- Earnings call transcript Q3 2022

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Operator

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

Third Quarter 2022 Financial Results Conference Call.

During today's presentation, all parties will be in a listen-only mode.

Following the company's brief prepared remarks, the conference will be open for questions with instructions to follow at that time.

As a reminder, this conference call is being recorded, and a replay is available through 11:59 p.m. XX, November on Time XXXX. Eastern like With to the over turn Lillis, that, Investor I'd Jamie Relations call to for Cannae.

Jamie Lillis

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

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

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

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

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

Richard Massey

working, occupied make another on project. Bill some to Jamie, everybody. us money is trying Thanks,

who of a -- I'm script And pitching knows you anybody I'm So follower. in. me, as not much

quarter over occurred about price things bought discount important about million to asset The XX% our down of we -- an the going that is X.X what most the to be believe value. the that So continues list of go I'm for which in to a past shares just we of net which is quarter. our $XX.XX, back average

We shares have some know, time. and are back vigorously as buying you we been, continuously for

Over the past what back, Bryan? year, have bought we

Bryan Coy

XX.XX million shares, XX%.

Richard Massey

the XX% company keep on on of our back, that. are we're doing We pace the and with happy bought we shareholders that. hope to

Board we've original authorized -- Our almost and our another our authorities, Board of exhausted has million shares. all XX

trades as buying another of stake a CorroHealth keep discount. we're at sold our AmeriLife XX% a when going cash. was a We And for or AmeriLife get XXXX little multiple so it it, million. is as to So for going our that. raised investment, long times closing of sold back initial million. X.X $XX We to half. with We're pleased very $XXX second the December? we're of We

Bryan Coy

Yeah, of this month. end

Richard Massey

company, surviving as to cycle an constant They in about things. with End products currency. revenue Dun They margin we're a XX% currency. matched up And They're throughout. this the much of new will we been of maintained starting to a good they're probably amount X% overall roll and And bound get in guidance. then And fruition. not -- in their a sort investment estimates small organic were you see and EBITDA and X% in believe It's about pretty constant revs grew late the now. for come their know, they've Their Bradstreet, of all us. cash, investments is still is for to a which piece that this less had just great a great going November. trade month, quarter. cash, in

comps all of and earnings is growth revenue some first We pleased. -- et think business and Bradstreet. way when really the adjust Dun one the is XX% Employer and that's the offering undervaluing their that's some to So growth, some a process you really my overall same the and world. so guys generated at life XX% cetera. The we're their expansion et in of months the we Services offer, year-over-year as that growth, they're their revenue offerings seeing transformative segment, past grew Even really for growth starting core time, the forth, -- work I'm looking a they of in from cycle. market service. They at line of margin -- companies which year. and Alight, Alight -- that cetera. and flagship know see just about we're But had sure They nine revenue revenues favorite nearly through about you were -- X.X% their is they for segment. investment

So they're they've of already year. about what, to guidance. hit left two the their got, months And

you're and to them new see they're some to sop large up next, make signed able that well, really Fortune really added announce the nice, surprisingly doing days. over it, logos yet, companies -- discontinuing and XX customers. but they're They shows call were to just not they them were all going just They've the XXX So them. it

about do about talk excited that. want So we're Dave, Sightline? you very to

David Ducommun

Sure.

Resorts in make is of working put kind with to progress year, continues World end in the cashless flagship Las be they'll retest to cashless core hopefully, position in which start to And Vegas their gaming. the place. segment, system of gaming by They're in a that. their currently to So Sightline end-to-end

premium in the invested in. business JPMorgan good came at investment we news, Another payments strategic made value a a to the in that

of more company, for stamp from the an partner. approval a it's great X-tier liquidity strategic So

