Donnelley Financial Solutions (NYSE:DFIN) executives highlighted strong fourth-quarter and full-year 2025 performance, pointing to double-digit growth in software solutions, a pickup in capital markets transaction activity late in the year, and continued margin expansion driven by sales mix and cost controls.
Fourth-quarter results exceeded guidance on transactional strength
Management said fourth-quarter 2025 consolidated net sales rose 10.4% year over year to $172.5 million, exceeding the high end of the company’s guidance range. CFO Dave Gardella attributed the outperformance primarily to higher-than-expected capital markets transactional revenue and better-than-expected growth in software products, while noting that price was “not significant” and only a “modest driver.”
Free cash flow in the quarter was $47.9 million, and the company reported higher operating cash flow and free cash flow versus the prior-year quarter.
Full-year 2025: record margin and continued shift toward software
CEO Dan Leib said the company delivered solid full-year results despite economic volatility, including software solutions net sales growth of 8.7%, higher adjusted EBITDA, record adjusted EBITDA margin, and higher free cash flow compared to 2024. For the full year, consolidated adjusted EBITDA was $239.8 million, up $22.5 million, or 10.4%, with adjusted EBITDA margin of 31.3%, about 350 basis points higher than 2024. Leib emphasized that 2025’s margin exceeded a prior record of 29.7% even though overall and transactional revenues were “significantly lower” than in that earlier record year.
Leib acknowledged that 2025 marked the fourth consecutive year of decline in transactional revenue, but said the company’s execution and mix shift have made DFIN “structurally more profitable.” He also described 2025 as the end of “chapter two” of the company’s post-2020 transformation, focused on simplifying processes, improving tooling, and increasing product development velocity.
Software solutions net sales reached a record $358.4 million, and management said software represented about 47% of full-year net sales. Leib added that since the 2016 spinoff, annual software solutions net sales have increased by about $222 million, from $136 million to $358 million.
Segment and product drivers: Venue, ActiveDisclosure, Arc Suite, and new offerings
In the fourth quarter, software solutions net sales grew 11.4% year over year. Within capital markets software solutions, net sales were $60.0 million, up 20%, with both Venue and ActiveDisclosure growing about 20% year over year. Gardella said Venue’s fourth-quarter growth was supported by activity in the U.S. and Europe and benefited from several large projects that accounted for about half of Venue’s year-over-year sales growth. Management also pointed to traction from “new Venue,” launched in the third quarter.
For ActiveDisclosure, Gardella said fourth-quarter sales rose $3.8 million, or 20.2%, with total subscription revenue up about 12% on continued client count growth. He also noted progress migrating certain activities from traditional services to ActiveDisclosure, including IPO use cases, and said the platform saw higher usage for drafting and filing S-1 documents in the quarter.
In capital markets compliance and communications management, fourth-quarter net sales increased 15.6% to $61.6 million, driven by higher transactional revenue. Transactional revenue was $48.6 million, up about $11 million, or 29%, and exceeded the high end of expectations. Gardella said a U.S. government shutdown temporarily paused some transaction completions, but activity resumed quickly after the shutdown ended in mid-November, aided by backlog and increased market activity. He also said the quarter saw more regular-way IPOs raising over $100 million and more completed public company M&A deals in the U.S. versus the prior-year quarter, and that DFIN maintained high share in large IPO and M&A transactions.
In investment companies software solutions, fourth-quarter net sales were $30.9 million, down 2.2% year over year as Arc Suite faced difficult comparisons to a strong prior-year quarter that included Tailored Shareholder Report onboarding and a large contract renewal. Subscription revenue was flat year over year, while services revenue declined modestly. For the full year, Arc Suite delivered about $128 million in revenue and grew 10.6%, driven by subscription growth.
Leib said recurring compliance products ActiveDisclosure and Arc Suite grew about 13% in aggregate in 2025, with ActiveDisclosure up 17% for the year—its highest annual growth rate since 2021. He said Arc Suite grew about 11% for the year, aided in part by the Tailored Shareholder Reports regulation, with more modest growth in the second half as the company lapped regulatory and renewal benefits. Management reiterated expectations for Arc Suite growth to be more modest outside of periods of regulatory change.
DFIN also discussed new products introduced in 2025, including a new Venue Virtual Data Room, ArcFlex for alternative investments, and Active Intelligence, an AI capability within ActiveDisclosure. Management said the initial ArcFlex release has received a positive market response, with revenue expected to ramp starting in 2027, though executives said some benefit could arrive late in 2026.
Capital allocation, leverage, and share repurchases
Management emphasized aggressive share repurchases in 2025. In the fourth quarter, the company repurchased about 1.255 million shares for $60.7 million at an average price of $48.38. For the full year, DFIN repurchased about 3.563 million shares for $172.3 million at an average price of $48.36. Leib said that represented roughly 12% of outstanding shares from the beginning of the year. The company ended 2025 with $53.8 million remaining under its $150 million repurchase authorization.
At year-end, DFIN reported total debt of $171.3 million and non-GAAP net debt of $146.8 million, with $61 million outstanding under its revolver and $24.5 million of cash on hand. The non-GAAP net leverage ratio was 0.6x.
2026 priorities and first-quarter outlook
Looking ahead, Leib said 2026 marks the start of “chapter three,” focused on sustained growth. He said revenue from recurring and recurring offerings is approaching 80% of total revenue, with about 20% event-driven, and management expects the mix to continue shifting toward more predictable revenue. He added that the company is encouraged by early-year momentum in capital markets transactional activity, expects print and distribution to continue declining, and does not anticipate major SEC rule changes in 2026.
For the first quarter of 2026, DFIN guided to consolidated net sales of $200 million to $210 million and adjusted EBITDA margin of 33% to 35%. Gardella said the midpoint implies roughly 2% year-over-year growth, with declines in print and distribution more than offset by software sales growth. The company assumed first-quarter transactional sales of $45 million to $50 million, with management noting that market volatility could affect transaction timing between quarters. Capital spending for 2026 is expected to be $55 million to $60 million, approximately flat versus $57.1 million in 2025.
About Donnelley Financial Solutions (NYSE:DFIN)
Donnelley Financial Solutions (NYSE:DFIN) offers risk and compliance software and managed services designed to help corporations, financial institutions and legal firms meet regulatory and reporting requirements worldwide. Headquartered in Chicago, the company delivers a cloud-based platform for regulatory filings, content automation, virtual data rooms and board communications. Its solutions are tailored to support public companies with SEC, FCA and other global filing obligations, as well as banks, asset managers and credit unions seeking to streamline compliance workflows.
Among DFIN’s flagship products is ActiveDisclosure, a SaaS application that automates the creation, review and filing of disclosure documents.
