DFIN - Earnings call transcript Q2 2021 | Donnelley Financial Solutions, Inc.

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Operator

Ladies and gentlemen thank you for standing by and welcome to the Donnelley Financial Solutions' Second Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. [Operator Instructions] I would now like to hand the conference over to your speaker today Mike Zhao, Head of Investor Relations. you. Thank sir. ahead go Please

Mike Zhao

of you. Good Donnelley call. you joining our a and morning the found Investors section morning Solutions' second everyone of copy report, Financial earnings conference at released thank can quarter be we in dfinsolutions.com. for website our Thank which XXXX This results

uncertainties. refer we'll call, that this forward-looking statements are subject During to to risks and

This report earnings our refer For company's informational the provided cautionary other the annual the our discussion, most GAAP are, in way in GAAP refer details Clay, tables please and the to Form report Leib, to am to information. now of release complete turn to quarterly further a joined call performance. purposes financial included Floyd and XX-Q, XX-K, on I release Turner. on Please will recent information for Dan statements Form Kami Johnson, and filings information. operations supplementary ongoing with for Eric Dan. the and SEC. by information morning I financial related Further, of useful financial to earnings non-GAAP we company's will the and for evaluate discuss is however, We non-GAAP Craig only. the information over financial concerning reconciliations They Gardella, with an Dave believe provides appropriate and you you Strimling, non-GAAP presentation

Dan Leib

for return within at and After Mike. our from performance staying Dave. from you I Relations first Thank heading your as that calls, their you, end pleased as noted quarterly had in of momentum our look well is with software activity. DFIN Good last SaaS to normalized Planning a momentum all while DFIN, DFIN. an and accelerated markets forward Teradata, Mike healthy. quarter a everyone. very DFIN, led one a joined the and At welcome safe in recently enterprise you second finance hope to meeting where operating seeing Investor the more within strong in are transactional your Financial and as at sales morning in first Analysis in in On earnings we year environment as significant go-to-market families strong. Mike And am few transactional our a We software call capital of of us up start quarter, again closely Mike company segments. he to quarter, level second growth The we remained the the we well to the with and been sales that increase markets. working

an specifically are transformation point aspects such more second and our the and an in in a resulting of Our XX and proof the by DFIN's in business financial margin. profile financial of sales the importantly, of the software XXXX of results offer increase resulting our XXXX quarter success year Two profitability another from strategy, targeting solutions mix. from XX% increase

look we forward the end, Over $XXX our by EBITDA strong points four-quarter results. you up ongoing is to In been same short, quarter trailing to strategy. execute $XXX.X has million. We our is At strategy over basis adjusted two-year up margin million XX%. our EBITDA with X,XXX period, delivering adjusted as progress sharing driving

As X.X% grew second sales year's quarter quarter. the it to last results, relates specifically from second total

in quarter, XX% overcoming Excluding increased grew as net sales. decline related and and in grew services a tech-enabled sales XX% print XX%, print year-over-year the XX% solutions distribution, and distribution software sales of

recurring The from is our aspects software services solution last aggregate positive the compliance management, contracts year. our with low-margin grew change sales software proactive tech-enabled decline our client total particularly and more recurring in regulatory record by compliance exiting market of consistent companies investment and reminder, and was and sales. of print quarterly sales recurring adoption a ActiveDisclosure a business our distribution our the our with printing for the a business. quarter feedback of strategic in the grow priority investing As XX% of the compliance in and to high result growth contributing launches software recent of which in We've in our over received product second component products, led ArcDigital to XX% ArcPro strong along the offering attractive

strong quarters, sales Similar of our our sales platform our gains. our activity, again addition, by than growth light approximately M&A print quarterly tech-enabled high to quarterly Venue and strength and transactional we on ongoing plan be resulted growth capital control in the again, and virtual believe along The impact low-margin cost impact our proactive the In market including our transactional in largely execution the and to in in solutions few with once in robust efforts, the room higher-margin print demand, product print driven all-time of data the quarter second achieved from the deal increase market services of software activity grew XX% share last work, increasing year-over-year right-size strong with of markets more earnings. what to aggressive of sales, significant sales an for regulatory another pruning XX% resulted net XXXX. share of

