Donnelley Financial Solutions Inc

remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the call over to Mike Zhao, Head of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining Donnelly Financial Solutions' first quarter 2024 results conference call. This morning, we released our earnings report, including a supplemental trending schedule of historical results, copies of which can be found in the investor section of our website at DFINSolutions.com. During this call, we'll refer to forward-looking statements that are subject to risks and uncertainties. For complete discussion, please refer to the cautionary statements included in our earnings release and further details in our most recent annual report on Form 10-K, quarterly report on Form 10-Q, and other filings with the SEC. Further, we will discuss certain non-GAAP financial information, such as adjusted EBITDA, adjusted EBITDA margin, and organic net sales. We believe the presentation of non-GAAP financial information provides you with useful supplementary information concerning the company's ongoing operations and is an appropriate way for you to evaluate the company's performance. They are, however, provided for informational purposes only. Please refer to the earnings release and related tables for GAAP financial information and reconciliations of GAAP and non-GAAP financial information. I am joined this morning by Dan Lieb, Dave Gardella, Craig Clay, Eric Johnson, Boyd Strimley, and Kami Turner. I will now turn the call over to Dan.

Thank you, Mike, and good morning, everyone. We started 2024 by building on the positive momentum in our performance from last year, delivering consolidated organic net sales growth with an improved sales mix, strong year-over-year growth in adjusted EBITDA, adjusted EBITDA margin expansion, and improvements in both operating cash flow and free cash flow. We delivered first quarter net sales of $203.4 million, which increased 2.8% on an organic basis compared to the first quarter of 2023. I am encouraged by the composition of our organic net sales growth, with software solutions net sales increasing 16%, tech-enabled services net sales increasing nearly 6%, and print and distribution net sales declining approximately 20% as we continue to balance our revenue profile to drive improved profitability. The combination of the improved revenue profile, modest consolidated net sales growth, and cost management yielded first quarter adjusted EBITDA of $55.2 million and adjusted EBITDA margin of 27.1%, both of which are above last year's first quarter and once again significantly stronger than historical periods with similar revenue profiles. Our first quarter performance highlights the continued progress we are making in our transformation and positions us well to achieve our updated long-term financial targets. A key driver of our first quarter results is the performance of our software solutions portfolio, which reached $80.3 million in net sales, a new quarterly record. Software Solutions net sales growth accelerated in the first quarter to 16% on an organic basis versus the first quarter of 2023, an increase from the growth trends over the last few quarters. The growth in Software Solutions net sales was led by the performance of Venu, our virtual data room product, which posted 43% sales growth. We are encouraged by Venu's strong performance, which reflects strong sales execution across Venu's broad application within the M&A ecosystem that serves both announced and unannounced deals, as well as across public and private companies alike. This results in more resilient, stable demand than our transactional offerings. As a further demonstration of the momentum in our software solutions net sales, the growth trends of our recurring compliance software products, Active Disclosure and ArcSuite, both improved in the first quarter. with each product delivering stronger year-over-year growth on a sequential basis compared to the fourth quarter of 2023. Software Solutions made up 39.5% of total first quarter net sales, up approximately 420 basis points from last year's first quarter net sales mix. On a trailing four-quarter basis, Software Solutions net sales are now in excess of $300 million and represent 37.8% of total net sales. an increase of approximately 370 basis points from the first quarter 2023 trailing four-quarter period. Looking ahead, we expect the growth rates for active disclosure and ARC suite each to improve further in the second half of this year. For active disclosure, this improvement is driven by recent wins combined with overlapping last year's platform transition. In the case of ARC suites, The improved growth rate is primarily driven by the tailwind from the Tailored Shareholder Reports regulation. As we continue to evolve toward a higher sales mix of software solutions during the first quarter, that mix shift was accelerated by a reduction in print and distribution revenue, which declined by approximately $10 million, or 20%, compared to the first quarter of 2023. This reduction was evident mostly in the printing and distribution of annual reports and proxy statements aligned with our strategy to manage our sales mix toward a proportionally heavier mix of higher margin tech-enabled services and software solutions net sales, while benefiting from the financial profile associated with such a sales mix. Dave will cover our results in more detail, but first, I'd like to provide an update on our readiness for the Tailored Shareholder Reports regulation ahead of its July 2024 compliance date. As I've shared previously, we are making great progress in our technology development and go-to-market plans aimed to help our mutual fund and exchange traded funds clients operationalize the reporting to comply with this regulation, including being the first to market with the initial release of our TSR SaaS solution during the fourth quarter of last year. As we continue to mature and scale our TSR offerings, I'm excited by the end-to-end compliance solutions we have created for the regulation, giving DFIN an unmatched ability to serve clients the way they wish to work, via either SaaS-based solutions or traditional services, all in a one-stop shop that eliminates handoffs in the compliance process. In a further demonstration of our software product readiness, Last week, we announced DFIN successfully test-filed the full-form NCSR, including an IXBRL-tagged TSR, to the SEC on behalf of a large asset manager. The test filing was completed via our ARC Reporting SaaS product, the leading financial close software for investment companies, and a component of our ARC Suite offerings. The ARC Reporting solution offers clients the ability to execute financial calculations, report generation at the fund and share class level, IXBRL tagging, reviewing, and filing all through a single solution. Further, integrated data flow within ARC Reporting eliminates the need for post-production reconciliation and guarantees consistency with the fund's financial results at the share class level. This successful test filing demonstrates the dynamic end-to-end, straight-through processing that ArcSuite offers our clients, enabling them to create, file, web host, and distribute complex financial reports, all from a single platform. In addition to the functionality offered by Arc Reporting, DFIN is also ready to serve clients via traditional services for those who prefer that approach. In early April, we successfully completed the test filing of a full NCSR compliance document based on the new regulatory requirements, including IXBRL tagging of a tailored shareholder report by leveraging our industry-leading service capabilities. This test filing to the SEC was done on behalf of another large asset manager and highlights DFIN's deep expertise in the areas of IXBRL tagging and compliance filing. Our recent successful test filings represent an important milestone in our readiness journey and demonstrate DFIN's leadership in the industry and commitment to deliver a streamlined solution for a complex regulation. With less than three months to go until the July 2024 compliance date, DFIN remains very well positioned to serve our clients while capturing the recurring revenue opportunities associated with the tailored shelter reports regulation. Before I share a few closing remarks, I would like to turn the call over to Dave to provide more details on our first quarter results and our outlook for the second quarter. Dave?