Good morning. My name is Chris Nelbeer, Conference Operator today. At this time, I'd like to welcome everyone to the Donnelley Financial Solutions fourth quarter and full year 2021 results 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'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. To withdraw your question, please press star one again. Thank you. Mike Zhao, Head of Investor Relations, you may begin.
Thank you. Good morning, everyone, and thank you for joining Donnelley Financial Solutions fourth quarter and full year 2021 results conference call. This morning, we released our earnings report, including a supplemental trending schedule of historical results, copies of which can be found in the investors 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 detailed in our most recent annual report on Form 10-K and other filings with the SEC. Further, we will discuss non-GAAP financial information. 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 Leib, Dave Gardella, Craig Clay, Eric Johnson, Floyd Strimling, and Kami Turner. I will now turn the call over to Dan.
Thank you, Mike. Good morning, everyone. From all of us at DFIN, we hope that you and your families are doing well. I am very pleased with our fourth quarter financial results, which capped off a tremendous year for DFIN. 2021 was a year of many milestones. We developed and introduced advanced technology solutions to our clients, accelerated our sales growth of software solutions, further improved our balance sheet, and delivered increased value to our clients, employees, and shareholders. Turning now to our financial results. We delivered strong fourth quarter results, highlighted by record quarterly software solutions net sales of $73.8 million, which grew 36.2% compared to last year's fourth quarter, and represented nearly 32% of our total net sales in the quarter.
Our consolidated net sales grew by nearly 11% as compared to last year's fourth quarter, despite the decline in print and distribution-related sales, which were, as expected, down 30% in the quarter. Excluding print and distribution sales, year-over-year net sales increased 23% in the quarter. Fourth quarter non-GAAP Adjusted EBITDA was $61.3 million, an increase of over 75% from last year's fourth quarter. Adjusted EBITDA margin was 26.3%, a year-over-year improvement of approximately 970 basis points, continuing a trend of year-over-year margin improvement that now stands at 10 consecutive quarters. Reflecting on the full year of 2021, we delivered outstanding results. Our team's focused execution combined with a robust capital markets environment resulted in record full-year software solutions net sales, Adjusted EBITDA, Adjusted EBITDA margin, and free cash flow.
Net sales grew 11% and excluding print and distribution, our net sales grew 30%. Software solution sales grew 35% from 2020 and reached an annual level of $270 million. Our virtual deal room software Venue posted 46% annual net sales growth, driven by strong markets and share capture. While our recurring compliance offerings grew 31% versus 2020. One product within our recurring compliance offering that performed exceptionally well in 2021 was ActiveDisclosure, our cloud-native solution purpose-built for SEC reporting. Building on the success of ActiveDisclosure 3, we designed, developed, and deployed a reimagined compliance and regulatory filing software, leading to the release of New ActiveDisclosure in early 2021. In 2021, we made substantial progress transitioning clients to our new platform. We expect to complete that process later this year.
New ActiveDisclosure is born in the cloud and reimagined from the ground up. The platform transforms financial and regulatory reporting with seamless integration, simple and fast onboarding, and an array of intelligent core tagging and filing tools. Easy to get started, intuitive to use, and backed by the unparalleled support of DFIN experts, New ActiveDisclosure includes the collaboration tools and fast financial data linking our clients need without extra add-ons and hidden costs. This represents a significant step forward for the marketplace in SEC compliance. New ActiveDisclosure utilizes a modern security framework, delivering efficient financial reporting and SEC filing. Since its launch a year ago, New ActiveDisclosure has received tremendous market response, resulting in very strong client adoption. Our partner network agrees as we received Oracle's Built for NetSuite approval, making DFIN's New ActiveDisclosure the only SEC disclosure solution on NetSuite's SuiteApp.com.
NetSuite joins our valuable network that includes FloQast, Tipalti, Diligent, and other best-in-class providers. We believe New ActiveDisclosure is the perfect fit for a market that is looking for a solution dedicated to SEC compliance, and we are confident New ActiveDisclosure's features, security, and user experience will bring clients increased value and choice. Another strong contributor to our recurring software growth is Total Compliance Management, a component of Arc Digital that serves our investment company clients. With the adoption of SEC Rules 30e-3 and 498A, which eliminated most of the need for print associated with financial reports and variable annuity summary prospectuses, we recognized an opportunity to serve our clients in new ways via software solutions. DFIN responded to the regulatory changes by introducing our digital content distribution solution, Total Compliance Management.
The new software product provides clients with a software-based solution to manage the complexities of content management and digital distribution in a post-SEC Rule 30e-3 and 498A environment. I am pleased with the strong traction Total Compliance Management has gained since its launch, which was a big driver of the net sales growth for our investment company software solution segment in 2021. We expect continued revenue lift in 2022 related to the strong adoption for this solution, albeit at a more modest pace than in 2021. Additionally, the clients who are already on the platform represent potential opportunities to expand their consumption of DFIN software offerings as future rule changes arise.
