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What changed in Donnelley Financial Solutions, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Donnelley Financial Solutions, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+302 added−275 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-20)

Top changes in Donnelley Financial Solutions, Inc.'s 2024 10-K

302 paragraphs added · 275 removed · 232 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

58 edited+12 added−16 removed48 unchanged
Biggest changeCapital markets clients leverage the Company’s deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the SEC's EDGAR system. The Company's cloud-based product, ActiveDisclosure, provides features such as built-in collaboration tools and eXtensible Business Reporting Language (“XBRL”) and Inline XBRL (“iXBRL”) client-tagging capability.
Biggest changeThe Company’s cloud-based product, ActiveDisclosure, provides features such as built-in collaboration tools and Inline eXtensible Business Reporting Language (“iXBRL”) client-tagging capability. ActiveDisclosure provides capital markets clients with end-to-end solutions to collaborate, tag, validate and file with the SEC.
In 2023, approximately 42% of investment companies net sales related to software solutions, while tech-enabled services and print and distribution solutions accounted for approximately 58% of investment companies net sales, of which approximately 89% were compliance in nature and 11% were transactional in nature.
In 2023, approximately 42% of investment companies net sales related to software solutions, while tech-enabled services and print and distribution solutions accounted for approximately 58% of investment companies net sales, of which 89% were compliance in nature and 11% were transactional in nature.
The Company's overall risk profile is balanced by offering services in higher demand during a down market, such as document management tools for the bankruptcy/restructuring process and by moving upstream in the filing process with products like Venue. The quarterly/annual public company reporting cycle subjects the Company to filing seasonality which peaks shortly after the end of each fiscal quarter.
The Company's overall risk profile is balanced by offering services in higher demand during a down market, such as document management tools for the bankruptcy/restructuring process and by moving upstream in the transactional process with products like Venue. The quarterly/annual public company reporting cycle subjects the Company to filing seasonality which peaks shortly after the end of each fiscal quarter.
The Company believes that the risk of incurring material losses as a result of any unforeseen shortage in raw materials is unlikely as the Company has strategically downsized its print production platform in favor of outsourcing the offset printing to its select network of vendors and reduced its print and distribution revenue such that the losses, if any, would not have a materially negative impact on the Company’s business.
The Company believes that the risk of incurring material losses as a result of a shortage in raw materials is unlikely as the Company has strategically downsized its print production platform in favor of outsourcing the offset printing to its select network of vendors and reduced its print and distribution revenue such that the losses, if any, would not have a materially negative impact on the Company’s business.
The Company is committed to paying its employees in a fair and equitable way and has a rigorous compensation review process, including a review by external counsel and consultants. 10 Learning and Development —The Company invests in its employees’ skills and professional development by offering virtual, social and self-directed learning, mentoring, coaching and career development opportunities.
The Company is committed to paying its employees in a fair and equitable way and has a rigorous compensation review process, including a review by external counsel and consultants. Learning and Development —The Company invests in its employees’ skills and professional development by offering virtual, social and self-directed learning, mentoring, coaching and career development opportunities.
In addition to learning and development, the Company requires employees to complete a series of mandatory courses in data protection, IT security, principles of ethical business conduct, harassment awareness, anti-corruption/anti-trust and data privacy. In 2023, the Company achieved 100% completion of these required courses. Employee Experience —DFIN's Total Wellbeing program underscores its employment value proposition.
In addition to learning and development, the Company requires employees to complete a series of mandatory courses in data protection, IT security, principles of ethical business conduct, harassment awareness, anti-corruption/anti-trust and data privacy. In 2024, the Company achieved 100% completion of these required courses. Employee Experience —DFIN’s Total Wellbeing program underscores its employment value proposition.
The Company remains focused on driving annual recurring revenue to mitigate the impact of market volatility on its financial results. 8 Government Regulations and Regulatory Impact The SEC is adopting new as well as amending existing rules and forms to modernize the reporting and disclosure of information under the Securities Act, the Exchange Act and the Investment Company Act.
The Company remains focused on driving annual recurring revenue to mitigate the impact of market volatility on its financial results. 8 Government Regulations and Regulatory Impact The SEC is adopting new as well as amending existing rules and forms to enhance the security and modernize the reporting and disclosure of information under the Securities Act, the Exchange Act and the Investment Company Act.
Distribution The Company’s products are distributed to end-users through the U.S. or foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Customers For each of the years ended December 31, 2023, 2022 and 2021, no customer accounted for 10% or more of the Company’s net sales.
Distribution The Company’s products are distributed to end-users through the U.S. or foreign postal services, through retail channels, electronically or by direct shipment to customer facilities. Customers For each of the years ended December 31, 2024, 2023 and 2022, no customer accounted for 10% or more of the Company’s net sales.
The Company’s competitors for SEC filing services for investment companies clients include full service traditional providers, small niche technology providers as well as local and regional print providers that offer competing printing, mailing and fulfillment services. Technology The Company invests resources in developing software solutions to address customer and market requirements.
The Company’s competitors for SEC filing services for investment companies clients include full service traditional providers, small niche technology providers as well as local and regional print providers that offer competing printing services. Technology The Company invests resources in developing software solutions to address customer and market requirements.
The Company also provides a bi-weekly 401(k) match of 50 cents for every dollar an employee contributes up to 6% of eligible compensation with a potential for an additional discretionary Company match based upon overall Company performance.
The Company also provides a bi-weekly 401(k) match of 50 cents for every dollar a U.S. employee contributes up to 6% of eligible compensation with a potential for an additional discretionary Company match based upon overall Company performance.
In 2023, the Company was again ranked on Newsweek's list of Top 100 Most Loved Workplaces® in America, which recognizes companies that have created a workplace where employees feel respected, inspired and appreciated. Employees cited their strong bond with coworkers, flexible work schedules and strong management and senior leadership among the reasons they loved working for DFIN.
In 2024, the Company was again ranked on Newsweek’s list of Top Most Loved Workplaces® in America, which recognizes companies that have created a workplace where employees feel respected, inspired and appreciated. Employees cited their strong bond with coworkers, flexible work schedules and strong management and senior leadership among the reasons they loved working for DFIN.
The policy also provides up to 12 weeks of paid maternity leave and six weeks paid leave for fathers and both adoptive parents in the U.S. The Company continued to embrace a flexible model in which employees work remotely (with the exception of essential employees whose roles require them to be on site).
The Company’s policies also provides up to 12 weeks of paid maternity leave and six weeks paid leave for fathers and both adoptive parents in the U.S. The Company continued to embrace a flexible model in which employees work remotely (with the exception of essential employees whose roles require them to be on site).
DFIN helps its clients comply with applicable regulations where and how they want to work in a digital world, providing numerous solutions tailored to each client’s precise needs.
DFIN helps its clients comply with applicable regulations where and how they want to work in a digital world, providing numerous solutions tailored to each client’s business needs.
For the fifth year in a row, the Company was chosen as one of the Best Places to Work by Built In, for offering the best compensation packages, total rewards and cultural programs, among peers. Built In is the online community for startups and tech companies.
For the sixth year in a row, the Company was chosen as one of the Best Places to Work by Built In, for offering the best compensation packages, total rewards and cultural programs, among peers. Built In is an online community for startups and tech companies.
In its Compliance & Communications Management segments (CM-CCM and IC-CCM, as defined below), the Company’s strategy focuses on maintaining its market-leading position by offering a high-touch, service-oriented experience, using its unique combination of tech-enabled services and print and distribution capabilities.
In its Compliance & Communications Management segments (CM-CCM and IC-CCM, as defined below), the Company’s strategy focuses on maintaining its market-leading position by offering a high-touch, service-oriented experience, providing regulatory domain expertise, and using its unique combination of tech-enabled services and print and distribution capabilities.
The global compliance industry, in general, is highly competitive and barriers to entry have decreased as a result of technology innovation and the simplification of SEC EDGAR filings. Despite some consolidation in recent years, the industry remains highly fragmented in the United States and even more so internationally with many in-country alternative providers.
The global compliance industry, in general, is highly competitive and barriers to entry have decreased as a result of technology innovation. Despite some consolidation in recent years, the industry remains highly fragmented in the United States and even more so internationally with many in-country alternative providers.
Investment Companies – Compliance & Communications Management —The IC-CCM segment provides clients with tech-enabled solutions for creating, filing and distributing regulatory communications and solutions for investor communications, as well as XBRL and iXBRL-formatted filings pursuant to the Investment Company Act, through the SEC's EDGAR system.
Investment Companies – Compliance & Communications Management —The IC-CCM segment provides clients with tech-enabled services and print and distribution solutions for creating, filing and distributing regulatory communications and solutions for investor communications, as well as iXBRL-formatted filings pursuant to the Investment Company Act, through the SEC’s EDGAR system.
In 2023, approximately 62% of employees engaged in self-directed learning and development activities through the Company's on-demand learning platforms. The Company continues to focus on leadership development with two cohort leadership development programs aligned to the Company's values, leadership behaviors and skills for effective leadership.
In 2024, approximately 55% of employees engaged in self-directed learning and development activities through the Company’s on-demand learning platforms. The Company continues to focus on leadership development with two cohort leadership development programs aligned to the Company’s values, leadership behaviors and skills for effective leadership.
The Company sets annual leading and lagging indicators to improve its sustainability performance and in 2023 achieved a workforce total recordable incident rate of 0.28 (per 200,000 hours worked).
The Company sets annual leading and lagging indicators to improve its sustainability performance and in 2024 achieved a workforce total recordable incident rate of 0.19 (per 200,000 hours worked).
The Company's other offerings include short-term disability, long-term disability, life insurance programs, health savings accounts (which includes a Company contribution), flexible spending accounts and a group legal services plan. Diversity, Equity and Inclusion (“DEI”) —The Company is committed to fostering a diverse, equitable and inclusive environment where people feel valued, respected and heard.
The Company’s other offerings include short-term disability, long-term disability, life insurance programs, health savings accounts (which includes a Company contribution), flexible spending accounts and a group legal services plan. Inclusive Environment —The Company is committed to fostering an environment where people feel valued, respected and heard.
The components of the program are below: My Time —The Company has an unlimited paid time-off philosophy in which U.S. salaried employees can take as much time as needed for vacation or personal issues not covered by other sick or disability policies.
The components of the program are below: My Time —The Company has a flexible paid time-off philosophy in which U.S. salaried employees can, with manager approval, take as much time as needed for vacation or personal issues not covered by other sick or disability policies.
Office space is available and often used for team meetings and collaboration. My Career —The Company supports employees in growing their skills and making informed choices about their career. The “Career Map,” available on the Company's intranet site, shows every role in the Company by level with summaries about key positions.
Office space or other facilities are available for team meetings and collaboration. 9 My Career —The Company supports employees in growing their skills and making informed choices about their career. The “Career Map,” available on the Company’s intranet site, shows every role in the Company by level with summaries about key positions.
The Company's private conference facilities offer around-the-clock services to support the transaction process, production platform and service delivery for a fully-virtual experience while replicating the in-person experience. Clients utilize the range of options available to them, including a hybrid approach with working group members participating both virtually and in-person during drafting sessions for their transactions.
The Company offers around-the-clock services to support the transaction process, production platform and service delivery. Clients utilize the range of options available to them, including a hybrid approach with working group members participating both virtually and in-person during drafting sessions for their transactions or a fully-virtual experience.
As of December 31, 2023, the Company had approximately 1,900 employees, approximately 83% of whom are located in the United States and approximately 17% in international locations. The Company's workforce is approximately 40% female and 60% male, with an average tenure of approximately 13.4 years with the Company (including periods prior to the Separation from RRD).
As of December 31, 2024, the Company had approximately 1,800 employees, approximately 84% of whom are located in the United States and approximately 16% in international locations. The Company’s workforce is approximately 40% female and 60% male, with an average tenure of approximately 13.6 years with the Company (including periods prior to the Separation from RRD).
The Company’s competitors for SEC filing services for public company clients include full service financial communications providers, technology point solution providers focused on financial communications and general technology providers.
The Company’s competitors for SEC filing services for capital markets public company clients include full service financial communications providers, technology point solution providers focused on financial communications and general technology providers (through ActiveDisclosure or the Company’s CM-CCM services).
In 2023, the Company launched an Employee Stock Purchase Plan, which allowed eligible employees based in the U.S. to purchase DFIN stock at a 10% discount through payroll deductions.
In 2023, the Company launched an Employee Stock Purchase Plan, which allowed eligible employees based in the U.S. to purchase DFIN stock at a 10% discount through payroll deductions. In 2024, the program was extended to eligible employees based in Canada and the United Kingdom.
In 2023, tech-enabled services and print and distribution solutions accounted for approximately 66% of capital markets net sales, of which approximately 52% were transactional in nature and 48% were compliance in nature. In 2022, approximately 31% of capital markets net sales related to software solutions, of which approximately 55% related to Venue and 34% related to ActiveDisclosure.
In 2024, tech-enabled services and print and distribution solutions accounted for approximately 60% of capital markets net sales, of which approximately 55% were transactional in nature and 45% were compliance in nature. In 2023, approximately 34% of capital markets net sales related to software solutions, of which approximately 59% related to Venue and 34% related to ActiveDisclosure.
The Company’s Arc Suite software platform, which includes ArcDigital, ArcReporting, ArcPro and ArcRegulatory, is ISO/IEC 27001:2013-certified and enables its investment companies clients to comply with applicable ongoing SEC, Canadian and European regulations as well as to create, manage and deliver accurate and timely financial communications to investors and regulators.
Investment Company Act of 1940, as amended (the “Investment Company Act”) as well as European and Canadian regulations. The Company’s Arc Suite software platform is ISO/IEC 27001:2013-certified and enables its investment companies clients to comply with applicable ongoing SEC, Canadian and European regulations as well as to create, manage and deliver accurate and timely financial communications to investors and regulators.
Investment companies clients leverage the Company’s proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents (including incorporating appropriate XBRL and iXBRL tagging) through the SEC's EDGAR system.
The Company’s services and sales teams currently support clients in the United States, Canada and Europe. Investment companies clients leverage the Company’s proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents (including incorporating appropriate iXBRL tagging) through the SEC's EDGAR system.
Investment Companies The Company provides software solutions, tech-enabled services and print, distribution and fulfillment solutions to its investment companies clients that are subject to the filing and reporting requirements of the U.S.
Investment Companies The Company provides software solutions, tech-enabled services and print, distribution and fulfillment solutions to its investment companies clients, which are primarily mutual fund companies, alternative investment companies, insurance companies and third-party fund administrators, that are subject to the filing and reporting requirements of the U.S.
These proof points have helped to attract, engage and retain employees and have translated into being certified as a Most Loved Workplace by the Best Practice Institute, a leadership benchmark research company, two years in a row. Employees were surveyed and Company earned high ratings in the areas of trust, teamwork and competence.
These proof points have helped to attract, engage and retain employees and have translated into being certified as a Most Loved Workplace® by the Best Practice Institute, a leadership benchmark research company, three years in a row.
Manufacturing employees achieved a 100% completion rate for job-specific safety training and participate in an onsite safety committee that promotes safe practices at work and at home. 2023 marked the fifth year DFIN observed the importance of employee health and safety among its global workforce through its annual Safety Week event.
Manufacturing employees achieved a 100% completion rate for job-specific safety training and participate in an onsite safety committee that promotes safe practices at work and at home. 10 2024 marked the sixth year DFIN observed the importance of employee health and safety among its global workforce through its annual Safety Week event, which included blood pressure screenings, stress management exercises and virtual ergonomic sessions.
In 2022, approximately 41% of investment companies net sales related to software solutions, while tech-enabled services and print and distribution solutions accounted for approximately 59% of investment companies net sales, of which 94% were compliance in nature and 6% were transactional in nature.
In 2024, approximately 47% of investment companies net sales related to software solutions, while tech-enabled services and print and distribution solutions accounted for approximately 53% of investment companies net sales, of which approximately 92% were compliance in nature and 8% were transactional in nature.
Capital Markets – Compliance & Communications Management —The CM-CCM segment provides tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The Company's private conference facilities offer around-the-clock services to support the transaction process, production platform and service delivery model for a fully-virtual experience while replicating the in-person experience.
Capital Markets – Compliance & Communications Management —The CM-CCM segment provides tech-enabled services and print and distribution solutions to public and private companies for deal solutions and SEC compliance requirements. The Company offers around-the-clock services to support the transaction process, production platform and service delivery model.
