Aug 4, 2017
Executives
Kathleen Guinnessey - Corporate Treasurer and Investor Relations Robert Carrigan - Chairman & CEO Richard Veldran - CFO Joshua Peirez - President and COO
Analysts
Bill Warmington - Wells Fargo Jeff Meuler - R.W. Baird Peter Appert - Piper Jaffray Andrew Steinerman - JPMorgan Stephen Sheldon - William Blair Shlomo Rosenbaum - Stifel, Nicolaus Manav Patnaik - Barclays Capital
Operator
Good morning, and welcome to the Dun & Bradstreet's 2017 Second Quarter Teleconference. This conference is being recorded at the request of Dun & Bradstreet.
If you have any objections, you may disconnect at this time. All participants will be in a listen-only mode until the question-and-answer session of the call.
[Operator Instructions] I would now like to turn the call over to Ms. Kathy Guinnessey, Treasurer and Investor Relations Officer.
Ms. Guinnessey, you may begin.
Kathleen Guinnessey
Thank you. Good morning, everyone, and thank you for joining us today.
With me on the call, this morning are Bob Carrigan, our Chairman and Chief Executive Officer; Rich Veldran, our Chief Financial Officer; and Josh Peirez, our President and Chief Operating Officer. Here's what you can expect on the call.
Following my brief remarks, Bob will provide a brief overview of our second quarter results and an update on our strategy. Rich will then take you through the highlights of the quarter.
After that, we'll open the call to your questions. To help our analysts and investors understand how we view the business, our remarks this morning will include forward-looking statements.
Our Form 10-K and 10-Q filings as well as the earnings release we issued yesterday highlight a number of important risks factors that could cause our actual results to differ from these forward-looking statements. These documents are available on the Investor Relations section of our website.
We undertake no obligation to update any forward-looking statements. From time to time, we may refer to sales, which we define as the annual value of committed customer contracts.
In addition, we speak from time to time about deferred revenue. When we refer to the change in deferred revenue, we mean before foreign exchange, dispositions, acquisitions and the impact of the write-down of deferred revenue due to purchase accounting, unless otherwise noted.
During our call today, we will be discussing a number of non-GAAP financial measures, which we call as adjusted results, as that's how we manage the business. Unless otherwise noted, all metrics on the call will be presented on an as-adjusted and non-GAAP basis, as further described in our earnings release.
You can find the reconciliation between non-GAAP financial measures and the most directly comparable GAAP measures in the schedules to our earnings release. They can also be found in the supplemental reconciliation schedule that we post on the Investor Relations section of our website.
Where appropriate, we have reclassified certain prior year amount to conform with the current year presentation. And later today, you'll find a transcript of our prepared remarks as well as the financial model with historic results in the new format with sales and marketing revenue allocated between sales acceleration and advanced marketing on our Investor Relations site.
With that, I'll now turn the call over to Bob Carrigan.
Robert Carrigan
Thank you, Kathy, and good morning, everyone. Last night, we reported our results for the second quarter.
We grew revenue 3% with one point of organic growth, and deferred revenue growth accelerated to 3%. Operating income for the quarter was up 4%, and we grew EPS 2%.
We are pleased with our strong earnings growth as we have been very focused on driving efficiencies in our operations. We've gotten good cost synergies from the Avention acquisition.
Given the traction we are getting on profitability, we no longer see a scenario where operating income declines this year. So we are revising our operating income and EPS guidance ranges.
We are now on target to achieve operating income growth of 0% to 2%, revised up from a range of minus 2% to plus 2%. EPS between minus 4% and minus 7%, provides from our earlier guidance of minus 4% to minus 9%.
Revenue growth remains unchanged with total revenue growth of 3% to 5% and organic revenue growth of 1% to 3%. Regarding the top line, we had strong organic revenue growth in the Non-Americas portion of our business, particularly in China and our European partnerships, which offset a slight organic revenue decline in the Americas.
Organic revenue in the Americas was down about a point, which was a little light of our expectations. The decline came from a large customer that reduced its data spend in advanced marketing, partially due to its strategic decision to move away from the B2B part of its business.
However, we feel good that we'll get this revenue back as we are in advanced discussions with this customer to cross-sell them into some of our more sophisticated Master Data solutions later in the year. As I stand back and look at our execution against the strategy and our business midway through the year, there's a lot to feel good about.
But there are also some things that aren't quite where we want them to be. Revenue in D&B Credit suite is moving in the right direction, but still not where we need to be.
While our performance was better than last year, revenue was still down a point in the quarter. I am very -- I was very pleased to see we're getting improved pricing in the new product.
Overall retention is improving, and we bring a lot of new customers onto the platform, but we've got to move even faster. So the team is focused on executing better in the second half and finishing the year strong to get D&B Credit revenue to flat for 2017.
In sales acceleration, we've extended our quick start with our new D&B Hoover's solution launched in March. Overall, organic sales of D&B Hoover's and our Legacy Hoover's product combined were up in the mid-single digits in the quarter compared with the low double-digit decline in Hoover's sales for 2016.
D&B Hoover's is really resonating with customers, and we're improving on several fronts. Pricing and retention are both several points ahead of last year, and we're getting very good growth in new customer acquisition.
