Rendlesham: Royal Anglo-Saxon complex is "unique in England"

Rendlesham: Royal Anglo-Saxon complex is "unique in England".....»»

Category: topSource: yahooDec 3rd, 2023

The 13 best chocolates in 2023, tested and reviewed by a professional chocolatier

The best gourmet chocolates are striking in taste and look, making great food gifts. We had a professional chocolatier taste 36 brands to find the best. When you buy through our links, Insider may earn an affiliate commission. Learn moreWe had a chocolatier sample more than 75 chocolates from 36 brands to find the best you can buy.Bon Bon Bon; Christopher Elbow; Dandelion Chocolate Factory; EHChocolatier; Fran’s Chocolates; See’s Candies; Gilbert Espinoza/InsiderThere's no doubt that the best chocolate brings joy, conveys love, heals heartache, and forges connections. And when it comes time to find the perfect gift, chocolate is the answer then, too. The best chocolate is rich in flavor and almost too beautiful to eat.To find the best chocolates, I researched countless high-quality brands with stellar reputations in the chocolate industry. I sampled more than 75 chocolate products from the 36 top contenders, testing for appearance, flavor, and texture of the chocolate. Our favorite brand for gifting is Vosges Haut-Chocolat thanks to the artful packaging and unique flavor combinations. And if you want to stock up on quality candy bars, we recommend Chocolove for classics and subtle innovations.I'm lucky enough to say that my career revolves around chocolate. I trained at the Culinary Institute of America, pursued further training at the Chocolate Academy, Chicago, and worked for years at EHChocolatier, a small-batch artisanal chocolate producer in Cambridge, Massachusetts. These are the best chocolates money can buy, delivered right to your door (or the lucky recipient's). It doesn't get better than these. Trust me, I'm a chocolatier.Learn more about how Insider Reviews tests and researches products.Top picks for chocolatesBest for gifting: Vosges Haut-ChocolatFrom the stunning packaging to glamorous garnishes to the lingering flavor of luscious chocolate, Vosges Haut-Chocolat makes the perfect gift for anyone and any occasion.Best hot chocolate: Christopher Elbow ChocolatesChristopher Elbow's Drinking Chocolate is grown-up, yet still approachable; the cool older sister to your childhood hot cocoa.Best truffles and ganaches: Bon Bon BonBon Bon Bon's truffles are a treasure trove of fun, inventive flavors; each two-bite bonbon is meticulously and playfully decorated, and wrapped in its own individual box.Best candy bars: CompartésCompartés seamlessly draws upon familiar flavors and tailors them to contemporary, stylish candy bars.Best budget: ChocoloveChocolove has it all: decadent, rich chocolate, high quality ingredients, ethically sourced cacao, and fair prices.Best bean-to-bar: Dandelion Chocolate FactoryDandelion Chocolate Factory is the premium vintner of the chocolate world, offering the dynamic chocolate bars with helpful notes to guide you through your tasting experience.Best for kids: GhirardelliGhirardelli's individually wrapped chocolate squares are great for kids, and help introduce your young ones to more sophisticated flavors and textures in an approachable way.Best for caramel lovers: Fran's ChocolatesThe caramels from Fran's Chocolates possess everything a caramel lover seeks in the perfect bite: pull, chew, and just a touch of salt.Best for nut lovers: See's CandiesFrom classics to creative morsels, See's Candies knows how to honor the perfect pairing of nuts and chocolate.Best vegan: Seattle ChocolateSeattle Chocolate has an entire line of Vegan Truffle Bars that are divinely rich despite their lack of dairy.Most beautiful: Petrova ChocolatesEach brilliant chocolate from Petrova is meticulously painted with vivid colored cocoa butter to represent the filling within.Best for adventurous flavors: Cacao & CardamomCacao & Cardamom's chocolates are filled with intriguing flavors from unusual ingredients like chile peppers, spices, leaves, flowers, and berries.Best subscription: Chocolate of the Month ClubThe Gourmet Chocolate of the Month Club from offers delicious, diverse chocolates with a conscience.Best for gifting: Vosges Haut-ChocolatVosges Haut-Chocolat; Alyssa Powell/InsiderYou can find gifts for anyone, all occasions, and at a wide price range at Vosges Haut-Chocolat. Each box comes with an undeniable wow-factor before the recipient has even lifted the lid. The excitement doesn't end once the gift is unwrapped either. All Vosges chocolates are stunning. This chocolatier's use of shapes, layered components, textures, and variety within one box will be universally pleasing.There's the "safe bet" gift of hand-formed Milk Chocolate Truffles in an ornate purple box. Or opt for a too-easy-to-enjoy Comfort Food Tower. For a truly special occasion or just someone with a sweet tooth and trouble sleeping, the Dream Gift Set comes with 16 truffles flavored with chamomile, tulsi, and lavender, plus more chocolates, bath salts, a sleep mask, and loose leaf tea. While many Vosges chocolates feature uncommon ingredients in unexpected combinations, they are in reality very approachable to eat. For instance, I'll admit that a truffle of Reishi mushrooms and Italian hazelnuts was a bit intimidating to bite into, but it translated into a luscious, umami milk chocolate ganache with an underlying nuttiness that lingered, leaving me wanting more. Each Vosges Haut-Chocolat morsel is truly exciting to bite into, like unwrapping yet another surprise: the gift that keeps giving.Worth a try:Best hot chocolate: Christopher Elbow ChocolatesChristopher Elbow; InsiderI grew up relishing powdery, saccharine cocoa mix with tiny dehydrated marshmallows. Now, I crave unctuous, bittersweet sipping chocolate (sometimes with a splash of amaretto). Just as my hot cocoa habits have evolved over the years, so has sipping chocolate over millennia. Originating in Mayan culture, bitter drinking chocolate made its way to Europe and underwent countless adaptations before becoming the sweet, milky beverage we sip today. High-end hot chocolates celebrate the bitter notes of cacao, providing a grown-up sip with a touch of childhood nostalgia.Even before adding your choice of schnapps or liqueurs, a haute hot chocolate should be intense and richly flavored. The cocoa's innate acidity and bitterness should be prominent but palatable. Some chocolatiers add sugar or flavorings such as vanilla beans, peppermint, or espresso powder to their mixes. With single-origin chocolate bars in vogue, many producers are now offering single-origin sipping chocolates as well.Christopher Elbow, best known for its brightly colored chocolate bonbons, typically offers four hot chocolate options of various flavors and cacao origins, in sleek reclosable tins. (You may find more limited availability as the weather gets warmer.) We tested the Cocoa Noir Dark Drinking Chocolate, the chocolatier's luscious interpretation of a rich European-style drinking chocolate. Containing just dark chocolate and vanilla bean, this super intense, silky drink has a velvety texture. Its balanced bittersweet chocolate flavor lingers just long enough to leave you craving another sip. With something so decadent, I was satisfied after a small mugful. No marshmallows needed.Worth a try:Best truffles and ganaches: Bon Bon BonBon Bon Bon; Alyssa Powell/InsiderGanache. You've seen the word countless times on menus describing chocolate desserts. Ganache is the decadent combination of cream and chocolate, used to frost cakes, glaze donuts, and fill truffles. A traditional truffle is round with a simple chocolate shell or coating of cocoa powder, nuts, or coconut. But the world of ganache-filled bonbons need not end there. Our favorite producer of truffles and ganaches, Bon Bon Bon, is unconventional in its truffles' shape, use of flavors and textures, and packaging. When selecting a good truffle, there are a few key qualities to look for: first, it should have a uniform, thin shell enrobing the ganache filling. An overly thick coating of chocolate cracks and smashes the delicate ganache when bitten into. Secondly, it should have a shiny exterior (unless coated in cocoa powder, etc), free of blemishes or white "bloom" (a sign that the chocolate was not treated properly during production or storage). Lastly, inside the truffle should be a silky smooth ganache. Bon Bon Bon, a hip and cheeky producer out of Detroit, hits the mark on all of these and then some. Each truffle is a two-bite masterpiece, delivered in a thin rectangular chocolate shell.Rather than fully enrobing its ganaches, Bon Bon Bon chooses to leave its bonbons topless — a very risqué move. Not only is this visually unconventional, but each bonbon is also adorned with playful garnishes to match its youthful yet adult flavors. For example, the Bour-Bon-Bon-Bon has a layer of rich bourbon ganache topped with whiskey caramel in a dark chocolate shell, appropriately garnished with a glacée orange and dark chocolate "ice cube." The Lemon Bar None is a white chocolate cup filled with a zingy lemon custard ganache on top of a layer of shortbread crust, dressed with royal icing and a dusting of powdered sugar. Bon Bon Bon chooses fresh, local ingredients and packages each ingenious morsel individually in a tiny box, mirroring the care and thought put into each bite you'll enjoy.Worth a try:Best candy bars: CompartésCompartésCompartés seamlessly draws upon familiar flavors and tailors them to fun, stylish candy bars. Take, for example, The Donuts & Coffee bar, which is adorned with bits of real glazed buttermilk donuts, crispy coffee donut crumble, and finely ground coffee. That's just one of the nearly 70 flavors to choose from, and all come in beautiful packaging that makes for great gifting. Some of our favorites were the Cookies & Cream bar that draws on a crowd favorite flavor but uses an elegant blend of dark and white chocolate to control sweetness. I also loved the Strawberry Shortcake bar, which whimsically mixes jammy, tart bite-sized strawberries and crumbles of buttery shortcake into a strawberry flavored, rosy-hued white chocolate. There's even a plethora of vegan options. All of the chocolates ship with a "melt free" guarantee, and you can choose to buy individual bars or select a gift set, making it easy to customize to fit your budget.Worth a try:Best budget: ChocoloveChocoloveIf you're not looking to break the bank on chocolate, but your inner-gourmet can't stomach subpar, we recommend checking out Chocolove. This Boulder-based company prides itself on providing "affordable luxury."All too often, one has to sacrifice quality of flavor and texture, sustainability, and even ethical sourcing, all in the name of a good deal. Yet somehow, Chocolove has it all. It uses the highest quality non-GMO ingredients, including cacoa beans traceable down to the farmer, in order to ensure premium chocolate bars at a fair price. The elegant Cherries & Almonds in Dark Chocolate bar felt like a decadent dessert worthy of its own plate and white tablecloth. The Passion Fruit in Ruby Chocolate bar showcases the bright berry notes and pink hue of Ruby chocolate's naturally red cacao bean, complemented by a tart passion fruit puree filling. With Belgian-trained Master Chocolatier Patrick Peeters at the helm, Chocolove continues to provide exquisite chocolate bars of the highest caliber — at the lowest prices.Worth a try:Best bean-to-bar: Dandelion Chocolate FactoryDandelion Chocolate Factory; Insider"Bean-to-bar" chocolates are progressively popular among chocophiles; they're made by small-batch craft producers that manage everything from sourcing the cacao beans to the final touches of processing and flavoring.San Francisco-based Dandelion Chocolate Factory approaches its processing like a wine maker approaches the production of fine wine. It crafts single-origin chocolate bars, which are made from cacao beans of one variety from one location. Just as soil and climate impact grapes for winemaking, regional terroirs influence the flavors of cacao beans. Dandelion Chocolate's bars highlight the different beans' distinctive characteristics.Not only do Dandelion Chocolate's bars showcase the nuances of single-origin beans, but they richly represent the art of roasting by offering bars made from cacao of the same harvest but with different roasting profiles. For example, you can purchase a pack of bars made from the same beans, but processed by Dandelion's Tokyo and San Francisco chocolatiers.Each and every chocolate bar from Dandelion Chocolate feels deluxe, wrapped in gold-accented paper with tasting notes. As for the chocolates themselves, Dandelion Chocolate's bars are superb. When seeking chocolate to savor on its own, I look for a rich and complex taste with a pleasant bitterness and melt-in-your mouth smoothness, lacking any waxy residue. So many chocolate producers that make high-cacao dark chocolate that is too harsh. However, even at 70% cacao and beyond, Dandelion Chocolate's bars are balanced and approachable. Worth a try:Best for kids: GhirardelliGhirardelliWhen choosing a chocolate best suited for kids, I sought out a quality product with approachable flavors that didn't break the bank. I also saw this as an opportunity to introduce future chocoholics to slightly more sophisticated flavors and textures, while staying in a "safe space" for young, naive palates. Ghirardelli's individually wrapped chocolate squares are great for kids and connoisseurs alike. While more intense, bittersweet options are available, most of the chocolate used to create these classic squares are approachable and palatable to kids.The options are endless, so you are sure to find something for even the pickiest of eaters. Solid milk chocolate squares are the perfect sweet treat for the fussier of the bunch. White, milk, and dark chocolate morsels filled with gooey caramel and rich chocolate ganache offer a stepping-stone into more sophisticated flavors, while squares bejeweled with crispy rice, tart berries, or crunchy nuts are ideal for the more texturally adventurous of the group. Adorable miniature versions of the chocolate are ideal for the smallest in your posse, or those indecisive eaters that like to try an assortment of treats in one sitting.  Worth a try:Best for caramel lovers: Fran's ChocolatesFran’s Chocolates; Alyssa Powell/InsiderCaramels come in all shapes and sizes, firmnesses, colors, degrees of bitterness and butteriness, and with all types of garnishes. Setting out to name the best chocolate with caramel was no easy task, but I was up to the challenge. Fran's Chocolates caramels offer the "pull," deliberate chew, and strategic salting that a great caramel should possess. In my book, a good caramel should leave a trail of gooey — not runny — confection behind when you pull the candy away from your mouth. That being said, you still need your molars intact in order to enjoy a second taste. Like the perfect bagel or pizza crust, a caramel needs to have just the right amount of chew — not too hard, not too soft. Secondly, salt is great in moderation. It highlights the burnt sugar notes and cuts through the rich, buttery flavor of the confection. However, salt applied with a heavy hand makes for an unpleasant surprise; it stomps out nuanced flavors and tramples on the chocolate coating.Fran Bigelow, founder of Fran's Chocolates, was inspired by a trip to Paris and has since been dedicated to sharing the joie de vivre philosophy through exceptional confections. This Seattle-based candy producer features Fair Trade certified chocolate to complement, not overshadow, the caramel's delicate yet luxurious buttery flavor. The uniformity of each morsel and consistency in salting means that each bite will be just as perfect as the last. While you can find chocolate caramels in all sorts of variety boxes, Fran's Chocolates offers box options totally committed to caramels, revealing its devotion to the craft of caramel chocolates. With your choice of milk or dark chocolate coating, grey salt, smoked salt, or a classic exterior sans salt, the truest of caramel lovers will undoubtedly find what they need.Worth a try:Best for nut lovers: See's CandiesSee’s Candies; Alyssa Powell/InsiderFrom clusters to pralines, turtles to barks, nuts are no strangers to chocolate. A real nut lover, however, lusts for a chocolate that celebrates the nut, not just accompanies it. The sweet and savory flavors developed from roasting cacao beans make chocolate the ideal "plus one" to any toasted nut. A coating of good chocolate draws out the natural sweetness of almonds, pistachios, and pecans; coaxes the fatty richness of cashews, macadamia nuts, and hazelnuts; and embraces the slight bitterness of walnuts and pine nuts.See's Candies, founded in 1921, has a vintage, old-timey feel with black and white checkered packaging and classic confections included in its arrangements, such as Dark Scotchmallows, and it has an entire collection of "Nuts & Chews" for those devoted to nut-bejeweled chocolates. Toffee-ettes, sold in black and white coffee canisters, are small nuggets of Danish butter toffee and roasted almonds coated in milk chocolate and rolled in more crunchy almonds. See's also offers less conventional options for the more daring nut enthusiasts that you can put together in your own custom arrangement. Consider the CA Crunch, a flakey brittle center with peanuts and peanut butter enrobed in white chocolate and covered with chopped English walnuts. For the sweet tooth, go for the non-traditional white chocolate-covered Cashew Brittle. Looking for something a little more playful and funky? Try the Milk Mayfair, a soft pink-hued center of walnuts, cherries, and vanilla, coated with creamy milk chocolate. With a vast assortment of nut-celebrating confections, See's Candies are the one-stop-shop for any nut lover with a chocolate craving.Worth a try:Best vegan: Seattle ChocolateSeattle ChocolateVegan chocolate bars are a dime-a-dozen nowadays, seeing as how dark chocolate is innately dairy-free and therefore vegan. But achieving a rich, creamy chocolate minus the dairy is a whole other feat. Many options out there lack substantial mouthfeel or rely on heavy, grainy nut butters that leave a greasy film behind in your mouth. Seattle Chocolate has an entire line of Vegan Truffle Bars and they are divinely rich despite their lack of dairy. Seattle Chocolate often combines contrasting textures within one bar and adds a sophisticated touch to nostalgic flavors, as done in the salty-sweet, crispy-silky Chocolate Chip Cookie Dark Chocolate Truffle Bar. The Pike Place Espresso Chocolate Truffle Bar, speckled with finely ground decaf espresso beans, is bold and buzzworthy, while the Mexican Hot Chocolate Truffle Bar features fresh ground cinnamon, a pinch of fiery cayenne pepper, balanced with a touch of sweet Madagascar vanilla. To make matters sweeter, this women-owned company collaborates with independent artists to design its show-stopping packaging, is committed to sustainability and ethical cocoa sourcing and carbon-neutral production, and gives 10% of its net profits to Girls Inc., which provides mentorship, safe spaces, and programs proven to help girls develop their inherent strengths.Worth a try:Most beautiful: Petrova ChocolatesPetrova/InsiderHand-painted bonbons from Petrova Chocolates are truly eye-candy. Each brilliant chocolate is meticulously lacquered with vivid colored cocoa butter to represent the filling within. But the beauty of these chocolates is not just surface-deep; each has two to three layers of jewel-toned, jammy, creamy, bold, and balanced fillings that work harmoniously with the delicate chocolate shell. A cross-section of any of these bonbons reveals a stunning composition inspired by founder Betty Petrova's childhood memories and fine-dining experiences. If you eat with your eyes first, Petrova Chocolates offers the ultimate bedazzling feast.Some of my favorite bonbons from the collection include Hot Honey Lemon, denoted with bright yellow with orange brushstrokes. Inside is chili-infused wildflower honey above a tangy lemon ganache. Strawberry Peanut Butter was another favorite: A creamy ivory shell swirled with bold purple and metallic violet encasing a layer of juicy strawberry pate de fruit, peanut butter ganache, and crunchy peanut butter praline. Perhaps the most playful was Popping Almond; a bonbon composed of crunchy almond praline, cookie crumble, and effervescent Pop Rocks, all encased in a midnight-black shell streaked with a meteor shower of shimmering turquoise and pearl. Worth a try:Best for adventurous flavors: Cacao & CardamomCacao & Cardamom/InsiderPairing chile peppers with chocolate is not novel, but finding a chocolate that brings heat as well as depth of flavor and quality chocolate is a rare find. Heat seekers and adventure lovers will love Cacao & Cardamom. Based in Houston, Texas, founder Annie Rupani, uses chocolate as a medium to represent her South-Asian heritage and extensive travels to countries Italy, Greece, Lebanon, Egypt, China, Jordan, Pakistan, and Malaysia. She not only turns to chile peppers for intrigue, but spices, leaves, flowers, and berries as well. The stunning colors and shapes of Cacao & Cardamom bonbons rival those in our "most beautiful" category, with a sense of adventure.We tried a range of flavors to find the best chocolate from Cacao & Cardamom. The Coco Curry is a journey of flavors with velvety yet light caramel infused with coconut and herbaceous curry leaves. The Cardamom Rose bonbon leads with the warm, herbal spicy notes of green cardamom, and finishes with the soft floral touch of rose water. Finally, the Five Spice Praline delivers a robust blend of fennel, Szechuan peppercorns, star anise, clove, and cinnamon atop a base of crisp, toasty hazelnut chocolate praline. Cacao & Cardamom offers bold and exotic flavors that inspire the most seasoned of foodies to seek new adventures around the world.Worth a try:Best subscription: Chocolate of the Month; InsiderMonthly subscriptions are available for just about anything: flower bouquets, recipe kits, smoked meats, date-night in a box, and yes, you guessed it, chocolate. Subscriptions are a fun, interactive way to learn more about a specific product through exposure and experience. When searching for the best chocolate subscription, we considered each brand's selection, how the items are made, the brand's chocolate sustainability and trade models, and opportunities to learn more about chocolate in the process of enjoying our deliveries.The Gourmet Chocolate of the Month Club provided through works with professionals at the esteemed Zingerman's Delicatessen in Ann Arbor, Michigan to offer a curated assortment of chocolates, including both bonbons and bars. Zingerman's prides itself on a thorough product selection that sources chocolates from international, small-batch chocolatiers. It's noteworthy and respectable that these chocolates are sourced from eco-friendly, fair-trade producers you can feel good about supporting. Past boxes have even included some of our top picks mentioned above. Best of all, each delivery comes with an educational newsletter containing tasting notes, background reading material, and product information, so you'll get more out of your subscription than just really really delicious chocolate.Buy from monthlyclubs.comHow we test chocolateDandelion Chocolate Factory; iStock; Gilbert Espinoza/InsiderWhile I'm currently employed as a chocolatier, I've lived previous lives in both scientific research and recipe development. I'm a scientist at heart and a true chocolate-fanatic, so my testing approach for researching the best chocolate was both methodical and thorough. My education in the hard sciences, the savory culinary arts, and finally fine chocolatier-work has all been in preparation for the daunting task of hand-selecting the very best chocolates. I cut no corners and left no truffle unturned. I started by reading about top brands in the chocolate industry, then taste-tested countless confections, evaluating their flavors, textures, and presentation. In all, I sampled more than 75 products from 36 brands for this guide. Here is the criteria I considered:Flavor: The growing conditions of the cacao used to make any given chocolate impact its flavor, which can range from sweet and fruity, to nutty and toasty, to bitter or acidic. These can all be used effectively in different applications. However, chocolate that has gone bad or rancid will have a soapy or cheesy flavor. I looked for balanced, prominent cocoa notes with no off flavors.Freshness: To avoid sacrificing taste, presentation, and overall quality, it is best to consume chocolates within a few days of purchase. If that is not possible, you can store your chocolates in the refrigerator for up to a month. When storing your chocolates make sure to place them in an airtight container.Texture: I considered the texture of all the chocolates. Correctly tempered and stored chocolate shouldn't melt in your fingers; it should be firm and "snap" when broken or bitten into and melt smoothly on the tongue.Packaging and presentation: First and foremost, I looked for packaging that protects the chocolates it contains. Different art and decor appeal to different preferences and purposes, but no one wants broken or smashed confections. After that, I also considered how the packaging and presentation contributed to the overall impact of the chocolates, considering many give chocolates as gifts for special occasions.Read the original article on Insider.....»»

Category: worldSource: nytDec 12th, 2023

Harder Than Gold, Faster Than Fiat

Harder Than Gold, Faster Than Fiat Authored by Nick Giambruno via, French Emperor Napoleon III would use a unique set of aluminum cutlery only for his most honored dinner guests. Normal guests had to contend with gold utensils. In the middle of the 19th century, aluminum was more scarce and desirable than even gold. As a result, aluminum bullion bars found a place among the national treasures of France, and aluminum jewelry became a symbol of the French aristocracy. Aluminum, known by its atomic number 13 on the periodic table, is a ubiquitous element, yet it mainly exists intertwined in complex chemical compounds and not in its metallic state. The complex procedure of transforming aluminum compounds into pure aluminum metal was costly, making aluminum harder to produce than gold. The aluminum price at the time reflected that. In 1852, aluminum hovered around $37 per ounce, significantly more expensive than gold at $20.67 per ounce. But aluminum’s fate was about to take a dramatic turn towards the end of the 19th century. A monumental discovery in 1886 made it possible to produce pure aluminum on an enormous scale at a fraction of the previous cost. Before this groundbreaking finding, global aluminum production was a mere handful of ounces per month. After the discovery, America’s leading aluminum company manufactured 800 ounces daily. Within two decades, this company, which would later become Alcoa, made over 1.4 million ounces of aluminum daily. The price of aluminum plummeted from a staggering $550 per pound in 1852 to a mere $12 in 1880. By the dawn of the 20th century, a pound of aluminum cost approximately 20 cents. In less than a decade and a half, aluminum transitioned from the planet’s most expensive metal to one of the cheapest. Nowadays, aluminum is no longer a precious metal fit for royal feasts or a country’s national treasure. It has become an everyday item used in soda cans and cooking foil. Aluminum’s dramatic transformation from a highly prized metal to an inexpensive household material illustrates “hardness”—the most important characteristic of a good money. Hardness does not mean something that is necessarily tangible or physically hard, like metal. Instead, it means “hard to produce.” By contrast, “easy money” is easy to produce. The best way to think of hardness is “resistance to debasement,” which helps make it a good store of value—an essential function of money. Would you want to put your savings into something somebody else can create without effort or cost? Of course, you wouldn’t. It would be like storing your life savings in Chuck E. Cheese arcade tokens, airline frequent flyer miles, aluminum, or government fiat currencies. What is desirable in a good money is something that someone else cannot make easily. The Stock-to-Flow (S2F) Ratio The stock-to-flow (S2F) ratio measures an asset’s hardness. S2F Ratio = Stock / Flow The “stock” part refers to the amount of something available, like current stockpiles. It’s the supply already mined. It’s available right away. The “flow” part refers to the new supply added from production and other sources each year. A high S2F ratio means that annual supply growth is small relative to the existing supply, which indicates a hard asset resistant to debasement. A low S2F ratio indicates the opposite. A low S2F ratio means new annual production can easily influence the overall supply—and prices. That’s not desirable for something to function as a store of value. In the chart below, we can see the hardness of various physical commodities. No other physical commodity comes close to gold’s hardness or resistance to debasement. Monetary commodities such as gold and silver have higher S2F ratios. On the other hand, industrial commodities have low S2F ratios, typically around 1x. With an S2F ratio of 60x, it would take about 60 years of the current production rate to equal the existing gold supply. Another way to think of it is to look at the inverse of the SF ratio, which is the annual production rate relative to existing stockpiles. So, for example, gold’s yearly production is about a trivial 1.7% of its existing stockpiles. Two things can explain gold’s uniquely high S2F ratio. First, gold is indestructible. Gold doesn’t decay or corrode. That means that most gold people produced even thousands of years ago is still around today and contributing to current stockpiles. Second, gold has a history of thousands of years of production, unlike other metals. These two factors make gold’s existing stockpiles so large relative to new production. That means nobody can arbitrarily increase the gold supply, which helps make it a neutral store of value. It’s what gives gold unique and unmatched monetary properties among other metals. It’s important to clarify that hardness is not the same as scarcity. They are related concepts but not the same thing. For example, platinum and palladium are scarcer than gold but not hard assets. Current production is high relative to existing stockpiles. Unlike gold, stockpiles of platinum and palladium have not built up over thousands of years. It’s the primary reason why new supply can easily rock the market. Because of their low S2F ratios, platinum (0.4x) and palladium (1.1x) are even less suitable as money than silver. Their low S2F ratios indicate they are primarily industrial metals, corresponding to how people use them today. Almost nobody uses platinum and palladium as money. Here’s the main point. Hardness is the most important characteristic of a good money. All other monetary characteristics are meaningless if the money is easy for someone to produce. That’s why the history of money is the history of the hardest asset winning and why gold has always reigned supreme. But now gold has a serious competitor… Bitcoin’s S2F ratio today is about 57x, slightly below gold’s. According to its fixed protocol, we know precisely how Bitcoin’s supply will grow in the future. A key feature is that the new supply gets cut in half every four years, which causes Bitcoin’s hardness to double every four years. The process where Bitcoin’s new supply is cut in half every four years is known as the “halving”—or what I like to call “quantitative hardening.” Here’s another way to think of it. In 2023, the gold market must absorb roughly 117 million troy ounces of new supply. In 2024 we can expect that the gold market must absorb slightly more, say 119 million troy ounces of new supply. In subsequent years we can expect the amount of new supply the gold market must absorb to increase gradually. Bitcoin has the opposite dynamic. The amount of new supply the market must absorb is constantly shrinking. In 2023, the Bitcoin market must adsorb roughly 328,500 Bitcoin of new supply. After the halving in May 2024, the Bitcoin market must adsorb roughly an additional 164,250 Bitcoin of new supply each year until the halving in 2028. After the halving in 2028, the Bitcoin market must adsorb roughly an additional 82,128 Bitcoin of new supply each year until the halving in 2032. This process of new supply decreases will continue until the year 2140, when the last Bitcoin will be created. That’s when the total Bitcoin supply will reach 21 million. Today it’s about 19.5 million, meaning the vast majority—about 93%—of the total Bitcoin supply has already been created. That means only 1.5 million more Bitcoin will be created over the next 117 years at a decreasing rate. In other words, Bitcoin’s supply will only grow about 7% in the next 117 years. By reference, the US money supply has increased by around 35% since March 2020. Historically, halvings and their massive supply shocks have catalyzed eye-popping Bitcoin bull markets where Bitcoin has skyrocketed 10x (or more). The next time Bitcoin’s supply growth will be cut in half will be in May 2024—less than eight months from now. But this coming halving will be very different… That’s because Bitcoin’s hardness, as measured by the S2F ratio, will be twice that of gold’s when that happens. That’s how Bitcoin will soon become the hardest money the world has ever known—in less than eight months. And it will keep getting harder as its S2F ratio approaches infinity. For thousands of years, gold has always been mankind’s hardest money. That is all set to change in a matter of months, and most people have no idea. I think now is the time to get positioned for this unique moment in monetary history. Absolute Scarcity Bitcoin has another unique scarcity attribute. It isn’t just scarce. It is absolutely scarce. For example, imagine the price of copper going 5x or 10x. You can be sure that would spur increased production, eventually expanding the copper supply. Of course, the same is true of any other commodity. That’s why there is a famous saying in mining: “the cure for high prices is high prices.” The dynamic of higher prices incentivizing more production and ultimately more supply, bringing prices down, exists with every physical commodity. However, gold is the most resistant to this process. That supply response is why most commodity prices tend to revert around the cost of production over time. This dynamic is even more profound with money. When an asset obtains monetary properties, the natural reaction is for people to make more of it—a lot more of it. This known as the easy money trap. However, Bitcoin totally defies it because its supply is perfectly inflexible. It’s the only commodity where higher prices cannot induce more supply. In other words, Bitcoin is the first—and only—monetary asset with a supply entirely unaffected by increased demand. That is an astonishing and game-changing characteristic. Here’s the bottom line. Gold and other commodities are scarce, but only Bitcoin is absolutely scarce. That means the only way Bitcoin can respond to an increase in demand is for the price to go up. Unlike every other commodity, increasing the supply in response to increased demand is not an option. The market cap for Bitcoin today is around $528 billion. The market cap for all the mined gold in the world, which took thousands of years to accumulate, is about $12.3 trillion. That means Bitcoin has a market cap roughly equal to 4.2% of gold’s, even though it is about to surpass—double—gold’s hardness. Assuming gold stays flat and Bitcoin goes up about 23x, it would have a market cap roughly equal to gold. At that point, a single Bitcoin would be worth over $620,000. I think that’s a real possibility in the years ahead, though it could happen much sooner as the fiat currency scam continues to collapse at an accelerating rate. If that sounds outrageous, consider this… Ten years ago, the Bitcoin price was around $100. Today, it’s roughly 271x that. Bitcoin has made numerous breathtaking moves to the upside in the past. I think it can do it again, especially as corporations, institutional investors, and even nation states start buying Bitcoin for the first time and as Bitcoin surpasses gold and becomes the hardest money mankind has ever known. Of course, it’s important to remember that past performance does not indicate future results for any investment. That’s why I’ve just released an urgent PDF report revealing three crucial Bitcoin techniques to ensure you avoid the most common—sometimes fatal—mistakes. Check it out as soon as possible because it could soon be too late to take action. Click here to get it now. Tyler Durden Wed, 10/04/2023 - 19:00.....»»

Category: blogSource: zerohedgeOct 4th, 2023

30 Must-See UNESCO World Heritage Sites

In this article, we are going to discuss the 30 must-see UNESCO world heritage sites. You can skip our detailed analysis of the global tourism industry, the largest travel company in the world, and the need for sustainable tourism, and go directly to 10 Must-See UNESCO World Heritage Sites.  The United Nations Educational, Scientific and […] In this article, we are going to discuss the 30 must-see UNESCO world heritage sites. You can skip our detailed analysis of the global tourism industry, the largest travel company in the world, and the need for sustainable tourism, and go directly to 10 Must-See UNESCO World Heritage Sites.  The United Nations Educational, Scientific and Cultural Organization (UNESCO) seeks to encourage the identification, protection, and preservation of cultural and natural heritage around the world considered to be of outstanding value to humanity. This is embodied in an international treaty called the Convention Concerning the Protection of the World Cultural and Natural Heritage, adopted by UNESCO in 1972. What makes the concept of World Heritage exceptional is its universal application. World Heritage sites belong to all the peoples of the world, irrespective of the territory on which they are located. As of 2023, there are 1,157 UNESCO World Heritage Sites around the globe. The list is usually revised every year – 3 sites were added in 2022 and 34 in 2021 during the annual World Heritage Committee Sessions.  The Global Tourism Industry: Tourism has evolved into a massive industry with time, encompassing several other industries, such as hospitality, transport, entertainment etc. In 1950, at the dawn of the jet age, just 25 million people took foreign trips. By 2019, that number had reached 1.5 billion. As we mentioned in our article – 30 Most Magical Places in the World – the global Travel & Tourism (T&T) industry is expected to grow at a CAGR of 3.1% between 2021 and 2026, to be worth an estimated $8.9 trillion by the end of the forecast period.  The World Tourism and Travel Council has reported that the T&T sector contributed 7.6% to the global GDP in 2022, an increase of 22% from 2021 and only 23% below 2019 levels.  Largest Travel Company in the World:  With a market cap of about $110.77 billion, Booking Holdings Inc. (NASDAQ:BKNG) holds the title of being the largest travel company in the world. Operating in over 220 countries and 40 different languages, there are more than 28 million global listings available between hotels, homes, and apartments under the Booking Holdings Inc. (NASDAQ:BKNG) travel sites.  The company also strongly felt the shocks of the pandemic when its revenue fell by almost 55%, from $15.06 billion in 2019, to $6.8 billion in 2020. However, Booking Holdings Inc. (NASDAQ:BKNG) boasted a revenue of $17.09 billion in 2022 after the revival of international tourism, even higher than its pre-pandemic levels, and the stock price of the company has surged 52.71% since the beginning of the year. This is what Glenn Fogel, the CEO, had to say in the company’s Q2, 2023 Earnings Call Transcript:  “I am pleased to report that in the second quarter we continue to see robust leisure travel demand which helped drive the strong results we are announcing today. The 268 million room nights booked in the second quarter increased by 9% year-over-year and gross bookings of $39.7 billion grew 15% year-over-year and was the highest quarterly gross bookings ever. Both room nights and gross bookings came in ahead of our previous expectations as a result of the favorable demand environment. Revenue growth of 27% in Q2 also nicely outperformed our expectations. The strong top line results in the quarter combined with better-than-expected marketing efficiency helped drive our Q2 adjusted EBITDA to about $1.8 billion which is an increase of 64% versus Q2 last year, and meaningfully exceeded our prior growth expectations of about 35%.” Booking Holdings Inc. (NASDAQ:BKNG) ranks among the 15 Best Discretionary Stocks to Buy According to Hedge Funds.  The Need for Sustainable Tourism:  Although the tourism industry comes as a boon for many and supports millions of businesses and jobs worldwide, it often doesn’t come without a price. An example of this is the listing and rental of local homes on the online platform of Airbnb, Inc. (NASDAQ:ABNB). In many cities in Europe, the increasing listing of local homes for short-term rental on Airbnb, Inc. (NASDAQ:ABNB) has created a shortage of available residences for the cities’ residents, leading to insufficient housing and a massive increase in rents.  The Italian city of Florence has announced an outright ban on new short-term private holiday rentals, such as Airbnb listings, in the Renaissance city’s historic center. As one of Italy’s most popular tourist destinations, Florence has seen its housing stock depleted by short-term rentals, which are defined as covering any period of less than 30 days. Dario Nardella, the mayor of Florence, described the ban as ‘daring’ but legally defensible.  More recently, students in Florence, as well as other Italian cities such as Milan and Rome, have been camping out in tents on campuses to protest a lack of affordable housing. Florence has around 11,000 short-term private rental properties registered online. Mr. Nardella said that the city would not target the 8,000 that already exist in the historic center of Florence, which is a UNESCO World Heritage Site.  Airbnb, Inc. (NASDAQ:ABNB) has also witnessed a massive revival since the pandemic. The company’s revenue increased by over 148.6%, from $3.38 billion in 2020 to $8.4 billion in 2022. Stock price of Airbnb has witnessed a YTD increase of a staggering 68.75% so far this year. The following was mentioned in its Q2 Earnings Call Transcript: “Q2 was another strong quarter for Airbnb. We had over 115 million nights and experiences booked. Revenue of $2.5 billion grew 18% year-over-year. And when you exclude foreign exchange, our revenue increased 19% year-over-year. Net income was $650 million, representing a net income margin of 26%, our highest second quarter ever. And free cash flow for the quarter was $900 million, up 13% year-over-year. In fact, on a trailing 12-month basis, our free cash flow was $3.9 billion. And this represented a trailing 12-month free cash flow margin of 43%. And because of our strong cash flow and balance sheet, we were able to repurchase $2.5 billion of our stock in the last 12 months, which more than offset the impact of shared dilution.” Airbnb, Inc. (NASDAQ:ABNB) ranks among the 100 Biggest Technology Companies in the World. With that said, here are the UNESCO World Heritage Sites You Can’t Miss.  muratart/ Methodology: To collect data for this article, we referred to a number of sources, such as Lonely Planet, The Archaeologist, Washington Post, Reddit etc., looking for the Best UNESCO World Heritage Sites. We picked sites that appeared at least twice in these sources, assigned them a score based on their number of appearances, and ranked them accordingly. When two sites had the same score, we used the volume of foreign tourists that respective country received in 2022 as a tie-breaker.  30. Mount Fuji, Japan  Insider Monkey Score: 2 At over 12,380 feet (3,775 m) in elevation, Mount Fuji towers over the Japanese landscape below. It’s been a source of inspiration for writers, artists, and worshippers for over a thousand years.  The foreign tourist expenditure in Japan reached its highest ever figures in 2019, with $46.1 billion.  29. Persepolis, Iran  Insider Monkey Score: 2 Founded by Darius I in 518 B.C., Persepolis was the capital of the Achaemenid Empire. It was built on an immense half-artificial, half-natural terrace, where the king of kings created an impressive palace complex inspired by Mesopotamian models. The importance and quality of the monumental ruins make it a unique archaeological site.  28. The Red Square, Moscow, Russia  Insider Monkey Score: 2 An important public marketplace and meeting place for centuries, Red Square houses the ornate 16th-century St. Basil’s Cathedral, the State Historical Museum and the enormous GUM Department Store, as well as a modernist mausoleum for the revolutionary leader Vladimir Lenin.  Tourism to Russia has plummeted to a mere 4% of its pre-pandemic levels amidst the conflict in Ukraine.  27. Historic Center of Florence, Italy Insider Monkey Score: 2 The city of Florence is one of the Best Destinations in the World for Cultural Tourism. With its incredible museums and gardens, the Tuscan capital is a renaissance treasure and offers a number of hotels and also plenty of short-term rental options. If you have a taste for great red wines, Tuscany is the most perfect place in the world for you.  Florence is among the Best UNESCO World Heritage Sites in Europe.  26. Uluru-Kata Tjuta National Park, Australia  Insider Monkey Score: 3 Uluru-Kata Tjuta National Park is named after two of Australia’s most spectacular sites – the world-famous sandstone monolith of Uluru and the red domes of Kata Tjuta.  Australians are enthusiastic travelers and love to explore their own backyard. Increased domestic demand during the pandemic has continued, and in 2022, overnight and day trip spending by domestic tourists surpassed pre-pandemic levels. 25. Hạ Long Bay, Vietnam Insider Monkey Score: 3 Ha Long Bay is a beautiful natural wonder in northern Vietnam, near the Chinese border. The Bay is dotted with 1,600 limestone islands and islets and covers an area of over 1,500 sq km.  The Vietnam National Administration of Tourism announced in June that the country had welcomed over 5.5 million foreign visitors in the first six months of 2023, already exceeding the total number of international arrivals in 2022. 24. Iguazu National Park, Argentina  Insider Monkey Score: 3 Sprawling on the borders of three countries on the South American continent, the Must-Visit UNESCO World Heritage Site of Iguazu National Park is where one of the great wonders of nature lies. Known as the largest waterfall system on earth, the Iguazu Falls give the poor Niagara Falls a run for their money. 23. Abu Simbel, Egypt  Insider Monkey Score: 3 Sitting on the bank of Lake Nasser is one of Egypt’s most striking monuments, the twin temples of Abu Simbel. Built by Ramesses II over 3,000 years ago, these temples have stood the test of time.  Egypt received 11.7 million tourists in the 2021-2022 fiscal year, amassing over $10.7 billion for the North African country.  22. Leshan Giant Buddha, China  Insider Monkey Score: 3 Sitting on the confluence of three rivers in Leshan, the 71 meter-high Leshan Giant Buddha is the world’s largest Maitreya Buddha statue carved out of a cliff.  Even though the pandemic is over, China has struggled to revive foreign tourism in the country.  21. Venice, Italy  Insider Monkey Score: 3 Venice is a dream destination that’s made up of more than 118 islands. The only pedestrian-only city in the world, you’ll have to rely on your feet or a boat to experience the captivating atmosphere in Venice.  The introduction of an entrance fee for travelers not staying the night, which was announced several years ago by the Venice city council, has yet to be put in place. It has now been postponed until 2024. 20. Yosemite National Park, U.S.A.  Insider Monkey Score: 3 This widely-visited national park in California’s Sierra Nevada mountains is home to alpine meadows, five of the world’s highest waterfalls, giant sequoia groves, and the spectacular, half-mile-deep Yosemite Valley.  Yosemite is visited by over 3.5 million people each year, many of whom drive 3.5 hours from San Francisco and only spend time in the 18 km² of Yosemite Valley. The Yosemite National Park ranks among the Top 20 UNESCO World Heritage Sites in our list.  19. Works of Antoni Gaudi, Barcelona, Spain Insider Monkey Score: 3 Seven properties built by the architect Antoni Gaudí in or near Barcelona testify to the artist’s exceptional creative contribution to the development of architecture and building technology in the late 19th and early 20th centuries. The seven buildings are – Parque Güell, Palacio Güell, Casa Mila, Casa Vicens, La Sagrada Familia, Casa Batlló, and the Crypt in Colonia Güell. 18. Bagan, Myanmar Insider Monkey Score: 4 More than 3,500 ancient Buddhist pagodas, temples, and other religious structures occupy approximately 16 square miles of Old Bagan within the larger Bagan Archaeological Zone. Most of the structures were built between 800 and 1,000 years ago, when Bagan was a royal capital.  Tourism in Myanmar has become a concern following the Rohingya crisis, with tourists and tourism organizations debating whether it is safe or ethical to travel to the nation. But beyond the political issues, it is clear that tourism can benefit Myanmar’s communities. 17. Galapagos Islands, Ecuador Insider Monkey Score: 4 The Ecuadorian Government and caretakers of the Galapagos Islands have been stuck in a paradox of saving the economy over saving the ecosystem ever since tourism touched the islands. The Galapagos Islands serve as a major tourism point for the country of Ecuador. However, too much tourism may not only hurt the ecosystems of the irreplaceable islands, but also damage the income of native islanders as well as those impoverished on the mainland. The Galapagos Islands rank 17th in our List of Most Beautiful World Heritage Sites.  16. Kyoto, Japan Insider Monkey Score: 4 Kyoto is the cultural, historical, and spiritual center of Japan. From 794 to 1868, Kyoto served as the country’s capital and the imperial residence. Although destroyed by several wars and fires over the years, many of the city’s traditional priceless structures still survive. 15. Stonehenge, England  Insider Monkey Score: 4 Believed to be constructed between 3000 BC to 2000 BC, Stonehenge is one of the world’s most awe-inspiring prehistoric megalithic monuments.  The total contribution of travel and tourism to the U.K.’s GDP increased by 40% from 2020 to 2023. 14. Cappadocia, Turkey Insider Monkey Score: 4 Cappadocia is a land famous for its distinctive rock formation, historical heritage, and scenic hot air balloon trips. Sitting in Central Anatolia, this historical region attracts crowds of tourists from all over the world. Cappadocia sits among the Top 15 UNESCO World Heritage Sites.  13. Vatican City Insider Monkey Score: 4 The world’s smallest independent nation-state remains the home of the pope and the Roman Curia, and the spiritual center for some 1.2 billion followers of the Catholic Church. Vatican City generates revenue through museum admissions and the sale of coins, stamps, and publications. 12. Yellowstone National Park, U.S.A. Insider Monkey Score: 4 The world’s first national park sits on top of a volcanic hot spot and offers everything from great views to fun activities and wildlife sightings. A new National Park Service (NPS) report shows that the 3.3 million visitors to Yellowstone in 2022 spent $452 million in communities near the park. That spending supported 6,234 jobs in the local area and had a cumulative benefit to the local economy of $600 million. 11. Mont Saint-Michel, France Insider Monkey Score: 4 A magical island topped by a gravity-defying abbey, the Mont-Saint-Michel and its Bay count among France’s most stunning sights. For centuries one of Europe’s major pilgrimage destinations, this holy island is now a Breathtaking UNESCO World Heritage Site. Click to continue reading and see the 10 Must-See UNESCO World Heritage Sites.  Suggested Articles: 30 Top Tourist Attractions in the USA World Tourism Rankings by Country: Top 20 Countries Top 15 Luxury Travel Agencies in the World Disclosure: None. 30 Must-See UNESCO World Heritage Sites is originally published on Insider Monkey......»»

Category: topSource: insidermonkeySep 9th, 2023

25 Most Visited Museums in the World

In this article, we’ll take a detailed look at the 25 Most Visited Museums in the World. For a quick overview of the top 5 famous museums in the world, head over to our article 10 Most Visited Museums in the World. In the realm of art, history, and culture, museums act as treasuries of […] In this article, we’ll take a detailed look at the 25 Most Visited Museums in the World. For a quick overview of the top 5 famous museums in the world, head over to our article 10 Most Visited Museums in the World. In the realm of art, history, and culture, museums act as treasuries of the human story, capturing our journey across the vast expanse of time and space. They provide a window into the complexities of various civilizations, the progression of art, the marvels of science, and the mysteries of the natural world. Museums also play a vital role in the economy, supporting over 726,000 jobs in the US alone. Their annual contribution to the economy is substantial, with an impressive $50 billion infused each year. Furthermore, museums contribute significantly to tax revenue, generating over $12 billion annually, with a third of this sum benefiting state and local governments. For every job created within the museum sector, an additional $16,495 is generated in tax revenue. It’s also notable that each direct museum job supports an additional job in the economy. This multiplier effect outpaces many other industries, illustrating the broad economic impact of museums. Museums are more than just buildings filled with objects. Each one is a testament to the diversity of human creativity and ingenuity, and each artifact tells its own unique story. The lure of these museums often goes beyond their impressive collections; their architectural grandeur, historical significance, and cultural relevance are equally captivating. The Smithsonian Institution in Washington, D.C., which comprises multiple museums and galleries, each specialized in different fields, has arguably one of the most diverse collections, ranging from natural history to space exploration. The Acropolis Museum in Athens is another marvel, showcasing ancient Greece’s rich history and artistic prowess. Moreover, these museums don’t just cater to history buffs or art aficionados. There is something for everyone. Science museums like the National Museum of Natural History or technology-centric ones like the Deutsches Museum in Munich are designed to pique the interest of the scientifically inclined, making learning an engaging and interactive process. From the iconic glass pyramid of the Louvre Museum in Paris, which houses the enigmatic smile of the Mona Lisa, to the sprawling British Museum in London with its Rosetta Stone, the artifacts contained within these institutions draw millions of visitors annually. For instance, the Louvre Museum, widely considered the largest museum in the world, attracted 7.7 million visitors in 2022. Likewise, the National Gallery of Art in Washington, DC, one of the most visited museums in the US, welcomes around 3.2 million visitors in the same year. The way we engage with museums is evolving, too. Technological advancements have led to the growth of virtual tours, which have allowed museums to reach an even wider audience. Even though the COVID-19 pandemic led to a temporary shutdown of many museums, these virtual tours provided a unique opportunity for people to explore museums from the comfort of their homes. However, the COVID-19 pandemic also brought an unprecedented challenge to museums, resulting in nearly all of them closing their doors to the public. Alarmingly, a third of museum directors expressed fears about the risk of permanent closure of their institutions without immediate support. This represented a potential loss of about 12,000 museums and 124,000 jobs. While the Paycheck Protection Program (PPP) and Shuttered Venue Operators Grant (SVOG) were critical lifelines, a survey conducted in 2022 revealed that attendance was still down by 38%, on average, from pre-pandemic levels. Furthermore, 17% of museum directors still harbored fears of permanent closure without additional financial aid. Pixabay/Public Domain Methodology This article ranks the most visited museums in the world based on data gathered from a comprehensive survey report by the Art Newspaper. The Art Newspaper is a reputable source in the art world that provides authoritative, global coverage on a wide range of art-related topics, including museum visitation. The methodology followed in this article entailed a careful analysis of the data provided in the Art Newspaper’s survey report. This report offers a snapshot of visitor numbers for a broad range of museums across the world in 2022. The museums were then ranked in ascending order, starting from the 25th position, based on the annual visitor count reported. This means the museum at the 25th spot had the fewest visitors among the top 25, while the museum at the number 1 position received the highest visitor count. Below is the list of the most visited museums in the world. Top 25 Most Visited Museums in the World 25. NGV International, Melbourne Total visitors in 2022: 1.58 million The National Gallery of Victoria (NGV International) one of the most visited museums in the world. It is the oldest and most visited gallery in Australia. Established in 1861, the museum hosts a wide range of international exhibitions and collections, encompassing art from numerous periods and disciplines. It houses more than 70,000 works of art spanning thousands of years, including a large collection of Australian Indigenous art. 24. Royal Castle, Warsaw Total visitors in 2022: 1.75 million The Royal Castle in Warsaw is a castle residency and a symbol of Polish heritage, making it one of the best museums in the world. Serving as the official residence of the Polish monarchs, it’s located in Castle Square, at the entrance to the Warsaw Old Town. Its interiors are filled with significant paintings, sculptures, prints, and manuscripts. The museum also houses a rich collection of oriental art, including the largest collection of Chinese paintings in Poland. 23. Rijksmuseum, Amsterdam Total visitors in 2022: 1.76 million The Rijksmuseum is the most prestigious and largest museum for art and history in the Netherlands. It displays a large array of the country’s historical artifacts as well as works from Dutch masters such as Rembrandt, Vermeer, and Hals. The museum’s collection, totaling more than one million objects, spans the years 1,200 to 2,000. One of its most famous paintings is Rembrandt’s “The Night Watch.” 22. Wawel Royal Castle, Krakow Total visitors in 2022: 1.79 million Once the residence of the Kings of Poland and the symbol of Polish statehood, the Wawel Royal Castle is now one of the Poland’s premier art museums. The complex is a fascinating mixture of architectural styles, ranging from medieval, renaissance, and baroque. The museum showcases a wide range of exhibits, including royal chambers, an armory, and a collection of Oriental art. 21. MMCA Seoul, Seoul Total visitors in 2022: 1.8 million A central hub for Korean modern art, the National Museum of Modern and Contemporary Art (MMCA) is one of the most popular museums in the world. Established in 1969, it has become a multi-cultural complex where traditional art coexists with the contemporary, fostering an environment of creativity and inspiration. The MMCA’s collection includes more than 8,000 pieces that span the gamut of modern and contemporary Korean art – paintings, sculptures, installations, photographs, and video art. 20. State Tretyakov Gallery, Moscow Total visitors in 2022: 1.9 million The State Tretyakov Gallery is the foremost depository of Russian fine art in the world, making it one of the most visited museums in the world. Founded in 1856 by merchant Pavel Mikhailovich Tretyakov, the gallery’s collection covers more than 1,000 years of Russian art, from early religious paintings to a rich collection of modernist works. Its unique collection includes more than 170,000 works of painting, sculpture, and graphics. 19. National Museum of Scotland, Edinburgh Total visitors in 2022: 1.97 million The National Museum of Scotland’s broad collection features the wonders of nature, art, design, fashion, science, technology, world cultures, and Scottish history, all under one roof. From the ancient past to the cutting edge of modern science, the diversity of its collections is truly remarkable. Notable exhibits include the famous Dolly the Sheep, the first mammal cloned from an adult cell, and the world’s oldest color television. Museum visitors statistics show that it attracted around 1.97 million visitors in 2022. 18. M+, Hong Kong Total visitors in 2022: 2.034 million M+ in Hong Kong is a revolutionary museum of visual culture dedicated to collecting, exhibiting, and interpreting art, design, and architecture, moving image, and the Hong Kong visual culture of the 20th and 21st centuries. It is one of the largest museums of contemporary visual culture in the world, boasting a collection of over 6,000 objects. While it officially opened in 2021, it had already been actively acquiring works, staging exhibitions, and developing digital content before the building’s completion. 17. Museum of Modern Art, New York Total visitors in 2022: 2.19 million With a vast collection that includes works of designs, paintings, architecture, drawing, sculpture, photography, prints, and electronic media, the Museum of Modern Art (MoMA) has firmly established its role as a leader in the contemporary art world. It showcases works by groundbreaking artists like Vincent Van Gogh, Salvador Dalí, and Frida Kahlo. 16. Galleria Degli Uffizi, Florence Total visitors in 2022: 2.22 million Galleria Degli Uffizi is one of the oldest and most famous art museums in the world. It holds an exceptional collection of priceless works, particularly from the period of the Italian Renaissance. Among the iconic works on display are Botticelli’s “The Birth of Venus” and “Primavera,” along with masterpieces by Leonardo da Vinci, Michelangelo, and Caravaggio. 15. Somerset House, London Total visitors in 2022: 2.34 million Somerset House is a significant cultural hub in the heart of London, encompassing one of the city’s most beautiful courtyards. This Neoclassical building, built on the site of a Tudor palace, hosts a diverse and dynamic array of events, exhibitions, and installations. It is home to The Courtauld Gallery, renowned for its Impressionist and Post-Impressionist masterpieces, as well as King’s College London’s Cultural Institute. 14. Victoria and Albert Museum, London Total visitors in 2022: 2.37 million The Victoria and Albert Museum, often referred to as the V&A, is renowned for its expansive collection of applied and decorative arts and design, as well as sculpture, spanning some 5,000 years. It is one of the world’s biggest art museums, housing a permanent collection of over 2.8 million objects, including textiles, ironwork, ceramics, jewelry, costumes, glass, furniture, medieval objects, sculpture, prints, drawings, and more. 13. Museo Nacional del Prado, Madrid Total visitors in 2022: 2.45 million The Museo Nacional del Prado stands as one of the world’s most popular art galleries. With a collection that focuses on European art from the 12th century to the early 20th century, it boasts around 8,200 drawings, 7,600 paintings, 4,800 prints, and 1,000 sculptures. Among its most notable works are masterpieces from artists such as Velázquez, Goya, and El Greco. 12. State Russian Museum, St Petersburg Total visitors in 2022: 2.65 million As the world’s largest depository of Russian fine art and one of the most visited museums in the world, the State Russian Museum offers a comprehensive representation of Russian artistry, from icons of the 10th century to works of contemporary artists. The museum’s extensive collection comprises over 400,000 exhibits, covering the entire history of Russian fine art. 11. National Gallery, London Total visitors in 2022: 2.72 million The National Gallery houses an impressive collection of over 2,300 paintings dating from the mid-13th century to 1900, including works by masters such as Renoir, da Vinci and Van Gogh. Its commitment to preserving and showcasing European painting’s breadth and depth continues to make it an essential stop for art enthusiasts worldwide. Click to continue reading and see the 10 Most Visited Museums in the World. Suggested Articles: 35 Best Destinations in the World for Cultural Tourism 25 Most Culturally Influential Countries in the World 17 Oldest Buildings In The World That Are Still In Use Disclosure. None. 25 Most Visited Museums in the World is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyJul 25th, 2023

