earnings Conference Call August 4, 2022 8:30 AM ET Company Participants Ed Yuen - IR Anthony Jabbour - CEO Bryan Hipsher - CFO Conference Call Participants Kyle Peterson - Needham Hamzah Mazari - Jefferies Gustavo Gala - Truist Securities John Mazzoni - RBC Capital Markets Seth Weber - Wells Fargo Securities Manav Patnaik - Barclays Andrew Steinerman - JPMorgan Operator Good morning, and welcome to Dun & Bradstreet's Second Quarter 2022 Conference Call. As ...
Dun & Bradstreet(DNB) - 2022 Q2 - Quarterly Report
2022-08-03 16:00
[FORM 10-Q](index=1&type=section&id=FORM%2010-Q) This document is a quarterly report filed by Dun & Bradstreet Holdings, Inc. with the SEC, providing unaudited financial information and disclosures [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the company's unaudited condensed consolidated financial statements and management's discussion and analysis of financial condition and results of operations [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements, including the statements of operations, balance sheets, cash flows, and stockholder equity, along with comprehensive notes providing detailed disclosures and explanations for the reported figures [Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)%20(Unaudited)) This statement details the company's revenues, operating income, net income, and comprehensive income for the specified periods | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | |:----------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------------------------------|:------------------------------------| | Revenue | 537.3 | 520.9 | 1,073.3 | 1,025.4 | | Operating income (loss) | 29.7 | 26.9 | 46.1 | 35.2 | | Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. | (1.8) | (51.7) | (33.1) | (76.7) | | Basic earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Diluted earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Comprehensive income (loss) attributable to Dun & Bradstreet Holdings, Inc. | (76.2) | (36.8) | (120.3) | (109.6) | [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement provides a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2022 ($M) | December 31, 2021 ($M) | |:----------------------------|:-------------------|:-----------------------| | Total current assets | 748.1 | 718.0 | | Total non-current assets | 8,948.5 | 9,279.2 | | Total assets | 9,696.6 | 9,997.2 | | Total current liabilities | 948.0 | 1,004.9 | | Total liabilities | 6,050.9 | 6,251.9 | | Total stockholder equity | 3,582.1 | 3,681.2 | | Total equity | 3,645.7 | 3,745.3 | | Total liabilities and stockholder equity | 9,696.6 | 9,997.2 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement reports the cash inflows and outflows from operating, investing, and financing activities | Metric | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | |:------------------------------------------------|:------------------------------------|:------------------------------------| | Net cash provided by (used in) operating activities | 216.5 | 292.5 | | Net cash provided by (used in) investing activities | (103.4) | (749.0) | | Net cash provided by (used in) financing activities | (64.7) | 281.4 | | Effect of exchange rate changes on cash and cash equivalents | (10.0) | 0.4 | | Increase (decrease) in cash, cash equivalents and restricted cash | 38.4 | (174.7) | | Cash, Cash Equivalents and Restricted Cash, End of Period | 215.5 | 177.6 | [Condensed Consolidated Statements of Stockholder Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholder%20Equity%20(Unaudited)) This statement details changes in the company's equity accounts over the reporting period | Metric | Balance, January 1, 2022 ($M) | Balance, June 30, 2022 ($M) | |:----------------------------------------|:------------------------------|:----------------------------|\n| Capital surplus | 4,500.4 | 4,521.6 | | Accumulated deficit | (761.8) | (794.9) | | Accumulated other comprehensive loss | (57.1) | (144.3) | | Total stockholder equity | 3,681.2 | 3,582.1 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide detailed disclosures and explanations for the figures presented in the condensed consolidated financial statements [Note 1 -- Basis of Presentation](index=8&type=section&id=Note%201%20--%20Basis%20of%20Presentation) The company's unaudited condensed consolidated financial statements are prepared in conformity with GAAP and reflect management's estimates. The business is managed and reported through two segments: North America (US and Canada) and International (UK, Nordics, DACH, CEE, Greater China, India, and WWN alliances). Global events like COVID-19 and the Russia/Ukraine conflict introduce uncertainty to financial estimates - The company operates through **two primary segments**: North America (US and Canada) and International (UK, Nordics, DACH, CEE, Greater China, India, and WWN alliances)[18](index=18&type=chunk) - Ongoing global events, including the COVID-19 pandemic and the Russia/Ukraine conflict, continue to cause economic disruption and volatility, impacting management's estimates and assumptions[18](index=18&type=chunk) [Note 2 -- Recent Accounting Pronouncements](index=8&type=section&id=Note%202%20--%20Recent%20Accounting%20Pronouncements) The company early adopted ASU No. 2021-08 in Q4 2021, which changed the accounting for contract assets and liabilities in business combinations. It is also monitoring ASU No. 2020-04 and 2021-01 regarding the transition from LIBOR to alternative reference rates, with a proposed extension of the transition date to December 31, 2024 - The company early adopted ASU No. 2021-08 in Q4 2021, requiring contract assets and liabilities in business combinations to be recognized and measured based on Topic 606 guidance, rather than fair value[20](index=20&type=chunk)[22](index=22&type=chunk) - The company may apply temporary optional expedients for contract modifications and hedge accounting related to the LIBOR transition (ASU No. 2020-04 and 2021-01) through December 31, 2022, with a