In fact, more than half of the sales of the new D&B Hoover's Solution were to new customers, and the vast majority of those sales were the more advanced products that can integrate into other applications like CRM. Now let me talk a little bit about Advanced Marketing Solutions.
The main component of Advanced Marketing are Audience Solutions, which help our customers with programmatic and online marketing and our Master Data products, including optimizer and D&B Direct. If you recall, Master Data is a big area focus for us.
It's an area where we help companies deal with the huge volume and velocity of data they are collecting. Today, we generate more than $300 million a year in Master Data solutions, primarily with customers and our strategic vertical and government channels.
These deals are typically large and the revenue mostly recognized at the time of sale, so they can cause big quarterly swings in revenue growth. And the fourth quarter is the biggest in terms of both volume and growth.
We expect the same pattern this year, with a strong fourth quarter that will deliver growth in the mid-single-digit range for the year in Advanced Marketing. Staying on sales and marketing on July 19, we announced a new alliance with Microsoft that impacts both sales acceleration and Advanced Marketing Solutions, particularly Master Data.
Under the new alliance, we will give companies access to our data through Microsoft's Azure cloud and its related services. Specifically, we are partnering with Microsoft in 3 ways.
First, our data will be made available within Microsoft Dynamics 365, Microsoft business application services such as ERP and CRM. The Dun's number and our core business data will be integrated into Microsoft's common data service, which helps customers power their applications.
With our data embedded in the common data service, our joint customers, of course, they synchronize with the Dun & Bradstreet global business database. With this data integration, D&B and Microsoft Dynamics 365 customers will benefit from data that can be integrated directly into their CRM, ERP and internally developed business intelligence solutions, streamlining the process, so that they are able to access information in a way that saves a significant amount of time and improves productivity.
This capability is Dun & Bradstreet Master Data and Data-as-a-Service in action, where customers can access our high-quality data organized around the Dun's number and embedded into the workflows to feed their critical applications. Second, we will offer D&B Hoover's and build new services on the Microsoft Azure cloud platform.
As you know, making our data and insights available through modern delivery were as-a-service platforms has been a central component of our strategy. For our customers that means that our data is available in their workflows across platforms and updated in real time.
For us, modern delivery makes our data more useful and stickier, enhancing the value of the revenue we generate from newer delivery products. I'm pleased that nearly 1/4 of our total revenue in the Americas over the last 12 months came from our cloud-based and as-a-service solutions, and these modern delivery products are growing at a much faster rate than our legacy businesses.
The third element is that we will reach Microsoft's commercial users and prospects through a joint co-sell arrangement, focused on Dynamics 365, Dun & Bradstreet's core business data and D&B Hoover's. Under this joint go to market arrangement, Microsoft will co-sell both Dun & Bradstreet's data offerings in Dynamics 365 as well as D&B Hoover's on Azure.
Ultimately, Dun & Bradstreet will paper these transactions. We will get 100% of the revenue from our offerings and own the customer relationships going forward, giving us future cross-sell opportunities.
We expect these offerings to be available in the U.S. later this year, early next year, and yield new incremental sales opportunities for Dun & Bradstreet and incremental Azure consumption from Microsoft.
We feel good about the potential for this alliance, as we will lean into our multi-channel sales strategy, where we serve customers through alliances, emerging businesses and our global direct sales force. As I noted earlier, we're building momentum with strong sales of D&B Hoover's through our own sales channels.
We will now be positioned to drive additional growth with D&B Hoover's on Azure, enabling us to grow faster and really own the sales acceleration space. This co-sell arrangement also addresses one of the key learning’s from past alliances.
That we have to work together with our alliance partners to ensure both parties are working to generate sales. As the data expert in the alliance, we need to bring our expertise to the sales process to control our destiny with these customers.
At the same time, this joint go-to-market arrangement passed into the Microsoft sales and partner channel. With tens of thousands of field sellers and hundreds of thousands of channel partners, Dun & Bradstreet will become part of everyday Microsoft seller conversations with business leaders.
What excites me most about this new strategic relationship with Microsoft, is that it highlights the core components of our strategy. Perhaps most of all, it really speaks to the importance of what we mean to customers, the importance of the Dun's number and the power of Dun & Bradstreet data.
In closing, we're pleased with our earnings performance in the quarter and our outlook for the year. And we're excited about the new things we have going on at Dun & Bradstreet, especially in the area of cloud and as-a-service delivery of our content.
We are confident that we are laying the groundwork for future revenue growth. In the near term, we have our heads down focused on sales execution and profitability to make sure we drive results in the second half of the year, particularly in the fourth quarter.
So with that, I'll turn the call over to Rich. Rich?
Richard Veldran
Thanks, Bob, and good morning, everyone. As Bob described, we're pleased with our earnings results in the quarter, which I'll get to in a moment.
But first, let me start with revenue. Total revenue for the company was $408.4 million and grew 3% for the quarter, with organic growth of 1%.
The Americas segment had second quarter revenue of $336.8 million, which represented 82% of our revenue in the second quarter. Total revenue was up 2%, due to the acquisition of Avention, and organic was down a point.
Within the Americas, risk management, representing 54% of Americas revenue, was flat for the quarter. Strong growth in Other Enterprise Risk offset declines in Trade Credit.