Full year 2021 non-GAAP Adjusted EBITDA totaled $294.8 million, the highest in the history of DFIN, up $121.4 million or 70% compared to 2020. Our non-GAAP Adjusted EBITDA margin expanded to a record 29.7% in 2021, a year-over-year improvement of approximately 1,030 basis points. This improvement is again driven by the continued improvement of our business mix, combined with prudent cost control and a strong market environment. Increased profitability and reduced interest payments helped to drive record annual free cash flow of $137.7 million. Strong operating performance and cash flow generation provided us the financial flexibility to accelerate investments in software development, reduce debt, and repurchase just under 1 million shares during the year.
Our performance in 2021 represents another positive proof point in our transformational journey that started five years ago when we became an independent company. We are tracking significantly ahead of our original plan that underpins our 44 in 2024 goal. That is deriving 44% of our sales from software solutions by 2024. More importantly, the resulting financial profile is consistent with that mix. Further, our 2021 results are also ahead of the subsequent updates to our long-term outlook we provided since our 2018 investor day. We will share updated long-term projections soon. Before I turn it over to Dave, I'd like to take this opportunity to highlight several areas of our transformation that demonstrate the kind of business and company we have become since our spin-off five years ago.
First, and perhaps the most visible aspect of our transformation, is our improved sales mix versus five years ago. In 2016, we were predominantly a print and services-based company with a small software offering. We recognized the changing demand for our product offerings, the value we could offer to clients, and envisioned a future for our company as the market-leading regulatory and compliance solutions provider. Recognizing the need to serve our clients differently, we began our journey to develop the best software products in the market, coupled with our premier sales, service, and domain expertise to serve our clients globally. In the last five years, in addition to our investments in software development to modernize and expand our product offerings, we've improved sales and marketing capabilities and established third-party partnerships all aimed at satisfying the highest value needs of our clients.
Those actions enabled us to build a growing software solutions portfolio that reached $270 million in revenue in 2021, or 27% or 14% of sales. The revenue change from 2016 to 2021 represents approximately 15%. Of the $270 million in software revenue, approximately 61% of the dollars is highly recurring in nature, serving the predictable compliance needs of our clients. Our virtual data room product Venue accounts for the remaining 39% of software revenue. While sales growth of Venue has historically exceeded the growth of its offerings and have clearly benefited from M&A transactions. Our recurring SaaS compliance product grew at an annualized rate of nearly 18% between 2016 and 2021. While Venue's growth rate approximated 14% annually during the same period.
Overall, I am very encouraged by the performance of our software solutions portfolio and believe both our recurring compliance and transactional software products are well positioned for future growth. At the same time we scaled up our software offerings, we also took actions to strategically reduce our low-margin print and distribution revenue and significantly downsize our print production platform. Between 2016 and 2021, our print and distribution revenue declined by more than $180 million. The pace of decline accelerated in 2021 with lower print and distribution revenue, resulting from regulatory changes and our proactive exiting of low-margin print contracts, which impacted our Investment Company Compliance and Communications Management segment. On that $100 million of lower sales we lost approximately $3 million in Adjusted EBITDA. The reduction of printing was cash flow positive given the elimination of the associated working capital requirements.
Print and distribution sales made up approximately 20% of total sales in 2021, around half the level in 2016. With our strong growth, it represented the crossover point. Full-year net sales from software solutions exceeded net sales of print and distribution, a first for our company and a trend we expect to continue. Our mix shift was a major driver of DFIN's non-GAAP Adjusted EBITDA margin expansion since 2016. Despite losing $180 million in print and distribution sales compared to 2016, our 2021 year-end adjusted margin was 27.7% compared to a margin of 16.4% at the end of 2016. The step up in EBITDA margin is a reflection in many aspects of our fixed cost structure with focus on our print platform, driving internal efficiencies, and reducing our physical footprint.
Through these actions, we achieved permanent fixed cost reduction, allowing us to create a more optimized and variable cost structure that closely aligns with our current business mix, a part of which is driven by cyclical market factors. Another result of our strategic transformation is a much healthier balance sheet, achieved through significant leverage reduction over the last five years. At the time of our spin-off in 2016, we had nearly $600 million of net capital market transactions. Through strategic capital allocation over a span of five years, we have reduced our net debt by approximately $500 million, which is equivalent to more than $14 per share. As a result, at year-end 2021, we have created the financial flexibility to continue to aggressively invest in software development where financially justified and deliver value to shareholders through share repurchases.
