1. DFIN saw 13.8% growth in organic software sales for 2024. 2. Adjusted EBITDA decreased to $31.7 million, reflecting lower capital market transactions. 3. Total net sales of $156.3 million in Q4 2024 declined by 11.4% year-over-year. 4. DFIN's software solutions now make up 42% of total sales, up from 37%. 5. Leadership expresses optimism about future software performance despite transaction revenue softness.
Software sales growth signals ongoing demand and strategic direction, similar to past performance boosts.
The article outlines key financial metrics and strategic shifts that could attract investor interest.
Sustained growth in software solutions could increase market share and revenue potential over time.
Donnelley Financial Solutions, Inc. (NYSE: DFIN) (the "Company" or "DFIN") today reported financial results for the fourth quarter and full year of 2024.
(a) Adjusted EBITDA, Adjusted EBITDA margin, Free Cash Flow, organic net sales, gross leverage and net leverage are non-GAAP financial measures that exclude the impact of certain items noted in the reconciliation tables below. The tables below provide reconciliations to the most comparable GAAP measures.
(b) Defined as net cash provided by operating activities.
"I am pleased with our continued progress to increase the adoption of our software solutions offerings. During the fourth quarter, the growth in software solutions net sales was led by the performance of our recurring compliance software products, ActiveDisclosure and Arc Suite, which posted net sales growth of approximately 19% in aggregate, an improvement compared to the recent trend. Net sales of Venue, our dataroom offering, grew approximately 2% despite lapping very strong results from the fourth quarter of last year," said Daniel N. Leib, DFIN's president and chief executive officer.
Leib continued, "For full-year 2024, we delivered organic software solutions net sales growth of 13.8%, yielding total software solutions net sales of $329.7 million, which represents approximately 42% of our full-year consolidated net sales, up from approximately 37% of full-year consolidated net sales in 2023. In addition, we achieved an important milestone in our transformation journey during 2024, with software solutions net sales exceeding each of tech-enabled services net sales and print and distribution net sales to become the largest component of our consolidated full-year net sales, demonstrating another positive proof point of our software-centric strategy. The improved sales mix, combined with our continued cost discipline, generated strong full-year profitability, as we delivered $217.3 million of Adjusted EBITDA and 27.8% in Adjusted EBITDA margin, both of which exceeded the levels we achieved in 2023, despite continued softness in the capital markets transactional environment which resulted in the third consecutive year of lower transactional revenue."
"Heading into 2025, we are encouraged by the performance of our software solutions and remain well positioned to capture future opportunities. While our transactional offering is always subject to uncertainty, we are encouraged by the uptick in capital markets transactional activity to start the year. Our portfolio of market-leading regulatory and compliance offerings and deep domain and service expertise position us well to serve current and future needs of our clients," Leib concluded.
Net sales in the fourth quarter of 2024 were $156.3 million, a decrease of $20.2 million, or 11.4% (a decrease of 11.0% on an organic basis), from the fourth quarter of 2023. Net sales decreased primarily due to a reduction in capital markets and investment companies transactional revenue, which decreased $19.5 million in aggregate, and lower print and distribution volumes within capital markets and investment companies compliance offerings, partially offset by higher software solutions net sales.
For the fourth quarter of 2024, net earnings were $6.3 million, or $0.21 per diluted share, as compared to $10.6 million, or $0.35 per diluted share, in the fourth quarter of 2023. Net earnings in the fourth quarter of 2024 included after-tax charges of $5.7 million, or $0.19 per diluted share, primarily related to share-based compensation expense and restructuring, impairment and other charges, net. Net earnings in the fourth quarter of 2023 included after-tax charges of $8.2 million, or $0.26 per diluted share, primarily related to share-based compensation expense, the acceleration of rent expense associated with abandoned operating leases and restructuring, impairment and other charges, net.
For the fourth quarter of 2024, Adjusted EBITDA was $31.7 million, a decrease of $9.6 million as compared to the fourth quarter of 2023. Adjusted EBITDA margin was 20.3%, a decrease of approximately 310 basis points as compared to the fourth quarter of 2023. The decrease in Adjusted EBITDA and Adjusted EBITDA margin was primarily due to lower capital markets and investment companies transactional volumes, partially offset by higher software solutions net sales, cost control initiatives, and lower selling expenses as a result of the decrease in sales volume.
For the fourth quarter of 2024, non-GAAP net earnings were $12.0 million, or $0.40 per diluted share, as compared to $18.8 million, or $0.61 per diluted share, in the fourth quarter of 2023.
Reconciliations of net sales to organic net sales and consolidated net earnings to Adjusted EBITDA, Adjusted EBITDA margin and non-GAAP net earnings are presented in the tables.
DFIN's earnings press release for the fourth-quarter and full-year 2024, which is included as Exhibit 99.1 to the Company's Current Report on Form 8-K that has been furnished to the SEC on February 18, 2025, is available on the Company's investor relations website at investor.dfinsolutions.com. A supplemental trending schedule of historical results, including additional breakouts of segment-level net sales, is also available on the Company's investor relations website.
DFIN will hold a conference call and webcast on February 18, 2025, at 9:00 a.m. Eastern time to discuss financial results for the fourth quarter of 2024, provide a general business update and respond to analyst questions.
A live webcast of the call will also be available on the Company's investor relations website. Please visit investor.dfinsolutions.com at least fifteen minutes prior to the start of the event to register, download and install any necessary audio software.