And XXXX Second EBITDA XX.X%, of from margin. up points quarter adjusted basis $XX.X was quarter increase EBITDA million, second non-GAAP second adjusted over margin XX% EBITDA last quarter. XXX from adjusted year's an was

margin, with is long-term XX%. our earlier least quarters expanding eight of target trailing our tracking trend, ahead EBITDA XX% of Given currently EBITDA of year-over-year noted at adjusted I four-quarter well the margin consecutive

and footprint our the during second managed support At adjusted quarter also of continue and we've As our margin. real steps cost structure organizational optimize call, take certain same to in in expansion priorities. to I to areas, and our on time our aggressively the XXXX operations, the adjusted investment in in XXXX contributed highlighted EBITDA as we increased levels EBITDA last strategic having estate structure took our streamline growth of

supports by in we area Free the detail. expect related plan quarter superior XXXX. despite technology second products. accelerate be Specifically, so year's allocated with our LSC we've investment of we've done by the and X.X both million, than lower improved funding the same this where the historically, more debt million, of projects cover a to people we've second taken clear, $XXX.X X.X in in in topic the resources To quarter $XX.X net to products targeting areas transformation, that in we've deliver these cash than Dave pension our non-GAAP times, more software to our non-GAAP obligation. disciplined multi-employer times last quarter end, approach $XX.X At lower this million while leverage will was flow net quarter toward returns. resulting and and economic of terms dollars increased

few outlook to like provide call financial the to the a quarter. share Dave? business highlights, our and I our more over on would I quarter third results for Before detail second turn to Dave

Dave Gardella

Dan morning good you Thank everyone. and

As significant growth per we very adjusted increase year-over-year of strong EBITDA adjusted results or quarter filing the in flow. a our transactional X.X% solution million posted sales, second Dan from noted, share business XX% quarter $XX.X in in XXXX. the consolidated million On free earnings drive sales delivered and our all maintained and software for growth to non-GAAP EBITDA, adjusted net margin, including of X.X% $XXX.X and while operating strong market in basis share increases sales quarter non-GAAP We an were the continuing cash efficiencies.

of $XX.X in to by second data Tech-enabled net $XX distribution revenue have driven activity increased an This capital and the million within acceleration proactively net materials where markets. the XX.X% by companies sales Arc growth as by due quarter XX.X%, well transactional Software exited primarily primarily low-margin of services capital virtual ActiveDisclosure. accelerated in increased solutions the as increased environment, room decreased the transactional M&A by a was million due or within less Venue, investment commercial and to as or million solid for printed product certain Print we XX.X% markets in regulatory-driven due sales primarily sales print-related reduction subscription activity activity. adoption Suite, by partially increased to higher improved printing offset contracts. or in decline $XX.X demand within result

at XXXX, of of years. expect our be By our made meet for year-end to and the Regarding print our demand substantial over changes platform, operating third-party requirements. we variablizing to past print to XX% the majority needs our digital-only for have time platform print our production structure quick-turn own higher-value we of the the for XX% cost approximately couple same network the utilizing print

the and combined software quarter Second the in gross primarily higher XXXX, $XX XX% basis initiatives. higher lower volume ongoing million $XX.X million non-GAAP points of driven by XXX Non-GAAP, and SG&A mix print second control or featuring cost quarter overall was quarter business solution the quarter impact margin second sales with expense higher-margin approximately was services than XXXX. than of tech-enabled of favorable growth in a the

The quarter commissions higher primarily offset XX.X% was SG&A from non-GAAP sales, SG&A ongoing approximately in expense increase net basis is mix non-GAAP the compensation control cost second incentive on changes increase of by initiatives. percentage business XXXX. points sales to impact the partially XXX a the and As higher an in of of of sales, due

EBITDA XX.X% of non-GAAP quarter XXXX. second second $XX.X was an million from adjusted the $XX.X Our of or increase million quarter

again the adjusted non-GAAP by quarter quarter XXXX, increase cost expenses. incentive initiatives and mix primarily an offset of higher of driven the approximately second and basis points XXX compensation ongoing by Our sales margin favorable control selling second from EBITDA was partially XX.X%

