Q2 2024 Dun & Bradstreet Holdings Inc Earnings Call

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Shawn Anthony: Please note. This event is being recorded I would now like to turn the conference over to Shawn Anthony Vice President of F. P. N E and Investor Relations. Please go ahead. Thank you good morning, everyone and thank you for joining us for Dun <unk> Bradstreet financial results conference call for the second quarter of 2024.

Bryan Hipsher: 2000 marketing revenues were $55 million, and the increase of 0.3% or an increase of 1% before the effect of foreign exchange. On an organic basis, revenues grew 2%, primarily due to higher revenues from the UK, driven by growth in our API solutions. Second quarter, international adjusted EBITDA, a $54 million, increased $5 million, or 9.5%. An adjusted EBITDA margin was 31%, an increase of 120 basis points compared to the prior year quarter. The increase in adjusted EBITDA was due to revenue growth from the underlying business, partially offset by higher net personnel costs in foreign exchange laws.

Speaker Change: On the call today, we have Dun <unk> Bradstreet, CEO, Anthony Jabbour, and CFO Bryan Hipsher, Anthony will begin with an overview of our second quarter results and then pass it to Brian for an in depth Financial review, we will then finish up with Q&A and a few closing remarks.

Speaker Change: 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.

Bryan Hipsher: and it's a slide five. Slide five contains the details of our capital structure as of the quarter end. At the end of June 30th, 2024, we have cash and cash equivalence of $263 million and total principal amount of debt of $3,676 million with a weighted average interest rate of 5.8%. Currently, 87% of our debt is either fixed or hedged, and as of June 30th, 2024, we have 730 million available on our $850 million revolving credit facility. Our leverage ratio was 3.7 times on a net basis, and the credit facility senior secured net leverage ratio was 3.2 times.

Speaker Change: Due to a number of risks and uncertainties.

Speaker Change: Risks and uncertainties of forward looking statements are subject to are described in our earnings release and other SEC filings.

Speaker Change: Today's remarks will also include references to non-GAAP financial measures additional information, including a reconciliation between non-GAAP financial information to the GAAP financial information is provided in the press release and supplemental slide presentation.

Anthony: This conference call will be available for replay via webcast through Dun <unk> Bradstreet's Investor Relations website at Investor <unk>, Dnb Dot com with that I'll now turn the call over to Anthony.

Anthony: Thank you Sean good morning, everyone and thank you for joining us for our second quarter earnings call.

Bryan Hipsher: We expect to be at around 3.5 times on a net basis by the end of this year, as we continue to migrate towards a median term range of 3 to 3 and a quarter times by 2025.

Anthony: Overall, we delivered another solid result in both top and bottom lines.

Speaker Change: Organic revenue growth was four 3% up 40 basis points from the first quarter of 2023 and represents our fourth consecutive quarter of reported mid single digit growth.

Bryan Hipsher: Turning down to our share repurchase program. As Anthony mentioned, during the second quarter, we repurchased 961,360 shares of Dun & Bradstreet common stock for $9.3 million, net of accrued excise tax, at an average price of $9.71 per share. We currently have over 9 million shares remaining under our existing buyback authorization.

Speaker Change: With 90% of our revenue is growing slightly over 6% in the quarter and on a trailing 12 months basis. We saw continued strong demand for our third party supply chain risk and Master data management solutions in both our North America and international segments.

Speaker Change: We've seen continued strength in these two areas of strategic investment and believe there is much more opportunity to grow in the coming years.

Bryan Hipsher: Turning to 5.6. Our outlook for 2024 is as follows. Total revenues have to be effective foreign currency are expected to be at the low end of our previously communicated range of $2,400 million to $2,440 million, or an increase of approximately 3.7% to 5.4%. This includes an assumption of a modestly increased headwind in the first three quarters of the year, partially offset by a modest tailwind in the fourth quarter due to the effect of foreign currency related to the expected variances between the US dollar, Euro, British pound, and Swedish krona. Revenue on an organic currency basis are expected to be at the low end of our previously communicated range of 4.1% to 5.1% for the full year.

Speaker Change: The remaining 10% of our revenues comprised of credibility and digital marketing solutions continued to be negatively impacted by a variety of factors, including broader macro conditions.

Speaker Change: However, we have work underway to reduce their impact on the overall growth rate and I'll spend some time in my prepared remarks discussing our remediation efforts and the timing thereof.

Speaker Change: From a profitability perspective, EBIT grew 6% in the quarter driving 60 basis points of margin expansion.

Speaker Change: We continue to operate more efficiently and along with lower revenue growth from areas that have below average incremental margins, we were able to deliver strong profitability in the quarter.

Bryan Hipsher: Adjusted EBITDA is expected to continue to be in the range of $9.30 to $9.50 million, and adjusted EPS is expected to continue to be in the range of $1 to $4.

Speaker Change: We continue to focus our capital allocation on sustainable organic growth acceleration.

Speaker Change: Leveraging the balance sheet and maintaining our dividend while being opportunistic in both M&A and share buybacks when circumstances allow.

Bryan Hipsher: Additional modeling details underline our outlook are as follows. We expect interest expense to be around $220 million. Depreciation and amortization expense to be in the range of $125 to $135 million, excluding incremental depreciation and amortization expense resulting from purchase counting. Adjusted effective tax rate of approximately 22 to 23%, weighted average diluted shares don't stand in, of approximately $436 million. And for catabytes, we expect approximately $150 million to $160 million of internally developed software in $45 million of property, plant, and equipment in purchase software as capitalized spend begins to moderate in the second half of this year.

Speaker Change: And while we continue to execute well our share price provided an attractive valuation throughout the quarter and we began to utilize our share repurchase authorization.

Speaker Change: Throughout the quarter, we were able to purchase around 960000 shares at an average price per share of around $9 70.

Speaker Change: We accomplished this while maintaining our net leverage ratio of three seven times with visibility to around three five times by year end.

Speaker Change: As we expect capitalized spend another extraordinary investments to come down in the second half. We continue to expect improved free cash flow conversion for the full year, and we will look to deploy it efficiently and effectively.

Bryan Hipsher: With the exception of some lower transactional revenues in North America, the first two quarters played out largely as expected. And as we head into the second half of the year, our expectations for the cadence and the remaining quarters remains unchanged. With third quarter below the low end of the range, and fourth quarter being slightly above the high end of the range. In finally, with a heightened level of investment beginning to obey, we continue to anticipate operating pre-cash flow conversion as a percentage of adjusted net income, excluding the impact of the AR scaradization to improve person-to-prior year as previously discussed.

Speaker Change: And now turning to what's driving our financial results I'll start with an update on our financing risk solutions.

Speaker Change: Across both segments, we saw strong performance in our core finance and risk solutions.

Speaker Change: Finance solutions continues to be a deeply embedded solution set that creates an excellent platform for cross selling our risk solutions.

Speaker Change: While our finance and risk solutions are a key part of our 96% overall gross retention rate. There are also a key part of our 36% vitality index with third party risk management, delivering another stellar quarter of over 20% growth.

Operator: With that, we're now happy to open the call for questions. Operator, please open up the line for Q&A. Thank you. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you're using a speaker phone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you'd like to withdraw your question, please press star, then two.

Speaker Change: We are seeing strong demand for our risk analytics platform and even stronger demand for our risk data block solutions delivered via a direct API integrations.

Speaker Change: While medium to larger sized clients prefer a platform approach we are seeing the largest mega sized clients prefer a direct integrations due to their core applications.

Operator: At this time, we will pause momentarily to assemble our roster.

Speaker Change: While we continue to see growth and expansion with our medium and larger sized customers throughout the world.

Speaker Change: Our clients are still a great opportunity for us in both North America and internationally.

Andrew Steinerman: The first question will be from Andrew Steinerman from J.P. Morgan. Please go ahead.

Speaker Change: For instance in Asia, we saw high single digit growth driven by some of our more localized finance solutions.

Anthony Jabbour: Hi, Anthony. I wanted to hear more about the D&B Credit Insights launch. I'm looking through the product on the website, but if you could just help us understand why you feel like this will help revenue for the credibility section and how it differs really from the existing products within the credibility suite.

Speaker Change: A smaller companies throughout the region book to validate themselves as worthy suppliers to large multinational businesses D&B.

T&D: T&D stands as a trusted provider of authentication and confidence.

Driving our financial results I'll start with an update on our financing risk solutions.

T&D: Now, while we have continued to transform our SMB businesses in North America.

Across both segments, we saw strong performance in our core finance and risk solutions.

