Earnings call transcript Q4 2022

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Operator

Good morning. My name is Audra and I will be your conference operator today. At this time, I would like to welcome everyone to the Donnelley Financial Solutions Fourth Quarter and Full Year 2022 Financial Results Conference. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. there a remarks, session. speakers' the will question-and-answer be After [Operator Instructions]. I At of turn would the time, Investor conference Head to Zhao, like this Michael over Relations. to go Please, ahead.

Michael Zhao

our Donnelley everyone, XXXX results year conference copies at of be including call. website released can you Thank a and we results and found morning, of investor earnings Good fourth quarter which morning, for you. section in historical joining our Financial This supplemental Solutions full schedule of thank dfinsolutions.com. the report trending

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

to supplementary and the way the For We we you to cautionary most a only. complete will provides believe financial information, concerning tables GAAP company's discuss the and margin. other adjusted discussion, information Please information please and They refer non-GAAP XX-K in Form included refer release performance. information. our information company's you certain and financial our non-GAAP operations further ongoing filings on for for and detailed financial adjusted reconciliations however, as to EBITDA the earnings the such with Further, in SEC. EBITDA of report annual presentation and are, recent with informational statements financial for related release non-GAAP provided of purposes appropriate an to useful earnings is GAAP evaluate the

Dave will Clay, Eric Craig and I Dan Johnson, Gardella, Dan. Turner. the now turn I Leib, am call by this joined Strimling, Kami over morning Floyd to

Daniel N. Leib

everyone. good Thank you Mike morning and

a environment. Our operating performance our of EBITDA model operating our fourth and the in of performance adjusted resiliency quarter sustainability margin demonstrated further difficult

remained quarter we navigated that very challenging. fourth During a transactions the market

of quarter being delivered strong execution an the in of EBITDA fourth XXXX. XX% from transactional down revenue a quarter markets XX.X% capital adjusted As of despite margin nearly we result the

than significantly our continued our sales our discipline revenues. which transactional is structure, throughout adjusted overall similar permanent and cost margin quarters fourth cost XXXX, with changes historical mix, quarter and our Consistent higher reflects EBITDA evolving with performance to performance,

as Our is a our detail fourth a performance proven ability results quarter the a more higher strategy shortly. will sustainably range profitability of at Dave validation to level quarter of in fourth across of well as our conditions. market cover further operate

or full markets against strong the backdrop down headwinds, transactional Reflecting and being of market combination EBITDA uncertainty, both year and delivered with periods XX% similar year volatility, the year. are revenue of historical adjusted revenues. adjusted of the than on XX.X%, results. the and XXXX, higher million EBITDA transactional overall delivered of for $XXX.X geopolitical capital Despite of nearly We margin of million we which full an significantly $XXX macroeconomic

were and much that our margin EBITDA full by year XXXX each in the EBITDA the history record of environment. by more XXXX results second fact, in the In transactions robust company, adjusted highest only exceeded adjusted are a the driven

Our focused DFIN a costs in disciplined manage manner execution profitable. in improve to our resulted fundamentally our more sales becoming and has mix

shares flexibility continued gross XXXX, with towards a during investment and combined with the in leverage increase development to million growth, repurchase in well times. progress we flow one robust and our made provided drive software strong the company. to financial year profitability the becoming us Our In journey net organic below non-GAAP X.X generation cash software year, centric end

of net For record million, approximately sales from of software solutions the full we year, increase XXXX. $XXX.X X% achieved an

XX% sales, up our software the Venue, sales from sales of Despite on impact weak of net our solutions full total market year nearly XX% in transactional dataroom, net negative net of XXXX. the represented the offering

to achieve compliance software our to a driver just our the us gain was software software sales. year of sales and regulatory offerings, net primary sales, approximately Arc XX% path XX% and point sales growth in scale of continued total full ActiveDisclosure right in full sets and driven year total in performance The of approximately solutions These XX% and our products, Suite Software which sales on more XXXX. which sales grew the of is total net XXXX our from include transformation in driving software of comprising by XXXX. to sales reached $XXX software XX% compliance of than total recurring one proof to compared XXXX XX% significant in versus representing million third aggregate our overall goal of of XXXX

this illustrate of $XX progress, than compliance net total million in generated software To less sales XXXX.

