Software Shines in DFIN’s 2023 Earnings Report

DFIN’s software transformation remained on track in 2023, and our clients reaped the benefits.

In our just-released 4Q and full-year 2023 earnings report, DFIN achieved record software solutions net sales of approximately $293 million for the year, an increase of approximately 7% from 2022 on an organic basis. Software solutions net sales were approximately 37% of our full year net sales, up from approximately 34% in 2022.

This is powerful evidence that we are delivering the kind of solutions that clients require in a fast-paced, always-evolving business environment.

Venue’s Best Quarter Highlights Stable, Recurring Revenue Growth

Venue Data Room, our largest software product, had its highest revenue quarter on record in the fourth quarter, growing 26%. Venue allows for securely storing and sharing documents across teams, advisors, and other third parties.

It's worth spending a moment on why Venue did so well. First, it had outstanding performance despite the M&A environment, as Venue continues to have much more predictable performance than this underlying use case. Indeed, global M&A was down about 18% in Q4.

We are seeing increased room activity, as well as higher activity on existing rooms, which are staying open longer – reinforcing the stability of Venue performance. Further, underlying demand is less volatile versus M&A — meaning demand is re-occurring in nature.

In short, Venue is generating a more stable revenue stream within what has been an event- driven transactional software product. Encouraged by the resilience of underlying activity on the platform, we are hearing from dealmakers – who, after years of decline, are finding growth opportunities despite the valuation adjustments. Demand for high-quality assets is high, and there are large amounts of capital ready to be put to work.

So, as we look ahead, our Venue pipeline is good. We are in the process of extending Venue’s success outside of M&A and transaction activities, into more recurring use cases to support our clients with our Venue Subscription business. For example, we are seeing adoption and market reception for our Franchise Mgt, Technology, Energy, and Healthcare solutions and are executing on our plan to take share and win in any market.

In doing so, DFIN’s unique position on the deal team means that it will continue to drive our software revenue through Venue virtual data room sales.

ActiveDisclosure Solidifies Role as a Compliance Leader

For ActiveDisclosure, our product that helps businesses build the financial reporting rigor necessary for increased quarterly disclosure requirements, the progress we are making to expand adoption is not reflected in Q4 results, as the prospective metrics are favorable. But consider, we had an increase in net client count in Q3 for the first time in 2023, followed by an increased client count again in Q4.

We are excited by what we see on the ActiveDisclosure platform. We have the newest, fit for purpose disclosure tool in the market, which wants what we have built. This represents an opportunity for DFIN and our clients: as we capture more value, our clients are paying less than they would for the leading competitor.

They are using ActiveDisclosure for their most important compliance reporting needs — and ActiveDisclosure is delivering. Our pipeline is strong as our future clients see DFIN and ActiveDisclosure as a compliance leader.

The Future is about Our Clients

Those are substantial achievements, but we’re not slowing down. For the future, we will continue to be laser-focused on the needs of our clients.

For example, we are developing a DFIN compliance platform that will serve as the foundational component of our future technology ecosystem, which will address new regulatory requirements more efficiently.

As always, we will rely on DFIN’s amazing team of employees, whose hard work and talent are second to none. They deliver every day for our clients, our company, and all stakeholders.