are things come. good more hope to we So

Richard Massey

Duke. Thanks,

processing asked bringing probably, of a core we team rights, have he investment plans, believe numbers bank those. and of XXX and it, offered couple way It of as and a English bear stuff -- a for do we And was that his great years, category. in we you hockey has and a your big would build-buy work great incredible of just XX.X% you facilities, a new and club Medavante all why BGK like guys all as So might have Xx been team lead business. -- exit buyer night get same lucky. both It's I've small man the say know, wouldn't them of known the know billion whatever, one multiples was a magic up to I'm of goal of kind you since is of that but of decades. Chairman, cash. it, is Kentucky, gear scratch all Executive he's and other unbelievably as about I company money. he media And these sponsorships called in virtually optimism we've with like really Martire, that And much do pure park. committed might we at technology. a you have believe Bill credit doing same top Chairman young started the who been Paducah, it's we kind football a this talking FIS both have multiple many grow about Premier I biggest an Bill Bournemouth, record at Frank And alley. years And the Bill -- the the had after money right to for and track only one mean segment. that glorious generates know buying sub thing, said, not company. and why X our the There a FIS, CEO, why to when the times announced, a very got from durable I an of And NHL the or this guys, at revenue acquired investments Medavante market -- by an customer team time. It for there technology I'm you're a looking business. Bournemouth. services he's And our banks pretty his then ASC us is He's short answer at ago, that share. some We the that they've did at in -- banks. sales, X really a they in well, valuations own unions. got an are comes lucky investment. asset equity you of probably know, they earlier. area all of ownership then our every the have point his under you're original -- It's you're at It's their X with And $X be kinds can of is we been in team you team? But your and the million looking it's of is became

to got Bill apply -- So of has he's the how we this. think that they're that already side plans to going business grow for going

-- think X I next a or deal. asked at behalf make times the invest to in to to five asked years. because Cannae money mean seven we're I think I of I we this on minimum X So going our over

that, and all it major the -- for to unless Q&A. have I step covered over think I you quarter, that with all that turn think covered So we'll the something,

for you're miss If that, operator. ready

Operator

The with from first Singular Please begin now comes [Operator ahead. will We Research. Sakai session. Instructions] go the question-and-answer question Chris today

Richard Massey

Hey, Chris.

Chris Sakai

afternoon. good Hi,

a got you've of from $XXX sale million bunch balance the so plus sheet. know, cash to wanted on Just Marelli's the

more planning Just So with that? on back you shares? what buying are doing guys

Richard Massey

of options -- Yes. I'd to say be sort decisions. there are us, it's they're and for three going real-time

buying and discount our we preserve NAV. percent things on percent that the capital of cheap, as pretty a now Bill best capital a we're our we we going it's probably There's right to to is deal-by-deal happen it's shares we capital nothing with in to of as discount to aggressively return business range, that the this capital back robust have finding just XX-plus huge just things. as could one the we relatively the bring some but use have to the Cannae's be a get basis. to to new buy that supposed us we that's in to own a third-party going really investments, new shares the of pipeline as at can ways As has of long of and more doing finding back is with investments. range, also are get our XX-plus be done, deal probably is support so But And in to that have today, cash

have It's a a of that get is but capital the the throw million don't is $XX expect So services, we've I'd I that some I that third, like looking then that we'd there got sometime some we pretty would today the on do. it future right talking help, of be levered, to may chance more expect that. would They're a that chance our exposure. partnership. it XXXX that only our core the have through fairly be and little And get prospect. Duke list. -- in they we're Paducah, sidelined but I know And into other processor. would two existing of computer out Kentucky the raises business. need lot. companies bit know a and portfolio I a then we'll refusal will road. capital say, increase first core what about, about we're than down robust -- if new And money, an probably shopping to

companies. some the shares, other portfolio to yet. those buying look haven't top but So be got continuing back than back for needs three shares to would and we've is I'd our of buying we do one found other the opportunities for maybe better list But our and say

Chris Sakai

that. you or Thanks better right. are for then guys where valuations in equity? All now, Okay. And private seeing public

Richard Massey

without a doubt. Public,

Chris Sakai

that me, Okay. How long team -- works? how for? going investment soccer -- this soccer has on in the discussions been Last for the the investment was long

Richard Massey

he the the it. and Bill wanted year Rank were the on guys, it of and a of and current together. we has known a and the who and Board couple else, did have to as -- too. Alex, team was much met in go to somewhere And team process, say, Club of exciting own shall homework issues think interest I the one I we wanted think had to became he cash and and by a approached his Bill, lot pull of potential fellow go our available Bill's because pretty everything to And ahlf that -- owner, was -- well ago years and sanctions the

So bargain how we got that, that's a it on and happened.

put a what team So the not most say most that was was -- by XX of team. I'd a And the master is and the business important that's or a And the that soccer much Bill gears, football, alcohol recognition not that he something they that. the in operate It mean past like lines an the could sponsorships, the It's operate lines jerseys of I part lot NHL stuff tickets, that. question. like whatever, sales, -- in into. spontaneous months. like this if thought he other business very felt Concessions,

build So Premier over there, and fact, had League, he's, got to the he's helping the bring holes the that over in side management do to the very business. people here -- you revenues. in part. management I of games how on do call -- -- operations. management and then bear going business But you The learn the the business team to player know just lately he'll and that just it talk non-player fill he, on and stand think It's fact like I he's his the revenue. skilled part to how in player about win the how

Chris Sakai

Okay. answers. Thanks for the

Richard Massey

Sure thanks.

