DFIN 10-K & 10-Q changes, risk factors and insider trading

Maintaining the confidentiality, integrity and availability of DFIN’s systems, software and solutions is an issue of critical importance for the Company and its clients and users who rely on DFIN’s systems to prepare regulatory filings and store and exchange large volumes of information, much of which is proprietary, confidential and may constitute material nonpublic information. Given DFIN’s systems contain material nonpublic information about public reporting companies and potential M&A activities prior to its public release, the Company has been, and expects it will continue to be, a target of hacking or cybercrime. Inadvertent disclosure of the information maintained on DFIN’s systems (or on the systems of the vendors on which the Company relies) due to human error, breach of the systems through hacking, cybercrime or a leak of confidential information due to employee misconduct, could seriously damage the Company’s reputation, could cause it to expend significant resources responding to requests from government agencies and customers and could cause significant reputational harm for the Company and its clients. The Company’s technologies, systems, networks and software have been and continue to be subject to cybersecurity threats and attacks, which range from uncoordinated individual attempts to sophisticated and targeted measures directed at the Company. The risk of a securitycybersecurity breach or disruption, particularly through cyber attack or cyber intrusion,disruption has increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increasedincreased, including those utilizing AI capabilities, and the Company has in the past and may in the future be subject to security breaches.

Furthermore, DFIN’s systems allow the Company to share information that may be confidential in nature to its clients across the Company’s offices and remote working locations worldwide. This design allows the Company to increase global reach for its clients and increase its responsiveness to client demands, but also increases the risk of a security breach or a leak of such information as it allows additional points of access to information by increasing the number of employees and facilities working on certain jobs. In addition, DFIN’sDFIN systems leverageleverages third-party outsourcingtechnology arrangements,integrations across its systems, which expeditesfacilitate theanalytics Company’sthat responsivenessinform strategic decisions, but exposes information to additional access points. Malicious software, sabotage, ransomware and other cybersecurity breaches of the types described belowabove could cause an outage in DFIN’s infrastructure, which could lead to a substantial delay of service and ultimately downtimes, recovery costs and client claims. The occurrence of an actual or perceived information leak or breach of security could cause the Company’s reputation to suffer, clients to stop using DFIN’s services and products offerings, the Company to have to respond to requests from government agencies and customers in connection with such event and the Company to face lawsuits and potential liability, any of which could cause DFIN’s financial performance to be negatively impacted.

The Company’s business may be adversely affected if it fails to adapt to technological changes and address the changing demands of clients, including newthose technologies enabling clientsrelated to produce and file documents on their own.AI.

The markets in which the Company and its clients operate are characterized by changing business models, technology and regulation that causes clients’ needs and demand for DFIN’s services and products to evolve. Technological advancements such as artificial intelligence and machine learning are impacting client workflows and raising expectations for user experience, scale and efficiency. The Company’s business may be adversely affected if clients seek out alternative means to produce and file regulatory documentation and implement technologies that assist them in this process. For example, clients and their financial advisors have increasingly relied on web-based services which allow clients to autonomously file and distribute reports required pursuant to the Exchange Act, prospectuses and other materials or utilized other technologies to facilitate collaborative document production and integration of financial and other types of data to produce compliance reports. If competitors introduce technologies are further developed to provide clientclients alternative means to produce and file documents to meet their regulatory obligations,obligations that they prefer, and the Company does not develop products or provide services to compete with such new technologies in a timely and cost-effective manner, the Company’s business may be adversely affected. The Company’s future success will depend, in part, on its ability to respond to these developments and keep pace with an evolving competitive landscape. Additionally, if clients are unwilling to pay sufficiently higher prices or separate fees for DFIN’s products that include AI capabilities or such capabilities do not fully address clients’ needs, the Company may not see a return on its investment.

Additionally, third-party systemssystems, services and servicesintegrations underlying DFIN’s operations can contain undetected errors or bugs, or be susceptible to cybersecurity breaches described above. The Company may be forced to delay commercial release of its services until any discovered problems are correctedcorrected, and, in some cases, may needresort to implementmanual enhancementsprocesses for customer service and support functions or modificationslose access to correct errorstools that theprovide Companystrategic doesinformation notfor detectdecision until after deployment of its services.making. Furthermore, certain third-party service providers or vendors may have access to sensitive data including personal information, valuable intellectual property and other proprietary or confidential data, including that which was provided to DFIN by its clients. A third-party vendor could intentionally or inadvertently disclose sensitive data including personal information, which could have a material adverse effect on the Company’s business and financial results and damage the Company’s reputation.

A number of core processes, such as software development, operations and fulfillment, sales and marketing, client service and financial transactions, rely on DFIN’s IT infrastructure and applications. Many of DFIN’s productsservices and servicesproducts are delivered on a current and time-sensitive basis and depend on reliable access to important systems and information. Damage to the Company’s IT infrastructure could result from catastrophe, natural disaster, severe weather, power loss, telecommunications failure, terrorist attack or pandemic as well as from security breach of the types described above or other events that could have a significant disruptive effect on operations. Defects or malfunctions in the Company’s IT infrastructure and applications have caused, and could cause in the future, DFIN’s services and products offerings not to perform as clients expect, which could negatively impact the Company’s reputation and business. The Company has disaster recovery and business continuity plans in place in the event of system failure due to any of these events and these plans are tested regularly. If these disaster recovery or business continuity plans are not adequate to address the disruptive event, it could result in an outage in DFIN’s infrastructure, which could lead to a substantial delay of service and ultimately downtimes, recovery costs and client claims, any of which could negatively impact the Company’s results of operations, financial position and cash flows.

