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Dun & Bradstreet(DNB) - 2022 Q1 - Earnings Call Transcript
2022-05-10 02:05
Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Q1 2022 Earnings Conference Call May 9, 2022 2:30 PM ET Company Participants Ed Yuen - Investor Relations Anthony Jabbour - Chief Executive Officer Bryan Hipsher - Chief Financial Officer Conference Call Participants Kyle Peterson - Needham Kevin McVeigh - Credit Suisse Hans Hoffman - Jefferies Ashish Sabadra - RBC Capital Markets Andrew Jeffrey - Truist George Tong - Goldman Sachs Andrew Steinerman - JPMorgan Heather Balsky - Bank of America Faiza Alwy - Deutsche ...
Dun & Bradstreet(DNB) - 2022 Q1 - Quarterly Report
2022-05-08 16:00
[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This chapter provides the company's unaudited condensed consolidated financial statements for the three months ended March 31, 2022, and March 31, 2021, including statements of operations and comprehensive income (loss), balance sheets, cash flows, and stockholders' equity, along with detailed notes covering accounting policies, revenue recognition, restructuring charges, debt, contingencies, income taxes, pensions, stock-based compensation, earnings per share, financial instruments, accumulated other comprehensive income, acquisitions, goodwill and intangible assets, segment information, and related party transactions [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 section presents the unaudited condensed consolidated statement of operations and comprehensive income (loss) for the three months ended March 31, 2022, and 2021, detailing revenue, operating costs, and net income (loss) Condensed Consolidated Statement of Operations and Comprehensive Income (Loss) (Unaudited) | Metric (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------- | :-------------------------------- | :-------------------------------- | | Revenue | 536.0 | 504.5 | | Operating Costs | 519.6 | 496.2 | | Operating Income (Loss) | 16.4 | 8.3 | | Net Income (Loss) | (29.8) | (23.3) | | Net Income (Loss) Attributable to Dun & Bradstreet Holdings, Inc. | (31.3) | (25.0) | | Basic Earnings (Loss) Per Share | (0.07) | (0.06) | | Diluted Earnings (Loss) Per Share | (0.07) | (0.06) | - The company achieved revenue of **$536.0 million** in Q1 2022, a 6.2% year-over-year increase, but net loss attributable to Dun & Bradstreet Holdings, Inc. expanded to **$31.3 million**, with a loss per share of **$0.07**[8](index=8&type=chunk) [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This section provides the unaudited condensed consolidated balance sheets as of March 31, 2022, and December 31, 2021, outlining assets, liabilities, and stockholders' equity Condensed Consolidated Balance Sheets (Unaudited) | Metric (million USD) | March 31, 2022 | December 31, 2021 | | :------------------- | :------------- | :---------------- | | Cash and Cash Equivalents | 215.8 | 177.1 | | Total Current Assets | 732.3 | 718.0 | | Total Non-Current Assets | 9,124.9 | 9,279.2 | | **Total Assets** | **9,857.2** | **9,997.2** | | Total Current Liabilities | 973.4 | 1,004.9 | | Total Liabilities | 6,148.3 | 6,251.9 | | Total Stockholders' Equity | 3,643.5 | 3,681.2 | | **Total Liabilities and Stockholders' Equity** | **9,857.2** | **9,997.2** | - As of March 31, 2022, total assets were **$9,857.2 million**, a slight decrease from December 31, 2021, primarily due to a reduction in non-current assets, while cash and cash equivalents increased to **$215.8 million**[12](index=12&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2022, and 2021, detailing cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Type (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | Net Cash from Operating Activities | 138.8 | 168.2 | | Net Cash from Investing Activities | (49.4) | (637.9) | | Net Cash from Financing Activities | (51.0) | 290.1 | | Cash and Cash Equivalents at End of Period | 215.8 | 173.4 | - Net cash flow from operating activities was **$138.8 million** in Q1 2022, a decrease from the prior year, while investing cash outflows significantly reduced due to the absence of major acquisitions like Bisnode in 2021, and financing cash outflows of **$51.0 million** were primarily driven by debt redemption activities[16](index=16&type=chunk) [Condensed Consolidated Statements of Stockholder Equity (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholder%20Equity%20(Unaudited)) This section provides the unaudited condensed consolidated statements of stockholder equity as of March 31, 2022, detailing changes in capital stock, accumulated deficit, and other comprehensive income (loss) Condensed Consolidated Statements of Stockholder Equity (Unaudited) | Stockholders' Equity Item (million USD) | March 31, 2022 | | :------------------------------------ | :------------- | | Common Stock | — | | Additional Paid-in Capital | 4,506.8 | | Accumulated Deficit | (793.1) | | Treasury Stock | (0.3) | | Accumulated Other Comprehensive Loss | (69.9) | | **Total Stockholders' Equity** | **3,643.5** | | Noncontrolling Interests | 65.4 | | **Total Equity** | **3,708.9** | - As of March 31, 2022, total stockholders' equity was **$3,643.5 million**, a decrease from **$3,681.2 million** on January 1, 2022, primarily impacted by net loss and foreign currency translation adjustments[20](index=20&type=chunk) [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section provides detailed notes to the unaudited condensed consolidated financial statements, covering accounting policies, revenue recognition, debt, contingencies, and other key financial disclosures [Note 1 -- Basis of Presentation](index=7&type=section&id=Note%201%20--%20Basis%20of%20Presentation) The company's condensed consolidated financial statements are prepared in accordance with GAAP and should be read in conjunction with the 2021 annual report, with business segmented into North America and International, and potential impacts from COVID-19 and the Russia-Ukraine conflict noted - The company's business is segmented into North America and International, providing finance & risk and sales & marketing data, analytics, and business insights[22](index=22&type=chunk) - The COVID-19 pandemic and the Russia-Ukraine conflict continue to create economic uncertainties, potentially affecting management's estimates and assumptions[22](index=22&type=chunk) [Note 2 -- Recent Accounting Pronouncements](index=7&type=section&id=Note%202%20--%20Recent%20Accounting%20Pronouncements) The company has evaluated recent accounting pronouncements, including the early adoption of ASU No. 2021-08 in Q4 2021 for contract assets and liabilities in business combinations, and the availability of optional simplifications for LIBOR transition under ASU No. 2020-04 and ASU 2021-01 - The company early adopted ASU No. 2021-08 in Q4 2021, requiring contract assets and liabilities in business combinations to be recognized and measured under ASC 606 instead of fair value, resulting in no fair value adjustment for acquired deferred revenue balances in 2021 acquisitions[24](index=24&type=chunk)[26](index=26&type=chunk) - FASB issued ASU No. 2020-04 and ASU 2021-01, providing temporary optional expedients to ease the financial reporting burden of the LIBOR transition to alternative reference rates, which the company may prospectively apply through December 31, 2022[27](index=27&type=chunk) [Note 3 -- Revenue](index=8&type=section&id=Note%203%20--%20Revenue) As of March 31, 2022, the total transaction price of contracts with unsatisfied (or partially unsatisfied) performance obligations was **$2,857.6 million**, with revenue recognized at a point in time at **$208.8 million** and over time at **$327.2 million** in Q1 2022, and deferred revenue increased to **$632.8 million** from **$569.4 million** at December 31, 2021 Revenue Recognition Timing | Revenue Recognition Timing (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------- | :-------------------------------- | :-------------------------------- | | Revenue Recognized at a Point in Time | 208.8 | 205.0 | | Revenue Recognized Over Time | 327.2 | 299.5 | | **Total Revenue** | **536.0** | **504.5** | Contract Balances | Contract Balances (million USD) | March 31, 2022 | December 31, 2021 | | :------------------------------ | :------------- | :---------------- | | Accounts Receivable, Net | 339.4 | 401.7 | | Current Contract Assets | 4.0 | 3.4 | | Non-Current Contract Assets | 12.3 | 9.1 | | Current Deferred Revenue | 632.8 | 569.4 | | Non-Current Deferred Revenue | 17.3 | 13.7 | - Total future revenue from unsatisfied performance obligations was **$2,857.6 million** as of March 31, 2022[28](index=28&type=chunk) - Deferred revenue increased from **$569.4 million** as of December 31, 2021, to **$632.8 million** as of March 31, 2022, primarily due to cash payments received in advance[32](index=32&type=chunk) [Note 4 -- Restructuring Charge](index=9&type=section&id=Note%204%20--%20Restructuring%20Charge) The