DFIN - Earnings call 3 2023 | Donnelley Financial Solutions, Inc.

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Operator

Thanks for standing by, and welcome to the Donnelley Financial Solutions Third Quarter 2023 Earnings Conference Call.

I would now like to welcome Mike Zhao, Head of Investor Relations to begin the call. Mike, over to you.

Michael Zhao

Thank you. Good morning, everyone, and thank you for joining Donnelley Financial Solutions' Third Quarter 2023 Results Conference Call. our our results, including be copies the section released schedule supplemental found we Investors historical dfinsolutions.com. of of of morning, earnings a report, trending in This at website which can

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

the our most report For complete with recent other on XX-K, quarterly in annual Form refer and XX-Q further filings cautionary statements to report a release the detailed on and please included discussion, earnings SEC. in our Form

performance. Further, sales. will financial non-GAAP such the we ongoing an with certain refer discuss appropriate information, company's non-GAAP and GAAP GAAP margin They only. of informational the financial the you provided to financial operations of as non-GAAP EBITDA way related Please purposes for adjusted information for is useful and adjusted however you concerning supplementary tables company's financial presentation We EBITDA, information to release information. provides the are and earnings reconciliations for organic information net and believe to evaluate

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

Daniel Leib

strong Mike, million, $XX.X economic morning, good you, We third adjusted EBITDA of everyone. and the million Thank results, quarter adjusted XX.X%. given backdrop, delivered sales and net of with consolidated $XXX EBITDA of margin

that, transactions the some signs despite During improvement, a of weak. quarter, market we third remained navigated

adjusted our the and quarter from by increased As of basis expanded margin we EBITDA EBITDA $X.X quarter a adjusted XXX million third result strong of X.X% XXXX. our third by or year-over-year execution, points

business important our characteristics accomplishment our cost weak proof extended an underlying market managing being namely, stewards and recurring and aggressively that our to mix, broader continuing toward strategy, is disciplined the demonstrates for evolve a a sales through an structure is capital. point of of performance strong profitable Continued transactions

net sales quarter, basis third higher to an on trend. grew of Solutions organic performance sales of our delivered approximately offerings versus our recent XXXX. with Total growth compared last X% Software Consistent software the another quarter quarter

was Venue, net Arc Solutions approximately Software and by led XX% sales Suite quarter grew Third growth and X%, respectively. which

total year's X-quarter made sales, of last approximately of points On and quarter third a third from approximately an Solutions represented up software increase sales, third XXXX quarter quarter. X-quarter basis approximately of XXX Software Solutions net basis points increase XX.X% trailing XX.X% period. total an million basis, $XXX of XXX from the sales net trailing of net

Tech-enabled regulatory of both the compliance Our across third recurring investment offerings. the compliance companies. our needs corporations of performance Software Solutions quarter Services, reflects and and span strength serve offerings, which These and

model. toward our revenue profitable As importantly, benefit we recurring products, higher associated will recurring continue with from to profile of such invest ship we a revenue, DFIN and a compliance financial in more recurring the mix

our and One of each key characteristics component Suite, enterprise long-term as base revenue component of is well subscription of high software regulatory-driven our the possess products, ActiveDisclosure contracts. compliance software which include recurring with a as Arc offerings revenue recurring traditional and

quarter third offerings quarter, compliance Software for aggregate total XX% the approximately and X% sales. of these the net third software last of in During versus recurring year grew accounted Solutions

while such reporting, and us into As recurring growth. into under future Active provides served This and and the capabilities cases deep across domain better current addressable revenue future adjacent with use discussed suite, within single Disclosure use also features platform, and individual SEC-oriented previously, today, recurring building compliance serve cloud-native our current not ability also cases and to compliance us our market-specific the by filing that regulations foundational providing us and to and allows financial market enables expertise, platform are products. markets maintaining regulatory regulatory facilitating we unified conjunction expand a capabilities, Arc composition, in shared a as solution tagging,