Other Enterprise Risk, which was about 1/3 of risk management revenue in the Americas grew 6% in the quarter. The strong growth was spread across the product mix.
We've been very pleased with our performance in Other Enterprise Risk, especially in the compliant space. Our compliance offerings cover customer needs from the initial on-boarding of new vendors with basic validation to more sophisticated deep due diligence.
Our customers really value the enhanced screening that we can provide with the breadth and depth of our global database. Customers benefit from our ability to integrate third-party data, organized around the Dun's number to provide a more complete picture of who they're dealing around the globe.
The other 2/3 of risk management revenue was in Trade Credit, which was down 3% in the quarter. The D&B Credit suite, which included DNBi and represented 3 quarters of Trade Credit revenue, was down a point, which Bob just talked about.
Other Trade Credit was about 1/4 of Trade Credit revenue and was down 9% in the quarter. As we've seen over the past few quarters, they were several deals that shifted out of Other Trade Credit to other areas of D&B, without the impact of those shifts Other Trade Credit would have been down in the low single digits.
Now let me shift over to sales and marketing, where revenue in the Americas was up 6% in the quarter. Sales acceleration, which was 45%, sales and marketing revenue was up 14% due to the acquisition of Avention.
Organic revenue was down in the low to mid-single digits. The decline in organic revenue was due to weak sales of the old Hoover's product in 2016.
As Bob mentioned, Hoover's sales were down in the low double digits last year. And since it's a subscription-based product, it will take a while for the strong sales performance that we're seeing this year to flow through to revenue.
Advanced Marketing, which was 55% of Sales & Marketing revenue was down 1% in the quarter, entirely due to the reduction in spend from the large customer that Bob just talked about. Otherwise, Advanced Marketing revenue growth was strong across all product areas.
We're particularly pleased with our strength in Audience Solutions, which is really starting to get traction in the programmatic advertising world. Our sales efforts in advertising agencies and our presence on the major platforms and exchanges are building recognition of Dun & Bradstreet data in this space.
And we just launched a new product, Visitor Intelligence, which allows customers to see relevant Dun & Bradstreet business data about visitors to their website, allowing them to engage digitally in a more personal way. Shifting to Non-Americas.
Revenue was $71.6 million in the second quarter, which represented 18% of revenue for the company. Total revenue was up 7%, and organic revenue grew in the low teens.
The organic revenue growth was due to a strong performance on our Worldwide Network partnerships in Europe and very strong performance in China. In China, we're benefiting from sales of the Dun's registered field as service, where our customers can display our seal as validation that they have a Dun & Bradstreet profile.
This helps potential new business partners to know that they're dealing with a real company. Deferred revenue was up 3% for the company before M&A activity and the impact of foreign exchange.
Americas deferred revenue was also up 3% and Non-Americas was up over 2%. Now let me turn to profitability.
Operating income in the quarter was up 4%, thanks to a tight focus on cost as well as the timing of some spend that shifted to the second half of the year. We're pleased with our expense controls overall and have improved our full year operating income guidance range.
As we look forward to the second half of the year, we expect third quarter operating income to be down in the mid-single digits due to the cost that shifted out of the first half of the year, before rebounding in the fourth quarter, when we have our biggest revenue quarter. EPS grew 2% in the second quarter to $1.40 a share due to the higher operating income, partially offset by a higher tax rate in the quarter.
We've generated free cash flow of $143.2 million in the first 6 months of the year and are on track to deliver our full year guidance of $215 million to $245 million. And turning to the balance sheet, we ended the quarter with $1.7 billion of debt, including about $1 billion of fixed-rate senior notes and $700 million of floating rate debt.
Our cash balance was set $400 million for net debt of $1.3 billion. And with that, we'll open up the call for your questions.
Operator?
Operator
[Operator Instructions] Your first question comes from Bill Warmington of Wells Fargo.
Bill Warmington
Good morning, everyone.
Robert Carrigan
Good morning, Bill.
Bill Warmington
So I want to start out with Americas D&B Credit suite. That's one where we'd seen a number of years of decline and looked like 2017 was going to be the year that it turned positive.
First quarter, it looked like it was on its way. Second quarter, it turned negative again.
Just wanted to ask a little bit more about what's going on there? And then also, whether you still -- will you think you can bring it to breakeven for the year?
Robert Carrigan
Yes. Bill, its Bob.
Yes, you're right. This has been a product that was in decline for more than 5 years.
In fact, Q2 last year, we're down 4%. So look, I'm not happy about the fact that declined a point this quarter, but we're making progress.
You got to remember we have 20,000 customers. We have a mix of customers on the legacy DNBi and customers on the new product.
And we've got movement. And if you look at the history of DNBi, we've always had -- we had quarters that swung in 0.5 points, 1 point here and there.
We're still very focused on getting to flat this year. Obviously, we want to do better than that, but flat after 5 years of decline is a nice inflection point.
That is our focus. I did say, we have to execute better and work a bit faster to migrate our customers here.
It's a balance when you're dealing with a product that's got a deep history as an embedded workflow application with Risk Managers that are the customers, who are working with them to kind of make sure that we bring them over very thoughtfully. And so we're -- it's that balance of pushing the customers to the new solution because we know it's better for them in the long term, but we got to get them off the legacy stuff.
