Dun & Bradstreet - Q3 2024

Executive Summary

• Q3 2024 delivered solid top-line and margin execution: revenue $609.1M (+3.5% YoY) and adjusted EBITDA $247.4M with 40.6% margin; organic constant currency revenue growth was 3.4%, slightly above management’s expectations.
• International remained the growth engine (+5.7% revenue), while North America grew 2.6% with sequential improvement in Digital Marketing; consolidated margins expanded 60 bps YoY and North America margin reached 48.0% (+160 bps).
• FY24 outlook maintained at the low end for revenue/organic growth; adjusted EBITDA ($930–$950M) and adjusted EPS ($1.00–$1.04) reiterated; modeling updated: interest expense lowered to ~$215M (from ~$220M), D&A raised to $130–$140M.
• Strategic catalysts: launch of ChatD&B generative AI assistant and multi-year partnerships (LSEG private markets, Databricks data access), plus inbound strategic/financial interest in the company; dividend declared $0.05 per share for Q4.

What Went Well and What Went Wrong

• What Went Well

  • International Finance & Risk continued strong demand (Q3 F&R $121.6M, +7.1%), with growth across API solutions and third-party risk/compliance in Europe; International adjusted EBITDA margin up to 33.5% (+30 bps).
  • North America margin expansion to 48.0% (+160 bps) on revenue growth and lower net personnel costs; overall adjusted EBITDA margin expanded 60 bps YoY to 40.6%.
  • AI/partnership momentum: ChatD&B launched with positive client feedback; strategic collaborations with LSEG (private markets) and Databricks (real-time datasets), positioning for capital markets and data distribution expansion.
  • Quote: “Organic revenue growth of 3.4% was ahead of our expectations, and we delivered Adjusted EBITDA margin expansion of 60 basis points...” — CEO Anthony Jabbour.

• What Went Wrong

  • Digital Marketing remained a headwind (though improving sequentially to low single-digit decline), reflecting disciplined client spend and elongated sales cycles; macro caution persisted.
  • GAAP profitability remained modest (net income $3.2M; diluted EPS $0.01), with earnings affected by lower tax benefit and swap amortization; adjusted EPS flat YoY at $0.27.
  • Credibility (SMB) still below desired trajectory despite green shoots; management remains open to strategic options while focusing on company-level inbound interest.

Transcript

Operator (participant)

Good day and welcome to the Dun & Bradstreet Q3 2024 Earnings Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Sean Anthony, Vice President of FP&A and Investor Relations. Please go ahead.

Sean Anthony (VP of FP&A and Investor Relations)

Thank you. Good morning, everyone, and thank you for joining us for Dun & Bradstreet's Financial Results Conference Call for Q3 of 2024. On the call today, we have Dun & Bradstreet CEO Anthony Jabbour and CFO Bryan Hipsher. Anthony will begin with an overview of our Q3 results and then pass it over to Bryan for an in-depth financial review. We will then finish up with Q&A and a few closing remarks. Before we begin, allow me to provide a disclaimer regarding forward-looking statements. This call, including the Q&A portion of the call, may include forward-looking statements related to the expected future results for our company and are therefore forward-looking statements. Our actual results may differ materially from our projections due to a number of risks and uncertainties. The risks and uncertainties that forward-looking statements are subject to are described in our earnings release and other SEC filings.

Today's remarks will also include references to non-GAAP financial measures. Additional information, including the reconciliation between non-GAAP financial information to the GAAP financial information, is provided in the press release and supplemental slide presentation. The conference call will be available for replay via webcast through Dun & Bradstreet's Investor Relations website at investor.dnb.com. With that, I'll now turn the call over to Anthony.

Anthony Jabbour (CEO)

Thank you, Sean. Good morning, everyone, and thank you for joining us for our Q3 earnings call. Overall, we delivered another solid quarter on both the top and bottom lines. As we noted at the beginning of the year, there was some timing in North America between on-delivery and ratably recognized revenues in Q3, and I'm pleased to report that we delivered organic revenue growth of 3.4% overall, which is slightly above expectations. While international continued its consistent delivery of mid to high single-digit organic revenue growth of 5% this quarter, North America came in at 3%, largely due to the timing I mentioned upfront. On the profit side, we expanded margins 60 basis points and improved free cash flow conversion to nearly 50%.

We also enacted our planned reduction in capitalized software development spend at the end of September, and through the actions taken, and as a result, expect to see lower capitalized software expenditures of around $15 million on an annualized basis. We are coming off an elevated investment period and expect to move towards our medium-term target spend of 6%-7% of revenues on an annual basis. And finally, before moving on to some exciting things happening with new innovations, strategic partnerships, and client successes, I want to take a moment to update everyone on the inbound interest we received late this summer. We've been working with our advisor to evaluate inquiries from both strategic and financial acquirers.

