Dun & Bradstreet Holdings, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Dunn and Bradstreet second quarter 2021 earnings call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Deb McCann, Treasurer and Senior Vice President, Investor Relations and Corporate FP&A. Please go ahead.

Thank you. Good morning, everyone, and thank you for joining us for Dun & Bradstreet's Financial Results Conference call for the second quarter ending June 30th, 2021. On the call today, we have Dun & Bradstreet CEO Anthony Jabbour and CFO Brian Hipscher. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings. Today's remarks will also include references to non-GAAP financial measures. Additional information, including reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release and supplemental slide presentation. This conference call will be available for replay via webcast through Dun & Bradstreet's Investor Relations website at investor.dnb.com. With that, I'll now turn the call over to Anthony.

Thank you, Deb. Good morning, everyone, and thank you for joining us for our second quarter earnings call. The second quarter was another quarter of solid progress, as revenues grew 24.4% and EBITDA grew 12.6%. Organic revenue growth accelerated to 2.8%, fueled by low double-digit growth in international and low single-digit growth in North America. The sequential improvement in organic growth was driven by new logo wins, increased cross-sell, continued strong retention, and the lessening of previously communicated headwinds. We also saw strong sales in the building pipeline for our new solutions, both domestically and internationally, as businesses look to leverage more of our solutions to support their post-pandemic operating models. We expect to see a continued ramp in the third and fourth quarters as we execute against our near-term growth strategy and have continued to strengthen the business for the long term with new talent, data assets, partnerships, and solutions that continue to bolster our offerings and provide our clients differentiated insights that help them grow revenues, lower operating costs, and improve the risk and compliance profile. Before we jump into our normal business and operations update, I wanted to touch on a few announcements we made in the quarter. Back in May, we welcomed two new leaders, Jenny Gomez and Mike Manos, who joined our team in key roles and are already having a significant impact on the company. As Dun & Bradstreet's Chief Product Officer, Ginny comes to us from TransUnion and has over 20 years of experience driving innovation and leading product organizations. She manages the overall product strategy for our global portfolio and is focused on driving rapid innovation and developing solutions at scale that enable our clients' success. Mike is our Chief Technology Officer and brings more than 25 years of experience and deep technological insight to Dun & Bradstreet. Mike joins us from Fiserv and brings with him a proven track record of modernizing and scaling existing platforms for companies such as AOL, Microsoft, and First Data. We also established a new location in Jacksonville, Florida, which will serve as our global headquarters. We look to leverage this strategic location to help us to continue to innovate and grow, as well as benefit from substantial state and local financial incentives that made this move an easy one. And finally, before I move on to the business update, I wanted to share a very special milestone here at Dun & Bradstreet. On July 20th, we celebrated our 180th year anniversary, which is a testament to the longstanding value D&B has and continues to provide to businesses throughout the world. Now let's move on to our business update. On our first quarter call, we discussed our key priorities for 2021 which are to continue to grow our share of wallet with our strategic customers, to approach and monetize the SMB space in new and innovative ways, to launch new products domestically, to localize new and existing products globally, and lastly, to integrate the BizNode acquisition. Throughout the second quarter, our team has made great strides towards executing on these priorities, and I'll now share highlights from the quarter before I turn the call over to Brian for a more in-depth financial review. After that, we'll finish up by taking your questions. We're pleased with the ongoing success we're having with our strategic clients, which included renewal rates at near 100% and the addition of some exciting new logos. In North America, we signed a multi-year deal with Ceridian, a global human capital management software company for Analytics Studio and various sales and marketing products, including the new RevUp ABX and digital targeting solutions. Ceridian was looking to support their growth strategies and in particular the ability to connect and activate the offline view of customers and prospects through digital insights. They're also focused on strategic global expansion and leveraging our world-based file to better understand addressable markets by region to support growth and target markets. Leveraging the investments we've made in non-traditional data and our sales and marketing solutions We signed additional business with one of the largest online retailers who will be using our data and analytics to support their