Dun & Bradstreet Holdings, Inc.

Good morning and welcome to the Dun & Bradstreet's fourth quarter 2021 conference call. As a reminder, today's call is being recorded and your participation implies consent to such a recording. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, press star then zero on your telephone keypad. With that, I would like to turn the call over to Deb McCann, Treasurer and Senior Vice President of Investor Relations. You may proceed.

Thank you. Good morning, everyone, and thank you for joining us for Dun & Bradstreet's Financial Results Conference call for the fourth quarter and full year ending December 31, 2021. On the call today, we have Dun & Bradstreet CEO Anthony Jabbour and CFO Brian Hipcher. 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 reply 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, and good morning, everyone. Thank you for joining us for our fourth quarter and full year 2021 earnings call. Before we get into our review of the quarter in full gear, I want to take a moment to step back and reflect on our progress since it's a private three years ago. In February of 2019, we began our journey to maximize the potential of an asset that had been under managed for over a decade. In that time, we've made significant financial and operational improvements to the business. From a financial perspective, we've grown adjusted revenues nearly 30% and adjusted EBITDA nearly 50%, or approximately $280 million. We also expanded adjusted EBITDA margin by nearly 600 basis points, and all while improving net leverage by more than four terms. These financial outcomes are a direct reflection of the operational execution underway. Rather than talk about qualitative improvements in culture, organizational structure, and the like, let me hit on a few quantitative metrics that really show the progress we have made. Starting off, we've doubled our contribution from multi-year contracts, which now account for 50% of sales. We increased our new product vitality index from less than 1% to nearly 8%. We doubled the size of our international business, and we improved our data coverage globally by nearly 50%. Operational execution has been at the core of our transformation and is most recently fueling our increased focus and investment in accelerating organic growth. We finished 2021 on a high with our strongest quarter of the year, and I'm excited to update you on our most recent financial and operational achievements. Let's jump into the quarterly update, and then I'll hand the call over to Brian for more in-depth financial review of 2021 results and 2022 guidance. After that, we'll finish up by taking your questions. Fourth quarter, total company revenues grew 25%, and organic constant currency revenue growth came in at 4.8%. Organic revenue growth was fueled by high single-digit growth in international and mid-single-digit growth in North America. The international team capped off a strong year of growth as new solution introduction and global 500 account expansion led to an 8% increase over the prior year quarter. North America continued its organic growth progression, coming in at just over 4%, with finance and risk leading the way. Our risk solutions remain a bright spot as enterprises continue to grapple with an ever-evolving third-party risk landscape, and our solutions provide them the tools necessary to make rapid and informed decisions at an unparalleled level of company specificity. We continue to execute against our near-term financial objectives and even more importantly, continue to execute against our strategic roadmap. While the sales team had one of its best quarters in recent history, our technology and product organizations have been hard at work delivering new and innovative solutions to both our North American and international markets. The finance and risk teams have been focused on integrating and enhancing existing solutions while simultaneously expanding our solution set to include areas such as fraud and ESG for our strategic and national account segments and introducing new lighter version solutions for our SMB clients. On the sales and marketing side, we're enhancing our digital marketing solutions with the additions of IOTA and NetWise and bringing greater integration through the RevUp suite and more robust and connected data through our master data management solutions. The teams continue to deliver innovative solutions around the globe, helping us drive increased wallet share add net new logos, and increase utilization and stickiness through deeper and deeper integration into our client's most critical operational workflows. With that, I'll now go into more detail in each of these areas, beginning with an update on some of our most recent innovations. Beginning with finance and risk, we launched a new set of fraud capabilities that help companies prevent occurrences of business identity theft, synthetic fraud, and other commercial fraud techniques. Our fraud analytics are utilized within the initial screening of a business that might be looking to access credit or become a new supplier. Through our proprietary analytic methods and access to hundreds of millions of records throughout the globe, we're in a unique position to help our clients stop a fraudulent transaction before it even gets started. With 10 companies currently in beta, we plan a full North American rollout by the end of the first quarter and a country-by-country international rollout shortly thereafter. This morning, we announced the strategic agreement with Google Cloud for infrastructure modernization and to jointly innovate new industry-specific solutions. We will combine the depth and breadth of Dun & Bradstreet's business data and insights with Google Cloud's technology and data and analytics to push the boundaries of innovation and unlock opportunities to help our clients and stakeholders win in this fast-paced market. Our first joint initiative is focused on the development of solutions that solve the increasing challenge of managing global supply chain risk. Both Dun & Bradstreet and Google Cloud bring deep domain expertise, brand leadership, and a strong desire and ability to do something truly innovative for our clients. Work is already underway across our teams, and we are looking forward to sharing more in the quarters to come. We also continue to support and expand credit inclusivity for our small and medium-sized businesses, Our blended score is already showing great promise as we have been able to increase match rates by 30 to 35% with SMB client portfolios for some of our largest and most strategic clients. With the blended score's ability to take a core business score and supplement certain consumer credit attributes, we are finding a real differentiation in the combined solution. With rising interest rates, increasing inflation, and government loan paybacks coming due, It's more critical than ever that we assist small businesses in their ability to not just survive, but thrive in these ever-evolving macroeconomic conditions. Another rapidly evolving macroeconomic condition is a continued focus on ESG by both our international and North American clients. Our ESG intelligence solution has potential growth factors across supply chain management, investment decision-making, lending and credit evaluation, insurance, and sales and marketing segmentation. Our initial focus is on the first two I just mentioned, corporate clients who