Donnelley Financial Solutions (DFIN) Tops Q2 EPS by 13c, Revenues Miss; Lowers FY18 Revenue Guidance

Donnelley Financial Solutions (NYSE: DFIN) reported Q2 EPS of $0.90, $0.13 better than the analyst estimate of $0.77. Revenue for the quarter came in at $290.6 million versus the consensus estimate of $295.74 million.

Highlights:

• Second-quarter net sales of $290.6 million increased 0.1% from the second quarter of 2017
• Second-quarter GAAP net earnings of $18.9 million, or $0.56 per diluted share, compared to GAAP net earnings in the second quarter of 2017 of $18.8 million, or $0.57 per diluted share
• Second-quarter non-GAAP net earnings(1) of $30.5 million, or $0.90 per diluted share, compared to non-GAAP net earnings in the second quarter of 2017 of $24.9 million, or $0.76 per diluted share
• Non-GAAP adjusted EBITDA(1) in the quarter was $63.4 million, or 21.8% of net sales, compared to non-GAAP adjusted EBITDA in the second quarter of 2017 of $63.0 million, or 21.7% of net sales
• Non-GAAP adjusted EBITDA in the second-quarter includes a negative $2.3 million impact related to the adoption of the new revenue recognition standard,(2) negatively impacting non-GAAP adjusted EBITDA margin by 80 basis points
• Company provides updated guidance for full-year 2018; changes to guidance reflect exclusively the impact of the sale of the Language Solutions business; sale closed on July 22, 2018

“We continue to make progress on our digital-focused strategy that we outlined at our recent Investor Day. SaaS revenue grew 16.4% in the second quarter, driven by Venue, ActiveDisclosure and FundSuiteArc,” said Daniel N. Leib, Donnelley Financial’s president and chief executive officer. “Additionally, we had strong performance in our Capital Markets business, driven by a combination of improved market activity and increased market share, which was offset by print-related declines in Investment Markets.”

Leib continued, “Also consistent with our strategic focus, we completed the sale of our global Language Solutions business following the close of the quarter. Net proceeds of approximately $60 million were used to reduce outstanding debt under our term loan. We remain committed to our disciplined approach toward capital deployment as we continue to invest in the highest return opportunities to reshape our portfolio and enhance shareholder value.”

2018 Guidance - Net Sales

• Current Guidance
  • $970 to $990 million
• Previous Guidance
  • Approximately $1 billion

For earnings history and earnings-related data on Donnelley Financial Solutions (DFIN) click here.

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