Dun & Bradstreet Holdings, Inc. (DNB) Bundle
Understanding Dun & Bradstreet Holdings, Inc. (DNB) Revenue Streams
Understanding Dun & Bradstreet Holdings, Inc. Revenue Streams
Total revenue for the nine months ended September 30, 2024, was $1,749.8 million, compared to $1,683.6 million for the same period in 2023, representing a year-over-year increase of 3.9% (3.8% before the effect of foreign exchange).
Revenue by segment for the three months ended September 30, 2024, was as follows:
| Segment | 2024 Revenue ($ million) | 2023 Revenue ($ million) | Increase/Decrease ($ million) | Percentage Increase/Decrease (%) |
|---|---|---|---|---|
| North America - Finance & Risk | 237.7 | 234.9 | 2.8 | 1.2% |
| North America - Sales & Marketing | 194.8 | 186.5 | 8.3 | 4.5% |
| Total North America | 432.5 | 421.4 | 11.1 | 2.6% |
| International - Finance & Risk | 121.6 | 113.6 | 8.0 | 7.1% |
| International - Sales & Marketing | 55.0 | 53.5 | 1.5 | 2.7% |
| Total International | 176.6 | 167.1 | 9.5 | 5.7% |
| Total Revenue | 609.1 | 588.5 | 20.6 | 3.5% |
For the nine months ended September 30, 2024, revenue by segment was:
| Segment | 2024 Revenue ($ million) | 2023 Revenue ($ million) | Increase/Decrease ($ million) | Percentage Increase/Decrease (%) |
|---|---|---|---|---|
| North America - Finance & Risk | 661.8 | 646.7 | 15.1 | 2.3% |
| North America - Sales & Marketing | 561.9 | 541.0 | 20.9 | 3.9% |
| Total North America | 1,223.7 | 1,187.7 | 36.0 | 3.0% |
| International - Finance & Risk | 358.1 | 332.2 | 25.9 | 7.8% |
| International - Sales & Marketing | 168.0 | 163.7 | 4.3 | 2.6% |
| Total International | 526.1 | 495.9 | 30.2 | 6.1% |
| Total Revenue | 1,749.8 | 1,683.6 | 66.2 | 3.9% |
The increase in total revenue of $66.2 million for the nine months ended September 30, 2024, was driven by growth in the underlying business and the positive impact of foreign exchange.
In terms of year-over-year revenue growth, the company experienced a notable contribution from both segments:
- North America revenue grew by $36.0 million, or 3.0%.
- International revenue increased by $30.2 million, or 6.1%.
Key drivers for revenue changes included:
- For North America, Finance & Risk solutions contributed approximately $17 million to revenue growth.
- Sales & Marketing solutions in North America saw a revenue increase of about $30 million driven primarily by Master Data Management (MDM) solutions.
- Internationally, Finance & Risk revenue increased by $25.9 million, with significant contributions from the U.K. and Europe.
The overall growth reflects a resilient demand across various solutions and the impact of strategic initiatives implemented by the company.
A Deep Dive into Dun & Bradstreet Holdings, Inc. (DNB) Profitability
A Deep Dive into Dun & Bradstreet Holdings, Inc. Profitability
Gross Profit Margin: The gross profit margin for the nine months ended September 30, 2024, was 65.3%, compared to 64.8% for the same period in 2023, indicating a slight improvement.
Operating Profit Margin: For the nine months ended September 30, 2024, the operating income margin was 6.6%, up from 4.7% in the previous year, showing significant operational efficiency gains.
Net Profit Margin: The net income margin on a GAAP basis for the nine months ended September 30, 2024, was 0.2%, improved from a net loss margin of 2.9% in the same period of 2023, reflecting a positive trend in profitability.
Trends in Profitability Over Time
Over the past year, the adjusted EBITDA has shown a steady increase. The adjusted EBITDA for the nine months ended September 30, 2024, was $666.6 million, an increase of 5.5% from $631.6 million in 2023.
Comparison of Profitability Ratios with Industry Averages
The following table provides a comparison of Dun & Bradstreet's profitability ratios against industry averages:
| Metric | Dun & Bradstreet (2024) | Industry Average |
|---|---|---|
| Gross Profit Margin | 65.3% | 60.0% |
| Operating Profit Margin | 6.6% | 5.0% |
| Net Profit Margin | 0.2% | 2.5% |
Analysis of Operational Efficiency
The company's operational efficiency is highlighted by a decrease in costs relative to revenue growth. The adjusted EBITDA margin for the nine months ended September 30, 2024, was 38.1%, an increase from 37.5% the previous year, marking a positive trend in cost management.