A significant portion of the Company’s net sales depends on the purchase of DFIN’s services and products by parties involved in capital markets compliance and transactions. As a result, a significant portion of the Company’s business is dependent on the global market for IPOs, secondary offerings, M&A, public and private debt offerings, leveraged buyouts, spinouts, SPAC and de-SPAC transactions and other similar transactions. These transactions are often tied to market conditions and the resulting volume of these types of transactions affects demand for the Company’s services and products. A variety of factors impact the global markets for transactions, including economic activity levels, interest rates, market volatility, the regulatory and political environment, tariffs and trade policy, geopolitical and civil unrest and global pandemics, among others. Recently, U.S. capital markets transactions, especially IPO and M&A transactions were disrupted by the U.S. federal government shutdown that occurred during the fourth quarter of 2025. Future government shutdowns or other factors impacting the attractiveness of U.S. capital markets could result in additional volatility. Downturns in the financial markets, global economy or in the economies of the geographies in which the Company does business and reduced equity valuations create risks that could negatively impact the Company’s business. For example, in the past, economic volatility has led to a decline in the financial condition of a number of the Company’s clients and led to the postponement of their capital markets transactions. To the extent that there is continued volatility, the Company may face increasing volume pressure. Furthermore, the Company’s offerings for investment companies clients can be affected by fluctuations in the inflow and outflow of money into investment management funds which determines the number of new funds that are opened and closed. As a result, the Company is unable to predict the impact of any potential worsening of macroeconomic conditions which could have impacts to the Company’s results of operations. The level of activity in the financial communications services industry, including the financial transactions and related compliance needs DFIN’s services and products are used to support, is sensitive to many factors beyond the Company’s control, including interest rates, regulatory policies, general economic conditions, the Company’s clients’ competitive environments, business trends, terrorism and political change. In addition, a weak economy could hinder the Company’s ability to collect amounts owed by clients. Failure of the Company’s clients to pay the amounts owed or to pay such amounts in a timely manner, may increase the Company’s exposure to credit risks and result in bad debt write-offs. Unfavorable conditions or changes in any of these factors could negatively impact the Company’s business, results of operations, financial position and cash flows.

The Company does not generally have long-term contracts for traditional services and products within the CM-CCM and IC-CCM segments and, therefore, relies on those clientsclients’ continued use of DFIN’s services and products. As a result, client retention, particularly during periods of declining transactional volume, is an important part of the Company’s strategic business plan. There can be no assurance that clients will continue to use DFIN’s services and products to meet their ongoing needs, particularly in the face of competitors’ services and products offerings, or that their needsinterest forin those services will not be impacted by regulatory changes.changes or perception of the regulatory environment. Although some of the Company’s software contracts are multi-year, both multi-year contracts and contracts that are less than one year are subject to renewals. As a result, there can be no assurance that clients will continue to use DFIN’s software solutions to meet their ongoing needs. Client retention rates may decline due to a variety of factors, including:

A decline inIf the numberCompany’s ofretention rates are lower than anticipated or referrals could requiredecline, the Company could be required to devote substantially more resources to the sales and marketing of its services,services and products, which would increase costs, potentially lead to a decline in net sales, slow the Company’s growth and negatively impact itsthe Company’s business, results of operations, financial position and cash flows.

The financial communications services industry is highly competitive with relatively low barrier to entry and the industry remains highly fragmented in North America and internationally. Management expects that competition will increase from existing competitors, as well as new and emerging entrants.entrants, including those offering AI-enabled or self-filing services and products. Additionally, as the Company expands its services and product offerings, it may face competition from new and existing competitors. Budgetary constraints or other economic pressures on the Company’s existing or potential clients may impact DFIN’s ability to price its services and products profitably. As a result, these factors may lead to pricing dynamics for DFIN’s services and products which could negatively impact its business, results of operations, financial position and cash flows.

DFIN’s success depends, in part, on its general ability to attract, develop, motivate and retain highly skilled employees. Competition for these individuals is intense, especially for engineers with high levels of experience in designing and developing software and internet-related services, senior sales executives and professional services personnel with appropriate financial reporting experience. The loss of a significant number of employees or the inability to attract, hire, develop, train and retain additional skilled personnel could have a serious negative effect on DFIN’s business. Productivity or efficiency initiatives enabled by AI or other technological advances could impact the size or skills needed within the Company’s workforce. Management believes the Company’s ability to retain its client base and to attract new clients is directly related to DFIN’s sales force and client service personnel, and if the Company cannot retain these key employees, its business could suffer. In addition, many members of DFIN’s management have significant industry experience or functional experience that is valuable to competitors. The Company expects that its executive officers and employees in other key roles will have non-solicitation agreements contractually prohibiting them from soliciting clients and employees within a specified period of time after they leave DFIN. The Company undertakes succession planning to manage the risk that one of DFIN’s key members of management could unexpectedly leave, fall ill, pass away or otherwise become incapacitated and unable to work for an extended period of time. If one or more members of the senior management team are suddenly unavailable and their responsibilities cannot be handled by internal resources or a suitable replacement quickly, the Company could experience difficulty in managing its business properly, which could negatively impact its business, results of operations, financial position and cash flows.

Financing and Financial Risks

As of December 31, 2024,2025, the Company had $125.0$110.7 million outstanding under its Term Loan A Facility, as defined below, and no$61.0 million of borrowings outstanding under its Revolving Facility, as defined below. The Company’s ability to make payments on and to refinance indebtedness, as well as any future debt that it may incur, will depend on the Company’s ability to generate cash in the future from operations, financings or asset sales. The Company’s ability to generate cash is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond the Company’s control. The Company may not generate sufficient funds to service its debt and meet its business needs, such as funding working capital or the expansion of the Company’s operations. If the Company is not able to repay or refinance debt as it becomes due, it may be forced to take disadvantageous actions, including facility closure, staff reductions, reducing financing in the future for working capital, capital expenditures and general corporate purposes, selling assets or dedicating an unsustainable level of cash flows from operations to the payment of principal and interest on its indebtedness, and restricting future capital return to stockholders. The lenders who hold the Company’s debt could also accelerate amounts due in the event of a default, which could potentially trigger a default or acceleration of the maturity of the Company’s debt.

