Release Date: October 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dun & Bradstreet Holdings Inc (DNB, Financial) reported organic revenue growth of 3.4%, slightly above expectations.
- International segment delivered consistent mid-to-high single-digit organic revenue growth of 5%.
- The company expanded margins by 60 basis points and improved free cash flow conversion to nearly 50%.
- Dun & Bradstreet Holdings Inc (DNB) launched Chat D&B, a generative AI assistant, enhancing data accessibility and client engagement.
- Strategic partnerships with London Stock Exchange Group and Intercontinental Exchange were announced, broadening access to private market and climate risk data.
Negative Points
- Net income for the third quarter decreased by $1 million compared to the prior year, primarily due to a lower tax benefit and higher amortization loss.
- North America's revenue growth was limited to 3% due to timing issues between on-delivery and ratably recognized revenues.
- Digital Marketing solutions continued to decline, although the decline was less severe than in previous quarters.
- Sales cycles have lengthened, and client spending remains disciplined amid mixed macroeconomic signals.
- The company did not execute any share repurchases in the third quarter due to ongoing strategic discussions.
Q & A Highlights
Q: Can you provide an update on the Digital Marketing business and expectations for the fourth quarter?
A: Anthony Jabbour, CEO: Digital Marketing was still a headwind but improved sequentially as expected. We saw strengthening throughout the quarter, aligning with our expectations. Bryan Hipsher, CFO: The decline was in the low single digits, and we expect continued improvement into the fourth quarter.
Q: What are your expectations for deleveraging the balance sheet by year-end?
A: Bryan Hipsher, CFO: We expect to be around 3.5 times net leverage by year-end. As we move into 2025, the goal is to drive down towards 3 to 3.25 times, focusing on decreasing EBITDA and reducing gross debt levels.
Q: Can you provide more details on the strategic discussions and the potential for splitting the Credibility business?
A: Anthony Jabbour, CEO: Our focus is on larger conversations around the full company rather than smaller divestitures like Credibility. Bryan Hipsher, CFO: Credibility showed slight growth this quarter, and we are monitoring it while evaluating decisions for later this year.
Q: Could you elaborate on the partnerships with LSEG and ICE and their expected impact?
A: Bryan Hipsher, CFO: These partnerships are structured as revenue shares, leveraging both companies' capabilities. Anthony Jabbour, CEO: We are seeding the market with our D-U-N-S Number and unique data, and these partnerships are expected to generate incremental upside.
Q: How is the Finance Solutions business trending, excluding contract transitions?
A: Bryan Hipsher, CFO: Internationally, Finance Solutions is performing well with mid-single-digit growth. In North America, it acts as a platform for expansion, with core Finance Solutions growing in low single digits and supporting double-digit growth in Third Party Risk clients.
Q: What are the internal initiatives or external conditions needed to improve client spending and sales cycles?
A: Anthony Jabbour, CEO: Internally, we focus on efficiency gains with tools like Chat D&B and consolidating data providers. Externally, clarity in economic conditions and less ambiguity will help improve buying decisions and sales cycles.
Q: How has Chat D&B been received, and what are the plans for its rollout?
A: Anthony Jabbour, CEO: Feedback has been overwhelmingly positive, with significant time savings reported. We are enabling clients to use it without charge initially to drive data usage and will determine the best pricing strategy as we expand its rollout.
Q: What is your view on the macro environment in North America compared to a year ago?
A: Anthony Jabbour, CEO: The landscape is fairly consistent with last year, with slight lengthening in sales cycles. We focus on our capabilities to grow rather than relying on macro conditions, and we have weathered the environment well.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
