Maxwell Michaelis

Max Michaelis of Lake Street Capital Markets inquired if the 2026 revenue target for OAS is organic, sought more details on the Kestrel system win with a U.S. public safety agency, and asked about engagement with other U.S. police departments.

Answer

Chairman, President & CEO Eric Brock confirmed the $40 million 2026 revenue outlook for OAS is entirely organic and that any acquisitions would be accretive. He described the Kestrel win as a first order for an airspace awareness tool that could lead to broader engagement. Regarding other police departments, Brock noted intense nationwide interest in counter-drone technology but emphasized the importance of the evolving regulatory landscape before naming specific engagements.

Max Michaelis from Lake Street Capital Markets asked for data on new customer additions attributable to the F1 movie, inquired about other marketing initiatives planned to drive growth, and requested more color on the performance of Expensify Travel.

Answer

CFO Ryan Schaffer stated that it was too early to share F1-related customer data but confirmed more marketing initiatives are planned to leverage the increased brand awareness. He also highlighted that Expensify Travel is seeing accelerating growth and strong customer enthusiasm. CEO David Barrett added that the company has a 'war chest' and is willing to make further 'big swings' on strategic initiatives.

Maxwell Michaelis inquired about future product areas Expensify might pursue after the current initiatives and the Apple movie sponsorship. He also asked about the expected impact of the movie deal on the non-GAAP operating expense structure in 2025.

Answer

Executive Ryan Schaffer identified improving invoice and bill pay as the next logical product focus. CEO David Barrett added that a key priority is driving adoption of the existing product suite to get customers to realize its full value. Regarding expenses, Ryan Schaffer clarified that while the cash for the movie sponsorship has already been spent, GAAP accounting requires the expense to be recognized when the movie is released, which will cause a large, non-cash increase in sales and marketing expenses at that time.

Max Michaelis of Lake Street Capital Markets, LLC asked about the historical growth rate of the newly acquired ESCO Calibration. He also sought clarification on the forecast for a return to high single-digit organic revenue growth in the second half of fiscal 2026, specifically asking what this implies for the performance of the Transcat Solutions business.

Answer

President & CEO Lee Rudow characterized ESCO's historical growth as being similar to Transcat's, describing it as consistent and driven by ongoing investments in capabilities, sales, marketing, and personnel. Regarding the second-half outlook, Rudow explained that the forecast for high single-digit organic growth implies a stabilization of the Transcat Solutions business. He emphasized that Solutions is an important differentiator that enhances the company's value proposition, and achieving stability in that area is a key goal and a contributing factor to the overall growth projection, alongside strong quoting activity and win rates.

Max Michaelis of Lake Street Capital Markets, LLC inquired about the historical growth rate of the newly acquired ESCO Calibration. He also asked what the expectation for a return to high single-digit organic growth in the second half implies for the Transcat Solutions business.

Answer

President and CEO Lee Rudow characterized ESCO's historical growth as being similar to Transcat's, driven by consistent investment in people, sales, and capabilities. Regarding the second-half outlook, Rudow explained that the forecast for returning to high single-digit organic growth implies a stabilization of the Transcat Solutions business, which is a key differentiator and a contributing factor alongside strong quoting activity and win rates.

Max Michaelis of Lake Street Capital Markets asked about the historical growth rate of the newly acquired ESCO Calibration. He also sought clarification on what the forecast for a return to high single-digit organic revenue growth in the second half of fiscal 2026 implies for the performance of the Transcat Solutions business.

Answer

President & CEO Lee Rudow characterized ESCO's historical growth as being similar to Transcat's, driven by consistent investment in capabilities, sales, marketing, and people. Regarding the second-half outlook, Rudow explained that the forecast for high single-digit growth implies a stabilization in the Transcat Solutions business. He noted that this stabilization, combined with current quoting activity and win rates, are contributing factors to the positive outlook.

Max Michaelis asked about the historical growth rate of the newly acquired ESCO Calibration. He also sought clarification on the forecast for a return to high single-digit organic revenue growth in the second half of fiscal 2026, specifically questioning what this implies for the performance of the Transcat Solutions business.

Answer

CEO Lee Rudow characterized ESCO's historical growth as being similar to Transcat's, noting it has been consistent over many years due to their investments in capabilities, sales, marketing, and people. Regarding the second-half outlook, Rudow explained that the projection for high single-digit organic growth implies a stabilization of the Transcat Solutions business. He stated that achieving this stabilization was a key goal for the year and is a contributing factor to the growth forecast, along with strong quoting activity and win rates.

Max Michaelis of Lake Street Capital Markets, LLC asked about the historical growth rate of the newly acquired ESCO Calibration. He also questioned what the projection for a return to high single-digit organic revenue growth in the latter half of fiscal 2026 implies for the performance of the Transcat Solutions business.

Answer

President and CEO Lee Rudow characterized ESCO's historical growth as consistent and similar to Transcat's, driven by sustained investment in capabilities and personnel. Regarding the organic growth forecast, Rudow explained that it implies a stabilization of the Transcat Solutions business, which is a key goal for the year. He noted this stabilization, combined with strong quoting activity and win rates, supports the outlook for a return to high single-digit growth.

