Donnelley Financial Solutions Inc
For the period ended Dec 31, 2024. Filed Feb 18, 2025.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Feb 18, 2025
DFIN$66.98-0.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-02-20.
0000950170-24-017094
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-02-18.
0000950170-25-022207
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 134 previous paragraphs and 161 current paragraphs.
71 unchanged; 50 reworded; 34 added; 13 removed; 0 previous and 6 current paragraphs rearranged.
Tables are not compared: 15 previous and 15 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
The Company operates its business through four operating and reportable segments: Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions and Investment Companies – Compliance and Communications Management. The Company’s operating segments are components of the business for which discrete financial information is available and reviewed regularly by the Company’s chief operating decision maker (“CODM”), the Company’s CEO, to assess segment performance and to make decisions regarding the allocation of resources.
Current report
During the three months ended December 31, 2024, the Company changed the measure used by the CODM to evaluate segment profitability from income (loss) from operations to Adjusted EBITDA (“Segment Adjusted EBITDA”) in order to be consistent with changes in reporting reviewed by the CODM to evaluate the results of operations, allocate resources and make strategic decisions about the business. Segment Adjusted EBITDA is defined as earnings before interest expense, net, income tax expense, depreciation and amortization and adjusted to exclude the impact of certain costs, expenses, gains, losses and other items, as further described in Note 15, Segment Information, which management believes are not indicative of ongoing operations and segment performance. Presentation of segment profitability for the years ended December 31, 2023 and December 31, 2022 was revised to be comparable to the current period presentation. Corporate is not an operating segment and consists primarily of unallocated SG&A expenses. See Note 15, Segment Information, for a reconciliation of Segment Adjusted EBITDA to consolidated earnings before income taxes.
Current report
Income from operations for the year ended December 31, 2024 increased by $26.6 million, or 24.2%, to $136.6 million from $110.0 million for the year ended December 31, 2023. Income from operations increased primarily due to higher software solutions net sales, cost control initiatives, a net gain on the sale of land, lower consulting expense and a favorable sales mix, partially offset by lower compliance and transactional volumes, higher incentive compensation expense, higher selling expense as a result of the increase in software solutions net sales and higher bad debt expense.
Current report
nm – Not meaningful
Current report
Net sales of software solutions of $329.7 million for the year ended December 31, 2024 increased $37.0 million, or 12.6%, as compared to the year ended December 31, 2023. Net sales of software solutions increased primarily due to higher Venue volumes, price increases and the Company’s TSR offering, partially offset by the disposition of the eBrevia business in the fourth quarter of 2023.
Current report
Net sales of tech-enabled services of $320.8 million for the year ended December 31, 2024 decreased $16.1 million, or 4.8%, as compared to the year ended December 31, 2023. Net sales of tech-enabled services decreased primarily due to lower capital markets compliance and transactional volumes.
Current report
Net sales of print and distribution of $131.4 million for the year ended December 31, 2024 decreased $36.2 million, or 21.6%, as compared to the year ended December 31, 2023. Net sales of print and distribution decreased primarily due to lower capital markets compliance volumes and investment companies compliance and transactional volumes.
Current report
SG&A expenses of $290.9 million for the year ended December 31, 2024 increased $8.8 million, or 3.1%, as compared to the year ended December 31, 2023. SG&A expenses increased primarily due to higher incentive compensation expense, higher selling expense as a result of the increase in software solutions net sales, higher bad debt expense and higher share-based compensation expense, partially offset by lower consulting expense and cost control initiatives. As a percentage of net sales, SG&A expenses increased from 35.4% for the year ended December 31, 2023 to 37.2% for the year ended December 31, 2024, primarily driven by higher incentive compensation expense, higher selling expense, higher bad debt expense and higher share-based compensation expense, partially offset by lower consulting expense and cost control initiatives.
Current report
Depreciation and amortization of $60.2 million for the year ended December 31, 2024 increased $3.5 million, or 6.2%, as compared to the year ended December 31, 2023, primarily due to higher software amortization expense driven by additional software development and accelerated amortization expense related to discontinued software, partially offset by a decrease in other intangible asset amortization expense.
Current report
Other operating income, net of $10.3 million for the year ended December 31, 2024 included a net gain of $9.8 million on the sale of land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for further information. Other operating loss, net of $5.3 million for the year ended December 31, 2023 included a $6.1 million loss on the disposition of the eBrevia business. Refer to Note 3, Dispositions, to the audited Consolidated Financial Statements for further information.
Current report
Income from operations of $136.6 million for the year ended December 31, 2024 increased $26.6 million, or 24.2%, as compared to the year ended December 31, 2023. Income from operations increased primarily due to higher software solutions net sales, cost control initiatives, a net gain on the sale of land, lower consulting expense and a favorable sales mix, partially offset by lower compliance and transactional volumes, higher incentive compensation expense, higher selling expense as a result of the increase in software solutions net sales and higher bad debt expense.
Current report
Investment and other income, net of $1.4 million for the year ended December 31, 2024 decreased $6.4 million, or 82.1%, as compared to the year ended December 31, 2023, primarily due to a net realized gain of $7.0 million from the sales of investments in equity securities during the year ended December 31, 2023. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for further information.
Current report
Net sales of $213.6 million for the year ended December 31, 2024 increased $27.7 million, or 14.9%, as compared to the year ended December 31, 2023, primarily due to higher Venue volumes and price increases, partially offset by a $3.8 million decrease due to the disposition of the eBrevia business.
