Donnelley Financial Solutions Inc

and thank you for joining Donnelly Financial Solutions second quarter, 2025 results conference call. This morning we read our earnings report, including a set of supplemental trending schedules of historical results, copies of which can be found in the investor section of our website at definsolutions.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 10K quarterly report on form 10Q and other filings with the SEC. Further, we will discuss certain non-GAAP financial information such as adjusted EBITDA and adjusted EBITDA margin. 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 to non-GAAP financial information. I am joined this morning by Dan Lieb, Dave Gardella and other members of management. I will now turn the call over to Dan.

Thank you, Mike. And good morning, everyone. We delivered solid second quarter results highlighted by record quarterly software solutions net sales, strong adjusted EBITDA margin and increases in both operating cashflow and free cashflow all in the context of a challenging yet improving environment. We posted approximately 8% sales growth in our software solutions, including approximately 15% sales growth in our recurring compliance software offerings all while continuing to drive operating efficiencies and investing further in our transformation. Our second quarter results once again, demonstrated the resilience of our operating model and the sustainability of our performance as our business mix continues to evolve. As we entered the second quarter, difficult operating conditions persisted for much of April. Most acutely in our capital markets transactional offerings due to market uncertainty. As the quarter progressed, we saw improving trends not only in market activity, but also with respect to our own results. The stabilization supported a strong sequential rebound in transactional activity and related results from April to May, as well as from May to June. We are encouraged by the positive trajectory within the second quarter. A key area that reflects the success of our execution in the second quarter was our strong adjusted EBITDA margin performance. While the second quarter is a continuation of a prolonged multi-year downturn in capital markets transactional activity, our business remains fundamentally and substantially more profitable than it had been historically. Our second quarter adjusted EBITDA margin of 35% was the second highest quarterly EBITDA margin in our history. And trailing for a quarter EBITDA margin is 29.1%, despite the ongoing headwinds of a weak transactional market. Another area I would like to highlight is continued momentum in our software offerings, where we delivered year over year net sales growth of approximately 8%, despite a slight decline in our largest software offering venue, which faced a tough comparison, having grown 38% in last year's second quarter. Software Solutions made up .3% of total second quarter net sales up approximately 700 basis points from last year's second quarter sales mix. As a reminder, the second quarter, largely due to the annual meeting and proxy season, historically represents our largest quarter overall, yet represents a seasonal low for software as a percentage of revenue. On a trailing four quarter basis, Software Solutions comprised .1% of total net sales, an increase of approximately 610 basis points from the second quarter 2024 trailing four quarter period. Our second quarter Software Solutions net sales growth continues to be led by the performance of our recurring compliance and regulatory driven products, Active Disclosure and ArcSuite, which grew approximately 15% year over year in aggregate. Importantly, Active Disclosure and ArcSuite each posted double digit sales growth for the third consecutive quarter. For Active Disclosure, this growth was driven by the momentum in services revenue as a result of the continued adoption of our service package offerings, combined with the migration of certain traditional compliance activities to software, a trend we expect to continue going forward. In the case of ArcSuite, the improved growth rate was primarily driven by the Tailored Shareholder Reports Regulation. Consistent with our expectation, we've realized Software Solutions net sales of approximately $11 million related to the TSR regulation since the effective date of July, 2024. As we overlap the incremental year over year benefit from the Tailored Shareholder Reports Regulation in the third quarter, we expect ArcSuite to exhibit a more normalized growth profile beginning in the third quarter. As an end to end software solution for investment company financial and regulatory reporting, ArcSuite is well positioned to capture additional growth as the industry increasingly looks to improve efficiency, automate processes, and comply with evolving regulatory requirements. As it relates to venue, following a moderate decline in the first quarter, sales accelerated in the second quarter and were nearly flat compared to last year's second quarter. The resilient level of underlying activity taking place on the platform, including activity from a large project combined with improved -to-market execution, enabled venue to mostly offset the impact of several large projects, which benefited last year's second quarter results. We remain encouraged by venue strong performance, which reflects strong sales execution across venues broad application within the M&A ecosystem that serves both announced and unannounced deals across public and private companies. This results in more resilient, stable demand than our transactional offerings, which primarily serve public company, M&A, IPO, and debt transactions. Our continued revenue mix shift towards software solutions was exceeded by a reduction in print and distribution net sales, which declined by approximately $14 million or 26% compared to the second quarter of 2024. This reduction was mostly realized in the printing and distribution of corporate proxy statements and annual reports, as well as lower print volumes as a result of the tailored shareholder reports regulation, which significantly reduced page counts for mutual fund reports. On a trailing four quarter basis, print and distribution revenue is $117 million and makes up approximately 16% of our trailing four quarter sales. As we continue to execute our strategy to transform DFIN into the leading provider of compliance and regulatory solutions, served predominantly via software and services, we remain on target to deliver our latest five-year plan, which was updated in February of last year. Before I share a few closing remarks, I would like to turn the call over to Dave to provide more details on our second quarter results and our outlook for the third quarter.

