CNNE - Earnings call transcript Q2 2022

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Cannae Holdings, Inc.

Second Quarter 2022 Financial Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded and a replay is available through 11:59 P.M. Eastern on August 15, 2022. With that, I would like to turn the call over to Jamie Lillis of SOLEBURY TROUT. proceed. Please

Jamie Lillis

and for operator afternoon. us of all you, joining you this Thank

Ducommun; our the our Rick Executive David have today, Massey; Bryan Bill President, On we Chief Chairman, call Financial Chief Officer. Foley; our Cannae’s and Coy, Officer,

Cannae’s that remind including number I and hopes, conference future uncertainties. of expectations, following remarks risks to Q&A statements statements forward-looking statements that may this and Before we contain strategies like are that or listeners facts, regarding begin, forward-looking our would are about not call historical the involve intentions And a the statements.

are management’s projected. based results forward-looking The actual whether not to statements management. based Because Forward-looking those future expectations well results statements to update obligation any and and are may are statements the on operating on as by assumptions and fact, made from such available company of as as materially currently statements, no differ information undertakes to beliefs financial as information, otherwise. remarks and which other also include this in future limited in include released risks but measures. the a to filings and result quarterly non-GAAP the other shareholder to, with our events to our are subject afternoon and of The uncertainties factors Today’s forward-looking are financial or was new not statements which SEC. letter risks references detailed will

Bill? line like with questions. financial reconciliation for Additional the a now information the provided turn remarks is information, then GAAP who our over non-GAAP will in Bill information, we’ll letter. to the few Foley, open between would to including to Cannae’s your call shareholder I financial open brief Chairman,

William Foley

we cycle. prepare themes the inflation Thank rising interest you, for quarter, focused two on main Jamie. to Yes. the Through in rate second

to excess we value. which repurchase fair a liquidity discount meaningful we believe First, shares are trading at our our used to

our pleased to Overall, to inflationary by optimize are environment. to inflationary growing continue an very tax were we ability their immune position. our Second, companies simplify we less and that portfolio an monetizing to or our with portfolio generate that either in investments cycle helped profits continue

quarter, we repurchased representing X.X total, on undervalued have XXXX, Board X% repurchase outstanding. Cannae from the invested shares. since we are we but only million we shares, believe our shares of outstanding we the In XX% in repurchase our shares our approximately our companies. common program to of for portfolio million million shares of have have $XXX not as During approximately X.X million we XXXX the authorization. our our received continue are extinguished repurchased so XXXX Year-to-date, Board approval have [ph] X.X remaining only our too authorization shares to quarter shares At that end, completely repurchase and

XX our our intrinsic they As a below announced June, a investment. share when original premium an AmeriLife investment our repurchase our like value commitment authorization demonstrates shares new million further Board significantly values which to at significant has a approved to repurchase Cannae's are stake trading are they result, X-year In that today.

March of invested H. stake in Partners, for XXXX. AmeriLife in As XX% $XXX alongside a or Thomas Cannae reminder, Lee million THL, a

AmeriLife past have to the and THL we organic Over accelerate in years, and M&A. through the management two with strategic collaboration expand worked growth team

or wherein initial results. strategic as Partners. to million investment Genstar of equal it pleased from This multiple position investment take And THL the very made investment two a are years transaction led at with ago. Capital our an Cannae's original X.Xx $XXX We with a will about ownership they values

company. our of Cannae we involved remain and a & upside as anticipated the investments remains long-term a the this very we the While portion in our largest we that perspective from Dun enter Bradstreet holder, a of significant potential closings monetize half position one through given will our investment two see year. where in second

organic with alternatives. revenue closely while CEO that opportunities was delivering with is as evaluating work broader and line currency the tuck-in X% accretive end, they revenue strategic growth to organic We to guidance acquisition Anthony strategy and leadership To continue and range DNB X%. believe execute Jabbour, the of DNB's on that their was team We basis in accelerating half to an valuation. growth our growth X.X% a which driving improved constant organic key first