Given our current enterprise multiple, approximately 4x trailing EBITDA, even when recognizing the cyclicality inherent in parts of our business, we view share buybacks as an attractive use of capital. Having repurchased approximately 2.1 million shares over the past two years, we have a new share repurchase authorization of $150 million. Looking forward, while we have benefited from the current strong corporate transactions market, continued improvements in our business mix, permanent fixed cost reductions, a strong balance sheet, and ongoing cost control position us well to continue to execute our strategic transformation. We will remain disciplined and thoughtful in our approach to all capital allocation in order to create long-term shareholder value. Finally, and perhaps what I am most proud of, the strength of our people and culture are enabling DFIN to become the company we strive to become.
Following the spin-off in 2016, we defined a new culture. Alignment, accountability, and a pay-for-performance mindset. A culture that serves the needs and wants of our three main constituents. Employees, clients, and shareholders. Over the years, our culture continued to evolve as the company evolved. As we responded to a changing world, impacts on our people and organization. We strengthened our senior leadership team with leaders who will help us accelerate our shift to software. We launched My Total Wellbeing, a program focused on my money, my time, my health, with the tools and resources to make their experience at DFIN more meaningful. Additionally, we demonstrated our firm commitment to diversity, equity, and inclusion as we launched a DEI council and improved diversity representation. Most important of all, our actions have produced measurable results.
Internally, through frequent pulse surveys, our employees are telling us that what we are doing is working. They are proud to be at DFIN and are aligned around our purpose. Externally, we are receiving praise in the marketplace for the progress we are making to transform our culture and enhance the employee experience. I am pleased that DFIN Built In Chicago for the third year in a row, and we recently became Great Place to Work Certified. Doing the right things, we will continue to be an employer of choice and deliver to shareholders. Before I share a few closing remarks, I would like to turn the call over to Dave to provide more detail on our fourth quarter financial results and our out-
Thank you, Dan, and good morning, everyone. Before I discuss our fourth quarter financial performance, I'd like to provide an update on the LSC Multi-Employer Pension Plan arbitration process. In November 2021, the arbitration panel ruled in favor of DFIN, allocating the liabilities 1/3 to DFIN and 2/3 to R.R. Donnelley. As part of the ruling, we received a $7.1 million reimbursement in the fourth quarter of 2021 from R.R. Donnelley for prior payments we made in excess of our allocated share of liabilities. We had $10.1 million accrued as of December 31, 2021 on a discounted basis based on our total expected future pre-tax payments. The SG&A expense and reimbursement related to the LSC Multi-Employer Pension Plan liabilities is recorded within the corporate segment and is excluded from our non-GAAP results. Now, turning to our fourth quarter financial performance.
We delivered another quarter of strong results, highlighted by 10.7% sales growth, a significant increase in quarterly non-GAAP Adjusted EBITDA, and strong year-over-year Adjusted EBITDA margin expansion. Our software solution sales grew 36.2%, achieving yet another quarterly record. The capital markets transactional environment remained strong in the fourth quarter. In fact, the fourth quarter transactional sales of $106 million represented the second-highest quarter of the year. Despite the strong activity, we saw a deceleration in year-over-year net sales growth versus the levels we experienced in the first three quarters of the year as a result of comparing against a very strong fourth quarter of 2020, with 10% transactional sales growth from the fourth quarter of 2020. Overall, I am very pleased with our fourth quarter results, which capped off an outstanding year for DFIN.
On a consolidated basis, net sales for the fourth quarter of 2021 were $232.8 million, an increase of $22.5 million or 10.7% from the fourth quarter of 2020. Fourth quarter 2021 net sales represented the highest fourth quarter in the company for 36.2%, primarily due to an acceleration of virtual data room activity in Venue, driven in part by our recurring compliance software offerings, which include New ActiveDisclosure and growth in aggregate. Approximately 40% in the fourth quarter was the highest growth quarter of the year as sales momentum accelerated since its intro. Capped off a successful year by growing 28% in the fourth quarter as a result of the strong solution.
Second, by $17.5 million or 16.3%, primarily due to increased capital markets transactional and compliance activity. Fourth quarter 2021 sales faced a tougher year-over-year comparison as the capital markets environment in the fourth quarter of 2020 was also robust. Print and distribution revenue decreased by $14.6 million or 30%, primarily due to a regulatory-driven reduction in and less commercial printing, where we have proactively exited certain low-margin contracts. Fourth quarter non-GAAP gross margin was 60.4%, approximately 1,270 basis points higher than favorable business mix combined, and the impact of ongoing cost control initiatives. Non-GAAP SG&A expense in the quarter was $79.3 million, $13.8 million higher than the fourth quarter of 2020.