to today, to AD rate become and which an platform expansion recurring new predictable of by of new grown in market an approximately Over and the profile million more This and ecosystem, transformation product our more growth ArcDigital, sustained through course translates years management, six XX%. important such resilient. compliance the go of introductions $XXX we million growth level software $XXX partner than compliant annualized the total is as to step increased mix and of of our last compliance into investments business financial in software double-digit the have

software for the rate component in am liquidations recurring in ActiveDisclosure, SEC with impact of which recurring ActiveDisclosure’s which pleased the for subscription grew growth revenue. corporations built I of compliance offering, negatively XXXX. revenue subscription XX% a the SPAC purpose despite XX% reporting year-over-year impacted key base grew

strong revenue. ADX, resulting our strong has progress we thus ongoing the cumulative the we subscription by reached We annual the ADX decommission have onto that to ActiveDisclosure legacy base end new term to a to as approximately of the will the contract ActiveDisclosure levels the to transition pleased platform legacy launch, to that on legacy achieve in only costs year-end the on which $XXX of duplicative us ADX track XXXX significant XX% half we majority our XXXX, less enabled to milestone far, of transition At to platforms. since its platform. ActiveDisclosure. XXXX, point, and remains customers of years am XXXX, two sold expect Based also new us two commitments on new the operating price customers remain than legacy of on longer of recurring the with value from made higher Prior with client I first made million. the in progress end allow nearly ADX and shed associated remaining

we we in be XXXX. we've customer elevated, As recognizing customers the churn not our to rate noted that to expect past, out our and would play temporarily ADX legacy all that new convert ActiveDisclosure in have seen we

am longer is impact with XXXX, we platform the progress term for towards what same driving price offset the churn transition a made a consistent uplifts have experiencing retention foundation we in the half strong the on ActiveDisclosure pleased While Overall, single are when new contracts, we of ActiveDisclosure in ActiveDisclosure. and rates than we higher expect the first at I the while more with creating by new offering. complete time

response growth investment a Arc other revenue the solutions very XX% recurring full of Pro encouraged subscription as more strong to component sales introduction with well Suite, class leading excess in of offering software in adoption up with in our growth revenue, which XX% constant across Arc year total our nearly than delivered XX% market growth demand for management compliance its offering regulated enterprise normalized long-term net solution, companies mutual a contract am a solid on subscription to of XXXX funds revenue I offset helping makes Digital solid or a characteristics which compliance of three in total Regulatory the basis. Suite software Arc regulatory best possesses by a and terms as profile had and change. contracts Arc following high years. of to currency Arc average

use experienced sales tremendous XXXX versus a to a Turning prior as than to result the up capital XX% which M&A. case our its sales environment. markets growth Venue when year, Venue, transaction very XXXX last full software a were better significantly year transactions X%, were performing robust of down strong Venue driven year Compared primary

in over the under in Venue platform XXXX, M&A year-over-year very sales net more XXXX. market M&A place challenging $XXX a million under significantly, taking down the level With activity resilient. underlying virtual in dataroom delivered on of Perhaps global our environment remained just XX%

sales XXXX reported XXXX million Venue’s XX% $XX were net nearly context, than XXXX and higher million net and respectively. For of XX in sales

a XXXX is our Given market gains. in Venue’s and XXXX, the to share higher sales both execution levels of growth transactional and testament great activity

