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DFIN Donnelley Financial Solutions

Participants
Mike Zhao Head, Investor Relations
Dan Leib President and CEO
Dave Gardella Chief Financial Officer
Craig Clay President, Global Capital Markets
Eric Johnson President, Global Investment Companies
Charles Strauzer CJS Securities
Call transcript
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Operator

My name is Jane, and I will be your conference operator today. At this time, I would like to welcome everyone to the Donnelley Financial Solutions’ Third Quarter 2021 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. begin may you Zhao, your conference. Mike

Mike Zhao

a Good Donnelley at Financial you. This of we report, which morning, results. found of results section everyone. joining for morning of including earnings our the you can thank released printing Solutions’ Copies dfinsolutions.com. call. schedule historical And conference Thank supplement in third Investors be XXXX quarter website our

refer to we’ll call, to risks uncertainties. this that subject forward-looking During are and statements

in the information performance. XX-K, purposes earnings however, related included earnings reconciliations to for are, filings by refer financial over I information recent and an discuss of to to on concerning the and provided non-GAAP further For ongoing in release with the Form operations of Turner. the morning a Eric turn joined will complete details this appropriate the to Johnson; Dave They refer will and provides presentation Kami statements Further, Leib; non-GAAP believe and non-GAAP the discussion, please financial annual we financial financial cautionary report quarterly now XX-Q information. our our GAAP most Craig informational supplementary company’s on for release information. other you Floyd Form the and Gardella; for Dan. am Please Strimling; to Dan GAAP way I Clay; SEC. call company’s is evaluate We tables information useful with you and report only.

Dan Leib

our I’m from families with record staying we that your hope everyone. pleased you, are results. quarter Thank financial DFIN, Mike. healthy. and you morning, all third of at And us Good safe and very

milestones on to I’d details like highlight quarter, two we important Before I go into reached. the

leading their I a Together, DFIN’s enabled anniversary these and and software celebrated a as years. dedication provider five of printer technology DFIN we want solutions. hard our for and team DFIN’s financial company. leading financial transformation employees October, in thank from over of work course the innovative regulatory First, the entire to to standalone compliance a fifth are

and end the a regulatory and spans technology both enabled And solutions. took portfolio of approximately years XX% spin for compliance had reduce consistent total margin sales low a significantly time and strategically and we of our print revenue, and such distribution our and clients and with that technology an at print and to scaled and we actions a software our the sales same distribution unmatched comprehensive services, print by initiatives production Five platform. for our we of markets. off, ecosystem margin guided capabilities existing A software as launch years, five an transformation key our products, last us position upgrade significant DFIN the enabled was transformation the which to business software of executed of vision, acceleration their the new and Over development, solutions long-term as of profitable component which clients to well growth. to new reporting, this example compliance ActiveDisclosure created our assist other purpose help a tool Through workloads. their good manage needs. this earlier products, our enabled time, with we services, combined cloud-based evolving transactional A mix. expertise offer launched we is proven we also year ActiveDisclosure compliance transactional the clients ago new regulatory, software for when platform, have downsize sales built accounted and At our scale SEC we with to profile compliance offerings

XXXX. established marketing capabilities, efforts last managed our aimed of and our our the years compared XX.X% five accelerate is course we focused consecutive product all the quarters EBITDA pipeline, a sales improve of for partnerships, four to to margin margin and sales as with expanded XX.X%, the software third at of quarter of We’ve solutions end growth, and adjusted the expand offerings. our trailing the margin third-party nine driving of our Over to EBITDA quarter software at year-over-year adoption the last

corporate business very our from current the offering, transactions well. benefits our forward, mix margin and has Looking while strong positions changed us favorably

to solutions ability significant our the exceeded deliver in our proof the shareholders. quarter milestone, to the and the strategic from company’s are and print pleased clients, delivering distribution. returns remain from second that first evolution targeting the for our within which strategic net strategy During business year our importantly, trailing to-date, confident our and we achieve of a net solutions profile the point such turn of in time This the software sales mix. in from strategic both we major we to history, to on XXXX, more is basis, our positions a four-quarter a and quarter achieved us with was by specifically sales achievement another in a strong transformation to financial Not XX results continue the in XX% only the sales of strategy, XX software solutions resulting excellent

quarter, quarter from third sales XX.X% The third the sales, the third print accelerated into the Despite year’s and strong the grew history. XX.X% sales QX, sales boosting and throughout was of total Now quarter compliance transactional quarter. quarter which down results, in decline in last marking company’s the our highest across offerings. distribution the in coming turning expected pace related transactional to activity