On MayMarch 27,13, 2021,2025, the Company amended and restated its credit agreement dated as of September 30, 2016 (as in effect prior to such amendment and restatement, the “Credit Agreement,” and the Credit Agreement, as so amended and restated, the “Amended and Restated Credit Agreement”), by and among the Company, the lenders party thereto from time to time and JPMorgan Chase Bank, N.A., as administrative agent and collateral agent, to, among other things,to provide for a $200.0$115.0 million delayed-draw term loan A facility (the “Term Loan A Facility”), extendestablish the maturity of thea $300.0 million revolving facility (the “Revolving Facility,Facility” and, together) with thea Termmaturity Loandate Aof Facility,March 13, 2030 to replace the “Creditentire Facilities”)amount toof Maythe 27,revolving 2026facility and modify the financial maintenance and negative covenants in the Amended and Restated Credit Agreement.Agreement, Onamong Octoberother 14,things. 2021,The Amended and Restated Credit Agreement contains a number of covenants, including a minimum Interest Coverage Ratio and the CompanyConsolidated drewNet $200.0Leverage millionRatio, fromas defined in and calculated pursuant to the Term Loan A FacilityAmended and usedRestated theCredit proceedsAgreement, tothat, redeemin part, restrict the Company’s seniorability notesto dueincur Octoberadditional 15,indebtedness, 2024create (liens, engage in mergers and consolidations, make restricted payments and dispose of certain assets. The Amended and Restated Credit Agreement generally allows annual dividend payments of up to $20.0 million in the “Notes”).aggregate.

The Company may be able to incur significant additional debt, including secured debt, in the future. Although the Amended and Restated Credit Agreement governing the Credit Facilities restrict the incurrence of additional debt, these restrictions are subject to a number of qualifications and exceptions. Also, these restrictions do not prevent the Company from incurring obligations that do not constitute indebtedness. As of December 31, 2024,2025, the Company had the remaining $299.0$237.6 million available for additional borrowing under the Revolving Facility. The more indebtedness the Company incurs, the further exposed it becomes to the risks associated with leverage described above.

Fluctuations in DFIN’s operating results or unfavorable commentary in the research and reports that equity research analysts publish about the Company or algorithmic trading may negatively affect the Company's stock price.

In addition, the trading market for DFIN’s common stock is influenced by the research and reports that equity research analysts publish about the Company and its business. The price of DFIN’s stock or trading volume in DFIN’s stock could decline if one or more equity analysts downgrade the Company’s stock or if those analysts issue other unfavorable commentary or cease publishing regular reports about the Company. The volatility of DFIN’s common stock may be impacted by algorithmic or high-frequency trading, which can cause rapid and significant fluctuations in the stock price, unrelated to the Company’s actual performance or prospects. If any of the foregoing occurs, it could cause the Company’s stock price to fall and may expose it to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

Global economic and political conditions, including global health crisescrises, geopolitical instability and geopoliticalgovernment instability,shutdowns, broad trends in business and finance that are beyond the Company’s control may have a material impact on its business operations and those of DFIN’s clients and contribute to reduced levels of activity in the securities markets, which could adversely impact the Company’s results of operations.

As a multinational company, DFIN’s operations and ability to deliver services to its clients could be adversely impacted by general global economic and political conditions. DFIN’s business is highly dependent on the global financial services industry and exchanges and market centers around the world. Factors such as government shutdowns, legislative and regulatory changes, tariff and trade policies, social and health conditions, international conflict, extreme weather or other natural disasters, the level and volatility of interest rates, currency values, inflation and taxation could all have an impact on the financial well-being of DFIN’s clients or securities markets activities. These impacts may reduce demand for DFIN’s services and products offerings and negatively impact its business, results of operations, financial position and cash flows.

Rapidly changing technology, evolving industry standards and regulatory requirements and new service and product introductions characterize the market for the Company’s services and products. Clients are subject to rules and regulations requiring certain printed or electronic communications governing the form, content and delivery methods of such communications, such as SEC Rule 30e-3 which provides certain registered investment companies with an option to electronically deliver stockholder reports and other materials rather than providing such reports in paper. Other developments, such as the SEC’s TSR rule required in 2024, drove increased demand for the Company’s services and product in the Investment Company segments but also required additional investment of capital and other resources. Modifications in these regulations may impact clients’ business practices and could impact the competitive landscape for DFIN’s services and products offerings. The priorities of the current U.S. administration mayhave impactimpacted SEC rulemaking, causing proposed rules such as climate, proxyprivate votingfund reformreporting on Form PF, or other topics to be delayed, withdrawn or adopted in a form that is materially different from the Company’s expectation. Other items included in the SEC‘s latest regulatory agenda, such as a potential proposal to allow semi-annual reporting, may impact demand for the Company’s services and products. Modifications in such regulations could eliminate the need for certain types of communications altogether or impact the quantity or format of required communications. DFIN’s ability to monitor the timing and form of relevant developments at various stages of discussion, proposal or implementation are important for future operational planning and growth. The Company may find it difficult or costly to update its software and services to keep pace with evolving industry standards, regulatory requirements or other developments impacting the industries in which DFIN and its clients operate.

Privacy and data security laws apply to DFIN’s various businesses in all jurisdictions in which the Company operates. In particular, clients use DFIN’s software solutions, including Venue, to share personal data and information on a confidential basis, and such sharing may be subject to privacy and data security laws. DFIN’s global business operates in countries that have more stringent data protection laws than those in the United States. These data protection laws may be expanded to address concerns regarding AI, inconsistent across jurisdictions and are subject to evolving and differing interpretations. Complying with these regulations has been, and will continue to be, costly, and there are or will be significant penalties for failure to comply with these regulations. Further, any perception of DFIN’s practices, products or services as a violation of individual privacy rights may subject the Company to public criticism, class action lawsuits, reputational harm or investigations or claims by regulators, industry groups or other third parties, all of which could disrupt DFIN’s business and expose the Company to liability.