While we'll not comment on the status of any particular engagement, the team is spending a significant amount of time conducting in-person meetings, holding additional functional due diligence sessions, providing detailed responses to the interested parties, and will continue to be responsive and thoughtful in all of our interactions on behalf of our shareholders. Our D&B team continues to impress me, and I would like to thank them for their focus on delivering the quarter, executing the capital reduction, and being responsive to the interest we are currently receiving. And if all of that wasn't enough, we also continue to innovate for our clients. I'll start off with the release of Chat D&B, our patent-pending generative AI assistant. Chat D&B surfaces knowledge across the company's Data Blocks, delivering actionable insights to its users, ranging from prospecting to company due diligence.

Users can ask questions in conversational language, and it has the intelligence to access and analyze the underlying data to deliver the most relevant and accurate output. Chat D&B is fueled by our Dun & Bradstreet Data Cloud, which is renowned for the breadth, depth, and quality of private company data it possesses, and it will also be able to incorporate additional client first-party data, creating the ability to accurately answer questions posed on both private and public companies within seconds. Our autonomous GenAI agents show their work, the data sources, and lineage in Chat D&B, allowing users to have confidence in the quality and accuracy of the information presented. We launched Chat D&B internally with over 1,000 colleagues for testing and quality checks before releasing it to dozens of clients and partners in our early adopter program.

These clients shared feedback and insights into how they are using Chat D&B and the benefits of this new assistant in their daily jobs. Results were encouraging and centered around the speed at which data can be accessed, the broad amount of information that is available to query, and the summarization of vast amounts of information in a format that is easy to use, track, and trust. Chat D&B is an exciting evolution for our company, and we look forward to discussing its progress and expansion in the quarters to come. We announced two exciting partnerships this quarter, the first with London Stock Exchange Group, or LSEG, and the second with Intercontinental Exchange, or ICE. With LSEG, we are forming a strategic collaboration to broaden access to private market information.

The combination of LSEG's capital markets data, including deals, private equity, news, and research, with our trusted private market data providing visibility on officers and directors, ownership insights, and financial information from millions of companies globally, will enable investment in capital market firms to drive better data-driven financial assessments and decisions. Our D-U-N-S Number will now be available to LSEG's Workspace's large customer community, and therefore increase its reach into the capital markets as a new and expanding vertical. Using the D-U-N-S Number as the key to unlock data about a business, LSEG's Workspace users will be able to easily search for private company data and download the data to improve mapping, discoverability, and interoperability of content on the global public and private companies.

The D-U-N-S Number provides linkage across business relationships, employees, and subsidiaries, enabling users of LSEG Workspace to gain a better view of an enterprise's corporate structure, ownership, and financial health. The collaboration with LSEG marks a new era in providing technology power transparency to private company analysis. With the exponential growth of private markets, Dun & Bradstreet plays a critical role, providing clarity and insights to help investors manage risk and discover new investment opportunities. We also partnered with ICE to launch a new climate risk data offering covering private and public companies globally. The new service will be designed to provide transition risk data, including Greenhouse Gas, Scope 1, 2, and 3, and physical risk data on tens of millions of companies. This will be one of the broadest climate data offerings available on the market.

By combining our business intelligence, supply chain, and asset location data with ICE's geospatial and climate capabilities, and then leveraging ICE's distribution channels, this new service will offer the broader investment community a single source of climate data. This new data solution will become part of ICE Climate, which provides data and analytics that help quantify investment impacts posed by transition and physical climate risks, such as extreme weather events. These are two great examples of how we are picking our spots and partnering with world-class organizations to bring incremental value to these markets. While each of our partnerships are limited in terms of the magnitude of data, scope, and specificity of use case, we continue to balance our time to market and longer-term opportunities to drive maximum value creation. Before turning the call over to Bryan, I wanted to touch on a few updates on the commercial side.

North America continued to deliver consistent revenue retention of 97% while driving a 32% Vitality Index. Clients and prospects' buying behaviors were generally consistent with the first two quarters of the year, as businesses balanced mixed macroeconomic signals and an impending presidential election. And while business spending remains disciplined more broadly and sales cycles have lengthened, there were some examples of exciting wins in the quarter. The first is with one of the largest banks in the world that expanded their relationship with us by double digits. The client leverages our data and analytics within their commercial card and business banking portfolio, two areas that are growing at a rapid clip for them.

By leveraging our matching and SBFE attributes, the client is making more effective and efficient credit line decisioning, and we look forward to supporting them with their current efforts and their future strategies focused on the leveraging of generative AI solutions. We also had a strong multi-year win with one of the world's largest life insurance companies. The continued improvements in our data and solutions earned us the right to extend a four-year agreement and implement a mid-single-digit pricing increase. They use a bundled set of solutions that are heavily integrated into the customer's platforms and workflow, which allowed a new set of incoming stakeholders to realize the value we are providing across their organization, and before moving on to the international side, I wanted to mention our expanded relationship with Tamr.

