Hello, and thank you for standing by. My name is Lacey, and I will be your conference operator today. At this time, I would like to welcome everyone to the Donnelly Financial Solutions second quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the conference over to Mike Zhao, Head of Investor Relations. You may begin.

Thank you. Good morning, everyone, and thank you for joining Donnelly Financial Solutions' second quarter 2025 results conference call. This morning, we read our earnings report, including a set of supplemental trending schedules of historical results, copies of which can be found in the Investor section of our website at DFINsolutions.com. During this call, we'll refer to forward-looking statements that are subject to risks and uncertainties. For a complete discussion, please refer to the cautionary statements included in our earnings release and further details in our most recent annual report on Form 10-K, quarterly report on Form 10-Q, and other filings with the SEC. Further, we will discuss certain non-GAF financial information, such as adjusted EBITDA and adjusted EBITDA margin. We believe the presentation of non-GAAP financial information provides you with useful supplementary information concerning the company's ongoing operations and is an appropriate way for you to evaluate the company's performance. They are, however, provided for informational purposes only. Please refer to the earnings release and related tables for GAAP financial information and reconciliations of GAAP to non-GAAP financial information. I am joined this morning by Dan Lieb, Dave Vardella, and other members of management. I will now turn the call over to Dan.

Thank you, Mike, and good morning everyone. We delivered solid second quarter results highlighted by record quarterly software solutions net sales, strong adjusted EBITDA margin, and increases in both operating cash flow and free cash flow, all in the context of a challenging yet improving environment. We posted approximately 8% sales growth in our software solutions, including approximately 15% sales growth in our recurring compliance software offerings, all while continuing to drive operating efficiencies and investing further in our transformation. Our second quarter results once again demonstrated the resilience of our operating model and the sustainability of our performance as our business mix continues to evolve. As we entered the second quarter, difficult operating conditions persisted for much of April, most acutely in our capital markets transactional offerings due to market uncertainty. As the quarter progressed, we saw improving trends, not only in market activity, but also with respect to our own results. This stabilization supported a strong sequential rebound in transactional activity and related results from April to May, as well as from May to June. We are encouraged by the positive trajectory within the second quarter. A key area that reflects the success of our execution in the second quarter was our strong adjusted EBITDA margin performance. While the second quarter is a continuation of a prolonged multi-year downturn in capital markets transactional activity, our business remains fundamentally and substantially more profitable than it had been historically. Our second quarter adjusted EBITDA margin of 35% was the second highest quarterly EBITDA margin in our history, and trailing for a quarter EBITDA margin is 29.1%, despite the ongoing headwinds of a weak transactional market. Another area I would like to highlight is continued momentum in our software offerings, where we delivered year-over-year net sales growth of approximately 8%, despite a slight decline in our largest software offering venue, which faced a tough comparison, having grown 38% in last year's second quarter. Software solutions made up 42.3% of total second