XXXX positioned combined for which well by our our of solutions performance the our encouraged upon are our made software for touched I progress software SEC future. both achieve recurring solutions regulations in believe long-term new well recurring products The I'm and portfolio the previously, us we portfolio Overall, goals. transactional with to opportunities to software compliance and position scale XXXX compliance throughout

terms released reports SEC information final in regulation, as requires that revenue within horizon. the can basis. Let semiannual of on the Tailored consumption highlight the tailwinds solutions a opportunities tech portfolio as shareholder July compliance and me which holdings reports, regulatory which one on highlight to has of well a company software year, believe its date Late traded on that mutual shareholder increased see is performance, tailored we funds additional unlock of applies new regulation services and DFIN the The segment. such for of and creation XXXX. adoption a enabled exchange expenses, of reports, funds distribution both ruling tailored which we as investment key fund higher the last of

retail the that of aimed feature our will and measures clients. investor the graphic make replace rule effective disclosures distributed concise presentation, requirements and creation average adoption These impact financial production information being reports, increased today. directly which important the three more carries and This content for for stylistic detailed to

filed significantly per a done volume level, multiple has the requires create share rule to and rule the With class on reports distribute increases the shareholders. at average, to fund where level First, shareholder share report at and classes be the to new today. of the produced tailored versus fund it's a fund

be HTML, then tagged, current N-CSR Shareholder filed Tailored requiring iXBRL the introduces the unlike the are which into in Form Reports filed. and Regulation N-CSR to EDGAR Second, Form inserted iXBRL only tagging reports,

comprehensive Third, the requires a disclosure whereby the regulation to a linked more disclosure. document summary is layered

making require and an solution. introduced for the specific excellent key levels new industry this along foundation by DFIN of automation platform The workflow industry with changes rule technology, the

and client regulatory This Specifically, to exchange composition, a funds, compliance platform. Arc corporations, traded Shareholder and was Suite Tailored financial serving and needs in new our capabilities mutual designed funds, foundational deep domain to filing, single reporting regulated market create us and ActiveDisclosure to built companies. solutions tagging, across insurance stage under Reports combines single our and for regulation. expertise allows platform capabilities platform a platform conjunction integrate service into The with the all specific address future

support a required of distribution web reports. with the requirements to Finally, this great of digital our output, hosting, rule fit distribution and digital for clients our are platform e-delivery,

Pay Versus just clients Tailored and ruling turned our of are regulations DFIN Financial one the Transparency help this. as Reports operationalize. the that Performance defined, new well Shareholder Data examples is of them more to good to becomes Act both several

well Tailored regulatory are requirements. We excited software our as on opportunity future their for the to clients expand we by horizon Shareholder by our the opportunities as the of with as other regulatory uses services presented assist changes and Reports

progress more EBITDA value centric pricing clients, contracts, we than our points not investment be and XXXX. XXXX communications we delivered In addition adjusted aggressively compliance by company’s structure, becoming having in in and Further increasing to cost the segment. XXXX, low we the success highlight over the continued aligning are we XXXX margin what towards nearly company, to $XX by a I'd million, XX.X%. deliver exiting margin management to of doubled doubling our software the with than in adjusted basis our more combination to remiss of EBITDA increased improving the Through managing made a profitability

further segment in was As margin approximately XXXX X%. the in evidenced adjusted EBITDA

to over year. Dave, priorities our things a update this I to quick turning Before for on wanted provide strategic

is our previously, committed provider remain I market increasingly our regulatory of core compliance clients landscape. to revenue to our recurring as maintaining can grow to executing XXXX, be solutions transactions. while continuing to mix and and support SaaS unchanged. As our In compliance have strategy you complex business navigate strategy stated the traditional to accelerating they our our share regulatory We businesses leading shift focus including by remain base on expect primary in our

on We in non-SEC invest the future capitalize to regulations new will our and platform software continue cases. and demand regulatory compliance to use from to ready ourselves

operational manage and efficiencies. In addition, costs drive aggressively to continue will we our

these maintain our remain that to Finally, allocation flexibility execute in shareholders. capital we XXXX, in strategy. increased FINANCIAL to our do stakeholders, and disciplined create will I'm to we our value order will clients, the confident employees in well of all if things our we

on call for over Dave. provide I more first turn the share our our Before I would outlook details to few a fourth quarter like Dave closing and quarter, to to remarks, results,

Dave Gardella

morning Thank you, everyone. good And Dan.