Our relationship with Tamr expanded through the leveraging of our newly launched consumer marketing data to analytically improve match outcomes for customer-focused data management solutions. Ultimately, we are working together to improve data stewardship and act as a front end for cleaner consumer data sets that drive better business outcomes in sales and marketing use cases related to consumer-to-consumer and consumer-to-business matched records. Turning to international, the team continued on with their strategy of winning with the largest and most strategic players in the regions. With a retention rate of 93% and Vitality Index of 35%, the team is focused on completing our legacy solution migration efforts while balancing upsell and the addition of new client logos. Beginning with IKEA, they expanded our existing relationship with our D&B Supplier Risk solution by adding more markets to master their data supply chain.

IKEA is a great example of our ability to land and expand with the customer through the expansion of data elements, geographies, and number of businesses covered. In the United Kingdom, we had our largest ever sale of Hoovers in our international segment. The cross-sale was a five-year multi-million dollar expansion, adding to numerous other finance and risk products being utilized by the client. And finally, in Germany, we secured a contract with international distribution and service company Jebsen & Jessen to provide data and analytics to support their financial risk, master data management, and compliance activities. These renewals, expansions, and new wins across our segments are just a handful of examples of how we continue to deliver increased value across our clients' most critical use cases. As I said earlier, I'm very proud of the team's execution this quarter and throughout 2024.

We look forward to closing out the year and heading into 2025 with another year of significant progress under our belts. I'd now like to turn the call over to Bryan to discuss our financials in more detail and give a quick update on our outlook for the remainder of the year.

Bryan Hipsher (CFO)

Thank you, Anthony, and good morning, everyone. Turning to slide one, on a GAAP basis, third quarter revenues were $609 million, an increase of 3.5% compared to the prior year quarter, and an increase of 3.2% before the effect of foreign exchange. Net income for the third quarter was $3 million, for a diluted earnings per share of $0.01, compared to net income of $4 million for the prior year quarter. The $1 million decrease in net earnings for the three months ended September 30, 2024, compared to the prior year quarter, was primarily due to a lower tax benefit and higher amortization loss related to the interest rate swap amendment completed in the third quarter of 2023. This was partially offset by higher operating income and lower miscellaneous non-operating expenses, primarily driven by lower fees related to our senior credit facility.

Turning to slide two, I'll now discuss our adjusted results for the third quarter. Third quarter revenues for the total company were $609 million, an increase of 3.5% compared to the prior year quarter, and an increase of 3.2% before the effect of foreign exchange. The increase was attributable to growth in the underlying business and the positive impact of foreign exchange, partially offset by the impact of a divestiture of a business-to-consumer business in Finland in the fourth quarter of 2023. Excluding the impact of the divestiture and the positive impact of foreign exchange, total organic revenue increased 3.4%, reflecting growth across both of our segments. Third quarter adjusted EBITDA for the total company was $247 million, an increase of $12 million, or 5%. This was primarily due to revenue growth, partially offset by associated personnel and data acquisition costs.

Third quarter adjusted EBITDA margin was 41%, an increase of 60 basis points compared to the prior year quarter. Third quarter adjusted net income was $116 million, or adjusted earnings per share of $0.27, compared to $116.2 million, or $0.27 per share in the third quarter of 2023. The slight decrease in adjusted net income was primarily attributable to higher tax expense and higher depreciation amortization, partially offset by higher adjusted EBITDA and lower interest expense in the current year quarter. Turning now to slide three, I'll now discuss the results for our two segments, North America and International. In North America, revenues for the third quarter were $433 million, an increase of 2.6% from prior year quarter and 2.7% on an organic constant currency basis.

In finance and risk, revenues were $238 million, an increase of $3 million, or 1%, due to a net increase in revenue across our third-party risk and supply chain management, partially offset by decreased revenues from our finance solutions due in part to the timing of revenues shifting from on-delivery to ratable. For sales and marketing, revenues were $195 million, an increase of $8 million, or 5% before the effect of foreign exchange. Sales and marketing growth was due to higher revenue from our master data management solutions, partially offset by decreased revenues from our digital marketing solutions, and while our digital marketing solutions declined in the quarter, they improved sequentially and as expected versus the first half of 2024.