proposed extension to **December 31, 2024**[23](index=23&type=chunk) [Note 3 -- Revenue](index=9&type=section&id=Note%203%20--%20Revenue) The company's future revenue from unsatisfied performance obligations totals $2,832.2 million as of June 30, 2022. Revenue is recognized both at a point in time and over time, with the latter accounting for the majority. Deferred revenue increased by $15.3 million from December 31, 2021, to June 30, 2022, primarily due to advance payments | Metric | Amount ($M) | |:----------------------------------------|:------------| | Future revenue (Total) | 2,832.2 | | - Remainder of 2022 | 768.0 | | - 2023 | 815.4 | | - 2024 | 463.1 | | - 2025 | 223.5 | | - 2026 | 149.3 | | - Thereafter | 412.9 | | Revenue Recognition Timing | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | |:---------------------------|:--------------------------------------|:--------------------------------------|:------------------------------------|:------------------------------------| | At a point in time | 214.3 | 212.5 | 423.1 | 417.5 | | Over time | 323.0 | 308.4 | 650.2 | 607.9 | | Total revenue recognized | 537.3 | 520.9 | 1,073.3 | 1,025.4 | - Deferred revenue increased by **$15.3 million** from December 31, 2021, to June 30, 2022, primarily due to cash payments received in advance of satisfying performance obligations[28](index=28&type=chunk) [Note 4 -- Restructuring Charges](index=10&type=section&id=Note%204%20--%20Restructuring%20Charges) Restructuring charges, primarily for employee severance and contract terminations, decreased significantly in 2022 compared to 2021. For the three months ended June 30, 2022, charges were $2.4 million (down from $10.1 million in 2021), and for the six months, they were $7.7 million (down from $15.9 million in 2021) | Restructuring Charges ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:---------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Total charges | 2.4 | 10.1 | 7.7 | 15.9 | | Severance costs | 1.9 | 8.0 | 4.4 | 12.7 | | Contract termination & other exit costs | 0.5 | 2.1 | 3.3 | 3.2 | | Restructuring Reserves ($M) | Balance as of Dec 31, 2021 | Balance as of Mar 31, 2022 | Balance as of June 30, 2022 | |:----------------------------|:---------------------------|:---------------------------|:----------------------------| | Severance and termination | 4.7 | 3.8 | 3.0 | | Contract termination & other costs | 3.3 | 3.3 | 2.7 | | Total | 8.0 | 7.1 | 5.7 | [Note 5 -- Notes Payable and Indebtedness](index=12&type=section&id=Note%205%20--%20Notes%20Payable%20and%20Indebtedness) The company's total debt decreased slightly to $3,712.5 million as of June 30, 2022, from $3,744.8 million at December 31, 2021. This change reflects a January 2022 debt refinancing where $460 million in Incremental Term Loans (2029 Term Loan) were established to redeem $420 million of 6.875% Senior Secured Notes, resulting in a $23.0 million loss on debt extinguishment | Debt Category ($M) | June 30, 2022 (Carrying Value) | December 31, 2021 (Carrying Value) | |:-------------------|:-------------------------------|:-----------------------------------| | Total short-term debt | 32.7 | 28.1 | | Total long-term debt | 3,679.8 | 3,716.7 | | Total debt | 3,712.5 | 3,744.8 | - On January 18, 2022, the company established **$460 million** in Incremental Term Loans (2029 Term Loan) to redeem **$420 million** of 6.875% Senior Secured Notes due 2026, incurring a **$23.0 million** loss on debt extinguishment[42](index=42&type=chunk) - The 2029 Term Loan bears interest at SOFR + 325 basis points (**4.747%** at June 30, 2022), while the 2026 Term Loan bears interest at LIBOR + 325 basis points (**4.874%** at June 30, 2022)[46](index=46&type=chunk)[47](index=47&type=chunk) - The Revolving Facility has **$755 million** available at June 30, 2022, with an interest rate of **4.592%**[48](index=48&type=chunk) [Note 6 -- Other Assets and Liabilities](index=14&type=section&id=Note%206%20--%20Other%20Assets%20and%20Liabilities) This note details the composition of other non-current assets, other accrued and current liabilities, and other non-current liabilities. Key changes include a decrease in right-of-use assets and long-term lease liabilities, and a reduction in accrued interest expense | Other Non-Current Assets ($M) | June 30, 2022 | December 31, 2021 | |:------------------------------|:--------------|:------------------| | Right of use assets | 57.8 | 71.9 | | Prepaid pension assets | 37.8 | 36.6 | | Investments | 26.5 | 27.2 | | Other various | 36.2 | 36.9 | | Total | 158.3 | 172.6 | | Other Accrued and Current Liabilities ($M) | June 30, 2022 | December 31, 2021 | |:-------------------------------------------|:--------------|:------------------| | Accrued operating costs | 112.0 | 110.4 | | Accrued interest expense | 2.9 | 12.6 | | Short-term lease liability | 21.7 | 26.0 | | Accrued income tax | 5.9 | 16.4 | | Other various | 44.0 | 32.9 | | Total | 186.5 | 198.3 | | Other Non-Current Liabilities ($M) | June 30, 2022 | December 31, 2021 | |:-----------------------------------|:--------------|:------------------| | Deferred revenue - long term | 15.7 | 13.7 | | U.S. tax liability associated with the 2017 Act | 39.3 | 44.6 | | Long-term lease liability | 47.1 | 59.4 | | Liabilities for unrecognized tax benefits | 18.8 | 19.2 | | Other various | 11.5 | 7.8 | | Total | 132.4 | 144.7 | [Note 7 -- Contingencies](index=15&type=section&id=Note%207%20--%20Contingencies) The company is involved in various legal and regulatory matters, including an FTC investigation that resulted in a consent order and refund checks, and two right of publicity class actions (DeBose v. Dun & Bradstreet Holdings, Inc. and Batis v. Dun & Bradstreet Holdings, Inc.). While some matters could be material, the ultimate resolution of currently pending legal proceedings is not expected to have a material adverse effect on financial condition - The FTC investigation concluded with a consent agreement, leading to the company sending notices and refund checks