Dun & Bradstreet Holdings, Inc.

Hello and welcome to the Dunn and Bradstreet Third Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. Please note this event is being recorded. I would like now to turn the conference over to Sean Anthony, Vice President, 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 third quarter of 2023. 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 the reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release and supplemental slide presentation. The 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 third quarter 2023 earnings call. On today's call, we'll start with a brief overview of our third quarter results, followed by an update on our operational activities and progress towards our strategic initiatives. After that, I'll pass call over to Brian for an in-depth review of our financial results and to discuss our expectations for the remainder of 2023. We'll then open up the call for questions, and then I'll finish up with a few closing comments. With that, let's get started. We delivered a strong third quarter of financial results and operational execution. With organic constant currency revenue growth of 4.8%, adjusted EBITDA growth of 5.6%, and 40% EBITDA margins, we continue to show both acceleration and durability in the quarter. North America and international continue to capitalize on the need for businesses to better leverage data and analytics, and driving both financial and operational improvements, which is only being further magnified by the advancements of generative AI solutions. We're at the forefront of the application of GenAI to business, and we are excited about how clients and prospects are coming to us for guidance and support in implementing this groundbreaking technology. With our data as the backbone for some of the largest and most sophisticated companies throughout the world, we're uniquely positioned to help them achieve their goals of increasing revenues, driving down costs, and mitigating risk. As a reminder, we are collaborating with our clients in our dnb.ai labs, and we'll be launching new products under our Abe brand. We're also focused internally on ways that this technology can improve our own operational efficiency and act as client zero in the development of future commercial offerings. I don't believe there's been a time in our recent history in which our proprietary data, analytics, and platform solutions have had more potential, and I'm very excited about the progress we are making and the pace at which we are operating. With that in mind, let's dig into what we delivered in the third quarter across both our North American and international segments, and then I'll follow up with the latest on our strategic initiatives. Beginning with North America, revenues grew 4.5% in the quarter. Our finance and risk solutions grew 5%, driven by strong double-digit growth in risk, consistent growth in finance solutions, and this being the first quarter with no year-over-year impact from the GSA. Sales and marketing also grew 4%, driven by mid-single-digit growth in our master data management solutions. Finance solutions and third-party risk and compliance offerings continue to deliver resilient growth by offering mission-critical solutions that help clients weave their way through an increasingly complex and volatile business environment. Finance solutions continue to steady growth through delivering incremental value throughout the contract period, as well as providing a great client base to upsell and cross-sell additional capabilities. We continue to see strong retention rates and are working with our clients to integrate and deliver our solutions even deeper into the most mission-critical applications and processes within our customers' ERP, AR, and other finance-related workflows. Our risk solutions had another excellent quarter as businesses continue to search for ways to automate and optimize the onboarding, monitoring, and management of their third-party supplier networks. Whether it's the SEC bringing increased cybersecurity disclosure requirements, the state of California adding incremental ESG and supply chain reporting regulations, or Europe's increased adoption of sustainability requirements, businesses are being forced to understand and report on a more detailed level of who they are partnering and doing business with. With one of the world's most comprehensive global risk solutions, We are continuing to capitalize on the increasing demand for know your customer, know your supplier, and in general, know your third-party solutions. And we will continue to invest in accelerating these assets over the coming years. Turning to our sales and marketing solutions, we saw another solid quarter of 4% growth driven by our master data management and sales and marketing data solution sales. Our sales and marketing business is anchored by our MDM solution and therefore doesn't experience the same dynamics that other sales and marketing providers have out in the market. In both good times and bad, highly curated, organized, and rapidly accessible data is critical. With our ability to deliver economies of scale through the up-sale and cross-sale of our complementary solution sets, we are well positioned to defensively grow our enhanced set of sales and marketing solutions through leveraging our unique positioning with our MDM offerings. Throughout the quarter, we continue to roll out new solutions, deliver significant enhancements to existing platforms, and expand upon our strategic partnerships. On the new solution side in the SMB space, we launched the D&B Concierge Service, which allows for the contribution of other proprietary datasets. that provide prospects and existing clients the opportunity to create a more holistic picture of their financial profile and therefore provide themselves an even better opportunity to access much needed capital to establish or grow their business. This product was launched ahead of schedule and is already outselling our legacy concierge product. It is another great example of our ability to be nimble and execute with urgency. We also brought together a bevy of existing solutions in our new Credit Insights product that will allow small businesses to have a unified buying experience of products and services that supports them on each step of their growth journey. We also continue to drive new and modified solutions in our most rapidly growing areas. For example, in third party risk and compliance, we released Compliance Intelligence, a know-your-third-party monitoring and compliance decision-making solution driven by Dun & Bradstreet's AI-powered data. In master data management, we continue to expand our new D&B Connect Essentials launch and product that takes the power of MDM, but it simplifies it for mid-market utilization, allowing smaller companies to leverage a simplified user interface with pre-wired algorithms that companies can use right out of the box. As we continue to invest and innovate in sales and marketing and in finance and risk, we see a strong uptake of our new solutions, which further supports our now 26% vitality index in North