So the good is that the folks are loving the product. We're seeing really nice price uplift and getting great feedback on it.
And so that's all good. But we've got to definitely improve execution and make sure that we work a bit faster in the second half.
But our focus is still very much on hitting that 2017 goal of flat.
Bill Warmington
Okay. And one more question, if I may.
I've been getting a lot of questions recently about Moody's acquisition of BvD, and what that means for D&B? And I mean, it sounds like the plan at least from the Moody's side would be to combine BvD's corporate ownership data and Cortera's accounts receivable aging data and back that with the Moody's brand.
And so I guess, the question is, are you starting to see talk of increased competition in the credit and the compliance and the supply-chain sides of the business?
Robert Carrigan
Look, we - a lot of the areas that they compete against us in like supply and compliance. Those are the areas that are doing very well for us.
And those are faster-growing areas for us. We have been competing against BvD for a long time in Europe.
They are at the core, a data aggregator. And I would say that our data folks are -- we made investments in our data quality.
I would put our data heads and tails above what they can offer with Cortera. We don't hear about Cortera in the market.
I don't want to sound arrogant about that, believe me. Our antennas are up on this.
And we are remaining very focused on the competitive environment. Don't confuse that.
But at the same time, I don't think you should over blow the acquisition of Moody's and BvD. We're very focused on them.
We know we can compete well against them, particularly in the Trade Credit space. We've really -- we've got a lot of new products there.
Again, we've made credit investments there. We've got deep relationships there.
We're not going to, again, rest on our laurels, but I like our odds in this market.
Bill Warmington
Excellent. Thank you for the insight.
Robert Carrigan
Sure.
Operator
Next we have a question from Jeff Meuler of R.W. Baird.
Jeff Meuler
Yeah, thank you. Let me just maybe take that question, also, better ask it in a different way because a lot of investors are asking some version of it.
You just mentioned your data quality as a differentiator. But I guess, maybe make the case for D&B data other than the data quality, like what data do you have that's mostly differentiated and valuable, and maybe, spell out the power of the Dun's number because the question is coming up a lot more with investors in the wake of that?
Robert Carrigan
Yes. Look, the core of it is the trade data, the accounts receivable data that we get.
We have 12,000 sources and growing. And so -- and we own this data.
We are not an aggregator. And the Dun's number we own.
And so we have invested in growing the global breadth and depth of our data. But again, the point needs to be made that it is owned and indexed around this Dun's number, which is becoming increasingly important, as testified by the Microsoft deal that we just talked about.
They're very few companies, actually there's no company that has the crown jewel assets that we have that can do a deal of the magnitude like we've done, for instance, with Microsoft, where our data is being used to organize data sets of Microsoft CRM customers similar to what we're doing with Salesforce in the Data.com space. So again, the power of owning this data and the uniqueness of the Trade Credit data that we get -- the Trade data that we get, which is really what a lot of the customers want.
That is something that is unique to us. And we keep building our advantage in that.
We have been investing in that, particularly, the financial institutions, the FIs. They know the value of that trade data.
It's critically important in their decision making. And we have only upped our game in the last few years in that regard.
So that is what makes our content so unique. It's not just the raw data, but the insights, the analytics that we infuse in it, the Dun's number, all of those things uniqueness of our sources.
Those crown jewel assets are really at the core of our competitive advantage at Dun & Bradstreet.
Jeff Meuler
Okay. And then on the Microsoft co-sell agreement.
If you're getting a 100% of the revenue, can you just help me with what incents [ph] Microsoft to sell it? I just want to understand why they're going to lean into it?
And then, any impact on your discussions with Salesforce? And trying to get them to provide you with firm leads.
Robert Carrigan
Look, Microsoft, you can see the news lately. They've got a tremendous focus around Azure.
And the fact that now D&B Hoover's will be available on Azure. And within that environment, they'll be able to pull from our data in there common data service, which is the data layer that feeds a lot of their applications.
So we're going to be embedded in that environment. So Microsoft wants to bring the best solutions to its customers.
And the power of their applications in their cloud platform and our data is really enabling for their customers. And also, it drives Azure consumption.
And that is something that is a strategic focus for them. With regards to Salesforce, they continue to be a great partner of ours.
They continue to manage the existing customers. They were committed to working closely with them to serve those joint customers.
It's been great now for us to be able to sell D&B Hoover's in that environment. Recall when we had, when they were selling Data.com exclusively, we could not sell in that environment directly, and we are doing that now.
And at the same time, I have to say that, the performance of their relationship has actually been a little better than we expected. We're doing pretty well in terms of what Salesforce is producing.
So we like where we are with them and have a good relationship in that ecosystem. We're excited about the Microsoft ecosystem.
Let's get to the core of our strategy of being embedded and being in these environments. And we're making good progress.
Jeff Meuler
Okay. And then just finally.
On the good operating income performance, I think you said, it was driven by efficiencies and Avention cost savings. So I guess, if you could just confirm that.
You're still spending the same level on initiatives, I guess, that you were planning on, and this is really efficiency and synergies. And I guess, what I'm having trouble with is, it look like the EBIT strength was particularly pronounced in Non-Americas, which I'm just having a hard time syncing like Avention cost synergies and the Non-Americas strength.