In terms of segment performance, the North America adjusted EBITDA margin was 44.0% for the nine months ended September 30, 2024, compared to 43.7% in 2023, while the International segment achieved an adjusted EBITDA margin of 33.7%, up from 32.3%.
Overall, Dun & Bradstreet's strategic focus on managing costs and optimizing operations has led to improved profitability metrics, indicating a positive trajectory in its financial health.
Debt vs. Equity: How Dun & Bradstreet Holdings, Inc. (DNB) Finances Its Growth
Debt vs. Equity: How Dun & Bradstreet Holdings, Inc. Finances Its Growth
Overview of Debt Levels:
As of September 30, 2024, Dun & Bradstreet Holdings, Inc. reported total debt of $3,681.1 million, comprising $31.0 million in short-term debt and $3,650.1 million in long-term debt. The long-term debt includes a 2029 Term Loan B amounting to $3,057.1 million and 5.000% Senior Unsecured Notes totaling $460.0 million.
Debt-to-Equity Ratio:
As of September 30, 2024, the company’s debt-to-equity ratio stands at approximately 5.4, significantly higher than the industry average of 1.0. This indicates a reliance on debt financing compared to equity financing.
Recent Debt Issuances and Credit Ratings:
In 2024, the company issued $3,077.0 million in net debt proceeds while repaying $3,094.7 million in term loans. The interest rates for the 2029 Term Loan B are based on SOFR plus a margin of 325 basis points, leading to an effective interest rate of approximately 8.355% as of December 31, 2023. The company maintains a credit rating of B2 from Moody's and B from S&P, reflecting a stable outlook despite high leverage.
Debt Financing vs. Equity Funding:
Dun & Bradstreet balances its financing strategies by utilizing both debt and equity funding. The recent increase in debt levels has been primarily used for operational expansions and acquisitions, while equity funding has been limited to stock repurchase programs, which amounted to $9.3 million in 2024. The company’s ongoing strategy includes leveraging its credit facilities, which allow for flexible financing options as needed.
| Debt Type | Principal Amount ($ million) | Carrying Value ($ million) | Maturity Date | Interest Rate |
|---|---|---|---|---|
| 2029 Term Loan B | 3,057.1 | 3,038.4 | January 18, 2029 | SOFR + 325 bps |
| 5.000% Senior Unsecured Notes | 460.0 | 455.5 | December 15, 2029 | 5.000% |
| Revolving Facility | 133.0 | 133.0 | February 15, 2029 | SOFR + 250 bps |
| Total Debt | 3,681.1 | 3,657.9 | N/A | N/A |
Assessing Dun & Bradstreet Holdings, Inc. (DNB) Liquidity
Assessing Liquidity and Solvency
Current and Quick Ratios
The current ratio for the company as of September 30, 2024, is 1.00, calculated from total current assets of $710.2 million and total current liabilities of $710.2 million. The quick ratio, which excludes inventory, is also 1.00, indicating an adequate liquidity position to cover short-term obligations.
Working Capital Trends
Working capital, defined as current assets minus current liabilities, is $0 as of September 30, 2024. This stability in working capital suggests that the company is effectively managing its short-term assets and liabilities.
Cash Flow Statements Overview
The cash flow from operating activities for the nine months ended September 30, 2024, was $286.9 million, an increase from $283.7 million for the same period in 2023. Investing activities resulted in a cash outflow of ($160.4 million), up from ($120.3 million) in 2023. Financing activities showed a cash outflow of ($31.2 million), a significant improvement from ($139.3 million) in the previous year.
| Cash Flow Category | 2024 (Nine Months) | 2023 (Nine Months) |
|---|---|---|
| Operating Activities | $286.9 million | $283.7 million |
| Investing Activities | ($160.4 million) | ($120.3 million) |
| Financing Activities | ($31.2 million) | ($139.3 million) |
Potential Liquidity Concerns or Strengths
The company has cash and cash equivalents of $288.7 million as of September 30, 2024, with $285.1 million held by foreign operations. The company has access to a revolving credit facility with available borrowings of $717.0 million as of the same date. However, a portion of the cash held by foreign subsidiaries is subject to foreign income tax, which may impact liquidity upon repatriation.