DFIN’s strategy in its Software Solutions segments (CM-SS and IC-SS, as defined below) aligns with the changing marketplace by focusing the Company’s investments and resources in its advanced software solutions, primarily ActiveDisclosure® (“ActiveDisclosure”), Arc Suite® software platform (“Arc Suite”) and Venue® Virtual Data Room (“Venue”), while making targeted investments, such as the Company’s acquisition of Guardum Holdings Limited (“Guardum”) in 2021, to further enhance product features.
DFIN’s strategy in its Software Solutions segments (CM-SS and IC-SS, as defined below) aligns with the changing marketplace by focusing the Company’s investments and resources in its advanced software solutions, primarily ActiveDisclosure® (“ActiveDisclosure”), Arc Suite® software platform (“Arc Suite”) and Venue® Virtual Data Room (“Venue”).
The Company has seen clients utilizing the range of options available to them, including a hybrid approach with working group members participating both virtually and in-person during drafting sessions for their transactions. 6 Investment Companies – Software Solutions —The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcReporting, ArcPro and ArcRegulatory as well as services that enable storage and management of compliance and regulatory information in a self-service, central repository so that documents can be easily accessed, assembled, edited, tagged, translated, rendered and submitted to regulators and investors.
Investment Companies – Software Solutions —The IC-SS segment provides clients with the Arc Suite platform that contains a comprehensive suite of cloud-based solutions, including ArcDigital, ArcPro, ArcRegulatory and ArcReporting as well as services that enable storage and management of compliance and regulatory information in a self-service, central repository so that documents can be easily accessed, assembled, edited, tagged, translated, rendered and submitted to regulators and investors.
Employees participated in a 5-day activity challenge during this event and collectively achieved approximately 8.5 million steps. In November 2023, the Company expanded its Pinnacle Awards to recognize employee contributions in six categories: community service, data privacy and security, DEI, the environment, safety, health and wellbeing and living the Company values.
Employees participated in a 5-day activity challenge and collectively achieved approximately 6.9 million steps. In December 2024, the Company’s Pinnacle Awards recognized employee contributions in six categories: community service, data privacy and security, DEI, the environment, safety, health and wellbeing and living the Company values.
In partnership with external vendors, the Company provides development for senior leaders in the form of 360 surveys, formal coaching and program specific/skill-based development to support their career growth. In 2023, the Company piloted a Women in Leadership interactive development workshop series focused on strategic leadership and financial acumen.
In partnership with external vendors, the Company provides development for senior leaders in the form of 360 surveys with formal development plans, formal coaching and program specific/skill-based development to support their career growth.
Compliance Solutions The Company provides compliance solutions to capital markets clients in preparing the Exchange Act filings that are compatible with the SEC’s EDGAR system via its full-service traditional services and through the use of ActiveDisclosure.
Compliance Solutions The Company provides compliance solutions to capital markets clients in preparing the Exchange Act filings that are compatible with the SEC’s EDGAR system via its full-service traditional services and ActiveDisclosure. Capital markets clients leverage the Company’s deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the SEC’s EDGAR system.
The Company also hires contractors for production and engineering support. None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement.
The Company also hires contractors for production and engineering support. None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement. The Company’s 2024 voluntary turnover rate was approximately 6.0% for both its U.S. and global workforce.
In 2023, approximately 34% of capital markets net sales related to software solutions, of which approximately 59% related to Venue, the Company’s transactional solution, and 34% related to ActiveDisclosure, the Company's compliance solution.
In 2024, approximately 40% of capital markets net sales related to software solutions, of which approximately 65% related to Venue, predominantly a transactional solution, and 35% related to ActiveDisclosure, predominantly a compliance solution.
It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company may undertake in the future.
The Company actively monitors changes in regulations applicable to its employees, operating facilities, disclosure and reporting practices and other activities to align with new requirements and evolving best practices. It is not possible to quantify with certainty the potential impact of actions regarding environmental matters, particularly remediation and other compliance efforts that the Company may undertake in the future.
Climate The Company’s climate impact has benefited from operational changes such as reducing physical office space, closing several manufacturing facilities, adopting a fully flexible work environment and less employee commuter travel. In addition, for the sixth year in a row, the Company purchased renewable energy credits to match 100% of the electricity used by its print manufacturing facilities.
Climate The Company has transitioned to predominantly virtual operations after adopting a fully flexible work environment, reducing its physical office space globally and closing all but one print manufacturing facility. For the sixth year in a row, the Company purchased renewable energy credits to match 100% of the electricity used by this facility.
Segments The Company’s four operating and reportable segments are: Capital Markets – Software Solutions (“CM-SS”), Capital Markets – Compliance and Communications Management (“CM-CCM”), Investment Companies – Software Solutions (“IC-SS”) and Investment Companies – Compliance and Communications Management (“IC-CCM”).
The Company also supports the distribution, tabulation and solicitation of stockholders for corporate elections and mutual fund proxy events. 6 Segments The Company’s four operating and reportable segments are: Capital Markets – Software Solutions (“CM-SS”), Capital Markets – Compliance and Communications Management (“CM-CCM”), Investment Companies – Software Solutions (“IC-SS”) and Investment Companies – Compliance and Communications Management (“IC-CCM”).
This arrangement allows the Company to provide end-to-end annual and special meeting services, from fulfillment and distributions of proxy materials, to the centralization of communications for all investors, to hosting of virtual stockholder meetings and tabulation of voting results. 5 The Company provides additional compliance solutions through strategic relationships, including a full suite of audit management and compliance solutions for Sarbanes-Oxley Act (“SOX”) compliance, operational audits, IT compliance, enterprise risk management and workflow management.
This arrangement allows the Company to provide end-to-end annual and special meeting services, from fulfillment and distributions of proxy materials, to the centralization of communications for all investors, to hosting of virtual stockholder meetings and tabulation of voting results.
Capital markets clients leverage the Company’s software offerings, proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the SEC's Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system for their transactional and ongoing compliance needs.
Capital markets clients leverage the Company’s software offerings, proprietary technology, deep industry expertise and experience to successfully navigate the SEC’s specified file formats when submitting compliance documents through the SEC's Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system for their transactional and ongoing compliance needs. 4 The Company assists its capital markets clients throughout the course of initial public offerings (“IPOs”), secondary offerings, mergers and acquisitions (“M&A”), public and private debt offerings, leveraged buyouts, spinouts, special purpose acquisition companies (“SPAC”) and subsequent de-SPAC transactions and other similar transactions.
Through a strategic relationship, the Company provides a suite of software to brokers and financial advisors that enables them to monitor and view stockholder communications. The Company offers various technology and electronic delivery services and products to make the distribution of documents and content more efficient.
The Company offers various technology and electronic delivery services and products to make the distribution of documents and content more efficient.
In 2022, tech-enabled services and print and distribution solutions accounted for approximately 69% of capital markets net sales, of which approximately 58% were transactional in nature and 42% were compliance in nature. 4 Transactional Solutions The Company helps capital markets clients throughout the course of public and private business transactions via its full-service traditional services.
Transactional Solutions The Company helps capital markets clients throughout the course of public and private business transactions via its full-service traditional services and its software solutions, Venue and ActiveDisclosure.
Arc Suite products are cloud-based and include automation and single-source data validation which streamlines processes and drives efficiencies for clients. The Company provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review and expert support for mutual funds, variable annuities, REITs and other alternative investments.
The Company provides turnkey proxy services, including discovery, planning and implementation, print and mail management, solicitation, tabulation services, stockholder meeting review and expert support for mutual funds, variable annuities, REITs and other alternative investments. Through a strategic relationship, the Company provides a suite of software to brokers and financial advisors that enables them to monitor and view stockholder communications.
As the scope and complexity of the regulatory environment continues to increase, regulators are also demanding greater use of structured, machine-readable data in companies' disclosures. These actions are driving significant changes which impact the Company’s customers, and have enabled the Company to offer new value-added functionality and services and accelerate its transition from print and distribution to software solutions.
These actions are driving significant changes which impact the Company’s customers, and have enabled the Company to offer new value-added functionality and services and accelerate its transition from print and distribution to software solutions. It is the Company’s policy to conduct its global operations in accordance with all applicable laws, regulations and other requirements.
Paper and ink are sourced from a small set of select suppliers to ensure consistent quality and provide for continuity of supply. The global supply chain challenges, because of the COVID-19 pandemic, made it more difficult to source paper in 2021 and 2022, with residual effects in 2023.
Paper and ink are sourced from a small set of select suppliers to ensure consistent quality and provide for continuity of supply. The Company does not currently anticipate any significant supply chain challenges for raw materials in 2025.
The Company's 2023 voluntary turnover rate was 6.3% for its global workforce and 5.4% for its U.S. workforce, which is lower than the industry average. 9 In 2023, the Company continued its strategy to provide greater market-driven and predictable pay and benefit programs through the “My Total Wellbeing” program.
In 2024, the Company continued its strategy to provide greater market-driven and predictable pay and benefit programs through the “My Total Wellbeing” program.
The Company's disposition of the eBrevia business closed on December 1, 2023, and the Company received net cash proceeds of $0.5 million. Markets and Competition Technological and regulatory changes continue to impact the market for the Company’s services and products.
Markets and Competition Technological and regulatory changes continue to impact the market for the Company’s services and products.
ActiveDisclosure is ISO/IEC 27001:2013-certified, and the Company also engages third parties to perform annual SOC2 Type II compliance audits and penetration/vulnerability testing. The Company also supports capital markets clients in meeting SEC-mandated regulatory filing requirements, including tagging filings in the applicable XBRL format, through its full-service traditional offerings and through the use of ActiveDisclosure.
ActiveDisclosure is ISO/IEC 27001:2013-certified, and the Company also engages third parties to perform annual SOC2 Type II compliance audits and penetration/vulnerability testing. 5 The Company helps capital markets clients elevate their proxy filings from compliance documents to investor-focused strategic communications tools with Proxy Design services.
The Company is responsive to employee input in designing its programs and, in 2023, introduced new offerings in its health plans to meet its workforce's evolving needs. The Company's programs focus on physical as well as mental and emotional health and encouraging all employees to take ownership of their wellbeing.
The Company strives to offer a market competitive benefits package and, in 2024, made improvements to prescription drug coverage and introduced a new offering for long-term care insurance. The Company’s programs focus on physical as well as mental and emotional health and encouraging all employees to take ownership of their health and wellbeing.
The Company’s Arc Suite software platform provides investment companies clients with a comprehensive suite of cloud-based technology services and products that store and manage information in a self-service, central repository allowing regulatory documents to be easily accessed, assembled, edited, translated, rendered and submitted to regulators for compliance purposes.
The Company’s Arc Suite software platform provides investment companies clients with regulatory, reporting, filing and distribution solutions through one integrated financial compliance management software platform via a comprehensive suite of cloud-based technology services.
The Corporate Responsibility and Governance Committee of the Company's Board has broad oversight of environmental, social and governance issues, which includes climate-related risks and opportunities. Due to the nature of the business, DFIN does not anticipate any material direct impacts from climate-related regulations, physical effects of climate change or material expenditures for climate-related projects.
The Corporate Responsibility and Governance Committee of the Company’s Board has broad oversight of environmental, social and governance issues, which includes climate-related risks and opportunities. In 2024, the Company assessed its global footprint and reviewed climate-related risks and opportunities with reference to the Task Force on Climate-Related Financial Disclosures framework.
For investment companies, including mutual fund, insurance-investment and alternative investment companies, the Company provides solutions for creating, compiling and filing regulatory communications as well as solutions for investors designed to improve the access to and accuracy of their investment information.
For investment companies clients, the Company provides solutions that allow investment companies to comply with SEC regulations and support financial and regulatory reporting through the use of content management and technology-enabled solutions for creating, compiling and filing regulatory communications as well as digital-driven solutions for distributing content to investors.
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The Company assists its capital markets clients throughout the course of initial public offerings (“IPOs”), secondary offerings, mergers and acquisitions (“M&A”), public and private debt offerings, leveraged buyouts, spinouts, special purpose acquisition companies (“SPAC”) and subsequent de-SPAC transactions and other similar transactions.
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Since the Separation, the Company has primarily grown organically, focusing resources on further development of its software solutions and making targeted investments to further enhance product features.
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The cloud-based product replaced legacy ActiveDisclosure 3.0, which was decommissioned in 2023. ActiveDisclosure provides capital markets clients with end-to-end solutions to collaborate, tag, validate and file with the SEC efficiently over 80 different forms, including Section 16 and Form 144 forms.
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The Company supports clients primarily in North America, Europe and Asia.
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The Company provides clients with a suite of tagging, review and validation tools and has accounting and finance professionals that assist its capital markets clients with the processes of tag selection, tag review, file creation, validation and distribution. The Company helps capital markets clients elevate their proxy filings from compliance documents to investor-focused strategic communications tools with Proxy Design services.
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In 2023, tech-enabled services and print and distribution solutions accounted for approximately 66% of capital markets net sales, of which approximately 52% were transactional in nature and 48% were compliance in nature.
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Investment Company Act of 1940, as amended (the “Investment Company Act”) as well as European and Canadian regulations, which are primarily mutual fund companies, alternative investment companies, insurance companies and third-party fund administrators.
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The Company provides additional compliance solutions through strategic relationships, including a full suite of audit management and compliance solutions for Sarbanes-Oxley Act (“SOX”) compliance, operational audits, IT compliance, enterprise risk management and workflow management.
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The Company also supports the distribution, tabulation and solicitation of stockholders for corporate elections and mutual fund proxy events. The Company’s services and sales teams currently support clients in the United States, Canada, Ireland, the United Kingdom, France and Luxembourg.
Added
The platform supports a full spectrum of data, multilingual content and compliance needs with a suite of cloud-based solutions that include automation and single-source data validation which streamlines processes and drives efficiencies for clients. The Company’s Arc Suite provides clients with a complete end-to-end solution, incorporating four purpose-built products, ArcReporting® (“ArcReporting”), ArcPro® (“ArcPro”), ArcRegulatory® (“ArcRegulatory”) and ArcDigital® (“ArcDigital”).
Removed
On December 13, 2021, the Company completed the acquisition of Guardum, a leading data security and privacy software provider that helps companies locate, secure and control data. The acquisition enhances the Company's Venue offering. By safeguarding privacy and improving data accuracy, Guardum's data security is a competitive differentiator. Prior to the acquisition, the Company held a 33.0% investment in Guardum.
Added
ArcReporting shareholder reporting software is an automated financial reporting tool which helps investment companies clients manage complex data and content to create and file regulatory documents whereby improving clients’ internal controls and reducing the risk of errors.
Removed
The purchase price for the remaining equity of Guardum was $3.6 million, net of cash acquired of $0.1 million. The Company's disposition of the Edgar Online (“EOL”) business closed on November 9, 2022, and the Company received net cash proceeds of $3.3 million.
Added
ArcPro offers cloud-based workflow tools and managerial dashboards to streamline the review and approval process for prospectus creation and a wide range of other regulatory communications. ArcRegulatory, the Company’s regulatory reporting software solution, receives data, performs calculations and produces compliant regulatory reports.
Removed
On October 26, 2022, the SEC announced that it adopted the Tailored Shareholder Reports (“TSR”) for Mutual Funds and Exchange-Traded Funds rule which requires certain investment companies to complete a new concise and visually engaging annual and semi-annual TSR that highlights key information that is particularly important for retail investors to assess and monitor their investments.
Added
ArcDigital combines data processing with DFIN’s document and content management tools, feeding data into the Company’s automated publishing platform and communicating with a wide range of diverse investors in their preferred digital channels.
Removed
The TSR, which can be printed and mailed or delivered electronically upon request of the investor, replaces SEC Rule 30e-3 “Optional Internet Availability of Investment Company Shareholder Reports” for open-ended funds and ETFs registered under N-1A and will require iXBRL tagging. The rule went into effect on January 24, 2023 and compliance is required by July 24, 2024.
Added
The Company has seen clients utilizing the range of options available to them, including a hybrid approach with working group members participating both virtually and in-person during drafting sessions for their transactions or a fully-virtual experience.
Removed
As a result, the Company is expecting an increase in net sales from Arc Suite software, tech-enabled services and print beginning in the second half of 2024. It is the Company’s policy to conduct its global operations in accordance with all applicable laws, regulations and other requirements.
Added
As the scope and complexity of the regulatory environment continues to increase, regulators are also demanding greater use of structured, machine-readable data in companies’ disclosures, more summary documents and layered website disclosures.
Removed
The Company experienced a more stable supply of paper in the latter half of 2023 and anticipates continued stability in 2024.