Subsequent in they which September in a We share will all are million quarter generate as of to Dun per X.X tax will average. to peers continues to dividend to trade & also the year. pleased and approximately well similar we pay trading below performance Cannae second DNB sell hopefully half obligations per end, of $X.XX minimize improve the per of Bradstreet in dividend year quarter peer that paying did approximately cash this of flow a and shares $XX DNB's begin million its our

second Alight see public perform to that of quarter with XX% of continue growth upside Cannae We XXXX now holding one important revenues another is their significant reporting under continues to DNB in revenue anticipated shares. and contract. X.X% well, for

is as Alight management in Importantly, growth platform to model to valuation. recognized which or reflected clients a well as very to execute in team transition model year-over-year BPaaS add a their yet continues as a and and BPaaS BPaaS products not Process we their they Service to transition their continues they their XX% believe to Business revenues. to roster Alight

increase to shares our quarter, In revenue X% repurchased earlier, simplified noted the Board In share adjusted year-over-year the of of XXXX and aggressively full we given Directors further the and reiterated Management our guidance X.X%. year for to second which guidance $XXX and program. portfolio. and an fair repurchase X% X.X% increase discount value, as in a second an in EBITDA of the authorized half provided represents between million fact,

we within work their the continue to management teams will We exists unlock successfully with to ensure that our value businesses. that help them

for private We also AmeriLife control substantial investments shareholders. our new unlock where Sightline can our take apply will positions and like to we for look and playbook value

attractive opportunities. investment several in interested currently are We

a with and Wynn companies. Las Cannae will the we executive conference December hope quality that December. hosting event that Vegas. this I'll Lastly, December. turn our be of question-and-answer call format. of second another XX inaugural us management year's year in at X-day great to the the teams event all full to We Last constructive in-depth believe was to presentations successful our Vegas a was our a conference look operator And session. and of portfolio discussions be annual in will you continuation We on this conference XX with and same Holdings Las forward begin filled portfolio can in join now back

Operator

comes with Campbell question John first Our Instructions] Stephens. from [Operator

John Campbell

a It the almost sounds development Congrats AmeriLife, Xx of positive return. was on that nice. like

of maybe that the half of don’t in this looks for monetizing what plans then if mentioned it’s timing for And back Any year. know [indiscernible]. I You like? maybe, sense kind that

William Foley

a will Well, later. years be the early John. the payment to out AmeriLife. about XX a of looks into going our cash but amount first get going again, cash roll half the take next In off half, of transaction Yes, process. going to September three the feel late or in the XX% It it's couple double over back another to, table. about of this fair first we August -- are a it going We the our investment to of we're or case, triple overall continuing we're like would be investment position to and looks XX of like days occur X-stage like probably second

John Campbell

as And helpful. XX% a that's is the that on right? I that's performance Okay, reminder, on guess then fee, AmeriLife,

William Foley

I'm sorry, John.

John Campbell

is LTIP, XX% the On it on fee? the

William Foley

AmeriLife our... is one of

Richard Massey

all under Trasimene our portfolio. It's Trasimene, is John. This

John Campbell

Football the the back then and, to And Eagle mentioned. specifics any guess, Textor it. deal. I didn’t see Got I

through I for what some It sense a is know commitment it still funding you’re there guess, kind I’m to your guessing time. still So standpoint? from of, going looked weeks be? to But you’re couple equity early details. maybe that maybe too And development you deal out going but to going was I was it’s the thoughts And whether information. probably are looking guys a ago a over was there like ironing debt probably ultimate on that then any of roll or maybe how then

William Foley

with be going come $XXX There's to about pull million anticipate If it's ends trying together. we commitment. a transaction we're John, still Yes, loose this a together. lot of to things that

the we to they can that John with, that PCAOB is ensure audit -- the Textor can a they basis into involved We and fill other acquire can have that get Eagle need and then that the that of and football timely that assets to further audit Football. there get various contribute balance assets a on commitment OL

idea. this time. be at million target like if the like And moving We it will a it the remains commitment. proceeds, $XXX a concept. We roughly really it So