quarter M&A also XX%, market quarter increased subscriptions. XX.X% growth in solutions non-GAAP on Non-GAAP sales while results. EBITDA capital an File XXXX increased $XX.X trend an sales $XXX.X as The due capital primarily sales X,XXX improving continuing second Capital continued second approximately expenses Management adjusted transactional XX% Net our sales primarily to as sales XXXX. Markets XX% XXXX, second impact offset segment margin increased Net a began market for quarter Turning from increase increased due segment activity accelerating recurring of favorable to increase primarily sales and points primarily software focused was and basis well XXX by XX mix. our an margin million, in EBITDA adjusted the million, and driven solid Compliance quarter The of second higher environment Venue increased approximately ActiveDisclosure our EBITDA Venue third increase quarter of a to segment result was of to Communications transactions. compliance IPO the non-GAAP points adjusted gaining quarter marketing approximately well including growth selling activity partially the from had favorable activity growth, the was in the of of Non-GAAP ActiveDisclosure largely of by De-SPAC efforts momentum aggregate. the share efficiencies in now M&A mix XX.X% in volume. This products a the was segment in Data an increase that the Room EBITDA due & posting second as XXXX. were segment to the increased the our ongoing the margin of driven and quarter sales a was activity the from of for margin Virtual second from volume in the operating XXXX basis increased as of adjusted XXXX. XX.X% and growth of and quarter due as in of the an increase by sales increase from were markets sales

did growth As we a activity on call, for the we accounting SEC statement anticipated legal and IPO based registration SPAC potential decline warrants action protection also of the communicated classification and sequential in their on regarding last our projections. on see

driven approximately $X.X registrations the in were less than $XXX,XXX compared Second quarter. to by first million quarter SPAC sales

approximately XXX completed $X.X SPAC transactions. Over registrations and we've the million generated in these have sales last quarters, for four

changes ahead of initial the registration recurring Companies our transaction. As requirements. XXXX it is the of of opportunity a continues $XX.X for the quarter with affecting on million, activity, ArcDigital due segment Software for in pipeline it out clients' value De-SPAC demand strong the to our Net to of primarily average new second this gain XX.X% in Further, in quarter software a total since increase compliance investment sales ongoing lies from subscriptions Investment bigger the as to these we've transaction the times of opportunity Solutions an to were the our of arising support XX regulatory offering second relates provide launched companies. which XXXX the management momentum transactions value quarter compliance

a for approximately increase activity subscription fueled In from points adjusted from new million in & of sales from quarter to of Non-GAAP segments, segment sales commercial reduction were EBITDA this Companies second Non-GAAP to clients XX.X%, the existing overall in Compliance we the the second in decline XXXX was results primarily by print sales are margin XXX segment was to partially in segment. due the exited. of higher Communications platform and non-GAAP growth allocation have of lower the costs this reduction The lower as was being a of adjusted was EBITDA adjusted a by and sales result $XX.X for offset than segment impact shared organic of affecting in due our distribution. also activity and investment print operating Investment expense. in cost margin non-GAAP printing EBITDA reduced companies increase basis of which an a addition, a now favorable XXXX. the contracts for or basis primarily primarily regulatory consolidation incentive the mix such change other XX.X% EBITDA growth was for to decrease the the growth in expense in offset due quarter XXXX. segment adjusted impact the of segment proactively level The sales overhead Management XXX ArcPro related the levels margin the increase and quarter as second activity and million compensation lower of Net $XX.X need within related in absorbed to XX.X% savings partially the points three a by lower our due margin to of approximately the resources. This in print-related

with the ahead peak activity reduction to the Second to in execution of track savings approximately us, consolidate of quarter continue in now cost platform of the plan. and print our quarter print plans been our print to behind of has historically capture terms and related the demand XX%

increase compensation, unallocated reduction $XX.X regulatory from related Free adjusted the were regulatory EBITDA to $XXX cash to year. strong of improvement due quarter print-related will million to million $XXX in print the sales offset the a continue expenses the primarily by approximately continue segment, that of to to million, an demand quarter reduce to performance, we expect of $XX.X of net approximately Non-GAAP partially a increase in increased quarter cost for reduction million, representing in year. change Regarding $XX in the $X change. of of an driven second the million non-GAAP million corporate initiatives. $X in of was ongoing second million unallocated last incentive million was cost control The corporate impact last the flow $XX.X from by the and

payments this to plan despite was second was improvement any funded vast having million lump related the pension settlement majority of three LSC plans. year's as quarter the not to with this began we earlier, XXXX. the the multiemployer third mentioned $XX.X which related related making two Dan payments As to obligation, include Last item, of of sum quarter did payments in

was So last $XX.X second million the full outflow incremental quarter. to year's cash

debt, before arbitration, accordance made Donnelley DFIN final equally We in reminder, the payments adjustment required and occur an determined as perspective, needed and and a $XXX repayment had of total well R.R. revolver million $XXX.X As to on cash million we ended of to drawn agreed hand. will liquidity million remaining be including and to year. we debt with From of our million expect $XXX.X of revolver. share our the the the the as $XX.X in of quarter allocation end as a million with which $XX on second access non-GAAP net

