Donnelley Financial Solutions, Inc. (NYSE:DFIN) Q1 2024 Earnings Call Transcript

Dave Gardella: Yes, Raj, I appreciate the follow-up there. And I’d point to a couple of things. One, I think from the 5% perspective is intended to address the secular decline that we just see print becoming smaller and smaller over time. To your point, we’ve done a really nice job managing not only the cost side of the print, but the overall volume. As we talked about in 2021 with Rule 30e-3 and 498A, saw print volume drop right as the distribution default change from print to electronic. At the same time, we use that as a catalyst to exit some of the lower margin print work and variablize the cost structure, et cetera. And to my earlier point, that’s proved to be a good strategy for us. Gross margin in print has gone from 20% to over 40%.

And so what I would say is we’re continuing to take a look at the economics around certain print jobs, the economics around certain clients, and whether or not that print makes sense for us. I think as we saw in the first quarter here, not much revenue change, but pretty significant change in profit and really driven by that mix, right? More software, less print, driving profit dollars, driving margin. We will continue to see that in Q2 because that same dynamic is playing out. I think as we get into the back half of the year, that certainly starts to temper, but we’re going to continue to keep an eye on the overall mix, the overall economics that the component pieces of our offering drives. And again, the aggregate customer economics as well.

Great.

Operator: That concludes our Q &A session. I will now turn the conference back to Dan Leib for closing remarks.

Dan Leib: Okay. Thank you. And thank you everyone for joining. We look forward to speaking with you both on our call in a few months and in the interim. Thanks again.

Operator: Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.