company recorded **$5.3 million** in restructuring charges in Q1 2022, a decrease from **$5.8 million** in the prior year, primarily comprising **$2.5 million** in employee severance and **$2.8 million** in contract termination and other exit costs, with a restructuring reserve balance of **$7.1 million** as of March 31, 2022 Restructuring Charges | Restructuring Charges (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Severance and Termination Costs | 2.5 | 4.7 | | Contract Termination and Other Exit Costs | 2.8 | 1.1 | | **Total Restructuring Charges** | **5.3** | **5.8** | Restructuring Reserve | Restructuring Reserve (million USD) | March 31, 2022 | | :---------------------------------- | :------------- | | Balance as of December 31, 2021 | 8.0 | | Charges in Q1 2022 | 3.1 | | Payments in Q1 2022 | (4.0) | | **Balance as of March 31, 2022** | **7.1** | [Note 5 -- Notes Payable and Indebtedness](index=10&type=section&id=Note%205%20--%20Notes%20Payable%20and%20Indebtedness) As of March 31, 2022, total debt was **$3,721.4 million**, slightly down from **$3,744.8 million** at December 31, 2021, following a January 2022 credit agreement amendment that established a **$460.0 million** incremental term loan to redeem **$420.0 million** of 6.875% Senior Secured Notes, resulting in a **$23.0 million** loss on debt extinguishment, and a **$250.0 million** notional interest rate swap was entered into in March 2022 to hedge future cash flow variability of floating-rate debt Notes Payable and Indebtedness | Debt Type (million USD) | Carrying Value as of March 31, 2022 | Carrying Value as of December 31, 2021 | | :-------------------- | :---------------------------------- | :------------------------------------- | | Current Debt | 32.7 | 28.1 | | Long-Term Debt | 3,688.7 | 3,716.7 | | **Total Debt** | **3,721.4** | **3,744.8** | - On January 18, 2022, the company amended its credit agreement, establishing a **$460.0 million** incremental term loan due 2029, used to redeem **$420.0 million** of 6.875% Senior Secured Notes, resulting in a **$23.0 million** loss on debt extinguishment[45](index=45&type=chunk) - The company entered into a three-year interest rate swap agreement with a total notional amount of **$250.0 million** on March 2, 2022, to hedge future cash flow variability of floating-rate debt[50](index=50&type=chunk)[53](index=53&type=chunk) [Note 6 -- Other Assets and Liabilities](index=12&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 as of March 31, 2022, and December 31, 2021, showing slight decreases across these categories Other Assets and Liabilities | Item (million USD) | March 31, 2022 | December 31, 2021 | | :----------------- | :------------- | :---------------- | | Other Non-Current Assets | 166.9 | 172.6 | | Other Accrued and Current Liabilities | 170.7 | 198.3 | | Other Non-Current Liabilities | 139.1 | 144.7 | [Note 7 -- Contingencies](index=12&type=section&id=Note%207%20--%20Contingencies) The company is involved in various legal and regulatory matters, including commercial disputes, defamation claims, and employment claims, with the FTC investigation concluding with a consent order in April 2022, and two class action lawsuits regarding unauthorized use of names and likenesses on Hoovers product websites currently in early stages of investigation with no loss provision recorded - The Federal Trade Commission (FTC) investigation into potential violations of Section 5 of the FTC Act was finalized with a consent order on April 6, 2022, with related amounts accrued in Q1 2021[63](index=63&type=chunk)[64](index=64&type=chunk) - The company faces two class action lawsuits (DeBose v. Dun & Bradstreet Holdings, Inc. and Batis v. Dun & Bradstreet Holdings, Inc.) regarding the unauthorized use of names and likenesses on Hoovers product websites, which are in early stages of investigation, and no loss provision has been recorded as the loss is not yet probable or estimable[65](index=65&type=chunk)[67](index=67&type=chunk)[68](index=68&type=chunk)[69](index=69&type=chunk) [Note 8 -- Income Taxes](index=14&type=section&id=Note%208%20--%20Income%20Taxes) The company's effective tax rate for Q1 2022 was **23.4%**, with a tax benefit of **$9.3 million**, lower than Q1 2021's **29.0%** and **$9.8 million**, primarily due to the inclusion of Global Intangible Low-Taxed Income (GILTI) and higher non-deductible executive compensation, partially offset by tax benefits from increased income in foreign jurisdictions Income Tax Metrics | Tax Metric (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------- | :-------------------------------- | :-------------------------------- | | Income (Loss) Before Income Taxes | (39.8) | (33.7) | | Provision for Income Taxes (Benefit) | (9.3) | (9.8) | | Effective Tax Rate | 23.4% | 29.0% | - The effective tax rate decreased to **23.4%** in Q1 2022, primarily influenced by the inclusion of GILTI and non-deductible executive compensation, partially offset by increased income in foreign jurisdictions[70](index=70&type=chunk) [Note 9 -- Pension and Postretirement Benefits](index=14&type=section&id=Note%209%20--%20Pension%20and%20Postretirement%20Benefits) The company's net periodic pension cost (benefit) for Q1 2022 was a benefit of **$10.4 million**, a decrease from a benefit of **$12.1 million** in Q1 2021, mainly due to changes in service cost and expected return on plan assets Net Periodic Cost (Benefit) Components | Net Periodic Cost (Benefit) Components (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Service Cost | 0.8 | 1.3 | | Interest Cost | 8.8 | 6.8 | | Expected Return on Plan Assets | (20.0) | (20.8) | | **Net Periodic Cost (Benefit)** | **(10.4)** | **(12.1)** | [Note 10 -- Stock Based Compensation](index=14&type=section&id=Note%2010%20--%20Stock%20Based%20Compensation) Total stock-based compensation expense for Q1 2022 was **$10.7 million**, up from **$7.6 million** in Q1 2021, primarily comprising restricted stock and restricted stock units, stock options, and incentive units, with **$97.6 million** in unrecognized stock-based compensation expense as of March 31, 2022, to be amortized over a weighted-average period of **2.2 years** Stock-Based Compensation Expense | Stock-Based Compensation Expense (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | | Restricted Stock and Restricted Stock Units | 7.4 | 6.6 | | Stock Options | 1.0 | 1.0 | | Incentive Units | 2.3 | — | | **Total Compensation Expense** | **10.7** | **7.6** | - As of March 31, 2022, total unrecognized stock-based compensation expense was **$97.6 million**, with a weighted-average amortization period of **2.2 years**[76](index=76&type=chunk) [Note 11 -- Earnings (Loss) Per Share](index=16&type=section&id=Note%2011%20--%20Earnings%20(Loss)%20Per%20Share) The company's basic and diluted loss per share attributable to Dun & Bradstreet Holdings, Inc. for Q1 2022 was **$0.07**, slightly higher than **$0.06** in Q1 2021, with **434,115,063** shares of common stock outstanding as of March 31, 2022 Earnings (Loss) Per Share Metrics | Earnings (Loss) Per Share Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------- | :-------------------------------- | :-------------------------------- | | Basic Earnings (Loss) Per Share | (0.07) | (0.06) | | Diluted Earnings (Loss) Per Share | (0.07) | (0.06) | - As of March 31, 2022, the number of common shares outstanding was **434,115,063**[82](index=82&type=chunk) [Note 12 -- Financial Instruments](index=17&type=section&id=Note%2012%20--%20Financial%20Instruments) The company uses financial instruments to manage interest rate and foreign currency risks, not for trading or speculative purposes, with **$1,250.0 million** notional interest rate swaps designated as cash flow hedges and **$383.1 million** notional foreign currency forward contracts not designated as hedging instruments as of March 31, 2022, and the fair value of interest rate swap assets increased from **$10.1 million** at December 31, 2021, to **$42.4 million** at March 31, 2022 - The company uses foreign currency forward and option contracts to hedge short-term foreign currency denominated loans and transactions, and may use interest rate derivatives to hedge interest rate risk on debt, not for trading or speculative purposes[83](index=83&type=chunk)[84](index=84&type=chunk) Notional Amounts of Financial Instruments | Financial Instrument Notional Amount (million USD) | March 31, 2022 | December 31, 2021 | | :----------------------------------------------- | :------------- | :---------------- | | Interest Rate Swaps (Hedging Instruments) | 1,250.0 | 1,000.0 | | Foreign Currency Forward Contracts (Non-Hedging Instruments) | 383.1 | 448.5 | Fair Value of Derivative Financial Instruments | Derivative Financial Instrument Fair Value (million USD) | March 31, 2022 | December 31, 2021 | | :----------------------------------------------------- | :------------- | :---------------- | | Interest Rate Swap Assets | 42.4 | 10.1 | | Foreign Currency Forward