Epitome of Luxury: 29 Most Expensive Watch Brands

Do you want to make a statement with your wrist? If so, you may be interested in checking out some ... Read more Do you want to make a statement with your wrist? If so, you may be interested in checking out some of the most expensive watch brands. So, do you want to know what the most expensive watch brand in the world is? Patek Philippe is the most expensive watch brand in the world. The company has been manufacturing luxury watches for centuries and producing the world’s most expensive watches. The company manufactured the priciest timepiece and the most expensive watch ever sold for $31.9 million. Their attention to detail, craftsmanship, and innovation set them apart from other watch brands.  In this post, we’ll cover the most expensive watch brands on Earth today – names that will resonate with any true connoisseur of fine watches. From royal families and world leaders to actors and professional athletes, these premium watches are carried by some of the most influential people in history. Keep reading to learn more about these prestigious timepieces! 29 Most Expensive Watch Brands The list of the most expensive watch brands in the world is a feast for the eyes. While many of us may not have the budget for some of these luxury timepieces, it’s still interesting to look at the world’s most respected watchmakers and what they offer. From classic designs to cutting-edge innovations, these timepieces epitomize luxury and prestige. Whether crafted from precious metals or intricate feature complications, each watch carries its own story. So here is a list of these amazing, most expensive, and luxurious watch brands on the market today. Patek Philippe Patek Philippe is at the top of the list, renowned for its timeless designs and perpetual calendar chronographs. Patek Philippe is a Swiss luxury watch manufacturer founded in 1839 by Polish watchmaker Antoni Patek and French businessman Adrien Philippe.  Patek Philippe has produced some of the world’s most recognizable watches for over 180 years. The brand is famous for its intricate designs and superior craftsmanship, making them one of the most sought-after luxury watch brands.  From classic dress watches to complex chronographs, Patek Philippe’s watches are designed to last generations and are backed by a lifetime warranty. The company is also known for its commitment to innovation, launching groundbreaking technologies such as the Perpetual Calendar and Caliber 89 (the most complicated watch ever made).  Patek Philippe watches have impressive features, from intricate moon phase indicators to annual calendars and tourbillons. In addition, they are powered by some of the most reliable movements in the industry, ensuring that your watch will be accurate and reliable for years to come. At the time of its sale in 2019, the Grandmaster Chime 6300A-010 from Patek Philippe was the most expensive watch ever sold. Crafted especially for the Only Watch Charity Auction in Geneva, this unique and exquisite timepiece achieved a staggering price of 31.19 million USD. This limited edition masterpiece boasts an 18K white gold case and a movement of 1,366 parts. It has 20 complications, including two side-by-side dials to show the time in two different time zones, a chiming mechanism that indicates each quarter hour with a distinct sound, and an astronomical moon phase display. The 6300A-010 also features an impressive 72-hour power reserve with a date chime that plays on the hour and minute. Its stainless steel pushers are engraved with a relief of the Patek Philippe coat-of-arms, adding further refinement to this exquisite object. Why are Patek Watches so Expensive? Patek Philippe is the most expensive watch brand in the world, with good reason. The brand is one of the oldest watchmaking companies still in existence today. Their tradition of craftsmanship, quality materials, and attention to detail set the Patek watch apart from other luxury watches. Patek Philippe watches are made with the highest quality materials, usually made from precious metals like gold and platinum, and often include diamonds and other gemstones, which further contribute to the high cost of these exclusive timepieces. Every part is crafted by hand and tested for precision to ensure that the finished product meets its exacting standards of excellence. Furthermore, Patek Philippe watches are designed with innovative technology and a timeless aesthetic that can withstand the test of time. The legacy of Patek Philippe also adds to its value. The company has been creating exquisite watches for over two centuries, making it one of the world’s most recognizable brands. Their devoted customers often pass down their watches from generation to generation, further contributing to the heritage and value of these timepieces. All these factors combine to make Patek Philippe watches a highly sought-after commodity and one that commands an exorbitant price tag. It is easy to understand why Patek Philippe watches have earned their reputation as some of the most expensive in the world.  However, when you consider the quality, longevity, and heritage behind these exquisite timepieces, you can appreciate why many people are willing to pay for the privilege of owning one. With Patek Philippe watches, you truly get what you pay for—an investment in a timeless piece of craftsmanship that will last for generations. That is why these watches are so expensive and sought-after. Jaeger LeCoultre Jaeger LeCoultre is one of the most prestigious watch brands in the world. Established in 1833, the luxury watch brand has produced some of the most exquisite timepieces for over 195 years. Their watches have earned a reputation for precision and durability.  Jaeger LeCoultre’s high-end models typically feature complex complications like perpetual calendars, tourbillons, minute repeaters, and chronographs. Their attention to detail and craftsmanship is second to none, creating beautiful pieces that have become treasured possessions for watch aficionados worldwide. The brand was well known for creating some of the world’s smallest calibers and also developed the first alarm wristwatch. Over the years, it has continued to be a leader in watchmaking technology, developing several revolutionary inventions like the Atmos clock and the Reverso watch. It has also been responsible for well-known complications, such as the Jaeger LeCoultre Master Memovox, considered one of the most prestigious watches. Jaeger LeCoultre’s most expensive model sold to date is their Hybris Mechanica Grande Sonnerie watch, which retails at over $2.5 million. The current most expensive watch from Jaeger LeCoultre is also Hybris Artistica Grande Sonnerie. This luxurious timepiece also features a perpetual calendar and power-reserve indicator. This ultra-luxurious timepiece features a manually wound movement and an impressive 100 jewels. It is also encrusted with diamonds, giving it an incredible sparkle that has to be seen to be believed. On top of this, the timepiece features a complex tourbillion and various intricate complications, making it one of the most remarkable watches ever created. Jaeger-leCoultre store front Why is Jaeger LeCoultre Watches so Expensive? Jaeger LeCoultre watches are renowned for their precision and craftsmanship. Every watch is a testament to the highest level of watchmaking, with each component made with absolute attention to detail. From the case and bracelet to the movement and dial, every part has been carefully crafted to perfection. It takes a team of highly skilled watchmakers countless hours to craft these beautiful timepieces. The movement and mechanics of Jaeger LeCoultre’s watch make them so special. They use traditional mechanical movements, often with fewer parts than other luxury watch brands. Each part has been designed to work harmoniously with the others, allowing for extremely accurate timekeeping and reliability. Jaeger LeCoultre’s movements are known for their quality and require very little maintenance throughout their lifetime. Jaeger LeCoultre also emphasizes high-end materials and finishes to ensure that each watch is of the highest possible quality. The cases are made from high-grade stainless steel, titanium, gold, or platinum. The dials are often made from precious metals and stones, while the straps and bracelets use luxurious leather and exotic skins. Every part of the watch is perfectly hand-finished, giving it a unique look. The price of a Jaeger LeCoultre watch reflects all the meticulous work that goes into creating it. Every component is made with precise attention to detail, and hours of skilled labor are put in to assemble each watch. The result is a timepiece that will last for generations and be appreciated by the wearer and those around them. It’s no wonder why Jaeger LeCoultre watches are so expensive – but their timeless beauty and quality are worth every penny. Blancpain Blancpain is a Swiss luxury watch brand that has been around since 1735, making it one of the oldest watch manufacturers. Its founder, Jehan-Jacques Blancpain, opened his first workshop at the family farm in Villeret and began manufacturing high-quality pocket watches and clocks for the aristocracy. Today, Blancpain is known for making some of the world’s most luxurious watches and is widely regarded as one of the finest luxury watch brands. The most expensive model sold by Blancpain is the “Blancpain Specialities Tourbillon Diamonds Watch” wristwatch, having one of the highest retail prices of $1,342,700. The most expensive watch currently available from Blancpain is also the “Blancpain Specialities Tourbillon Diamonds Watch.” The watch was handcrafted by Blancpain’s top craftsman, using traditional techniques and the finest materials.  The watch features a complex movement, a flying tourbillon, 20 carats worth of diamonds, and a luxurious white gold case. It was handcrafted by Blancpain’s top craftsmen using traditional techniques and the finest materials. It is a testament to the brand’s commitment to creating some of the world’s most exquisite timepieces. It also reflects Blancpain’s long history as one of the oldest and most respected luxury watch brands. Why is Blancpain Watches so Expensive? Blancpain watches are incredibly expensive due to the highly intensive craftsmanship and engineering that goes into their production. The brand is renowned for its commitment to creating watch models with intricate details, from the most basic models to its grand complication pieces like the Blancpain 1735.  These complex timepieces require great precision and skill and are made from high-quality materials. Each component is carefully crafted, and every movement is perfectly finished. This attention to detail and commitment to craftsmanship makes Blancpain watches so expensive, as they require significant time and skill to create them.  Not only that, but the limited nature of the watches also contributes to their high price tag, as each piece is unique. These factors make Blancpain watches worth every penny and a great investment for those who appreciate luxury timepieces. Blancpain is an iconic brand that has set the standard for craftsmanship in watchmaking. Their commitment to innovation, precision, and quality makes them a truly special brand that produces timepieces unlike any other.  Every watch from Blancpain is an exquisite piece of art, guaranteed to last for generations and become a cherished family heirloom. Blancpain is the way to go if you’re in the market for a high-end watch. Their incredible craftsmanship and timeless designs make it easy to see why Blancpain watches are so expensive. Audemars Piguet Audemars Piguet is one of the world’s most luxurious watch brands, famed for its opulent and intricate timepieces. Founded by two childhood friends who shared a passion for watchmaking, Audemars Piguet has become one of the biggest names in luxury timepieces.  They have been at the forefront of innovation since 1875, creating some of the most iconic designs in watchmaking history. The Swiss-based brand has become renowned for its excellent craftsmanship and superior designs. The company has released some of the most expensive watches in the world, with prices that can reach millions of dollars. The Audemars Piguet Royal Oak series has become one of the most iconic watch designs, and it’s no surprise that they continue to be sold at auction for large sums of money. With their exquisite craftsmanship and superior designs, Audemars Piguet remains one of the most sought-after watch brands in the world. The Audemars Piguet Royal Oak is the company’s most expensive watch ever sold. It is an 18-karat yellow gold bezel Genta, sold for $2.1 million in an auction in 2022. According to Sotheby’s, it became the most valuable vintage Audemars Piguet watch ever sold at auction. This iconic model features a steel case, octagonal bezel and “Tapisserie” dial, and an integrated bracelet, making it stand out even more. A man wearing an Audemars Piguet watch Why are Audemars Piguet Watches so Expensive? AP watches boast some of the most intricate and advanced mechanical movements available today – often requiring new machinery to be developed and deployed to achieve the desired level of precision. This added effort is reflected in the price tag of AP watches, as each requires significant time and resources to create. The materials used to craft Audemars Piguet watches are also a major factor in their prices. For instance, the brand exclusively uses top-notch metals such as gold or platinum for its watch cases. On top of all this, Audemars Piguet watches are also adorned with precious stones like diamonds or rubies – another factor that helps drive their prices up.  Additionally, much of the finishing and polishing is done by hand – a painstaking process that requires high levels of skill and attention to detail. This added level of craftsmanship certainly adds to the overall cost of an Audemars Piguet watch. The limited production of Audemars Piguet watches is another factor that drives up the prices. The brand produces fewer watches than other Swiss watch companies; all pieces are handmade. Each watch takes an extended period to create and can only be made in small quantities. Audemars Piguet pays close attention to detail, polishing and brushing its models with intricate care. This ensures that the pieces they create have a smooth, eye-catching, long-lasting finish. This attention to detail is why so many of their pieces are considered some of the most expensive watches in the world. All in all, these factors combine to create a product that is truly one of a kind. Audemars Piguet watches are renowned for their quality, precision, and craftsmanship – qualities that come with a significant price tag. However, for those who appreciate the artistry behind these amazing timepieces, the investment may be well worth it. Breguet Breguet is one of the world’s most expensive watch brands. Breguet is a Swiss watchmaking company founded by Abraham-Louis Breguet in 1775. It has become one of the most prestigious names in watchmaking, and its watches are highly sought after by collectors worldwide. Breguet’s history is rich with innovation, having invented many important movements, such as the tourbillon and the automatic watch. The brand is renowned for its high-end timepieces, crafted with the finest materials and intricate craftsmanship. With nearly two centuries of experience in developing some of the world’s most exquisite watches, it’s no surprise that Breguet is considered one of the most expensive watch brands in the world. The most expensive model ever sold by Breguet was their Sympathique Clock No. 128 & 5009 (Duc d’Orléans Breguet Sympathique), owned by Ferdinand Philippe, Duke of Orléans), which was auctioned off by Sotheby’s in New York for a whopping US$6.8 million in December 2012 — making it the most expensive Breguet timepiece ever sold at auction. However, if that’s too much out of your budget, their current priciest watch is the Double Tourbillon, made of 18-carat rose gold and featuring twin rotating tourbillons. The Double Tourbillon is amongst the most intricate pieces created by Breguet and is priced at around US$329,000. With its two independent tourbillons affixed to a center plate, it’s easy to see why this watch carries a hefty price tag. For those wanting something from Breguet but not willing to pay six figures, the brand has plenty of other luxurious options, such as their highly sought-after Marine and Classique collections. While still expensive, these offerings will cost you considerably less than their most expensive watch. And for those who can’t afford either, the Breguet boutique in Geneva offers small souvenirs and trinkets that are a fraction of the cost. Why are Breguet Watches so Expensive? Breguet watches are highly sought after due to their intricate craftsmanship, luxurious design, and use of high-end materials. The components used in a Breguet timepiece, such as gold, diamonds, and alloys, are of the highest quality and sourced from only the most reputable providers.  Every Breguet watch is handmade using traditional techniques by expert watchmakers with decades of experience. In addition, the craftsmanship required to create a Breguet watch is painstakingly detailed and requires great skill. All of these factors contribute to the overall cost of a Breguet timepiece. Breguet also has a long history that adds to its desirability. Breguet is one of the oldest watchmakers in the world and has a storied history of creating some of the most iconic timepieces ever made. Iconic figures such as Napoleon Bonaparte and Marie Antoinette have been known to own Breguets, which further adds to the brand’s allure. Roger Dubuis Roger Dubuis is one of the world’s most exclusive and expensive watch brands. From its humble beginnings in 1995, the company has grown to become one of the most sought-after watch brands in the world. Its signature style, exquisite craftsmanship, and commitment to excellence have established it as a leader in fine watchmaking.  Known as a status symbol of prestige, Roger Dubuis watches are highly sought after by collectors, enthusiasts, and connoisseurs of luxury watches. Their watches combine traditional watchmaking techniques with modern technology, resulting in stunningly crafted, functional, and aesthetically pleasing watches. One of the most expensive models sold by Roger Dubuis is the Excalibur Quatuor, which was originally released in 2005 as part of a limited-edition series. The Excalibur Quatuor was sold at auction for a whopping $1.1 million, making it one of the most expensive watches ever sold. This luxurious timepiece features four independent balance wheels, making it one of the most complex watches ever. It is also encased in an 18-karat rose gold case and diamonds for added sparkle. The most expensive watch currently available from Roger Dubuis is the Excalibur Monobalancier, which retails for $75,000. This luxurious timepiece features an 18-karat rose gold case with diamonds and a unique single balance wheel. The Excalibur Monobalancier is one of the most complex watches ever created and is a must-have for any true connoisseur of luxury watches. Why are Roger Dubuis Watches so Expensive The Roger Dubuis watches are some of the most sophisticated and exquisite art pieces. They are crafted with great attention to detail, using only the finest materials. Each watch has a unique design that is both aesthetically pleasing and functional.  The craftsmanship that goes into each Roger Dubuis watch is quite impressive. From the intricate engraving to the minute details, these watches are made with a level of precision that is hard to match. They use only the best quality materials and components to deliver an exceptional product. Additionally, their attention to detail extends beyond aesthetics, as they also pay close attention to mechanics and functionality. The high price tag of Roger Dubuis can be attributed to the fact that they are limited edition pieces. The time commitment put into the production process is also a major factor in the cost, with some models taking up to 2400 hours and 7 years of research. The level of sophistication and quality of a Roger Dubuis watch is unparalleled in the industry. From its timeless design to its reliable performance, this luxurious timepiece will stand the test of time. Those lucky enough to own one will surely appreciate its value for years to come. By investing in a Roger Dubuis watch, one can be sure to have a luxurious and valuable accessory that will be cherished for years to come. The brand offers an incredible level of precision, quality, and craftsmanship that is simply unmatched. The high price tag may seem intimidating initially. Still, once one considers the time and effort that went into creating this masterpiece, it is easy to understand why it is so expensive. Louis Moinet The Louis Moinet brand has been a leader in the luxury watch industry for centuries. Established by watchmaker, scientist, and inventor Louis Moinet in 1815, the company continues to produce some of the most exquisite and creative timepieces available today.  Each watch is carefully crafted and intricately detailed with diamonds, precious gems, and other luxurious touches that make it truly one-of-a-kind. In addition to their watches, Louis Moinet also offers a variety of accessories, including leather straps, cufflinks, pens, wallets, and belts – all made with the same level of craftsmanship and attention to detail as their watches. One of their most expensive watches is the Meteoris collection, which is rated as one of the 12 most expensive watches with prices over $1 million. This collection consists of four limited-edition timepieces modeled after the solar system. Each watch contains a fragment of a rare meteorite from around the world. The most expensive piece in this series was sold for $4.6 Million, making it one of the most expensive watches ever sold. The most expensive watch currently available at Louis Moinet is the Space Revolution watch, which will set you back a whopping $380,000. This exceptional timepiece features an intricate design and utilizes cutting-edge technology to ensure precise accuracy. The dial has been designed with meteorite fragments from Mars, giving it an incredibly unique look.  It also features a revolutionary movement allowing accurate timekeeping and a power reserve of 120 hours. Each watch is handcrafted by one of the company’s master craftsmen, ensuring that every piece is made to perfection. Louis Moinet watches are not only beautifully crafted, but they also represent innovation and precision in the world of horology. Each piece is a testament to the brand’s commitment to excellence and innovation, from the Space Revolution watch to its more affordable models. Whether you’re looking for a timeless classic or something contemporary and unique, there’s sure to be a Louis Moinet watch perfect for you. Why is Louis Moinet Watches so Expensive? Louis Moinet Watches are expensive because they are made with high-quality materials. The watches contain pieces from various sources, including lunar rocks, Mars meteorites, and even asteroids.  In addition to sourcing these rare components, Louis Moinet Watches also feature intricate craftsmanship in their construction. Skilled watchmakers carefully crafted each watch, ensuring the highest quality and precision. Furthermore, many Louis Moinet Watches are encrusted with gemstones, making them even more expensive and luxurious. Louis Moinet watches stand out from the competition not only due to their rare components but also because they were designed with a focus on exclusivity and luxury. They are not made for everyday use but are intended to be art pieces. As such, they often cost significantly more than a similarly-made watch from another brand. The watches offer unparalleled uniqueness and luxury that is hard to find elsewhere. Each watch is guaranteed to be made from the finest materials and designed to last forever. This combination of features and Louis Moinet’s commitment to excellence and quality make them some of the most expensive watches in the world. Piaget Piaget is a Swiss luxury watch and jewelry manufacturer founded in 1874. Georges-Édouard Piaget founded the company, whose passion for crafting fine timepieces has been passed down through the generations. The brand has become renowned for using precious metals, gemstones, and intricate designs to create exquisite watches. Piaget is known for its high-end watches and jewelry, but it is also well respected for its innovative movement technology. The brand was the first to create a quartz movement that was accurate to within one second per day, and it has continued to develop new movements and technologies since then. Piaget has created some of the thinnest watches in the world and is considered one of the most luxurious watch brands on the market. Piaget’s timepieces are some of the most expensive watches available. The brand has created several models that cost millions, including the Piaget Emperador Temple, which retails for an astonishing $3.3 million. This watch features 481 brilliant-cut diamonds and 207 baguette-cut diamonds, plus a large emerald-cut diamond in the center. Its 18K white gold bracelet is adorned with 350 baguette-cut diamonds. Why are Piaget’s Watches so Expensive? For some good reasons, Piaget’s watches are some of the world’s most sought-after and expensive watches. Piaget has become renowned for their unique designs and meticulous craftsmanship. They have been crafted with incredible attention to detail, using only the finest materials, and powered by some of the most advanced watchmaking technology.  The craftsmanship that goes into each Piaget timepiece is truly remarkable; they are made with precision and care to ensure that each watch is both beautiful and reliable. The process starts with carefully selecting materials, including stainless steel for the case and sapphire crystal for the dial – both chosen for their durability.  The movement then undergoes rigorous testing throughout production to ensure it is accurate and powerful. Finally, the watchmakers hand-assemble the watches and conduct a series of quality control checks to ensure it meets Piaget’s exacting standards.  This attention to detail is reflected in the price tag – but for those who appreciate fine watchmaking, this expense is well worth it. Their watches symbolize luxury and sophistication, and for those who can afford them, they make an exquisite addition to any collection. Piaget watches will last for generations, providing a lifetime of timekeeping excellence with style and elegance. Vacheron Constantin Vacheron Constantin is one of the world’s oldest and most prestigious watch brands, dating back to 1755. Founded in Geneva, Switzerland, Vacheron Constantin has been creating luxury timepieces for over two centuries. The brand is known for its commitment to quality and craftsmanship, using only the finest materials and components. Each watch is meticulously finished by hand to ensure a timeless design. Each model is designed with precision and masterfully crafted by expert watchmakers. The brand has become synonymous with elite luxury, becoming a status symbol for those who can afford it. The brand offers an impressive selection of styles and designs, from classic to modern, ensuring that each customer finds the perfect watch for their needs.  One of the most expensive watches ever created by Vacheron Constantin was the Kalista, which retailed at $11 million. Released in 1979, this stunning timepiece featured 118 emerald-cut diamonds that the brand’s experts carefully crafted over 20 months. It took 6,000 man-hours to complete the elegant design. Another of Vacheron Constantin’s most expensive watches is its Overseas Tourbillon, which retails at $136,453. This limited edition timepiece boasts a stunning 42mm case, an intricate dial with a stunning 18-carat gold bridge, and a hand-engraved power reserve indicator. This luxurious watch is truly one of a kind and is sure to add an air of sophistication to any outfit. Whether you’re looking for a timeless heirloom or something more fashion-forward, Vacheron Constantin has something to suit your taste and budget. No matter the price tag, you can be sure that you’re getting only the best when you purchase a Vacheron Constantin timepiece. Why are Vacheron Constantin Watches so Expensive Vacheron Constantin Watches are expensive due to their incredible craftsmanship and attention to detail. The brand has a long and storied history, becoming renowned for its dedication to quality watchmaking.  Each Vacheron Constantin watch is essentially hand-crafted, taking up to 500 hours of manual labor to create only 20,000 pieces per year. This starkly contrasts with other major watch brands, which can produce thousands of pieces of the same model in a fraction of the time. The materials used for Vacheron Constantin watches are also top-notch. Precious metals such as rose gold, white gold, platinum, palladium, and titanium are used to craft the watch cases, while diamonds are often used to adorn the bezels. This ensures that each watch is truly unique and luxurious.  It is no wonder why Vacheron Constantin watches have become so expensive and desirable! Whether looking for a luxury watch to wear on special occasions or an heirloom to pass down through the generations, Vacheron Constantin is a perfect choice. Their watches are timeless and sure to become treasured family keepsakes. Take a Look at 15 Things You Didn’t Know About VACHERON CONSTANTIN: A. Lange & Sohne Lange & Söhne is a German watchmaker that has been in business since 1845. Founded by Ferdinand Adolph Lange, the brand quickly gained notoriety for its exquisite craftsmanship and meticulous attention to detail. Over the years, A. Lange & Söhne watches have become some of the most sought-after timepieces due to their superior quality and design. The most expensive watch ever sold by A. Lange & Söhne is the 1815 Homage to Walter Lange in stainless steel, which was auctioned off for US$852,000 in 2018 – making it one of the most expensive watches ever sold. The 1815 Homage to Walter Lange is the most exquisite watch crafted by A. Lange & Sohne. It features an impressive complication: a jumping sweep-seconds hand with a start-and-stop function, based on an invention of Walter Lang.....»»

Category: blogSource: valuewalkJul 23rd, 2023

21 Best Smelling Colognes For Men

In this article, we will take a look at the 21 best smelling colognes for men. If you want to see more colognes in this selection, go to the 5 Best Smelling Colognes For Men. According to a report by Grand View Research, the size of the perfume industry stood at $50.85 billion in 2022. […] In this article, we will take a look at the 21 best smelling colognes for men. If you want to see more colognes in this selection, go to the 5 Best Smelling Colognes For Men. According to a report by Grand View Research, the size of the perfume industry stood at $50.85 billion in 2022. The perfume industry is set to expand at an average growth rate of 5.9% during the 2023 to 2030 period and reach a size of $80.16 billion. The growth of the perfume industry can be attributed to numerous factors, such as a growing emphasis on personal grooming and the rising demand for both youthful and exotic scents. Additionally, manufacturers are expanding their product lines to cater to a wider audience, further attracting more consumers. The growth of urban areas, expanding populations, and competitive marketing tactics are propelling the demand for perfumes. To improve consumer experiences, manufacturers are prioritizing the creation of innovative and high-quality fragrance solutions. This involves the incorporation of potent oils and flavours to extend the fragrance’s shelf-life and eliminate odours. Companies are making use of artificial intelligence technology to launch new fragrance solutions. For example, Sephora, LVMH introduced ‘MAISON 21G’ in April 2021, an AI-driven solution that allows the personalization of scents. Moreover, the widespread use of online retail platforms is expected to drive global product demand by offering consumers a vast selection of fragrances and greater convenience. Competitive Landscape of the Perfume Market In the future, the North American region is expected to hold a significant share of the perfume market due to a growing demand for luxury consumer goods. In 2020, the market size in this region was valued at $10.50 billion. Meanwhile, within the Asia Pacific region, China is expected to hold a significant share of the global perfume market. This is due to the increasing purchasing power among Chinese consumers who prefer premium brand scents. The premium segment of the perfume industry is expected to observe the fastest growth. Leading companies in the industry are placing greater emphasis on providing natural fragrances in their premium product lines, driven by growing concerns among consumers regarding allergies and harmful ingredients present in synthetic fragrances. As the premium segment offers greater flexibility for innovation, it is expected to give a boost to product revenues in the near future. The fragrances and perfumes industry is competitive, with both international and regional competitors vying for market share. Dominating the market are major players such as Chanel SA, LVMH Moet Hennessy Louis Vuitton SE (EPA:MC), Christian Dior SE (EPA:CDI), and Capri Holdings Limited (NYSE:CPRI), who employ various strategies like product diversification, AI-powered solutions, and acquisitions to maintain their dominant position. However, small players also occupy a significant portion of the market, manufacturing various personal care products. Companies are competing on different aspects, including price levels, product offerings, and marketing activities, in order to gain a competitive advantage. trung-do-bao-Y9SA59I-fYw-unsplash Our Methodology We first carried out in-depth market research to determine the most popular and highly rated colognes for men. We consulted a variety of web resources, including expert opinions from fragrance enthusiasts, customer reviews on e-commerce sites, Reddit threads, and leading publications such as Vogue, GQ, CNN, Esquire, Men’s Heath, US Magazine, and Scent Grail. Our rankings are based on a consensus opinion-based approach and consider factors such as scent longevity, versatility, and overall appeal. A score was assigned to each cologne based on the number of times it appeared on the lists. The colognes have been ranked in ascending order of their aggregated scores across 16 sources. The price listed for each of the colognes is for the 3.4 fluid ounces (100 ml) bottle unless mentioned otherwise. Best Smelling Colognes For Men 21. Le Male by Jean Paul Gaultier Insider Monkey Score: 3 Price (4.2 oz): $92.33 Le Male by Jean Paul Gaultier was launched in 1995 and has since become a well-liked scent. Le Male is a fresh and aromatic fragrance that features top notes of mint, lavender, and bergamot, heart notes of cinnamon, cumin, and orange blossom, and base notes of vanilla, tonka bean, and sandalwood. The bottle of Le Male is designed to resemble a masculine torso, with a striped sailor’s shirt and a metal canister. The Jean Paul Gaultier brand is majority owned by Barcelona, Spain-based fashion house Puig. 20. Gucci Last Day Of Summer Insider Monkey Score: 3 Price: $380 Gucci’s The Alchemist’s Garden – The Last Day of Summer is a unisex fragrance that was launched in 2018. It is part of Gucci’s luxury fragrance collection that draws inspiration from ancient alchemy and natural ingredients. The Last Day of Summer is a fresh and floral scent that combines notes of mandarin, magnolia, and jasmine with a base of sandalwood and musk. It is designed to capture the fleeting beauty of summer and the essence of a sun-soaked garden. The bottle is also designed to reflect the alchemical inspiration behind the fragrance, with a vintage-style glass flacon and a gold-toned metal label. Gucci is owned by the French luxury brand Kering SA (EPA:KER). 19. Valentino Uomo Born in Roma Insider Monkey Score: 4 Price: $107.95 Valentino Uomo Born in Roma is a men’s fragrance that was launched in 2019. It is inspired by the modern Valentino man and his Roman heritage. The fragrance is a blend of aromatic and woody notes, with top notes of sage and violet leaf, heart notes of spicy ginger and savoury salt, and base notes of cedarwood and vetiver. The overall effect is a fresh and masculine scent that is both modern and classic. The bottle is designed to evoke the architecture of ancient Rome, with a square shape and silver details. Valentino is owned by Qatari royal-backed investment firm Mayhoola for Investments S.P.C. 18. Prada Luna Rossa Ocean Insider Monkey Score: 4 Price: $85.00 Prada Luna Rossa Ocean is a men’s fragrance that was launched in 2021. It is the latest addition to the Luna Rossa collection by Prada, inspired by the world of sailing and the thrill of competition. The fragrance is a fresh and aquatic scent, with top notes of marine accord and bergamot, heart notes of lavender and clary sage, and base notes of ambroxan and cedarwood. The overall effect is a clean and invigorating scent that captures the essence of the ocean. The bottle is designed to reflect the Luna Rossa collection’s distinctive style, with a sleek and modern design featuring a silver metal cap and a navy blue label. The Italian luxury fashion brand is listed on the Frankfurt stock exchange as Prada S.p.A. (PRP.F). 17. Dior Homme Insider Monkey Score: 4 Price: $120.00 Dior Homme is a men’s fragrance that was launched in 2005. It is a modern and sophisticated scent with traditional masculine notes. The fragrance features top notes of lavender and bergamot, heart notes of iris and cocoa, and base notes of amber and vetiver. The overall effect is a rich and sensual scent that is both classic and contemporary. The bottle of Dior Homme has a sleek and minimalist design featuring a black cap and a transparent label. The scent is made by Paris, France-based multinational luxury brand Christian Dior SE (CDI.PA). 16. Maison Martin Margiela ‘Replica’ Jazz Club Insider Monkey Score: 4 Price: $160.00 Maison Martin Margiela ‘Replica’ Jazz Club is a unisex fragrance that was launched in 2013. It is part of Maison Margiela’s Replica fragrance line, which is designed to evoke memories of different places and moments in time. Jazz Club is a warm and spicy scent meant to recreate the atmosphere of a New York City jazz club in the 1960s. The fragrance features top notes of pink pepper, neroli, and lemon, heart notes of rum, clary sage, and Java vetiver, and base notes of tobacco leaf, vanilla, and styrax. 15. Blu Atlas Atlantis Insider Monkey Score: 4 Price: $100 Blu Atlas Atlantis is a men’s fragrance released in 2022 by Hawthorne, California-based skincare company Blu Skin Care LLC. The perfume has a citrusy-fruity feel. The fragrance features top notes of bergamot, lemon, and blackcurrant, heart notes of lavender, clary sage, peach, and apricot, and base notes of orris, oak-moss, violet, ambrette seed, and musk. 14. Yves Saint Laurent Y For Men Insider Monkey Score: 4 Price: $148.00 Yves Saint Laurent Y For Men is a fragrance that was launched in 2017. The scent is a combination of fresh, spicy, and woody notes that create a modern and sophisticated fragrance. The top notes of the fragrance include bergamot, ginger, and white aldehydes. The base notes include ambergris, incense, fir balsam, and cedarwood, which provide a warm and woody finish to the fragrance. Yves Saint Laurent is a part of the French luxury brand Kering SA (EPA:KER). 13. Tom Ford ‘Oud Wood’ Insider Monkey Score: 4 Price: $262.18 Tom Ford ‘Oud Wood’ is a luxurious and exotic fragrance that was launched in 2007 as part of the Private Blend Collection. The scent is inspired by the rare and precious Oud wood, which is highly valued in the Middle East for its rich and complex aroma. The fragrance opens with top notes of spicy cardamom, warm and woody cypress, and Brazilian rosewood. The heart of the fragrance is composed of rich and smoky oud wood blended with spicy and sweet notes of pepper, nutmeg, and jasmine. The Tom Ford brand was acquired by the Estée Lauder Companies Inc. (NYSE:EL) for a total enterprise value of $2.8 billion in 2022. 12. Gucci – Guilty Insider Monkey Score: 4 Price (3 oz): $78.08 Gucci – Guilty is a fragrance line by the Italian luxury fashion house Gucci. The line was first introduced in 2010 and has since become an in-demand choice among fragrance enthusiasts. The men’s version is a spicy-oriental fragrance that features top notes of lavender and lemon, heart notes of orange flower and neroli, and base notes of cedarwood and patchouli. The Gucci Guilty fragrances are known for their sensual and seductive aromas, making them popular choices for evening wear or special occasions. The fragrances are also packaged in sleek and stylish bottles featuring the iconic Gucci interlocking G logo. Gucci is part of the French luxury brand Kering SA (EPA:KER). 11. Hermes H24 Insider Monkey Score: 5 Price: $69.71 Hermes H24 is a fragrance line by the French luxury fashion house Hermès International Société en commandite par actions (RMS.VI). The line was first introduced in 2021 and quickly gained popularity among fragrance enthusiasts. Hermes H24 features a unique combination of floral and woody notes. The fragrance was created by renowned perfumer Christine Nagel and features top notes of clary sage and narcissus, heart notes of rosewood and geranium, and base notes of Sclarone, Iso E Super, and cedarwood. 10. L’eau d’Issey Pour Homme by Issey Miyake Insider Monkey Score: 5 Price (4.2 oz): $91.80 L’eau d’Issey Pour Homme by Issey Miyake is a fragrance line by the Japanese fashion designer, Issey Miyake. The line was first introduced in 1994 and has since become a desired choice among fragrance enthusiasts, winning several awards for its unique composition. L’eau d’Issey Pour Homme is a men’s fragrance that features a fresh, aquatic scent. The fragrance was created by perfumer Jacques Cavallier and features top notes of yuzu, bergamot, and lemon, heart notes of nutmeg and water lily, and base notes of tobacco, vetiver, and sandalwood. The Issey Miyake brand is owned by Shiseido Company, Limited (4911.T). 9. Paco Rabanne 1 Million Insider Monkey Score: 5 Price: $66.90 Paco Rabanne 1 Million is a fragrance by the Spanish fashion house Paco Rabanne. The fragrance was first introduced in 2008 and has since become a staple in the world of men’s fragrances. 1 Million is a bold and spicy fragrance that features a combination of fruity and floral notes. The fragrance was created by perfumers Christophe Raynaud, Olivier Pescheux, and Michel Girard and features top notes of grapefruit, mint, and blood mandarin, heart notes of cinnamon, rose, and spicy notes, and base notes of leather, amber, and patchouli. The Pacro Rabanne is owned by the Puig group. 8. Jo Malone Wood Sage & Sea Salt Cologne Insider Monkey Score: 5 Price: $155.00 Jo Malone Wood Sage & Sea Salt Cologne is a unisex fragrance by the British fragrance and cosmetics brand Jo Malone London. The fragrance was first introduced in 2014. Wood Sage & Sea Salt is a fresh and woody fragrance that captures the essence of the British coast. The fragrance was created by perfumer Christine Nagel and features top notes of ambrette seeds and sea salt, heart notes of sage, and base notes of musk, seaweed, and red algae. The Jo Malone brand has been owned by the Estée Lauder Companies Inc. (NYSE:EL) since 1999. 7. Le Labo Santal 33 Insider Monkey Score: 6 Price: $310.00 Le Labo Santal 33 is a unisex fragrance by the New York-based fragrance brand Le Labo. The fragrance was first introduced in 2011 and has since become one of the brand’s most famous scents. Santal 33 is a warm and woody fragrance that features a combination of spicy and floral notes. The fragrance was created by perfumers Frank Voelkl and Daphne Bugey and features top notes of cardamom, iris, and violet, heart notes of Australian sandalwood, papyrus, cedarwood, and base notes of leather, amber, and musk. Le Labo is another brand on our list of the best-smelling colognes for men owned by the Estée Lauder Companies Inc. (NYSE:EL). 6. Boss Bottled by Hugo Boss Insider Monkey Score: 7 Price: $88.90 Boss Bottled by Hugo Boss is a well-appreciated men’s fragrance by the Metzingen, Germany-based luxury fashion house, Hugo Boss AG (BOSS.DE). The fragrance was introduced in 1998. Boss Bottled is a warm and spicy fragrance that features a combination of fruity and woody notes. The fragrance was created by perfumer Annick Menardo and features top notes of apple and citrus, heart notes of geranium, cinnamon, and cloves, and base notes of sandalwood, vetiver, and cedarwood. In addition to Boss Bottled by Hugo Boss, products by LVMH Moet Hennessy Louis Vuitton SE (EPA:MC), Christian Dior SE (EPA:CDI), and Capri Holdings Limited (NYSE:CPRI) are also amongst some of the best-smelling colognes for men.   Click to continue reading and see the 5 Best Smelling Colognes For Men.   Suggested articles: 15 Best Noise Cancelling Headphones Under $100 Jeff Bezos Stock Portfolio 15 Largest Oil Fields in the World Disclosure: None. 21 Best Smelling Colognes For Men is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyApr 21st, 2023

The 38 best romance books to read in 2022, from beloved classics to bestselling rom-coms

From light rom-coms and YA fiction to bestselling modern and classic books, this list has your next favorite romance novel. When you buy through our links, Insider may earn an affiliate commission. Learn more.From light rom-coms and YA fiction to bestselling modern and classic novels, this list has your next favorite romance book.Amazon; Alyssa Powell/Insider Romance books range from contemporary love stories to historical fiction reads. They make great weekend reads and gifts for friends. These are our top romance picks, from new bestsellers to classic tales. Books can transport us through time, across galaxies, or smack-dab in the middle of a heartfelt love story, filled with every swoon-worthy moment and a satisfyingly happy ending. Great romance books fall into all kinds of tropes and sub-genres from enemies-to-lovers to fantasy romance, but they all follow interesting characters through a series of challenges on their way to falling in love. The romance books on this list fit into a few categories: contemporary, romantic comedies, young adult, classics, and historical fiction. They're bestsellers, award-winners, readers' favorites on social media and Goodreads, and some of our personal favorite picks. So whether you're looking for a tumultuous romantic comedy or a sweet and simple happily ever after, here are the best romance books to read in 2022.The 38 best romance books to read in 2022:Contemporary Rom-ComsYoung AdultClassics Historical FictionContemporary"Honey & Spice" by Bolu BabalolaAmazonAvailable on Amazon and Bookshop, from $23.85Kiki Banjo is the host of a popular student radio show, "Brown Sugar," where she gives advice to the women on campus as they navigate players and try to avoid heartbreak. When she publicly kisses Malakai Korede, the guy she just denounced on her show, she needs to quickly fix the public perception, as a prized internship is on the line. She asks Malakai to fake a relationship with her, though their chemistry is undeniably real from the moment they first met."The Love Hypothesis" by Ali HazelwoodAmazonAvailable on Amazon and Bookshop, from $11.04Needing to convince her best friend that she's happily dating, Ph.D. candidate Olive Smith impulsively kisses Adam Carlson, a young, hot professor with an unyieldingly harsh reputation. When the two agree to start a fake relationship, real feelings start to bubble to the surface until everything changes at a big science conference. To find out why this is one of our favorite new romances, check out our more in-depth review."Seven Days in June" by Tia WilliamsAmazonAvailable on Amazon and Bookshop, from $16.61When they were teenagers, Eva and Shane spent one week together madly in love, so when they meet by chance at a literary event 20 years later, their immediate chemistry is no surprise. In this warm and emotional romance, Eva and Shane reconnect over seven days in Brooklyn, exploring the spark between them while addressing the questions left lingering after all this time. "The Charm Offensive" by Alison CochrunAmazonAvailable on Amazon and Bookshop, from $13.04Dev has always believed in a fairytale romance, which is why he works on the notorious dating show "Ever After," even if his own love life isn't a magical love story. When the new Prince Charming, self-made tech giant Charlie, struggles to push past his anxiety to make any connections with the women on the show, Dev makes it his personal mission to ease Charlie's stress in this incredible queer romance that also addresses serious mental health issues. "The Dating Plan" by Sara DesaiGoodreadsAvailable on Amazon and Bookshop, from $13.99When it seems like Daisy can no longer avoid the marital pressure from her family, she asks her childhood crush (and first heartbreak) to be her fake fiancé. Realizing a marriage of convenience could majorly benefit each of them, they begin to go on a series of fake dates to get to know each other better and find the long-buried feelings for each other are still very real. "You Had Me At Hola" by Alexis DariaAmazonAvailable on Amazon and Bookshop, from $12Jasmine is returning to NYC after a messy and public breakup to film a new telenovela with co-star Ashton, who fears his career is dead after his last character was killed off. Ashton and Jasmine make a pact to rehearse in private in order to generate on-screen chemistry. As their behind-the-scenes romance heats up, so does their performance, until the press threatens to ruin everything. Despite their initial awkward meeting, the chemistry between these characters nearly explodes off the pages and makes for a wildly sexy read. "The Devil Wears Black" by L. J. ShenAmazonAvailable on Amazon and Bookshop, from $8.75You will love to hate some of these characters in a romance that's as entertaining as it is delicious. Maddie has set up everything for her perfect life until her ex walks back in with an outrageous proposition that lands her in the middle of a fake engagement. It combines the fake relationship and enemies-to-lovers tropes to a unique plot with Grade-A characters. It's romantic, funny, angsty, and full of all kinds of heartbreak. "The Proposal" by Jasmine GuilloryAmazonAvailable on Amazon and Bookshop, from $13.02Nikole attends a baseball game with her boyfriend of five months when he very publically proposes, despite his inability to spell her first name and the fact that they aren't even in love. After she says "no," — and Carlos, a stranger sitting nearby, rescues her from a stadium of disapproving onlookers — Nik sets off on an epic rebound with her new hunky doctor/hero until they start breaking all the hookup rules. This is one of those books that made me forget I was reading because the story played out so smoothly.  "In Five Years" by Rebecca SerleAmazonAvailable on Amazon and Bookshop, from $10.03In a job interview, Dannie is asked where she sees herself in five years. That night, Dannie accepts the job offer and a proposal but wakes up five years into the future in a different apartment next to a different man. Dannie struggles to figure out what happened — until she's back in 2020 an hour later, the experience remaining barely more than a visceral vision. This is a fast read that had me so interested in the balance between what we want and what we need. "The Kiss Quotient" by Helen HoangAmazonAvailable on Amazon and Bookshop, from $11.30This steamy romance is about Stella, a 30-year-old math genius with Asperger's who wants a bit more experience in the love department. When she hires Michael, an escort, to help her practice everything from kissing to complicated positions, he can't resist her offer — and she soon finds that she can't resist him. This one has a ton of sexy scenes but also takes us on Stella's journey of accepting that romance might not fit her careful computations. "Take A Hint, Dani Brown" by Talia HibbertAmazonAvailable on Amazon and Bookshop, from $11.80Dani is on the hunt for a friend-with-benefits when she and Zafir, the flirty security guard, go viral for a video of him carrying her out of a building during a fire drill. Monopolizing on the publicity by faking a relationship is mutually beneficial: Zafir gets the publicity he needs for his rugby charity, and Dani gets to see him naked. It's fun, it's flirty, it's down-right sexy — but this rom-com is also fantastic for tackling (pun intended) toxic masculinity, anxiety, and witchy spirituality. "The Light We Lost" by Jill SantopoloAmazonAvailable on Amazon and Bookshop, from $8.58I cried actual tears on public transit because of this book and I am not sorry. This is a 13-year journey of the battle between fate and choice between Lucy and Gabe, starting from their senior year at Columbia. They reunite a year later, just before Gabe receives a photojournalism assignment in the Middle East and Lucy pursues a career in New York. This book is overflowing with emotion, fantastic prose, and heartbreak. It explores all kinds of love, especially the kind that changes you forever."The Intimacy Experiment" by Rosie DananAmazonAvailable on Amazon and Bookshop, from $10.99Naomi's sex-positive business has taken off and Ethan is looking to bring more congregants to his synagogue. An unlikely pair, the two team up to host a seminar series on "Modern Intimacy," a solution that will save Ethan's synagogue and expand Naomi's business to higher education — until their attraction for one another threatens their success. This book is beloved for its strong plot and for the way it doesn't follow the common tropes of many new releases. It's also extremely sexy while tackling real issues, making it an enriching (and very steamy) read.  "The Bodyguard" by Katherine CenterAmazonAvailable on Amazon and Bookshop, from $16.99Though you wouldn't guess it at first glance, Hannah Brooks has been hired as superstar actor Jack Stapleton's bodyguard, protecting him from a determined stalker. But when Jack's mom gets sick, he doesn't want his family to worry about the stalker or his bodyguard and asks Hannah to pretend to be his girlfriend as a cover in this sweet, magical romance.Rom-Coms"Delilah Green Doesn't Care" by Ashley Herring BlakeAmazonAvailable on Amazon and Bookshop, from $13.99This adorable and steamy rom-com is about Delilah Green who reluctantly returns to her hometown of Bright Falls to photograph her estranged stepsister's wedding for an irrefutable amount of money. Though she's hoping to lay low and leave quickly, Delilah soon runs into Claire Sutherland, one of her stepsister's best friends, and decides to have a little fun messing with Claire until real feelings develop as they're forced together time and time again. "The Unhoneymooners" by Christina LaurenAmazonAvailable on Amazon and Bookshop, from $8.44Truly one of the funniest books I've ever read, "The Unhoneymooners" takes place on a romantic Hawaiian vacation between sworn nemeses Olive and Ethan. When food poisoning at her sister's wedding leaves everyone but Olive and Ethan heaving, the two head on the abandoned, all-expense-paid honeymoon with the intention of avoiding each other. All of it works out — until Olive's new boss is at the same resort and the couple fakes being madly-in-love newlyweds to avoid being caught in a lie. The banter between these two characters made me want a whole series of just their conversations.You can find more Christina Lauren books here."People We Meet on Vacation" by Emily HenryAmazonAvailable on Amazon and Bookshop, from $9.98Emily Henry is quickly becoming the queen of unique summer rom-coms (her last one, "Beach Read," blew readers away) and this one continues the trend. Alex and Poppy are complete opposites and were inseparable best friends until two years ago. They decide to take a week-long vacation together again to mend their friendship and find their old happiness again. This is a romance that's wholly cute and emotional at the same time. "The Bromance Book Club" by Lyssa Kay AdamsAmazonAvailable on Amazon and Bookshop, from $11.78I found myself utterly invested in this book's non-traditional romantic plot and deep characters — the first in a short and highly entertaining series. The "Bromance Book Club" is a secret club amongst Nashville's major-league baseball players who read sexy romance novels to keep the romance in their marriages alive. When Gavin finds out that his wife faked every orgasm, his teammates bring him into the club to help him save his marriage. This is the perfect, easy romantic read when you need a laugh. "In A Holidaze" by Christina LaurenAmazonAvailable on Amazon and Bookshop, from $10.95Okay yes, this is a holiday read but it's such a fun "Groundhog Day"-style romance that it's worth reading any time of year. At her favorite cabin with her family and friends, Mae awkwardly makes out with Theo — a family friend on whom she's had a crush since she was 13. On the drive back to the airport, Mae finds out that the beloved family cabin is being sold, just before a truck crashes into the side of their car. She tumbles into living the same day over and over until she finally allows the universe to tell her where to find happiness. You can find more Christina Lauren books here.Young Adult"Excuse Me While I Ugly Cry" by Joya GoffneyAmazonAvailable on Amazon and Bookshop, from $9.89In this authentic and heartfelt enemies-to-lovers romance, Quinn loses her precious journal of lists — filled with everything from all the days she's cried to the boys she'd like to kiss — when an anonymous account blackmails her into facing her greatest fears or else the journal will go public. She teams up with Carter Bennett to face her fears, track down the blackmailer, and just maybe fall in love."All The Bright Places" by Jennifer NivenAmazonAvailable on Amazon and Bookshop, from $7.48Theodore Finch is always thinking about death and dying, but every time he comes close to taking his life, something stops him. Violet is pining for the future where she can escape their small town and the memories of her late sister. After Violet and Finch meet at the bell tower, each saving each other in some small way, they set out to discover the wonders of their state. Along with having a memorable and surprising story, this book also touches on the delicacy and importance of mental health in young people.You can read our review of "All the Bright Places" here."Everything, Everything" by Nicola YoonAmazonAvailable on Amazon and Bookshop, from $8.49As the moving truck next door brings Olly into Maddy's exceptionally small world, she knows love and disaster are inevitable. Maddy's immunodeficiency confines her to her home, but Olly is the key to a world she can't help but ache to explore. This and Nicola Yoon's other YA stories have garnered so many readers in need of a happy ending. "Everything, Everything" comes with a great message, eager and aching characters, and a classic teen romance."Eleanor and Park" by Rainbow RowellAmazonAvailable on Amazon and Bookshop, from $11.43A love story between two completely different (but equally quirky) teenagers, Eleanor and Park begin to fall for each other over mixtapes and late-night conversations in 1986. Anyone who's ever felt that all-consuming, first-love feeling can attest that this book captures it perfectly. It's told with alternating points of view, so you really get to understand the souls of these characters as they navigate a teenage romance in the midst of two separately difficult lives."The Fault in Our Stars" by John GreenAmazonAvailable on Amazon and Bookshop, from $6.10How could I list YA romances without "The Fault in Our Stars"? A cult favorite, "The Fault in Our Stars" has earned every tear dropped onto its pages. Hazel is living on borrowed time with her terminal cancer diagnosis when she meets Augustus in her support group, who lights up a world that's felt so dark. This is a magical love story that will fill your heart just to break it and put it back together again. I think this book is still so deeply loved because the writing is so moving and the testaments between Hazel and Augustus feel incredibly real.You can find more John Green books here."Red, White, and Royal Blue" By Casey McQuistonAmazonAvailable on Amazon and Bookshop, from $9.97The sheer comedy and sweet enemies-to-lovers story make this is a queer, YA, royal romance staple in the genre. When a confrontation between Alex (the First Son in the US) and Henry (British royalty) hits the tabloids, the PR teams decide the best course of action is for Alex and Henry to stage a very public, fake friendship. But as their time together buds into a secret romance, Alex and Henry know so much more is at stake than teenage heartbreak. "Five Feet Apart" by Rachael LippincottAmazonAvailable on Amazon and Bookshop, from $11.18This is a YA love story about two teens living with cystic fibrosis. Perpetually stuck in the hospital, Stella is on the waiting list for new lungs and Will can't wait to turn 18 so he can walk away from all the treatments. They have to stay six feet apart in order to not risk infection — but six feet for a budding teenage love might as well be a universe away. I was so emotionally invested in the characters while also learning so much about cystic fibrosis and the trials each patient endures. Classics"Pride and Prejudice" by Jane AustenAmazonAvailable on Amazon and Bookshop, from $8.37Published in 1813, "Pride and Prejudice" is the epitome of a classic love story. It explores the contrast between marrying for love and marrying out of societal and familial pressure, all as Elizabeth's witty and flirty relationship with Mr. Darcy unfolds. This story is a masterful, high-society classic that is enchanting from the very first page. You can find more Jane Austen books here."Jane Eyre" by Charlotte BrontëAmazonAvailable on Amazon and Bookshop, from $5.95Jane Eyre is a Victorian, gothic romance that follows Jane from her teen years to adolescence. This, at least on the surface, is a story woven and sometimes driven by romance but it is so much more than the love between Jane and Rochester, the contemplative and mysterious man by whom she's been hired. "Jane Eyre" feels so ahead of its time, telling the story of an intellectual and morally driven young woman navigating the secrets held by Rochester and his home."Wuthering Heights" by Emily BrontëAmazonAvailable on Amazon and Bookshop, from $7.44Catherine and Heathcliff are doomed lovers, selfish and borderline monstrous as characters. Their two families are linked by fate — the actions of one inevitably affecting the other. The love and lust that runs through this story is just one component of the careful balance between good and wicked that continues to uphold this classic's epic status to this day.  "Gone with the Wind" by Margaret MitchellAmazonAvailable on Amazon and Bookshop, from $15"Gone With The Wind" is rightfully one of the bestselling novels of all time, beloved for the tragic and emotionally absorbing story of Scarlett O'Hara and how the Civil War changed her life forever. Scarlett is a character designed for us to hate — she's selfish, self-absorbed, and seems to have little to no redeeming qualities, but must tear herself from poverty after Sherman's March to the Sea. This classic is simply a masterpiece, with nearly every line meticulous and memorable."A Room with a View" by E. M. ForsterAmazonAvailable on Amazon and Bookshop, from $8.99Published in 1908, "A Room with a View" is a love story between independent Lucy and the handsome George Emerson, but it's also a wide-angle portrait of the human condition. Set in Italy and England, this book gives us a great look at the societal changes of the early 1900s and the charming love between two characters as Lucy finds the bravery that will set her free. It's a short classic, but the progression of Lucy's character development and love story is unforgettable.Historical Fiction"The Duke and I" by Julia QuinnAmazonAvailable on Amazon and Bookshop, from $9.29In Regency-era London, Daphne Bridgerton should be poised, courteous, and perfectly ladylike — but her honesty and lack of desire to play the games to get a husband leaves her without a suitor. She finds that a fake courtship with Simon, Duke of Hastings — who wants to shun marriage completely — could be more than mutually beneficial...until she begins to fall for him. In this book, we get to know the families and histories of Daphne and Simon really well, which multiplies our empathy for the characters. This is a really sweet story with a couple of sexy scenes that will have you reaching for the rest of the books. You can find more Julia Quinn books here."Lessons in Chemistry" by Bonnie GarmusAmazonAvailable at Amazon and Bookshop, from $18.76Years ago, Elizabeth Zott was a chemist on an all-male research team with only one man who didn't treat her like she didn't belong. Now, Elizabeth finds herself a single mother, reluctantly hosting the nationally adored cooking show "Supper at Six." Set in the 1960s, Elizabeth is unwittingly teaching women not just how to cook, but how to fight against the status quo in this hysterical and poignant historical romance."Secrets of a Summer Night" by Lisa KleypasAmazonAvailable on Amazon and Bookshop, from $8.36Annabelle's situation is tense — she must wed a wealthy man to help her family, no matter what. But Annabelle's only persistent suitor is Simon, an entrepreneur who wants Annabelle as his mistress. This might be easy to resist, considering what's at stake — if Annabelle's attraction to Simon was remotely resistible. The tension and magical romance in this novel keep this historical read at the top of my list. "The Duke Heist" by Erica RidleyAmazonAvailable on Amazon and Bookshop, from $8.36Chloe Wynchester is able to blend into any crowd, a curse she finds highly useful when recovering a missing painting becomes her father's dying wish. In the heist, she accidentally kidnaps the hunky Lawrence Gosling, a Duke who must marry an heiress to mend his family's reputation, complicated by his immediate attraction to Chloe. If you've read an Erica Ridley novel in the past, you know most of her romances are slow burns with low steam. In this series, she cranked up the heat to deliver a fast-paced, sexy, and playful heart-melter of a story.  "Outlander" by Diana GabaldonAmazonAvailable on Amazon and Bookshop, from $9.29The plot of this book is a rollercoaster of motives and morals that so many readers can't resist. Claire is a former combat nurse on a second honeymoon in 1945 when she finds herself inexplicably thrown back in time to a war-torn Scotland in 1743. In her potentially impossible mission to get back home, she meets James Fraser, a complex man with whom love is easy, and finds herself romantically torn between her husband (who she may never see again) and her newfound protector.  "The Notebook" by Nicholas SparksAmazonAvailable on Amazon and Bookshop, from $8.36I've read a lot of sometimes-cheesy, super-romantic Nicholas Sparks novels over the years but this one is still my favorite. Noah is restoring a home in North Carolina after returning from WWII, reminiscing about the love-filled summer he spent with Allie 14 years ago. When she suddenly returns to town to see him again, their love story continues to unfold. "The Notebook" is every bit as sappy and cheesy as we've come to want from a Nicholas Sparks story, but this romance will likely draw out the waterworks, too."Bringing Down the Duke" by Evie DunmoreAmazonAvailable on Amazon and Bookshop, from $12.39In 1879, Annabelle is among the first women accepted into Oxford University. The only stipulation? She must support the women's suffrage movement by recruiting Sebastian Devereux-a Duke to their cause — while denying the attraction she has for a man who stands against everything she's fighting for. This book is a chemistry-filled debut with an interesting look at the women's suffrage movement in Britain. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderAug 31st, 2022

Greenwald Opines On Biden"s "Submissive - And Highly Revealing - Embrace Of Saudi Despots"

