Peter Christiansen

Peter Christiansen of Citi inquired about the underlying color on CPN onboarding and flows, including initial use cases, stickiness, and growth per financial institution partner. He also asked how investors should think about the agentic commerce opportunity transforming Circle's operating and financial model.

Answer

Jeremy Allaire, Co-founder, CEO, and Chairman of Circle, reported steady and strong growth for CPN, with 55 financial institutions now on the network and an annualized PPV of $5.7 billion, up 68% since the last update. He noted a focus on larger firms with greater flow potential and streamlining the onboarding process for financial institutions new to blockchains. Key use cases include B2B cross-border merchant settlement, particularly for exporters in Asia and importers in emerging/developed markets, and south-to-south/north-to-south remittance applications. For agentic commerce, Allaire sees it as a major new demand driver for stablecoin utility, increasing transaction volume and balances, and accelerating Circle's reach into non-crypto-native software institutions. He anticipates it will drive traffic and growth on Arc, potentially creating significant transaction-based revenue streams over time.

Peter Christiansen requested details on the Circle Payments Network (CPN) onboarding and transaction flows, including initial use cases, partner stickiness, and growth per financial institution. He also asked how the opportunity in agentic commerce might transform Circle's operating and financial model for investors.

Answer

Jeremy Allaire, Co-founder, CEO, and Chairman of Circle, reported steady and strong growth for CPN, with 55 financial institutions now on the network and an annualized PPV of $5.7 billion as of February 20th, up 68% since the last update. Key use cases include B2B cross-border merchant settlement and remittance applications. For agentic commerce, Allaire sees it as a major new demand driver for the Stablecoin network, increasing transaction volume and balances, and accelerating adoption in non-crypto-native businesses. He also anticipates it will drive traffic and growth on Arc, potentially creating new transaction-based revenue streams over time.

Peter Christiansen of Citigroup Inc. inquired about the relationship between USDC's high transaction volume growth and its circulation growth, and asked about the next milestones for the Circle Payments Network (CPN) and its future integration with the new ARC blockchain.

Answer

Chairman, CEO & Co-Founder Jeremy Allaire explained that USDC's high velocity is due to the speed and low cost of blockchain transactions, noting that transaction volume growth has outpaced money supply growth. For CPN, he stated near-term priorities are activating more payment corridors and adding self-service tools for partners. He confirmed ARC will play a key role for CPN, offering features like a native FX engine and configurable privacy.

Peter Christiansen questioned the potential impact of AI disruption on the commercial real estate broker space, including possible reductions in broker numbers, and CoStar Group's ability to adjust pricing or face disruption to its CoStar suite business.

Answer

CoStar Group CEO Andy Florance expressed skepticism about significant AI disruption to relationship-driven CRE brokers, noting that CoStar's core audience remains resilient. He highlighted that brokers represent only about 30-33% of CoStar's revenue, with the majority coming from banks, owners, and institutions. CFO Chris Lown added that current investments are geared towards these non-broker customers, expecting the broker revenue percentage to decrease.

Peter Christiansen asked about the potential impact of AI disruption on the commercial real estate (CRE) broker space, specifically whether a reduction in brokers would affect CoStar Group's ability to maintain pricing or disrupt its CoStar suite business.

Answer

CoStar Group CEO Andy Florance expressed skepticism about significant AI disruption to relationship-driven CRE brokers, noting that CoStar's core audience remains resilient. He highlighted that brokers represent only about 30-33% of CoStar's revenue, with the majority coming from banks, owners, and institutions, many of whom are not on a seat license basis. CFO Chris Lown added that current investments are geared towards these other customer segments, potentially decreasing the broker revenue percentage.

Peter Christiansen from Citi inquired about the sequential change in bookings, excluding the COVID-impacted year, and sought insights into seasonal behaviors, particularly for residential agents and the Apartments.com business.

Answer

CEO Andy Florance noted Apartments.com's Q2 seasonality due to the NAA event and anticipated limited seasonality for residential agents, with Homes.com showing linear growth. CFO Chris Lown added that salesforce expansion is in early stages, productivity ramps over time, and current seasonality aligns with expectations. Andy highlighted Homes.com's 53% quarter-over-quarter bookings increase.

Peter Christiansen asked about sequential booking trends, excluding COVID-19 impacts, and specific seasonal behaviors observed in the residential segment, including agent cancellations and Apartments.com's typical seasonality.

Answer

CEO Andy Florance explained that Apartments.com experiences seasonality due to the NAA event, while Homes.com currently shows linear growth with minimal seasonality, noting a 53% quarter-over-quarter increase in Homes.com bookings. CFO Chris Lown added that overall booking trends are positive and in line with expectations.