Added
The Company continues to support employee resource groups (“ERGs”) and champion efforts such as mental wellness with campaigns for World Mental Health Day and Mental Health Awareness Month. The ERGs play an important role in keeping inclusion at the forefront of the Company’s culture.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

50 edited+8 added−13 removed115 unchanged
Biggest changeThe Company continues to invest substantially all of its capital expenditures budget on software development, including the development of software solutions for both investment companies and capital markets, most recently with the launch of cloud-based ActiveDisclosure in 2021 and the ongoing development of additional features thereafter and new functionality developed in Arc Suite in 2023 to prepare for the new TSR regulatory requirements in 2024.
Biggest changeIn 2022, the Company completed the consolidation of its print platform, which enabled DFIN to achieve meaningful cost savings, as well as reduced the number of leased and owned global facilities as part of its overall business strategy, resulting in a reduction of leased and owned global facilities from 50 as of December 31, 2020 to 14 as of December 31, 2024. 16 The Company continues to invest substantially all of its capital expenditures budget on software development, including the development of software solutions for both investment companies and capital markets, most recently with the functionality developed in Arc Suite for the Tailored Shareholder Reporting (“TSR”) regulations, required starting in 2024, and the launch of cloud-based ActiveDisclosure in 2021 and the ongoing development of additional features thereafter, including the ability to file transactional deals utilizing ActiveDisclosure.
Client retention rates may decline due to a variety of factors, including: • the Company’s inability to demonstrate to clients the value of its solutions; • the price, performance and functionality of DFIN’s solutions; • the availability, price, performance and functionality of competing services and products; • clients ceasing to use or anticipating a declining need for the Company’s services in their operations; • consolidation in the Company’s client base; • the effects of economic downturns and global economic conditions; • technology and application failures and outages, interruption of service, security breaches or fraud, which could adversely affect the Company’s reputation and the Company’s relations with its clients; or • reductions in clients’ spending levels.
Client retention rates may decline due to a variety of factors, including: • the Company’s inability to demonstrate to clients the value of its solutions; • the price, performance and functionality of DFIN’s solutions; • the availability, price, performance and functionality of competing services and products; • clients ceasing to use or anticipating a declining need for the Company’s services in their operations; • consolidation in the Company’s client base; 15 • the effects of economic downturns and global economic conditions; • technology and application failures and outages, interruption of service, security breaches or fraud, which could adversely affect the Company’s reputation and the Company’s relations with its clients; or • reductions in clients’ spending levels.
The Amended and Restated Credit Agreement that governs the Company’s Credit Facilities contain a number of significant restrictions and covenants that limit the Company’s ability to: • incur additional debt; • pay dividends, make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • make loans and investments; 19 • sell, transfer or otherwise dispose of assets; • incur or permit to exist certain liens; • enter into certain types of transactions with affiliates; • enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of the Company’s assets.
The Amended and Restated Credit Agreement that governs the Company’s Credit Facilities contain a number of significant restrictions and covenants that limit the Company’s ability to: • incur additional debt; • pay dividends, make other distributions or repurchase or redeem capital stock; • prepay, redeem or repurchase certain debt; • make loans and investments; • sell, transfer or otherwise dispose of assets; • incur or permit to exist certain liens; • enter into certain types of transactions with affiliates; • enter into agreements restricting the Company’s subsidiaries’ ability to pay dividends; and • consolidate, merge or sell all or substantially all of the Company’s assets.
A failure to successfully develop, introduce or integrate new services or enhancements to DFIN’s services and products platforms, systems or applications, may harm DFIN’s reputation, and cause its net sales and operating income to suffer. The Company’s business plan continues to focus on transitioning its business to a software and technology focused company, offering compliance and regulatory solutions.
A failure to successfully develop, introduce or integrate new services or enhancements to DFIN’s services and products platforms, systems or applications, may harm DFIN’s reputation, and cause its net sales and operating income to suffer. The Company’s strategic plan continues to focus on transitioning its business to a software and technology focused company, offering compliance and regulatory solutions.
A third-party vendor could intentionally or inadvertently disclose sensitive data including personal information, which could have a material adverse effect on the Company’s business and financial results and damage the Company’s reputation. In the event of a material disruptive event, the Company’s disaster recovery and business continuity plans may fail, which could adversely interrupt operations.
A third-party vendor could intentionally or inadvertently disclose sensitive data including personal information, which could have a material adverse effect on the Company’s business and financial results and damage the Company’s reputation. 13 In the event of a material disruptive event, the Company’s disaster recovery and business continuity plans may fail, which could adversely interrupt operations.
Damage to the Company’s reputation and loss of brand equity may reduce demand for DFIN’s services and products offerings and negatively impact its business, results of operations, financial position and cash flows. There are risks associated with operations outside the United States. The Company has operations outside the United States.
Damage to the Company’s reputation and loss of brand equity may reduce demand for DFIN’s services and products offerings and negatively impact its business, results of operations, financial position and cash flows. 17 There are risks associated with operations outside the United States. The Company has operations outside the United States.
As of December 31, 2023, the Company had the remaining $299.0 million available for additional borrowing under the Revolving Facility. The more indebtedness the Company incurs, the further exposed it becomes to the risks associated with leverage described above. Adverse credit market conditions may limit the Company’s ability to obtain future financing.
As of December 31, 2024, the Company had the remaining $299.0 million available for additional borrowing under the Revolving Facility. The more indebtedness the Company incurs, the further exposed it becomes to the risks associated with leverage described above. Adverse credit market conditions may limit the Company’s ability to obtain future financing.
Management cannot be sure, however, that its efforts at hedging will be successful, and such efforts could, in certain circumstances, lead to losses. 20 Fluctuations in DFIN’s operating results or unfavorable commentary in the research and reports that equity research analysts publish about the Company may negatively affect the Company's stock price.
Management cannot be sure, however, that its efforts at hedging will be successful, and such efforts could, in certain circumstances, lead to losses. 19 Fluctuations in DFIN’s operating results or unfavorable commentary in the research and reports that equity research analysts publish about the Company may negatively affect the Company's stock price.
A number of core processes, such as software development, sales and marketing, client service and financial transactions, rely on DFIN’s IT infrastructure and applications. Many of DFIN’s products and services are delivered on a current and time-sensitive basis and depend on reliable access to important systems and information.
A number of core processes, such as software development, operations and fulfillment, sales and marketing, client service and financial transactions, rely on DFIN’s IT infrastructure and applications. Many of DFIN’s products and services are delivered on a current and time-sensitive basis and depend on reliable access to important systems and information.
These impacts may reduce demand for DFIN’s services and products offerings and negatively impact its business, results of operations, financial position and cash flows. 21 Legal and Regulatory Risks Modifications in the rules and regulations to which clients or potential clients are subject to may impact the demand for the Company’s services and products offerings.
These impacts may reduce demand for DFIN’s services and products offerings and negatively impact its business, results of operations, financial position and cash flows. 20 Legal and Regulatory Risks Modifications in the rules and regulations to which clients or potential clients are subject to may impact the demand for the Company’s services and products offerings.
Although a majority of the Company’s employees work remotely, restrictions on the locations of the Company’s manufacturing operations could impact service delivery timeliness or create other process inefficiencies. Such results could have a material adverse effect on DFIN’s reputation, client retention, operations, business, financial condition, results of operations and cash flows.
Although a majority of the Company’s employees work remotely and certain operations are outsourced, restrictions on the locations of the Company’s manufacturing operations could impact service delivery timeliness or create other process inefficiencies. Such results could have a material adverse effect on DFIN’s reputation, client retention, operations, business, financial condition, results of operations and cash flows.
As of December 31, 2023, the Company had $125.0 million outstanding under its Term Loan A Facility, as defined below, and no borrowings outstanding under its Revolving Facility, as defined below.
As of December 31, 2024, the Company had $125.0 million outstanding under its Term Loan A Facility, as defined below, and no borrowings outstanding under its Revolving Facility, as defined below.
DFIN works with capital markets clients around the world, and in 2023 the Company’s international sales accounted for approximately 12% of DFIN’s total net sales. The Company’s operations outside of the United States are primarily focused in Asia, Europe and Canada.
DFIN works with capital markets clients around the world, and in 2024 the Company’s international sales accounted for approximately 11% of DFIN’s total net sales. The Company’s operations outside of the United States are primarily focused in Europe, Canada and Asia.
Other developments, such as the SEC's TSR rule required in 2024, are expected to drive increased demand for the Company's services and product in the Investment Company segments but also requires additional investment of capital and other resources. Modifications in these regulations may impact clients’ business practices and could impact the competitive landscape for DFIN’s services and products offerings.
Other developments, such as the SEC’s TSR rule required in 2024, drove increased demand for the Company’s services and product in the Investment Company segments but also required additional investment of capital and other resources. Modifications in these regulations may impact clients’ business practices and could impact the competitive landscape for DFIN’s services and products offerings.
If any of the foregoing occurs, it could cause the Company’s stock price to fall and may expose it to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.
If any of the foregoing occurs, it could cause the Company’s stock price to fall and may expose it to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management. The future sale of shares of the Company’s common stock may negatively affect the stock price.
As a percentage of total net sales, the Company’s software solutions net sales increased from 18% in 2018 to 37% in 2023, tech-enabled services net sales decreased from 46% in 2018 to 42% in 2023 and print and distribution net sales decreased from 36% in 2018 to 21% in 2023.
As a percentage of total net sales, the Company’s software solutions net sales increased from 18% in 2018 to 42% in 2024, tech-enabled services net sales decreased from 46% in 2018 to 41% in 2024 and print and distribution net sales decreased from 36% in 2018 to 17% in 2024.
If one or more members of the senior management team are suddenly unavailable and their responsibilities cannot be handled by internal resources or a suitable replacement quickly, the Company could experience difficulty in managing its business properly, which could negatively impact its business, results of operations, financial position and cash flows. 17 Fluctuations in the costs and availability of paper and other raw materials may adversely impact the Company.
If one or more members of the senior management team are suddenly unavailable and their responsibilities cannot be handled by internal resources or a suitable replacement quickly, the Company could experience difficulty in managing its business properly, which could negatively impact its business, results of operations, financial position and cash flows.
In addition, the Company’s MEPP liabilities could also be affected by the financial stability of other employers participating in such plans and decisions by those employers to withdraw from such plans in the future.
In addition, the Company’s MEPP liabilities could also be affected by the financial stability of other employers participating in such plans and decisions by those employers to withdraw from such plans in the future. ITEM 1B. UNRESOL VED STAFF COMMENTS None.
Changes to health care regulations in the U.S. and internationally may also increase cost of providing such benefits. The Company may become liable for funding obligations arising from multi-employer pension plans (“MEPP”) obligations of the Company’s former affiliates.
If this trend in health care costs continues, the cost to provide such benefits could increase, adversely impacting profitability. Changes to health care regulations in the U.S. and internationally may also increase cost of providing such benefits. The Company may become liable for funding obligations arising from multi-employer pension plans (“MEPP”) obligations of the Company’s former affiliates.
In addition, it is possible that the Company’s vendors could increase their prices, which could have an adverse impact on DFIN’s business, operating results and financial condition.
In addition, it is possible that the Company’s vendors could increase their prices, which could have an adverse impact on DFIN’s business, results of operations, financial position and cash flows.
There can be no assurance that clients will continue to use DFIN’s services and products to meet their ongoing needs, particularly in the face of competitors’ services and products offerings. Although some of the Company’s software contracts are multi-year, both multi-year contracts and contracts that are less than one year are subject to renewals.
Although some of the Company’s software contracts are multi-year, both multi-year contracts and contracts that are less than one year are subject to renewals. As a result, there can be no assurance that clients will continue to use DFIN’s software solutions to meet their ongoing needs.
The Company also believes that the importance of DFIN’s brand recognition and reputation for products will continue to increase as competition in the market for DFIN’s products and industry continues to increase.
Maintaining and further enhancing DFIN’s brands and reputation will be important to retaining and attracting clients for DFIN’s products. The Company also believes that the importance of DFIN’s brand recognition and reputation for products will continue to increase as competition in the market for DFIN’s products and industry continues to increase.
Despite production testing by the Company and operational testing by current and potential clients, errors may not be found in new services and products until after commencement of commercial availability or use, resulting in a loss of or a delay in market acceptance, a need for additional non-billable customer service and support to ameliorate the error, damage to the Company’s reputation, client dissatisfaction and decline in net sales and operating income. 14 If the Company is unable to protect its proprietary technology and other rights, the value of DFIN’s business and its competitive position may be impaired.
Despite production testing by the Company and operational testing by current and potential clients, errors may not be found in new services and products until after commencement of commercial availability or use, resulting in a loss of or a delay in market acceptance, a need for additional non-billable customer service and support to ameliorate the error, damage to the Company’s reputation, client dissatisfaction and decline in net sales and operating income. 14 Business, Economic, Market and Operating Risks A significant part of the Company’s business is derived from the use of DFIN’s services and products in connection with financial and strategic business transactions.
Breaches and other inappropriate access can be difficult to detect and any delay in identifying them could increase their harm. An attack of this type could disrupt the proper functioning of the Company’s software solutions, cause errors in the output of clients’ work, allow unauthorized access to sensitive, proprietary or confidential information and other undesirable or destructive outcomes.
An attack of this type could disrupt the proper functioning of the Company’s software solutions, cause errors in the output of clients’ work, allow unauthorized access to sensitive, proprietary or confidential information and other undesirable or destructive outcomes.
Further, to access the Company’s services and products, the Company’s customers use personal electronic devices that are beyond DFIN’s security control systems. Techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and generally are not recognized until executed against a target. Similar to other software solutions, DFIN’s software may be vulnerable to these types of attacks.
Further, to access the Company’s services and products, the Company’s customers use their own electronic devices that are beyond DFIN’s security control systems. Techniques used to obtain unauthorized access to, or to sabotage, systems change frequently and generally are not recognized until executed against a target.
A significant portion of the Company’s net sales depends on the purchase of DFIN’s services and products by parties involved in capital markets compliance and transactions.
Trends that affect the volume of these transactions may negatively impact the demand for DFIN’s services and products. A significant portion of the Company’s net sales depends on the purchase of DFIN’s services and products by parties involved in capital markets compliance and transactions.
A decline in the number of referrals could require the Company to devote substantially more resources to the sales and marketing of its services, which would increase costs, potentially lead to a decline in net sales, slow the Company’s growth and negatively impact its business, results of operations, financial position and cash flows. 16 The highly competitive market for DFIN’s services and products, clients’ budgetary constraints and industry fragmentation may continue to create adverse price dynamics.
A decline in the number of referrals could require the Company to devote substantially more resources to the sales and marketing of its services, which would increase costs, potentially lead to a decline in net sales, slow the Company’s growth and negatively impact its business, results of operations, financial position and cash flows.
On May 11, 2023, the Company entered into the first amendment to the Amended and Restated Credit Agreement to change the reference rate from LIBOR, which ceased being published on June 30, 2023, to the Secured Overnight Financing Rate (“SOFR”) for both the Term Loan A Facility and the Revolving Facility.
On October 14, 2021, the Company drew $200.0 million from the Term Loan A Facility and used the proceeds to redeem the Company’s senior notes due October 15, 2024 (the “Notes”). 18 On May 11, 2023, the Company entered into the first amendment to the Amended and Restated Credit Agreement to change the reference rate from LIBOR, which ceased being published on June 30, 2023, to the Secured Overnight Financing Rate (“SOFR”) for both the Term Loan A Facility and the Revolving Facility.
DFIN provides health care and other benefits to both employees and retirees. For many years, costs for health care have increased more rapidly than general inflation in the U.S. economy. If this trend in health care costs continues, the cost to provide such benefits could increase, adversely impacting profitability.
The trend of increasing costs to provide health care and other benefits to employees and retirees may continue. DFIN provides health care and other benefits to both employees and retirees. For many years, costs for health care have increased more rapidly than general inflation in the U.S. economy.
If the Company is unable to protect its intellectual property, the Company’s competitors could use its intellectual property to market services and products similar to DFIN’s, which could decrease demand for its services.
If the Company is unable to protect its proprietary technology and other rights, the value of DFIN’s business and its competitive position may be impaired. If the Company is unable to protect its intellectual property, the Company’s competitors could use its intellectual property to market services and products similar to DFIN’s, which could decrease demand for its services.
The occurrence of an actual or perceived information leak or breach of security could cause the Company’s reputation to suffer, clients to stop using DFIN’s services and products offerings, the Company to have to respond to requests from government agencies and customers in connection with such event and the Company to face lawsuits and potential liability, any of which could cause DFIN’s financial performance to be negatively impacted.