efforts in growing a new business line that needed help targeting specific retailers and high foot traffic areas, such as airports and sports stadiums. Deloitte Touche Tomatsu also entered into a multi-year agreement with us to assist with their client engagement, customer relationship management, and overall master data program. Their global data management team was tasked with creating a global master data warehouse that could be used across all markets and would be the central hub for global applications as well as local markets. The team selected our D&B Direct Plus API to be the central point for company information, hierarchies, and connections, including our full family tree. Along with the master data use case, they're also using our insights to inform their investment to drive a more diverse workforce pipeline and in particular, underrepresented minorities to the public accounting profession. We will deliver a microsite with downloadable learning modules and coupled with a multi-channel marketing campaign. We're proud to support Deloitte in ensuring the success of this fantastic program. We also signed a deal with Vintro, an online networking platform who will be using our comprehensive B2B data as well as our insights and AI-driven platforms to enable their clients to accelerate global opportunity and innovation. In addition to the direct sale, we're also partnering with Vintro on a new platform to enhance the supply chain ecosystem through enhanced access to SMDs. Turning to our international segment, we're making strong progress on the Global 500 account program we rolled out in the first quarter, demonstrated by several wins in the second quarter. One of these was a significant expansion of our longstanding relationship with Barclays through a multi-year enterprise-wide agreement supporting their global master client data and insight strategy. Barclays will be using D&B's comprehensive global data cloud for a multitude of use cases. Globally consistent and identifiable by the DUNS number, our data will enable a broader and deeper view of every customer and prospect from intent data to financial and regulatory information. Barclays was looking for an end-to-end global solution and we stood alone in our ability to deliver such an outcome. In D&B Europe, our newly acquired business region, we signed several deals with Global 500 companies as our strategy to become the provider of choice in Central Europe has begun to bear fruit. Bayer, a life science company with more than 150 year history and core competencies in the areas of healthcare and agriculture, signed a three-year global contract for D&B data via multiple delivery platforms. This deal will support Bayer in organizing and managing their third-party records across various software platforms. Deutsche Bank signed a new contract to use their local German database to support their sales efforts. After various data and usability comparisons, they chose D&B over their previous provider, a large international competitor. We continue to build and grow relationships with Global 500 companies. At the end of the second quarter, nearly three-quarters of the Global 500 companies are clients of ours. Significant increase from year-end 2019 that was closer to two-thirds. While we continue to deepen relationships with our strategic clients, we're also seeing positive trends in the small and mid-sized markets. As it relates to our second priority, addressing the SMB market in new and innovative ways, we started with the build-out of our D&B product and data marketplaces. The D&B product marketplace was created to provide a curated set of our solutions, as well as partner solutions designed for small business. It now has 20 partners, the newest of which are Brex and LendingTree, along with other major brands such as Microsoft, Comcast Business, AT&T Business, MasterCard, and Symantec. The D&B data marketplace, where users can now buy a broader range of pre-matched independent data sets from alternative data providers, now includes data sets such as commercial real estate, job postings, shipping, healthcare, and U.S. agricultural data. We currently have 36 partner data sets as of the end of the second quarter, up from 22 at the end of the first quarter. Now turning to our e-commerce strategy, we continue to see more and more attention in our digital assets. In the second quarter, we saw dnb.com site visits continue to grow with over 46 million visits in Q2, an 84% increase over prior Q2. While the vast majority of customers are coming for credit signal and monitoring services, we're also beginning to see increased demand for our sales and marketing solutions. Overall, we hit more than 2 million in e-commerce sales in Q2, up 73% from prior year quarter, and are forecasting sales to double again by the end of the third quarter. This, combined with our D&B marketplaces, are expected to drive nearly $10 million in incremental annual recurring revenues by year end, and we look forward to updating you in the coming quarters on our progress. Our third priority is launching new products and use cases. Last quarter, we announced D&B RevUp ABX, a solution that simplifies and automates marketing and sales workflows for our clients. Since its launch, we closed six deals with ACV of nearly $2 million and with a strong and growing