quarter net sales, up approximately 700 basis points from last year's second quarter sales mix. As a reminder, the second quarter, largely due to the annual meeting and proxy season, historically represents our largest quarter overall, yet represents a seasonal low for software as a percentage of revenue. On a trailing four-quarter basis, software solutions comprise 45.1% of total net sales, an increase of approximately 610 basis points from the second quarter 2024 trailing four-quarter period. Our second quarter software For Solutions Net Sales Growth continues to be led by the performance of our recurring compliance and regulatory-driven products, Active Disclosure and ArcSuite, which grew approximately 15% year-over-year in aggregate. Importantly, Active Disclosure and ArcSuite each posted double-digit sales growth for the third consecutive quarter. For Active Disclosure, this growth was driven by the momentum in services revenue as a result of the continued adoption of our service package offerings. combined with the migration of certain traditional compliance activities to software, a trend we expect to continue going forward. In the case of ArcSuite, the improved growth rate was primarily driven by the Tailored Shareholder Reports regulation. Consistent with our expectation, we have realized software solutions net sales of approximately $11 million related to the TSR regulation since the effective date of July 2024. As we overlap the incremental year-over-year benefit from the tailored shareholder reports regulation in the third quarter, we expect ARC Suite to exhibit a more normalized growth profile beginning in the third quarter. As an end-to-end software solution for investment company financial and regulatory reporting, ArcSuite is well positioned to capture additional growth as the industry increasingly looks to improve efficiency, automate processes, and comply with evolving regulatory requirements. As it relates to Venue, following a moderate decline in the first quarter, sales accelerated in the second quarter and were nearly flat compared to last year's second quarter. The resilient level of underlying activity taking place on the platform, including activity from a large project, combined with improved go-to-market execution, enabled Venue to mostly offset the impact of several large projects, which benefited last year's second quarter results. We remain encouraged by Venue's strong performance, which reflects strong sales execution across Venue's broad application within the M&A ecosystem that serves both announced and unannounced deals across public and private companies. This results in more resilient, stable demand than our transactional offerings, which primarily serve public company, M&A, IPO, and debt transactions. Our continued revenue mix shift towards software solutions was expected by a reduction in print and distribution net sales, which declined by approximately $14 million, or 26%, compared to the second quarter of 2024. This reduction was mostly realized in the printing and distribution of corporate proxy statements and annual reports, as well as lower print volumes as a result of the Tailored Shareholder Reports Regulation, which significantly reduced page counts for mutual fund reports. On a trailing four-quarter basis, print and distribution revenue is $117 million and makes up approximately 16% of our trailing four-quarter sales. As we continue to execute our strategy to transform DFIN into the leading provider of compliance and regulatory solutions, served predominantly via software and services, we remain on target to deliver our latest five-year plan, which was updated in February of last year. Before I share a few closing remarks, I would like to turn the call over to Dave to provide more details on our second quarter results and our outlook for the third quarter.

