The latter has slightly increased its position as per the latest filing. The two largest owners are Cannae Holdings ( CNNE) with 18.1% of shares and Thomas H. Five different investors hold 40.5% of the stock outstanding. The ownership structure of Dun & Bradstreet is concentrated. In total, the company spent over a billion dollars for acquisitions during one year, and it’s yet difficult to assess if they have created value for the shareholders. In 2021 the company also acquired two other companies, Eyeota and NetWise, for $242 million. With the acquisition Dun & Bradstreet gained a meaningful position in 19 European countries. At the time the revenues of Bisnode was approximately $400 million and DNB recorded $488 million of goodwill on its balance sheet. In January 2021 Dun & Bradstreet acquired a Swedish company called Bisnode for $811.60 million. Revenue and cash flow from operations (Seeking Alpha, author) Concentrated ownership and confusing competition The former growing with a CAGR of 3.6% and the latter growing with a CAGR of 4.8 %. The nearly $600 million amortization is a result of the take-private transaction, when the company was taken private for a couple of years.įrom 2013 to 2022 Dun & Bradstreet has been able to grow revenues and cash flow from operations. The amortization brings down the GAAP earnings, while the company is still making 25 % cash from operations. However, currently the amortization of goodwill is 26-30% of DNB’s revenue, while normal level for DNB and its competitors is somewhere around 3-5%.
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Dun & Bradstreet has a retention rate of 96 % and capital expenditures, including capitalized software development costs, are around 10 % of revenues and gross margin close to 70%. Some of the numbers support the marketing above.
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We also benefit from strong operating leverage given our centralized database and solutions, which allow us to generate strong contribution margins and free cash flow. The proprietary and embedded nature of our data and analytics solutions and the integral role that we play in our clients’ decision-making processes have historically translated into high client retention and revenue visibility. We believe that we have an attractive business model that is underpinned by highly recurring, diversified revenue, significant operating leverage, low capital requirements and strong free cash flow. In the latest 10-K the company describes its business model attractive with the following words: The North American part of the business is significantly more profitable than the International segment, 45.2% EBITDA in North America and 31.7% EBITDA in the International segment and 38.8% for the whole enterprise. 70% of revenues are derived from North America and the rest mostly from Europe. The revenue increased 2.7% (5.8% excluding the effect of foreign exchange). Net loss improved from a negative of $71.7 million in 2021.
Last year the company posted revenues of $2.2 billion and a GAAP net loss of $2.3 million. D&B collects different data from 28 000 sources, 256 countries and serves 240 000 clients both private and public organizations. D&B can, for example, link the CRM system with its cloud to keep the contact information of the customers up to date. No earnings but cash flowĭun & Bradstreet is a business information company providing critical information for businesses to make financing, sourcing, supply chain, sales and marketing decisions. Regardless, it’s generating a massive amount of cash from operations and trades at depressed valuation. Additionally, when taking a helicopter view at the competitive landscape, one could argue that Dun & Bradstreet doesn’t necessarily have much competitive advantage. However, the company carries plenty of debt and goodwill on the balance sheet, doesn’t produce any GAAP earnings and has made three acquisitions that haven’t yet proven themselves. Additionally, the company’s GAAP earnings are muted due to taking the company from listed to private and back to listed in a short period of time. Its revenues are recurring in nature, doesn’t require much capital, has scale advantages and doesn’t go through rapid change. The business model of the company has many attractive qualities. The investment thesis is interesting but controversial. Dun & Bradstreet ( NYSE: DNB) is a business information provider.
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