As last times, from of net times quarter our year. ratio down second leverage XXXX, X.X non-GAAP the X.X June was XX,

historically cash seasonal. is Our flow

cash free more and the the second cash in of generate user We of a the XXX% year. half of than our are first in half flow

mix to significant. the to more software seasonality evolve we be less subscription-based As continues our sales proportionately solutions, to expect

that our which $X.X million approximately draw company's of at things become an $XXX extended the quarter During other which time, extend redeem The approximately for only during our Term XX, stock to lower agreement company at repurchased $XX.XX notes, million It October for proceeds facility or redeemable million. the or these annual and to of and will XXXX. due interest by to to loan million that A XX, May maturity on $XX to intent after per the notes redeem we average the Loan term of the credit shares following XXXX, the used facility common The revolving quarter, expense share. delayed of amended provide $XXX X.XX% our XXX,XXX senior XXXX. be among price is transaction may repurchase

We on $XX have approximately stock our authorization. $XX.X million million remaining repurchase

quarter, activity it to transactional third robust July. in the As throughout relates markets capital remained

Regarding our or and at million down approximately outlook consolidated expecting range for to be for million $XXX XXe-X due XXXA. to to year-over-year of X.X% in the SEC and midpoint, the the are in sales quarter, regulatory $XXX rules million, we net print planned distribution to changes reduction $X related the the

revenue Excluding on range. the as approximately print XX% the is expect the margin for in We pass the mid-XX% outlook grow remain quarter and From at on a by transactional midpoint back third in similar our Dan? perspective Solution as to of sales markets I'll our activity. estimated With now capital third profitability well a EBITDA to we near-term distribution, Software year's it low that quarter third range quarter, margin. last Dan. to to non-GAAP bullish adjusted

Dan Leib

The continues results. execution our to strategy of deliver Dave. Thanks, positive

Our sales position the market momentum growth with new to sustained strong to The the generate and in software over quarters. combined last offerings has adoption. continue enabled our interest transactional four strong us in attract software

and for eight strategy. increasing mix also The management, in XX we bottom margins this the business our XXXX In excited delivered in year we our by was keenly in goal strong consecutive our closing, yielding and and various The strong and the our continued cash clients. strategy. expansion our of first in results top successes sales in driven EBITDA strategy. XXXX year-over-year trends remain addition, print in to decreases value value while line adoption and now driving illustrate reinforce our our on and our products cost very trends XX have the sales for disciplined generation. quarters of in Achieving investments focused margins delivering new improvement our accelerate software to about services software operational our tech-enabled are we're half and the demonstrating In solutions increases exceptional

We continue to to further find and returns. on shareholder focus opportunities enhance

Stay Before operations healthy. we been our tirelessly employees up to to thank Q&A, develop the the maintain around world, I'd safe products for to who clients continue quality our it receive service the without ensure have like disruption. open and and DFIN new highest working

operator that, with for Now we're questions. ready

Operator

[Operator CJS. from Charlie question Instructions] comes first Strauzer And with your

Charlie Strauzer

Good Hi. morning.

of questions you. couple a for quick Just

all, software saw a well? little are you that that? First And can business that drivers new a impressive more quarter leading Venue the excluding you of behind of as the dive pickup the drivers beyond growth of you terms seeing in activity you growth? in kind the are in detail maybe to of bit in Especially, De-SPAC what seeing

Dan Leib

about Okay. the the Thanks, morning. then a speak our Eric Charlie. on I'll products market. Craig start and product engineering developed some go-to-market Good and ask and in that have bit we and have teams that off, I'll to of new recently

$XXX then is offering, the compliance for point clients into you look Room. software break Data balance and is our which SEC four and our our regulatory Venue of to million over of your filing it to our at other requirements, we if past the it's primarily quarters, our with software So built revenue regulatory comply the purpose majority