Richard Veldran
Yes. Jeff, it's Rich.
Yes, so couple of things. There were really 3 things in the quarter that went on.
There were some better Avention synergies. We'd actually expected that we would get synergies beginning in the second half, as we consolidated data sources, those types of thing.
The integration went remarkably well, very smooth, and we got some of those synergies quicker. So that was a true impact.
We tightened the belt on a couple of other areas as well and cut a couple of costs. There was some cost from a few areas that moved into the second half, which is why we mentioned that the third quarter will be a little bit lighter.
But overall, the biggest drivers and the reason that we took the bottom end up is, we got some synergies earlier, and we tightened the belt a little bit on a couple of areas. In terms of the outside the Americas operating income being very strong, those are the few factors going on there.
First, obviously, we did the Benelux conversion last year, which does help the margin. It becomes a much more profitable revenue stream for us.
We also had some big data file sales as part of the partnership network. And those things are relatively high margin.
So you did see some pretty good performance there. But the guidance increased at least of the bottom end of the range was really driven by the better synergies and a little bit of my belt tightening,
Jeff Meuler
Thank you.
Richard Veldran
Wait, there was one. You had also asked about the investment.
Investment program hasn't changed. We're still expecting to spend the numbers that we talked about in the beginning of the year, which was about all told in the $40 million range.
Operator
Next up we have Peter Appert of Piper Jaffray.
Peter Appert
Thank. Good morning.
On the Microsoft alliance, can you talk a little bit about how you see the scale of the opportunity there? And then, just timing wise, when does it actually impact the operating results?
Is there any exclusivity associated with this deal?
Robert Carrigan
Yes. Look, as we've said about our alliance relationships, we do have a portfolio approach.
Having said that, that I think, we're obviously very excited about this one. It really speaks to the power of our content and the Dun's number and all that we offer.
Our goal is to, as we said, we're going to be in market later this year, early next year. We've got a couple of different products.
We've got D&B Hoover's on Azure. But also, we'll have products around our data that's embedded in the common data service at Microsoft.
So we'll be rolling those out. We've already had kind of a kick off with the Microsoft sales team.
And we are -- we're very much at work right now that we've announced this getting ready. The good news is that it currently leverages areas that play to our strength.
So D&B Hoover's is something that where we've got a lot of momentum on, and re-platforming to Azure is not -- that's not something that's kind of outside of our wheelhouse, okay. It's not like we're creating brand new products here.
So -- and then leveraging our core data sets in Microsoft's common data service, again, is also something that's within our core competency. So we're excited about it.
And I think it's got big potential. Again, the alliance relationships are a portfolio thing.
So I don't want to speak to -- I don't want to oversell anyone. But we're excited about it.
The final thing I'll say is, we've learned a lot about alliances over the last couple of years. And as I said in my remarks, leveraging the joint sales power of our organization is critical.
This co-sell is the key word, the fact that we are papering these contracts. So we're not just getting royalty for something sold through another Salesforce, where our folks are involved.
We're papering a relationship. We book 100% of the revenue, so the chance for us to go a little deeper with these customers and have a longer-term relationship is -- it is higher probability of that.
So there's a lot of things we're excited about. And we'll keep you posted as we make progress there.
But it's good stuff. Good stuff for us.
Peter Appert
Okay. And then, how about on the differed revenue, the improvement in the growth you saw there?
Can you give us any color in terms of the composition of what was driving that?
Richard Veldran
Yes, I mean, we're seeing some of the newer products. Obviously, more of the as-a-service products are making a difference for us there.
So -- and we see that as a good sign right that will continue to progress the business as we go.
Peter Appert
Okay. How are you feeling, Bob, in the context -- or Bob or Rich, in the context of the better differed revenue of getting to your mid-single-digit objective by next year?
Robert Carrigan
Well, I don't think we've said by next year. I think we've said, we certainly see it within the context of our strategy.
We haven't guided for next year. But obviously, we're very focused around getting there.
As Rich just said, a lot of the deferred is around some of our more modern as-a-service products. I think we talked about as-a-service, and I hope you guys get the importance of that, which is really embedding our data making available in real time becomes more useful to clients.
It gets embedded in their workflows. And that's a much better place for us to be.
And that's really been where a lot of investments have been. And so I like the deferred growing in that direction.
I like some of the newer relationships we're announcing. I like our progress with both D&B, Hoover's and D&B Credit.
All those things will contribute to us getting to that mid-single-digit price that we're targeting.
Peter Appert
Okay. Thank you.
Operator
Next up we have Andrew Steinerman of JPMorgan.
Andrew Steinerman
Hi. It's Andrew.
I definitely quote Rich, that you're spending -- your investment spending of $40 million hasn't changed for the year. But could you let us know why some of those costs slipped from third -- from second quarter to third quarter end?
What are some of the nature of those costs?
Richard Veldran
Yes. Some of the things that slipped but then, I would characterize them as the less mission-critical spending.
So certain development costs that were not time bound did shift. Also, some hiring of certain positions, not necessarily even as part of the investment, just sort of our normal costs, some things did shipped out.
