Alex

Alex from Bank of America inquired about the sustainability of Recursion Pharmaceuticals' cost optimization measures, specifically asking if Q4's reduced operating expenses included any one-off benefits and if these levels are indicative of future expectations.

Answer

CFO Ben Taylor confirmed that the Q4 efficiencies were not due to one-offs but rather a result of a complete integration of corporate systems and a disciplined approach to strategic decision-making, aiming for continued impact per dollar invested. CEO Najat Khan added that the company's agile capital allocation, driven by rapid go/no-go decisions and an investor-like mindset, contributes to ongoing efficiency.

Alex from Bank of America Corporation inquired about the impact of cost optimization measures, specifically whether Q4 2025's reduced operating expenses included one-off benefits or represent a sustainable go-forward level.

Answer

Ben Taylor, CFO and President of Recursion UK, stated that the Q4 levels reflect completed integration and ongoing efficiency efforts, with no significant one-offs, indicating these levels are sustainable. Najat Khan, CEO and President, added that agile capital allocation and rapid go/no-go decisions, driven by data, contribute to sustained efficiency.

Alex asked if there could be future options to modify MYQORZO's REMS requirements, specifically if Cytokinetics could approach the FDA with updated post-marketing data to potentially make the REMS even more favorable.

Answer

President and CEO Robert Blum and EVP of R&D Fady Malik acknowledged that real-world evidence could inform future REMS modifications, similar to what was seen with Camzyos. However, they stated it is premature to specify what those changes might look like, as they first need real-world data to identify any 'pinch points.'

Alex asked if the ONSTRIDE 1 and ONSTRIDE 2 studies had begun enrolling patients, noting that no indication was yet visible on ClinicalTrials.gov. He also inquired if the impact of litigation and settlements on operating expenses was primarily reflected in the General and Administrative line item, and what run rate should be expected moving forward.

Answer

Kumar Budur, Chief Medical and Scientific Officer, confirmed that sites for ONSTRIDE 1 and ONSTRIDE 2 studies began initiation towards the end of last year and would be posted on ClinicalTrials.gov within 21-30 days after the first subject enrollment, with sites currently preparing to enroll patients. Sandip Kapadia, CFO and Chief Administrative Officer, confirmed that most litigation and settlement expenses were recorded under G&A, noting that some were one-time while others would continue as the litigation process progresses.

Alex (on behalf of Danielle Brill) asked for a breakdown of payers requiring documentation versus attestation versus medical exception for BRINSUPRI, the percentage of covered lives each represents, and confidence in establishing policies for plans currently using medical exemption.

Answer

Will Lewis, Chair and CEO, declined to provide a specific breakdown but stated that the benchmarks for documentation requirements are 'right in line, probably a little better' than anticipated. He emphasized that the market access picture is aligned with guidance for patients with two or more exacerbations and is not expected to change dramatically, with attestation helping to smooth the process and Insmed's teams supporting education and execution.

Alex asked about the potential for Duke Energy's EPS growth to begin ramping sooner than 2028, the delta between the 5-7% EPS growth and the 8-8.5% rate base growth, and any further opportunities for asset recycling beyond the Tennessee and Florida deals.

Answer

Brian Savoy, EVP and CFO, explained that 2028 is an inflection point due to increased Florida capital, multi-year rate plan completion, the Brookfield transaction, and large load customers coming online. Harry Sideris, President and CEO, emphasized the durability of this growth. Brian Savoy stated the focus is on integrating the two announced deals, with future funding involving 30-50% equity.

Alex, on behalf of Shah Bareza, inquired about the potential for Duke Energy's EPS growth to reach the top half of the 5%-7% range sooner than 2028 and the factors driving the difference between the 5%-7% EPS growth and the 8%-8.5% rate base growth. Additionally, he asked about future funding opportunities, specifically whether Duke Energy would pursue further asset recycling or rely on equity and equity-like instruments.

Answer

Brian Savoy, Executive Vice President and CFO, explained that 2028 is an inflection point for higher growth due to increased capital investments in Florida, completion of the multi-year rate plan, the Brookfield transaction, and large load customers coming online in late 2027/2028. He clarified that the growth is a strong CAGR in the top half from a 2025 base. Harry Sideris, President and CEO, added that this growth is expected to be durable beyond 2028. Savoy stated that Duke Energy's focus is on integrating the recently announced deals, with 30%-50% of the plan funded by equity, and reiterated commitment to a 15% FFO to debt target, exceeding 14% this year.