Assets | 0.7 | 1.9 | | Foreign Currency Forward Liabilities | 1.0 | 0.7 | [Note 13 -- Accumulated Other Comprehensive Income (Loss)](index=21&type=section&id=Note%2013%20--%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) As of March 31, 2022, the company's accumulated other comprehensive loss was **$69.9 million**, an increase from **$57.1 million** on January 1, 2022, primarily due to the negative impact of foreign currency translation adjustments, partially offset by gains on derivative financial instruments Components of Accumulated Other Comprehensive Income (Loss) | Components of Accumulated Other Comprehensive Income (Loss) (million USD) | March 31, 2022 | January 1, 2022 | | :---------------------------------------------------- | :------------- | :-------------- | | Foreign Currency Translation Adjustments | (88.9) | (52.6) | | Defined Benefit Pension Plans | (12.0) | (11.9) | | Derivative Financial Instruments | 31.0 | 7.4 | | **Total** | **(69.9)** | **(57.1)** | - Foreign currency translation adjustments contributed to a **$36.3 million** increase in accumulated other comprehensive loss in Q1 2022[103](index=103&type=chunk) [Note 14 -- Acquisitions](index=22&type=section&id=Note%2014%20--%20Acquisitions) In 2021, the company completed three significant acquisitions: Eyeota Holdings Pte Ltd for **$172.4 million** cash on November 5, NetWise Data, LLC for **$69.8 million** on November 15, and Bisnode Business Information Group AB for **$805.8 million** (cash plus stock) on January 8, aiming to enhance its targeted marketing business and European market presence, and expand its data cloud, with the allocation of Eyeota and NetWise acquisitions still preliminary - On November 5, 2021, the company acquired Eyeota Holdings Pte Ltd, a global online and offline data integration and transformation company, for **$172.4 million** in cash, with goodwill allocated to the North America segment[105](index=105&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk) - On November 15, 2021, the company acquired NetWise Data, LLC, a provider of B2B and B2C identity graph and audience targeting data, for **$69.8 million**, with goodwill allocated to the North America segment[113](index=113&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk) - On January 8, 2021, the company acquired Bisnode Business Information Group AB, a leading European data and analytics company, for **$805.8 million** (**$646.9 million** cash and **$158.9 million** stock), expanding its European operations and data cloud[121](index=121&type=chunk) [Note 15 -- Goodwill and Intangible Assets](index=26&type=section&id=Note%2015%20--%20Goodwill%20and%20Intangible%20Assets)) As of March 31, 2022, total goodwill was **$3,475.4 million** and total other intangible assets were **$4,689.7 million**, with changes primarily influenced by acquisitions such as Eyeota and NetWise, and foreign currency fluctuations Goodwill and Intangible Assets | Asset Type (million USD) | March 31, 2022 | January 1, 2022 | | :----------------------- | :------------- | :-------------- | | Computer Software | 563.4 | 557.4 | | Goodwill | 3,475.4 | 3,493.3 | | Other Intangible Assets | 4,689.7 | 4,824.5 | - Acquisitions of Eyeota and NetWise added **$0.5 million** to goodwill in Q1 2022[129](index=129&type=chunk)[133](index=133&type=chunk) [Note 16 -- Segment Information](index=27&type=section&id=Note%2016%20--%20Segment%20Information) The company manages its business and reports financial results through two segments: North America and International, with North America revenue at **$367.3 million** and International revenue at **$168.7 million** in Q1 2022, and adjusted EBITDA for North America at **$153.3 million** and International at **$55.1 million**, with adjusted EBITDA used as the primary measure of ongoing operating profitability - The company's business is segmented into North America and International, providing finance & risk and sales & marketing data, analytics, and business insights[135](index=135&type=chunk) Segment Revenue | Segment Revenue (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | North America | 367.3 | 339.4 | | International | 168.7 | 169.9 | | **Consolidated Total** | **536.0** | **504.5** | Segment Adjusted EBITDA | Segment Adjusted EBITDA (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | North America | 153.3 | 151.0 | | International | 55.1 | 51.5 | | **Consolidated Total** | **190.1** | **185.6** | - The company uses adjusted EBITDA as the primary measure of ongoing operating profitability, excluding depreciation, amortization, interest, taxes, non-operating income/expenses, stock-based compensation, and other items[137](index=137&type=chunk) [Note 17 -- Related Parties](index=31&type=section&id=Note%2017%20--%20Related%20Parties) The company is jointly controlled by an investor consortium (Bilcar, THL, Cannae Holdings, Black Knight, and CC Capital) with significant voting influence, and has agreements with Black Knight for data licensing and product services, and with Paysafe for data licensing and risk management solutions, recognizing **$0.9 million** in revenue from Paysafe in Q1 2022 - An investor consortium (Bilcar, THL, Cannae Holdings, Black Knight, CC Capital) holds significant voting influence over the company and can designate five board members[148](index=148&type=chunk) - The company has a five-year agreement with Black Knight, where D&B will receive approximately **$24.0 million** in data licensing fees and pay approximately **$34.0 million** for product and professional services[150](index=150&type=chunk) - The company has a ten-year agreement with Paysafe, providing data licensing and risk management solutions, recognizing **$0.9 million** in revenue in Q1 2022[150](index=150&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Unaudited)) This chapter provides management's discussion and analysis of the company's financial condition and results of operations for the three months ended March 31, 2022, including business overview, recent developments, key operating components, non-GAAP financial measures, and liquidity and capital resources, reporting a 6.2% total revenue growth, 2.4% adjusted EBITDA growth, but an expanded GAAP net loss, and discussing segment performance, debt refinancing, and the impacts of the Russia-Ukraine conflict and COVID-19 [Forward-Looking Statements and Risk Factors](index=32&type=section&id=Forward-Looking%20Statements%20and%20Risk%20Factors) This section contains forward-looking statements whose results may differ materially from projections, and lists risks and uncertainties that could affect the company's future business and financial performance, including strategic plan execution, market competition, brand reputation, global economic conditions, cybersecurity, data integrity, system failures, data source access, reliance on strategic alliances, intellectual property protection, government regulatory compliance, the COVID-19 pandemic, and economic uncertainties from the Russia-Ukraine conflict - Forward-looking statements are based on management's beliefs and available information, and actual results may differ materially from projections[153](index=153&type=chunk) - Risk factors include the ability to execute strategic plans, market competition, damage to brand reputation, global economic conditions (e.g., COVID-19 and Russia-Ukraine conflict), cybersecurity incidents, data or system integrity issues, limited access to data sources, and reliance on strategic alliances[154](index=154&type=chunk) [Business Overview](index=32&type=section&id=Business%20Overview) Dun & Bradstreet is a leading global provider of business decision data and analytics, helping clients transform uncertainty into confidence through its Finance & Risk and Sales & Marketing solutions, serving over **200,000** global customers across North America, Europe, Greater China, and India, with a highly recurring, diversified revenue base, significant operating leverage, low capital requirements, and strong free cash flow - Dun & Bradstreet is a leading global provider of business decision data and analytics, helping clients make informed decisions through Finance & Risk and Sales & Marketing solutions[156](index=156&type=chunk)[157](index=157&type=chunk)[160](index=160&type=chunk) - The company serves over **200,000** global customers, with operations spanning North America, Europe, Greater China, and India, and has expanded its data cloud through the acquisition of Bisnode[161](index=161&type=chunk) - The company's business model features highly recurring, diversified revenue, significant operating leverage, low capital requirements, and strong free cash flow[162](index=162&type=chunk) [Segments](index=33&type=section&id=Segments) The company manages its business and reports financial results through two segments: North America, serving the US and Canadian markets with finance & risk and sales & marketing data, analytics, and business insights, and International, providing