Dave? Thanks, Dan, and good morning, everyone. As Dan noted, we continue to experience positive momentum in the adoption of our software solutions, for which sales increased approximately 8% year-over-year, including approximately 15% net sales growth in our recurring compliance software products. Despite a very weak capital markets transactional environment, our software performance enabled us to deliver another quarter of improved sales mix, strong adjusted EBITDA margin, and year-over-year improvements in both operating cash flow and free cash flow. As Dan commented earlier, following a very soft start to the quarter, driven by heightened market volatility and economic uncertainty, our results improved sequentially throughout the quarter as market conditions gradually stabilized and deal activity began to recover. On a consolidated basis, total net sales for the second quarter of 2025 were $218.1 million, a decrease of $24.6 million, or 10.1% from the second quarter of 2024. The decrease in consolidated net sales was driven by lower volume in our compliance and communications management segments, which decreased by $31.2 million in aggregate with compliance revenue across the capital markets and investment companies' businesses, accounting for approximately $19 million of that decline. The reduction in compliance revenue was mostly reflected in lower print and distribution volume related to both the ongoing decline in this area, consistent with recent trend, as well as the timing impact of certain investment companies' print volume that shifted from the second quarter into the first quarter of this year. In addition, total event-driven transactional revenue declined approximately $13 million year-over-year, primarily a result of the depressed level of capital markets transactional activity during the quarter. These declines were partially offset by growth in software solutions net sales, which increased $6.6 million, or 7.7%, compared to the second quarter of last year. Second quarter adjusted non-GAAP gross margin was 63.7%, approximately 70 basis points lower than the second quarter of 2024, primarily driven by lower capital markets transactional volume, partially offset by higher software solutions net sales, the impact of cost control initiatives, and price uplifts. Adjusted non-GAAP SG&A expense in the quarter was $62.6 million, a $6.4 million decrease from the second quarter of 2024. As a percentage of net sales, adjusted non-GAAP SG&A was 28.7%, an increase of approximately 30 basis points from the second quarter of 2024. The decrease in adjusted non-GAAP SG&A expense was primarily driven by a reduction in selling expense related to lower sales in certain areas, the impact of cost control initiatives, and lower bad debt expense, which continued to normalize in the second quarter. Our second quarter adjusted EBITDA was $76.3 million, a decrease of $10.9 million, or 12.5%, from the second quarter of 2024. Second quarter adjusted EBITDA margin was 35%, a decrease of approximately 90 basis points from the second quarter of 2024, primarily driven by lower capital markets transactional volume, partially offset by higher software solutions net sales, cost control initiatives, and lower selling expense as a result of the decrease in sales volume. Turning now to our second quarter segment results, net sales in our capital markets software solution segment were $59.1 million, an increase of $1.8 million, or 3.1% from the second quarter of last year, driven by active disclosure, which was up $2.2 million year over year, partially offset by a slight decline in venue. During the second quarter, active disclosure sales grew approximately 11%, a continuation of the stronger growth trend we experienced over the last two quarters, primarily driven by the continued adoption of active disclosure services packages and the ongoing migration of certain activities historically performed on our traditional services platform to active disclosure. We remain encouraged by active disclosure's solid foundation for future revenue growth. During the second quarter, VEW posted $37.3 million in revenue aided by a large project that partially offset last year's several large projects and was down approximately one percent year over year against the robust performance from last year's second quarter when venue achieved record quarterly revenue and grew approximately 38 percent in addition venue delivered strong sequential improvement in revenue increasing approximately 22 percent from the first quarter adjusted EBITDA margin for the segment was 37.9 percent, an increase of approximately 90 basis points from the second quarter of 2024, primarily due to the increased sales and cost control initiatives. Net sales in our capital markets, compliance, and communications management segment were $93.5 million, a decrease of $20.3 million, or 17.8 percent, from the second quarter of 2024, driven by lower transactional revenue, as well as a reduction in compliance volume, part of which was related to lower print and distribution consistent with recent trend. In the second quarter, we recorded $34.8 million of capital markets transactional revenue, which was at the low end of our expectation and down $10.4 million from last year's second quarter, resulting in the lowest level of quarterly transactional revenue in our history. Following a modest rebound in the first quarter, global equity deal volume declined sharply in April as a result of escalating market volatility and macroeconomic uncertainty. Following the slow start to the quarter, market conditions gradually improved with modest upticks in activity levels during May and June, resulting in sequential improvement as the quarter progressed. That said, overall transactional activity in the second quarter remained well below historical norms, with regular way IPO transactions that raised over $100 million and large public company M&A deals below last year's levels. Capital markets compliance revenue decreased by 9.9 million dollars primarily due to lower proxy statement and annual report volume and the related printing and distribution consistent with our experience during last year's proxy and annual meeting season in addition the weak transactional environment resulted in lower market