The occurrence of an actual or perceived information leak or breach of security could cause the Company’s reputation to suffer, clients to stop using DFIN’s services and products offerings, the Company to have to respond to requests from government agencies and customers in connection with such event and the Company to face lawsuits and potential liability, any of which could cause DFIN’s financial performance to be negatively impacted. 12 The Company has incurred, and expects to continue to incur, expenses to prevent, investigate and remediate security breaches and vulnerabilities, including deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
The quality and timing of the development services provided by such resources is not totally under the Company’s control, which may result in late delivery, errors or higher project costs.
The quality and timing of the development services provided by such resources is not totally under the Company’s control, which may result in late delivery, errors or higher project costs. A failure to appropriately manage third party resources could have an adverse impact on DFIN’s reputation or profitability.
The Company cannot be sure that its investments or operations in other countries will produce desired levels of net sales or that one or more of the factors listed above will not affect the Company’s global business. The Company’s reliance on strategic relationships as part of its business strategy may adversely affect the development of DFIN’s business in those areas.
The Company cannot be sure that its investments or operations in other countries will produce desired levels of net sales or that one or more of the factors listed above will not affect the Company’s global business. Financial Risks The Company’s indebtedness may adversely affect the Company’s business and results of operations, financial position and cash flows.
Unfavorable conditions or changes in any of these factors could negatively impact the Company’s business, results of operations, financial position and cash flows. 15 The quality of the Company’s customer support and services offerings is important to the Company’s clients, and if the Company fails to offer high quality customer support and services, clients may not use DFIN’s solutions resulting in a potential decline in net sales.
The quality of the Company’s customer support and services offerings is important to the Company’s clients, and if the Company fails to offer high quality customer support and services, clients may not use DFIN’s solutions resulting in a potential decline in net sales.
DFIN’s ability to monitor the timing and form of relevant developments at various stages of discussion, proposal or implementation are important for future operational planning and growth.
Modifications in such regulations could eliminate the need for certain types of communications altogether or impact the quantity or format of required communications. DFIN’s ability to monitor the timing and form of relevant developments at various stages of discussion, proposal or implementation are important for future operational planning and growth.
A failure to appropriately manage third party resources could have an adverse impact on DFIN’s reputation or profitability. 13 Additionally, third-party systems and services underlying DFIN’s operations can contain undetected errors or bugs, or be susceptible to cybersecurity breaches described above.
Additionally, third-party systems and services underlying DFIN’s operations can contain undetected errors or bugs, or be susceptible to cybersecurity breaches described above.
As a result, the Company may be less able to respond timely to changes in market dynamics, which could have a material adverse effect on its business, results of operations, financial position and cash flows. 18 The Company has in the past acquired and may in the future acquire other businesses, and it may be unable to successfully integrate the operations of these businesses and may not achieve the cost savings and increased net sales anticipated as a result of these acquisitions.
As a result, the Company may be less able to respond timely to changes in market dynamics, which could have a material adverse effect on its business, results of operations, financial position and cash flows.
Low trading volume may also make it difficult for the Company’s stockholders to make transactions in a timely fashion.
This, combined with a potentially low daily trading activity in DFIN’s stock, may lead to greater fluctuations in the stock price. Low trading volume may also make it difficult for the Company’s stockholders to make transactions in a timely fashion.
Budgetary constraints or other economic pressures on the Company’s existing or potential clients may impact DFIN’s ability to price its services and products profitably. As a result, these factors may lead to pricing dynamics for DFIN’s services and products which could negatively impact its business, results of operations, financial position and cash flows.
As a result, these factors may lead to pricing dynamics for DFIN’s services and products which could negatively impact its business, results of operations, financial position and cash flows. Fluctuations in the costs and availability of paper and other raw materials may adversely impact the Company.
There is no guarantee that these measures will be adequate to safeguard against all data security breaches, system compromises or misuses of data. 12 Furthermore, DFIN’s systems allow the Company to share information that may be confidential in nature to its clients across the Company’s offices and remote working locations worldwide.
Furthermore, DFIN’s systems allow the Company to share information that may be confidential in nature to its clients across the Company’s offices and remote working locations worldwide.
However, the ever-evolving threats mean the Company and its third-party service providers and vendors must continually evaluate and adapt their respective systems and processes and overall security environment.
However, the ever-evolving threats mean the Company and its third-party service providers and vendors must continually evaluate and adapt their respective systems and processes and overall security environment. There is no guarantee that these measures will be adequate to safeguard against all data security breaches, system compromises or misuses of data.
If adverse conditions were to continue for an extended period of time, the Company’s costs and required cash contributions associated with pension and other postretirement benefits plans may substantially increase in future periods. 22 The trend of increasing costs to provide health care and other benefits to employees and retirees may continue.
If adverse conditions were to continue for an extended period of time, the Company’s costs and required cash contributions associated with pension and other postretirement benefits plans may substantially increase in future periods. 21 The Company may be unable to effectuate the termination of its frozen primary defined benefit plan (the “Plan”) on favorable terms or at all.
The Company’s business strategy includes pursuing and maintaining strategic relationships in order to provide seamless end-to-end solutions to its clients as well as to facilitate its entry into adjacent lines of business. This approach may expose the Company to risk of conflict with its strategic arrangement partners and divert management resources to oversee these arrangements.
The Company’s reliance on strategic relationships as part of its business strategy may adversely affect the development of DFIN’s business in those areas. The Company’s business strategy includes pursuing and maintaining strategic relationships in order to provide seamless end-to-end solutions to its clients as well as to facilitate its entry into adjacent lines of business.
For example, DFIN directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they may contract with a broker to sell shares on a periodic basis. This, combined with a potentially low daily trading activity in DFIN’s stock, may lead to greater fluctuations in the stock price.
If certain of the Company’s significant stockholders sell substantial amounts of DFIN common stock, including stock sales pursuant to Rule 10b5-1, the market price of its common stock could fall. For example, DFIN directors and officers may adopt written plans, known as Rule 10b5-1 plans, in which they may contract with a broker to sell shares on a periodic basis.
Moreover, rising raw materials costs, and any consequent impact on pricing, could lead to a decrease in demand for DFIN’s services and products. DFIN’s business is dependent upon brand recognition and reputation, and the failure to maintain or enhance the Company’s brand or reputation would likely have an adverse effect on its business.
DFIN’s business is dependent upon brand recognition and reputation, and the failure to maintain or enhance the Company’s brand or reputation would likely have an adverse effect on its business. DFIN’s brand recognition and reputation are important aspects of the Company’s business.
Other proposed rules regarding climate, proxy voting reform or other topics may be delayed or adopted in a form that is materially different from the Company's expectation. Modifications in such regulations could eliminate the need for certain types of communications altogether or impact the quantity or format of required communications.
The priorities of the current U.S. administration may impact SEC rulemaking, causing proposed rules such as climate, proxy voting reform or other topics to be delayed, withdrawn or adopted in a form that is materially different from the Company’s expectation.
However, the Company and RRD remain jointly and severally liable for the LSC MEPP Liabilities pursuant to laws and regulations governing multiemployer pension plans, and the Company remains jointly and severally liable for certain additional RRD MEPP liabilities. In 2020 and 2021, RRD and the Company made payments to settle certain obligations related to these funds.
Responsibility for certain pre-Separation withdrawal liability obligations was assigned to the parties, including LSC (the “LSC MEPP Liabilities”) during the Separation, however, the Company and RRD remained jointly and severally liable for the LSC MEPP Liabilities pursuant to laws and regulations governing multiemployer pension plans.
The financial communications services industry is highly competitive with relatively low barrier to entry and the industry remains highly fragmented in North America and internationally. Management expects that competition will increase from existing competitors, as well as new and emerging entrants. Additionally, as the Company expands its services and product offerings, it may face competition from new and existing competitors.
Management expects that competition will increase from existing competitors, as well as new and emerging entrants. Additionally, as the Company expands its services and product offerings, it may face competition from new and existing competitors. Budgetary constraints or other economic pressures on the Company’s existing or potential clients may impact DFIN’s ability to price its services and products profitably.
As a result, there can be no assurance that clients will continue to use DFIN’s software solutions to meet their ongoing needs.
There can be no assurance that clients will continue to use DFIN’s services and products to meet their ongoing needs, particularly in the face of competitors’ services and products offerings, or that their needs for those services will not be impacted by regulatory changes.
In the second quarter of 2020, the Company became aware that, subsequent to the LSC Chapter 11 Filing, LSC failed to make certain required monthly and quarterly withdrawal liability payments to multiemployer pension plans from which RRD had withdrawn prior to the Separation.
On October 1, 2016, DFIN became an independent publicly traded company through the Separation. In 2020, LSC, which separated from RRD at the same time as DFIN, filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code and stopped making required withdrawal liability payments to multiemployer pension plans from which RRD had withdrawn prior to the Separation.
Removed
The Company has incurred, and expects to continue to incur, expenses to prevent, investigate and remediate security breaches and vulnerabilities, including deploying additional personnel and protection technologies, training employees and engaging third-party experts and consultants.
Added
Similar to other software solutions, DFIN’s software may be vulnerable to these types of attacks. Breaches and other inappropriate access can be difficult to detect and any delay in identifying them could increase their harm.
Removed
Business, Economic, Market and Operating Risks A significant part of the Company’s business is derived from the use of DFIN’s services and products in connection with financial and strategic business transactions. Trends that affect the volume of these transactions may negatively impact the demand for DFIN’s services and products.
Added
Unfavorable conditions or changes in any of these factors could negatively impact the Company’s business, results of operations, financial position and cash flows.
Removed
In 2022, the Company completed the consolidation of its print platform, which enabled DFIN to achieve meaningful cost savings as well as reduced the number of owned and leased global facilities from 50 as of December 31, 2020 to 20 as of December 31, 2023.
Added
The highly competitive market for DFIN’s services and products, clients’ budgetary constraints and industry fragmentation may create adverse price dynamics. The financial communications services industry is highly competitive with relatively low barrier to entry and the industry remains highly fragmented in North America and internationally.
Removed
DFIN’s brand recognition and reputation are important aspects of the Company’s business. Maintaining and further enhancing DFIN’s brands and reputation will be important to retaining and attracting clients for DFIN’s products.
Added
Moreover, rising raw materials costs, including potential tariffs on imported paper and raw materials, and any consequent impact on pricing, could lead to a decrease in demand for DFIN’s services and products.
Removed
Achieving the anticipated benefits of acquisitions will depend in part upon DFIN’s ability to integrate these businesses in an efficient and effective manner. The integration of companies that have previously operated independently may result in significant challenges, and the Company may be unable to accomplish the integration smoothly or successfully.
Added
This approach may expose the Company to risk of conflict with its strategic arrangement partners and divert management resources to oversee these arrangements.
Removed
In particular, the coordination of geographically dispersed organizations with differences in corporate cultures and management philosophies may increase the difficulties of integration. The integration of acquired businesses may also require the dedication of significant management resources, which may temporarily distract management’s attention from the day-to-day operations of the Company.
Added
In August 2024, the Company executed an amendment to commence the process of terminating the Company’s Plan, as further described in Note 7, Retirement Plans , to the audited Consolidated Financial Statements.
Removed
In addition, the process of integrating operations may cause an interruption of, or loss of momentum in, the activities of one or more of the Company’s businesses and the loss of key personnel from the Company or the acquired businesses.
Added
The Plan’s benefit obligation is expected to be settled by offering lump sum distributions to participants, followed by the purchase of annuity contracts to transfer the Plan’s remaining obligation to a third party. As settlement of the obligations will be funded with Plan assets, the Company expects to make a cash contribution to fully fund the Plan in 2025.
Removed
Further, employee uncertainty and lack of focus during the integration process may disrupt the businesses of the Company or the acquired businesses. Financial Risks The Company’s indebtedness may adversely affect the Company’s business and results of operations, financial position and cash flows.
Added
The cash contribution amount will depend upon the nature and timing of participant lump sum settlements and prevailing market conditions. Finalization of the Plan termination is subject to certain conditions, including regulatory review, and the Company has the ability to change the effective date of the termination or revoke the decision to terminate the Plan.
Removed
On October 14, 2021, the Company drew $200.0 million from the Term Loan A Facility and used the proceeds to redeem the Company's senior notes due October 15, 2024 (the “Notes”).
Removed
The future sale of shares of the Company’s common stock may negatively affect the stock price. If certain of the Company’s significant stockholders sell substantial amounts of DFIN common stock, including stock sales pursuant to Rule 10b5-1, the market price of its common stock could fall.
Removed
On April 13, 2020, LSC announced that it, along with most of its U.S. subsidiaries, voluntarily filed for business reorganization under Chapter 11 of the U.S. Bankruptcy Code. LSC and the Company separated from RRD in a tax-free distribution to stockholders of RRD effective October 1, 2016.
Removed
Responsibility for certain pre-Separation withdrawal liability obligations, resulting in such monthly and quarterly payment obligations (the “LSC MEPP Liabilities”), had been assigned to LSC pursuant to the Separation Agreement, while RRD retained responsibility for certain other pre-Separation withdrawal liability assessments against RRD.
Removed
In November 2021, arbitration proceedings were completed and the final allocation of the LSC MEPP Liabilities of one-third to the Company and two-thirds to RRD was determined by the arbitration panel.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

17 edited+3 added−1 removed10 unchanged
Biggest changeThese incident response plans and training initiatives are regularly evaluated to adapt to evolving cyber threats and awareness. The Company’s goal is to create an ethos of “security first” and “security by design” and to have a culture (and accountability) that security is the responsibility of every DFIN employee.
Biggest changeThe Company’s goal is to create an ethos of “security first” and “security by design” and to have a culture (and accountability) that security is the responsibility of every DFIN employee. 23 No material cybersecurity incident has been identified nor materially affected the Company’s business strategy, results of operations, or financial condition during the periods covered by the Annual Report.
These processes include the identification, assessment and management of material risks that are derived from cybersecurity threats. DFIN engages assessors, consultants, auditors and specialized third parties to enhance the Company’s cybersecurity posture. These collaborations provide evaluations, audits and insights to fortify DFIN’s resilience against evolving cyber threats.
These processes include the identification, assessment and management of material risks that are derived from cybersecurity threats. 22 DFIN engages assessors, consultants, auditors and specialized third parties to enhance the Company’s cybersecurity posture. These collaborations provide evaluations, audits and insights to fortify DFIN’s resilience against evolving cyber threats.
The Company leverages cybersecurity technologies designed to ensure security of client, employee and business confidential data. Minimization of cybersecurity risk is also a part of DFIN’s overall business strategy and is further evidenced by programmatic endeavors such as adopting a Zero Trust Architecture wherein all users, systems, applications and networks are deemed untrusted and must be verified.
The Company leverages cybersecurity technologies designed to ensure security of client, employee and business confidential data. Mitigating cybersecurity risk is also a part of DFIN’s overall business strategy and is further evidenced by programmatic endeavors such as adopting a Zero Trust Architecture wherein all users, systems, applications and networks are deemed untrusted and must be verified.
Generally, these reviews include an evaluation of the effectiveness of a supplier or third party’s cybersecurity along with the risks associated with adding and/or integrating this third party into the DFIN ecosystem. New and existing suppliers that were determined to pose a material risk may be rejected or have their contracts terminated.
Generally, these reviews include an evaluation of the effectiveness of a supplier or third party’s cybersecurity along with the risks associated with adding and/or integrating this third party into the DFIN ecosystem. New and existing suppliers that are determined to pose a material risk may be rejected or have their contracts terminated.
In 2023, the Company conducted monthly simulations to train employees to detect and respond to various cyber attack vectors like phishing, vishing and smishing attempts and provides enhanced training to employees who fail a simulated cyber attack.
In 2024, the Company conducted monthly simulations to train employees to detect and respond to various cyber attack vectors like phishing, vishing and smishing attempts and provides enhanced training to employees who fail a simulated cyber attack.
In addition, the Company manages a 24x7 Security Operations capability that monitors and responds to cyber threats in real-time. DFIN manages and continues to mature a comprehensive third-party risk management program, referred to as “Supply Chain Security.” The program evaluates critical suppliers for inherent risk and classifies suppliers according to the overall risk they present to the Company.
In addition, the Company manages a 24x7 Security Operations capability that monitors and responds to cyber threats. DFIN maintains a comprehensive third-party risk management program, referred to as “Supply Chain Security.” The program evaluates critical suppliers for inherent risk and classifies suppliers according to the overall risk they present to the Company.