Dave? Thanks, Dan, and good morning, everyone. As Dan noted, we continue to experience positive momentum in the adoption of our software solutions for which sales increased approximately 8% year over year, including approximately 15% net sales growth in our recurring compliance software products. Despite a very weak capital markets transactional environment, our software performance enabled us to deliver another quarter of improved sales mix, strong adjusted EBITDA margin, and year over year improvements in both operating cashflow and free cashflow. As Dan commented earlier, following a very soft start to the quarter, driven by heightened market volatility and economic uncertainty, our results improved sequentially throughout the quarter as market conditions gradually stabilized and deal activity began to recover. On a consolidated basis, total net sales for the second quarter of 2025 were $218.1 million, a decrease of $24.6 million, or .1% from the second quarter of 2024. The decrease in consolidated net sales was driven by lower volume in our compliance and communications management segments, which decreased by $31.2 million in aggregate with compliance revenue across the capital markets and investment companies businesses accounting for approximately $19 million of that decline. The reduction in compliance revenue was mostly reflected in lower print and distribution volume related to both the ongoing decline in this area, consistent with recent trend, as well as the timing impact of certain investment companies print volume that shifted from the second quarter into the first quarter of this year. In addition, total event-driven transactional revenue declined approximately $13 million year over year, primarily a result of the depressed level of capital markets transactional activity during the quarter. These declines were partially offset by growth and software solutions net sales, which increased $6.6 million or .7% compared to the second quarter of last year. Second quarter adjusted non-GAAP gross margin was 63.7%, approximately 70 basis points lower than the second quarter of 2024, primarily driven by lower capital markets transactional volume, partially offset by higher software solutions net sales, the impact of cost control initiatives and price uplifts. Adjusted non-GAAP SG&A expense in the quarter was $62.6 million, a $6.4 million decrease from the second quarter of 2024. As a percentage of net sales adjusted non-GAAP SG&A was 28.7%, an increase of approximately 30 basis points from the second quarter of 2024. The decrease in adjusted non-GAAP SG&A expense was primarily driven by a reduction in selling expense related to lower sales in certain areas, the impact of cost control initiatives and lower bad debt expense, which continued to normalize in the second quarter. Our second quarter adjusted EBITDA was $76.3 million, a decrease of $10.9 million or .5% from the second quarter of 2024. Second quarter adjusted EBITDA margin was 35%, a decrease of approximately 90 basis points from the second quarter of 2024, primarily driven by lower capital markets transactional volume, partially offset by higher software solutions net sales, cost control initiatives and lower selling expense as a result of the decrease in sales volume. Turning now to our second quarter segment results, net sales in our capital markets software solution segment was $59.1 million, an increase of $1.8 million or .1% from the second quarter of last year, driven by active disclosure, which was up $2.2 million year over year, partially offset by a slight decline in venue. During the second quarter, active disclosure sales grew approximately 11%, a continuation of the stronger growth trend we experienced over the last two quarters, primarily driven by the continued adoption of active disclosure services packages and the ongoing migration of certain activities historically performed on our traditional services platform to active disclosure. We remain encouraged by active disclosure solid foundation for future revenue growth. During the second quarter, that you posted $37.3 million in revenue, aided by a large project that partially offset last year several large projects and was down approximately 1% year over year against the robust performance from last year second quarter when venue achieved record quarterly revenue and grew approximately 38%. In addition, venue delivered strong sequential improvement in revenue, increasing approximately 22% from the first quarter. Adjusted EBITDA margin for the segment was 37.9%, an increase of approximately 90 basis points from the second quarter of 2024, primarily due to the increased sales and cost control initiatives. Net sales in our capital markets, compliance and communications management segment were $93.5 million, a decrease of $20.3 million or .8% from the second quarter of 2024, driven by lower transactional revenue, as well as a reduction in compliance volume, part of which was related to lower print and distribution consistent with recent trend. In the second quarter, we recorded $34.8 million of capital markets transactional revenue, which was at the low end of our expectation and down $10.4 million from last year's second quarter, resulting in the lowest level of quarterly transactional revenue in our history. Following a modest rebound in the first quarter, global equity deal volume declined sharply in April as a result of escalating market volatility and macroeconomic uncertainty. Following the slow start to the quarter, market conditions gradually improved with modest upticks in activity levels during May and June, resulting in sequential improvement as the quarter progressed. That said, overall transactional activity in the second quarter remained well below historical norms with regular way IPO transactions that raised over a hundred million dollars and large public company M&A deals below last year's levels. Capital markets compliance revenue decreased by $9.9 million, primarily due to lower proxy statement and annual report volume and the related printing and distribution consistent with our experience during last year's proxy and annual meeting season. In addition, the weak transactional environment resulted in lower market demand