And across all to clients to so always looking the products. nature, we're increase our for of recurring serve ways

business, few the existing over change even within introduction spending market began months build. our great including past on product then our new products. the have the market response GIC all is interest new so, And it with suite, clients the support on and products, most going total to introduced brand-new and broadly. new in sell to we XXe-X, We the which with our and AD, but to is the and increased regulatory or new management across ago. particular recent product year compliance then in we're a offerings a more the XXXA both seeing The new We three technology client in receptivity to introducing

a new in year ago. introduced also We so or a offering Europe

So to let me pass it Craig. off

new a of AD? make then also to Craig, couple Eric to anything comments. ask will add We on

Craig Clay

And SPAC post net surpasses is piece, the is in SPAC what have think scrutiny, the we've XXXX's also count maybe Sure. seen to which touch really on total. SEC start I there QX normalized, so SPACs sort I'll of total

are QX supporting but the at great companies value DFIN's So really think it certainly and the it that perfectly public it's new highlights And increased and isn't We're the creating through proposition. the and we for it's pricing. normalized. level, traditional opportunity deal SPACs team filings AD a

are using our data Our And this well, got as room their then you've clients for virtual pipe pipeline. Venue, financing.

looking target, a and plus SPACs for them. support we're XXX ready So to

pleased recurring So launched new of clients. ERP the mile then browser-based. market to early with integrates new very of the last new who've the experience AD, software, It client's these financials public built. In built and very, software with of from of those up. reside. And Simple and Excel QX, you onboarded get servicing pipeline. the indicate where took wants high-retention SEC-compliant our purpose-driven client so what our We're it's great creating have ground It's from we the we takeaways AD, we clients companies. decades fast onboarding SEC

from to clients are Our AD AD. new converting X.X

through choice wins, at clients clients new welcoming a IPO having certainly, DFIN. public And our newly competitive are our SPAC are AD. competitor or on Our

see and Eric, of forward to turn I'll the about we new it So XXXX with what excited we're we're really second AD to looking you. and beyond. half

Eric Johnson

for Craig. thanks Thanks, Yes. Charlie question. the And

and XXXA. the For launched from total market like product rules management as compliance compliance a US new seen performance well new regulatory XXe-X it's and GIC, our few ArcDigital XXXX, things. as in We've in strong iXBRL solution drivers

operationalize Arc helps software clients Suite requirements. reg Our

focused digitizing well and positioned internal middle are them and in Companies Arc Another goals. help the digitization as processes workflows, many technology on to their their important is supporting office. back factor Investment the velocity And is achieve of adoption segment, the firms Suite

Charlie Strauzer

of if much much very you, kind Thank And we that. a just second could, Great. on for that then, are... just exactly for staying how topic

Dan Leib

historically revenue SPAC market. the the $X.X we've Craig on comment of on being to XXX last commented math going and -- going just was under I forward. sorry, times what we've transaction in for SPACS opportunity De-SPAC registration outlined around add the larger. and that your seen year, the done XX the sorry, million the over I about kind typically question my Charlie, then

registration, through math, have If that an XXX complete that you yet there's but the acquisition. SPACS completed to roughly run have

at to pipeline So that or million couple you noted, activity it's as our SPAC the of $XX over the isn't historical years And opportunity rates call unreasonable you a subscriptions the recurring us then if aggregate revenue activity, million to market completion Craig And then, of more transactions. look next creating it's our the million for think in market, software transactional probably, $XXX the the that $XX nice share, next specific M&A on couple of importantly, haircut for and years. over it even market share for ActiveDisclosure. of as De-SPAC also about

Charlie Strauzer

share De-SPAC, companies if Great. think in begun you been do about And terms the those more garnering business that one like for just new your to then from De-SPAC-ing just companies? have on second, just staying you has what feel that of

Craig Clay

shot that. Yes. I'll for a it take at

So you. thank

has been share increasing. Our

from high-quality high the be management now of doing the it resort, it's So check certainly mean great SPAC, evolving to used things. last blank team sort a I

started reflect Our that. to share has

public companies real Super an their we our often But our pipeline holding then here AD at from De-SPAC, what in SPAC They for those take that, create complicated companies, So is to recurring creating can super, are revenue, about own the from the takeaway excited the an and the it's these extremely upgrade of the the SPAC DFIN. of they the competitor. needs and retain De-SPAC deal and will seeing revenue. of but DFIN. we're team creation be is work. on us that then, amazing reporting we super of then this share also SPAC certainly to upgrade retention these And and this clients often they have new and just those company, actually high ongoing De-SPAC-ing, De-SPACs not new

