Dye & Durham Limited (DND:CA) Q2 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call presents a mixed picture. While there are positive elements like anticipated sales growth, strong adjusted EBITDA margin, and share repurchases, there are concerns such as accumulated debt, strategic review uncertainties, and issues in the Canadian legal business. The Q&A reveals potential risks, including competition and financial reporting challenges. However, the overall outlook remains stable with optimistic guidance and strategic initiatives, balancing out the negative aspects. Therefore, the stock price is likely to remain within a neutral range over the next two weeks.
Key Financial Performance
Revenue for the first half of fiscal 2026 $215.3 million, representing a decline of $16.8 million or 7% year-over-year. The decrease was primarily driven by continued market softness and customer turnover affecting legal software platforms, partially offset by growth in banking technology and contributions from Affinity in Australia.
Adjusted EBITDA for the first half of fiscal 2026 $100.8 million, down 24% year-over-year. The decline reflects revenue pressure in legal software, targeted reinvestment in labor and IT infrastructure, and a lower capitalization rate as certain expenditures were temporarily shifted from capitalized software development to maintenance expense.
Legal software revenue for the first half of fiscal 2026 $161.5 million. Declines were attributed to market downturns and reduced customer volumes and pricing in practice management and data insights.
Banking Technology revenue for the first half of fiscal 2026 $53.8 million. This segment provided stable, recurring infrastructure-like cash flows, which helped offset softer transactional volumes in parts of legal software.
Revenue in Canada for the first half of fiscal 2026 Declined 10% year-over-year, driven by the broader market downturn and reduced customer volumes and pricing in practice management and data insights. Segment adjusted EBITDA declined 25%, reflecting the revenue impact, a lower capitalization rate, and investment in sales, customer service, and IT infrastructure.
Revenue in the U.K. and Ireland for the first half of fiscal 2026 Declined 6% year-over-year due to softness in search platforms. Segment adjusted EBITDA declined 26% year-over-year.
Revenue in Australia for the first half of fiscal 2026 Grew 2% year-over-year, primarily driven by the Affinity acquisition, partially offset by declines in search and mortgage services. Segment adjusted EBITDA declined 14%, largely due to higher labor costs.
Operating cash flow for the first half of fiscal 2026 Net cash provided by operating activities was $73.8 million, compared to $62.3 million in the prior year period. The improvement reflects lower cash taxes, lower net interest paid, and favorable working capital movements.
Capital expenditures for the first half of fiscal 2026 $9 million, reflecting disciplined investment in platform development and maintenance.
You have reached the limit. Sign up to access full content
Get started
Operating Highlights
Unity launch in British Columbia: The launch of Unity in British Columbia on February 9 demonstrates modernization and integration, improving automation, adoption, engagement, and retention.
Geographic expansion through acquisitions: The company expanded its customer and geographic reach through acquisitions, creating a broad portfolio and global platform potential.
Cost savings initiatives: Identified $15-$20 million in annualized EBITDA savings from structural efficiency initiatives, with 60% targeted for action by the end of the fiscal year. Savings will come from consolidating global delivery teams, automation, and process standardization.
Operational improvements: Efforts to simplify and modernize the legal software portfolio into a unified global operating platform for small and midsized legal practices.
Shift to integrated global platform: The company plans to simplify, modernize, and integrate its legal software portfolio into a unified global operating platform, reducing SKU count and converging fragmented product portfolios.
Debt reduction and financial flexibility: Proceeds from the sale of Credas were used to reduce debt, including repayments on the revolving facility and Term Loan B, aligning with the priority of deleveraging the balance sheet.
You have reached the limit. Sign up to access full content
Get started
Risk or Challenges
Operational Complexity: The rapid expansion through acquisitions has increased operational complexity and fragmented systems, making integration and scalability challenging.
Customer Disruption: Pricing actions, cost reductions, and leadership volatility have disrupted customers, leading to reduced customer retention in certain segments.
Competitive Pressures: Pricing actions and limited investment in products have allowed competitors to enter the market, impacting margins and customer loyalty.
Product Misalignment: There is a disconnect between the perceived value and cost of products, leading to reduced customer retention and dissatisfaction.
Margin Sustainability: Lofty margins achieved through pricing actions have proven unsustainable in the long term, requiring structural efficiencies to improve margins.
Customer Transition Risks: The transition from legacy products to new global product offerings carries the risk of losing certain customers.