Current report
Segment Adjusted EBITDA of $63.5 million for the year ended December 31, 2024 increased $18.3 million, or 40.5%, as compared to the year ended December 31, 2023, primarily due to higher sales volumes, a favorable sales mix, price increases and cost control initiatives, partially offset by higher selling expense, higher incentive compensation expense and higher bad debt expense.
Current report
Segment Adjusted EBITDA margin increased from 24.3% for the year ended December 31, 2023 to 29.7% for the year ended December 31, 2024, primarily due to a favorable sales mix, price increases and cost control initiatives, partially offset by higher selling expense, higher incentive compensation expense and higher bad debt expense.
Current report
Segment Adjusted EBITDA of $45.2 million for the year ended December 31, 2023 increased $6.9 million, or 18.0%, as compared to the year ended December 31, 2022, primarily due to price increases and cost control initiatives, partially offset by higher selling expense and a higher allocation of overhead costs.
Current report
Segment Adjusted EBITDA margin increased from 21.3% for the year ended December 31, 2022 to 24.3% for the year ended December 31, 2023, primarily due to price increases and cost control initiatives, partially offset by higher selling expense and a higher allocation of overhead costs.
Current report
Net sales of $321.7 million for the year ended December 31, 2024 decreased $33.7 million, or 9.5%, as compared to the year ended December 31, 2023, primarily due to lower compliance and transactional volumes, partially offset by price increases.
Current report
Segment Adjusted EBITDA of $110.9 million for the year ended December 31, 2024 decreased $8.5 million, or 7.1%, as compared to the year ended December 31, 2023, primarily due to lower sales volumes, higher bad debt expense and higher incentive compensation expense, partially offset by cost control initiatives, a lower allocation of overhead costs and lower selling expense.
Current report
Segment Adjusted EBITDA margin increased from 33.6% for the year ended December 31, 2023 to 34.5% for the year ended December 31, 2024, primarily due to cost control initiatives, a lower allocation of overhead costs and lower selling expense, partially offset by higher bad debt expense and higher incentive compensation expense.
Current report
Segment Adjusted EBITDA of $119.4 million for the year ended December 31, 2023 decreased $22.0 million, or 15.6%, as compared to the year ended December 31, 2022, primarily due to lower sales volumes, an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Current report
Segment Adjusted EBITDA margin decreased from 34.5% for the year ended December 31, 2022 to 33.6% for the year ended December 31, 2023, primarily due to an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Current report
Net sales of $116.1 million for the year ended December 31, 2024 increased $9.3 million, or 8.7%, as compared to the year ended December 31, 2023, primarily due to the Company’s TSR offering, impacting ArcReporting and ArcDigital, as well as Arc Suite price increases, partially offset by lower ArcRegulatory volumes.
Current report
Segment Adjusted EBITDA of $39.7 million for the year ended December 31, 2024 increased $2.8 million, or 7.6%, as compared to the year ended December 31, 2023, primarily due to price increases and higher sales volumes, partially offset by a higher allocation of overhead costs.
Current report
Segment Adjusted EBITDA margin increased from 34.3% for the year ended December 31, 2022 to 34.6% for the year ended December 31, 2023, primarily due to cost control initiatives and price increases, partially offset by higher product development costs and a higher allocation of overhead costs.
Current report
Net sales of $130.5 million for the year ended December 31, 2024 decreased $18.6 million, or 12.5%, as compared to the year ended December 31, 2023, primarily due to lower compliance and transactional volumes.
Current report
Segment Adjusted EBITDA of $41.5 million for the year ended December 31, 2024 decreased $7.9 million, or 16.0%, as compared to the year ended December 31, 2023, primarily due to lower sales volumes and a higher allocation of overhead costs.
Current report
Segment Adjusted EBITDA margin decreased from 33.1% for the year ended December 31, 2023 to 31.8% for the year ended December 31, 2024, primarily due to a higher allocation of overhead costs.
Current report
Segment Adjusted EBITDA margin increased from 29.1% for the year ended December 31, 2022 to 33.1% for the year ended December 31, 2023, primarily due to a favorable sales mix and cost control initiatives, partially offset by a higher allocation of overhead costs.
Current report
Corporate unallocated expenses of $38.3 million for the year ended December 31, 2024 decreased $5.2 million as compared to the year ended December 31, 2023, primarily due to lower consulting expense, partially offset by higher incentive compensation expense.
Current report
Gain on sale of long-lived assets—Included a net gain of $9.8 million for the year ended December 31, 2024 related to the sale of land and a gain of $0.8 million for the year ended December 31, 2023 related to non-refundable fees on the sale of land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for additional information.
Current report
Qualitative Assessment for Impairment—As of October 31, 2024, the Company performed a qualitative assessment for the CM-SS, CM-CCM and IC-SS reporting units, to determine whether it was more likely than not that the fair values of the reporting units were less than their carrying values. In performing this analysis, the Company considered various qualitative factors, including economic conditions, industry and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific events.
Current report
Based on its qualitative assessments, management concluded that as of October 31, 2024, it was not more likely than not that the fair values of the reporting units were less than their respective carrying values. As of December 31, 2024, the goodwill balances of the CM-SS, CM-CCM and IC-SS reporting units were $99.9 million, $252.5 million and $53.0 million, respectively.