similar services in the UK, Ireland, Nordics, DACH region, Central and Eastern Europe, Greater China, India, and through its Worldwide Network Alliance - The company's business is divided into two segments: North America and International[164](index=164&type=chunk) - The North America segment serves the US and Canadian markets, while the International segment covers the UK, Ireland, Nordics, DACH region, Central and Eastern Europe, Greater China, India, and the Worldwide Network Alliance[164](index=164&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) The company recently refinanced debt by establishing a **$460.0 million** incremental term loan due 2029 to redeem **$420.0 million** of 2026 Senior Secured Notes, and continues to monitor the potential impacts of the Russia-Ukraine conflict and the COVID-19 pandemic on the global economy and supply chains, with future uncertainties remaining despite limited current operational and financial impact - On January 18, 2022, the company amended its credit agreement, establishing a **$460.0 million** incremental term loan due 2029, used to redeem **$420.0 million** of 6.875% Senior Secured Notes[165](index=165&type=chunk) - The Russia-Ukraine conflict has increased global economic uncertainty; while the company has no significant operations or customers in the region, an escalation or expansion of sanctions could adversely affect customers, suppliers, and financial markets[166](index=166&type=chunk)[168](index=168&type=chunk) - The COVID-19 pandemic continues to cause economic disruptions and market volatility; the company has successfully adopted a distributed work model, but the duration of the pandemic and pace of recovery remain uncertain[169](index=169&type=chunk)[170](index=170&type=chunk) [Key Components of Results of Operations](index=34&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section details the key components of the company's results of operations, including revenue primarily from subscription-based contracts for Finance & Risk and Sales & Marketing solutions, cost of services covering data acquisition and operational costs, selling and administrative expenses for personnel and professional services, depreciation and amortization for property, plant, and equipment and acquired intangible assets, non-operating income and expenses, and provision for income taxes - Revenue is primarily generated through subscription-based contracts, providing data, analytics, and related services, categorized into Finance & Risk and Sales & Marketing solutions[172](index=172&type=chunk)[173](index=173&type=chunk)[174](index=174&type=chunk) - Cost of services primarily includes data acquisition and royalty fees, database-related costs, service fulfillment costs, and technology support costs[175](index=175&type=chunk) - Selling and administrative expenses primarily include personnel costs for sales, administrative, and corporate staff, professional and consulting service fees, and advertising expenses[177](index=177&type=chunk) - Depreciation and amortization expenses include depreciation of property, plant, and equipment, and amortization of software and intangible assets (primarily databases and customer relationships) arising from acquisitions, particularly the Bisnode acquisition[178](index=178&type=chunk) [Key Metrics (Non-GAAP Financial Measures)](index=35&type=section&id=Key%20Metrics%20(Non-GAAP%20Financial%20Measures)) The company uses non-GAAP financial measures such as Adjusted Revenue, Organic Revenue, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS to assess performance, adjusting for non-core items like acquisition and divestiture-related revenue and expenses, restructuring charges, stock-based compensation, debt extinguishment costs, and purchase accounting amortization to provide a clearer view of ongoing operating performance - Adjusted Revenue includes revenue adjustments due to the timing of the Bisnode acquisition and excludes the impact of foreign currency fluctuations[184](index=184&type=chunk) - Organic Revenue is defined as Adjusted Revenue excluding the impact of foreign currency and revenue from acquired businesses (for the first 12 months) and divested businesses, to reflect underlying revenue trends[185](index=185&type=chunk) - Adjusted EBITDA excludes depreciation, amortization, interest, taxes, non-operating income/expenses, stock-based compensation, restructuring charges, acquisition-related costs, transformation costs, significant legal fees, and asset impairments[186](index=186&type=chunk) - Adjusted Net Income and Adjusted Diluted EPS are calculated by adjusting for non-GAAP items such as intangible asset amortization from purchase accounting, stock-based compensation, restructuring charges, acquisition-related costs, debt refinancing and extinguishment costs, and related tax impacts[189](index=189&type=chunk)[190](index=190&type=chunk) [Results of Operations (GAAP and Non-GAAP)](index=37&type=section&id=Results%20of%20Operations%20(GAAP%20and%20Non-GAAP)) In Q1 2022, total revenue was **$536.0 million**, up 6.2% year-over-year, with Adjusted Revenue growing 5.3% and Organic Revenue growing 4.5%, while GAAP net loss expanded to **$31.3 million**, Adjusted Net Income increased 4.9% to **$102.5 million**, and Adjusted Diluted EPS was **$0.24**, with North America revenue up 8.2% and International revenue down 0.7% (up 4.2% excluding FX), and Adjusted EBITDA increased 2.4% to **$190.1 million** but Adjusted EBITDA Margin decreased 100 basis points to **35.5%** Results of Operations (GAAP and Non-GAAP) | Metric (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------- | :-------------------------------- | :-------------------------------- | | Revenue | 536.0 | 504.5 | | Adjusted Revenue | 536.0 | 509.1 | | Organic Revenue | 528.8 | 505.8 | | Operating Income (Loss) | 16.4 | 8.3 | | Net Income (Loss) Attributable to Dun & Bradstreet Holdings, Inc. | (31.3) | (25.0) | | Adjusted EBITDA | 190.1 | 185.6 | | Adjusted EBITDA Margin | 35.5% | 36.5% | | Adjusted Net Income | 102.5 | 97.8 | | Adjusted EPS | 0.24 | 0.23 | - Total revenue increased by **6.2%** year-over-year to **$536.0 million**, with Adjusted Revenue growing **5.3%** and Organic Revenue (excluding acquisition/divestiture impacts and foreign currency changes) growing **4.5%**[199](index=199&type=chunk) - GAAP net loss expanded to **$31.3 million**, primarily due to a **$16.3 million** debt early redemption premium, partially offset by improved operating income[228](index=228&type=chunk) - Adjusted EBITDA increased by **2.4%** to **$190.1 million**, but Adjusted EBITDA margin decreased by **100 basis points** to **35.5%**, primarily due to revenue growth and lower personnel costs, partially offset by increased data and data processing costs[218](index=218&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains liquidity primarily through cash flow from operations, cash and cash equivalents on hand, and short-term borrowings, with **$215.8 million** in cash and cash equivalents as of March 31, 2022, of which **$206.4 million** was held by foreign operations, and Q1 2022 saw **$138.8 million** net cash from operating activities, **$49.4 million** cash outflow from investing activities, and **$51.0 million** cash outflow from financing activities, with total debt at **$3,721.4 million**, and operations expected to continue generating substantial cash - The company's primary sources of liquidity include cash flow from operating activities, cash and cash equivalents on hand, and short-term borrowings under its senior secured credit facilities[230](index=230&type=chunk) - As of March 31, 2022, cash and cash equivalents totaled **$215.8 million**, with **$206.4 million** held by foreign operations[232](index=232&type=chunk) Cash Flow Summary | Cash Flow Type (million USD) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--------------------------- | :-------------------------------- | :-------------------------------- | | Net Cash from Operating Activities | 138.8 | 168.2 | | Net Cash from Investing Activities | (49.4) | (637.9) | | Net Cash from Financing Activities | (51.0) | 290.1 | - Operating cash flow decreased primarily due to higher net tax payments of **$88.0 million** in Q1 2022, compared to a **$66.2 million** cash benefit from the CARES Act in Q1 2021[235](index=235&type=chunk) - Investing cash outflows decreased significantly due to the absence of major acquisitions in Q1 2022, compared to the Bisnode acquisition in Q1 2021[236](index=236&type=chunk) - Financing cash outflows increased primarily due to **$436.3 million** in debt redemption payments in Q1 2022, partially offset by proceeds from an incremental term loan[238](index=238&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 market risks primarily include the impact of foreign currency fluctuations on assets and liabilities, changes in the market value of certain investments, and the effect of interest rate changes on borrowing costs and fair value calculations, with no material changes in market risk as of March 31, 2022, compared to the 2021 annual report - The company's market risks primarily include foreign currency fluctuations, changes in investment market values, and interest rate changes[243](index=243&type=chunk) - As of March 31, 2022, there were no material changes in market risk compared to the 2021 annual report[243](index=243&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 31, 2022, the company's CEO and CFO concluded that disclosure controls and procedures were effective, providing reasonable assurance that required information is timely recorded, processed, summarized, and reported, with no material changes in internal control over financial reporting identified during the quarter - As of March 31, 2022, the company's CEO and CFO concluded that disclosure controls and procedures were effective, providing reasonable assurance that required information is timely recorded, processed, summarized, and reported[248](index=248&type=chunk) - No material changes in internal control over financial reporting were identified during the quarter[249](index=249&type=chunk) [PART II. OTHER INFORMATION](index=48&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=48&type=section&id=Item%201.