The CISO reports to the Chief Information Officer and leads multiple cybersecurity functions that consist of Cyber Defense and Threat Intelligence, Application Security, Network Security, Identity Governance Administration and IT Governance as well as Risk and Compliance functions.
The CISO reports to the Chief Information Officer and leads multiple cybersecurity functions that consist of Cyber Defense and Threat Intelligence, Application Security, Network Security Engineering, Security Architecture, Identity Services and IT Governance as well as Risk and Compliance functions.
DFIN also conducted quarterly IT training on topics such as risk detection and data handling and provided targeted cybersecurity threat awareness and training to executives during 2023. The Company conducts Incident Response tabletop exercises throughout the year at different levels of the organization, including the executive team.
DFIN also conducted quarterly IT training on topics such as risk detection and reporting, data handling and provided targeted cybersecurity threat awareness and training to executives during 2024. The Company reviews its Incident Response plans and conducts tabletop exercises throughout the year at different levels of the organization, including the executive team.
The Company’s Chief Information Security Officer (“CISO”) has over 29 years of cybersecurity experience overseeing enterprise cybersecurity risk management and compliance programs and has responsibility for assessing and managing cybersecurity risks.
The Company’s Chief Information Security Officer (“CISO”) has approximately 30 years of cybersecurity experience overseeing enterprise cybersecurity risk management and compliance programs and has responsibility for assessing and managing cybersecurity risks.
The DFIN Cybersecurity Program is based upon industry leading frameworks, which include International Standardization Organization (“ISO”) 27001, Control Objectives for Information Technology (COBIT). The Company’s technologies and software must also comply with domestic and international regulatory and legal requirements. Ensuring that these technologies and software comply with those regulations is a key focus of the Company’s efforts.
The DFIN Cybersecurity Program is based upon industry leading frameworks, which include International Standardization Organization (“ISO”) 27001, the National Institute of Technology Cybersecurity Framework (“NIST CSF”) and Control Objectives for Information Technology (COBIT). The Company’s technologies and software must also comply with domestic and international regulatory and legal requirements.
DFIN’s Board and senior management are engaged in managing and overseeing the Company’s cyber risks. Internal Audit periodically reviews enterprise risk management topics as well as the effectiveness of information security controls and other procedures and reports significant findings to executive management and either the Board or the Audit Committee.
Internal Audit periodically reviews enterprise risk management topics as well as the effectiveness of information security controls and other procedures and reports significant findings to executive management, the Board or the Audit Committee, as appropriate.
The functions are also engaged in incident response should incidents occur and are accountable for remediating cyber threats, if manifested. 24 The Board maintains oversight of risk from cybersecurity threats and is regularly briefed regarding emerging cyber risks, mitigation strategies and incident response protocols directly from the CISO. The Board includes at least one cybersecurity subject matter expert.
The Board maintains oversight of risk from cybersecurity threats and is regularly briefed regarding emerging cyber risks, mitigation strategies and incident response protocols directly from the CISO. The Board includes at least one cybersecurity subject matter expert.
As the front line of defense against cybersecurity risks, these functions employ several tools, processes and procedures to detect attempted cyber attacks, prevent cyber threats and monitor cyber risks.
As the front line of defense against cybersecurity risks, these functions employ numerous tools, processes and procedures to detect attempted cyber attacks, prevent cyber threats and monitor cyber risks. The functions are also engaged in incident response should incidents occur and are accountable for remediating cyber threats, if manifested.
DFIN has cyber incident response partners that conduct penetration testing and other exercises throughout the year whereby cybersecurity controls effectiveness is evaluated and reported to management. DFIN engages a third-party auditor to ascertain its cybersecurity risk management effectiveness as a part of its enterprise ISO 27001 certification process.
DFIN engages a third-party auditor to ascertain its cybersecurity risk management effectiveness as a part of its enterprise ISO 27001 certification process. The ISO 27001 certification process is highly prescriptive and covers cyber risk management methodology, risk assessment and risk treatment.
The processes also include evaluating existing suppliers and third parties for ongoing risk. The classification rating determines the frequency in which suppliers are evaluated. For example, those identified as critical suppliers are continuously monitored and assessed. Other supplier reviews occur on an annual basis or other cadence.
The program also includes evaluations of existing suppliers and third parties for ongoing risk. A supplier’s classification rating determines the frequency with which it is evaluated. For example, those identified as critical suppliers are monitored on a quarterly basis, or more frequently if an event occurs that could elevate the risk, and assessed at a higher frequency than other suppliers.
DFIN has adopted the National Institute of Standards and Technology Cybersecurity Framework (NIST CSF) and engages a consultant to periodically assess the Company’s NIST CSF profile and maturity. 23 The Company leverages cybersecurity technologies designed to provide for the security of client, employee and business confidential data.
The Company leverages cybersecurity technologies designed to provide for the security of client, employee and business confidential data.
No material cybersecurity incident has been identified nor materially affected the Company’s business strategy, results of operations, or financial condition during the periods covered by the Annual Report. The Company’s goal is to continually assess potential incidents, enhance protocols, expand cyber risk capabilities to mitigate future risks and safeguard DFIN’s intellectual property, operations and client data.
The Company’s goal is to continually assess potential incidents, enhance protocols, expand cyber risk capabilities to mitigate future risks and safeguard DFIN’s intellectual property, operations and client data. DFIN’s Board and senior management are engaged in managing and overseeing the Company’s cyber risks.
Removed
The ISO 27001 certification process is highly proscribed and covers cyber risk management methodology, risk assessment and risk treatment.
Added
Ensuring that these technologies and software comply with those regulations is a key focus of the Company’s efforts. DFIN has cyber incident response partners that conduct penetration testing and other exercises throughout the year whereby cybersecurity controls effectiveness is evaluated and reported to management.
Added
DFIN has adopted the NIST CSF and engages a consultant to periodically assess the Company’s NIST CSF profile and maturity. DFIN also obtains System and Organization Control (“SOC”) Type 2 certification demonstrating control effectiveness across multiple American Institute of Certified Public Accountants (AICPA) Trust Service Principle domains.
Added
These incident response and training initiatives are regularly evaluated to adapt to evolving cyber threats and awareness.

Item 2. Properties

Properties — owned and leased real estate

2 edited+1 added−2 removed0 unchanged
Biggest changeLEG AL PROCEEDINGS For a discussion of certain litigation involving the Company, see Note 8, Commitments and Contingencies , to the audited Consolidated Financial Statements. ITEM 4. MIN E SAFETY DISCLOSURES Not applicable. 25 PART II
Biggest changeOf the Company’s worldwide facilities, approximately 0.2 million square feet of space was owned, while the remaining 0.3 million square feet of space was leased. ITEM 3. LEG AL PROCEEDINGS For a discussion of certain litigation involving the Company, see Note 8, Commitments and Contingencies , to the audited Consolidated Financial Statements. ITEM 4.
ITEM 2. PROP ERTIES The Company’s corporate office is located in leased office space at 35 West Wacker Drive, Chicago, Illinois, 60601. As of December 31, 2023, the Company leased or owned 11 U.S. facilities encompassing approximately 0.5 million square feet. The Company leased 9 international facilities encompassing less than 0.1 million square feet in Asia, Europe and Canada.
ITEM 2. PROP ERTIES The Company’s corporate office is located at 391 Steel Way, Lancaster, Pennsylvania, 17601. As of December 31, 2024, the Company leased or owned 7 U.S. facilities encompassing approximately 0.4 million square feet. The Company leased 7 international facilities encompassing less than 0.1 million square feet in Asia, Canada and Europe.
Removed
Of the Company’s worldwide facilities, approximately 0.2 million square feet of space was owned, while the remaining 0.3 million square feet of space was leased.
Added
MIN E SAFETY DISCLOSURES Not applicable. 24 PART II
Removed
As further described in Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements, as of December 31, 2023, the Company had land held for sale which encompassed approximately 3.3 acres. ITEM 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−2 removed2 unchanged
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (a) October 1, 2023 - October 31, 2023 37,633 $ 53.56 37,633 $ 104,274,335 November 1, 2023 - November 30, 2023 28,726 55.92 24,812 102,891,003 December 1, 2023 - December 31, 2023 (b) 20,000 61.19 20,000 $ 101,667,267 Total 86,359 $ 56.11 82,445 (a) As further described in Note 13, Capital Stock , to the audited Consolidated Financial Statements, on February 17, 2022, the Board authorized an increase to its previously approved stock repurchase program to bring the total remaining available repurchase authorization for shares on or after February 17, 2022 to $150 million and extended the expiration date of the repurchase program through December 31, 2023.
Biggest changeIssuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Dollar Value of Shares that May Yet be Purchased Under the Plans or Programs (a) October 1, 2024 - October 31, 2024 69,633 $ 64.58 69,633 $ 104,175,063 November 1, 2024 - November 30, 2024 110,847 60.19 110,847 97,503,187 December 1, 2024 - December 31, 2024 (b) 101,273 61.29 101,273 91,296,178 Total 281,753 $ 61.67 281,753 (a) As further described in Note 13, Capital Stock , to the audited Consolidated Financial Statements, on November 14, 2023, the Board authorized the repurchase of up to $150 million of the Company’s outstanding common stock commencing on January 1, 2024, with an expiration date of December 31, 2025.
Market for Donnelley Financial Solutions, Inc.'s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this Annual Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. ITEM 6. [RESERVED] 27
Market for Donnelley Financial Solutions, Inc.’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities of this Annual Report shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of Section 18 of the Exchange Act. ITEM 6. [RESERVED] 26
The comparison assumes all dividends have been reinvested and an initial investment of $100 on December 31, 2018. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
The comparison assumes all dividends have been reinvested and an initial investment of $100 on December 31, 2019. The stock price performance on the following graph is not necessarily indicative of future stock price performance.
Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so. (b) Includes 2,000 shares, valued at $0.1 million, for which the Company placed orders prior to December 31, 2023 that were not settled until the first quarter of 2024.
Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so. (b) Includes 4,000 shares, valued at $0.3 million, for which the Company placed orders prior to December 31, 2024 that were not settled until the first quarter of 2025.
ITEM 5. MARKET FOR DONNELLEY FINANCIAL SOLUTIONS, INC.’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Principal Market DFIN’s common stock began “regular-way” trading under the ticker symbol “DFIN” on the New York Stock Exchange (“NYSE”) on October 3, 2016. Stockholders As of February 13, 2024, there were 3,099 stockholders of record of the Company’s common stock.
ITEM 5. MARKET FOR DONNELLEY FINANCIAL SOLUTIONS, INC.’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Principal Market DFIN’s common stock began “regular-way” trading under the ticker symbol “DFIN” on the New York Stock Exchange (“NYSE”) on October 3, 2016. Stockholders As of February 11, 2025, there were 2,896 stockholders of record of the Company’s common stock.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Annual Report. 26 PEER PERFORMANCE TABLE The following graph compares the cumulative total stockholder return on DFIN’s common stock from December 31, 2018 through December 31, 2023, with (i) the cumulative total return of the Russell 2000 Index, (ii) the cumulative return of the Standard & Poor’s (“S&P”) SmallCap 600 Index, and (iii) S&P Composite 1500 Diversified Financials Index, a business industry index of which DFIN is a constituent.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters of this Annual Report. 25 PEER PERFORMANCE TABLE The following graph compares the cumulative total stockholder return on DFIN’s common stock from December 31, 2019 through December 31, 2024, with (i) the cumulative total return of the Russell 2000 Index, (ii) the cumulative return of the Standard & Poor’s (“S&P”) SmallCap 600 Index, and (iii) the cumulative return of the S&P Composite 1500 Financial Services Index (f/k/a S&P Composite 1500 Diversified Financials Index), a business industry index of which DFIN is a constituent.
Performance Table Base Period December 31, December 31, December 31, December 31, December 31, Company Name/Index 12/31/2018 2019 2020 2021 2022 2023 Donnelley Financial Solutions 100 74.63 120.96 335.99 275.48 444.55 Russell 2000 Index 100 125.53 150.58 172.90 137.56 160.85 S&P SmallCap 600 Index 100 122.78 136.64 173.29 145.39 168.73 S&P Composite 1500 Diversified Financials Index 100 124.57 138.79 188.23 166.30 192.61 This performance graph and other information furnished under Part II, Item 5.
Performance Table Base Period December 31, December 31, December 31, December 31, December 31, Company Name/Index 12/31/2019 2020 2021 2022 2023 2024 Donnelley Financial Solutions 100 162.08 450.24 369.15 595.70 599.14 Russell 2000 Index 100 119.96 137.74 109.59 128.14 142.93 S&P SmallCap 600 Index 100 111.29 141.13 118.41 137.42 149.37 S&P Composite 1500 Financial Services Index 100 111.42 151.11 133.50 154.63 198.41 This performance graph and other information furnished under Part II, Item 5.
Removed
On August 17, 2022, the Board authorized an increase to the stock repurchase program previously approved in February 2022 to bring the total remaining available repurchase authorization for shares on or after August 17, 2022 to $150 million, which expired on December 31, 2023 with a remaining available repurchase authorization of $101.7 million.
Added
The stock repurchase program may be suspended or discontinued at any time.
Removed
On November 14, 2023, the Board authorized the repurchase of up to $150 million of the Company's outstanding common stock commencing on January 1, 2024, with an expiration date of December 31, 2025. The stock repurchase program may be suspended or discontinued at any time.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+44 added−9 removed64 unchanged
Biggest changeManagement's Discussion and Analysis of Financial Condition and Results of Operations of DFIN's Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 21, 2023. 28 Results of Operations for the Year Ended December 31, 2023 as Compared to the Year Ended December 31, 2022 The following table shows the results of operations for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 $ Change % Change (in millions, except percentages) Net sales Tech-enabled services $ 336.9 $ 380.9 $ (44.0 ) (11.6 %) Software solutions 292.7 279.6 13.1 4.7 % Print and distribution 167.6 173.1 (5.5 ) (3.2 %) Total net sales 797.2 833.6 (36.4 ) (4.4 %) Cost of sales (a) Tech-enabled services 127.6 141.1 (13.5 ) (9.6 %) Software solutions 108.7 113.4 (4.7 ) (4.1 %) Print and distribution 97.0 115.7 (18.7 ) (16.2 %) Total cost of sales 333.3 370.2 (36.9 ) (10.0 %) Selling, general and administrative expenses (a) 282.1 264.0 18.1 6.9 % Depreciation and amortization 56.7 46.3 10.4 22.5 % Restructuring, impairment and other charges, net 9.8 7.7 2.1 27.3 % Other operating loss, net 5.3 0.4 4.9 nm Income from operations 110.0 145.0 (35.0 ) (24.1 %) Interest expense, net 15.8 9.2 6.6 71.7 % Investment and other income, net (7.8 ) (3.5 ) (4.3 ) nm Earnings before income taxes 102.0 139.3 (37.3 ) (26.8 %) Income tax expense 19.8 36.8 (17.0 ) (46.2 %) Net earnings $ 82.2 $ 102.5 $ (20.3 ) (19.8 %) nm – Not meaningful (a) Exclusive of depreciation and amortization Consolidated Net sales of tech-enabled services of $336.9 million for the year ended December 31, 2023 decreased $44.0 million, or 11.6%, as compared to the year ended December 31, 2022.