substantially markets EBITDA we of very quarter The delivered the weak three softness fourth fourth a capital the in strong last XXXX volume in remains deteriorated context the quarter. markets year's environment. of adjusted noted, of capital market Dan the as first deal below margin in As transactional activity levels, quarters further

have In year. fewest execute strategy compared priced sales. of become the to demand fundamentally our EBITDA slightly fact, of to focused Despite the basis number higher fourth challenging the XXXX of points of our had of environment, completed efforts margins adjusted enabled quarter M&A XXXX, and IPOs had transactional XXXX profitable with which overall more and in any higher quarter levels the sales very to quarter transactions the high DFIN fourth nearly

markets vast $XX.X XX%, decline. capital XXXX businesses and markets $XXX.X dataroom or drove the of fourth fourth last of transactions, through The specifically XXXX. Venue quarter versus of the $XX the of consolidated million, and majority transactional aggregate, most quarter from quarter XX% decreased In a the our fourth Venue leveraged capital transactional million, dataroom the or year. the On revenue portfolio year-over-year corporate decrease for net parts million basis, of a sales were of

was lower Fourth than offset sales sales $XX.X incentive driven a million XXXX. activity, selling as lower a a gross quarter unfavorable $XX.X expense, of decrease points Adjusted margin capital by SG&A the from lower quarter non-GAAP mix, compensation XXX and and lower by transactional quarter expense partially of ongoing volume business initiatives adjusted XX.X%, was cost control volume, million, in lower the ongoing to decrease an markets approximately impact in in expense. primarily the initiatives. fourth compensation the XXXX SG&A control the is non-GAAP lower fourth of cost quarter non-GAAP basis impact by related The both primarily driven incentive and result expenses of of the reduction

adjusted decrease XXX quarter net a fourth sales, non-GAAP SG&A from a basis As was XX.X%, the XXXX. of percentage points of approximately of

million approximately Our million, the fourth margin $XX and or of primarily expense, initiatives. XXX. XX.X% adjusted points $XX.X was decrease XX.X%, was Venue expenses XXXX lower of of quarter driven cost the lower by fourth EBITDA sales incentive control a offset XXX compensation quarter partially of from quarter decrease and basis adjusted transactional from selling the capital lower sales, quarter a as of result EBITDA a by Fourth impact fourth ongoing lower markets volume, of

overall As XXXX our our is we adjusted noted fourth quarter in earlier, margin margins with EBITDA historical approximately than revenue. transactional similar basis points quarters and higher

fixed to our market sustainable has resilient specific cycles. and efforts focused DFIN Our positioned across the be reduce business areas throughout costs and more structure cost in to to variablize

is in XXXX. of our $XX.X sales Turning includes while the by EDGAR sales net solution fourth ActiveDisclosure’s now to recurring our net decrease market to and quarter revenue, the subscriptions and primarily due X% fourth X%. both increase in our results, were quarter, the grew recurring segment revenue quarter capital services Venue software million, offset a total XX.X% segment from lower ActiveDisclosure. In decrease of Online in fourth the of grew which compliance activity partially disposition subscriptions dataroom product The

earlier, commented Dan nearing we from ADX client end are transitions of to the new As AD.

quarter. number the migrations revenue, of decreases, is the the the declined related services part which fourth transition customer of As amount clients in making to of

was results customer the declining SPAC liquidations, in ongoing to revenue wins. a offset on The in customer price of and of IPO combination conversions more customers than new decline churn the churn, number Additionally, weakness in services by and normal the in of addition platform. activity customer impact the modest increases on

use the M&A last were volume. during by in fourth resulted to Venue the driven our breeding comparison. better Venue quarter revenue, Venue virtual its of M&A the quarters down first this experienced fourth decline in of dataroom market Similar of during case a record XX.X% quarterly quarter. steep difficult Robust the year, activity a primary compared to Sales year, offering of quarter in M&A XXXX trend we fourth year-over-year performed than the what three