As a percentage of net sales, non-GAAP SG&A was 34.1%, an increase of approximately 300 basis points from the fourth quarter of 2020. Primarily due to sales commissions on higher sales, changes in the business mix, and higher incentive compensation associated with the strength of our full-year financial performance. Partially offset by the impact of ongoing cost control initiatives. Our fourth quarter non-GAAP Adjusted EBITDA was $61.3 million, an increase of $26.4 million or 75.6%. Our non-GAAP Adjusted EBITDA margin was 26.3%, an increase of approximately 970 basis points from the fourth quarter of 2020. Primarily driven by favorable sales mix and ongoing cost control initiatives, partially offset by higher selling incentive compensation expenses. Turning now to our fourth quarter segment results.
Net sales in our Capital Markets segment primarily due to increased Venue virtual data room activity and continued growth in ActiveDisclosure subscriptions. Venue sales grew 48% and once again achieved record quarterly sales driven by strong M&A activity as well as our in-market execution that boosted year-over-year growth and resulted in what we believe to be market share gains. Recurring compliance products, primarily ActiveDisclosure, also had an excellent quarter, posting approximately 40% growth. As I mentioned, ActiveDisclosure's fourth quarter since the New ActiveDisclosure was introduced a year ago. EBITDA margin for the segment was 23.3%, an increase of approximately 250 basis points. The increase in non-GAAP Adjusted EBITDA margin was primarily due to the increased sales mix as well as the impact of operating efficiencies, partially offset by higher incentive compensation and selling.
Net sales in our Capital Markets, Compliance and Communications Management segment were $127.4 million, an increase of 18% from the fourth quarter of 2020, primarily due to strong capital market transactional activity. As expected, the year-over-year sales growth trend in the fourth quarter moderated versus the first three quarters of 2021. Activity levels in the fourth quarter of 2020 were robust, which led to a more challenging year-over-year comparison relative to the first nine months of the year. While the year-over-year growth trend decelerated to 17%, the absolute level of activity remained robust. As I mentioned earlier, transactional sales in the fourth quarter were $106 million, which represented the second highest quarter of the year.
non-GAAP Adjusted EBITDA margin for the segment was 41.4%, an increase of approximately 600 basis points from the fourth quarter of 2020. The increase in non-GAAP Adjusted EBITDA margin was primarily due to the increased sales volume and favorable sales mix, partially offset by higher selling and incentive compensation expenses. 2021 was an exceptional year for equity capital markets activity, highlighted by unprecedented levels of SPAC IPOs, a substantial uptick in traditional IPOs, as well as a resurgence in M&A activity following years of decline. Our industry-leading portfolio of solutions dedicated to our clients' private to public journey enabled DFIN to further strengthen our market position. 2021's robust transactional market, combined with focused execution, propelled DFIN to achieve record full-year transactional revenue and consolidated profits.
While the recent market, we are optimistic the pipeline of approximately 600 new public companies from completed SPAC registrations that are actively looking for acquisition targets will generate future deals. Our strong market position in the transactional filing business positions us well to capture a significant portion of future de-SPAC activity, which on average represents 10x the value of an initial SPAC registration transaction. Additionally, these transactions provide a pipeline for recurring software subscriptions to support our clients' ongoing compliance requirements. Net sales in our investment company software solutions segment were $23.2 million for ArcSuite, our Total Compliance Management offering, as investment companies' clients turn to digital alternatives in their transition away from print. In addition, growth in ArcPro related to new subscription activity and organic growth from existing clients also fueled the growth in this segment.
Non-GAAP Adjusted EBITDA margin for the segment was 20.3%, an increase of approximately 370 basis points from the fourth quarter of 2020. The increase in non-GAAP Adjusted EBITDA margin was primarily due to operating leverage on the increase in sales and a favorable sales mix, partially offset by higher incentive compensation expense and increased allocations of overhead. Net sales in our investment companies' compliance communications management segment were $31.6 million, a decrease of $16.5 million, or 34.3% from the fourth quarter of 2020 due to the impact of regulatory changes and a reduction of print sales related to contracts we have proactively exited. Non-GAAP Adjusted EBITDA margin for the segment was 15.8%, approximately 2,250 basis points higher than the fourth quarter of 2020.
The increase in non-GAAP Adjusted EBITDA margin was primarily due to a reduction in overall expense within the segment as a result of the consolidation of our print platform and reduced overhead costs based on the lower activity level in this segment. As part of our continuous focus to streamline print operations and variabilize our cost structure, by year-end 2021, we had shifted 100% of our offset print production needs to our third-party vendor network, creating a fully variable cost structure. Going forward, we will continue to operate a digital-only print platform to meet the demand for higher value, quick-turn requirements. Regarding the regulatory changes that will continue to reduce demand for print in this segment, the 2021 impact to net sales and non-GAAP Adjusted EBITDA were approximately $100 million and $3 million, respectively.