North America's third quarter adjusted EBITDA was $208 million, an increase of $12 million, or 6%, and North America's EBITDA margin was 48%, an increase of 160 basis points from the prior year quarter. This was primarily due to revenue growth and lower net personnel costs, partially offset by higher cloud infrastructure costs and data acquisition costs. Turning to slide four, in our international segment, third quarter revenues increased 5.7% to $177 million, or an increase of 4.7% before the effect of foreign exchange, and an increase of 5.1% on an organic constant currency basis. Finance and risk revenues were $122 million, an increase of 7%, or an increase of 6% before the effect of foreign exchange. All markets contributed to the growth, including strong contributions from newer API solutions across our own markets and third-party risk and compliance solutions in Europe.

A Worldwide Network alliance has also had increased revenue due to higher product royalties. Sales and marketing revenues were $55 million, an increase of 3%, or an increase of 1% before the effect of foreign exchange. On an organic basis, revenues grew 2.4%, primarily due to higher product loyalty revenues from our Worldwide Network alliances and continued demand for our master data management solution. International third quarter adjusted EBITDA was $59 million, an increase of $4 million, or 7%, and an international adjusted EBITDA margin was 34%, an increase of 30 basis points from the prior year quarter. The increase in adjusted EBITDA was primarily due to revenue growth from the underlying business, partially offset by higher personnel and data acquisition costs and foreign exchange loss. Turning to slide five, slide five contains the details of our capital structure as of quarter end.

At the end of September 30, 2024, we had cash and cash equivalents of $289 million and total principal amount of debt of $3,681 million with a weighted average interest rate of 6.0%. Currently, 87% of our debt is either fixed or hedged, and as of September 30, 2024, we had $717 million available on our $850 million revolving credit facility. Our leverage ratio was 3.7 times on a net basis, and the credit facility senior secured net leverage ratio was 3.2 times. We continue to expect to be around three and a half times on a net basis by the end of this year as we continue to migrate down towards our medium-term range of 3-3.25 times in 2025.

To manage our floating rate exposure ahead of the $1,250 million of swaps that did mature during the first quarter of 2025, we executed $600 million of forward-starting interest rate swaps, $350 million at 3.229% and $250 million at 3.24%. These become effective at the end of March of 2025 and mature in March of 2028. Additionally, we terminated $1 billion in swaps with maturity in February of 2026 and entered into a new billion-dollar swap with a March 2028 maturity at a rate of 3.2463%. In regards to our share repurchase program, we did not execute any share repurchases in the third quarter due to the ongoing process related to the inbound interest we received earlier this year. Year to date, we repurchased 961,360 shares of Dun & Bradstreet Common Stock for $9.3 million, net of accrued excise tax at an average price of $9.71 per share.

We currently have over nine million shares remaining under our existing buyback authorization, and now turning to slide 6, our outlook for 2024 is as follows. Total revenues after the effect of foreign currency continue to be expected at the low end of our previously communicated range of $2,400 million-$2,440 million, or an increase of approximately 3.7%-5.4%. This includes an assumption of a modest tailwind in the fourth quarter due to the effect of foreign currency related to the expected variances between the U.S. dollar, euro, British pound, and Swedish krona. Revenues on an organic constant currency basis continue to be expected at the low end of our previously communicated range of 4.1%-5.1% for the full year. Adjusted EBITDA continues to be expected in the range of $930-$950 million.

An Adjusted EPS is expected to continue to be in the range of $1-$1.04. Additional modeling details underline our outlook are as follows. We now expect interest expense to be approximately $215 million. Depreciation amortization expense is now expected to be in a range of $130-$140 million, excluding incremental depreciation amortization expense resulting from purchase accounting. Adjusted effective tax rate of approximately 22%-23%, weighted average diluted shares outstanding of approximately $436 million. And for CapEx, we continue to expect approximately $150-$160 million of internally developed software and $45 million of property plant equipment and purchased software as capital spend begins to moderate around the second half of the year.

Finally, with the heightened level of investment beginning to abate, we continue to anticipate operating free cash flow conversion as a percentage of adjusted net income, excluding the impact of the AR securitization to improve versus the prior year as previously discussed. The team is pushing hard to finish out the year as strong as possible and preparing for another year of improvement in 2025. With that, we're now happy to open the call for questions. Operator, will you please open up the line for Q&A?

Operator (participant)

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. The first question comes from Kyle Peterson with Needham. Please go ahead.

Kyle Peterson (Managing Director of Equity Research)

Great. Thanks, guys. Good morning. Appreciate you taking the question. Just wanted to start off on the digital marketing business. It does sound like there was some sequential improvement there, which is good to hear. I know there's typically some seasonal benefit as kind of the year goes, but I just wanted to see how that performed both relative to expectations and any expectations for that business that you can share for the fourth quarter would be really helpful.