XXXX, from fourth costs due and new the and XXX lower fourth as continue basis volume, of overhead compensation sales sales lower segment be of XX.X%, for the allocation price nearly partially a With we offset Venue on resiliency lower to approximately decrease margins primarily sales. down of Adjusted lower XX% basis mix, points from was this encouraged of quarter the of global selling uplift to market in and EBITDA expenses the unfavorable result higher sales quarter, year-over-year a volume, M&A by by expense, AD. a incentive a

million $XX the $XX.X which demand markets a the driven Similar sales markets approximately the our we in the and primarily accounted of transactional transactions million trends of of by this first in were Communications million, environment Management nine quarter. from the in XXXX, remained quarter sales capital experienced or equity capital Net to fourth for months decrease Compliance segment. in $XX XX.X% the lower of year-over-year fourth challenging very segment decline the activity, year, for

the quarter, IPOs place Specifically, fourth the frozen the quarter IPOs taking exchanges, compared in over IPO market fourth U.S. only three million to nearly remained of during XXX, pre-priced $XXX on with XXXX. priced

segment the from in cost XX% expenses, partially EBITDA quarter fourth transactional compensation selling was XXX the market in decrease by resilient last due while of quarter margin fourth and year. approximately lower lower decrease basis loads points versus the IPO XXXX. of sales, and down adjusted incentive nearly savings quarter initiatives. the EBITDA M&A primarily lower The market was sequentially the from than The to offset was XX.X%, margin expense, third for more a this Adjusted

were from of segment million, solution of XXXX. our X.X% in an company quarter fourth sales the software $XX.X Net investment increase

of year-over-year rates, foreign offering. growth exchange revenue Regulatory driven by XXXX. quarter Excluding Arc subscription in The Suite the Arc was versus Arc sales products XX.X% net of the Pro and primarily increased fourth two within negative impact

delivered delivered Suite the the Arc rates. improvement impact quarters the exchange the in foreign adoption sales profile the quarter, we including of our Combined, Arc from sales of an solution Digital of products full positive in the following offering growth negative growth our management of saw Additionally, initial XX.X%, total or year-over-year year, normalized net XXXX. XX.X% year in the demand three first compliance more

growth. further the additional approximately Reports, of increase As this well positioned to as capture in from of margin technology to Tailored Dan points an future was drive increase XXXX. mentioned revenue lower sales XXXX higher basis earlier, Suite segment operating quarter new to investments. regulations expense, offset primarily fourth in by EBITDA from due Arc EBITDA The XX.X%, such incentive the partially increase adjusted margin is product demand leverage Shareholder for and Adjusted was and on development compensation

regulatory in XX.X%, in on segment this increase the featuring the was increases, services this based reduction a The changes, lower $XX.X than offset and quarter fourth segment. print, the decrease to our price sales due we mix, overall contracts were proactively revenue a Adjusted to Management Compliance higher increases. more expense less and by points related exited, fourth were from level Communications in service of related reduction sales basis print within investment a higher sales in for activity of EBITDA and adjusted as XXXX XX% companies margin a segment of segments approximately favorable million, impact the and and of XXXX. the quarter was partially XXX Net price primarily EBITDA margin

cash capital. compared payments the free primarily The flow ongoing at interest the EBITDA, primarily million decrease million of in cash compensation in were and the to by a quarter quarter, of and quarter partially driven a $XX.X our aimed million, decrease offset incentive cost partially control lower XXXX adjusted expenses quarter by fourth in was of impact fourth in reduction offset transformation. is cash flow decline $X.X and taxes $X.X of accelerating by quarter Non-GAAP fourth lower in from an the expense, favorable on initiatives the of expenses XXXX. $XX.X driven working million the increase by outdated Free corporate on

of million perspective, our we We $XX $XX.X revolver. million cash revolver, on debt ended From net the and $XXX liquidity as of million drawn on our remaining total to the debt, million quarter a had of with non-GAAP including as hand. of $XXX $XXX.X million well access

XX, X.X December our XXXX, leverage of As ratio times. net was non-GAAP

average shares Regarding quarter capital and per for price we repurchased common $XX.XX fourth the of million $XX.X stock share. deployment, X.X of approximately during million an

we year $XXX.X million X.X for the repurchased common of shares XXXX, For approximately average million price of share. per stock at $XX.XX full an

million As million remaining of December $XXX stock repurchase on XX, XXXX we authorization. $XXX.X our had

we always, remain on all capital As future disciplined allocation will decisions.