Anthony Jabbour: Sure, Andrew. A couple points. The first is on the product itself. We've updated it in a significant way in terms of consolidating and making it easier for our clients to navigate. As part of that, we've also implemented different sales techniques around engagement with the clients, and what we've seen so far is a material improvement in our attrition in that base. So hanging on to clients and keeping them close. The second that we talk about with the money back guarantee is a really powerful one. It took a little longer because, like I said, with compliance, who wanted to dot all the i's across all the keys around the money back guarantee.

Speaker Change: <unk> continued to see some softness in the second quarter.

Finance solutions continues to be a deeply embedded solution set that creates an excellent platform for cross selling our risk solutions.

Speaker Change: Largely as expected.

Speaker Change: The second quarter was down $2 3 million.

Speaker Change: Or a 7% decline versus prior year.

While our finance and risk solutions are a key part of our 96% overall gross retention rate. There are also key part of our 36% vitality index with third party risk management, delivering another stellar quarter of over 20% growth.

Speaker Change: And $4 1 million or.

Speaker Change: Or six 4% decline year to date.

Speaker Change: The declines up to this point have solutions that are directly impacted by the consent order and its impact on those renewals throughout last year and into early this year.

We are seeing strong demand for our risk analytics platform and even stronger demand for our risk data blocks solutions delivered via direct API integrations.

Speaker Change: We still expect the business to be near flat in Q3, and then begin to slightly grow in Q4 and remained positive as we are seeing green shoots in our new solution sales and in particular, the improved performance of our credit insights product.

While medium to larger sized clients prefer a platform approach we are seeing the largest mega sized clients prefer direct integrations into their core applications.

Bryan Hipsher: But essentially what that sank to clients is if we can't help you improve it, then you don't pay. So it creates a really simple value proposition compared to the consent or that we have to read with clients at the time. So I think for those reasons, and like I said, we launched that July 17th, and later part of July, we saw a nice improvement versus July last year on the sales side. So I'd say from a product improvement perspective, the money back guarantee perspective, our sales go to market changes that we've put in place and also that we're adding some of our sales and marketing capabilities like Coopers. And if these businesses are trying to improve their credit, let's also try and help them improve the business through sales and marketing capability.

Speaker Change: While it took us a little longer to launch than expected I'm, particularly excited about the early results. We're seeing from the July 17th launch of our money back guarantee and.

While we continue to see growth and expansion with our medium and larger sized customers throughout the world.

Speaker Change: And that coupled with the product enhancements, we have made significantly increase the value, we're providing to our clients and prospects.

Unnamed Speaker: For instance, in Asia, we saw high single-digit growth driven by some of our more localized finance solutions as smaller companies throughout the region look to validate themselves as worthy suppliers to large multinational businesses.

Speaker Change: These efforts combined with several others are transforming the credibility solutions and gives us confidence in our ability to turn this part of our negative 10% into a more positive contributor by the end of this year.

Speaker Change: And now turning to our sales and marketing solutions. We grew mid single digits overall, driven by strong performance in master data management and improving performance in sales acceleration.

Unnamed Speaker: Credibility continued to see some softness in the second quarter, or a 6.4% decline year-to-date. However, the declines up to this point have been reactions that are directly impacted by the consent order and its impact on those renewals throughout last year and into early this year. We still expect the business to be near flat in Q3 and then begin to slightly grow in Q4 and remain positive as we are seeing green shoots in our new solution sales and, in particular, the improved performance of our Credit Insights product.

Speaker Change: The overall market remained constrained.

Bryan Hipsher: So it's the combination of all of that, Andrew, is why we feel good about this. And it's the product priced above or below, let's say, the legacy credibility products. So I hear you repeat that question. Just price it, price it for the DNB Credit Insights. Is it priced higher than the legacy products with the credibility, or is it a more attractive price point to cut? Andrew, it's a pretty consistent from a pricing perspective. And so, as Anthony said, obviously with the guarantee we're putting, is a net benefit from that perspective. And then opening the aperture as we have in a lot of areas, so alternative data assets, the utilization of things outside of the manual trade.

Speaker Change: <unk> interest rate cuts persisted throughout the second quarter.

Speaker Change: But through the mission critical nature of our MDM solutions and improving sales acceleration offerings, we were able to offset much of the lackluster spending.

Speaker Change: That being said the majority of the business was growing nicely.

Speaker Change: Our transactional volumes and digital marketing solutions remain depressed.

Speaker Change: While things didn't deteriorate further from the prior trends they certainly didn't improve at the rate we had expected.

Speaker Change: While the vast majority of our revenues are subscription based our digital marketing solutions are more cyclical in nature, and therefore impacted both positively and negatively by volume trends.

Speaker Change: For context, these solutions were down $4 6 million or 14% in the second quarter and.

Anthony Jabbour: So we're bringing in financial statements, utility health statements, other broader business credit card usage, et cetera, that gives them a more holistic picture of a firm and allows them to continue to drive incremental benefit. But again, from a cost perspective, it'll be on par with where we were before. And Andrew's going to let on to that is with the additional data that will be required for the money back guarantee access to credit card statement, bank accounts, et cetera. What we're seeing in our lives is a 20% lift in credit when we have the additional data.

Speaker Change: $7 7 million or 12% year to date.

Speaker Change: We anticipate improvement in the back half of this year for three reasons. The first because we expect the fed to begin to reduce interest rates driving increased spend.

Unnamed Speaker: These efforts, combined with several others, are transforming credibility solutions and giving us confidence in our ability to turn this part of our negative 10% into a more positive contributor by the end of this year. Now, turning to our sales and marketing solution. The overall market remained constrained as delayed interest rate cuts persisted throughout the second quarter. As a result, our transactional volumes and digital marketing solutions remain depressed. While things didn't deteriorate further from the prior trends, they certainly didn't improve at the rate we had expected.

Speaker Change: Second Google will no longer be deprecating cookies, which should help lift traditional volumes and third we are expanding into rapidly growing areas such as connected TV retail media and further into social media.

Speaker Change: Overall things have largely played out as we expected through the first two quarters of the year and while we are tweaking our full year organic revenue guidance to take into account the lower than expected transactional revenues from digital marketing, we are maintaining our previous adjusted EBITA and adjusted EPS guidance.

Andrew Steinerman: And so from our perspective, we've got confidence that we can help improve credit for small business, which is great for the industry, for the country. And also in the instances where we can't, we'll also have more data adding on to the lead that we have in terms of data quality. On it. Thank you. Appreciate it. Thank you.

Speaker Change: We will stay close to credibility and digital marketing that comprised the 10% of our revenues that are challenged throughout the remainder of this year and make any changes necessary to be set up to achieve a 2025 growth rate that is within the 5% to 7% range. We previously discussed.

Operator: Thanks, Andrew.

Heather Balsky: And the next question will be from Heather Bosky from Bank of America.

Heather Balsky: Please go ahead.

Anthony Jabbour: Good morning. It's what he'd mean on for Heather. Just want to touch on the digital marketing solutions. The issues sound more external macro related. Can you discuss what you and the team are doing internally so you can also use macro challenges if things potentially get worse? Sure. Well, so a couple of things, you know, we certainly think and you see it broadly in the sales and marketing industry in terms of the reduction in spend in the space. And as there's more certainty on interest rate cuts coming, we believe that we'll free up the spend, and that will help.

Speaker Change: Another important element in our growth plan is continued innovation.

Speaker Change: In the second quarter, we introduced Hoover Smart mail, which allows automated messaging and deployment to high targeted contacts for more individualized content creation.

Speaker Change: And in combination with smart search launched in Q1, both now have over 4000 clients using these new Gen AI capabilities.

Speaker Change: In addition, we have our new chat D&B Gen AI assistant this.

Unnamed Speaker: The first is that we expect the Fed to begin to reduce interest rates, driving increased spend. Overall, things have largely played out as we expected through the first two quarters of the year. And while we are tweaking our full-year organic revenue guidance to take into account the lower than expected transactional revenues from digital marketing, we are maintaining our previous adjusted EBITDA and adjusted EPS guidance. We will stay close to credibility and digital marketing, which comprise the 10% of our revenues that are challenged throughout the remainder of this year, and make any changes necessary to be set up to achieve a 2025 growth rate that is within the 5 to 7% range we previously discussed.

Anthony Jabbour: Not just us, but you know, the industry and more generally. But also there's a number of things that are going on. So recently, Google announced that they're not going to deprecate the cookie me longer and that will drive more traditional volume for us and other players, which will be positive. The other new channel that we're starting and what was going to be just a copulous world around connected TV, retail media and social work penetrating those very well got, you know, very nice growth rate in those. I'll be at their small businesses and not contributing, but the growth rate is very significant in those.

Speaker Change: This is the patent pending autonomous AI agent that speaks to all of our data assets.

