DFIN Q2 software sales up 7.7% YoY to $92.2mln.

• DFIN reports Q2 2025 record software sales of $92.2m, up 7.7% YoY. • Software solutions account for 42.3% of total sales, up from 35.3% in Q2 2024. • Net earnings of $36.1m, or $1.28 per diluted share. • Adjusted EBITDA of $76.3m and margin of 35.0%. • Operating cash flow increases by $12.2m, free cash flow by $14.9m from Q2 2024. • Gross leverage of 0.9x and net leverage of 0.7x as of June 30, 2025. • Board authorizes new $150m stock repurchase program.

Donnelley Financial Solutions (DFIN) reported its Q2 2025 financial results, highlighting record quarterly software solutions net sales of $92.2 million, up 7.7% year-over-year. Software solutions accounted for 42.3% of total net sales, representing a significant increase from 35.3% in Q2 2024. The company posted net earnings of $36.1 million, or $1.28 per diluted share, and Adjusted EBITDA of $76.3 million with a 35.0% margin. Operating cash flow increased by $12.2 million, and free cash flow rose by $14.9 million from the same period in 2024. DFIN also reported a gross leverage of 0.9x and net leverage of 0.7x as of June 30, 2025. The Board of Directors authorized a new $150 million stock repurchase program [1].

In its Q2 2025 earnings report, DFIN emphasized its strategic pivot toward software solutions, which are expected to account for 60% of total sales by 2028. The company's software solutions, including ActiveDisclosure and Arc Suite, demonstrated strong growth, contributing to the overall increase in software sales. Despite a 10.1% decrease in total net sales due to lower print and distribution volumes, DFIN's focus on software solutions and cost control initiatives helped maintain a healthy gross margin of 61.9% and an adjusted EBITDA margin of 33.9% [2].

DFIN's President and CEO, Daniel N. Leib, highlighted the success of the company's software-focused strategy, noting the resilience of the business model despite macroeconomic headwinds. Leib emphasized the company's commitment to investing in a more recurring sales mix, managing costs, and disciplined capital allocation to deliver long-term value.

For the third quarter of 2025, DFIN provided the following guidance: total net sales of $165-175 million, Adjusted EBITDA margin of 23-25%, and capital markets transactional net sales of $35 million to $40 million. The company's stock repurchase program, authorized by the Board of Directors, aims to enhance shareholder value by reducing the number of outstanding shares [3].

In conclusion, DFIN's Q2 2025 financial results demonstrate the company's commitment to transforming its business model through a strategic focus on software solutions. While the company faces near-term challenges, such as declining print and distribution volumes and revenue forecast revisions, its long-term growth prospects remain promising. Investors should closely monitor DFIN's progress in the coming quarters to assess the company's ability to balance short-term execution with long-term reinvention.

References:
[1] https://www.stocktitan.net/news/DFIN/dfin-reports-second-quarter-2025-ycsiohklgnxj.html
[2] https://www.ainvest.com/news/donnelley-financial-solutions-q2-earnings-outperformance-justify-long-term-bet-2507/
[3] https://www.tradingview.com/news/tradingview:ca9ea47b7adaf:0-dfin-reports-second-quarter-2025-results/