pipeline as awareness spreads and further enhancements are added to the platform. We're excited to now take the RevUp capabilities to the SMB marketplace with the launch of D&B RevUp now. RevUp now brings enterprise digital marketing technology, once only available to large-sized businesses, to SMBs so that they can find and engage their best customers without having the cost and complexity of an in-house analytics department. We're also bolstering our sales and marketing solutions through our alliance with Zeta Global. We are bringing together trusted consumer and private business data into a single, highly secure data cloud that contains profiles on over 220 million individuals in the United States. The Data Cloud combines Zeta's business-to-consumer data, including individuals' intent, behavioral, transactional, and location-based signals, with Dun & Bradstreet's business-to-business data, including employer data such as companies, titles, and emails, to power a new market sector we refer to as business-to-person, or B2P. which will enable businesses to unlock the buying power of decision makers through this uniquely combined data set offering a true 360-degree view of an individual and the ability to reach them through both business and consumer-based activation channels. And last but not least, I'm excited to announce the launch of D&B ESG Intelligence, which delivers a standardized score and analytics built from the Dun & Bradstreet Data Cloud and establish sustainability standards. CMB ESG Intelligence provides extensive coverage of 9 million U.S. private companies and all 6,000 U.S. public companies. Our ESG rankings cover 12 ESG themes and 32 topic-specific categories to help our clients best understand specific risks and opportunities. We believe this is another great example of how we can leverage the power of our data cloud and the DUNS number to create consistent and comprehensive rankings for businesses of all sizes throughout the globe. This deep coverage and breakdown of specific ESG topic rankings helps compliance and procurement teams track and report on specific ESG factors that increase growth and reduce risk. Similar to how Paydex established the de facto commercial credit score, we see the opportunity to set a standardized commercial ESG score That will help underwriters, procurement organizations, investors, and many other areas quickly analyze and action new customers, vendors, suppliers, investments, and partners in an accurate and efficient manner. In our international segment, we continue to focus on rolling out localized solutions across our owned and partner markets. In the second quarter, we delivered 14 product launches across Europe. Greater China, and the worldwide network partner markets, including important new solutions, D&B finance analytics, D&B risk analytics, and data blocks. We also expanded distribution of D&B Onboard and Direct Plus across a slew of worldwide network partners. In D&B Europe, we continue to see good traction from existing D&B products like D&B Credit, Direct Plus, and D&B Onboard, while also introducing new products including DMV finance analytics and risk analytics in the Nordic markets, optimizer in the Nordics and Southeast Europe, and data blocks in Central Europe. These solutions will enable us to execute our strategy of migrating customers off legacy offerings onto modern digital platforms, as well as attract new customers. These solutions, along with the many we have discussed over the past few quarters, are allowing us to create a significant amount of new product revenue. For North America and international combined, the new product vitality index, or the percentage of revenues from new products, was 6% in Q2. For context, we began measuring this stat in Q1 of 2019, and it's up already from 0.2% in Q2 of 2019. We will continue to drive more and more new solutions into our markets around the world and look forward to updating you on our progress through the coming quarters. Turning to BizNode, I'm pleased to report that integration is going as planned with top line performance in line and synergy realization coming in slightly ahead of expectations. We've executed more than $25 million in annualized savings from actions taken through Q2. Savings are being driven by the consolidation of functions across our global team, as well as executing a broad real estate strategy, including vacating or reducing the footprint of 14 office locations. On the BizNode operation side, we implemented a new global data framework across D&B Europe markets to ensure consistent monitoring and enhancement of database breadth and quality. We have already made key data improvements, including the failure scores in Nordic markets and Germany, growing the database of non-registered companies in Central Europe, and increasing financial statement data in Switzerland. These initiatives are intended to improve retention, to enhance customer satisfaction, as well as demand for data from our global customers. Overall, I'm pleased with our continued transformation and I'm excited about the progress we continue to make, laying the foundation for accelerated sustainable growth throughout the remainder of 2021 and into 2022. With that, I'll now turn the call over to Brian to discuss our financial results and outlook for the remainder of 2021.