There isn't a question about our business, we can't answer and this new assistant is being used by over 500 internal users and an early adopter testing with our clients.

Speaker Change: Lastly, our continued partnership with IBM has been new asked procurement assistant and early trials as well.

Speaker Change: As a reminder, all of our Gen. AI solutions are based on APE are foundational architecture for quickly building testing and launching new solutions.

Anthony Jabbour: So we feel good about it from that perspective as well. And also going more directly to our clients, that where we've got broader relationships with and bringing this additional capability versus more traditionally, you know, leveraging agencies and the broader industry approach in the space. We've got a great client relationship. There's lots of ways that we can bring this additional data and capability to those clients. And probably the last is, you know, we had very strong comps in this space last year, at the beginning of the year until the comps become more favorable to that capitalist.

Speaker Change: Along with the exciting progress in Gen. AI, we continue to extend our dun's and data graphs from the offline world to the online world.

Speaker Change: Our business to person or <unk> service, combining specific consumer marketing characteristics to our best in class <unk> identity graph, creating a uniquely blended offering.

Unnamed Speaker: Another important element in our growth plan is continued innovation. And, in combination with SmartSearch, launched in Q1, both companies now have over 4,000 clients using these new Gen AI capabilities. It's still early stages, but we believe this could be a game changer in the ability to effectively market to key business audiences in an ever-evolving landscape. Similar to the comments you've heard from other industry peers, the general sales environment has stayed relatively stable compared to the slower one that started late last year. Our belief is that as the Fed begins to take its first steps to reduce interest rates in the late fall, businesses will become more constructive in their spending on new solutions and sales and marketing investments.

Speaker Change: Think about the VIP connection is focusing not on the individual as a consumer but the individual and his or her role within the defined organization.

Speaker Change: It's still early stages, but we believe this can be a game changer in the ability to effectively market to key business audiences and ever evolving landscape.

Heather Balsky: Thank you.

Anthony Jabbour: And then on sales and marketing, it was quite a bit of a step down sequentially internationally. Can you talk about what's going on there differently compared to North America? Yes, I think they're like said, you know, our revenues aren't consistently flowing quarter to quarter all the time. We've seen that in the business. I think the better approach in terms of the normalize for the timing of certain deliveries, for example, or client usage is, you know, looking at a broader range versus just a quarter. And I said, we feel pretty confident about how that business is growing.

Speaker Change: And as we continue to develop and execute within our key product lines. I'm also very pleased and our continued progress to finalize our cloud migration project.

Speaker Change: Our technology team has made huge progress in the first half of this year upgrading and migrating our solutions to the cloud and we look forward to completing a majority of the heavy lifting by the end of this year.

Before I update you on some client successes in the quarter I want to provide a quick update on the general buying environment.

Speaker Change: Similar to the comments you've heard from other industry peers. The general sales environment has stayed relatively stable to the slower one that started late last year.

Anthony Jabbour: And while he does, that one's obviously a smaller business ride in. And you know, as we went through some of the major migrations, some of the finance and risk guys, you know, for our last year, there are some smaller ones that we're working through this year. And so again, quarter to quarter, as Anthony said, you could have a little bit of movement. But if you look at the consistency throughout the year, I think you'll see that ultimately play out.

Speaker Change: Our belief is that as the fed begins to take its first actions to reduce interest rates in the late fall businesses will become more constructive and they are spending around new solutions and sales and marketing investments.

Speaker Change: And now turning back to Q2 I wanted to start off with North America, and a five year renewal and expansion with a fortune 500 company and one of the world's largest industrial supply companies.

Operator: Thank you.

Surinder Thind: And our next question will be from Surrender Thin from Jeffries. Please go ahead.

Speaker Change: This client has been with us for over 25 years and continues to leverage the unparalleled breadth and depth of our data and analytics to create predictive risk, scoring and automated credit decisioning.

Surinder Thind: Thank you. The first question I'd like to just follow up on is I believe on the prepared remarks I heard about a willingness to make any changes to some of the revenues that are challenged. Can you expand upon that comment? It sounds like perhaps strategic options or maybe I misheard. Yes, surrender. I'd say everything's on the table for us. You know, we've been working hard in terms of, you know, transforming this business. We're really proud of it. You know, we look at 90% of our revenues growing 6%. That's in the sweet spot, and the margins near 40% the sweet spot of the best players right now in the industry.

Speaker Change: By leveraging our data and analytics to support over 2 million customers. This company was able to create increased ROI relative to automated upfront credit limits at Onboarding and an analytics driven onboarding process that is helping to streamline the quote to cash process.

Speaker Change: Another five year renewal and the F&I segment with another Fortune 500 company and one of the world's premier providers of technology products and services for business government and education.

Anthony Jabbour: And so, with the remaining 10%, you know, we'll do whatever we need to do in terms of addressing those. And as you could see, you know, from my answers on SMV and digital marketing of a number of initiatives underway in terms of turning those around.

Speaker Change: Our client has been with US for 25 years and continues to look for new and innovative ways to automate their credit and risk functions.

Speaker Change: Through the addition of our new capabilities such as the SFA account manager, we were able to provide them incremental tools to reduce the friction and ultimately time between sales credit and close the.

Anthony Jabbour: But we're open to; I'd say everything's on the table, you know, from strategic partnerships, different sort of licensing agreements, et cetera, to other strategic options. Understood. And then how integrated are those into the business or their ability to separate those? How should we think about that? Or maybe some data dependencies between the various business lines? Sure, I'd say on the digital marketing side, it's, you know, not as integrated. And on the SMV side, like I said, the data that we collect is valuable in terms of it. It's what enriches, you know, the strong data quality that we have that we're known for in our clients' benefit.

Speaker Change: The team did a great job solution with our client and delivering significant value through our latest Dnb finance solutions.

<unk> and sales and marketing investments.

Speaker Change: We also continued to see strong expansion within our master data management client base.

And now turning back to Q2 I wanted to start off with North America, and a five year renewal and expansion with a fortune 500 company and one of the world's largest industrial supply companies.

Speaker Change: One of the world's largest technology companies has engaged us to assist in continuing to build out for uniform and structured process for sales and marketing programs across their enterprise.

This client has been with us for over 25 years and continues to leverage the unparalleled breadth and depth of our data and analytics to create predictive risk, scoring and automated credit decisioning.

Speaker Change: The leveraging of our specialized match capabilities contact management and support by our unique business to person data on the programmatic and social marketing channels, we're able to support them with enhancing their market leading position.

By leveraging our data and analytics to support over 2 million customers. This company was able to create increased ROI relative to automated upfront credit limits at Onboarding and an analytics driven onboarding process that is helping to streamline the quote to cash process.

Unnamed Speaker: By leveraging our data and analytics to support over 2 million customers, this company was able to create increased ROI relative to automated upfront credit limits at onboarding and an analytics-driven onboarding process that is helping to streamline the quote-to-cash process. The team did a great job solving for our client and delivering significant value through our latest D&B finance solution. One of the world's largest technology companies has engaged us to assist in continuing to build out the uniform and structured process for sales and marketing programs across their enterprise.

Anthony Jabbour: And so there's ways, you know, to solve for I take for both of those on go for basis, but clearly our data, you know, if we were to pursue strategic options, there would need to be, you know, ongoing licensing agreements, et cetera. That's helpful.

Speaker Change: They have one of if not the Premier first party data sets in the world and by allowing US a trusted third party provider to add onto those exceptional capabilities has put them in an even more differentiated position.

Anthony Jabbour: And then in terms of just investment back in the business, obviously some color around the tech transformation and where we are moving from the products to the cloud. But as we think about other products and technologies that you're exploring, let's say within AI, how should we think about the rapid changes that are going on there? and your ability to kind of invest at the pace that you want. I mean, would accelerated investment tell for how do you think about balancing that? Yeah, that's a great question. And it's one that we're obviously very focused on. The duty is we're seeing some of our projects roll off, which are helping us with our efficiency, right?

Speaker Change: And before turning to our international segment I wanted to finish up with a three year deal and sales and marketing with another Fortune 500 company and one of the largest human resources management software and services providers.

Speaker Change: Who has also been a client of ours for 25 years.

Speaker Change: Through our differentiated data and enhanced match capabilities, we're able to support our clients lead optimization for customer cross sell through enhancing the foundation of their market research planning and customer segmentation efforts.

Speaker Change: By testing our data against other providers and focusing on streamlining to a high quality process, we're able to grow our relationship with this client and create not only significant improvements to their marketing efforts, but reduce costs overall for them by eliminating process inefficiencies driven by our multi vendor strategy.