demand for certain event-driven filings such as 8k and special proxies associated with corporate transactions. Finally, as I commented earlier, certain traditional compliance activities shifted to active disclosure during the second quarter. Adjusted EBITDA margin for the segment was 39.4%, a decrease of approximately 80 basis points from the second quarter of 2024. The decrease in adjusted EBITDA margin was primarily due to lower sales volume, partially offset by lower bad debt expense, lower selling expense, and cost control initiatives. Net sales in our investment company software solution segment were $33.1 million, an increase of $4.8 million, or 17% versus the second quarter of 2024, primarily driven by incremental revenue from our tailored shareholder report solution on a trailing four quarter basis total arc suite reached approximately 126 million dollars in net sales and grew approximately 17 percent compared to the trailing four quarters as of last year's second quarter driven by growth and subscription revenue including the impact of the tailored shareholder report solution As Dan noted, based on the mid-year 2024 effective date, we will overlap the growth from this new regulation in the second half of the year, and as such, we expect a more normalized growth rate beginning in the third quarter. Adjusted EBITDA margin for the segment was 42.9 percent, an increase of approximately 370 basis points from the second quarter of 2024. The increase in adjusted EBITDA margin was primarily due to operating leverage on the increase in net sales and price uplifts, partially offset by higher service-related costs associated with the tailored shareholder reports offering. Net sales in our investment company's compliance and communications management segment were $32.4 million, a decrease of $10.9 million, or 25.2%, from the second quarter of 2024, primarily driven by lower print and distribution volume, which accounted for $9.6 million of the year-over-year decline. second quarter print and distribution revenue within this segment was impacted by the timing shift into this year's first quarter of certain volume related to tailored shareholder reports for the regulated insurance market as well as lower page counts related to tailored shareholder reports for the mutual fund industry as a reminder the tailored shareholder reports regulation eliminated the demand for full-length shareholder reports at the fund level and replaced them with two- to four-page summary documents at the share class level, resulting in a net reduction in print. With the second quarter being a peak period for mutual fund compliance, the year-over-year reduction on the overall page count was significant in the second quarter as a result of the TSR regulation. We expect this dynamic will become less meaningful in the second half of the year as we overlap last year's second half impact of this regulation. Going forward, we expect a broader secular decline in the demand for printed products will continue to result in lower print and distribution revenue within this segment. Adjusted EBITDA margin for the segment was 38.9%, approximately 340 basis points lower than the second quarter of 2024. The decrease in adjusted EBITDA margin was primarily due to the impact of lower sales volume, partially offset by cost control initiatives. Non-GAAP unallocated corporate expenses were $9.7 million in the quarter, an increase of $0.5 million from the second quarter of 2024, primarily due to higher investments aimed at accelerating our transformation and higher health care expense, partially offset by cost control initiatives. Free cash flow in the quarter was $51.7 million, $14.9 million higher than the second quarter of 2024. The year-over-year increase in free cash flow was primarily driven by favorable working capital and lower capital expenditures, partially offset by lower adjusted EBITDA. On a year-to-date basis, the strong free cash flow generation during the second quarter enabled us to achieve positive free cash flow through the first half of the year. For reference, our cash flow is seasonal, with the majority of it generated in the second half of the year. We ended the quarter with $190.1 million of total debt and $156.3 million of non-GAAP net debt, including $77 million drawn on our revolver. As of June 30, 2025, our non-GAAP net leverage ratio was 0.7 times. Regarding capital deployment, we repurchased approximately 787,000 shares of our common stock during the second quarter for $34.3 million at an average price of $43.56 per share. Year-to-date through June 30th, we've repurchased approximately 1.6 million shares for $76.1 million at an average price of $46.18 per share. During the second quarter, the Board of Directors authorized a new share repurchase program of up to $150 million, with an expiration date of December 31, 2026. This repurchase authorization, which commenced on May 16, 2025, replaced the prior authorization, which was nearly fully utilized. As of June 30, 2025, we had the full $150 million remaining on the new authorization. We continue to view organic investments to drive our transformation, share repurchases, and net debt reduction as key components of our capital deployment strategy and will remain disciplined in this area. As it relates to our outlook for the third quarter of 2025, we expect consolidated third quarter net sales in the range of $165 million to $175 million and adjusted EBITDA margin in the range of 23% to 25%, which at the midpoint is similar to last year's third quarter, where we posted adjusted EBITDA margin of approximately 24%. Compared to the third quarter of last year, the midpoint of our consolidated revenue guidance, $170 million, implies a reduction of $9.5 million, or 5.3%, as lower print and distribution sales and lower capital markets transactional sales are expected to more than offset growth in software solutions. We expect venue to be approximately flat to last year's third quarter, similar to the year-over-year change we recorded in the second quarter. Further, our estimates assume capital markets transactional net sales in the range of $35 million to $40 million, which at the midpoint is down approximately $8 million from last year's third quarter. And with that, I'll pass it back to Dan.