Greenwald Opines On Biden's "Submissive - And Highly Revealing - Embrace Of Saudi Despots" Authored by Glenn Greenwald via, In 2018, President Trump issued a statement reaffirming the U.S.'s long-standing relationship with the Saudi royal family on the ground that this partnership serves America's “national interests.” Trump specifically cited the fact that “Saudi Arabia is the largest oil producing nation in the world” and has purchased hundreds of billions of dollars worth of weapons from U.S. arms manufacturers. Trump's statement was issued in the wake of widespread demands in Washington that Trump reduce or even sever ties with the Saudi regime due to the likely role played by its Crown Prince, Mohammed bin Salman, in the brutal murder of Washington Post columnist Jamal Khashoggi. Then-Saudi Foreign Minister Prince Saud al-Faisal (2nd R) welcomes then-US Vice President Joe Biden (C) at the Riyadh airbase on October 27, 2011, upon his arrival in the Saudi capital with a US official delegation to offer condolences to the King Abdullah bin Abdul Aziz following the death of his brother, Crown Prince Sultan. AFP PHOTO/STR (Credit: AFP via Getty Images) What made these Trump-era demands somewhat odd was that the Khashoggi murder was not exactly the first time the Saudi regime violated human rights and committed atrocities of virtually every type. For decades, the arbitrary imprisonment and murder of Saudi dissidents, journalists, and activists have been commonplace, to say nothing of the U.S./UK-supported devastation of Yemen which began during the Obama years. All of that took place as American presidents in the post-World War II order made the deep and close partnership between Washington and the tyrants of Riyadh a staple of U.S. policy in the Middle East. Yet, as was typical for the Trump years, political and media commentators treated Trump's decision to maintain relations with the Saudis as if it were some unprecedented aberration of evil which he alone pioneered — some radical departure of long-standing, bipartisan American values — rather than what it was: namely, the continuation of standard bipartisan U.S. policy for decades. In an indignant editorial following Trump's statement, The New York Times exclaimed that Trump was making the world "more [dangerous] by emboldening despots in Saudi Arabia and elsewhere,” specifically blaming “Mr. Trump’s view that all relationships are transactional, and that moral or human rights considerations must be sacrificed to a primitive understanding of American national interests.” The life-long Eurocrat, former Swedish Prime Minister Carl Bildt, lamented what he described as Trump's worldview: “if you buy US weapons and if you are against Iran - then you can kill and repress as much as you want.” CNN published an analysis by the network's White House reporter Stephen Collinson— under the headline: “Trump's Saudi support highlights brutality of 'America First' doctrine” — which thundered: “Refusing to break with Saudi strongman Mohammed bin Salman over the killing in the Saudi consulate in Istanbul, Trump effectively told global despots that if they side with him, Washington will turn a blind eye to actions that infringe traditional US values." Trump's willingness to do business with the Saudis, argued Collinson, “represented another blow to the international rule of law and global accountability, concepts Trump has shown little desire to enforce in nearly two years in office.” Perhaps the most vocal critic of Trump's ongoing willingness to maintain ties with the Saudi regime were then-Democratic presidential candidates Joe Biden and Kamala Harris. As a recent CNN compilation of those statements demonstrates: “In the years prior to taking office, President Joe Biden, Vice President Kamala Harris, and many of their administration's top officials harshly criticized President Donald Trump's lack of action against Saudi Arabia and Crown Prince Mohammed bin Salman for the 2018 murder of Saudi journalist and Washington Post columnist Jamal Khashoggi.” In a 2019 Democratic primary debate, Biden vowed: “We were going to in fact make them pay the price, and make them in fact the pariah that they are,” adding that there is “very little social redeeming value in the present government in Saudi Arabia.” Harris similarly scolded Trump for his ongoing relationship with the Saudis, complaining on Twitter in October, 2019, that "Trump has yet to hold Saudi officials accountable," adding: "Unacceptable—America must make it clear that violence toward critics and the press won't be tolerated." That Joe Biden was masquerading as some sort of human rights crusader who would sever ties with the despotic regimes that have long been among America's most cherished partners was inherently preposterous. As Obama's Vice President, Biden was central to that administration's foreign policy which was driven by an embrace of the world's most barbaric tyrants. So devoted was Obama to the U.S.'s long-standing partnership with Riyadh that, in 2015, he deeply offended India — the world's largest democracy — by abruptly cutting short his visit to that country in order to fly to Saudi Arabia, along with leaders of both U.S. political parties, to pay homage to Saudi King Salman upon his death. Adding insult to injury, Obama, as The Guardianput it, boarded his plane to Riyadh “just hours after lecturing India on religious tolerance and women’s rights.” The Guardian, Jan. 27, 2015 The unstinting support of the Saudi regime by the Obama/Biden White House was not limited to obsequious gestures such as these. Their devotion to strengthening the despotic Saudi ruling family was far more substantial — and deadly. Obama's administration played a vital role in empowering the Saudi attack on Yemen, which created the world's worst humanitarian crisis: far worse than what has been taking place in Ukraine since the Russian invasion on February 24. In order to assuage the Saudis over his Iran deal, “Obama’s administration has offered Saudi Arabia more than $115 billion in weapons, other military equipment and training, the most of any U.S. administration in the 71-year U.S.-Saudi alliance,” reported Reuters in late 2016, just months before Obama and Biden left office. Beyond the enormous cache of sophisticated weapons Obama/Biden transferred to the Saudis to use against Yemen and anyone else they decided to target, the Snowden archive revealed that Obama ordered significant increases in the amount and type of intelligence technologies and raw intelligence provided by the NSA to the Saudi regime. That intelligence was — and is — used by Saudi autocrats not only to identify Yemeni bombing targets but also to subject its own domestic population to rigid, virtually ubiquitous, surveillance: a regime of monitoring used to brutally suppress any dissent or opposition to the Saudi regime. In sum, no hyperbole is required to observe that the Obama/Biden White House — along with their junior British counterparts — was singularly responsible for the ability of the Saudi regime to survive and to wage this devastating war in Yemen. But that is nothing new. The centerpiece of U.S. policy in the Middle East for decades has been to prop up Saudi despots with weapons and diplomatic protection in exchange for the Saudis serving U.S. interests with their oil supply and ensuring the use of the American dollar as the reserve currency on the oil market. That is what made the hysterical reaction to Trump's reaffirmation of that relationship so nonsensical and deliberately deceitful. Trump was not wildly deviating from U.S. policy by embracing Saudi tyrants but simply continuing long-standing U.S. policy of embracing all sorts of savage despots all over the world whenever doing so advanced U.S. interests. Indeed, what angered the permanent ruling class in Washington was not Trump's policy of embracing the ruling Saudi monarchs, but rather his honesty and candor about why he was doing so. American presidents are not supposed to admit explicitly that they are overlooking the human rights abuses of their allies due to the benefits that relationship provides, even though that amoral, self-interested approach is and for decades has been exactly the foundational ideological premise of the bipartisan U.S. foreign policy class. But this has been the core propagandistic framework employed by the DC ruling class since Trump was inaugurated. They routinely depicted him as an unprecedentedly monstrous figure who has vandalized American values in ways that would have been unthinkable for prior American presidents when, in fact, he was doing nothing more than affirming decades-old policy, albeit with greater candor, without the obfuscating mask used by American presidents to deceive the public about how Washington functions. Reuters, Sept. 7, 2016 Beyond the Saudi example, this same manipulative media scam could be seen most vividly when Trump welcomed the brutal Egyptian dictator Abdel Fattah el-Sisi to the White House. As I reported at the time, the mainstream Washington commentariat depicted Trump's meeting with and praise for the Egyptian strongman as some sort of shocking violation of bedrock American principles. In fact, the U.S. has been by far the largest benefactor of Egyptian tyranny for decades. It armed and supported the Mubarak regime up until the very moment it was overthrown. Obama's Secretary of State, John Kerry, praised the military coup engineered by Gen. Sisi against the country's first democratically elected leader, as an attempt to protect democracy. And shortly before the Arab Spring began, Kerry's predecessor, Hillary Clinton, declared her personal affection for Sisi's predecessor, the monstrous dictator who ruled Egypt for three decades: “I really consider President and Mrs. Mubarak to be friends of my family, so I hope to see him often here in Egypt and in the United States,” Clinton gushed in 2009, while Obama ensured that the flow of money and weapons to Mubarak never ceased. While the bipartisan political and media class has spent decades insisting, and still insists, that the core foreign policy goal of the U.S. is to defend freedom and democracy and fight tyranny around the world, the indisputable reality is the exact opposite: propping up the world's most brutal dictators who serve U.S. interests has been a staple of U.S. foreign policy since at least the end of World War II. The only attribute that differentiated Trump from his predecessors and the rest of the mainstream D.C. ruling class was not his willingness to do business and partner with despots. There are few policies official Washington loves more than that. It was his honesty about admitting that he was doing this and his clarity about the reasons for it: namely, that the real goal of U.S. foreign policy is to generate benefits for the U.S. (or, more accurately, ruling American elites), not to crusade for democracy and human rights. To the extent that one attempted to isolate any other difference between Trump and official Washington, it was that he was often insistent that “American interests” be defined not by "what benefits a small sliver of U.S. arms manufacturers and the U.S. Security State” but rather “what benefits the American people generally” (hence his eagerness, and his ultimate success, to be the first U.S. president in decades to avoid involving the U.S. in new wars). In sum, the U.S. always has been, and continues to be, not just willing but eager to support and embrace foreign dictators whenever doing so serves those interests. They are just as willing and eager to overthrow or otherwise undermine and destabilize democratically elected leaders who are judged to be insufficiently deferential to American decrees. What determines U.S. support or opposition toward a foreign country is not whether they are democratic or despotic, but whether they are deferential. Thus, it was not Trump's embrace of long-standing U.S. partnerships with Saudi and Egyptian despots that represented a radical departure from the American tradition. The radical departure was Biden's pledge during the 2020 presidential campaign to turn the Saudis into "pariahs” and to isolate them as punishment for their atrocities. But few people in Washington were alarmed by Biden's campaign vow because nobody believed that Joe Biden — with his very long history of supporting the world's worst despots — ever intended to follow through on his cynical campaign pledge. It took no prescience or cleverness to see it as nothing more than a manipulative attempt to demonize Trump for what official Washington, and Obama and Biden themselves, have always done with great gusto and glee. This is why it comes as absolutely no surprise, repellent as it may be, that Joe Biden aggressively abandoned this core 2020 campaign foreign policy vow regarding Saudi Arabia the first chance he got. Far from turning them into a "pariah” state as he pledged, Biden has seamlessly continued — and even escalated — the U.S. tradition of propping up and strengthening what is quite plausibly the world's single most despotic and murderous regime. Just one month after Biden's inauguration, the Director of National Intelligence made public a long-secret report that announced: “We assess that Saudi Arabia's Crown Prince Muhammad bin Salman approved an operation in Istanbul, Turkey to capture or kill” Jamal Khashoggi. Yet the White House, while imposing some mild sanctions on some Saudi individuals, adamantly refused to impose punishments on Crown Prince bin Salman himself, dispatching anonymous officials to friendly media outlets to explain that they were unwilling to jeopardize the significant benefits that come from the U.S./Saudi partnership. That was exactly the argument Trump made in 2018 in defense of his identical decision which caused so much faux indignation. One would, needless to say, be very hard-pressed to find similarly vehement condemnations of Biden for vandalizing sacred U.S. principles by refusing to sever or even meaningfully reduce the American partnership with the Saudis due to their murder of Khashoggi. But this was merely the start of Biden's embrace of the Saudi regime. Last November, “the U.S. State Department approved its first major arms sale to the Kingdom of Saudi Arabia under U.S. President Joe Biden with the sale of 280 air-to-air missiles valued at up to $650 million.” Just a few weeks later, the U.S. Senate, reported Politico, “gave a bipartisan vote of confidence to the Biden administration’s proposed weapons sale to Saudi Arabia, blunting criticisms from progressives and some Republicans over the kingdom’s involvement in Yemen’s civil war and its human rights record.” A group of dissenters — led by Sens. Rand Paul (R-KY), Bernie Sanders (I-VT), and Mike Lee (R-UT) — argued that the arms sales would fuel the war in Yemen and embolden the Saudi regime, but they were easily swept aside by a status-quo-protecting bipartisan majority led by the two party's leaders, Sen. Chuck Schumer (D-NY) and Mitch McConnell (R-KY). And it was during that same time — long before the Russian invasion of Ukraine — when Biden had all but abandoned any pretense of weakening ties with the Saudis, let alone turning them into the "pariah” state he promised during the campaign against Trump. “Mr. Biden was already prepared to end the isolation of Prince Mohammed as far back as October when he expected to encounter the Saudi leader at a meeting of the Group of 20 leaders and most likely would have shaken hands,” explainedThe New York Times last week (bin Salman was a no-show at the meeting). And now, it appears that Biden is planning a pilgrimage to Riyadh to visit his Saudi partners in person. Last week, The New York Times reported that Biden “has decided to travel to Riyadh this month to rebuild relations with the oil-rich kingdom at a time when he is seeking to lower gas prices at home and isolate Russia abroad.” During the trip, “the president will meet with” bin Salman himself, who Biden's own DNI said oversaw the murder of Khashoggi. The rationale offered by The New York Times for Biden's planned trip was virtually identical to the arguments Trump used in 2018: “the visit represents the triumph of realpolitik over moral outrage, according to foreign policy experts.” Indeed, the explanation offered by Biden's Secretary of State for the president's ongoing embrace of the Saudis is virtually indistinguishable from the rationale offered by Trump that sparked so many outraged denunciations about the fall of American ideals supposedly caused by his willingness to do business with undemocratic regimes: “Saudi Arabia is a critical partner to us in dealing with extremism in the region, in dealing with the challenges posed by Iran, and also I hope in continuing the process of building relationships between Israel and its neighbors both near and further away through the continuation, the expansion of the Abraham Accords,” Secretary of State Antony J. Blinken said on Wednesday at an event marking the 100th anniversary of Foreign Affairs magazine. He said human rights are still important but “we are addressing the totality of our interests in that relationship.” Despite Biden's clear abandonment from the start of his campaign pledge to distance the U.S from the Saudis, this trip is being justified by the need to plead with the Saudis to make more oil available on the market in order to compensate for U.S.-led sanctions on Russia. As The Times put it: “Russia and Saudi Arabia are close to tied as the world’s second-largest oil producers, meaning that as Biden administration officials sought to cut off one, they concluded they could not afford to be at odds with the other.” After the Times report, Biden officials said the trip had been postponed to July, but did not deny that it was happening. What cogent moral argument can be advanced that it is preferable to buy Saudi oil as a means of avoiding the purchase of Russian oil? Whatever one's views are on the extent of autocracy under Putin's rule in Russia, there is no minimally credible argument that it is worse than the systemic tyranny long imposed by the Saudi ruling family. Indeed, it is virtually impossible to contest that, at least prior to the Russian invasion of Ukraine, civil freedoms were more abundant in Russia than in Saudi Arabia. And while one can certainly contend that Russia's three-month war in Ukraine has been more a moral atrocity, there is no basis — none — for arguing that it is worse on any level than the indiscriminate violence and destruction the Saudis have been unleashing for seven years in Yemen (unless one values the lives of European Ukrainians more than non-European Yemenis). And even if one did insist upon the view that absolutely nothing on the planet is worse than the Russian invasion of Ukraine and that everything must therefore be done to maintain the sanctions regime imposed on Russia, how would that dubious moral claim justify overlooking Saudi atrocities and sending Biden, on his knees, to beg bin Salman for more oil? If suffocating and punishing Russia is the highest moral and strategic priority, why would it not be more prudent and more moral for the U.S. to lift Biden's restrictions on its own domestic drilling as a means of replacing Russian oil, especially if that would avoid the need to further strengthen the Saudi regime? But herein lies the unique truth-providing value of the U.S. partnership with Saudi Arabia. Of course U.S. foreign policy is not devoted to spreading freedom and democracy and fighting despotism and tyranny in the world. How can a country that counts the Saudi monarchs, the Egyptian military junta, the Qatari slave owners, and the Emirati dictators as its closest partners and allies possibly claim with a straight face that it opposes tyranny and fights wars in order to protect democracy? The U.S. does not care, at all, whether a foreign country is ruled by democracy or tyranny. It cares about one question and one question only: whether the government of that country serves or hinders U.S. interests. Donald Trump's sin was admitting this obvious fact. This has been the central deceit shaping the virtually closed propaganda system imposed by the West around the U.S./NATO role in the war in Ukraine. If Western leaders had simply acknowledged from the start the obvious truth about their role — that they regard Russia as a geopolitical adversary and seek to exploit the war in Ukraine to weaken or even break that country — at least an honest debate would have been possible. Instead, they and their corporate media allies did what they always do whenever a new war is newly marketed: they draped it in fabricated moral fairy tales about freedom-fighting and opposition to tyranny. Thus, the popular Western moralistic narrative imposed a series of claims about U.S. motives that should not have even passed the laugh test, yet became virtually obligatory articles of faith. The U.S. is not involved in this war in Ukraine because it sees an opportunity to advance its own interests by sacrificing Ukraine in order to weaken Russia (a truth they began admitting in private: their goal is not to end the war but prolong it). Nor is the U.S. motivated by an opportunity to enrich the weapons manufacture industry which lost its primary weapons market after the U.S. withdrawals from Iraq and Afghanistan and which wields enormous power in Washington. Nor does the U.S. government, with its posture of Endless War, seek to justify the ever-increasing budget and power of the U.S. Security State and the sprawling Pentagon bureaucracy. Perish these thoughts. The massive benefits conferred on those powerful sectors by every new war are always just happy coincidences. Only a deranged conspiracy theorist would believe that profit and power for these factions — whose unrestrained growth was the target of Dwight Eisenhower's grave warnings when leaving office in 1961: long before their power exploded even more due to Vietnam, the ongoing Cold War and especially 9/11 — is ever a factor in shaping U.S. war policy. Good American patriots view the military-industrial complex as just a chronic lottery winner: they just keep hitting the jackpots purely through immense strokes of luck. To sustain popular support for the expenditure of hundreds of billions of dollars in new foreign wars, the population must be fed a morally uplifting framework, a sense of righteous purpose that leads them — at least at the start — to believe these new wars are moral necessities. Thus, rather than self-interest in Ukraine, the U.S. is acting benevolently, with the noblest of motives, with nothing but a desire to help others. The United States, you see, is a country that cares deeply that the peoples of the world remain free, that they enjoy the right of democratic rule and self-determination, and that they should never suffer under the repressive thumb of despotism — and we are so magnanimously devoted to these values that we are even willing to expend our our vast resources to ensure the prosperity of others. Those kinds of grandiose morality tales are always deployed to secure American support for new wars (hence, the war in Vietnam was about defending our South Vietnamese democratic allies from aggression and invasion by North Vietnamese Communists; the war in Afghanistan would liberate oppressed Afghan women from the Taliban; the first war in Iraq, beyond “liberating” Kuwait, was to stop a tyrant who tore babies out of incubators, while the second war in Iraq, beyond WMDs, was about freeing Iraqis from Saddam's tyranny; the wars in Libya and Syria would rid their long-suffering populations from the brutal thumb of Gadaffi and Assad, etc. etc.). It is the great enduring mystery of American and British discourse that the U.S. and UK Governments can still have employees of media corporations genuinely believe that their governments fight wars not to advance their own interests but to defend democracy and fight tyranny — even as these very same media figures watch those very same governments prop up the most repressive tyrannies on the planet and lavish them with weapons, intelligence technologies, and diplomatic protection. Somehow, without the U.S. press batting an eye, Joe Biden can deliver a speech righteously touting his commitment to protect democracy in Ukraine and stop Russian autocracy, and then board a plane the very next minute to go visit Mohammed bin Salman and General Sisi, heralding them as vital American partners, and announce new aid military and intelligence packages to each. Somehow, this severest cognitive dissonance — watching a government insisting with one hand that it fights wars in order to protect democracy and vanquish tyranny and then, with the other, send aid to the world's most repressive tyrants — eludes these savvy journalistic gurus. Perhaps this cheap, repetitive, and transparent propaganda works with the journalistic in-group because the officials inside the U.S. Government who disseminate these fraudulent tales are the friends, colleagues, neighbors and vital sources for the country's wealthiest and most prominent journalists, who therefore see the world the way they see it and want to assume the best about the intentions of their socioeconomic and professional comrades. Perhaps it is due to the great career benefits that are inevitably conferred on journalists who uncritically cheer and help sell the lies behind U.S. war propaganda (the path that led Jeffrey Goldberg from writing full-on Iraq War agitprop for The New Yorker in 2002 to becoming editor-in-chief of The Atlantic today). Perhaps it is because bolstering U.S. war propaganda fosters widespread elite applause, while doubting it fosters attacks on one's patriotism, loyalty, competence and sanity. Perhaps American journalists feel a sense of jingoistic pride and psychological pleasure by believing that their government, unlike most in the world, involves itself in an endless stream of new wars due to magnanimity rather than more craven motives. When it comes to the uniquely gullible and herd-like U.S. and British press corps and their unyielding faith in the noble motives of U.S. war planners, all of those dynamics are likely at play. Notably, this self-evidently manipulative propaganda — U.S. foreign policy is devoted to spreading freedom and fighting despotism — works only in the U.S., the UK and various parts of Western Europe. The rest of the world — especially those regions whose democracies have been on the receiving end of the CIA's violence and destabilization efforts — react to such claims not with gullible credulity but scornful laughter. This is why, as The New York Times reported this week, the Biden administration has been encountering increasing levels of resistance around the world for his Ukraine war policies, because most countries understand that what the Western press refuses to acknowledge: namely, that the U.S's motives in Ukraine — whatever they might be — have nothing to do with safeguarding democracy and fighting despotism. The same dynamic was vividly apparent with Biden's failed attempt to summon Latin American countries to Los Angeles for his so-called “Summit of the Americas.” After the Biden administration announced the exclusion of Cuba, Venezuela and Nicaragua on the ground that those countries are insufficiently democratic, numerous other Latin American nations, led by Mexican President Andrés Manuel López Obrador, announced they were likely to refuse to participate. Mexico ultimately boycotted the event, whereas Brazil attended only after Biden acceded to the demands of its president, Jair Bolsonaro, to hold a one-on-one meeting with him and refrain from criticizing Brazil over environmental policies in the Amazon. Again, nobody outside of the U.S. and British media takes seriously the claim that the U.S. — loyal patron to the Saudis, Emiratis and Egyptians and countless CIA coups in their region — is so offended by authoritarianism in the three excluded Latin American countries that they cannot abide participating in a conference with them. Such a claim is particularly unsustainable in light of reports that Biden officials were all but begging Venezuelan leader Nicolas Maduro to sell oil on the market to compensate for sanctions on Russia in exchange for the lifting of U.S. sanctions on Venezuela (indeed, why is it more moral to buy oil from the Saudis than the Venezuelans)? The reason for the U.S.'s shunning of those countries has nothing to do with America's antipathy to autocracy and everything to do with the political importance of rapidly growing immigrant communities in Florida and other key swing states who fled those Latin American countries due to contempt for those governments. What possible cogent moral argument holds that it is permissible to maintain relations with the Saudis and Egyptians due to geo-strategic benefits around oil and international competition but not countries in the U.S.'s own hemisphere such as Venezuela, Cuba and Nicaragua? If American interests compel the U.S. to “overlook” or even sanction grave human rights abuses in their close Gulf-State-dictatorship-partners, why do the benefits for American citizens from relations with these Latin American countries not compel the same? The undeniable reality is that Kissingerian realism — the question of what is in the self-interest of the United States, or at least what is in the interests of a small sliver of American elites — is and long has been the core, animating, overarching ideology of U.S. foreign policy, as is true of the foreign policy of all great powers. The bit about crusading for human rights and democracy and battling tyranny and despotism is just the propagandistic packaging for domestic media consumption. That is why both presidents Obama and Trump, and every president before them, were willing to embrace many of the world's most repressive regimes: because they perceived that doing so would produce tangible benefits for “American interests,” however that might be defined. It is that same mindset that caused both of those presidents, for instance, to view Ukraine as a vital interest of Russia, but not the United States, and therefore not a country worth risking war with Moscow in order to defend. The core deceit about U.S. foreign policy — that it is designed to spread democracy and vanquish tyranny — serves no purpose other than to manipulate the American public, through the government tool known as the U.S. corporate media, to support whatever new wars, obscene spending packages, or authoritarian powers are demanded in its name. And therein lies the real value of the long-standing U.S./Saudi partnership, the reason that Biden's immediate abandonment of his campaign pledge to scorn the Saudis, is so illuminating. For any rational person, watching Joe Biden continue and even escalate the decades-long love affair between Washington and the murderous despots in Riyadh should dispel these myths once and for all and illuminate the reality, the actual motivational scheme, that drives the role that the United States plays in the world, both generally and in Ukraine. To support the independent journalism we are doing here, please subscribe, obtain a gift subscription for others and/or share the article Tyler Durden Sun, 06/12/2022 - 14:30.....»»

Category: blogSource: zerohedgeJun 12th, 2022

The 46 best fantasy books to escape into this summer, from the classics to new highly anticipated sequels

Whether you like fantasy books with a dash of drama, historical fiction, romance, or science fiction, these novels are sure to become favorites. Prices are accurate at the time of publication.When you buy through our links, Insider may earn an affiliate commission. Learn more.Whether you like fantasy books with a dash of drama, historical fiction, romance, or science fiction, these novels are sure to become favorites.Amazon; Alyssa Powell/Insider Fantasy books are delightfully filled with magic, creatures, and new worlds. This list ranges from classic fantasy novels to exciting new releases. We looked at bestsellers, award-winners, and reader recommendations to find the best fantasy books. Fantasy books are a blissful escape from reality into worlds of magical creatures, mythological heroes, and folklore come to life. They are where we can discover new worlds where heroes and heroines face brutal beasts, travel across distant lands, and unearth forgotten kingdoms. From epic high fantasy to magical realism, the fantasy genre is expansive. Fantasy can include countless different types of magic, characters, and adventurous pursuits and many of these novels intertwine with other genres, especially science fiction and romance. To compile this list of best fantasy books, we looked at all-time fantasy bestsellers, award-winners, and new releases about which readers are raving. So whether you're looking to find a magical first fantasy read or delve deeper into a sub-genre you already love, here are some of the best fantasy novels to read this summer. The 46 best classic and new fantasy books to read in 2022:A historical fantasy retelling of an ancient Indian epicAmazon"Kaikeyi" by Vaishnavi Patel, available at Amazon and Bookshop, from $16.54For fans of "Circe," "Kaikeyi" is the historical fantasy tale of a young woman who discovers her magic while looking for deeper answers in the texts she once read with her mother. When Kaikeyi transforms into a warrior and a favored, feminist queen, darkness from her past resurfaces and the world she has built clashes with the destiny the gods once chose for her family, forcing Kaikeyi to face the consequences of resistance and the legacy she may leave behind. A new exciting fantasy sequelAmazon"Fevered Star" by Rebecca Roanhorse, available at Amazon and Bookshop, from $23.49"Fevered Star" is the highly anticipated sequel to "Black Sun," and continues as sea captain Xiala finds new allies with the war in the heavens affecting the Earth. Meanwhile, avatars Serapio and Naranpa must continue to fight for free will despite the wave of destiny and prophecy they face in this fantasy novel loved for its unique cast of characters and incredible world-building. The first epic fantasy novel in an upcoming trilogyAmazon"The Woven Kingdom" by Tahereh Mafi, available at Amazon and Bookshop, from $12.99"This Woven Kingdom" intertwines fantastical Persian mythology and rich romance in the first novel of an upcoming fantasy trilogy about Alizeh, the long-lost heir to the kingdom for which she works as a servant. Kamran, the crown prince, has heard the prophecies his kingdom is destined to face but couldn't imagine the strange servant girl would be the one to uproot everything he's ever known. The most classic fantasy you can getAmazon"The Hobbit" by J. R. R. Tolkien, available on Amazon and Bookshop, from $10.37An introduction to the mystical world of "The Lord of the Rings," "The Hobbit" is one of the most charming adventure fantasies in history. It's the timeless story of Bilbo Baggins meeting Gandalf as they set out to raid the treasure guarded by a dragon — indisputably a classic fantasy novel, and a must-read for any fantasy lover. A fantastical retelling of Chinese mythologyAmazon"Daughter of the Moon Goddess" by Sue Lynn Tan, available at Amazon and Bookshop, from $16.19Inspired by the legend of Chang'e, the Chinese moon goddess, "Daughter of the Moon Goodess" follows Xingyin as her existence is discovered by the feared Celestial emperor and she must flee her home and leave her mother behind. In this mythological retelling, Xingyin must learn archery and magic in the very empire that once exiled her mother and challenge the Celestial Emperor with her life, loves, and the fate of the entire realm at stake. A steamy fantasy retelling of "Beauty and the Beast"Amazon"A Court of Thorns and Roses" by Sarah J. Maas, available at Amazon and Bookshop, from $14.49In this wildly popular series, Feyre is brought to a magical kingdom on the crime of killing a faerie where both she and the secrets of her captor are closely guarded. This series is known for its careful pacing, beautiful romance, and nightmarish fantasy creatures. The final book was just released, so now you can binge-read straight to the end. A historical fantasy that you won’t soon forgetAmazon"The Invisible Life of Addie LaRue" by V.E. Schwab, available at Amazon and Bookshop, from $16.19In 1714, Addie LaRue accidentally prays to the gods that answer after dark and curses herself to a life in which she cannot be remembered. This book spans 300 years as Addie lives without a trace until one day, she meets a boy who remembers her name. Contrary to the premise, Addie's story is one that stays with you long after you finish this book. This was my favorite book of 2020 and remains in my top five of all time. A fantasy book that begins with "It was a dark and stormy night"Amazon"A Wrinkle in Time" by Madeleine L'Engle, available on Amazon and Bookshop, from $5.35This is one of the few books from my childhood that has stood the test of time and remained on my bookshelf to this day. Meg Murry — along with her mother and brother — rushes downstairs in the middle of the night to find a strange visitor in the kitchen, launching an adventure through space and time to save Meg's father and the world. I was whisked away by the magic in this story, along with so many other readers. A fantasy story that will take you to a new worldAmazon"The Lion, The Witch, and The Wardrobe" by C.S. Lewis, available at Amazon and Bookshop, from $7.64Though chronologically second, this was the first "Chronicles of Narnia" book to be published and therefore should be read first. It tells the story of three siblings who step through the door of a wardrobe and find themselves in the magical land of Narnia, enchanted by the evil White Witch. They team up with a lion and join the battle to save Narnia. C.S. Lewis wrote: "Some day, you will be old enough to start reading fairy tales again," and that resonates with so many readers who pick this book up and hold it close to their hearts forever.A fantasy series that's quickly become a modern classicAmazon"A Game of Thrones" series by George R. R. Martin, available at Amazon and Bookshop, from $26.93The "Game of Thrones" series is hailed as an undeniable classic even though it was just published in 2005. The entire series is iconic. It's about families caught in a never-ending war over who rules over the seven kingdoms. In these books, the good guys don't always win and the heroes don't always live. There are highly complicated characters, tons of subplots, and every kind of conflict imaginable. A powerful and diverse fantasy with contemporary issuesAmaozon"Legendborn" by Tracy Deonn, available at Amazon and Bookshop, $16.29"Legendborn" has quickly become a favorite amongst fantasy readers since it was published in September 2020. It weaves issues of grief, racism, and oppression with Arthurian-inspired magic. Bree enrolls in a college program for gifted high schoolers after an accident that left her mother dead. When an attempt to wipe Bree's memory after she witnesses a magical attack fails, her own magic and memories begin to return to her and leave her wondering if her mother's death was truly an accident. An enchanting, magical fantasy adventureBookshop"The Girl Who Fell Beneath the Sea" by Axie Oh, available at Amazon and Bookshop, from $16.99Mina's homeland has been devastated by storms for generations so every year, a maiden is sacrificed to the sea in the hopes the Sea God will take a true bride and end the villages' suffering. When Shim Cheong, her brother's beloved, is chosen for the next sacrifice, Mina throws herself into the sea in her place and is swept into the Spirit Realm where she seeks to wake the Sea God, confront him — and save her homeland before her time in the realm runs out. A feminist fairy tale classicAmazon"Ella Enchanted" by Gail Carson Levine, available at Amazon and Bookshop, $7.35Whether or not you've seen the hilarious Anne Hathaway movie, this is one to pick up. It's the story of Ella, enchanted as an infant with the "gift" of obedience. It quickly turns into a curse as Ella can't help but do what she's told no matter who orders her or how silly (or dangerous) the order may be. When Ella finds she might be in danger, she sets out to undo the curse and ends up on an adventure with ogres, elves, even the classic pumpkin carriage. I thought this book was just as amusing as the movie and I probably read it a dozen times as a teen. A deadly fantasy tale of three royal sistersAmazon"Three Dark Crowns" series by Kendare Blake, available at Amazon and Bookshop from $14.99In every royal generation on the island of Fennbirn, a set of triplets is born. They are each equal heirs to the throne and possess one of three magics: control of the elements, affinity to nature and animals, or immunity to poison. When the girls turn sixteen, the fight for the crown begins and will only end once only one queen remains. In this dark series about strong women, the tension and twists build with each novel until the action-packed and intensely satisfying ending. The magic in these books is easy to understand and really entertaining to read. I loved seeing this sisterhood grow and change over the four books.A bloody fantasy epic of warrior womenAmazon"The Gilded Ones" by Namina Forna, available at Amazon and Bookshop, from $15.39Deka is already different from the rest of her village, but when she bleeds gold — the mark of a demon girl — during a ceremony, she faces consequences worse than death. She is soon offered a choice: to stay and face her fate or leave and fight in an army of girls like her. This story moves swiftly with a mix of dystopian fantasy, horror, and a touch of romance. It can be quite violent at times, as demon girls suffer death after gruesome death. If you've ever been hesitant about picking up YA fantasy, this is one that won't disappoint. A dark fantasy that's perfect for a rainy dayAmazon"Neverwhere" by Neil Gaiman, available at Amazon and Bookshop, from $13.29While you are probably more familiar with "Coraline," "Neverwhere" is a Neil Gaiman book that just can't be passed over. On the streets of London, Richard Mayhew stops to help a bleeding girl and ends up in Neverwhere — a dark version of London where monsters lurk in the shadows. After finishing this, you'll ask yourself why you haven't read more of his novels. Gaiman also has a series on MasterClass that deconstructs his storytelling yet somehow adds more magic to every book. A classic fantasy novel full of magicAmazon"A Wizard of Earthsea" by Ursula K. Le Guin, available at Amazon and Bookshop, from $6.79When Ged was young, he was the reckless Sparrowhawk. Now he's grown into the most powerful sorcerer in Earthsea, but he must face the consequences of the power-hungry actions of his younger self. This book (and the entire six-book series) continues to enchant fantasy readers 50 years after its first publication. Through graceful writing and impeccable character development, Le Guin challenges us to know and embrace our true selves.A high seas pirate adventure storyAmazon"Fable" by Adrienne Young, available at Amazon and Bookshop, from $14.69Fable is a trader, a fighter, and a survivor. Four years ago, she watched her mother drown in a ruthless storm and her father abandon her on an island of thieves. Relying on the skills her mother taught her, Fable enlists West to help her confront her father and demand a place on his crew. When she finally makes it off the island, Fable learns how much more dangerous her father's work has become and finds that the island may have been the safest place for her after all. This is a gritty story with a strong feminist lead and (thankfully) a sequel that was just released.A fantasy series where light and dark magic exist in parallel worldsAmazon"A Darker Shade of Magic" by V.E. Schwab, available at Amazon and Bookshop, from $8.99Kell is a smuggler and one of the last magicians able to travel between parallel Londons: red, white, grey, and (long ago) black. After being robbed and then saved by Delilah Bard, the two set out on an adventure to save themselves and the worlds through which they travel. Schwab is a masterful world-builder and you will absolutely travel right along with this pair. Because of this series, I have become a sucker for a parallel universe trope. The fantasy story of a forced marriage between a witch and a witch hunterAmazon"Serpent & Dove" by Shelby Mahurin, available at Amazon and Bookshop, from $10.59In Belterra, witches are feared and burned at the stake by ruthless witch hunters. For two years, Louise hid her magic to stay alive until one mistake set in motion a story of impossible choices, an enemies-to-lover romance, and a tangled battle between right and wrong. With how compelling the writing is, you'd never guess it is a debut novel. I bought this one just for the gorgeous cover and had no idea how extraordinary it would be.A criminal account of a steampunk band of anti-heroesAmazon"Six of Crows" by Leigh Bardugo, available at Amazon and Bookshop, from $7.99Kaz is a professional criminal, offered an alluring heist that he can't pass up, but he can't pull off alone. This story is completely brilliant, gritty, and a little messy. With six main characters, "Six of Crows" is a fast-paced heist, a story that leaves you constantly surprised as you'll never fully know any one character's intentions due to its third-person point of view.The fantastical tale of a magical unicornAmazon"The Last Unicorn" by Peter S. Beagle, available at Amazon and Bookshop, from $13.99This is a beautiful fairy tale with poems and songs set throughout the pages. In this book, a unicorn who lives alone in a forest protected from death decides to find what happened to the others. Helped by a magician and a spinster, the unicorn sets out on a journey of love and destiny, faced with an evil king who aims to rid the world of the final unicorn. The life lessons woven throughout this book are bittersweet, but also real and honest. A cherished chronicle of magical children and guarded secretsAmazon"The House in the Cerulean Sea" by T.J Klune, available at Amazon and Bookshop, from $15.29This is one of the few books I refer to as "beautiful." Linus Baker is a quiet caseworker for the Department of Magical Youth — and has just been charged with investigating a highly secretive case that requires him to travel to an island where six dangerous magical orphans (including the actual son of Satan) live under the care of Arthur Parnassus. This book is all about family, filled with comforting magic as you come to care for fictional characters. Plus, reading about a child who is trying to be a good kid while also being the literal Anti-Christ is absolutely hysterical and was the highlight of this book for me.A dark, horror-fantasy book about occult magicAmazon"Ninth House" by Leigh Bardugo, available at Amazon and Bookshop, from $16.55Alex Stern is recovering in the hospital after surviving an unsolved homicide when she's mysteriously offered a full ride at Yale University. The only catch: she has to monitor the activities of the school's secret societies that practice dark magic. Alex, a high school dropout from LA, has no idea why she's been chosen but by the time she finds out, she'll be in too deep. This book won the Goodreads Choice Awards "Best Fantasy" category in 2019 and it absolutely lives up to the hype. It's intense, bloody, and powerful as dangerous magic weaves itself into an everyday school setting. A truly fun Greek mythology storyAmazon"The Lightning Thief" by Rick Riordan, available at Amazon and Bookshop, from $5.98Deeply loved, the Percy Jackson books are just as regarded as "The Hunger Games" or "Divergent." Percy has no idea that he is a demigod, son of Poseidon, but he's having trouble in school, unable to focus or control his temper. Percy is sure that his teacher tried to kill him and when his mom finds out, she knows she needs to tell him the truth about where he came from. He goes to a summer camp for demigods and teams up with two friends to reach the Underworld in order to prevent a war between the gods. Percy makes a great hero and it's so easy to root for him as he pushes through his journey, the pages filled with Grade-A characters, action scenes, and monsters. A West-African inspired fantasy world of danger and magicAmazon"Children of Blood and Bone" by Tomi Adeyemi, available at Amazon and Bookshop, from $12.99After a ruthless king left the world without magic and her mother dead, Zélie finds she has only one chance to save her people. On a dangerous journey to restore magic to the land before it is lost forever, Zélie's greatest danger may be herself. Readers agree that the best parts of this book are the characters, who all go on a transformative journey as they fight for peace. This is in TIME's Top 100 Fantasy Books of All Time, which is a huge deal. A captivating vampire fantasy novelAmazon"Crave" by Tracy Wolff, available at Amazon and Bookshop, from $11.51It's easy to draw a comparison between "Crave" and "Twilight," especially since the moment "brooding vampires" is mentioned, everyone's first thought is Edward Cullen. Plus, the cover looks like it's part of Stephanie Meyer's famous saga. But the "Crave" series is more sophisticated and literary while embracing the inherent cringe that now seems to accompany any vampire story. This is an engaging read because it blends nostalgia with something fresh and new. Open this book when you're ready to have fun with reading — the cheesy moody vampire moments are absolutely present amongst turf wars, a gothic academy, and dragons. A dark urban fantasy where people hunt the godsAmazon"Lore" by Alexandra Bracken, available at Amazon and Bookshop, from $14.99Greek mythology meets "The Hunger Games" in this world where every seven years, nine Greek gods are forced to walk the earth as mortals, hunted by those eager to steal divine power and immortality for themselves. Lore wants to leave this brutality behind when her help is sought out by two opposing participants: a childhood friend she thought long dead and a gravely wounded Athena. The world created in this standalone is thorough and complex. But if you love crazy twists and that "just one more chapter" feeling, you should give this a shot.An iconic fantasy book that checks every boxAmazon"The Princess Bride" by William Goldman, available at Amazon and Bookshop, from $10.11"The Princess Bride" is a modern classic that has something for everyone: action, beasts, true love, and a whole lot of fighting. A beautiful girl, Buttercup, and her farm boy, Westley, have fallen madly in love. Westley sets off to claim his fortune so he can marry her before he's ambushed by pirates. Thinking he's dead, Buttercup marries an evil prince as Westley plans to return to her. It's riddled with narration from the author that really adds to the passion and humor of this book.A 200-years-later fantasy sequel to "Cinderella"Amazon"Cinderella is Dead" by Kalynn Bayron, available at Amazon and Bookshop, from $15.63200 years after Cinderella found her prince, girls are required to appear at the annual ball where men select their wives. If a girl is not selected, she is never heard from again. Sophia would much rather marry her love, Erin, so she flees the ball where she runs into Constance, the last known descendant of Cinderella. Together, they decide to bring down the king once and for all. This book gathered attention for its Black and queer lead characters that have no intention of waiting for a night in shining armor to save them. It's a story of bravery, anger, and fighting for love.A fantasy that's all about booksAmazon"Inkheart" by Cornelia Funke, available at Amazon and Bookshop, from $9.29Meggie's father is reading to her from a book called "Inkheart" one night when an evil stranger from her father's past knocks on their door. When Meggie's dad is kidnapped, she has to learn to control the magic to change the story that's taken over her life, creating a world that she's only read about in books. It's a story about magic, for sure, but also about the unwavering bond between Meggie and her father — a truly heartwarming love that you'll feel as a reader.  A darker collection of fairy talesAmazon"The Complete Grimm's Fairy Tales" by Jacob and Wilhelm Grimm, available at Amazon and Bookshop, from $4.95The German brothers who wrote this book aimed to collect stories exactly how they were told. This led to a collection of fairy tales that we all know and love, minus the obligatory "happily ever afters." It has all the classics like "Cinderella" and "Rapunzel" that haven't been softened or brightly colored for younger audiences. This is great for anyone who loves the feeling of discovering all the secrets behind the stories or movies we loved when we were young.A fantasy re-telling of "Romeo and Juliet," set in 1920s ShanghaiAmazon"These Violent Delights" by Chloe Gong, available at Amazon and Bookshop, from $14.99In 1926, a blood feud has left the city starkly divided, Juliette the heir to the Scarlet Gang and Roma the heir to the White Flowers. They were each other's first love, separated by their families and long ago (but not forgotten) betrayal. Now, as a mysterious illness is causing the people to claw their own throats out, Roma and Juliette must put aside their differences to save their city. This one features a river monster, a serious amount of blood and gore, and nods to the original "Romeo and Juliet" throughout. A fantastical tapestry of legends and rivalriesAmazon"The Priory of the Orange Tree" by Samantha Shannon, available at Amazon and Bookshop, from $16.24Told from four points of view, Queen Sabran IX must conceive a daughter, for the legends say that as long as a queen rules, the monster beneath the sea will sleep. But as the assassins close in, the eastern and western kingdoms of Virtudom refuse to unite, even against an ancient and monumental threat that could kill them all. This is 800 pages of high fantasy, charged by dragons, queer representation, and a large cast of characters — but don't worry, you can find a glossary and character list in the back to help you keep it all straight. It's been hailed as "A feminist successor to 'The Lord of the Rings'" and decidedly embraces that praise.A fantasy novel hailed for its romanceAmazon"From Blood and Ash" by Jennifer L. Armentrout, available at Amazon and Bookshop, from $13.67While this absolutely falls into the fantasy genre, it actually won the Goodreads Choice Awards for "Best Romance" in 2020. Poppy is the Maiden, chosen to fulfill a destiny that has never been fully explained to her, living the life of a recluse and awaiting to ascend to prove she is worthy to the gods and can protect her land from the curse. When she can't stand it anymore, she sneaks away from the kingdom and meets Hawke, spurring a desperate secret romance. The beginning of the first book is slow, but the momentum builds quickly. It ends on a huge cliffhanger but the second one has already been released and the third is out on April 20, 2021. A classic Arthurian taleAmazon"The Sword in the Stone" by T. H. White, available on Amazon and Bookshop, from $15.50Before the famous King Arthur, there was a boy named Wart, a wizard named Merlin, and a sword stuck in a stone. In this story, Merlin helps Wart learn valuable coming-of-age lessons as he grows up. It feels both medieval and modern, with an emotional ending as Wart finally faces the sword. If you loved the Disney movie, you should still read this, since they're very different. The witchy prequel to “Practical Magic”Amazon"The Rules of Magic" by Alice Hoffman, available at Amazon and Bookshop, from $10.30Franny, Bridget, and Vincent are growing up in the 1950s, aware that they are different but held under strict parental rules to keep them safe and away from magic. When they visit their Aunt Isabelle in Massachusetts where their family name holds great history, the Owens siblings learn to embrace their magical sides. You don't need to have read "Practical Magic" to love this story of sibling love and finding your identity. The book is simply delightful and the whole thing feels like a cool autumn in Salem. A fantasy series that you'll hold close long after the final bookAmazon"Throne of Glass" series by Sarah J. Maas, available at Amazon and Bookshop, from $6.59This entire eight-book series has insanely high reviews, with a ton of fantasy readers picking up anything Sarah J. Maas writes. It follows Celaena Sardothien, an assassin who is offered a chance to serve as the King's Champion and earn her freedom after serving in a camp for her crimes. Celaena is drawn into a series of battles and a deeply woven conspiracy, discovering secrets about the kingdom and herself. This is an epic, powerful, and brilliant journey that might just become your new favorite series.The first in a new "Shadowhunter" seriesAmazon"Chain of Gold" by Cassandra Clare, available at Amazon and Bookshop, from $12.49Cordelia is a Shadowhunter, a warrior who has trained all her life to battle demons. On a mission to prove her father's innocence, she travels to London where she meets James, a childhood friend. She's whisked into his secret and dazzling life when a series of demon attacks hit London. These new monsters seem impossible to kill as they hide in plain sight and close off the city. The characters are what drives this book and if you've read other "Shadowhunter" novels by Cassandra Clare, you'll love getting to know family members you've heard about before. A portal fantasy that all begins with a girl finding magic in a bookAmazon"The Ten Thousand Doors of January" by Alix E Harrow, available at Amazon and Bookshop, from $14.99While serving as the ward to a wealthy man, January finds a strange book that tells a story of secret doors, adventure, and danger. As she reads, January is taken on an imaginative journey of discovery as a book she thought was fiction elaborately bends her reality. It's a portal story of love and enchanting adventure, a book about a book that will mercilessly break your heart but gracefully put it back together. A wintery fairytale story, loosely based on “Rumpelstiltskin”Amazon"Spinning Silver" by Naomi Novik, available at Amazon and Bookshop, from $10.99Miryem quickly earns a reputation for being able to spin silver to gold after setting out to save her family from poverty, capturing the attention of the Ice King. This is a woven story of three women, three mothers, and three marriages. Naomi Novik does an incredible job of helping you follow each story, creating some amazingly strong female protagonists. This is not your typical fairytale, but it's still full of whimsical writing, familial bonds, and tons of charm.  A deep-sea fantasy journey with seven kinds of magicAmazon"All The Stars and Teeth" by Adalyn Grace, available at Amazon and Bookshop, from $9.89In a kingdom where you can choose your magic, Amora knows that to be queen, she must master the dangerous but fickle soul magic. When her demonstration fails, Amora flees and strikes a deal with a pirate: she will help him reclaim his magic if he can help her prove that she's fit to rule. "All the Stars and Teeth" is an epic adventure-driven fantasy featuring mermaids, sea monsters, and a kingdom in danger. A fantasy book that will pull you in from the first lineAmazon"A Curse So Dark and Lonely" by Brigid Kemmerer, available at Amazon and Bookshop, from $9.89Set in the parallel land of Emberfall, a cursed Prince Rhen has become a destructive, murderous monster. Harper, a regular girl with cerebral palsy, was mistakenly kidnapped and is now the prince's only hope. Yes, this is the second "Beauty and the Beast" retelling in this roundup but they are both so different and so loved. Readers come for the complexity of Rhen and Harper and stay for the snarky, hysterical bickering between the two.A fantasy story of a darkly magical school where you graduate or dieAmazon"A Deadly Education" by Naomi Novik, available at Amazon and Bookshop, from $17.41At Scholomance, magically gifted students must survive to graduate — and failure means death. There are no teachers, no breaks, and only two rules: don't walk the halls alone, and beware of the monsters that lurk everywhere. El has no allies, just incredibly strong dark magic that could save her — but might kill all the other students. El's evolution and hilarity during this story plus Novik's thoughtful world-building and extremely diverse cast of characters are what make this a favorite. A fae-centered high fantasyAmazon"The Cruel Prince" by Holly Black, available at Amazon and Bookshop, from $10.9910 years ago, Jude and her sisters were kidnapped after their parents' murder and taken to the land of Faerie, where they are mortal humans amongst fantastical but cruel creatures. In order to belong, Jude must win a place in the high court which will require her to defy the youngest prince. Holly Black (crowned the supreme Faerie-world writer) creates a world so real, you'll forget its magic. A new fantasy duology of a world of enchanted injusticeAmazon"Spellbreaker" by Charlie N. Holmberg, available at Amazon and Bookshop, $8.49There are two kinds of wizards in the world: those who pay for the power to cast spells and those born with the ability to break them. Elise was born a spellbreaker but her gift is a crime. While on a mission to break the enchantments of aristocrats, Elise is discovered and must strike a bargain with an elite wizard to protect herself. It's a fun fantasy mystery with plenty of twists and danger that are sure to keep you intrigued.Read the original article on Business Insider.....»»

Category: topSource: businessinsiderMay 23rd, 2022

The 22 best book quotes - and the books they come from

We rounded up some of the most famous and inspirational book quotes - as well as the classic and contemporary books they're from. We rounded up some of the most famous and inspirational book quotes - as well as the classic and contemporary novels they're from. Amazon; Bookshop; Alyssa Powell/Insider When you buy through our links, Insider may earn an affiliate commission. Learn more. Some of the best quotes about life and love come from literature. We've gathered some of the best book quotes as well as the books they're from. Want more books? Check out our list of the best classic books. Great literature has gifted us some of the most meaningful and timeless quotes about life, love, and everything in between. Writers can put words to the feelings and experiences we can't quite capture ourselves and leave us with quotes that resonate long after we've turned the page. Readers have found moving quotes in everything from gothic classics to contemporary young adult reads. Sometimes, we're inspired by a quote that we didn't even know came from a book. I've heard "Not all those who wander are lost" countless times but never knew it was from a beloved fantasy series. To create this list, I looked at some of the most memorable and moving quotes from literature throughout time. For readers looking for a new inspirational read or wondering where some of the greatest lines originated from, here are some of the best literary quotes and the books they came from.The 22 best book quotes of all time: "Love is or it ain't. Thin love ain't love at all." Amazon "Beloved" by Toni Morrison, available at Amazon and Bookshop, from $9.29"Beloved" is a Pultizer Prize-winning historical fiction about Sethe, an escaped slave still running from her past 18 years later. Haunted both metaphorically by her memories and literally by the ghost of her baby, Sethe's past and present collide when a mysterious teenage girl arrives with the same name engraved upon her child's tombstone. "I am not afraid of storms, for I am learning how to sail my ship." Amazon "Little Women" by Louisa May Alcott, available at Amazon and Bookshop, from $5.47This adored classic is about four sisters — Jo, Beth, Meg, and Amy — who are struggling to survive in New England during the Civil War. First published in 1869, this novel has delighted readers for generations as they follow the sisters on each of their unique journeys to womanhood.  "Everything was beautiful, and nothing hurt." Amazon "Slaughterhouse-Five" by Kurt Vonnegut, available at Amazon and Bookshop, from $14.99First published in 1969, "Slaughterhouse-Five" is an anti-war novel about Billy Pilgrim, who becomes a chaplain's assistant in the US. Army during World War II. While the story begins with Billy's childhood and continues years after the war, Billy occasionally travels through time to reflect upon his life, humanity, and the devastating effects of war. "It's the possibility of having a dream come true that makes life interesting." Amazon "The Alchemist" by Paulo Coelho, available at Amazon and Bookshop, from $8.89"The Alchemist" is a powerful and inspirational story full of wisdom about a boy named Santiago who travels to Egypt from Spain in search of a treasure buried near the Pyramids. On his adventure, Santiago encounters numerous obstacles, meets interesting new people, and discovers so much more than the treasure he once sought. "There is always something left to love." Amazon "One Hundred Years of Solitude" by Gabriel García Márquez, available at Amazon and Bookshop, $14.49This beautiful multi-generational story of the Buendía family begins with José Arcadio Buendía, the founding patriarch of the town of Macondo. Following seven generations of the family through feuds, friendships, and technological advancements, this novel uses magical realism to explore extraordinary moments through time. "What's the point of having a voice if you're gonna be silent in those moments you shouldn't be?" Amazon "The Hate U Give" by Angie Thomas, available at Amazon and Bookshop, from $12.98"The Hate U Give" is a moving and timely young adult read about Starr Carter, a 16-year-old who witnesses her best friend, Khalil, get shot and killed by the police. When his death makes national headlines, everyone wants to hear what really happened, but Starr is fully aware of what telling the truth could mean as well as the consequences of staying silent. "They say nothing lasts forever but they're just scared it will last longer than they can love it." Amazon "On Earth We're Briefly Gorgeous " by Ocean Vuong, available at Amazon and Bookshop, from $9.67This stunning and poetic novel is a letter from a son to his mother, who cannot read. Little Dog is in his 20s, exploring and speaking frankly about sexuality, masculinity, grief, and race as he unravels his family's history rooted in Vietnam, leading to an unforgettable conclusion in this powerful novel about humanity and language.  "Anything worth dying for is certainly worth living for." Amazon "Catch-22" by Joseph Heller, available at Amazon and Bookshop, from $12.22Loved as a funny and realistic view on war, "Catch-22" is about Yossarian, a bombardier during World War II who is mad that thousands of enemies are trying to kill him while his army continues to increase the number of dangerous missions he's required to fly. Yossarian finds himself in a Catch-22, a bureaucratic rule that says men who continue to fly dangerous missions should be considered insane, yet if they make a request to be removed, they are proven sane and ineligible for relief. "I took a deep breath and listened to the old brag of my heart: I am, I am, I am." Amazon "The Bell Jar" by Sylvia Plath, available at Amazon and Bookshop, from $15"The Bell Jar" is a semi-autobiographical novel and a haunting classic from Sylvia Plath. The book follows Esther Greenwood, a young woman in Boston who is consumed by depression and anxiety as her mental state worsens over time. "Time moves slowly, but passes quickly." Amazon "The Color Purple" by Alice Walker, available at Amazon and Bookshop, from $12.99Winner of the Pulitzer Prize and the National Book Award, "The Color Purple" is a magnificent and important novel about the abuse silently suffered by Black women in the 20th century. Celie and Nettie are sisters who were separated as children but continue to communicate and share messages of hope through letters that sustain them through seemingly insurmountable pain in this story of strength and redemption. "Now that I knew fear, I also knew it was not permanent. As powerful as it was, its grip on me would loosen. It would pass." Amazon "The Round House" by Louise Erdrich, available at Amazon and Bookshop, from $10.25This 2012 National Book Award winner follows a young boy on the Ojibwe reservation in North Dakota whose community and family is changed forever in the wake of a terrible crime. Richly layered, this profound mystery is about so much more than finding a criminal and seeking justice. "When I discover who I am, I'll be free." Amazon "Invisible Man" by Ralph Ellison, available at Amazon and Bookshop, from $13.99"Invisible Man" is a 1952 classic that shaped American literature as an unnamed man from the South who gets a scholarship to an all-Black school in Harlem but must participate in a horrifying and humiliating "battle royal" in order to claim his spot. Powerful and raw, this novel explores identity and belonging as the narrator continues to search for his individuality in a society that doesn't want him to be himself.  "Beware; for I am fearless, and therefore powerful." Amazon "Frankenstein" by Mary Shelley, available at Amazon and Bookshop, from $5.52First published in 1818, "Frankenstein" is a horror classic about a scientist named Victor Frankenstein who brings a monster to life and flees his laboratory in disgust, to return the next day and find that the creature is missing. In this novel that explores the dark power of alienation, Frankenstein's monster tells the devastating story to his creator of his first challenging days in the world. "It is only with the heart that one can see rightly; what is essential is invisible to the eye." Amazon "The Little Prince" by Antoine de Saint-Exupéry, available at Amazon and Bookshop, from $8.99In this classic French children's book, a young prince meets a pilot whose plane has crashed in the desert, who begins to tell him his story of traveling across various planets and all he had seen and learned along the way. One of the most translated books in the world, "The Little Prince" is for readers of all ages who wish to reminisce upon the nostalgic innocence of childhood. "Too much sanity may be madness - and maddest of all: to see life as it is, and not as it should be!" Amazon "Don Quixote" by Miguel de Cervantes Saavedra, available at Amazon and Bookshop, from $7.99"Don Quixote" is a historical novel from the 1600s and one of the top-selling books of all time. Quixano is a young nobleman who decides to become a knight-errant after reading countless romances and falling in love with the idea of chivalry. Under the name "Don Quixote de la Mancha," Quixano brings the witty Sancho Panza along as his squire on his quest for knighthood. "Whatever our souls are made of, his and mine are the same." Amazon "Wuthering Heights" by Emily Brontë, available at Amazon and Bookshop, from $7.36"Wuthering Heights" is a classic, gothic novel from 1847 about two families — the Lintons and the Earnshaws — and their relationships with the Earnshaws' adopted son, Heathcliff. Full of complex characters, this classic follows Heathcliff's young friendship with his benefactor's daughter, Cathy, as it grows and morphs into a passionate and twisted romance. "There is no greater agony than bearing an untold story inside you." Amazon "I Know Why the Caged Bird Sings" by Maya Angelou, available at Amazon and Bookshop, from $7.35"I Know Why the Caged Bird Sings" is Maya Angelou's first book in her multi-volume autobiography series. This installment offers a glimpse at Maya Angelou's early years as she struggles against racism when she and her brother are sent to live with their grandmother in a small Southern town. When she returns to live with her mother, a horrible attack changes Maya Angelou's life forever in this memoir about identity, race, and hope in the face of impossible circumstances.  "Nolite te bastardes carborundorum." Amazon "The Handmaid's Tale" by Margaret Atwood, available at Amazon and Bookshop, from $7.99Offred can remember enjoying life with her husband and daughter not long ago. Now, trapped in a dystopian present where women are only valued if they have viable ovaries, Offred is the Commander's handmaid, forced to lie down for him once a month and pray she gets pregnant in this devastatingly memorable read. "As he read, I fell in love the way you fall asleep: slowly, and then all at once." Amazon "The Fault in Our Stars" by John Green, available at Amazon and Bookshop, from $6.10Hazel's terminal cancer diagnosis has been extended by a few years when she meets a gorgeous boy named Augustus in her support group. Immediately drawn to one another, they agree to read each other's favorite books, launching a whirlwind teenage romance that's full of love and heartbreak. "That's the thing about books. They let you travel without moving your feet." Amazon "The Namesake" by Jhumpa Lahiri, available at Amazon and Bookshop, from $10.98"The Namesake" is Jhumpa Lahiri's first novel and explores the immigrant experience through the Ganguli family, whose story begins as Ashoke and Ashima uproot their traditional life in Calcutta and move to America shortly after their arranged marriage so Ashoke can attend school at MIT. When Ashima names their child Gogol, the meaning of his name continues to follow him through his life as he navigates the expectations of a first-generation immigrant.   "We accept the love we think we deserve." Amazon "Perks of Being A Wallflower" by Stephen Chbosky, available at Amazon and Bookshop, from $7.19In this unique coming-of-age novel set in the 1990s, Charlie is a freshman in high school who is torn between passivity and a budding passion for life while also being stuck between childhood and adulthood. This book is a compilation of his letters to an unknown recipient, discussing the challenges he faces with his family, in school, and in his personal life. "Not all those who wander are lost." Amazon "The Fellowship of the Ring" by J.R.R. Tolkein, available at Amazon and Bookshop, from $8.27"The Fellowship of the Ring" is the first novel in the classic fantasy "Lord of the Rings" series. In this book, the hobbit Bilbo Baggins entrusts young Frodo Baggins with an incredible and dangerous task: To take the powerful Ring to the Cracks of Doom and destroy it once and for all. Frodo sets off on an epic adventure across Middle-Earth in this beloved and revered novel. Read the original article on Business Insider.....»»