for certain event-driven filings, such as 8K and special proxies associated with corporate transactions. Finally, as I commented earlier, certain traditional compliance activity shifted to active disclosure during the second quarter. Adjusted EBITDA margin for the segment was 39.4%, a decrease of approximately 80 basis points from the second quarter of 2024. The decrease in adjusted EBITDA margin was primarily due to lower sales volume, partially offset by lower bad debt expense, lower selling expense and cost control initiatives. Net sales in our investment company software solution segment were $33.1 million, an increase of $4.8 million or 17% versus the second quarter of 2024, primarily driven by incremental revenue from our tailored shareholder report solution. On a trailing four quarter basis, total ARC suite reached approximately $126 million in net sales and grew approximately 17% compared to the trailing four quarters as of last year's second quarter, driven by growth in subscription revenue, including the impact of the tailored shareholder report solution. As Dan noted, based on the mid-year 2024 effective date, we will overlap the growth from this new regulation in the second half of the year. And as such, we expect a more normalized growth rate beginning in the third quarter. Adjusted EBITDA margin for the segment was 42.9%, an increase of approximately 370 basis points from the second quarter of 2024. The increase in adjusted EBITDA margin was primarily due to operating leverage on the increase in net sales and price uplifts, partially offset by higher service related costs associated with the tailored shareholder reports offering. Net sales in our investment companies compliance and communications management segment were $32.4 million, a decrease of $10.9 million or .2% from the second quarter of 2024, primarily driven by lower print and distribution volume, which accounted for $9.6 million of the year over year decline. Second quarter print and distribution revenue within this segment was impacted by the timing shift into this year's first quarter of certain volume related to tailored shareholder reports for the regulated insurance market, as well as lower page counts related to tailored shareholder reports for the mutual fund industry. As a reminder, the tailored shareholder reports regulation eliminated the demand for full length shareholder reports at the fund level and replaced them with two to four page summary documents at the share class level resulting in a net reduction in print. With the second quarter being a peak period for mutual fund compliance, the year over year reduction on the overall page count was significant in the second quarter as a result of the TSR regulation. We expect this dynamic will become less meaningful in the second half of the year as we overlap last year's second half impact of this regulation. Going forward, we expect a broader secular decline in the demand for printed products will continue to result in lower print and distribution revenue within this segment. Adjusted EBITDA margin for the segment was 38.9%, approximately 340 basis points lower than the second quarter of 2024. The decrease in adjusted EBITDA margin was primarily due to the impact of lower sales volume, partially offset by cost control initiatives. Non-GAP unallocated corporate expenses were $9.7 million in the quarter, an increase of $0.5 million from the second quarter of 2024, primarily due to higher investments aimed at accelerating our transformation and higher healthcare expense, partially offset by cost control initiatives. Free cashflow in the quarter was $51.7 million, $14.9 million higher than the second quarter of 2024. The year over year increase in free cashflow was primarily driven by favorable working capital and lower capital expenditures, partially offset by lower adjusted EBITDA. On a year to date basis, the strong free cashflow generation during the second quarter enabled us to achieve positive free cashflow through the first half of the year. For reference, our cashflow is seasonal with the majority of it generated in the second half of the year. We ended the quarter with $190.1 million of total debt and $156.3 million of non-GAP net debt, including $77 million drawn on our revolver. As of June 30, 2025, our non-GAP net leverage ratio was 0.7 times. Regarding capital deployment, we repurchased approximately 787,000 shares of our common stock during the second quarter for $34.3 million at an average price of $43.56 per share. Year to date through June 30th, we've repurchased approximately 1.6 million shares for $76.1 million at an average price of $46.18 per share. During the second quarter, the Board of Directors authorized a new share repurchase program of up to $150 million with an expiration date of December 31, 2026. This repurchase authorization, which commenced on May 16, 2025, replaced the prior authorization, which was nearly fully utilized. As of June 30, 2025, we had the full $150 million remaining on the new authorization. We continue to view organic investments to drive our transformation, share repurchases, and net debt reduction as key components of our capital deployment strategy and will remain disciplined in this area. As it relates to our outlook for the third quarter of 2025, we expect consolidated third quarter net sales in the range of $165 million to $175 million, and adjusted EBITDA margin in the range of 23% to 25%, which at the midpoint is similar to last year's third quarter where we posted adjusted EBITDA margin of approximately 24%. Compared to the third quarter of last year, the midpoint of our consolidated revenue guidance, $170 million, implies a reduction of $9.5 million or .3% as lower print and distribution sales and lower capital markets transactional sales are expected to more than offset growth in software solutions. We expect venue to be approximately flat to last year's third quarter, similar to the year over year change we recorded in the second quarter. Further, our estimates assume capital markets transactional net sales in the range of $35 million to $40 million, which at the midpoint is down approximately $8 million from last year's third quarter. And with that, I'll pass it back to Dan.