XX.X% year-over-year quarter grew with XX%. net and and as services distribution, XX.X% sales the grew increased software in solution tech-enabled sales Excluding print

solutions of months recurring grown $XX.X The launches, that nine in along sales Management, compliance marking the our offering, product and trend continuation totaled Year-to-date, growth ActiveDisclosure strong first a component of of strong DFIN. all recent yet very growth ArcPro, sales in quarter software sales in the XX% to the first ArcDigital XX% particularly our and solution another software all-time year. contributing of quarterly of XX% Total began software our solution XXXX. sales Software is have for client feedback adoption Compliance market growth with the positive We’ve sales. a received versus this million, our record

gains. by M&A deal achieved all-time market Venue de-SPAC transactions, grew year-over-year, including we believe another share product well as high again once an for software largely in and sales transactional our addition, as what to increase quarterly activity, In driven be XX%

higher markets earlier, record strong of impact mentioned with from The transactional accelerated low margin solutions growth share, the are quarter. work, services increasing quarter capital XXXX. of resulted the along third reductions of strength I with in permanent quarterly transactional and tech-enabled the in growth, print third in market margin significant cost sales the sales As robust we pruning XX% software net with our sales achieved Coupled the earnings. proactive activity of

from of was quarter adjusted third Third non-GAAP EBITDA X,XXX points XX% over last third quarter and from the XXXX up adjusted margin. million, an basis EBITDA increase margin EBITDA quarter year’s $XX.X XX.X%, was adjusted

expense times but Senior topic. structure only earlier, quarter cash the times, savings. We non-GAAP Subsequent by in As I the improvement XXXX. margin the X.X our providing a $XXX.X cash financial lower X.XX% flexibility, previously it noted leverage quarter transaction was free improves debt more we of This end, in million year’s of third on EBITDA resulting At the lower than quarter is quarter trailing net $XX.X our interest this of of quarter not provide third our resulting completed currently redemption Dave by the from record an Notes. year. third our million, non-GAAP than flow capital X.X of lower last the to quarter in net announced four-quarter last our additional will XX.X%. will adjusted of million, of achieve end $XXX.X detail

and financial Before like on results more provide a our closing the would quarter. call share quarter detail the few I to third I remarks, fourth for our over turn to Dave to outlook

Dave Gardella

Thank you, Dan, and morning, good everyone.

performance, delayed-draw financial we Dan proceeds like loan completed X.XX% call of our our the combination XXth, at from discuss the to of of just remaining finance the the I the approximately quarter million update notes with hand. We the redemption third Senior balance A $XXX provide and price on the redemption redemption a date, $XXX on a redemption an I’d outstanding $XXX. facility October notes On million Before Notes. first cash mentioned, term of of item

the our loan portion not purposes third classified For or as long-term balance of short-term was $XX the repayment of approximately the of portion reporting financed million the sheet, debt. by quarter

current expense million will Following our decrease at by rates. annual this interest interest transaction, approximately $XX

interest past, our required contributions this would I DFIN the movements, related As net in allow level to eliminating while liability contributions. debt liability potentially noted related a of environment altogether reduce our annuitize and rate rate to structure the rising plans, to our and subjects decreasing benefit the us the future net plans, pension the pension

very of flow. operating posted performance, a adjusted continuing transactional in quarter consolidated quarterly drive by million, after markets XX.X% of were our growth third all $XX.X and solution of to first sales, quarter capital an half third active $XXX.X EBITDA, extended and position a environment strong our year, the efficiencies. another cash quarter strong results, On and in or XXXX. free highlighted net the quarter Now of increase of basis, XX.X% we our non-GAAP margin record high while XXXX a excellent software from We growth million sales XX.X% delivered the sales EBITDA financial adjusted turning third for to