As on to has market but taking fluctuate alike. diligence been relates stable, relatively public both place historical activity demand though those based to unannounced, private can deals room to it underlying also announced and data the related in Venue, not only

to and strong Venue's contributed all consistent resilient enhancement sales more addition DFIN. which for top bottom to demand, market's execution this product also and performance In line promote of performance have steady

Shareholder DFIN recurring source and that come have will remains Reports growth July A into effect demand recurring the from revenue in key profile, which XXXX. the come regulatory focused such on a opportunities growth. driving profitable compliance of as will Tailored regulation

mid-October, introduced launching make in Shareholder We great integrates an milestone alpha with we module the our readiness component newly continue SaaS financial one Reports offerings. also capability to of end-to-end features solution, in important industry-leading of and Distribution progress This In Tech-enabled of offering. ArcReporting is Print Services release Tailored just that by our our go-to-market the our achieved our plans. and development SaaS technology our and reporting which functionalities

to to self-service, our way clients combination from adapt wish service a DFIN work, to Our or both. of full full enables the platform solution

We the response clients positive our the started and have platform. onto are onboarding to encouraged by market solution

benefit expect and Tech-enabled of Reports will Software, offering. Tailored each our Distribution We Shareholder Print Services and

working refine look estimated February the currently benefits our to on forward earnings call. and details further are to We providing

of evolve, number As an ESG including serve landscape positioned compliance is and increasing cases, the well DFIN global to regulatory recurring compliance use reporting. continues to

and ESG our adopt increased With of requirements measures, disclosure level suited product. to ActiveDisclosure recurring reporting globally well the building is momentum for the

California to passing September public first collection ESG X and state robust the framework. which U.S., the encouraged data California require will of a state are bills is XXXX. disclosure by to private and publicly gas California greenhouse mandate disclose operating the in by in companies In we emissions

ESG suit near SEC the expect the enact to regulations broader in We future. and national-level follow

reporting Commission. Corporate mandatory will Directive become XXXX as In European the ESG adopted the of EU, Reporting part by the in Sustainability

EU-specific to this our solution. upcoming of revenue regulations. functionalities the data ESG expanding to our and ESG partners, growth ecosystem leveraging look ActiveDisclosure offers ESG our with U.S.- capabilities integrating forward and robust from ready By recurring a of solution DFIN We platform leading fulfill further

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

David Gardella

Thanks, Dan, everyone. morning, and good

delivered Dan challenging in quarter strong we results EBITDA third adjusted environment, As margin. including in EBITDA increases adjusted year-over-year noted, solid a and

in operating to Solutions X% third XXXX. consolidated X.X% of We third the organic growth on including net on XXXX net X.X% the all organic quarter $XXX basis were our basis million reported approximately from decrease expanding million, sales sales, while an growth or and basis, $X.X and compliance a of a posted XX.X%. products, Software total for recurring drive quarter of software approximately X% a EBITDA our adjusted continuing sales to in On margin efficiencies

environment Despite remained third sequential modest quarter, of activity decline. In a third XXXX, in of versus overall markets for transactional year-over-year or level once capital than improvement capital the XX% more in all transactional the third million which the the again quarter, weak. accounted business, was sales quarter markets $X.X the the the down transactional of

as third The X.X% and growth markets sales organic partially sales activities markets as or basis compliance capital which the quarter basis on to Solutions $X.X a well decline capital related an million to lower in increased sales on by in reported last transactional were year. X.X% of Software compared offset

growth the impact of by basis and approximately accelerate margin markets in was by of incremental non-GAAP control XX.X%, offset than and Third transactional quarter cost lower initiatives sales, gross our higher points Software the the partially XXX activity investments quarter third transformation. XXXX, adjusted Solutions to capital driven primarily

in of expense $X.X SG&A XXXX. million, million non-GAAP $XX.X the third Adjusted was the quarter quarter a increase from