we weakness are business to outlook transactional for are the quarter sales planning continued XXXX weakness $XXX first the when expect of to term. opportunities secure As of offerings. we forecast remain XX%. trajectory million of our expect to well adjusted near our in in pieces first consolidated of as market though returns, positioned approximately sales it $XXX non-GAAP our The that backdrop, With the challenging and ongoing in activity quarter margin relates we and the transactional for of we the EBITDA to the range very million

our relates year, operating incremental it accelerating transformation. towards includes to investments our the plan full As aimed XXXX

which we modest Our spent them, million, related support of capital $XX.X products $XX is in the development and is from be technology million that XXXX. increase spending, to approximately to underlying a software projected predominantly to

operating also technology including product expense, system implementations, related aimed primarily operating plan efficiencies. all which approximately and enhancing our includes XXXX revenue our growth, in are addition, In to and $XX operating accelerating improving for of million also transformation, investments, additional

equally or generating and impact will to projects are and these returns investment staged take we the year expect We a at all disciplined above levels. to as approach each decisions, quarter expected throughout with remain ensure

I'll that, back Dan. pass We initiatives off XXXX. to benefit expect it these the beginning will in pay now With substantially of

Daniel N. Leib

Dave. Thanks,

in proof while becoming challenging a in profitable, market We resilient. focused, Our very more We resilient. our and invest very transformation software environment, centric to a financial our is company. further challenging strategic solid as serves environment aspiration XXXX of DFIN well results continuing well a to executed performance and enabling executed that market in in delivering become

capital our more continue While was in I foundation the execute the to transformation. excited predict markets, the ever. than provides profile downturn us our to end current am about to financial difficult solid with of strategic future it our

Before it tirelessly Q&A, the receive to to our been for the DFIN who ensure up quality the around highest we have clients thank to solutions. open world employees like working I'd continue

ready Now we're questions. with for that

Operator

[Operator Instructions]. you. Thank

We will first to CJS go at Charles Strauzer Securities.

Stefanos Crist

this morning, for questions. Crist Charlie, Stefanos taking Good is our for calling in thanks

Daniel N. Leib

Thanks Stefanos.

Stefanos Crist

you near Can and talk the software just in term? thoughts the about growth just visibility your in business on the maybe

Daniel N. Leib

Yeah, I'll sure. This start off. Dan, is

So if we look at our compliance of operating. offerings, there's regardless we're great exists stability in terms the of market demand that which in economy

talked And mentioned, a so annual we're in we XX% rate. we look compounded And out that grown talked as since to as we thing so, same one a final bit of the forward things; is spun they've teens new AD. that ActiveDisclosure two within one from transition long-term, and rate. on a or The is growth we headwind, on -- ADX we about

new are some towards -- that's the us tailwind that So then end that starts headwind. of XXXX. of the bit of towards and benefit I XXXX. benefit some should of a lot regulatory occur there's to the more benefit think And we in potential prominently regulations, will There's a that a say

would, which market. broader really of case which use that then nice the a done has transactions point its last not outperforming I But insignificant is -- we've really out is the is major M&A. a And piece, done just Venue, job

been more well again, is. environment. at a market But So spread, be the how challenging M&A we've the in you that look if will will doing by M&A impacted

Stefanos Crist

how on you. just software offerings? the you software, sorry, total Thank you Then to is can be into XX it. of Got mentioned million much down CAPEX break improving that on CAPEX, or going

Dave Gardella

And around this specific two CAPEX all technology also little a is There's there. IT areas it. goes the our that there's underlying either Substantially product very the of development. Yeah, supports Stefanos portion is Dave. to outside that capital then

Stefanos Crist

it, Got much. so thanks

Daniel N. Leib

you. Thank

Operator

next move Pete at will D.A. Davidson. Heckmann to We

Peter Heckmann

good EBITDA quick that that on think in gentlemen. Hey, questions. kind points of basis of you about would increase A in morning, few operating how expenses, margins? you terms When quantify

