Highlights

  • Q3 2026 net sales rose 5.5% to US$185.0 million, with software solutions contributing 51.5% of the total.
  • Net Earnings reached US$21.3 million, or US$0.85 per diluted share, versus a US$40.9 million loss a year earlier.
  • Free Cash Flow climbed 44.9% to US$85.8 million in the quarter, while net Leverage stood at 0.4 times.
  • Management guides Q4 2026 net sales of US$175 million to US$180 million and adjusted EBITDA Margin of 26% to 27%.

Software-led growth and a return to quarterly profit marked the third-quarter 2026 report from Donnelley Financial Solutions, Inc. (NYSE:DFIN), the risk and compliance solutions provider that serves Capital Markets participants and Investment companies. Net sales for the quarter ended 30 September 2026 rose 5.5% to US$185.0 million from US$175.3 million, with organic growth of 5.6%.

GAAP net earnings were US$21.3 million, or US$0.85 per diluted share, compared with a net loss of US$40.9 million, or US$1.49 per share, in Q3 2025. Adjusted non-GAAP net earnings rose to US$26.8 million, or US$1.07 per diluted share, from US$23.7 million, or US$0.86.

Software Now Accounts for More Than Half of Revenue

Software solutions net sales increased 5.0% to US$95.2 million, representing 51.5% of total net sales, with the ActiveDisclosure platform growing about 24%. Tech-enabled services sales rose 5.4% to US$72.3 million, and print and distribution sales increased 9.4% to US$17.5 million.

Capital Markets drove the gains. Capital Markets Software Solutions sales grew 8.6% to US$64.1 million, and Capital Markets Compliance and Communications Management sales rose 8.2% to US$61.9 million. On the investment companies side, Software Solutions sales slipped 1.9% to US$31.1 million, while Compliance and Communications Management edged up 1.8% to US$27.9 million.

Management noted that capital markets deal Volume moderated in Q3 from first-half levels, particularly in priced IPOs, although overall activity still improved year over year.

Margins Widen and Cash Generation Accelerates

Adjusted EBITDA increased 9.9% to US$54.4 million, lifting the adjusted EBITDA margin to 29.4%, about 120 basis points higher than a year earlier. Operating Cash Flow rose 32.0% to US$98.2 million and free cash flow increased 44.9% to US$85.8 million after US$12.4 million of capital expenditures.

By segment, Capital Markets Compliance and Communications Management delivered adjusted EBITDA of US$25.2 million at a 40.7% margin, while Capital Markets Software Solutions contributed US$19.2 million at a 30.0% margin. The two Investment Companies segments added US$11.2 million and US$10.8 million, respectively.

For the nine months to 30 September 2026, net sales grew 3.4% to US$614.7 million and net earnings reached US$91.2 million, or US$3.58 per diluted share. During Q3, the company repurchased 146,672 shares for about US$6.9 million, leaving US$118.5 million under its US$150 million authorization. Total Debt was US$127.0 million at quarter-end against cash of US$27.2 million, giving net leverage of 0.4 times, and net available Liquidity was US$304.7 million.

Fourth-Quarter Guidance Points to Seasonal Moderation

For Q4 2026, management expects total net sales of US$175 million to US$180 million and an adjusted EBITDA margin of 26% to 27%, with capital markets transactional net sales of about US$50 million. No full-year 2026 guidance was issued. Chief Executive Daniel Leib said the company enters the fourth quarter with momentum as it marks its tenth anniversary as an independent company.