Operator

Instructions] Lee with Capital next comes Please Kenneth from go [Operator ahead. Markets. RBC The question

Kenneth Lee

the question. Hey, Thanks for afternoon. good taking

terms you -- And but the about -- could AFC the jumping kind the to stadium terms within more million of of then I've there of if better transfers, of any and and and on in the calls. that commitment, in little if could future a bit the in of on the a terms one I I Bournemouth player sense me -- Just mechanics economics But But Cannae. talk want how commitments. investments things infrastructure obligation -- get of just the is Bornemouth around just the nature? of flow to pardon $XXX any kind I in been financial wonder

Richard Massey

question. Good it. Got

XXX million for know it And GBPXXX hard that's So we -- million. It's what is, whatever I it have don't $XXX.X, million. £ a it. commitment is,

no have We obligations. future

In fact, overfunded we it.

lower $XX $XXX It mixed I pounds up, because there's very million develop and there earnout transfer next next in sell more $XX million could player the League, there's to tickets, pay a million. poor wants of is a of be much very So about my stay -- million course, GBPXX have stadium, Premier getting maximum of stadium in -- and of that owe in he if adequate the all there's cash facility, seller the and deal probably a that very you they I'm in investment pretty our the GBPXX a -- for million and After the business Bill They improve stadium. if is build an is wants you but there's where this capital. the year they know -- extra two about after dollars and we small flows. very, stuff. stay is And fact There year. -- budget And them it or healthy, own and to that.

that have you'll of cash isn't look at holes. lot just that and the the big this deep like ones So a holes

dollars, -- the to million most going -- be we believe is $XXX I is could it in do, that we're and less. So

same Cannae's limited partner. We we'll do And Now do kind kind -- the that. partner. money is that fees. we He not does that any return any make pay from not the is does get the investment fees we'll as managing of makes. make earn as him to that team. raised, we our a committed when Bill return a general any to promote partner. enough He's not He he a the general

your transaction. Bill I with aligned in that totally answers question. are hope we that So

Kenneth Lee

helpful gears, I Absolutely, one if absolutely. Very switching then just there. may. And follow-up,

bringing for potential when around in potentially you're looking about third-party talked investments. capital new You

color that take. bit kind more could little around form what a of get to wanted Just

Richard Massey

$X.X could times. well, It's probably because we you $X an be the total we just -- abstract have put with business, also We -- the of but to go deal to somewhat about billion. want hard a have the on could so an don't talking it's enterprise now it -- don't LBO, deal The a we call $X.X nebulous -- hard private equity -- be it's we a value course, to about. billion, too we be equity talk company, much would -- where leverage put X we're say billion, LBO. total it's because a could total But buying don't to check

to $X So sorry, we'd $X need raise million million or -- $XXX million.

to -- Sorry. in alternative. is up raise world uncommon form would Maybe And the miss we vehicle. haven't to because They're call other some Cannae an not enough But third more million, It's then and $XXX it, to there want have some going that, we maybe called $XXX million. And $XXX the out it raise special what capital. a deals. today. to we as good do than million. is we would do, the the we're We just get party, pursued to capital deals so don't go purpose

Kenneth Lee

Thanks, Very you. again Got helpful there.

Richard Massey

Ken. thanks, Sure,

Operator

The next John question Campbell from with Stephens. go ahead. Please comes

Richard Massey

Hey, John.

Unidentified Analyst

Hay is in This stepping today. [ph], for John AJ

Richard Massey

bait-and-switched us. We thought Well, -- you yes.

Unidentified Analyst

about that. Apologies

Richard Massey

AJ, you no, with just rather talk messing we're to We'd you. anyway.

Unidentified Analyst

Perfect. Good deal.

So Sightline. then monetization color you're then payments? some thinking the maybe of of update JPMorgan and you benefits Sightline add with fundamentals on on maybe the as Sightline realize how you touched a Sightline's about can strategic may add the But some guys you long And relationship can term? slightly on result

David Ducommun

Sure.

order. Let me answer these in

with They're partnership incredible. strategic put JPMorgan with the network. payment So both representative a a on is We huge partner the the Board.

to rates us and important in helping Mastercard. give us some strategic our with think with So We help approval advice up. they approval can Visa issues get

our can They efficiently have customer right. to their in incredible more design us help base think obviously I access they network. own