Peter Christiansen of Citi asked for an elaboration on CoStar's pricing strategy, particularly concerning the new homes model on Homes.com, in light of positive ASP trends in multifamily and LoopNet.

Answer

Founder & CEO Andy Florance clarified that for the new Homes.com product, the current strategy prioritizes market penetration over maximizing average selling price (ASP). He noted that with low penetration, the focus is on profitable growth, establishing a foothold, and that they have 'the rest of eternity to play the ASP game.' Pricing currently ranges from a few hundred to several thousand dollars a month based on an agent's portfolio.

Peter Christiansen asked for an elaboration on CoStar's pricing strategies, particularly for the new homes model and other business segments beyond multifamily and LoopNet.

Answer

CEO Andy Florance explained that for the new Homes.com product, the current strategy prioritizes market penetration over maximizing average selling price (ASP). He noted that pricing is optimized based on a member's portfolio size and value, with the goal of achieving profitable unit growth first, leaving ASP optimization for later stages.

Peter Christiansen from Citigroup Inc. asked for details on the integration and monetization plan for the recently acquired Matterport over the next 12 to 18 months.

Answer

CEO Andrew Florance explained that Matterport will be deeply and natively embedded into all CoStar platforms while also expanding its standalone business by growing its small international sales team. CFO Christian Lown added that this integration is expected to lower customer cancellations and increase user time on site, creating financial tailwinds.

Peter Christiansen asked for a breakdown of the 2025 revenue guidance for Apartments.com, specifically the assumed mix of property growth versus pricing, and the impact of targeting smaller properties.

Answer

CFO Christian Lown confirmed that unit growth will likely be a larger driver than pricing in 2025, while noting a significant TAM remains in larger buildings. CEO Andrew Florance added that high NPS scores (94) reflect a focus on existing clients in 2024, and the planned sales force expansion is designed to target more new properties, including smaller ones where the mid-market team has shown increased productivity.

Peter Christiansen asked about potential seasonality in the Homes.com business and whether renewals for shorter-term contracts might be impacted during the real estate market's slower seasons.

Answer

CEO Andy Florance clarified that the primary issue with early renewals was not seasonality but the inexperience of the initial, non-dedicated sales force. He explained that some early clients misunderstood the value proposition, which is centered on helping agents win more listings, not just lead diversion. He pointed to the steadily improving member NPS score as evidence that the value proposition is resonating, suggesting it will become a year-round subscription for active agents.

Peter Christiansen asked about the drivers of Alight's recent financial underperformance, how CEO Rohit Verma's prior experience at Crawford applies to turning around the company, and how investors should measure milestones in the upcoming transition year.

Answer

CEO Rohit Verma attributed the underperformance primarily to execution issues in operational excellence, client management, technology, and product innovation. He drew parallels to his experience at Crawford, emphasizing a focus on cultural change, leadership philosophy, and consistent execution. Verma stated that definitive metrics for measuring progress would be provided once a full-time CFO is appointed and he has a more complete understanding of all moving parts.

Peter Christiansen asked how the current 92% of 2025 revenue under contract paces against previous years. He also inquired about any recent implementation reschedules and requested clarification on the wealth business's exposure to a weaker macro environment.

Answer

CFO Jeremy Heaton explained that having 92% of revenue under contract is a strong position, representing good progress from the 89% at the start of the year, which is ahead of historical pacing. He also confirmed no material implementation reschedules. CEO David Guilmette clarified that the wealth business's exposure to market volatility is minimal, with a potential revenue impact of 'well less of $10 million' in a protracted downturn.

Peter Christiansen of Citigroup Inc. inquired about the 92% of 2025 revenue under contract, asking how that pacing compares to previous years, whether any implementations have been rescheduled, and for clarification on the wealth business's exposure to market volatility.

Answer

CFO Jeremy Heaton explained that the 92% revenue under contract represents good progress and is a stronger position than in prior years. He also confirmed no material implementation delays. CEO David Guilmette clarified that the wealth business's exposure to a protracted market downturn would result in a revenue impact of 'well less of $10 million.'

Peter Christiansen asked for a benchmark of the 8-point improvement in contract renewal rates against historical levels and for color on pricing trends. He also questioned if pricing has become a higher priority for new clients given rising benefit costs.

Answer

CEO David Guilmette stated the improvement brings retention close to historical norms, with a bit more headroom to improve, and noted no unusual pricing pressure. He emphasized that for new clients, the focus is on Alight's ability to impact their total benefit spend, making it a value proposition rather than a price-driven decision. CFO Jeremy Heaton added that any price compression is already factored into the loss metric.