Transferring personal data and information across international borders is becoming increasingly complex. For example, Europe has historically had stringent regulations regarding transfer of personal data and information. The mechanisms that DFIN and many other companies rely upon for data transfers from Europe to the United States (e.g., Standard Contractual Clauses) have been successfully challenged in the European court systems and compliance with legislation related to data transfers is uncertain. The Company is closely monitoring developments related to requirements for transferring personal data and information. Privacy regulation continues to develop globally and could impact DFIN’s business, results of operations, financial position and cash flows.

The Company operates its business through four operating and reportable segments: Capital Markets – Software Solutions, Capital Markets – Compliance and Communications Management, Investment Companies – Software Solutions and Investment Companies – Compliance and Communications Management. Corporate is not an operating segment and consists primarily of unallocated SG&A activities and associated expenses including, in part, executive, legal, finance and certain facility costs. In addition, certain costsexpenses and earningsincome of employee benefits plans, such as pension and other postretirement benefits plans expense (income) as well as share-based compensation expense, are included in Corporate and not allocated to the operating segments. For a description of the Company’s operating segments, refer to Part I, Item 1. Business of this Annual Report.

DuringThe Company’s operating segments are components of the threebusiness monthsfor endedwhich Decemberdiscrete 31,financial 2024,information theis Companyavailable changedand thereviewed measure usedregularly by the Company’s chief operating decision maker (“CODM”), the Company’s Chief Executive Officer. The CODM toregularly evaluatereviews segment profitabilitynet fromsales incomeand (loss) from operations toSegment Adjusted EBITDA (“Segmentto Adjustedassess EBITDA”)segment inperformance orderand to bedecide consistent with changes in reporting reviewed by the CODMhow to evaluate the results of operations, allocate resources and make strategic decisions about the business.resources. Segment Adjusted EBITDA is defined as earnings before interest expense, net, income tax expense, depreciation and amortization and adjusted to exclude the impact of certain costs, expenses, gains, losses and other items, as further described in Note 15, Segment Information, which management believes are not indicative of ongoing operations and segment performance. Presentation of segment profitability for the years ended December 31, 2023 and December 31, 2022 was revised to be comparable to the current period presentation. Corporate is not an operating segment and consists primarily of unallocated SG&A expenses. See Note 15, Segment Information, for a reconciliation of Segment Adjusted EBITDA to consolidated earnings before income taxes.

Net sales for the year ended December 31, 20242025 decreased by $15.3$14.9 million, or 1.9%, to $781.9$767.0 million from $797.2$781.9 million for the year ended December 31, 2023,2024, including a $0.2$0.8 millionmillion, or 0.1%, increase due to changes in foreign currency exchange rates. Net sales decreased primarily due to lower tech-enabled services net sales of $22.5 million, primarily driven by lower capital markets compliance volumes, and lower print and distribution net sales of $21.1 million, primarily driven by lower investment companies compliance and transactionalcapital markets compliance volumes, partially offset by higher Venue volumes, software pricesolutions increasesnet sales of $28.7 million, primarily due to higher ActiveDisclosure net sales of $12.7 million and higher Arc Suite volumesnet as a resultsales of the$12.3 Company’s TSR offering.million.

Income from operations for the year ended December 31, 20242025 increased by $26.6$4.5 million, or 24.2%,3.3%, to $136.6$141.1 million from $110.0$136.6 million for the year ended December 31, 2023.2024. Income from operations increased primarily due to higherlower softwarecost solutionsof sales of $17.5 million and lower SG&A expenses of $13.0 million, partially offset by lower net sales,sales costof control$14.9 initiatives,million, as described above, a net gain of $9.8 million on the sale of land,land during the year ended December 31, 2024 and higher restructuring, impairment and other charges, net of $3.8 million. The lower consultingcost of sales is largely driven by lower sales volumes, cost control initiatives and lower overhead costs, whereas the lower SG&A expenses are primarily driven by cost control initiatives, lower bad debt expense of $6.5 million, lower overhead costs and alower favorableincentive salescompensation mix,expense, partially offset by lower compliance and transactional volumes, higher incentiveshare-based compensation expense, higher selling expense as a result of the$6.2 increase in software solutions net salesmillion and higher badhealthcare debtexpense expense.of $2.3 million.

In the financial review that follows, the Company discusses its consolidated results of operations, segment net sales, Segment Adjusted EBITDA, financial condition,position, cash flows and certain other information. The Company’s cost of sales as a percentage of net sales, consolidated income from operations, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin may be affected by sales mix (i.e., a higher proportion of sales of higher or lower margin services or products relative to total sales). Sales mix can vary period to period and is impacted by regulatory filing seasonality and global capital markets volatility. This discussion and analysis should be read in conjunction with the Company’s audited Consolidated Financial Statements and related notes thereto.

ResultsA discussion of Operationsthe Company’s financial condition, changes in financial condition and results of operations for the Yearyear Endedended December 31, 2024 as Comparedcompared to the Yearyear Endedended December 31, 20232023, can be found in Part II. Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of DFIN’s Annual Report on Form 10-K for the Yearyear Endedended December 31, 20232024, asfiled Compared towith the YearSEC Endedon DecemberFebruary 31,18, 20222025.

The following table shows the resultsResults of operationsOperations for the yearsYear endedEnded December 31, 2024,2025 2023as andCompared 2022:to the Year Ended December 31, 2024

Net sales of software solutions of $329.7$358.4 million for the year ended December 31, 20242025 increased $37.0$28.7 million, or 12.6%,8.7%, as compared to the year ended December 31, 2023.2024. Net sales of software solutions increased primarily due to $12.7 million of higher VenueActiveDisclosure volumes,net pricesales, $6.5 million of increases andin non-TSR-related Arc Suite net sales, $5.8 million of higher net sales from the Company’s TSR offering,offering partiallyand offset$3.7 by the dispositionmillion of thehigher eBreviaVenue businessnet in the fourth quarter of 2023.sales.