Current report
In August 2024, the Company executed an amendment to commence the process of terminating the Company’s primary defined benefit plan (the “Plan”), as further described in Note 7, Retirement Plans, to the audited Consolidated Financial Statements. The Plan’s benefit obligation is expected to be settled by offering lump sum distributions to participants, followed by the purchase of annuity contracts to transfer the Plan’s remaining obligation to a third party. As settlement of the obligations will be funded with Plan assets, the Company expects to make a cash contribution to fully fund the Plan in 2025. The cash contribution amount will depend upon the nature and timing of participant lump sum settlements and prevailing market conditions. As termination of the Plan is considered probable, the Plan’s actuarial assumptions as of December 31, 2024 reflect the expected Plan termination. Finalization of the Plan termination is subject to certain conditions, including regulatory review, and the Company has the ability to change the effective date of the termination or revoke the decision to terminate the Plan.
Removed paragraphs (13)
Previous report
Income from operations for the year ended December 31, 2023 decreased by $35.0 million, or 24.1%, to $110.0 million from $145.0 million for the year ended December 31, 2022. Income from operations decreased primarily due to lower sales volumes, an unfavorable sales mix, higher depreciation and amortization expense, a $6.1 million loss on the disposition of the eBrevia business and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Previous report
Income from operations of $6.8 million for the year ended December 31, 2023 decreased $6.7 million, or 49.6%, as compared to the year ended December 31, 2022, primarily due to an increase in depreciation and amortization expense, a $6.1 million loss on the disposition of the eBrevia business in the fourth quarter of 2023, higher selling expense, a higher allocation of overhead costs and higher restructuring, impairment and other charges, net, partially offset by price increases and cost control initiatives.
Previous report
Operating margin decreased from 7.5% for the year ended December 31, 2022 to 3.7% for the year ended December 31, 2023, primarily due to an increase in depreciation and amortization expense, a $6.1 million loss on the disposition of the eBrevia business, which had a negative impact on operating margin of 3.3%, the decline in sales due to the disposition of the EOL business, higher selling expense, a higher allocation of overhead costs and higher restructuring, impairment and other charges, net, partially offset by price increases and cost control initiatives.
Previous report
Income from operations of $103.9 million for the year ended December 31, 2023 decreased $27.5 million, or 20.9%, as compared to the year ended December 31, 2022, primarily due to lower sales volumes, an unfavorable sales mix, higher bad debt expense and higher accelerated rent expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Previous report
Operating margin decreased from 32.0% for the year ended December 31, 2022 to 29.2% for the year ended December 31, 2023, primarily due to an unfavorable sales mix, higher bad debt expense and higher accelerated rent expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Previous report
Operating margin increased from 24.8% for the year ended December 31, 2022 to 30.0% for the year ended December 31, 2023, primarily due to a favorable sales mix, cost control initiatives, and lower restructuring, impairment and other charges, net, partially offset by a higher allocation of overhead costs.
Previous report
Gain on sale of long-lived assets—Included a gain of $0.8 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively, from non-refundable deposits on the potential sale of land.
Previous report
COVID-19 related recoveries—Included recoveries of $0.5 million for the year ended December 31, 2022 from certain governmental subsidies related to employee wages at certain international locations.
Previous report
On August 16, 2022, President Biden signed the Inflation Reduction Act (“IRA”) into law, which included enactment of a 15% corporate minimum tax effective in 2023 and imposes a 1% excise tax on share repurchases that occur after December 31, 2022. The enactment of the IRA did not have a material impact on the Company's audited Consolidated Financial Statements.
Previous report
The Company’s disposition of the eBrevia, Inc (“eBrevia”) business closed on December 1, 2023, and the Company received net cash proceeds of $0.5 million.
Previous report
Quantitative Assessment for Impairment—As of October 31, 2023, the Company performed a quantitative assessment for the CM-SS, CM-CCM and IC-SS reporting units. The analysis performed included estimating the fair value of the reporting units using both the income and market approaches. The income approach requires management to estimate a number of factors, including projected future operating results, anticipated future cash flows, discount rates and the allocation of shared or corporate items. The market approach estimates fair value using comparable marketplace fair value data from within a comparable industry grouping. The Company weighed both the income and market approaches equally to estimate the concluded fair value of the reporting unit.
Previous report
The determination of fair value in the quantitative assessment requires the Company to make significant estimates and assumptions. These estimates and assumptions primarily include, but are not limited to: the selection of appropriate peer group companies and an appropriate market multiple, the discount rate; terminal growth rates; and forecasts of revenue, operating income, restructuring charges and capital expenditures.
Previous report
As a result of the quantitative assessment for CM-SS, CM-CCM and IC-SS, the estimated fair value substantially exceeded the carrying value and no goodwill impairment charge was recorded for the year ended December 31, 2023. The goodwill balances of the CM-SS, CM-CCM, and IC-SS reporting units as of December 31, 2023 were $100.0 million, $252.8 million, and $53.0 million, respectively.
Reworded paragraphs (50)
Previous wording
The Company operates its business through four operating and reportable segments: Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions and Investment Companies – Compliance and Communications Management. Corporate is not an operating segment and consists primarily of unallocated SG&A activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costs and earnings of employee benefits plans, such as pension and other postretirement benefits plans expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the operating segments. For a description of the Company’s operating segments, refer to Part I, Item 1. Business of this Annual Report.
Current wording
Corporate is not an operating segment and consists primarily of unallocated SG&A activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costs and earnings of employee benefits plans, such as pension and other postretirement benefits plans expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the operating segments. For a description of the Company’s operating segments, refer to Part I, Item 1. Business of this Annual Report.