Daniel N. Leib

I'd the the thirds referring in you're to is around transformation. probably some think some we I And XX then, base. Pete, its of noted of about so basis. a on -- two that accelerating Roughly, that and Yeah, incremental year-over-year the million of OPEX say

think gauge XXXX. obviously I with or to is terms so, on will margin. depending on transactional think, what margin it That on And has vary happens I amount of basis the tough the market the overall points impact impact in in

Peter Heckmann

was alright. divestiture that related then EDGAR material Online, And of just any subsidiary? there to level of Okay, the revenue

Dave Gardella

They were insignificant.

We think it X.X or million in have I about last quarter was a total. million X year,

Peter Heckmann

then how and XXXX best much and revenue? obviously, back is Okay, you chapters anticipate for on that some great. maybe way do you there still would noted that on think facts versus are and guess closing XXXX, deals, that or liquidating been estimate thinking of I a success finding And of mean, remaining looking be to just of best in about about about are the drag how lastly, haven't terms your final I this of crop liquidations, you written having deals some but those XXXX guess, the SPACs

Craig Clay

we have bigger small is noted Yeah, historically SPAC. revenue. in percentage sure. This made Craig Clay, I'll start. as De IPOs opportunity, past of The the our the transactional up SPAC a

SPAC in had quarter XXXX. combinations, announce were QX There their December XX the most business So active was alone. XX it in

So as began. or at business private valuing these were you their for boom the to referenced combination. about take deal seeking are logic, XXX SPACs level lowest companies obtained to since According their SPACs

the year, billion. XXX X last fell from merger to So million about valuation

a in the digesting SPAC you but this has what valuation, as SPAC a peaked. that And certainly, market De in referenced, also reset shows is been So performance progress challenged.

the it And $XX poor So scrutiny, were trading and lot of of higher. the did did SPAC that redemptions. this market year, completed only a of number at largest cause XX% performance have last certainly

still teams still are a level XX%, But had you market we're have we continue place are that that in together, worst their SPAC when roll lower albeit there, find saw. was looking, QX which what at and are on the that you some deal is capital that than to So quality all optimistic the record. going to

Peter Heckmann

Okay. Alright…

Dave Gardella

it the coming XXXX, as XXXX, the And that a to Dan lack specific in because the is, ADX. AD on one platform. to add of with XXXX, remainder our obviously was growth the lot XXXX, slow the in in The see up of XXXX there clients of liquidations IPO of thing off relates and in it to, we onto AD, did some obviously mentioned of SPACs earlier, is impact, addition I transitioning rate as started compliance nicely. business would really of moving and in In then

that continuing as so, half expect the to everything in then resets back and of year the And first see to we'll improving kind kind of half. in starting of trend the softer

Speakers] [Multiple

Peter Heckmann

Can side, additional some the proceeds the were you That's offerings IPO we selective by years, that as in or than by real for maybe IPO it XX for worked over see lowest issuance XX yields, the XX that now pent deals. first demand you the what reasons in with highly greater a XXXX that transactions. on year were to to the can that half may IPO you're only those year of previously a And in in well, that full small are slowest second was you've largest telling for half. deals. up There the XXX in lead few the us IPOs We're years. pipeline right encouraged happy is and XX future our process clients and commented, And but XX broader we know dominated provide in million.

have for little regulatory being to tailwind approval with without restriction. limited price the a We listings direct new the

market. And could same unused have this work DFIN. positive the So amount a it's of for yet for alternative the

opens. go taking quickly So that when public, we to all our to remain market they'll these given are steps clients that know ready respond

Peter Heckmann

thanks. Great,

Operator

question Raj from Sharma Riley Securities. We'll at take next our B.

