Good morning. I'm Alex Hess, a member of the Business Information Services Equity Research Team led by Andrew Steinerman at JPMorgan. We're pleased to have with us today Dun & Bradstreet's CFO, Bryan Hipsher. Bryan's been CFO at D&B since February 2019. Bryan, this is the fourth year that you and I have had this conversation, so welcome back. I want to start with, we sort of have to start with, any updates to the ongoing exploration of strategic options that you guys are undertaking. You're clearly exploring your options. You provided an update to the investment community about two weeks ago. A lot can change in a deal process in two weeks. What might you be able to share about where D&B stands today? We're going to let this be an open-ended question. Yeah, so first, thanks for having me back four years in a row. It's been quite the journey, I think, over that time period from back in February of 2019 to where we are today. So appreciate the support and have already had a really good start to the day today. In terms of our response to the inbound interest, I think, as you know, this was something that we weren't going out exploring a process from that side, but for several reasons, including what we think is clearly a disconnect between kind of where we thought the value was and where we were trading. We got some of that inbound interest, and as you said, we spoke to it in our prepared remarks. And so from that perspective, the team is doing what you would expect us to do, which is take the interest in, make sure that we're handling it appropriately from that side, and making sure to fulfill our fiduciary responsibilities. And so the core team is obviously focused on continuing to execute, grow the business, fulfill our kind of medium-term ranges from that side, and close the year out. But at the same time, like I said, handle everything with, I would say, focus and clarity and just make sure that, obviously, the broader community, the investment community, any of this interest understands where the business is today, right? What we've really achieved from that perspective. And frankly, some of the opportunities I'm sure we're going to talk about in terms of what we could do on a go-forward basis. So that's really where it's at from that perspective. And again, this is a leadership team, management team that is, again, really focused on the creation of shareholder value and maximizing that is really our priority. Got it. So we're going to, since we're asking foundational questions, let's walk through the core data asset for a second. You have the DUNS number, widely used identifier in industry, and then the D&B Data Cloud, which has data on 557 million. It's the last, I think, public number company is. It's actually a little higher now. I think we've crept over like 580 million. Okay. It's a little over 500. Continuing to grow. Good, so can you give investors a high-level view of maybe somewhere you source your data, what's proprietary, how many contributors' data feeds into D&B and into that D&B Data Cloud product? Just sort of high-level thoughts on dimensioning that. Yeah. It's really clearly one of the exciting things. And I think a little bit serendipitous, right, from that perspective too in terms of what the construct of that Data Cloud is. And frankly, when you're talking about 580 million entities, clearly, the vast, vast, vast majority of those are private companies, right? And so when we think about you asked number of sources, it's tens of thousands of sources, right? So I think even within kind of the contributory aspect, and I'm not including the ones that come in as small businesses who want to be a vendor to Walmart, want to be in the Google Play Store, want to be in the App Store, who then are contributing, right, some financial statements or other documents from that side. Just in terms of the receivables and the payables, so kind of the trade credit we receive, that in and of itself is over 10,000 sources within the contributory network. We then kind of have, I would say, two other branches, right? One is, in essence, data that we go out and have kind of exclusive relationships with providers. So there's a big software provider on the shipping side of the equation that we have a long-term exclusive relationship with for shipping data. And so that's an example of where we're purchasing, right, a data asset, but it's exclusive to us over a long-term arrangement. And then there's, of course, going out to the thousands and thousands of registries and other publicly available sources where we're procuring the data from that perspective. And all of that, to your point, gets tied under the DUNS hierarchy, right, which is a unique identifier that has linkage characteristics up through a parent-child database, parent-child hierarchy. And so there's probably about 4,000 data elements per DUNS. So we don't have 4,000 on every single DUNS. But the more of those elements we have that are connected to the DUNS, then the more use cases and insights we really can solve from that perspective. So traditionally, that's been on a finance or risk or a sales and marketing use case. If you think about where we're headed in terms of some of the opportunities in the private and capital markets, you're kind of turning that Rubik's Cube a little bit and pointing it at a more specific use case from that perspective in a more, I would say, verticalized approach. So again, very early stages in that realm, but really exciting in terms of, you said, proprietary private company data. This is something that, if it's about vendors, third parties, if it's about financial risk, and then certainly if