David Paige

David Paige inquired about the factors that could push APi Group's adjusted EBITDA margins to the upper end of the guidance range and the anticipated impact of recent tariff changes.

Answer

President and CEO Russ Becker stated that no material impact from tariffs is expected. He emphasized that margin expansion will continue through disciplined pricing across all business aspects, including enhanced gross margins from technically difficult and remote project work, such as data centers, by leveraging existing operational levers.

David Paige, on behalf of RBC Capital Markets, requested an update on the performance and outlook for the international business, Chubb.

Answer

President and CEO Russ Becker expressed strong satisfaction with the international business, highlighting its continued organic growth every quarter since acquisition. He pointed to high single-digit order growth as a key indicator of the health and momentum in its inspection and service business, noting that optimization efforts are ongoing.

David Page questioned Axon's go-to-market strategy for the enterprise market, specifically how they approach new business given potentially different competitive dynamics compared to public safety.

Answer

CEO Rick Smith explained that security departments in retail and medical sectors, often staffed by former law enforcement, are highly collaborative and do not view safety technology as a competitive advantage. He cited partnerships like Auror for retail crime. President Josh Isner added that Axon focuses on building a strong business case and demonstrating ROI for every customer, acknowledging that lead generation efforts are more critical in enterprise than in public safety, but the market's size mitigates competitive nuances.

David Paige inquired about Axon's go-to-market strategy for the enterprise market, specifically how the company acquires new business. He highlighted that, unlike public safety, big box retailers might not refer competitors, questioning how Axon navigates this dynamic.

Answer

President Josh Isner clarified that security departments in retail often consist of former law enforcement and collaborate extensively, not viewing security technology as a competitive advantage. He noted similar collaboration in the medical response space. CEO Rick Smith added that Axon focuses on building a strong business case and demonstrating ROI for every customer, acknowledging that lead generation efforts are more critical in enterprise than in public safety.

David Paige asked about the percentage of Verisk's revenues derived from contributory data sources. He also inquired about the AI moats across Verisk's different business segments, particularly in light of concerns about "vibe coding" potentially impacting vertical software or workflow solutions.

Answer

Elizabeth Mann, CFO of Verisk Analytics, clarified that contributory data primarily underpins forms, rules, loss costs, and anti-fraud businesses, while other segments also have significant proprietary data and analytics, providing strong defensibility. Lee Shavel, President and CEO, added that proprietary datasets, like those in property estimating solutions (e.g., repair cost understanding), establish industry standards. Shavel dismissed "vibe coding" as a threat, stating that Verisk's software primarily delivers datasets and provides connectivity, which is fundamentally different from underlying software itself, likening it to securities exchanges providing connectivity to complex market participants.

David Paige asked about the percentage of revenues derived from contributory data sources and the strength of Verisk's AI moats across business segments, especially concerning potential impacts of vibe coding on vertical software and workflow solutions.

Answer

CFO Elizabeth Mann clarified that Forms, Rules, and Loss Costs, and anti-fraud are primarily built on industry-wide contributory solutions, while other businesses have proprietary data and analytics, suggesting strong defensibility. CEO Lee Shavel added that proprietary datasets, like those in Property Estimating Solutions, provide valuable content and establish industry standards. He dismissed vibe coding as a threat, stating that Verisk's software primarily delivers datasets and connectivity, which is fundamentally different from underlying software coding and represents a strong data and connectivity differentiation.

David Paige requested more information on the recent acquisition of Pequity, asking about the strategic rationale, anticipated benefits, and its financial profile.

Answer

President and CEO Maria Black explained that the Pequity acquisition aligns with ADP's strategic priority to lead with best-in-class HCM technology, bringing innovative compensation management software to enhance existing offerings for clients. CFO Peter Hadley noted that Pequity is a small company, and its financial profile is not meaningful in the context of ADP's overall results for the current fiscal year, having been contemplated within the reaffirmed outlook.

David Paige, on for Ashish Sabadra, asked about the net contribution of AI to margins and whether ADP faces any pushback in international markets due to being a U.S.-based company.

Answer

CFO Peter Hadley explained that while AI is driving meaningful productivity gains, ADP remains in a net investment position, with investments in the tens of millions. President & CEO Maria Black stated there has been no pushback in international markets, emphasizing ADP's strong local presence and execution in the 140 countries it serves.

David Paige asked for more details on international performance in the quarter and the outlook for the rest of the year.

Answer

CEO Mark Begor highlighted strong performance in Canada post-cloud transformation, very strong growth in Latin America (especially Brazil with Boa Vista), and solid performance in Australia, UK, and Spain. CFO John Gamble added that the UK, having recently completed its cloud transformation, is expected to drive improving performance in 2026.

David Paige asked for more details on international performance in the quarter and the outlook for the rest of the year.

