Donnelley Financial Solutions (DFIN) Q3 2026 earnings summary

Executive summary

• Q3 net sales rose 5.5% YoY to $185.0M; software sales grew 5.0% and accounted for 51.5% of sales.

• Adjusted EBITDA increased 9.9% to $54.4M, with margin expanding 120 bps to 29.4%.

• Net earnings were $21.3M, or $0.85 per diluted share, versus a $40.9M net loss, or a $1.49 diluted loss per share, in Q3 2025.

• Trailing four-quarter sales were $787.2M, adjusted EBITDA was $253.1M and free cash flow was $178.9M.

Financial highlights

• Q3 sales by offering: software $95.2M (+5.0%), tech-enabled services $72.3M (+5.4%) and print and distribution $17.5M (+9.4%).

• Q3 gross margin was 57.2% versus 54.4%; adjusted non-GAAP gross margin was 64.8% versus 62.7%.

• Q3 free cash flow was $85.8M versus $59.2M; nine-month free cash flow was $131.0M versus $59.9M.

• Nine-month net sales rose 3.4% to $614.7M, and adjusted EBITDA reached $207.3M versus $194.0M.

• Adjusted non-GAAP net earnings were $26.8M, or $1.07 per diluted share, versus $23.7M, or $0.86 per diluted share.

Outlook and guidance

• Q4 2026 net sales guidance is $175M–$180M; adjusted EBITDA margin guidance is 26%–27%.

• Q4 Capital Markets transactional net sales are estimated at $50M, with somewhat stronger IPO activity than Q3 and M&A activity broadly similar to Q3.

• FY 2026 capital expenditures are expected to be $55M–$60M, with substantially all recent investment directed to software development.

• 2023–2028 projections: low-single-digit total sales CAGR, mid-teens software sales CAGR, adjusted EBITDA margin above 30%, and more than $500M cumulative free cash flow.

• Priorities include growing software, migrating traditional services to SaaS and investing in new growth opportunities; ArcFlex adoption is expected to ramp in 2027.