Dun & Bradstreet Holdings, Inc.

Greetings and welcome to the Dunn and Bradstreet fourth quarter and full year 2022 earnings call. At this time, all participants are in listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Sean Anthony, Investor Relations with Dun & Bradstreet. Thank you, and you may begin.

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, 2022. 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 the 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 the 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.dmb.com. With that, I'll now turn the call over to Anthony.

Thank you, Sean. Good morning, everyone, and thank you for joining us for our fourth quarter and full year 2022 earnings call. On today's call, I'll start with a brief overview of our fourth quarter and full year results, followed by a look back at some of our most significant accomplishments in 2022, a brief view into our plans for 2023, and finally, a preview of our upcoming investor day. After that, I'll pass the call over to Brian for an in-depth review of our results and to discuss our guidance expectations for 2023. We'll then open up the call for Q&A and finish up with a few closing comments. With that, let's get started. The fourth quarter was another quarter of solid progress as total company revenues grew 2.8% on a constant currency basis and organic revenues grew 2.2%. Our finance and risk solutions continue to perform well in both North America and international, with particular areas of strength, such as third-party and supply chain risk management solutions, that achieve double-digit growth for an eighth consecutive quarter. On the sales and marketing side, we continue to see acceleration through the end of November. However, in December, clients got a bit more conservative with their usage and spending levels. While master data management was solid in the quarter and IOTA and NetWise continued their strong performance, lower than expected volumes in December offset the growth we had previously seen. As companies grappled with the macro environment uncertainties exiting 2022, we didn't see the normal uplift we usually do with budget releases and heightened volumes as they prepared for their upcoming sales year. However, we believe this to be more of an anomaly and have been encouraged by volumes and sales activity beginning to resume to normal levels in January and into early February. Full-year revenues grew 5.6% on a constant currency basis and 3.5% organically. Organic growth for the full year accelerated 30 basis points over 2021, And when excluding the impact of the GSA contract, growth accelerated 120 basis points to 4.4%. Our international business grew 5.4% organically, driven by 6% growth in our localized finance and risk solutions. And while North America grew 3% organically overall, when excluding the government revenues, which make up about 5% of the segment, North America grew 5% and North America finance and risk grew 8%. With our transformation well underway and incremental progress towards sustainable mid-single-digit growth, I'm pleased with the continued progress we made throughout 2022. On the sales side, we finished the year with some key wins and renewals in North America and international. For example, in the fourth quarter, North America closed new business with a leading provider of online financial services and lending. This company is using our finance solutions data and analytics to underwrite small business loan applicants. They wanted to backtest hundreds of thousands of small business applications by using our data to optimize and modernize their analytics and underwriting process. We were also able to expand our relationship with Pepsi. They required greater visibility and transparency into their existing third-party relationships, as well as any new third parties they awarded business to. We provided an end-to-end onboarding, compliance, screening, and monitoring solution through our data blocks offering, which provides Pepsi with what we believe is an unmatched combination of breadth and depth of data delivered through an integrated, automated solution. Desley was a similar opportunity in that they were looking to monitor and expand their understanding of their large and complex supply chain. Through our risk analytics and data blocks offerings, Nestle is able to assess a more holistic and accurate risk profile of their vendors, including the evaluation of ESG and cyber risk elements. On the renewal front, we continue to show the stickiness and strength of our long-standing client relationships. Verizon, who has been a customer for 24 years, expanded their relationship with us through a multi-year agreement extension. With master data management underpinning much of what they do on the marketing analytics and sales operations side, we were able to bring incremental data and analytics via modern API delivery mechanisms. Verizon was one of many customers that extended and expanded their relationship in the fourth quarter, and we're very pleased with our continued strong retention rates and ability to expand with our largest customers in North America. Our international segment continued its strong sales performance for the year with a fourth quarter that included wins such as NatWest in the United Kingdom, Essity in Sweden, and a large social media platform in Asia. Similar to the trends we just spoke about in North America, NatWest added our Compliance Direct Plus API solution to bolster their risk and compliance underwriting. Essity, a larger consumer packaged goods company out of Stockholm, added DirectPlus master data management API capabilities to help cleanse, match, append, and organize their massive amount of customer files. This is an example of how master data management plays a