XXXX quarter in Third quarter third sales net the represented company’s history. the highest

third environment. XX.X%, the million Venue $XX.X driven activity primarily Data Virtual net a robust solutions Software or increased to acceleration by M&A Room of quarter by in due sales in an

by strong for commercial and margin client result adoption have partially we services print the or million decline $XX.X reduction Printed activity where performance. printed decreased as less continued XX%, primarily to companies was transactional XX.X%, contributed due solid printing, increase offset within certain $XX.X million in transactional sales increased strong growth addition, capital demand due revenue Suite a increased or In to driven ActiveDisclosure, within higher subscription capital related as distribution proactively investment and contracts. and well This activities. sales exited compliance of regulatory as markets. materials by to and Arc markets by Tech-enabled primarily net within low

favorable quarter was the the points cost third with quarter higher million, higher than Third expense and $XX.X driven third of combined of of business volume higher software tech-enabled X,XXX non-GAAP the lower margin primarily initiatives. sales, million XXXX, a basis print featuring than margin was quarter services XX.X%, in by XXXX. impact $XX.X growth overall solution approximately control mix the SG&A Non-GAAP ongoing and in gross quarter

is of net offset of partially points increase due increase and in commissions non-GAAP of the XXX was from higher on of SG&A As mix SG&A XX.X%, cost non-GAAP an impact the in a business sales, primarily higher sales quarter by incentive The approximately percentage ongoing the changes initiatives. sales, to third control XXXX. compensation, basis

EBITDA Our quarter the an of quarter adjusted of non-GAAP third was from XX.X% $XX.X third increase million or million, XXXX. $XX.X

offset increase by X,XXX again, and XXXX, of partially and basis sales primarily Our margin driven record an EBITDA of third a quarter high third mix higher points reached a quarter cost of by the non-GAAP favorable compensation adjusted approximately expenses. incentive control XX.X%, ongoing selling from initiatives,

increased featuring now Venue to EBITDA quarter XXXX. from higher record The market adjusted high to favorable approximately XXXX, and results, aggregate. activity what third increased sales were our the segment in our of quarter and the XX was activity, IPO an due increase XXX approximately third of basis The was for continued of quarter growth was basis as de-SPAC net subscriptions. largely adjusted operating due in-market approximately margin and non-GAAP the of third resulted decrease by from a growth were growth sales gains. margin Recurring third our products partially $XX.X due robust sales XX.X%, of primarily the XXXX. activity, quarter, million, Net in selling driven in momentum by mix, an increase a as sales segment was in primarily acceleration sales decrease in This to of well market in of XX.X%, Management offset transactions. impact from EBITDA partially adjusted that the primarily Capital driven Communications activity, the increase Non-GAAP XX to ActiveDisclosure XX% XX.X% M&A as the XX% volume the points offset XXXX, quarter quarter and the due EBITDA compensation of was activity, favorable began the also second including higher third transactional third Compliance well to quarter a Turning capital trend segment posting expenses, XXXX the to in ActiveDisclosure IPOs solutions sales in software $XXX.X for segment quarter. as modestly of the market as capital by by third Markets solid approximately of expense. adjusted new non-GAAP increased had believe Virtual that of strong an segment Venue XXXX. of Data boosted from a points share quarter selling quarter as and After Room we of in the XX.X% growth sharply fell a this well quarter this sales, first during level SPAC reach efficiencies. third mix, File execution million, & formations EBITDA our in SPAC rebounded M&A be Non-GAAP unprecedented incentive margin an and year-over-year from in compliance margin year, the to increased strong increase primarily increase the an

debuts importantly, More transactions companies the level this saw third a acquisition created SPAC targets. for accelerated. in the that pipeline public quarter XXX the looking We than public de-SPAC via evidence more of are have completed actively heightened of mergers of new pace activity as

times de-SPAC to registration on XX as positions future Our in value strong of activity, capture portion market a which position business significant represents filing of the average, initial transaction. transactional the well

recurring a company for support clients’ $XX.X compliance these segment primarily provide investment from companies software sales third an momentum quarter, quarter continues from which a Total solution in as they investment continue Additionally, Net million, XXXX, of away our requirements. the in subscriptions preferred to to XX.X% alternative in the the of as stand digital to Compliance to our were transactions software offering Management pipeline ongoing for increase out due transition print. ArcDigital,