Anthony Jabbour: So number one, you know, that of itself is great, but also just we continue to build confidence internally in terms of hills that we want to take. We take, and I'm really proud of the team and all their efforts that way. We've made investments; you know, I shared, you know, the AI initiatives that we've got underway. You know, the chat, GPT one, for example, that also has a lot of internal use for it in terms of the efficiency that we can save with our own customer service and own internal process that we have today to create more efficiency.

Speaker Change: Okay.

Speaker Change: On the international front, we continue to see strong demand across our European and Asian regions.

Speaker Change: In early Q2, we signed a three year deal for Dnb data blocks for finance with top Hog Lloyd AG, one of the leading global liner shipping companies to support the credit management automation.

Unnamed Speaker: They have one of, if not the premier first-party data sets in the world, and by allowing us, a trusted third party provider, to add on to those exceptional capabilities, it has put them in an even more differentiated position. In early Q2, we signed a three-year deal for D&B Data Blocks for Finance with Hapag Lloyd AG, one of the leading global lines of shipping companies, to support their credit management automation. HCI Global SE, one of the largest insurance companies in Europe, signed a three-year contract for D&B DataBlocks to organize and manage its master data management, support sales and marketing, and optimize its risk management.

Speaker Change: Lloyd is among the top five largest shipping container transportation companies in the world and we are pleased to support their global need to manage financial risk and a more efficient and effective manner.

Anthony Jabbour: So I'd say from an investment perspective, we've been very consistent in making the right long-term decisions for our company versus short-term, and we'll continue to do that in terms of making sure we are in a position to always be successful, putting our clients in the similar position. So we feel really confident with, you know, the amount of investment that we have today based on where we see the market and the needs. And I'm excited with, you know, the capabilities that we're coming up with. They're, you know, candidly, you know, faster and better than I thought it would be by this stage.

Speaker Change: HDI Global FC one of the largest insurance companies in Europe signed a three year contract with Dnb data blocks to organize and manage its master data management.

Speaker Change: Support sales and marketing and optimize its risk management.

Speaker Change: This is a great example of how we can help create efficiencies across several use cases by clients leveraging our master data management capabilities.

Speaker Change: We also landed new business with a large global energy provider out of Norway.

Anthony Jabbour: I should ask maybe a year ago. Thank you.

Speaker Change: <unk> third party risk management.

Speaker Change: This is a three year contract and represents the largest sale to date of our new racy or risk analytics compliance intelligence solution.

Ashish Sabadra: And, as a reminder, if you have a question, please press star, then one. The next question will be from Ashish Sabhadra from RBC Capital Markets.

Gracie: Gracie has an intelligent Ky C slash ky be monitoring and assessment solution for compliance risk management.

Anthony Jabbour: Please go ahead. Thanks for taking my question. It's good to see the third-party risk management continue to grow at such a robust 20% plus space. I was wondering; you obviously mentioned a couple of good wins there and some of the new technology innovations that you're putting in place, which are gaining traction. I was thinking, as you think about, are you seeing any kind of slowdown from a macro challenge perspective but also anything from a regulatory perspective which is driving it? How are you thinking about cross-selling into the existing customer base versus winning new clients there as well?

Gracie: That allows clients to streamline their onboarding processes quickly identify and verify entities and people the company looks to do business with.

Gracie: Defines a risk relevancy and materiality based on a company specific risk policies.

Gracie: Monitor changes to business partners, they can proactively mitigate risk and regularly screen business partners again sanctions watchlist Pep lists and adverse media.

Speaker Change: We are very excited about how the racy pipeline is building and the early wins, we are seeing with this newly introduced solution.

Anthony Jabbour: So any incremental color that will be helpful. Thanks. Yeah, she's great questions. Excuse me, I take from a slowdown perspective. Your first one. You know, we're seeing what the industry is seeing. You've seen on other calls that you've been on. It's been pretty consistent since Q4 of last year, you know, with the industry and the spend has been. You know, I'd say we've, you know, we publish a global optimism report where we survey clients and see, you know, how they're feeling, and the majority of the embassy that we track, it's positive, right? So the future looks brighter, but I'd say, you know, currently where the industry's at, it's been pretty consistent since Q4 of last year.

And finally in Asia, we expanded our relationship with China Mobile International with our finance analytics and compliance solutions that allow them global coverage of their oversee client credit risk.

Speaker Change: And also drove new business with.

Unnamed Speaker: This is a great example of how we can help create efficiencies across several use cases by clients leveraging our master data management capability. We also landed new business with a large global energy provider out of Norway to manage their third-party risk management. This is a three-year contract and represents the largest sale to date of our new RACI, or Risk Analytics Compliance Intelligence, solution. RACI is an intelligent KYC slash KYB monitoring and assessment solution for compliance risk management.

Speaker Change: With reliance industries in India, a fortune 500 company and the largest private sector Corporation in India to support their potential expansion into new locations.

Speaker Change: Overall, I am proud of our team's focused execution against our long term strategy and the results we're driving.

Speaker Change: Over the trailing 12 months, 90% of our revenues have grown 6% and with margins close to 40%.

Anthony Jabbour: I take from our perspective, don't really see anything coming from a regulatory perspective that could hurt. Typically, when regulatory creeps in, it creates more burden for clients. So therefore, more opportunity for us to help solve the pain for our clients. So, you know, as we talk about, you know, regulatory, new regulatory requirements create pain for our clients. And if we could sell pain killers, those are easy to sell, right? Because our clients want the pain to go away as quickly as possible. I'd say on the Cross Health side, we're constantly looking at ways to cross-sell very nicely into our finance solutions base, which is great, but also, you know, we're looking at cross-selling everything that we have to all of our existing clients. You know, the one example I gave in my prepared remarks about a client who was leveraging us for their onboarding, what they had discovered was when they provided a credit limit to a client at the time of onboarding, there was an increased ROI on those clients.

Speaker Change: Putting us in a great position for continued future growth.

Speaker Change: With that I'd now like to turn the call over to Brian to discuss our financials in more detail and give a quick update on our outlook for the remainder of the year.

Unnamed Speaker: It allows clients to streamline their onboarding processes, quickly identify and verify entities and people the company looks to do business with. We are very excited about how the RACI pipeline is building and the early wins we are seeing with this newly introduced solution. It also drives a new business.

Brian: Thank you Anthony and good morning, everyone.

Brian: Turning to slide one on a GAAP basis second quarter revenues were $576 million, an increase of three 9% compared to the prior year quarter and an increase of four 2% before the effect of foreign exchange net.

Speaker Change: Net loss for the second quarter was $16 million or diluted loss per share of <unk> <unk> compared to a net loss of $19 million for the prior year quarter.

Speaker Change: $3 million decrease in net loss for the three months ended June 30 of 2024 compared to the prior year quarter was primarily due to higher operating income, partially offset by a lower tax benefit and the amortization loss related to the interest rate swap amendment completed in the third quarter of 2023.

Speaker Change: Turning now to slide two.

Speaker Change: Now discuss our adjusted results for the second quarter second quarter revenues for the total company were $576 million, an increase of three 9% compared to the prior year quarter and an increase of four 2% before the effect of foreign exchange.

Anthony Jabbour: And so, as we find examples like that simple one, for example, we're going to take that's all of our existing clients in Cross Health at use case and in find ways to help them grow and cross some more capability. So, I'd say, you know, as I look to the future, you know, I believe the, you know, budgets will grow; businesses feel more optimistic, and, like I said, I feel that the success that we're having will continue or accelerate. So, that's why I said we feel very, very good about, you know, the upcoming years, and building on the 90% that we have this business growing at 6%.

Speaker Change: The increase in revenues was attributable to growth in the underlying business, partially offset by the negative impact of foreign exchange and the impact of the divestiture of a business to consumer business in Finland in the fourth quarter of 2023, and therefore, our revenues on an organic constant currency basis were up four 3%.

Percent.

Putting us in a great position for continued future growth.

With that I'd now like to turn the call over to Brian to discuss our financials in more detail and give a quick update on our outlook for the remainder of the year.

Brian: Thank you Anthony and good morning, everyone.

Brian: Turning to slide one on a GAAP basis second quarter revenues were $576 million, an increase of three 9% compared to the prior year quarter.

Speaker Change: Second quarter adjusted EBITDA for the total company was $218 million, an increase of $12 million or 6%.

Ashish Sabadra: That's very helpful color. And again, it is very encouraging to see the steps that have been taken to turn around credibility and the marketing solutions, digital marketing.

Speaker Change: This was primarily due to revenue growth, partially offset by higher costs driven by cloud infrastructure costs.

Brian: And an increase of four 2% before the effect of foreign exchange.

Speaker Change: Net loss for the second quarter was $16 million or diluted loss per share of <unk> <unk> compared to a net loss of $19 million for the prior year quarter.