to eligible customers by **May 27, 2022**[61](index=61&type=chunk) - Two class action lawsuits, DeBose v. Dun & Bradstreet Holdings, Inc. and Batis v. Dun & Bradstreet Holdings, Inc., allege unauthorized use of names and personas for product promotion, with motions to dismiss filed by the company[63](index=63&type=chunk)[65](index=65&type=chunk) - Management does not believe the ultimate resolution of currently pending legal proceedings will have a material adverse effect on the company's financial condition[58](index=58&type=chunk) [Note 8 -- Income Taxes](index=16&type=section&id=Note%208%20--%20Income%20Taxes) The effective tax rate for the three months ended June 30, 2022, was 16.7% (tax benefit of $0.1 million on a pre-tax loss of $0.7 million), a significant change from (509.1)% in the prior year. For the six months, the rate was 23.3% (tax benefit of $9.4 million on a pre-tax loss of $40.5 million), compared to (78.8)% in the prior year. These changes were primarily due to an increase in net deferred tax liabilities from a state tax apportionment change and an enacted tax rate change in the U.K | Metric | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:-------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Effective tax rate | 16.7% | (509.1)% | 23.3% | (78.8)% | | Tax benefit (provision) | $0.1M | $(43.0)M | $9.4M | $(33.2)M | - The change in effective tax rate was primarily due to an increase in net deferred tax liabilities resulting from a state tax apportionment change related to a new corporate headquarters building in Florida and an enacted tax rate change in the U.K[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 9 -- Pension and Postretirement Benefits](index=17&type=section&id=Note%209%20--%20Pension%20and%20Postretirement%20Benefits) The net periodic pension cost (income) for the three months ended June 30, 2022, was an income of $(10.2) million, compared to $(12.2) million in the prior year. For the six months, it was an income of $(20.6) million, compared to $(24.3) million in the prior year | Components of net periodic cost (income) ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:----------------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Service cost | 0.8 | 1.3 | 1.6 | 2.6 | | Interest cost | 8.8 | 6.9 | 17.6 | 13.7 | | Expected return on plan assets | (19.8) | (20.9) | (39.8) | (41.7) | | Amortization of prior service cost (credit) | — | — | — | — | | Amortization of actuarial loss (gain) | — | 0.5 | — | 1.1 | | Net periodic cost (income) | (10.2) | (12.2) | (20.6) | (24.3) | [Note 10 -- Stock Based Compensation](index=17&type=section&id=Note%2010%20--%20Stock%20Based%20Compensation) Total stock-based compensation expense increased to $15.3 million for the three months ended June 30, 2022 (from $7.1 million in 2021) and to $26.0 million for the six months (from $14.7 million in 2021), primarily due to 2022 annual grants and accelerated share expense. Unrecognized compensation expense totals $78.1 million as of June 30, 2022, with a weighted-average amortization period of 2.2 years | Stock-based compensation expense ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:--------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Restricted stock and RSUs | 14.6 | 4.5 | 22.0 | 7.6 | | Stock options | 0.6 | (0.4) | 1.6 | 1.1 | | Incentive units | 0.1 | 3.0 | 2.4 | 6.0 | | Total compensation expense | 15.3 | 7.1 | 26.0 | 14.7 | - Unrecognized equity-based compensation cost as of June 30, 2022, is **$78.1 million**, with a weighted-average amortization period of **2.2 years**[75](index=75&type=chunk) - ESPP expense was approximately **$1 million** for the three months and **$2 million** for the six months ended June 30, 2022[76](index=76&type=chunk) [Note 11 -- Earnings (Loss) Per Share](index=19&type=section&id=Note%2011%20--%20Earnings%20(Loss)%20Per%20Share) Basic and diluted earnings (loss) per share were $(0.00) for the three months ended June 30, 2022, and $(0.08) for the six months ended June 30, 2022. The weighted-average number of shares outstanding remained relatively stable | Metric | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:----------------------------------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. | $(1.8)M | $(51.7)M | $(33.1)M | $(76.7)M | | Basic earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Diluted earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Weighted average number of shares outstanding-basic | 429,137,384 | 428,884,721 | 428,959,588 | 428,695,323 | | Weighted average number of shares outstanding-diluted | 429,137,384 | 428,884,721 | 428,959,588 | 428,695,323 | [Note 12 -- Financial Instruments](index=20&type=section&id=Note%2012%20--%20Financial%20Instruments) The company uses derivative financial instruments, including interest rate swaps and cross-currency interest rate swaps, to manage exposure to interest rate and foreign currency fluctuations, not for speculative purposes. As of June 30, 2022, the notional amount of interest rate swaps was $1.25 billion, and new cross-currency swaps with a notional amount of $375 million were entered into in April 2022 to hedge net investments in foreign subsidiaries - The company uses interest rate swaps to manage interest rate exposure on outstanding debt, with a notional amount of **$1.25 billion** at June 30, 2022, up from **$1 billion** at December 31, 2021[87](index=87&type=chunk) - In April 2022, the company entered into cross-currency interest rate swaps with an aggregate notional amount of **$375 million**, designated as net investment hedges, to protect foreign investments against exchange rate changes[51](index=51&type=chunk)[94](index=94&type=chunk) | Derivative Instrument ($M) | June 30, 2022 (Fair Value) | December 31, 2021 (Fair Value) | |:---------------------------|:---------------------------|:-------------------------------| | Interest rate Swaps (Asset) | 52.4 | 10.1 | | Cross-currency swaps (Asset) | 1.7 | — | | Foreign exchange forwards (Asset) | 0.6 | 1.9 | | Foreign