Category: topSource: businessinsiderNov 4th, 2021 Ltd. (NASDAQ:TBLA) Q4 2023 Earnings Call Transcript Ltd. (NASDAQ:TBLA) Q4 2023 Earnings Call Transcript February 28, 2024 Ltd. beats earnings expectations. Reported EPS is $0.09, expectations were $0.02. Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing […] Ltd. (NASDAQ:TBLA) Q4 2023 Earnings Call Transcript February 28, 2024 Ltd. beats earnings expectations. Reported EPS is $0.09, expectations were $0.02. Ltd. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and thank you for standing by. Welcome to the Taboola Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to turn the conference over to your speaker for today, Jessica Kourakos. Please begin. Jessica Kourakos: Thank you, and good morning everyone, and welcome to Taboola’s fourth quarter and fiscal 2023 earnings conference call. I’m here with Adam Singolda, Taboola’s Founder and CEO, and Steve Walker, Taboola’s CFO. The company issued earnings materials today before the market and they are available in the Investors section of Taboola’s website. Now, I’ll quickly cover the Safe Harbor, certain statements today, including our expectations for future periods, are forward-looking statements. They are not facts and are subject to material risks and uncertainties described in our SEC filings. These statements are based on currently available information and we undertake no duty to update them except as required by law. Today’s discussion is also subject to the forward-looking statement limitations in the earnings press release, future events could differ materially and adversely from those anticipated. During this call, we will use terms defined in the earnings release and refer to non-GAAP financial measures. For definitions and reconciliations to GAAP, please refer to the non-GAAP tables in the earnings release posted on our website. With that, I’ll turn the call over to Adam. Adam Singolda: Thanks, Jessica. Good morning, everyone, and thank you all for joining us. And before we talk about the business, I want to start with a word about our people. I’ve always said that a company’s true innovation is its culture and people. And I’m so proud of the tremendous resilience displayed by our nearly 2,000 Taboolars during the war in Israel. Their resilience is what’s driving our progress in reaching new users, delivering engaging experiences in the open web, improving our effectiveness at monetization and driving yield. We have real momentum coming into this year, and it shows in our Q4 results and strong 2024 financial guidance. Turning first to our quarterly results, we had a strong end to 2023; Q4 ex-TAC of $168.5 million, growing 6% versus 2023 Q4. Q4 adjusted EBITDA of $50.1 million, a significant beat to the high end of our guidance by $18 million, representing over 30% adjusted EBITDA margin. Free cash flow in Q4 was $10.5 million, bringing our 2023 free cash flow to $52.2 million, representing 3x growth over 2022, as well as 50% conversion to EBITDA, which is our desired stated goal. 2024 is set to be a record year for Taboola across all key measures, revenue, ex-TAC gross profit, adjusted EBITDA, and free cash flow. On the revenue front, we’re back to fast growth. Revenue is growing 33% to nearly $2 billion this year. Ex-TAC is growing 25% to $670 million. We are reiterating our adjusted EBITDA guidance of over $200 million, which is 2x 2023. And we are reiterating our free cash flow guidance of over $100 million, also nearly 2x of 2023. On the business front, there is a lot of good momentum. 2024 is benefiting from fast adoption of our AI offerings, and we assume yield expansion this year after two years of softness. Yahoo is ramping up, already crossing the $100 million mark in Q1, with the great trust and collaboration between our teams. Now, and since we’ve signed the partnership with Yahoo, many investors have asked us what is next, what will be the next Yahoo-style partnership? And I’m very, very happy to share than another iconic consumer brand has just chosen Taboola as its partner of choice to help them grow their advertising business. I hope to share more about this very soon. On the back of our business momentum, strong balance sheet, and commitment to shareholder returns, we’re announcing a new share buyback authorization of $100 million, which represents approximately 6% of our current market cap. 2023 was going to be an investment year for growth. We’re investing more than $100 million a year in R&D and AI to bring users and advertisers the same amazing experience they have when they interact with search and social platforms. Every day, we’re getting closer to the size of X, Pinterest, Snap, and others in revenue and ad spend. And we’re paving our way to becoming the very first must-buy platform for the open web. As I reflect on our journey, 10 years ago, we generated just over $200 million in revenue. I remember it like it was yesterday. And this year, 10 years later, we’re approaching $2 billion. Now, looking ahead, I see two key themes that will allow us to achieve our financial transformation in 2024. The first one is reaching and engaging users in the open web. With the addition of Yahoo, and now another iconic consumer brand, there’s a lot of momentum here. The second one is how well we can monetize our time with consumers, specifically growth in performance advertising and AI to drive yield. Now, let’s expand into both of these areas. Starting with how we reach users on the open web. We’re seeing great momentum of publishers choosing Taboola on the back of our technology investments. We’re so much more than just to publishers as we empower the entire publish organization, the editorial team, subscription team, audience team, monetization team, and more. Publisher win rates continue to improve with terrific new publisher partners joining Taboola family from all around the globe, including A360 Media, Postmedia, Times Internet, Nine Entertainment, and more. We renewed and expanded our scope with existing publishers, including NBC News, McClatchy, Editora Globo, Prisa, Ynet, and more. In the industry, we’re seeing a shift of great consumer companies getting into advertising in a bigger way. This includes Disney, Amazon, Netflix, DoorDash, Uber, Walmart, and more, where to some, advertising is already one of the most profitable lines of business they have. I expect that Fortune 500 CEOs will increasingly be asked to present their advertising strategy. And that the advertising industry will get to become a $1 trillion market in years to come. This is just the beginning. Now, while I believe many of these companies would try to sell directly to big brands, many would consider partnering with a technology company like Taboola to reach tens of thousands or hundreds of thousands of mid-funnel performance advertisers. We have an opportunity to become the advertising engine of choice to the open web. We call it advertising in a box. Signing strategic partnerships with publishers and big consumer platforms give Taboola another way to reach users, and access new premium advertisers. And we’ve seen it already with Yahoo, as incredible brands are starting to spend. And these are the best of the best out there, names like Samsung, and Verizon, Hulu, Hilton Hotels, Southwest Airlines, Citibank, and many others. On the Yahoo front, I can tell you we just had an executive offside for the Yahoo leadership, and we’re focused on executing our plans this year, and into 2025. our biggest priority is demand migration of Yahoo omnichannel advertisers. I’m happy to tell you we’re seeing good results. And we recently shared the case study of large advertisers seeing 3x in leads volume at 24% lower cost. To share some of Yahoo’s good progress, we expect Q1 revenue to cross the $100 million in revenue, which is fast ramping. Beyond working with publishers, we also reach users as part of Taboola News as we bring our publishers’ content to Android devices. Taboola News had a spectacular year in 2023, with revenue growing to over $100 million. It is still in early stages, with a lot of work ahead of us, yet we expect another strong year for Taboola News in 2024. This is because device manufacturers all around the world continue to seek differentiated offerings that delight users with personalized experiences. Beyond publishers and Taboola News, we’re also reaching users with our Header Bidder. We’re continuing to take advantage of our direct demand, unique data, and AI to bid on inventory that is not exclusively ours. Microsoft continues to be our largest Bidder partner, and we expect to expand our scope across a network of publishers in 2024. Microsoft made some changes to its Epic platform in Q4 that impacted all Epic partners they work with, including us. This had a single-digit millions of dollars impact in Q4, and a small impact to 2024, which is already included in our guidance. Now, switching to the second driver of revenue growth, how we monetize time with consumers, essentially how we grow yield. Yield represents the revenue we can generate per user. For comparison, we estimate Meta makes $200 of revenue per user a year in the U.S. Snap makes $33, and we make about $3.00 to $4.00 per user a year. While I think Taboola is among the best in the open web when it comes to monetizing user attention, you can imagine how much runway we have to improve, and how much better the open web can do. When we win, the open web wins. Now, the open web is about an $80 billion market because it uses low yield monetization capabilities invented 30 years ago, such as display banners, text ads, interstitials, and more. And on top of that, only in the open web advertisers are asked to bid using CPC or CPM, which companies like Google or Meta don’t do. Now there are three ways Taboola will grow yield. The first one is data. This is where code on page being bigger and getting a large volume of clicks from the network, makes us better at driving conversions to advertisers faster. The second one is AI. Deep learning is really hard to do. We’ve been at it for years. And, this is a key element as it relates to matchmaking between users to information. And, the third one is advertisers. We’ve 15,000 to 20,000 advertisers as of now while Google and Meta have 10 million advertisers each. Bringing more advertisers means better diversity and personalization to offer users the ad they may like. We’re seeing great momentum from Maximize Conversions, our advanced AI biding technology. Advertisers are seeing up to 50% boost in conversions while maintaining their cost per acquisition or CPA. As well as, some advertisers are seeing reduced CPA by nearly 20%. Let’s give an example. If you sold 10 flower bouquets with Taboola and it’s cost you $30 to get a single costumer, you can now sell the same 10 bouquets at the cost of $24 per customer. Or, sell up to 15 bouquets at the same $30 cost to acquire that customer. Now that’s selling a lot more flowers and saving more which is great. Now as more advertisers adopt our AI and Max Conversions, we expect improved retention, essentially lower churn, as well as increase in net dollar retention, NDRs, which means advertisers are able to spend more with us over time. In Q4, we launched Generative AI ad maker helping advertisers kick off a campaign faster. For self-serviced advertisers, one is four new creative are being generated using our new Generative AI. In 2024, we are focused on enhancing our data integration with Yahoo, continuing adoption, and improvement to maximize conversions as well as launching a new maximized optimization product called Maximize Revenue. Maximize Revenue is the way for advertisers that have direct value associated with conversions like in ecommerce space to optimize their desired return on investment. I am happy to say that with this momentum where already 50% of our revenue is driven by advertisers who adopted Max Conversion and are at steady roadmap were back to yield growth this year. Another segment of advertisers that is helping us drive yield growth and seen momentum is ecommerce. In 2023, we’ve benefited from the combined fire power of Connexity, Skimlinks, and Taboola. We launched Turnkey Commerce, which is where we partner with publishers to establish or expand their commerce business. This is in high demand, we essentially created commerce content, drive traffic to it, and monetize it. All powered by Taboola. I am very, very happy to say that at the end of 2023, we signed an agreement with the Associate Press, one of the largest and most trusted news publishers in the world, to power its new ecommerce destination using Taboola Turnkey Commerce. Ecommerce represents approximately 20% of ex-TAC. It’s premium revenue. And we continue to see it as an important growth driver for Taboola in years to come. Now as I am wrapping up my part, I would be remise in not acknowledging that our industry is facing tectonic changes this year like cookie deprecation, gen AI, and the need for performance advertising in times of recession and market softness. And, we are so ready. We have more code on page than anyone. We understand intent with users clicking on Taboola tens of billions of times a year. And if history is a proxy for the future, we did well when Apple deprecated cookies. In summary, we are coming in strong into 2024 with stunning partnership, fresh revenue growth, and a strong EBITDA and free cash flow profile. We’re now seeing a new $100 million buyback authorization. And after two years of yield been soft, we are back to growth as our clients adopt AI faster than any product developed since I started Taboola. With that, let me the pass the call over to Steve to review our financials and outlook in more detail. Stephen Walker: Thanks, Adam, and good morning, everyone. As Adam mentioned, we had a strong end to 2023. Our Q4 revenues were approximately $420 million and grew 13% year over year, accelerating from Q3 levels. Ex-TAC’s gross profit was $169 million, which represented growth of 6% year over year. Ex-TAC growth was driven by double-digit growth in advertising spend and included a small contribution from Yahoo in the quarter. These positive factors were partially offset by margin compression due to the ad rate declines in 2022, which have since stabilized in 2023. Net income was $3.7 million, and non-GAAP net income was $31.4 million. Adjusted EBITDA was $50.1 million, representing a 30% adjusted EBITDA margin. Year-over-year, adjusted EBITDA was down, which was due primarily to higher expenses related to the onboarding of Yahoo’s supply that were not in the year-ago period. Operating expenses excluding Yahoo would have been relatively flat year-over-year, reflecting strong cost discipline in 2023, which we plan to continue into 2024. For the full-year of 2023, we finished with over $1.4 billion in revenue, $536 million in ex-Tac gross profit, and $99 million in adjusted EBITDA. We had a net loss of $82 million and non-GAAP net income of $33 million. We also generated $52 million of free cash flow in 2023, which was up 181% versus 2022. Free cash flow benefited from the stronger than forecasted adjust EBITDA, which reflects the cost controls mentioned previously, partially offset by the expenses related to the onboarding of Yahoo inventory in the period. Free cash flow in Q4 would have been even stronger if not for the timing of some payables and capital expenditures that we mentioned were delayed last quarter. As Adam said, our strong revenue and Ex-Tac gross profit performance was driven by strength in our e-commerce, bidding, and Taboola News businesses, as well as the initial contributions from Yahoo and relatively stable yields in our core business. E-commerce had double-digit growth in 2023, driven by strong growth in advertising budgets from some of our largest retail advertisers, as well as strong momentum in Europe. In addition, we are seeing great success ramping Taboola’s feeds and now Yahoo as supply sources for our retail advertisers. In fact, Taboola’s feed supply has become a top ten traffic source globally for these advertisers. As we have stated previously, Taboola News grew very quickly and exceeded $100 million in revenues in 2023. In total, e-commerce, Taboola News, and Header Bidding now represent approximately 30% of our ex-Tac gross profit. This is exciting because each represents very valuable forms of supply that are valued by high-quality advertisers. Our teams have achieved accelerating revenue and ex-Tac performance while improving cost efficiency, indicated by our strong adjusted EBITDA margin exiting 2023. Operating expenses were $489 million in 2023, up $11 million year-over-year as a result of the cost incurred to onboard the significant inventory we are gaining with the addition of Yahoo. Excluding Yahoo, as I mentioned earlier, operating expenses were essentially flat with the prior year. Our headcount is down approximately 2.5% from its peak in July of 2022. With our ongoing expense discipline and our strong growth expectations, we expect that in 2024 we will approach our long-term adjusted EBITDA margin target of 30%. GAAP net loss for 2023 of $82 million included amortization of intangibles of $63.9 million, share-based compensation expenses of $53.7 million, and holdback compensation expenses related to the — connects the acquisition of $10.6 million, all of which were excluded from non-GAAP net income. Our non-GAAP net income of $32.6 million was above the high end of our guidance range. In terms of cash generation, we had approximately $84.4 million in operating cash flow in 2023 and free cash flow of $52.2 million. This includes net publisher prepayments, which were a source of cash of $19.7 million, and interest payments on our long-term debt, which were a use of cash of $18.5 million. As I have highlighted in previous quarters, I would note that net publisher prepayments were a source of cash for the full-year due to the fact that new prepayments were lower than the amortization of historical prepayments. Let’s turn to the balance sheet. You can see that our net cash balance remains healthy. Our net cash position of $36.2 million remained positive at the end of Q4, even after share repurchases. Cash and cash equivalents, plus our short-term investments decreased from $250.7 million at the end of Q3 to $181.8 million at the end of Q4. This reflected a $50 million prepayment of our debt and $32 million used for share buyback activity in Q4. Cash and cash equivalents and short-term investments remained above our debt principal balance of $142.2 million. Speaking of our share repurchases, I would also like to provide an update on our share buyback and debt repayment programs. The share buyback program was initiated on June 1, and as of December 30, we had repurchased over 15 million shares at an average price of $3.62 for total repurchases of $55.1 million. The average repurchase price of $3.62 represented a return of approximately 30% based on our closing price on Monday. Today, we are also announcing a new share buyback authorization of $100 million that replaces our former buyback plan, which was largely exhausted. We are fortunate enough to be able to fund our organic growth investments from our operating cash flow. Given that, we believe that at current valuations the best use of our free cash flow is to buy back shares. To the extent that we have additional cash to deploy, we intend to pay down our long-term debt. We did this in October of 2023, in fact when we voluntarily prepaid another $50 million of our long-term debt, bringing the total debt that we have voluntarily prepaid to $141 million. As always, both the share repurchase program and the debt pay-down are contingent upon the availability of sufficient working capital. As an Israeli company, we are also required to obtain Israeli court approval for share repurchases. Also of note, we will be filing a general purpose shelf in the coming days. We consider it good corporate hygiene for a company at our stage to have a general purpose shelf on file. Given we believe our stock is a great value at current levels and have announced a new buyback authorization today, we obviously do not intend to issue new shares at this time. I just wanted to make sure that was clear. Now let me shift to our forward-looking guidance. As Adam mentioned earlier, in the last 12 months, we invested in technology that advanced our e-commerce and Taboola News offerings, successfully launched maximized conversions and onboarded all of Yahoo’s global native supply onto the Taboola network. 2023 was a year in which we invested heavily in these initiatives, sometimes in advance of revenue. As we look ahead, we see the following tailwinds driving outsized growth in our business through 2025. First, we expect the Yahoo Advertiser migration to be materially complete by Q3 2024 and to continue ramping into 2025. Second, we expect yield growth to turn positive in 2024. Third, we expect a phased onboarding of the supply from our new iconic consumer brand partner in 2024 and 2025. And lastly, we expect further yield gains over time as the volume of our contextual data increases with the addition of Yahoo and other supply to our network, which will further enhance yield. As a result, we are initiating guidance for 2024 that includes strong top line growth and improving profitability. We expect revenue of $1.89 billion to $1.94 billion, which represents growth of 33% at the midpoint. We expect gross profit of $535 million to $555 million and ex-TAC gross profit of $656 million to $679 million. That ex-TAC is up roughly 25% year-over-year at the midpoint. We are reiterating our 2024 adjusted EBITDA guidance of over $200 million and free cash flow expectation of over $100 million. I will note that the adjusted EBITDA guidance represents a doubling of that metric versus 2023. Finally, we are expecting non-GAAP net income of $84 million to $104 million in 2024. We continue to be very by the addition of Yahoo to our business. Adam mentioned earlier we feel good about the progress with Yahoo, and we expect revenue on Yahoo to exceed $100 million in Q1. For competitive purposes and due to the fact that Yahoo’s supply has been fully integrated into our broader publisher network, we will treat disclosures around Yahoo similarly to how we treat other major publishers on our network on a going-forward basis. Finally, we are introducing Q1 2024 guidance. This quarter, we expect revenues of $387 million to $413 million, gross profit of $94 million to $106 million, ex-TAC gross profit of $123 million to $135 million, adjusted EBITDA of $10 million to $17 million, and non-GAAP net income of negative $15 million to negative $3 million. Let me finish by saying that we are happy with our fourth quarter performance, and excited about the step change growth that we are expecting in our business in 2024. The growth investments we have made in 2023, the additional scale that Yahoo is bringing, and the additional supply we will be onboarding as part of a new partnership with an iconic consumer brand is accelerating our journey towards becoming a must-buy for advertisers looking to reach consumers in the open web. With that, let me pass it back to Adam for some closing remarks. Adam Singolda: Thanks, Steve. I’ve never been more bullish about Taboola, and I’m so proud of our Taboolars’ dedication, passion, making us the high-performing company through the most difficult of times. We’re coming in strong into 2024, making it a record year for us. Revenue is growing 33% to $2 billion, ex-TAC is growing 25% to nearly $670 million, EBITDA is doubling to over $200 million, free cash flow is nearly doubling to over $100 million. And on the back of these numbers, we’re now seeing an authorization of $100 million of buyback, essentially looking to buy 6% of our company. As I mentioned, our industry is changing. And with companies like Netflix and Disney, Uber, DoorDash, Amazon, and more expending through advertising initiatives, I suspect we’re in the beginning of an exciting ad mania. Taboola has a chance of becoming the partner of choice to many of them. And as I said at the beginning of our call, in addition to Yahoo, I’m incredibly excited to have just signed another iconic consumer brand that validates Taboola’s advertising-in-a-box value proposition. Our vision is to become the recommendation engine for the open web, and build the very first multibillion dollar gateway for advertisers to reach publishers, OEMs, and apps outside of walled gardens. Today is a good day for us. I’m excited to get 2024 going. To everyone, thank you for being part of our journey. And with that, let’s open it up to questions. Operator? See also 16 Longest Lasting Jeans Brands of 2024 and 18 Most Tax-Friendly States to Retire in 2024. Q&A Session Follow Ltd. Follow Ltd. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question today will be coming from Andrew Boone of JMP Securities. Your line is open. Andrew Boone: Great, thanks so much for taking my questions. Adam, as we think about yield improvements in 2024 and the inflection that you guys are expecting, can you just help us understand what the key drivers, as well as what are products that are your key priorities in terms of improving yield over the next year? And then I want to step back and talk about a big-picture question for Yahoo and Taboola. If I go back and I think about 2022 pro forma revenue of kind of that $2.5 billion of gross revenue, is that still on the table? Is that still the roadmap as we think about maybe 2025 or what are the puts and takes as we think about that benchmark? Thanks so much, guys. Adam Singolda: Sure, thanks for the question. Good morning, everyone. So, on the Yahoo front, there’s a lot going on. And as you know, it’s number one investment as a company because we think this drive the most amount of value to our clients, our partners, and to Taboola itself in a competitive way as we’re adopting and going off to a new business. So, let me just drive in, into that. 2024, we’re starting strong. We’ve lapsed conversion already crossing the 60% adoption. As a quick reminder, Max Conversions is kind of our AI that allows clients and advertisers to work with us in a similar way to how they work with Google and Facebook, where they don’t have to tell us what is the CPC they want to bid or what is the CPM they’re looking to buy; they just give us their budgets. At times they give us their targets for what is worth — what is the client worth, we do the rest. It’s the fastest adopted product since I started Taboola, and it’s really fantastic. We’re seeing great case studies, not only from Taboola’s advertisers, now also with Yahoo advertisers migrating to Taboola’s technology. And we’re publishing those case studies because we’re seeing advertisers that essentially either are able to spend more or new advertisers that are churning less. And this is a really good metrics for us to follow. Again, we know as flower examples on my letter. But essentially just from a numbers perspective, we’re essentially seeing up to 50% boost in the amount of conversions at the same price. And in other times, we’re seeing the same amount of conversions, but the price is being reduced by 20%. These are serious numbers. And also, just from the client’s perspective, the experience they have working with us, it’s so much simpler and more easy to do than they have to do with — in the Epic industry, which I always argue one of the Achilles heels of the Epic industry is that we’re still working with advertisers the way we used to work 30 years ago, whereby everyone around us, mainly platforms and walled gardens have evolved to using AI. So, I want, by the end of this year, really the vast majority of Taboola’s business, as you know, approaching $2 billion, to be using AI, and CPC and CPM to be kind of a story from the past. That what’s coming next for us, and going to launch in H2, Max Revenue, this is on top of Max Conversion, it’s another sophisticated AI-based strategy allowing clients that know what is the price associated with a purchase to give us that margin and revenue growth they have, and we optimize for that. This is going to launch in the second-half of the year, which will be additive to Max Conversion. Gen AI is continuing to get great adoption by self-service. As you know, I love self-service. This is an opportunity to get kind of introduced to great new clients. There — a lot of times they come small, but they potentially become big, and one in every four creative titles and thumbnails you just saw with OpenAI, they’re now already the industry is talking about video creation, so who knows where that goes. But one in four creative is using gen AI, so that’s been great. E-commerce is another source of — a bolster in our yield in 2024. You may have seen that I mention in the letter that Associated Press just chose Taboola to launch its e-commerce business. You all know, you know advanced also working with us in e-commerce with turnkey, and now AP, that was a new announcement today, and all that is helping us to essentially attract new retailers and improve our, basically, weighted average yield across the network. Then you add data integration, we’re looking to expand our contextual data segments with Yahoo, that’s something that I’m very excited about, especially on the back of current H2 cookie deprecation, so that’s also going to compound our ability to drive yield. And last but not least, more advertisers. So, we’re migrating advertisers from Yahoo. We expect that to be fully complete in Q3. And these are best — the crème de la crème, best of the best. You see others, Samsung, and Citi, and Verizon, these are fantastic enterprise advertisers. All of those things, from the technology side, the data side, and the client side are compounding our yield expansion. And you may have seen also, and I mentioned that on earlier — on my remarks, that after two years of softness in yield that all of us have experienced in this industry, Taboola, we kind of assume that if nothing happens in the market, we will do better than the market. So, we assume that yield is back to growth in 2024. It’s in our budgets, it’s in our guidance. So, we expect all these initiatives to come to fruition. Stephen Walker: And then to your second question about $1 billion opportunity with Yahoo, the simple answer on that is yes, we still believe there is more than $1 billion of value in that partnership. It’s been — by the way, we did say that we expect to see $100 million in revenue from the supply in Q1, so that’s encouraging. That’s a good step towards that. Advertisers will be fully migrated only in Q3, so that’s also key to capturing the base value of the partnership. And then, from there, what we expect is that the revenue will continue to grow as we capture synergies to get us to the full billion dollar value. So, yes, we expect it. It’ll happen over time. Andrew Boone: Thank you so much. Operator: Thank you. [Operator Instructions] And our next question will be coming from Jason Helfstein of Oppenheimer. Your line is open. Jason Helfstein: Hey everybody. Just some clarification and then a question, so to be clear, so the $100 million in Yahoo, that’s not cumulative, that’s like for first quarter, correct? Adam Singolda: Correct, that’s $100 million on Yahoo supply in Q1. Jason Helfstein: And then, you said the fourth quarter obviously was like meaningfully below that. You’re not giving the number, but we have to guess. Just repeat the language you said, how much it was like the way you described in the fourth quarter? Adam Singolda: We said low tens of millions. Jason Helfstein: Okay. So, I mean like so kind of hit the elephant in the room here. I mean, if you play around with the math that means that like the kind of ex-Yahoo, the business is decelerating, but like that’s not really fair, right? Because at the end of the day you have certain amount of advertiser demand, there’s different publishing sources, different yields you’re trying to get. So, just how should we all look, we’re going to all kind of play with math for the next year to look at the kind of the with and without Yahoo impact. Like how are you thinking about that? Because I don’t think you’re describing the business is like slowing down. So, just how do you think about like the puts and takes around bringing that inventory in kind of like the yields you get out of that versus other inventory and like should we be doing that math on the growth ex-Yahoo and then just one quick follow-up on identity and cookies? Adam Singolda: Okay. So, I’ll take that first question and it’s a good question. So, first of all, we’re growing nearly $500 million in top line revenue this year, so 33% year-over-year, so obviously, strong growth. A good chunk of it is Yahoo, but not all of it. As you observed, the complexity of that is that Yahoo comes with both supply and advertiser demand. In the $100 million that we just talked about, that is Q1 and that’s revenue on the Yahoo Supply. And but it’s a mix of Taboola advertisers and Yahoo Advertisers. So, where the top line growth comes from over time is also migrating the Yahoo advertisers over and growing our overall advertiser base, thanks to this really great high quality supply we have. So, in order to get full growth, we need to go there. That’s Wave 1, and we expect to have the advertisers migrated by Q3. And then, as I mentioned before in answer to Andrew’s question, then Wave 2 is to start to grow the synergies to get to the full $1 billion of value. So, you are correct that it’s not as simple as you just bring over the supply and you’re done. We have to bring over the advertisers. It’s more complex. So, that’s kind of the way to think about it. And you’re right, our core business is still growing. It’s just that Yahoo will take time to get to the full ramp. Jason Helfstein: And then, just on Identity, you’ve talked in the past that you’re not dependent on cookies and so folks should be less concerned about kind of where we go from here. However, there’s going to be more identity metrics that obviously are going to be adopted and coming to the market, on third-party metrics like can you use those metrics to drive kind of even more yield even though you don’t need to use identity? Thanks. Adam Singolda: Yes. I think we’ll take the right thing about it is, from a downside protection in terms of risk that companies might have, we believe the risk is mitigated for two reasons. 1, we have the past with Apple deprecated cookies in 2020 and we did well. In fact, we actually accelerated yield, so that’s good. And the second thing is that we have a large amount of first-party cookies today as we store we reach 600 million people a day and people click on Taboola tens of billions of times. So, we think we have a good kind of setup for cookie deprecation. So, the way I think about it is, we can do well and potentially even grow because again, in the past, other demand came to us when it couldn’t find other channels and we were a good channel to spend money on. If there’s anything in the market that can accelerate that even further, we’ll take it. I just don’t — personally I feel comfortable because we don’t need any new solution to do well. I think we have what we need to cross that bridge successfully to our publishers and advertisers. And again, just as a reminder, the vast majority about 90% of our revenue comes from clients who buy from Taboola Direct. No programmatic, no agencies, which means that we have pixels on their pages. So, when someone moves from our publishers to their pages, we know we drove that conversion. So, that’s why we don’t need third-party cookies to demonstrate value to clients as they buy from us. This is a fundamental point. There is I feel there is potentially even further upside to yield, but the downside is mitigated. Jason Helfstein: Thank you. Operator: Thank you. One moment for the next question. Our next question will be coming from Laura Martin of Needham & Company. Your line is open. Laura Martin: Good morning, you guys. My first one is on political. So, globally, there’s a really strong election cycle going on in 2024. And can you remind us how that impacts your impression growth and your readership and how that flows through to revenue in a political year, please? And then I’ll ask my second one after that. Adam Singolda: Good morning, Laura. Thanks for the question. Hey, it’s up. So, the way we think about historically, we did see some bump in kind of demand coming on political season, but especially from video with some more kind of increase in video demand in our guidance and way we kind of like manage the business, we don’t assume that is coming. So, want to be conservative in terms of what might happen. There is also potential acceleration in traffic because there is more viewership and things of that nature. Again we don’t assume those things as a material kind of like financial benefit to us. But historically, we did see some nice bumps, but again nothing too significant that we would like to sort of embed in our planning. Laura Martin: Okay. So, that’s an upside driver because it’s not in the numbers, super helpful. By the way, they’re talking about $17 billion of spending in the U.S. alone. So, I think it might be a bigger political year than people than your historical lift. Adam Singolda: That’s good. Laura Martin: The second question I had for you, Adam is I’m really curious as you bring over these new types of advertisers that Taboola has never had with Yahoo like Verizon and Citi and these big enterprise, high quality branding customers. Is that, A, I’m really interested in what kinds of challenges or what kinds of things they need that your historical advertisers have not? And secondly, does it give you new product ideas when you think about the product roadmap? Are there things these types of advertisers are asking for that could sort of, if you develop them could really forever accelerate the trajectory of revenue growth of Taboola. What’s your point of view on that? Adam Singolda: Yes, this is it’s such a good question, because we obviously this is a very new type of segment of clients that get introduced to Taboola. Most of it right now is on the Yahoo side, right, like we’re filling that incredible kind of publisher with a mix of Taboola and Yahoo advertisers. But what we’re seeing is, first of all, they really appreciate the technology that we can bring to the table. So, they’re adopting Max conversion, our pixels and these are new things to them and it allows us and our account managers to and I think a lot of our account managers are always daily to see the graphs and to see the trends and these are really good trends, both in terms of increase of budgets and performance as it relates to conversion rates and CPA. So, it’s early days. It’s only $100 million. So, it’s still early days, but I’m seeing really good things and they are very happy. So, these clients want to spend time with us and the Yahoo team and this is all good beginning. Where I think it’s going is this potentially will allow us to develop new formats and kind of new experiences that those clients are used to getting either historically from Yahoo or on other channels. And I think that might open up a whole new way users would experience sponsored content and ads on its own network, as well as in Yahoo over time. So, I would say, stay tuned for potential UX innovation and formats and experiences that those brand advertisers are looking for that we are yet to offer. So, I do think they might make us even better, those clients. And we try to be humble. We’re learning. We’re asking questions, and we’re spending time with them. But I’m excited mainly by the performance. That’s the most important thing. But I’m sensing they would like us to further develop the way we present ads on the open web, and that might affect not only our relationship with Yahoo but whether how we render ads across our entire network, Disney and NBC and the rest of our great partners. Laura Martin: Thanks very much. Operator: Thank you. One moment for the next question. Our next question will be coming from James Kopelman of TD Cowen. Your line is open. James Kopelman: Good morning. Thanks for taking the question. The first one is for Adam. In the letter you referenced the amount of contextual data that Taboola has for AI and deep learning. Can you talk about how you view Taboola’s growing data set as a differentiator when it comes to training AI and leveraging generative AI over time? And then I have a follow-up for Steve. Adam Singolda: Yes, sure. So, as it relates to just the amount of data we have, I think the most important thing and I speak a lot about becoming the must-buy for the open web. And what I mean by that is, it’s a matter of how big is your actual gross revenue and your spend, because this is a good proxy for how reliant advertisers become on you, because you’re big enough that it’s worth their time to spend money with you. Because again, I think today the ad tech industry is a bit fragmented, or too fragmented for advertisers to rely on you. And I’m looking at companies like Snapchat and Pinterest and X, it’s in the $2 billion to $4 billion range and now we’re getting into that range. So, I think, first of all, the most important thing to become a must-buy is growing revenue and get that flywheel going so that advertisers want to work with you and it’s worth their time. Two, the footprint we have and the code on the page Taboola has, I would argue, is probably the largest in the open web or in the world. I don’t know of any company that has a first-party relationship with publishers like Taboola at our site, which really gives us first-party access to everything that takes place on the page, from context to scrolling to clicks to purchases to things of that nature. And I think that’s growing exponentially, obviously, with Yahoo. So, this is, I think, one of the most important assets the company has, which is code on page exclusively for long term. And this is what gives us also predictability as a business to know that we don’t expect any big shift one way to the other. And then, as we look into Gen AI, I think it’s important to kind of reference what exactly is Gen AI can do to the market. Gen AI eventually is going to be a technology that is available to everyone. What’s going to make a difference from one company to the other is really the amount of data and the type of data you can prompt into the engine so you can get better outcomes. So, as an example, when an advertiser comes to Taboola and suggests thumbnails and titles for me, we are able to say, well, we’ve seen, let’s take an example, an insurance client comes to Taboola, we’re able to say, we’ve seen a billion dollars of insurance spent over the last few years, and we can prompt that into the engine, and then we’re getting really great, kind of authentic and new and original titles and thumbnails we can suggest to the client. So, I think what makes us special here is the amount of data we have, our size, and this is also why I love the Yahoo partnership, and as I mentioned in the letter, there’s another iconic consumer brand that is signed and starting to roll with us. All of those will give us more data to prompt into the Gen AI. And we have a senior person leading Gen AI, Taboola now. And I can tell you we’re working on very exciting things because I believe that the biggest opportunity Gen AI has to the advertising industry is to simplify the experience of buying ads. Today it’s very, very complicated to succeed. And I think Gen AI can make it really simple. So, what’s to come is our unique data into Gen AI and producing special creatives that others don’t have. James Kopelman: And then for Steve, high level, how should we think about the seasonality of both gross revenue and Ex-Tac in 2024, given the various moving parts around Yahoo, the new unnamed publishing partner, and your typical historical seasonality. And then, finally, I just want to ask about OpEx efficiencies. What are some of the ways that you’re able to limit headcount increases this year, even as you scale? Thank you. Stephen Walker: So, in terms of the seasonality, so Yahoo is like a very large publisher in our traditional core business. So, I think their seasonality is very similar to our historical pre-connect of the seasonality. So, that’s the way to think about adding them to our network. As a company, as we’ve become more and more fourth-quarter-dominated because of our e-commerce business in particular. And this year, obviously, with the bringing on Yahoo over the course of the year, we’ll be more back half loaded than usual as well. But generally, the way to think of seasonality with Yahoo is it’s like a large publisher and they have very similar seasonality to other large publishers. They’re number one or number two in news, sports, finance, and that is pretty much what the kind of core of our base is. So, that’s a way to think about seasonality. In terms of OpEx and how we control headcount here, I think we’ve shown pretty good cost discipline over the course of the last year. I mentioned in my prepared remarks that our OpEx for Q4 and in fact for all of 2023 would have been flat year-over-year except for the hiring that we did for Yahoo to support that. I would expect that our fourth quarter OpEx space is probably going to be similar to what it is the rest of this year. There may be a slight increase as a result of some additional hiring that we have to do for Yahoo, but we’re really working on kind of keeping a lid on costs. And the way we do that is we find efficiencies and we find ways to leverage the people we have to do more. Frankly, we’re using generative AI and other AI tools internally now to generate productivity and to improve things. So, for — and a great example, that is exactly what Adam talked about. Historically, our account managers who support our advertisers used to spend a lot of time helping the advertiser figure out what’s a good headline, what’s a good creative or image for this ad. Now we have generative AI tools that help them do it, can generate a dozen of them instantly, whereas it used to take a lot of thought and a lot of time to come up with a dozen. So, it’s all about productivity, finding ways to leverage your people across more accounts, and I think we’re doing a pretty good job of that. James Kopelman: Great. Thanks, guys. I appreciate all the color. Stephen Walker: Thanks, James. Operator: Thank you. One moment for the next question. Our next question will be coming from Dan Day of B. Riley Securities. Your line is open......»»

Category: topSource: insidermonkey9 hr. 48 min. ago

Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) Q4 2023 Earnings Call Transcript

Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) Q4 2023 Earnings Call Transcript February 28, 2024 Lindblad Expeditions Holdings, Inc. misses on earnings expectations. Reported EPS is $-0.53 EPS, expectations were $-0.3. Lindblad Expeditions Holdings, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). […] Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND) Q4 2023 Earnings Call Transcript February 28, 2024 Lindblad Expeditions Holdings, Inc. misses on earnings expectations. Reported EPS is $-0.53 EPS, expectations were $-0.3. Lindblad Expeditions Holdings, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Hello, everyone, and welcome to the Lindblad Expeditions Fourth Quarter and Full Year Financial Results. My name is Bruno, and I’ll be operating your call today. [Operator Instructions] I will now hand over to your host and Chief Financial Officer, Craig Felenstein. Please go ahead. Craig Felenstein: Thank you, Bruno. Good morning, everyone, and thank you for joining us for Lindblad’s 2023 fourth quarter and year-end earnings Callc With me on the call today is Sven Lindblad, Lindblad’s Founder and Chief Executive Officer. Sven will begin with some opening comments, and then I will follow with some details on our 2023 financial results and current expectations for 2024 before we open the call for Q&A. You can find our latest earnings release in the Investor Relations section of our website. Before we get started, let me remind everyone that the company’s comments today may include forward-looking statements. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of forecasts or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company’s SEC filings. In addition, our comments may reference non-GAAP financial measures. A reconciliation of the most directly comparable GAAP financial measures and other associated disclosures are contained in the company’s earnings release. And with that, let me turn the call over to Sven. Sven-Olof Lindblad: Thanks, Craig, and good morning, and thank you all for joining us today. When I returned to CEO of Lindblad Expeditions in June of 2023, I laid out for you a variety of priorities that I believe would usher in a new era for our enterprise. With eight months now in the rearview mirror, I would like to take a few minutes to discuss the progress we have made in each of these areas while providing some color on what drove our success this past year and why we are excited about the growth opportunity we have in the months and years ahead. First and foremost, the new era starts with putting the pandemic definitively behind us. The record financial results we delivered in 2023, including 35% revenue growth and adjusted EBITDA of over $71 million, a pretty good indication that we are well on our way to achieving that outcome. Craig will go through our financial results in a moment, but we took nearly 30,000 guests more than ever before to the remarkable destinations we have been visiting for decades. And most importantly, the guest feedback has been nothing short of extraordinary. All the drivers of our business were up this year, led by a 33% increase in guest nights, as we began to fully utilize our expanded fleet. As we increase capacity, we also saw meaningful growth in net yield, up 12% to $1,097 per guests night and occupancy taking up to 77% from 75% a year ago. I know there is a tendency to focus on occupancy, but in isolation, it is a misleading metric, especially in our business. Understandably, at the big cruise lines, there is a commitment to 100% occupancy even if the last percentages represent very low or perhaps even no yield. The reason is obvious, the onboard spend is meaningful in the casino, shops, spas, bars, land excursions, etc. So even if you add guests for free, you would be better off. In our case, there is minimal onboard spending. So that approach has absolutely no value. Also, we are extremely committed to maintaining price integrity, given long-term ramifications as there is no benefit in adding occupancy if yield decreases proportionately. So price integrity is a key metric and essential to preserve even if occupancies move ahead a bit slower in the short term. The second catalyst of our new era is capitalizing on the massive growth of interest in expedition travel. The poll to connect authentically with nature and culture is growing by the day, and there’s no other company in this segment with our track record or with our commitment to providing authentic and immersive itineraries. This past November, we further solidified our ability to take advantage of this growth with the extension and expansion of our 20 year old partnership with National Geographic, one of the world’s most respected and beloved brands. This new agreement, which runs through 2040 will enable us to grow our brand on an international scale and reach more citizen explorers than ever before. Beyond enhancing our shared expertise and the onboard experience for our guests, it will increase the earnings potential of the company by opening larger addressable markets through new worldwide audiences. In short, it will further solidify our position as the leader in expedition cruise and experiential adventure in travel, a segment we have been leading for more than 50 years. It also brings with it the power of Disney, the world’s largest media and entertainment conglomerate. They have so many different capabilities to promote and activate the market. And in past months, our team, along with their marketing and sales teams have been deep in the strategy and tactical plans on a regular basis meeting monthly to plan specific initiatives to drive business. By year’s end, we will be able to report with far more accuracy the detail about how the anticipated significant National Geographic and Disney effect, about the National Geographic and Disney effect, but harnessing that collective power is extremely exciting at a time with a poll to connect authentically with nature and culture is growing by the day. I firmly believe that this will result in meaningful accelerated growth in terms of occupancy, yield protection and expansion of the fleet for years to come. Third, in this new era is building our technology to support innovative ways to drive the business. In many ways, 2023 was a year of transition on this front as we launched our new reservation system in May, the final building block in our digital stack transformation, which also included a new CRM, a new connect management system, a new digital asset management system and a new customer data platform. Not surprisingly, the rollout of the reservation system was complex with numerous challenges that had to be solved. It was certainly a distraction for various parts of our organization, but we kept our focus on our guests and have put most of those challenges behind us. We still have ways to go before we finally exploit the possibilities that these systems provide, but we are already seeing record bookings coming through our website. We are achieving higher conversion rates across all parts of the funnel and we are delivering stronger guest service metrics at our contact center. A fourth pillar in this new era is reconnecting with our community in creative ways and creating the most modern marketing and sales platform to propel growth. The new agreement with National Geographic and our upgraded technology platform will certainly be a big part of that moving forward, but we are already reaching new audiences. With an expanded sales team and upgraded digital lead generation capabilities, we have been focusing on driving first-timer bookings through elevated search campaigns to capture and convert more prospects than ever before. Growing first timers is critical and that repeat behavior is significant, and they become the key community to propel growth. A new era also means bring R&D back to the forefront in terms of new geographies, new experiences in parts of the world we have been visiting for years and integrating the ways we immerse our guests in these remarkable destinations. For 2024, we have developed a variety of new itineraries specifically designed to attract new guests. Most are shorter duration in order to get people into the system for the first time. Examples of a multi-month commitment in Iceland this summer and our recently launched collaboration with Food & Wine magazine, preparing 14 trips along the Columbia and Snake Rivers in Washington and Oregon with programming elements, wine selections and specials of guest selected by the editorial staff of Food & Wine. One of our biggest initiatives — the biggest initiative, new initiative is a fly-in component for one of our Antarctica ships, creating itineraries that avoid crossing the Drake passage on some voyages and just one way on others. It also allows for people with more limited time to visit Antarctica. These offerings have literally flown off the shelves and are allowing us to connect with new travelers who wouldn’t have been — who wouldn’t have considered this kind of expedition before. The last component of the new era, I mentioned, was maximizing our diverse portfolio of land businesses while looking for additional expansion opportunities either through new capacity or further diversification of land offerings. The investments we have made thus far in broadening the land portfolio has proven widely successful, laying the vision of expertise and entrepreneurial spirit of the founders with the operating and marketing power of Lindblad has grown our land portfolio from EBITDA of just over $3 million when we first acquired Natural Habitat to nearly $23 million in 2023, including nearly 30% growth year-on-year. This has not only created significant value for our guests and shareholders but also is a great calling card as we strategically look to find additional companies to join our family. So as you can see, the new era has clearly begun for Lindblad Expeditions and we are excited to further accelerate that new era in 2024. We start the year with a strong foundation of future bookings with the Lindblad segment pacing 2% ahead of where we were at the same point in 2023, despite having significantly less carryover business from cancellations during COVID. Excluding these carryover bookings, we would be 21% ahead of a year ago. There are a couple of headwinds to point out for the upcoming year. Due to the gang violence that erupted in Ecuador, on January 10, we canceled two voyages out of precaution in the first quarter, and there was some booking instability. Fortunately, Ecuador’s young, energetic President seems to have quelled the violence. And for all practical purposes, the country has largely stabilized. We certainly are feeling no disruption of activity and bookings are returning to a more normal pattern. Another potential headwind in Q2 is the possible rerouting of water warships around the tip of Africa to avoid the Red Sea due to the recent attacks from Yemen. We did not operate with guests in the Red Sea. But if we reroute the transit, there would likely be a couple of voyages impacted. While these isolated events are certainly frustrating, we have come to expect a certain amount of external disruption, and these short-term headwinds tail in comparison to the broader opportunity. As to the — to expedition travel more broadly and incorporating adventure travel, this still represents one of, if not the largest growth segment in the travel industry. I get why nature and particularly the concern over its long-term future is fueling interest. And while there is much more competition than ever, I believe that a very strong brand will inevitably be elevated by expanding interest. So I’m really excited about the next years as we, together with our partners with National Geographic and Disney, build and grow our business, expand our ideas, our relevance in supporting necessary strategies that help protect environments, communities and history. So many thanks for your time. And now I will turn it back to Craig. Craig Felenstein: Thanks, Sven. As Sven highlighted, Lindblad delivered record revenue and EBITDA in 2023 as we further ramped operations with broader deployment of our expanded fleet and additional departures across our platform of land-based businesses. As we have discussed previously, the earnings potential of the company has increased considerably over the last several years with the addition of over 40% more ship capacity and three industry-leading land operators. And the record results we delivered in 2023 demonstrates the opportunity we have across our diverse portfolio of experiential offerings. Before we look ahead, let me take a few minutes to discuss our performance from this past year as we focused on further ramping ship operations, fueling the growth of our differentiated land portfolio and solidifying our overall infrastructure, technological footprint and marketing and sales capabilities to allow us to maximize the earnings potential in the years ahead. Total company revenue for the full year 2023 of $570 million increased $148 million or 35% versus 2022, as we continue to ramp operations with strong growth across both our Lindblad and Land Experiences segments. At the Lindblad segment, revenue of $397 million increased $119 million or 43% year-on-year, primarily due to a 33% increase in available guest nights from broader utilization of the fleet. Additionally, net yield increased 12% to $1,097 per available guest night due to higher pricing and occupancy expansion to 77%, despite the significant increase in available guest nights year-over-year. As we further ramp occupancy towards historical levels, you can see both the revenue opportunity and the operating leverage inherent in our marine platform as we attract more and more guests while maintaining strong pricing discipline across the expanded fleet. Similar to our ship operations, our land portfolio is also delivering strong growth, driven by additional departures and guests across each of our four unique businesses. Land Experiences revenue of $172 million increased $29 million or 20% versus a year ago, led by Natural Habitat’s polar bear and Africa trips, DuVine’s cycling tours across Europe, Classic Journeys walking tours in Italy and Morocco and Off the Beaten Path trips to the U.S. National Parks. The strong revenue growth across both segments generated significant operating leverage in 2023, with total company adjusted EBITDA of $71 million, an increase of $83 million versus a year ago, driven by a $78 million increase at the Lindblad segment and a $5 million or 29% increase at the Land Experiences segment. Looking a little closer at the cost side of the business, operating expenses before depreciation and amortization, interest and taxes increased $65 million or 15% versus 2022, led by a $39 million or 14% increase in cost of tours versus a year ago, primarily related to operating additional ship and land-based itineraries. Fuel costs decreased year-on-year as increased usage from operating additional trips was more than offset by lower pricing versus a year ago. Fuel was 5% of revenue in 2023 as compared to 7% of revenue in 2022. Sales and marketing costs increased $10 million or 17% versus a year ago, primarily due to higher commissions and royalties related to the increase in revenue and from increased search and direct mail marketing to drive future bookings. And G&A spending increased $15 million or 17% excluding stock-based compensation and onetime items versus a year ago, primarily due to higher personnel costs as we ramp operations and increase credit card commissions related to final payments for upcoming itineraries and higher deposits on new reservations for future travel. Total company net loss available to stockholders of $50 million or $0.94 per diluted share improved $66 million versus the net loss available to common stockholders of $116 million or $2.23 per diluted share reported a year ago. The improvement reflects the significant ramp in operations, partially offset by $8 million of additional interest expense net associated with the higher rates and increased borrowings mostly related to our debt refinancing in May of 2023 and a $7 million increase in stock-based compensation primarily related to the increase in value of Natural Habitat. Looking quickly at the fourth quarter of 2023, revenue increased 6% compared to the same period in 2022, due in large part to broader utilization of the fleet and additional land trip operations. Available guest nights at the Lindblad segment increased 18% due in large part to an additional transit voyage from Southeast Asia to French Polynesia on the resolution as well as from the timing of dry docks. As I highlighted on the last call, while taking guests on our transit voyages generates additional revenue on voyages that would normally be non-revenue generating, they do have a negative impact on occupancy and yields, which was evident in the Q4 metrics. The decrease in occupancy versus a year ago was predominantly due to the additional transit nights for sale as well as from increased cancellations on our Egypt itineraries due to the Israeli-Hamas war. Adjusted EBITDA in the fourth quarter of $4 million increased $7 million from the fourth quarter a year ago, as the majority of the revenue growth in the quarter fell to the bottom line with operating expenses before depreciation and amortization, stock-based comp, interest and taxes up only 1% versus the fourth quarter a year ago. Turning to the balance sheet. We ended the year with $187 million in cash and short-term securities, an increase of $58 million versus the end of 2022, primarily driven by the net proceeds of $67 million from the debt refinancing back in May of 2023, which was offset by free cash flow use of about $4.5 million. Free cash flow for the year included $25 million in cash from operations, led by the improved operating performance, which was partially offset by interest payments of $44 million. Please note that cash from operations was also negatively impacted by the use of future travel credits, which made up approximately 8% of ticket revenues in the current year. Cash from operations was more than offset by CapEx of $30 million, mostly from routine vessel maintenance as well as from investments in our digital initiatives. Looking ahead, we are excited by the sustained operating momentum across our expanded platform, and we anticipate significant growth in 2024, driven by higher occupancies and increased net yields across our fleet as well as additional travelers across our growing land businesses. The Lindblad segment is in a strong booking position for the upcoming year and the booking momentum has only accelerated with booking since the start of December for travel in 2024 up over 50% versus the same period a year ago for 2023. Additionally, we have already booked over 87% of our full year projected ticket revenues for the year. Given the strong booking trends we are generating, we expect total company tour revenue in 2024 between $610 million and $630 million and adjusted EBITDA between $88 million and $98 million. Please note that these projections reflect the increased royalty rate associated with the expansion and extension of our National Geographic relationship as well as the impact of the voyage cancellations that Sven mentioned earlier. In addition to the robust P&L growth in 2024, we also anticipate strong free cash flow generation, excluding any growth CapEx. Maintenance CapEx is expected to be approximately $25 million to $30 million in the current year, which includes vessel maintenance as well as some additional investments in our digital initiatives. We do anticipate buying part of the minority interest in our land companies during the first quarter, and we will continue to explore additional growth opportunities in the year ahead, including further diversifying our product portfolio or opportunistically expanding our fleet to capitalize on the continued growth in the demand for experiential travel. Thanks for your time this morning. And now Sven and I would be happy to answer any questions you may have. See also 20 Countries With the Longest Coastlines in the World and 15 Best Stocks to Buy According to Billionaire D.E. Shaw. Q&A Session Follow Lindblad Expeditions Holdings Inc. (NASDAQ:LIND) Follow Lindblad Expeditions Holdings Inc. (NASDAQ:LIND) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question comes from Steve Wieczynski from Stifel. Steve, your line is now open. Jackson Gibb: Hi This is Jackson Gibb on for Steve Wieczynski. So we’ve seen a fair amount of these disruptions over time and kind of how they’re magnified by your scale and in some cases, the uniqueness and your replaceability of the destinations you visit. But is there anything about the new expanded Disney deal that might help mitigate that impact by maybe filling funnel more from the demand side moving forward? Any kind of specifics about how you’re thinking about the deal might help mitigate impacts from shifting itineraries would be helpful. Sven-Olof Lindblad: Yeah. That’s an interesting question. Well, first of all, the — as a consequence of this new deal with National Geographic and by extension Disney, our marketing prowess or power, if you will, will increase, we believe, rather dramatically. Obviously, we will know more specifically and in greater detail by the end of the year how that manifests itself in terms of combating situations around the world that periodically arise, we will have to see. I mean one of the things we have done — first of all, there’s always been — if you think about going back decades, there’s always been something almost invariably, every now and then, you get through a year where absolutely nothing happened in the world that has any consequence or disruption in any way. But generally speaking, there’s always a couple of things — two or three things that cause you to have to maybe reroute a ship or diminish booking somewhat, in certain instances, significantly. So most areas we’re in are — we’re not in for extended periods of time, except for places that are traditionally very, very stable, Alaska, Galapagos, okay, we had some recent disruption, but that’s not — historically, there has not been disruption there, Iceland, Antarctica, the Arctic. So we’re very conscientious of making sure that we’re not in places in a significant — for a significant amount of time that are questionable in terms of the degree to which political influences and such can affect them. So I would say that — put it this way, we are going to be strengthened as a consequence of this relationship. Now we have a triangle. In essence, we have National Discovery, Disney and ourselves, and that’s a real powerhouse. So anything we face should be faced much — in a stronger way than we would have without them as part of it. I hope that answers your question. Craig Felenstein: Yeah. Thanks, Sven. The other side of this — yes, thanks, Sven. Jackson, the other side of this from my perspective is that there’s two aspects of our business that are pretty unique. One is we should have fair enough flexibility as Sven kind of highlighted, which is because of we are expedition by nature and we’re less reliant on individual ports or resources, we can’t take our ships and move them when these disruptions happen as long as there’s enough notice to ultimately sell whatever the change, ultimately we’re going to do is. The second thing is the company has scaled up pretty dramatically. If you think about where we were back in 2016 before we embarked on our expansion of our overall fleet, the fleet itself is up over 60% in terms of size. And then when you look at the land companies that we’ve expanded, the company’s earnings power has increased so dramatically that these kind of issues, the ones that you’re seeing in something like Ecuador potentially in the Red Sea have much less of an impact than they ever had before. The second thing on that front is we will continue to expand the company. As we continue to increase the scale and diversify the company, these things will continue to have less and less of an impact as we move forward. So to echo Sven’s point, it is something that is inherent in our business, but traditionally, the impact has not been significant or it will be even less so here moving forward as we continue to scale. Jackson Gibb: Okay. Awesome. That’s super helpful. I guess on the subject of expanding the company, we’ve seen a couple of your larger peers put in new ship orders, obviously, much different size and scale and different areas of operation. But is that something that you’re considering more seriously now? And I guess, a different way, what would have to happen for it to be the right time to order a new ship to make an addition to the fleet? Sven-Olof Lindblad: Yeah. So first of all, it’s absolutely clear that the most valuable thing, the single most valuable thing that we can do as a company and our focus on doing as a company is maximizing the inventory that we have already bought and spent money on acquiring, right? So getting the occupancies back up and making sure that the yields are maintained is the primary key element of growth, obviously, internally. So this year, we will learn a lot about what this triangle, and it’s the first time I’ve actually referenced it in that way. Disney, National Geographic and Lindblad, what the power of that is and assume as we understand that somewhat better, that will accelerate in all likelihood the commitment to acquire new vessels, whether that is acquiring vessels that exist that are no longer viable in the companies where they live or building new ships. Those are two avenues. If you think about our fleet broadly, up until 2015, there was — that we — up until 2017, we hit — always bought existing ships, modified them and made them suitable for our purposes, and then we started building ships. So we only built four new ships, and we have acquired a lot more than that over time. And so going forward, we will also be looking at these two avenues: are there existing ships that are suitable to us that need a happy home or are there — or should we build — be building new ships? And we will begin looking closely at that in the not-too-distant future as to which of those avenues is most suitable going forward. Jackson Gibb: Okay. Understood. And if I could just squeeze in one more. I just wanted to get some updated thoughts on how you’re thinking about buybacks. You’ve been unrestricted by — from a covenant perspective since February 2023, seem to have fairly ample liquidity. Just wanted to get your perspective on how you’re thinking about share repurchases now? Craig Felenstein: Sure. Thanks, Jackson. So I would say we really haven’t changed the way we look at share buybacks, really since we put our share buyback plan in place prior to the pandemic. And that is when you think about the cash at the company and what we want to do with that cash, our first priority is to grow the business organically. Our second priority is to look for M&A opportunities that will ultimately increase the earnings potential of the company here moving forward and increase the opportunity to grow. And then third, we have no hesitation about returning capital to shareholders, either through buying back shares or obviously lowering our outstanding debt when we have the ability to do so. So I would say that’s how we weigh all of our cash return at any given moment, and we’ll continue to do that moving forward. Jackson Gibb: Got it. Thanks, great. That’s all from me. Thank you. Operator: Our next question comes from Eric Wold from B. Riley Securities. Eric, your line is now open. Eric Wold: Thank you. Hi, everyone. Just a couple of questions for me. I guess first, Craig, if we think about the obviously strong growth in EBITDA year-over-year, we think about the numbers came in towards the lower end of the guidance range that you gave or kind of reaffirmed on the Q3 call. I know that there’s disruption from the Israeli-Hamas war, which was known at that time. Maybe just kind of give us a sense of kind of what are the biggest factors that kept EBITDA towards the lower end versus possibly getting up towards that higher end? Craig Felenstein: Sure. Yeah. I think you pretty much touched upon it, Eric, more than anything else, right? So when you look at the fourth quarter, everything pretty much came in where we anticipated it to come in from both revenue and cost perspective with the exception of the cancellations that came because of the conflict that was happening over in the Middle East. So when you ultimately have cancellations, they tend to have a pretty dramatic effect on revenue and it tends to fall right to the bottom line. So in the absence of that, the numbers certainly would have been a little bit higher, but the expectations for everything else pretty much came in where we thought they would. Eric Wold: Okay. Perfect. And then kind of a broader question. I know you’ve had now a number of months of working with kind of the expanded National Geographic, Disney team since you announced the extended agreement. I guess maybe give us, if you had more time to work with them, updated sense on, I guess, timing of when you expect kind of the full effect of kind of the Disney travel team to really start working with yours and start pushing the Lindblad tours? How visible do you think this relationship will be to consumers now versus maybe previously how visible consumers know that you’re a partner or kind of working with Disney and a part of that relationship? And then any sense on how those teams will kind of market your voyages relative to Disney’s own mass crews and kind of how that will be kind of — since you kind of parsed out in kind of their efforts, so to speak? Sven-Olof Lindblad: Yeah. So this is a multifaceted answer because it’s a multifaceted campaign, if you will. So there are three buckets of investment in terms of marketing. One is a joint investment between Disney and ourselves, which is managed jointly. There’s the National Geographic expeditions investment and there’s our investments, all pulling in the same direction because we have no longer any attribution connected with how business comes in. We — for the 20 years previously, we’ve had attribution. There’s specific business that’s coming through the National Geographic expeditions channel and through our own. And those have different financial mechanisms connected with it. That has been completely eliminated. So we’re all pulling in absolutely the same direction. None of us care where the business comes from, which of the channels it comes from and there’s value in all of the channels. So when you think about the addition of Disney, right, you had National Geographic expeditions in Lindblad, that’s been going on for 20 years. Now Disney comes into the mix as part of it. They have extraordinary distribution channels. When it comes to — I mean they have a huge sales force, for example, that accesses the trade. They have so many sort of distribution avenues, where they are intending to showcase Lindblad Expeditions, National Geographic. The teams are meeting regularly month to month on a disciplined basis for an extended period of time to develop strategies and tactics. And periodically, we get together on a wider basis at different levels of engagement between ourselves, the Disney team and the National Geographic expedition’s team to deal with longer-term issues that we believe can drive the business. So the engagement between the organizations has just been hugely cooperative and very excited and very, very committed to the idea of growing our business together because there’s lots of value for all parties if we do that. The good thing about a really, really good agreement is where you pretty much assured that everybody that’s part of that agreement gain significant value as a consequence of growth, and that’s what this agreement is. Eric Wold: Helpful. Thank you. Thank you, both. Operator: [Operator Instructions] Our next question comes from Alex Fuhrman from Craig-Hallum Capital Group. Alex, your line is now open. Alex Fuhrman: Hey, guys. Thanks for taking my question. It sounds like you’re obviously guiding to pretty significant revenue growth this year and the vast majority of the revenue that you’re projecting is already on the book. Can you help us square that a little bit with a relatively modest 2% increase in bookings compared to the same time last year? Are you starting to see people maybe book a little bit closer to the departure time now that it’s harder for them to cancel or reschedule their voyages? Craig Felenstein: Yeah. So let me touch on that, and then I’ll turn it over to Sven for any comments. The 2% increase in terms of revenue today is very misleading because we had this significant pile of money that was in — from cancellations that happened — cancellations from deferrals that happened during COVID into 2023 that were on the books at this point versus what we’re seeing this year, which is we had less of the carry in, but the week-on-week growth of bookings is so much more significant than it was a year ago in terms of the weekly bookings. So what we’re seeing is that 2% growth number is expanding rapidly every single week. So if I looked at it several weeks ago, it was down and now it’s already up and it will continue to head in that direction because, again, as I mentioned in my comments, if you look at the bookings from kind of December 1 through today, we’re up 50%, 5-0, versus where we were in the same bookings a year ago. So the momentum is really, really strong, and it has really just continued, so we fully anticipate that, that opportunity will continue to expand moving forward. Sven, I think you want to add. Sven-Olof Lindblad: Yeah. Well, just to clarify, so when — during COVID, we issued a ton of — and Craig can give you the actual amount of what’s called future travel credits, right, rather than canceling, they got a credit for the future. So we already received the money and then they were able to travel in the future. And so last year, a lot of — a significant number of those credits were utilized and were part of the — or considered part of the revenue. So this year, it’s all new people, by and large, very, very few future travel credits. So in a sense, the 2% is really misleading. If you exclude that particular metric, it’d be more like 20%, 21% ahead and 50% in the last couple of months in terms of future growth. So you got to take that in context. Alex Fuhrman: Okay, guys. That’s really helpful. I appreciate that. Thank you, both. Sven-Olof Lindblad: Thank you. Operator: We have no further questions. So I’d like to hand the call back to you, Craig. Craig Felenstein: Thank you, operator. Thank you, everybody else for joining us today. We appreciate your time. As always, if you have additional questions, please reach out. And we look forward to hearing from each of you. Thank you. Sven-Olof Lindblad: Thank you very much. Operator: Ladies and gentlemen, this concludes today’s call. Thank you for joining. You may now disconnect your lines. Thank you. Follow Lindblad Expeditions Holdings Inc. (NASDAQ:LIND) Follow Lindblad Expeditions Holdings Inc. (NASDAQ:LIND) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkey13 hr. 36 min. ago