Raj Sharma

than you can you wanted of do better understand your bit questions. guidance on thank my see from great? software? and others, building see you us certain to you have be guidance for quarter, sort currently, And, into a doing do for pipeline more for transactions I little first your the and taking visibility is Hi, just on in give just color the transactions that, sectors what would that how you that any

Daniel N. Leib

Raj. Yeah,

perspective transactional even markets the so. kind I million last sequentially. downward capital a think we revenue was when think year of expecting specifically, from I or year-over-year, continued we're So pressure, And XX look both transactional at

And so number. that to relative we're expecting, down again

a on I I think software commented from again, AD. perspective,

So, think things that few the And XX% And also at component is what been lowest pressure growth as continuation the you the we've software margin or our then -- over the here. within better seeing GIC when QX in second range half up. growth typically I a come a look we half we've what last been in the from think first the margin so reset. of perspective likely more given slower we that again, transactional, on quarters and where in counted just is I'd quarter. business,

Raj Sharma

that know on longer commented probably expecting see up you're expect in possibly that? piece, How year the investments then picking of build I in that headwinds, to this term XXXX, but Great. to the somewhere way are something And and is growth your mid-teens into growth. software low should up this that and you so with that we mid-teens there we South should look rates year,

Dave Gardella

But other how the half. and activity does, market has Venue regulatory on largely. tail And better in you to and earlier, a of rules earlier referenced the lack of depending in certain year M&A not that. mid in kind resetting specifically meant even to that what year be talked XXXX. to this around about out the expect M&A be of going will on the some so the back aggregate the Difficulty]. growth Shareholder Venue M&A the things facing second do given range year-to-year or the quarter-to-quarter in market. that's that. earlier then there's them the But in be half guidance a kind is transactional that on on then teen year. that Certainly that what we we've will And And plays broader right. and past we be of done of long horizon product-by-product, be said, And more to would AD of a than some or a function Tailored normalized I we're Yeah, mid the on trajectory exactly Dan side, and alluded but Certainly winds like that then, on there's would you headwind talked about this [Technical teen more Reports, a

Raj Sharma

didn’t We get it, just off.

Daniel N. Leib

guess, I yeah. Sorry.

and what on is add target few we there you two the obviously software. think just had our the XXXX, we over thirds growth last rates as well. as tailwinds Back if driven back and can hit look like software is. Venue. the what third So it double I And Dave with to compliance term in I One And, would long a tailwind is transactions instructive just grew of our regulation. are go years

a predictable we the is bigger point, of two through because part a here cycles. to is less So, there's range it third more becoming as predictable operate whole Dave's guidance a and of long and thirds

Raj Sharma

and year? of expecting or sort on then what lining print it flat in revenues are of a this Got decline you just certain

Dave Gardella

to on I decline print or it range Raj longer would of kind trend secular call Yeah, they the say and the so. back run X%

by the transactions extent impacted are going more documents the the term caveat expect one to some thing. trend could longer Tailored extent that and same transactional that would along then possibly or Shareholder with regulations such the beat gets there the Reports less printed well. The incremental that of there we Some as of those. the there printing require environment would to any future And as might be

Raj Sharma

in lastly pieces? that $X much it software other about disposition how impact then Can have that mentioned functionality the million. the reason on sort and the and know for can -- talk was just Great now was you the already revenue for, I just about EDGAR do you of disposed you talk you Online,

Daniel N. Leib

Yeah.

some perspective incremental business, require compliance level economic pretty as incremental, to so So maintain overall the going an significant just high it. was deployment declining at not look it's a from to investment capital And offering to our at the but it relative core combination outcome just didn't And good found a fortunately was the there, of low buyer for asset alternatives sense. really albeit pretty non-strategic we at make declining think I to investing price a in a a we us.

Raj Sharma

Thank will you. questions Thank Great. take again, offline. I you my

Daniel N. Leib

Raj. you Thank

Dave Gardella

Raj. Thanks

Operator

conclude And turn question-and-answer for the like that closing Dan Leib to call would back to the any I does remarks. over session.

Daniel N. Leib

morning, this forward the Great, ensuing time with Appreciate you and Thank you. to thank months. look over we'll connecting everyone’s you.

Operator

conference today's concludes call. This

may now disconnect. You

Donnelley Financial Solutions (DFIN) 21 Feb 232022 Q4 Earnings call transcript