%20Legal%20Proceedings) This chapter refers to the disclosures regarding legal proceedings, including the Federal Trade Commission investigation and two class action lawsuits, as detailed in Note 7 'Contingencies' within Part I Financial Information - Legal proceedings information is detailed in Note 7 'Contingencies' within Part I Financial Information[250](index=250&type=chunk) [Item 1A. Risk Factors](index=48&type=section&id=Item1A.%20Risk%20Factors) In addition to the risk factors disclosed in the 2021 annual report, new risk factors related to the Russia-Ukraine conflict were added this quarter, increasing economic uncertainty and potentially having a significant negative impact on the global macroeconomic and financial markets, despite the company having no significant operations or customers in the region - New risk factors this quarter include the company's exposure as a global enterprise to geopolitical conflicts and events, such as the Russia-Ukraine conflict, which could lead to increased economic uncertainty and significant adverse impacts on macroeconomic and financial markets[251](index=251&type=chunk)[252](index=252&type=chunk) - The company has no operations or significant customer base in Russia and Ukraine, with its exposure primarily limited to immaterial Worldwide Network Alliance relationships in the region[252](index=252&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=48&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds during the quarter - There were no unregistered sales of equity securities or use of proceeds during the quarter[253](index=253&type=chunk) [Item 3. Defaults Upon Senior Securities](index=48&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the quarter - There were no defaults upon senior securities during the quarter[253](index=253&type=chunk) [Item 4. Mine Safety Disclosures](index=48&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) Not applicable - Not applicable[253](index=253&type=chunk) [Item 5. Other Information](index=48&type=section&id=Item%205.%20Other%20Information) No other information was disclosed this quarter - No other information was disclosed this quarter[253](index=253&type=chunk) [Item 6. Exhibits](index=49&type=section&id=Item%206.%20Exhibits) This chapter lists the exhibits filed with this quarterly report, including credit agreement amendments, executive employment agreements, CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906, and financial statements and cover interactive data files submitted in iXBRL format - Exhibits include credit agreement amendments, executive employment agreements, and CEO and CFO certifications under Sarbanes-Oxley Sections 302 and 906[255](index=255&type=chunk) - Financial statements and cover interactive data files are submitted in Inline Extensible Business Reporting Language (iXBRL) format[255](index=255&type=chunk)
Dun & Bradstreet(DNB) - 2021 Q4 - Annual Report
2022-02-23 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, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-39361 | --- | --- | |--------------------------------------------------|--------------------------------------------| | Delaware | 83-2008699 | | (State of incorporation ...
Dun & Bradstreet(DNB) - 2021 Q4 - Earnings Call Transcript
2022-02-16 20:05
Financial Data and Key Metrics Changes - For Q4 2021, total company revenues were $598 million, a 25% increase compared to the prior year quarter [50] - Full year 2021 revenues reached $2,166 million, also a 25% increase [52] - Adjusted EBITDA for Q4 2021 was $243 million, a 19% increase [54] - Full year adjusted EBITDA was $847 million, a 19% increase [56] - Net loss for Q4 2021 was $12 million, compared to a net income of $2 million in the prior year [51] Business Line Data and Key Metrics Changes - North America revenues for Q4 2021 were $429 million, a 7% increase [59] - International segment revenues for Q4 2021 increased 114% to $170 million, primarily driven by the Bisnode acquisition [67] - Finance and risk revenues in North America for Q4 2021 were $231 million, a 6% increase [60] - Sales and marketing revenues in North America for Q4 2021 were $198 million, an 8% increase [61] - International finance and risk revenues for full year 2021 were $430 million, a 76% increase [70] Market Data and Key Metrics Changes - Organic constant currency revenue growth for Q4 2021 was 4.8% [13] - International organic revenues increased $26 million or 9% for full year 2021 [70] - North America organic revenue increased $31 million or 2% for full year 2021 [63] Company Strategy and Development Direction - The company aims to maximize the potential of its assets through operational execution and strategic investments [8][12] - Focus on enhancing digital marketing solutions and expanding audience targeting capabilities internationally [17][31] - Continued investment in data and technology to drive organic growth, particularly in third-party risk management and digital marketing [86] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing growth opportunities despite challenges from the GSA contract expiration [80][84] - The company is well-positioned to accelerate organic growth in 2022, with expectations of increased revenues and EBITDA [78][86] - Management highlighted the importance of supporting small and medium-sized businesses through innovative solutions [42][114] Other Important Information - The company has doubled its contribution from multiyear contracts, now accounting for 50% of sales [11][111] - The strategic agreement with Google Cloud aims to enhance infrastructure and develop new industry-specific solutions [20][21] - The company has launched 10 additional solutions across international markets, bringing the total to nearly 40 for 2021 [44] Q&A Session Summary Question: What is the headwind from the GSA contract? - The headwind is approximately $24 million on a full-year basis, expected to impact the second and third quarters of 2022 [88] Question: How do the new fraud capabilities differ from credit bureaus? - The company focuses on B2B fraud solutions, addressing commercial fraud risks and providing predictive analytics for business identity theft [93][94] Question: What percentage of Bisnode's revenue has been replaced with D&B products? - Approximately $10 million to $15 million of Bisnode's revenue was transitioned in 2021, with the remainder expected to transition in 2022 [101] Question: What are the capital allocation priorities for the coming year? - The company prioritizes organic growth through innovation, followed by debt repayment and potential M&A opportunities [110] Question: Does the FTC settlement pose ongoing risks to revenue? - Management does not foresee significant risks from the FTC settlement, emphasizing confidence in the SMB space and ongoing innovations [113][114]
Dun & Bradstreet(DNB) - 2021 Q3 - Earnings Call Transcript
2021-11-05 21:56
Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Q3 2021 Earnings Conference Call November 4, 2021 8:30 AM ET Company Participants Deb McCann - Treasurer and Senior Vice President of Investor Relations Anthony Jabbour - Chief Executive Officer Bryan Hipsher - Chief Financial Officer Conference Call Participants Mario Cortellacci - Jefferies Kevin McVeigh - Credit Suisse Ashish Sabadra - RBC Capital Markets Andrew Jeffrey - Truist Securities Gary Bisbee - Bank of America Securities Manav Patnaik - Barclays Kyle Pe ...
Dun & Bradstreet(DNB) - 2021 Q3 - Quarterly Report
2021-11-03 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, 2021 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. | --- | --- | |--------------------------------------------------------|------------------------------------------| | | | ...
