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Jun 30, 2025
Donnelley Financial Solutions Q2 2025 Earnings Report
Donnelley Financial Solutions reported its second-quarter 2025 financial results, highlighting record software solutions net sales and strong Adjusted EBITDA margin despite overall revenue decline.
Key Takeaways
Donnelley Financial Solutions (DFIN) delivered solid results in the second quarter of 2025, with record quarterly software solutions net sales of $92.2 million, a 7.7% increase year-over-year. Software solutions now account for 42.3% of total net sales, demonstrating progress in its software-focused strategy. Despite a 10.1% decrease in total net sales to $218.1 million due to lower print and distribution volumes and reduced transactional revenue, the company maintained a strong Adjusted EBITDA margin of 35.0% and improved cash flow.
Record quarterly software solutions net sales reached $92.2 million, marking a 7.7% increase from Q2 2024, driven by recurring compliance software products ActiveDisclosure and Arc Suite.
Software solutions comprised 42.3% of total net sales in Q2 2025, up from 35.3% in the prior year, aligning with the company's long-term strategic shift.
Net earnings were $36.1 million, or $1.28 per diluted share, while Adjusted EBITDA stood at $76.3 million with a strong Adjusted EBITDA margin of 35.0%.
Operating Cash Flow increased by $12.2 million and Free Cash Flow increased by $14.9 million year-over-year, reflecting improved working capital management and lower capital expenditures.
Revenue by Segment
Forward Guidance
For the third quarter of 2025, DFIN anticipates total net sales between $165 million and $175 million, with an Adjusted EBITDA margin ranging from 23% to 25%. Capital markets transactional net sales are projected to be between $35 million and $40 million.
Positive Outlook
- Continued focus on investing to drive a more recurring sales mix.
- Aggressive management of cost structure to maintain profitability.
- Disciplined capital allocation aimed at delivering long-term value.
- Encouraging stabilization and improving trend in capital markets transactional activity observed in May and June, continuing into Q3.
- Strategic shift towards software solutions is expected to contribute to future growth.
Challenges Ahead
- Persistent macroeconomic headwinds are expected to continue suppressing demand for transactional offerings.
- Total net sales guidance for Q3 2025 ($165M-$175M) is lower than Q2 2025 ($218.1M).
- Adjusted EBITDA margin guidance for Q3 2025 (23%-25%) is lower than Q2 2025 (35.0%).
Revenue & Expenses
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Historical Earnings Impact
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Avg. Return Before/After Earnings
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