Anthony Jabbour (CEO)

Sure. Thank you, Kyle, for the question, Anthony. Yeah, we saw the digital marketing was still a headwind in the quarter, but a much smaller headwind from the first two quarters of the year, kind of as we expected. And I'd say throughout the quarter, we saw strength in strengthening throughout the quarter. So we feel good in terms of the progress that we're making and as it lines up to our expectations. And what I mentioned on the previous call, we're very focused, obviously, on digital marketing and credibility and removing those headwinds from the business.

Bryan Hipsher (CFO)

Yeah, Kyle, we do look at it. This is a quarter that it had gone from kind of double-digit declines really starting late last year and throughout the early part of this year. As we're getting through some of those comps and specialists we had in Q4, we saw this quarter was in the low single digits right from a decline perspective, and again, expect that to continue to improve into the fourth quarter.

Kyle Peterson (Managing Director of Equity Research)

Got it. That's very helpful. And I guess just kind of switching gears a little bit on the balance sheet, I know kind of third quarter in a row, net leverage has been about flat. I know it's probably coming down, but decimals and rounding and stuff. But just wanted to see, I think you guys had mentioned earlier this year kind of expectations to get to three and a half turns on a net basis, but by year-end, is that still within sight based on the current guide or how you guys kind of thinking about deleveraging the balance sheet from here?

Bryan Hipsher (CFO)

Yeah, Kyle, you're exactly right. It's borderline right from a rounding perspective. But if you look for the full year where we expect to be, we expect to be right around that three and a half times. And then as we head into next year, obviously, we'll get formal guidance and plans and all of that kind of shaped up for our February call. But the intention is to drive down towards that three, three and a quarter throughout 2025. And that's going to be a mix of, again, increasing EBITDA, but also beginning to bring down just the gross net level soon.

Kyle Peterson (Managing Director of Equity Research)

Got it. Thanks for the color and for taking my questions. Nice results.

Anthony Jabbour (CEO)

Thank you, Kyle.

Operator (participant)

The next question comes from Faiza Alwy with Deutsche Bank. Please go ahead.

Faiza Alwy (Managing Director of Equity Research)

Yes, hi, thank you. I wanted to ask about the strategic discussions that you've been having. Appreciated your commentary there. I'm curious if you're exploring if you can give us any more color around the credibility business and sort of what are some of the factors around that, and if you're considering sort of splitting that business separately or any other color there would be helpful?

Anthony Jabbour (CEO)

So Faiza, the question on the larger process and specifically on credibility in terms of looking at how we would handle our divestment, I think was the question. I'll answer the second part first. From a credibility perspective, obviously, we're focused on the larger conversations around the full company and those conversations and meetings that are taking place more so than a smaller divestiture. Like I said, it is something that we will do, but all of our energy is really going to the main transaction at the moment.

Bryan Hipsher (CFO)

Faiza, to the point Anthony made on the last call, certainly, we're getting further away from some of that direct impact from the consent order. This quarter, it actually credibility showed some slight growth. So it's not out of the woods. It's not incremental to where we want to be from an organic perspective. Again, if you look at that trailing 12 months and the 90%, the revenue streams, they're still right around that 6%. And that includes, obviously, the third quarter where it was certainly lower because of some of the timing that we discussed upfront. So I think we're in the same phase where we're for continuing to monitor, continue to look to improve the business, but again, committed to evaluating and making some decisions later this year.

Faiza Alwy (Managing Director of Equity Research)

Okay. That's really helpful. And then just you mentioned the collaborations with LSEG and ICE around the capital markets business. Curious if there's any numbers that you'd be willing to put around that. When might you start to see some benefits accrue there? And maybe some color on how the partnership works, sort of is it usage-based? Is it a fixed fee-based? Again, more color there would be helpful.

Bryan Hipsher (CFO)

Yeah. So I'll let Anthony talk a little bit about the partnership and how we think about capital markets and private company data in general. But if you think about these two, and Anthony mentioned it, we're very, I would say, mindful of selecting partners like LSEG, like an ICE, doing a very specific use case and really starting to monetize off of both of our capabilities. We have long-standing commercial relationships actually with both of them. But in this case, if you think about the true power of this, it would be a revenue share between the two entities as we move forward from that perspective. So that's really the concept when we form into an alliance in this case would be to really generate the incremental upside from the selling of the combined solution on a real-world basis.

Anthony Jabbour (CEO)

Yeah. And maybe what I'd add is it's serendipitous. The amount of time and money, effort that we spend enhancing the private company data assets for the traditional use cases here has really put us in an advantageous position, I think, for the coming wave of private market activity, same with generative AI. And as we look into capital markets or private markets, we really don't have any amazing private market solutions today or a large sales force focused on that space. We'll build them over time. But in the short term, we're picking select partners who we could really begin seeding the market with our D-U-N-S Number and our unique data. And like I said, we're excited about these partnerships. They're great organizations, and we're looking forward to great running with them in these spaces.

