Dun & Bradstreet Holdings, Inc., a leading global provider of business decisioning data and analytics, today announced unaudited financial results for the fourth quarter and year ended December 31, 2020.
A reconciliation of U.S. generally accepted accounting principles (“GAAP”) to non-GAAP financial measures has been provided in this press release, including the accompanying tables. An explanation of these measures is also included below under the heading “Use of Non-GAAP Financial Measures.”
- Revenue for the fourth quarter of 2020 was $480.1 million, an increase of 11.0% as reported, and 10.5% on a constant currency basis compared to the fourth quarter of 2019; which includes the net impact of lower deferred revenue purchase accounting adjustments of $39.0 million.
- Net income for the fourth quarter of 2020 was $7.0 million, or diluted loss per share of $0.02, and adjusted net income of $118.1 million, or adjusted diluted earnings per share of $0.28.
- Adjusted EBITDA for the fourth quarter of 2020 was $208.9 million, up 32.2% compared to the fourth quarter of 2019, and adjusted EBITDA margin of 43.5%, an increase of 700 basis points; which includes the net impact of lower deferred revenue purchase accounting adjustments of $39.0 million.
“We are pleased with our solid performance in the fourth quarter, which was in line with our expectations, and contributed to the achievement of our full-year 2020 guidance,” said Anthony Jabbour, Dun & Bradstreet Chief Executive Officer. “2020 was an important year for us as we completed a successful IPO, signed a definitive agreement to acquire Bisnode and continued to execute on our growth and transformation strategies. These actions have laid the foundation for continued growth and we are excited about the opportunities to maximize shareholder value that lie ahead.”
- Revenue for the year ended December 31, 2020, was $1,738.1 million, an increase of 10.2% as reported, and 10.1% on a constant currency basis, compared to the year ended December 31, 2019, on a combined pro forma basis. This increase includes the net impact of lower deferred revenue purchase accounting adjustments of $133.8 million (inclusive of a pro forma deferred revenue adjustment) and international lag adjustment of $25.9 million which had a combined ten percentage point impact on the year over year growth.
- Net loss for the year ended December 31, 2020, was $175.6 million, or diluted loss per share of $0.48, and adjusted net income of $349.7 million, or adjusted diluted earnings per share of $0.95.
- Adjusted EBITDA for the year ended December 31, 2020, was $715.4 million, an increase of 29.5% compared to the year ended December 31, 2019, on a combined pro forma basis, and adjusted EBITDA margin of 41.2%, an increase of 670 basis points, compared to the year ended December 31, 2019, on a combined pro forma basis. This includes the net impact of lower deferred revenue purchase accounting adjustments of $133.8 million (inclusive of a pro forma deferred revenue adjustment) which had a 25 percentage point impact on the year over year growth and a five percentage point impact on the margin improvement.
Segment Results
North America
For the fourth quarter of 2020, North America revenue was $400.8 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019.
- Finance and Risk revenue for the fourth quarter of 2020 was $217.9 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019, primarily due to the shift of $4 million government contract from Q3, higher subscription-based revenues, partially offset by known, transient headwinds of $1 million from structural changes within our legacy Credibility solutions and $8 million in lower usage compared to an elevated Q4 2019 along with the impact of COVID-19.
- Sales and Marketing revenue for the fourth quarter of 2020 was $182.9 million, an increase of less than 1% both as reported and on a constant currency basis compared to the fourth quarter of 2019, primarily due to higher revenue of approximately $8 million from our D&B Direct solution, partially offset by lower royalty revenue of approximately $6 million from the Data.com legacy partnership.
North America adjusted EBITDA for the fourth quarter of 2020 was $198.3 million, a decrease of less than 1%, with an adjusted EBITDA margin of 49.5%, a decrease of 20 basis points both compared to the fourth quarter of 2019.
For the year ended December 31, 2020, North America revenue was $1,459.9 million a decrease of $4.8 million, or less than 1% both as reported and on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis.
- Finance & Risk revenue for the year ended December 31, 2020, was $811.1 million, an increase of $2.5 million, or less than 1% both as reported and on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis. The increase was primarily due to higher subscription-based revenue of approximately $30 million, partially offset by lower revenues of approximately $17 million of lower usage, primarily attributable to the impact of COVID-19 and lower revenue of approximately $11 million primarily due to structural changes we made within our legacy Credibility solutions and lower usage.
- Sales & Marketing revenue for the year ended December 31, 2020, was $648.8, a decrease of $7.3 million, or 1.1% as reported and 1.2% on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis. The decrease was primarily due to lower royalty revenue of approximately $20 million from Data.com legacy partnership along with lower usage revenue across our Sales & Marketing solutions partially due to the impact of COVID-19. The aforementioned decreases were partially offset by a net increase in revenue across our Sales & Marketing solutions of approximately $6 million largely attributable to our D&B Direct solutions. In addition, revenue increased by $6.5 million from the acquisition of Lattice, which was acquired at the beginning of the third quarter of 2019.