Daktronics, Inc. (NASDAQ:DAKT) Q3 2024 Earnings Call Transcript

Daktronics, Inc. (NASDAQ:DAKT) Q3 2024 Earnings Call Transcript February 28, 2024 Daktronics, Inc. beats earnings expectations. Reported EPS is $0.2113, expectations were $0.17. Daktronics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, ladies and gentlemen, and welcome […] Daktronics, Inc. (NASDAQ:DAKT) Q3 2024 Earnings Call Transcript February 28, 2024 Daktronics, Inc. beats earnings expectations. Reported EPS is $0.2113, expectations were $0.17. Daktronics, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, ladies and gentlemen, and welcome to the Daktronics’ Fiscal Year 2024 Third Quarter Earnings Results Conference Call. As a reminder, this conference is being recorded, Wednesday, February 28, 2024, and is available on the company’s website at After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Ms. Carla Gatzke, Corporate Secretary for Daktronics, for some introductory remarks. Please go ahead, Carla. Carla Gatzke: Thank you, Kevin. Good morning, everyone. Thank you for participating in our third quarter earnings conference call. I would like to review our disclosure cautioning investors and participants that in addition to statements of historical facts, we will be discussing forward-looking statements reflecting our expectations and plans, about our future financial performance and future business opportunities. These forward-looking statements reflect the company’s expectations, or beliefs concerning future events. All forward-looking statements involve risks, and opportunities that could cause actual results, to differ materially from our expectations. Such risks include, but are not limited to, changes in economic and market conditions, management of growth, timing and magnitude of future contracts and orders, fluctuations in margins, the introduction of new products and technology, availability of raw materials, components and shipping services, and other important factors. These identify factors could cause actual results, to differ materially from those discussed in this call in the company’s 2024 quarterly earnings release, and in its most recent annual report on Form 10-K. Our second quarterly 2024 earnings release, contains certain non-GAAP financial measures and was furnished to the SEC on a Form 8-K this morning — clarify, third quarter 2024 earnings release. We also made slides available for today’s call. All of these documents are available on the Investors section at Daktronics website, I’ll turn the call over to our CEO, Reece Kurtenbach. Reece Kurtenbach: Thank you, Carla. Good morning, everyone. Thank you all for joining us today. Our third quarter and year-to-date results reflect our team’s strong execution of our strategies across all our business areas. These strategies have raised the bar for execution and expectations of profitability in our operating model. As a result, we have delivered record sales and operating income to-date in fiscal 2024, and drove robust operating cash generation in the third quarter. These results serve as evidence, of the success of our past decisive, and deliberate actions taken, to adapt to challenging business conditions, and to improve our customers’ experience, while increasing our profitability, and working capital levels. The results also testify, to the resiliency and strength, of our teams within Daktronics and to our strategy, of capturing demand in diversified markets, and innovating across technology platforms. If you have opened the slide deck, I invite you to turn to Slide 3 titled Fiscal Third Quarter 2024 Highlights and to follow the financial outcomes for the quarter. To put our fiscal 2024 results delivery into perspective, our third quarter is historically a seasonally low volume quarter, for revenue and therefore, historically could result in a breakeven, or even a loss-making quarter. However, reflecting back to fiscal 2023 third quarter, we fulfilled back-ordered work, as we had new designs available, to take advantage of the available parts in our supply chain, and as other supply chain-related pressures were resolving. This resulted in extraordinarily high volume, and high profit for the third and fourth quarters of fiscal 2023, a unique time for us. During this fiscal year’s third quarter, despite a return to more traditional seasonality, and fulfilling a lower volume of orders, as compared to last year’s surge, we drove an $8 million profit – operating profit and generated $9 million in operating cash flow. During fiscal Q3, we experienced robust order volume, of $192 million. Live Events in the Commercial business unit, orders strengthened in the quarter, and all domestic markets saw growth. Third quarter orders grew, 29% more than last year’s third quarter, bringing year-to-date order growth, to 6.6% for the year. These increases reflect our focus on profitable order generation in our serviceable address available markets or SAM. Backlog continues to decrease from last year’s built-up levels, as we recognize the anniversary of the resolution, of supply chain challenges and utilize our capacity, to deliver customer orders at market-expected lead times. With respect to sourcing, our revamped and more diversified supply chains, are functioning well, across our suppliers. As we primarily compete, with companies that obtain their products, from China and compete on price, we continue to evaluate our price position in the market, and are adjusting our prices, to achieve our order attainment goals, at profitable levels. Given our results to-date this year, and the momentum in our order flow, we feel good about our positioning, to drive profitable growth and cash flow generation into the fourth quarter, and beyond. For additional details on the financial results for the quarter, I’ll now turn it over to Sheila. Sheila Anderson: Thank you, Reece. Please turn your attention to Slide 4 titled F Q3, FY 2024 Financial Highlights for the quarterly overview. Orders for the third quarter of fiscal 2024, increased by 29.4%, from the third quarter of fiscal 2023, through strong demand in the Live Events business unit, returning demand in the spectacular and out-of-home markets in our Commercial business unit and solid growth in High School Park and Recreation and Transportation business units. These higher orders, offset the decline in the International business unit orders, as compared to last year’s third quarter. We believe international demand softness, relates to the economic, and geopolitical conditions. We generated sales of $170 million, for the third quarter of fiscal 2024, as compared to $185 million of sales, for the third quarter of fiscal 2023. This 7.9% sales volume declined, as the industry is returning to more traditional seasonal trends, and because during last year’s back half of the second quarter, and during the third quarter, the supply chain stabilization, allowed us to physically finish a high volume of orders and deliver, for revenue recognition in those quarters. As Reece highlighted, the third quarter is our historically low sales volume quarter, because of sport seasonality, outdoor construction lulls in the winter months, and fewer workdays due to the holiday breaks. This year’s third quarter volume, was as expected. Supply chains, also continued to flow generally as expected. Gross margin as a percentage of net sales, increased to 24.5% for the third quarter, of fiscal 2024, as compared to 22.6% in the third quarter of fiscal 2023. The 190 basis point increase in gross profit percentage, is attributable to strategic pricing actions, and stability in our diversified supply chains. Operating margin, was 4.7% of sales, during the third quarter of fiscal 2024, as compared to last year’s 3.8%, or adjusted to 6.3% without the noncash goodwill impairment charge, recorded in last year’s quarter three. Fiscal 2024 third quarter’s positive operating margin rate, is attributable to our continued careful management of operating expenses. Again, it’s notable that we delivered, an $8 million third quarter fiscal 2024, operating profit in our seasonally lowest volume, quarter of the year. Please turn to Slide 5, as I highlight year-to-date performance. Orders for the first nine months of fiscal 2024, increased by 6.6%, as compared to the first nine months, of fiscal 2023, through strong demand in Live Events, Transportation and High School Park and Recreation business units. Commercial orders are down, for the nine months from last year, due to a lack of large project bookings and the reduction in order spend by the out-of-home segment customers in the first six months of the year, partially offset by the third quarter improvement in order placements. International also is down slightly on a nine-month basis. Sales grew 10.6%, for the first nine months, which aligns to the order volume and built up backlog, coming into the first part of the fiscal year. Gross margin as a percent of net sales, increased to 27.7%, for the first nine months of fiscal 2024, as compared to 18.2% in the first nine months of fiscal 2023. The 950 basis point increase in gross profit percentage, is attributable to our strategic pricing actions, our investments in factory automation, our focus on cost-effective and high-quality product designs, and the stability of our diversified supply chain. After investments in operational areas and organic growth, the resulting operating margin was 11.2% of sales during the third quarter of fiscal 2024, as compared to last year’s 0.6%, or 1.4% if that goodwill impairment, was removed from the calculation of non-GAAP calculation, but helpful to compare the improvement. The balance sheet – from a balance sheet perspective, our cash position net of debt increased, due to cash generation from the profitable quarter, and management of working capital. Cash net of debt was $27.2 million, and we generated $53.8 million, of operating cash flow, during the first nine months, because of our profitability and our ability to lower investments in inventory levels, from the height of the supply chain challenges. Our working capital ratio at quarter end, was 2.2, compared to 1.6 at the same time last year. For an update on the market verticals, I’ll turn it back over to you, Reece. Reece Kurtenbach: Thank you, Sheila. Please reference Slide 6 titled Market Verticals Update. Our mission is to support our customers to inform, entertain and persuade their audiences, and their customers. Let’s look more specifically into our business areas. In Live Events, we again partnered with the Detroit Tigers, to deliver the second largest main video display in baseball’s major leagues at Comerica Park, updating and upgrading our previous installation from 2012. Five additional displays will be installed along the fascia, dug out and line score locations ahead of the 2024 baseball season. Moving forward, we expect Live Events demand, to remain strong as there are a number of projects being bid, as venues enhance facilities, to entertain fans and attract athletes. We see this trend continuing, and more focus being placed on entertainment areas, and the experience outside the bowl, in places like entryways, atriums, concourses and adjacent entertainment areas. Commercial orders, especially from customers in the out-of-home advertising space, can be sensitive to economic conditions, and they can rebound quickly as conditions improve. This market is also sensitive, to the large national advertiser spending decisions, which is why we also focus, on winning other independent billboard sales. We saw a nice order rebound in Q3 in both national and local out-of-home customers. However, large national out-of-home companies, are noting plans to continue, to constrain spending in the coming calendar year. We continue to innovate, and provide competitive differentiation in the marketplace, to reach the needs of our customers. For example, we are seeing interest in our light direct digital billboards. Light direct, narrows the viewing cone of the display, preventing light emissions from spilling into surrounding areas, and targeting only the intended audience in urban and rural environments. We continue to build out our AV integrator network, to market our narrow pixel product lines, especially in control room applications used by military, utility and transportation agencies. Transportation, our teams are focused in winning projects for intelligent transportation systems, as highlighted by fiscal Q3 wins, on projects in Arkansas and Tennessee. International, during the quarter, we won a stadium project and orders for transportation areas, yet orders have been slow this year, which we believe is, due to the economic and geopolitical uncertainty. Customers continue to demonstrate interest in projects, but are delaying buying decisions. Our sales teams, continue to be responsive to customers and are actively quoting opportunities. In high schools, the trend going forward continues to be, conversion to full video. We are well positioned, to meet this demand and believe, we are in the early stages of this transition. We are looking to speed up, and simplify the sales processes, and increase our market reach process, by deploying sales strategies to make certain items available, to be purchased online. We also continue to develop our e-sales channel, and these efforts are going well. We are continuing, to offer more products through these online and partner channels and have improved processes to make the buying process more efficient. From a big picture perspective, our customers use our control capabilities to create, manage and schedule content, for engagement with fans and audiences. We continue to make progress on our multiyear strategy, to create more capabilities, to aid in the service and maintenance of our systems, as well as continually add to the feature set of our cloud-based and locally hosted systems. These capabilities, are increasingly offered through software as a service, and we are investing in people and capabilities to grow these higher margin opportunities. If you would focus on Slide 7, titled Strategic Focus. Overall, our target markets are large, and growing with resilient demand driven, by our customers’ desire to improve their audience experience in sports, commercial and transportation environments. More specifically, we are focused on profitable growth, by capturing more of our serviceable available market, or SAM. By expanding the share of customer spend, adding new customers, developing control options, and expanding the services we offer, driving increases in monthly recurring revenues. For example, we are offering frameworks, a content design platform that enables students and staff, the ability to access top-level content, to elevate their brand, for event production and promotions. We’re also working, to capture new ways to use in-demand products, such as expanding applications using our indoor narrow pixel pitch product, which are applicable across all of our businesses. For example, we sold additional concourse displays from our NPP product line, to the Green Bay Packers at Lambeau Field, an existing customer using our traditional products. Internationally, we are driving Live Events, commercial, and transportation opportunities, as the economic conditions continue to improve. And we are focused on developing, and marketing to the military, by attending trade shows, specific to the industry, and growing relationships with AV integrators focused on this market. As we grow revenues, we are working to further increase our nimbleness and flexibility in capacity allocation and utilization. We are investing over the coming fiscal years, and improvements in our demand planning tools and alignment to capacity, for integrated business planning and our expanding factory qualifications to have flexibility for where a product is built, to maximize the use of our infrastructure. And dynamically aligning capacity, to adjust to seasonality, and varying order flow by market. Turning to Slide 8 on Slide 9, we are – we appreciate the feedback and questions that we received from our shareholders and wanted to take this opportunity to address some of the questions most frequently asked. First, we are often asked why we don’t give guidance today. As you know, our demand is project driven and therefore, can be lumpy. Demand is also highly seasonal, and additionally, demand can be impacted by customers and construction schedules, all making it difficult to give precise estimates for the future. What we can say today is that, over the next three to five years, we are working to drive sales growth, with our sights on $1 billion of annual revenue, and operating margin sustainability in the mid to upper end of the 5% to 10% range as we move forward. We are investing in processes and systems to increase our level of control, over the controllable elements of our business. This work is expected, to increase our ability to be responsive, to changing conditions, as we grow in an increasingly complex global marketplace. By taking these actions, our goal is to raise our visibility in, as I mentioned, a lumpy seasonal business and enhance our internal planning capabilities. It is important to note – that as we look more on an annual perspective, in order to identify prevailing trends in our businesses, and plan accordingly while maintaining, as much flexibility as possible. We will continue to reevaluate, our guidance practices over time to help our investors understand our outlook. Investors also ask, what is our capital allocation strategy? We historically plan around 5% of sales in research, and development expenses, and roughly 3% of sales, on average in capital spending, to maintain our technology leadership, manage and maintain our manufacturing capacity, information system infrastructure, and sales demonstration equipment. We also look for opportunistic acquisitions that, can help us advance our technologies, penetrate new geographies, or help expand our serviceable addressable market. Going forward, as we increase our sustainability and cash flow generation, we could consider repayment of our debt, and we may also consider the resumption of quarterly dividends and/or share repurchases. Turning to Slide 9. Finally, we want to reiterate that our Board has aligned management’s compensation structure with investors’ priorities for profitable growth. Specifically, the incentive compensation program is based on operating income as our key metric with targets of 10%. The strategies we described previously, are designed to help us move towards that achievement, capturing profitable SAM, developing best-in-class solutions and managing expenses. Maximizing our utilization and increasingly – increasing the agility of our manufacturing capacity and automation, through our systems and processes, are keys to managing expenses. Turning to fiscal Q4, 2024 qualitative outlook. I encourage you to reference Slide 10. Given what we see in our businesses today, we anticipate our fiscal fourth quarter seasonality, to be similar to pre-pandemic patterns, which is historically an increase in revenue and profitability, as compared to the third quarter. While we are not offering a quantitative outlook, qualitatively, we look for fiscal 2024 fourth quarter net sales to increase sequentially, and decrease from the year ago period, which was again a high-volume period in, which we were fulfilling back orders, related to the pandemic recovery. We are positioned for continued sequential margin and cash flow generation. In conclusion, our summary on Slide 11 recaps our key highlights. Our year-to-date results, offer evidence that we have overcome the challenges caused, by the constrained supply chain, and pandemic implications of recent years. We enjoy our position, as a global industry leader in best-in-class video communication systems. We are the technology leader in our industry and are the only U.S. manufacturer of scale, with a global footprint. What differentiates us from our competitors is our U.S. base, our technology leadership, the high quality of our solutions, our high-touch service and our large entrenched customer base. Our target markets, are large and growing, with resilient demand driven, by audience experience, sports fan engagement, and customer success with our systems. We are focused on a multiyear journey, to capture the growth in existing SAM, and in other areas. This poises us for sustainable revenue, earnings and cash flows. We are very proud of, our results and grateful to our teams, who work together to deliver them, and we look forward, to a solid end to the year. With that, I would ask the operator, to please open the line for questions. See also 25 Companies with the Best Benefits and Perks and 20 Countries With Worst Vision Problems. Q&A Session Follow Daktronics Inc (NASDAQ:DAKT) Follow Daktronics Inc (NASDAQ:DAKT) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. [Operator Instructions] Our first question comes from BJ Cook with Singular Research. Your line is open. BJ Cook: Hi, thanks for taking my question, guys. New order growth was quite a bright spot for the quarter. Interestingly, last quarter, there were higher orders in International and Transportation, decrease in Commercial. This quarter was quite the opposite. I know results can kind of be choppy, but is there anything unique that you’re seeing in those segments, given the jump in new orders? Reece Kurtenbach: BJ, first of all, I appreciate the question. Thanks for joining us this morning. And I think what you’re seeing is, as we described here, lumpiness, we – International and Transportation tends to be large order based and that order books in a certain period, and then it fulfills in the subsequent periods. And so, I think what you’re seeing, is a normal kind of impact of our business, which is why we tend to look, over larger periods, to kind of smooth some of that out. BJ Cook: Great. Thanks. You guys mentioned in your remarks, some new sources of revenue and SaaS, or recurring revenue in military as well. Can you expand on those? Or how far along in the sales process, are you in those different opportunities? Reece Kurtenbach: Certainly, our – what we call our narrow pixel pitch product, has really matured into a nice line of different pixel pitches in different ways that our customers can use them. And the AP integrator reseller chain that we sell a lot of that through, continues to grow and be developed. Some of – but there’s still room to continue to add AV integrators and build our visibility in that market space. On the software as a system and some of these other content services, we see great potential in those areas, but relatively new. We’re adding customers in those areas, but really in the past 12 to 18 months that has started. BJ Cook: Thanks, guys. Appreciate it Reece Kurtenbach: Thanks, BJ. Operator: [Operator Instructions] Our next question comes from Anja Soderstrom with Sidoti. Your line is open. Anja Soderstrom: Hi, and thank you for taking my question. Congratulations on the good progress here. I’m just curious with the backlog declining. I understand that’s, due to catch-up from last year a supply chain. But when do you think that will revert, to seeing growth again? Reece Kurtenbach: Our backlog is going to fluctuate from quarter-to-quarter, Anja, as we book these large orders and then kind of work them off. We believe, though, that our – a year ago, our backlog was too large. We had a lot of product in there, and we weren’t able to meet market lead times. And so, we see the reduction year-over-year in backlog as a positive as we’ve got our delivery more into market lead times. But I would also say that as we talked about seasonality, our fiscal Q1 and Q2, tend to be our largest revenue quarters. And so, we would expect backlog to grow, somewhat as we go into that period, and then shrink as we go into Q3. And then grow again, as we would come back into the next fiscal year, as we’ve – just over time, experienced that seasonality in and out. Is that helpful Anja? Anja Soderstrom: Yes, that was helpful. Thank you. And then in terms of the gross margin is fluctuating quite a bit as well. What is sort of a sensible one to use going forward for projections? Reece Kurtenbach: Revenue growth is the… Anja Soderstrom: The gross margins? Reece Kurtenbach: Gross margins. I think we’re going to see a stabilization in our gross margins as the business environment just isn’t as volatile, as it was a year or so ago. Where does that all settle out is a good question, Anja. We believe that we certainly are enjoying these gross margins, and we’re very sensitive to pricing adjustments and cost increases. And we’re fighting, to hold those gross margins quarter-after-quarter. As far as guidance on what gross margins would, or could be, I don’t think we’re ready, to give that at this time. Anja Soderstrom: Okay. Thank you. That was all from me. Reece Kurtenbach: Thank you, Anja Operator: [Operator Instructions] And I’m not showing any further questions at this time. I’d like to turn the call back over to Reece for any closing remarks. Reece Kurtenbach: Thank you, Kevin. I’d like to thank everyone for attending our conference call today. I would like to let you know that, we are appearing at the Sidoti Small Cap Conference in March, and we often have one-on-ones following the conference call. And we’ll host the next earnings call likely in June, as we release our annual results. I hope you all have a great day, and a great week, and thanks again for joining us. Operator: Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day. Follow Daktronics Inc (NASDAQ:DAKT) Follow Daktronics Inc (NASDAQ:DAKT) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkey13 hr. 36 min. ago

TransMedics Group, Inc. (NASDAQ:TMDX) Q4 2023 Earnings Call Transcript

TransMedics Group, Inc. (NASDAQ:TMDX) Q4 2023 Earnings Call Transcript February 26, 2024 TransMedics Group, Inc. beats earnings expectations. Reported EPS is $0.12, expectations were $-0.08. TransMedics Group, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and welcome […] TransMedics Group, Inc. (NASDAQ:TMDX) Q4 2023 Earnings Call Transcript February 26, 2024 TransMedics Group, Inc. beats earnings expectations. Reported EPS is $0.12, expectations were $-0.08. TransMedics Group, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and welcome to the TransMedics Fourth Quarter and Full Year 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Brian Johnston from the Gilmartin Group for a few introductory comments. Brian Johnston: Thanks, Operator. Earlier today, TransMedics released financial results for the fourth quarter and full year ended December 31, 2023. A copy of the press release is available on the company’s website. Before we begin, I would like to remind you that management will make statements during this call, including during the question-and-answer portion, that include forward-looking statements within the meaning of federal securities laws. Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. All forward-looking statements, including without limitation, are an examination of operating trends, the potential commercial opportunity for our products and our future financial expectations, which include expectations for growth in our organization and guidance and our expectations for revenue, gross margins, and operating expenses in 2024 and beyond are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not undue reliance on these statements. Additional information regarding these risks and uncertainties appears under the heading Risk Factors on our Form 10-K filed with the Securities and Exchange Commission on February 27, 2023, our subsequent Form 10-Q filings and the forward-looking statements included in today’s earnest press release, all of which are available at and on our website at TransMedics disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, February 26, 2024. With that, I will now turn the call over to Waleed Hassanein, President and Chief Executive Officer. Waleed Hassanein: Thank you so much, Brian. Good afternoon, everyone, and welcome to TransMedics’ fourth quarter and full year 2023 earnings call. As always, joining me today is Stephen Gordon, our Chief Financial Officer. Our fourth quarter performance represents a new high watermark for TransMedics’ business. We ended the year on a very strong note, laying a solid foundation for continued growth. Also, the fourth quarter was the first quarter that we had TransMedics transplant logistics services operational during the full three months of the quarter. Although, it is early — although, TransMedics logistics is in its early innings, I am thrilled to report on the early successes of the logistical services. We successfully executed on every front and overcame early operational challenges as we continue to expand our footprint and team. Let me share the summary of our results for Q4 and full year 2023. Total revenue for 4Q grew to $81.2 million, representing 159% growth from 4Q 2022 and a 22% sequential growth from 3Q 2023. For the full year 2023, total revenue was $241.6 million, representing 159% growth over 2022. So for the second consecutive year, we delivered on and even exceeded our aspirational — our aspirations to double revenue year-over-year in the first years of OCS commercial launch. TransMedics logistics services revenue for 4Q was $9.2 million, up from $2.1 million in 3Q. We are proud of this success in the first full quarter of operations. Based on everything we know today, we are growing extremely confident and bullish on the significant potential positive impact of TransMedics logistical services to help us grow the use of NOP platform. We fully expect our integrated NOP and logistics services to enable TransMedics to deliver an end-to-end, seamless, efficient and safe solution to transplant programs across the U.S. Simply stated, providing a world-class service through a highly cost-efficient model. Our overall gross margin for 4Q was 59%, down from 66% in 4Q 2022. The full year 2023, our gross margin was 64% compared to 70% in 2022. I know Stephen is going to detail this in his section of today’s presentation. However, I want to take this opportunity to give you my perspectives on this important topic of TransMedics gross margins. Please remember, we are still very early in our commercial ramp and more so with our logistics services. There are several leverage points. I repeat, there are several leverage points for both product and service revenues that are not fully reflected in our models yet. Based on everything we know today, we are extremely confident that we will be able to ramp the gross margin up over the next 12 months to 18 months, as we achieve more leverage of scale in our operations. In the meantime, we are thrilled that we achieved a 35% gross margin for our service business faster than we had projected, exceeding our early expectations. Again, it is just the beginning. We also achieved critical profitability milestones in 4Q as we delivered our first GAAP operating profit quarter. Specifically, we delivered $2.6 million of operating profit and $4 million of net profit in the fourth quarter. This marks a critical step forward as we strive to reach and sustain positive cash flow in the very near future. Before moving on, I’d like to take a moment to recognize that these exceptional results were only possible through the hard work of the entire TransMedics team. Let me send a message to team TransMedics. We are grateful for your world-class effort, commitment and creativity in navigating every operational challenge of our rapidly growing business in 2023. Importantly, I want to make it crystal clear that we are now gearing up for another strong year of execution in 2024. Now, let me move on to provide my perspectives on some important trends and what do they mean for our business. In line with our growth strategy, we grew our case volume across all three organ markets in 2023 compared to 2022. Our OCS lung case volume grew by approximately 11%, our OCS heart case volume grew by approximately 82% and our OCS liver case volume grew by approximately 199%, almost tripling from 2022. For the full year, we have transplanted approximately 2,300 OCS transplants in the U.S., compared to approximately 1,000 transplants in 2022. We plan to report our annual OCS case volume in the U.S. going forward as a benchmark towards the stated goal of performing 10,000 transplants in the U.S. by 2028. In terms of NOP contribution, as we predicted, NOP represented the lion’s share of OCS transplants in the U.S. We ended the year with an overall NOP rate of more than 98% across all three organs. We are confident that this sustained growth and success of NOP is based solely on the operational efficiency to grow transplant volumes, highest level of clinical care of donor organs and the overall cost efficiency experienced by transplant programs across the United States. Importantly, we are planning to present several data analyses during the upcoming transplant conferences in 2024 to unequivocally demonstrate the improved clinical outcomes achieved using OCS NOP in the U.S. Again, I want to stress a key point. The success of OCS NOP program is based on better clinical, economic and operational outcomes experienced by the transplant centers and not based on anything else. In Q4, we buttressed the NOP clinical staffing by adding 37 new clinical specialists and four procurement surgeons. Now, let me share the impact of our OCS technology and NOP and the overall national transplant volume in the U.S. For the first time in nearly eight-plus years, both liver and heart transplant volumes grew by 12% nationally in the U.S. Based on our OCS case number and donor mix, we are confident that our OCS technology and NOP services were primary drivers for this annual transplant volume growth. The overall national growth came from both increased use of DCD donors driven by OCS use, as well as a modest increase in DBD donor utilization. This is a great first step to prove the ability of the OCS and NOP to grow the overall U.S. transplant market. We are looking forward to continuing this trend in 2024 and hopefully seeing similar growth in lung driven by OCS and NOP over the next few years. Now, let’s discuss the percent — percentage penetration of the OCS use in each organ market segment nationally in the U.S. We ended 2023 with the OCS case volume representing approximately 17% share of the national liver transplant volume, approximately 16% share of the heart national transplant volume and approximately 4% share of the lung national transplant volume in the U.S. For anyone who may be assuming that TransMedics has maxed out on our growth potential, these data provided crystal clear evidence that we have a long way to go to continue to grow our market share in the U.S. This will be fueled further by our unique ability to also expand the overall national growth of transplant volumes in the U. S. to help patients who are desperately in need for a lifesaving transplant procedure. Our vision is that by the time we reach the ten thousand U.S. OCS transplants that this number 10,000 would represent a portion of the overall U.S. transplant market and not the total addressable U.S. market. Now, let me turn to a more detailed discussion on our transplant logistics service strategy and review its early performance in late 2023. I want to start by highlighting our strategy and value proposition. Please allow me to share some important facts and background on this important topic. One, historically for cold preservation and organ transport transplant center relied exclusively on charter flight brokers and local small operators. I repeat transplant center relied on charter flight brokers and/or local small charter operators. These brokers typically have used what they promote as an asset-light model, meaning they don’t own or operate any aircrafts. The role is simply to contract a charter flight and a crew from a local or regional operator when a donor mission is needed. When TransMedics first deployed the NOP program, you all remember we to relied on the same network of charter brokers. Unfortunately, we quickly learned through firsthand experience that the brokered charter flight model had significant limitations to help grow the transplant volume in the U.S. and was becoming a huge bottleneck for our NOP program. This regional charter brokerage approach was very operationally inefficient and added significant costs to the transplant centers due to; one, fragmented local and regional operators using older aircrafts that were not capable of covering the new longer range donor missions now afforded by the new U.S. national organ allocation loss and the use of OCS technology and it’s — an NOP. capability to go longer distances to increase utilization of donor organs for transplant. Two, significant shortage of charter plane availability for 24×7 to cover the growing demand for transplant mission. This resulted in the loss of approximately 20% to 30% of donor retrieval missions for NOP in 2022 and early 2023. Three, the lack of control over the planes and pilots by most charter brokers, often resulting in the use of more than one plane and multiple crews to complete a single mission, which sometimes doubled the transportation bill paid by the transplant center. Four, lack of control over the starting location of the aircraft led to use of highly inefficient routes, which added even more costs in order to reposition the aircraft. Five, lack of control over air safety standards of these contracted chartered, sorry, of these contracted local or regional operators flying 20-year, 30-year-old aircrafts. In fact, our own NOP clinical and surgical teams experienced a few near-catastrophic events on brokered aircrafts in 2022 and 2023. Six, an inefficient route — round-trip cost model even if the donor organ is not procured for transplant or if a DCD donor never progressed to become a donor. Finally, a very complex cost structure with multiple middlemen that paid with associated profit margins for the owner of the aircraft, the operator of the aircraft and the broker of the chartered flight. All these added significant and unnecessary cost burden to the transplant centers. So while this asset model might be light for the broker, it is clearly a very heavy financial burden to the transplant centers and payers who ended up paying multiple middlemen. Importantly, it is also severely — it also severely limits the ability to grow transplant volumes due to the shortage of dedicated aircrafts and we saw it as a roadblock to our stated goal and commitment to growing the U.S. transplant volume. To address these significant inefficiencies, safety issues and capacity constraints in the historical model above, TransMedics created a new more scalable model that meets the current and future needs for growth of the transplant markets in the U.S., while providing significant operational and cost efficiencies to the transplant centers. Let me share with you our vision and our goals that we’ve actually achieved to-date. One, we set out to maximize donor organ utilization for transplants by building and operating a modern fleet of jets that can go longer distances. This fleet is dedicated to transplant missions and not charter flights. Using newer model aircraft allows us to use less fuel so we can be environmentally responsible, reduce maintenance costs and reduce downtime to maximize availability to conduct transplant missions. Two, our goal was to maximize operational efficiency, which would reduce costs on the transplant centers. Three, our goal is to maintain the highest level of air safety for our staff, our clinical users and the precious donor organs we are caring for. Four, maximize logistics availability to ensure that we reduce the waste of donor organs that do not get used due to lack of plane availability. And finally, leveraging the unique NOP network and proprietary modern dispatching algorithm with a digital command and control center structure to significantly reduce cost burden of DCD donors that don’t progress to become a donor. The NOP network infrastructure created by TransMedics has given us a unique ability to share our cost efficiencies with our transplant center users. Now, with the above background, let me share with you some important early performance metrics for TransMedics transplant logistics service, which encompasses aviation and ground logistics for NOP missions. As mentioned earlier, revenue from transplant logistics service alone was $9.2 million in 4Q, compared to $2.1 million in 3Q, as we are only operational for approximately four weeks to five weeks in 3Q. The average number of active TransMedics Aviation planes were approximately seven planes in 4Q compared to approximately 3.5 in 3Q. We ended the year with a total of 11 owned aircrafts that will become fully operational in early 2024. Approximately 98 transplant programs in the U.S. use TransMedics logistics service in 4Q, compared to approximately 36 programs in 3Q. This is an important metrics to unequivocally show that operational availability, cost efficiency and high safety standards enabled us to disrupt the inefficient historical model and take market share relatively quickly. We were able to cover only approximately 35% of our NOP flights needs in 4Q using TransMedics Aviation planes compared to 13% in 3Q. At scale, we are hoping to cover 80% of the NOP cases using our TransMedics logistics service for both air and ground transport. We will use carefully selected, highly reliable and safe operators for supplemental lifts to support our missions. So far, we are humbled and proud by these early results. We are continuing to expand our air fleet and crew to operate the aircrafts. We are hoping to have 15 to 20 aircrafts operational by end of 2024 or early 2025. We opened the digital command and control, I’m sorry, command and dispatch center in Andover at the end of December and we are now fully operational 24×7, 365 from this state-of-the-art facility. This dispatch center is designed to maximize operational availability and efficient routing of our NOP resources to max — to minimize plane repositioning costs on the transplant programs. Again, based on everything we know today, we are extremely confident and bullish on the potential positive impact of transplant logistics services on the growth of our NOP case volume and a more efficient utilization of our clinical resources. Before I leave the TransMedics logistics section, I want to share some perspective on a matter that recently entered the public domain. Many of you may be aware that a letter was emailed to TransMedics from a member of the U.S. Congress on February 21st, writing in his capacity as an individual member of Congress regarding TransMedics business practices. Prior to receiving this letter, we had never communicated with this Congressman nor with any member of his staff. This letter contained serious accusations which are grossly inaccurate, unfounded and based on wrong information. Let me repeat again. This letter contained serious accusations which are grossly inaccurate, unfounded and based on wrong information. Rest assured, TransMedics has responded to this letter with the same level of seriousness with factual evidence to set the record straight. Our formal response is posted publicly on the Investor Section of our website. It is clear that what TransMedics is doing in the area of transplant logistics is disrupting this antiquated charter brokerage model for organ transplantation. This is creating some competitive dynamic in this area by some of our historical — by some of the historical brokers that are struggling to compare or to compete with our operationally efficient and cost effective logistical capabilities. Finally, let me give you a bird’s eye view of our growth strategy in 2024 and hope to detail these initiatives in our 1Q 2024 call in May. Our goal in 2024 is to continue to invest in building out our TransMedics transplant logistical services throughout 2024 to give us more operational leverage and efficiencies. We will focus on growing our NOP case volume in all three market segments by driving both growth in the overall transplant volume and take share of existing volumes. We will initiate a new clinical program to try to reinvigorate the lung transplant activities in the United States. Finally, we are investing in our next-gen OCS technology platform that will be more optimized for NOP workflow and streamline the support process on our clinical staff to maintain the highest clinical management quality and achieve better product leverage. We are humbled by our success in 2023, however, we are not standing still. We are laser focused on our execution plan for 2024 to help drive growth in the overall transplant volumes in the U.S. and for TransMedics business. That being said, we need to be balance — we need to balance our bullish plans with potential scalability and competitive challenges. We are providing an annual revenue guidance between $360 million to $370 million, which will present 49% to 53% growth over 2023. With that, let me turn the call to Stephen Gordon to cover the detailed financial results for the quarter. Stephen Gordon: Thank you, Waleed. I will now provide some additional detail on the Q4 results and other financial information for the quarter and the year. So starting with revenue, for the fourth quarter of 2023, our total revenue was $81.2 million. This is an increase of 159% from the fourth quarter of 2022 and a 22% sequential increase from last quarter. The $81.2 million included $1.1 million related to our flight school and $1.4 million related to Summit Aviation’s legacy business. So a total of $2.5 million that is non-transplant related. The $1.4 million of legacy business is not continuing and is expected to be zero in the first quarter of 2024. So that leaves $78.7 million of transplant related revenue worldwide. In the U.S., transplant revenue was $75.2 million. U.S. revenue also increased up over 100 — 159% from the fourth quarter of 2022 and the U.S. grew 26% sequentially from last quarter and this included the $9.2 million of TransMedics logistics revenue. The organ breakdown on U.S. revenue was $54.7 million of liver, $17.6 million of heart and $2.9 million of lung. All organs growing substantially over Q4 of 2022. We did see a modest sequential decline in lung revenue while liver and heart continued strong sequential growth in Q4. Ex-U.S. revenue was $3.5 million, a 51% increase in Q4 of 2022, but also a sequential decline from Q3 of 2023. As we have stated in the past, our revenue outside the U.S. may not be consistent due to the nature of transplant and the lack of reimbursement outside the United States. The OUS organ breakdown was $3.2 million of heart and $0.3 million of lung. Next, I will cover the product and service revenue. Our service revenue includes the added amounts we charge for the surgical procurement and organ management, and now also includes the amount we charge for organ procurement and transplant logistics, including air and ground services. In Q4, product revenue was $51.9 million and service revenue was $29.3 million. So the service portion was 36% of the total in Q4 and that includes the non-transplant service revenue. Gross margin for the fourth quarter of 2023 was 59%. This is down from 66% in the fourth quarter of 2022 and reflects the higher NOP service component of our business, which was still in the early stage in Q4 of 2022. Now drilling down one level, the product margin was 73% in Q4 and service margin was 35%. We did experience an unfavorable impact to product margin of about 300 basis points that will not repeat in Q1, which was related to the end-of-year inventory cleanup and adjustments. We have made changes to our processes, so we will not see this type of quarterly anomaly in the future. On the service side, we are pleased that we were able to deliver 35% service gross margin in our first full quarter of providing our logistics service. And just to repeat, the service portion of the business includes the NOP clinical service, as well as air and ground logistics. So this achievement gives us confidence that we will be able to provide this service with a mid-30%s service gross margin or better as we grow our footprint in utilization of aviation. As a reminder, all costs related to aviation, including fuel, pilots, maintenance and depreciation are included in the service cost of goods sold. Total operating expenses for the quarter were $45.3 million, 65% above Q4 of 2022 operating expense and this expense growth was driven by investment throughout the organization, including 87% growth in R&D related to investments in new products, development and NOP tools, and 59% growth in SG&A for both NOP support and overall corporate infrastructure. The growth in operating expense of 65%, while growing revenue by 159%, allowed TransMedics to deliver its first GAAP operating profit of $2.6 million and net profit of $4 million for the fourth quarter of 2023. These compare with an operating loss of $6.8 million in Q4 of 2022 and a net loss of $6.7 million in Q4 of 2022. Total cash at the end of the year was $394.8 million as of December 31, 2023, which equates to cash usage of $32.3 million from the balance at the end of Q3 of 2023. However, operating cash was a positive $8.3 million in the quarter, which was offset by the purchase of three additional planes in the quarter for about $39 million. Basic weighted average common shares outstanding for the quarter were $32.6 million and diluted weighted average common shares outstanding for the quarter were $34.2 million. Now let me share some summarized information on the full fiscal year 2023 results. For the full year, total revenue was $241.6 million, again at 159% increase over the prior year. The U.S. organ breakdown for the full year was $151.5 million of liver, $59.4 million of heart and $10.5 million of lung. Ex-US was $14 million of heart, $1.3 million of lung and $0.1 million of liver. And again, non-transplant revenue for the year was $4.9 million. Product revenue for the year was $176.1 million and service revenue was $65.6 million. Gross margin for the full year 2023 was 64%, compared to 20% — compared to 70% in 2022. Again, this is a result of the higher portion of NOP service revenue. Product margin was 77% and service margin was 29% for the full year of 2023. Total operating expenses were $182.5 million for the full year 2023, up 89%, from $96.7 million in 2022 and included $27.2 million of one-time acquired in-process R&D related to our acquisition of technology from Bridge to Life and $2 million of acquisition-related expenses from our acquisition of Summit, both in the third quarter of 2023. Our operating loss for the year was $28.7 million for 2023, compared to $31.4 million in 2022 and net loss was $25 million in 2023, compared to $36.2 million in 2022. Overall, 2023 was a tremendous year for TransMedics, as we demonstrated the potential to grow our business while helping to increase the overall number of transplants. By adding logistic services to our NOP offering, we can now provide a true turnkey solution to our transplant center customers. We continue to be extremely optimistic about our opportunities to continue to grow in 2024 and beyond. To repeat Waleed’s earlier comment, we are providing annual revenue guidance in the range of $360 million to $370 million, which represents 49% to 53% growth over the full year of 2023. Also, for modeling purposes, we expect gross margins to improve throughout 2024. We would expect to exit 2024 in the 63% to 64% range for overall gross margin. We would expect the product mix and service mix to be around 65% product and 35% service in 2024. We expect expenses to grow in 2024, likely in the 30% to 40% range. Now, I would like to turn the call back to Waleed for closing comments. Waleed Hassanein: Thank you, Stephen. We’re very humbled by and proud of TransMedics’ performance in 2023. We more than doubled our overall revenue. We helped grow the national U.S. heart and liver transplant volumes by double-digit numbers. We launched a new TransMedics logistics network to drive more operational and cost efficiency for our clinical users. And we achieved our first GAAP operating profit quarter for the business. In totality, we set a solid foundation for sustained growth of our business and our mission of growing transplant volumes to help patients in need for an organ transplant. Now, we are laser-focused on our 2024 operational plans and on our path towards achieving 10,000 OCS transplants by 2028. With that, I will now turn the call back to the Operator for Q&A. Operator? See also 20 Countries with the World’s Best Skin and 15 Highest Quality Cheeses in America. Q&A Session Follow Transmedics Group Inc. (NASDAQ:TMDX) Follow Transmedics Group Inc. (NASDAQ:TMDX) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Our first question comes from Allen Gong with JPMorgan. Please go ahead. Allen Gong: Hi, team. Thanks for the question. Congrats on the good quarter. I wanted to start off diving a little bit deeper into your guidance. You provided the gross margin outlook by disposables versus service, but I think a big question that we still have is, when we think about your disposables versus service on the top line, how should we think about the drivers of the growth that you’re expecting to see? Stephen Gordon: Yeah. Allen, as far as drivers of growth, I mean, we continue to, as Waleed mentioned, we want to penetrate deeper across all three organs and we want to deliver a clinical program in lung that will help increase the lung later in the year. And the impact of the logistics business is not just for the growth in logistics, it’s also to grow the case volume, which we expect to happen. Waleed Hassanein: Yeah. Allen, thank you for the question. From our perspective, I agree with Stephen, but let me give you a little bit more granular response. We’re nowhere close to being done growing in transplant volume. We will grow our transplant volume by growing — by going deeper into existing accounts, by adding more DCD and DBD organs across all three organs, by reinvigorating the lung program, by adding new accounts in areas where we don’t have enough accounts, like the lung program, as well as adding more DBD to our heart franchise. We are just in the beginning of this commercial ramp up. The other impact is the indirect or direct impact of operational efficiency with the TransMedics logistics. It may even drive more growth into the actual case volume and overall revenue growth from the logistics aspect of our business. So it is — we monitor and drive both sides of our business, the disposable and the product, as well as the service and the synergies that exist between the two will also have an important catalyst to adoption of the disposables. Allen Gong: Got it. And then just as a quick follow-up, we’ve seen the letter that you sent in response to the congressional letter, so I won’t dive more into that, but there also was an article out kind of talking about a more thorough investigation of OPOs as a kind of a continuation of the investigation that’s been ongoing over the last few years. How should we think about the potential for that to disrupt the underlying transplant market and how should we think about the longer term impact on TransMedics? Thank you. Waleed Hassanein: Thank you, Allen. As you said, what was announced today in the Washington Post is just a continuation of what’s been ongoing for several years, trying to disrupt or revamp the OPO network in the U.S. The bottom line is the following. TransMedics went out alone and developed a unique model called the NOP. We built it, we executed it and we delivered results to grow transplant volumes in this country by double digits, numbers that hasn’t been seen in almost a decade. We are going to continue to do that and we are proud of what we’ve accomplished. We don’t think what’s happening with the OPOs or what’s been announced earlier today has anything to do with us, but we are here and we’re proud to show anybody who cares to know how to grow transplant volumes in this country. We’ve already done it and we will continue to do it. So, again, it’s unfortunate what’s going on, but as you said, it’s been going on for several years. In the meantime, we are focusing on our business. We’re focusing on driving more organ transplants in this country successfully with excellent results using our NOP service and now our logistics service. Brian Johnston: Next question, Operator. Operator: The next question comes from Josh Jennings with TD Cowen. Please go ahead. Josh Jennings: Hi. Good evening. Thanks for taking the questions. Congrats on a strong finish to a remarkable year. I wanted to just ask about the congressman’s letter. He provided us a strong rebuttal, shooting every accusation, allegation. Waleed, do you think there could be any short-term disruption to the business with these headlines floating around? Our sense is that you’ve added so many transplant programs as customers. They’re all aware of the business model. Don’t seem to have any issues with it. But just, one, any short-term disruption potential? And then two, any next steps that you expect from this inquiry by the congressman? Waleed Hassanein: Thank you, Josh. Josh, the first part of your question. Listen, one has always to assume some level of confusion, okay? This letter came out of left field. It was not supported by any facts. It was completely unfounded. I am sure whomever is behind this is going to try to use that letter to try to distract from TransMedics’ business. But what they’re not counting on or what you guys should expect, is TransMedics is not going to stand still. We are going to defend our practice, our success, our goal to grow transplant volumes, our ability to support these transplant institutions to deliver the best clinical support for their organs and for their patients as we have been doing for the past 25 years. And we all — you all know that TransMedics defend our positions very vigorously and fairly. So we’re not going to be standing still. We’re going to try to minimize that distraction as much as we can. Do we expect distraction? Absolutely. Because it’s natural. As far as the next part of the question, I really don’t know, Josh. I don’t know where this — how this letter came about, other than it appears that there’s some misinformation being propagated. But our response is pretty strong and it was designed as such to make sure that if anybody wants to go down the same path, that they need to know exactly the facts before they come and levy these accusations against TransMedics. And of course, we’re doing that with the full coordination of our senior advisors and legal team in Washington, D.C. But we don’t know what the next steps are, other than we have responded on time and in a comprehensive fashion and we are propagating our positions to all the right people around TransMedics and on — in the Congress as well. Josh Jennings: Thanks for that. Just a follow-up. Just you mentioned, Waleed, about the plan to present some data analyses demonstrating improved clinical outcomes, U.S. transplant using — transplant centers using the NOP and the OCS within the NOP. Any metrics you can share with us that we should be looking for and how impactful do you think these data analyses can be in terms of driving increased demand and adoption trends for NOP and OCS? Thanks for taking the questions. Waleed Hassanein: Thank you, Josh. I think our key metrics are the ones we’ve been monitoring all the time. We’re looking at both short- and long-term definitive outcomes. We’re looking at rates of PGD, primary graft dysfunction, early allograft dysfunction. We’re looking at patient and graft survival, both at six months and 12 months. So these are the metrics we — these are the metrics that transplant programs are measured by and also we’re looking at penetration and growth of the case volume within each transplant program in each market. So these are the metrics we’ll be discussing at ISHLT and ATC and ILTS. Operator: The next question comes from Bill Plovanic with Canaccord. Please go ahead. Bill Plovanic: Great. Thanks. Good evening. Thanks for taking my questions. Yeah. Very strong quarter. It looks like especially in the liver, and I’m just curious, by our math, it looks like the liver procedures were probably up about 20% sequentially and almost triple year-over-year. I was just kind of — if you could help us understand, what is kind of the really driving the liver adoption, because it seems to be going much faster than the heart, which looks like it was up sequentially, but just not at the scale and pace at which liver is. Waleed Hassanein: Thank you, Bill. I think there’s several reasons, and frankly, several expected reasons for that. We all know that liver transplant procedures are nearly double or even 2.5x heart transplant procedures. So that’s number one. Number two, liver transplantation is a dedicated service at transplant programs versus heart transplant is always adjunct to regular open heart surgery and cardiothoracic surgery in general. That’s number two. I think we are confident that the heart will pick up. Liver will always lead the way just because of the sheer number of procedures. I think over the next two years or three years, the heart will get up there as we continue to demonstrate growth and the overall transplant volume. We will get the number of procedure up, we will see the long-term effect of OCS as we will start reporting that at the next ISHLT and we are extremely confident that the heart will pick up the pace. And more importantly, we’re going to go out on a limb and say that over the next couple of years, we should see the lung starting to really become more contributing to our overall growth. Again, not at the same level of liver because of the sheer number of procedures, but that’s our goal is to get all three organs to be contributing close to each other. Bill Plovanic: Great. Thanks. And my second question, if I could, is just aviation ramp has gone a lot faster than we expected. You’re at 13 planes now. You said you get to 16 to 20. How do we and I think you gave us the metric of 80%. When do you expect to hit the 80%? Then how should we think about average revenue per case for aviation as you get a little more information and you’re getting deeper into this? And then how do we think about that service gross margin longer term is, I think originally you thought it’d be 30%, you’re already surpassing 35%? And thanks for taking my questions. Waleed Hassanein: Thank you, Bill. As always, three layered questions. The first aspect, we hope to be fully operational at the scale of doing 75%, 80% of our transplant missions with our own fleet when we surpass 20 operating TransMedics flights or aircrafts, which means we’re talking sometime second half of 2025. So that’s number one. The second part of the question was, remind me again, Bill, please. Oh, the price per — the average price per mission. We can’t comment on that until we are completely dispersed equally across the two sides of the United States, East and West, because it — the mix is different and that will happen hopefully as we exit 2024. Then finally, as far as the margin is concerned, I think, it’s early. I think we are going to be in the 30%s. I will leave it as that for now and then we will see how we’re executing going forward. Bill Plovanic: Okay. Great. Stephen Gordon: I would just add, as I mentioned, we do expect modest improvement over the year as we — really what’s important is we ramp the number of hours on the planes that we have and cover more of the fixed costs of the aviation plane. Bill Plovanic: Great. Thanks. Operator: The next question comes from Ryan Daniels with William Blair. Please go ahead. Ryan Daniels: Yes, guys. Congrats on the strong quarter and the year and thanks for the questions. Stephen, maybe we wanted to start with the margin front. It’s more revenue-related actually. This quarter it looks like about 34.5% of your sales came from the logistics and that’s with you only covering about 35% of your NOP cases with your own logistic solutions. So why would that percentage, the 65%, 35$, stay the same as it ramps towards 80% given that you’re only at 35% today, just trying to square that up? Stephen Gordon: Yeah. I think it’s important to note that that mix today, that’s not just logistics. That’s all of the NOP service. So we only had $9 million of logistics service, which is a smaller percent of the total. Ryan Daniels: Okay. Stephen Gordon: And so as we grow this business, a couple of things are different. One is we — part of the service revenue this quarter was some overhang from non-transplant-related revenue. That’s going to go away in Q1. So that’s a little bit coming out of the service. The other thing is we expect international to kind of come back to where it was last quarter and so that is higher product revenue. So both of those are skewing the service product mix in the wrong direction, I would say, in Q4. It will change a bit in Q1. And then it remains to be seen how we pass — how we go through the rest of the year. But generally speaking, I think, the service portion is going to be in the mid to kind of maybe slightly upper 30% range. I don’t think it ever gets to 40% of our business. Ryan Daniels: Okay. That’s very helpful color. And then maybe a broader strategic question. Obviously, with the growth and dynamic opportunity here, a ton on your plate, but you’ve also got Bridge to Life Technology acquisitions, new product development. You’re really building out the logistics business, hiring a lot of clinicians to support your growth targets. I’m curious if you could perhaps outline maybe two or three of the largest strategic initiatives that we should be keeping an eye on in 2024, not to set the platform as much for this year, but really to set that platform getting to the 10,000 cases? Thanks. Waleed Hassanein: Ryan, thank you for the question. We’re planning to detail all these in our next earnings call. But very important, we are doing all of the above and we are looking forward to sharing more specific and granular details about our goals in 2024 and beyond in our next earnings call. Ryan Daniels: Okay. I look forward to that. Thank you. Operator: The next question comes from Suraj Kalia with Oppenheimer & Company. Please go ahead. Suraj Kalia: Waleed, can you hear me all right? Waleed Hassanein: We can hear you just fine, Suraj. Suraj Kalia: Perfect. Gentlemen, congrats on an excellent quarter. So, Waleed, two questions. First, our math says you exited Q4 with liver, heart and lung market shares of approximately 25%, 20% and 4%. You guys do not put out guidance lightly, especially given your performance in the last two years and how the street starts building things in. And rough math is telling us, based on your FY 2024 guide, you guys are looking to get somewhere close to 25% to 30% share in heart and livers and 10% to 15% in lungs. I’ll be approximately right in our math and can you give us some additional granularity? How are you thinking through DBD, DCD or site movement? I guess just strip down the $360 million to $370 million guide a little more for us, if you could. Stephen Gordon: Yeah. Suraj, this is Stephen. So, I don’t think we can give where we expect share to be. We definitely expect share to improve from where we are today. As we said, we looked at it on an annual basis and we were kind of at 16% to 17% share in heart and liver, and we certainly expect to improve that as we go into 2024. And your — the next part of your question, Suraj, remind me? Suraj Kalia: Yeah. Just in terms of any additional color, how are you thinking about DBD versus DCD, and also the bell curve [ph] for site distribution? I guess just trying to understand is that, how are you targeting or getting to those numbers? Waleed Hassanein: Yeah. Suraj, let me address that one and thank you for the question. I think, Suraj, the way we approach this is very broad. I mean, we look at our case distribution and here’s what we expect. We expect, if we’re heavily used in DCD, we expect that to continue and we expect to continue to drive that forward across all three organs. But we’re not going to stop here. We are going to find ways to invigorate DBD utilization. We do that through a variety of different programs and mechanisms to drive adoption in that area to drive overall national transplant volume. So number three, we look at areas that are quiet or relatively quiet or lower penetration like the lung and we find ways to reinvigorate the lung and it doesn’t matter at that point whether it’s DBD or DCD. Can you imagine if we are more than where we are in the lung and near heart at least, what would that do to our revenue mix and penetration overall? It would be great. After that, as far as the transplant programs is concerned, again, our service is universal. Our service has been proven to result in every promise that we set to achieve or every hypothesis or value that we set to achieve and now it’s up to transplant programs to decide whether or not they want to be thriving and growing in the future of being a leading transplant program and that is the way every transplant program should look at OCS and NOP and transplant logistics. This is the future and we know that, we’ve proven it and we are standing by our commitment to transforming the field and we welcome and expect many of the transplant programs will be contributing part of our growth going forward, because we are contributing to their growth. So it’s not a one-size-fits-all. We have to be dynamic. We have to be flexible. We have to tackle it in a broad range across all three organs, across the two different types of donors and be creative on how we pull the levers to achieve our goals, and again, we are very early given the penetration rates we discussed. Suraj Kalia: Fair points. Waleed, if I could quickly ask a follow-up. Very nice sequential jump in the number of sites using TransMedics Aviation. So, Waleed, as it normally happens, right, even at our site visit, one of the comments you had made was like, look, we want to make it like a one-stop shop, attach TransMedics Aviation to every run. So you go to sites, the 98 sites you talked about in Q4. What has been the reception? And I’m trying to understand, is it like you all went to, I don’t know, pick a number, 200 sites, 98 are on board, the remaining one or two are resisting for whatever reason. Just set the stage for us to slice and dice how aggressive TransMedics is or lack thereof. Gentlemen, you guys are on a roll. Congrats again. Thank you for taking my question. Waleed Hassanein: Thank you very much, Suraj. Unfortunately, I might disappoint you by saying, I cannot give you more granular detail other than remind you that there are not 250 programs out there that we would go to. Again, our approach to these programs is very, very simple. When we get called for an NOP case, we provide them the option to use our TransMedics logistics. We provide them a price quote and it’s up to them to decide whether they want to use us or not. Some centers liked using us, came back and asked Tamer and Andre for a long-term contract. Some centers are — we don’t require that, but some centers wanted to do that and we are there to help them achieve that goal. The bottomline for us is, we know and we are confident that we are providing an operationally scalable and the most efficient cost structure in transplant logistics in the United States and it’s going to get better from here as we have more leverage and more plane and more capacity to meet many of these cases. And it’s up to the transplant program to participate in this, if cost-effective or efficient model or not. I hope I addressed the question, and I’m sorry, I can’t give you more granular detail than that at this early stage of launching logistics. It’s only one quarter, Suraj. Suraj Kalia: Fair enough. Fair points. Thank you. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Waleed Hassanein for any closing remarks. Waleed Hassanein: Thank you, Operator. Thank you all very much for being with us this evening and we look forward to speaking again in May. Have a wonderful evening. Operator: The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect. Follow Transmedics Group Inc. (NASDAQ:TMDX) Follow Transmedics Group Inc. (NASDAQ:TMDX) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyFeb 28th, 2024