exchange forwards (Liability) | 2.3 | 0.7 | [Note 13 -- Accumulated Other Comprehensive Income (Loss)](index=24&type=section&id=Note%2013%20--%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) Accumulated other comprehensive loss (AOCI) increased from $(57.1) million at January 1, 2022, to $(144.3) million at June 30, 2022. This change was primarily driven by foreign currency translation adjustments and cash flow hedge derivatives, partially offset by net investment hedge derivatives | AOCI Component ($M) | Balance, January 1, 2022 | Balance, June 30, 2022 | |:--------------------|:-------------------------|:-----------------------| | Foreign currency translation adjustments | (52.6) | (176.0) | | Net investment hedge derivative | — | 5.5 | | Defined benefit pension plans | (11.9) | (12.1) | | Cash flow hedge derivative | 7.4 | 38.3 | | Total | (57.1) | (144.3) | [Note 14 -- Acquisitions](index=25&type=section&id=Note%2014%20--%20Acquisitions) In 2021, the company acquired Eyeota for $172.4 million and NetWise for $69.8 million, both accounted for as purchase transactions and allocated to the North America segment. The acquisition of Bisnode for $805.8 million in January 2021, allocated to the International segment, has finalized its purchase accounting. Pro forma financial information is provided assuming these acquisitions occurred on January 1, 2020 - In November 2021, the company acquired Eyeota Holdings Pte Ltd for **$172.4 million** in cash, allocating goodwill and intangible assets to its North America segment[109](index=109&type=chunk)[110](index=110&type=chunk) - In November 2021, the company acquired NetWise Data, LLC for **$69.8 million**, funded by cash on hand, also allocating goodwill and intangible assets to its North America segment[116](index=116&type=chunk)[117](index=117&type=chunk) - The January 2021 acquisition of Bisnode Business Information Group AB for **$805.8 million** (cash and common stock) has finalized its purchase accounting and is included in the International segment[124](index=124&type=chunk)[125](index=125&type=chunk) | Pro Forma Financial Information ($M) | Three months ended June 30, 2021 | Six months ended June 30, 2021 | |:-------------------------------------|:---------------------------------|:-------------------------------| | Total pro forma revenue | 532.6 | 1,051.0 | | Pro forma net income (loss) attributable to Dun & Bradstreet Holdings, Inc. | (53.9) | (77.2) | [Note 15 -- Goodwill and Intangible Assets](index=28&type=section&id=Note%2015%20--%20Goodwill%20and%20Intangible%20Assets) Goodwill decreased to $3,437.1 million at June 30, 2022, from $3,493.3 million at January 1, 2022, primarily due to foreign currency fluctuations. Other intangible assets also decreased to $4,541.7 million from $4,824.5 million over the same period, mainly due to amortization and foreign currency impacts | Asset Category ($M) | January 1, 2022 | June 30, 2022 | |:--------------------|:----------------|:--------------| | Computer software | 557.4 | 578.9 | | Goodwill | 3,493.3 | 3,437.1 | | Other Intangibles ($M) | January 1, 2022 | June 30, 2022 | |:-----------------------|:----------------|:--------------| | Customer relationships | 1,793.3 | 1,657.4 | | Reacquired rights | 284.7 | 251.3 | | Database | 1,285.1 | 1,186.8 | | Other indefinite-lived intangibles | 1,280.0 | 1,280.0 | | Other intangibles | 181.4 | 166.2 | | Total | 4,824.5 | 4,541.7 | - Changes in computer software, goodwill, and other intangibles were primarily due to foreign currency fluctuations, acquisitions (Eyeota and NetWise), and amortization[132](index=132&type=chunk) [Note 16 -- Segment Information](index=30&type=section&id=Note%2016%20--%20Segment%20Information) The company reports financial results through North America and International segments. North America revenue increased by 6.7% for the three months and 7.5% for the six months ended June 30, 2022, while International revenue decreased by 4.7% and 2.7% respectively, largely due to foreign exchange impacts. Adjusted EBITDA for North America decreased, while International improved | Revenue ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:-------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | North America | 381.3 | 357.2 | 748.6 | 696.6 | | International | 156.0 | 163.7 | 324.7 | 333.6 | | Consolidated total | 537.3 | 520.9 | 1,073.3 | 1,025.4 | | Adjusted EBITDA ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:---------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | North America | 161.4 | 167.4 | 314.7 | 318.5 | | International | 46.5 | 42.6 | 101.6 | 94.1 | | Corporate and other | (7.9) | (11.7) | (26.2) | (28.6) | | Consolidated total | 200.0 | 198.3 | 390.1 | 384.0 | | Customer Solution Set Revenue ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Six months ended June 30, 2022 | Six months ended June 30, 2021 | |:-----------------------------------|:---------------------------------|:---------------------------------|:-------------------------------|:-------------------------------| | Finance & Risk | 311.4 | 303.8 | 622.6 | 599.3 | | Sales & Marketing | 225.9 | 217.1 | 450.7 | 426.1 | | Total Revenue | 537.3 | 520.9 | 1,073.3 | 1,025.4 | [Note 17 -- Related Parties](index=34&type=section&id=Note%2017%20--%20Related%20Parties) The company has significant related party relationships with the Investor Consortium (Bilcar, THL, Cannae Holdings, Black Knight, CC Capital) who exert voting influence. Key executives hold dual roles. The company has agreements with Black Knight and Paysafe for data licensing, products, and services, generating revenue and incurring expenses - The Investor Consortium (Bilcar, THL, Cannae Holdings, Black Knight, CC Capital) continues to exercise significant voting influence over the company[145](index=145&type=chunk) - The company has a five-year agreement with Black Knight, expecting **$24 million** in data license fees and incurring **$34 million** for products and services[147](index=147&type=chunk) - For the three and six