Thanks, Dave. Our performance in the second quarter offers a further proof point that DFIN continues to become more durable and structurally resilient as we execute our strategy. The stability of our revenue base, driven by a high proportion of recurring and reoccurring compliance-related offerings, provides a solid foundation even in turbulent times. Although capital markets transactions remain well below historical levels, we are encouraged by the recent uptick in activity levels. With a strong balance sheet, robust free cash flow, and disciplined capital allocation, we are confident in our ability to execute our strategy and deliver long-term value to all stakeholders. Before we open it up for Q&A, I'd like to thank the DFIN employees around the world. Now with that, Operator, we're ready for questions.

At this time, I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad.

We will pause for a moment to compile the Q&A roster. your first question comes from the line of charlie strouser with cjs securities inc you may go ahead hi good morning morning so if we look at the q3 guidance uh and the familiarity of the transactional um as within that maybe you can shed a little bit more light on the assumptions behind that and kind of like what the um deal environment is looking like currently, both, you know, IPOs and M&A, especially M&A, given the change in administration?

Yeah, thanks, Charlie. It's Dave. I'll start, and, you know, Craig may want to add a little bit of color here. I think when you look at our guidance for transactional sales for Q3, right, the range of $35 to $40 million, that's sequential growth over Q2, you know, and up to about 15% at the high end of that range. As you know, and we've talked about before, this is the area where we have the least visibility in terms of timing of getting the deals done. So while we feel good about the underlying trend in market activity, I'd say, as it relates to the guidance, trying not to get too far over our skis here. I think probably the most positive is regardless where transactional revenue comes in, we're very happy with the margins and cash flow that we're delivering. Obviously, you can see that in the Q2 results, the year-to-date results, as well as our guidance for Q3. With respect to the market activity, M&A IPO, Craig, I'll let you comment there.

Yeah, Charlie, thank you for the question. I'll provide some context on Q2 and then talk about what we're seeing in July in relation to the guidance. Transactional offerings are always subject to uncertainty, and the market backdrop varied materially over the course of the quarter, as you heard us discuss. The tariff announcement had a significant short-term impact, followed by the sequential improvement. This bears out in the flow of IPOs in the quarter. Of the 14 total IPOs greater than $100 million, there was one in April. There were five in May. There were eight in June. This was the same number, 14 of IPOs in Q1. So there was no growth quarter to quarter. Deepin was happy to support Circle, which was the largest IPO, over a billion dollars. Huge pop, the largest increase ever for a billion dollar IPO, and it was the largest, certainly, of the first half year. We supported many others. For the first half of 2025, there were 30 IPOs compared to 35 in the first half of 2024, so a decrease of 14%. Deepin supported four of the five largest in the first half, but then to your point, you see the resurgence. So the IPO index, Renaissance's IPO index was up 16%. So, there is a renewed investor appetite. So, I'll talk about July for IPOs. Assuming Figma and shoulder price today, there'll be 27 IPOs pricing in the quarter compared to 14 in July of 24. But if you exclude small international deals, there's 10. So, this compares to seven. And if you cut that to 100 million IPOs and above, both this year and last July had seven. So, July will have fewer IPOs than the prior month of June. And one theme we're seeing is that the IPO market rebounding is at lower valuations. So, companies are accepting down rounds. Hinge Health is an example of that. And the final note on shoulder, again, pricing today below their range at $15. Another metric we watch is the number of companies that are publicly filed. So that stands at 19. So these are on file and communicating publicly with the SEC. This is not a robust number by historical standards. And then as well, DFIN has a robust pipeline of companies who file confidentially. but not publicly, as well as a pipeline of RFPs. So the market is continuing to build. If I think about M&A, certainly it was building kind of same thing throughout Q2. So you had fewer deals, but larger deals on a year-over-year basis. There's a lot of optimism in M&A as well, whether that's spends, whether it's consolidation with companies who are looking to cut costs, such as Union Pacific Norfolk, whether it's AI. We're certainly seeing that from an opportunity perspective. So I think if you wrap it all together, it's building momentum, but risks remain. We have rate pressures. We have trade policy shifts, headline risks. We've seen a tweet can change things very quickly. And then as well, Q3 is a headwind because of the calendar. The summer months of August and Labor Day have not historically been favorable to deals. So we're planning on a modest increase. We are going to continue to see the stabilization that we think we saw in May and June. And our guidance balances the enthusiasm for the second half with the realities of building a pipeline and revenue recognition. As Dave said, we've demonstrated we're ready for any market, we're going to deliver no matter what the market means for us.

Great. That's very helpful. Thank you. And just looking at the non-transactional segments, as you think about guidance in general, what assumptions should we be using when we model out the quarter?