Market Softness: Continued market softness has led to revenue declines, particularly in legal software platforms.
Geographic Performance Variability: Revenue declines in Canada, the U.K., and Ireland due to market downturns and reduced customer volumes, with only slight growth in Australia driven by acquisitions.
Labor and IT Costs: Targeted reinvestments in labor and IT infrastructure have increased costs, impacting adjusted EBITDA.
Debt and Financial Flexibility: High debt levels require deleveraging efforts, including proceeds from asset sales to reduce financial risk.
You have reached the limit. Sign up to access full content
Get started
Guidance & Outlook
Multiyear Transformation Plan: The company plans to execute a multiyear transformation to simplify, modernize, and integrate its legal software portfolio into a unified global operating platform for small and midsized legal practices. This includes reducing SKU count and converging fragmented product portfolios into global product lines to drive growth in volumes, improve margins, and enhance shareholder value.
Global Platform Initiative: The company has approved a global platform roadmap and plans to reinvest savings from cost initiatives into this initiative. The goal is to create an integrated practice management platform with embedded legal workflow applications, API-enabled data, and a unified customer experience.
Cost Savings and Efficiency Initiatives: The company has identified $15 million to $20 million in annualized EBITDA savings from structural efficiency initiatives, with approximately 60% targeted to be actioned by the end of fiscal 2026. Savings will come from consolidating global delivery and service teams, automation, and process standardization.
Product Rationalization: The company plans to rationalize and integrate acquired platforms to drive growth and improve operational leverage. This includes transitioning from legacy products to new global product offerings, which may involve the potential loss of certain customers.
Unity Launch in British Columbia: The launch of Unity in British Columbia on February 9 demonstrates the benefits of modernization and integration, including improved automation, adoption, engagement, and retention. This serves as a trial direction for the broader portfolio.
Debt Reduction and Financial Flexibility: The company has completed the sale of the non-core Credas business for $146.3 million in gross proceeds, which are being used to reduce debt and strengthen financial flexibility. Actions include a $30 million repayment on the revolving facility and a USD 27.3 million repayment on the Term Loan B.
You have reached the limit. Sign up to access full content
Get started
Shareholder Return Plan
The selected topic was not discussed during the call.
You have reached the limit. Sign up to access full content
Get started
Key Q&A
Q:Can you share any updates on the strategic review process, including its status, scope, or timeline?
A:The company is exploring strategies to deleverage the business due to accumulated debt. They are considering selling the entire business or parts of it, depending on the bids received. Meanwhile, they are preparing to operate the company independently.
Q:What factors contributed to the decline in the Canadian legal business, and is it stabilizing?
A:The decline is primarily due to a combination of price and volume reductions, with market decline playing a smaller role (2%-3%). Revenue from unfulfilled minimum volume contracts has decreased. The Search business in the U.K. shows more stability, while the Australian Search business requires more work.
Q:What is the status of customer retention rates and the 2022 renewal cycle in the Canadian legal business?
A:No specific information was provided. A strategic plan will be shared in the coming weeks after Board review.
Q:Have there been any changes in the competitive dynamics in the legal and fintech businesses?
A:The Canadian conveyancing business faces competition from lower-priced entrants offering more value. The financial technology business remains strong, benefiting from post-COVID refinancing activity.
Q:Can you provide details on the OSC review, audit process, and new internal controls implemented?
A:The audit addressed issues with external parties and financial reporting standards. The OSC review focused on purchase accounting disclosures and goodwill impairment, leading to expanded disclosures and a $14 million impairment in South Africa. New internal controls were implemented to simplify contract variations and ensure accurate revenue accounting.
Q:Are contract renewals ongoing, and are favorable terms being applied consistently?
A:Yes, contract renewals are ongoing, typically on a 3-year cycle. Controls have been implemented to simplify contracts, ensure fairness, and improve internal accounting.
Q:Is the company confident in sustaining the business and implementing initiatives despite thinning free cash flow?
A:Yes, the company is confident. They are simplifying operations from 40 products to one platform, launching new products, and creating operating leverage. They have also moved past most holdback and contingent payments, which will help preserve cash flow.
Q:What opportunities exist in the U.K. Search business, and what is the impact of the government review of search processes?
A:The U.K. Search business has transitioned to a centralized service model, stabilizing customer attrition. Opportunities include increasing share of wallet with existing customers, improving product workflows, and scaling practice management to drive search usage. No specific details were provided on the government review.
