DFIN Q1 Earnings: Software Growth Suggests a Recovery of M&A and IPO Activity May Be Underway

DFIN’s Q1 2024 earnings report, released this week, showcases the success of the company’s software transformation, while suggesting that the turn in the IPO market might not be too far off.

Delivering first quarter net sales of $203.4 million, which increased 2.8% year over year on an organic basis, DFIN’s software solutions net sales totaled $80.3 million, a 16% increase. Software net sales was 39.5% of total net sales, up from 35.3% in the first quarter of 2023. Notably, Venue, our virtual data room product, was the software star of the quarter, growing approximately 43% — a record.

Multiple factors contributed to the Venue results, including increased page volume on the platform and rooms staying open longer. In fact, demand is becoming more recurring in nature, creating a more stable Venue revenue stream in what has been an event-driven transactional software product.

What does this mean for the future? Our clients are telling us that dealmaking is looking up, so we view Venue growth as a precursor to completed deals. The macro-economic environment may be challenging, but I believe companies aren’t waiting on the Fed any longer. We keep seeing demand for high quality assets, and there is a lot of capital on the sidelines that can be put to work quickly. And we're pleased with our pipeline in the IPO space.

We also grew sales of our compliance platform, ActiveDisclosure, in the quarter, achieving our third consecutive quarter of net client growth.

We expect an increase in ActiveDisclosure growth in the second half of the year. We have the newest fit-for-purpose product in the market — and clients are using it for their most important reporting needs. In addition, they value the improvements we’ve made, including our editor, and tracked changes capability. And the pipeline is strong because our future clients see DFIN as the compliance leader.

Our success in the quarter is the product of the hard work and talent of DFIN employees around the world. They have my — and the company’s — sincere thanks.