XXXX. was primarily by selling non-GAAP XX.X%, investments adjusted As non-GAAP SG&A expenses lower and of from increase control points by offset The transactional XXX basis as was an partially quarter net reduction volumes. in transformation-related a of impact sales, and third driven expense, of a percentage adjusted of approximately SG&A debt result incremental cost a sales higher in bad increase initiatives the of the

an Our million adjusted of $X.X $XX.X third quarter third EBITDA quarter million, from the was of X.X% XXXX. or increase

quarter XX.X%, lower the transactional driven capital incremental of basis control was quarter accelerate from XXXX, to and third markets cost initiatives, XXX Third partially sales of company's EBITDA adjusted approximately the an transformation. points by primarily offset the increase of impact by investments margin

results. an were Solutions third Markets now the basis Net of on organic an our year. sales Software from quarter quarter in million, X.X% last segment third Turning of segment to $XX.X increase our Capital

our compliance product, of ActiveDisclosure, X% sales quarter. grew Net recurring third approximately in the

progress the of expand we to ActiveDisclosure. adoption the During made continued quarter,

third With an achieved quarter. the and of the the decommissioning increase in associated for the we platform count ADX behind legacy this customer during year us, client first time net churn

ActiveDisclosure efforts on sold value AD. of to of nearly cumulative subscription increase million $XXX the platform has value Our contract new generated

second the new quarter is per of importantly, subscription increased client in the up launch has resulted More value quarter of the to XX% to of average from our and XXXX third XX% value over XXXX prior increase from by approximately AD. this

our third quarter virtual room data pricing. the of up $X.X of driven room year offering, were by increased to last million sales higher activity X.X% and Venue, compared Net or

execution. remained room data well is earlier, platform strong our As as performance Dan noted virtual which a demand testament our to recurring stable, for Venue's the as has sales

for was investments in to third of control increase primarily Adjusted and segment XXX higher approximately incremental initiatives, offset EBITDA cost the due by technology sales the partially XXXX, of margin an quarter basis XX.X%, from points development.

transactional quarter primarily by Capital from Management million, & driven organic XXXX, activity. of basis markets XX% lower in $XX.X sales on Communications our decrease a Net were segment Markets third capital an Compliance the of

the half albeit we well the quarter we remained decline anticipated, the lower transactional in modestly the capital than and of level last of year. from year's third below at first a quarter As the activity of rate markets in second experienced improved level,

demand share transactional remains a positioned stemming when activity While negative uncertain, market transaction-related potential from DFIN very up. markets future for significant the products government including outlook picks capture a of to for well services capital is impact and environment shutdown,

Compliance XXXX. million of versus quarter revenue $X.X approximately was Capital the Markets or XX% third down

it as driven third quarter in year. offering, year our to second volume certain is in and year's recurring net were special their our Compliance a nature, is ongoing compliance period. filings sales and with This decline which shifts filings proxies, period can third client Markets While the lower X-K event-driven mostly proxies were this of corporate including fluctuate needs and completed Capital by special timing recognized was from the which recognized in but as component of certain clients which a last well completed event-driven, quarter of supports quarter

cost the debt XXX increase XXXX. offset Adjusted segment primarily bad in for to margin expense. approximately volumes third quarter higher EBITDA due and by EBITDA basis was XX.X%, an partially adjusted increase sales the was points from margin initiatives, of lower control The of

of Net increase driven primarily Arc XXXX, Suite a XX.X% by segment were an adoption organic result our Investment as in the sales companies. an in of quarter investment Software growth million, XX.X% on revenue of within third or continued basis $XX.X Company Solutions of versus strong subscription

In in that services addition in growth, and revenue support the related third higher was realized subscription to revenue nature. the filing onetime a to regulatory-driven we EU the quarter in

the a more expect quarter. normalized growth rate in fourth We

We performance Reports Shareholder capture to are future Arc encouraged by in such regulations and the third the remain Tailored quarter growth. opportunities well revenue from positioned as to drive recurring Suite of