We expect a de minimis impact on non-GAAP Adjusted EBITDA in the expected impact to net previous guidance, while the Adjusted EBITDA impact is favorable to previous guidance. Expenses were $13 million, an increase of $2.4 million from the fourth quarter of last year. The increase in unallocated corporate costs was primarily due to partially offset initiatives. Free ca-- $7 million and full y- $37.7 million, an increase of $14.6 million over full year 2020. primarily due to flow-through of higher Adjusted EBITDA, partially offset by higher cash taxes, an increase in working capital $24 million of total debt dollars of non-GAAP net debt, a reduction of $106.5 million and $87.4 million respectively versus year-end 2020.
Our non-GAAP net leverage ratio was 0.2x , down 0.7x from the. We repurchased approximately 358,000 shares of our common stock during the fourth quarter for $13.7 million at $0.42 per share. For the full year 2021, we repurchased approximately 973,000 shares of our common stock for $32.4 million at an average price of $33.30. December 31, 2021, we had approximately $17.7 million remaining on our $50 million stock repurchase authorization. Further, so far in nearly the entire remaining $17.7 million dollar repurchase authorization.
As noted in our earnings release, and as Dan mentioned earlier, our board of directors recently approved a $150 million common stock repurchase authorization that expires December 31, 2023, replacing our existing plan, which again was nearly fully utilized during the first several weeks of 2022. This repurchase program demonstrates management's as well as the board's confidence in our strategy and our deep belief in the intrinsic value of our company. We plan to be more aggressive with repurchasing shares in 2022 as part of our broader capital allocation strategy that will also feature additional investment in technology development and debt reduction or cash build. At the same time, we will maintain our disciplined approach on all capital deployment.
Lastly, at year-end 2021, our pension and other post-retirement plans were $42.5 million underfunded, an improvement in funding levels of approximately $10 million compared to year-end 2020. Next, I wanted to provide an update on our long-term guidance as well as our outlook for the first quarter. As Dan mentioned earlier, we are in the process of updating and refining our long-range model. We provided our original five-year plan during the May 2018 Investor Day, and have since updated our long-term expectations on a yearly basis relative to our original plan. We are ahead of our original plan, as well as ahead of our updated long-term guidance. We plan to update our projections and look forward to sharing those soon.
As it relates to our outlook for the first quarter of 2022, we expect continued strength in the growth trajectory of our recurring compliance software offerings. We expect sales from print and distribution to continue to decline, but with minimal Adjusted EBITDA impact. As I've noted several times over the last few years, the transactional pieces of our business are challenging to forecast regardless of the economic environment. While there is a large pipeline of activity, including 600 SPACs looking for a merger, recent market volatility has delayed some deals at the end of 2021 and in early 2022. We remain enthusiastic about the future demand for M&A as this volatility subsides and are very well positioned in this area.
With that as the backdrop, we expect consolidated first quarter revenue in the range of $210 million-$230 million and non-GAAP Adjusted EBITDA margin in the mid-20% range, much stronger than our historical first quarter margins, with the exception of the first quarter of 2021, where transactional revenue was nearly double the level we recorded in the first quarters of both 2019 and 2020. Regarding my comment on our expected Adjusted EBITDA margin in the first quarter being higher than historical margin, this is an important proof point that our evolving mix of revenue and permanent reductions to the cost structure are driving sustainable Adjusted EBITDA margin expansion. As an example, in the first quarter of 2020, net sales were $220.7 million, and Adjusted EBITDA margin was 13.6%.
Similarly, in the first quarter of 2019, net sales were $229.6 million, and Adjusted EBITDA margin was 10.3%. On an expected similar level of net sales in the first quarter of 2022, our expected Adjusted EBITDA margin is over 1,000 basis points higher than we generated just two years ago and approximately 1,500 basis points higher than three years ago. Certainly, the outstanding results we posted in 2021 will be tough comparisons, but taking a more holistic view of the longer-term trend in profitability provides insight to the sustainable margin expansion we are delivering. With that, I'll now pass it back to Dan.
Thanks, Dave. It is clear that our transformation efforts have enabled DFIN to become more profitable, focused, and resilient. We have plenty of work ahead of us as the opportunities ahead exceed what we have accomplished over the past five years. We will continue to focus on accelerating software growth and pursuing other initiatives in support of our strategy to be the market-leading provider of regulatory and compliance solutions. We will also continue to operate efficiently and remain disciplined and thoughtful in our approach to capital allocation to deliver increasing value to our clients, employees, and shareholders. Before we open it up for Q&A, I'd like to thank the DFIN employees around the world who have been working tirelessly to ensure our clients continue to receive the highest quality solutions. Stay safe and healthy. Now with that, operator, we're ready for questions.
Thank you. As a reminder, if you'd like to ask a question, please press star then one on your telephone keypad. Our first question is from Charles Strauzer with CJS Securities. Your line is open.
Hi. Hi, good morning.
Morning, Charles.
Just start with the Q1 guidance, specifically when you look at the margins that you just gave out, you know, can you give us a little bit more color on the assumptions behind those margins?