Net sales of tech-enabled services of $320.8$298.3 million for the year ended December 31, 20242025 decreased $16.1$22.5 million, or 4.8%,7.0%, as compared to the year ended December 31, 2023.2024. Net sales of tech-enabled services decreased primarily due to lower capital markets net sales of $18.4 million, driven by a decline in both compliance and transactional volumes, as well as lower investment companies net sales of $4.1 million, largely driven by a decline in compliance volumes.

Net sales of print and distribution of $131.4$110.3 million for the year ended December 31, 20242025 decreased $36.2$21.1 million, or 21.6%,16.1%, as compared to the year ended December 31, 2023.2024. Net sales of print and distribution decreased primarily due to lower investment companies net sales of $14.0 million and lower capital markets compliancenet volumessales andof investment$7.1 companiesmillion, both largely driven by a decline in compliance and transactional volumes.

Software solutions cost of sales of $108.7$111.4 million for the year ended December 31, 20232025 decreasedincreased $4.7$4.0 million, or 4.1%,3.7%, as compared to the year ended December 31, 2022.2024. Software solutions cost of sales decreasedincreased primarily due to cost control initiatives, partially offset by higher product development costs of $1.4 million and a higherlower allocation of technology-relatedoverhead expenses.costs. As a percentage of software solutions net sales, software solutions costs of sales decreased 3.5%,1.5%, primarily driven by cost$12.7 controlmillion initiativesof higher ActiveDisclosure net sales and aArc favorableSuite salesprice mix,increases, partially offset by higher product development costs and a lower allocation of overhead costs.

Tech-enabled services cost of sales of $127.6$112.8 million for the year ended December 31, 20232025 decreased $13.5$7.8 million, or 9.6%,6.5%, as compared to the year ended December 31, 2022.2024. Tech-enabled services cost of sales decreased primarily due to lower sales volumes,volumes costof control$22.5 initiatives andmillion, a lower allocation of technology-relatedoverhead expenses,costs partiallyand offsetcost bycontrol an unfavorable sales mix.initiatives. As a percentage of tech-enabled services net sales, tech-enabled services cost of sales increased 0.9%, primarily driven by an unfavorable sales mix, partially offset by cost control initiatives and a lower allocation of technology-related expenses.0.2%.

Print and distribution cost of sales of $97.0$56.2 million for the year ended December 31, 20232025 decreased $18.7$13.7 million, or 16.2%,19.6%, as compared to the year ended December 31, 2022.2024. Print and distribution cost of sales decreased primarily due to lower sales volumes of $21.1 million, a lower allocation of overhead costs and cost control initiatives and lower sales volumes.initiatives. As a percentage of print and distribution net sales, print and distribution cost of sales decreased 8.9%,2.2%, primarily driven by a lower allocation of overhead costs and cost control initiatives.

SG&A expenses of $282.1$277.9 million for the year ended December 31, 20232025 increaseddecreased $18.1$13.0 million, or 6.9%,4.5%, as compared to the year ended December 31, 2022.2024. SG&A expenses increaseddecreased primarily due to acost highercontrol allocationinitiatives, of technology-related expense, higherlower bad debt expense,expense higherof employee-related$6.5 expensesmillion, drivenlower byoverhead additional headcount in areas that support the Company's strategic initiatives, higher share-based compensation expense, higher third-party servicescosts and higherlower incentive compensation expense, partially offset by costhigher controlshare-based initiativescompensation expense of $6.2 million and lowerhigher sellinghealthcare expense as a result of the$2.3 decrease in sales volumes.million. As a percentage of net sales, SG&A expenses increaseddecreased from 31.7%37.2% for the year ended December 31, 20222024 to 35.4%36.2% for the year ended December 31, 2023, primarily driven by a higher allocation of technology-related expense, higher bad debt expense, higher employee-related expenses, higher share-based compensation expense, higher third-party services and higher incentive compensation expense, partially offset by cost control initiatives and lower selling expense as a result of the decrease in sales volumes.2025.

Depreciation and amortization of $56.7$59.3 million for the year ended December 31, 20232025 increaseddecreased $10.4$0.9 million, or 22.5%,1.5%, as compared to the year ended December 31, 2022,2024, primarily due to $2.8 million of accelerated amortization expense related to discontinued software recorded during the year ended December 31, 2024 and lower depreciation expense of $1.5 million, partially offset by higher software amortization expense of $3.4 million, driven by additional software development and higher other intangible assets amortization expense.development.

Restructuring, impairment and other charges, net of $9.8$10.4 million for the year ended December 31, 20232025 increased $2.1$3.8 million, or 27.3%,57.6%, as compared to the year ended December 31, 2022.2024, Forprimarily due to $3.9 million of impairment charges related to certain software assets recorded during the year ended December 31, 2023,2025. theseFor chargesthe includedyears $9.2ended December 31, 2025 and December 31, 2024, the Company recorded $6.1 million of employee termination costs for approximately 17090 employees.employees Forand the year ended December 31, 2022, these charges included $6.8$5.5 million of employee termination costs for approximately 13070 employees.employees, respectively. Refer to Note 6, Restructuring, Impairment and Other Charges, net, to the audited Consolidated Financial Statements for further information.

InvestmentOther and otheroperating income, net of $7.8$10.3 million for the year ended December 31, 20232024 increased $4.3 million as compared to the year ended December 31, 2022, primarily due toincluded a net realizedgain gainof $9.8 million on the salessale of investments in equity securities, partially offset by a decrease in earnings on equity investments.land. Refer to Note 1, Overview, Basis of Presentation and Significant Accounting Policies, to the audited Consolidated Financial Statements for further information.