Dun & Bradstreet(DNB) - 2021 Q2 - Earnings Call Transcript
2021-08-03 17:41
Financial Data and Key Metrics Changes - Revenues for Q2 2021 were $521 million, an increase of 24% year-over-year, with a 23% increase on a constant currency basis [39] - Adjusted EBITDA for Q2 2021 was $198 million, a 13% increase from the previous year, with an adjusted EBITDA margin of 38.1% [42] - Net loss for Q2 2021 was $52 million, compared to a net loss of $208 million in the prior year quarter [39] Business Line Data and Key Metrics Changes - North America revenues were $357 million, a 1% increase year-over-year, with organic revenue growth of 1% [43] - International segment revenues increased 147% to $164 million, primarily driven by the Bisnode acquisition, with organic growth of approximately 13% excluding Bisnode [46] - Sales and marketing revenues in the International segment increased 383% due to the Bisnode acquisition, with a 22% increase excluding its impact [47] Market Data and Key Metrics Changes - The company reported strong sales in the building pipeline for new solutions, with significant wins in both domestic and international markets [7] - The D&B product marketplace now includes 36 partner datasets, up from 22 at the end of Q1 2021, indicating growth in the SMB market [24] - D&B.com site visits grew to over 46 million in Q2, an 84% increase year-over-year, with e-commerce sales reaching over $2 million, up 73% from the prior year [25] Company Strategy and Development Direction - The company aims to grow its share of wallet with strategic customers and monetize the finance and business (F&B) space in innovative ways [12] - New product launches and localization of existing products globally are key priorities, with a focus on integrating the Bisnode acquisition [12] - The establishment of a new global headquarters in Jacksonville, Florida, is expected to enhance innovation and growth [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued organic revenue growth, expecting Q3 to be slightly below the midpoint of the 3% to 4.5% range and Q4 to be at the high end [49][51] - The company anticipates a continued ramp in growth as it executes its near-term strategy and strengthens its business for the long term [8] - Management highlighted strong retention rates and a solid pipeline of new products as positive indicators for future performance [58] Other Important Information - The company celebrated its 180th anniversary, emphasizing its longstanding value to businesses globally [11] - The integration of Bisnode is progressing well, with revenue coming in better than anticipated [86] Q&A Session Summary Question: Confirmation on organic growth guidance for Q3 and Q4 - Management confirmed that Q3 is expected to be slightly below 3% and Q4 slightly above 4.5%, with headwinds from Data.com diminishing [55][56] Question: North America revenue acceleration - Management acknowledged the need for new product creation in North America and expressed optimism about future growth as new products are launched [61][62] Question: Margins and data costs - Management indicated that higher data costs impacted margins but expects continued margin expansion as new assets flow through the data cloud [63][64] Question: Competitive dynamics in sales and marketing - Management noted discrete competitors in the sales and marketing space and emphasized the strength of their marketing technology stack [73][74] Question: Cross-sell opportunities - Management sees significant opportunities for cross-selling, particularly by integrating capabilities into suites for easier client consumption [82][84] Question: Bisnode integration and revenue transition - Management reported that the integration is on track, with revenue from new D&B products expected to replace sunsetting Bisnode revenues [85][89] Question: ESG opportunity and differentiation - Management highlighted the unique company-level data focus of their ESG offerings, differentiating from larger competitors [99][100]
Dun & Bradstreet(DNB) - 2021 Q2 - Quarterly Report
2021-08-02 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)) This section presents the unaudited condensed consolidated financial statements, including the statements of operations, balance sheets, cash flows, and shareholder equity, along with detailed notes explaining the basis of presentation, significant accounting policies, and specific financial line items [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 provides a summary of the company's revenues, operating income, net income, and earnings per share for the specified periods | Metric | Three months ended June 30, 2021 ($M) | Three months ended June 30, 2020 ($M) | Six months ended June 30, 2021 ($M) | Six months ended June 30, 2020 ($M) | |:--------------------------------------------------------------------|:--------------------------------------|:--------------------------------------|:------------------------------------|:------------------------------------| | Revenue | 520.9 | 418.7 | 1,025.4 | 814.4 | | Operating income (loss) | 26.9 | (2.3) | 35.2 | (9.5) | | Net income (loss) attributable to Dun & Bradstreet Holdings, Inc. | (51.7) | (208.0) | (76.7) | (166.1) | | Basic earnings (loss) per share | (0.12) | (0.66) | (0.18) | (0.53) | | Diluted earnings (loss) per share | (0.12) | (0.66) | (0.18) | (0.53) | [Condensed Consolidated Balance Sheets (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement presents a snapshot of the company's assets, liabilities, and equity at specific points in time | Metric | June 30, 2021 ($M) | December 31, 2020 ($M) | |:----------------------------------------|:-------------------|:-----------------------| | Total current assets | 624.2 | 874.4 | | Total non-current assets | 9,236.2 | 8,345.9 | | Total assets | 9,860.4 | 9,220.3 | | Total current liabilities | 972.9 | 828.1 | | Total liabilities | 6,211.8 | 5,636.4 | | Total equity | 3,648.6 | 3,583.9 | | Total liabilities and stockholder equity | 9,860.4 | 9,220.3 | [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement details the cash inflows and outflows from operating, investing, and financing activities over specific periods | Cash Flow Activity | Six months ended June 30, 2021 ($M) | Six months ended June 30, 2020 ($M) | |:--------------------------------------------------|:------------------------------------|:------------------------------------|\ | Net cash provided by (used in) operating activities | 292.5 | 127.7 |\ | Net cash provided by (used in) investing activities | (749.0) | (68.5) |\ | Net cash provided by (used in) financing activities | 281.4 | (48.7) |\ | Increase (decrease) in cash and cash equivalents | (174.7) | 9.1 |\ | Cash and Cash Equivalents, End of Period | 177.6 | 93.5 | [Condensed Consolidated Statements of Shareholder Equity (Deficit) (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholder%20Equity%20(Deficit)%20(Unaudited)) This statement outlines changes in the company's equity components, including capital surplus, accumulated deficit, and comprehensive loss, over specific periods | Equity Component | Balance, January 1, 2021 ($M) | Balance, June 30, 2021 ($M) | |:------------------------------------------------|:------------------------------|:----------------------------|\ | Capital Surplus | 4,310.1 | 4,482.3 |\ | Accumulated Deficit | (693.9) | (770.6) |\ | Accumulated other comprehensive loss | (90.6) | (123.5) |\ | Total Stockholder Equity (Deficit) | 3,525.6 | 3,587.9 |\ | NonControlling Interest | 58.3 | 60.7 |\ | Total Equity (Deficit) | 3,583.9 | 3,648.6 | [Notes to Condensed Consolidated Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) These notes provide additional information 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) This note describes the foundational principles and assumptions used in preparing the financial statements - The company manages its business and reports financial results through two segments: North America (U.S. and Canada) and International (U.K., Ireland, Northern Europe, Central Europe, Greater China, India, and Worldwide Network alliances)[26](index=26&type=chunk) - On January 8, 2021, the company acquired **100%** ownership of Bisnode Business Information Group AB for **$805.8 million**, integrating its financial results into the International segment[27](index=27&type=chunk) - Effective January 1, 2021, the company eliminated the one-month reporting lag for subsidiaries outside North America, aligning all subsidiaries' year-ends to December 31, and applied this change retrospectively to all Successor periods[28](index=28&type=chunk) [Note 2 -- Recent Accounting Pronouncements](index=10&type=section&id=Note%202%20--%20Recent%20Accounting%20Pronouncements) This note outlines recently adopted accounting standards and their impact on the financial statements - The company adopted ASU No. 2019-12, "Income Taxes (Topic 740)," on January 1, 2021, which simplifies income tax accounting but did not have a material