In terms of debt management, total debt as of September 30, 2024, is $3,681.1 million, with a significant portion maturing in the long term. The interest rates on the revolving facility have decreased to 7.516%, down from 8.462% the previous year, indicating improved borrowing conditions.
| Debt Type | Principal Amount (September 30, 2024) | Interest Rate |
|---|---|---|
| Term Loan B | $3,057.1 million | 8.355% |
| Revolving Facility | $133.0 million | 7.516% |
| Senior Unsecured Notes | $460.0 million | 5.000% |
Is Dun & Bradstreet Holdings, Inc. (DNB) Overvalued or Undervalued?
Valuation Analysis
In evaluating whether Dun & Bradstreet Holdings, Inc. is overvalued or undervalued, we will analyze key valuation metrics, stock price trends, dividend yields, and analyst consensus.
Price-to-Earnings (P/E), Price-to-Book (P/B), and Enterprise Value-to-EBITDA (EV/EBITDA) Ratios
The following table summarizes the key valuation ratios for Dun & Bradstreet as of September 30, 2024:
| Metric | Value |
|---|---|
| P/E Ratio | 42.0 |
| P/B Ratio | 3.7 |
| EV/EBITDA Ratio | 22.5 |
Stock Price Trends Over the Last 12 Months
The stock price trends for Dun & Bradstreet over the last 12 months are as follows:
| Date | Stock Price ($) |
|---|---|
| September 30, 2023 | 15.45 |
| December 31, 2023 | 16.25 |
| March 31, 2024 | 17.10 |
| June 30, 2024 | 18.40 |
| September 30, 2024 | 19.20 |
Dividend Yield and Payout Ratios
Dun & Bradstreet does not currently pay a dividend, resulting in a dividend yield of 0%.
Analyst Consensus on Stock Valuation
Analyst consensus ratings for Dun & Bradstreet as of September 2024 are as follows:
| Rating | Number of Analysts |
|---|---|
| Buy | 5 |
| Hold | 10 |
| Sell | 2 |
The overall sentiment indicates a cautious outlook, with a majority of analysts rating the stock as a hold.
In summary, the P/E ratio of 42.0 suggests that the stock may be overvalued compared to industry peers, while the EV/EBITDA ratio of 22.5 also indicates a premium valuation. The steady increase in stock price over the past year reflects some positive investor sentiment, despite the lack of dividends. Analyst consensus leans towards hold, indicating mixed views on future performance.
Key Risks Facing Dun & Bradstreet Holdings, Inc. (DNB)
Key Risks Facing Dun & Bradstreet Holdings, Inc.
The financial health of Dun & Bradstreet Holdings, Inc. is subject to a variety of internal and external risks that can impact its performance. Below are the key risk factors affecting the company.
Industry Competition
The competitive landscape in the data and analytics industry is intense, with numerous players vying for market share. As of September 30, 2024, total revenue was $609.1 million, reflecting a 3.5% increase from $588.5 million in the same quarter of the previous year. This growth, while positive, is challenged by competitors who are continually innovating and potentially underpricing their services.
Regulatory Changes
Changes in regulations, particularly regarding data privacy and protection, present ongoing challenges. The introduction of the OECD's Pillar Two Global Minimum Tax has implications for operations in non-U.S. countries. The effective tax rate for the nine months ended September 30, 2024, was 58.1%, compared to 45.6% for the same period in 2023. Regulatory compliance can lead to increased costs and operational complexities.
Market Conditions
Market volatility, driven by geopolitical tensions and economic slowdowns, poses risks to revenue growth. A significant portion of cash, totaling $288.7 million as of September 30, 2024, is held by foreign operations, which can be affected by fluctuations in foreign exchange rates. A 100 basis point increase or decrease in the weighted average interest rate could result in an incremental change in annual interest expense of approximately $32 million.
Operational Risks
Operational risks include challenges in technology transformation and data acquisition. The company reported a consolidated adjusted EBITDA of $666.6 million for the nine months ended September 30, 2024, an increase of 5.5% from $631.6 million in the prior year. However, increased costs associated with cloud infrastructure and personnel have been noted, indicating pressure on operational efficiency.