We lay out plans in the beginning of the year. You expect things to fall in certain timing and sometime some of that timing shifts.
I think the important part though is, there's nothing that moved out of the quarter that was -- that's growth depended upon. So we didn't miss the delivery or something like that.
It was literally just, you setup plans in beginning of the year and certain costs tend to shift, and a little bit of that shifted into the third quarter as we geared up on a few things.
Andrew Steinerman
Okay. Thank you.
Operator
Your next question comes from the line of Stephen Sheldon of William Blair.
Stephen Sheldon
Hi. Good morning, everyone.
First, are you still in the - I guess, in the early innings or rolling out D&B Credit, but I guess, can you give an update on your plans for migrating DNBi clients to the new platform? And then, I guess, from a time line perspective, when would you expect to see D&B Credit represent kind of a majority of revenue within the Trade Credit suite?
Joshua Peirez
Stephen, its Josh. Thanks.
I think, we are probably well past that. Just talking about the first innings, but we're still sort of in the earlier part of the middle innings maybe in the rollout.
We have most of the functionality we need for the majority of customers in market. We do have larger customers, who have some of the module capabilities that do require some more sophisticated capabilities that are still being rolled out and in our plans moving forward.
So to migrate them, we will need to get some of those capabilities out. But we do have about 30% of customers currently on the new platform.
And that is increasing every quarter, so that's great to see. We're seeing the migrations go very well, where our capture rates are higher on customers that we're moving over to the new platform, which is what we want to see, and again, when we talk about capture.
It's the combination of retention and price lift. And for us, we're happy to trade one for the other as long as we end up moving that overall capture rate up.
So in any given quarter, those can move around, but we're seeing the capture rate trend continue to improve, which is important to us. And I think, as we've said on previous calls, this is a product suite that it can swing 0.5 points to 1 point in any given quarter, which we saw in the second quarter.
And it certainly, our intention to try to focus and shift that around in the back half to get to the flat number that we indicated for this year as our goal. And that's still our focus, as Bob said.
So for us, the rollout plan has gone very well. We've been able to put out the core functionality that the majority of our customers in the U.S.
need, mainly our small and midsize businesses. We articulated that as the goal when we talked about our rollout plan at our Investor Day a couple of years ago.
That's been going very well. We also talked about global expansion, and we've launched in our global markets in the U.K., Ireland and in India.
And we also have launched with a number of our Worldwide Network partners, as a royalty as they sell this product. And they're just getting going now as well.
So the next part is the large customers here in the U.S. and Canada getting those module capabilities in and then, completing moving all the customers off of the DNBi products into the D&B Credit suite.
But it's going well. We need it to go faster, as Bob said.
We think we have the opportunity now, with a lot of the functionality out and the traction experience we have in market. And the results we've been seeing and understanding the customer behaviour to actually drive that faster, but that is what we need to do in order to hit our goal.
Stephen Sheldon
Okay. And that's helpful.
And then one more if I can. On Salesforce, can you maybe provide an update on how direct sales of D&B Hoover's are coming in?
And maybe the -- I think you gave it last quarter, but where the renewal rate kind of sits on that existing client base?
Robert Carrigan
Yes, this is Bob. We don't -- I'll just say that we are -- sales are going well.
The version of D&B Hoover's that has the critical connections to the Salesforce environment is the majority of our new business sales. So we know the customers are buying the capabilities to integrate into the Salesforce environment.
And obviously, our overall -- this has been a pretty dramatic turn in sales for us year-on-year. And so certainly, the Salesforce environment is one of the most robust environments.
So without saying specifically, how we're doing I'll just say that in general, we're really pleased with how we're doing. And we're going to continue to push hard.
We've got the best product in the market by far. And with all the right integration capabilities in that environment, and we're putting the pedal to the metal there.
And we're going to do the same thing in the Microsoft environment.
Joshua Peirez
And it's Josh. Just to build on Bob's comments, I would say specifically, we're saying the capture rate improve well for us versus what we were seeing on Hoover's.
And so when you talk about a double-digit decline and sales turning into a -- an increase in sales as we articulated in the first half and to do that in both the first and second quarter, to see those improvements for the first half is critically important. And it's coming both from increased new sales and also, from improvement on the capture rate, which again, is a combination of retention in price.
We'll trade one for the other, but that overall rate is improved from what we were seeing last year.
Stephen Sheldon
Thanks.
Joshua Peirez
Sure.
Operator
Your next question comes from the line of Shlomo Rosenbaum of Stifel, Nicolaus.
Shlomo Rosenbaum
Hi, good morning. Thank you for taking my questions.
Either Bob or Josh, could you explain to a little bit more how the joint sales will work on the ground? I just want to follow-up on the other question, in terms of the sales people from Microsoft being incented to sell it.
I mean, one of the key learning’s, I think, with Salesforce.com, as you guys have to being controlled the relationship and I fully understand. I think, that makes a lot of sense for you to be doing it.
Just trying to understand, where's their skin in the game for them and why would they introduce you if you're a sales guy? There's got to be -- what is it doing for them that improves their own business on the ground that they'll bring you in there?
Robert Carrigan
Yes. Shlomo, its Bob.
How are you doing? Look, as I said earlier, their critical focus is around Azure.