impact on its consolidated financial statements[34](index=34&type=chunk) [Note 3 -- Revenue](index=10&type=section&id=Note%203%20--%20Revenue) This note provides details on the company's revenue recognition policies and disaggregation of revenue Future Revenue | Period | Future Revenue ($M) | |:-------------------|:--------------------|\ | Remainder of 2021 | 741.3 |\ | 2022 | 713.2 |\ | 2023 | 371.7 |\ | 2024 | 164.9 |\ | 2025 | 106.9 |\ | Thereafter | 250.0 |\ | **Total** | **2,348.0** | Revenue Recognition Timing | Revenue Recognition Timing | Three months ended June 30, 2021 ($M) | Three months ended June 30, 2020 ($M) | Six months ended June 30, 2021 ($M) | Six months ended June 30, 2020 ($M) | |:---------------------------|:--------------------------------------|:--------------------------------------|:------------------------------------|:------------------------------------|\ | At a point in time | 212.5 | 173.8 | 417.5 | 352.6 |\ | Over time | 308.4 | 244.9 | 607.9 | 461.8 |\ | **Total revenue** | **520.9** | **418.7** | **1,025.4** | **814.4** | - Deferred revenue increased by **$114.3 million** from December 31, 2020, to June 30, 2021, primarily due to cash payments received in advance of performance obligations and the acquisition of Bisnode, partially offset by **$352.0 million** of recognized revenue[38](index=38&type=chunk) [Note 4 -- Restructuring Charge](index=11&type=section&id=Note%204%20--%20Restructuring%20Charge) This note details the costs incurred for restructuring activities, including severance and contract termination expenses - Restructuring charges for the three months ended June 30, 2021, totaled **$10.1 million**, consisting of **$8.0 million** in severance costs for approximately **120 employees** and **$2.1 million** in contract termination and other exit costs[45](index=45&type=chunk) - For the six months ended June 30, 2021, restructuring charges amounted to **$15.9 million**, including **$12.7 million** for severance impacting approximately **155 employees** and **$3.2 million** for contract termination and other exit costs[47](index=47&type=chunk) [Note 5 -- Notes Payable and Indebtedness](index=13&type=section&
Dun & Bradstreet(DNB) - 2021 Q1 - Earnings Call Transcript
2021-05-05 18:31
Financial Data and Key Metrics Changes - Adjusted revenues for Q1 2021 increased by 29% and adjusted EBITDA increased by 37% [7] - Total company revenue retention was 96.3% with approximately 48% of the business under multiyear contracts [7] - First quarter revenues on a GAAP basis were $505 million, a 27% increase on a constant currency basis compared to the prior year [33] - Adjusted net income for Q1 was $98 million, or adjusted diluted earnings per share of $0.23, an increase from $50 million in the prior year [35] Business Line Data and Key Metrics Changes - North America revenues for Q1 were $339 million, a decrease of approximately 1% from the prior year, but grew approximately 2% when excluding known headwinds [36] - International revenues increased by 137% to $170 million, primarily driven by the Bisnode acquisition [38] - Finance and Risk revenues in the international segment increased by 83%, while Sales and Marketing revenue increased by 383% due to the Bisnode acquisition [39] Market Data and Key Metrics Changes - Organic constant currency revenues increased by 1.3%, with growth in the international segment partially offset by COVID-19 headwinds in North America [7][34] - The SMB market is showing signs of recovery, with a significant rise in new business formations, particularly in gig economy startups [16][17] Company Strategy and Development Direction - Key priorities for 2021 include growing share of wallet with strategic customers, monetizing the SMB space, launching new products domestically, and integrating the Bisnode acquisition [11][30] - The company is focusing on enhancing data quality and technology to improve customer relationships and drive cross-sell opportunities [8][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing transformation and integration of Bisnode, expecting to leverage foundational enhancements for future growth [10][30] - The outlook for full-year 2021 includes expected adjusted revenues in the range of $2,145 million to $2,175 million, representing a 23.5% to 25% increase compared to 2020 [42] Other Important Information - The company completed its formal cost savings program with $246 million of annualized run rate cost savings, exceeding the original target by 23% [9] - The D&B Customer Portal launched in Q1 resulted in a 60% increase in cross-sales [21] Q&A Session Summary Question: Timing of new products and partnerships impacting revenue growth - Management indicated that new products will contribute to revenue growth but will come on more slowly compared to established products, with positive early signs from SMB capabilities and e-commerce [46][47] Question: Organic growth guidance clarification - Management clarified that organic growth is expected to be in the range of 3% to 4.5%, with the first quarter showing a 1.3% increase after accounting for COVID-19 and Data.com headwinds [51][53] Question: Competitive environment changes - Management noted that they are gaining strength in the competitive landscape, with improvements in data quality and innovative product offerings [54][55] Question: Impact of vaccine rollout on customer engagement - Management stated that the faster growth in international markets is more related to product launches than the vaccine rollout, with North America expected to recover from headwinds [66] Question: Pricing environment and ability to raise prices - Management reported successful pricing strategies, with 70% of contracts seeing price increases, indicating effective pricing strategies [70]
Dun & Bradstreet(DNB) - 2021 Q1 - Quarterly Report
2021-05-04 16:00
[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [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 for the three months ended March 31, 2021, and comparative periods, including the impact of the Bisnode acquisition and a retrospective accounting change [Note 3 -- Revenue](index=9&type=section&id=Note%203%20--%20Revenue) As of March 31, 2021, the company had **$2,357.8 million** in future revenue allocated to unsatisfied performance obligations, with deferred revenue increasing by **$155.0 million** during the quarter Future Revenue from Unsatisfied Performance Obligations (as of March 31, 2021) | Period | Amount (in millions) | | :--- | :--- | | Remainder of 2021 | $1,003.3 | | 2022 | $583.7 | | 2023 | $315.6 | | 2024 | $125.7 | | 2025 | $94.1 | | Thereafter | $235.4 | | **Total** | **$2,357.8** | - The deferred revenue balance increased by **$155.0 million** from December 31, 2020, to March 31, 2021, mainly due to advance cash payments and the Bisnode acquisition, offset by the recognition of **$219.4 million** in revenue that was previously deferred[26](index=26&type=chunk) [Note 5 -- Notes Payable and Indebtedness](index=11&type=section&id=Note%205%20--%20Notes%20Payable%20and%20Indebtedness) As of March 31, 2021, total debt stood at **$3,674.0 million** with a carrying value of **$3,576.1 million**, following a term loan amendment and a **$300 million** incremental term loan draw for the Bisnode acquisition Total Debt Summary (as of March 31, 2021) | Debt Instrument | Principal Amount (in millions) | Carrying Value (in millions) | | :--- | :--- | :--- | | New Term Loan Facility | $2,804.0 | $2,727.9 | | 6.875% New Senior Secured Notes | $420.0 | $412.2 | | 10.250% New Senior Unsecured Notes | $450.0 | $436.0 | | **Total Debt** | **$3,674.0** | **$3,576.1** | - In January 2021, the company amended its credit agreement to reduce the applicable margin for the term loan facility by **0.50%** to LIBOR plus **3.25%**[44](index=44&type=chunk) - Proceeds from a **$300 million** Incremental Term Loan, established in November 2020, were drawn in January 2021 to help finance the acquisition of Bisnode[43](index=43&type=chunk) [Note 14 -- Acquisitions](index=24&type=section&id=Note%2014%20--%20Acquisitions) On January 8, 2021, the company acquired Bisnode for **$805.8 million**, comprising **$646.9 million** in cash and **$158.9 million** in common stock, adding significant intangible assets and goodwill - The acquisition of Bisnode was completed on January 8, 2021, for a total consideration of **$805.8 million**, comprising **$646.9 million** in cash and **6,237,087 shares** of common stock valued at **$158.9 million**[106](index=106&type=chunk) Bisnode Initial Purchase Price Allocation Highlights | Assets Acquired / Liabilities Assumed | Fair Value (in millions) | | :--- | :--- | | **Intangible assets (Reacquired right)** | $271.0 | | **Intangible assets (Database)** | $116.0 | | **Intangible assets (Customer relationships)** | $106.0 | | **Goodwill** | $488.4 | | **Total assets acquired** | $1,185.8 | | **Total liabilities assumed** | $380.0 | [Note 16 -- Segment