Previous wording
Net sales for the year ended December 31, 2023 decreased by $36.4 million, or 4.4%, to $797.2 million from $833.6 million for the year ended December 31, 2022, including a $0.8 million, or 0.1% decrease due to changes in foreign currency exchange rates. Net sales decreased primarily due to lower capital markets transactional volumes and a $5.7 million decrease from the disposition of the EOL and eBrevia businesses, partially offset by higher software solutions net sales driven by price increases and higher volumes and higher investment companies transactional volumes.
Current wording
Net sales for the year ended December 31, 2024 decreased by $15.3 million, or 1.9%, to $781.9 million from $797.2 million for the year ended December 31, 2023, including a $0.2 million increase due to changes in foreign currency exchange rates. Net sales decreased primarily due to lower capital markets and investment companies compliance and transactional volumes, partially offset by higher Venue volumes, software price increases and higher Arc Suite volumes as a result of the Company’s TSR offering.
Previous wording
Depreciation and amortization of $56.7 million for the year ended December 31, 2023 increased $10.4 million, or 22.5%, as compared to the year ended December 31, 2022, primarily due to additional software development and higher other intangible assets amortization expense. Refer to Note 4, Goodwill and Other Intangible Assets, net, to the audited Consolidated Financial Statements for further information.
Current wording
Depreciation and amortization of $56.7 million for the year ended December 31, 2023 increased $10.4 million, or 22.5%, as compared to the year ended December 31, 2022, primarily due to additional software development and higher other intangible assets amortization expense.
Previous wording
The following tables summarize net sales, income from operations, operating margin and certain items impacting comparability within each of the operating segments and Corporate.
Current wording
The following tables summarize net sales, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin within each of the operating segments.
Previous wording
Net sales of $185.9 million for the year ended December 31, 2023 increased $5.7 million, or 3.2%, as compared to the year ended December 31, 2022. Net sales increased primarily due to Venue and ActiveDisclosure price increases and higher Venue volumes, partially offset by a $5.7 million decrease due to the disposition of the EOL and eBrevia businesses in the fourth quarters of 2022 and 2023, respectively.
Current wording
Net sales of $185.9 million for the year ended December 31, 2023 increased $5.7 million, or 3.2%, as compared to the year ended December 31, 2022, primarily due to Venue and ActiveDisclosure price increases and higher Venue volumes, partially offset by a $5.7 million decrease due to the disposition of the EOL and eBrevia businesses in the fourth quarters of 2022 and 2023, respectively.
Previous wording
Net sales of $355.4 million for the year ended December 31, 2023 decreased $54.9 million, or 13.4%, as compared to the year ended December 31, 2022. Net sales decreased primarily due to lower transactional and compliance volumes.
Current wording
Net sales of $355.4 million for the year ended December 31, 2023 decreased $54.9 million, or 13.4%, as compared to the year ended December 31, 2022, primarily due to lower transactional and compliance volumes.
Previous wording
Operating margin decreased from 22.0% for the year ended December 31, 2022 to 20.7% for the year ended December 31, 2023, primarily due to higher product development costs, higher depreciation and amortization expense and a higher allocation of overhead costs, partially offset by cost control initiatives and price increases.
Current wording
Segment Adjusted EBITDA margin decreased from 34.6% for the year ended December 31, 2023 to 34.2% for the year ended December 31, 2024, primarily due to a higher allocation of overhead costs, partially offset by price increases.
Previous wording
Net sales of $106.8 million for the year ended December 31, 2023 increased $7.4 million, or 7.4%, as compared to the year ended December 31, 2022. Net sales increased primarily due to higher ArcRegulatory, ArcPro, and ArcDigital volumes and price increases.
Current wording
Net sales of $106.8 million for the year ended December 31, 2023 increased $7.4 million, or 7.4%, as compared to the year ended December 31, 2022, primarily due to higher ArcRegulatory, ArcPro, and ArcDigital volumes and price increases.
Previous wording
Income from operations of $22.1 million for the year ended December 31, 2023 increased $0.2 million, or 0.9%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, cost control initiatives and price increases, partially offset by higher product development costs, higher depreciation and amortization expense and a higher allocation of overhead costs.
Current wording
Segment Adjusted EBITDA of $36.9 million for the year ended December 31, 2023 increased $2.8 million, or 8.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, cost control initiatives and price increases, partially offset by higher product development costs and a higher allocation of overhead costs.
Previous wording
Net sales of $149.1 million for the year ended December 31, 2023 increased $5.4 million, or 3.8%, as compared to the year ended December 31, 2022. Net sales increased primarily due to higher transactional volumes, partially offset by lower compliance volumes.
Current wording
Net sales of $149.1 million for the year ended December 31, 2023 increased $5.4 million, or 3.8%, as compared to the year ended December 31, 2022, primarily due to higher transactional volumes, partially offset by lower compliance volumes.
Previous wording
Income from operations of $44.7 million for the year ended December 31, 2023 increased $9.0 million, or 25.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, a favorable sales mix, cost control initiatives and lower restructuring, impairment and other charges, net, partially offset by a higher allocation of overhead costs.
Current wording
Segment Adjusted EBITDA of $49.4 million for the year ended December 31, 2023 increased $7.6 million, or 18.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, a favorable sales mix and cost control initiatives, partially offset by a higher allocation of overhead costs.