segment related addition, print-related segment. absorbed by in $XX.X growth on majority Communications compensation remain quarter XX.X%, decrease increase clients to were to level by savings change In shared an lower higher contracts of & for ArcPro needs EBITDA in within from which Compliance reduction in fueled non-GAAP decrease margin The to in XXXX, investment printing network for this investment XX% new XXX reduction segment consolidation a or segment, of overhead overhead activity from in sales third primarily million a exited. of structure in XXXX. activity initiatives. commercial results growth than million, third-party adjusted need by from a segment print due to growth companies Non-GAAP quarter and the sales print EBITDA vendor the profit cost impact in of organic a non-GAAP incentive we impact our segment XXXX, of regulatory third of and margin track Net offset control and our margin X.X%, $XX.X due the the ongoing a due was margin allow margin expense, quarter partially such of year as platform the in to XXXX. also have the approximately decrease will primarily basis us adjusted adjusted cost the increase sales our Non-GAAP XX.X% end result gross the was affecting for The of the the of our variablize existing costs, production. three of EBITDA being our proactively XXX for to in other higher of subscription EBITDA due third the adjusted segments, approximately increase XX% companies Management points primarily reduced basis expense which of allocations of overall a a to this was to cost related of to and our expense print and are lower as operating to We now resources. shift allocation in was points

continue the to higher requirements. quick will platform to We digital-only operate turn meet for value demand own our

adjusted quarter of in the continue to approximately million to reductions majority aggregate $XX To $XXX regulatory the million, a EBITDA sales change, corporate impact was record, expenses impacting from million, the The continue XXXX. increase in in cash occur incentive expected last $XXX of are the quarter line and EBITDA, the respectively, primarily an million, unallocated an Regarding unallocated partially net was due to The the guidance. of $X representing be were and XXXX. $XXX with in the reduce and Non-GAAP lower from improvement of XXXX respectively, improvement million quarterly free We of compensation adjusted year. $XXX million $X a to $X the $XXX.X impacts expenditures. partially reduction the to decrease cost overall sales and capital with third corporate change by by that the million reduction net $X.X net net we $XX of in regulatory third for to Free total debt in million to and $X.X of million, decrease to flow-through of now approximately offset adjusted print expect ended last non-GAAP related $XX.X by non-GAAP remaining We cash in million will million of was driven performance. vast EBITDA increased be third higher offset a million flow third-party of and to the due previous to clear, debt. with million with sales approximately flow in $XXX.X year. million primarily expenses, strong demand quarter EBITDA print-related expect segment, quarter

net a available million of was of which the on of of and comprised third on million, at $XXX.X was liquidity hand. Our the cash end $XXX.X $XXX.X revolver million availability quarter

XXXX, ratio year. of million leverage $X.X quarter per common times X.X was shares the stock The down price approximately non-GAAP As XXX,XXX net last our X.X an for times, the third $XX.XX from September company of quarter at during XX, of repurchased share. average of

our authorization. we $XX.X had remaining repurchase approximately million September of $XX XXth, on As million stock

to markets transactional in throughout capital activity quarter, As the fourth remained October. it robust relates

partially capital albeit comps, up of range the strength environment, as $XXX midpoint fourth transactional well also X% the products, continued our much growth EBITDA to software markets that, near-term perspective solution transactional sales, This Dan. growth back we a quarter and quarter low-to-mid We $XX the the XXth in software offset by in against With million improvement. on year’s the as profitability quarter, as consolidated XX% expect margin print adjusted reduction to in was representing quarter, to range are the consecutive for fourth remain fourth the non-GAAP the due it our and expecting activity. the distribution in a sales at be pass on sales. our margin of or markets bullish robust. now million, year-over-year the planned we I’ll as million in last ongoing outlook the $XXX as From outlook transactional will approximately be for capital Regarding tougher year-over-year well in activity net the to

Dan Leib

Thanks, Dave.

through Over the printer course and the associates, in solutions. financial DFIN our and transforming significant how provider leading to of in our of and years change ahead and and more to we become and us represents work dedication to point, we is made reach fundamental software The financial, employees best company. behind regulatory increasing clients, shareholders. profitable we deliver process, value a that technology-enabled what’s innovative opportunity through operate business news of the from have and a last five focused, this work a to hard predictable progress exceeds It our compliance the

of and phase offerings, we of efficiency. focused and service next innovation, speed adoption and consumption accelerating the software remain our For on increasing with operating and our software journey,