Sightline network JPMorgan and really affords intellectual with unlocking a capital their breadth virtually opportunity So of access. I think company partnership growing like It's both just the unlimited. the are for payments

for can Sightline's business. it think do wonders I

fundamentals gaming the I'd you the of a bit little And talk about say business, has so when this been challenged online quarter.

the think and, volumes of stagnate demise you've in free $X,XXX the overall with some casinos, sign-up kind from the seen I even drop. of credits cases,

of think see in is from going cashless those Sideline the solution is That we our and not them immune next want the this execute developing in casino, term that's monetization inside From what's World. perspective, business I business competitors. their and being term couple really to Resorts to of them really core So trends. their long near from is don't said, a the differentiate quarters,

picked away or really And I think get and on the be have think that predictable see whether S curve whether we estimates MGM, that's Street, of IPO year-over-year we at But it confidence is. company, that sale make think casino, is comparables see acceleration cashless Caesars they're have them want it next to from an or strategic whether to that explore the Empire, alternative large to earnings for in we up event a once I another next potentially solution. of and or so we adoption year both this that. can I we're my the what's like time least probably guess be

Unidentified Analyst

touched on the update to it maybe then And near-term can bigger-picture find your betting provide you an the on in that you so kind But of sports why arena. space and Okay. continue trends attractive? thesis you for

David Ducommun

future of and kind to we're wave is where is when, headed we the just it if. to continues this gaming what know all Continue has think that have sometimes the to to liberalization liberal doubt. holds, pointed fits it not think -- of starts. that the is attractive? we that unfold. in markets the believe timing trends as and I that ready yeah, find that the The We a ride matter of beyond been But

Richard Massey

out be you new are to going states, there are opening big up? the that What Duke, think

David Ducommun

up. is Michigan opening

New has York up. opened

continue California, legalized or you obviously up costs just in even I have has continued Florida game-changing up. open, some was sign-up. with always opened But that will think industry. not in if get the the at user be New and the growth Nevada obviously Texas, Jersey adoption that movement and for states now,

quarter the without industry. the X a or pulling a still for even of But and free rapid at bowl in supposed growth a be but punch it's growing to proverbial there, industry think billion pause caused the I that money of it's the So $XX acceleration out away by the still least XXXX.

Richard Massey

go highjacking back growing -- When DraftKings, just go these like all level, have that I look to call. Is I draft not trading spec sorry, I'm $XX, look incentives they're your down they're I'm at --- their $XX. and because back pulled When at people

David Ducommun

I that table, and Combination largest have the in including we may planet. line, of these at partners don't one that specifically, banks have slowdown concerns. think our I the top for names the of business. great there of private some be and around we're Obviously, issue the think liquidity on don't

macro little though, do live So hope. environment We're guys. a in our the -- still as same better but those P&L managing we bit we

Richard Massey

Hope so.

Unidentified Analyst

SPAC Last color the should the question, Cannae? viewing as we X Australis Great. just of Really at for there. and wind-down of a last level, be activity the appreciate high the X

Richard Massey

-- now, would quality lot sales SPAC I we you properly any they you -- the of never not -- great not could that And IPO have And you say do secondary some the an and never, companies. of in we believe it not that for might size traditional be can't structured of the amount get, because do and do an and but could that. -- IPO what XX% company And it's could of be to a a do do alternative could can't plans. you can they're of you but the but more IPOs. be those the in

say is never are -- now, So horizon. right But see I say I'd -- it them use we I we'll before there again. abused. market that to it's for it those. the pursue -- but there got don't again just a going don't want a that a terribly take vehicles have valuable, on and to are And And while

Unidentified Analyst

quarter the thank and you. on Congrats you. Got Okay.

Richard Massey

Thank you.

Operator

Rick question-and-answer turn conference back over session. like Massey to I would to for remarks. any concludes our This the closing

Richard Massey

going is out. to finish -- Actually, Ducommun this is this David

David Ducommun

Phoenix, excited opportunities third call focused and to invite the to and Thank that position, who look in the XX. see hope for to X And in one look the us you, exited a Suisse all everyone continued conference events. quarter November want we come Annual XX our operator, joined XX Wynn again, of to we forward that going at month, upcoming November to end on be We're you the the and and you'll Stephens We we Along of going lines, Credit We're conference we Las to month, this Thank for thanks at you at the those see join and XX. Portfolio XX Conference we be ahead. December XX in strong Vegas. remain and Cannae's our we future today. and you events.

Richard Massey

Thanks, everybody. good Have a week.

Operator

The concluded. presentation. Thank conference for attending has today's now you

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Cannae (CNNE) 10 Nov 222022 Q3 Earnings call transcript