critical role in an organization's ability to quickly update with reliable, organized, and up-to-date information. And as the social media platform continued to expand and mature, they added finance analytics and data blocks to enhance their credit underwriting processes. Many of these types of businesses start out as a pure B2C play, but as they evolve, they expand in B2B, and that is where we come in. In both North America and international, we continue to see strong retention rates and increased customer satisfaction, which is ultimately manifesting itself in accelerated revenue growth. To go along with the financial and sales execution, I'm also pleased with the significant operational progress we made this year as we continue to execute on our multi-year vision of transforming Dun & Bradstreet. In particular, I want to highlight the advancements we completed in terms of data and analytic enhancements, technological improvements, and product innovations. On the data and analytics front, we continued to make significant progress in our data breadth, depth, quality, and consistency. This year alone, we expanded our data cloud to 500 million businesses covered, an 8% increase versus the prior year. We expanded our key contact database to 58 million records, a 66% increase versus the prior year, and reduced client data discrepancy inquiries by over 50%. On the analytics side, our blended score saw a 15 to 20% lift in predictability, and we improved our match rates to 100% across three beta clients. We also acquired 250 additional data sources to strengthen our existing analytics and power our new ones, such as ESG intelligence. For instance, we curated and appended utility data, greenhouse emissions, and several other risk-related datasets to expand our public and private company ESG scores across 42 million companies in 176 global markets. And finally, we have mapped 20% of all supplier connections between customers and their suppliers globally, showing 68 million verified relationships. We believe that no other company has anything close to this level of insight, and we intend to continue to drive our leadership in this space to guide businesses in making more informed and real-time decisions on who they do business with and whether or not they should continue doing business with them on an ongoing basis. And while we look to bring more and more data sets into our proprietary cloud, the technology team has been hard at work simplifying our supply chain by reducing complexity by 30% and increasing data throughput by 10 times. Simultaneously, through the elimination and standardization of several legacy components, we're able to improve our data consistency by nearly 60%. The technology organization was also instrumental in supporting our product organization with the migration of nearly 17,000 clients across North America and international. While a majority of those came out of D&B Europe, we also migrated around 5,000 in the United States, and we continue to free the company of an excess of legacy apps. And while cleaning up legacy applications is important in setting a clear path going forward, We're also able to launch over 100 products in 2022. This range from brand new solutions in North America to localized offerings in our 20 plus own markets throughout Europe, the United Kingdom and Asia. Overall, through upgrade investments, new data sets, migrations and integrations, we continue to strengthen our solution set and we ended another year much stronger than we began it. Looking ahead to 2023, while we expect a challenging market backdrop overall, we continue to focus on the things we can control and execute against our strategic priorities. For the upcoming year, we plan to continue to optimize our solution set and maximize our ability to extract value from our current and future customers. With the significant investments we have made in technology, data, and product, we have confidence in our ability to garner incremental price where it makes sense and expand cross-sell, up-sell opportunities within our existing base. While the worsening economic backdrop will be more challenging for certain client segments, overall, we have a significant opportunity to drive growth within our existing client base and expect to do so throughout the year. We also have the opportunity to win new logos in both North America and international. In North America, we have some of the largest and most well-known businesses in the world. While there are a few more large and mega-sized prospects to add to our blue-chip client base, the real opportunity for us is to break into the small and micro business segment in a more meaningful way. Due to a variety of factors, including a worse than anticipated impact from the FTC consent order, We have yet to fully capitalize on the small and micro business opportunity. The legacy credibility business continued to be a headwind through the fourth quarter, which masked the positive momentum we've been building in our digital and other small business strategies. As we head into 2023, we expect to have less of an impact from the legacy credibility solutions, and we expect to see more of our new business investments flow through. On the international side, we have the opportunity to continue to land small and medium businesses, but the true list will come from the large and mega-sized prospects in those regions. In 2022, we won new business with names like Barclays, Volkswagen, Siemens, the Agriculture Bank of China, and Alibaba. We expect to continue to build on this momentum in 2023 as we orient our teams, products, and data sets to serve this segment. On the modernization and innovation front, we continue to expand upon our significantly improved vitality index. As I mentioned earlier, migration to modern