EBITDA product adjusted due EBITDA margin was approximately development increase for quarter offset cost an on technology partially the sales in from XX.X%, The leverage initiatives in Adjusted third investments by the was basis of control opportunities. of higher primarily operating margin in of segment XXXX. to growth the XXX and increase and points support increase

XXXX, from were primarily the in X.X% special project. sales increase to Management fund large by Communications third and higher driven segment an transactional Compliance our revenue a related Companies mutual proxy $XX.X Net of of Investment quarter million,

was Adjusted print The third higher consolidation continued the XXXX. initiatives, impact of cost sales due in from higher control XX.X%, primarily including platform the was of adjusted increase and segment approximately to than points basis EBITDA for margin margin our quarter volumes. the EBITDA synergies XX

an from cost expenses accelerating aimed increase primarily the transformation, an control in million third of at XXXX, impact the increase Non-GAAP $XX.X million unallocated quarter corporate quarter, partially expenses initiatives. of our in the driven by $X.X were by of offset

restructuring cash The capital year-over-year to was million and higher in to quarter an payments, expenditures third decrease a in technology partially quarter of free interest is offset of by support adjusted them cash related the in higher driven by to underlying flow decline our $XX.X in XXXX. the $X.X EBITDA. Free investments flow and software and increase million, products compared

at $XXX.X million the debt including non-GAAP down $XXX.X on of drawn quarter the revolver, of $XX.X the net debt, quarter. ended total from million with our drawn $XX.X million end of We million and second

liquidity perspective, hand. of we revolver of From remaining as to had $XXX.X access a as well $XX.X our the cash million on million

leverage our ratio As of September net was non-GAAP X.Xx. XXXX, XX,

seasonal, generating the historically year. As of flow than cash cash half a more free in all our flow reminder, is the of our second

approximately $XX.X price $XX.XX common deployment, per at stock per average approximately XXX,XXX repurchased of through price shares average repurchased share. quarter September for for of shares an million Year-to-date during an the at million $XX.XX XX, XXX,XXX capital we Regarding of we've $XX share.

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

Going approach balanced forward, to towards we will capital a continue take deployment.

to as in strategy view drive key repurchases capital investments transformation, and each and will area. this continue reduction organic remain our our net deployment debt We to disciplined components of share

it to the relates for of As outlook quarter fourth our XXXX.

and softness the expect geopolitical environment We due headwinds continued factors. transactions in markets to capital macroeconomic

revenue modest $XXX We very increase EBITDA quarter in and margin range. the guidance, last the $XXX the in million year-over-year sales implies consolidated the sales. to fourth net of fourth net million of adjusted expect in quarter a to of million, consolidated year, range our mid-XX% midpoint Compared $XXX

I'll Compliance sales Communications Management million. the midpoint color $XX for At also more on bit sales Capital we of assume and a approximately our of our assumptions provide segment. Markets transactional the range,

In my decline addition, to fourth assumes the and year-over-year compliance-based quarter modest within earlier our of notably X-Ks, in related certain sales the compliance most and this environment segment. estimate filings, transactional proxies our impact special on regarding a comments

Dan. now that, With I'll back pass to it

Daniel Leib

in Dave. continues Thanks, The demonstrates perform DFIN's further to conditions. to of positive varying deliver and well execution our ability strategy market results

profile our us transformation. continue the While for the foundation execute with markets to market outlook solid capital the remains transactions uncertain, our to strategic financial provides

revenue accelerating base market maintaining to our our elsewhere. Our share while continuing focus grow mix on recurring by shift remains business

will We platform Tailored created Reports, in regulatory by to regulations, to on tailwinds such Data Transparency the and Shareholder our continue software compliance capitalize as invest ESG Financial Act.

operational manage maintaining our In of aggressively our addition, and efficiencies costs capital. to drive we will discipline continue historical allocation in while the

extending strategy, to the We expect the capital of In benefits our and plan driven execution our broader are midst new environment, realize through operating preparing macroeconomic of continued headwinds. expect additional regulations, the continued XXXX, uncertainty in our plan from and XXXX. in long-range XXXX transformation we operational transactional markets yet by

and February. Through value past on Consistent expect and shareholders. the our provide practice, continued update we expect XXXX planning our period, an in we higher with clients, long-range to in delivering employees for progress projections