And personnel expenses.

Speaker Change: Second quarter adjusted EBITDA margin was 38% an increase of 60 basis points compared to the prior year quarter.

Anthony Jabbour: I was just wondering, other than that, are there any other legacy products, which may be a drag on growth and any strategic plan to either divest or turn them around? Thanks. I think from a focus perspective, our focus is on the 10% right now, right? We get that solved. You know, we're looking very strong. And so that's what our focus is. So, I don't see others popping up. Well, we have done, you know, we've migrated thousands and thousands of clients from legacy solutions to our most modern solution. So, and that's helped us in so many ways from, you know, cross health capabilities, from, you know, retention perspective, multi-year contracts, expense reductions on our side.

Speaker Change: Second quarter adjusted net income was $99 million, while our adjusted earnings per share of <unk> 23.

Speaker Change: Compared to $95 million or 22 per share in the second quarter of 2023.

Speaker Change: The increase was primarily attributable to higher adjusted EBITDA and lower interest expense in the current year quarter, partially offset by higher depreciation and amortization and tax expenses.

Speaker Change: Turning now to slide three I will now discuss the results from our three segments North America and international.

Unnamed Speaker: Second quarter revenues for the total company were $576 million, an increase of 3.9% compared to the prior year quarter, and an increase of 4.2% before the effect of foreign exchange. Second quarter adjusted even a margin of 38%, an increase of 60 basis points compared to the prior year quarter. The increase was primarily attributable to higher adjusted EBITDA and lower interest expense in the current year quarter, partially offset by higher depreciation and amortization and tax expenses. Turning now to slide three, I'm now going to discuss the results from our two segments, North America and International.

Speaker Change: North America revenues for the second quarter were $405 million, an increase of 3% from prior year quarter, and three 4% on an organic constant currency basis.

Speaker Change: And financial risk revenues were $216 million, an increase of $5 million or 3% due to a net increase in revenue across our third party risk supply chain management can finance solutions, partially offset by decreased revenues from our credibility sources.

Anthony Jabbour: So, so we've done a lot of that work, but like I said, our real focus is the 10%. That's very helpful. Thanks.

Operator: And ladies and gentlemen, this concludes our question-and-answer session.

Anthony Jabbour: I would like to turn the conference back over to Anthony Jibor for any closing remarks. Thank you. As always, I would like to thank my Dunn and Bradstreet colleagues for their exceptional efforts to sustainably grow our business for the years to come, and to our great clients for the partnership and guidance. Thank you for your interest in Dunn and Bradstreet for joining us on this call. I hope you enjoy the rest of your summer.

Speaker Change: Sales and marketing revenues were $189 million, an increase of $8 million or 4%.

Speaker Change: Sales and marketing growth was primarily driven by higher data sales and higher revenues from our master data management solutions, partially offset by decreased revenues from our other digital marketing solutions.

Speaker Change: North America second quarter, adjusted EBITDA was $178 million.

Operator: The conference has now concluded. Thank you for attending today's presentation.

Operator: You may now disconnect.

Speaker Change: An increase of $5 million or 3% and North America EBIT margin was 44% a decrease of 30 basis points from the prior year quarter. This was primarily due to revenue growth, partially offset by higher costs, driven by cloud infrastructure costs, selling and marketing expenses as well as personnel costs supporting our overall solution <unk>.

Speaker Change: People to higher adjusted EBITDA and lower interest expense in the current year quarter, partially offset by higher depreciation and amortization and tax expenses.

Speaker Change: <unk>.

Speaker Change: Turning to slide four.

Speaker Change: In our international segment second quarter revenues increased 5% to $172 million or an increase of 6% before the effect of foreign exchange and an increase of six 4% on an organic constant currency basis.

Speaker Change: Turning now to slide three I will now discuss the results from our two segments North America and international and.

Unnamed Speaker: In North America, revenues for the second quarter were $405 million, an increase of 3% from the prior year quarter and 3.4% on an organic, constant currency basis. In finance and risk, revenues were $216 million, an increase of $5 million, or 3%. Due to a net increase in revenue across our third-party risk, supply chain management can finance solutions, partially offset by decreased revenues from our credibility solution. North America's second quarter adjusted EBITDA was $178 million, an increase of $5 million, or 3%.

Speaker Change: In North America revenues for the second quarter were $405 million, an increase of 3% from prior year quarter, and three 4% on an organic constant currency basis.

Speaker Change: <unk> revenues were $160 million, an increase of 8% or an increase of 9% before the effect of foreign exchange all markets contributed to the growth, including higher revenue from our ACI solution in the United Kingdom growth in Europe from third party risk and compliance.

Speaker Change: And financial risk revenues were $216 million, an increase of $5 million or 3% due to a net increase in revenue across our third party risk supply chain management can finance solutions, partially offset by decreased revenues from our credibility solutions sales.

Speaker Change: Finance analytics, and API solutions and growth in greater China from finance analytics, and API solutions, along with increased revenues from worldwide network alliances due to increased cross border activity.

Speaker Change: Sales and marketing revenues were $189 million in.

Speaker Change: An increase of $8 million or 4%.

Speaker Change: Sales and marketing revenues were $55 million.

Speaker Change: A decrease of 0.3% or an increase of 1% before the effect of foreign exchange.

Speaker Change: On an organic basis revenues grew 2% primarily due to higher revenues from the U K driven by growth in our API solutions.

Unnamed Speaker: In North America, EBITDA margin was 44%, a decrease of 30 basis points from the prior year quarter. This was primarily due to revenue growth partially offset by higher costs driven by cloud infrastructure costs, selling and marketing expenses, as well as personnel costs supporting our overall solution innovation. Second quarter international adjusted EBITDA of $54 million increased $5 million, or 9.5%. The adjusted EBITDA margin was 31%, an increase of 120 basis points compared to the prior quarter.

Speaker Change: Second quarter International adjusted EBITDA of $54 million increased $5 million or nine 5% and adjusted EBITDA margin was 31% an increase of 120 basis points compared to the prior year quarter.

Speaker Change: The increase in adjusted EBITDA was due to revenue growth from the underlying business, partially offset by higher net personnel costs and foreign exchange loss.

Turning to slide five.

Speaker Change: Slide five contains the details of our capital structure as of quarter end.

Speaker Change: At the end of the June 32024, we had cash and cash equivalents of $263 million.

Speaker Change: And total principal amount of debt of 3670 $6 million with a weighted average interest rate of five 8%.

Speaker Change: Currently 87% of our debt is either fixed or hedged and as of June 32024, we had $730 million available on our $850 million revolving credit facility.

Speaker Change: Our leverage ratio was three seven times on a net basis and the credit facility senior secured net leverage ratio was three two times.

Speaker Change: We expect to be at around three five times on a net basis by the end of this year as we continue to migrate towards our medium term range of three to three and a quarter times by 2025.

Anthony: Turning now to our share repurchase program as Anthony mentioned during the second quarter, we repurchased 961360 shares of <unk> common stock for $9 3 million.

Speaker Change: <unk> increased $5 million or nine 5% and adjusted EBITDA margin was 31% an increase of 120 basis points compared to the prior year quarter.

Anthony: Accrued excise tax at an average price of $9 71 per share.

Speaker Change: The increase in adjusted EBITDA was due to revenue growth from the underlying business, partially offset by higher net personnel costs and foreign exchange loss.

Anthony: We currently have over 9 million shares remaining under our existing buyback authorization.

Unnamed Speaker: The increase in adjusted EBITDA was due to revenue growth from the underlying business, partially offset by higher net personnel costs in foreign exchange law. Slide 5 contains the details of our capital structure as of the quarter end. Our leverage ratio was 3.7 times on a net basis, and the credit facility senior secure net leverage ratio was 3.2 times.

Speaker Change: And now turning to slide six.

Speaker Change: Turning to slide five.

Speaker Change: Our outlook for 2024 is as follows.

Speaker Change: Slide five contains the details of our capital structure as of quarter end.

Speaker Change: Total revenues after the effect of foreign currency are expected to be at the low end of our previously communicated range of 2000 and $400 million to $2 $440 million or an increase of approximately three 7% to five 4%.

Speaker Change: At the end of the June 32024, we had cash and cash equivalents of $263 million and total principal amount of debt of 3670 $6 million with a weighted average interest rate of five 8%.

Speaker Change: This includes an assumption of a modestly increased headwind in the first three quarters of the year, partially offset by a modest tailwind in the fourth quarter due to the effect of foreign currency related to the expected variances between the U S dollar Euro British pound and Swedish krona.

Speaker Change: Revenues on an organic constant currency basis are expected to be at the low end of our previously communicated range of four 1% to five 1% for the full year.