North America adjusted EBITDA for the year ended December 31, 2020, was $696.4 million, an increase of $6.5 million, or 1.0%, for the year ended December 31, 2020, compared to the year ended December 31, 2019, on a combined pro forma basis.
North America adjusted EBITDA margin of 47.7% increased 60 basis points for the year ended December 31, 2020, compared to the year ended December 31, 2019, on a combined pro forma basis.
The improvement in both adjusted EBITDA and adjusted EBITDA margin was primarily due to lower operating costs primarily resulting from ongoing cost management driven by lower net personnel expenses.
International
International revenue for the fourth quarter of 2020 was $79.9 million, an increase of $7.3 million or 9.9% as reported, and 7.6% on a constant currency basis compared to the fourth quarter of 2019.
- Finance and Risk revenue for the fourth quarter of 2020 was $63.9 million, an increase of $6.4 million or 11.0% as reported, and 8.5% on a constant currency basis compared to the fourth quarter of 2019, primarily due to higher revenue of approximately $4 million from WWN alliances due to higher cross border data sales and higher revenue from risk solutions in our U.K. market of approximately $1 million.
- Sales and Marketing revenue for the fourth quarter of 2020 was $16.0 million, an increase of $0.9 million or 5.7% as reported and 4.3% on a constant currency basis compared to the fourth quarter of 2019, primarily attributable to higher revenue from API solutions in our U.K. market of approximately $1 million.
International adjusted EBITDA for the fourth quarter of 2020 was $23.2 million, an increase of $0.9 million or 3.6%, with an adjusted EBITDA margin of 29.0%, a decrease of 170 basis points both compared to the fourth quarter of 2019.
For the year ended December 31, 2020, International revenue was $299.3 million, an increase of $6.6 million, or 2.2% as reported and 1.4% on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis.
- Finance & Risk revenue for the year ended December 31, 2020, was $243.6 million, an increase of $8.9 million, or 3.8% as reported and 2.9% on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis. The increase was driven primarily by higher revenue of approximately $10 million from WWN alliances due to higher cross border data sales, higher revenue of approximately $1 million from increased sales of risk solutions in the U.K., and $2 million from our Greater China market driven by solutions targeted at small businesses, partially offset by lower usage volume in our Asia markets of approximately $2 million primarily due to the impact of COVID-19 and transitory headwinds in the WWN and U.K. of $6 million.
- Sales & Marketing revenue for the year ended December 31, 2020, was $55.7 million, a decrease of $2.3 million, or 4.0% as reported and 4.6% on a constant currency basis compared to the year ended December 31, 2019, on a combined pro forma basis. The decrease in revenue was driven primarily by lower product royalties from our WWN alliances of approximately $1 million, and lower usage volume in our Asia market of approximately $1 million primarily due to the impact of COVID-19.
International adjusted EBITDA was $94.8 million, a decrease of $3.7 million, or 4.0%, for the year ended December 31, 2020, compared to the year ended December 31, 2019, on a combined pro forma basis.
International adjusted EBITDA margin of 31.7% decreased 190 basis points for the year ended December 31, 2020, compared to the year ended December 31, 2019, on a combined pro forma basis. The decrease in both adjusted EBITDA and adjusted EBITDA margin was primarily due to higher WWN alliances data expense.
Balance Sheet
As of December 31, 2020, we had cash and cash equivalents of $354.5 million and the total principal amount of debt of $3,381.0 million. We had the full capacity available on our $850 million revolving credit facility as of December 31, 2020.
On January 27, 2021, we refinanced our term loan and reduced the spread by 50 basis points, from 375 basis points to 325 basis points which will save us approximately $14 million of annual interest.
Business Outlook
Dun & Bradstreet’s full-year 2021 outlook is as follows:
- Adjusted Revenues are expected to be in the range of $2,145 million to $2,175 million.
- Adjusted EBITDA is expected to be in the range of $840 million to $855 million.
- Adjusted EPS is expected to be in the range of $1.02 to $1.06.
Dun & Bradstreet, a leading global provider of business decisioning data and analytics, enables companies around the world to improve their business performance. Dun & Bradstreet’s Data Cloud fuels solutions and delivers insights that empower customers to accelerate revenue, lower cost, mitigate risk, and transform their businesses.
Since 1841, companies of every size have relied on Dun & Bradstreet to help them manage risk and reveal the opportunity. For more information on Dun & Bradstreet, please visit www.dnb.com.