TheInterest effectiveexpense, incomenet taxof rate$12.9 was 19.4%million for the year ended December 31, 20232025 was flat as compared to 26.4% for the year ended December 31, 2022.2024. TheA changedecrease in interest expense due to a 1.0% decrease in the effectiveweighted-average income taxinterest rate on borrowing under both the Term Loan A Facility and the Revolving Facility was primarily drivenoffset by thehigher taxaverage benefitborrowing fromof $14.5 million during the lossyear onended December 31, 2025 as compared to the dispositionyear ofended theDecember eBrevia31, business, income tax credits, favorable return to provision adjustments and lower pre-tax earnings.2024. Refer to Note 9,10, Income Taxes,Debt, to the audited Consolidated Financial Statements for further information.

The following tables summarize net sales, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin within each of the operating segments.segments for the years ended December 31, 2025 and 2024:

Net sales of $213.6$230.0 million for the year ended December 31, 20242025 increased $27.7$16.4 million, or 14.9%,7.7%, as compared to the year ended December 31, 2023,2024, due to higher ActiveDisclosure net sales of $12.7 million and higher Venue net sales of $3.7 million, both primarily due to higherincreased Venue volumes and price increases, partially offset by a $3.8 million decrease due to the disposition of the eBrevia business.volumes.

Segment Adjusted EBITDA of $45.2$75.0 million for the year ended December 31, 20232025 increased $6.9$11.5 million, or 18.0%,18.1%, as compared to the year ended December 31, 2022,2024, primarily due to pricehigher increasesnet andsales costof control$16.4 initiatives,million, partially offset by higher SG&A expenses of $4.5 million, largely driven by higher selling expense and a higher allocationbad debt expense of overhead$1.1 costs.million, partially offset by cost control initiatives.

Segment Adjusted EBITDA margin increased by approximately 290 basis points (“bps”) from 21.3%29.7% for the year ended December 31, 20222024 to 24.3%32.6% for the year ended December 31, 2023,2025, primarily due to pricean increasesapproximately 180 bps and 120 bps decrease in cost controlof initiatives,sales partiallyand offsetSG&A expenses as a percentage of net sales, respectively, largely driven by higher sellingnet expense and a higher allocation of overhead costs.sales.

Net sales of $321.7$296.2 million for the year ended December 31, 20242025 decreased $33.7$25.5 million, or 9.5%,7.9%, as compared to the year ended December 31, 2023,2024, primarily due to lower tech-enabled services net sales of $18.4 million, driven by a decline in both compliance and transactional volumes, partiallyand offsetlower print and distribution net sales of $7.1 million, primarily driven by pricea increases.decline in compliance volumes.

Segment Adjusted EBITDA of $110.9$113.8 million for the year ended December 31, 20242025 decreasedincreased $8.5$2.9 million, or 7.1%,2.6%, as compared to the year ended December 31, 2023,2024, primarily due to lower SG&A expenses of $19.6 million and lower cost of sales volumes,of higher$9.0 million, partially offset by lower net sales of $25.5 million. The decrease in SG&A expenses was primarily due to lower bad debt expense andof higher$7.4 incentive compensation expense, partially offset by cost control initiatives,million, a lower allocation of overhead costscosts, lower selling expense and cost control initiatives, whereas the lower cost of sales of $9.0 million was primarily due to a lower allocation of overhead costs, cost control initiatives and lower sellingsales expense.volumes.

Segment Adjusted EBITDA margin decreasedincreased by approximately 390 bps from 34.5% for the year ended December 31, 20222024 to 33.6%38.4% for the year ended December 31, 2023,2025, primarily due to an unfavorableapproximately sales420 mixbps anddecrease higherin SG&A expenses as a percentage of net sales, largely driven by lower bad debt expense, partiallya offsetlower byallocation costof controloverhead initiatives andcosts, lower selling expense asand acost resultcontrol of the decrease in sales volumes.initiatives.

SegmentNet Adjusted EBITDAsales of $39.7$128.4 million for the year ended December 31, 20242025 increased $2.8$12.3 million, or 7.6%,10.6%, as compared to the year ended December 31, 2023, primarily2024, due to higher non-TSR-related net sales of $6.5 million, largely driven by price increasesincreases, and higher net sales volumes, partially offset by a higher allocation of overhead$5.8 costs.million from the Company’s TSR offering, primarily within ArcReporting and ArcDigital.

There were no material changes during the three months ended MarchJune 31,30, 2026 to the risk factors identified in the Annual Report.

FirstSecond Quarter Overview

Net sales for the three months ended MarchJune 31,30, 2026 increased by $4.4$6.1 million, or 2.2%,2.8%, to $205.5$224.2 million from $201.1$218.1 million for the three months ended MarchJune 31,30, 2025, including a $1.1$0.2 million, or 0.5%,0.1%, increase due to changes in foreign currency exchange rates. Net sales increased due to higher software solutions net sales of $7.1$7.2 million and higher tech-enabled services net sales of $5.0 million, partially offset by lower print and distribution net sales of $3.7 million, partially offset by lower tech-enabled services net sales of $6.4$6.1 million. The higherincrease in software solutions net sales werewas primarily driven by higher ActiveDisclosure net sales of $4.5$6.4 millionmillion. andThe higherincrease Venuein tech-enabled services net sales of $2.2 million. The higher print and distribution net sales werewas primarily driven by higher capital markets transactional volumes, partially offset by lower capital markets and investment companies compliance volumes. The lowerdecrease tech-enabledin servicesprint and distribution net sales werewas primarily driven by lower capital markets transactionalcompliance volumes.