months ended June 30, 2022, revenue from Black Knight was **$3.3 million** and operating expenses were **$0.5 million** and **$1.0 million**, respectively[147](index=147&type=chunk) - A 10-year agreement with Paysafe provides data license and risk management solutions, recognizing revenue of **$1.5 million** and **$2.4 million** for the three and six months ended June 30, 2022, respectively[147](index=147&type=chunk) [Note 18 -- Subsequent Event](index=34&type=section&id=Note%2018%20--%20Subsequent%20Event) On July 28, 2022, the Board of Directors declared a quarterly cash dividend of $0.05 per share of common stock, payable on September 22, 2022, to shareholders of record as of September 1, 2022 - A quarterly cash dividend of **$0.05 per share** was declared on July 28, 2022, payable on September 22, 2022[148](index=148&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)](index=35&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Unaudited)) This section provides management's perspective on the company's financial condition and results of operations for the three and six months ended June 30, 2022. It covers business overview, recent developments, key components of results, key performance metrics, and a detailed analysis of operating results and liquidity, highlighting impacts from acquisitions, foreign exchange, and global economic conditions [Business Overview](index=35&type=section&id=Business%20Overview) Dun & Bradstreet is a leading global provider of business decisioning data and analytics, aiming to deliver a global network of trust. Its core solutions, Finance & Risk and Sales & Marketing, are embedded in client workflows to inform critical business decisions. The company serves over 200,000 clients globally, with a strong presence in North America and growing international markets, underpinned by a highly recurring revenue model and strong operating leverage - Dun & Bradstreet is a global leader in business decisioning data and analytics, providing Finance & Risk and Sales & Marketing solutions[153](index=153&type=chunk)[154](index=154&type=chunk)[156](index=156&type=chunk) - The company serves over **200,000 clients** globally across various industries and geographies, with a strong presence in North America and expanding international markets[157](index=157&type=chunk) - The business model is characterized by highly recurring, diversified revenue, significant operating leverage, low capital requirements, and strong free cash flow, leading to high client retention[158](index=158&type=chunk) [Segments](index=36&type=section&id=Segments) The company manages its business and reports financial results through two segments: North America, offering Finance & Risk and Sales & Marketing data in the US and Canada; and International, providing similar solutions directly in the U.K., Europe, Greater China, India, and indirectly through Worldwide Network alliances - The company's two reporting segments are North America (US and Canada) and International (UK, Europe, Greater China, India, and WWN alliances)[160](index=160&type=chunk) [Recent Developments](index=36&type=section&id=Recent%20Developments) Recent developments include a debt refinancing in January 2022, the ongoing Russia/Ukraine conflict exacerbating global economic uncertainty and impacting foreign currency, and the continued monitoring of the COVID-19 pandemic's effects, though the company's distributed workforce model has maintained operations [Debt Refinancing](index=36&type=section&id=Debt%20Refinancing) The company completed a debt refinancing in January 2022, establishing $460 million in Incremental Term Loans to redeem $420 million of Senior Secured Notes - On January 18, 2022, the company amended its credit agreement to establish **$460 million** in Incremental Term Loans, using the proceeds to redeem **$420 million** of 6.875% Senior Secured Notes due 2026[161](index=161&type=chunk) [Russia/Ukraine Conflict and Current Economic Conditions](index=36&type=section&id=Russia%2FUkraine%20Conflict%20and%20Current%20Economic%20Conditions) The Russia/Ukraine conflict has intensified global economic uncertainty, impacting supply chains, inflation, and foreign currency exchange rates - The Russia/Ukraine conflict has exacerbated global economic uncertainty, potentially disrupting supply chains, broadening inflationary costs, and adversely affecting customers, vendors, and financial markets[162](index=162&type=chunk)[163](index=163&type=chunk) - A strengthening U.S. dollar against currencies like the Euro and SEK has negatively impacted reported revenue from non-U.S. markets, which account for approximately **30% of total revenue**[163](index=163&type=chunk) [COVID-19 Update](index=38&type=section&id=COVID-19%20Update) The COVID-19 pandemic continues to cause disruptions, but the company's distributed workforce model has maintained operations without significant impact - The COVID-19 pandemic continues to cause disruptions, but the company's distributed workforce model has successfully maintained operations without significant impact on productivity or financial performance[165](index=165&type=chunk)[166](index=166&type=chunk) [Recent Accounting Pronouncements](index=38&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 2 for details on recent accounting pronouncements and their potential impact on financial reporting - Refer to Note 2 of the unaudited condensed consolidated financial statements for details on recent accounting pronouncements[167](index=167&type=chunk) [Key Components of Results of Operations](index=38&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section defines the primary revenue and expense categories used in the company's financial reporting, including subscription-based revenue from Finance & Risk and Sales & Marketing solutions, various operating costs, non-operating income/expense, and income tax provisions [Revenue](index=38&type=section&id=Revenue) Revenue is primarily generated from subscription-based contracts for Finance & Risk and