Biggest changeResults of Operations for the Year Ended December 31, 2024 as Compared to the Year Ended December 31, 2023 and the Year Ended December 31, 2023 as Compared to the Year Ended December 31, 2022 The following table shows the results of operations for the years ended December 31, 2024, 2023 and 2022: Year Ended December 31, 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change % Change $ Change % Change (in millions, except percentages) Net sales Software solutions $ 329.7 $ 292.7 $ 279.6 $ 37.0 12.6 % $ 13.1 4.7 % Tech-enabled services 320.8 336.9 380.9 (16.1 ) (4.8 %) (44.0 ) (11.6 %) Print and distribution 131.4 167.6 173.1 (36.2 ) (21.6 %) (5.5 ) (3.2 %) Total net sales 781.9 797.2 833.6 (15.3 ) (1.9 %) (36.4 ) (4.4 %) Cost of sales (a) Software solutions 107.4 108.7 113.4 (1.3 ) (1.2 %) (4.7 ) (4.1 %) Tech-enabled services 120.6 127.6 141.1 (7.0 ) (5.5 %) (13.5 ) (9.6 %) Print and distribution 69.9 97.0 115.7 (27.1 ) (27.9 %) (18.7 ) (16.2 %) Total cost of sales 297.9 333.3 370.2 (35.4 ) (10.6 %) (36.9 ) (10.0 %) Selling, general and administrative expenses (a) 290.9 282.1 264.0 8.8 3.1 % 18.1 6.9 % Depreciation and amortization 60.2 56.7 46.3 3.5 6.2 % 10.4 22.5 % Restructuring, impairment and other charges, net 6.6 9.8 7.7 (3.2 ) (32.7 %) 2.1 27.3 % Other operating (income) loss, net (10.3 ) 5.3 0.4 (15.6 ) nm 4.9 nm Income from operations 136.6 110.0 145.0 26.6 24.2 % (35.0 ) (24.1 %) Interest expense, net 12.9 15.8 9.2 (2.9 ) (18.4 %) 6.6 71.7 % Investment and other income, net (1.4 ) (7.8 ) (3.5 ) 6.4 (82.1 %) (4.3 ) nm Earnings before income taxes 125.1 102.0 139.3 23.1 22.6 % (37.3 ) (26.8 %) Income tax expense 32.7 19.8 36.8 12.9 65.2 % (17.0 ) (46.2 %) Net earnings $ 92.4 $ 82.2 $ 102.5 $ 10.2 12.4 % $ (20.3 ) (19.8 %) nm – Not meaningful (a) Exclusive of depreciation and amortization 28 Consolidated Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 Net sales of software solutions of $329.7 million for the year ended December 31, 2024 increased $37.0 million, or 12.6%, as compared to the year ended December 31, 2023.
As a percentage of print and distribution net sales, print and distribution cost of sales decreased 8.9%, primarily driven by cost control initiatives. SG&A expenses of $282.1 million for the year ended December 31, 2023 increased $18.1 million, or 6.9%, as compared to the year ended December 31, 2022.
As a percentage of print and distribution net sales, print and distribution cost of sales decreased 8.9%, primarily driven by cost control initiatives. 30 SG&A expenses of $282.1 million for the year ended December 31, 2023 increased $18.1 million, or 6.9%, as compared to the year ended December 31, 2022.
No new employees are permitted to enter the Company’s frozen plan and participants do not earn additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations.
No new employees are permitted to enter the Company’s frozen plans and participants do not earn additional benefits. Benefits are generally based upon years of service and compensation. These defined benefit retirement income plans are funded in conformity with the applicable government regulations.
Refer to Note 9, Income Taxes , to the audited Consolidated Financial Statements for further information. New Accounting Pronouncements and Pending Accounting Standards Recently adopted and issued accounting standards and their effect on the Company’s audited Consolidated Financial Statements are described in Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements.
Refer to Note 9, Income Taxes , to the audited Consolidated Financial Statements for further information. New Accounting Pronouncements and Pending Accounting Standards Recently adopted and issued accounting standards and their effect on the Company’s audited Consolidated Financial Statements are described in Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements. 44
The future contractual obligations consist of outstanding debt and related interest, sales commissions, operating and finance lease payments, outsourced services relating to information technology, maintenance and other services, incentive compensation, deferred compensation, multi-employer pension plans obligations and other miscellaneous obligations.
The future contractual obligations consist of outstanding debt and related interest, outsourced services related to information technology, maintenance and other services, sales commissions, operating and finance lease payments, incentive compensation, deferred compensation, multi-employer pension plans obligations and other miscellaneous obligations.
Cash Flows Used In Investing Activities Net cash used in investing activities was $51.3 million for the year ended December 31, 2023, which consisted of $61.8 million of capital expenditures, substantially all related to investments in software development, partially offset by $10.0 million of proceeds from the sales of investments in equity securities.
Net cash used in investing activities was $51.3 million for the year ended December 31, 2023, which primarily consisted of $61.8 million of capital expenditures, substantially all related to investments in software development, partially offset by $10.0 million of proceeds from the sales of investments in equity securities.
(b) Includes estimated interest for the Term Loan A Facility based on borrowings and the interest rates at December 31, 2023. Estimated interest payments may differ in the future based on changes in borrowings, floating interest rates, timing of additional prepayments or other factors or events.
(b) Includes estimated interest for the Term Loan A Facility based on borrowings and the interest rates at December 31, 2024. Estimated interest payments may differ in the future based on changes in borrowings, floating interest rates, timing of additional prepayments or other factors or events.
As of December 31, 2023, the Revolving Facility is supported by fifteen U.S. and international financial institutions. As of December 31, 2023, the Company met all the conditions required to borrow under the Revolving Facility, and management expects the Company to continue to meet the applicable borrowing conditions.
As of December 31, 2024, the Revolving Facility is supported by fifteen U.S. and international financial institutions. As of December 31, 2024, the Company met all the conditions required to borrow under the Revolving Facility, and management expects the Company to continue to meet the applicable borrowing conditions.
Revenue Recognition The Company manages highly-customized data and materials to enable filings with the SEC on behalf of its customers related to the Exchange Act, the Securities Act and the Investment Company Act as well as performs XBRL and other services.
Revenue Recognition The Company manages highly-customized data and materials to enable filings with the SEC on behalf of its customers related to the Exchange Act, the Securities Act and the Investment Company Act as well as performs iXBRL and other services.
If actual results differ from these estimates, or the estimates are adjusted in future periods, adjustments to the valuation allowance might need to be recorded. As of December 31, 2023 and 2022, valuation allowances of $5.8 million and $5.4 million, respectively, were recorded on the Company’s audited Consolidated Balance Sheets.
If actual results differ from these estimates, or the estimates are adjusted in future periods, adjustments to the valuation allowance might need to be recorded. As of December 31, 2024 and 2023, valuation allowances of $5.5 million and $5.8 million, respectively, were recorded on the Company’s audited Consolidated Balance Sheets.
Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements for additional information. Non-income tax, net —Included income of $0.9 million for both of the years ended December 31, 2023 and 2022 related to certain estimated non-income tax exposures previously accrued by the Company.
Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements for additional information. Non-income tax, net —Included income of $1.1 million and $0.9 million for the years ended December 31, 2024 and 2023, respectively, related to certain estimated non-income tax exposures previously accrued by the Company.
The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience, market conditions and input from its actuaries and investment advisors. The weighted-average discount rate to determine the pension benefit obligation at December 31, 2023 was 5.0%.
The Company believes that the assumptions utilized in recording its obligations under its plans are reasonable based on its experience, market conditions and input from its actuaries and investment advisors. The weighted-average discount rate to determine the pension benefit obligation at December 31, 2024 was 5.3%.
Clients are provided with EDGAR filing services, XBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among other services.
Clients are provided with EDGAR filing services, iXBRL compliance services and translation, editing, interpreting, proof-reading and multilingual typesetting services, among other services.
Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business, a significant decrease in the market value of the assets or significant negative industry or economic trends.
Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy for the overall business or significant negative industry or economic trends.
A 0.25% change in the expected long-term rate of return on plan assets as of December 31, 2023 would increase (decrease) net pension plan income for the year ending December 31, 2024 as follows: Year Ending December 31, 2024 (in millions) 0.25% increase $ 0.6 0.25% decrease $ (0.6 ) 41 Accounting for Income Taxes In the Company’s audited Consolidated Financial Statements, income tax expense and deferred tax balances have been calculated on a separate income tax return basis.
A 0.25% change in the expected long-term rate of return on plan assets as of December 31, 2024 would increase (decrease) net pension plan income for the year ending December 31, 2025 as follows: Year Ending December 31, 2025 (in millions) 0.25% increase $ 0.5 0.25% decrease $ (0.5 ) 43 Accounting for Income Taxes In the Company’s audited Consolidated Financial Statements, income tax expense and deferred tax balances have been calculated on a separate income tax return basis.
As of December 31, 2023, there were no borrowings outstanding under the Revolving Facility, however, the Company had $2.5 million in outstanding letters of credit and bank guarantees, of which $1.0 million of the outstanding letters of credit reduced the availability under the Revolving Facility.
As of December 31, 2024, there were no borrowings outstanding under the Revolving Facility, however, the Company had $1.6 million in outstanding letters of credit and bank guarantees, of which $1.0 million of the outstanding letters of credit reduced the availability under the Revolving Facility.
Disposition-related expenses —Included charges of $0.3 million for the year ended December 31, 2023 related to costs associated with the disposition of the eBrevia business and charges of $0.1 million for the year ended December 31, 2022 related to legal costs associated with the disposition of the EOL business.
Disposition-related expenses —Included charges of $0.3 million for the year ended December 31, 2023 related to costs associated with the disposition of the eBrevia business.
Software solutions cost of sales decreased primarily due to cost control initiatives, partially offset by higher product development costs and a higher allocation of technology-related expenses. As a percentage of software solutions net sales, software solutions costs of sales decreased 3.5%, primarily driven by cost control initiatives and a favorable sales mix, partially offset by higher product development costs.
As a percentage of software solutions net sales, software solutions costs of sales decreased 3.5%, primarily driven by cost control initiatives and a favorable sales mix, partially offset by higher product development costs.
Credit Agreement —On May 27, 2021 (the “Restatement Effective Date”), the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.00% to 2.50% based upon the Company’s Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million revolving credit facility (the “Revolving Facility”) to May 27, 2026 and modify the financial maintenance and negative covenants in the Credit Agreement. 37 On May 11, 2023, the Company entered into the first amendment to the Amended and Restated Credit Agreement to change the reference rate from LIBOR, which ceased being published on June 30, 2023, to the Secured Overnight Financing Rate (“SOFR”) for both the Term Loan A Facility and the Revolving Facility.
Credit Agreement —On May 27, 2021, the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things, provide for a $200.0 million delayed-draw term loan A facility (the “Term Loan A Facility”) (bearing interest at a rate equal to the sum of the London Interbank Offered Rate (“LIBOR”) plus a margin ranging from 2.00% to 2.50% based upon the Company's Consolidated Net Leverage Ratio), extend the maturity of the $300.0 million revolving credit facility (the “Revolving Facility”) to May 27, 2026 and modify the financial maintenance and negative covenants in the Credit Agreement.
The following describes the Company’s cash flows for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 2022 (in millions) Net cash provided by operating activities $ 124.0 $ 150.2 Net cash used in investing activities (51.3 ) (50.9 ) Net cash used in financing activities (84.6 ) (121.1 ) Effect of exchange rate on cash and cash equivalents 0.8 1.5 Net decrease in cash and cash equivalents $ (11.1 ) $ (20.3 ) Cash Flows Provided By Operating Activities Operating cash inflows and outflows are largely attributable to sales of the Company’s services and products as well as recurring expenditures for labor, rent and other operating activities.
The following table describes the Company’s cash flows for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in millions) Net cash provided by operating activities $ 171.1 $ 124.0 Net cash used in investing activities (53.3 ) (51.3 ) Net cash used in financing activities (82.1 ) (84.6 ) Effect of exchange rate on cash and cash equivalents (1.5 ) 0.8 Net increase (decrease) in cash and cash equivalents $ 34.2 $ (11.1 ) 37 Cash Flows Provided By Operating Activities Operating cash inflows and outflows are largely attributable to sales of the Company’s services and products as well as recurring expenditures for labor, rent and other operating activities.
If the carrying value of an asset group exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset group’s carrying value over its fair value. Pension and Other Postretirement Benefits Plans The Company’s primary defined benefit plan was frozen effective December 31, 2011.
If the carrying value of an asset group exceeds its estimated future undiscounted cash flows, an impairment loss is recorded for the excess of the asset group’s carrying value over its fair value. 42 Pension and Other Postretirement Benefits Plans The Company’s defined benefit plans are frozen.
Contractual Cash Obligations and Other Commitments and Contingencies As of December 31, 2023, the Company had total future contractual and other obligations of approximately $334 million, with approximately $138 million of the future contractual and other obligations due during 2024.
Contractual Cash Obligations and Other Commitments and Contingencies As of December 31, 2024, the Company had total future contractual and other obligations of approximately $348 million, with approximately $155 million of the future contractual and other obligations due during 2025.
Cash on hand, operating cash flows and the Company’s Revolving Facility are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, acquisitions and completion of restructuring programs.
Cash and cash equivalents on hand, operating cash flows and the Company’s Revolving Facility are the primary sources of liquidity and are expected to be used for, among other things, payment of interest and principal on the Company’s debt obligations, capital expenditures necessary to support productivity improvement and growth, share repurchases and continuous operational improvements.
Depreciation and amortization of $56.7 million for the year ended December 31, 2023 increased $10.4 million, or 22.5%, as compared to the year ended December 31, 2022, primarily due to additional software development and higher other intangible assets amortization expense. Refer to Note 4, Goodwill and Other Intangible Assets, net , to the audited Consolidated Financial Statements for further information.
Depreciation and amortization of $56.7 million for the year ended December 31, 2023 increased $10.4 million, or 22.5%, as compared to the year ended December 31, 2022, primarily due to additional software development and higher other intangible assets amortization expense.
Net cash provided by operating activities was $124.0 million for the year ended December 31, 2023, as compared to $150.2 million for the year ended December 31, 2022.
Net cash provided by operating activities was $171.1 million for the year ended December 31, 2024, as compared to $124.0 million for the year ended December 31, 2023.
The enactment of the IRA did not have a material impact on the Company's audited Consolidated Financial Statements. 35 The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”).
The Organization for Economic Co-operation and Development’s (“OECD”) current project, widely known as Anti-Base Erosion and Profit Shifting, seeks to address tax challenges arising in the global economy by introducing a global minimum corporate tax of 15%, referred to as Pillar Two, and several mechanisms to ensure tax is paid (the “GloBE Model Rules”).
Accounts payable decreased operating cash flows by $15.3 million for the year ended December 31, 2023, as compared to increasing operating cash flows by $12.1 million for the year ended December 31, 2022, primarily due to timing of supplier payments.
Accounts payable decreased operating cash flows by $5.7 million for the year ended December 31, 2024, as compared to decreasing operating cash flows by $15.3 million for the year ended December 31, 2023, primarily due to the timing of supplier payments.
A 1.0% change in the discount rates as of December 31, 2023 would (decrease) increase the accumulated benefit obligation and projected benefit obligation: 1.0% 1.0% Increase Decrease (in millions) Accumulated benefit obligation $ (19.7 ) $ 23.2 Projected benefit obligation $ (19.7 ) $ 23.2 The Company’s defined benefit plan has a risk management approach for its pension plan assets.
A 1.0% change in the discount rates as of December 31, 2024 would (decrease) increase the accumulated benefit obligation and projected benefit obligation: 1.0% 1.0% Increase Decrease (in millions) Accumulated benefit obligation $ (13.0 ) $ 15.2 Projected benefit obligation $ (13.0 ) $ 15.2 The Company has a risk management approach for its pension plan assets.
The Company repatriated excess cash at its foreign subsidiaries to the U.S. during the year ended December 31, 2021 and did not make cash repatriations during 2023 and 2022. The Company is evaluating whether to make any cash repatriations in the future.
The Company repatriated $30.0 million of excess cash of previously taxed earnings at its foreign subsidiaries to the U.S. during the year ended December 31, 2024. The Company did not make cash repatriations during the years ended December 31, 2023 and 2022. The Company is evaluating whether to make any cash repatriations in the future.
COVID-19 related recoveries— Included recoveries of $0.5 million for the year ended December 31, 2022 from certain governmental subsidies related to employee wages at certain international locations. 34 Selected Financial Data Year Ended December 31, 2023 2022 (in millions, except per share data) Consolidated Statements of Operations data: Net sales $ 797.2 $ 833.6 Net earnings 82.2 102.5 Net earnings per share: Basic 2.81 3.33 Diluted 2.69 3.17 Consolidated Balance Sheets data: Total assets 806.9 828.3 Long-term debt 124.5 169.2 The following table includes the pre-tax and after-tax impact of certain Non-GAAP adjustments for the years ended December 31, 2023 and 2022: Year Ended December 31, 2023 Year Ended December 31, 2022 Pre-tax After-tax Pre-tax After-tax (in millions) Restructuring, impairment and other charges, net $ 9.8 $ 7.5 $ 7.7 $ 5.7 Share-based compensation expense 22.5 13.3 19.3 12.1 Loss on sale of businesses 6.1 — 0.7 0.4 Accelerated rent expense 3.7 3.2 0.8 0.6 Disposition-related expenses 0.3 0.2 0.1 0.1 Gain on investments in equity securities (7.0 ) (5.1 ) (0.5 ) (0.4 ) Non-income tax, net (0.9 ) (0.6 ) (0.9 ) (0.6 ) Gain on sale of long-lived assets (0.8 ) (0.6 ) (0.2 ) (0.2 ) COVID-19 related recoveries — — (0.5 ) (0.3 ) Liquidity and Capital Resources The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its investors.