Peter Christiansen sought Upstart's perspective on potential saturation or normalization in the personal loan market for 2026 and its implications for Upstart's selectivity. He also asked if short-term consumer benefits like tax refunds might crimp demand for personal loans.

Answer

Paul Gu, Co-founder and CTO, stated that Upstart focuses on winning market share in the personal loan market, where their product competes exceptionally well on rates and process. He added that while more consumer money might marginally lower credit demand, the dominant factor is Upstart's ability to approve competitive rates, which benefits from healthy consumer finances.

Peter Christiansen asked for Upstart's perspective on potential saturation and normalization in the personal loan market for 2026, and how first-half 2026 economic factors like tax refunds might impact consumer credit performance and short-term personal loan demand.

Answer

Paul Gu, Co-founder and CTO, stated that Upstart focuses on winning market share in the useful personal loan product category, where their competitive rates and process are gaining traction. He added that looser economic policies benefit borrowers, and while more money might marginally lower credit demand, the primary factor is Upstart's ability to offer affordable rates, which is easier with healthy consumers.

Peter Christiansen asked about the quality of leads following improvements in marketing channels, considering the AI system's conservatism, and whether an improvement in non-prime auto delinquencies would significantly impact Upstart's auto originations.

Answer

Paul Gu, CTO of Upstart, explained that marketing improvements optimize for both application and conversion propensity, and while conversion rates were lower due to model conservatism, it wasn't a chosen strategy. He also noted that Upstart has seen very good credit performance in auto, and market shifts could present opportunities for growth in 2026.

Peter Christiansen asked about the quality of leads generated from Upstart's improved marketing channels, considering the AI system's conservatism, and whether an improvement in non-prime auto delinquencies would significantly impact Upstart's auto originations.

Answer

CTO Paul Gu explained that AI in customer acquisition optimizes for both application and conversion propensity, noting that the model's conservatism led to a higher application-to-origination ratio. Paul Gu also stated that Upstart has seen very good credit performance in auto, and market disruption could present an opportunity for 2026 growth.

Peter Christiansen asked about the health of the ABS market, particularly the appetite for equity tranche investments, and inquired about competitive pressures in the near-prime and prime lending spaces.

Answer

CFO Sanjay Datta described the ABS bond market as "constructive" but noted the equity tranche market remains "opportunistic" and not fully recovered. CEO Dave Girouard acknowledged that improved funding markets increase competition but expressed confidence in Upstart's ability to grow market share through its model advantages.

Peter Christiansen from Citi inquired about the health of the ABS market, particularly the appetite for equity tranche investments, and asked about competitive pressures in the near-prime and prime lending spaces.

Answer

CFO Sanjay Datta characterized the ABS bond market as "constructive" but noted the equity tranche market is more "opportunistic" and not fully recovered. CEO Dave Girouard acknowledged that improving funding markets increase competition but affirmed Upstart's confidence in its ability to grow market share and maintain its competitive strength.

Peter Christiansen asked for an assessment of the ABS market's health following a recent transaction and inquired about trends in risk retention and co-investment with the new Fortress deal and other partners.

Answer

CFO Sanjay Datta reported that the latest ABS deal was healthily oversubscribed but reiterated that Upstart uses this market opportunistically and is not reliant on it. He also stated that there are no significant changes in trends for risk retention or deal structures with new partners, as these have become very consistent.

Peter Christiansen from Citigroup Inc. questioned Upstart's view on risk retention for new capital deals and the market's appetite for risk. He also asked about the recent uptick in borrower acquisition costs and the strategy for customer acquisition.

Answer

CFO Sanjay Datta confirmed their risk retention strategy remains a single-digit percentage for committed capital deals and noted a generally increasing appetite for risk in the market. CEO David Girouard addressed acquisition costs, stating that long-term unit economics are exceptional and have improved over time, giving them flexibility to adjust marketing spend as needed.

Peter Christiansen of Citigroup inquired about any observable changes in the underlying use cases for personal loans and whether a potential debt consolidation trend was impacting demand.

Answer

CEO Dave Girouard responded that there have been no radical shifts in personal loan use cases. He emphasized that they continue to serve as a versatile financial tool for consumers for a variety of purposes, and the company has not observed any dramatic changes in application trends.

Peter Christiansen inquired about S&P Global's strategic focus on decentralized finance (DeFi), specifically its role in on-chain credit assessment or Oracle-style verification, or if the strategy is to remain a layer removed from direct protocol integration, and the impact of potential market structure legislation on DeFi investment.