Sales & Marketing data, analytics, and services - Revenue is primarily generated through subscription-based contractual arrangements for Finance & Risk and Sales & Marketing data, analytics, and related services[168](index=168&type=chunk) - Finance & Risk solutions provide global information, monitoring, portfolio analysis, and support for supply chain risk management and compliance[169](index=169&type=chunk) - Sales & Marketing solutions offer analytics to optimize sales and marketing strategies, cleanse CRM data, and target high-probability prospects[170](index=170&type=chunk) [Expenses](index=38&type=section&id=Expenses) Expenses include cost of services, selling and administrative costs, and depreciation and amortization related to assets and acquisitions - Cost of services includes data acquisition, royalty fees, database costs, service fulfillment, technology support, and personnel-related costs[171](index=171&type=chunk) - Selling and administrative expenses cover personnel costs for sales, administrative, and corporate management, professional services, advertising, and occupancy costs[173](index=173&type=chunk) - Depreciation and amortization expenses relate to property, plant, and equipment, as well as purchased and developed software and other intangible assets from acquisitions[174](index=174&type=chunk) [Non-Operating Income and Expense](index=39&type=section&id=Non-Operating%20Income%20and%20Expense) Non-operating items encompass interest expense/income, costs from early debt repayments, dividends, divestiture gains/losses, and derivative mark-to-market adjustments - Non-operating income and expense includes interest expense/income, costs from early debt repayments, dividends, gains/losses from divestitures, and mark-to-market expense for derivatives[175](index=175&type=chunk) [Provision for Income Tax Expense (Benefit)](index=39&type=section&id=Provision%20for%20Income%20Tax%20Expense%20(Benefit)) This provision accounts for international, U.S. federal, state, and local income taxes across various jurisdictions - Provision for income tax expenses (benefit) represents international, U.S. federal, state, and local income taxes based on income in multiple jurisdictions[176](index=176&type=chunk) [Key Metrics](index=39&type=section&id=Key%20Metrics) This section defines the non-GAAP financial measures used by management to evaluate performance, including adjusted revenue, organic revenue, adjusted EBITDA, adjusted net income, and adjusted net earnings per diluted share, along with their respective adjustments and exclusions [Adjusted Revenue](index=40&type=section&id=Adjusted%20Revenue) Adjusted revenue includes a revenue adjustment for the Bisnode acquisition timing and isolates foreign exchange rate changes for period-over-period comparison - Adjusted revenue includes a revenue adjustment due to the timing of the Bisnode acquisition and isolates the effects of foreign exchange rate changes for period-over-period comparison[180](index=180&type=chunk) [Organic Revenue](index=40&type=section&id=Organic%20Revenue) Organic revenue is adjusted revenue before foreign exchange effects, excluding revenue from acquired businesses for the first twelve months and divested businesses - Organic revenue is defined as adjusted revenue before the effect of foreign exchange, excluding revenue from acquired businesses for the first twelve months and current/prior year revenue from divested businesses[181](index=181&type=chunk) [Adjusted EBITDA and Adjusted EBITDA Margin](index=40&type=section&id=Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20Margin) Adjusted EBITDA excludes various non-cash and non-recurring items, while Adjusted EBITDA margin is calculated by dividing Adjusted EBITDA by Adjusted Revenue - Adjusted EBITDA excludes depreciation, amortization, interest, income tax, other non-operating items, equity in affiliates, non-controlling interests, purchase accounting adjustments, equity-based compensation, restructuring charges, M&A costs, transition costs, legal expenses, and asset impairment[182](index=182&type=chunk) - Adjusted EBITDA margin is calculated by dividing adjusted EBITDA by adjusted revenue[183](index=183&type=chunk) [Adjusted Net Income](index=40&type=section&id=Adjusted%20Net%20Income) Adjusted net income excludes incremental amortization, purchase accounting adjustments, equity-based compensation, restructuring, M&A, transition, legal, asset impairment, and debt refinancing costs - Adjusted net income excludes incremental amortization from purchase accounting, other purchase accounting adjustments, equity-based compensation, restructuring charges, M&A operating/non-operating costs, transition costs, legal expenses, asset impairment, debt refinancing/extinguishment costs, and the tax effect of non-GAAP adjustments and the CARES Act[185](index=185&type=chunk) [Adjusted Net Earnings Per Diluted Share](index=41&type=section&id=Adjusted%20Net%20Earnings%20Per%20Diluted%20Share) Adjusted net earnings per diluted share is calculated by dividing adjusted net income by the weighted average number of common shares outstanding, including dilutive stock awards - Adjusted net earnings per diluted share is calculated by dividing adjusted net income by the weighted average number of common shares outstanding, including the dilutive effect of stock incentive awards[186](index=186&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the company's financial performance for the three and six months ended June 30, 2022, compared to the prior year. It covers GAAP results, revenue by segment and solution set, consolidated operating costs, adjusted EBITDA, interest income/expense, other income/expense, income taxes, and net income/loss, highlighting key drivers and impacts from acquisitions, divestitures, and foreign exchange [GAAP Results](index=41&type=section&id=GAAP%20Results) This section presents the company's financial performance based on Generally Accepted Accounting Principles for the reported periods | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | |:----------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------------------------------|:------------------------------------| | Revenue | 537.3 | 520.9 | 1,073.3 | 1,025.4 | | Operating income (loss) | 29.7 | 26.9 | 46.1 | 35.2 | | Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. | (1.8) | (51.7) | (33.1) | (76.7) | | Basic earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Diluted earnings (loss) per share | — | (0.12) | (0.08) | (0.18) | | Net income (loss) margin | (0.3)% | (9.9)% | (3.1)% | (7.5)% | [Revenue](index=44&type=section&id=Revenue) Total revenue increased by 3.1% to $537.3 million for the three months and 4.7% to $1,073.3 million for the six months ended June 30, 2022, compared to the prior year. Organic revenue, excluding foreign exchange and acquisitions/divestitures, grew by 3.7% and 4.1% for the respective periods, driven by underlying business growth | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | Total Revenue | 537.3 | 520.9 | 16.4 | 3.1% | 1,073.3 | 1,025.4 | 47.9 | 4.7% | | Organic Revenue (before FX, acquisitions & divestitures) | 536.7 | 517.8 | 18.9 | 3.7% | 1,065.5 | 1,023.6 | 41.9 | 4.1% | [North America Segment](index=45&type=section&id=North%20America%20Segment) North America revenue increased by 6.7% to $381.3 million for the three months and 7.5% to $748.6 million for the six months ended June 30, 2022. Organic revenue growth was 2.8% and 3.6% respectively, driven by new business and higher customer spend in Finance & Risk, and acquisitions in Sales & Marketing | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | Total North America Revenue | 381.3 | 357.2 | 24.1 | 6.7% | 748.6 | 696.6 | 52.0 | 7.5% | | North America Organic Revenue (excl. acquisitions & FX) | N/A | N/A | 9.8 | 2.8% | N/A | N/A | 24.9 | 3.6% | [Finance & Risk](index=45&type=section&id=Finance%20%26%20Risk) North America Finance & Risk revenue increased by 4.9% to $209.5 million for the three months and 5.5% to $411.7 million for the six months ended June 30, 2022, primarily due to new business and higher customer spend in Third Party Risk and Supply Chain Risk Management solutions, partially offset by lower government sector revenue | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | North America Finance & Risk Revenue | 209.5 | 199.7 | 9.8 | 4.9% | 411.7 | 390.2 | 21.5 | 5.5% | - Growth was driven by new business and higher customer spend in Third Party Risk and Supply Chain Risk Management solutions, partially offset by lower revenue from the government sector[200](index=200&type=chunk)[201](index=201&type=chunk) [Sales & Marketing](index=46&type=section&id=Sales%20%26%20Marketing) North America Sales & Marketing revenue increased by 9.1% to $171.8 million for the three months and 10.0% to $336.9 million for the six months ended June 30, 2022, primarily driven by the acquisitions of Eyeota and NetWise | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | North America Sales & Marketing Revenue | 171.8 | 157.5 | 14.3 | 9.1% | 336.9 | 306.4 | 30.5 | 10.0% | - Revenue growth was primarily driven by the impact of the acquisitions of Eyeota and NetWise, contributing approximately **$14 million** for the three months and **$26 million** for the six months[203](index=203&type=chunk)[204](index=204&type=chunk) [International Segment](index=46&type=section&id=International%20Segment) International revenue decreased by 4.7% to $156.0 million for the three months and 2.7% to $324.7 million for the six months ended June 30, 2022, primarily due to negative foreign exchange impacts. Excluding these impacts and divestitures, organic revenue increased by 5.7% and 5.1% respectively | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | Total International Revenue | 156.0 | 163.7 | (7.7) | (4.7)% | 324.7 | 333.6 | (8.9) | (2.7)% | | International Organic Revenue (excl. FX & divestiture) | N/A | N/A | 9.1 | 5.7% | N/A | N/A | 16.8 | 5.1% | [Finance & Risk](index=46&type=section&id=Finance%20%26%20Risk) International Finance & Risk revenue decreased by 2.1% to $101.9 million for the three months and 0.3% to $210.9 million for the six months ended June 30, 2022. Before the negative foreign exchange impact, revenue increased by 6.8% and 6.3% respectively, driven by growth across all markets, particularly Europe (API solutions), UK (D&B Credit), and WWN alliances | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | International Finance & Risk Revenue | 101.9 | 104.1 | (2.2) | (2.1)% | 210.9 | 211.4 | (0.5) | (0.3)% | - Excluding foreign exchange impact, revenue increased by **$7.0 million (6.8%)** for the three months and **$13.2 million (6.3%)** for the six months, driven by API solution sales in Europe, D&B Credit growth in the UK, and higher cross-border data fees from WWN alliances[207](index=207&type=chunk)[208](index=208&type=chunk) [Sales & Marketing](index=46&type=section&id=Sales%20%26%20Marketing) International Sales & Marketing revenue decreased by 9.3% to $54.1 million for the three months and 6.8% to $113.8 million for the six months ended June 30, 2022. Before foreign exchange impact, revenue increased by 1.9% and 1.7% respectively, driven by UK data sales and WWN product royalties, partially offset by a divested German business | Metric | Three months ended June 30, 2022 ($M) | Three months ended June 30, 2021 ($M) | Change ($M) | Change (%) | Six months ended June 30, 2022 ($M) | Six months ended June 30, 2021 ($M) | Change ($M) | Change (%) | |:----------------------------|:--------------------------------------|:--------------------------------------|:------------|:-----------|:------------------------------------|:------------------------------------|:------------|:-----------| | International Sales & Marketing Revenue | 54.1 | 59.6 | (5.5) | (9.3)% | 113.8 | 122.2 | (8.4) | (6.8)% | - Excluding foreign exchange impact, revenue increased by **$1.2 million (1.9%)** for the three months and **$2.1 million (1.7%)** for the six months, driven by UK data sales and WWN product