Yeah, Charlie, this is Dave. Thanks for the question. You know, as I mentioned, you look at our historical margin on a similar level of revenue in 2020, you know, first quarter margin was 13.6%. Same story in 2019, it was just over 10%, 10.3%. Compared to the mid-20% range that we're talking about in the first quarter of 2022, the improvement is really driven by a handful of things. First, the evolving revenue mix, really more software, less print, and then the permanent cost reductions.
Then, you know, the last thing I would say, you know, as I mentioned in the prepared remarks, you know, the expectation for Q1 2022 margin is, you know, 1000 basis points higher than we saw in 2020 and almost 1500 basis points higher than 2019. You know, what underlies the overall revenue assumption, you know, we continue to believe that the recurring software compliance offering will grow double digits. That's not only in the first quarter, but, you know, as we look longer term, that would be our expectation going forward as well. You know, print continued to decline, and that's, you know, a combination of two factors.
I'd say first is, you know, kind of the tail end of the regulatory impact in some of the contracts we've exited. Again, that'll be $40 million, you know, remaining, mostly in the first half of the year. again, really a de minimis impact on EBITDA. You know, for transactional, like we said, we have seen some delays in deals getting done here to start the year, just given the market volatility. You know, certainly the pipeline, as we talked about from a de-SPAC perspective, remains strong. that's really the biggest variable that we see.
You know, depending on how volatility is or, you know, in the first quarter and as that starts to dampen, we should see some of that activity come back just given the pipeline.
Great. That's very helpful. Just to follow up for you. Looking at kind of the torrid pace of the, you know, new SPACs that have come to market that you mentioned, I think it's, you know, over 600, you know, new SPACs in the marketplace looking for a target. You know, as these things start to de-SPAC, you know, still seeing, you know, growth and backlog, you know, from those kind of companies, you know, for your software offerings?
Yeah. You know, we're converting not only the clients that we've done the initial SPAC registration for, obviously converting those at a high rate, but also, you know, to the extent that we didn't have the initial SPAC registration, we're taking share on the de-SPAC. As you pointed out, you know, importantly, the opportunity for that ongoing recurring compliance revenue with ActiveDisclosure is, you know, we're really seeing, you know, great opportunity there. I think, I don't know, Dan, do you wanna comment further?
Yeah. Thanks, Dave. I guess, yeah, I think your comments are spot on. The only thing I'd add is, if we look over the past five years, you know, the SaaS growth has been about 15%, so it's a doubling of revenue. You know, the 2021 market was tremendous, certainly, for parts of our business, you know, presents some comparable issues. You know, with the backlog that we see, you know, maybe not, time will tell on market volatility and the impact of how that flows through to transactions.
When we look ahead, you know, over the next five years, we see it being a lot of the same, which is mid-teens growth in our software products, propelled by higher growth in the compliance recurring offerings, with growth in Venue being projected a bit lower than that, but with upside from transactional market activity. Print continues to decline. When you get, you know, five years out from now, you know, when we look at new regulations, we look at some use cases, you get to a, you know, without those baked in, you get to a doubling of SaaS revenue, call it $500 million plus of software revenue, with print being less than $100 million.
That's you know additional $250 million or so of software revenue and you know about $100 million or so less of print which is really a tremendous mix shift. When we think about that, we think about it on two vectors. One is it drives strong profitability, and the second is it also starts to shift the predictability of the business. You know excited about what we've accomplished, as I said in my remarks over the first five years and more excited about what the opportunity that lies ahead is.
Excellent. Thank you very much.
Thank you.
Again, if you'd like to ask a question, please press star then one on your telephone keypad. The next question is from Pete Heckmann with D.A. Davidson. Your line is open.
Hey, good morning, gentlemen. Thanks for taking the question. Could you provide us, I think I missed it, the full year transactional revenue? I think you said for the fourth quarter it was $106. What was full year again?
Pete, let me look that up and come back to you. I just wanna make sure I give you the correct number.
Okay. As a follow-up on that question, I think historically, maybe back at the Analyst Day, you've had a breakdown of that transactional revenue. The biggest components at that time I think were IPOs, then M&A, then corporate debt issuance, and then kind of other, maybe a little bit of, you know, bankruptcy type printing revenue. How has the mix shift changed in terms of how you think about at least in 2021, how you thought about the contribution from the SPAC mergers and the increased filing activity that comes from that?
Dan, you wanna take that one?
Yeah. This is
Yeah, go ahead, Craig.
Craig, go ahead. This is Craig, and then I'll let Dave take the financial part of it. I think for me in 2021, the capital markets, you know, you know, primarily driven IPO, SPAC, M&A, the resurgence of that, but the real story is the link back to software. We have this terrific transactional revenue, and we'll let Dave quantify what that was. This portfolio of software that is really this link to, you know, the clients using our deal room for the pipe, they're using our ActiveDisclosure for the SPAC, for the de-SPAC. We're doing that de-SPAC deal, and then those companies are reporting on our New ActiveDisclosure going forward.