you're starting to think about it from some of these different applications, really, really unique and powerful asset. Yeah. One way I sort of think about Dun & Bradstreet is you have that core set of receivables, data, contributors, then you have some, and you're, for natural reasons, a little confidential on who the counterparties are, but then you have additional value-add data that comes from other parties. You then do the hard work of stitching that together into something that has proprietary inflow, bought inflow, partner inflow, whatever. But the sum total is a truly proprietary and unique data asset. Absolutely. And look, when you think about in the background, the matching algorithms, right, and the linkage capabilities that we have, those in themselves are extremely proprietary, right? And so I look back sometimes in my career when I was at, call it, Black Knight, right? And even in the United States, there were only two large-scale real estate databases that were literally called public records databases. And there were two, right? Because even that in and of itself, the cleansing and the kind of matching across the different MSAs in the U.S., that in and of itself is challenging and expensive, let alone every country in the world on 580 million entities and the amount of data. It is truly proprietary from that perspective. So when we think about how do you take this proprietary data asset and turn it into faster revenue growth, we ask ourselves a lot, "Can D&B grow faster? What would drive it? How do we get there?" And I want to ask about maybe the two things we hone in on a little bit are new business, new logo growth, and pricing. We'll start with maybe the new business side. Do you have the internal sales capabilities at your scale, and you are on the smaller side of the infoservices sector, to deliver on that growth that you sort of outlined, 5%-7%? Or are partnerships going to be a vital aspect of getting the new business contribution? Yeah. I mean, first, I think you've seen the acceleration of growth since the four years we've been on this conversation, continuing to progress into that kind of mid-single digits. In terms of how we're really addressing the landscape, obviously, we have the core North American sales force, right? And then we have some sales forces that are individual to, for instance, UKI to DACH region, right? And so from that perspective, that's kind of how it's organized. What I would say is, in terms of the use cases that we have today, finance or risk, master data management, sales, and marketing, we have the coverage in terms of getting to strategic corporates, right? Getting to solving the use cases we have today. And from that perspective, again, that's where I think you've seen the continued progress in terms of cross-sell, upsell, right? The ability to take price, obviously, is something that we've shown the ability from less than 1% of growth to now, this year is about 2.5%, right? So really good progression from that perspective. Where I would say the next turn of the crank in terms of the GTM evolution is going to be a little bit more verticalized, right, and a little bit more industry-specific. And so where we thought about it before is these solutions really play very well horizontally, right? So if you're extending trade credit, if you're extending business-to-business lending, if you have master data management within a large-scale organization, marketing, sales, those are things that are relatively, I would say, similar across the board. But there are uniquenesses in terms of if you go deep into insurance, if you go deeper into healthcare, if you go deeper into FI, where the data and then just the selling expertise needs to be tweaked a little bit to really understand, "Okay, I get the use case, but how does it really affect, right, a financial institution versus a software player versus an automotive player?" Those things are different and they're nuanced. The other side of the equation in that is the solution sets, right, that then become more nuanced, become more specific, and then need that industry expertise to really drive it home. So cap markets, right? I can sit here and tell you we have hundreds of thousands of financial statements on private companies. Nobody else has that, right? And so this data that really is sitting and underlying within the asset has a lot of application in cap markets and in private markets. Do we have the product team right now? Do we have the sales team right now to really maximize that value right at this moment? No. Right? I mean, it would be disingenuous to say so. But we've started to bring in and build that asset out. But what we've also done in the short term is we've picked some partners, right, to do some, I would say, limited use cases from that side that are very strong within the space that start to kind of seed our data and start to bring that knowledge forward in terms of what our abilities are in that spot. And I think we mentioned two of them right on the call, which were LSEG and ICE. LSEG. Yeah. Yeah. And And again, makes a lot of sense. ICE, that has to do with a climate solution, right, from that perspective where our data, their data in some of their distribution mechanisms made a lot of sense. But again, we try to do these things in a relatively controlled environment because there's a much broader opportunity for us over the longer term. And we wouldn't want to, you know what I mean, give away too much from that perspective in any partnership. Same thing, LSEG, Refinitiv, really great partner, has great distribution platforms. And that's one thing too, Alex, that over time