Previous wording
The following table summarizes unallocated operating expenses and certain items impacting comparability within the activities presented as Corporate:
Current wording
The following table summarizes unallocated expenses within Corporate:
Previous wording
Corporate operating expenses of $67.5 million for the year ended December 31, 2023 increased $10.0 million as compared to the year ended December 31, 2022, primarily due to higher consulting expense, higher share-based compensation expense, higher incentive compensation expense and higher healthcare expense, partially offset by cost control initiatives.
Current wording
Corporate unallocated expenses of $43.5 million for the year ended December 31, 2023 increased $6.2 million as compared to the year ended December 31, 2022, primarily due to higher consulting expense, higher incentive compensation expense and higher healthcare expense, partially offset by cost control initiatives.
Previous wording
The Company believes that certain non-GAAP measures, such as non-GAAP adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and enhance the overall ability to assess the Company’s financial performance. The Company uses these measures, together with other measures of performance prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Adjusted EBITDA allows investors to make a more meaningful comparison between the Company’s core business operating results over different periods of time. The Company believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provides useful information about the Company’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as historic cost and age of assets, restructuring, impairment and other charges, net, non-income tax, net, gain on investments in equity securities as well as other items, as described below, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated.
Current wording
The Company believes that certain non-GAAP measures, such as non-GAAP consolidated adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and enhance the overall ability to assess the Company’s financial performance. The Company uses these measures, together with other measures of performance prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), to compare the relative performance of operations in planning, budgeting and reviewing the performance of its business. Adjusted EBITDA allows investors to make a more meaningful comparison between the Company’s core business operating results over different periods of time. The Company believes that Adjusted EBITDA, when viewed with the Company’s results under GAAP and the accompanying reconciliations, provides useful information about the Company’s business without regard to potential distortions. By eliminating potential differences in results of operations between periods caused by factors such as historic cost and age of assets, restructuring, impairment and other charges, net, non-income tax, net, gain on investments in equity securities as well as other items, as described below, the Company believes that Adjusted EBITDA can provide a useful additional basis for comparing the current performance of the underlying operations being evaluated.
Previous wording
Adjusted EBITDA is not presented in accordance with GAAP and has important limitations as an analytical tool. These measures should not be considered as a substitute for analysis of the Company’s results as reported under GAAP. In addition, these measures are defined differently by different companies and, accordingly, such measures may not be comparable to similarly-titled measures of other companies. In addition to the factors listed above, share-based compensation expense is excluded from Adjusted EBITDA. Although share-based compensation is a key incentive offered to certain employees, business performance is evaluated excluding share-based compensation expense. Depending upon the size, timing and the terms of grants, share-based compensation expense may vary but will recur in future periods.
Current wording
Adjusted EBITDA is not presented in accordance with GAAP and has important limitations as an analytical tool. These measures should not be considered as a substitute for analysis of the Company’s results as reported under GAAP. In addition, these measures are defined differently by different companies and, accordingly, such measures may not be comparable to similarly-titled measures of other companies. In addition to the factors listed above, share-based compensation expense is excluded from Adjusted EBITDA. Although share-based compensation is a key incentive offered to certain of the Company’s employees, business performance is evaluated excluding share-based compensation expense. Depending upon the size, timing and the terms of grants, share-based compensation expense may vary but will recur in future periods.
Previous wording
A discussion of the Company’s financial condition, changes in financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021, can be found in Part II, Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of DFIN's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023.
Current wording
A reconciliation and discussion of changes in Adjusted EBITDA for the year ended December 31, 2023 as compared to the year ended December 31, 2022, can be found in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of DFIN’s Annual Report for the year ended December 31, 2023, filed with the SEC on February 20, 2024.
Previous wording
A reconciliation of net earnings to Adjusted EBITDA for the years ended December 31, 2023 and 2022 is presented in the following table:
Current wording
The following table reconciles net earnings to Adjusted EBITDA for the years ended December 31, 2024 and 2023:
Previous wording
Restructuring, impairment and other charges, net—The year ended December 31, 2023 included employee termination costs of $9.2 million. The year ended December 31, 2022 included employee termination costs of $6.8 million. Refer to Note 6, Restructuring, Impairment and Other Charges, net, to the audited Consolidated Financial Statements for additional information.
Current wording
Restructuring, impairment and other charges, net—The year ended December 31, 2024 included employee termination costs of $5.5 million. The year ended December 31, 2023 included employee termination costs of $9.2 million. Refer to Note 6, Restructuring, Impairment and Other Charges, net, to the audited Consolidated Financial Statements for additional information.
Previous wording
Share-based compensation expense—Included charges of $22.5 million and $19.3 million for the years ended December 31, 2023 and 2022, respectively.
Current wording
Share-based compensation expense—Included charges of $25.2 million and $22.5 million for the years ended December 31, 2024 and 2023, respectively.
Previous wording
Non-income tax, net—Included income of $0.9 million for both of the years ended December 31, 2023 and 2022 related to certain estimated non-income tax exposures previously accrued by the Company.
Current wording
Non-income tax, net—Included income of $1.1 million and $0.9 million for the years ended December 31, 2024 and 2023, respectively, related to certain estimated non-income tax exposures previously accrued by the Company.
Previous wording
Gain on investments in equity securities—Included a net realized gain of $7.0 million for the year ended December 31, 2023 related to the sales of investments in equity securities and an unrealized gain of $0.5 million for the year ended December 31, 2022. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for additional information.