PubMatic, Inc. (NASDAQ:PUBM) Q4 2023 Earnings Call Transcript

PubMatic, Inc. (NASDAQ:PUBM) Q4 2023 Earnings Call Transcript February 26, 2024 PubMatic, Inc. beats earnings expectations. Reported EPS is $0.34, expectations were $0.19. PubMatic, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Hello, everyone and welcome to PubMatic’s Fourth […] PubMatic, Inc. (NASDAQ:PUBM) Q4 2023 Earnings Call Transcript February 26, 2024 PubMatic, Inc. beats earnings expectations. Reported EPS is $0.34, expectations were $0.19. PubMatic, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Hello, everyone and welcome to PubMatic’s Fourth Quarter and Full Year 2023 Earnings Call. My name is Kelsey and I will be your Zoom operator today. We thank you all for your attendance today and as a reminder, today’s webinar is being recorded. And now, I will turn things over to Stacie Clements with The Blueshirt Group. Stacie, over to you. Stacie Clements: Good afternoon, everyone, and welcome to PubMatic’s earnings call for the fourth quarter and full year ended December 31st, 2023. This is Stacie Clements with The Blueshirt Group and I’ll be your operator today. Joining me on the call are Rajeev Goel, Co-Founder and CEO; and Steve Pantelick, CFO. Before we get started, I have a few housekeeping items. Today’s prepared remarks have been recorded. After which Rajeev and Steve will host live Q&A. [Operator Instructions].A copy of our press release can be found on our website at I would like to remind participants that during this call, management will make forward-looking statements, including, without limitation, statements regarding our future performance, market opportunity, growth strategy, and financial outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy, and other future conditions. These forward-looking statements are subject to the inherent risks, uncertainties, and changes in circumstances that are difficult to predict. You can find more information about these risks, uncertainties, and other factors in our reports filed from time-to-time with the Securities and Exchange Commission, including our most recent Form 10-K and any subsequent filings on Forms 10-Q or 8-K, which are on file with the Securities and Exchange Commission and are available at Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you, therefore, against relying on any of these forward-looking statements. All information discussed today is as of February 26, 2024 and we do not intend and undertake no obligation to update any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as may be required by law. In addition, today’s discussion will include references to certain non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income, and free cash flow. These non-GAAP measures are presented for supplemental informational purposes only and should not be considered a substitute for financial information presented in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measures is available in our press release. And now, I will turn the call over to Rajeev. Rajeev Goel: Thank you, Stacie and welcome, everyone. We delivered a terrific fourth quarter with results that significantly exceeded our expectations on both the top and bottom-line. Revenue growth accelerated to 14% over Q4 last year, which drove strong profit and cash generation. This inflection point in our growth was fueled by innovation investments we made over the past few years and particularly in 2023. I’m extremely proud of our entire team for their hard work, dedication, and outstanding execution. We saw year-over-year growth in the quarter for both omnichannel video and display. And I’m particularly excited about the contribution and growth of emerging revenue streams, which now represent a low single-digit share of total revenue and I anticipate will expand significantly over the course of this year. See also 25 Easiest Countries with Digital Nomad Visas for Remote Work and 15 Safest Countries That Give Citizenship by Buying Real Estate. Q&A Session Follow Pubmatic Inc. Follow Pubmatic Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Our results more than offset a sizable headwind from Yahoo as they shutter their SSP business earlier in 2023 and continue to transition their technology for owned and operated inventory. Excluding Yahoo, year-over-year revenue growth in the fourth quarter accelerated to 19%. Recall, we had a similar revenue headwind from Yahoo in Q3, making Q4 the second consecutive quarter of accelerating revenue growth when excluding Yahoo. This highlights the strength of our platform, the value we deliver to publishers and buyers, and the increasing importance of sell-side technology across the ecosystem. Investments we’ve made over the last few years are gaining momentum and are becoming meaningful growth drivers. They’ve allowed us to expand our customer relationships and deepen technology integrations on the back of a growing product portfolio. We have built a flexible integrated platform that meets the needs of buyers, sellers, retailers and data providers across the digital advertising supply chain, while delivering superior efficiency. As a result, we believe we are at the early stages of a period of significant multiyear revenue growth and market share expansion. On top of that, there are several major tailwinds that we expect to benefit from. Shifts in ad budgets to CTV and Commerce Media, continued industry consolidation as well as external forecasts pointing to a stable and constructive ad spend environment. With a focus on increasing shareholder value, we intend to drive market share gains, expand margins and generate strong cash flow. Underpinning this are a number of efficiency initiatives we implemented this past year across the business. In addition, we anticipate a 15% to 20% increase in engineering productivity in 2024, driven by the use of generative AI and multiple points in the software development and release process. These efficiencies, along with our expected revenue growth and strong financial profile, give us the ability to reinvest back into the business in sales and engineering for market share gains, while simultaneously expanding our share repurchase program. We’ve significantly ramped Connect our audience addressability platform for a variety of privacy-compliant post-cookie solutions. Over the last few months, we have seen a marked increase in activity on post-cookie solutions as buyers and publishers prepare for the end of third-party cookies. Just in Q4 alone, the number of revenue-generating Connect customers increased by 20% from Q3 to over 100%. We are also seeing more publishers adopt alternative signals with over 80% of impressions on our platform now having these signals available to buyers. Even more compelling, alternative identifiers provide more relevant, higher ROI ads to consumers. Our analysis across more than 600 billion ad impressions processed daily by PubMatic concluded that when alternative IDs are present,, publisher revenue increased by 16%. There is a tremendous opportunity in front of us for the open Internet to take share from walled gardens. As the open Internet scales up alternative signals, which drive increased advertiser performance, combined with its inherent advantages of professionally created content relative to the walled gardens user-generated content, the open Internet will be structurally more attractive to advertisers. For instance, we are collaborating closely with GroupM on a market-leading privacy-compliant first-party data solution developed by Resolve, a choreographed company specializing in distributed computing and federated learning applications for the ad tech industry. This partnership empowers advertisers to enhance their ad campaigns targeting capabilities without transferring any personal data outside of their native environment. PubMatic works alongside publishers to provide consumer cohorts based on customized next-generation large language models for each of GroupM’s clients. Ad transactions are then facilitated on the PubMatic platform against these cohorts to deliver highly relevant ads and improve advertiser ROI. We’re also working closely with Google, the U.K. Competition Markets Authority and Interactive Advertising Bureau’s tech lab on the Privacy Sandbox initiatives. As part of the Google Markets Testing Brands program, we are now facilitating end-to-end transactions with privacy sandbox APIs between multiple publishers and demand-side platforms. Given our success and the increased market activity in advanced addressability solutions, we plan to grow our engineering team focused on this area as well as our Connect go-to-market team by several dozen people in 2024. The deprecation of third-party cookies is driving more buyers to lean into sell-side technology partnerships. As a result of this and other trends, Supply Path Optimization continues to be a major growth driver for us as we add new SPO relationships and expand existing ones. We have been investing in SPO technology and partnerships for five years and ended 2023 with a high watermark, little over 45% of total activity coming from SPO. This is nearly double where we were just a few years ago. We see a significant greenfield opportunity ahead, even beyond our initial goal of 50% of total activity. A recent study by the Association of National Advertisers identified that only one-third of advertisers have engaged in SPO and that the average advertiser working with 15 to 20 SSPs. The study also actively advocates for advertisers in addition to large agencies to engage in SPO, consolidating activity with preferred technology providers to drive increased efficiency, transparency and operational simplicity. SPO is also gaining momentum among independent agencies, unlocking additional opportunities for growth. We recently launched a partnership with Wpromote, an independent marketing agency managing clients like Intuit QuickBooks, Peacock, Spinks and TransUnion. Through our SPO partnership, we will provide supply chain efficiencies that enable them to solve complex challenges for their brand clients with a performance rooted approach to media. Wpromotes’s Head of Programmatic & Video, Skyler McGill noted, through our preferred partnership with PubMatic, Wpromotes clients will be able to more efficiently and transparently access curated CTV and video inventory to drive business outcomes and create unique competitive advantages. Our SPO opportunity is further boosted by Activate, which is continuing to scale in both pipeline and revenue. We have an active pipeline of over 75 advertisers, agencies and campaigns. This pipeline is up by over 25% compared to the previous quarter. Earlier this month, we officially launched Activate in Japan, partnering with nearly a dozen leading CTV publishers in the region, including Asahi Television Broadcasting Corporation, Fuji Television, Nippon Television Network and Tokyo Broadcasting System Television. Premium streaming companies around the world are embracing Activate as buyers seek more efficient, programmatic access to their inventory to drive measurable business outcomes. For example, a prominent luxury retailer in the US wanted to drive brand awareness across channels with a focus on video and CTV during the holiday shopping season. With Activate, their agency was able to reach their niche target audience across PubMatic’s premium omnichannel video inventory, driving efficiencies across cost, operations and scale, ultimately achieving or exceeding each campaign KPI. As we continue to drive strong ROI for clients, I’m excited to tap into the nearly $65 billion expansion of our total addressable market that Activate represents. Together, SPO and Activate delivered strong profitable revenue growth in 2023. I continue to see tremendous opportunity ahead of us as buyers engage more closely and strategically with sell-side technology providers like PubMatic. We plan to expand our bio focused sales and customer success teams by 50% in 2024 in order to capture this opportunity and accelerate growth. Our growth trends with buyers also mirror the momentum we are seeing with publishers, particularly around high-value CTV and online video formats. Omnichannel video revenue growth accelerated in the fourth quarter. We have 271 premium CTV publishers monetizing on the platform, up 27% over 2022, and we continue to have a robust pipeline of opportunity as we head into 2024. Most recently, we added SLING TV and Vevo as they seek access to the unique and differentiated demand we offer through our SPO and Activate relationships. Equally important, our strong SPO relationships are driving increased premium content to our platform, creating a network effect. For example, driven by buyer interest, we recently signed a deal with DISH Media to provide buyers with access to premium programming on Sling TV, including their broad range of live sports content. With major global sporting events like the Paris Summer Olympic Games and Copa America in the US this year, we are excited to provide advertisers transparent, signal enhanced access to this valuable CTV inventory. We believe an interoperable approach is the only sustainable way to manage the anticipated growth in programmatic CTV advertising, particularly as newer entrants contribute to a rapid increase in CTV inventory and corresponding increases in ad dollars across the ecosystem. In 2023, we deepened engagement with CTV ad server providers like FreeWheel. And most recently, we expanded our relationship with the top three DSP partner by integrating their CTV demand onto our platform. The anticipated surge in buyer demand will bring increased ad dollars and monetization opportunities for streaming content providers on PubMatic. Our strong SPO relationships have also been instrumental in growing the size of our one-to-one private marketplace business, whereby publishers choose our platform to transact deals they sell directly to ad buyers. As publishers get familiar with the ease of use and benefits of our platform, they are increasingly using our software to run their one-to-one deals. Overall, revenue from one-to-one deals grew more than 50% year-over-year in 2023. Our strong Q4 results were built upon a foundation of sustained innovation that has been core to PubMatic’s DNA since our inception. In no year was this more evident than in 2023. Last year, we increased software releases by 60% year-over-year, including delivering two of our biggest product launches ever with Activate and Convert. Not only did these launches mark an innovation milestone for our company, but also reinforced our position as one of the leading independent technology providers across the digital advertising ecosystem. We have spent the past few years scaling our product development to extend the value of our core SSP platform beyond ad monetization services. We offer wrapper software to large publishers with OpenWrap, solutions like Activate for buyers, post-cookie targeting with Connect and Commerce Media with Convert, each adding new revenue streams in addition to the core SSP revenue we generate on ad impressions flowing through our platform. These solutions increase customer stickiness with more touch points and software integrations. They enrich the data flowing through our platform, making us more invaluable to our clients, and they provide us with clear points of differentiation. Collectively, these solutions that unlock emerging revenue streams for our business and now drive meaningful revenue generation and growth on top of our core SSP revenue. We expect these solutions to contribute mid-single-digit percentages of revenue in 2024, more than doubling year-over-year. The changing dynamics of the industry and the evolving digital advertising supply chain are also ushering in a new era for the open Internet. Historically, performance advertising has been the domain of walled gardens. Now, driven by the increase in first-party and identity data, further fueled by the rise of Commerce Media, as well as buyers ongoing focus on efficiency, we see a long-term opportunity to drive ROI and outcomes-based advertising on the open Internet. We see PubMatic as a platform best positioned to take advantage of this new opportunity. But the closed-loop reporting and valuable commerce data available through Convert, coupled with the efficiency and end-to-end control that Activate provides and the enhanced sell-side data now available via Connect, we have the foundational building blocks in place to deliver performance advertising solutions that rival the walled gardens. While it’s still early, we will increase our investment in product development and machine learning engineers to build new performance-based solutions. As I predicted last quarter, Q4 was a clear inflection point up for revenue growth. Our strong performance highlights the value of our integrated platform and our customer-centric approach to growth. As buyers continue to consolidate spend on our platform and take advantage of the growing solutions suite we offer, our publishers benefit from stronger monetization and greater utilization of our technology across our software products. I see tremendous opportunity ahead of us in 2024 and beyond to grow our market share and deliver shareholder value. We plan to expand our head count by over 150 people this year to take advantage of the revenue growth opportunities ahead of us. These investments will pay off partially in 2024 and more fully in 2025. With our focus on efficiency and our robust business model, we anticipate expanding margins in 2024. I will now hand it over to Steve for the financial details. Steve Pantelick: Thank you, Rajeev, and welcome, everyone. We ended the year with outstanding results across our business with fourth quarter revenue accelerating to 14% year-over-year and 33% sequentially versus Q3. There were several factors that drove this growth inflection point. We increased the total number of impressions monetized across all formats and channels by an impressive 29% over Q4 last year. Both omnichannel video and display revenues increased year-over-year. We achieved robust growth in every geographic region. In our emerging revenue streams like Activate and OpenWrap added approximately 3 percentage points of growth in the quarter compared to Q4 2022. These results are particularly notable given the revenue headwinds in our business from Yahoo! that we commented on last quarter. Our revenue growth, excluding Yahoo’s owned and operated inventory in the fourth quarter grew 19% over Q4 last year and grew 8% for the full year versus 2022. Along with our revenue acceleration, we’ve continued our long track record of profitability with adjusted EBITDA margin of 46%, and we generated the highest quarterly and full year free cash flow in the company’s history at nearly $20 million for Q4 and $52.8 million for the full year. These notable results once again highlight our robust business model, our operational excellence, and our ability to grow our core business while simultaneously investing in our technology and products for revenue growth acceleration. Breaking Q4 down by format and channel, which includes Yahoo unless otherwise called out Omnichannel video revenue grew sequentially 31% from Q3 and 7% year-over-year. These results were powered by a 30% plus increase in monetized impressions, which offset year-over-year CPM declines. As a reminder, on a year-over-year basis, video CPMs declined in early 2023, but were relatively stable from August onwards. Display returned to growth for the first time this year, delivering strong year-over-year growth at 9%. Mobile display led the way at over 20% year-over-year growth. Excluding Yahoo, total mobile and desktop display revenue grew 27% in the fourth quarter. On a regional basis, every region grew double digit percentages in Q4. Looking at ad spend by category, we saw notable recovery in the shopping vertical, which returned to year-over-year growth for the first time in 2023. The business, technology, and personal finance categories in aggregate grew over 30%. Overall, the top 10 ad verticals combined increased by 26% over Q4 last year. Our excellent fourth quarter results were driven by ongoing innovation over many years and are focused on the operating priorities that I outlined a year ago. Collectively, we expect this rigor will accelerate revenues in 2024, while delivering an expanded strong margins and healthy cash flows. To recap, our first priority was to deepen our relationships with our publishers and buyers to be well-positioned when the ads spend environment stabilizes. We did this through technology innovation on the PubMatic platform and partnership development. In 2023, we increased the number of high-value video impressions we monetized on behalf of our customers by over 30%. With a focus on capacity optimization and targeted CapEx investments, our rate of acceleration increased as the year progressed. We increased its activity from supply path optimization to over 45% of total, up from approximately 34% at the end of 2022. We maintained high rates of net spend retention from SPL buyers and very low churn underscoring the stickiness of these relationships. The net spend retention rate from SPL Partners with at least three years of spending was 120%. We added 151 publishers in 2023, which includes premium CTV inventory and transactional commerce brands. And perhaps one of the most exciting things we accomplished in 2023 was the ramp-up of our emerging revenue streams through new products, incremental data connections, and sticky software degradations. Our second operating priority was to drive free cash flow generation. Coupled with our durable model, we were disciplined in capital allocation and ongoing investments. We delivered $52.8 million of free cash flow, a 38% increase over 2022. Over the last three years, we generated over $140 million of free cash flow, which has provided us the flexibility to continually invest, accelerate growth, and differentiate our product offerings. And third, we focused on establishing a new level of efficiency in our cost structure. Our owned and operated infrastructure provides tremendous leverage in our business. On the back of CapEx investment in 2021 and 2022, our focus in 2023 was on driving increased optimization. These efforts resulted in more than 20% additional capacity on our platform, while allowing us to reduce CapEx by more than 70% versus 2022. In addition, our efforts delivered an 8% reduction in cost of revenue per impression processed. We also drove efficiencies across our product and engineering teams supported by generative AI and through a highly efficient and productive development organization in India. We launched and scaled a mid-market customer success team in India to deliver outstanding account management with greater focus and efficiency. Through the combination of improved engineering productivity and cost efficiency efforts, we have improved our cost base by over $20 million. Full year GAAP operating expenses were $165.7 million, a 23% increase over 2022, reflecting investments across the business. Included in this total is $5.7 million of bad debt expense related to the bankruptcy of one of our buyers in Q2. Extending our long track record of standout financial performance, 2023 marked our eighth straight year of GAAP net income and 11th straight year of positive adjusted EBITDA. Full year GAAP net income was $8.9 million, or $0.16 per diluted share. Non-GAAP net income, which adjusts for unrealized loss on equity investments, stock-based compensation expense and related adjustments for income taxes was $32 million, or $0.57 per diluted share. We ended 2023 with $175.3 million in cash and marketable securities and zero debt. During the year, we used our significant free cash flow for growth investments, and we repurchased shares as planned. As of December 31, we had repurchased 4 million shares of our Class A company stock for $59 million in cash, and we’ve reduced our fully diluted weighted average shares outstanding. We had approximately $16 million remaining from our prior authorization at the end of the year. Consistent with our long-term capital allocation strategy, supported by our healthy balance sheet and strong cash generation, we plan to continue our capital allocation strategy of, first, investing for growth; and second, returning capital to shareholders. Accordingly, the Board of Directors has authorized the repurchase of up to an additional $100 million of the company’s Class A common stock through the end of 2025 on top of the remaining funds from our prior authorization. Turning to 2024, we have seen a more constructive ad spend environment and are planning for accelerated year-over-year revenue growth and incremental margin expansion. This means investing in areas where we see the highest returns, while driving further efficiencies across the business. Key incremental investment areas include innovation and go-to-market resource. We plan to add more engineers to drive our post-cookie solutions and develop new revenue opportunities, such as performance advertising. We plan to increase our buyer-focused sales and customer success team by 50% to accelerate growth in SPO and Activate. And we plan to hire more sales people to focus on growing our emerging revenue streams coming from our enterprise-grade OpenWrap software, post-cookie targeting with Connect and Commerce Media with Convert. Overall, we expect to add more than 150 net new team members this year. In addition, we expect to increase CapEx by several million over 2023 levels to support the growth of our new products. And finally, we anticipate we will achieve further productivity gains through the use of AI and continued cost efficiencies by focusing on capacity and infrastructure optimization. Based on our successful long-term track record of maximizing the return of our growth investments, we are confident that our 2024 operating plan will help us accelerate our revenue growth to over 10% this year, which includes the Yahoo headwind referenced earlier. Excluding Yahoo, this growth translates to over 12% year-over-year growth. At the same time, we anticipate expanding our adjusted EBITDA margin and generating positive cash from operations in line with 2023. Turning to Q1. With the tailwind from our strong finish to the year, we are starting 2024 on solid footing. January trends were excellent with double-digit percentage increase in monetized impressions on a year-over-year basis. CPMs were in line with seasonal expectations and emerging revenue streams continue to grow. Notably, omnichannel video revenues were up double-digit percentages year-over-year and display revenues also increased year-over-year. Based on these recent trends, we anticipate Q1 2024 revenue to be in the range of $61 million to $63 million or 12% year-over-year growth at the midpoint and 17% growth, excluding Yahoo. In terms of costs, GAAP cost of revenue in Q1 is expected to be approximately $26 million. Over the coming quarters as a function of continued proactive steps on productivity and cost-saving measures, we anticipate keeping sequential quarter-over-quarter cost increases in the low single-digit percentages. We expect Q1 GAAP OpEx to increase approximately $5 million versus Q4. This increase absorbs the Q4 run rate of expense, global annual cost revenue adjustments that are effective in Q1, plus an additional costs related to our January global sales conference. With our focused investments for growth, we anticipate that OpEx will increase sequentially in the low single-digit percentages Q2 onwards. Given our revenue guidance and our cost structure, which is largely fixed in the near-term by design, we expect our Q1 adjusted EBITDA to be between $10 million and $12 million or approximately 18% margin at the midpoint. As a reminder, historically, our first quarter is impacted by prior year investments that are carried forward during a period of low seasonal ad spend. We expect profitability to improve as the year progresses, driven by our continued focus on productivity improvements, cost efficiencies and typical seasonal increases in ad spend. For the full year, we expect adjusted EBITDA margin to be approximately 30%. We expect CapEx to be between $16 million to $18 million for the full year. Over many years, we have developed a successful playbook to drive sustained innovation and operational excellence. This gives us the confidence to incrementally invest for future growth, while continuing to deliver robust profitability and cash flow. As one of the largest independent sell-side technology providers, I’m very excited about prospects in 2024, and the trajectory we are on for sustained double-digit growth this year and beyond. With that, I’ll turn the call over to Stacie for questions. A – Stacie Clements: Thank you Steve. [Operator Instructions] In the interest of time, we ask that you please limit your question to one and one follow-up. Our first question comes from Shweta Khajuria at Evercore. Please go ahead, Shweta. Shweta Khajuria: Thanks, Stacie. Let me try two, please. So first one, Rajeev, on cookie deprecation. I guess the question is, what is your sense in terms of the readiness of publishers and advertisers if cookies were to go away in third quarter and more so by fourth quarter? Do you think that they are ready to transition on both sides, the large advertisers as well as publishers? And then also on cookies — this is part of question one. Also on cookie, you talked about the 80% adoption of alternative IDs. I guess the question there is, how does it work once cookies do go away in terms of your revenue exposure that is — that has been reliant on cookies. Is it simply that cookies go away, you have – publishers have alternative IDs, so ROI goes up and potentially CPMs could go up. And those who publishers that don’t have alternative IDs will likely get lower CPMs. Could you help us think through how it would impact you? And then the second question for Steve is, Steve, could you please help us with the cadence of the revenue acceleration through the year as all these new incremental products will start playing a role. It sounds like mid-single-digit percentage in terms of full year contribution is how you characterized it. But how should we think about it through the year? Thanks a lot. Rajeev Goel: Yes. Why don’t I start? Thank you, Shweta on the cookie piece, and I’ll turn it over to Steve. So I would say there’s a mixed level of readiness across the ecosystem. We have been working for four or five years now on our Connect product, so we feel quite good about how we’re positioned. Some publishers are ahead of the curve. Some publishers are behind the curve, and I would say the same is true of advertisers and agencies. We saw what we announced with Group and resolve around modeled cohorts today. So that’s a great example of, I think, of getting ahead of the curve. I do want to emphasize that we are not dependent on how Privacy Sandbox evolves to what Google does. So we have been scaling non-cookie environments, such as CTV, Commerce Media mobile app. All of these areas are growing as a percentage of revenue as well as just the raw volume of impressions. And so we have plenty of impression opportunities to meet advertiser needs right? And as you commented, 80% of our impressions on our platform now have alternative signals available to the third-party cookie I think there will be a transition period when that cookie application, time line happens. It’s impossible to be fully for everybody in the ecosystem to be fully transitioned away from the cookie, while the cookie is still around. But we’ve been building signal. That percentage has been growing. It’s going to continue to grow. So we feel really good about all the things we’re doing around alternative IDs, contextual advertising, publish first-party data and modeled cohorts. And then stepping back, what I see is that Privacy Sandbox is introducing significant complexity into the ecosystem. It’s an entirely new parallel option environment and there’s a collection of APIs that have to be implemented and those APIs themselves are evolving rapidly. And so what that means is that it will take substantial and sustained engineering investment in order to compete effectively. And we’re in a position to make that investment. It’s factored into our 2024 plan. I suspect there are many companies in the ecosystem in the ad tech ecosystem that will not be in a position to make that investment. So this may very well be a share gain opportunity for us. Let me turn it over to you, Steve, on the revenue piece. Steve Pantelick: Great. Thanks, Shweta, for the question. So a couple of things just to highlight. Number one, our guidance at the midpoint is about 12% year-over-year growth. So clearly a step-up from where we were historically in the first half of 2023. So overall, we feel that the start of the year is very robust and positive. And then to your question and comment, we have additive over time in emerging revenue streams. So I expect that through the course of the year, we’ll continue to build on the momentum we’ve established in the first quarter. It will probably match a more seasonal expectation in terms of historical averages. So expected growth in Q2 versus Q1, and then strong fourth quarter, which will be supplemented by our emerging revenue streams. The other comment to note on emerging revenues is that, it’s really positive on a number of fronts for us, not the least of which is net new in many cases, but it’s SaaS-like revenue and more stable and less from to, let’s say, the ups and downs of the overall ad spend environment. So we see a lot of stability in those revenue streams and build up over time. And our current expectation is that by the end of the year, we will double the portion of our revenue — emerging revenue streams through the course of this ramp up and investment in these areas. Stacie Clements: Thanks, Rajeev. Thanks, Steve. Our next question comes from Matt Swanson, RBC. Please go ahead, Matt. Matt Swanson: Yeah. Thanks, Stacie. Congratulations on the quarter, guys. I think I want to say maybe on the SPO side. And like you mentioned, you’re dangerously close hitting those long-term targets of 50%. And I guess the two-parter on that would be, one, do you have a new number that kind of sticks out in your head is like what the long-term contribution from SPO is? And then also just kind of thinking this journey we’ve been on how the value proposition of SPO has changed from today versus when it started. Rajeev Goel: Sure. Yeah. Thank you, Matt. So with respect to SPO, as you mentioned, right, we are very close to the targets that we had set out earlier. When I think about it, I think long term, maybe three-quarters of our business could be SPO based. So let’s put a pencil that in as kind of the next frontier, the next water mark for us to hit. I think there’s still a tremendous amount of opportunity. As I mentioned in the prepared remarks, we are expanding the sales and customer success teams here by 50% in order to go after it. We highlighted Delve promote more of an independent agency, we see a lot of activity on the advertiser front. So in terms of how the value proposition is evolving, it certainly has been evolving and I think the kind of economic cycle that maybe we’re still in, or maybe we’re most of the way through has also changed where the value proposition is headed for SPO. So it used to be about simplifying operations in order to focus on high-quality inventory from a media virus perspective. And I think as we’ve gotten deeper into these SPO conversations and relationships, we found a whole set of different opportunities for us to focus on. So, helping make the buyer more efficient and certainly one that buyers are very focused on these days, that ANA study where buyers are still working with 15 to 20 SSPs. Obviously, that’s a metric that’s far too high and is not going to be sustained. Buyers are looking for help with the privacy and regulatory environment. So there’s more and more privacy regulations around the world and they need to be compliant in all places where they do business. There’s 20-some US state regulations in place now are coming in place. Post-cookie targeting is another area. So the exactly the point that we made with GroupM and Resolve. So, I think it’s turning into a much more multifaceted data, workflow, efficiency, compliance opportunity, which creates tremendous, I think, innovation opportunity for us and tremendous growth opportunity for us. Matt Swanson: And then if I could ask one more. Steve, you mentioned some of this being more SaaS-like revenue. One of the interesting parts of the SPO, is it meets your spend like almost more DSP like, right, where it’s about ad budgets and less CPM sensitive. So can you just talk about like as like, let’s say, we got to 75% SPO activity, what that does for your visibility in terms of being able to forecast revenue? Steve Pantelick: Well, I actually think it grows and to Rajeev’s point, I mean, we’ve gone on this journey with buyers and we learn them more and more every day and deepen the relationships. I shared the stickiness measure and the incremental spend that we see from our SPL relationships. So, all of that contributes to what I’ll call the stability of our revenues over time. But the aspect with respect to emerging revenues is that something that is built on our innovation capabilities, and it’s on top of our platform. And so we are finding significant pockets of opportunity, these SaaS business models, whether it be database through our Connect, OpenWrap software, enterprise-grade software, we are able to charge for that. And of course, the significant launch of ACTIVATE, which adds a net new revenue stream in terms of buyer fees......»»

Category: topSource: insidermonkeyFeb 28th, 2024

Huron Consulting Group Inc. (NASDAQ:HURN) Q4 2023 Earnings Call Transcript

Huron Consulting Group Inc. (NASDAQ:HURN) Q4 2023 Earnings Call Transcript February 27, 2024 Huron Consulting Group Inc. beats earnings expectations. Reported EPS is $1.29, expectations were $1.12. Huron Consulting Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good […] Huron Consulting Group Inc. (NASDAQ:HURN) Q4 2023 Earnings Call Transcript February 27, 2024 Huron Consulting Group Inc. beats earnings expectations. Reported EPS is $1.29, expectations were $1.12. Huron Consulting Group Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and welcome to Huron Consulting Group’s Webcast to Discuss Financial Results for the Fourth Quarter and Full-year of 2023. [Operator Instructions] As a reminder, this conference call is being recorded. Before we begin, I would like to point all of you to the disclosure at the end of the company’s news release for information about any forward-looking statements that may be made or discussed on this call. The news release is posted on Huron’s website. Please review that information along with the filings with the SEC for a disclosure of factors that may impact subjects discussed in this afternoon’s webcast. The company will be discussing one or more non-GAAP financial measures. Please look at the earnings release and on Huron’s website for all of the disclosures required by the SEC, including reconciliations to the most comparable GAAP numbers. And now I would like to turn the call over to Mark Hussey, Chief Executive Officer and President of Huron Consulting Group. Mr. Hussey, please go ahead. Mark Hussey: Good afternoon, and welcome to Huron Consulting Group’s Fourth Quarter and Full-year 2023 Earnings Call. With me today are John Kelly, our Chief Financial Officer; and Ronnie Dale, our Chief Operating Officer. Driven by strong growth across all three operating segments in 2023, we achieved record revenues and expanded our operating margins for the third consecutive year. Our fourth quarter performance was consistent with our expectations, culminating in record financial performance for full-year 2023. Revenues in the fourth quarter and full-year 2023 grew 8% and 20%, respectively. In 2023, our consulting and managed services capability, which represents over half of our revenues, grew 23%, while our digital capability grew 17%, achieving revenue that is approaching $600 million and represented 43% of our revenues across all three operating segments. Full-year adjusted EBITDA margins improved 70 basis points over the prior year, reflecting continued progress toward our objective of returning to mid-teen EBITDA margins by 2025, and our strong cash flow enabled us to return $124 million to shareholders via share repurchases in 2023 while maintaining a strong financial position. Our financial performance demonstrates the strength of the foundation we have established under our integrated go-to-market model to continue delivering on our medium-term investor objectives. Our deep industry expertise and leading market positions in health care and education, our expanding presence in commercial industries, and our growing portfolio of digital capabilities positions us well to meet or exceed our medium-term financial objectives or low double-digit revenue growth and increased profitability. Now I will discuss our fourth quarter and full-year 2023 performance along with our expectations for 2024. In the fourth quarter of 2023, Healthcare segment revenue grew 12% over the prior year quarter, reflecting the strong demand across our digital strategy and innovation, performance improvement and financial advisory offerings. On a full-year basis, the Healthcare segment achieved record revenues of $674 million, growing 26% over 2022. Demand was widespread across our performance improvement digital, financial advisory, strategy and innovation and managed services offerings. Our Consulting and Managed Services revenues increased 30% and digital capability revenues increased 16% over the prior year. We continue to diversify our portfolio to meet the expanding needs of our health care clients and build a strong foundation for ongoing growth for this segment. As I mentioned on our last earnings call, the operating environment for health care providers began to improve in 2023. Despite some improvements in the overall patient volume, many health systems continue to face significant financial pressures, a confluence of paper-driven financial and operating challenges, combined with increasing competition, deteriorating payer mix and inflationary and interest rate headwinds, create challenges for health system business models. We believe these market pressures create opportunities for our diverse set of health care offerings. The investments we have made and will continue to make in innovation, new services, products and partnerships, physicians or health care segment well, continued growth in 2024. Turning now to the Education segment. In the fourth quarter of 2023, Education segment revenues increased 7% over the prior year quarter primarily driven by demand for our digital offerings. Annual revenues in the segment grew 19% compared to 2022, achieving record revenues of $430 million. For the full-year, demand was broad-based, with our Digital revenues and Consulting and Managed Services revenues increasing 28% and 12%, respectively, over 2022. We believe the solid demand for our digital, research and strategy and operations offerings will remain strong as higher education institutions face continued financial and operational challenges. The frequently mentioned demographic challenges leading to declining numbers of college-bound students creates a highly competitive environment for admissions. Similar to our health care clients, increased labor and facilities costs, unfunded government mandates, and the increased reliance on digital platforms, create financial pressures and challenges to the achievement of university admissions here as well as have the reputation, long history of proven results and deep client relationships makes us one of the most trusted advisers to the industry, which we believe positions us well to support our clients through the diverse set of challenges faced by the higher education industry. Before I turn to the Commercial segment, I would like to highlight the recently announced investment we will make to accelerate our growth in our mission-driven end markets, which is a key pillar of our strategy. Earlier this month, we announced our intent to acquire GG&A, a leading philanthropy-focused management consulting firm, serves education institutions and health care, arts and other non-profit organizations. This acquisition strengthens our philanthropic consulting offerings, complements our advancement-focused digital services and creates new pathways for us to serve our mission-driven clients. And we expect the transaction to close next month. Now turning to the commercial segment. In the fourth quarter of 2023, Commercial segment revenues were flat over the prior year quarter primarily attributable to growth or our digital offerings, offset by declines in our strategy and innovation offerings. On a full-year basis, Commercial segment revenues grew 9% year-over-year. The growth was broad-based as our Consulting and Managed Services capability and Digital capability grew 13% and 7%, respectively. A standout performer within the Commercial segment was our financial advisory business, which grew 68% for 2022, driven by strong demand for our restructuring and turnaround offerings. The uncertainties in the broader macroeconomic environment, including rising interest rates, inflationary pressures and geopolitical risks, have created unique challenges, particularly among some of our mid-market commercial clients. As is often the case, and uncertain economic environment means many organizations to take a more cautious approach to executing large-scale initiatives. This created mixed demand for our offerings in 2023. Our financial advisory offerings were in strong demand during the past year as many organizations facing financial distress sought our expertise. Our digital offerings grew more slowly as some organizations were more cautious about their spending on large-scale digital initiatives. We were now seeing positive indicators that demand for commercial digital projects is improving as we begin 2021. Our growth in 2023 demonstrates the importance of our balanced commercial portfolio. We remain focused on growing our presence in commercial industries by putting more industry type and expanding our capabilities while maintaining balance within the commercial segment and across a more diversified enterprise platform. Now let me turn to our expectations and guidance for 2024, which contemplates our pending acquisition of GG&A. Our revenue guidance for the year is $1.46 billion to $1.54 billion. We also expect adjusted EBITDA in the range of 12.8% to 13.3% of revenues and adjusted diluted earnings per share of $5.35 to $5.95; company-wide, guiding to 10% revenue growth at the midpoint for 2024. We are proud of the significant growth we achieved in 2022 and 2023, and we believe demand for our portfolio of offerings will continue through 2024. We remain focused on achieving low double-digit annual revenue growth objective that we established at our 2022 Investor Day while pursuing opportunities to accelerate growth beyond those goals as demonstrated in recent years. In terms of margins, the midpoint of our 2024 guidance, we expect a 70 basis point improvement over 2023, building off the collective 150 basis point improvement achieved in 2022 and 2023. The midpoint of our guided adjusted earnings per share range of $5.35 to $5.95 per share is actually 116% higher than our 2021 adjusted EPS of $2.61, which reflects the compounding impact of revenue growth, margin expansion and return to shareholders via share repurchases. We remain committed to achieving our financial objectives for sustainable revenue growth and improve profitability. And to deliver these objectives, we remain focused in five key areas: first, accelerating growth in our core end markets of health care and education; second, expanding our growing commercial business; third, advancing our global digital technology and analytics platform; fourth, broadening our offerings and capabilities to build a sustainable base from which to drive consistent revenue growth and margin expansion; and fifth, strategically deploying capital to invest in the areas of our business with the greatest growth potential while returning capital to shareholders. Our growth strategy has delivered strong results in recent years, and we believe it will continue to be the foundation from which we will achieve top and bottom line growth for the future. Each of the pillars of our full strategy reinforced to build it by the one another. And when executed together, it will help us enhance our ability to deliver on our clients’ most complex challenges, strengthens our competitive advantage to create value for our shareholders. 2023 was a record year for Huron, and these results are only possible because of our incredibly talented team and their commitment to making a lasting impact on our clients and our business. Huron has always had a vibrant and collaborative culture and that culture remains at the heart of our success. Together, we have collectively built a client-centric culture and supportive work environment, which was reflected by Huron securing the 32nd position out of 100 on Glassdoor’s Best Places to Work U.S. Large Companies list. The Glassdoor rankings and our financial results demonstrate considerable impact our team has had on Huron’s performance. We won’t take our recent success for granted. We remain focused on executing our strategy. We are excited about our prospects for 2024 as we strengthen our competitive position to take advantage of the market opportunities that lie ahead. And now before I lose my words, I’m going to turn it over to John for a more detailed discussion of our financial results. John? John Kelly: Thank you, Mark, and good afternoon, everyone. Before I begin, please note that I will be discussing non-GAAP financial measures, such as EBITDA, adjusted EBITDA, adjusted net income, adjusted EPS and free cash flow. The press release, 10-K and Investor Relations page on Huron’s website have reconciliations of these non-GAAP measures to the most comparable GAAP measures, along with the discussion of why management uses these non-GAAP measures and why management believes they provide useful information to investors regarding our financial condition and operating results. I would first like to touch on two housekeeping items before discussing our financial results for the quarter. First, earlier this month, we announced our intent to acquire GG&A. We expect that transaction to close in the first quarter of 2024, and as such, it is not included in our fourth quarter results. The acquisition of GG&A will strengthen our industry expertise and expand our consulting offerings to help our mission-driven clients build and accelerate their philanthropic programs. Second, let me provide a brief comment on a note in our press release. GAAP net income includes a non-cash unrealized loss of $19.4 million, net of tax, during the quarter related to our investment in a hospital-at-home company. As a reminder, in 2019, we invested $5 million in a hospital-at-home company as a strategic investment that has annually produced meaningful implementation projects for our Healthcare segment. In the first quarter of 2022, we recognized a non-cash unrealized gain on this investment of $19.8 million, net of tax, based on the valuation established around the financing that closed that quarter. In the fourth quarter of 2023, the company recorded a non-cash impairment loss of $19.4 million, net of tax, on the investment, essentially reversing the 2022 gain based on the valuation established in the new round of financing expected to close in early 2024. As of December 31, 2023, the investment’s carrying value was $7.4 million, reflecting a net unrealized gain of $2.4 million on the investment since inception. Huron’s ownership percentage in this hospital-at-home company is less than 5%. Now I will share some of the key financial results for the quarter and full-year 2023. Revenues for the fourth quarter of 2023 were $339.2 million, up 8.1% from $313.7 million in the same quarter of 2022. The increase in revenues in the quarter was driven by growth in the Healthcare and Education segments. In addition, our digital capability posted strong growth across all three segments. For the full-year 2023, revenue was $1.362 billion, up 20.3% from $1.132 billion in 2022. We achieved record revenues in 2023, reflecting broad-based demand for our portfolio of offerings across all three operating segments. Our prevalence in 2023 also reflects strong execution on the key elements of our growth strategy: accelerating growth in health care and education, expanding our presence in commercial industries and further growing our digital capability. Net income for the fourth quarter of 2023 was $2.8 million or $0.15 per diluted share compared to net income of $17.1 million or $0.85 per diluted share in the fourth quarter of 2022 and reflects the non-cash unrealized loss of $19.4 million, net of tax, or $1 per diluted earnings per share related to our investment in a hospital-at-home company, as discussed earlier. For full-year 2023, net income was $62.5 million or $3.19 per diluted share. This compares to net income of $75.6 million or $3.64 per diluted share in 2022. Both periods reflect the impact of non-cash changes in fair value related to our investment in the hospital-at-home company, as discussed earlier. Our effective income tax rate in the fourth quarter of 2023 was negative 60.2%, which is more favorable than the statutory rate, inclusive of state income taxes, primarily due to a tax benefit related to nontaxable gains and the investments used to fund our deferred compensation liability and a discrete tax benefit for share-based compensation awards that vested during the quarter and the positive impact of certain federal tax credits. On a full-year basis, our effective income tax rate for 2023 was 25.5%, which is more favorable than the statutory rate, inclusive of state income taxes, primarily due to a discrete tax benefit for share-based compensation awards that vested during the year and positive impact of certain federal tax credits. These favorable items were partially offset by certain nondeductible expense items. Adjusted EBITDA was $41.4 million in Q4 2023 or 12.2% of revenues compared to $39 million in Q4 2022 to 12.4% of revenues. For full-year 2023, adjusted EBITDA as a percentage of revenues increased 70 basis points to 12.3% compared to 11.6% in 2022. The increase in full-year adjusted EBITDA reflects higher result utilization, improved pricing, expanded deployment of our global delivery capabilities and lower corporate SG&A expense as a percentage of revenues in 2023 compared to 2022 after adjusting for the impact of our deferred compensation plan liability. Partly offsetting these factors is continued investment in the growth of our business and increased bonus compensation related to the strong performances across our business. Adjusted net income was $25.1 million or $1.29 per diluted share compared to $22.6 million or $1.12 per diluted share in the fourth quarter of 2022. For the full-year 2023, adjusted net income was $96.2 million or $4.91 per diluted share compared with $71.1 million or $3.43 per diluted share in 2022. Now I will discuss the performance of each of our operating segments. The Healthcare segment generated 51% of total company revenues during the fourth quarter of 2023. The segment posted revenues of $172 million, up $18.7 million or 12.2% from the fourth quarter of 2022. The increase in revenues in the quarter was driven by strong demand for our digital, strategy and innovation, performance improvement and financial advisory offerings. On a full-year basis, Healthcare revenue increased 26% to $674 million compared to $535 million in 2022, also driven by strong demand for our performance improvement and digital offerings as well as our financial advisory and strategy and innovation offerings. In 2023, Consulting and Managed Services capabilities in health care, which is our largest capability company-wide, grew 30%. Operating income margin for Healthcare was 25.9% in both Q4 2023 and Q4 2022. On a full-year basis, the Healthcare segment’s operating income margin was 25.7% compared to 24.5% in 2022. The increase in operating income margin year-over-year was primarily due to revenue growth outpacing compensation costs for our revenue-generating professionals, partially offset by an increase in contractor expenses. The Education segment generated 31% of total company revenues during the fourth quarter of 2023. The Education segment posted revenues of $103.8 million, up $7.2 million or 7.4% from the fourth quarter of 2022. The increase in revenues in the quarter was primarily driven by demand for our digital offerings. On a full-year basis, Education segment revenues grew 19.4% year-over-year driven by demand for our technology and analytics services and software products within our digital capability as well as increased demand for our strategy, operations and research solutions within our Consulting and Managed Services capability. The operating income margin for Education was 21.2% in Q4 2023 and compared to 20.8% for the same quarter in 2022. The increase in operating income margin in the quarter was primarily driven by decreased restructuring and contractor expenses partially offset by increased compensation costs for our revenue-generating professionals. On a full-year basis, operating income margin was 23.1% compared to 21.9% in 2022 primarily due to a decrease in contractor expenses, partially offset by increases in compensation costs for our revenue-generating professionals and technology expenses. The Commercial segment generated 18% of total company revenues during the fourth quarter of 2023 and posted revenues of $63.5 million compared to $63.8 million in the fourth quarter of 2022. On a full-year basis, Commercial segment revenues increased 8.7% to $258.4 million compared to $237.6 million in 2022. The increase in full-year revenues was driven by strong demand for our financial advisory and digital offerings. Operating income margin for the Commercial segment was 22.4% for Q4 2023 compared to 18.4% for the same quarter in 2022. The increase in operating income margin in the quarter was primarily driven by decreases in compensation costs for our revenue-generating professionals and contractor expenses. On a full-year basis, Commercial segment operating income margin was relatively even at 21% in 2023 compared to 21.1% in 2022. Corporate expense is not allocated at the segment level and, excluding restructuring charges, were $45.2 million in Q4 2023 compared to $40.1 million in Q4 2022. Unallocated corporate expenses in the fourth quarter of 2023 and 2022 included $3.2 million and $1.8 million, respectively, of expense related to the increase in the liability of our deferred compensation plan, which is offset by the investment gain on the assets used to fund that plan reflected in other income. Excluding the impact of the deferred compensation plan in both periods, unallocated corporate expenses increased $3.7 million, primarily due to increased compensation costs for our support personnel and third-party professional services expenses. On a full-year basis, corporate expenses not allocated at the segment level increased to $174.8 million, including $5.5 million of expense related to the deferred compensation plan, compared to $136.5 million of unallocated corporate expenses in 2022, which included a $6.9 million reduction of expense related to the deferred compensation plan. Excluding the impact of the deferred compensation plan in both periods, unallocated corporate expenses increased $25.9 million primarily driven by an increase in compensation costs for our support personnel as well as increases in third-party professional services expenses and software and data hosting expenses. Now turning to the balance sheet and cash flows. Total debt as of December 31, 2023, was $324 million, consisting entirely of our senior bank debt. We finished the year with cash of $12.1 million for a net debt of $311.9 million. This was a $36.8 million decrease in net debt compared to Q3 2023. The fourth quarter included $34.9 million of share repurchases or approximately 345,000 shares. Our leverage ratio, as defined in our senior bank agreement, was 1.6 times adjusted EBITDA as of December 31, 2023, compared to 1.9 times adjusted EBITDA as of December 31, 2022. Cash flow generated from operations for 2023 was $135.3 million. We used $35.2 million of our cash between investment capital expenditures inclusive of internally developed software costs, purchases of property and equipment, resulting in free cash flow of $100.1 million. In addition, in 2023, we used $123.6 million to repurchase approximately 1.5 million shares, representing 7.4% of our outstanding shares as of the beginning of the year, and we used $1.6 million for strategic tuck-in acquisitions. As of December 31, 2023, $86.2 million remained available for share repurchases under our current share repurchase program. DSO came in at 87 days for the fourth quarter of 2023 compared to 83-days for the third quarter of 2023 and 77-days for the fourth quarter of 2022. The increase in DSO during the fourth quarter when compared to the third quarter reflects the impact of contractual payment schedules for certain larger health care projects. Today, we also announced that we have amended our senior secured credit facility to include a $275 million term loan in addition to our existing $600 million revolving credit facility, both of which matured November 2027. The proceeds from the term loan will be used to reduce borrowings under the company’s revolving credit facility, which increases the company’s capacity for investment by $275 million. This expanded capacity will enable us to continue executing on our balanced capital deployment strategy, inclusive of strategic tuck-in acquisitions, and returning capital to shareholders through targeted share repurchases. Finally, let me turn to our expectations and guidance for 2024, which contemplates our pending acquisition of GG&A. For the full-year 2024, we anticipate revenues before reimbursable expenses in the range of $1.46 billion to $1.54 billion, adjusted EBITDA in a range of 12.8% to 13.3% of revenues and adjusted non-GAAP EPS in a range of $5.35 to $5.95. We expect cash flows from operations to be in a range of $155 million to $185 million. Capital expenditures are expected to be approximately $40 million, inclusive of cost to develop our market-facing products and the analytical tools, and free cash flows are expected to be in the range of $115 million to $145 million, net of cash taxes and interest, and excluding non-cash stock compensation. Weighted average diluted share count for 2024 is expected to be in the range of 19 million to 19.5 million shares. Finally, with respect to taxes, you should assume an effective tax rate in the range of 28% to 30%, which compromises the federal tax rate of 21%, a blended state tax rate of 5% to 6% and incremental tax expense related to certain nondeductible expense items. Let me add some color to our guidance, starting with revenue. The midpoint of the revenue range reflects 10% growth over 2023. As Mark mentioned, while we are proud of the accelerated 20%-plus growth we achieved in 2022 and 2023, we believe that our guidance aligns with a more normalized level of growth for our business and is consistent with our previously stated medium-term financial objectives. We remain focused on executing our growth strategy across all segments of our business and with fully aligned incentives for all of our managing directors and principles with our strategic goals and integrated operating model. With regard to our Healthcare segment, we expect mid- to high single-digit percentage revenue growth for the full-year 2024, and we expect operating margins will be in the range of 25% to 27%. In the Education segment, we expect low-teen percentage revenue growth for full-year 2024, inclusive of a mid- to high-teens million-dollar contribution for 10 months of GG&A, and we expect operating margins will be in a range of approximately 24% to 26%. In the Commercial segment, we expect to see low double-digit percentage revenue growth for 2022. We expect our operating margins in this segment to be in the range of approximately 21% and 23%. We expect unallocated corporate SG&A to increase in the low to mid-single-digit percentage range year-over-year. Also in the first quarter, consistent with prior years, we note the following items as it relates to expenses. The reset of wage basis for FICA and our 401(k) match, our annual merit and promotion wage increases go into effect on January 1st and an increase in stock compensation expense for restricted stock awards that granted in March to retirement-eligible employees. Based on these factors, we anticipate approximately 15% to 20% of our full-year adjusted EBITDA and full-year adjusted EPS to be generated during the first quarter, consistent with the pattern we have seen for the last several years. As a closing reminder, with respect to 2024 adjusted EBITDA, adjusted net income and adjusted EPS, there are several items that you will need to consider when reconciling these non-GAAP measures to comparable GAAP measures. The reconciliation schedules that we included in our press release will help walk you through these reconciliations. Thanks, everyone. I would now like to open the call to questions. Operator. See also 44 Countries With Hot and Wet Equatorial Climate and 25 US Cities with the Most Breweries Per Capita. Q&A Session Follow Huron Consulting Group Inc. (NASDAQ:HURN) Follow Huron Consulting Group Inc. (NASDAQ:HURN) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: [Operator Instructions] Our first question comes from the line of Tobey Sommer of Truist Securities. Tobey Sommer: I was curious if you could speak to your medium-term financial targets laid out at Investor Day. It has been, I don’t know, for exactly at the midpoint between when you gave them and when they’ll ultimately be rendered. But how do you feel about those, in particular, the EBITDA margin figure? John Kelly: Tobey, it is John. So we feel good about our progress against those medium-term financial objectives that we established in our Investor Day back in 2022. Certainly, I think if you are looking at it from the perspective of EBITDA dollars and adjusted EPS, we feel like we are pacing ahead of the projections that we talked about during that Investor Day. I think the mix has maybe been a little bit different than what we might have projected at that point in time. The growth has been much stronger. So we talked about low double-digit growth, and our growth has actually been in excess of 20% in the past couple of years. And related to that growth, we needed to continue to invest in our talent and our team to build out the resources to be able to deliver on that growth. And I think that is put a little bit of pressure on the margin percent. So the net-net has us ahead in terms of the EBITDA dollars and in terms of the adjusted EPS, but the mix has probably been a little bit different. I think going forward from where we are at, we still feel good about our ability to beat those revenue objectives. And I think we feel really good about our guidance for 2024 from a margin perspective. And our focus will be on meeting or beating those margin percent objectives for 2024 which, at the top end, would be in the low-13% range. And if we are able to continue to execute and have a similar sort of step next year, I think that will get us comfortably into kind of that 14%-plus range for the mid-teen range at that point in time. But that is kind of the outlook halfway through. Mark Hussey: Yes. Maybe, Tobey, I will add one or two to that. Just to say when you look at the drivers, say, okay, what is it that we do that enables us to achieve those things. We have made really good progress on utilization. We have room to run there. The pricing work that we have been doing is probably not fully baked in yet to everything we are doing across the enterprise. Our global delivery model continues to expand and then just continuing to scaling our corporate SG&A. So we have got a lot of levers still that we are pretty confident in. As John said, it is just the growth is some headwinds, but we think we are going to get there. It will probably be in that 14%-plus range into 2025. Tobey Sommer: How long do you think your hospital customers — what are you hearing from them in terms of how long they expect activity to remain at elevated levels and therefore, some of them are doing fine from a profitability perspective before that activity level normalizes? And maybe in the context of that answer, you could speak to what you are seeing from an assessment perspective in your PI offering? Mark Hussey: Sure, Tobey. This is Mark. I will keep are lose my voice holds up. As I noted in the script, we started to see some improvement across the industry toward the latter half of 2023. There really is, I would say, a mixed story coming into 2024. So you have those systems, I think, that have actually done a pretty good job of recovering. And we are seeing them continuing to spend, but the spending on the growth aspect of what they are trying to do. They are trying to enhance their traditional platforms and things that are perhaps more pros that could up in nature. And we have repositioned our portfolio very well to be able to play both on the up and down aspects of that. But having said that, there are still a number of clients. And we are quite busy on a number of assessments coming into 2020 for those clients who are still facing underwing challenges. So by no means do we think that demand is going to run out of the cycle here. We feel that 2024, we will be just continuing to evolve, that is kind of reflected in the pipeline. John Kelly: Right. Yes, that is right, Mark. If we look at the pipeline, what gives us confidence in our guidance for the year and the continued growth really is an evolving mix where we have got still plenty of projects in the pipeline that relate to clients that are going through some level of financial stream and our seeking performance improvement health. But now we are seeing increased pipeline activity related to some of our other offerings, which, as Mark said, are more pro cyclical like our strategy offerings, our non-distressed financial advisory offerings and then critically, really, the digital offerings, which I think a lot of clients at this point are now seeking to invest funds in their technology platforms and really try to modernize those to help them operate more efficiently, to help them better get actionable insight from their data to protect their data, to automate many processes as possible in a high labor cost environment. So we are seeing a nice mix of projects right now that really reflect both dynamics going on in the market. Tobey Sommer: Okay. Two things for me, and I will get back to the queue. Could you speak to why expand liquidity now? And then John, if you could, what is the inorganic contribution to EBITDA and EPS in the initial guidance? . John Kelly: Sure, Tobey. So the first question about why expanding the borrowing capacity now, it really just have to do with the significant growth we have seen in the company over the past couple of years. When we first entered into our $600 million revolving credit facility that was really designed to support 3.7 times EBITDA leverage, so our trailing 12-month bank definition of EBITDA. And having seen our EBITDA practically double since 2021 that is significantly tied to our capacity on the $600 million revolver. So really adding the $275 million term loan that just kind of gets us back to the capacity that we originally had on a leverage basis given the much bigger size of the company now. So from our perspective, in terms of capital deployment strategy with that extra capacity, I think it is the same messaging. I think you are going to see some mix of strategic tuck-in acquisitions as a result of our programmatic M&A process as well as continued targeted share buybacks. But we just felt like, given our increased size, that we needed some more capacity. And then as far as GG&A on the guidance, I commented from a revenue perspective, given it is a partial year, kind of high-teen million-dollar revenue, I would expect that to flow through at the same percent as our overall corporate EBITDA percentage just given that there will be some transition-type expenses during the first year. And then from an EPS perspective, it is accretive. But in this first partial year, it is pretty minimal from an EBS perspective. Operator: Our next question comes from the line of Andrew Nicholas of William Blair & Company. Andrew Nicholas: I want to double-back on the margin conversation, a pretty good expansion that you expect here in 2024. I think, Mark, you highlighted a few things where there is more room to run between utilization and pricing and the delivery model. I’m just wondering if there is any way to maybe split up the 70 or 80 basis points of expansion across some of those drivers. Like, what is the primary set of drivers in 2024? And maybe related to that, how much of this is maybe expecting a pullback in head count growth and some improved utilization as we progress through the year. John Kelly: Andrew, I don’t know if I would describe it as all pullback and head count growth. I think what you will probably see from a head count growth perspective in the base case this year is the head count growth will be generally in line with revenue growth. I think in terms of the breakout of that 70 basis points of improvement, between the key things that Mark mentioned, utilization, pricing and then SG&A leverage that is actually more than 70 basis points of improvement that we are expecting. And then on the flip side of that, we do expect to continue to invest in our business, continuing to add talent in new areas to keep the growth going. So I think the initiatives that we have underway actually contribute more than 70 basis points margin improvement, and then we do expect to invest some of that back in the business. So think of those investments as 100 basis points of investment. So if you are thinking of them, okay, between 150 basis points to 200 basis points of operational efficiency improvement, I would say that that is about split 50/50 between some of our pricing and utilization objectives as well as continued global deployment of our India team and then just some of the natural scaling of SG&A that we expect to experience this year. Andrew Nicholas: Great. That is helpful. And then you mentioned, I think, briefly some pickup in Innosight and some of the strategy pieces. Can you unpack that a little bit more? And are there particular end markets where that is strongest and how much of that recovery are you baking in for 2024? Mark Hussey: Yes. Andrew, it is Mark. I would say that in 2023, what we saw for Innosight, a little bit slower start to the year, but really what we were very excited to see was very good strength in the health care market and really in conjunction with working across our teams, so very, very much kind of integrated into our overall delivery. At the same time, some of the industrial areas that we have had great strength had a little bit quieter year. But coming into 2024, we feel like they have a very strong pipeline across both sides of that business, and we are excited about just the good recovery into 2024. Operator: Our next question comes from the line of Bill Sutherland of Benchmark. William Sutherland: Guys, another terrific year in the books. I was curious on the refi, John. Did you mention kind of how to think about interest expense with the change? John Kelly: The change is really pretty minimal, Bill. If you think about the funds flow on it, we added a $275 million term loan, but then we used the proceeds from that term loan to immediately pay down the revolver. So it is really about adding capacity. There will be some minimal incremental expense related to just the fees of establishing that as well as now some more unused fees on the revolving credit facility, but that will be pretty minimal in the scheme of things. William Sutherland: Okay. I wasn’t sure if there was – I don’t think you mentioned if there is any change in rates. John Kelly: So Bill, there is a 50 basis point additional spread on the term that we just think is more reflective of the market right now versus when we were able to lock in the revolving credit facility. But again, probably, in the scheme of things, that will be pretty minimal. We did also, in the early first quarter, do an interest rate swap that we are able to lock in some more short-term savings versus the silver spot rate right now. That largely offsets any of that additional expense in 2024. William Sutherland: Okay. John, when you were talking about the drivers for the 2023 segment results, it was interesting, on Education, you mentioned digital. And then for the year, there was the other parts of the business that seem to be important. Was digital just kind of the centerpiece of the fourth quarter or am I reading too much into it? And I’m curious how you are thinking about the offerings in Education contributing to 2024’s outlook. John Kelly: The fourth quarter, it was broad-based demand, Bill. I would say that the leader in the clubhouse though was the digital offerings during the fourth quarter, which is why we highlighted it. But our consulting offering as well as our managed service offerings, which is a smaller base of revenue right now, they also had healthy growth during the fourth quarter. And then if you pivot towards 2024, again, I think it is going to be a broad-based story in the Education business. Clearly, from a digital perspective, we see clients investing in what many institutions right now are dated, legacy technology infrastructure that really needs to get modernized to help those universities meet their missions. But then even beyond the digital side, on the consulting side, you’d probably see it quite a bit down in the headlines, a lot of the pressure that universities are under. And so some of our offerings that help our university partners enroll students, from a philanthropic perspective that help them with their fundraising and then help them minimize risk and efficiently manage their research function. Those are all things that are very important to our education clients right now. So I think the growth we expect to see is pretty balanced across those areas. Mark Hussey: Yes. And I will just add research as well. Research has been a very important part of our portfolio, continues to be the area that clients pay a lot of attention to because it is so important, not only to the revenues but to their risk management around the research enterprise. So I think it is been a very fine story. You may have quarters where one is a little bit ahead of another. But I would just say, from a demand backdrop, it is been a very consistent demand across all of them. William Sutherland: Right. No, it certainly has. And finally, I was just curious, as you look at your head count plans this year, are you weighting it heavily towards offshore? Is it going to be this kind of the same kind of mix? John Kelly: I think it is going to be a similar mix to our total head count, Bill. William Sutherland: Okay. So that is not part of the 150 to 200 bps. John Kelly: So there is continued increased utilization out of the team, the global delivery team in India as part of the margin story. But if you look at our head count as of 12/31/2023, it is about 70% in North America and about 30% in India. When we look at our head count modeling for the year, I don’t think we expect any big shift in that percentage. It could be a little bit more weighted towards India, but it will be modest. I think it is going to be pretty balanced. Operator: [Operator Instructions] Next question comes from the line of Kevin Steinke of Barrington Research Associates. Kevin Steinke: So I just wanted to ask about the Education segment, certainly another strong year, a solid fourth quarter. We did see a sequential dip in revenue fourth quarter versus third quarter. I guess we have kind of gotten spoiled by these continually sequential increases, although it is kind of flattened out third quarter versus second quarter. But is there anything to note there in terms of timing of projects or anything that might have led to that sequential change fourth quarter versus third quarter? John Kelly: Kevin, it is largely just related to business days and holidays during the fourth quarter. We see it across the entire business. There is always less effective business days in the fourth quarter than there are in other quarters. Within Education, just based on our client schedules, sometimes that can be even a little bit more pronounced, and that is all that you are seeing. As I said in my remarks, we are expecting low-teens growth for next year, so we feel good about the growth trajectory in the Education segment. Kevin Steinke: Okay. Great. So just following up on the GG&A acquisition, maybe just a little more color on what attracted you to that business and how it fits in. And I guess just lastly, in the Education segment, so I’m assuming it predominantly serves education institutions, but you also mentioned health care and nonprofit, just also trying to get a sense for the business mix there. Mark Hussey: Yes, Kevin, this is Mark. We are very excited about the GG&A acquisition, that John Clear is joining us as well and continue to be very active in the market. You noted correctly that their position in education, they actually do serve not profit much more broadly. And also on a global basis, they have clients in Europe as well. And so as an example, what we believe will be the pitch here is, obviously, philanthropy is a huge lever within higher education to drive their revenue. But at the same time, it really gives an opportunity for us to bring some of our digital solutions and enablement to advancement function, it is just been a great area of momentum for us from a sales force point of view. And we think the combination of that, their expertise around the whole advancement function will be highly accretive to us. So we think it is well positioned. And then at the same time, because of our operating model that really enables us to bring solutions across lines. We feel that as we have opportunities, whether it is in health care or even outside of health care, not-for-profit more generally, we will have nearly very full ability to take advantage of the full scope and scale of that acquisition. Kevin Steinke: Okay. Great. John, I think when you are talking about the progression towards the mid-teens margin target by 2025, you mentioned mix has been maybe a little bit different than you would have expected. Were you referring to a mix of digital versus consulting? Or what was that comment targeted at? John Kelly: Thanks for asking, Kevin. And to clarify, I was more referring to the mix to get to the increase in adjusted EBITDA dollars and adjusted EPS that we have seen. And now that is, at this point, pacing significantly ahead of our Investor Day targets. And the path to getting to those increased EBITDA dollar amount and increased EPS amount, the mix has been a little bit more towards higher growth than what we had initially projected with a little bit of pressure on the margin percent just as we have been investing in our team to deliver that growth. So I was speaking about the two levers of revenue growth versus margin percent in getting to the nice results we have had from an increased EBITDA dollars and adjusted EPS. Kevin Steinke: Okay. Understood. And then lastly, you mentioned continued ramp or greater utilization of your staff in India as one of the margin drivers going forward. Can you just update us on utilization there and plans to build out the team there, et cetera? Mark Hussey: So Kevin, I think, John, I will tag team on this one. So let me just tell you, I think from a from an expansion standpoint, we are really happy with how that team has been built out. And the way we do this is not in an offshore capability, we really run the business truly on a global integrated basis by each service line. So our team in India and our team in the U.S., we consider part of one unit line team, and their goal is to optimize their performance in the market together. So at the time, we continue to expand that to other areas of service line. We have had a small team, as an example, in our business advisory practice doing some consulting support around financial advisory engagement, has had great success and impact. But more broadly, in terms of just the utilization numbers and sales, let me ask John to just give you an update. John Kelly: Yes. Kevin, that is been a really great story for us as the year has progressed. So as you may recall, at the end, we have made some targeted investments in our team in India to really build out our capacity there in anticipation of growth. And part of that investment was we experienced some lower utilization in the back half of last year and into really the first quarter of this year. We have seen that utilization steadily increase over the course of the year. And by the time we got to the fourth quarter, it is very much in line with our overall utilization, which I would note, for the fourth quarter, was in the 78% to 79% range overall as a company, which is really one of the strongest utilization metrics we posted that I can remember and definitely gives us encouragement about the margins heading into next year as we expect to continue to operate at roughly that level heading into 2024. Operator: And seeing no more questions in the queue, I would like to turn the call back to Mr. Hussey. Mark Hussey: Thank you very much for joining us this afternoon. We look forward to speaking with you again in April when we announce our first quarter results. Have a good evening. Operator: That concludes today’s conference call. Thank you, everyone, for your participation. Follow Huron Consulting Group Inc. (NASDAQ:HURN) Follow Huron Consulting Group Inc. (NASDAQ:HURN) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyFeb 28th, 2024