Income from operations offor $48.5the three months ended June 30, 2026 increased by $3.2 million, or 6.1%, to $56.0 million from $52.8 million for the three months ended MarchJune 31, 2026 increased by $2.7 million, or 5.9%, as compared to the three months ended March 31,30, 2025, primarily due to higher net sales of $4.4$6.1 million, as described above, and lower restructuring, impairment and other charges, netcost of $2.2sales of $3.0 million, partially offset by higher SG&A expenses of $1.6$4.7 million,million and higher restructuring, impairment and other charges, net of $1.3 million. The decrease in cost of sales was primarily driven by lower print and distribution cost of sales of $1.4 millionvolumes and highercost depreciationcontrol and amortization expense of $0.9 million.initiatives. The higherincrease in SG&A expenses werewas primarily driven by higher sellingshare-based compensation expense andof $1.8 million, higher selling expense, higher bad debt expense of $0.9$1.2 million,million and higher incentive compensation expense, partially offset by costlower controlconsulting initiatives, whereas the higher print and distribution cost of sales were primarily due to higher sales volumes.expense.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 as Compared to the Three and Six Months Ended MarchJune 31,30, 2025

The following table shows the results of operations for the three and six months ended MarchJune 31,30, 2026 and 2025:

Net sales of software solutions of $91.7$99.4 million for the three months ended MarchJune 31,30, 2026 increased by $7.1$7.2 million, or 8.4%,7.8%, as compared to the three months ended MarchJune 31,30, 2025. Net sales of software solutions increased primarily due to higher ActiveDisclosure net sales of $4.5$6.4 millionmillion, andlargely driven by higher Venue net sales of $2.2 million.volumes.

Net sales of tech-enabled services of $70.1$90.2 million for the three months ended MarchJune 31,30, 2026 decreasedincreased by $6.4$5.0 million, or 8.4%,5.9%, as compared to the three months ended MarchJune 31,30, 2025. Net sales of tech-enabled services decreasedincreased primarily due to lowerhigher capital markets net sales of $6.5$5.9 million, largely driven by a decline in bothhigher transactional andvolumes, partially offset by lower compliance volumes.

Net sales of print and distribution of $43.7$34.6 million for the three months ended MarchJune 31,30, 2026 increaseddecreased by $3.7$6.1 million, or 9.3%,15.0%, as compared to the three months ended MarchJune 31,30, 2025. Net sales of print and distribution increaseddecreased due to higherlower capital markets net sales of $5.4$3.5 million,million partially offset byand lower investment companies net sales of $1.7$2.6 million. The higherdecreases in capital markets net sales were largely driven by higher transactional volumes, partially offset by lower compliance volumes, whereas the lowerand investment companies net sales were both largely driven by lower compliance volumes.

PrintSoftware and distributionsolutions cost of sales of $19.5$28.2 million for the three months ended MarchJune 31,30, 2026 increased by $1.4$1.8 million, or 7.7%,6.8%, as compared to the three months ended MarchJune 31,30, 2025. PrintSoftware and distributionsolutions cost of sales increased primarily due to higher sales volumes. As a percentage of printsoftware and distributionsolutions net sales, printsoftware and distributionsolutions cost of sales decreased by 0.7%, primarily due to higher sales volumes.0.2%.

SG&ATech-enabled expensesservices cost of $67.4sales of $29.8 million for the three months ended MarchJune 31,30, 2026 increaseddecreased by $1.6$1.8 million, or 2.4%,5.7%, as compared to the three months ended MarchJune 31,30, 2025. SG&ATech-enabled expensesservices increasedcost of sales decreased primarily due to a higher sellingproportion expenseof transactional net sales, which generally have higher margins as acompared resultto of the increase incompliance net salessales, andas higherwell bad debt expense of $0.9 million, partially offset byas cost control initiatives. As a percentage of tech-enabled services net sales, SG&Atech-enabled expensesservices increasedcost of sales decreased by 4.1%, largely driven by a higher proportion of transactional net sales, which generally have higher margins as compared to 32.8%compliance fornet thesales, threeas monthswell endedas Marchcost 31,control 2026 from 32.7% for the three months ended March 31, 2025.initiatives.

Depreciation and amortization of $15.0 million for the three months ended MarchJune 31,30, 2026 increaseddecreased by $0.9$0.1 million, or 6.4%,0.7%, as compared to the three months ended MarchJune 31,30, 2025. Depreciation and amortization increased due to higher software amortization expense, driven by additional software development.

Restructuring, impairment and other charges, net of $0.7$2.3 million for the three months ended MarchJune 31,30, 2026 decreasedincreased by $2.2$1.3 million, or 75.9%, as compared to the three months ended MarchJune 31,30, 2025. For the three months ended MarchJune 31,30, 2025,2026, these charges included $2.8$2.2 million of employee termination costs for approximately 4010 employees. For the three months ended June 30, 2025, these charges included $0.9 million of employee termination costs for approximately 10 employees.

Income from operations of $48.5$56.0 million for the three months ended MarchJune 31,30, 2026 increased by $2.7$3.2 million, or 5.9%,6.1%, as compared to the three months ended MarchJune 31,30, 20252025. Income from operations increased primarily due to higher net sales of $4.4$6.1 million, as described above, and lower restructuring, impairment and other charges, netcost of $2.2sales of $3.0 million, partially offset by higher SG&A expenses of $1.6$4.7 million,million and higher restructuring, impairment and other charges, net of $1.3 million. The decrease in cost of sales was primarily driven by lower print and distribution cost of sales of $1.4 millionvolumes and highercost depreciationcontrol and amortization expense of $0.9 million.initiatives. The higherincrease in SG&A expenses werewas primarily driven by higher sellingshare-based compensation expense andof $1.8 million, higher selling expense, higher bad debt expense of $0.9$1.2 million,million and higher incentive compensation expense, partially offset by costlower controlconsulting initiatives, whereas the higher print and distribution cost of sales were primarily due to higher sales volumes.expense.

Interest expense, net of $2.8$3.5 million for the three months ended MarchJune 31,30, 2026 decreased by $0.3 million, or 9.7%.7.9%, as compared to the three months ended June 30, 2025.

