Donnelley Financial Solutions, Inc. (NYSE:DFIN) Q4 2023 Earnings Call Transcript
Donnelley Financial Solutions, Inc. (NYSE:DFIN) Q4 2023 Earnings Call Transcript February 20, 2024
Donnelley Financial Solutions, Inc. misses on earnings expectations. Reported EPS is $0.61 EPS, expectations were $0.62. DFIN isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good morning. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Donnelley Financial Solutions Fourth Quarter and Full Year 2023 Earnings Conference Call. Today's conference is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] At this time, I would like to turn the conference over to Mike Zhao, Head of Investor Relations. Please go ahead.
Mike Zhao: Thank you. Good morning, everyone, and thank you for joining Donnelley Financial Solutions' fourth quarter and full year 2023 results conference call. This morning, we released our earnings report, supplemental trending schedules of historical results and the latest investor presentation, which includes our updated long-term projections, all of which can be found in the Investors section of our website at dfinsolutions.com. During this call, we'll refer to forward-looking statements that are subject to risks and uncertainties. For a complete discussion, please refer to the cautionary statements included in our earnings release and further detailed in our most recent annual report on Form 10-K and other filings with the SEC.
Further, we will discuss certain non-GAAP financial information such as adjusted EBITDA, adjusted EBITDA margin and organic net sales. We believe the presentation of non-GAAP financial information provides you with useful supplementary information concerning the company's ongoing operations and is an appropriate way for you to evaluate the company's performance. They are, however, provided for informational purposes only. Please refer to the earnings release and related tables for GAAP financial information and reconciliations of GAAP to non-GAAP financial information. I am joined this morning by Dan Leib, Dave Gardella, Craig Clay, Eric Johnson, Floyd Strimling and Kami Turner. I will now turn the call over to Dan.
Dan Leib: Thank you, Mike, and good morning, everyone. We finished 2023 by delivering strong fourth quarter results, highlighted by 5.4% organic consolidated net sales growth, year-over-year growth in adjusted EBITDA and strong adjusted EBITDA margin performance. I am encouraged by the reacceleration of sales growth in the fourth quarter despite the continued headwind in our event-driven capital markets transactional offering. I am also pleased by the performance of our Venue dataroom product, which delivered net sales growth of approximately 26% in the quarter. As a result of focused execution, we grew consolidated adjusted EBITDA by $2 million or 5.1% year-over-year and delivered an adjusted EBITDA margin of 23.4% in the quarter, in line with last year's fourth quarter, despite 9% lower event-driven revenue within capital markets.
Our fourth quarter results continue to demonstrate the resiliency of our operating model. Reflecting on the full year 2023 results, given the persistent market volatility, macroeconomic headwinds and geopolitical uncertainty, we delivered strong full year results. Following significant declines in capital markets event-driven revenue in 2022, the market remained very weak throughout 2023, resulting in a further revenue reduction of approximately $52 million or 22% year-over-year. Our total event-driven revenue, which also includes investment companies transactions, was down [Technical Difficulty] or 18% year-over-year. Despite this headwind, in 2023, we delivered $207.4 million of adjusted EBITDA, resulting in an adjusted EBITDA margin of 26%, both of which continue to be significantly higher than historical periods with similar overall and transactional revenues.
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