Xencor, Inc. (NASDAQ:XNCR) Q4 2023 Earnings Call Transcript

Xencor, Inc. (NASDAQ:XNCR) Q4 2023 Earnings Call Transcript February 28, 2024 Xencor, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and thank you for standing by. Welcome to Xencor’s Fourth Quarter and Year End 2023 Conference Call. […] Xencor, Inc. (NASDAQ:XNCR) Q4 2023 Earnings Call Transcript February 28, 2024 Xencor, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good afternoon, and thank you for standing by. Welcome to Xencor’s Fourth Quarter and Year End 2023 Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded at the company’s request. Now, I would like to turn the call over to your speaker today, Charles Liles, Head of Corporate Communications and Investor Relations. The floor is yours. Charles Liles: Thank you, and good afternoon. Earlier today, we issued a press release, which outlines the topics we plan to discuss today. It’s available at Providing comments on the call are Bassil Dahiyat, President and Chief Executive Officer; Nancy Valente, Chief Development Officer; and Dane Leone, Senior Vice President, Corporate Strategy. After the prepared remarks and presentation, we will then open up the call for your questions, and we will then be joined by John Desjarlais, Chief Scientific Officer, and John Kuch, Chief Financial Officer. Slides that we are using today should be visible here on the webcast and we’ve made available for download on the Events & Presentations page of our website. Before we begin, I would like to remind you that during the course of the conference call, Xencor management may make forward-looking statements, including statements regarding the company’s future financial and operating results, future market conditions, plans and objectives of management, future operations, the company’s partnering efforts, capital requirements, future product offerings, and research and development programs. These forward-looking statements are not historical facts but rather are based on our current expectations and beliefs, and are based on information currently available to us. The outcome of the events described in these forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from the results anticipated by these forward-looking statements, including but not limited, to those factors contained in the Risk Factors section of our most recently filed annual report on Form 10-K. With that, I’ll pass the call over to Bassil. Bassil Dahiyat: Thanks, Charles, and welcome, everyone. Today, we’ll cover a few business highlights from 2023, briefly review our clinical pipeline, and provide a data update on vudalimab in prostate cancer. You can refer to our press release for more information about the last quarter and full year. We focused our pipeline and discovery work on our T-cell engagers because of growing validation for their potential in solid tumors. Supporting this is the continued advance of vudalimab in prostate cancer, where we’ll provide an update today, and the start of a trial in front-line lung cancer for vudalimab. And we’ve decided to reduce our investment in our cytokine drug candidates as part of this focusing. Our partnerships and licenses played a significant role for us last year: first, with validating data for our XmAb 2+1 CD3 platform from our partner Amgen with their Xaluritamig data in prostate cancer; and two, Phase 1 programs started in our CD28 bispecific collaboration with J&J. And we significantly strengthened our balance sheet with a partial monetization of our Ultomiris and Monjuvi royalties. As a result of that and robust milestone in royalty revenues, we ended 2023 with $697 million and expect runway into 2027. Now, onto our pipeline. The focus of our clinical pipeline is bispecific T-cell engagers for solid tumors, an area with rapidly growing promise. Solid tumors have been challenging for antibody and cell therapies. But recent data, some of which we’ll review momentarily, suggests that CD3 and CD28 bispecifics could play a role as therapies in a range of solid tumors. Key programs for us addressing this opportunity are XmAb819, an ENPP3 x CD3 XmAb bispecific for renal cell carcinoma, an XmAb808, a B7-H3 x CD28 XmAb bispecific in prostate and other cancers. Both are advancing in dose escalation in Phase 1 and right behind them is XmAb541, a CLDN6 x CD3 bispecific that we expect to start Phase 1 the first half of this year. For vudalimab, we initiated a new study, its first front-line study, in non-small cell lung cancer, based both on our Phase 1 data in lung cancer and external data, suggesting potential advantages against standard checkpoint therapy in this setting. And we’ve made progress with our metastatic castration-resistant prostate cancer studies, both in combination with chemo and monotherapy and with encouraging monotherapy data we’re going to present in a moment. Finally, we’re wrapping up our Phase 1 work next quarter for both XmAbs 564 and 662, taking the PK, PD, and safety data in hand to establish initial product profiles and monitoring the field for further validation of these cytokines before we do any additional development work. Underpinning our T-cell engagers is our XmAb bispecific technology. It lets us address the solid tumor opportunity by engineering our antibodies with a format and affinities designed to give tumor selectivity in the context of each tumor targets particular expression levels and tissue distributions. Solid tumor targets, in particular, need a customized approach because they’re distributed more broadly than heme tumor targets, which have already been successfully addressed by CD3 bispecifics in lymphoma and myeloma. Our plug-and-play antibody modules let us do this work rapidly, and as a result, we’ve got a growing pipeline of molecules with our 2+1 design, which is particularly helpful with selectivity for solid tumors. And here is the first clinical proof of concept for our XmAb 2+1 CD3 format Xaluritamig, which targets STEAP1. Our partner, Amgen, presented very promising efficacy and tolerability data at ESMO last October in late-line prostate cancer, usually considered a cold tumor for immunotherapy. This target was challenging due to the limited accessible binding regions outside the cell membrane and non-tumor expression. So, we’re very encouraged to see this early data for the molecule in the 2+1 format. Amgen has announced they are nearing completion of the Phase 1 study and are planning additional studies in earlier lines of therapy, so we’ll be eagerly awaiting their updates. Now, our own lead XmAb 2+1 CD3 bispecific is XmAb819, targeting ENPP3 in renal cell carcinoma. We chose ENPP3 as a target because it has exactly the kind of expression and profile we want for a CD3 solid tumor target, much higher expression on tumor than normal tissues and nearly uniformly high expression on clear cell renal cell carcinoma. Plus, it has potential for use in select patients in range of other tumors. Also, we think renal cell carcinoma has a need for new mechanisms beyond checkpoint inhibitors and TKIs, and directly cytotoxic antibody could be well positioned. 819’s design gives us the selectivity we wanted in vitro and we’re continuing to advance in dose escalation with both IV and subcutaneous dosing and expect to make significant progress this year toward target dose levels. I’ll shift now to XmAb808, our new T-cell engager mechanism, CD28 targeting. The goal here is to activate T-cells via the Signal 2 pathway, which powerfully amplifies and sustains T-cell responses. We designed 808’s bispecific format and affinities to try to drive this activation in a tumor-specific way by requiring sufficient binding to its tumor antigen, B7-H3 to turn on CD28 signaling. A key part of our approach is a lower potency CD28 binding domain that we think could give us control of CD28 signaling and improved tolerability. We picked B7-H3 because it offers high expression across a range of tumor types, creating an opportunity to potentially treat multiple cancers in combination with either checkpoint inhibitors or CD3 bispecifics. CD28 targeting has generated a lot of interest among clinicians and across the industry in the current Phase 1 study in combination with pembrolizumab is progressing well in escalation. Now, our latest CD3 bispecific is set to enter the clinic imminently. XmAb541 targets CLDN6, which is highly expressed on the majority of ovarian cancers and also on several other tumor types. Though it has a very promising expression profile, it is a selectivity design challenge because there are multiple closely homologous CLDNs. We think we addressed it with careful binding domain engineering and our 2+1 format. XmAb541 binding is open and we expect to be in patients the first half of this year. We’re planning to apply lessons learned for solid tumor CD3 dosing from both internal and external programs to move the study quickly. Now, I’m going to turn it over to Nancy for the vudalimab update. Nancy Valente: Thanks, Bassil. I’m excited about the encouraging new data we have to share from the prostate cancer monotherapy cohort. If we could go to the next slide? This cohort is part of the overall vudalimab program, which consists of four studies. Based on the outcome of the Phase 1 study, we moved into two tumor-specific expansions initially. The study 717-04 in metastatic castrate-resistant prostate cancer in combination with standard-of-care chemo and other agents, and study 717-05 that included patients with gynecologic malignancies and a monotherapy metastatic castrate-resistant prostate cancer cohort, which I’m going to further describe. The next slide? The prostate monotherapy cohort required patients [who have] (ph) RECIST measurable disease, including visceral sites or lymph nodes, and the patients had to have progressed after all other appropriate therapy. Vudalimab was given every three weeks based as a flat dose based on our PK analysis of earlier studies. You can see that this study enrolled a heavily pretreated patient population that had exhausted available standard-of-care therapies. With a median of four prior therapies, 100% received prior antiandrogen therapy, all but one received prior chemotherapy, and 86% were ECOG-1 performance status. As noted, the study protocol required patients with measurable disease at baseline, which is why we see a high rate of visceral metastases and high median baseline PSA. Reduction in target lesions and disease control are encouraging for such a heavily pretreated patient population, as you can see on the right, with a RECIST response rate of 35% and a disease control rate of 50% and the spider plot shows we have several lasting responses and one patient with stable disease past 48 weeks. Deep PSA reduction was also seen in three patients giving a PSA90 rate of 25% and a fourth patient with a nearly a 50% PSA who is still on study. To describe one especially poor prognostic patient who responded well to vudalimab, this patient had three liver mets, a total disease burden of 12 centimeters and PSA at baseline of 180 nanograms per mil, and achieved a confirmed PR, a PSA90, and was in response for over 22 weeks. The treatment-emergent adverse events highlight the tolerability has been generally well managed by dose modifications with only two treatment discontinuations. Unfortunately, there has been one case of Grade 5 immune-related mediated hepatitis. The patient’s treatment course was complex and this is the only known Grade 5 immune-mediated hepatitis event in over 240 patients that we’ve treated with vudalimab to-date. Reviewing specific immune-related adverse events, generally, the events are what we’d expect with checkpoint inhibitor therapy. The rate of Grade 3 events, that you can see on the right, were generally limited and specific to several patients. Overall, we are encouraged by the tolerability profile of the Q3 week flat dosing schedule with vudalimab. In summary, we have observed encouraging single-agent activity in heavily pretreated patient population. This is consistent with the data from the Phase 1 study in prostate cancer, where we had patients with six and 10-months duration of response. Vudalimab’s safety profile is consistent with other checkpoint inhibitors and we observed limited treatment discontinuations. Now, I will turn this over to Dane to share comparative data to place these results in context. Dane Leone: Thanks, Nancy. As you can see on the next slide, these emerging data support us enrolling more patients into the monotherapy cohort. When you put the data into the context of the broader novel therapeutic landscape under development, it really is clear why we and our investigators during our discussion at ASCO GU were so encouraged about continuing the study. When you compare the baseline characteristics of our patients versus our peer studies, vudalimab monotherapy cohort is among the most heavily pretreated and has the most advanced disease upon enrollment, as shown by nearly all having ECOG-1 and all having measurable disease. Comparatively, only the Xaluritamig dose escalation study has enrolled similar patients that are very late-line in poor performance status. Despite the remarkably advanced patient population, patients treated with vudalimab have comparable RECIST response rate versus the peer studies in this table and experience deep PSA90 responses. Importantly, we think that RECIST response and deep PSA response are required for translating into effective durability of response and ultimately survival outcomes for these patients. Regarding tolerability, using the Q3 week flat dose schedule of vudalimab has supported a manageable safety profile compared to our peers. Overall, considering the early nature of the vudalimab monotherapy cohort, we are encouraged by the clinical benefit for these advanced prostate cancer patients that have been treated well beyond current standard of care, and we look forward to evaluating a larger cohort of patients by year-end. Now, on the next slide, beyond prostate cancer, we are executing on the start of our frontline non-small cell lung cancer study of vudalimab plus chemotherapy, and we are excited that the study is underway with the first patient dose in the fourth quarter of last year. And with that, I’ll turn back to Bassil for a review of our corporate goals for 2024. Bassil Dahiyat: Thanks, Dane. Here’s a look at our priorities for 2024. We’re starting with a strong balance sheet and as you can see, we’re looking forward to this year really bringing the focus to our solid tumor bispecifics pipeline, where we have a lot going on for our CD3 and CD28 T-cell engagers and for vudalimab. Of course, we’re doing discovery work on additional CD3 and CD28 bispecifics and we’ll select our next IND candidate later this year. Operator, we’ll now open this call to questions. Operator: Thank you. At this time, we will now conduct the question-and-answer session. [Operator Instructions] Our first question comes from Jonathan Chang of Leerink Partners. The floor is now yours. See also 11 Countries with the Best Military Special Forces in the World and 20 Best Personal Injury Lawyers in NYC. Q&A Session Follow Xencor Inc (NASDAQ:XNCR) Follow Xencor Inc (NASDAQ:XNCR) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Dylan Drake: Hi, guys. This is Dylan Drake on for Jonathan. Thanks for taking our questions. First of all, would you be able to comment on how investors should be thinking about when we might be able to see initial clinical data from the ENPP3 study? Bassil Dahiyat: Sure. I’ll take that one. So, we’re not commenting on data just yet. And what we’re trying to do is characterize with a sufficient patient number and follow up the sort of outlines of the effective dose level as we pull together a dosing regime. These are CD3 bispecifics, so you want to have that — you want to have your priming and step-up doses. We’ve made great progress and we really hope that this year, we’ll have a lot more knowledge about it. And then, when we get close to having the decision to disclose, we will tell you. So, we’re not guiding anything there yet. Dylan Drake: Great. Thanks. And if I could just sneak in one more? You guys set the stage pretty well with your comparative table there. But looking ahead to the go-forward decisions for both the mono and combination vudalimab approaches, how would you guys set the bar? Bassil Dahiyat: Yes. I guess maybe the mono first. I mean, Nancy, Dane, you guys want to take that? What’s the bar for advanced comparables? Dane Leone: Yeah, sure. Great question. When we look at the patients that we’ve enrolled into the monotherapy cohort, we’ll continue to enroll, these are patients that are as late line as you can get and have exhausted every standard-of-care therapy available to them. As such, what we’ve really decided to do in engaging the signal that we’ll have as we hopefully get a cohort of 20 to 30 patients enrolled over the course of this year, is look at some of the contemporary studies where cabazitaxel has been used as a control arm. And in those studies, namely the control arm for therapy or the very recently reported part two of CheckMate 650, you’ve seen a RECIST response rate for cabazitaxel on that 11% to 24% range, and a PSA50 response rate of 24% to 37%. This is why we’re quite encouraged with what we’re seeing in the cohort now with clinical activity of vudalimab monotherapy. And hopefully, with a larger cohort, more follow-up, we can then try and extrapolate what would be needed in terms of survival outcomes. And cabazitaxel, for reference, has generally come out around eight months for a radiographic progression-free survival. And right now, based on some of the durability, seems like we’re in pretty good shape. Bassil Dahiyat: Now, then for the combo cohort, I guess we’ve got different baselines there to look at. Dane Leone: Yeah. In the combination cohort with Docetaxel, you really have to think about what Docetaxel might be able to do in what would be post and during receptor inhibitor exposure for these patients. And again, the landscape will continue to change with PLUVICTO, but historically, if you’re looking at the TAX 327 study, you’d be looking at a PSA50 response range of 40% to 50% and a fairly low RECIST response rate of somewhere around 10%. That said, the survival curves are a bit better for that line in that setting with Docetaxel monotherapy. But that’s kind of what you have to think about when you’re doing a combination study with Docetaxel at this point. Dylan Drake: Perfect. Thanks so much. I appreciate it. Operator: Thank you. One moment, please. Our next question comes from the line of Etzer Darout from BMO Capital Markets. Etzer Darout: Great. Thanks for taking the question. I guess maybe on the safety profile of vudalimab, if there’s anything you can or will incorporate into the study to maybe kind of mitigate this autoimmune hepatitis? Is this something that is just unique to this patient or is there are other things sort of going on that you need to understand? And then, also on XmAb564, just wondered the decisions to sort of pause that, was that data-driven or whatever other contributing factors, if you could comment on that to pausing that study? Thank you. Bassil Dahiyat: Sure. So, I’ll talk — I’ll go through the XmAb564. Then maybe Nancy can take the question on the vudalimab safety profile. So, for 564, it was really driven by our — as much as anything, by our decision to focus on our T-cell engagers, our resources, our capital, and our people and looking at how the class cytokines generally, and IL-2 Treg driving cytokines in particular has evolved. There’s still I think a lot of outstanding data coming in the next year from other companies about efficacy, about how much potential does this class have. And with our study having progressed and given us a reasonable look at our PK, PD, and safety, we think that that’s the time to consider resources and wait and see how the field evolves. Well positioned — we’re well positioned to ramp up again, but it’s about focus now. And for 2024, pipeline focus is the key for Xencor. So, it was really more just strategy-driven. With that, maybe, Nancy, if you want to touch on the question on vudalimab? Nancy Valente: Yeah. So, I’ll go back to the patient with the hepatitis death, and that’s the only immune-related hepatitis death we’ve seen across our program with more than 240 patients treated both in the monotherapy and combination setting. The patient had responded to therapy, but did have other treatment-emergent adverse events before that, including diabetes mellitus and diabetic ketoacidosis, a thyroiditis, a hyperkalemia, lipase increase. So, a bit of a complex course here. We have looked across the entire program and we don’t see anything concerning relating hepatitis. As far as the protocol and the investigators, we have emphasized to the investigators to be watchful for this and communicated with them. The protocol does include the NCCN guidelines for treatment, and it’s also consistent with ASCO guidelines and other society guidelines like the gastric GI guidelines for monitoring and treatment. And so, we do include screening at baseline for any diseases that might contribute to hepatitis. And we have frequent laboratory monitoring. Etzer Darout: Great. Thank you for the color. Nancy Valente: Sure. Bassil Dahiyat: Thanks, Etzer. Operator: Thank you for the question. One moment, please. Our next question comes from Gregory Renza of RBC Capital Markets. The floor is yours. Unidentified Analyst: Hi. Thank you so much for taking our question. This is [Kurt] (ph) for Greg. Just to confirm if this monotherapy data was from a particular molecular subtype since I think that was how the trial used to be characterized? And if I may, secondarily, from the data comparison table, I think the PSA90 looks competitive but PSA50 looks a little lower. Just curious if you have any hypothesis on why the data looks that way. Thank you. Bassil Dahiyat: So, I’ll touch on the specifics of the trial and the population. So, I think, just to be careful, there’s two studies ongoing now where we’re studying prostate cancer with vudalimab. The monotherapy study, the one we discussed today, is not subdivided by molecular subtype. It’s people with clinically defined high-risk disease, which includes extra pelvic and visceral metastases. So that’s a population that’s independent of molecular subtype in that regard. The other study, our combination with chemo study, that study is subdivided by molecular subtype. That’s a different study. We didn’t discuss data for that one today. We’re enrolling still accrued patients and more follow-up and we hope to have a lot more clarity later in the year on that program. And also, I guess, first half of next year really bring it all together. So that, just I just want to make sure that this is not from the molecular subtype dividing study. Maybe on the comparison table, Dane, you want to answer that one on the PSAs? Dane Leone: Yeah, sure. That’s a great question that we looked at quite extensively once we had this data cut and were able to review the data with our investigators during ASCO GU. What seems to be somewhat of an artifact of taking patients that are required to have measurable disease at baseline versus other studies that also include bone only. And as you can see on that table, most of our peer studies outside, maybe one with a similar mechanism of action, is more of a mixed patient population. And what we see in those studies is you will get more PSA50s that don’t necessarily correlate to a RECIST response, as some of those patients do not have measurable disease at baseline. In our cohort, to really get clinical benefit, those patients will need either a RECIST response or a PSA90. So, I think there’s two things there. One is PSA50 for patients that are this advanced in their disease course are relevant for survival outcomes, very debatable. But what is definitely needed is those RECIST responses and PSA90s. Unidentified Analyst: Thank you. Operator: Thank you. One moment for our next question. Our next question comes from the line of Kaveri Pohlman from BTIG. The floor is yours. Kaveri Pohlman: Yeah. Good evening. Thanks for taking my questions. My questions are mostly on vudalimab. So, first on the safety profile. Can you tell us how the safety profile looks in comparison with IPI/NIVO combination? And how you are thinking about the dose that will be used going forward? And my second question is also for the go/no-go decision. How many patients you plan to enroll in monotherapy and combination cohorts for that? And is efficacy the only factor you’re considering to make these decisions? And the last one is also from the same trial. Any color you can provide on how many patients had bone disease? And were there any responses observed in those patients? Thank you. Bassil Dahiyat: Hey. Thanks, Kaveri. So that’s a set of questions. I think maybe the one that’s more just generically descriptive is your first one, vudalimab safety versus IPI/NIVO, which is a broad kind of amorphous question, but we’ll take a crack at it and what our dose going forward is. Nancy, do you want to jump in on that one? Nancy Valente: Yeah. I mean, overall, what we’ve seen so far is a safety profile. It looks similar to other checkpoint inhibitors. So, we haven’t seen anything that says that this is different — markedly different in some way that wouldn’t be unfavorable to the product. I guess I could say that overall. I mean, there’s a lot of data out there on IPI single monotherapy checkpoint inhibitors as well as combinations. So broadly, we’re similar to that. Do you want to… Bassil Dahiyat: Yeah. And on the dose going forward, note that in our lung cancer study, the newest study we started, as well as in the monotherapy prostate study, which was the second newest, we have switched to Q3 week schedule using flat doses. And I think that’s given us a good feeling that the Q3 week might have some benefits over the Q2 week weight-based dosing. With regard to IPI/NIVO, even though we’ve got over 240 patients now, it’s still hard to parse out those subtle differences. We don’t see the kind of colitis that often bedevils IPI therapy at high doses. And note, we’re giving much higher doses of our drug than the current sort of IPI regime of 1 milligram per kilogram. So, I think that’s maybe the best we can say comparatively across such a range of studies and whatnot. But generally very checkpoint-like. And then, on your second question, go/no-go number of patients that we’d hope to have for both the combo and the mono, so by first half next year, we’re looking at on the order of I guess roughly 30 patients in each of those settings. The chemo study in particular, in the main cohort, which is our no targetable mutations cohort, which is our now Docetaxel combo, and then on our monotherapy study as well. So in that, we’re aiming for 20 patients. Hopefully, we’ll get pretty close to that and be able to make decisions. Was that — was your… Dane Leone: I think we… Kaveri Pohlman: Bone response… Bassil Dahiyat: Bone res. Dane Leone: I think it would be helpful, maybe, Nancy, you could just explain the difference between measurable disease and non-measurable disease at baseline, because I think that might be helpful for everyone. Nancy Valente: Sure. I mean, measurable disease means it has very basically two dimensions, and it’s got to be a metastatic site in an organ or a measurable lymph node bigger than a normal lymph node. Non-measurable would typically be bone-only disease, or if a patient had bone-only disease. Our patients had measurable disease and they could have also had bone disease on top of that. I can tell you two of the four responders had bone disease in addition to their other measurable disease. So, we have seen responses in bony — in patients who had bony disease. Kaveri Pohlman: Got it. Yeah, that’s what I wanted to know. Thank you. Thanks for the color. Operator: Thank you for that question. One moment, please. Our next question comes from the line of Brian Cheng from JPMorgan. The floor is yours. Brian Cheng: Hey, Bassil. Hey, guys. Thanks for taking my questions today. Maybe first one is just on the three confirmed responders. I think just kind of piggybacking on what was the question prior to this. What was the background of the three confirmed responders? Can you just kind of give us how many lines they have and kind of give us a sense of what their historical responses were to prior AR or even — I see that they had — some patients had radiation. So just curious like what were the responses like? And I have a follow-up. Thank you. Bassil Dahiyat: Yeah. I mean, Nancy, you could take that. You know all the details. I’d say they were really heavily pretreated in rough shape when we got them. Nancy Valente: Yeah. They had to be progressing through prior therapies. They had to have at least two prior therapies. They’re — I’m looking at the background and they had anywhere from three to like seven prior therapies, including XRT. I’m just looking at… Bassil Dahiyat: Yeah. That’s a lot of detail, Brian. So we’re picking up our notes. Nancy Valente: Yeah. So, one patient had three prior therapies, not including any radiation. Second patient had three prior therapies. The third patient had six prior therapies, not including — so none of these are with radiation or counting that. And then last patient had two prior therapies. They all included Docetaxel or one included Carboplatin. Two had prior radiotherapy. Let me just see. I can’t really bet on their prior responses. But maybe in an upcoming presentation, we could drill down into each individual patient. Bassil Dahiyat: Yeah. But suffice to say, they’d seen a lot of prior therapy, Brian. Brian Cheng: Okay. And then a follow-up here is, as you’re looking at this data, and I think the last time we saw the combo data might be back in — let’s see I think, back in 2022. How should we think about the low-hanging fruit piece? What is the lowest-hanging subset of the mCRPC patient that investors should think of when it comes to vudalimab? And is it high risk, is it genetically defined? How do you think about the low-hanging fruit, either with combo or monotherapy? Thanks. Dane Leone: Yeah. I think it’s a great question that we’re obviously going to have a fuller answer to as we get these cohorts enrolled over the course of this year and can really look for a reliable signal, hopefully in 30 patients per cohort for monotherapy and for the combination. But the way we’re thinking about it now is we just had an update on part two of CheckMate 650 at ASCO GU, where IPI/NIVO was tried in every foreseeable combination relative to Cabazitaxel. The emergent signal that we have in a small end right now is better than anything that was achieved in that study in a comparable patient population post-taxane patients. So that’s step one. We think we have something differentiated, that hasn’t been done with an IO therapy before in this heavily pretreated patients, even going back to the table that we have looking across all of our peer studies. And then step two is more of a question I think you’re asking of how we see the treatment landscape evolving. As everyone knows, PLUVICTO is probably going to be used more and more. They had a good 2023 of commercial uptake in the United States. And so that has to be on our minds as we look through future development. But the interesting point here is the toxicity profile of vudalimab is non-overlapping with PLUVICTO. So that’s one. And secondly, there’s emerging evidence presented and published late last year that treatment of PLUVICTO might actually sensitize the tumor microenvironment to checkpoint-targeted therapy. And this all has to be proven out in the clinic within larger studies. And step one for us is still defining what we think the clinical profile is of vudalimab monotherapy for these heavily treated metastatic patients with measurable disease. But once we understand that, I think there’s a number of options how to move forward in an intelligent manner for development of this drug. So, we’re excited for what we’re seeing. Again, early days here, so we don’t want to get over our skis. But we’ll look for a confirmation of this signal as we move throughout the year. Brian Cheng: Great. Thank you, guys. Operator: Thank you for your question. One moment, please. Our next question comes from the line of Alec Stranahan from Bank of America. The floor is yours. Unidentified Analyst: Hey, guys, thanks for taking the question. This is [indiscernible] for Alec. Just a first, quick question. I think this was briefly mentioned before, but just wanted to check. I didn’t catch everything. But what would be like a good benchmark or like a comparator for us to look at in comparison to the vudalimab monotherapy data presented today? That’s my first question. Second question on quality-of-life data. When can we expect to see some color regarding that, if you’re keeping track of it? And could you maybe provide some — shed some light on what you’re currently observing in the clinic in terms of quality-of-life and some patient-reported outcomes? Thanks. Thank you. Bassil Dahiyat: Yeah. We’re not collecting — sorry, Dane, you want to take both of them or… Dane Leone: Yeah. I think — I mean that question is really a question of when we have a totality of a cohort in discussion with our clinical investigators is the clinical experience overall for these patients something that we should move forward? And so to that effect, the totality of the data, we don’t know at this point, right? We want to see, hopefully, 30 patients in each of these cohorts, the monotherapy cohort and the Docetaxel combination cohort to have that conversation with our clinical investigators. So, it’s a great question and that’s really what we’re hoping to answer. In terms of the first part of the question, that’s why we provided the data table and the slides. Because each of these studies that we’re looking at are peer studies, are exciting, right? We’re excited about Xaluritamig and the clinical response there. But they’re also limited in terms of their size and their scope and the comparability of the patients that were enrolled. So, we don’t want to make apples-and-oranges, comparisons of novel agents for the treatment of these prostate cancer patients right now. But I think what we could say is a number of these programs, Xaluritamig, I think is undeniable. And hopefully, our vudalimab monotherapy program as well seem to be surpassing what you could probably expect for a late-line chemotherapy from contemporary studies. As we mentioned, the Cabazitaxel response rates and the CheckMate 650 study and the therapy study. And then once you get to earlier lines of therapy, I think it is a toxicity profile. And again, if it does seem that PLUVICTO is sensitizing the tumor microenvironment for IO therapy, we have a therapy that does not have overlapping hemetox and could be an interesting idea to explore down the road. Unidentified Analyst: All right. Thanks for the color. Operator: Thank you for your question. One moment, please. Our next question comes from the line of Tara Bancroft from TD Cowen. The line is now yours. Tara Bancroft: Hi. Good afternoon. So, my question is more of a general question. So, are there any other combos besides chemo that you’re considering or really excited about that could increase the robustness of this data? And then, in specifically referring to the chemo combo, how do you think safety will look in that combination? Is there any update that you can provide on how that’s going now in the 17-04 study? Thanks. Bassil Dahiyat: So I guess on the first one, other combos other than the chemo, we think chemo is a very important one in this setting because it is the predominantly used therapy post androgen still. I think it’s really interesting to imagine post-PLUVICTO treatment maybe not in concert, given the intriguing immune priming activity that PLUVICTO perhaps has from some small studies recently published and they got a UCSF. So, I think those are the two top things on our mind now. But I think in the future, as we see our CD28 technology evolve, our XmAb808 program is, of course, aimed partially, at least at prostate, maybe even predominantly at the moment. And as that one evolves in combo with Pembro, we’re certainly keeping our eye on how to maybe use that with vudalimab if the stars align, right? So that’s maybe the other big one that we’re thinking of. The future might hold combinations with CD3 bispecifics with molecules like vudalimab. I think that’s something people are looking at or just starting to happen in the clinic now. I’m aware of some CD3 solid tumor molecules that are being tested with checkpoints. That’s maybe a little bit further off in the future, though. And then I guess your second question was on what can we say about safety from the ongoing 04 study, given that we’re not sharing specific data. So maybe, Nancy, do you want to comment? Nancy Valente: Yeah, absolutely. So maybe I can share also that since we last presented data, we amended the protocol, the combination protocol in prostate cancer to remove the carboplatin in all but the aggressive variant. And we’re really focused on the taxane, specifically Docetaxel, as first-line chemotherapy. And so far, based on feedback from investigators, we seem to be seeing better tolerability with these new regimens than the prior one. Bassil Dahiyat: Operator, we have any other questions? Operator: No. That looks like that’s clear. Bassil Dahiyat: Great. Well, thanks, everybody, for joining us today, and have a wonderful evening. We look forward to our next update. Operator: Thank you for participation in today’s conference. This does conclude the program. You may now disconnect. Follow Xencor Inc (NASDAQ:XNCR) Follow Xencor Inc (NASDAQ:XNCR) or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy......»»

Category: topSource: insidermonkeyFeb 28th, 2024

Rocket Lab USA, Inc. (NASDAQ:RKLB) Q4 2023 Earnings Call Transcript

Rocket Lab USA, Inc. (NASDAQ:RKLB) Q4 2023 Earnings Call Transcript February 27, 2024 Rocket Lab USA, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day. My name is Ellie, and I will be your conference operator for today. […] Rocket Lab USA, Inc. (NASDAQ:RKLB) Q4 2023 Earnings Call Transcript February 27, 2024 Rocket Lab USA, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day. My name is Ellie, and I will be your conference operator for today. At this time, I would like to welcome everyone to the Rocket Lab Fourth Quarter, 2023 Financial Results update and 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. [Operator Instructions] Thank you. I’d now like to introduce to the call Colin Canfield, Head of Investment and Relations. Colin, you may now begin. Colin Canfield: Thank you. Hello, everyone. We’re glad to have you join us for today’s conference call to discuss Rocket Lab’s fourth quarter and full-year 2023 financial results. Before we begin the call, I’d like to remind you that our remarks may contain forward-looking statements that relate to the future performance of the company, and these statements are intended to qualify for the Safe Harbor protection from liability established by the Private Securities Litigation Reform Act. Any such statements are not guarantees of future performance, and factors that could influence our results are highlighted in today’s press release, and others are contained in our filings with the Security and Exchange Commission. Such statements are based upon information available to the company as of the date hereof and are subject to change for future developments. Except as required by law, the company does not undertake any obligation to update these statements. Our remarks and press release today also contain non-GAAP financial measures within the meaning of Regulation G enacted by the SEC. Included in such release and our supplemental materials are reconciliations of these historical non-GAAP financial measures to comparable financial measures calculated in accordance with GAAP. This call is also being webcast with a supporting presentation, and a replay and copy of the presentation will be available on our website. Our presenters today are Rocket Lab’s Founder and Chief Executive Officer, Peter Beck, and Chief Financial Officer, Adam Spice. After our prepared comments, we will take questions. And now, let me turn the call over to Mr. Beck. Peter Beck: Yes, thanks, Colin. So, we’ve got a lot of great achievements and milestones to share across Q4 2023 and Q1 2024. Adam will then talk through our financial results for the fourth quarter before covering the financial outlook for Q1 2024. After that, we’ll take questions and finish today’s call with near-term conferences that we’ll be attending. Okay, on to what we achieved in the fourth quarter and for the year, starting with our launch business. So we had a successful return to flight in Q4. We rounded out 2023 with that flight, successfully deploying a satellite for a Japanese customer iQPS. This launch marked the conclusion of an in-depth, round-the-clock investigation that got to the bottom of the issue we had experienced on the previous launch. With mitigations now in place for future missions, we’re starting to pick up the launch pace for this year. In Q4, we also hit a new annual launch record, ending the year with ten launches, besting our previous record of nine. Not only did we reach this record, but we also commenced launches from our U.S. launch site, introduced and launched our HASTE suborbital Hypersonic vehicle for the first time, and we were the only small launch provider to launch more than one orbital mission in 2023. Overall, a strong year for the Electron team with plenty of firsts and new records, and we look forward to building on that this year. With the end of the fourth quarter, we wrapped up a record year of another kind, this time for new launch deals. We signed 25 new launch contracts in 2023, including 18 Electron missions and seven HASTE missions. Contracts were signed across a diverse customer base, including civil, defense, and national security and government customers, as well as commercial constellation operators. Clearly, demand for Electron is strong and continues to grow. With two launch sites now up and running, we’re well-positioned to meaningfully increase our launch cadence this year. We’ll dig into some more Electron achievements since the end of Q4 soon, as well as some key Neutron milestones. But first, let’s take a look at some of the key highlights from our space systems business across the final quarter of 2023. Well, we closed out 2023 and we secured a contract that started a new era for Rocket Lab, and that is the era of being a prime contractor. We were selected by the Space Development Agency to design and build 18 spacecraft for the agency’s tranche to transport layer. As prime contractor for the approximately $0.5 billion contracts, we are leading the design, development, production, test, and operations of the satellites, including procurement and integration of the payload and subsystems. It’s our largest single contract to date and establishes Rocket Lab’s position as a leading satellite prime contractor, providing supply chain diversity to the Department of Defense. All 18 satellites will integrate subsystems and components built in-house by our team, including solar panels, structures, star trackers, reaction wheels, radios, flight software, avionics, and for the first time a launch dispenser. This is a vertical integration strategy at work, and it gives us a real level of control over supply chain, enabling efficiencies, uncertainty on cost and schedule and quality of course. Of course, the SDA contract is not the only spacecraft constellation we have in development build. Our space systems team rounded out Q4 and the start of Q1 with some key milestones in the development of our constellation for Global Star. We’re now officially progressing from the design phase into production with the first flight frames and build for the constellation of 17 spacecraft. Simultaneously, our spacecraft component teams are getting to work on their subsystems, including solar panels, flight software, and so on. This constellation is still in the early phase, but we’re making rapid progress ahead of the 2025 launch schedule. Now onto a mission scheduled to launch much sooner than that. Our ESCAPADE mission for NASA and the University of California, Berkeley, we’re building two spacecraft headed to Mars orbit via Blue Origin launch scheduled for Q3 this year. In recent months, we’ve completed both propulsion decks, started environmental testing, and getting ready for ground operations at the launch site in preparation for launch. After a successful mission to the moon for NASA in 2022, we’re looking forward to pushing the boundaries of even more on this highly ambitious space science mission. That’s just a quick overview of some of the key highlights across Q4 and broader 2023. There’s plenty more we could have shared, but in the interest of time, let’s move on to some of the exciting progress and achievements so far in Q1. Okay, Neutron’s path to first flight. So there’s more green across the board, which is what we always like to see with Neutron team delivering on some key milestones at the end of last year and in early 2024. But let’s dive into some of the details. So, with Neutron vehicle development, we’ve hit my favorite part of the development program. Real flight hardware is not only coming off the production line, but it’s entering the integration test phase in preparation for first flight. The Avionics team has kicked some major goals with successful hardware in the loop, testing for simulated flights to orbit as well as landings. This is a process where we integrate real flight software with real flight avionics and hardware to get thousands of simulated flight environments. Hardware in the loop, or huddle testing, as we call it, has really been a key part of Electron’s success, enabling us to test like we fly on the ground. And it’s exciting and great to be entering that phase for Neutron now. We’re also well into the test and validation campaign for the Canard’s, which provides stability and steering to Neutron, particularly on re-entry and descent. We’ve now tested our first complete flight representative Canard drivetrain, including motion controller software, linear actuator, and all the Canard mounting hardware, bearings, and so on. Now this is really a big step forward for Neutron, and this represents one of the things we haven’t done before, so it’s great to get that behind us. On the structures side, development and production of Neutrons fairing, and Stage 1 and Stage 2 tanks continue, fairing molds and plugs are completed. These are some of the final steps before carbon composite flight structures start to come out of the factory. Things start to move very quickly in composites from here, so expect to see some more structure resembling a complete Neutron in coming months. And it’s been a big few months for the propulsion team bringing the Archimedes engine to life. The single-element pre-branded test campaign was completed. All of the engine components are complete or in final production for the first engine and once integrated testing is complete, we’ll start to see some fire at [indiscernible] and can move into production of those flight engines following successful test campaigns. Then on the launch infrastructure, Launch Complex 3 in Virginia is taking shape nicely. The team has completed initial piles and concrete foundations work for the water tower, locks tank, and of course the launch mounts. And having built three launch pads now, even though I said I’d never built another one, we’re really starting to get well refined and streamlining the process to build these quickly and efficiently. One of the ways we do this is by developing lots of key infrastructure in parallel. So we don’t wait until foundations to be done to you know, start the cryo tanks. We do it all concurrently and so on and so forth for launch mounts. We fabricate all those large steel structures off-site and bring them to site and install them just as soon as that foundation work is done. That’s how we’re able to build LC-2 in the record time of just ten months. And now with foundation work substantially underway, above-ground infrastructure like the launch mount, water tower, and tanks will start to be installed across the next couple of months, ready for final integration testing, and then, of course, in preparation for launch. Now over to Mississippi, where Archimedes test stand is ready for hot-fire at NASA Stennis, all the major concrete and steel construction work is complete and commissioning of the locks cold flow systems is underway. We’re on track for the stand to support an engine by the end of March. After that, we’ll really start to see some fire, which would be good. And on the Neutron production infrastructure in Q4, we announced we are establishing a space structures complex in Middle River, Maryland, in the former Lockheed Martin vertical launch building. This facility will be home to the development and production of a wide range of large composite structures and products for both launch and space systems, including Neutron. Just a couple of months after taking over the building, we’ve ready the facility to accept and install the large-scale production equipment, including our automated fiber placement machine, which is really the key to rapid repeatable production of Neutron’s composition structures. So across the board, we’ve reached some really critical milestones on our journey to the first Neutron launch over the past quarter and a bit. Now we’re at the pointy end of the development program where all the hardware, systems, and infrastructure start to integrate, culminating in Neutron’s first launch. Currently, our schedule closes for this by the end of 2024, and we do have a track record for delivering programs faster than typical industry standard timelines. But we’ll know more about how close to the schedule and timeline we are and we can hold once Archimedes breathes fire and we complete a couple of other major tests. So we’ll have an update on that soon. And then, now back to small launch. We had a strong start to the quarter, so far with two successful Electron missions. These included a dedicated launch for Spire Global and North Star, as well as a really complex and unique mission for Astroscale. The mission launched a satellite designed to rendezvous on orbit with an old derelict Japanese rocket stage. The purpose was to demonstrate the ability for a satellite to closely follow and monitor a non-cooperative object in space, with a view to understanding how satellites might be able to dock with pieces of space junk in the future and drag them back to Earth and obviously reduce orbital debris and increase space sustainability. Now, I don’t think many people really realize just how wildly ambitious and challenging that mission was for our team. It’s difficult enough to rendezvous two items in space that talk to each other like an astronaut capsule and the [ISS] (ph). They’re both communicating with each other and they know where each relevant object is. But in the case of a derelict rocket stage, it offers no data on its location, speed, tumble rates, all of these things you really, really need to know to approach something in space. So to put Astroscale’s spacecraft into exactly the right place at the right time to rendezvous with the stage. A GNC team demanded highly accurate orbital insertion with tighter margins than required on just about any missions. The exact zero was only able to be defined a day prior to the launch and required an [LTAN] (ph) accuracy of only plus or minus 15 seconds. I should note that the GNC team was able to deliver that accuracy to within 1.05 seconds, so 15 times better than the speed that was required. The team delivered perfect bullseye, the spacecraft was deployed to exactly the right location and they were able to contact the spacecraft and prepare to start commissioning it with only minutes — with after minutes after launch. It’s this level of tailored mission design, and that simply is just not possible on rideshare missions. And why demand for Electron continues to grow. With two launches down. We have two more to complete this quarter, including a mission for Synspective from LC-1 on March 9 UTC, followed by a dedicated launch for the National Reconnaissance Office on March 20 UTC from LC-2 in Virginia. The missions are a testament to the trust and value of our customers place in Electron since this will be Electron’s fourth launch for Synspective and fifth launch for the NRO. It will however be our first NRO launch from U.S. soil, so we’re excited to demonstrate responsive launch capability for the DoD on two continents. Not only did we launch two missions from Q1 so far, but we brought an Electron back too. We recovered Electron’s first stage from the Spire mission in January, bringing it back for an ocean recovery. Electron’s recovery process has been iterative, enabling us to make small modifications and improvements to the stage and marine recovery process without causing a slowdown on the rocket production line, enabling us to keep increasing Electron’s launch cadence. Generally, a program like this would cause a lengthy pause in production to allow for design freezes and production changes, but by taking small steps on each flight, we’ve been able to continue delivering the launch service to our customers and the one that they rely on. Happily, this process has yielded successful results. The January mission saw Electron come back in the best condition yet. The stage is currently undergoing hydrostatic testing to determine if we’re comfortable to put it back on the pad. The next milestone for the recovery program is to fly a mission with nine pre-flown Rutherford engines. You remember that we successfully relaunched a single Rutherford engine late last year, so now we’re going to put all nine of them through their paces. So keep an eye out for that milestone coming. Right, on to some of the key highlights for our space systems since the end of Q1 and just last week, we achieved a world first, successfully reentering a capsule from orbit that was used to manufacture pharmaceutical products in space. We designed and built and operated the spacecraft for Varda Systems Industries to host their in-space manufacturing capsule. Launched in of June last year, the spacecraft was initially designed to operate in orbit for around four months before being deorbited into the Utah desert. However, lengthy delays in regulatory approvals to bring the spacecraft home meant that we ended up on orbit for more than eight months, and in a testament to both our spacecraft builders and operators, it performed flawlessly for that extended duration. Now, operating a spacecraft is one thing, but bringing it home and landing it within a tiny designated area is quite another. A team managed 24/7 flight operations, conducted multiple engine burns, and carrying out real-time trajectory calculations and adjustments to set the capsule on a course for the Utah testing and training range. For context, the margin of error is less than 0.05%, and if an engine burn is even a fraction of a second too long or too short, you end up hundreds of miles away from your designated landing zone. This is typically the stuff of huge government programs and decades of development. The only other company to successfully reenter a capsule from orbit for a purely commercial mission is our friends over at SpaceX. So we’ve joined a very elite club on our first attempt. This mission was the first of four missions that we have booked for Varda, and the next spacecraft is built and ready for launch in the middle of the year. Excitingly, the lessons we’ve learned on this program are helping inform future projects, including scientific sample returns, point-to-point cargo delivery, and of course, human spaceflight capability on Neutron in the future. So on that note, before I hand it over to Adam to talk through the financial highlights and outlook, it’s fitting time to share an update on our wider spacecraft programs. In 2020, we launched our very first Rocket Lab-built satellite called Photon. It was really a defining moment for the business, a line in the sand where we became an end-to-end space company, not just a launch provider. Since then, we’ve had the privilege of developing, launching and operating spacecraft for a broad range of customers. And they’ve all told us the same thing, they need a reliable, highly capable spacecraft built quickly, affordably, and at scale and we’ve done this. We’ve developed a spacecraft that has delivered a mission — a successful mission to the moon for NASA, we’ve developed twin spacecraft for a mission to Mars, we’re building constellations of half-ton spacecraft for SDA and NDA. And of course, we’ve proven spacecraft reentry capability now too. As we’ve delivered more and more successful spacecraft missions, demand for these spacecraft or similar variants on them has grown. So we’ve expanded beyond Photon to create a full family of standard spacecraft buses. So allow me to formally introduce Lightning, Pioneer, Explorer, and of course the original Photon. Lightning is our newest spacecraft bus designed for a twelve-year-plus orbital lifespan in LEO. It utilizes electric propulsion, delivers high power and radiation tolerance, and incorporates full redundancy in all critical subsystems. This is a half-ton, three-kilowatt bus, ideal for communications, imaging, and remote sensing. Then there’s Pioneer, a highly configurable platform designed to support large payloads and unique mission profiles, including reentry. For interplanetary missions there’s Explorer, a high delta V spacecraft with around about a kilowatt of power, large propellant tanks, and precision orbit determination system ranging transponder, and all the things you need to go into deep space. Explorer enables small spacecraft missions to planetary destinations, near-Earth objects, and Earth-moon Lagrange points. And of course, Photon is sticking around as the original spacecraft plus launch option. Thanks to our vertical integration strategy, these spacecraft share many common components and subsystems designed and manufactured in-house by us, enabling us to deliver spacecraft quickly, affordably, and reliably using flight-proven components. Each of the spacecraft are currently on order in a range of quantities, with 40 plus satellites currently in our production backlog. So from humble beginnings with one spacecraft just four years ago, to a full family of them designed to serve commercial and government partners is certainly an exciting time for our space systems business. So that wraps up the key business highlights from Q4 2023 and Q1 this year so far. So from here, I’ll hand over to Adam to take us through the financial updates. Over to you, Adam. Adam Spice: Thanks, Pete. Fourth quarter 2023 revenue was $60 million, in line with our revised guidance provided on January 31, 2023, but below the low end of our original Q4 guidance in November, due primarily to the pushout of one of our planned Q4 launches, which was due to the longer than anticipated September anomaly remediation’s. Fourth quarter revenue represented a sequential decline of 11.3% due to the reduction of launches from three in Q3 to one in Q4, partially offset by continued growth in our space systems business. On a full-year basis, 2023 revenue was $244.6 million, with impressive growth of approximately 16% year-on-year, especially when taking into consideration the effect of September’s Electron anomaly. Our launch services segment delivered revenue of $8.5 million in the quarter from one launch, which is above our targeted average selling price of $7.5 million and consistent with our revised guidance of $8.5 million. Our current aggregate electron backlog reflects an average selling price of $8.1 million and we’re encouraged by a funnel of new business that is consistent with this pricing level. On a full-year basis, launch delivered revenue of $71.9 million, or an increase of 18.5% year-on-year. Our space system segment delivered $51.5 million of revenue in the quarter, which was up 11.2% sequentially and in line with our revised guidance of $50.5 million to $52.5 million. With sequential growth driven by our MDA satellite bus contract, as well as growth in our component businesses. On a full-year basis, space systems delivered revenue of $172.7 million or an increase of 14.9% year-on-year. Turning to gross margin. GAAP gross margin for the fourth quarter was 25.8%, in line with our revised guidance of 24.8% to 26.8%, while non-GAAP gross margin for the fourth quarter was 32.3%, which was well in line with our revised guidance of 31.4% to 33.2%. GAAP and non-GAAP gross margin performance reflects improved mix in both our merchant component and satellite manufacturing businesses, partially offset by the effect of less overhead absorption in our launch business due to only one Electron launch in the quarter. We ended Q4 with total production-related headcount of 852, up 36 from the prior quarter. Turning to backlog. We ended Q4 2023 with just over $1 billion of total backlog with launch backlog of $248.3 million and space systems backlog of $797.8 million. Relative to where we ended 2022, total backlog was up 108%, or $542.5 million, thanks primarily to the $489 million base portion of December’s $515 million SDA Beta award. For space systems backlog was up 106% year-over-year, or $410.4 million, again, largely due to the SDA Beta contract signing. In our launch services business, backlog was up over 213% on the back of multi-launch Electron deals with government and commercial partners along with strong HASTE bookings. We expect approximately 41% of current backlog to be recognized as revenues within 12 months as we scale our work in Electron, HASTE, MDA, and other space systems projects. Turning to operating expenses in the quarter, GAAP operating expenses for the fourth quarter of 2023 were $63.4 million. In line with our revised guidance of $62.5 million to $64.5 million. Non-GAAP operating expenses were $53.5 million, again, consistent with our revised guidance of $52.5 million to $54.5 million. GAAP operating expenditures grew 63% from the prior year’s fourth quarter, almost entirely within R&D due to increases in staff costs within space systems and Neutron, as well as prototyping and materials-related expenses. Non-GAAP operating expenditures grew 95% year-over-year, largely due to the same reasons above, less the effect of stock compensation expenses. Now focusing on the quarter-over-quarter changes. As mentioned in the prior slide, GAAP operating expenses for the fourth quarter of 2023 were $63.4 million and non-GAAP operating expenses were $53.5 million. The increase in both GAAP and non-GAAP operating expenses versus the third quarter of 2023 were primarily driven by a reduction in contra R&D credit that wrapped up in Q4 related to Neutron upper-stage development from our U.S. government partners, as well as the impact of increases in headcount and increased depreciation amortization expenses related to the recent CapEx additions. In SG&A, GAAP expenses declined $1.3 million quarter-on-quarter due to a decrease in performance reserve escrow related to our ASI acquisition, partially offset by an increase in change in contingent consideration related to our PSE acquisition. Non-GAAP SG&A expenses increased by $500,000, primarily due to increases in headcount along with increase in outside services expenses. Q4 ending SG&A headcount was 247, representing an increase of 11 from the prior quarter. In R&D specifically, GAAP expenses increased $10.9 million quarter-on-quarter due to the previously mentioned roll-off of contra R&D credits related to Neutron upper stage development, as well as an increase in Neutron development spending offset somewhat by a reduction in stock-based compensation expense. Non-GAAP expenses increased by $13.3 million due to the same underlying factors driving the GAAP spending increases. Q4 ending R&D headcount was 585, representing an increase of 65 from the prior quarter. In summary, total fourth quarter headcount was 1,684, up 112 heads from the prior quarter. Turning to cash, purchase of property, equipment and capitalized software licenses was $10.4 million in the fourth quarter of 2023, a decrease of $10.6 million from the $21 million in the third quarter of 2023. This sequential decrease was due to lumpiness in the timing of our large CapEx items across both of our launch and space systems businesses. Cash consumed from operations was $42.4 million in the fourth quarter of 2023 compared to $25.2 million in the third quarter of 2023. The sequential increase of $17 million was driven primarily by the timing of receipts and payments related to our satellite manufacturing business and the impact of delayed launch services milestone invoicing due to shifting manifest adjustments post Electron’s September 19, 2023 anomaly. Overall non-GAAP free cash flow, defined as GAAP operating cash flow reduced by the purchase of property, equipment, and capitalized software in the fourth quarter of 2023, was a use of $52.6 million compared to $46.2 million in the third quarter of 2023, or a more apples-to-apples comparison of $54.6 million when including the impact of our asset acquisitions, most of which is classified as PP&E. The material step up in negative non-GAAP free cash flow was, as noted in my prior GAAP operating cash flow commentary was result of the lumpy timing of payments and receipts associated with our space systems manufacturing operations and the impact of post anomaly launch services milestones invoice delays for which we expect the reversal of this negative working capital cycle through early 2024. The ending balance of cash, cash equivalents, restricted cash, and marketable securities was $327.9 million as of the end of the fourth quarter of 2023. Reflecting on the past four quarters, we continue to make meaningful progress towards our long-term financial model. Increased Neutron investment will likely continue to drive EBITDA losses in 2024 as we move through the year we believe a trend to improving scale and efficiency in our space systems business and Electron launch, cadence, and production efficiencies provide an optimistic outlook towards achieving our long-term target business model. Overall, we expect gross margin trends will continue to improve over time, thanks to the same factors that help drive improvement this year. In terms of when we can get to adjusted EBITDA breakeven Neutron investment, especially R&D spend, continues to be the pacing item to achieve its critical milestone. Turning to our recent fundraising of $355 million in convertible senior notes. With this financing, we believe we secured a large quantum of cost-effective and shareholder-friendly capital. The roughly $300 million of proceeds, net of our capped call and deal fees, positions the company to exercise inorganic adoptions to further vertically integrate our supply chain with the critical capabilities that are consistent with what we have done successfully in the past, which has enabled larger and more strategic program wins like the recent $0.5 billion SDA program. With that, let’s turn to our guidance for the first quarter of 2024, we expect revenue in the first quarter to range between $92 million and $98 million, representing sequential revenue growth of between 53% and 63%. This range reflects $60 million to $65 million of contribution from space systems and $32 million to $33 million from launch services, which assumes four launches. Although modestly lower than what we previously expected for Q4 just a few months ago. We don’t want to understate how encouraged we are with the magnitude of this forecasted quarter-on-quarter growth and how positively it reflects on the capabilities of the team to deliver this level of growth in such a complex and competitive set of businesses. We expect first quarter GAAP gross margin to range between 24% to 26% and non-GAAP gross margins to range between 29% to 31%. These forecasted GAAP and non-GAAP gross margins reflect improved projected launch cadence in Q1, offset by mixed shifts in our space systems business bias towards the larger and lower margin satellite manufacturing program revenue contribution versus certain of our higher gross margin component offerings. We expect first-quarter GAAP operating expenses to range between $73 million and $75 million and non-GAAP operating expenses to range between $62 billion and $64 million. The quarter-on-quarter increases are driven primarily by increased Neutron investment, including staff costs, prototyping, and materials, as well as the runoff of contra R&D credits related to our Neutron upper stage development agreement with U.S. Space Force. We expect first quarter GAAP and non-GAAP net interest expense to be $1.5 million. We expect first-quarter adjusted EBITDA loss to range between $28 million and $30 million and basic shares outstanding to be approximately 490 million shares. And with that, we’ll hand the call over to the operator for questions. Operator: We’re now opening the floor for the question-and-answer session. [Operator Instructions] Our first question comes from Andres Sheppard from Cantor Fitzgerald. Your line is now open. See also 16 Best Financial Stocks To Buy According to Hedge Funds and 20 Best Personal Injury Lawyers in NYC. Q&A Session Follow Rocket Lab Usa Inc. Follow Rocket Lab Usa Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Andres Sheppard: Hello, everyone. Good afternoon. Congratulations on the quarter, all the launches, the development of the Neutron and sounds like it really was a busy quarter. So congrats on all developments and thanks for taking our question. I was just wondering if maybe you can give us some color as to how we should think about scaling and timing of other opportunities in space systems across both maybe satellite manufacturers and components? And maybe how should we think about a reaction wheel in your backlog versus revenue so far contract? Thank you. Peter Beck: I’ll take the first pass at that, Adam. And you might want to talk about the revenue side. But I mean you know, we continue to see lots of scaling across the space systems business, particularly from commercial and government. So you have big programs like the SDA program that are procuring hundreds of satellites over extended periods of time that require replenishment, and then you have a commercial model that’s kind of similar. So as we — as those constellations and those government programs continue to build out, and we continue to either supply what we’ve already won or win more, the corresponding timing of that revenue will scale appropriately. But maybe. Adam, further comment? Adam Spice: Yes, no, I think a little more color there. So if you look at the mixed changes that are going on within our space systems business, specifically between the satellite manufacturing and the components businesses, we’ll say that this year we’ll have probably a more significant step up in the relative mix of the space systems part, like the satellite manufacturing part of the business, and that’s a function of going into production phase on our contract with MDA. So I think this year you start to see again a little more relative contribution from the Photon side of the business, but we are seeing very significant growth also from the components. It’s just coming from a different base. When you think specifically, you also asked about the reaction wheel business and kind of where that is. I think you’re probably referring to the mega constellation win that we’ve announced some time ago. And so that starts to ship in meaningful ways this year as well. So we see again very encouraging growth across the satellite manufacturing, but also components. In this case this year will be a very good year for growth in our reaction wheel business, particularly tied to that one mega constellation deal that we announced a couple of years ago. Andres Sheppard: Got it. That’s super helpful. I appreciate all of that context. Maybe one follow-up for you, Adam. In regards to the $515 million contract award with the Space Development Agency. I’m wondering if maybe you can give us some color as to how we should be thinking about in terms of modeling it in terms of revenue recognition. I understand there’s a base amount of little less than $490 million. And I think work for this contract has already begun. But just wondering if maybe you can give us some direction as to how we should be thinking about it in terms of recognition for revenue. Thank you. Adam Spice: Sure. Yes, for this contract in particular, it’s not too dissimilar to other satellite build contracts, and the fact that it’s more back-end loaded, it’s not like — under this contract, we will recognize revenue as we expend resources against the program to complete it. So under what they call an EAC basis, under ASC 606. So if you think about this year is really all about kind of finalizing the design elements of the program, and the majority of the revenue ultimately gets recognized as you’re kind of starting to build hardware and start to pull things to the floor. So this year we will recognize some revenue against the contract because there is cost to complete kind of the design elements of it. But what you really see is, the more meaningful contribution of revenue will start up probably more towards the second half of 2025, and then ultimately the satellites begin shipping and ultimately ship in 2027. Now, what we’ll say is that, if you think about the kind of the working capital kind of elements of this deal is, revenue recognition is not tied to kind of cash receipts and will be positive from a working capital perspective on this contract, because at some point we receive the payments from the customer and then we have to forward some of those payments, obviously, to our long lead vendors. But we have modeled this contract to be cash flow positive from its inception. So this is one where it’s both good from a working capital perspective, but also it’s going to build nicely from a revenue contribution as we progress through 2024 and into 2025 and beyond. Andres Sheppard: Wonderful. That’s super helpful. I appreciate that. Congrats again on the quarter. I’ll pass it on. Thank you. Operator: Next question comes from Erik Rasmussen from Stifel. Your line is now open. Erik Rasmussen: Yeah. Thanks for taking the questions and congrats on all the progress you guys have been making. Maybe just on the SDA award. When looking at that $515 million basis, it seems like the value per satellite of almost $29 million is meaningfully higher than what we saw that was previously awarded on that beta program. What’s driving this and what is the cost structure of the satellite and are there any NRE fees associated? Adam Spice: Yeah. Pete, I’ll let you take the first piece of that. Peter Beck: Sure. Yes, I mean not all satellites are created equal, Erik. And that particular bus and design is pretty unique. So I wouldn’t read too much into the average satellite price. It’s kind of saying the average car price, but there’s a Ferrari and a Toyota and you don’t expect those to be the same price. So you have to kind of look at it with respect to what its capabilities are and what are the quality of the components that have been used in it and so on and so forth. Adam Spice: And Erik, as far as the NRE piece, yes, there is an NRE element to this program. And that’s really, again, what’s going to be happening this year in 2024. And that’s what we’ll get the beginnings of revenue recognition on. It certainly won’t be a very significant portion of the overall contract value, but it’s also not completely immaterial. So as we progress through 2024, we’ll be able to provide more color on what that rev-rec looks like. It’s a little bit early because the contract is relatively new and we’re still going through a lot of program details. But again, as we progress throughout the year, we should have much more kind of ability to provide color on kind of the timing and the magnitude of the incremental contribution from the NRE phase of this contract. Erik Rasmussen: Okay, we’ll wait for that. Thanks. And then, obviously, your backlog continues to grow. You added over $500 million with the SDA award. Can you just comment on some of the types and sizes of potential deals, whether on the government or commercial side that you’re tracking, or maybe some qualitative comments to highlight the opportunities or maybe the programs you guys are looking at? Peter Beck: Sure. Obviously, Eric, SDA is a big one. I mean, as I mentioned in previous answer, these are spacecraft that require replenishing. U.S. government is moving from a few succinct assets in GEO to a distributed LEO architecture. So that’s a significant opportunity and change from the government. And it’s not just SDA. If you look across all of the government agencies, the transition down to LEO is occurring. So we see a lot of opportunities from the U.S. government and quite frankly from other governments as other governments follow that path. And then on the commercial side, there’s a number of constellations that we continue to track, but we’ll always be pretty selective about the work that we take on. And I think we mentioned before that we only really take on work that we believe is strategic to the longer-term vision of the company, and we’ll continue to follow that process. Adam Spice: Yes, and Erik, I’d add a little bit to that, too. I mean we had this big step up, as you noted, related to the SDA contract. And I think it’s a very meaningful one for us because, again, we’re priming that mission. We’re not a sub, we’re the prime for it. So I think that opens up other opportunities to take on bigger and bigger prime projects. But I think with this big step up, I think we can also kind of look forward to, really, as we get closer and closer to getting Neutron to the pad. Obviously, that’s going to be an opportunity to significantly build our backlog in a very, very meaningful way given the estimated average selling price of that vehicle versus Electron. And in addition to basically looking forward to having Neutron start adding to the backlog, we’re seeing a lot of excitement and appetite towards HASTE. And the HASTE missions are a great opportunity for us. They’re a recent add to our launch capability stack. So across both Neutron, HASTE, and just kind of, if you want to call the Electron classic, I think there’s really a lot of opportunities to continue to build that backlog and kind of hopefully maintain a relatively consistent mix of launch and space systems. When Pete and I kind of were looking at how we want to model this business going forward, we do like the predictability that space systems brings with it across components, plus large program opportunities, because launch is always going to be a lumpier business. But we think there’s a large magnitude of opportunity there again, particularly as we mix in more HASTE and start to see neutral opportunities feather into the backlog. Erik Rasmussen: Great. Maybe if I could just ask one more on the convert deal you announced, how did you arrive at this maybe versus other financing options you were contemplating? And then of the $300 million net proceeds, obviously, we mentioned M&A, what kind of assets could be interesting to bring in-house that would drive further your strategy? Adam Spice: Yes, I’ll take the first one and I’ll pass off to Pete to kind of maybe provide a little more color on M&A targets as far as areas we might be looking at. But why convert I think, when we looked at all the different options and we did kind of exhaust all the different possibilities out there, it was the right vehicle to provide us the quantum of cash that we were looking to raise because we do see a lot of opportunities out there to grow inorganically and continue exploiting kind of M&A as a growth vehicle for us. And if you look at the flexibility that provides as well, there were no financial covenants related to it, it gives us a lot more freedom to run the business the way that we think it needs to be run. And from a cost to capital perspective, we just think it represented the lowest cost to capital versus some other kind of straight debt options and so forth. So we ran kind of parallel processes, looking at different ways to bring capital into business, all the way from doing a straight equity offering to doing straight debt to then the convertible. And the convertible just came on top in almost every metric that we were looking to raise on. So to us, it became kind of a no-brainer as we learned more about each of those options as they would be presented to our business. So I would say we put some competitive tension in the process to make sure that we were picking the right product and ultimately felt comfortable that this indeed was the one. Peter Beck: Yes. And on the assets for potential M&A targets. So, look, there’s a couple of things that we don’t have in [indiscernible] with respect to space systems. So there’s a potential for some tuck-ins. I would say we have a reasonable focus on payloads, I mean, as a prime now on the SDA mission, the only thing that we’re not really doing, the actual payloads and sensors, so I think that’s obviously an area of interest. And I’ll remind you that the end goal here is not just to be a bus provider or even a prime. It’s to ultimately have our own constellation in orbit providing services because that’s where we ultimately think this all goes. So, as I mentioned before, everything we do is within that kind of vision. And the same with any kind of M&A target, especially in the payload area. Erik Rasmussen: Great. Thanks for taking the questions, and good luck. Adam Spice: Thank you. Operator: Our next question comes from Kristine Liwag from Morgan Stanley. Your line is now open. Kristine Liwag: Hey, good afternoon, everyone. Peter, with the Varda mission, you mentioned that your experience with a capsule’s re-entry could inform potentially crude missions via Neutron. Can you expand on that a bit? And how far along are you in developing a re-entry capsule for Neutron’s that can carry humans? And how are you thinking about that market opportunity there? Peter Beck: Yes. Thanks, Kristine. So, look, as we’re designing Neutron, to be clear, we don’t have any active capsule development programs or anything. But as we’re developing the vehicle, we wanted to make sure it was human-ratable because it’s a vehicle of significant enough scale and class that it should be capable of human spaceflight. So it’s definitely something we pay close attention to. Now, with respect to the human spaceflight market, it’s kind of an unusual one because really, there’s only one customer right now that being NASA and they’re fairly well served. So it’s unclear whether or not there’s a big enough market opportunity to go after that as it stands today, especially if you were to self-fund all the development because typically those programs, the development has been paid for by the government. So that would be a pretty big call to make. But we’ll make sure that we’re ready and able to do human spaceflight missions when we think the market conditions are right and when there’s more than probably one customer, which, obviously, needs to be more than one destination. So as the Space industry continues to evolve and grow and it becomes clear that there’s more destinations and more customers for human spaceflight, then we’re ready with the Neutron vehicle and clearly, we can reenter and land stuff exactly where we need to. Kristine Liwag: Great. Thanks for the color. And maybe on Neutron, too. You talked about Neutron being on the pad this year, but what do you think about a launch in 2024 given all the work left on the program? And also how do you think about the cadence? Are you still on track for about three Neutron launches in 2025? Peter Beck: Yes, look, I mean, at the end of the day, it’s a rocket program, right? And right now we have a schedule that closes for a launch by the end of the year. But we’ve got a lot of testing to get through. And if everything goes well, then everything goes well. If we have some issues and some development issues along the way, whether it be propulsion or other systems, then that will cause us to real evaluate the schedule. But kind of as it stands today, that’s kind of where we’re looking at it. And we have a — like I said, we have a schedule that closes. And then on cadence, we’ll follow a very similar cadence to what we did with Electron. So if we get one away this year, then next year we’d look to do sort of three and then we may be able to step it up to as much as five. But it really depends on how the development program goes and it also depends on how much work we have to do after we get past first flight as to what cadence we can meet. But what I will say is, we certainly get up from an infrastructure perspective to deliver those cadences with the AFP machine in the Middle River facility and also the Virgin orbit asset. I would say that from an infrastructure standpoint, we’re in a good position to scale. Kristine Liwag: And last question on Neutron. As you sit here, what do you anticipate the mix of customer set is for government versus commercial over the next two years? Where do you see the most opportunity for Neutron customers? And when do you plan to share the details of the initial customer set for the first launch? And ultimately, do you expect to launch Neutrons from both Wallops and New Zealand? Peter Beck: Sure. So we certainly hope for a mix of sort of 50-50. We’ve found that to be pretty, you know, about right for Electron. I think it provides a good mix and there’s plenty of government customers that are looking forward to the vehicle coming online and equally so commercial customers. So I have no reason to believe that we won’t see a different mix. And then with respect to Wallops and New Zealand. So it will only launch from Wallops. New Zealand is not a viable launch site for a vehicle of this size. To give you a sense of scale, if we took all of the liquid oxygen produced in New Zealand it would half-fill a Neutron tac once. So there’s just not the industrial base to be launching this vehicle of this class down in New Zealand. So it’ll be exclusively Wallops pad to start with, for sure. Kristine Liwag: Great. Thank you for the color. Peter Beck: No worries. Operator: Our next question comes from Cai von Rumohr from TD Cowen. Your line is now open. Cai von Rumohr: Thank you very much. So your gross margin you’ve indicated is going to be lower in the first quarter than the fourth. And yet if you hit the target you’re going to have four launches versus one. And you’ve basically made the point that there’s this huge leverage in terms of more launches. So how come the gross margin is down? You mentioned systems, but is the launch margin up sequentially? Adam Spice: Yes. So, Cai, I’ll take that one. The launch margin actually does increase sequentially based on those increased number of launches. It’s really all consumed, though, and then some by space systems is again a result of a disproportionate growth on the system side of things as we move into the production phase of the MDA contract. So again, it’s kind of a goodness on the launch side does get consumed by kind of just the mix on the space system side. So the benefit of these large space system contracts is obviously scale and absolute dollars that flow. But they do come at a lower gross margin versus our components business. So over time, it’s really all about managing that mix of this kind of larger, lower gross margin programs on the manufacturing side of space systems versus the higher margin component sales and the increasing gross margins that we expect from our launch business as we continue to grow or scale the cadence of Electrons throughout the year. Cai von Rumohr: Thank you. And then a second one, HASTE, you mentioned you got seven orders in 2023. What percent are they? How many are there out of your manifest of 2022 this year. Roughly when do they go and how does their profitability compare with an Electron launch? Adam Spice: Yes. So we have two HASTE missions on the manifest for 2024 out of the total 22 manifested. And if you look at the contribution from a margin perspective is relatively consistent with other launches. I mean we have a higher selling price but we also have some incremental costs associated with those because they go out of Wallop. So we have more kind of variable costs related because we pay the range fees in Virginia. Plus we also have kind of incremental government mission assurance costs. So you basically have the benefit of the higher selling price. But as a gross margin percentage contributor, it’s about on par with other Electron missions. Cai von Rumohr: Thank you very much. Operator: Next question comes from Matt Akers from Wells Fargo. Your line is now open. Matt Akers: Hey guys, good afternoon. Thanks for the question. I think, Adam, you touched on EBITDA break even and it sounds like that’s kind of paced by sort of how fast Neutron then goes. Is there any more color you can kind of give there? Is there a range we should sort of think of, I guess is 2025 a reasonable outcome? Kind of if everything goes as planned. Adam Spice: Yes. So as we progress through 2024, we expect obviously growth on the top line to continue, we expect gross margin expansion. All of that really does get consumed by a step up in investment for Neutron. We’re really kind of in the throat of the spend on Neutron this year and it’s really all about getting across the line, getting the vehicle to pad, and then once we start kind of going into production on that vehicle, then obviously you’ve got some — obviously contributing revenue to offset the cost and it moves from R&D to cost to sales. So from a adjusted EBITDA perspective we really need to get that initial Neutron model to the pad and off. So if you think about our timing again, if we’re successful in the green light schedule holds, as Pete talked about earlier, where we get to launch off by the end of this year, that’s really kind of that cresting point. And so not too long after that, we should really be in the phase that where we could be looking down at line of sight to adjusted EBITDA positivity, but it really can’t happen practically without getting that first Neutron off. Matt Akers: Got it. Thanks. That’s helpful. And then I guess, just to go back to the M&A discussion, I think you highlighted some of the assets you might be looking at. Are those assets coming available for sale? Are the prices reasonable? Just any color on what you’re seeing in the market out there. Adam Spice: I want Pete take a first stab at that. Peter Beck: Yeah, sure. Thanks, Adam. Yeah, I mean, bear in mind that a lot of these potential acquisitions are companies that we’ve worked with for many years and we know well, that’s kind of been our normal kind of motives of operation. It’s less what’s coming to market and what people are delivering to our plate, rather than strategically going through and working out the ones that we really need. So for us, it’s not about buying revenue. It’s about making sure we have the capability in-house and with the end goal of doing our own thing in the future. I think privately funded, privately held companies seem to have, I’ve noticed it seem to have kind of been slightly insulated from some of the value destruction that publicly traded companies may have experienced. So we are seeing probably prices and asks that are a little bit higher than might be benchmarked against public companies. Adam, you might have some more to say about that, but that’s typically what we’re seeing. Adam Spice: Yeah. Matt, I would say that the expectations of sellers remains high. I think though, we are seeing now maybe we’re getting to a breaking point because we’ve seen processes, sale processes that have been broken so where a transaction hasn’t been reached by privately held companies. So I think that they’re meeting a lot of resistance with their expected price tags. So hopefully that starts to kind of drive a change in sellers behaviors and expectations. I think at some point they ought to realize that ultimately the buyers, if they’re not just going to trade amongst kind of private equity players, that it’s these public market larger companies that have liquidity and currencies to use, that they’ve got to kind of come in line more with public market valuations......»»