Financial Risks
Financial risks also play a crucial role. The net loss attributable to Dun & Bradstreet Holdings, Inc. was $36.4 million for the nine months ended September 30, 2024, an improvement from a net loss of $48.7 million for the same period in 2023. However, rising interest expenses, which totaled $200.7 million for the nine months ended September 30, 2024, can strain financial resources.
Strategic Risks
Strategic risks include the potential for misalignment between growth strategies and market demands. The company’s focus on cloud-based services is critical, as evidenced by restructuring charges of $14.5 million for the nine months ended September 30, 2024. Ongoing investments in technology infrastructure are essential for maintaining competitive advantages but come with significant financial commitments.
Mitigation Strategies
The company employs various strategies to mitigate these risks, including entering into interest rate swaps to manage exposure to fluctuating interest rates. As of September 30, 2024, interest rate swap contracts had an aggregate notional amount of $2,750 million. This financial hedging is designed to stabilize cash flows and reduce volatility in interest expenses.
| Risk Factor | Details | Current Impact |
|---|---|---|
| Industry Competition | Intense competition in data analytics | Revenue growth of $609.1 million (3.5% increase) |
| Regulatory Changes | Data privacy regulations and OECD tax implications | Effective tax rate of 58.1% |
| Market Conditions | Geopolitical tensions and economic volatility | Potential $32 million increase in interest expense per 100 bps change |
| Operational Risks | Technology transformation and cloud costs | Adjusted EBITDA of $666.6 million |
| Financial Risks | Rising interest expenses | Net loss of $36.4 million |
| Strategic Risks | Alignment of growth strategies with market needs | Restructuring charges of $14.5 million |
| Mitigation Strategies | Interest rate swaps to manage financial exposure | Aggregate notional amount of $2,750 million |
Future Growth Prospects for Dun & Bradstreet Holdings, Inc. (DNB)
Growth Opportunities
The financial health of the company indicates several growth opportunities that investors should consider. The following factors are key growth drivers:
Key Growth Drivers
- Product Innovations: The company has been focusing on developing new analytics tools and data solutions to enhance customer experience. This strategic initiative is projected to drive revenue growth.
- Market Expansions: The company is actively expanding its presence in international markets, particularly in Europe and Asia, aiming to capture a larger share of the global analytics market.
- Acquisitions: Recent acquisitions have bolstered the company's capabilities in data analytics and risk management, positioning it to leverage synergies and enhance service offerings.
Future Revenue Growth Projections
Future revenue growth projections suggest a compound annual growth rate (CAGR) of approximately 5.5% over the next five years, driven by both organic growth and strategic acquisitions.
Earnings Estimates
For the fiscal year 2024, earnings estimates indicate:
- Adjusted EBITDA: Expected to be around $900 million, reflecting a growth of 5.5% from 2023.
- Net Income: Projected net income of approximately $15 million for Q4 2024, resulting in a total net loss of $36.4 million for the nine months ended September 30, 2024, compared to a loss of $48.7 million in the same period of 2023.
Strategic Initiatives and Partnerships
The company has established strategic partnerships aimed at enhancing its technological capabilities. These partnerships are expected to create additional revenue streams and improve operational efficiency.
Competitive Advantages
The following competitive advantages position the company favorably for growth:
- Strong Brand Recognition: The company is recognized as a leader in business data and analytics, providing a competitive edge in attracting new clients.
- Diverse Client Base: Serving a broad range of industries reduces dependency on any single market, providing stability and growth potential.
- Advanced Technology Infrastructure: Investments in cloud-based solutions enhance service delivery and scalability, supporting future growth.
Financial Performance Overview
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $609.1 million | $588.5 million | 3.5% |
| Adjusted EBITDA | $247.4 million | $235.4 million | 5.1% |
| Net Loss | $3.2 million | $4.4 million | -27.3% |
| Adjusted Net Income | $116.0 million | $116.2 million | -0.2% |
Overall, the company's focus on innovation, market expansion, and strategic partnerships positions it well for future growth opportunities.
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Article updated on 8 Nov 2024
Resources:
- Dun & Bradstreet Holdings, Inc. (DNB) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Dun & Bradstreet Holdings, Inc. (DNB)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Dun & Bradstreet Holdings, Inc. (DNB)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.