leverage ZMB to underwrite the overall risk profile of a supplier or third party during the onboarding process, and second, investment managers who are seeking credible ESG data for comprehensive ESG integration across their investment portfolios. For both, The power of our public and private global data footprint can help to augment existing credit and compliance risk at a time of increased supply chain scrutiny. We can also provide private equity and venture capital firms private company ESG ratings based on actual data that can be leveraged for many uses, including due diligence, portfolio assessment, and limited partner reporting. We are early on in this journey, but it's clear to us that our most strategic clients will begin to mandate ESG solutions in multiple areas of their business, and we believe we are well-positioned to capture this expanding demand. Moving on to sales and marketing, I want to touch on the progress we have made to date with IOTA and NetWise and their inclusion into our audience solutions offering. To start, we have commenced with the integration of the DUNS number into the NetWise ID graph. creating a full 360-degree view of our clients. We have identified and are approaching a high-propensity cross-sell pipeline to bring IOTA and NetWise capabilities to our existing clients, and we are expanding our audience targeting capabilities internationally. Our audience solutions capabilities are designed to address the evolving international regulatory landscape, and we are excited to bring these solutions to our largest clients in the Scandinavian and DOC regions, along with the United Kingdom. We expect to deploy to Canada and the UK in the first quarter and to the rest of the world throughout the remainder of the year. I'm very pleased with the results that we're seeing after the first few months from these two acquisitions, and I'm quite excited about our ability to assist our clients in navigating and optimizing their digital marketing efforts. And finally, before we move on to the key sales update, I want to share another significant milestone in our solution modernization journey. We've often talked about the importance of API-based solutions in driving stickier and deeper client relationships, which is why we were delighted to see that in the fourth quarter, we hit a milestone where the percentage of revenues from API-based solutions have doubled in the past three years. With API-based solutions now accounting for 10% of our revenues, our recurring revenues have grown to over 90%, and continue to provide us with a very defensible base to grow from. Moving on to key sales wins in the fourth quarter, we won competitive new business with TransUnion, a global information and insights company, who chose our risk and compliance solutions to improve their supplier risk assessment process. The multi-year deal includes our new ESG intelligence solution, which will allow them to gain better visibility into third-party ESG risks through topic-specific rankings built from verified data points. A financial services and digital payments company signed a new multi-year third-party risk and compliance deal with us as well. On the finance solution side, we're excited about new multi-year business with a rapidly growing fintech company. Our solutions will enable them to grow their commercial card business by maximizing approval rates by simultaneously avoiding high-risk applicants. A leading provider of multi-cloud services signed a new multi-year master data management agreement that will improve their operational effectiveness and scalability, resulting in increased opportunities and revenue. ODP expanded their sales and marketing business with us to include more modern API solutions as well as the addition of RevUp. And finally, KeyBank renewed its sales and marketing business with a multi-year deal to support their analytics, insights, marketing, and lead generation. We continue to broaden and deepen our relationships with our strategic clients while at the same time making incremental progress in our SMB segment. Improving our SMB segment has been a priority for us since day one. There were shortcomings with the solutions and sales practices that brought about not only challenges to growth, but also an open investigation by the FTC beginning in 2018 prior to privatization. Almost immediately when we took over, we began making changes, including a completely new leadership team, significant changes to sales and contracting practices, and a rationalized and expanded solution set that is pointed at helping small businesses grow and thrive in an ever-evolving business landscape. We've updated you on all our progress in each of our quarterly calls, and while many of these changes address the issues brought up by the FTC, That was but a byproduct of our focus on evolving our SMB solutions in new and innovative ways. We are pleased to settle this matter and will continue to focus our time, energy, and efforts on helping small and medium-sized businesses enhance credit inclusivity and leverage sophisticated solutions that help small businesses make sophisticated decisions without a team of data scientists. I'm very proud of the efforts made to date and enthusiastic about our opportunities to serve this market through continued innovation and expanded strategic partnerships. On the international front, performance remains strong as we continue to focus on developing innovative solutions, enhancing existing client relationships, and winning new clients in targeted markets. We launched 10 additional solutions across our international and worldwide network markets, which brings our total to nearly 40 for all of 2021. Key launches in the quarter included our localized D&B Hoovers across Europe, D&B Onboard in the Nordics, RevUp in the UK, and Risk Analytics across varying Asian worldwide network partner markets. These new offerings are enabling us to initiate and expand our relationships with large enterprise accounts, facilitated by our improved go-to-market strategies that fosters more cross-border collaboration than ever before. with our global 500 clients. We expanded and established new relationships with organizations such as Deutsche Telekom that add to a growing list of mega clients looking to do business with us throughout the world. And we are excited about the momentum we have built in a segment that has more than doubled in three short years. Part of the success we're having in the core international business is the benefits of our successful acquisition and integration of BizNote. and to what is now known as D&B Europe. Through a tremendous amount of effort and teamwork, the business turned from a decline in 2020 of approximately 1.5% to growth of nearly 2% in 2021. And at the same time, we're able to achieve over $20 million in annualized run rate savings. With 12 new products launched in 2021 and the migration to more modern D&B products underway, I'm very pleased with the progress we have made and look forward to continuing in 2022 and beyond. Overall, I'm extremely proud of our team's accomplishments this quarter, this year, and the performance over the past three years. We have accomplished an incredible amount in a short period of time and are ready and energized to continue maximizing the assets and opportunity we have in front of us. With that, I'd now like to turn the call over to Brian to discuss our financial results for 2021 and outlook for 2022.