Category: topSource: insidermonkeyFeb 28th, 2024

11 Countries with the Best Military Special Forces in the World

In this article, we look at the 11 countries with the best military special forces in the world. You can skip our detailed analysis on the most formidable and well-trained units a country can boast and head over directly to the 5 Countries with the Best Military Special Forces in the World. The concept of […] In this article, we look at the 11 countries with the best military special forces in the world. You can skip our detailed analysis on the most formidable and well-trained units a country can boast and head over directly to the 5 Countries with the Best Military Special Forces in the World. The concept of special forces varies among different countries. While some view them as elite soldiers of the military, others consider the forces as special units of the armed forces tasked to perform specialized operations. Irrespective of how their roles are interpreted, the special forces are made up of the finest soldiers recruited from across the country. What makes these soldiers special is their level of training and personality traits such as strong mentality and bravery. They are also equipped with state-of-the-art military hardware that allows them to dominate the battlefield and overcome challenging scenarios that come in their way. For instance, according to an analysis on Business Insider, weapons and gear the US military special forces head to the field with include assault rifles such as the M4A1 and MK18, the MK46 and MK48 machine guns, as well as other vital equipment like night-vision goggles, first aid kits, GPS devices, ballistic helmets, and belts. It is common for these troops to carry grenade launchers and anti-tank missiles as well if they need to. The FGM-148 Javelin anti-tank missile, jointly developed by Lockheed Martin Corporation (NYSE:LMT) and RTX Corporation (NYSE:RTX), had been deployed extensively by the United States in its combat operations in Afghanistan and Iraq. The American forces had experienced over 5,000 engagements with this weapon system during the war in these two countries, as noted by defense news website, Army Technology. More than 45,000 units of these portable and platform-employed anti tank missiles had been produced until 2019 by these companies since its first launch in 1996. While RTX Corporation (NYSE:RTX) builds the command launch unit (CLU), Lockheed Martin Corporation (NYSE:LMT) shoulders the responsibility of assembling the missile itself. Javelin is being widely used by the Ukrainian military as well to repulse Russian invasion of their country. According to a report, as of late August 2023, the US had provided over 10,000 Javelin anti-tank missiles to Kyiv, which has helped Ukraine in keeping Russia at bay from the capital. Owing to the demand for this weapon, both Lockheed Martin Corporation (NYSE:LMT) and RTX Corporation (NYSE:RTX) have been taking measures to increase Javelin production from 2,000 units to 3,500 per year. On the other hand, the Remington Modular Sniper Rifle (MSR) is a key weapon in the Delta Force arsenal that is enhancing the operational effectiveness of the elite group. Launched to enter service in 2013, the MSR has a firing range of 4,920 feet and a rate of 12 shots per minute. The sniper has also received acclaim from defense experts for its modularity that allows users customizable configurations of the equipment. In 2013, each unit cost around $15,000, according to a report. Moreover, large defense sector corporations also offer tactical and strategic support to the special forces. General Dynamics Corporation (NYSE:GD)’s information technology unit in 2016 was awarded a contract to provide professional support services to the American special operation forces in carrying out their global missions. Under the agreement, General Dynamics Corporation (NYSE:GD) was to provide infinite delivery of services for an indefinite time period, with a maximum ceiling of $900 million over five years. General Dynamics Corporation (NYSE:GD) is the sixth largest defense contractor in the world, and posted its highest-ever revenue of $42.3 billion last year. You can read more on this in our article on the Top 20 Defense Contractors in 2024. Copyright: zabelin / 123RF Stock Photo Methodology The 11 countries with the best military special forces in the world are ranked based on a consensus method, where we analyzed three sources – The Independent, The Times of India, and While the first source ranked various special forces (out of 8) on their capabilities, the other two websites discussed these units without ranking them. In the first case, we observed where each unit ranked and assigned scores to the country, depending on where its special forces group (s) ranked. For instance, if a country ranked first, it received a score of 1 (8/8); if it was third, it received 0.75 (6/8). For the remaining two sources, we counted the number of times a military special forces group was mentioned on these websites and assigned a score of 1 for each time they received a mention. Finally all scores were aggregated to get an overall score. Countries with the best military forces in the world are ranked in ascending order of their overall scores. In cases where two or more countries had the same score, we outranked one over the other on the battle-hardness of their special forces. If interested, you can also take a look at the 15 Countries with the Most Reserve Military Manpower in the World. By the way, Insider Monkey is an investing website that uses a consensus approach to identify the best stock picks of more than 900 hedge funds investing in US stocks. The website tracks the movement of corporate insiders and hedge funds. Our top 10 consensus stock picks of hedge funds outperformed the S&P 500 stock index by more than 140 percentage points over the last 10 years (see the details here). So, if you are looking for the best stock picks to buy, you can benefit from the wisdom of hedge funds and corporate insiders. Let’s now head over to the list of countries with the best military special forces. Top 11 Countries with the Best Military Special Forces in the World: 11. Fuerza de Guerra Naval Especial Country: Spain Score: 0.25 Spain, with its Unidad de Operaciones Especiales, has one of the best military special forces in the world. Since June 2009, the group has been absorbed into the Fuerza de Guerra Naval Especial, or Special Naval Warfare Force, which has inherited its reputation. What started off in 1952 as the Amphibious Climbing Company has grown into being among the most respected special forces in Europe. According to The Independent, the force has a rejection rate of around 80%.  10. MARCOS Country: India Score: 1.00 India finds itself among countries with the best military special forces in the world, with three special forces that are controlled by the military. These include the Army’s Paratrooper Special Forces, Navy’s MARCOS, and the Air Force’s Garud Commando Force. The Marine Commandos, abbreviated as MARCOS, are the most widely acclaimed special forces group in the country. According to The Times of India, it takes about three years of rigorous training before soldiers could become a part of this special unit. MARCOS is capable of operations at sea, land, and air. 9. Kommando Spezialkräfte Country: Germany Score: 1.00 Kommando Spezialkräfte (KSK) is the elite special force of the Bundeswehr — the German military. It is a large brigade-level unit, that is tasked with performing a wide range of operations as required related to counter-terrorism, commando warfare, and search and rescue. However, like all other Germany units, KSK’s deployments have to be authorized by the German parliament. The unit carried out several successful operations during the war against terrorism in Afghanistan, including a raid on an Al Qaeda safehouse in 2006. Germany also has another top special services group in GSG 9 der Bundespolizei, which is the special forces unit of the German Police, and plays an active role in combating terrorism and organized crime. Primarily due to these two agencies, Germany finds itself in the list of countries with the best military special forces in the world. 8. Joint Task Force 2 (JST2) Country: Canada Score: 2.00 The Joint Task Force 2 (JST2) is an elite, tier 1 special forces group of the Canadian military, and serves under the Canadian Special Operations Forces Command. The unit is tasked with working on counter-terrorism missions, both at home and abroad, and has come to be recognized as a world-class special force. The JST2 is known to collaborate closely with the Delta Force in the US and Britain’s Special Air Service (SAS) in missions of common interest. 7. GROM Military Unit Country: Poland Score: 2.00 Poland’s GROM Military Unit is one of the best military special forces in the world. It is a top-tier special forces unit that can be compared with the best of the best. The group was formed in 1990 as part of a mission to help Soviet Jews enter Israel safely amid resistance from Hezbollah. These days, GROM is a highly-capable anti-terrorism unit, which has successfully undertaken several missions at home and overseas. One of its most notable operations was the rescue of hostages after terrorists took control of a government building in Paktia, Afghanistan in 2012.  6. Special Services Group (SSG) Country: Pakistan Score: 2.00 Pakistan’s Special Services Group, or SSG, is one of the best military special forces units in the world. The unit is also known as the Black Storks, due to the unique headgear worn by its commandos. The Independent and have both highlighted that SSG’s training involves a 36-mile march in 12 hours, as well as a 5-mile sprint in just 20 minutes, while only 5% of those who enter training pass out upon completion of the course. The SSG is a battle-hardened force that is undertaken some of the most complex missions during Pakistan’s war against militant groups in the country’s tribal north and come out successful.  Click to continue reading and see the 5 Countries with the Best Military Special Forces in the World. Suggested Articles: 10 Countries with the Most Military Drones in the World 24 Most Powerful Militaries in the World in 2024 15 Navies with the Most Submarines in the World Disclosure: None. 11 Countries with the Best Military Special Forces in the World is originally published on Insider Monkey......»»

Category: topSource: insidermonkeyFeb 28th, 2024

Remitly Global, Inc. (NASDAQ:RELY) Q4 2023 Earnings Call Transcript

Remitly Global, Inc. (NASDAQ:RELY) Q4 2023 Earnings Call Transcript February 24, 2024 Remitly Global, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and welcome to the Remitly Fourth Quarter 2023 Earnings Conference Call. At this time, all […] Remitly Global, Inc. (NASDAQ:RELY) Q4 2023 Earnings Call Transcript February 24, 2024 Remitly Global, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here). Operator: Good day, and welcome to the Remitly Fourth Quarter 2023 Earnings Conference Call. At this time, all participants in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Stephen Shulstein, Vice President, Investor Relations. Please go ahead. Stephen Shulstein: Thank you. Good afternoon and thank you for joining us for Remitly’s fourth quarter 2023 earnings call. Joining me on the call today are Matt Oppenheimer, Co-Founder and Chief Executive Officer of Remitly, and Hemanth Munipalli, our Chief Financial Officer. Our results and additional management commentary are available in our earnings release and presentation slides, which can be found at Please note that this call will be simultaneously webcast on the Investor Relations website. Before we start, I would like to remind you that we’ll be making forward-looking statements within the meaning of federal securities laws, including but not limited to statements regarding Remitly’s future financial results and management’s expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You should not place undue reliance on any forward-looking statements. Please refer to our earnings release and SEC filings for more information regarding the risk factors that may affect our results. Any forward-looking statements made in this conference call, including response to your questions, are based on current expectations as of today and Remitly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following presentation contains non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings press release, and the appendix to our earnings presentation, which are available on the IR section of our website. Now, I will turn the call over to Matt to begin. Matt Oppenheimer: Thank you, Stephen, and thank you all for joining us for our fourth-quarter earnings call. As we look back on Remitly’s performance in 2023, we have a lot to be proud of as we delivered on our commitments to our customers and shareholders. At the beginning of last year, we laid out our commitment to deliver strong growth at robust unit economics, increase return on our investments, and deliver a fast, reliable and seamless experience for our customers. As you can see on Slide 4, we delivered on these commitments in the fourth quarter and in 2023. These results reflect the progress we have made on our strategic initiatives and our commitment to our customers to deliver peace of mind as they send money across borders. Our revenue increased 39% in the fourth quarter and 44% for the full year. On a fourth-quarter annualized basis, our scale has reached over 1 billion of revenue. We also delivered $8 million of adjusted EBITDA in the fourth quarter and $44 million of adjusted EBITDA for the full year, well ahead of the goals we set for ourselves at the onset of the year. We benefited from strong execution across the business, increasing scale, the nondiscretionary nature of our service, and the resilience of our customers. We’ve expanded on our vision as you can see on Slide 5. Our vision is to transform lives with trusted financial services that transcend borders. This vision encapsulates a broad view of who our customers are today and who we can serve in the future. It also speaks to the unmet customer needs that we believe we are uniquely positioned to solve by delivering peace of mind to customers around the world with cross-border financial needs. Our four strategic focus areas on Slide 6 are designed to help us deliver against this audacious vision with customer-centricity at the heart of our strategy. We believe our total addressable market is approximately 1.8 trillion, which represents the total consumer cross-border payments market. We currently have 2% of this total market with nearly $40 billion of send volume in 2023. According to the UN, this market includes approximately 1 billion people around the globe who send or receive cross-border payments, including immigrants, their families, and others with cross-border financial needs. We remain focused on investing where we have clear advantages as a digital-first, cross-border financial services company. In addition, we believe investments in our technology platform will allow us to efficiently serve more of this market over time. We are confident our strategy will allow us to drive robust growth with this very large market opportunity for many years to come. First, we aim to delight our customers with a fast, reliable, and seamless cross-border payment experience which results in providing our millions of customers with a delightful experience. This is a key driver of improving retention, engagement and maintaining strong unit economics. Delivering a delightful cross-border payment experience in a trusted and reliable way to a highly diverse and global customer base is incredibly complex. Our technology investments and increasing scale have resulted in significant progress across various aspects of improving the customer experience, which as a result has increased customer engagement on our mobile app and website and enabled market share gains. But there is still so much more to do to improve the customer experience and we are excited about continuing our journey to reinvent international person-to-person payments. Second, our targeted marketing investments across both performance and brand channels have delivered new customers to our platform at very attractive unit economics. Our focus remains on maximizing lifetime value for the long term while we efficiently acquire new customers and retain a growing large base of customers. We define lifetime value as revenue-less transaction expense over five years, even though many customers continue to transact with us for more than five years. This long-term view of our customers provides us with many levers to enhance lifetime value and we are experiencing LTV improvements as customers have increased their transaction activity, particularly for digital receive options, and we have also been decreasing transaction costs. Third, we see significant opportunities to expand into more geographic markets. Our global network consists of more than 5,000 corridors and we have plans to increase our reach to thousands of additional corridors while increasingly benefiting from diversification. We will use the same disciplined corridor expansion strategy and our targeted approach that has served us so well to date. While our customer base today is primarily customers who regularly send home to family and friends in developing countries, we believe over time, we can better serve a broader set of customers who have cross-border financial needs. Fourth, we believe there are enormous opportunities to deepen customer relationships by leveraging the unique technology platform we have built and continue to build, to efficiently scale new features and products to the millions of customers we serve today, and to make our offerings even more attractive to other customers that have cross-border financial needs. Now, let’s turn to more details regarding each of these focus areas. On Slide 7, you can see that in the fourth quarter, quarterly active customers increased 41% year-over-year to 5.9 million. The significant year-over-year increase in quarterly active users can be attributed to multiple factors, increased activity due to the holiday season from a growing base of active customers who were acquired in prior periods, as well as the acquisition of a record number of new customers during this period. Customer behavior trends remain strong, and we see transaction intensity, which we define as transactions per quarterly active customer, continued to increase as the year-over-year mix of digital receive transactions increased by more than 500 basis points in the fourth quarter. As we continue to deliver value for customers, we believe we can serve these digital receive customers in a way that maximizes retention and engagement while also reducing unit costs across our pay-in and disbursement networks. In the fourth quarter, we also acquired a record number of new customers across all our send geographies, including the U.S., Canada, and the rest of the world. Now let’s turn to Slide 8. We talked last quarter about the complexity inherent in cross-border payments experience and how our value proposition of providing a fast, reliable, and seamless customer experience is a key differentiator. Our investments in reducing complexity and eliminating all unnecessary friction in various elements of the customer remittance experience enables us to provide value to our customers, which in turn results in improved retention, increased transaction intensity, lower customer support costs, and strong word-of-mouth referrals. While we are pleased with the progress we are making in reducing unnecessary friction in our disbursement network and customer support, we continue to see opportunities to further improve the customer experience. In this context, we are focused on improving the quality of our disbursement network, which can be enhanced by direct integrations which eliminate intermediate steps in the remittance journey. This enhances our ability to deliver instant transactions for our customers, which is a key driver of loyalty and word-of-mouth effects, as speed and reliability enable us to delight our customers. Since early 2021, we have significantly increased the percentage of transactions that go via direct disbursement routes. This now includes strategic partnerships with some of the largest banks and telcos, including M-Pesa in Africa, Alipay in China, BDO in the Philippines, and Elektra in Mexico. As a result of these investments we have made to enhance the quality of our network in the fourth quarter, we were able to disperse more than 90% of transactions in less than 1 hour, even as we onboarded a record number of new customers where the risks of delays are higher. Our direct integrations also allow us to disperse funds rapidly, 24 hours a day, seven days a week, which would not be the case if we exclusively relied on intermediary payment networks. This outcome is critically important to our customers who are often sending money for immediate needs, so a reliable and fast service is of paramount importance. Optimizing the balance between a great customer experience and preventing fraud is another area that has been a key focus for us and very important to our customers. We have made significant investments to ensure that legitimate transactions can go through with the least amount of friction and that we are able to block fraudulent transactions more effectively and in real time. We are continuing to leverage artificial intelligence and machine learning to more accurately make risk decisions. These models have been getting even more precise with growing customer data, which the models continuously adapt to. This allows us to operate more efficiently while improving their customer experience. This helped drive a decline in our non-GAAP customer support costs as a percentage of revenue by 260 basis points in the fourth quarter as compared to the prior year. Our customer support experience is a key driver of product differentiation. We have made significant improvements by reducing problems in the first place and with a new self-help experience to empower customers to resolve problems quickly and efficiently. We are highly focused on reducing issues the customers face during a transaction, reducing friction related to fraud that I just discussed is one example of where we made significant progress in the fourth quarter. Secondly, we are highly focused on increasing the number of customers that can resolve issues themselves using our digital service options. As an example, we offer support in 15 languages, and after thorough testing, we are using AI to efficiently serve even more customers by translating and responding to contacts in real time. These efforts have been key drivers of more than 95% of customer transactions proceeding without a customer support contact. To make self-service a preferred method of support for customers, we recently launched a new self-help experience across both our app and web platforms. The new experience is responsive to customer needs based on aggregated insights from customer interactions and customer focus groups. Key improvements include an AI-based search that improves precision of answers to customer questions, more clearly communicates outages and delays that could impact a specific transaction, building customer trust by displaying available contact channels and customers’ preferred language. We have seen early returns from this new self-help experience with continued reduction in our customer contact rate. Finally, in cases where customers are unable to resolve problems on their own, we aim to provide an efficient and empathetic service that resolves issues the first time and builds peace of mind and trust for our customers. Now, let’s turn to how our highly localized and targeted marketing strategy enables us to acquire new customers at very strong unit economics on Slide 9. We are focused on customer lifetime value, which again we define as revenue-less transaction expense over a period of five years. We use our deep knowledge of our customer lifetime value to be intentional about how much we’re willing to pay to acquire new customers, and our average payback period remains below 12 months. This gives us very high confidence in our recent marketing investments, which are expected to deliver returns this year and beyond. We have also observed that our customers’ behavior over the past many years they have been active on our platform are predictable and durable. This is why we do not optimize for marketing expenses in any given quarter but rather optimize the amount we’re willing to pay for a newly acquired customer with the projected lifetime value over five years and remain confident that our efficient marketing investments are generating significant value. This is especially true as we continue to scale and drive down our unit costs, thereby increasing our LTV via lower per-transaction expenses. As a result, we have been able to drive even more lifetime value on a total dollar basis. As you can see in the chart on Slide 9, our revenue-less transaction expense remains very durable over time, primarily as a result of declining unit costs and resilient customer behavior. Following the first full year after we acquire a new customer, these same customers have provided, on average, approximately 95% of revenue less transaction expense for each subsequent year. This continues to validate that our marketing investments are expected to generate high returns for the long term. Our revenue less transaction expense grew 56% in 2023 compared with our 44% growth in revenue. We expect revenue less transaction expense to continue to grow faster than revenue in 2024 as we benefit from increasing scale across pay-in fees, disbursement fees and fraud. Also, similar to prior years in 2023, a significant portion of our revenue less transaction expense was contributed by customers acquired prior to 2023, further demonstrating the predictability and durability of the lifetime value of our customers. We continue to benefit from scale, a multiyear focus on brand building, creative velocity and experimentation and optimization across marketing channels. We have high confidence in the return these investments are delivering in the aggregate, given the predictability and durability of the associated lifetime value from our customers. Turning to our third strategic pillar on Slide 10. We also see an opportunity to drive growth by expanding to additional markets and customers. While today our global network spans over 5,000 corridors around the world, we have plans to increase our reach to thousands of additional corridors over time, using our disciplined corridor expansion playbook. We have demonstrated our success in growing both new and existing markets. Since 2020, we have more than tripled our revenue from North America and our revenue outside of North America has grown more than 7x to nearly 200 million in 2023. While the global market opportunity is significant for us, we are very targeted and intentional about our investments and are focused on ensuring product-market fit for our customers. We expect to go about our expansion plans methodologically and by deploying our well-established playbooks and technology as we have done for many years. Now, let’s turn to our fourth strategic pillar on Slide 11. We believe there is a significant opportunity to further deepen our relationship with customers. We are excited about the opportunity to offer complementary new products built on our technology platform. This platform additionally enables us to test and learn at scale and provide our customers with features and functionality that increase engagement and remittance transaction intensity. We are structuring our technology platform to create a multiplier effect where we improve the quality of all products, including both our remittance app and complementary new products. We are enhancing our technology platform so that can scale for even more rapid and efficient development cycles. The technology platform is also enabling us to leverage data, AI and ML models, and analytical capabilities to drive improved customer experiences. The improvements we have made in fraud management, customer service operations, reliability, including a 99.99% availability in the fourth quarter, higher quality represented by better and faster expansions at lower error rates, and better security and privacy posture are all directly the benefits of our technology platform. To summarize, we have high-return investment opportunities over the short and long-term horizons that will help us drive strong revenue and sustainable profit growth in a large and growing cross-border market. Given the increasing scale, we also intend to drive additional focus on improving our operational efficiencies in 2024 across the business. We plan to take a similar rigorous approach we took to driving efficiencies in transaction expense and customer service costs to other areas of the business. By streamlining processes, increasing automation, and deploying technology solutions, we expect to continue to be able to make high-return-yielding investments towards growth while also sustainably growing our profits for the long term. I could not be more excited about the opportunities ahead to achieve our vision, to transform lives with trusted financial services that transcend borders. With that, I’ll turn the call to Hemanth, to provide more details on our financial results and our 2024 outlook. Hemanth Munipalli: Thank you, Matt. I’m pleased with our strong results in the fourth quarter as results came in ahead of our expectations consistent with our strong execution throughout 2023. I will start with a review of our fourth-quarter financial highlights and then provide additional details on our 2024 outlook. I will discuss non-GAAP operating expenses and adjusted EBITDA in my remarks. These metrics exclude items such as stock-based compensation, the donation of the common stock in connection with our pledge 1% commitment, acquisition, integration, restructuring, and related costs, and foreign exchange gain or loss. Reconciliations to GAAP results are included in the earnings release and the appendix to our earnings presentation. With that, let’s turn to our fourth quarter results beginning on Slide 13 with our high-level financial performance. Quarterly active customers grew by 41% year-over-year to 5.9 million. Send volume grew 38% year-over-year to approximately $11.1 billion, all resulting in revenue growth of 39% year-over-year to $265 million in Q4. Our GAAP net loss was $35 million in the quarter and included $36 million of stock compensation expense. The strong growth in revenue combined with significantly lower transaction expense as a percentage of revenue led to adjusted EBITDA of 8.2 million in the quarter, which was above our expectations. Our adjusted EBITDA results in the quarter also reflected the targeted and high-return marketing investments that we made as planned. We fully expect to benefit from these investments in 2024 and beyond, as I will discuss later in our 2024 outlook. Now let’s turn to Slide 14 for a detailed review of our performance in the fourth quarter. Let’s begin with revenue, which was up 39% year-over-year in the fourth quarter on a reported basis and 37% on a constant currency basis. Our strong revenue growth was primarily driven by a 41% increase in quarterly active customers, which includes a record number of new customers acquired in the quarter, high retention of existing customers and seasonal sending patterns. We’re pleased with both the year-over-year and sequential growth in quarterly active customers, which benefited from both in-period and prior marketing investments and additional customer activity due to strong seasonal demand. The record number of new customers we acquired in the quarter will drive growth in 2024 and beyond. Customer behavior in the fourth quarter remained very strong as we continue to deliver a fast, reliable and seamless experience and our customers remain resilient in supporting their family and friends back home. As Matt mentioned, we continue to see a shift to digital disbursement options in certain markets, which results in smaller transaction sizes and increased transaction intensity. We view this as a positive trend given our digital-first-at-scale positioning and our ability to effectively localize our product offering and drive down transaction expenses. Transaction expense as a percentage of revenue improved nearly 400 basis points year-over-year as we continue to benefit from our rapidly increasing scale, technology investments and our direct integration strategy. Of the 400-basis point improvement in transaction expense, approximately 200 basis points were due to improved economics with payment acceptance and disbursement partners as we demonstrate scale and are increasing value to our partners across our global payment acceptance and disbursement networks. We also began to see the benefit from our recent agreements with large payment processors flow through in the fourth quarter. We are pleased with the speed of integration with our partners, which can be attributed to our technology platform and the strong execution of our teams. We also benefited from continued improvement in our year-over-year fraud loss rates in the fourth quarter, even as we onboarded a record number of new customers. Once again, we were very pleased that our fraud loss rate continues to improve, while at the same time, our customer contact rate continues to decline. However, as we’ve noted before, fraud losses can be volatile, especially for new customers. However, we remain confident that we will be able to sustain improvements in fraud loss management. Turning to marketing expense, as we mentioned last quarter, we were able to take advantage of strong unit economics and make targeted incremental marketing investments in the fourth quarter, including some upper funnel investments. Marketing expense increased sequentially as planned and enabled us to acquire record new customers during a seasonally high activity quarter. While marketing expense as a percentage of revenue increased 610 basis points on a year-over-year basis, we expect the revenue and lifetime value of the new customers acquired in the fourth quarter to be predictable and durable for multiple years ahead, as Matt had also discussed. In the fourth quarter, customer support and operations expenses were down 260 basis points year-over-year as a percentage of revenue. This is primarily driven by lower contact rates as investments in delivering a fast, reliable, and seamless cross-border customer experience continue to pay off for our customers. This was also driven by an improving self-help experience which allows customers to resolve many more issues across the transaction flow without contacting customer support. We’ve also invested in automating certain back-office customer support processes, which makes our agents more efficient and more effective in resolving customer issues. In the fourth quarter, technology and development expenses increased 20 basis points year-over-year as a percentage of revenue. Our investments are primarily focused on driving a fast, reliable, and seamless experience for our customers. We have seen strong returns from these investments in the form of reducing friction to enable our active customer growth, improving fraud management with increased precision, and increased automation and other technology solutions to lower customer support costs. In the fourth quarter, G&A expense as a percentage of revenue increased 100 basis points year-over-year and was negatively impacted by the timing of certain non-recurring items. We continue to be actively focused on operating more efficiently as we have been achieving scale. Our GAAP net loss in the quarter was $35 million compared with $19 million in the fourth quarter of 2022. Our net loss included $36 million of stock compensation expense in the fourth quarter, compared with $27 million in the fourth quarter of last year. We’re actively focused on managing stock-based compensation expense and we’re pleased to see our year-over-year growth in stock compensation expense moderate in the fourth quarter as compared with the year-over-year growth in the third quarter. Turning to an annual view of our progress to drive sustainable long-term returns on Slide 15. We’ve delivered strong revenue growth even as our scale has increased, with revenue growth accelerating in 2023 compared with 2022, as we benefited from resilient customer behavior and acquiring new customers through our high-return marketing investments, which continue to have an average payback period of less than 12 months. We’re particularly pleased with our improvement in transaction expense as a percentage of revenue, which has declined approximately 700 basis points from 2021 to 2023. This has been primarily driven by scale benefits which provide improved economics as a result of nearly $40 billion of send volume in 2023 flowing through our pay-in and disbursement partners, and vast amount of data that have improved the precision of our fraud models. Our other operating expense performance reflects both the progress we have made in customer support as well as the continuing investments in reducing unnecessary friction for our customers, building our technology platform, and ensuring we have the right infrastructure in place to ensure we’re able to scale rapidly with a strong focus on compliance. Our customer support expense as a percentage of revenue has declined approximately 140 basis points from 2021 to 2023. We see opportunities ahead to drive even more leverage in our customer support. We are planning to take the same disciplined approach to our G&A expenses and other operating expenditures to drive even more productivity and efficiency through this year and beyond. We’re also seeing longer-term scale benefits from our marketing investments which are driving record customer acquisition. As our unit economics remain strong, we have continued to increase our marketing dollar investment to capture even more customer lifetime value. As Matt noted, we look at marketing investments over a longer-term horizon as the lifetime value from new customers remains predictable and durable for many years. This is why we believe taking a longer-term view of our in-period marketing investments is key to understanding our business model and the overall profit potential as we retain on average 95% of revenue less transaction expenses after the first full year of active customer growth. Before I turn to our 2024 outlook, I’d like to discuss how we’re building a differentiated long-term financial strategy. We expect that our high quarterly active user growth, reducing transaction expenses and customer service costs, and increased focus on delivering operational efficiencies will enable us to invest in marketing and technology for high returns over the short, medium, and long term, and also sustainably growing profits. We have an exciting opportunity in a large cross-border payments market, and we believe a targeted and disciplined approach to deploying our resources and capital will generate long-term value for our shareholders. In this context, we also continue to focus on actively managing stock-based compensation and share dilution. Our outlook for 2024 reflects a disciplined approach we have been taking to generate long-term returns and recognizing that 2024 will be another year in a multiyear journey since our IPO to unlock significant value. As you can see on Slide 16, we expect revenue to be between $1.225 billion and $1.25 billion, which reflects a strong year-over-year growth rate of 30% to 32% on a large active user base. This outlook reflects the confidence we have in LTV, the returns from our marketing investments, and our plans to acquire even more customers in 2024 than we acquired in 2023. Consistent with seasonal patterns, we expect first-quarter sequential growth to moderate from the 10% sequential revenue growth we delivered in the fourth quarter. We expect adjusted EBITDA to be between $75 million and $90 million in 2024 and for it to ramp sequentially as we benefit from additional growth and scale efficiencies throughout the year. However, factors like timing of marketing investments and outcomes of initiatives to improve our efficiency may impact adjusted EBITDA growth in any specific quarter. Our macroeconomic and FX assumptions remain relatively consistent to what we have seen in the fourth quarter of 2023 and we expect continued resilience in customer behavior across our diversified portfolio of corridors. Turning to some balance sheet highlights. At the end of the quarter, we had over $320 million of cash and we continue to have access to a $325 million working capital facility. During the fourth quarter, we upsized our working capital facility by $75 million, which provides us with additional flexibility. This is especially relevant during peak periods such as holiday weekends as we have grown significantly since we have last amended our working capital facility. At the end of the quarter, we had $130 million outstanding on the facility, which allowed us to fund peak demand over the year-end holiday weekend. This balance was paid off the following week in early January. We are proud of our execution this year as we have delivered both higher-than-expected revenue growth, making targeted investments for the long term, and sustainably increasing adjusted EBITDA profitability. We’re in a strong position to be able to make investments to sustain future growth while also delivering efficiencies that drop to the bottom line. With that, Matt and I will open up the call for your questions. Operator? See also 15 Mailchimp Alternatives for Email Newsletters in 2024 and 20 Most Profitable Email Newsletters on Substack. Q&A Session Follow Remitly Global Inc. Follow Remitly Global Inc. or Subscribe with Google We may use your email to send marketing emails about our services. Click here to read our privacy policy. Operator: Thank you. At this time, we’ll conduct the question-and-answer session. [Operator Instructions] Our first question comes from Tien-Tsin Huang with JP Morgan. Your line is open. Tien-Tsin Huang: Hey, good afternoon. Great results here. I did want to hone in on the comment that you’re planning to add more users in ’24 than you did in ’23. I’m curious if you can be a little bit more specific on that. I mean, it looks like you’re adding closer to 500,000 per quarter trend line at this stage. If you look at the fourth quarter, is that a good starting point? I’m just curious if there’s any thoughts on seasonality or maybe difference in type of customer that might come on at different points in time. Any additional color would be great. Thanks. Matt Oppenheimer: Yeah. Thanks, Tien-Tsin for the question. Yeah, first off, really excited about the opportunities we have in 2024. In terms of when we think about customer growth this year, I mean, one, you got to recognize 2023, we’ve added record customers in 2023 as well, thanks to the resilience of the customers and our marketing machinery to add a whole lot of new customers in ’23 as well. And we look at ’24, we think that sort of pattern will continue to hold where based on our marketing investments, which we think are highly predictable and durable in terms of return profile on those, we would be expecting to add more new customers in ’24 than we did in 2023. So largely speaking, I think we have a huge market opportunity. We’re 2% of $1.8 trillion market. So we think that — going about that in a very methodical fashion and building on sort of the core corridors that we already are in and as well as expanding in rest of the world will get us those growth rates. Tien-Tsin Huang: Perfect. Then, my follow-up just on the intensity comment, and I think you mentioned has climbed because of higher mix of digital receive. I think about down to 500 bps. So is that secular or intentional on your part of driving that channel, and is that sustainable and is that also tying back to the benefit you’re seeing on transaction expense? Hemanth Munipalli: Yeah. Thanks, Tien-Tsin and great questions. I think that we are good at both receiving funds the way that customers want to send them to us, as well as dispersing funds across the globe, whether that’s bank accounts, mobile wallets, cash pickup, or door-to-door delivery in seamless and diverse ways. And so I would view the increase in digital disbursement as a positive in the sense that we have a great digital disbursement network, whether that’s bank deposit or mobile wallet that oftentimes carries a lower variable cost for us, which is helpful. And we’re excited about leading the way when it comes to digital disbursement in several markets. Tien-Tsin Huang: That’s great. Thank you so much. Operator: One moment for our next question. Our next question comes from Ramsey El-Assal with Barclays. Your line is open. Allison Gelman: Hi. This is Allison on for Ramsey. Thank you, guys, so much for taking our question. So just in the context of marketing spend, maybe could you just provide some color on the latest regarding your pricing strategy? Are you doing any promo pricing at all? Are you still marketing strategically by corridors you’ve done in the past? Just are there any changes to the marketing strategy beyond what you’ve outlined so far and anything that you want a highlight on the holiday send environment in terms of marketing spend, what it looked like this quarter versus a year prior? Matt Oppenheimer: Yeah. Thanks, Allison. Great question. I think that our marketing strategy has been something that remains consistent, as it has over the last decade of building the business. We tend to be analytical, data-driven marketers, but we also have a structural benefit as our customer base grows and our product continues to deliver, in that there’s word-of-mouth and continued just trust within the communities that we serve that helps continue to grow our product. And so wouldn’t say any large changes to our marketing strategies, continuing to execute it in a measured, data-driven way. And that’s why we’re excited about the record number of new customers in Q4, as well as being able to guide the ’24 in a way that both continues to grow top line, but also you get the profitability from those customers that we’ve added in Q4 and throughout 2023 and prior quarters, being able to deliver to the bottom line in 2024 as well. Hemanth Munipalli: Yeah. Maybe just adding a little bit to what Matt said too is Q4 for us is a seasonally high quarter in terms of acquiring new customers. We want to make sure that we’re leaning into marketing, which we’re able to do. And as you can see, we did add record new customers in Q4. So as we look forward, we do think it makes sense for us to continue to invest in marketing and the right sort of guardrails and thresholds on LTV and CAC, but we see it as a high-return sort of investment. And so we think based on these investment thresholds and what we expect for 2024, that we’ll be able to add additional new customers in ’24, above and beyond what we did in 2023. Allison Gelman: Great. Thanks so much. Really appreciate the time. Operator: One moment for our next question. Our next question comes from Andrew Schmidt with Citiglobal Markets. Your line is open. Andrew Schmidt: Hey, Matt, Hemanth, Stephen. Thanks for taking my questions. Good quarter here. I want to dig in on just sort of your core corridors U.S. to India, U.S. to Mexico, U.S. to Philippines, obviously seeing good rest of world growth beyond that, I think that’s important part of the story. But in the corridor of where you started, maybe talk a little bit about the growth trends you’re seeing, and then what can help sustain that growth as you reach higher levels of penetration? Thanks a lot, guys. Matt Oppenheimer: Yeah. Thanks, Andrew. Great to hear from you and appreciate the question. I think that if you look at the overall, you mentioned the three receive markets — India, Philippines and Mexico. And the punchline is there’s still significant growth opportunities and we’re continuing to see growth in those three receive markets, both and this is important in markets that we’ve originated from over many years like the U.S. where we started, but we also now originate across North America, Europe, a variety of countries, Australia, UAE, et cetera. And so I think that there’s large opportunities as we expand the addressable market in terms of origination country. And all of this needs to be put in the backdrop that we are 2% of a $1.8 trillion market. And so while we might have slightly higher share in markets that we’ve been in for a while, we’re still seeing healthy growth in those markets, and we still see a lot of opportunity to continue to grow. Hemanth Munipalli: Yeah. Maybe just adding a little bit on to what Matt said, Andrew, is that when we look at the digital trend that we’re seeing in the business, so increasing shift to digital is another sort of a tailwind as we look at even the core corridors we’ve been in. So whether you take U.S. to the Philippines and the adoption of mobile wallets as an example is one that certainly we think is benefiting sort of our growth in that corridor. That’s just one example. Andrew Schmidt: Got it. Very helpful. Thank you, Matt, Hemanth. And then, maybe to follow up just on sales and marketing, if you just discuss, maybe put a finer point on what’s embedded in the outlook for 2024 for marketing spend and then maybe talk about the philosophy about flexing that up and flexing it down. I know this is a longer-term story and it’s important to go after the market, because there’s attractive unit economics. But just curious to get your thoughts on what could drive marketing up or down as we progress throughout the year? Thanks a lot, guys. Hemanth Munipalli: Yeah. Thanks, Andrew. So first off, I think just wanted to make sure that it’s recognized that marketing is a lever that we can actually dial up and down and we think that it makes sense to do that within the return threshold. So we set ourselves for here and you can see that we have a pretty long and durable stream of sort of revenues from the customers we acquire from marketing investments, which exceeds five years. So we talk about LTV from a five-year lens, but it’s even longer than that. So we think it’s the right investment to continue to make. So in terms of projections, we have factored in an increase in marketing expenditures — investments in 2024 versus 2023 on a broad basis. And that’s reflected in our guidance. So we’ve factored that in, and it obviously impacts our revenue growth for this year. But certainly, we’re looking at it beyond this year and looking at ’25 and beyond in terms of these investments we’re making. Matt Oppenheimer: Yeah. The only thing I’d add there, Andrew, is I think that, as you know, and therefore, I appreciate the question in terms of we have the ability to dial up or back the amount that we spend on the marketing front because we do view it, one, really targeted towards new customer acquisition, building that trust top of funnel with a customer base that’s historically hard to build trust with. But then once we built that trust, we see nice recurring long-term profit and revenue streams from the customers that we serve. And so if you think about how much we’re spending to build that top-of-funnel trust, it is something that we can calibrate depending on the cost of capital, depending on the market environment. And we’ve certainly taken into account the increased cost of capital. And there’s a spirit of just driving efficiencies within the business as we think about 2024. You see that in our adjusted EBITDA guidance, as well as continuing to build an even more profitable and even larger business as we think about 2025 and beyond. So we think we struck the right balance and certainly those efficiencies and the focus on efficiency as well as growth is included in our 2024 guide. Andrew Schmidt: Got it. Appreciate the balance, and congrats on the good quarter, guys. Matt Oppenheimer: Thank you. Operator: One moment for our next question. Our next question comes from Will Nance with Goldman Sachs. Your line is open. Will Nance: Hey, guys. Appreciate you taking the question today. Matt, competition remains a big focus in the market, particularly in the digital remittance space. And I think investors’ perception of the levels of churn in the digital remittance space are relatively high. And I think you guys have highlighted several times today the retention that you guys have in terms of revenue less transaction expense from prior cohorts. So maybe if you could just talk a little bit about the stickiness of your customer base, what you think keeps them coming back to Remitly over time in a world where there are lots of options. And then I think you mentioned in some of the prepared remarks, talking about future products that can address additional needs of the customer base. So how are you thinking about the interplay with those additional products with levels of customer retention over time? Thanks. Matt Oppenheimer: Yeah. Great question and several things to unpack within that. I think that the first thing to your question of why customers choose a remittance provider and why they stay with us is it really does come down to the things that ladder up to trust. It’s a customer base that might be reticent to provide a lot of their personal sensitive information, and then they’re trusting us with a big percentage of their hard-earned money to be sent back home, often hundreds of thousands of miles away. And they need that money immediately. It’s for things like basic living expenses, emergency medical needs and so that combined with the complexity of delivering a remittance internationally in a fast and reliable way means that trust is at a premium. And so when we talk about things like speed and reliability, that is ultimately what customers care about the most. And having a fair and transparent price, which we can do, given that we’re a digital-first provider is a component of building that trust, but it’s not about just having the best price. Once you’ve built that trust and you deliver with a great product, as we’ve done and as we continue to do, as we get more scale and can invest more into our global payments platform, you see the kind of retention rates that we’ve shared on Slide 9, where you can see on a cohort basis that customers come back on a very regular basis. And we shared that following the first full year after we acquired new customers, those same customers have on average approximately 95% of revenue less transaction expense for each subsequent year. And so that is something that we really appreciate about our customers, their resilience, the nondiscretionary nature of our service. And something that I’ve seen over the last now 13 years of building this business is that customers care about trust as a premium, and that is what we’re ultimately good at delivering. Will Nance: I appreciate all that. And then I think you also have some comments in the prepared remarks around turning your attention to operational efficiency, taking the track record you have on things like customer support and fraud, and looking at some of the other OpEx levers that you have maybe around G$A or whatever else that you guys are focused on. Maybe you could just kind of talk about that and wondering if anything has changed in your thought process around kind of optimizing for profitability and kind of cutting out any pieces of G&A and OpEx while still making some of the growth-related investments in sales and marketing that you guys need to grow the business? Matt Oppenheimer: Yeah. I’ll start and then I’ll turn it over to Hemanth to talk about it from a P&L standpoint. But the thing that I would highlight is we’re starting, given some of the OpEx investments that we’ve made, we are really seeing the benefit both from a P&L standpoint. You see the improvements from a CS — cost standpoint. You see the improvements from a transaction expense standpoint. And those are improvements not only in our costs, but they also represent that customers are contacting us less, our product is more reliable, our product is faster. 95% of customers don’t have to contact customer support and we’re continuing to improve that every day. And I will tell you having started this business 13 years ago when we were subscale, it was really, really hard to truly differentiate and build a like frictionless and seamless, and reliable product. We’re doing that a lot better now, and we’re just getting started in that effort. And so we need to invest enough in the G&A side to get both the cost benefits on other aspects of the P&L as well as continuing to differentiate our product and pull away from some of the subscale competitors that really can’t build a reliable product. And I think that’s what you’re seeing, in the P&L in Q4 and what you’re seeing in our 2024 guide from a financial standpoint. And Hemanth, anything you’d add from a financial. Hemanth Munipalli: Yeah. No, I think that’s right. I think just on the point on efficiency as well, I mean we’re now a business that Q4 annualized $1 billion plus and as you can see in our guide as well. I think we’ve reached the point where we have tremendous opportunity to take some of the things we’ve done, whether you’ve seen in sort of improving our transaction expense or reducing that, the progress we’ve made on reducing our customer service costs by focusing on contacts from customers and some of the playbooks, on really driving efficiencies from an operational perspective, but also using technology to drive automation in the business, so we think we can apply that across other aspects of the business, whether it’s G&A, other corporate areas as well. So we’re looking to do that with more intentionality, given now the size of the business and being much more global in nature that we can get those efficiencies this year. Some of that’s reflected now in our forecast around EBITDA, but as we also look forward beyond 2024. So we’re excited to go about that with a lot of focus. Will Nance: Great. Appreciate you guys taking the questions and nice shot today. Operator: One moment for our next question. Our next question comes from Andrew Bauch with Wells Fargo. Your line is open. Andrew Bauch: Hey, guys. Thanks for taking the question. Following up on the comments that you made that net revenue growth should outpace volume growth in 2024. In your comments, that transaction expense still has further room on the efficiencies. How should we think about the magnitude of efficiencies on transaction expense versus what your expectations are for the top-line yield side in the year ahead? Matt Oppenheimer: Yeah. Thanks for the question, Andrew. We think that there will be continued efficiencies here on reducing transaction expense for years to come. And, we see 2024 as another year in that sort of multi-year focus on driving down transaction expense and just to kind of level set in terms of what makes up that expense category, you’ve got pay-in and payout costs. So these are economics that we have with our pay-in partners as well as disbursement partners, and then fraud, loss management. And on the first two in particular with close to $40 billion of send volume going through our platform, if you will, it’s a tremendous opportunity for us to have the right economics with our partners, which is largely driven by the volume, and we think that with our growing scale and volume, that will give us further opportunities for this year and beyond. And on fraud losses and we’ve talked about this earlier as well as it’s really driven around data and the amount of data we’re ingesting into our AI and ML models. And we see that with increasing data, we’re just getting more and more precise and how we’re delineating between what’s a good remittance transaction and what could potentially be fraudulent. So we see continued improvements there. Having said that, I think with fraud, we’re always watchful, and there’s generally some sort of volatility around it in any given quarter. But the broader trend in transaction expense reduction is something that we’ve factored in in our guidance, but we also think that’s mid-to-long-term trajectory that will continue. Andrew Bauch: And then on the gross yield side? Hemanth Munipalli: Yes. So we’re really looking to ensure that we’re providing value to our customers. And I think, as Matt talked about, I think when you talk about yield, you think about pricing, but it goes beyond that. The trust that we’re building with our customers, which is through the speed of the transaction, the reliability of it, there’s multiple levers as we look at LTV and maximizing that for our customers. So we expect that we’ll continue to focus on that and that’ll result in our revenue growth, and you see that in our guidance for this year......»»

Category: topSource: insidermonkeyFeb 27th, 2024