Donnelley Financial Solutions — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total net sales reached $185.0 million, a 5.5% increase from $175.3 million in the third quarter of 2025.
• Net earnings were $21.3 million ($0.85 per diluted share), compared to a net loss of $40.9 million ($1.49 per diluted share) in the prior year period.
• Adjusted EBITDA was $54.4 million, up 9.9% from $49.5 million in the third quarter of 2025.
• Adjusted EBITDA margin expanded to 29.4%, an increase of approximately 120 basis points from 28.2% in the third quarter of 2025.
• Adjusted non-GAAP net earnings were $26.8 million ($1.07 per diluted share), up 13.1% from $23.7 million ($0.86 per diluted share) in the third quarter of 2025.
• Operating cash flow improved to $98.2 million from $74.4 million in the third quarter of 2025, a 32.0% increase.
• Free cash flow improved to $85.8 million from $59.2 million in the third quarter of 2025, a 44.9% increase.
• Gross leverage was 0.5x and net leverage was 0.4x as of September 30, 2026.
• Total debt was $127.0 million as of September 30, 2026, down from $171.3 million as of December 31, 2025.
• Cash and cash equivalents were $27.2 million as of September 30, 2026.

Guidance and Future Outlook:

• The Company provided fourth-quarter 2026 guidance for total net sales of $175 million to $180 million.
• Adjusted EBITDA margin guidance for the fourth quarter of 2026 is 26% to 27%.
• Capital markets transactional net sales guidance for the fourth quarter of 2026 is $50 million.
• Management expressed encouragement regarding continued momentum in operating performance entering the fourth quarter.
• Management noted capital markets deal volume moderated from first-half 2026 levels, particularly in priced IPOs, though overall market activity improved compared to the third quarter of the prior year.

Business Segments and Product Lines:

• Software solutions net sales were $95.2 million, an increase of 5.0% from the third quarter of 2025, accounting for 51.5% of total net sales.
• ActiveDisclosure, a component of compliance offerings, grew approximately 24% in the third quarter of 2026.
• Tech-enabled services net sales increased to $72.3 million from $68.6 million in the third quarter of 2025.
• Print and distribution net sales increased to $17.5 million from $16.0 million in the third quarter of 2025.
• Capital Markets – Software Solutions segment net sales were $64.1 million with an adjusted EBITDA margin of 30.0%.
• Capital Markets – Compliance and Communications Management segment net sales were $61.9 million with an adjusted EBITDA margin of 40.7%.
• Investment Companies – Software Solutions segment net sales were $31.1 million with an adjusted EBITDA margin of 36.0%.
• Investment Companies – Compliance and Communications Management segment net sales were $27.9 million with an adjusted EBITDA margin of 38.7%.
• Corporate segment adjusted EBITDA was a loss of $12.0 million.

Market and Competitive Landscape:

• The Company is the leading global provider of compliance and regulatory software and services.
• Management highlighted continued momentum in client adoption and value expansion for ActiveDisclosure.
• The Company is migrating certain traditional services onto its software platform.
• Capital markets transactional revenue was higher compared to the third quarter of the prior year due to improved overall market activity.

Risks and Challenges:

• Capital markets deal volume moderation, specifically in the number of priced IPOs, was noted as a factor in the third quarter.
• Forward-looking statements are subject to risks and uncertainties detailed in the Company's periodic public filings with the SEC, including risk factors in the Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.
• Actual results may differ materially from forward-looking guidance due to factors beyond the Company's control.

Management Commentary and Tone:

• Daniel N. Leib, President and Chief Executive Officer, stated the Company was pleased with the quarter's performance, citing 5.5% consolidated net sales growth, increased Adjusted EBITDA, and margin expansion.
• Management attributed software solutions growth to the momentum of ActiveDisclosure, expanding client adoption, and migrating traditional services to the platform.
• Management credited higher overall net sales, ongoing operating efficiencies, improved profitability, and disciplined working capital management for strong cash flow growth.
• Leib noted the Company is celebrating its 10th anniversary as an independent company and remains focused on building a strong foundation for the next chapter of growth and long-term value creation.

Other Key Points:

• The Company repurchased 146,672 shares for approximately $6.9 million at an average price of $46.98 per share during the quarter.
• As of September 30, 2026, there was $118.5 million remaining on the current $150 million share repurchase authorization.
• Net earnings in the third quarter of 2026 included after-tax charges of $5.5 million primarily related to share-based compensation expense.
• Net loss in the third quarter of 2025 included after-tax charges of $64.6 million, primarily related to a non-cash pension plan settlement charge and share-based compensation expense.
• A conference call and webcast were held on October 29, 2026, at 9:00 a.m. Eastern time to discuss results.
• The Company has a $300.0 million senior secured revolving credit facility; as of September 30, 2026, $21.0 million was borrowed and $1.5 million was used for letters of credit, leaving $277.5 million available.