John Campbell

some the there's framework figures potential? I for any put from probably again, kind early helping too on over out revenue the frame but returns. Okay, there, I've time the far particular. seen And any know as very targets the helpful. don't some guess, growth of of what But as up kind if they've any return sense out for Lyon in sense I

William Foley

speculate elements trying transaction this really We at moving with pretty to so on it’s this really. to It’s returns mean that, right there’s many -- John, I need point. speculative, now, that estimate

Operator

[Operator Instructions] Our next with Zaffino Ian Oppenheimer. from question comes

Ian Zaffino

details. the very Thank for much you all

way Bradstreet of wanted thesis Dun in the motivation or What’s there. business the of confidence you the thought your on shares process. sold sale? on and Maybe least of to thoughts out & of initially you sort the maybe kind at the ask that we the playing Just business some the the

William Foley

that large mean, -- and shares this Ceridian million have in value $XX.XX line table about to shares Dun $XXX reduce be time. a raise that And XX It's that $XX.XX we shares. in off a to and we can sold take didn't of we cash we for repurchase investments, shares is loss If for other to And of any the investment our bank loss IPO credit is got million we to I us make currently of like that shares we Bradstreet the because we position really said, repurchase pretty were This to a at and the & into some sure where course, happen that was going We money raised recover before a tax X.X kind We just take we the the a But made. all make go like company. role really hurtful just to tax a in distributions and a to be shares and sale. to we with significant is we give said to we did that bank. that our obviously $XXX in tough Well, of were of it which, felt time tax sense time in some of of incurring we company particular, going. like disposed it the million terms position. to having together very acquired in we bill thought, investment. around or we does we some own Trasimene some or wanted from a money million to have

Ian Zaffino

great. to or you there exit also you’re a about Okay, thinking sources about then, Good. are how you Just going anything of that that. monetization? immediately Is to discussion And continue exit? maybe

William Foley

we that a investment really we don't really the And that shares path Yes. any at our It's liquidate other lot just we companies, treated fairly portfolio don't they're now. obviously, very balance We to We like in Ceridian marketplace time. -- want to of more great to we're earnings. want And of a been couple being feel just -- really of reported this we've the future. a have like we The companies. Ceridian monetizing not great years like feel pretty about remaining -- really really excited of got there's our it. for

in a priority Dun high to of So now. with of which monetization & viewpoint in position is a shares to kind good a but the investments repurchase sale, right also our the in make AmeriLife we're cash couple Bradstreet continue pretty

Ian Zaffino

you the to becomes large it discount looking act look Maybe the aggressively And super spread thinking want one more. could are at of in that, the and a or how then understand if like you the us how like point are what just to about and to when you stock? maybe of relates like the at MA I if your NAV have squeeze buyback point And be, aggressive help last in some that spread base? at Bill, not? you you your does buybacks and so

William Foley

Yes.

to half that market it we -- we their have when mean I I a That as to had saw shareholders. frankly, we window that prior was position going position they when really kind I think bought X-year of stepped $XX.XX first of to to we happened like go year was around November kind X spinout. was out due of that shares with you what took -- to really the So the that FNF sell And of in the thought part think the to they up they we were got the [ph] and this our to in that value range really acquisition. which,

So current pretty that if to higher be us buying more at you point. in much in we And we're kind market again see downturn stiff and get piling shares that get at we down going really we and marketplace aggressive the even levels range. back on a of and back the below got $XX, $XX would

Ian Zaffino

probably and taxes, [ph]? pass thinking so that you're that of just in just other none And Okay. in if of bangs get houses to houses on pass one changes, won't the going

William Foley

our the past pretty because have had -- over an the don’t we And Ceridian we we’ve year. situation we we’re liquidated in mean that like paying taxes. tax think hand we sales Well, much this as feel really with I in past Yes. investment.

in our immune We’re at portion investment. are well to now And revenue interest good of in for part then to when are looking tougher. in playbook times higher and them at to positioned rates recurring what look to of looking be a that on looking and companies. get and of inflation, we’re number AmeriLife times -- good sort inflation at a we they’re like interest to right kind that strong rates, what tax companies like of we we’d dependable But feel a be can pretty going just all like little very a and really for have and of relative invest and our models time they’re which consequence portfolio