Our transformation. to a latest the pace results are and of scale testament our

cash sales flow. adjusted in quarterly adjusted margin sales despite and and quarters print growth, free reductions year-over-year achieved have five record EBITDA, We regulatory-driven significant consecutive of EBITDA

our XX financial targets ahead and on are long-term associated profile. in tracking the are XX including achieve our the way of to strategy, we We

on our strategic a up, me partnerships. wrap words recent few I Before several say on announcements let

will doing connected the and partner which on leader third a productivity us marketplace, regulatory allow an supplement and Corporation, provider, creating can host in In importance introducing to while engage in in enhance clients, the capabilities. our whose growth. These are earlier early the a and the portfolio the go-to-market them partners compliance readiness contribute to own in we recurring the days level automation so ecosystem, regard, to and many SaaS IPO earlier relationships clients with our ways products we cycle. global revenue recognize to in In with and the can of of benefit operate pre-IPO Tipalti. convenience payables our service, software and with announced of and partner purchase of of product activities, partnerships or that extend we dynamic As quarter, and increasingly governance Diligent our offerings we them in solutions

benefiting are focused we we XX keenly we In on are from in I creating about a executing results ecosystem in and look and partner our days the the mentioned, partnerships. to and As year-to-date against very early quarter of third remain strong excited strategy. those forward XX closing,

DFIN ensure to open been products, like and we I’d Stay employees to thank for Before develop clients the disruption. safe. world operations highest who the around have receive healthy tirelessly Q&A, without service new our it to the quality and maintain up working our continue

questions. Now, with that, Operator, for we’re ready

Operator

[Operator from comes Davidson. D.A. first the Heckmann Instructions] question of Your line of Peter

Your line is open.

Unidentified Analyst

on This Pete. is [ph] Dan. for Hi, John

de-SPAC quick on year? ask a wanted revenue question, last more they and the activity to can guys little from to Just a compare you provide how detail

Dan Leib

Yeah. out part separately transactional don’t break M&A, we just our John, it’s that obviously, the overall of -- category. and as bigger so

on there. transactional the comparison markets, show I of the the which capital is detailed think more breakout looked you of posted revenue Investor site, within a we if do

Unidentified Analyst

it. just thoughts provide moving topline on can parts, And growth XXXX? Got any just number it. then Got of you the in given preliminary guys

Dan Leib

Yeah.

the the and the so early quarter and the forward give we’ve part We what for least call that on yet historically guidance talking will in about at haven’t to cycle we year done February. finished planning XXXX, on of look fourth

Unidentified Analyst

it. it. Got Okay. Got

in update Room just one one, competitive the any last Virtual dynamics on squeezing in space? Data Just

Dan Leib

If question, the of ramping for year increasing successive in our with year-to-date, up going some our very quarter Thanks visibility up XX%. quarter last performance. feel it’s competitors. year-to-date We that second and up this look had sales -- the been we’ve But are first back the and all. to Yeah. our There’s increases XX% of to we the performance at just we into essentially have prepared said we’ve of as comments. in good

with into that is security the recognized have of It great don’t but and like that’s is resonates product feel participants, being have the the in components pretty very We marketplace. visibility we helpful clients, connection strong. really all fantastic, our eBrevia good feel it

Unidentified Analyst

Thanks it. Got so much.

Dan Leib

you. Thank

Operator

CJS next the question Your Instructions] comes [Operator of Securities. of line from Strauzer Charles

is open. line Your

Charles Strauzer

morning. Good

Dan Leib

Charles. morning, Good

Charles Strauzer

with very transactional, obviously, sounds and the charts now mentioned, it quarter, markets QX kind Talk off a it higher looking trends given targets? number? a there conservative, of strong could de-SPACking guidance, for be just we’ve maybe bit So, the really that just about and like got ongoing IPO your was a and little you to seeing in the QX we’re market, here like, more M&A, capital guidance a plus at looks companies XXX the your cause right what tad looking the

Dan Leib

Charlie. comments and add Clay the will guidance some on then, for have here. Yeah. color QX some I Great, Craig

So as we activity robust we fact continue in our October. -- did said through prepared see in the remarks,

little but at the start the were outperform August, chance in doing you made second If bit. there? certainly these I part quarter of visibility, amount the October, to that that in Are seen right, of extent to comments a you the the at have about the guidance, activity that you’re throughout levels that remains limited transactions, a the the we timing we’re hedging call, would we that, have we still saw that we’ve to similar we up given against visibility, where and ramped say we the obviously, when QX the It quarter. least what back remains rewind and July,

Craig Clay

to that. that, the looks think build be I and market, same of look more David, October So, to to of we’re regardless to on going outperform the

combinations. mentioned are at remarks numbers pending SPACs are their in SPACs the and SPACs XXX XXX for that searching in their XXX business over that You the registration over look just There’s de-SPAC.

