Dun & Bradstreet Holdings, Inc. (NYSE:DNB) Q2 2023 Earnings Call Transcript

Bryan Hipsher: Yes, sure. I think one part even — start with this, we continue to have a really strong gross retention. I think in North America, it was actually up about 50, 60 bps in the quarter. And so Anthony stocked for a long time, the first thing you do is close the back door. And that’s Vitality index reflection. That’s the investments we’ve been making, the continued engagement from our sales force. And so that piece, again, is really solid. And then when you think about the stop, stops, you’re absolutely right. Price previously was something that wasn’t a big impact. We’re now talking it approaching 2-plus percent and starting to accelerate as we stack these renewals on and growth on throughout the year. And then the remainder is really a mix of, I’d say, cross-sell and upsell with a little bit of new product.

But certainly, when we look at the Vitality Index, when we look at the migrations, these are all the components, both North America and International, that are contributing to the accelerated growth.

Operator: Your next question comes from Heather Balsky from Bank of America.

Heather Balsky: Back in. Sorry about that before. I was hoping you could talk about your North America Finance and Risk segment. Stripping out GSA, you called out strength in third-party risk and supply chain, but you also talked about some softness in public sector and small business solutions. Can you talk about where you’re seeing areas of strength and some of the softness as well and kind of your expectations for how the year is going to progress.

Anthony Jabbour: Sure, Heather. I’d say overall from the core businesses that we have in North America are performing well, right? And oftentimes, we try to be transparent with you as to what the underlying engine is producing. And so our core finance and our third-party risk and supply chain risk, our Sales and Marketing is growing about 5.5%. And so that’s where we’ve been very pleased with it. And similar to what I shared, I think it was on our Q4 earnings call about the two areas where it’s pulling back to growth, and it’s in public sector and it’s in the legacy credibility business. And in both of them, we are very focused on turning around those businesses. We’ve made, I’d say a lot of progress on the public sector side.

And we expect to see a turnaround overall in that business in the coming quarters. And on the credibility side, we’ve got a pretty aggressive transformation in place, really following the consent order that we inherited when we took over the company. We’ve got a pretty aggressive transformation underway that we’re looking to launch later this year, which is a very different approach to the space and we’re very excited about what it can do for us. So at a high level, that’s really what’s going on. We’re seeing a lot of great growth in the core parts of our business. Like I said, 90-plus percent of the business is growing in the range that we guided to midterm at our Investor Day 6 months ago. And as we focus on these two businesses, in addition to a lot of the other work we have going on with innovations, migrations and now the new generative AI initiatives on top of it, that’s really what our focus is here.

Heather Balsky: And then as a follow-up, with regards to the margin outlook, can you just help us think through potential cadence for the back half, 3Q versus 4Q?