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

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

Operator

line with Our first [Operator CJS of Securities, Strauzer Instructions] question Inc. comes the Charlie from

Charles Strauzer

a little of about really recurring lot towards provide and bit avenue, boosting will. more mix talk more about more Maybe appreciate a efforts that drive recurring a sales you Just revenue color if we little bit your the there could and revenue. talk to

Daniel Leib

Great.

see comments. and start, additional you me any then have Let Dave, if

the course, at attractive serve is they're as financially and So and obviously which, demand, of clients. the as corporate And recurring rather, important performance tech-enabled to the demand market, the recurring we -- serve but we our software also markets the start event-driven, offering addition, solutions. or then an in And offerings we and business we nature by serve drives transactions characterized both predictability. that's serve in of well really

has the serves. something and its then predictable where process or than transactions markets consistent breadth the the like business more middle, And because Venue broader been diligence serves it of in it than of sits its that our the or performance --

predictable predictable our spin, clients' you investment in do and new some areas clearer more really through as serving been Dave we new the of split to to the needs. the have and pieces. so and more geared mix for least time, reporting, regulations, our compliance since of some of that includes back, disclosures, And new disclosure Over cases event-driven have support as offerings, if We looking well use has will towards expanding we look a recurring, a take view that And planning of at that can that. and demand. out help business, our include various get our

Dave?

David Gardella

Charlie. question, the for Thanks Yes.

the in provide detailed noted, presentation. investor Dan by of we sales our as So do the breakout product

of segment and data, Compliance a the can I that call think that The sales both Management good of Communications sense. compliance get bucket. in from what vast pretty fit you would we majority

should of software. company in things remarks it majority, et Dan cetera. -- File the recurring and we event-driven the to touched just that prepared on proxies, is -- I the right, All go and in the what on when XX, it. like ActiveDisclosure, nature. The special we of you or There say, the vast then things, capital markets commented investment And all call component like really of compliance a is software,

And that the out be breaking in so we'll future. detail

Dan here. again, touched than while M&A M&A for tended and the it much et And primary is on use remarks, like then deals case much, we Venue at the be on the When look it more the certainly commented Venue, cetera. completed, Venue's to think, in broader getting consistent prepared I you something M&A, market,

I activity, think much getting of regardless or more to diligence whether underlying are stable the completed when you look not. tends it be deals at just

Charles Strauzer

follow-up competitive And of maybe pre-pandemic today a avenues? environment Great. What it the look was like just does there. those recurring software kind in versus

Daniel Leib

Yes.

service improvement distribution. made and for offerings, we've I into including time a software our expansive think our us area a the I differentiator the being to over nature of from the into real in offerings, of has bridge lot able been think and

going to If like look expand X of Shareholder offerings. and Tailored you something at across Reports, that's those all

a And standing That just is internally of breadth so combination as what either. said, doing offering still we've I competitors as well helpful. aren't the our been think of

progress really remain about but markets feel the we've so been, And competitive good made. the always we as that they've

Operator

comes next Heckmann D.A. Pete with line the from of Our question Davidson.

Peter Heckmann

morning. of this seems It seeing Are dynamics is within much piece player the But had I players. talking side about on the compliance wanted some follow lot the there? shift and like thing the to strong missed to one then you me competitive of up of maybe one smaller business. activity software on of fragmentation I the overlapping some call, a

how compete, Do do or do you with see with maybe -- those how on players you you guess, out, functionality? that just the to subscale business? the mean, software I able yourself not of But shaking importantly, out intermediate kind side see tech over term? I shaking feature see owners the more some the out of aging of being competing

Daniel Leib

offer. product me to start Sure. Yes, in. vary let others jump going can It's and and by

in us, at X. we for #X, X generally offerings #X, think or I you to X economics flow X leadership And we're of look if have. each that the or