Max Michaelis of Lake Street Capital Markets asked about the historical growth profile of the newly acquired ESCO Calibration. He also sought clarity on the fiscal 2026 outlook, specifically what the forecast for high single-digit organic revenue growth implies for the performance of the Transcat Solutions business.

Answer

CEO Lee Rudow described ESCO's historical growth as consistent and similar to Transcat's, driven by sustained investment in capabilities and personnel. Regarding the outlook, Rudow explained that the projection for a return to high single-digit organic growth in the second half of the fiscal year incorporates an expected stabilization in the Transcat Solutions business, which remains an important differentiator for the company.

Max Michaelis of Lake Street Capital Markets inquired about the historical growth rate of the newly acquired ESCO Calibration. He also asked for clarification on the fiscal 2026 outlook, specifically how the Transcat Solutions business factors into the forecast for a return to high single-digit organic revenue growth.

Answer

President & CEO Lee Rudow described ESCO's historical growth as consistent and similar to Transcat's, driven by steady investment in capabilities and personnel. He explained that the forecast for high single-digit organic growth in the second half of the year assumes a stabilization of the Transcat Solutions business, which is a key differentiator and a contributing factor to the positive outlook.

Max Michaelis of Lake Street Capital Markets asked about future growth plans for Rasmussen, including new programs and campus expansions, following the removal of a Department of Education restriction. He also inquired about Q2 NCLEX score trends and the company's capital allocation priorities, including stock repurchases.

Answer

CEO Angela Selden stated that a multi-year view of campus and program strategy will be detailed at the November 20th Investor Day. She noted that Q2 NCLEX results are still pending from some states but are pacing as expected. CFO Richard Sunderland ranked investment priorities as: 1) organic growth initiatives, 2) tuck-in acquisitions, 3) maintaining regulatory cash levels, and lastly, 4) stock repurchases or dividends. He confirmed no shares were repurchased in Q2.

Max Michaelis of Lake Street Capital Markets asked whether future hyperscaler wins would necessitate a similarly substantial investment or if there would be opportunities for leverage and savings.

Answer

CEO Charles Giancarlo confirmed that he expects to see significant leverage in design and investment for subsequent hyperscaler engagements. He explained that fundamental capabilities developed for the first partner are reusable, and future work would be a fraction of the initial effort, focusing on areas like management integration. He cited the expensive process of qualifying flash suppliers as a one-time investment that will benefit future deals.

Maxwell Michaelis of Lake Street Capital Markets, LLC asked if there were any Pure-specific factors, beyond the geopolitical environment, that might pose a risk to the 11% revenue growth guide for the next year.

Answer

CEO Charles Giancarlo stated they see no specific artificial blockers and that in a normalized market, he would expect improvement. CFO Kevan Krysler reiterated that the guide depends on a consistent IT spending environment and the expected return to growth for the Evergreen//One service offering.

Maxwell Michaelis asked for directional guidance on Q2 performance, specifically whether to expect typical flat seasonality from Q1 to Q2 or if outsized demand might lead to sequential growth.

Answer

Executive Andrew D'Silva responded that the company expects a 'small step-up sequentially' from Q1 to Q2. He added that historically, the first half of the year accounts for 35% to 45% of full-year revenue and that the company is on a 'pretty good pace' compared to historical trends.

Max Michelis followed up on the Chipotle win, asking if Olo displaced a competitor or a homegrown system, the timeline for the pilot, and what new initiatives might be expected from the new Chief Sales Officer, Parrish Chapman.

Answer

Founder and CEO Noah Glass confirmed Chipotle was using a homegrown system and saw value in Olo's specialized Catering+ features and other modules, with the pilot starting mid-year. Regarding the new CSO, Glass highlighted Parrish Chapman's deep industry experience and his focused role on driving bookings and new customer acquisition, separating it from the broader responsibilities of the former CRO role.

Maxwell Michaelis sought specifics on the product performance that drove the record contract win, the percentage of new business related to AI, and the pricing structure for B2 Overdrive compared to the standard B2 product.

Answer

CEO Gleb Budman stated the record win was driven by the need for fast, reliable data delivery for the customer's application, combined with significant cost savings. While declining to provide a specific percentage, he reiterated that AI was the fastest-growing part of the business in Q1. He detailed that B2 Overdrive starts at $15/TB/month, 2.5x the standard B2 price, but remains up to 90% more cost-effective than AWS for comparable high-throughput workloads.

Maxwell Michaelis asked for the full-year growth rate of customers with over $50,000 in ARR and whether the B2 guidance implies continued strength in this cohort.

Answer

CFO Marc Suidan did not disclose a specific growth rate but confirmed that momentum with larger customers (over $50k ARR) has been very good, noting they are now closing deals in the $1 million range. He affirmed that the B2 growth guidance assumes ongoing momentum in moving upmarket.

Maxwell Michaelis of Lake Street Capital Markets inquired about the expected 2025 order growth split between commercial and defense, any unforeseen strength in commercial markets, and the number of current development programs in the OSS segment.

