Dun & Bradstreet(DNB) - 2020 Q2 - Earnings Call Transcript

Financial Data and Key Metrics - Q2 2020 GAAP revenues were $421 million, an increase of 5.4$207 million, or a diluted loss per share of $0.66, compared to a net loss of$94 million in the prior year quarter [57] - Adjusted EBITDA for Q2 2020 was $176 million, an increase of 18.5$82 million, or adjusted diluted earnings per share of $0.26 [61] - Full-year 2020 revenue guidance is expected to be in the range of$1.729 billion to $1.759 billion on a constant currency basis [70] - Full-year 2020 adjusted EBITDA guidance is expected to be in the range of$704 million to $724 million [70] Business Line Performance - North America Q2 2020 revenues decreased 1.8$354 million, with Finance and Risk revenues declining 3.6% to $194 million and Sales and Marketing revenues increasing less than 1$161 million [62][64] - International Q2 2020 revenues decreased 9.9% to $68 million, with Finance and Risk revenues declining$8 million to $56 million and Sales and Marketing revenues increasing$0.4 million to $13 million [65][66] - The company saw a$6 million impact from COVID-19 on usage-based revenues across segments [60] Market Performance - North America Finance and Risk revenues were impacted by structural changes in the legacy credibility business and COVID-19, partially offset by an increase in subscription-based revenues [62][63] - International Finance and Risk revenues were impacted by non-recurring revenues in the worldwide network and COVID-19 effects in Asian markets [65] - Sales and Marketing revenues in North America benefited from the acquisition of Lattice, while international Sales and Marketing revenues were driven by increased product royalties from the worldwide network [64][66] Strategic Direction and Industry Competition - The company is focused on five strategic initiatives: enhancing client relationships, winning new clients, developing innovative solutions, expanding international presence, and pursuing strategic acquisitions [34][35][36] - The company is leveraging its data cloud and D-U-N-S Number to drive innovation and deliver unique solutions to clients [15][16][17] - The company is investing in technology, data, and analytics to improve data ingestion, matching, and delivery, with a focus on alternative data sets and modern API offerings [24][25][26][27][28] - The company is targeting a $250 million annualized run rate cost savings, with$220 million achieved to date [32] Management Commentary on Operating Environment and Future Outlook - The company is optimistic about its long-term growth potential, with a large total addressable market across credit decisioning, governance compliance, risk, and sales and marketing [33] - The company expects Q3 2020 adjusted revenues to be flat to slightly down YoY, with Q4 2020 returning to growth [74] - The company is focused on driving sustainable growth through innovation, cross-selling, and expanding its international footprint [37][38] Other Important Information - The company completed its IPO in July 2020, raising net proceeds of $2.2 billion, which were used to redeem preferred stock and pay down senior unsecured notes [68][69] - The company has a strong liquidity position, with$99.8 million in cash and cash equivalents and $313 million available under its revolving line of credit [67] - The company is investing in cloud infrastructure, with over 70$14 million achieved in Q2 2020 and a target of $250 million annualized run rate savings [117][118][119][120] Question: International Market Expansion and Cross-Sell Opportunities - The company is accelerating product localization and internationalization, with significant progress in launching products in international markets [123][124] - Cross-sell opportunities are expected to grow over time, with current cross-sell penetration at less than 5% of clients using both Finance and Risk and Sales and Marketing solutions [132][133][134]