Dun & Bradstreet Holdings, Inc. (NYSE:DNB): Consistent Execution Driving Accelerated Growth and Margin Expansion

Published on September 24, 2024 | Ticker: DNB

As an analyst reviewing Dun & Bradstreet Holdings, Inc. (NYSE:DNB), it is evident that the company delivered a strong start to 2024, with accelerated organic revenue growth, margin expansion, and improved free cash flow conversion. The company's consistent execution across its North America and International segments has positioned it well to capitalize on the growing demand for its data, analytics, and business insights solutions.

Financials

In the first quarter of 2024, Dun & Bradstreet reported revenue of $564.5 million, an increase of 4.5% compared to the prior year period. On an organic constant currency basis, revenue grew 4.3%, reflecting balanced growth across both the North America and International segments. The company's North America segment generated revenue of $386.6 million, up 3.2% year-over-year, while the International segment reported revenue of $177.9 million, an increase of 7.4% (6.3% before the effect of foreign exchange).

The company's Finance & Risk solutions, which include its market-leading commercial credit decisioning, supply chain risk management, and compliance offerings, were a key driver of growth. North America Finance & Risk revenue increased 3.5%, while International Finance & Risk revenue grew 8.3% (7.1% before the effect of foreign exchange). Dun & Bradstreet's Sales & Marketing solutions also contributed to the strong performance, with North America Sales & Marketing revenue up 2.9% and International Sales & Marketing revenue increasing 5.5% (4.7% before the effect of foreign exchange).

Dun & Bradstreet's consistent focus on operational excellence and disciplined cost management enabled the company to expand its adjusted EBITDA margin by 50 basis points to 35.7% in the first quarter. Adjusted EBITDA for the quarter was $201.3 million, an increase of 6% compared to the prior year period. The company's North America segment reported adjusted EBITDA of $152.1 million, up 1%, while the International segment's adjusted EBITDA grew 15.6% to $64.3 million.

The company's net loss for the first quarter of 2024 was $21.9 million, compared to a net loss of $32.8 million in the prior year period. On an adjusted basis, net income was $85.0 million, or $0.20 per diluted share, compared to $80.5 million, or $0.19 per diluted share, in the first quarter of 2023.

Liquidity

Dun & Bradstreet's balance sheet and liquidity position remain strong, with $216.0 million in cash and cash equivalents as of March 31, 2024. The company's total debt stood at $3,537.8 million, with a weighted average interest rate of 6%. Dun & Bradstreet's leverage ratio was 3.7x on a net basis, and the company expects to reach its medium-term target of 3.5x by the end of 2024.

Outlook

Looking ahead, Dun & Bradstreet reiterated its full-year 2024 guidance. The company expects total revenue to be in the range of $2,400 million to $2,440 million, representing growth of 3.7% to 5.4% (4.1% to 5.1% on an organic constant currency basis). Adjusted EBITDA is expected to be between $930 million and $950 million, and adjusted earnings per share is anticipated to be in the range of $1.00 to $1.04.

Recent Developments

The company's strategic initiatives, including investments in data and analytics, cloud infrastructure, and generative AI solutions, are expected to drive continued growth and innovation. Dun & Bradstreet's focus on expanding its third-party risk management and master data management offerings, as well as its efforts to leverage generative AI to enhance its product suite, position the company well to capitalize on the growing demand for its solutions.

Conclusion

Dun & Bradstreet's consistent execution, strong financial performance, and strategic investments have earned the company a loyal customer base and a leading market position. With a diversified revenue stream, robust operating leverage, and a clear path to deleveraging, Dun & Bradstreet is well-positioned to deliver sustainable growth and value for its shareholders.

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