Faiza Alwy (Managing Director of Equity Research)

Great. Thank you so much.

Anthony Jabbour (CEO)

Thank you, Faiza.

Operator (participant)

The next question comes from Andrew Steinerman with J.P. Morgan. Please go ahead.

Alex Hess (Analyst)

Hi, this is Alex Hess on for Andrew. Hope everybody's well today. I want to start with the finance solutions callout, and if you could give us some color on maybe how that business is trending from an underlying basis, that would be helpful. FX fee contract transitions.

Bryan Hipsher (CFO)

Yeah, Alex, thanks for the question. The core finance solutions, I would say, is a little bit split between North America and international. On the international side, really continues to perform well as we've gone through the transitions and migrations from some of those legacy applications onto our modern FP&A and then our modern delivery mechanisms around our Data Cloud solutions. You see really nice kind of mid-single-digit growth within the international region on the finance side of the equation. In North America, you know that it's a big chunk of the revenue stream, very embedded within organizations, really sets the foundation for a lot of those relationships on the F&R side. And so we've used it as a springboard to really expand and upsell into those third-party risk lines, which has been growing double digits.

And so while the core finance solutions have had that low single-digit consistent growth on that side, it really acts as a platform to really land and then expand off of it from that perspective. That's been our strategy in North America.

Alex Hess (Analyst)

Yeah, that's super helpful. And then just a couple of maintenance questions from us. When you say when you indicate full year revenues at the low single digits, sorry, at the low end of the guide, there's a large variation for what that might imply for 4Q. Do you still expect 4Q performance to be above the range? So I'm asking the exit year question, the exit rate question. And then can you tell us what the receivables draw on the facility was in 4Q as well? Excuse me.

Bryan Hipsher (CFO)

Sure. So I'll start with the kind of range side of the equation. So what we saw, Alex, was the third quarter obviously came in a little bit better than expected. The same way where sometimes we have a little bit of timing go against us, this time it actually was a little bit positive from that side. And so we were mindful into the fourth quarter, kind of balancing that in our expectations right for the year. So I would say where originally we had laid out the case for that side of the equation to be a little bit above, if you're kind of doing the math towards the lower end, you're not necessarily above the high end of the range anymore. If we're looking at the AR securitization, we actually paid back. It was $9.6 million in the quarter.

Alex Hess (Analyst)

Thank you.

Operator (participant)

The next question comes from Manav Patnaik with Barclays. Please go ahead.

Good morning. This is Brendan on for Manav. I also want to follow up and touch on the North America finance solutions, and I just want to better understand the delivery timing impact. I mean, you called it out previously, but growth did seem to come in a little better than you expected. Given the fiscal year is still at the low end, was it just that some of that revenue did end up shifting in the Q3 versus what you previously expected compared to Q4?

Bryan Hipsher (CFO)

Yeah. So, Brendan, thanks for the question. I mean, again, we're really kind of splitting hairs a little bit from that perspective. But what I would say is if you think about that finance solutions, when we expand into a new customer with a new solution, there are times where the delivery portion of that happens a little bit more upfront, especially when you're laying the baseline for an underwriting model, you're laying the baseline for a new analytic from that perspective, especially when you're doing risk underwriting from that side. And then as it evolves, again, as we said, the annual revenues in some circumstances don't shift that much, but it's just how it gets recognized throughout the year. And that was really the shift that we were discussing from that perspective.

Again, when we look at specifically into that F&R group a little bit better from that side, again, we continue to see very strong growth in our third-party risk compliance. So things like supply chain risk management, know your third party, those are very germane topics, I would say, both in North America and also drove a lot of nice growth on the international side. And so those are the types of things that ended up maybe being a little bit better than what we expected.

Okay. And then just a quick update on credibility, just how that did during the quarter and relative to your expectation.

Yeah. So we said that credibility would kind of improve throughout the back half of the year. We thought it would get close to break even and actually grew very slightly this quarter. So again, a positive, I would say, trajectory from that perspective. So in line with, I think, where we thought it would be. And then maybe, Anthony, if you want to touch on some of the things we're doing that will continue to evolve that business and how we think about how to go forward.

Anthony Jabbour (CEO)

Yeah. Sure. So we talked before about launching what we just call a money-back guarantee where, as we work with clients, say, if you give us one of four pieces of information, it's a bank account, credit card statement, taxes, permission to pull Consumer Bureau, link that score with our business bureau score. Each of them has a significant increase in credit ratings based on the model that we've done in our labs. And so with that, we had launched that in mid-July. I think we talked about the previous call. And we're seeing significant growth in that space because from a client perspective, it's a money-back guarantee. If we don't improve your credit, you don't pay or you get your money back, sorry.