If you are unable to participate live, a replay of the webcast will be available following the conference call on the Company's investor relations website, along with the earnings press release and related financial tables.
DFIN is a leading global provider of innovative software and technology-enabled financial regulatory and compliance solutions. We provide domain expertise, enterprise software and data analytics for every stage of our clients' business and investment lifecycles. Markets fluctuate, regulations evolve, technology advances, and through it all, DFIN delivers confidence with the right solutions in moments that matter. Learn about DFIN's end-to-end risk and compliance solutions online at DFINsolutions.com or you can also follow us on X (formerly Twitter) @DFINSolutions or on LinkedIn.
This news release contains certain non-GAAP financial measures, including non-GAAP gross profit, adjusted non-GAAP gross profit, non-GAAP gross margin, adjusted non-GAAP selling, general and administrative expenses ("SG&A"), adjusted non-GAAP income from operations, adjusted non-GAAP operating margin, Adjusted EBITDA, Adjusted EBITDA margin, non-GAAP earnings before income taxes, non-GAAP effective tax rate, adjusted non-GAAP net earnings, adjusted non-GAAP diluted earnings per share, Free Cash Flow and organic net sales. The Company believes that these non-GAAP financial measures, when presented in conjunction with comparable GAAP measures, provide useful information about the Company's operating results and liquidity and enhance the overall ability to assess the Company's financial performance. The Company uses these measures, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business.
This news release includes certain "forward-looking statements" within the meaning of, and subject to the safe harbor created by, Section 21E of the Securities Exchange Act of 1934, as amended, with respect to the business, strategy and plans of DFIN and its expectations relating to future financial condition and performance. Statements that are not historical facts, including statements about DFIN management's beliefs and expectations, are forward-looking statements. Words such as "believes," "anticipates," "estimates," "expects," "intends," "aims," "potential," "will," "would," "could," "considered," "likely," "estimate" and variations of these words and similar future or conditional expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. While DFIN believes these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond DFIN's control. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend upon future circumstances that may or may not occur. Actual results may differ materially from DFIN's current expectations depending upon a number of factors affecting the business and risks associated with the performance of the business. These factors include such risks and uncertainties detailed in DFIN periodic public filings with the SEC, including but not limited to those discussed under "Special Note Regarding Forward-Looking Statements" and in Part I, Item 1A. Risk Factors of DFIN's Annual Report on Form 10-K for the fiscal year ended December 31, 2024, those discussed under "Special Note Regarding Forward-Looking Statements" in DFIN's Quarterly Reports on Form 10-Q and in other investor communications of DFIN's from time to time. DFIN does not undertake to and specifically declines any obligation to publicly release the results of any revisions to these forward-looking statements that may be made to reflect future events or circumstances after the date of such statement or to reflect the occurrence of anticipated or unanticipated events.
| Assets | December 31, 2024 | December 31, 2023 |
|---|---|---|
| Cash and cash equivalents | $57.3 | $23.1 |
| Receivables, less allowances for expected losses of $25.0 in 2024 (2023 - $18.9) | $138.0 | $151.8 |
| Prepaid expenses and other current assets | $37.2 | $31.0 |
| Assets held for sale | — | $2.6 |
| Total current assets | $232.5 | $208.5 |
| Property, plant and equipment, net | $8.9 | $13.5 |
| Operating lease right-of-use assets | $12.3 | $16.4 |
| Software, net | $96.5 | $87.6 |
| Goodwill | $405.4 | $405.8 |
| Deferred income taxes, net | $56.4 | $45.8 |
| Other noncurrent assets | $29.6 | $29.3 |
| Total assets | $841.6 | $806.9 |
| Liabilities | December 31, 2024 | December 31, 2023 |
|---|---|---|
| Accounts payable | $28.7 | $33.9 |
| Operating lease liabilities | $10.3 | $14.0 |
| Accrued liabilities | $185.1 | $153.7 |
| Total current liabilities | $224.1 | $201.6 |
| Long-term debt | $124.7 | $124.5 |
| Deferred compensation liabilities | $12.2 | $13.1 |
| Pension and other postretirement benefits plans liabilities | $23.3 | $34.4 |
| Noncurrent operating lease liabilities | $6.4 | $12.1 |
| Other noncurrent liabilities | $14.8 | $19.0 |
| Total liabilities | $405.5 | $404.7 |
| Equity | December 31, 2024 | December 31, 2023 |
|---|---|---|
| Preferred stock, $0.01 par value | — | — |
| Common stock, $0.01 par value | $0.4 | $0.4 |
| Treasury stock, at cost | $(344.1) | $(262.1) |
| Additional paid-in capital | $333.2 | $305.7 |
| Retained earnings | $528.5 | $436.1 |
| Accumulated other comprehensive loss | $(81.9) | $(77.9) |
| Total equity | $436.1 | $402.2 |
| Total liabilities and equity | $841.6 | $806.9 |
| For the | Three Months Ended December 31, | Twelve Months Ended December 31, | ||
|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |
| Net sales | $81.6 | $73.7 | $329.7 | $292.7 |
| Tech-enabled services | $60.5 | $73.6 | $320.8 | $336.9 |
| Print and distribution | $14.2 | $29.2 | $131.4 | $167.6 |
| Total net sales | $156.3 | $176.5 | $781.9 | $797.2 |
SOURCE Donnelley Financial LLC