thinking about how do you evolve from a platform perspective. So we have platforms in Finance Solutions. We have platforms in MDM. We have platforms in supply chain and third-party risk management. But you need to kind of turn that again to have platforms that deliver through when you're thinking about these use cases and the users within those types of institutions. Yeah. Yeah. I think that doesn't really what I think about the three core businesses at D&B, the three core ways you're going to move this ship forward. It's going to be Finance Solutions that you've always been, the Third-Party Risk and Compliance business, which has grown very nicely, and then MDM, which has been growing, and now it's growing. Sure. Sure. There's been some acceleration there. So maybe we'll pivot to, obviously, you guys have embraced GenAI, but there is a specific application, an important application that you envision the MDM business having within a GenAI world. Can you elaborate a bit on what that is? Yeah. We think that while GenAI is a really exciting opportunity and there's a very broad base from that perspective, in a commercial environment, having organized, curated, transparent, right, really responsibly sourced data upfront is going to be key in really leveraging GenAI for a long-term business outcome, right? So when we're talking about things like doing functions within an organization and making significant changes from that perspective, you're really going to have to rely upon the data set. And again, is it trusted? Is it responsibly sourced? Is it legally sourced, right? Because once you make those shifts, if you're going to make a shift in terms of your workforce through automation and efficiency gains, because that's what GenAI is ultimately going to do, right? It's either reducing expenses or it's increasing revenues or reducing your risk profile. And the only way you generally do those things is either less software and/or less FTEs, right, and resources on the expense side. And then on a revenue side, it's just a more efficient sales force and a more efficient GTM from that perspective, along with, of course, the ability to generate new products, right? But from that side of it, when you start to layer those in and you start to institute those, it can't be something that works for six months or works for a year. Then you figure out, "Oops, I didn't actually have the data rights," or, "I didn't have the proper data set that was trusted and built upon." And therefore, I have to kind of unwind this and try to reel back. That's a very challenging position for a business to be in. And so we think that, obviously, having a core MDM strategy upfront is foundational, right? And the other side of it, and you'll see this a little bit, I'm sure, from a product that we just released, which is ChatD&B. And ChatD&B is interesting because more and more of these kind of solutions and platforms are going to start to cross, right, organizations. And so ChatD&B actually sits off of our foundational data set. It's connected to the Data Blocks right now and allows you, in a more layman's terms, natural language, conversational, to be able to query and question and see responses back on the data. Now, could you ask it a finance or risk question? Of course. Could you ask it a sales or marketing question? Of course. Could you ask it a data management question? Of course. Now, what responds and what ultimately comes back is going to be predicated on the entitling, right, and the commercial aspect of the equation. But it's a much more intuitive and a much more, I would say, cross-functional way to start to think about how data is utilized within an organization. And I know ChatD&B is a new offering. And I know you guys have moved at a deliberate pace in your GenAI product rollout, but I've seen them. And I've been like, "That's pretty nifty. Yeah. Yeah. Sean loves it. I know that. Can you maybe explain to investors a little bit what traction, how have you commercialized things thus far to the extent that you have? And then what traction are you seeing? Yeah. I think initially, if we think about commercialization, clearly, the first step was the kind of data management and starting to think about it from a data perspective. Now, we don't allow our data to be utilized in training of large language models, but obviously, it's a complementary component of the utilization of a large language model. And there's a really important differentiation there between those two as we're starting to roll out products. So ChatD&B went from internal use. We exposed it then to a select set of first-mover customers. And now it's rolling into general acceptance. So from a commercial perspective, we'll start to see that impact flow through, right? And then we just rolled out a little bit more specific use case on what's called Ask Procurement. And so again, we're trying to take these agents and models and utilize them in a little bit more specific use case perspective too. And so on that one, you can imagine it's tuned to vendor management, monitoring, and procurement practices. So really, I think, powerful applications early on. But again, in terms of monetization, it'll be a mix of something like Ask Procurement, standalone, sell it as an independent solution. ChatD&B will be a mix of it being built into the platforms eventually in terms of a Risk Analytics or a Finance Analytics that'll help drive usage and volume, right? And then you'll see it as a complementary asset, which may be an upcharge that sits on top of our API delivery mechanisms. And so that's how we're thinking about it from a monetization perspective. That makes