Also in a worst-case scenario where they didn't deserve to have their credit rating improved, we now have a lot more information and data about that private company. Again, that's just an example as we think about not only how to grow the business or how to take exhaust data and make it relevant to get more and more information on these private companies, which, as you see, is really by far mostly not being lucky or serendipity, but building up the richness of this private company data is really, I think, beneficial for our future.

Thank you.

Thank you, Brendan.

Operator (participant)

The next question comes from Craig Huber with Huber Research Partners. Please go ahead.

Craig Huber (Equity Research Analyst)

Thank you. Anthony, I wanted to ask you, what's your opinion right now of the macro environment in North America? How are you feeling about that right now versus how you were feeling, say, a year ago? Thank you.

Anthony Jabbour (CEO)

Yeah. Thank you, Craig. I'd say there are many of our peers have reported, and I think the, excuse me, the landscape is fairly similar across many of the peers, and we see that as well in terms of, and compared to a year ago, I think it's pretty consistent with what we saw last year, so quarter to quarter, we see a slight lengthening in the sales cycle right now. Candidly, as we look internally, is that because of just the market? It's because we're in the middle of a process. That certainly doesn't help on your sales cycle when you're in the middle of a process, as you can imagine, and again, I'm really proud of the team to push through that, but I'd say it's fairly consistent with what it's been.

And I've always believed here we've got more ability to grow based on what we do and what we own versus what happens in the macro environment. So I think we've been able to weather it fairly well over this past year, and I feel the same going forward.

Craig Huber (Equity Research Analyst)

Thank you for that. Bryan, if I could just ask you, maybe I missed this, but what did you say how the revenues did with credibility? I think you said prior quarters it was down roughly 10%, but I missed what you said there on the current quarter. And also curious, how is your patience, the executives yourselves, with that business and the marketing business right now, given the problems you guys have been having for the last year plus here? I mean, what's your patience level right now? The question was asked about this earlier too, but I mean, just your patience here to keep that business as part of Dun & Bradstreet as opposed to selling it or shutting down that and/or the marketing effort that you have.

Anthony Jabbour (CEO)

I'll answer, Craig. Bryan said it was low single-digit growth in Credit Intelligence in this quarter, which was obviously positive. So the second part of your question in terms of what's our patience, on the second quarter call, I talked about our patience. We've made a lot of changes in both businesses. We're going to monitor them through the year to see how they perform. Like I said, we've seen significant uptake in the Credit Intelligence business. I talked about the money-back guarantee and our concierge service, a significant improvement there. On the digital marketing side, we're seeing that that one is something that's more macro-focused, and we've seen a return of spend there in the market. And again, we're continuing to monitor it. Our focus, though, right now really is on the sale of the full company, right?

Those are all the conversations that we're in, and they're extremely time-consuming. And they're very, like I said in my prepared remarks, we went through an FTE reduction related to our capitalized software, right? And that's always difficult, no matter what organization you're in, to do that. And then the inquiries that are coming in from a number of companies, at the lower level, you've got the risk of water cooler-type conversation, which we don't see. And at the senior level, they're involved actually in the process, right, in helping answer all the questions and all the diligence. And so again, I'm very proud of the team in terms of how they're staying focused on the task at hand and not giving in to the distraction. So from our perspective, we have urgency in everything that we do here, and we have urgency around remediating both of those businesses.

But the overwhelming, I'd say, priority right now is the full process that we're in.

Craig Huber (Equity Research Analyst)

Great. Thank you.

Anthony Jabbour (CEO)

Thank you, Craig.

Operator (participant)

The next question comes from Ashish Sabadra with RBC. Please go ahead.

Hey. Good morning, everyone. This is [Seth Wilkie] on Ashish Sabadra. Appreciate you taking our question. Really great to hear kind of that early feedback on Chat D&B, maybe a bit of a two-parter on that. How has the kind of early benefits been internally from kind of an operational efficiency standpoint that you guys are seeing? Then also externally, maybe if you could give some color, just the general pace of rollout that you're expecting for these types of initiatives. Is it relatively fast to market or more of a gradual kind of teaching/assimilation-type cadence? Thank you.

Bryan Hipsher (CFO)

Yeah. That's a great question. I appreciate it on Chat D&B. We're very excited about it, as I talked about, for a lot of reasons. The feedback that we've been receiving was just really overwhelming. Both one of my emails here from one of our clients. It's a fantastic tool. Saves a lot of time. I use Chat D&B in my day-to-day tasks. The time it takes to summarize a small business goes from 10 to 15 minutes to seconds. We have other ones that just go on and on, but something normally taking hours that's done in minutes. So it's a really big time saver. It's very positive. We're seeing the benefits of it internally as well as we do work. So I'd say the response has been better than we expected from, I'd say, our pilot.

