Giuliano Bologna

Giuliano Bologna of Compass Point inquired about the specific drivers behind the accelerating growth in the Aerospace Products segment, the durability of these trends, and any potential industry trigger events that could fuel further growth.

Answer

Joseph Adams, Chairman, CEO & Director, identified the core growth driver as airlines seeking to avoid the cost and risk of managing their own engine shop visits. He stated that trends like aging platforms and fleet fragmentation favor FTAI's scale-based model. David Moreno, COO, added that the Strategic Capital Initiative (SCI) acts as a significant accelerant by exposing more airlines to their services, which in turn drives cross-selling opportunities and market share gains.

Giuliano Bologna asked about the new partnership program's accounting, specifically if loans would continuously flow into 'held for sale' status beyond the initial transaction. He also inquired about the magnitude of loans that would need to be moved to 'held for sale' to align with the updated guidance range, and the accounting impact of structural changes in forbearance and modifications on interest rate reversals and charge-offs.

Answer

CFO Pete Graham confirmed the intent for a multi-year partnership where a portion of new originations would ideally flow into this new arrangement. He reiterated that the specific notional amount of loans moved to 'held for sale' for guidance purposes is not disclosed. Pete Graham also explained that the shift from short-term forbearance to programmatic modification tools is designed to manage stress effectively, with promising performance metrics and expected high success rates as borrowers graduate.

Giuliano Bologna asked if the designation of loans as 'held for sale' for the new partnership program would be a one-time event for the initial sale or an ongoing flow for future originations. He also attempted to dimensionalize the amount of loans that would need to be moved to 'held for sale' to align with the updated guidance range, suggesting a figure well into the $1 billion to $2 billion range. Finally, he inquired about the accounting impact of the shift from forbearance to modifications, specifically if it would lead to less interest rate reversals and a net benefit despite potentially higher charge-offs.

Answer

CFO Pete Graham clarified that the intent is to create a multi-year partnership, with the initial loans being the start, and ideally, a portion of new originations would flow into this new partnership over time. Regarding the amount of loans, he stated that the simple math would involve the reserve rate multiplied by a notional number, which has not been disclosed. On the accounting impact, Pete Graham explained that the overall levels of borrowers in forbearance versus modification programs are relatively consistent. The company substituted short-term, judgmental forbearance with a more programmatic modification tool, which is proving fit for purpose with promising performance metrics, and they expect high success as borrowers graduate.

Giuliano Bologna of Compass Point Research & Trading, LLC asked about the implications of a much larger mix of graduate loans, including whether they might be sold separately and their relative credit characteristics. He also sought to clarify the market share assumption for the graduate loan opportunity.

Answer

CFO Pete Graham explained that based on bureau data, the credit profile of the new opportunity is similar to their existing programs and that grad loans are typically a lower-loss, higher-return product. CEO Jonathan Witter clarified that Sallie Mae's current market share in the smaller private grad loan market is already high, around 67%, and they see no reason they shouldn't maintain that share in the expanded market.

Giuliano Bologna asked about LendingClub's strategy for balancing the growth of its marketplace demand (structured certificates, whole loan sales) versus the growth of its held-for-investment portfolio, considering its significant capital and liquidity. He also inquired about the efficiency of marketing spend, which remained low at 1.55% of volume despite new channel pushes, and how this percentage might evolve given anticipated growth in 2026.

Answer

CFO Drew LaBenne explained that the goal is to grow originations sufficiently to satisfy both balance sheet growth and marketplace investor demand, acknowledging a balancing act while originations ramp up. CEO Scott Sanborn noted significant opportunity in marketing, with efforts yielding positive results in new channels like direct mail. He highlighted that repeat customers, who are lower cost and lower credit risk, contribute to scaling at an equivalent pace, driving up lifetime value and the ability to invest more in acquisition.

Giuliano Bologna inquired about LendingClub's marketing spend efficiency, noting that the marketing spend as a percentage of volume (calculated at 1.55%) remains lower than expected despite efforts to push new marketing channels and anticipated increases for 2026 growth.

Answer

CEO Scott Sanborn highlighted significant ongoing opportunities in marketing, noting that LendingClub is still early in optimizing new channels like direct mail. He emphasized that the overall efficiency is boosted by repeat customers, who represent roughly 50% of volume and have much lower acquisition costs, effectively offsetting the spend on new member acquisition and contributing to overall lifetime value.

Giuliano Bologna of Compass Point asked about the potential for wallet partnerships to enable offline transactions and how this could drive incremental GMV growth and differentiate Affirm's underwriting.

Answer

Founder & CEO Max Levchin expressed strong excitement for the enormous offline opportunity, noting that major wallets share this interest. He identified the key challenges as consumer awareness and technical 'tender delivery' integration, both of which Affirm is actively solving. He believes the market is now primed to promote BNPL as a key conversion driver in-store.

Giuliano Bologna asked about the specific synergies from combining the TransStar and Wheeling railroads, the strategic value of diversification for the rail platform, and the company's forward-looking priorities after achieving several major 2025 goals, including potential future M&A targets.

Answer

Ken Nicholson, CEO & President, detailed the $20 million in expected annual cost savings from network efficiencies and purchasing power. He emphasized that the acquisition is a 'game changer' for the rail platform's valuation, as increased customer and commodity diversification supports a higher trading multiple, in line with industry peers. Looking ahead, Nicholson stated the focus is on growing the freight rail segment through further 'chunky' acquisitions, with a long-term vision of monetizing other stabilized assets and potentially becoming a pure-play publicly traded freight rail company.

Giuliano Bologna of Compass Point inquired about Gannett's timeline for achieving flat revenue, details of the $100 million cost reduction program, the impact of AI search on audience traffic, updates on the Google ad tech antitrust case, the path to restoring digital subscriber revenue growth, and trends in AI content licensing deals.

Answer

CEO Mike Reed projected flat revenues in early 2026, driven by improving print trends, strong digital advertising, and new deals like AddressUSA and Perplexity. CFO Tricia Gosser detailed that the cost program targets automation, outsourcing, and facility consolidation. President of Gannett Media Kristin Roberts noted that despite AI search changes, Gannett's audience is growing due to a proactive multi-platform strategy and that the digital subscription business is focused on profitability and ARPU growth, expecting sequential revenue growth in H2 2025. Mike Reed also expressed confidence in the Google antitrust case and noted a positive momentum shift toward publishers in AI content licensing negotiations.

Giuliano Bologna of Compass Point Research & Trading LLC inquired about Gannett's outlook, asking when revenues might turn flat, for details on the $100 million cost reduction program, and about the company's experience with audience traffic from AI search. He also requested updates on the Google ad tech antitrust case, the timeline for returning to digital subscriber revenue growth, and the current landscape for AI content licensing deals.

Answer

CEO Mike Reed projected revenues would flatten in early 2026, driven by improving print trends, strong digital advertising, and new deals like Perplexity and AddressUSA. CFO Trisha Gosser detailed that the cost program focuses on automation, outsourcing, and consolidating print facilities. President of Gannett Media Kristin Roberts stated that despite AI search changes, Gannett's audience is growing due to a proactive strategy of diversifying traffic and blocking unauthorized scraping. Mike Reed also provided positive updates on various ad tech legal cases and noted a momentum shift toward publishers in AI content licensing negotiations. Kristin Roberts added that while digital subscriber revenue growth will take a few quarters, ARPU is already growing, and sequential revenue growth is expected in Q3 and Q4.