sense. And just for anybody in the room who's not familiar, when they say finance analytics, risk analytics, those are the two sort of core platforms on the finance. On the finance. And then again, D&B Hoovers is a great example, right, on the sales and marketing side. And so before, where you're using the user interface to kind of drop down and query to create a market analysis, right, or a plan of, "If I'm going to sell a new green server, which types of companies should I go out and go after?" Now you're in, again, a more natural way asking it, "Hey, I'm looking for customers that look like X, Y, and Z. Oh, and by the way, I want to see if they have a high sustainability practice." And then it can ping off our ESG data, bring that back. And all of a sudden, your funnel of 40 million businesses has become 10,000. And that's where you're going to focus your time and attention. So because you mentioned Hoovers, I'll dive in there. But when I sort of think about D&B, and I'm very high level conceptually, you guys have outlined that finance solutions business. It's pretty mature, pretty penetrated. It's a low single-digit grower. The third-party risk and compliance, and so the risk solution side of that business, and then the, excuse me, the MDM side, those are very nice growers, maybe high single digits, I think, where you guys have been most recently. And then the wild card to getting to that five to seven really kind of, to some degree, becomes Hoovers' Credibility. Yeah. So what I would say, even more so than that, Credibility, obviously, about 5% of the business, the legacy impacts it had from some kind of the sales practices that were pre-even us, but the order we received was about a year and a half ago. So we've seen that obviously decline, pretty tough coming off the back of renewals on those legacy products. But now that that's kind of bottoming out, we actually saw it grow slightly in the third quarter, right? Which, again, you're not spiking the football and calling victory at that point. But just for us to start to see that kind of flatten out and then think about the potential of what we could do with small businesses, see some of the new solutions we rolled through with Credit Insights, with the new Concierge, and even some of the things that I think we could do going forward. As long as it's kind of getting in that stable region, then in starting to grow, I think it's beneficial from that side. Now, on the flip side, that's also a business that it's not as core, right, as, for instance, the third-party risk and compliance or the MDM businesses from that side. And so we talked about on the third quarter call, we would certainly look at, maybe second quarter call, the potential for something to be more strategic, right, and just understanding how's it performing, what do we ultimately want to do with that on a go-forward basis. And so we'll continue to evaluate that as we go through the end of the year and then obviously make a decision because the other side of it is that Digital Marketing that you were mentioning, right? And you talked about Hoovers. Hoovers, again, kind of got into a spot where it's growing a little bit, right? I think there's a little bit of potential as sales and marketing starts to pick up. But the one that's much more transactional, I would say, in nature, that has been more of the kind of current headwind to growth is the Digital Marketing side. So while that was growing double digits, about the late third quarter last year, it turned the opposite way. And so part of that is just because of the transactional nature. It's a little bit more impacted by the broader volumes of spending in sales and marketing. And so, again, it's a complementary asset to what we do on that contact side and what we do on the audience side. But at the same time, is that something super core to the business? And if it does become too volatile from that side, we'll look at it and evaluate whether or not that's something that stays in the portfolio or something we make a different decision on. Got it. So we've got options for both those assets, credibility and, excuse me, and the Digital Marketing. And the Digital Marketing. Yeah, but when I think about the reason I asked, you said Hoovers and not Digital Marketing is because it does feel like you've done a lot of real and pretty core remediation work in Hoovers and in the credibility small business products. So that's just for your benefit. And I agree. And that's the piece is why we're not just saying, "Hey, it's going to go," right? I mean, I think we want to kind of see all this work that's happened, get a little bit out, and then evaluate it from that perspective. D&B Hoovers is an interesting one because if you look at its trajectory, a lot of the players in that space have actually started to dip negative at this point, right, from growing positively before. And part of that's just the overall macro has gotten a little tougher. All of a sudden, rates were rising. Then it looked like when was a rate ever going to get cut? And so I think there was a little bit of relief, and you saw some of that after the first rate cut. There's been a subsequent second one. The presidential election has been decided, so there's less ambiguity about which way that's going, and all of that, I think, starts to be a little bit more positive in terms of that front-footedness from a corporate's perspective on spending in the sales and marketing space. Got it. So I think we've sort of exhausted the organic revenue growth topic to this point. So maybe we'll pivot. It's an important one. Yeah. It's the most important in our view. But maybe