Dan Leib

-- then add Chris's -- has to did registration And was Charlie just XX% initial competitor, comments -- where back where it on initial SPAC on Craig and taken SPAC transaction. an or the where And that those to also the by pointed conversion SPAC high the rate roughly where we've was acquisition transaction. handled done don't De-SPAC as a or out we we the very company so

Charlie Strauzer

you feel Do like…

Dan Leib

referenced think SPAC on calls, prior the context a document. Further small really as we've I

is the with De-SPAC real real opportunity. disclosure Charlie obviously opportunity, that then back So the it and reporting you. to

Charlie Strauzer

Great. just just the you're your well? the from side competitors on taking And of on traditional side, you still share like feel as do share business,

Dan Leib

array in a We're strong of across an product position yes. Yes. lines

Charlie Strauzer

very you Thank Excellent. much.

Dan Leib

Charlie. Thank you

Operator

next Heckmann Davidson. Your Pete question comes from with D.A.

Pete Heckmann

are Hey. competitive Good of morning, capital public question gains existing a or weighted those everyone. last also towards companies? Great takeaways new results. contribution market capturing more you from the issues, greater on gains, on share like the share do feel On that just side, there's market a share of

Dan Leib

think I both. Well, are they

place deals, on the do transactional first and is well seeing to in deal of markets, think side side of you tend compliance robust question. if right your do we're regulatory. quality So the very In really really well about those the and now. our We the nexus that that transactional we teams,

side, of said on part QX from is from second The reporting which the we it that did again. have your that on we share. is and in did needs. question the XXXX XXXX. We ongoing saw in We've increased prior that We compliance XXXX calls

whether IPO continue or retaining De-SPAC. to It's both companies taking minted as well companies us. it's as we number with newly increase of share company’s So working public the

Pete Heckmann

got it. Got it,

Okay. new either XX say to terms be we months DFIN? a that be rearview outlook. let's tailwind mirror. And then regulatory the for could the that in should watching on Anything rules in headwind a see over good It's the just XXe-X almost and or XXX of next proposed

Craig Clay

were monitor we for that products a They Yeah, are for We very closely with our making I'll in modernization out. in are. and happening making closely. We're the that are SEC sure products. that start our today very process. ready it sure on what's the example, call

a as opportunity There's an it's traditional negative. we They're about think requirements. us. see net about certainly ESG. iXBRL for I that They're talking talking nothing

And we're have those. those proposed. been none So monitoring of

is a proposal many like long XX months So before a comment there typically there's rule to change. to process

have So out for far is net people more. anything and we're What positive Transparency a report certainly disclose change. any as would great. hear, to substantive I have that very think we is

Dan Leib

add to that. Yeah. I'd

when last yet data, discussed some to about ask but feel tagging couple things been disclosure to tough timing, And I pinpoint a the we you think to that I'm had think I positive proposed. say. sorry, you not XX exactly of of Craig's discussed Eric, that very transparency things the months but being about have of enhanced relative are comment and

Eric Johnson

Dan. And the say Thanks And it's requirements. mentioned, the I operationalizing Pete we software, thanks things our GIC as with about on earlier, Craig well as very of mentioned regulators. side I close see we just stay would the for as Yes. the question. reg

US close very well stay we So as regulators EU. as with

of in tackle As software we'll to way. clients set But far our certainly comment change their any is as our stay really period, things again, regulatory help lot a the it. to that near horizon, there's and close comes

Pete Heckmann

it. go helpful. back I’ll That’s Got in queue.

Dan Leib

you. Thank

Operator

B. Raj from with comes question next Riley. Your Sharma

Raj Sharma

quarter. Hi. another guys. on solid Good morning, Congratulations

Dan Leib

Raj. Thanks Hi.