Operator

with Research. Our Chris next Singular from question comes Sakai

Chris Sakai

And best public had possible either on or where why? rather in seeing a markets? you the question I are investment private

William Foley

SPACs now have moving we have been not -- We're Yes. we two that deployed.

the environment, for opportunities, in that are, difficult very are with So particularly today's in in SPAC SPAC. we company selling People interested continue market. the look not to frankly, partnering today's

or that Rick we've of take doing So really investments been if to at can and screens -- either and take or looking make private you'd companies about companies control can and like in lots but that hard private this we we've talk of. more are

that? Because Rick, you're anything one... So add do you the want to to

Richard Massey

No, that’s all.

please. ahead, Sorry. Go

William Foley

mean waiting for you. I No. I'm --

Richard Massey

-- so No. It's sorry. if --

we've and if all pinch economy, handful going got looking talked management and they're open. you very around much we've model of be can some don't -- doesn't The Okay. bill that -- utility at interesting companies subscription are the to where open, the to model, we they customer the model, point those. a a Same in

lot a we're maybe to be stuff and And a Bill. them want of that might we them there not -- there's a if will of partner of couple done people surprising some be. But get of with them and good out lot

Chris Sakai

you’ve made? acquisitions And investments or Okay. how do have idea about you new an many then,

William Foley

mean, to range. it to assets for buyback monetization Well, in And various trying investments million I depends our $XXX I We're million of look upon can the $XXX really program. take and that.

Alight year -- So we investments to of goal of SPAC way our in and in that it up the kind with had we Alight the do three through is build in these done possibly past Paysafe. and our have backstopping or the two acquisitions portfolio and up build not a the

And market difficult we're we've from away So model. the market -- the moved now. that right is -- is

the and have we rates. interest So and navigate navigate to market inflation

Operator

with Our next comes from question Stephens. John Campbell

John Campbell

$XXX of I the it just I Bryan. a for question This saw question monetization, those you had quarter, update that a the a guys DNB the add in but I’m letter, makes come up you August looks on there $XX If guess, little bit like is million. cash. still short. housekeeping I closed between Is maybe that this out in as is anything million Maybe up call X, two? difference to

Bryan Coy

been but to balance million fees should another should come $XX DNB exactly got Paid it management the management quarter of less now. the the fees have plus like we've what million, end sheet on on at out $XXX

John Campbell

the fees. net a Okay. I management taking was with

frame And But a was combination what on X-year guys? [indiscernible] partner? find don’t than Okay. sense. it’s like lot you harder that? that mechanics last that there sound you around Bill, time And the a think this What a Makes trust? if I there’s process on does maybe can you the return cash -- look then looks it a it like final to what like? Is probably time. us remind partners, does then, look from year the like for

William Foley

Yes.

imagine, is trust an a have after and from And different find because What right. candidates X-year shareholders. it's environment, easy. couple and investors of these difficult. them But that, to it's we're they get on candidates acquisition point merge process-oriented. Rick extension unless place is good and day. with. candidates and the returned exactly but with bad that to several in have that Duke happens hard to can Caswell You're of Ryan of our we the really working in working we It's as are all hard money too And every working all is we're you not we this are And kind

Operator

At like back the you. over for this turn Mr. comments. to time, Foley closing Thank to call would I

William Foley

Thanks, thank everybody operator to and who you our today. joined call

playbook, value. monetizing the finding the of ambiguous, control can fair operational market driving buying steep companies will our to back discount given remain we focused as of portfolio strive you speaking our remain is earnings path see opportunities and your across in our on look Thanks to our and to Overall, the improvements opportunities future for again on approach create exceptional investment the time the in XXXX quarter investments. adept again While which will today. shares, we our call. remains we to all nimble what through shareholder third value long-term forward market in We we with we that

Operator

teleconference. does This Thank you. conclude today's

your You lines your a great and day. at for thank time this you may disconnect have and participation

Cannae (CNNE) 9 Aug 222022 Q2 Earnings call transcript