we'll pivot a little to the free cash flow conversion. Your 2023 investor day target is 80+% of adjusted net income. Year to date, you're not close to that. But there's seasonality, of course. But what is preventing D&B from getting free cash flow into those levels with consistency? Yeah. And this is why we put it out as a medium-term target because we knew we'd be growing into it. So the good thing is, obviously, we're closer than what we were last year, right? It's a progression. A couple of the big things that are in there, which were first and foremost, our CapEx as a percentage of revenue really had to ramp up in our investment because we were dealing with a pretty significant amount of tech debt, right? I mean, you guys knew the business clearly before. And in terms of what we needed to do on data supply chain, in terms of what we need to do with the infrastructure, we're still working through kind of the final stages of that cloud conversion and cloud transformation. But all of those were playing into the need to spend at—I mean, we were at 8-9%, almost 10%, and now starting to come back down to that more normalized kind of 6-7%. So we made an adjustment at the end of September in terms of about $15 million of annualized CapEx spend reductions, right, from that perspective that have flown the fourth quarter into next year. But you get this differentiation mathematically of cap is cash going out the door immediately, but depreciation amortization is ramping up right through that investment period. And so when you're talking about just pure conversion from that side, you've got to see D&A and cap start to come together before you can get a higher percentage conversion from that perspective. So we're seeing it improve, and that's a big focus from our perspective. But like I said, we called walking and chewing gum, improving revenue and improving margins at Black Knight. This one, we had to kind of skip rope too because of the investments that we had to put forth to really start driving those two. So again, that's why even 80%, that's not the final goal. When this business is kind of matured, right, clearly you'd go north of that on a go-forward basis. But there's a ramp to all these things. And we're also balancing that, as you said, organic investment and really getting the flywheel spinning, really getting the innovation spinning and starting to drive that organic growth because we know as we kind of pivot and slow down the investment side, the conversion picks up. And that's how the business is built from that perspective. And that $15 million of annualized software development spend that you sort of took out exiting the third quarter, what was that that you were spending on? Yeah. I mean, these were things like, again, cloud architecture in terms of the platforms, right? Because it's not just an infrastructure move. You actually have to architect the core code bases and the core platforms to be more cloud-native versus just I'm picking it up, a platform out of a terrestrial data center and dropping it in the cloud. So it wasn't a lift and you're not doing a lift and shift. We're not doing a lift and shift. And so that's why you're going to see the spend from that perspective, what ticked up. But then those projects come to an end, and then you frankly release the resources because that's the end of the project. Got it. And then one of the things that you've done is move about 20% of your revenues when you and Anthony joined from multi-year contracts to well over half. I know I think it was one Q was 55%. Can we get an update there? Yeah, sure. It's right around, I think, like 53%-54% blended. That was the big move for us. And it was less than 20%, as you said, when we got into the business. That has to do with many things, right? Obviously, the confidence in us as a partner to our clients and the investments that we made and the satisfaction that they were seeing allowed them to have confidence to move into three- to five-year deals, right? For us, it's a great move because then we stack on a price escalator, right? And we were quite reasonable, I would say, in the first ones that we did, 3%-4%, right, from that perspective. But then what you're doing is you're taking that conversation from rehashing on the same solutions each and every year where that's off the table, and now you're having a more strategic conversation about, "How do I do more with you, right? How do I upsell? How do I cross-sell?" And so we blended the incentives to the sales force needed to be off of total contract value, not just off of annual contract value. That move is a headwind to cash flows. It is too, right? And so that one is another one. So if I said three things, right? That was one. Clearly, the CapEx was the other one. And then if you look in our adjustments, right, transition cost is probably the biggest one. As we're moving infrastructure from terrestrial data centers to the cloud, we're paying two providers at one time, right? And so what we're trying to do is normalize what the true expense is because, again, we're not getting benefit out of both of those data centers, but the cash is going out the door. So as those migrations are complete, we cancel the legacy provider, and then you're saving the cash at the same time. So it won't be an improvement to adjusted EBITDA, but that's another converging factor from a free cash flow perspective too. Great. Bryan, I want to thank you for your time. Everyone here in the room, I want to thank you for joining us. Everyone online, thank you as well for listening in. Wish you were in the room. Yeah. Everybody have a lovely day. All right. Thank you.