And a key way for them to get more usage and to showcase the platform is to have great offerings on the platform, and they're enabling their sales folks to co-sell key relationships like ours. And I can tell you they're putting a lot of emphasis around that.
We've already had, again, a kick off with their team. And so -- but look, we're not going to rely on them exclusively to sell.
That's why I love the idea of a co-sell. Today, we're selling D&B Hoover's.
So this is not like some foreign product right for us. This is our product.
And we will be selling it on Azure through our sales teams. And so that's why, I like this arrangement.
I think there's incentive on both sides. And the fact that we are going to be embedded in that environment is a real incentive for them.
They love working with a brand like ours. Our data also, I think, they would agree our data probably makes their applications evermore useful and their environment more useful and more actionable, and so it really gets to what they're trying to accomplish with Azure.
And so that's where the incentive is. But again, we're doing very well, right now, selling D&B Hoover's.
We've had an incredible turn. It's been really terrific for us.
And we're going to continue to sell Azure and sell D&B Hoover's as it moves to Azure and that's within our wheelhouse. So that all goes well for our future there.
Shlomo Rosenbaum
Are they, in someway, directly or indirectly compensating their sales guys to bring you in?
Robert Carrigan
Look, I can't. I really cannot comment on the specifics of compensation and those things, but let's just say that, we're happy with how both sides are incenting their sales teams.
And again, it's very much on strategy for them with their focus around Azure. And it's really important to them as a company.
And so but again, let me just add, again, that other point, which is we are selling this as well. And the co-sell means, we are also selling.
And our sales team are -- have a 100% focus around selling D&B Hoover's and have full incentive to do that. And this is a product that we've got a lot of momentum in.
Shlomo Rosenbaum
Okay. Can you just move into a different tact.
On the Non-Americas revenue that was really strong. Can you parse it for how much was kind of unique data sales or data sales that tend to be more lumpy to and where you're getting royalty through your partners?
And how much is from this selling the D&B seal in China? I don't recall having heard that before.
When did this business pick up? When was it started?
How much of the growth was that? Can you give us a little detail on that?
Joshua Peirez
Shlomo, its Josh. I'll start and Rich can jump in with some detail.
So let me just break it apart a little bit. First of all, we're pleased because we're seeing the Non-Americas growth and performance.
And generally, the KPIs that we would measure really across the board improved this year from last year, across all of our Non-Americas businesses, so that's encouraging. Some of that doesn't yet show up in revenue results, but some of it does.
In particular, what we talked about in this quarter, in China, we have been selling Dun's seal for a while, but we have been increasing our focus on being able to sell that with the help of our team there, but also, some of the needs of larger customers we have, who are looking for credible suppliers in China and want to see their companies are verified and real and exist and in our database. And so it provides us with an opportunity to accelerate growth.
And as we focused on our strategy and execution in China this year, a big focus has been accelerating that growth. And so we're seeing that.
So that's encouraging for us. That is also, by the way, a direct business that we operate as a joint venture.
So that's not what's showing up in the partnerships act. I know you that but just to be clear.
In the partnerships, it's a combination. We're seeing better overall performance.
Strategically, I think, as Bob's talked about as part of our global strategy, we've been leaning into the partner network. We've been focused on leaning into have bigger, better partners who consolidate markets and have more opportunity therefore, to sell our newer products and to also, sell ourselves to sell them data services and other things that help them to grow their businesses.
And so for us, we think we've built a great team to support our network partners. We've leaned into a partner network with partners who are covering additional markets.
That is something that also gives us a little more profitability as you've seen. But it allows us to then go and sell them to help them grow these new businesses they're buying.
We did have some projects, as you indicate that fell in the quarter and in the first half. But our view is there are always a number of projects that we're working on with Worldwide Network partners.
In which quarter they're going to hit is always a question. We do see this as a growth driver for the business.
That's something that should be above our stated goal of the mid-single. This was something that should be above that and drive it.
In any given quarter, it's obviously, a smaller overall number, so it could be driven by these projects, which is what we saw in the second quarter. But we do have other projects in the pipeline that we're looking at.
And we don't know exactly when they'll end, but it is something that we see as a continued growth driver for us.
Shlomo Rosenbaum
So is this level of project work just an increasing pipeline for you guys that as you strategically made some changes internationally, you wish to start to see this just be a better growth area? Or is this -- what I'm trying to dissect is, is it a timing pop or is it like, hey, we've been working on this for a while, you're going to see a sustained growth or like that over there?
Robert Carrigan
Yes. Shlomo, its Bob.
Look, as Josh said, these are project-oriented initiatives. But the bigger issue is, when you look at what we've done with the Worldwide Network and how we've cultivated those relationships, how we leaned into that.
We've made some big moves over the last couple of years with Australia, New Zealand and the Benelux, Latin America, really leaning into this model, and really improving our relationships with our Worldwide Network partners. We've got some of the top companies in the world locked in to long-term agreements with us.
And we're doing more and more things with them. And we're rolling out lot of our core products to them, like we've never done before.
And the cloud enables us to do that by the way. We're able to rollout in a more elegant fashion.
But beyond that, the ability to work with these guys on initiatives, that can be lumpy. And as Josh said, some quarters were better than others.