It's really this ecosystem that the transactional revenue was created for us, this you know nexus of regulatory compliance and governance that we're able to play at to take our legacy business to really drive software, as Dan stated. Dave, I'll turn it back to you for the particulars.
Great. Thanks, Craig. Pete, just a follow-up on the last question. Full year number was just under $405 million. Then it, you know, as Craig alluded to, kind of the shifting mix, right? We get the inbound IPO activity and whether it's SPAC or regular way IPO. Obviously, you know, we've seen a tremendous lift from the registrations as well as the de-SPAC transactions, which again, the pipeline remains fairly robust with the 600 companies or so out there looking for merger deals. You know, for us, I mean, you look at the long-term benefit, it's exactly what we said earlier and what Craig alluded to around transitioning these clients to the software offering.
You know, Dan mentioned, you know, a doubling of our software again over the next five years. You know, a significant part of that is converting these clients to our recurring compliance platform.
Got it. All right. That's helpful. Just as a reminder, in terms of this comparison, is it correct to be thinking about it as for 2021, the toughest compares are in the first and fourth quarters?
Yeah. When you look at, you're talking specifically from a transactional perspective?
Yeah. I mean, overall, but yes, they're primarily from transaction.
The two largest quarters of the year for transactional were Q3 and Q4. We really saw transactional ramp up during the year.
Got it. All right. Thank you.
The next question is from Charles Strauzer with CJS Securities. Your line is open.
Hey, just a couple of quick follow-ups, please. I know you talked about that you'll be updating soon the kind of, you know, 44 in 2024 kind of, you know, long-term guidance. You know, just maybe, a little sneak peek there as to what your thoughts are behind that. Thanks.
Yeah, Charlie. When you look at, you know, like we mentioned, we're well ahead of the initial guidance we gave, and, you know, frankly, even well ahead of the updated interim guidance. We're taking a closer look at that. I think you know we mentioned in our prepared remarks, and, you know, I answered your question earlier around Q1, you know, we have some permanent changes to the cost structure that we're layering in. You know, so from a margin perspective, you know, that longer term trend is very healthy.
I think, you know, when you look at the software pieces, you know, Dan mentioned the overall software growth in the mid-teens with the recurring compliance software growing a little bit higher and then, you know, Venue probably a little bit lower, but obviously that could be higher depending on what happens with capital markets activity, which really supports that. From an overall print perspective, you know, aside from the $40 million in print decline that we talked about this year, our expectation would be that print continues to decline at kind of the historical secular rate of roughly, you know, 4% or 5%. The biggest wild card remains transactional.
You know, we'll be clear about what our assumptions are in the projections that we give around the transactional activity. You know, again, kind of the caveat is that we have the least visibility there and, you know, that can swing either way, but we'll be clear on what our underlying assumptions are for transactional.
Great. Thanks. Just lastly, the interest expense line was picked up a decent amount in Q4. How should we think about interest expense going into 2022?
Yeah. That'll drop going forward. I think when you look at the refinancing that we did, we took out the 8.25 2024 notes on October 1st, and that should reduce interest by about $14 million per year or so. On a go-forward basis, that would be the expectation.
Great. Thank you. I think I have no other questions. Thank you.
Thank you.
We have no further questions at this time. Oh, my apologies. We do have a question from Raj Sharma with B. Riley. Your line is open.
Hi. Good morning, guys. I just wanted to quantify the print impact for the year. I know that you had earlier indicated print declines were gonna be about $30 million left for 2022. Is that still the number? Does that happen mostly in the first half or the second half?
Yeah. Raj, the number is $40 million. That's the tail end of the regulatory impact and contracts that we were exiting. The lion's share will happen in Q1 and Q2, as you noted.
Right. Then just going forward, how do we—I know you gave some guidance on the EBITDA margins. How do we kind of view the gross margins for each one of those divisions going forward now with print coming down significantly? Could you talk about the divisions, the software gross margins and the print gross margins and the tech enabled. How do we look at that? 'Cause clearly the product mix is improving in terms of the gross margins. I just wanna see how that kind of lays out.
Yeah. There's a couple different factors there. I would say, you know, at the highest level, when we look at the acceleration or continued, I should say, software growth, that will typically carry higher than average gross margins. You know, with the print decline, that should also help gross margin. I think probably the biggest factor will be the level of transactional work that we do, which again, typically has a pretty high gross margin. You know, in the prepared remarks, I mentioned the guidance on Q1 for EBITDA margin is in the mid-20% range. You know, that's down a bit year-over-year, and a lot of that impact will show up in gross margin.
Again, it's just based on, you know, some of the pause we've seen here recently with the market volatility.