increasing and So caution, off pressure. pre- still But aftermarket and creating an one perfectly certainly QX aligns QX. that’s of it the backwards our There’s far stories QX. recent for the of value could Dan described. is is an post-acquisition reasons performance downward increase that here SPACs, real ecosystem, the lackluster over with cause IPO, companies position SPAC saw this public It’s of both

with the services. using disclosure. pipe. for We’re They’re working They’re Venue groups active supporting using using target. and our managed as SPACs Venue the software They’re

to supporting using de-SPAC reporting. Looking new recurring ActiveDisclosure revenue compliance powered for contracted someone much for is their we company artificial complicated a have Dan DFIN by and the formal with then that intelligence, as deal said, acquire, public then more new

we’re ready So, wants for what QX. be market excited we’ve to market and the built, we’re going any for

Charles Strauzer

That’s helpful. what you’re my is a uptake IPO next segue the the de-SPACking high you really think actually handled that it for, you’ve great SPACs those uptake process very are And kind from is the rates you into with of do seeing and regarding through de-SPAC companies? from now,

Craig Clay

question. find using you do your they a are that uptake, target of, forward? say When or clarification on they us going Just expand maybe

Charles Strauzer

Yeah.

de-SPACking, for handling as you use are the -- if of actually so to the now companies IPO you continuing provider, saying, and that that the percentage speak? you to SPAC the Just used de-SPAC are did

Craig Clay

Got Correct. it. Yes.

SPAC a are typically is much SPAC. we the handling The So document. smaller

Charles Strauzer

Right.

Craig Clay

real a working a weeks, group, complicated very we’re extremely opportunity, leading What our follow months did because and be often is changing they’re to their us. to the strong. cut happening the to team become right? on not years that’s lot de-SPAC extremely deals and from this that, upgrading they’re we’re finding that have those advantageous been deal is much in often -- the is and It times and which then more share And do finding complicated deals acquisition, SPAC, share we we also a de-SPAC, can

up that we’re SPAC So picking we or de-SPAC did not do. initially

Charles Strauzer

you. That’s And… Great. helpful. very Thank

Dan Leib

I’d thing And Yeah. add… only the

Charles Strauzer

Okay.

Dan Leib

Yeah.

Sorry.

that market, area. there’s the ActiveDisclosure compliance I’d and to and look the ActiveDisclosure very thing high add when new into Craig’s The at the to Sorry. that a also point, rate cetera, the de-SPACs, rate, attach is, -- only attach et high the we IPO and

through so, And process take we’re them the that to and them with client serving continue ActiveDisclosure. on able the

Charles Strauzer

margin the excellent. of look to more kind better That’s modeling QX obviously, EBITDA information incremental core a the about to as your us Great. call give about QX I here segment you in the Thank again, guide Thank think saw well? you during should of haven’t talk to from thank about a tables, you out more benefit kind but that think we recurring sense kind for can you, through bit in of little well transactional, very how really the had by much. those as the and chance a maybe you how yet, putting tried and of revenue it,

Dan Leib

it’s incremental not I you about and Charlie think Yeah. just clarify, driving to it. the that’s revenue, think when all transactional

growth seen you when on the incremental excellent look solutions, at the we think get we’ve I there. margin software

when think I perfect platform as between in of the it’s look storm just margin. software kind higher and transactional, as the reduction at, print, build print increased to increased the mix well print the revenue, overall the and less you

now that, of to of our of Communications things on the software just the costs fully-loaded comment those Compliance an too in want to One basis, we from I pushed some from comments the & of a prepared margin look remarks allocation shared the perspective, software get GIC you some year-over-year at, shared is, segments. some decline if given the Management, in cost, segments made the a

the And technology ahead of extra when look of the side, incremental overall, costs margin, with by happy the their lot total basis. we’ll based at some of look on and get on an we’re margins think, that depend. you impacting company but, that I the on amount in very those absorbing incentive will on higher investments shared compensation when segment, margins think addition performance then, a I to you making the what they’re negatively,

bit line the Capital reporting on ends I be the than segments, the going activity transactional then that driven Markets segment, think, QX Communications of in in and software we’re you lot Compliance at that we & think, through. little a maybe what when will Management look better of just here a amount probably, by up

Charles Strauzer

Great. helpful. very That’s you, guys. Thank

Dan Leib

Yeah. Thanks, Charlie.

Craig Clay

you. Thank

Dan Leib

Thank Okay. will the see With we QX February you no for more questions, in you. call.

Operator

today’s concludes call. This

You may now disconnect.