Answer

Martina Cheung, President and CEO, expressed excitement about DeFi opportunities in Ratings and Index. She highlighted S&P Global's stablecoin stability assessments, which cover the vast majority of stablecoin market cap and help the market understand risk. S&P Global is actively developing methodologies for rating protocols, having issued its first protocol rating in Q3. The company has long-standing partnerships for on-chain presence and is enthusiastic about on-chain credit assessments. In Index, rapid innovation includes tokenizing the S&P 500 on-chain and launching innovative products based on this tokenization. Martina affirmed a proactive approach to DeFi, with more updates expected throughout the year.

Peter Christiansen asked about S&P Global's role in decentralized finance (DeFi) for on-chain credit assessment or Oracle-style verification, and if market structure legislation would lead to stepped-up investment in DeFi.

Answer

Martina Cheung, President and Chief Executive Officer, highlighted S&P Global's excitement and active involvement in DeFi, particularly in Ratings and Indices. She mentioned stablecoin stability assessments covering the vast majority of market cap, the first rating of a protocol in Q3, and partnerships for on-chain credit assessments. In Indices, innovation includes tokenizing the S&P 500 on-chain and subsequent launches, indicating a strong lean into the opportunity.

Peter Christiansen from Citigroup asked about the expected pace of synergy realization in 2025 and how new AI products or the Vitality Index might contribute to achieving those targets.

Answer

President and CEO Martina Cheung expressed pleasure with synergy realization, noting they were ahead of target in 2024 and expect to continue that pace. She explained AI will drive innovation through both enhancements to existing products (like ChatIQ) and new solutions (like the Kensho-LLM-ready API), which will contribute to overall business growth.

Peter Christiansen asked for Anthony Noto's perspective on recent sentiment changes in private credit, specifically concerning direct consumer lending, and the demand flows from SoFi's private credit partners.

Answer

Anthony Noto, CEO, stated that the attractiveness of SoFi's prime customer loans to partners is driven by their consistent returns. He emphasized the company's ability to manage prepayments, defaults, interest rates, and funding costs to deliver strong value, ensuring partner demand often exceeds supply. Noto also noted that with SoFi's strong capital position, the company has the flexibility to retain more loan production on its balance sheet, highlighting the disparity between Q4 originations growth (40%) and lending revenue growth (15%).

Peter Christiansen asked for an update on SoFi's investment cycle, covering marketing, branding, new capabilities, client onboarding for the tech platform, and crypto initiatives.

Answer

CEO Anthony Noto stated SoFi aims to invest as much as possible while maintaining at least a 30% Incremental EBITDA margin, accelerating hiring and spending when performance exceeds expectations. Investments focus on enhancing existing products (speed, selection, content, convenience), new offerings like SoFi Plus and the Smart Card, AI initiatives (Cash Coach, SoFi Coach), and novel crypto products, including FDIC-insured SoFi Money integration and a differentiated stablecoin leveraging SoFi's bank license.

Peter Christiansen asked about SoFi's current position in its investment cycle, encompassing marketing, brand building, and capability development, including onboarding new tech platform clients and building out crypto offerings, and how this balances growth with the 30% incremental EBITDA margin target.

Answer

CEO Anthony Noto expressed a desire to invest more, balancing growth with profitability by adhering to at least a 30% incremental EBITDA margin. He detailed investments in existing products (speed, selection, content, convenience), new products like SoFi Plus (including the upcoming SoFi Smart Card), AI initiatives (Cash Coach, SoFi Coach), and crypto offerings (buy, sell, hold crypto with FDIC-insured SoFi Money, and the planned SoFi USD stablecoin leveraging bank advantages).

Peter Christiansen from Citigroup asked about SoFi's discretionary spending plans given its strong margins, and whether the 30% incremental margin target is sustainable as the high-margin LPB grows.

Answer

CEO Anthony Noto affirmed a commitment to reinvesting for long-term growth, aiming to put $0.70 of every incremental revenue dollar back into the business. He stated that while margins could exceed 30%, the priority is funding future growth. Increased spending is directed toward engineering, product, and design for initiatives in SoFi Money, Invest, crypto, and AI, which are expected to drive growth in future years.

Peter Christiansen asked about trends in the alternative credit space and requested an update on the Tech Platform's sales pipeline, particularly regarding decision delays from large clients.

Answer

CEO Anthony Noto confirmed that investor demand for SoFi's loans has increased significantly, a trend SoFi is meeting with its loan platform business. Regarding the Tech Platform, he stated that while no final decisions have been made on the large deals in the pipeline, he remains confident SoFi will secure wins. He noted that the need for clients to modernize is inevitable due to technical, risk, and regulatory pressures, creating a long-term tailwind.

