DFIN · Donnelley Financial Solutions, Inc.

DFIN’s first-quarter 2026 results reflect continued execution on its software-led strategy, with net sales growth of 2.2% year-over-year to $205.5 million, underpinned by an 8.4% increase in software solutions revenue — now representing 44.6% of total net sales, up 250 basis points from last year. This shift contributed directly to Adjusted EBITDA expansion of 50 basis points to 34.4%, even as Tech-enabled Services declined 8.4% and Print & Distribution grew only 9.3%, largely due to a one-time special proxy project. Management attributed the margin improvement to both evolving sales mix and permanent cost structure changes, including operating efficiencies and disciplined SG&A management (32.8% of sales, flat YoY). Net earnings rose 8.1% to $33.5 million ($1.27 diluted EPS), while adjusted non-GAAP net earnings reached $38.2 million ($1.45 diluted EPS), aided by lower restructuring charges and stable share-based compensation expense. Notably, operating cash flow improved dramatically — from ($37.7) million to ($5.6) million — and free cash flow rose from ($51.0) million to ($16.0) million, driven by better working capital management and reduced capital expenditures. The Board’s authorization of a new $150 million share repurchase program — following $28.3 million in Q1 buybacks — signals confidence in liquidity and capital allocation discipline, reinforced by strong balance sheet metrics: net leverage of 0.8x and $203.7 million in net available liquidity as of March 31, 2026. Forward-looking second-quarter guidance reflects cautious optimism: $215–225 million in net sales and 34–36% Adjusted EBITDA margin, acknowledging near-term volatility from geopolitical uncertainty but emphasizing resilience in recurring compliance offerings.