Donnelley Financial Solutions, Inc.

What they do

DFIN helps clients meet SEC filing and reporting requirements through software, technology-enabled services and, where still required, print and distribution. It serves capital markets clients across IPOs, M&A, debt offerings, SPACs and ongoing Exchange Act filings, and investment company clients for fund regulatory and stockholder communications. The company operates four reportable segments: Capital Markets Software Solutions, Capital Markets Compliance and Communications Management, Investment Companies Software Solutions and Investment Companies Compliance and Communications Management. Its primary software products are ActiveDisclosure, Arc Suite and Venue Virtual Data Room.

Revenue drivers

• Software solutions (ActiveDisclosure, Arc Suite, Venue) — Second-quarter 2026 software solutions net sales were $99.4 million, or 44.3% of total net sales, up 7.8% year-over-year, with ActiveDisclosure growing approximately 29%.
• Tech-enabled services — Second-quarter 2026 tech-enabled services net sales were $90.2 million, up $5.0 million or 5.9% year-over-year, covering document composition, SEC EDGAR filing services and transactional solutions.
• Print and distribution — Second-quarter 2026 print and distribution net sales were $34.6 million, down $6.1 million or 15.0% year-over-year, as clients shift away from physical printing.
• Capital markets transactional and Venue offerings — Demand is tied to IPO, M&A, debt offering, SPAC and de-SPAC activity, which management describes as volatile and recently disrupted by the fourth-quarter 2025 U.S. federal government shutdowns.

Recent performance

Second-quarter 2026 net sales were $224.2 million, up 2.8% from $218.1 million in the second quarter of 2025. Net earnings were $36.4 million, or $1.44 per diluted share, versus $36.1 million, or $1.28 per diluted share, a year earlier. Adjusted EBITDA was $82.3 million, up 7.9%, with Adjusted EBITDA margin of 36.7%, up about 170 basis points. Operating cash flow was $74.7 million and free cash flow was $61.2 million. For full-year 2025, net sales were $767.0 million and net earnings were $32.4 million, down from $92.4 million in 2024, which included an $82.8 million non-cash pension plan settlement charge.

Strategy

DFIN is focusing resources on its software solutions segments while making targeted investments to enhance product features. In its Compliance and Communications Management segments, it aims to maintain a market-leading position through high-touch, tech-enabled services and print and distribution capabilities. The company repurchased 763,451 shares for approximately $34.7 million in the second quarter of 2026, leaving $125.4 million on its $150 million authorization. It appointed Ken Napolitano as Chief Revenue Officer to advance a sales transformation. Gross leverage was 0.8x and net leverage 0.7x as of June 30, 2026.

Risks

• Capital markets cyclicality — Demand for transactional and Venue offerings depends on IPO, M&A and debt offering activity, which management says can cause uneven financial performance and was disrupted by fourth-quarter 2025 government shutdowns.
• Print and distribution decline — Clients are shifting away from physical print and distribution except where regulatorily required, and print and distribution net sales fell 15.0% year-over-year in the second quarter of 2026.
• Client self-service shift — Technological, regulatory and workflow changes have led clients to manage more of the financial disclosure process themselves, changing the marketplace for DFIN's services and products.
• Filing seasonality — The quarterly and annual public company reporting cycle subjects DFIN to filing seasonality that peaks shortly after each fiscal quarter end.

Outlook

Management pointed to a rebound in capital markets transactional activity, continued software solutions growth and permanent cost structure changes as drivers of second-quarter 2026 margin expansion. It noted the capital markets transactional environment remained active despite geopolitical uncertainty and market volatility. Management also flagged a moderate decline in traditional compliance revenue, part of which related to lower print and distribution revenue.