The effective income tax rate was 26.2%30.1% for the three months ended MarchJune 31,30, 2026,2026 as compared to 26.5%25.9% for the three months ended MarchJune 31,30, 2025. The decreaseincrease in the effective income tax rate was primarily driven by a net decrease in non-recognizablevaluation losses.allowances during the three months ended June 30, 2025 and the net unfavorable impact of discrete adjustments.

The following tables summarize net sales, Segment Adjusted EBITDA and Segment Adjusted EBITDA margin within each of the operating segments for the three and six months ended MarchJune 31,30, 2026 and 2025:

Net sales of $58.6$65.7 million for the three months ended MarchJune 31,30, 2026 increased by $6.7$6.6 million, or 12.9%,11.2%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to higher ActiveDisclosure net sales of $4.5 million and higher Venue net sales of $2.2$6.4 million, both largely driven by increasedhigher sales volumes.

Segment Adjusted EBITDA of $19.2$23.7 million for the three months ended MarchJune 31,30, 2026 increased by $5.3$1.3 million, or 38.1%,5.8%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to higher net sales of $6.7$6.6 million, partially offset by higher SG&A expenses of $1.9$4.1 million,million largely driven byand higher badcost debtof expensesales of $1.1 millionmillion. andThe increase in SG&A expenses was primarily due to higher selling expense as a result of the increase in net sales,sales partiallyand offsethigher byincentive compensation expense, whereas the increase in cost controlof initiatives.sales was primarily due to a higher allocation of overhead costs.

Segment Adjusted EBITDA margin increaseddecreased by approximately 600180 basis points (“bps”) from 26.8%37.9% for the three months ended MarchJune 31,30, 2025 to 32.8%36.1% for the three months ended MarchJune 31,30, 2026, primarily due to an approximately 390 and 200230 bps decreaseincrease in cost of sales and SG&A expensesexpense as a percentage of net sales, respectively, largely driven by higher netselling sales.expense and higher incentive compensation expense.

Net sales of $82.8$95.9 million for the three months ended MarchJune 31,30, 2026 decreasedincreased by $1.1$2.4 million, or 1.3%,2.6%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to lowerhigher tech-enabled services net sales of $6.5$5.9 million, partially offset by higherlower print and distribution net sales of $5.4$3.5 million. The decreaseincrease in tech-enabled services net sales was largely driven by a decline in both transactional and compliance volumes, whereas the increase in print and distribution net sales was due to higher transactional volumes, partially offset by lower compliance volumes, whereas the decrease in print and distribution net sales was largely driven by lower compliance volumes.

Segment Adjusted EBITDA of $33.7$40.2 million for the three months ended MarchJune 31,30, 2026 decreasedincreased by $3.0$3.4 million, or 8.2%,9.2%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to higherlower cost of sales of $2.5$2.6 million and lowerhigher net sales of $1.1$2.4 million, partially offset by higher SG&A expenses of $1.8 million. The increasedecrease in cost of sales was primarilylargely duedriven toby higherlower print and distribution net sales,sales whichand generallycost havecontrol initiatives, whereas the increase in SG&A expenses was largely driven by higher variablebad costs,debt asexpense comparedof to$1.3 tech-enabled services net sales.million.

Segment Adjusted EBITDA margin decreasedincreased by approximately 300250 bps from 43.7%39.4% for the three months ended MarchJune 31,30, 2025 to 40.7%41.9% for the three months ended MarchJune 31,30, 2026, primarily due to an approximately 350370 bps increasedecrease in cost of sales as a percentage of net sales, largely driven by a higher printproportion of transactional net sales, which generally have higher margins, as compared to compliance net sales, and distributioncost control initiatives, partially offset by an approximately 130 bps increase in SG&A expenses as a percentage of net sales.sales, largely driven by higher bad debt expense.

Net sales of $33.1$33.7 million for the three months ended MarchJune 31,30, 2026 increased by $0.4$0.6 million, or 1.2%,1.8%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to price increases.

Segment Adjusted EBITDA of $13.1$14.6 million for the three months ended MarchJune 31,30, 2026 increased by $0.3$0.4 million, or 2.3%,2.8%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to higher net sales.

Segment Adjusted EBITDA margin increased by approximately 5040 bps from 39.1%42.9% for the three months ended MarchJune 31,30, 2025 to 39.6%43.3% for the three months ended MarchJune 31,30, 2026, primarily due to higher net sales.

Net sales of $31.0$28.9 million for the three months ended MarchJune 31,30, 2026 decreased by $1.6$3.5 million, or 4.9%,10.8%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to lower print and distribution net sales of $1.7$2.6 million, largely driven by lower compliance volumes.

Segment Adjusted EBITDA of $12.1$11.9 million for the three months ended MarchJune 31,30, 2026 decreased by $0.1$0.7 million, or 0.8%,5.6%, as compared to the three months ended MarchJune 31,30, 2025, primarily due to lower net sales of $1.6$3.5 million, partially offset by lower cost of sales of $1.4$2.2 million.million, largely driven by lower sales volumes.

Segment Adjusted EBITDA margin increased by approximately 160230 bps from 37.4%38.9% for the three months ended MarchJune 31,30, 2025 to 39.0%41.2% for the three months ended MarchJune 31,30, 2026, primarily due to an approximately 200170 bps decrease in cost of sales as a percentage of net sales, largely driven by a higher proportion of tech-enabled services net sales, which generally have higher margins, as compared to print and distribution net sales.

CorporateNet unallocated expensessales of $7.5$59.9 million for the threesix months ended MarchJune 31,30, 2026 increaseddecreased by $0.1$5.1 million, or 1.4%,7.8%, as compared to the threesix months ended MarchJune 31,30, 2025, primarily due to higherlower consultingprint and third-partydistribution expenses,net mostlysales offsetof $4.3 million, largely driven by lower healthcarecompliance expense of $1.0 million.volumes.