Current wording
Gain on investments in equity securities—The year ended December 31, 2024 included a gain of $0.4 million. The year ended December 31, 2023 included a net realized gain of $7.0 million related to the sales of investments in equity securities. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for additional information.
Previous wording
Loss on sale of businesses—Included a loss of $6.1 million for the year ended December 31, 2023 related to the disposition of the eBrevia business and a loss of $0.7 million for the year ended December 31, 2022 related to the disposition of the EOL business.
Current wording
(Gain) loss on sale of a business—Included a gain of $0.4 million and a loss of $6.1 million for the years ended December 31, 2024 and 2023, respectively, related to the disposition of the eBrevia business. Refer to Note 3, Dispositions, to the audited Consolidated Financial Statements for further information.
Previous wording
Accelerated rent expense—Included charges of $3.7 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively, related to the acceleration of rent expense associated with abandoned operating leases.
Current wording
Accelerated rent expense—Included charges of $3.7 million for the year ended December 31, 2023 related to the acceleration of rent expense associated with abandoned operating leases.
Previous wording
Disposition-related expenses—Included charges of $0.3 million for the year ended December 31, 2023 related to costs associated with the disposition of the eBrevia business and charges of $0.1 million for the year ended December 31, 2022 related to legal costs associated with the disposition of the EOL business.
Current wording
Disposition-related expenses—Included charges of $0.3 million for the year ended December 31, 2023 related to costs associated with the disposition of the eBrevia business.
Previous wording
The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its investors. Cash on hand, operating cash flows and the Company’s Revolving Facility are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, acquisitions and completion of restructuring programs.
Current wording
The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its investors. Cash and cash equivalents on hand, operating cash flows and the Company’s Revolving Facility are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, share repurchases and continuous operational improvements.
Previous wording
The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate foreign cash, associated with foreign earnings previously subjected to U.S. tax, with minimal additional tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign earnings already subject to U.S. tax. The Company repatriated excess cash at its foreign subsidiaries to the U.S. during the year ended December 31, 2021 and did not make cash repatriations during 2023 and 2022. The Company is evaluating whether to make any cash repatriations in the future.
Current wording
The Company maintains cash pooling structures that enable participating international locations to draw on the pools’ cash resources to meet local liquidity needs. Foreign cash balances may be loaned from certain cash pools to U.S. operating entities on a temporary basis in order to reduce the Company’s short-term borrowing costs or for other purposes. The Company has the ability to repatriate foreign cash, associated with foreign earnings previously subjected to U.S. tax, with minimal additional tax consequences. The Company maintains its assertion of indefinite reinvestment on all foreign earnings and other outside basis differences to indicate that the Company remains indefinitely reinvested in operations outside of the U.S., with the exception of the previously taxed foreign earnings already subject to U.S. tax. The Company repatriated $30.0 million of excess cash of previously taxed earnings at its foreign subsidiaries to the U.S. during the year ended December 31, 2024. The Company did not make cash repatriations during the years ended December 31, 2023 and 2022. The Company is evaluating whether to make any cash repatriations in the future.
Previous wording
The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”). Policymakers across jurisdictions have begun adopting the GloBE Model Rules to implement a global minimum corporate tax rate of 15%. The OECD continues to release administrative guidance and many countries in which the Company operates have adopted or have proposed legislation to adopt Pillar Two. Many aspects of the minimum tax directive will be effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring implemented legislation and effective dates in its jurisdictions of operations. The Company currently does not expect the Pillar Two framework to have a material impact on its consolidated financial statements.
Current wording
The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”). Policymakers across jurisdictions have begun adopting the GloBE Model Rules to implement a global minimum corporate tax rate of 15%. The OECD continues to release administrative guidance and many countries in which the Company operates have adopted or have proposed legislation to adopt Pillar Two. Many aspects of the minimum tax directive became effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring enacted legislation and effective dates in its jurisdictions of operations. The Pillar Two framework did not have a material impact on the Company’s audited Consolidated Financial Statements for the year ended December 31, 2024 and the Company does not expect enacted legislation to have a material impact in future periods.
Previous wording
The Company currently expects capital expenditures to be approximately $65 million to $70 million in 2024, as compared to $61.8 million in 2023. The increase in capital expenditures relates to investments in the Company’s software portfolio.
Current wording
The Company currently expects capital expenditures to be approximately $65 million to $70 million in 2025, as compared to $65.9 million in 2024. Capital expenditures primarily relate to investments in the Company’s software portfolio.
Previous wording
Cash and cash equivalents were $23.1 million at December 31, 2023, which included $4.7 million in the U.S. and $18.4 million at international locations.
Current wording
Cash and cash equivalents were $57.3 million at December 31, 2024, which included $34.2 million in the U.S. and $23.1 million at international locations.