Unnamed Speaker: We expect to be at around 3.5 times on a net basis by the end of this year as we continue to migrate towards our medium-term range of three to three and a quarter times by 2025. Turning now to our share repurchase program. As Anthony mentioned, during the second quarter, we repurchased 961,360 shares of Dun & Bradstreet Common Stock for $9.3 million, net of accrued excise tax at an average price of $9.71 per share.

Speaker Change: Adjusted EBITDA is expected to continue to be in the range of 930 for $950 million and adjusted EPS is expected to continue to be in the range of $1 to $1 four additional modeling details underlying our outlook are as follows.

Speaker Change: We expect interest expense to be around $220 million.

Jason: Jason amortization expense to be in the range of $125 million to $135 million excluding.

Jason: Excluding incremental depreciation and amortization expense, resulting from purchase accounting.

Jason: Adjusted effective tax rate of approximately 22% to 23%.

Jason: Weighted average diluted shares outstanding of approximately $436 million.

Unnamed Speaker: And now I'll turn it to slide six. Our forecast for 2024 is as follows. This includes an assumption of a modestly increased headwind in the first three quarters of the year, partially offset by a modest tailwind in the fourth quarter due to the effect of foreign currency related to the expected variances between the U.S. dollar, euro, British pound, and Swedish krona. And for CapEx, we expect approximately $150 million to $160 million of internally developed software and $45 million of property, plant, and equipment and purchase software, as capital spend begins to moderate in the second half of this year.

Jason: And for Capex, we expect approximately $150 million to $160 million of internally developed software and $45 million of property plant and equipment and purchased software as capitalized spend begins to moderate in the second half of this year with the exception of some lower transactional revenues in North America. The first two quarters.

Jason: Played out largely as expected and as we head into the second half of the year, our expectations for the cadence of the remaining quarters remains unchanged with third quarter below the low end of the range and fourth quarter being slightly above the high end of the range.

Jason: Finally, with a heightened level of investment beginning to abate, we continue to anticipate operating free cash flow conversion as a percentage of adjusted net income excluding the impact of the AR securitization to improve versus the prior year as previously discussed.

Speaker Change: With that we're now happy to open the call for questions. Operator will you. Please open up the line for Q&A.

Speaker Change: Thank you we will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing the keys if at anytime. Your question has been addressed and you'd like to withdraw. Your question. Please press Star then two at this time.

Speaker Change: We expect interest expense to be around $220 million depreciation and amortization expense to be in the range of $125 million to $135 million, excluding incremental depreciation and amortization expense, resulting from purchase accounting.

Speaker Change: Adjusted effective tax rate of approximately 22% to 23%.

Speaker Change: We will pause momentarily to assemble our roster.

Speaker Change: Weighted average diluted shares outstanding of approximately $436 million.

Speaker Change: And the first question will be from Andrew Steinman from Jpmorgan. Please go ahead.

Andrew Steinman: Hi, Anthony I wanted to hear more about the dnb credit insights launching.

Andrew Steinman: Looking through the product on the website, but if you could just help us understand why you feel like this will help our revenue for the credibility section and how it differs from the existing products within the credibility suite.

Unnamed Speaker: With the exception of some lower transactional revenues in North America, the first two quarters played out largely as expected, and as we head into the second half of the year, our expectations for the cadence of the remaining quarters remain unchanged, with the third quarter below the low end of the range, and the fourth quarter being slightly above the high end of the range. Thank you.

Anthony: Sure Andrew.

Anthony: So a couple of points. The first is on the product itself.

Anthony: <unk>.

Anthony: Updated it in a significant way in terms of consolidating and making it easier for our clients to navigate and as part of that we've also implemented different sales techniques around.

Anthony: Engagement with the clients and what we've seen so far is.

Anthony: A material improvement in our attrition in that base, so hanging on to clients and keeping them close.

Anthony: The second that we talk about with the money back guarantee is a really powerful one it took a little longer because like I said with.

Anthony: Compliance wanted to dot all the I's cross all the Ts around the money back guarantee.

Anthony: But essentially what that St to clients is if we can help you improve. It then you don't pay so it creates a really simple value proposition compared to.

Speaker Change: Yes, I'd say the consent order that we have to.

Speaker Change: REIT with clients at the time, so I think for those reasons.

Operator: And the first question will be from Andrew Steinerman from J.P. Morgan. Please go ahead.

Speaker Change: And like I said, we launched that July 17th in the later part of July we saw a nice improvement versus July last year on the sales side, So I would say from a.

Andrew Charles Steinerman: Anthony, I wanted to hear more about the D&B Credit Insights launch, and I'm looking through the product on the website, but if you could just help us understand why you feel like this will help revenue for the credibility section and how it really differs from the existing products within the credibility suite.

Speaker Change: <unk>.

Speaker Change: Our product.

Speaker Change: Movement perspective, the money back guarantee perspective, our sales go to market changes that we've put in place.

Speaker Change: And also that we're adding some of our sales and marketing capabilities like Hoover's and if these businesses are trying to improve their credit. Let's also trying to help them improve their business through sales and marketing capabilities. So it's the combination of all of that Andrew is why we feel good about this and.

Speaker Change: <unk> the credibility suites.

Andrew: Sure Andrew.

Anthony M. Jabbour: Sure, Andrew. So, just a couple points. The first is the product itself. We've updated it in a significant way in terms of consolidating it, making it easier for our clients to navigate. And as part of that, we've also implemented different sales techniques around engagement with the clients. And what we've seen so far is a material improvement in our attrition rate in that they're so, you know, hanging on to clients and keeping them close.

Andrew: So a couple of points. The first is on the product itself.

Andrew: <unk>.

Andrew: Updated it in a significant way in terms of consolidating and making it easier for our clients to navigate and as part of that we've also implemented different sales techniques around.

Andrew Steinman: And is the product priced above or below let's say the legacy credibility products.

Andrew Steinman: Sorry can you repeat that question just pricing pricing for the Dnb credit insights.

Andrew: Engagement with the clients and what we've seen so far is.

Andrew: Material improvement in our attrition in that base, so hanging on to clients and keeping them close.

Andrew Steinman: Just higher than the legacy products within credibility or is it a more attractive price points to customers.

Andrew: The second that we talk about with the money back guarantee is a really powerful one it took a little longer because like I said with.

Andrew Steinman: No Andrew.

Andrew Steinman: It's a pretty consistent from a pricing perspective, and so as Anthony side, obviously, where.

Andrew: Compliance wanted to dot all the I's cross all the Ts around the money back guarantee.

Speaker Change: The guarantee of reporting.

Speaker Change: Net benefit from that perspective, and then opening the aperture as we have a lot of areas for alternative data assets the utilization of things outside of just manual trade. So we're bringing in financial statements utility payments.

Anthony M. Jabbour: But essentially, what that's saying to clients is if we can't help you improve it, then you don't pay. So it creates a really simple value proposition compared to, yeah, I'd say the consent order that we have to, you know, read with clients at the time. So I think for those reasons, and like I said, we launched that July 17th, and in the latter part of July, we saw a nice improvement versus July last year on the sales side.

Speaker Change: Their broader business credit card usage et cetera that give them more holistic picture of a firm and allows them to continue to drive incremental benefit, but again from a cost perspective it'll be on a.

Anthony M. Jabbour: So I'd say from a product improvement perspective, the money-back guarantee perspective, our sales go-to-market changes that we've put in place, and also that we're adding some of our sales and marketing capabilities, like Hoovers. And if these businesses are trying to improve their credit, let's also try and help them improve their business through sales and marketing. So it's the combination of all of that, Andrew, is why we feel good about this.

Speaker Change: On par with where we were before got it I mean, the only thing I'll add onto that is with the additional data is that.

Speaker Change: Will be required for the money back guarantee access to a credit card statement bank accounts et cetera.

Speaker Change: What we're seeing in our lines or the 20% lift.

And in credit when we have the additional data and so from our perspective and confidence that we can help improve credit for small business, which is great for the industry for the country.

Speaker Change: And also in the instances, where we can't we will also have more data adding onto the lead that we have in terms of data quality.

Andrew Charles Steinerman: Just pricing. Pricing for D&B Credit Insights, is it priced higher than the legacy products within Credibility, or is it a more attractive price point to customers?

Speaker Change: Got it thank you I appreciate it.

Andrew Steinman: Thanks, Andrew.

Andrew Steinman: And the next question will be from Heather <unk> from Bank of America. Please go ahead.