Alex asked if IFF is observing a 'K-shaped' economy, where lower-income households are spending less, across its business segments, and what this implies for volumes in 2026.

Answer

CEO Erik Fyrwald confirmed seeing some aspects of a K-shaped economy, particularly weakness in North America volumes. He noted IFF's diverse customer base allows adaptation, with increased emphasis on lower-end and private label areas, which are seeing growth. He also highlighted continued strength in fine fragrance, especially in fast-growing geographies like the Middle East, where IFF has invested in creative centers. He emphasized adapting the model to grow at or ahead of the market.

Alex asked if IFF is observing a 'K-shape' economy, where lower-income households are spending less, across its business segments, and what this implies for volumes in 2026.

Answer

CEO Erik Fyrwald confirmed that IFF is seeing some aspects of a K-shaped economy, particularly weakness in North America volumes. He highlighted IFF's diverse customer base and its adaptation by increasing emphasis on the lower-end and private label areas, where growth is observed, and maintaining focus on the high-end fine fragrance business, which continues to perform well. He also noted increased emphasis on regional and smaller customers in fast-growing geographies like the Middle East.

Alex, representing Shah Peruza from Wells Fargo, inquired about Pinnacle West's growth rate outlook, specifically how the 5-7% target off the 2024 midpoint would translate into a new base for guidance, and if the plan would be rolled forward post-rate case conclusion. He also sought more insight into the megawatt pipeline for hyperscalers, the balance between capacity and generation needs, and the breakdown of the 4.5 gigawatts of committed customers, including whether it would primarily enter the rate base or utilize the subscription model.

Answer

CFO Andrew Cooper stated that the rate case conclusion would be the catalyst for reevaluating the base year and moving towards an evergreen 5-7% EPS growth, aiming for year-over-year stability. Chairman, President, and CEO Ted Geisler detailed a robust demand pipeline, including 4.5 GW of committed incremental demand from industrial growth (chip manufacturing, data centers) and steady residential/small business growth. He clarified that all investments, including those under the subscription model, go into the rate base, with the model primarily affecting recovery and financing.

Alex from Raymond James asked how the changing mix shift towards video cross-selling is impacting Cartrack's gross margins.

Answer

CEO Zak Calisto explained that gross margin was 72% in the quarter, a slight decrease from 74% a year ago, primarily due to increased cost of sales. He clarified that video itself is not negatively impacting gross profit margins due to strategic pricing and unit economics, but an increase in commission payments, which are part of cost of sales, was observed.

Alex from Raymond James asked about the vision attach rate by Jira, how it compares for new customers versus back-to-base sales, and whether Karooooo is landing with video solutions with a higher percentage of new subscribers. He also inquired about the impact of the changing mix shift towards video cross-sell on CARTRACK's gross margins.

Answer

Zak Calisto, Founder and Group CEO, stated that it's still early days for video solutions, with most sales currently coming from the existing customer base, representing only about 10% of total sales. He reiterated that the bottleneck is building proper distribution teams. Regarding gross margins, he noted that the current 72% (down from 74% a year ago) is due to increased cost of sales, primarily commissions, but clarified that video itself is not impacting gross profit margins due to the company's pricing and unit economics model.

Alex from Raymond James asked how the changing mix shift towards video cross-selling is impacting Cartrack's gross margins.

Answer

CEO Zak Calisto explained that gross margin was 72% in the quarter, a slight decrease from 74% a year ago, primarily due to increased cost of sales. He clarified that video itself is not negatively impacting gross profit margins due to strategic pricing and unit economics, but an increase in commission payments, which are part of cost of sales, was observed.

Alex inquired about the factors contributing to the strong performance in H.B. Fuller's Engineering Adhesives (EA) segment, specifically asking if anything accelerated in the quarter or if acquisitions played a role in EA's volumes and margins.

Answer

Celeste Mastin, President and Chief Executive Officer, highlighted that the electronics business returned to double-digit organic growth globally. She also noted significant improvement in the U.S. EA business, moving from negative mid-single-digit to positive mid-single-digit organic growth, driven by share gains and new customer wins.