Previous wording
The following describes the Company’s cash flows for the years ended December 31, 2023 and 2022:
Current wording
The following table describes the Company’s cash flows for the years ended December 31, 2024 and 2023:
Previous wording
Net cash provided by operating activities was $124.0 million for the year ended December 31, 2023, as compared to $150.2 million for the year ended December 31, 2022. The decrease in net cash provided by operating activities was primarily due to unfavorable changes to accounts payable, accounts receivable, a decrease in net earnings and an increase in interest paid, partially offset by lower incentive compensation and commissions payments. Accounts payable decreased operating cash flows by $15.3 million for the year ended December 31, 2023, as compared to increasing operating cash flows by $12.1 million for the year ended December 31, 2022, primarily due to timing of supplier payments. Accounts receivable decreased operating cash flows by $2.3 million for the year ended December 31, 2023, as compared to increasing operating cash flows by $24.4 million for the year ended December 31, 2022, due to the timing of collections. The Company’s interest payments increased to $16.6 million for the year ended December 31, 2023 from $7.6 million for the year ended December 31, 2022, primarily due to higher interest rates and higher average borrowings on the Revolving Facility. These decreases in cash provided were partially offset by accrued liabilities and other, which decreased operating cash flows by $14.6 million for the year ended December 31, 2023, as compared to a decrease of $53.9 million for the year ended December 31, 2022, primarily due to lower incentive compensation payments in 2023 as a result of the Company’s 2022 operating results and lower commissions payments in 2023 as a result of lower sales volumes.
Current wording
Net cash provided by operating activities was $171.1 million for the year ended December 31, 2024, as compared to $124.0 million for the year ended December 31, 2023. The change in net cash provided by operating activities was primarily due to favorable changes to accrued liabilities and other, an increase in net earnings, and a favorable change to accounts payable, partially offset by an unfavorable change in prepaid expenses and other current assets. Accrued liabilities and other increased operating cash flows by $16.9 million for the year ended December 31, 2024, as compared to decreasing operating cash flows by $13.8 million for the year ended December 31, 2023, primarily due to higher expected incentive compensation payments, an increase in estimated commission payments as a result of higher 2024 software solutions net sales and lower consulting costs associated with Company process improvements. Accounts payable decreased operating cash flows by $5.7 million for the year ended December 31, 2024, as compared to decreasing operating cash flows by $15.3 million for the year ended December 31, 2023, primarily due to the timing of supplier payments. Prepaid expenses and other current assets decreased operating cash flows by $6.3 million for the year ended December 31, 2024, as compared to increasing operating cash flows by $1.7 million for the year ended December 31, 2023, primarily due to the timing of prefunding payroll payments with the Company’s payroll processor.
Previous wording
Net cash used in investing activities was $50.9 million for the year ended December 31, 2022, which consisted of $54.2 million of capital expenditures, mostly driven by investments in software development, partially offset by $3.3 million of proceeds from the sale of the EOL business.
Current wording
Net cash used in investing activities was $53.3 million for the year ended December 31, 2024, which primarily consisted of $65.9 million of capital expenditures, substantially all related to investments in software development, partially offset by $12.4 million of proceeds from the sale of land.
Previous wording
Net cash used in investing activities was $51.3 million for the year ended December 31, 2023, which consisted of $61.8 million of capital expenditures, substantially all related to investments in software development, partially offset by $10.0 million of proceeds from the sales of investments in equity securities.
Current wording
Net cash used in investing activities was $51.3 million for the year ended December 31, 2023, which primarily consisted of $61.8 million of capital expenditures, substantially all related to investments in software development, partially offset by $10.0 million of proceeds from the sales of investments in equity securities.
Previous wording
Net cash used in financing activities was $121.1 million for the year ended December 31, 2022. During the year ended December 31, 2022, the Company received $345.5 million of proceeds from the Revolving Facility borrowings, offset by $300.5 million of payments on the Revolving Facility borrowings. The Company’s common stock repurchases for the year ended December 31, 2022 totaled $164.7 million, which included $152.5 million of repurchases under the stock repurchase program and $12.2 million associated with vesting of the Company employees' equity awards.
Current wording
Net cash used in financing activities was $82.1 million for the year ended December 31, 2024. During the year ended December 31, 2024, the Company received $159.5 million of proceeds from the Revolving Facility borrowings, offset by $159.5 million of payments on the Revolving Facility borrowings. The Company’s common stock repurchases for the year ended December 31, 2024 totaled $81.6 million, which included $58.5 million of repurchases under the stock repurchase program and $23.1 million associated with vesting of the Company’s equity awards.
Previous wording
Net cash used in financing activities was $84.6 million for the year ended December 31, 2023. During the year ended December 31, 2023, the Company made payments of $347.0 million on the Revolving Facility borrowings, partially offset by $302.0 million of proceeds from the Revolving Facility borrowings. The Company’s common stock repurchases for the year ended December 31, 2023 totaled $40.3 million, which included $22.6 million of repurchases under the stock repurchase program and $17.7 million associated with vesting of the Company’s employees’ equity awards.
Current wording
Net cash used in financing activities was $84.6 million for the year ended December 31, 2023. During the year ended December 31, 2023, the Company made payments of $347.0 million on the Revolving Facility borrowings, partially offset by $302.0 million of proceeds from the Revolving Facility borrowings. The Company’s common stock repurchases for the year ended December 31, 2023 totaled $40.3 million, which included $22.6 million of repurchases under the stock repurchase program and $17.7 million associated with vesting of the Company’s equity awards.
Previous wording
As of December 31, 2023, the Company had total future contractual and other obligations of approximately $334 million, with approximately $138 million of the future contractual and other obligations due during 2024. The future contractual obligations consist of outstanding debt and related interest, sales commissions, operating and finance lease payments, outsourced services relating to information technology, maintenance and other services, incentive compensation, deferred compensation, multi-employer pension plans obligations and other miscellaneous obligations. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies; Note 5, Leases; Note 6, Restructuring, Impairment and Other Charges, net; Note 7, Retirement Plans; Note 8, Commitments and Contingencies and Note 10, Debt to the audited Consolidated Financial Statements for additional information.