Unnamed Speaker: No, Andrew, it's pretty consistent from a pricing perspective. And so, you know, as Anthony said, obviously, with the guarantee we're putting in, it's a net benefit from that perspective. And then, you know, opening the aperture as we have in a lot of areas, so alternative data assets, you know, the utilization of things outside of just manual trade. So we're bringing in financial statements, you know, utility accounts, payments, other broader, you know, business, credit card, you know, usage, etc. That, you know, gives a more holistic picture of a firm and allows them to continue to drive, you know, incremental benefits. But again, from a cost perspective, it'll be on par with where we were before.

Heather Immuno: Hi, good morning, it's where heat immuno on for Heather.

Heather Immuno: Just wanted to touch on the digital marketing solutions the issues more external macro related can you discuss what you and the team are doing internally. So you can ask for these.

Andrew Charles Steinerman: Got it. Thank you.

Speaker Change: Macro challenges if things potentially get worse.

Andrew: Besides the utilization of things outside of just manual trade. So we're bringing in financial statements.

Speaker Change: Sure So a couple of things.

Speaker Change: We certainly think and you see it broadly in the NIM.

Speaker Change: <unk> payments other broader business credit card usage et cetera that gives them more holistic picture of a firm and allows them to continue to drive incremental benefit, but again from a cost perspective, it'll be on par with where we were before.

Speaker Change: And the sales and marketing industry in terms of the reduction in spend in this space.

Speaker Change: And as there's more certainty on interest rate cuts coming we believe that will free up the spend and that will help.

Speaker Change: Not just us, but the industry more generally.

Speaker Change: But also there is a number of things that are going on so recently, Google announced that they're not going to deprecate, the cook any longer and that will drive more traditional.

Andrew: I'll, let onto that is with the additional data that will.

Andrew: We will be required for the money back guarantee access to credit card statement bank accounts et cetera.

Speaker Change: Volume for us and other players which will be positive.

Speaker Change: What we're seeing in our lines as a 20% lift in in credit when we had the additional data and so from our perspective, we do have confidence that we can help improve credit for small business, which is great for the industry for the country.

The other new channels that we're starting and what was going to be just a coupla swirled around connected TV retail media and social.

Speaker Change: We're penetrating those very well.

Andrew: And also in the instances, where we can't we will also have more data adding onto the lead that we have in terms of data quality.

Speaker Change: Very nice growth rates in those albeit they're small businesses and not contributing.

Speaker Change: But the growth rate is very significant and those so we feel good about it from that perspective, as well and also going more directly to our clients that where we've got broader relationships with and bringing this additional capability versus more traditionally.

Speaker Change: Leveraging agencies in the broader industry approach in this space, we've got a great client relationship.

Speaker Change: There's lots of ways that we can bring this additional data and capability to those clients and probably the losses.

Speaker Change: We had very strong comps in this space last year at the beginning of the year until the comps become more favorable in the back half of this year.

Speaker Change: Got it thank you and then.

Sales and marketing it was quite a bit of a step down sequentially internationally can you talk about what's going on there differently compared to North America.

Speaker Change: Yes, so I think there.

Like I said, our revenues arent consistent.

Speaker Change: Following quarter to quarter, all the time, we've seen that in the business.

Speaker Change: Number of parts of our business domestically and internationally I think the the <unk>.

Speaker Change: <unk> approach in terms of.

Speaker Change: The normalized for the timing of certain deliveries for example, or client usage is looking at a broader range versus just a quarter and instead, we feel pretty confident about how that business is growing and why.

Speaker Change: Obviously, a smaller business Friday and as we went through some of the major migration from a finance and risk Sky front last year. There are some smaller ones that we're working through this year and so again quarter to quarter as Anthony said, you could have a little bit of movement, but if you look at the consistency throughout the year.

Anthony: Youll see that ultimately play out.

Speaker Change: Thank you.

Speaker Change: And our next question will be from Surinder <unk> from Jefferies. Please go ahead.

Speaker Change: Thank you.

Surinder <unk>: The first question I'd like to just follow up on that is I believe on the prepared remarks I heard about.

Surinder <unk>: Our willingness to make any changes to some of the revenues that are challenged can you expand upon that comment it sounds like perhaps strategic options or maybe I misheard.

Unnamed Speaker: And then on sales and marketing, there was quite a bit of a step down sequentially internationally. Can you talk about what's going on there differently compared to North America?

The instrument here I'd say everything's on the table for US we've been working hard in terms of.

Speaker Change: Transforming this business, we're really proud of it when we look at 90% of our revenues growing 6% that's in the sweet spot.

Speaker Change: The margins near 40% the sweet spot of the best players right now in the industry and so with the remaining 10% we will do.

Andrew: In terms of.

Speaker Change: The normalized for the timing of certain deliveries for example, or client usage is looking at a broader range versus just a quarter and instead, we feel pretty confident about how that business is growing and why that one is obviously a smaller business Friday and as we went through some of the major migration from the finance and risk Sky front last year.

Speaker Change: Whatever we need to do in terms of addressing those and as you can see from my answers on.

Speaker Change: SMB and digital marketing, we have a number of initiatives underway in terms of turning those around but we're open to.

Unnamed Speaker: And Wahid, that one's obviously a smaller business, right, and, you know, as we went through some of the major migrations from the finance and risk guide, you know, throughout last year, there are some smaller ones that we're working through this year. And so, again, quarter to quarter, as Anthony said, you could have a little bit of movement, but if you look at the consistency throughout the year, I think you'll, you know, see that ultimately play out.

Speaker Change: I'd say everything's on the table from.

Speaker Change: Strategic partnerships different sort of licensing agreements et cetera to other strategic options.

Andrew: Sure there are some smaller ones that we're working through this year and so again quarter to quarter as Anthony said, you could have a little bit of movement, but if you look at the consistency throughout the year.

Speaker Change: Understood and then how integrated our those into the business or the ability to separate those how should we think about that or maybe some data dependencies between the various business lines.

Speaker Change: I think youll see that ultimately play out.

Speaker Change: Thank you.

Andrew: And our next question will be from Surinder <unk> from Jefferies. Please go ahead.

Sure I'd say on the digital marketing side it's.

Operator: And our next question will be from Surinder Thind from Jeffreys. Please go ahead.

Not as integrated and on the <unk>.

Andrew: Hum.

Sandy: Sandy side.

Speaker Change: Like I said, the the data that we collect is valuable in terms of its what enriches.

Surinder: First question I'd like to just follow up on is I believe on the prepared remarks I heard about.

Surinder Singh Thind: willingness to make any changes to some of the revenues that are challenged. Can you expand upon that comment? It sounds like perhaps strategic options or maybe a misheard.

Speaker Change: The strong data quality that we have that we're known for and our clients benefit.

Speaker Change: And so there's ways to solve for.

Speaker Change: I'd say for both of those on a go forward basis, but clearly our data.

Unnamed Speaker: Yes, Surinder, I'd say everything's on the table for us. You know, we've been working hard in terms of, you know, transforming this business. We're really proud of it. You know, when we look at 90% of our revenue growing 6%, that's in the sweet spot. And the margin's near 40%, the sweet spot of the best players right now in the industry. And so with the remaining 10%, we'll do whatever we need to do in terms of addressing those.

Speaker Change: If we were to pursue strategic options there needs to be an ongoing licensing agreements et cetera.

Speaker Change: That's helpful.

Speaker Change: And then in terms of just investment back in the business.

Speaker Change: Obviously, some color around the tech transformation and where we are in moving some of the products to the cloud so as we think about.

Unnamed Speaker: And as you can see, you know, from my answers on SMB and digital marketing, we have a number of initiatives underway in terms of turning those around. But we're open to, I'd say everything's on the table, you know, from strategic partnerships, different sorts of licensing agreements, et cetera, to other strategic options.

Speaker Change: Other products and technologies that you're exploring.

Speaker Change: Lets say within AI, how should we think about the rapid changes that are going on there and.

Speaker Change: Your ability to kind of invest at the pace that you want I mean wood accelerated investments held for how do you think about balancing that.

Speaker Change: Yes, that's a great question and it's one that we're obviously very focused on.

Unnamed Speaker: Understandable. But how integrated are those into the business or their ability to separate them? How should we think about that? Or maybe some data dependencies between the various business lines?

Speaker Change: The beauty is we're seeing some of our projects.

Speaker Change: Roll off which are helping us with our efficiency right. So number one.

Unnamed Speaker: Sure. But on the digital marketing side, it's, you know, not as integrated. And on the S&D side, like I said, the data that we collect is valuable in terms of it enriches the strong data quality that we have that we're known for and our clients benefit. And so there are ways, you know, to solve for both of those on a go forward basis. But clearly, our data, you know, if we were to pursue strategic options, there would need to be, you know, ongoing licensing agreements, etc.

Speaker Change: And of itself is great, but also we continue to build confidence internally in terms of hills that we wanted to take we take and I'm really proud of the team and all their efforts that way we are.

