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Donnelley Financial Solutions Reports First-Quarter 2025 Results

On April 30, 2025, Donnelley Financial Solutions, Inc. (NYSE: DFIN), commonly referred to as DFIN, announced its financial performance for the first quarter of 2025. Despite encountering some challenges in market conditions, the company showcased notable growth in its software solutions segment along with a robust adjusted EBITDA.

Highlights of Q1 2025 Results:

• - Record Software Sales: DFIN recorded net sales from its software solutions totaling $84.6 million, marking an increase of 5.4% year-over-year, which translates to a 5.8% increase on an organic basis. This segment alone represented 42.1% of the total net sales, up from 39.5% in Q1 2024.
• - Overall Net Sales: Although the company faced a small decline in total net sales, reporting $201.1 million for the quarter, this was only a dip of $2.3 million or 1.1% compared to the first quarter of 2024. The organic basis showed a slightly better reduction of 0.8%.
• - Net Earnings: The company's net earnings also saw a slight reduction, totaling $31.0 million or $1.05 per diluted share, down from $33.3 million or $1.09 per diluted share last year.
• - Strong Adjusted EBITDA Growth: DFIN achieved an adjusted EBITDA of $68.2 million, representing a substantial increase of 23.6% or $13 million over the previous year, resulting in an adjusted EBITDA margin of 33.9%. This margin reflected an improvement of approximately 680 basis points compared to Q1 2024.

Strategic Execution and Market Stability

Daniel N. Leib, DFIN's president and CEO, expressed satisfaction with the company’s quarterly performance, attributing the results to focused execution and effective cost management strategies. He stated, “Our focused execution, combined with aggressive cost management actions, resulted in strong quarterly adjusted EBITDA and adjusted EBITDA margin.”

The CEO also highlighted that despite facing inconsistencies in market conditions, the company’s portfolio of recurring compliance offerings provides a stable foundation to implement their strategies moving forward, emphasizing the intention to expand their recurring revenue model and manage costs diligently.

Segment Performance

The financial report revealed contrasting performances across segments. While DFIN's software solution sales surged, driven by strong uptake in recurring compliance products such as ActiveDisclosure and Arc Suite, the capital markets segment saw reduced volumes. The decline in activity impacted Venue sales, attributed to the overlapping of large projects that had previously boosted last year's figures.

Future Outlook

Looking ahead, DFIN remains committed to investing in its software offerings and optimizing its cost structure. The management's focus on capital allocation reflects a disciplined approach to driving long-term shareholder value. Furthermore, as market conditions stabilize, DFIN’s leadership believes that their competitive offerings will position the company favorably when capital market activity rebounds.

Conclusion

Donnelley Financial Solutions continues to navigate a challenging market landscape effectively, emphasizing the importance of adaptability in achieving growth. The increase in software sales illustrates the company’s strategic pivot towards technology-driven solutions in financial reporting and compliance, securing its place as a leader in the industry. DFIN plans to elaborate on its performance and strategy in an upcoming conference call scheduled for April 30, 2025.

For further details, stakeholders can access DFIN’s comprehensive financial statements and additional appendices available on the company’s investor relations website.

About DFIN

Donnelley Financial Solutions is recognized for providing innovative software and technology-enabled solutions that foster compliance and financial reporting efficiencies. Catering to various market needs, DFIN's solutions are adaptable, evolving in accordance with market trends, regulations, and technology advancements. To stay updated with their offerings, visit DFINsolutions.com and follow them on social media platforms.