So the predictability I think that you're looking for is something that we can't promise you. But what I can tell you is that, the relationships that we built and the strategic focus that we've had around this, which we probably don't talk about enough is bearing fruit.
And we're seeing that, and we're also seeing great progress in our own markets. Focusing now on China and India and the U.K.
and Ireland, that enables us to really direct our resources against the earned and operated markets. Essentially, all of Continental Europe is now a partner.
And so this focus enables us to better deploy our resources and the relationships that we have with our Worldwide Network partners is really at an all-time high. And I like the road map ahead and our ability to be able to do more and more things with them.
So this has been a big area of strategic focus for us. And I just want to make that bigger point.
And we're pleased to see that the global strategy, which I've talked about from the very beginning since I got here, how do we really maximize the global breadth and depth of what we do. It's nice to see that we're seeing some good results from that.
Shlomo Rosenbaum
Okay. Thank you very much.
Operator
[Operator Instructions] Your next question comes from the line of Manav Patnaik of Barclays Capital.
Manav Patnaik
Good morning, guys. Bob, you've referenced your data set, obviously, as crown jewel and so forth for several years now.
I was just wondering, I don't know if this the right way to frame it, but how much of your revenues does that data set drive or maybe, just some reference there, and if I'm barking up the wrong tree here?
Robert Carrigan
Well, look, we have a saying here, Manav, that the data is the product. The data underlies everything we do, right.
D&B Hoover's and D&B Credit are merely vessels through which we surface our data and make it actionable in those used cases, Trade Credit or sales acceleration. We're using that very same data in our supply area.
We're using that same data in compliance and other areas of Advanced Marketing. So the data is the business.
That's what makes us unique. Having said that, we've also said that the -- we cannot just be good at data, you have to deliver it in modern ways.
And so a big part of our strategy has been activating it through as-a-service, through API and cloud delivery, leveraging other peoples applications and also, our own people like Credit and Hoover's to make it available and useful to customers. So that's it.
But our data is 100% of what we do.
Manav Patnaik
And so I guess, is there a disconnect then in convincing the end customers that, that data is crown jewel. Because I guess, forged into it and then, you have obviously, a world where the appetite for data and analytics is extremely high.
And so I guess, why hasn't that helped do more than what you guys have already done?
Robert Carrigan
Yes. Well, look, the central challenge has been activating that data in more modern ways.
When I first got here, a lot of it sat in very legacy systems. We delivered it in very traditional ways.
We had a legacy issues that I've articulated on prior calls. Some of them have been a bit more significant than I first appreciated when I got here.
And then, some of those delivery methods like DNBi were really on very old stacks technologies, stacks very arthritic. And so getting the data in a place where it's actionable and useful has been a key part of this strategy.
And that's proved a bit of a heavier lift. I will admit, but don't confuse that with the potential.
Don't confuse that with the value of what we do. Just that we went through years of cost cutting and no growth.
And it takes a while to sort of get that flywheel going again. And moving customers from legacy to new, it's something that is a lot of companies are dealing with right now, and it's kind of new cloud environment.
And it requires skills and capabilities that we had that kind of build into our sales team, into our technology teams. So that's been the transformation of our company.
And we are very much in the crux of that right now. We are in the heat of that.
And so we love the progress we're making. There are certain areas that are still frustrating because there are a bit more legacy than we'd like.
But we're making progress. And the goal is to get the majority of our revenue into this new way of delivering it.
The majority of our data in this environment. And that is the laser focus that we have right now.
Manav Patnaik
Got it. And then just a last question to me just around the M&A pipeline and so forth.
I mean, some of these areas of frustration you've tackled fairly well with deals like Credibility, Prospects, Avention and so forth?
Robert Carrigan
Yes.
Manav Patnaik
I mean, is there more you can do in some of the remaining frustration areas, I suppose? Like how should we think about the appetite and pipeline there?
Robert Carrigan
Look we're -- as you say, we have done some really key acquisitions. We're really proud of how we've integrated these acquisitions, how we're using them very deeply, the people, the technology, the sales teams.
It's really, really been a critical part of our strategy. I think, we've addressed the majority of the critical areas at this point.
I think, as I look around, I think we've done that. That's not to say that there aren't other opportunities.
There's always opportunities, and we keep our eye out for that. We're also keeping our eye on the balance sheet as well and making sure that we make very smart choices that we'll -- there's a high bar from this point forward.
We need to obviously -- we're focused on paying down some debt and also, focused on executing on what we've got and what we've done. The acquisitions we've made.
And so that's really where our focus is right now. And the good news is, I think, we again, addressed a lot of the critical areas of opportunities.
Manav Patnaik
All right, great. Thanks, guys.
Robert Carrigan
Sure.
Operator
Your final question comes from the line of Jeff Miller with R.W. Baird.
Robert Carrigan
Jeff. Jeff, are you there?
Operator
And it looks like Jeff is no longer in the queue.
Robert Carrigan
Okay. Okay.
Sure. Thank you.
Richard Veldran
Thank you, operator.
Kathleen Guinnessey
All right. So that's it for questions.
I would like to thank everyone for their attention this morning. And we'll talk to you soon.
Operator
This concludes today's conference call. You may now disconnect.