And then there's other aspects of it which we really didn't see coming. Many of the clients, like I said, we've been in over a couple dozen clients in the pilot. Many of them are asking if they can give us their first-party client data. The power of that is we have obviously our data. We have their other first-party data that they add to it. Now, with us hosting that data, I think three things happen. One, we have a much secure relationship with that client. Two, we drive revenue. Obviously, we drive more revenue from that relationship by hosting their data and working with them. Three, it drives more collaboration with that client, right, which we can create and innovate more and more new ideas. It's really off to a great start. Like I said, we couldn't be more excited about it. We'll see how things pan out.

What we started with is really enabling our clients to use it without a charge, and so really what it'll do is it'll drive up their usage of our data, which is where we get paid. Because what we want to do is really widen the tent and get everyone in it and really understand all the possible things we can do, and then we'll figure out how specifically we want to charge, what's the most efficient way to do it, or do we want to include it and have more aggressive price increases for the relationship in general, but it's been a winner for us so far out of the gates, and like I said, I'm really proud of the team, and they're really the focus on this, so many other things are going on.

Great. Thank you very much.

Thank you.

Operator (participant)

Once again, if you have a question, please press star, then one. The next question comes from George Tong with Goldman Sachs. Please go ahead.

George Tong (Senior Research Analyst)

Hi. Thanks. Good morning. You mentioned that client spending remains disciplined and sales cycles have lengthened in the quarter. Can you discuss what internal initiatives or external market conditions you would need to see for these trends to begin to improve?

Anthony Jabbour (CEO)

I'll say George.

I'd say a couple of things, and there could be different buckets. Like I said, one bucket I think is the process that we're in, and some of the additional questions from clients, some wait and see as to what happens in this process. I'd say internally, what we can do is really continue to drive our, so if we think about Chat D&B as an example, there's real efficiency gain there, so at times, it's having a tighter budget. This is exactly the thing that you need and exactly, I'd say, we've priced it without an incremental charge initially where our clients can adopt it and do more and engage more with us. The other is, as we look at clients that have many data providers, we're approaching them about consolidating all their vendors into one, one being us, and saving money and having the best data that's available.

So there's a number of things that we're focused on doing here to help with the macro environment. And like I said, what I'm proud of the team is that they don't look at the macro as an excuse. They're always looking at ways to push through it. And so those would be the things I think that I'd focus on. Bryan, do you have anything?

Bryan Hipsher (CFO)

Yeah. And George, I think certainly we talked about one thing that put power into place right away was the fact the Fed took the first step right in the 50 basis points cut, right? And so that was definitely, on the opposite side, a positive move right from that perspective. So look, we're going to get through a presidential election, right? We're going to continue to see economic data come out. The Fed's going to continue to move towards, I think, a longer-term terminal that most believe is somewhere between 2.75 and 3. And all those things, as you get a little bit more clarity and less ambiguity, they help, I think, ease into better buying decisions, tightening up those sales cycles really soon from that perspective.

George Tong (Senior Research Analyst)

Got it. That's helpful. And then you're expecting organic revenue growth in 4Q to accelerate toward the high end of the full-year guidance range, maybe not above the range, but toward the higher end. Can you talk about whether that 4Q growth rate is a reasonable starting point for organic growth in 2025, or whether there are other factors that could perhaps alter growth rates next year that might cause it to deviate from what you're going to expect in 4Q?

Bryan Hipsher (CFO)

Yeah. So George, if you look at it, clearly, we'll get through the end of the year. Q4 is always a time for us to close out, right? A lot of sales, a lot of renewals, etc., from that perspective. And so we'll clearly issue formal guidance in February as we get out to the earnings call from that perspective. We've said it before, the quarter is not always a perfect. No quarter in the year is a perfect kind of jumping-off point. But if you think about how we've talked about our progression, right, into our medium-term guidance ranges, we've talked about getting things resolved around some of the 10% of the business that hasn't been necessarily performing relative to the other 90%. I mean, those are all the things that, as we think about transitioning from 2024 into 2025 and continuing to improve the business, right?

That's how we think about it versus any given quarter kind of being the jumping-off point from that perspective.

George Tong (Senior Research Analyst)

Got it. Very helpful. Thank you.

Anthony Jabbour (CEO)

Thanks, George.

Operator (participant)

This concludes the question and answer session. I would like to turn the conference back over to Anthony Jabbour for any closing remarks. Please go ahead.

Anthony Jabbour (CEO)

Thank you. As always, I'd like to thank my Dun & Bradstreet colleagues for all their efforts in growing this great business, our great clients who help us with their partnership and guidance, and for all of you for your interest in Dun & Bradstreet. I hope you have a wonderful rest of your day.

Operator (participant)

This concludes today's conference call. Thank you for attending today's presentation. You may now disconnect.