Information](index=28&type=section&id=Note%2016%20--%20Segment%20Information) For Q1 2021, North America revenue was **$339.4 million**, while International revenue grew significantly to **$169.9 million** due to the Bisnode acquisition, contributing to a consolidated Adjusted EBITDA of **$185.6 million** Revenue by Segment (Q1 2021 vs Q1 2020) | Segment | Q1 2021 Revenue (in millions) | Q1 2020 Revenue (in millions) | | :--- | :--- | :--- | | North America | $339.4 | $341.5 | | International | $169.9 | $71.6 | | Corporate and other | $(4.8) | $(17.4) | | **Consolidated total** | **$504.5** | **$395.7** | Adjusted EBITDA by Segment (Q1 2021 vs Q1 2020) | Segment | Q1 2021 Adjusted EBITDA (in millions) | Q1 2020 Adjusted EBITDA (in millions) | | :--- | :--- | :--- | | North America | $151.0 | $144.5 | | International | $51.5 | $24.0 | | Corporate and other | $(16.9) | $(33.4) | | **Consolidated total** | **$185.6** | **$135.1** | Condensed Consolidated Statement of Operations (Q1 2021 vs Q1 2020) | Metric | Three months ended March 31, 2021 (in millions) | Three months ended March 31, 2020 (in millions) | | :--- | :--- | :--- | | **Revenue** | $504.5 | $395.7 | | **Operating income (loss)** | $8.3 | $(7.2) | | **Net income (loss) attributable to Dun & Bradstreet** | $(25.0) | $41.9 | | **Diluted earnings (loss) per share** | $(0.06) | $0.13 | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2021 (in millions) | December 31, 2020 (in millions) | | :--- | :--- | :--- | | **Cash and cash equivalents** | $173.4 | $352.3 | | **Goodwill** | $3,318.2 | $2,857.9 | | **Total assets** | $9,924.9 | $9,220.3 | | **Total long-term debt** | $3,548.0 | $3,255.8 | | **Total liabilities** | $6,246.7 | $5,636.4 | | **Total equity** | $3,678.2 | $3,583.9 | Condensed Consolidated Statement of Cash Flows (Q1 2021 vs Q1 2020) | Cash Flow Activity | Three months ended March 31, 2021 (in millions) | Three months ended March 31, 2020 (in millions) | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $168.2 | $5.1 | | **Net cash used in investing activities** | $(637.9) | $(34.0) | | **Net cash provided by financing activities** | $290.1 | $103.9 | - On January 8, 2021, the company acquired **100%** ownership of Bisnode Business Information Group AB for a total purchase price of **$805.8 million**, with Bisnode's financial results included in the International segment since the acquisition date[16](index=16&type=chunk) - Effective January 1, 2021, the company eliminated the one-month reporting lag for its international subsidiaries, applying this accounting policy change retrospectively to all periods presented, resulting in recasted financial statements for 2020[17](index=17&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Unaudited)](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations%20(Unaudited)) Management discusses the company's Q1 2021 financial performance, highlighting a **28%** increase in total revenue driven by the Bisnode acquisition, and a **37%** growth in Adjusted EBITDA to **$185.6 million** [Results of Operations](index=40&type=section&id=Results%20of%20Operations) In Q1 2021, the company reported an operating income of **$8.3 million**, an improvement from a prior-year loss, though net loss attributable to the company was **$25.0 million** due to non-recurring gains and tax benefits in Q1 2020, while Adjusted net income increased **98%** to **$97.8 million** Revenue by Segment and Solution (Q1 2021 vs Q1 2020) | Segment / Solution | Q1 2021 Revenue (in millions) | Q1 2020 Revenue (in millions) | % Change | | :--- | :--- | :--- | :--- | | **North America** | **$339.4** | **$341.5** | **(1)%** | | - Finance & Risk | $190.5 | $192.8 | (1)% | | - Sales & Marketing | $148.9 | $148.7 | 0% | | **International** | **$169.9** | **$71.6** | **137%** | | - Finance & Risk | $107.4 | $58.6 | 83% | | - Sales & Marketing | $62.5 | $13.0 | 382% | | **Total Revenue** | **$504.5** | **$395.7** | **28%** | - Operating expenses increased **16%** to **$160.9 million**, and selling and administrative expenses increased **44%** to **$179.8 million**, both primarily due to costs from the newly acquired Bisnode business[210](index=210&type=chunk)[211](index=211&type=chunk) - Interest expense decreased by **$34.1 million (41%)** due to lower interest rates from Term Loan repricing and a lower overall debt balance compared to the prior year[223](index=223&type=chunk) [Liquidity and Capital Resources](index=48&type=section&id=Liquidity%20and%20Capital%20Resources) The company's primary liquidity sources are cash from operations and its revolving credit facility, with **$173.4 million** in cash and cash equivalents as of March 31, 2021, and the Bisnode acquisition funded by cash, stock, and a **$300 million** incremental term loan draw, supplemented by a **$98.4 million** CARES Act refund - As of March 31, 2021, the company held **$173.4 million** in cash and cash equivalents, with **$161.7 million** held by foreign operations[240](index=240&type=chunk) - The company utilized relief opportunities from the CARES Act, resulting in a net income tax cash benefit of approximately **$98.4 million**, of which **$66.2 million** was received in January 2021[239](index=239&type=chunk) - The company's credit ratings were upgraded by S&P, Moody's, and Fitch in mid-2020 following steps to reduce debt and leverage[235](index=235&type=chunk) - Total revenue for Q1 2021 increased by **$108.8 million**, or **28% (27%** before foreign exchange effects), compared to Q1 2020, primarily driven by the net impact of the Bisnode acquisition, which contributed **$87.7 million** in net revenue[198](index=198&type=chunk) - Consolidated adjusted EBITDA for Q1 2021 increased by **$50.5 million**, or **37%**, to **$185.6 million**, with the adjusted EBITDA margin improving by **240 basis points** to **36.5%**, largely due to the Bisnode acquisition and lower purchase accounting deferred revenue adjustments[218](index=218&type=chunk) - Operating cash flow increased significantly to **$168.2 million** in Q1 2021 from **$5.1 million** in Q1 2020, driven by a **$66 million** net tax refund from the CARES Act, lower interest payments, and lower bonus payments[243](index=243&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=51&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section states that there have been no material changes in the company's market risks since its last Annual Report on Form 10-K, with primary risks remaining related to currency exchange rates, investment market values, and interest rates on borrowings - As of March 31, 2021, no material change had occurred in the company's market risks compared to the disclosure in its Annual Report on Form 10-K filed on February 25, 2021[251](index=251&type=chunk) [Item 4. Controls and Procedures](index=51&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021, excluding the recently acquired Bisnode from the assessment of internal control over financial reporting - The CEO and CFO concluded that as of March 31, 2021, the company's disclosure controls and procedures were effective at a reasonable assurance level[255](index=255&type=chunk) - Management excluded the recently acquired Bisnode from its assessment of internal control over financial reporting as of March 31, 2021[255](index=255&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=52&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 7 of the financial statements, detailing ongoing legal matters, including an FTC investigation into credit managing and monitoring products - Information regarding legal proceedings is incorporated by reference from Note 7 — Contingencies in Part I of the report[258](index=258&type=chunk) [Item 1A. Risk Factors](index=52&type=section&id=Item%201A.%20Risk%20Factors) The company reports that there have been no material changes to its risk factors since the filing of its Annual Report on Form 10-K on February 25, 2021 - There have been no material changes in risk factors since the filing of the Annual Report on Form 10-K[259](index=259&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=52&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) On January 8, 2021, the company issued **6,237,087 shares** of common stock in a private placement, valued at **$158.9 million**, as partial consideration for the Bisnode acquisition - On January 8, 2021, the company issued **6,237,087 shares** of common stock in a private placement to partially fund the acquisition of Bisnode, valued at **$158.9 million**[260](index=260&type=chunk) [Other Items (Items 3, 4, 5, 6)](index=52&type=section&id=Other%20Items%20(Items%203,%204,%205,%206)) This section confirms no defaults on senior securities, no applicable mine safety disclosures, and no other material information to report under Item 5, with Item 6 listing filed exhibits - The company reports no defaults on senior securities, no mine safety disclosures, and no other material information for the period[261](index=261&type=chunk)