Cannae Holdings, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Kenai Holdings, Inc. Third Quarter 2021 Financial Results Conference Call. During today's presentation, all parties will be in a listen-only mode. Following the company's brief prepared remarks, the conference will be open for questions with instructions to follow at that time. As a reminder, this conference call is being recorded and a replay is available through 1159 p.m. Eastern Time on November 23rd, With that, I would like to turn the call over to Jamie Lillis of Solberry Trout.

Thank you, Operator, and thank you to all of you joining us today. On the call today, we have our Chief Executive Officer, Rick Massey, and I's President, David Ducamin, and Brian Coy, the company's Chief Financial Officer. Before we begin, I would like to remind you that this conference call and the Q&A following our remarks may contain forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about Kaniyia's expectations, hopes, intentions, or strategies regarding the future are forward-looking statements. Forward-looking statements are based on management's beliefs as well as assumptions made by and information currently available to management. Because such statements are based on expectations as to future financial and operating results and are not statements of fact, actual results may differ materially from those projected. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, the risks and other factors detailed in our quarterly shareholder letter, which was released this afternoon, and in our other filings with the SEC. Today's remarks will also include references to non-GAAP financial measures. Additional information, including the reconciliation between non-GAAP financial information to the GAAP financial information, is provided in our shareholder letter. I would now like to turn the call over to Kani's CEO, Rick Mastey, who will open with a few brief remarks and then open the line for questions.

Okay, thanks, Jamie. Bill is, our leader, Bill, is momentarily delayed. He's actually off working on He hasn't excused us. It's because he's working on a canine business or maybe potential piece of canine business. So he may join us. He may not during the call. So you've got the backup quarterback today. Before we start, I just want to refer you to what we think is a pretty nice document, our third quarter quarterly update. It's on our website. It's got a lot more detail about our numbers. our portfolio companies, Bill's outlook on the business, recent events, and so forth. It's going to cover a lot more detail than we're going to be able to on this call. I always want to start off by acknowledging that both Duke and Brian do a really nice job on that. You know, we're an active manager, and results of our active management approach began with this quarter with Dun & Bradstreet's third quarterly results, which were driven by an acceleration in organic revenue growth, which we believe is a key to improving the company's multiple valuation. We think eventually they're going to get a re-rate as their organic revenue continues to accelerate. In the quarter, they grew revenues 22 percent. They had adjusted EBITDA growth at 12 percent, both compared to the third quarter of 2020. The best part of the story was their organic revenue growth accelerated to 3.7% in constant currency as compared with about 120 basis points below that in the second quarter. And then, yeah, that was 3.3, sorry, not 120 basis points. The growth is all an execution of Anthony Jabbour's strategy which is continued growth in international. They got low-digit growth in North America, and they got that from what he calls the four horsemen. They added new logos. They upsold new products to their existing enterprise customers. They affected price increases, and they continue to grow their products small and medium sized marketing business. They have a lot of organic growth momentum and we believe that's going to accelerate through 2022. You know, it's been said that D&B is a show me stock and we believe they're beginning to show you. So we're happy owners. I'm happy to own it personally. I know a number of you on the call own it. I think you're going to be happy shareholders. It's been been sort of some dark days. here lately, but they're coming out. We believe they're coming out of the ditch, and it's going to be a great stock to own. We're also pleased with Alight and Ceridian. They posted great results this quarter. Alight reported earlier today 20% revenue growth in their BPAS revenue, which is their enterprise software platform. They had a 42% increase in and BPAS bookings in the third quarter, so incredible growth in the growth engine of Alight. They actually reported that at the end of the third quarter, they had achieved already 99% of the revenue that they had originally projected to achieve for the full year. So we're obviously, we're really happy with this company. They've done a few deals to expand their product offerings. Those are listed in the quarterly report and in their own press release, but that was Benify, Consumer Medical, and the Aon Retiree Health Exchange. We think Stephan and his team, Katie, Katinka, are best in class, and we share his vision, Stephan's vision, with the unlocking the power of Alight's BPAS platform. And it's funny because we were just talking, Alight started this year or started out as a public company. They talked about organic revenue growth of 1% for 2021. Then sometime in the second quarter, they said, well, we're going to get maybe 3% revenue growth, 3%, 4%, maybe up to 5%. Then today they got it to 5% to 6%. and 2021, and that obviously boats very well. I don't think they got it for 22, but you can expect the revenue to continue to accelerate. This company, in my own personal opinion, is going to be a high single digits grower in the very near future. That's going to get you a re-rate, a much higher multiple of EBITDA, and we think you're going to be a very happy owner there. Ceridian continues to deliver consistent results and continues to gain a wider following as evidenced by their inclusion in the S&P 500. This is an affirmation of their consistent growth and outstanding leadership. Their cloud revenue increased very strongly in the third quarter, which supports our belief that Ceridian has a long runway ahead for value creation and growth. And we're very excited about the bill in particular. We're very excited about the prospect of their wallet product and its expanding feature set. CDA is up almost three times in the past five years, and it represents a moik from our original investment of, what, 11 times? More than that? I'm sorry, I didn't write the number down, but it's incredible. David Ducamin, our president here, is... is the man in charge of our Sightline investment besides Bill. And I particularly, and we are all very excited about it. The Sightline is, we put in 240 on a $1 billion post-money valuation, and Kenai now owns 33% of Sightline. It is the provider, the lead, maybe the only provider of cashless payment solutions to online and physical casino gaming betting markets. Its solution includes cashless payment methods for slot machines and table games and casinos, plus payment methods for iCasinos and online sports betting. We are very impressed with management team there. We think this ultimately is a public company, don't we, dude? Everybody says transformational. This company is transforming. the payments business inside of these casinos from cash and ATMs and all this old school cash advances and so forth to a slick digital wallet. It's a very exciting business. PaySafe, another one of our portfolio companies, announced several wins across digital commerce verticals as well as three acquisitions that broadens their position in e-cash and open banking. And they report Thursday morning before the market opens. Trebia's merger with System One continues to move forward. They're in the middle of the registration process. We think that's going to happen kind of fourth quarter of this year, first quarter of next year. I got a chance to meet Michael Bland, very impressive, very smart guy. It is not an easy business to understand. And we're going to ask you to have the patience to study this business because we think it's a rule of 40 company, but it also generates a gob of cash. And that's a pretty rare combination. So we like the business. We think it's durable. We like the management. We think it's going to be a lot bigger. So we're encouraged with our progress as we work with our management teams to unlock the value. within our portfolio, but we know we've got a lot more to do, and we, and particularly Bill, will remain engaged in supporting our portfolio companies. I'm going to mention this again, but I can't go without mentioning our portfolio conference next month. All of our significant portfolio companies will be organized, as well as Black Knight and F&F. It's here in Vegas on December 8th. If you have not been invited and would like an invitation, I'm sure Jamie can get you there or Brian Coy, our CFO. So with that, we're ready, operator, for Q&A.