So that said, there invest comment, are we're the more. said last I happy with like that we're competitors, and the make it behind in formidable we'll continue progress but making, to to

question different standpoint or to obviously, the Specifically to the or we've financing, market, behavior. the increase of thing folks' going in your it, one We're public owners the in cost been the interest a rates seen, applied a with from seeing some torch. broader -- is valuation of on these businesses and that raising both lot a out businesses not passing and have private, having repriced. Recently,

with against executing we're on it. us, very for our But focused strategy. We're comfortable

mentioned pushed both along helpful to sides ourselves play in think clients them on can more certainly last the I our want and work and software both progression in orientation. we progression I for the work, it towards getting is But us. really push ability side along and to the which differentiators the in meantime, sometimes they we've the the the question way of software is that got with the

Craig Clay

to build making that compliance on with the ActiveDisclosure necessarily maybe we're isn't software. quarter. The Dan, this progress reflected in

QX, a which we've net at client count. -- QX had And in client is look in that so time higher I first the count increased

disclosure the us And be the platform it's market. on in I'd we're newest than ActiveDisclosure see fit-for-purpose excited the else. tool because anyone by rather what we

needs. SEC for of using are have their most It's it delivering. client purpose-driven. on built compliance success. clients We're our Very and So important building it ActiveDisclosure decades

remains Price for a strategic opportunity us.

contracts. are contracts. to achieve better the built-in product. our price multiyear this value with renewals So of and been able recognizing up clients we've higher prices And They're for signing longer

average contract is now Our cumulative months. XX length

for relative what opportunity able additional gives charges or price at the ActiveDisclosure us that does. an market, are accomplish the competition, which to can We who to modules expensive below add-ons

want So you can for pay being buy not you what multiple forced contracts. here, modules to other with

we're totally new that opportunities focused competition decommissioning the growth. the logos. pipeline really our done, the future ADX net metrics our With for we on We're into And funnels. on of bringing encouraged see more we're by in

Operator

line next with Salvas the of Company. Needham comes question from Sam & Our

Sam Salvas

capital progressed Could I'm those on maybe seeing Kyle bit talk the markets what of about more guys quarter? today. you and for just you're a in throughout trends terms how

Craig Clay

Craig. Sure. you This question. is the Thank for

last continues that we look that is you not straight if the IPO going it first, in certainly at IPO think and October. I market the be and time market a said QX, saw recovery I line, to in

raised QX. XX% quarterly So in some we the Arm, QX. of had big IPOs had We proceeds which in

-- We also haven't in marketplace. It's well received Instacart had Klaviyo. been always and those the

had from microchip filings filings, were file So the XX which greater XX, were remaining -- than $XX microcap perspective, a companies. we in nano, quarter, million. The

it out So in that quarter, to X above speaks weeks and small priced the X in million are of those IPO took raised companies IPO couple deals last XX the trading price. IPOs $XX of quarter. of more $XXX had raising than X in of that who the the the million. We their place the noise really there. market the

for filed, working market we XX with XX include had the of And pipeline publicly confidentially. have filed nice. the companies it So And in is those. that companies certainly doesn't filed DFIN's the

enthusiasm, you've resurgence depend in the and seen these going there's we waiting is But dampened of still market, think for quarter how solid So companies pipeline do. are the a IPOs IPOs that the a of first to XXXX. little there's second quarter, late certainly, on

the rates, situations. economy, Assuming we stability geopolitical some interest get in

have success. Carve-outs a been

a out bright we've had of IPOs. companies carving spot continued So

So the And a nice there's pipeline. worked a which was we IPO. with Kellogg's, in we which strong had quarter,

there's of are almost working We're X about all spins that with major So terrific. them, which working. really is

certainly, was M&A, I very exciting. as quarter then to the move And not

in in deals the October, X remarks, volume has years. monthly note which be M&A bright As down over But greatest XX%. seen a referenced in we the

quite So XXXX for to for and some we've in certainly, are place These had that while, month deals time. the obviously take events. a busiest going us, be

this But DFIN few listings mix all is The our only change going think, well-received And deliver to as private It of strong high what M&A, demonstrated change very can the the equity, does deal profile, has that we takes sentiment. to mean? normalizes, a de-SPACs. market -- history profit, IPO, high business quickly.

more And back and software their deals these are importantly, support revenue question, clients pipeline software the for to subscription our we transactional because recurring a ongoing reporting needs.

