Donnelley Financial Solutions Tops Q2; Continued Progress Towards Becoming Software-Centric

  • Donnelley Financial Solutions, Inc DFIN reported second-quarter FY22 net sales of $266.2 million, flat year-on-year, beating the consensus of $222.1 million.
  • The software solutions net sales grew 7.5% Y/Y to $71.6 million; compliance software net sales increased by 12.7% Y/Y.
  • EPS of $1.54 beat the consensus of $0.89.
  • Adjusted EBITDA margin of 31.0% was up 110 bps, primarily driven by higher capital markets compliance volume and favorable sales mix.
  • DFIN generated $45.8 million in operating cash flow and held $17.8 million in cash and equivalents.
  • CEO Daniel N. Leib continued, "During the second quarter, we made continued progress toward becoming a software-centric company. Total software sales grew nearly 8% compared to the second quarter of 2021 and made up 26.9% of total second-quarter net sales, an increase of 200 basis points from last year's second quarter sales mix." 
  • "Our software sales growth was led by the performance of our recurring compliance products which posted 13% sales growth in the quarter, with ActiveDisclosure sales growing 20%, including a 25% growth in NewAD subscription revenue."
  • Price Action: DFIN shares traded higher by 16.40% at $39.11 on the last check Wednesday.
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