Selected Financial Data Year Ended December 31, 2024 2023 (in millions, except per share data) Consolidated Statements of Operations data: Net sales $ 781.9 $ 797.2 Net earnings 92.4 82.2 Net earnings per share: Basic 3.16 2.81 Diluted 3.06 2.69 Consolidated Balance Sheets data: Total assets 841.6 806.9 Long-term debt 124.7 124.5 The following table includes the pre-tax and after-tax impact of certain Non-GAAP adjustments for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 Year Ended December 31, 2023 Pre-tax After-tax Pre-tax After-tax (in millions) Restructuring, impairment and other charges, net $ 6.6 $ 5.0 $ 9.8 $ 7.5 Share-based compensation expense 25.2 14.8 22.5 13.3 Gain on sale of long-lived assets (9.8 ) (7.0 ) (0.8 ) (0.6 ) Non-income tax, net (1.1 ) (0.7 ) (0.9 ) (0.6 ) Gain on investments in equity securities (0.4 ) (0.3 ) (7.0 ) (5.1 ) (Gain) loss on sale of a business (0.4 ) (0.3 ) 6.1 — Accelerated rent expense — — 3.7 3.2 Disposition-related expenses — — 0.3 0.2 36 Liquidity and Capital Resources The Company believes it has sufficient liquidity to support its ongoing operations and to invest in future growth to create value for its investors.
Gain on investments in equity securities —Included a net realized gain of $7.0 million for the year ended December 31, 2023 related to the sales of investments in equity securities and an unrealized gain of $0.5 million for the year ended December 31, 2022.
Gain on investments in equity securities —The year ended December 31, 2024 included a gain of $0.4 million. The year ended December 31, 2023 included a net realized gain of $7.0 million related to the sales of investments in equity securities.
The Company’s common stock repurchases for the year ended December 31, 2023 totaled $40.3 million, which included $22.6 million of repurchases under the stock repurchase program and $17.7 million associated with vesting of the Company’s employees’ equity awards. Net cash used in financing activities was $121.1 million for the year ended December 31, 2022.
The Company’s common stock repurchases for the year ended December 31, 2023 totaled $40.3 million, which included $22.6 million of repurchases under the stock repurchase program and $17.7 million associated with vesting of the Company’s equity awards.
Net sales increased primarily due to Venue and ActiveDisclosure price increases and higher Venue volumes, partially offset by a $5.7 million decrease due to the disposition of the EOL and eBrevia businesses in the fourth quarters of 2022 and 2023, respectively.
Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 Net sales of $185.9 million for the year ended December 31, 2023 increased $5.7 million, or 3.2%, as compared to the year ended December 31, 2022, primarily due to Venue and ActiveDisclosure price increases and higher Venue volumes, partially offset by a $5.7 million decrease due to the disposition of the EOL and eBrevia businesses in the fourth quarters of 2022 and 2023, respectively.
Net sales of tech-enabled services decreased primarily due to lower capital markets transactional and compliance volumes. Net sales of software solutions of $292.7 million for the year ended December 31, 2023 increased $13.1 million, or 4.7%, as compared to the year ended December 31, 2022.
Net sales of tech-enabled services of $320.8 million for the year ended December 31, 2024 decreased $16.1 million, or 4.8%, as compared to the year ended December 31, 2023. Net sales of tech-enabled services decreased primarily due to lower capital markets compliance and transactional volumes.
Income from operations of $22.1 million for the year ended December 31, 2023 increased $0.2 million, or 0.9%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, cost control initiatives and price increases, partially offset by higher product development costs, higher depreciation and amortization expense and a higher allocation of overhead costs.
Segment Adjusted EBITDA of $36.9 million for the year ended December 31, 2023 increased $2.8 million, or 8.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, cost control initiatives and price increases, partially offset by higher product development costs and a higher allocation of overhead costs.
Refer to Note 9, Income Taxes , to the audited Consolidated Financial Statements for further information. 30 Information by Segment The following tables summarize net sales, income from operations, operating margin and certain items impacting comparability within each of the operating segments and Corporate.
Refer to Note 9, Income Taxes , to the audited Consolidated Financial Statements for further information. 31 Information by Segment The following tables summarize net sales, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin within each of the operating segments.
Based on these interim assessments in 2023, management concluded that as of the interim periods, no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying amount.
Based on these interim assessments in 2024, management concluded that no events or changes in circumstances indicated that it was more likely than not that the fair value for any reporting unit had declined below its carrying amount. Three of the Company’s four reporting units, CM-SS, CM-CCM and IC-SS, had goodwill as of October 31, 2024.
Executive Overview Net sales for the year ended December 31, 2023 decreased by $36.4 million, or 4.4%, to $797.2 million from $833.6 million for the year ended December 31, 2022, including a $0.8 million, or 0.1% decrease due to changes in foreign currency exchange rates.
Executive Overview Net sales for the year ended December 31, 2024 decreased by $15.3 million, or 1.9%, to $781.9 million from $797.2 million for the year ended December 31, 2023, including a $0.2 million increase due to changes in foreign currency exchange rates.
A discussion of the Company’s financial condition, changes in financial condition and results of operations for the year ended December 31, 2022 as compared to the year ended December 31, 2021, can be found in Part II, Item 7.
A reconciliation and discussion of changes in Adjusted EBITDA for the year ended December 31, 2023 as compared to the year ended December 31, 2022, can be found in Part II, Item 7.
Unbilled receivables are recorded when there is an unconditional right to payment and invoicing has not yet occurred. The Company estimates the value of unbilled receivables based on a combination of historical customer selling price and management’s assessment of realizable selling price. Unbilled receivables can vary significantly from period to period as a result of seasonality, volume and market conditions.
The Company estimates the value of unbilled receivables based on a combination of historical customer selling price and management’s assessment of realizable selling price. Unbilled receivables can vary significantly from period to period as a result of seasonality, volume and market conditions.
The Company currently expects capital expenditures to be approximately $65 million to $70 million in 2024, as compared to $61.8 million in 2023. The increase in capital expenditures relates to investments in the Company’s software portfolio. Cash and cash equivalents were $23.1 million at December 31, 2023, which included $4.7 million in the U.S. and $18.4 million at international locations.
The Company currently expects capital expenditures to be approximately $65 million to $70 million in 2025, as compared to $65.9 million in 2024. Capital expenditures primarily relate to investments in the Company’s software portfolio. Cash and cash equivalents were $57.3 million at December 31, 2024, which included $34.2 million in the U.S. and $23.1 million at international locations.
As a result, the estimated revenue and contract assets may be constrained until the uncertainty associated with the variable consideration is resolved, which generally occurs in less than one year.
As a result, the estimated revenue and contract assets may be constrained until the uncertainty associated with the variable consideration is resolved, which generally occurs in less than one year. Determining whether there will be a significant revenue reversal in the future and the determination of the amount of the constraint requires significant judgment.
The current availability under the Revolving Facility and net available liquidity as of December 31, 2023 is shown in the table below: December 31, 2023 Availability (in millions) Revolving Facility $ 300.0 Availability reduction from covenants — $ 300.0 Usage Borrowings under the Revolving Facility $ — Impact on availability related to outstanding letters of credit 1.0 $ 1.0 Current availability at December 31, 2023 $ 299.0 Cash and cash equivalents 23.1 Net Available Liquidity $ 322.1 The Company was in compliance with its debt covenants as of December 31, 2023, and expects to remain in compliance based on management’s estimates of operating and financial results for fiscal year 2024 and the foreseeable future.
Based on the Company’s results of operations for the year ended December 31, 2024 and existing debt, the Company would have had the ability to utilize the remaining $299.0 million of the Revolving Facility and not have been in violation of the terms of the agreement. 39 The current availability under the Revolving Facility and net available liquidity as of December 31, 2024 are shown in the table below: December 31, 2024 Availability (in millions) Revolving Facility $ 300.0 Availability reduction from covenants — $ 300.0 Usage Borrowings under the Revolving Facility — Impact on availability related to outstanding letters of credit 1.0 $ 1.0 Current availability $ 299.0 Cash and cash equivalents 57.3 Net Available Liquidity $ 356.3 The Company was in compliance with its debt covenants as of December 31, 2024, and expects to remain in compliance based on management’s estimates of operating and financial results for fiscal year 2025 and the foreseeable future.
Depending upon the size, timing and the terms of grants, share-based compensation expense may vary but will recur in future periods. 33 A reconciliation of net earnings to Adjusted EBITDA for the years ended December 31, 2023 and 2022 is presented in the following table: Year Ended December 31, 2023 2022 (in millions) Net earnings $ 82.2 $ 102.5 Restructuring, impairment and other charges, net 9.8 7.7 Share-based compensation expense 22.5 19.3 Loss on sale of businesses 6.1 0.7 Accelerated rent expense 3.7 0.8 Disposition-related expenses 0.3 0.1 Gain on investments in equity securities (7.0 ) (0.5 ) Non-income tax, net (0.9 ) (0.9 ) Gain on sale of long-lived assets (0.8 ) (0.2 ) COVID-19 related recoveries — (0.5 ) Depreciation and amortization 56.7 46.3 Interest expense, net 15.8 9.2 Investment and other income, net (0.8 ) (3.0 ) Income tax expense 19.8 36.8 Adjusted EBITDA $ 207.4 $ 218.3 Restructuring, impairment and other charges, net —The year ended December 31, 2023 included employee termination costs of $9.2 million.
The following table reconciles net earnings to Adjusted EBITDA for the years ended December 31, 2024 and 2023: Year Ended December 31, 2024 2023 (in millions) Net earnings $ 92.4 $ 82.2 Restructuring, impairment and other charges, net 6.6 9.8 Share-based compensation expense 25.2 22.5 Gain on sale of long-lived assets (9.8 ) (0.8 ) Non-income tax, net (1.1 ) (0.9 ) Gain on investments in equity securities (0.4 ) (7.0 ) (Gain) loss on sale of a business (0.4 ) 6.1 Accelerated rent expense — 3.7 Disposition-related expenses — 0.3 Depreciation and amortization 60.2 56.7 Interest expense, net 12.9 15.8 Investment and other income, net (1.0 ) (0.8 ) Income tax expense 32.7 19.8 Adjusted EBITDA $ 217.3 $ 207.4 Restructuring, impairment and other charges, net —The year ended December 31, 2024 included employee termination costs of $5.5 million.
The year ended December 31, 2022 included employee termination costs of $6.8 million. Refer to Note 6, Restructuring, Impairment and Other Charges, net , to the audited Consolidated Financial Statements for additional information. Share-based compensation expense —Included charges of $22.5 million and $19.3 million for the years ended December 31, 2023 and 2022, respectively.
The year ended December 31, 2023 included employee termination costs of $9.2 million. Refer to Note 6, Restructuring, Impairment and Other Charges, net , to the audited Consolidated Financial Statements for additional information.
Under the Step 0 test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.
For the annual goodwill impairment review, the Company has the option to perform a qualitative test (“Step 0”) or a quantitative test (“Step 1”). Under the Step 0 test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying value.
Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
OTHER INFORMATION Litigation and Contingent Liabilities For a discussion of certain litigation and contingent liabilities involving the Company, see Note 8, Commitments and Contingencies , to the audited Consolidated Financial Statements. 40 Critical Accounting Estimates The preparation of financial statements in conformity with GAAP requires the extensive use of management’s estimates and assumptions that affect the reported amounts of assets and liabilities as well as disclosures of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods.
Goodwill The Company performs its goodwill impairment tests annually as of October 31, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Contract liabilities consist of deferred revenue and progress billings, which are included in accrued liabilities on the audited Consolidated Balance Sheets. 41 Goodwill The Company performs its goodwill impairment tests annually as of October 31, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.
Income from operations of $103.9 million for the year ended December 31, 2023 decreased $27.5 million, or 20.9%, as compared to the year ended December 31, 2022, primarily due to lower sales volumes, an unfavorable sales mix, higher bad debt expense and higher accelerated rent expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes. 31 Operating margin decreased from 32.0% for the year ended December 31, 2022 to 29.2% for the year ended December 31, 2023, primarily due to an unfavorable sales mix, higher bad debt expense and higher accelerated rent expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Segment Adjusted EBITDA margin decreased from 34.5% for the year ended December 31, 2022 to 33.6% for the year ended December 31, 2023, primarily due to an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Income from operations of $44.7 million for the year ended December 31, 2023 increased $9.0 million, or 25.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, a favorable sales mix, cost control initiatives and lower restructuring, impairment and other charges, net, partially offset by a higher allocation of overhead costs.
Segment Adjusted EBITDA of $49.4 million for the year ended December 31, 2023 increased $7.6 million, or 18.2%, as compared to the year ended December 31, 2022, primarily due to higher sales volumes, a favorable sales mix and cost control initiatives, partially offset by a higher allocation of overhead costs.
As a percentage of tech-enabled services net sales, tech-enabled services cost of sales increased 0.9%, primarily driven by an unfavorable sales mix, partially offset by cost control initiatives and a lower allocation of technology-related expenses. 29 Software solutions cost of sales of $108.7 million for the year ended December 31, 2023 decreased $4.7 million, or 4.1%, as compared the year ended December 31, 2022.
Software solutions cost of sales of $108.7 million for the year ended December 31, 2023 decreased $4.7 million, or 4.1%, as compared the year ended December 31, 2022. Software solutions cost of sales decreased primarily due to cost control initiatives, partially offset by higher product development costs and a higher allocation of technology-related expenses.
In addition to the factors listed above, share-based compensation expense is excluded from Adjusted EBITDA. Although share-based compensation is a key incentive offered to certain employees, business performance is evaluated excluding share-based compensation expense.
In addition to the factors listed above, share-based compensation expense is excluded from Adjusted EBITDA. Although share-based compensation is a key incentive offered to certain of the Company’s employees, business performance is evaluated excluding share-based compensation expense. Depending upon the size, timing and the terms of grants, share-based compensation expense may vary but will recur in future periods.
Operating margin decreased from 22.0% for the year ended December 31, 2022 to 20.7% for the year ended December 31, 2023, primarily due to higher product development costs, higher depreciation and amortization expense and a higher allocation of overhead costs, partially offset by cost control initiatives and price increases.
Segment Adjusted EBITDA margin increased from 21.3% for the year ended December 31, 2022 to 24.3% for the year ended December 31, 2023, primarily due to price increases and cost control initiatives, partially offset by higher selling expense and a higher allocation of overhead costs.
The Company funds at least the minimum amount required for all funded plans using actuarial cost methods and assumptions acceptable under government regulations. The annual income and expense amounts relating to the pension plan are based on calculations which include various actuarial assumptions including mortality expectations, discount rates and expected long-term rates of return.
The annual income and expense amounts relating to the pension plan are based on calculations which include various actuarial assumptions including mortality expectations, discount rates and expected long-term rates of return.
Income from operations for the year ended December 31, 2023 decreased by $35.0 million, or 24.1%, to $110.0 million from $145.0 million for the year ended December 31, 2022.
Income from operations for the year ended December 31, 2024 increased by $26.6 million, or 24.2%, to $136.6 million from $110.0 million for the year ended December 31, 2023.
Accelerated rent expense— Included charges of $3.7 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively, related to the acceleration of rent expense associated with abandoned operating leases.
Refer to Note 3, Dispositions , to the audited Consolidated Financial Statements for further information. Accelerated rent expense— Included charges of $3.7 million for the year ended December 31, 2023 related to the acceleration of rent expense associated with abandoned operating leases.
Many aspects of the minimum tax directive will be effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring implemented legislation and effective dates in its jurisdictions of operations. The Company currently does not expect the Pillar Two framework to have a material impact on its consolidated financial statements.
Many aspects of the minimum tax directive became effective beginning in 2024, with certain additional impacts coming into effect beginning in 2025 and beyond. The Company is monitoring enacted legislation and effective dates in its jurisdictions of operations.
Debt The Company’s debt as of December 31, 2023 and 2022 consisted of the following (in millions): December 31, 2023 2022 Term Loan A Facility $ 125.0 $ 125.0 Borrowings under the Revolving Facility — 45.0 Unamortized debt issuance costs (0.5 ) (0.8 ) Total long-term debt $ 124.5 $ 169.2 The Company’s debt maturity and interest payments schedule as of December 31, 2023 is shown in the table below: Payments Due In Total 2024 2025 2026 2027 2028 2029 and thereafter (in millions) Term Loan A Facility (a) $ 125.0 $ — $ — $ 125.0 $ — $ — $ — Interest (b) 22.4 9.3 9.3 3.8 — — — Total as of December 31, 2023 $ 147.4 $ 9.3 $ 9.3 $ 128.8 $ — $ — $ — (a) Excludes unamortized debt issuance costs of $0.5 million, which do not represent contractual commitments with a fixed amount or maturity date.
Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies ; Note 5, Leases ; Note 6, Restructuring, Impairment and Other Charges, net ; Note 7, Retirement Plans ; Note 8, Commitments and Contingencies and Note 10, Debt to the audited Consolidated Financial Statements for additional information. 38 Debt The Company’s debt as of December 31, 2024 and 2023 consisted of the following (in millions): December 31, 2024 2023 Term Loan A Facility $ 125.0 $ 125.0 Unamortized debt issuance costs (0.3 ) (0.5 ) Total long-term debt $ 124.7 $ 124.5 The Company’s debt maturity and interest payments schedule as of December 31, 2024 is shown in the table below: Payments Due In Total 2025 2026 2027 2028 2029 2030 and thereafter (in millions) Term Loan A Facility (a) $ 125.0 $ — $ 125.0 $ — $ — $ — $ — Interest (b) 11.3 8.0 3.3 — — — — Total as of December 31, 2024 $ 136.3 $ 8.0 $ 128.3 $ — $ — $ — $ — (a) Excludes unamortized debt issuance costs of $0.3 million, which do not represent contractual commitments with a fixed amount or maturity date.
Net cash used in investing activities was $50.9 million for the year ended December 31, 2022, which consisted of $54.2 million of capital expenditures, mostly driven by investments in software development, partially offset by $3.3 million of proceeds from the sale of the EOL business. 36 Cash Flows Used In Financing Activities Net cash used in financing activities was $84.6 million for the year ended December 31, 2023.
Cash Flows Used In Investing Activities Net cash used in investing activities was $53.3 million for the year ended December 31, 2024, which primarily consisted of $65.9 million of capital expenditures, substantially all related to investments in software development, partially offset by $12.4 million of proceeds from the sale of land.
Loss on sale of businesses —Included a loss of $6.1 million for the year ended December 31, 2023 related to the disposition of the eBrevia business and a loss of $0.7 million for the year ended December 31, 2022 related to the disposition of the EOL business.
Other operating loss, net of $5.3 million for the year ended December 31, 2023 included a $6.1 million loss on the disposition of the eBrevia business.
The decrease in net cash provided by operating activities was primarily due to unfavorable changes to accounts payable, accounts receivable, a decrease in net earnings and an increase in interest paid, partially offset by lower incentive compensation and commissions payments.
The change in net cash provided by operating activities was primarily due to favorable changes to accrued liabilities and other, an increase in net earnings, and a favorable change to accounts payable, partially offset by an unfavorable change in prepaid expenses and other current assets.
The expected long-term rate of return on plan assets assumption that will be used to calculate net pension plan income for the year ending December 31, 2024 is 6.0%.
The expected long-term rate of return on plan assets assumption used to calculate net pension plan income for the year ending December 31, 2025 is 5.3% and reflects the effective discount rate required to settle the Plan’s benefit obligations.
Financial Review In the financial review that follows, the Company discusses its consolidated results of operations, financial condition, cash flows and certain other information. This discussion and analysis should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto.
This discussion and analysis should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto.
Gain on sale of long-lived assets —Included a gain of $0.8 million and $0.2 million for the years ended December 31, 2023 and 2022, respectively, from non-refundable deposits on the potential sale of land.
Share-based compensation expense —Included charges of $25.2 million and $22.5 million for the years ended December 31, 2024 and 2023, respectively. 35 Gain on sale of long-lived assets —Included a net gain of $9.8 million for the year ended December 31, 2024 related to the sale of land and a gain of $0.8 million for the year ended December 31, 2023 related to non-refundable fees on the sale of land.
During the year ended December 31, 2022, the Company received $345.5 million of proceeds from the Revolving Facility borrowings, offset by $300.5 million of payments on the Revolving Facility borrowings.
Cash Flows Used In Financing Activities Net cash used in financing activities was $82.1 million for the year ended December 31, 2024. During the year ended December 31, 2024, the Company received $159.5 million of proceeds from the Revolving Facility borrowings, offset by $159.5 million of payments on the Revolving Facility borrowings.
Net sales decreased primarily due to lower capital markets transactional volumes and a $5.7 million decrease from the disposition of the EOL and eBrevia businesses, partially offset by higher software solutions net sales driven by price increases and higher volumes and higher investment companies transactional volumes.
Net sales decreased primarily due to lower capital markets and investment companies compliance and transactional volumes, partially offset by higher Venue volumes, software price increases and higher Arc Suite volumes as a result of the Company’s TSR offering.
Income from operations decreased primarily due to lower sales volumes, an unfavorable sales mix, higher depreciation and amortization expense, a $6.1 million loss on the disposition of the eBrevia business and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
Segment Adjusted EBITDA of $119.4 million for the year ended December 31, 2023 decreased $22.0 million, or 15.6%, as compared to the year ended December 31, 2022, primarily due to lower sales volumes, an unfavorable sales mix and higher bad debt expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.
The Company’s common stock repurchases for the year ended December 31, 2022 totaled $164.7 million, which included $152.5 million of repurchases under the stock repurchase program and $12.2 million associated with vesting of the Company employees' equity awards.
The Company’s common stock repurchases for the year ended December 31, 2024 totaled $81.6 million, which included $58.5 million of repurchases under the stock repurchase program and $23.1 million associated with vesting of the Company’s equity awards. Net cash used in financing activities was $84.6 million for the year ended December 31, 2023.
The target asset allocation percentage for the pension plan was approximately 60% for fixed income investments and 40% for return seeking investments. The expected long-term rate of return on plan assets assumption used to calculate net pension plan income for the year ended December 31, 2023 was 5.8% for the Company’s pension plans.
The expected long-term rate of return on plan assets assumption used to calculate net pension plan income for the year ended December 31, 2024 was 6.0%. In accordance with the Company’s intent to settle the Plan, the current target asset allocation is 100% fixed income investments to reduce the risk of significant decreases in the funded status.
Dispositions The Company’s disposition of the eBrevia, Inc (“eBrevia”) business closed on December 1, 2023, and the Company received net cash proceeds of $0.5 million.
Dispositions The Company has disposed of the eBrevia business, which closed on December 1, 2023, resulting in net cash proceeds of $0.5 million and Edgar Online (“EOL”) business, which closed on November 9, 2022, resulting in net cash proceeds of $3.3 million.
Changes in assumptions concerning future financial results, including lower than expected growth or profitability, unfavorable regulatory developments or other underlying assumptions could have a significant impact on the fair value of the reporting units. 40 Other Long-Lived Assets The Company evaluates the recoverability of other long-lived assets, including software, operating lease right-of-use assets (“ROU”) and property, plant and equipment, whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable.
Other Long-Lived Assets The Company evaluates the recoverability of other long-lived assets, including software, net and operating lease right-of-use assets (“ROU”), whenever events or changes in circumstances indicate that the carrying value of an asset or asset group may not be recoverable. The Company assesses its asset groups for indicators of impairment on a recurring basis.
Income from operations of $6.8 million for the year ended December 31, 2023 decreased $6.7 million, or 49.6%, as compared to the year ended December 31, 2022, primarily due to an increase in depreciation and amortization expense, a $6.1 million loss on the disposition of the eBrevia business in the fourth quarter of 2023, higher selling expense, a higher allocation of overhead costs and higher restructuring, impairment and other charges, net, partially offset by price increases and cost control initiatives.
Segment Adjusted EBITDA of $45.2 million for the year ended December 31, 2023 increased $6.9 million, or 18.0%, as compared to the year ended December 31, 2022, primarily due to price increases and cost control initiatives, partially offset by higher selling expense and a higher allocation of overhead costs.
Determining whether there will be a significant revenue reversal in the future and the determination of the amount of the constraint requires significant judgment. 39 Generally, the contract assets balance is impacted by the recognition of additional revenue, amounts invoiced to customers and changes in the level of constraint applied to variable consideration.
Generally, the contract assets balance is impacted by the recognition of additional revenue, amounts invoiced to customers and changes in the level of constraint applied to variable consideration. Unbilled receivables are recorded when there is an unconditional right to payment and invoicing has not yet occurred.
Accounts receivable decreased operating cash flows by $2.3 million for the year ended December 31, 2023, as compared to increasing operating cash flows by $24.4 million for the year ended December 31, 2022, due to the timing of collections.
Prepaid expenses and other current assets decreased operating cash flows by $6.3 million for the year ended December 31, 2024, as compared to increasing operating cash flows by $1.7 million for the year ended December 31, 2023, primarily due to the timing of prefunding payroll payments with the Company’s payroll processor.
Unbilled receivables and contract assets are included in accounts receivable on the audited Consolidated Balance Sheets. Contract liabilities consist of deferred revenue and progress billings which are included in accrued liabilities on the audited Consolidated Balance Sheets.
Unbilled receivables and contract assets are included in receivables, less allowances for expected losses on the audited Consolidated Balance Sheets.
Non-GAAP Measures The Company believes that certain non-GAAP measures, such as non-GAAP adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and enhance the overall ability to assess the Company’s financial performance.
Corporate unallocated expenses of $43.5 million for the year ended December 31, 2023 increased $6.2 million as compared to the year ended December 31, 2022, primarily due to higher consulting expense, higher incentive compensation expense and higher healthcare expense, partially offset by cost control initiatives. 34 Non-GAAP Measures The Company believes that certain non-GAAP measures, such as non-GAAP consolidated adjusted EBITDA (“Adjusted EBITDA”), provide useful information about the Company’s operating results and enhance the overall ability to assess the Company’s financial performance.
Net sales increased primarily due to higher ArcRegulatory, ArcPro, and ArcDigital volumes and price increases.
Year Ended December 31, 2023 compared to the Year Ended December 31, 2022 Net sales of $106.8 million for the year ended December 31, 2023 increased $7.4 million, or 7.4%, as compared to the year ended December 31, 2022, primarily due to higher ArcRegulatory, ArcPro, and ArcDigital volumes and price increases.
These decreases in cash provided were partially offset by accrued liabilities and other, which decreased operating cash flows by $14.6 million for the year ended December 31, 2023, as compared to a decrease of $53.9 million for the year ended December 31, 2022, primarily due to lower incentive compensation payments in 2023 as a result of the Company’s 2022 operating results and lower commissions payments in 2023 as a result of lower sales volumes.
Accrued liabilities and other increased operating cash flows by $16.9 million for the year ended December 31, 2024, as compared to decreasing operating cash flows by $13.8 million for the year ended December 31, 2023, primarily due to higher expected incentive compensation payments, an increase in estimated commission payments as a result of higher 2024 software solutions net sales and lower consulting costs associated with Company process improvements.
Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies ; Note 5, Leases ; Note 6, Restructuring, Impairment and Other Charges, net ; Note 7, Retirement Plans ; Note 8, Commitments and Contingencies and Note 10, Debt to the audited Consolidated Financial Statements for additional information.
Other operating income, net of $10.3 million for the year ended December 31, 2024 included a net gain of $9.8 million on the sale of land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies , to the audited Consolidated Financial Statements for further information.
Investment Companies – Software Solutions Year Ended December 31, 2023 2022 $ Change % Change (in millions, except percentages) Net sales $ 106.8 $ 99.4 $ 7.4 7.4 % Income from operations 22.1 21.9 0.2 0.9 % Operating margin 20.7 % 22.0 % Items impacting comparability Restructuring, impairment and other charges, net 0.6 0.5 0.1 20.0 % Accelerated rent expense 0.2 — 0.2 nm Non-income tax, net (0.2 ) (0.2 ) — — nm – Not meaningful Net sales of $106.8 million for the year ended December 31, 2023 increased $7.4 million, or 7.4%, as compared to the year ended December 31, 2022.
Investment Companies – Software Solutions Year Ended December 31, 2024 vs. 2023 2023 vs. 2022 2024 2023 2022 $ Change % Change $ Change % Change (in millions, except percentages) Net sales $ 116.1 $ 106.8 $ 99.4 $ 9.3 8.7 % $ 7.4 7.4 % Segment Adjusted EBITDA 39.7 36.9 34.1 2.8 7.6 % 2.8 8.2 % Segment Adjusted EBITDA margin 34.2 % 34.6 % 34.3 % Year Ended December 31, 2024 compared to the Year Ended December 31, 2023 Net sales of $116.1 million for the year ended December 31, 2024 increased $9.3 million, or 8.7%, as compared to the year ended December 31, 2023, primarily due to the Company’s TSR offering, impacting ArcReporting and ArcDigital, as well as Arc Suite price increases, partially offset by lower ArcRegulatory volumes.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

9 edited+1 added−0 removed5 unchanged
Biggest changeA hypothetical 10% strengthening of the U.S. dollar relative to multiple currencies as of December 31, 2023 would have resulted in a decrease in total assets of approximately $4.0 million. 42 Interest Rate Risk The Company assesses market risk based on changes in interest rates utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change in interest rates.
Biggest changeInterest Rate Risk The Company assesses market risk based on changes in interest rates utilizing a sensitivity analysis that measures the potential loss in earnings, fair values and cash flows based on a hypothetical 10% change in interest rates.
The Company has operations internationally that are denominated in foreign currencies, primarily the Canadian dollar, Hong Kong dollar, and British Pound, exposing the Company to foreign currency exchange risk which may adversely impact financial results.
The Company has operations internationally that are denominated in foreign currencies, primarily the Canadian dollar, British Pound and Hong Kong dollar, exposing the Company to foreign currency exchange risk which may adversely impact financial results.
Credit Risk The Company is exposed to credit risk on accounts receivable balances. This risk is mitigated due to the Company’s large, diverse customer base, dispersed over various geographic regions and industrial sectors. No single customer comprised more than 10% of the Company’s net sales for the years ended December 31, 2023, 2022 and 2021.
Credit Risk The Company is exposed to credit risk on accounts receivable balances. This risk is mitigated due to the Company’s large, diverse customer base, dispersed over various geographic regions and industrial sectors. No single customer comprised more than 10% of the Company’s net sales for the years ended December 31, 2024, 2023 and 2022.
The Company maintains provisions for potential credit losses and such losses to date have normally been within the Company’s expectations. The Company evaluates the solvency of its customers on an ongoing basis to determine if additional allowances for expected losses needs to be recorded.
The Company maintains provisions for potential credit losses and such losses to date have normally been within the Company’s expectations. The Company evaluates the solvency of its customers on an ongoing basis to determine if additional allowances for expected losses should be recorded.
The Company was not a party to any derivative financial instrument as of December 31, 2023 and 2022. The Company discusses risk management in various places throughout this Annual Report, including discussions concerning liquidity and capital resources.
The Company was not a party to any derivative financial instrument as of December 31, 2024 and 2023. The Company discusses risk management in various places throughout this Annual Report, including discussions concerning liquidity and capital resources.
CHANGES IN AN D DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
CHANGES IN AN D DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 45
For the year ended December 31, 2023, a hypothetical 10% strengthening of the U.S. dollar relative to multiple currencies would have resulted in a decrease in the Company’s earnings before income taxes of approximately $0.6 million.
For the year ended December 31, 2024, a hypothetical 10% strengthening of the U.S. dollar relative to multiple currencies would have resulted in a decrease in the Company’s earnings before income taxes of approximately $1.0 million.
Using this sensitivity analysis for the year ended December 31, 2023, such changes would have a $2.2 million impact on interest expense and cash flows. A hypothetical 10% change in yield as of December 31, 2023 would change the fair value of the Term Loan A Facility by approximately $12.4 million, or 10.0%.
Using this sensitivity analysis for the year ended December 31, 2024, such changes would have a $1.0 million impact on interest expense and cash flows. A hypothetical 10% change in yield as of December 31, 2024 would change the fair value of the Term Loan A Facility by approximately $12.5 million, or 10.0%.
Foreign Exchange Risk While the substantial majority of the Company’s business is conducted within the U.S., approximately 12% of the Company’s net sales during the year ended December 31, 2023 were earned outside of the U.S.
Foreign Exchange Risk While the substantial majority of the Company’s business is conducted within the U.S., approximately 11% of the Company’s net sales during the year ended December 31, 2024 were earned outside of the U.S.
Added
A hypothetical 10% strengthening of the U.S. dollar relative to multiple currencies as of December 31, 2024 would have resulted in a decrease in total assets of approximately $3.4 million.

Other DFIN 10-K year-over-year comparisons