So a we result recurring than market. is think we better is activity think it we're performing and the underlying From high, software. engagement transactional in perspective, high, will

So Dave, I don't to to know want if add you that?

David Gardella

think relative sales. million say a XXXX, in context it couple transactional the just business And of to of things Yes. $XXX I was into where put I north would to just

under when so. I we're trailing X-quarter think basis $XXX on I you half of about look well think a that, now, million or

million QX; quarter-by-quarter, slowly To quarter. and and million million quarter; $XX fourth you Craig's like go assuming has said the the from year QX; how to in $XX in point, guidance, $XX this for million $XX look started when you recover this to in at we

well for the high in range the that still $XXX So we XXXX. watermark saw year million the in is off

Sam Salvas

drivers behind the just in the think I should to quarter. of talk too, touch strength And maybe? there? about gross Could really some we then margin impressive. this wanted guys about you Those those going the expansion how on just forward, And came

David Gardella

Yes.

as you offering the incremental right, that leverage shift software. same, the mix continue the get on of to very, operating more margins, is it's very look, we towards high. think, The I

and structure. part cetera. of the doing our -- it's when some recognizing increases, referenced also the a since offerings look in managing product et you think And we we're some of I price DNA, where on really tremendous spin, the been job cost really

So margin, all the markets factors Really, soft capital the quarter. contribute really to margin -- the high gross in in strong, transactional not at especially only those environment. the EBITDA but XX%

Operator

Sharma of B. question Riley. next from comes Our the with Raj line

Rajiv Sharma

Solid quarter.

were that on QX. decline Just Could transactions I to had that, there please? were And of is to continue? the compliance color seasonality? impact all due add a lower you see Is one-off couple that proxies. questions more the in to

David Gardella

Yes. Compliance talking absolutely, Raj, I so and of there. compliance that Markets we prepared There's Communications it remarks, is you're segment in it we the assume revenue Management the -- right? seasonal. and And the -- call and Capital noted part about

So you seasonality, look typically year-over-year seasonality would the in is prepared similar on years. with normal a the note the peak. you basis, when QX comparisons and being at the remarks see did obviously, the between We that

The other same companies of the there that those few of a factors kind in and XXXX, contributed fact in proxy were and to filed proxies recurring it were the were that of work QX that QX XXXX. filed

So bit do flipping we QX, QX. get a pickup little way see that and you in in then other here of a the back

associated with we in type some also proxies the of And didn't the level that then were there and XXXX, event-driven addition, quarter year. work of are activity in which special more this that the in occurred of third have third quarter

Rajiv Sharma

need on requirements. from a forward XXe-X of for the Tailored Got in it. is terms seemingly just then impact Shareholder And is or services sort going the the need the question for -- the The different output Reports. print of

print now that raise do output print that and how Or lot costs needed of and... has been a does handle TSR, margins? that reduce sort more if for rationalized of So the and is outsourced you

David Gardella

Yes.

it's Eric jump more And Raj. great some I'll comment So and a details. question, with in have

software. regulation the seeing in is but -- our stream what's be talked We've as way that part part the revenue required only that print also as that we well right expect past output we're of of there. currently, to -- the you're not the print be So and see services will will traditional

the and structure cost your it question affects to how on Specific us.