Current wording
As of December 31, 2024, the Company had total future contractual and other obligations of approximately $348 million, with approximately $155 million of the future contractual and other obligations due during 2025. The future contractual obligations consist of outstanding debt and related interest, outsourced services related to information technology, maintenance and other services, sales commissions, operating and finance lease payments, incentive compensation, deferred compensation, multi-employer pension plans obligations and other miscellaneous obligations. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies; Note 5, Leases; Note 6, Restructuring, Impairment and Other Charges, net; Note 7, Retirement Plans; Note 8, Commitments and Contingencies and Note 10, Debt to the audited Consolidated Financial Statements for additional information.
Previous wording
Excludes unamortized debt issuance costs of $0.5 million, which do not represent contractual commitments with a fixed amount or maturity date.
Current wording
Excludes unamortized debt issuance costs of $0.3 million, which do not represent contractual commitments with a fixed amount or maturity date.
Previous wording
Credit Agreement—On May 27, 2021 (the “Restatement Effective Date”), the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.00% to 2.50% based upon the Company’s Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million revolving credit facility (the “Revolving Facility”) to May 27, 2026 and modify the financial maintenance and negative covenants in the Credit Agreement.
Current wording
Credit Agreement—On May 27, 2021, the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.00% to 2.50% based upon the Company's Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million revolving credit facility (the “Revolving Facility”) to May 27, 2026 and modify the financial maintenance and negative covenants in the Credit Agreement.
Previous wording
As of December 31, 2023, there were no borrowings outstanding under the Revolving Facility, however, the Company had $2.5 million in outstanding letters of credit and bank guarantees, of which $1.0 million of the outstanding letters of credit reduced the availability under the Revolving Facility. Based on the Company’s results of operations for the year ended December 31, 2023 and existing debt, the Company would have had the ability to utilize the remaining $299.0 million of the Revolving Facility and not have been in violation of the terms of the agreement.
Current wording
As of December 31, 2024, there were no borrowings outstanding under the Revolving Facility, however, the Company had $1.6 million in outstanding letters of credit and bank guarantees, of which $1.0 million of the outstanding letters of credit reduced the availability under the Revolving Facility. Based on the Company’s results of operations for the year ended December 31, 2024 and existing debt, the Company would have had the ability to utilize the remaining $299.0 million of the Revolving Facility and not have been in violation of the terms of the agreement.
Previous wording
The current availability under the Revolving Facility and net available liquidity as of December 31, 2023 is shown in the table below:
Current wording
The current availability under the Revolving Facility and net available liquidity as of December 31, 2024 are shown in the table below:
Showing the first 40 of 50 pairs. Open the source sections for the rest.
Rearranged current paragraphs (6)
Current report — wording carried from elsewhere
Software solutions cost of sales of $107.4 million for the year ended December 31, 2024 decreased $1.3 million, or 1.2%, as compared the year ended December 31, 2023. Software solutions cost of sales decreased primarily due to a favorable sales mix and cost control initiatives, partially offset by higher sales volumes. As a percentage of software solutions net sales, software solutions costs of sales decreased 4.5%, primarily driven by a favorable sales mix, price increases and cost control initiatives.
Current report — wording carried from elsewhere
Tech-enabled services cost of sales of $120.6 million for the year ended December 31, 2024 decreased $7.0 million, or 5.5%, as compared to the year ended December 31, 2023. Tech-enabled services cost of sales decreased primarily due to lower sales volumes and cost control initiatives. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales decreased 0.3%, primarily driven by cost control initiatives.
Current report — wording carried from elsewhere
Print and distribution cost of sales of $69.9 million for the year ended December 31, 2024 decreased $27.1 million, or 27.9%, as compared to the year ended December 31, 2023. Print and distribution cost of sales decreased primarily due to lower sales volumes and cost control initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 4.7%, primarily driven by cost control initiatives.
Current report — wording carried from elsewhere
Restructuring, impairment and other charges, net of $6.6 million for the year ended December 31, 2024 decreased $3.2 million, or 32.7%, as compared to the year ended December 31, 2023. For the year ended December 31, 2024, these charges included $5.5 million of employee termination costs for approximately 70 employees. For the year ended December 31, 2023, these charges included $9.2 million of employee termination costs for approximately 170 employees. Refer to Note 6, Restructuring, Impairment and Other Charges, net, to the audited Consolidated Financial Statements for further information.
Current report — wording carried from elsewhere
Interest expense, net of $12.9 million for the year ended December 31, 2024 decreased $2.9 million, or 18.4%, as compared to the year ended December 31, 2023. Interest expense, net decreased primarily due to lower average Revolving Facility borrowings during the year ended December 31, 2024 compared to the year ended December 31, 2023, partially offset by a higher variable interest rate on the Company’s outstanding debt facilities. Refer to Note 10, Debt, to the audited Consolidated Financial Statements for further information.
Current report — wording carried from elsewhere
The effective income tax rate was 26.1% for the year ended December 31, 2024 compared to 19.4% for the year ended December 31, 2023. The change in the effective income tax rate was primarily driven by the tax benefit from the loss on the disposition of the eBrevia business recorded in 2023 and a reduction in favorable return to provision adjustments, partially offset by higher pre-tax earnings. Refer to Note 9, Income Taxes, to the audited Consolidated Financial Statements for further information.