Yeah, Charlie, and we didn't give too much detail here, but I think when you look at, you know, some of the software products, right, which is where we've seen the growth in the first two quarters, right? Active disclosure has posted 11% year-to-date growth. And so, that's been a really strong area for us, and we expect that to continue to grow going forward. As we mentioned in the prepared remarks, the growth in ARC Suite has been outsized in the first part of the year, in part because of the timing of the launch of the tailored shareholder reports regulation. So, that started in Q3 of last year. We'll be overlapping some of the growth we achieved last year in ArcSuite. So that'll be tempered a bit. And then, you know, venues got pretty tough comps throughout the year, right? We saw some outsized growth, as we mentioned, you know, even, you know, Q2 was down a bit, but that's coming off a quarter that grew at 38% last year. And so I think when you look at, you know, kind of the venue being flattish in Q2, uh sorry in q3 relative to last year uh is probably a reasonable assumption there and then on the um you know the the traditional compliance right so the compliance and communications management uh non-transactional piece uh that'll continue to be uh you know challenged from a from a print count perspective um you know as you know we've seen that trend for a while and would expect that trend to continue. But, you know, there again, even as it relates to Taylor Shareholder reports where we saw, you know, a drop in overall print demand related to that regulation, that impact started in the back half of last year, offsetting the growth on the software side.

Great. Thanks on that. And looking at your long-term goals that you've had out there, Or can you just remind us of some of the assumptions behind that, those goals?

Yeah, so it's, you know, really, I think at the highest level, it's continuing to execute the change in mix, right? Growing the recurring and reoccurring software offerings, continuing to expand margin in large part due to the operating leverage on that growth. And then from a capital markets transactional perspective, you know, at the time we made the assumption that there would be, you know, not much of a change in the overall level of capital markets transactional revenue. obviously that's come down uh come down quite a bit actually uh you know since last february and so you know that that's an area that it's cyclical it's you know we do a good job in terms of maintaining or growing our market share but you know can't really impact the overall demand there uh and then i would say the last thing uh in in terms of the revenue mix you know we do assume And we talked a little bit about it today, you know, some of the sales that are currently in the compliance and communications management segments transitioning to software. And we've seen that happen over the last several quarters, whether it be some of the structured forms, proxy work, et cetera, continuing to migrate toward, you know, we would say in the near term, a hybrid model. that would be leveraging the software and then also the tech-enabled services behind that, but eventually, you know, migrating to software, you know, continuing to expand margins, and then probably, you know, from a cash flow perspective, converting EBITDA to free cash flow at about 45% or greater.

Got it.

And just speaking of cash flow, when you look at the strong performance of cash flow in the quarter and then look at the full year, are you expecting a full year for cash flow to be up your up here? um you know we're so we're obviously ahead of where we were on a year year-to-date basis um you know i think when you look at we we've talked about uh over the last several years really as the the top line uh is proportionally more uh software solution sales more long-term contracts more uh you know uh paid in advance that our cash flow would become less seasonal than it has been historically and so i think i think what we're starting to see is uh you know the cash flow being less less seasonal which is giving us a bit of a head start uh at the highest level, you know, if I had to say what would cash flow look like, you know, on a full year basis, I'd say pretty similar to last year.

Got it. And then just lastly, just going back to the deal environment, are you maintaining a good share of the deals that are out there? And if you lose a deal to another competitor, what are the reasons behind that? Maybe you're working with them, the companies or the issuers, to notice they use a different vendor for the print and distribution and formation of the documents. And then on the back end, you pick up the software side. Are you seeing any kind of, you know, situations like that?

Yeah, I'll start. And then, Craig, if you want to jump in, I think, you know, I would describe it as we're happy with our overall share performance. I think, and Craig could get into some of the nuances here, as Craig commented on, even with the overall improving market backdrop, In terms of the number of deals, I think when you start to look at some of the characteristics of the deals that have been in the market, smaller foreign deals or even smaller domestic deals, SPACs, et cetera, our market share in some of the lower end deals isn't typically as high as it is for the larger high profile deals. And so, you know, I think when you look at overall share, it's about what we would expect, but we're really happy with how we're performing, you know, in our sweet spot, correct?