royalties, partially offset by a divested business-to-consumer business in Germany[209](index=209&type=chunk)[210](index=210&type=chunk) [Consolidated Operating Costs](index=46&type=section&id=Consolidated%20Operating%20Costs) Consolidated operating costs increased by 2.8% to $507.6 million for the three months and 3.7% to $1,027.2 million for the six months ended June 30, 2022. This was driven by higher cost of services and selling and administrative expenses, partially offset by decreases in depreciation and amortization and restructuring charges. Operating income improved by 10.2% and 30.8% for the respective periods | Operating Costs ($M) | Three months ended June 30, 2022 | Three months ended June 30, 2021 | Change ($M) | Change (%) | Six months ended June 30, 2022 | Six months ended June 30, 2021 | Change ($M) | Change (%) | |:---------------------|:---------------------------------|:---------------------------------|:------------|:-----------|:-------------------------------|:-------------------------------|:------------|:-----------| | Cost of services (excl. D&A) | 181.6 | 167.3 | 14.3 | 8.5% | 358.3 | 328.2 | 30.1 | 9.2% | | Selling and administrative expenses | 176.6 | 164.3 | 12.3 | 7.5% | 364.8 | 344.1 | 20.7 | 6.0% | | Depreciation and amortization | 147.0 | 152.3 | (5.3) | (3.4)% | 296.4 | 302.0 | (5.6) | (1.8)% | | Restructuring charges | 2.4 | 10.1 | (7.7) | (76.5)% | 7.7 | 15.9 | (8.2) | (51.9)% |\n| Operating costs | 507.6 | 494.0 | 13.6 | 2.8% | 1,027.2 | 990.2 | 37.0 | 3.7% | | Operating income (loss) | 29.7 | 26.9 | 2.8 | 10.2% | 46.1 | 35.2 | 10.9 | 30.8% | [Cost of Services (exclusive of depreciation and amortization)](index=47&type=section&id=Cost%20of%20Services%20(exclusive%20of%20depreciation%20and%20amortization)) Cost of services increased by $14.3 million (8.5%) for the three months and $30.1 million (9.2%) for the six months ended June 30, 2022. This was primarily due to increased costs from acquisitions (Eyeota and NetWise) and higher data/data processing costs, partially offset by lower net personnel costs and favorable foreign exchange impacts - Three-month increase of **$14.3 million (8.5%)** driven by **$10.3 million** from acquisitions and higher data/data processing costs, partially offset by lower net personnel costs and favorable foreign exchange[213](index=213&type=chunk) - Six-month increase of **$30.1 million (9.2%)** driven by **$18.4 million** from acquisitions and higher data/data processing costs, partially offset by lower net personnel costs and favorable foreign exchange[214](index=214&type=chunk) [Selling and Administrative Expenses](index=47&type=section&id=Selling%20and%20Administrative%20Expenses) Selling and administrative expenses increased by $12.3 million (7.5%) for the three months and $20.7 million (6.0%) for the six months ended June 30, 2022. This was mainly due to acquisitions and higher net personnel costs (retention, equity-based compensation), partially offset by lower office/occupancy costs and legal costs, and favorable foreign exchange impacts - Three-month increase of **$12.3 million (7.5%)** due to acquisitions (**$4.7 million**) and higher net personnel costs (**$10 million**), partially offset by lower office/occupancy costs and favorable foreign exchange (**$8 million**)[215](index=215&type=chunk) - Six-month increase of **$20.7 million (6.0%)** due to acquisitions (**$8.5 million**) and higher net personnel costs (**$21 million**), partially offset by lower legal costs (**$11 million**) and favorable foreign exchange (**$11 million**)[216](index=216&type=chunk) [Depreciation and Amortization](index=47&type=section&id=Depreciation%20and%20Amortization) Depreciation and amortization expenses decreased by $5.3 million (3.4%) for the three months and $5.6 million (1.8%) for the six months ended June 30, 2022. This was primarily due to foreign exchange impacts and lower amortization of intangible assets from the Take-Private Transaction and Bisnode acquisition, partially offset by additional expense from Eyeota, NetWise acquisitions, and the new headquarters building - Three-month decrease of **$5.3 million (3.4%)** and six-month decrease of **$5.6 million (1.8%)** primarily due to foreign exchange and lower amortization of intangible assets from prior acquisitions, partially offset by new acquisitions and the headquarters building[217](index=217&type=chunk)[219](index=219&type=chunk) [Restructuring Charges](index=48&type=section&id=Restructuring%20Charges) Restructuring charges significantly decreased by $7.7 million (76.5%) for the three months and $8.2 million (51.9%) for the six months ended June 30, 2022, compared to the prior year. This reduction was primarily due to higher exit costs in the prior year related to initiatives in International businesses - Three-month restructuring charges decreased by **$7.7 million (76.5%)** and six-month charges decreased by **$8.2 million (51.9%)** due to higher exit costs in the prior year related to International business operational improvements[220](index=220&type=chunk)[221](index=221&type=chunk) [Operating Income (Loss)](index=48&type=section&id=Operating%20Income%20(Loss)) Consolidated operating income improved by $2.8 million (10.2%) to $29.7 million for the three months and $10.9 million (30.8%) to $46.1 million for the six months ended June 30, 2022. This improvement was driven by higher revenue from underlying business, partially offset by increased business costs and negative foreign exchange impacts - Three-month operating income improved by **$2.8 million (10.2%)** and six-month operating income improved by **$10.9 million (30.8%)**, driven by higher underlying business revenue, partially offset by increased business costs and foreign exchange impacts[222](index=222&type=chunk)[223](index=223&type=chunk) [Adjusted EBITDA and adjusted EBITDA margin by segment](index=48&type=section&id=Adjusted%20EBITDA%20and%20adjusted%20EBITDA%20margin%20by%20segment) Consolidated adjusted EBITDA increased by 0.8% for the three months a