Dun & Bradstreet(DNB)2025-05-01 11:36Acquisition - The company entered into a definitive agreement to be acquired by Clearlake Capital Group, L.P. for approximately $7.7 billion, with an equity value of $4.1 billion, expected to close in Q3 2025[146][147]. Client Base and Revenue Sources - As of December 31, 2024, the company had a global client base of approximately 215,000, serving various industries including financial services, technology, and government[143]. - The company generated approximately 30% of its revenues from non-U.S. markets, making it susceptible to fluctuations in foreign currency exchange rates[153]. - The company’s revenue is primarily generated through subscription-based contracts, providing data and analytics services to clients[157]. Financial Performance - Total revenue for Q1 2025 was $579.8 million, an increase of $15.3 million or 2.7% compared to $564.5 million in Q1 2024[177]. - Adjusted EBITDA for Q1 2025 was $210.9 million, up from $201.3 million in Q1 2024, reflecting a margin of 36.4% compared to 35.7%[175]. - Adjusted net income for Q1 2025 was $90.9 million, compared to $85.0 million in Q1 2024, resulting in adjusted net earnings per diluted share of $0.21 versus $0.20[175]. - Operating income for Q1 2025 was $35.3 million, an increase from $16.6 million in Q1 2024[174]. - Net income attributable to Dun & Bradstreet Holdings, Inc. for Q1 2025 was a loss of $15.8 million, improving from a loss of $23.2 million in Q1 2024[176]. - The company reported a net income margin of (2.7)% for Q1 2025, compared to (4.1)% in Q1 2024[174]. - The increase in total revenue was attributed to growth in the underlying business and positive foreign exchange impacts, with a 3.6% increase before the effect of foreign exchange[177]. Cost Management and Expenses - Interest expense for Q1 2025 was $52.9 million, significantly reduced from $85.3 million in Q1 2024[174]. - Restructuring charges for Q1 2025 were $2.9 million, down from $3.4 million in Q1 2024[174]. - Interest expense decreased by $32.4 million to $52.9 million, primarily due to the write-off of debt issuance costs in the prior year[197]. Regional Performance - North America revenue increased by $11.4 million, or 2.9%, with Finance & Risk segment growing by $8.5 million (4.1%) and Sales & Marketing by $2.9 million (1.6%) compared to the prior year[179][180][181]. - International revenue increased by $3.9 million, or 2.2%, with Finance & Risk segment growing by $2.8 million (2.3%) and Sales & Marketing by $1.1 million (1.9%) compared to the prior year[182][183][184]. Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2025, totaled $241.3 million, with $207.4 million held by foreign operations, including $74.9 million from China and India subsidiaries[207]. - Net cash provided by operating activities decreased by $22.0 million to $136.9 million for the three months ended March 31, 2025, primarily due to higher income tax payments[209][210]. - The company reported a decrease in net cash used in financing activities by $31.1 million, primarily due to lower term loan repayments and higher net proceeds from borrowings on the Revolving Facility[213]. Debt and Taxation - Total debt as of March 31, 2025, was $3,547.6 million, with $3,516.6 million classified as long-term debt[215]. - The effective tax rate for the three months ended March 31, 2025, was (2.7)%, compared to 66.0% for the same period in 2024, mainly due to an uncertain tax position benefit from an audit settlement[200]. Future Outlook and Risks - Future capital requirements will depend on various unpredictable factors, including potential acquisitions and market conditions, with the company actively managing interest rate risks through swaps[206][218]. - The company expects operating cash requirements in 2025 to be primarily related to interest payments, contractual obligations, and tax liabilities, with a potential $31 million impact from a 100 basis point change in interest rates[211]. - The company is exposed to risks from geopolitical conflicts, including the ongoing Russian-Ukraine war, which may impact global economic growth and client spending[154][155]. Operational Efficiency - The company reported strong operating leverage and high client retention due to its proprietary data and analytics solutions, contributing to significant free cash flow[144]. - The company’s Finance & Risk solutions are critical for clients in decision-making processes, particularly in extending business loans and trade credit[141]. - The company’s Sales & Marketing solutions help clients optimize their sales strategies, enhancing efficiency in advertising campaigns[160]. Shareholder Returns - The company has authorized a stock repurchase program allowing for the repurchase of up to 10 million shares, with 961,360 shares repurchased for $9.3 million at an average price of $9.71 per share since inception[152].