Answer

Executive Michael Knowles responded that 2025 order growth is expected to be balanced equally between commercial and defense markets. He highlighted that the medical imaging sector is showing stronger and faster growth than initially anticipated due to accelerated AI adoption. Regarding development programs, Knowles explained the strategy of using customer-funded development to secure long-term production contracts, rather than providing a specific count of current programs.

Asked for clarification on the Q4 bookings guide's impact on the Dice segment, the expected timing of a return to growth for Dice in 2025, and the company's stance on M&A.

Answer

The Q4 bookings guide reflects trends similar to Q3, with some large Dice customers renewing at lower levels, which is viewed as a temporary reset. A gradual recovery for Dice in 2025 is a reasonable expectation. The company is not actively pursuing M&A, focusing instead on organic growth from its current platforms.

Maxwell Michaelis of Lake Street sought clarification on the Q4 bookings guide, asking if the 8-10% contraction implied further degradation in the Dice segment. He also inquired about the timing of the expected 2025 bookings recovery and the company's current stance on M&A.

Answer

CFO Raime Muhle clarified that Q4 performance is expected to be similar to Q3, with some large Dice customers renewing at lower levels, which she described as a 'healthy reset.' She affirmed that expecting incremental improvements at Dice alongside continued growth at ClearanceJobs in 2025 was a 'reasonable perspective.' Executive Art Zeile stated that the company is not actively considering M&A, focusing instead on maximizing performance from its existing platforms.

Maxwell Michaelis sought clarification on the Disney renewal, asking if Magnite sourcing demand for Disney was a new aspect of the relationship.

Answer

CEO Michael Barrett clarified that this is not a new capability but rather a reflection of the industry's evolution. As premium publishers like Disney embrace more biddable programmatic and expand into new areas like audio or international markets with a smaller direct sales footprint, it creates a more natural opportunity for Magnite to source demand and earn a higher take rate.

Maxwell Michaelis asked for clarification on the Disney renewal, questioning if Magnite sourcing its own demand for a higher take rate was a new capability for that partnership.

Answer

CEO Michael Barrett clarified that this is not a new capability but an evolution of the market and the partnership. As premium publishers like Disney increasingly adopt biddable programmatic models, it creates more opportunities for Magnite to source demand, which carries a higher take rate. He added that expansion into new areas like international markets also naturally lends itself to Magnite-sourced demand.

Max Michaels of Lake Street Capital Markets inquired about expectations for adjusted EBITDA margin expansion in 2025 and the reason for the sequential increase in professional services revenue.

Answer

CFO Dana Gerner pointed to the company's long-term model, which targets a 20-25% adjusted EBITDA margin, suggesting performance would remain within that range. She explained that the quarterly increase in professional services revenue was a one-time event due to the early completion of a contract with a specific APAC customer.

Inquired about the company's interest in using its growing cash balance for inorganic growth opportunities (M&A) and asked about how new business trends were continuing into the fourth quarter.

Answer

The company acknowledged its cash balance is growing beyond simple working capital needs and that they are considering all options for its use, including inorganic opportunities, though nothing specific was mentioned. Regarding Q4, they expressed confidence after strong Q3 execution but did not provide specific details on current trends, noting Q4's importance for the 2025 outlook.

Maxwell Michaelis of Lake Street Capital Markets asked why the company did not reaffirm its full-year fiscal 2025 guidance, sought confirmation that the prior adjusted EBITDA guidance still stands, and inquired about the progress on achieving its $16 million operational efficiency target.

Answer

CFO Kenneth Gianella stated that it is Quantum's standard practice not to reiterate full-year guidance quarterly and that the year is expected to be back-half weighted. He confirmed the previous adjusted EBITDA guide of $10 million to $20 million still stands, noting significant one-time restructuring costs in the first half. Regarding operational efficiencies, Gianella confirmed they are on track to realize the savings by the end of the calendar year. CEO Jamie Lerner highlighted the progress, pointing to the quarterly OpEx reduction from over $35 million to $30.8 million.

Inquired about the decision not to reaffirm the full-year fiscal '25 guidance, specifically the adjusted EBITDA target, and asked for an update on the progress of the stated $16 million in operational efficiencies.

Answer

The company stated it is their standard practice not to reiterate full-year guidance quarterly. They confirmed the plan for a back-half weighted year to achieve the EBITDA target, citing significant one-time expenses in the first half. Regarding operational efficiencies, they are on track to realize the full amount by the end of the calendar year and pointed to the OpEx reduction from over $35 million to $30.8 million as evidence of progress.

Maxwell Michaelis of Lake Street Capital Markets asked why the company did not reaffirm its full-year fiscal 2025 guidance and questioned the progress made on the previously announced $16 million in operational efficiencies.

Answer

CFO Kenneth Gianella stated that not reiterating the full-year outlook is standard practice and that the company's plan remains back-half weighted, with significant one-time expenses in H1 expected to subside. Regarding efficiencies, he confirmed they are on track to realize the savings by the end of the calendar year. CEO Jamie Lerner highlighted tangible progress, pointing to the reduction in quarterly OpEx from over $35 million to $30.8 million.