America. In addition to the GenAI initiatives I mentioned up front, we also announced at a recent global client conference an expanded partnership with IBM. Together, we will be building and launching new products based on the integration of DMV data and IBM Watson X. This new go-to-market will be a part of IBM's consulting engagements to embed these new capabilities directly into the solutions our joint clients use today as part of their daily workflows. As announced at our conference, the first use cases include foundational entity resolution for any commercial use case and a new ask procurement capability for supply chain risk mitigation. We're excited about bringing together the power of Watson X and APE to solve business issues that will ultimately unlock significant value for our clients. Moving on to North American sales. We continue to show resilient growth, which is supportive of our continued acceleration into 2024 and beyond. Overall, our portfolio of solutions is once again proving to not only be mission critical in times of uncertainty, but a strategic path forward so that clients and prospects have the ability to drive a more efficient and effective operation through data and analytic-driven processes, improvements, and or automation. We set out on a strategy four years ago to build not only a growing business, but a sustainably growing business. I'm pleased with the durability that we have built in that time, and with 55% of our North American revenues under multi-year contracts and 53% overall, we continue to progress towards our goal of 60% in the midterm. And not only are we increasing our total amount of revenues under multi-year contracts, we're also seeing the 10-year increase. For instance, in the third quarter, we saw the number of four-year plus deals increase 16% versus the prior year period. This lengthening of contracts is directly proportional to our clients' growing trust and confidence in Dun & Bradstreet as a partner. With over 96% retention rates and a vitality index of 26%, we continue to strengthen our base position with existing customers. In addition, with the introduction of innovative new solutions, we are better able to expand with existing clients and convert new prospects as we broaden our addressable market. On the land and expand front, Kofos, a worldwide leader in credit insurance, business information, and accounts receivable management, extended their nearly 25-year relationship with us through a multi-year deal that migrates them to our modern data block solution and creates an opportunity for them to further increase their volumes while creating economies of scale throughout their credit insurance underwriting operations. From an SMB perspective, we continue to expand our marketplace with the addition of Innova International's OnDeck. Innova continues to look for new and innovative ways to drive increased small business loan origination. Through a combination of our DMV mobile applications and SMB advertising capabilities, we're able to drive a significant increase in leads to ONDEC through a captive audience of millions of businesses that come through the DMV ecosystem each and every year. And finally, we also had a significant expansion with the Department of Defense. our client continues to invest in supply chain risk mitigation and foreign investment assessment, enabling further discovery of potential vulnerabilities, identification of industrial-based risk, and ultimately supporting the administration's objective to fortify and strengthen our nation's security. Whether it's in sales and marketing, finance and risk, public sector, or private, I'm very pleased with the progress we're making across our North American segment and the team is laser-focused on closing out the year and maintaining our positive momentum as we head into 2024. Now, turning to our international segment, we saw another quarter of strong organic growth at 5.8%, as all regions drove positive growth, including high single digits, across UK, Asia, and worldwide network markets, while Europe grew greater than 3% and is up 4% year-to-date. a marked improvement from levels when we acquired the business less than three years ago. We continue to focus on the localization of existing solutions and driving new innovations in our own and WWN markets. Most recently, we launched the compliance intelligence module in risk analytics, expanded our ESG registered seal in additional WWN markets, and enhanced the Hoovers platform with audience builder, and launched in Central Europe. We continue to see excellent uptake in our new solutions and our vitality index reflected this progress with its rise to 34%. We plan to continue to steadily execute a balance of migrations and the introduction of localized solutions to drive further sustainable growth across our global regions. We are very pleased with the consistent operational execution by our international team. On the sales front, we had another strong quarter. Enterprise accounts remain a key focus of our strategy, and sales growth in this channel is up double digits through the first three quarters. Retention remained healthy in the third quarter at 93%, and we added a few more key names to our growing roster of top-tier multinational clients. Beginning with a significant new business win, we are excited to welcome Munich RE to our DMV client portfolio. We sold a combined solution across both finance and risk and sales and marketing in which the value of our end-to-end solution connected by the DUNS ecosystem ended up becoming a very compelling offering. We're also able to support Siemens Energy with an MDM solution that allows them to cleanse and curate data from several of the required companies that built up some inconsistencies over time. Another land and expand win in Asia was Hong Kong Export Credit Insurance Corporation. We deepened our relationship with the addition of credit decision data blocks that allowed them to more efficiently manage the financial underwriting of clients they are handling throughout the region. Again, these are but a handful of examples of strong wins in the quarter, and there were many others that continue to provide additional proof points of the strengthening of our global solutions, data, and go-to-market team. Whether it's improving our data quality and coverage, migrating and upgrading our infrastructure and back office systems through cloud migration and system enhancements, adding new clients, or coming to market with leading partners like IBM and Google, we continue on our path of executing against our strategic vision and delivering strong and improving financial results along the way. As we've said before and proven out over time, BNB is a defensible growth asset the significant upside from emergent opportunities such as the Gen AI revolution. And we will continue to focus our capital and energy on driving accelerated growth, delighting our clients, and delivering significant shareholder value. With that, I'd now like to turn the call over to Brian to discuss our financial results for the third quarter in more detail and the outlook for the remainder of 2023.