Right. In terms of the guidance for Q1, what transactional percentage are you assuming in that guidance, that number?
Yes. We're assuming that transactional will be down year-over-year. I think when you look at what we did in the first quarter of 2021 was around $90 billion. We're assuming that transactional will be down from that.
Right. Could you talk, or just give some more color on the transactional volume that's happening so far in the first quarter? I know that you talked about the big pipeline for SPACs and 600, you know, looking for 600 mergers. What about the other piece of, you know, the debt and the IPOs? How are you kinda seeing the volumes right now, and how do you see them moving forward? Of course, the Venue is related to that. Is that what you don't-
Yeah, sure.
The transactionals part, right?
Right. I'll start, and then I'll let Craig comment further. I think our comment around the market volatility and you know the impact that it's had on you know some of the activity that we see here in the first several weeks of the year applies broadly to the transactional space, not just the SPAC transactions. You know, the other activity I think from you know from a debt side obviously not as impactful to our overall financials. You know, lastly, with your comment on Venue, very often Venue is you know not highly correlated to the number of deals that are actually getting completed, right?
There could be activity going on in the background or private company deals that don't impact our, the other part of our transactional business. You know, I think we're seeing pretty good activity there as well. Craig, you wanna comment further?
Yes. Thank you for the question. You know, certainly the December and the early days of 2022, you know, there were imbalances by the geopolitical issues and the pandemic. What we're seeing from our clients working is this business cycle, you know, is gonna normalize for these extremes. If you look at the IPO segment just specifically, the first IPOs, especially in January, were small mid-cap offerings. There was only one offering over $1 billion, PPG, which was a taken deal. Then you look at the pipeline. Post-President's Day, there are several potential large IPOs that have the ability to launch. The Bausch Health spin-offs, Solta Medical, and Bausch + Lomb, Savers Value. There are IPOs that have that ability to go on the roadshow.
We're really hearing and seeing from our clients that there's some strength that we'll see in the later part of Q1. Clearly we've mentioned SPACs, the 600 SPACs searching for their business combinations. You know, the headlines for SPACs have certainly not been great. Cancellations, the redemption rates, that as we hear and see from our clients is a natural shakeout of sort of the companies and businesses that weren't quite ready for the public market. This recent volatility has certainly dampened enthusiasm for SPACs. Again, what we're seeing and hearing from our clients and the work that they're doing in preparation is that the underlying market is still strong. We think the market is efficient. We're gonna see SPACs combine to go after targets. We're gonna see consolidation.
It's created again, this terrific ecosystem for us. Again, our position with Venue and software and ActiveDisclosure, super strong. As you get to Venue, you know, our clients are using that. We believe they're taking share. We have a product that stands above our competitors, we believe, because of our product excellence. The security PII that we have embedded in it, which instantly redacts content, the sort of burned in redaction, and then certainly the artificial intelligence component of it. We've delivered in Venue. Our pipeline is, you know, still at a terrific level. We believe that outside of any market, we're gonna continue to take share, which gives us confidence for 2022.
I have a last question, and then I'll take it offline. On software, how do we view—are you gaining share in software in any of the key product lines versus, you know, your other competitors, Workiva? You know, because software obviously is very strong and robust. But your total valuation gets held back significantly, because of, you know, your episodic business and transactions. I just wanted to understand your software playing field and if you're gaining share, and then just if you can comment on your total valuation being held back by the transactions business.
Yeah. Thanks, Raj. It's a great question. You know, you look at our overall growth rate in software this year and you know, breaking apart even compliance software from transactional, and we feel like we did really well in the markets in which we play. There's you know, we compete against different parties in different offerings and you know, there's not one company that's a direct overlay. When you start to segment the pieces, we feel really really you know, proud of how we did and good about how we did and feel enthusiastic about the future based on what we've developed, what we're hearing in the marketplace you know, across both businesses and across the various software lines.
To your point on valuation, yeah, I made comment in my prepared remarks that, you know, based on trailing EBITDA multiple, enterprise value multiple, we're trading at about 4x, and that's, you know, 4x EBITDA, not 4x revenue. We think it's cheap. We think it's attractive. We approved a larger buyback. I think it's important that, you know, we focus on what we've done with the balance sheet that's positioned us to execute our strategy. We have a lot of flexibility, and we have the dollars, you know, to also execute buybacks. We see intrinsic value, and we recognize some of the volatility in some of our product lines.
We have a lot of product lines that are recurring, and predictable, and trade at significantly higher valuation in the marketplace. We agree with the sentiment.
Right. I'll take my questions offline. Thank you.
We have no further questions at this time. I'll turn the call back to the presenters.
Great. Thank you very much, and thank you everyone for joining. We will look forward to connecting following our Q1 results in May, and hopefully speak to many of you in the interim. Thank you.
Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.