Speaker Change: Made investments.

Speaker Change: Third the AI initiatives that we've got underway.

Speaker Change: Chad CPT. One for example that also has a lot of internal use for it in terms of efficiency that we can save with our own customer service and on internal.

Andrew: Theres ways to solve for.

Speaker Change: I would say for both of those on a go forward basis, but clearly our data.

Speaker Change: Net processes that we have today to create more efficiency. So I'd say from an investment perspective, we've been very.

Speaker Change: If we were to pursue strategic options, there would need to be ongoing licensing agreements et cetera.

Speaker Change: Consistent and making the right long term decisions for our company versus short term.

Speaker Change: That's helpful.

Speaker Change: And then in terms of just investment back in the business.

Speaker Change: And we will continue to do that in terms of making sure we are.

Speaker Change: Obviously, some color around the tech transformation and where we are in moving some of the products to the cloud because we think about.

Speaker Change: In a position to always be successful, putting our clients in a similar position. So we feel really confident with.

Speaker Change: Other products and technologies that you're exploring.

Speaker Change: The amount of investment that we have today based on where we see the market and the needs and I am excited with the capabilities that we're coming up with there.

Speaker Change: Lets say within AI, how should we think about the rapid changes that are going on there and.

Speaker Change: Your ability to kind of invest at the pace that you want I mean wood accelerated investments help or how do you think about balancing that.

Unnamed Speaker: your ability to kind of invest at the pace that you want? I mean, would accelerated investments help? Or how do you think about balancing that?

Speaker Change: Candidly.

Speaker Change: Faster and better than I thought there would be by this stage should asked me a year ago.

Speaker Change: Thank you.

Speaker Change: Yes, that's a great question and it's one that we're obviously very focused on.

Speaker Change: Thank you.

Speaker Change: And as a reminder, if you have a question. Please press Star then one.

Speaker Change: The beauty is we're seeing some of our projects.

Speaker Change: Roll off which are helping us with our efficiency right. So number one.

Ashish <unk>: The next question will be from Ashish <unk> from RBC capital markets. Please go ahead.

Thanks for taking my question, it's good to see the third party risk management continued to grow at such a robust 20% plus fees. I was wondering you. Obviously you mentioned a couple of quick wins, there and some of the new technology technology innovation that youre, putting in place kind of gaining traction I was thinking as you think about it are you seeing any.

Speaker Change: Kind of a slowdown from a macro challenge perspective, but also anything from a regulatory perspective, which is driving it or are you thinking about cross selling into the existing customer base versus new clients, there as well so any incremental color there that would be helpful. Thanks.

Speaker Change: Yes, great questions.

Speaker Change: Excuse me I'd say from a slowdown perspective.

Speaker Change: The first one we're seeing what the industry seem you've said on other calls that you've been on it's been pretty consistent since Q4 of last year.

The industry and the spend has been.

Speaker Change:

Speaker Change: I'd say we've.

Speaker Change: We publish a global optimism report, where we surveyed clients and see what how they're feeling and.

Speaker Change: And the majority of.

Speaker Change: The indices that we track it's positive right. So so the future looks brighter, but I would say currently where the industry is that it's been pretty consistent since Q4 of last year.

I'd say from from our perspective.

Speaker Change: I don't really see anything coming from a regulatory perspective that could hurt typically when regulatory creep and it creates more burden for clients. So therefore.

Speaker Change: More opportunity for us to help solve the pain for our clients. So.

Speaker Change: As we talk about.

Regulatory new regulatory requirements create pain for our clients and if we could sell pain killers, those are easier to sell right because.

Speaker Change: Section I was thinking as you think about are you seeing any kind of slowdown from a macro challenge perspective, but also anything from a regulatory perspective, which is driving it but what are you thinking about cross selling into the existing customer base versus winning new clients there as well so any incremental color there would be helpful. Thanks.

Speaker Change: Obviously, our clients want the pain to go away as quickly as possible.

Speaker Change: I would say on the cross sell side look we're constantly looking at ways to cross sell and cross selling very nicely into our finance solutions base, which is great.

Unnamed Speaker: Yeah, she's got great questions. Excuse me, I take from a slowdown perspective. So, you know, as we talk about, you know, regulatory issues, new regulatory requirements create pain for our clients, and if we could sell painkillers, those are easy to sell, right? Because, obviously, our clients want the pain to go away as quickly as possible. You know, we're looking at cross-selling everything that we have to all of our existing clients. The one example I gave in my prepared remarks about a client who was leveraging us for their onboarding, what they discovered was when they provided a credit limit to a client at the time of onboarding, there was an increased ROI on those clients.

Speaker Change: But also.

Speaker Change: Yeah, she's great questions.

Speaker Change: We're looking at cross selling.

Speaker Change: [noise] excuse me I'd say from a slowdown perspective.

Speaker Change: Everything that we have set to all of our existing clients.

Speaker Change: First one we're seeing what the industry soon you've said on other calls that you've been on it's been pretty consistent since Q4 of last year.

Speaker Change: The the one example, I gave you my prepared remarks about a client.

Speaker Change: Who is leveraging us for their onboarding, what they had discovered was when they provided a credit limit to our clients at the time of Onboarding.

Speaker Change: The industry and the spend has been.

Speaker Change: I'd say we've.

Speaker Change: We publish a global optimism report, where we surveyed clients and see what how they're feeling and.

Speaker Change: There was an increased ROI on those clients and so as we find examples like that simple. One for example, we're going to take that as all of our existing clients and cross sell that used case and and find ways to help them grow and cross sell more capability. So.

Speaker Change: And the majority of.

Speaker Change: The indices that we track it's positive right. So the so the future looks brighter, but I'd say.

Speaker Change: Currently where the industry is that it's been pretty consistent since Q4 of last year.

Speaker Change: As I look to the future I believe the.

Speaker Change: Budgets will grow businesses feel more optimistic.

Speaker Change: I would say from from our perspective.

Speaker Change: And it.

Phil: Thanks, Phil.

Speaker Change: That the success that were without we're having will continue or accelerate so that's why we said we feel very.

Speaker Change: Very good about.

Speaker Change: Coming years and.

And building on the 90% that we have this business growing at 6%.

Speaker Change: That's very helpful color and again this is very encouraging to see the steps that have been taken to turn around.

Speaker Change: Credibility and marketing solution.

Speaker Change: Because of the marketing I was just wondering other than that are there any other legacy products, which may be a drag on growth in any strategic.

Speaker Change: Our strategic plan to either divest or done in their opex.

Speaker Change: I think from a focus perspective, our focus is on the 10% right now right.

Speaker Change: Get that solved.

Speaker Change: We're looking very strong.

Speaker Change: So that's what our focus is so I don't see others.

Speaker Change: Popping up what we have done we've migrated thousands and thousands of clients from legacy solutions to our most modern solution. So and that has helped us in so many ways from.

Unnamed Speaker: And so as we find examples like that simple one, for example, we're going to take that to all of our existing clients and cross out that use case and find ways to help them grow and add more capabilities. So, I'd say, as I look to the future, I believe the budgets will grow, businesses will feel more optimistic, and, like I said, I feel that the success that we're having will continue or accelerate. So that's why I said we feel very, very good about, you know, the upcoming years.

Speaker Change: Cross sell capabilities from.

Speaker Change: And a retention perspective multi year contracts.

Speaker Change: Expense reductions on our side.

Speaker Change: So we've done a lot of that work, but like I said, our real focus is the 10%.

Speaker Change: That's very helpful. Thanks.

Ashish <unk>: Thanks Ashish.

And ladies and gentlemen, this concludes our question and answer session I would like to turn the conference back over to Anthony Jabbour for any closing remarks.

Anthony Jabbour: Thank you as always I'd like to thank my Dun <unk> Bradstreet colleagues for their exceptional efforts to sustainably grow our business for the years to come into our great clients for their partnership and guidance. Thank you for your interest in Dun <unk> Bradstreet for joining us on this call and I hope you enjoy the rest of your summer.

Unnamed Speaker: That's a very helpful color. And again, it is very encouraging to see the steps that have been taken to turn around credibility and marketing solutions and digital marketing. I was just wondering, other than that, are there any other legacy products that may be a drag on growth and any strategic plan to either divest or turn them around?

Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Unnamed Speaker: That's very helpful. Good. Thanks.

Unnamed Speaker: Thank you. As always, I'd like to thank my Dun & Bradstreet colleagues for their exceptional efforts to sustainably grow our business for the years to come, and to our great clients for their partnership and guidance. Thank you for your interest in Dun & Bradstreet, for joining us on this call, and I hope you enjoy the rest of your summer.

Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Speaker Change: [music].