Answer

Mark Begor, Chief Executive Officer, highlighted strong performance in Canada post-cloud transformation, robust growth in Latin America (especially Brazil with Boa Vista), and solid contributions from Europe and Asia-Pacific. John Gamble, Chief Financial Officer, added that the UK's recent cloud transformation completion positions it for improved performance in 2026.

David Paige asked about any potential pull-forward of PC demand into the current quarter, referencing a previous estimate of $100-$200 million, and also sought an update on the free cash flow expectations for fiscal 2025, which was previously projected at $1.1 billion.

Answer

CEO Patrick Zammit stated that any PC demand pull-forward was very limited, emphasizing continued strong global PC momentum driven by the Windows 11 refresh cycle and the emerging trend of AI PCs. CFO Marshall Witt revised the fiscal 2025 free cash flow expectation to approximately $800 million, attributing the change to higher overall portfolio growth, increased working capital requirements for both distribution and HIVE, and a longer cash conversion cycle for HIVE. He reiterated a medium-term net income to free cash flow conversion target of around 95%.

David Paige inquired about any potential pull-forward of PC demand into the current quarter, referencing a previous estimate of $100 to $200 million, and also asked for an update on the free cash flow expectation for fiscal 2025, specifically whether the $1.1 billion target was still anticipated.

Answer

CEO Patrick Zammit stated that any PC demand pull-forward was very limited, attributing strong PC momentum to the Windows 11 refresh cycle and the early stages of AI PC adoption. CFO Marshall Witt revised the free cash flow expectation for the year to approximately $800 million, down from the previously discussed $1.1 billion for 2025, explaining that higher-than-expected growth rates across the portfolio, particularly in HIVE, increased working capital requirements. He noted that Q4 free cash flow is projected around $850 million, driven by earnings growth and cash conversion improvements, while reiterating a medium-term net income to free cash flow conversion target of 95%.

David Paige of RBC asked about the extent of any PC demand pull-forward observed in the quarter, referencing previous estimates, and sought an update on the free cash flow expectations for fiscal 2025.

Answer

CEO Patrick Zammit stated that any PC pull-forward was very limited, noting continued strong momentum driven by the Windows 11 refresh cycle and the early stages of AI PC demand. CFO Marshall Witt revised the free cash flow expectation for the year to approximately $800 million, down from $1.1 billion, due to higher working capital requirements from stronger-than-expected growth in both distribution and HYVE, while reiterating a medium-term net income to free cash flow conversion of around 95%.

David Paige asked for an assessment of the PC refresh cycle, specifically wanting to know where the company believes the market is in terms of timing, such as the beginning, middle, or end of the cycle.

Answer

CEO Patrick Zammit stated that he believes the PC refresh cycle is in the middle of its course, not at the beginning, as it started one or two quarters ago. He added that this view supports the company's positive outlook on PC contributions to growth in the upcoming quarter.

David Paige of RBC Capital Markets asked if the xVantage platform was a key driver of the recent growth in the SMB market and inquired about the potential for future portfolio rationalization.

Answer

CEO Paul Bay confirmed that the xVantage platform, particularly its AI-powered digital assistant 'AIDA,' is helping to stimulate growth in the SMB segment by shortening sales cycles, especially in North America. He stated that while the company continuously reviews its portfolio, the current focus is on investing in its core platform strategy rather than further major divestitures. EVP & CFO Mike Zilis added that the company remains open to smaller, strategic tuck-in acquisitions.

David Paige of RBC Capital Markets, on for Ashish Sabadra, asked about commercial business trends and tariff impacts. He also inquired about the company's capital allocation strategy following the debt increase for the Sela acquisition.

Answer

President & CEO Jerry Gahlhoff stated that the commercial business continues to be a strong opportunity, driven by investments in sales and marketing, and highlighted its high customer retention. He noted no significant impact from tariffs. On capital allocation, Gahlhoff emphasized a disciplined and balanced approach, noting the company's healthy leverage ratio of 0.9x provides flexibility to invest in growth while providing shareholder returns.

David Paige, on for Ashish Sabadra, asked about the performance of the Uniform Direct Sales business relative to expectations and its impact on the organic growth guide. He also inquired if any specific vertical, within or outside the focus areas, stood out for its performance.

Answer

CEO Todd Schneider explained that the Uniform Direct Sale business, which was down for the quarter, can be 'lumpy' due to its large-customer focus but remains strategically important for cross-selling. He noted that all four focus verticals are performing well and declined to single one out, emphasizing continued investment across all of them.

Speaking for Ashish Sabadra, David Paige of RBC Capital Markets inquired about the competitive dynamics in the auto and credit card score markets and asked about FICO's capital allocation priorities for 2025.

Answer

CEO William Lansing stated that the competitive landscape in auto and card remains stable and largely unchanged from previous years, with no significant new threats. On capital allocation, he reaffirmed FICO's long-standing strategy of returning capital to shareholders, primarily through share repurchases, noting that despite a high P/E ratio, the company still considers its stock a "screaming value."