Raj Sharma

bigger decline year? I decline to of -- to the the moved the that QX of be recollection. thought of I QX second was little a from to the declines Sure. a bit my proactive sort in going print. of wanted was understand half better. some print It's I there

balance the of you is about year? Could that? so for remaining the talk And what

Dave Gardella

Yes. Raj, it's Dave.

so. impact of $XXX the things you a through there's and look One there. of which when couple on about million was print the that. going overall way numbers, of or XXe-X right, regulatory change, that We're at XX% the XXXA is the So,

the things way. other Capital of remain transactional quarter We strong. couple a specifically pointed Markets the have going you environment this and Now

print reflected so too. a on incremental And some the was there numbers basis year-over-year in

So, think look said going I through the that of million print year, roughly XX% it. this at of we we're you decline when on way $XXX forward

XX% of or the And so, roughly million that next $XX last quarters. couple over

Raj Sharma

it. Got

Dan Leib

some outside -- benefit regulatory of print variablizing of I to just variability done. is add the And Yes. does that to the as platform change the of demonstrate we've that

for platform able a up comments, the higher-value, obviously have scale types quicker dictates. marketplace turn, and we demand prepared scale very so, And go digital And into of as to now needs. nice then, to Dave's down to we're

Raj Sharma

be it the net than print reduction in the $XXX simply that this less fair is million, year the could these actually of because to would So, in transactions? to -- be uptake say looking

Dave Gardella

the That's right Raj. way it think about to Yes.

Raj Sharma

then, Is Okay. EBITDA margins reason the XXX on any than Thank points you. And lower. be your particular QX? the that to right basis -- margins XXX, guidance, expecting would QX you're why

Dan Leib

transactional has I over low I look the last last quarters, think to million in -- it's think $XX the quarters QX. Again, said, at So, now similar mid-XXs had when gone row. way year's we plus least we've several a you at to for three

sure deliver QX remains is a to that business bit we're issue just against and to but little the always like we're in still I make about be we're July, although outlook, an want on tends to always mix the While watching. is And the going a guidance. little market strong our talked before that so lighter, unpredictable, transactional bullish we've work

Raj Sharma

Right.

So, -- margins it's a in almost so of the see which upon that are say of. you good transaction wildcard business the QX fair far? and to that part strength entirely sort in the But is the do predicated

Dan Leib

Yeah.

drive I you margins to would the EBITDA. growth through like incremental flows would revenue the at we said, do. But be far, transactional. we very through So other the gross biggest on and certainly that is comes software the aspect wildcard high solutions say

Raj Sharma

quarter Thank my questions. you for answering again. Great

Dan Leib

Thanks, Raj.

Operator

CJS. is with follow-up question next a Your Charlie Strauzer from

Charlie Strauzer

Thanks.

you guidance on segment. little the up And each building QX a then bit M&A side, maybe on about assuming are as there? could. thoughts transactional segment think IPOs if give the Maybe down transactions for been side out that like some the thoughts Can some we both Dave big seeing well How picking drilling for Obviously, on M&A? assumptions very as for as lately. model a from should well. big has Just what more you pickup basis on your you very us a

Dave Gardella

Yeah, sure.

be print we seen think get the QX. expect I we in of there segment, had Management. so predominantly see to QX. by the the little Compliance would in Compliance again & market Companies it's million three the - Certainly, the the & QX Investment print, then growth this starting Management Communications Markets pretty Capital the last you a point earlier really QX, software segment to transactional segments we and a excess last That's far then growth by substantially we look and the to the into high as quarters last pretty actually mentioned in two would think biggest there of Markets, in of sales. I that software, Investment QX if and quarters Compliance I in $XX regulatory the Companies the last Communications would year Communications And on what card declines around level, this in increase be I the we've do wild similar three expecting look number -- impact continue for growth Management big pretty to both first segment QX. the So then in to when in Management year four robust a year. at to transactional over The segment. quarters get And decline go also which Communications Capital that we've specific & comps or a over again, hits tougher the Compliance three at quarters. offset & of into that seen bit And in But in

quarter. to And it a we've $XX there July. $XX up, million market in But this specific strong million holds the I think that I in looking transactional. the that like transaction be at the said, on to off range to get started would call probably we'd stretch be looking extent

Charlie Strauzer

vacation you speak kind obviously, summer -- the you so doldrums see tail Right. And down traditional of should too. got to for

Dave Gardella

Yeah, that's right.

Charlie Strauzer

much. very you Thank Great.

Dave Gardella

Thank you.

Operator

Instructions] will back time, to questions. call are hand no [Operator this the further now closing At I there remarks. for management

Dan Leib

Great. we you. and all look you Ashley. to you speaking Thank forward in November. joining to Thank you, Thank for us

Operator

for your That conference. participation. you concludes today's Thank

disconnect. You now may

Donnelley Financial Solutions (DFIN) 4 Aug 212021 Q2 Earnings call transcript