And to really, our facility done all margin, gross our manufacturing single to really job. good printing. we've of location. As on a know, consolidated you print we've earlier outsource We digital the a down offset question

about effectively those it's fully a printing components, model. you variable the when -- X will think And so offset

a And impact produce outsourcing cost we bit digital it. to the on have on the a our there. so model of And than no we the different that and revenue equipment, structure work need when other that work little

time, As print the how seen, the have as given platform mix we're how gone the the over our and outsourcing. digital up managing as both we're treating well margins you've just --

answer so change the if structure. drive the to the that But serve kind And good and to some incremental really margins of market with and about cost offset really there obviously is revenue. print print. the dynamics going costs feel or There's that how forward, we're we regardless no positioned short digital it's solid come variable along

on add the regulation? to anything Eric,

Eric Johnson

on Dave's document, Dave. report, Raj, much fit comments. the page a a Report so is if platform. digital larger an Thanks, our annual building just And much Tailored The much, it's great of smaller Shareholder for think count you

while classes of the pages of increases, the actually decreases. distributed So number share number

extremely again, So that well. our fits platform

But share your tagging filing. you question There's I think discussion and around of is A as a were as bit regulation class impact. But can question creation think the where mix a Tech-enabled reports, around spectrum that broad maybe to I DFIN which on in Solutions, our the is lot was done of this and going a the downstream well then of with be the expand and to of key tagging services our software the and extremely fit it, iXBRL. your well. the

electronically from solutions, clients digital requirements, print the to help distributed, to all beyond the that meet our and this that element the an there's to our delivered. reports and share value-add be tech-enabled have across spectrum. DFIN both those where web-hosted class And there, demand software, So this, provides ADA

significantly manager-type the our certainly, but the does distribution but printing has which a of more also insurance lot spectrum impact, side not is digital fund activity, impacted this, a it of drive drives -- it it only side. solutions. on And services investment across there's asset So

While investment comply to side has share are requirements the the insurance the of funds and regulation. also class business significant, mutual the the with TSR

big complex coming that. there's our So there DFIN very are a impact well, as ecosystem, clients and to to manage

of our Dan we important TSR flexibility the output to alpha earlier has and it's a any release linked, that a I strongly allowing earlier, a output, and that for the to then drives The talk solution release, in October that and deal dynamic had processing and release. output. the press report ultimately And enables straight-through mentioned that our post-production element be to template's need reconciliation. had distribution think great about financial in eliminating note

production our way of managed enhanced then giving distribution. full view clients dashboard all from the then their a stand, TSRs through of by experience this where whole And

Rajiv Sharma

just on one question Tailored coming. Reports then related are requirements to SEC Shareholder that and -- the the And last mandates

So they will drive growth. revenues software revenue higher for

you grown in has year. could But mistaken jump you where bit How by jump a Correct last, let's that. significant you say that? growth understand the year-on-year fiscal doubling go from to talk a software current is I'm a in growth rates forward? talked And do 'XX. software me say, how rates on little going you when doubling, about that from there -- to -- pretty to about if is That the

David Gardella

take to happy that I'm Raj, one.

your out, And the so a I to point, get answer. those run may And think historical rates. at just you if you growth look you different

talked new about into like the of address play, with I TSR, think new compliance when we've the platform look our single at regulations regulations. potential to coming you some

also continue I or will over software the traditional we aspect software certain that, a migrate parts an work services to that there's time, business offering. today, through offering hybrid more of of a think toward

extending But in midst about we are we'll we're the out so thinking forward. highlights February in more our of some going the as And the of projections, of we're we typically share mix overall of how said, and revenue those long-range like do. just

Operator

Leib There Dan for the closing I are no would like questions remarks. call to time. now further to at turn this over

Daniel Leib

thank Yes. to on to call investor prior everyone, that QX forward at in you, our some and speaking Thank and conferences. you, We again look February joining us. for

So thank again. you

Operator

would all concludes This joining us. like you now and thank today's speakers and you now may thank for for presentation call, today's to I disconnect. our

Donnelley Financial Solutions (DFIN) 1 Nov 232023 Q3 Earnings call transcript