To build on that, you know, trans share is going to fluctuate quarter to quarter. Our strength is in one, $2 billion M&A deals, large IPOs raising over $100 million, And even D-SPACs that have upgraded to have a substantive acquisition, and the upgrade includes an upgraded deal team. So where we really win is when these deal teams that are familiar with D-FIN or service or technology, whether that's traditional or software, come into play on these deals, we're really doing well. So you saw that play out in the first half of the year. If you look at priced IPOs as a barometer, 171, 63 were SPACs. So of the 108 total priced excluding SPACs, there were only 30 that were over $100 million. So there were still a lot of fundraise-like deals in there. Our share of those over 100 was our historic average, which is around 60%. So as you unpack what's happened in the first half of the year and even in Q2, it is comprised of a lot of nanocompany, international, smaller places that we don't play.

Great. Thank you very much.

Question comes from the line of Kyle Peterson with Needham. You may go ahead.

Great. Thanks, guys. Good morning. Yeah, I just wanted to, I guess, follow up a little bit on the outlook with Capital Markets Guide. I guess it was a little softer than we were expecting, given that there does seem to be an improving pipeline. I know you mentioned that the confidential filings seem like they do seem to be picking up. Is some of that activity converting and closing, is some of that in the outlook for 3Q, or are you guys taking a more conservative outlook in the guide for cap markets?

Yeah, Kyle, as I said earlier, I think when you look at that $35 million to $40 million range. At $40 million, that's up roughly 15% relative to the Q2 number. I guess I would describe it this way without getting into the details of any particular deal would be to say that if the trend that we saw in Q2 in terms of the intra-quarter improvement from month to month If that trend continues, I would say we would be, you know, at the high end of the guidance, potentially above if that trend continues. So, you know, we're just taking a, you know, a look at the improvement, again, given that the lack of visibility in terms of the exact timing. As I said to Charlie, you know, just try not to get too far over our skis there.

Okay, that is helpful. And then I guess as a follow-up on capital allocation from the sounds of it based on the authorization, it sounds like it's still full after it's authorized like halfway through the quarter. so it seems like you guys kind of front-loaded buybacks this quarter um do you still think that that'll be uh an important part of the the toolkit moving forward or are you guys being sensitive around you know valuation and where the stock's at like how should we think about uh the buyback uh especially given that uh you know we have bounced off the uh the post-liberation day lows.

Yeah. So I, you know, I think as we said in the prepared remarks that we, you know, view share repurchases as a key component of capital allocation, to your point, and, you know, also consistent with what we've done historically and said that our path would be forward, right, is that, you know, at the higher prices were less aggressive, at the lower prices were more aggressive and um that'll continue to be the path forward okay yeah and i think it's it's uh one one thing to add there as we've said before you know with the the highest and best use

of capital is for us to uh execute and or you know where possible accelerate the transformation You know, that said, the business generates quite a bit of cash, and so, you know, to Dave's point, we consider the organic investment into growth and the transformation as, you know, the highest use, and then we look at, you know, the buybacks given stock price with employing a grid. So, you know, even I think the Q2 is a great example where we were extremely aggressive early on at much lower prices. And then, you know, the third is debt pay down. And in that context, you know, making sure that we're not getting out, you know, and levering up too much on the buyback side as we see, you know, performance over time. And so the program over time, and we go back to when we initiated this several years ago, you know, we bought obviously much more aggressively at significantly lower prices than where we are today. And that's, you know, how we think about it going forward.

Okay, that's hopeful. And then last one for me, I guess, just do you have any update on the pension? I think you guys were planning on doing kind of annuitization and kind of converting that over just to clean up the balance sheet a little bit. Any update on either the expected timing or cash impact or anything that we should be mindful of, you know, as that process continues?

Yeah, so the update on timing, that process is underway. um you know things are coming out i'd say generally in line with uh kind of the assumptions we made going going into it um you know we still haven't gone out to um you know annuitize the plan and and work with the uh the insurers to to take that over uh that'll happen during the third quarter and so um you know on the the q3 call potentially uh before then we'll have uh additional news to share in terms of uh the cash outlay and what that looks like okay um thanks for taking

the questions thank you again if you would like to ask a question press star one on your telephone keypads we have no more questions this concludes our q a session i would now like to turn the conference over to dan leap for closing remarks great thank you lacy and thank you everyone for joining um we'll look forward to uh talking to you in a few months and seeing you in the interim that concludes today's call you may disconnect