solutions was a big theme in 2022, and that will continue in 2023. Beginning with D&B Europe, while we focus the majority of our efforts on migrating the legacy finance solutions to D&B Finance Analytics, We are now shifting gears to focus on migrating the remaining legacy point solutions across our sales and marketing and finance and risk portfolios in both Europe and the UKI. Simultaneously, we are enacting a similar program in North America as we continue to migrate clients onto our most modern solutions such as D&B Connect, D&B Direct Plus, Finance Analytics, and Risk Analytics. Through refining our implementation strategies in Europe, we're now able to deliver a much more streamlined and less invasive experience for our customers in all regions of the world, including our North American clients. And consequently, this will allow us to more easily deliver our latest innovations, such as fraud solutions, ESG scores and insights, supply chain linkage and illumination, and alternative data match and append. On top of the new solutions we developed and brought to market in 2022, we're also excited about the new innovations we plan to bring to market in 2023. We are focused on three primary areas for near-term innovation efforts. First and foremost, supply chain and third-party risk continues to be a significant area of interest for our clients and prospects. We have the opportunity to build upon our solution set today and provide even more robust solutions around the underwriting and monitoring of vendors and suppliers throughout the world. By deepening and broadening our data sets and delivering those through a comprehensive end-to-end integrated global platform, we can broaden our ability to solve new and evolving use cases that are being driven out of a shifting legal, regulatory, compliance and political landscape. We are well positioned to continue compounding growth in North America and the build out of our localized compliance solutions internationally, which only allow us to continue to accelerate growth in this fast and growing segment. We also continue to see the digitalization of our go to market as a key opportunity for our ability to accelerate and expand throughout the globe. In North America, we saw our digital sales increase materially as our e-commerce capabilities and simplified solution set resonated with small and medium businesses. A prime example of this was the introduction of the DUNS registered seal in North America. Originally a solution crafted for our Asian markets, the Dunn's Registered Seal is a sub-$1,000 entry solution that allows a small business the ability to show legitimacy and begin its journey to build out its maturing credit profile. The Registered Seal was a new North America solution that was introduced in Q4 of 2022, and we already have over $1 million in sales and a ramping pipeline. Similarly, light versions of Finance Analytics, Risk Guardian and the Nordics, Hoovers, and an ESG seal will be delivered throughout our own markets and the worldwide network to go after this customer segment and free up resources to go after enterprise accounts. We're also excited about the opportunity to further leverage our growing advantage in the B2B online digital advertising space. While B2C digital advertising has been maturing over the last five to ten years, B2B is just beginning to come into its own. So while B2C advertising is ebbing and flowing more with the overall economic conditions, B2B is still a growing opportunity and one that could show even more rapid growth in a more positive macro environment. Through our unique blend of assets, connections, and relationships, we'll continue to look to deepen our penetration with existing customers and look to educate and expand with the remainder of our client base and prospects alike. With tighter budgets and a more conservative approach to sales and marketing budgets in the near term, it will be imperative for our clients and prospects to get the most out of their investments. We believe that digital advertising delivered to the right audience on the right platforms with the right messaging will do just that. Overall, I'm extremely proud of our team's accomplishments this year. In 2022, we delivered mid-single-digit total revenue growth, accelerated organic revenue growth, and nearly 40% EBITDA margins, which is a remarkable improvement relative to where we were when we took the business over four years ago. We stayed focused on our mission and performed at a very high level despite a challenging market environment. We also continue to execute on our multi-year vision to transform Dun & Bradstreet, and I'm excited by our path and strategy to continue to accelerate revenue growth and expand margins over the next three to five years. With our investor day rapidly approaching, I look forward to having the opportunity to discuss our longer term growth prospects and the key investments in our core assets, along with new areas of strategic growth that we are looking to capitalize on. Through presentations with our presidents of North America and international, along with a fireside chat featuring our chief technology officer and chief data and analytics officer, I'm also excited for all of you to get some exposure to the team that is going to take us on the next leg of our journey together. In the end, our goal is for you to all walk away with an understanding of the successful execution of our transformation to date and why that should lead to a further acceleration in growth and profitability, which should ultimately manifest itself in a strengthened balance sheet and the ability to deliver significant shareholder value creation. With that, I'd now like to turn the call over to Brian to discuss our financial results for 2022 and outlook for 2023.