Q:What is the outlook for the financial services or banking technology segment?
A:The segment has a positive outlook, with long-term contracts and infrastructure-like characteristics. It continues to benefit from increased mortgage solution volumes.
Q:Why were one-time costs higher this quarter, and what is the expected run rate going forward?
A:One-time costs were higher due to the OSC review, restatement, and bank waiver process. These costs are expected to decrease significantly going forward.
Q:Can you allocate one-time costs to specific buckets, and were they related to the Credas transaction?
A:The costs were not related to the Credas transaction. Most one-time costs were associated with the restatement and waiver process, which were linked to the delay in financial reporting.
Q:Has the volume of contingent payments and holdbacks changed since the quarter?
A:The company has paid a number of these during fiscal year 2025. The remaining amount is spread over the current and next year.
Q:Why was the change in reporting segments initiated, and does it facilitate selling parts of the business?
A:The change was driven by the new CEO's management style and decision-making process. It also helped address issues in the OSC review. While most assets are considered core, the company may simplify the business by selling non-core products or geographies if it results in positive cash flow.
Q:Why were non-GAAP measures like ARR removed, and will new metrics be introduced?
A:ARR was removed because the business is primarily volume-based, not subscription-based. The company plans to migrate clients to subscriptions by adding value and reducing exposure to housing market fluctuations. New metrics will be introduced over time to measure progress.
Q:Review of Unclear Management Responses
A:Management avoided providing specific details on customer retention rates and the 2022 renewal cycle in the Canadian legal business, stating that more information would be shared in a strategic plan in the coming weeks.
You have reached the limit. Sign up to access full content
Get started
Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Affinity
Australia month
Banking Technology
British Columbia
Dye Durham
IFRS measure
MDA press
Segment
Unity British
capitalization rate
consistency
cost action
cost saving
customer retention
development maintenance
disclosure
efficiency infrastructure
filing limitation
foundation integration
law
limitation MDA
path
portfolio platform
practice
proceeds
product offering
reinvestment
release information
repayment
review
search
section filing
volume
ZBRA Transcript
Dye & Durham Limited (DND:CA) Q2 2026 Earnings Call Transcript
Unknown2-17
The earnings call presents a mixed picture. While there are positive elements like anticipated sales growth, strong adjusted EBITDA margin, and share repurchases, there are concerns such as accumulated debt, strategic review uncertainties, and issues in the Canadian legal business. The Q&A reveals potential risks, including competition and financial reporting challenges. However, the overall outlook remains stable with optimistic guidance and strategic initiatives, balancing out the negative aspects. Therefore, the stock price is likely to remain within a neutral range over the next two weeks.
Zebra Technologies Corporation (ZBRA) Presents at Citi's Global Industrial Tech & Mobility Conference 2026 Transcript
Neutral2-17
Zebra Technologies Corporation (ZBRA) Q4 2025 Earnings Call Transcript
Positive2-12
The earnings call presents a generally positive outlook with anticipated sales growth, strong RFID performance, and AI-driven advancements. The management's confidence in achieving 11% organic growth, despite macro challenges, and the strategic focus on AI and RFID are strong positives. The Q&A reveals some uncertainty in memory pricing, but the company's proactive strategies and stable channel inventory levels mitigate concerns. The planned share repurchases and tariff impact mitigation further support a positive sentiment. Overall, the combination of growth initiatives and strategic planning suggests a positive stock price movement in the short term.
Zebra Technologies Corporation (ZBRA) Presents at UBS Global Technology and AI Conference 2025 Transcript
Neutral12-1
ZBRA Slides
Zebra Technologies Q4 2025 slides: organic growth and AI initiatives drive performance2026-02-12
Zebra Technologies Q3 2025 slides: EPS up 11%, stock tumbles despite beat2025-10-28
Zebra Technologies Q2 2025 slides reveal 6.3% growth, Elo acquisition strategy2025-08-05
Zebra Technologies Q1 2025 slides: strong growth amid tariff headwinds2025-04-29
ZBRA Report
Frequently Asked Questions
Where does this earnings call transcript come from?
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
How soon is the transcript available after the earnings call ends?
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
Is the transcript edited or altered in any way?
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
Why do some answers appear as “Unclear” or “Inaudible”?
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
Who creates the AI Summary and Key Q&A highlights shown above the transcript?
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