Peter Christiansen with Citi asked about Bullish's motivation for seeking transfer agent capabilities and licensure, the competitive landscape for tokenized real-world assets (RWAs) like single stocks, and the performance of the Automated Market Maker (AMM) during recent heightened volatility.

Answer

CEO Tom Farley explained that the transfer agent license will enable Bullish to more actively engage with asset issuers tokenizing US securities, offering robust listings, liquidity, visibility, and additional services like smart contract writing, positioning them for the tokenization of the US securities market. CFO Dave Bonanno highlighted the AMM's strong performance during the October 10th volatility, noting superior depth preservation and fewer liquidations compared to other venues, which was noticed by customers.

Peter Christiansen asked about Bullish's motivation to seek transfer agent capabilities and licensure, the competitive landscape for tokenized real-world assets (RWAs) like single stocks, and the performance of the AMM during recent heightened volatility.

Answer

CEO Tom Farley explained the strategic rationale behind the transfer agent license to offer more robust services for tokenizing U.S. securities, building on their existing liquidity services for stablecoins and other assets. CFO Dave Bonanno highlighted the AMM's strong performance during the October 10th flash crash, noting preserved depth and fewer liquidations compared to other venues. Tom Farley further emphasized the importance of regulated, collateralized systems for institutional clients.

Peter Christiansen inquired about an analog for the sales cycle and implementation time for institutional accounts in the U.S. market following the BitLicense approval, and also asked about the $10 million trader challenge promotion.

Answer

CEO Tom Farley noted that onboarding institutional clients in the U.S. can take two to six months due to legal negotiations and API connectivity, but Bullish has an advanced pipeline. CFO David Bonanno clarified that the $10 million trader challenge is an investment prize, not a giveaway, designed to expose new customer segments to Bullish's cross-sell potential and data availability.

Peter Christiansen inquired about the typical sales cycle for signing up institutional clients in the U.S. market post-BitLicense approval, including implementation time, and asked for insights into the $10 million trader challenge promotion's impact on marketing and selling expenses.

Answer

Tom Farley, CEO and Chairman, stated that onboarding institutional clients can range from two to six months due to legal and technical integration complexities, but Bullish has an advanced pipeline. David Bonanno, CFO, clarified that the $10 million trader challenge is a seed investment, not a giveaway, designed to expose different customer segments to Bullish's cross-sell potential and data availability.

Peter Christiansen asked about the anticipated sales cycle and implementation timeline for institutional clients in the U.S. following the BitLicense award, and how the $10 million trader challenge promotion should be viewed in terms of future marketing expenses.

Answer

Tom Farley, CEO and Chairman, stated that onboarding U.S. institutional clients could take two to six months due to legal and connectivity requirements, but an advanced pipeline exists. David Bonanno, CFO, clarified that the $10 million trader challenge is an investment, not a giveaway, designed to expose new customer segments to Bullish's cross-sell potential and data availability.

Peter Christiansen asked about the extent to which third quarter's record issuance reflected pull-forward activity and Moody's assumptions for CLO activity in Q4 2025 and 2026.

Answer

Rob Fauber, President and Chief Executive Officer, stated that pull-forward activity in spec grade issuance for 2025 was consistent with the past four years, with very little in investment grade. He also noted healthy maturity walls going forward.

Peter Christiansen inquired about the extent to which third quarter's record issuance reflected pull-forward activity and Moody's assumptions for CLO activity in Q4 and 2026.

Answer

Rob Fauber, President and Chief Executive Officer of Moody's Corporation, stated that pull-forward activity in Q3 2025 was consistent with the last four years, primarily in spec-grade issuance, with very little in investment grade. He also noted healthy maturity walls ahead.

Peter Christiansen from Citigroup asked for a deeper look into the assumption for first-time mandates (FTMs), questioning the source of confidence that the strong momentum would continue throughout the year.

Answer

CEO Robert Fauber confirmed that Q1 FTMs were up 20% year-over-year, driven by Corporate Finance and, increasingly, the Financial Institutions Group (FIG). He explained that a new dynamic is the significant contribution from private credit entities (like BDCs and funds) getting rated for the first time, with about one-third of FIG FTMs coming from this area. While FTMs are linked to leverage finance, this private credit tailwind supports the current guidance.

Peter Christiansen from Citigroup inquired about Moody's Analytics' (MA) ability to implement value-based pricing and also asked about headcount growth expectations for the Moody's Investors Service (MIS) segment.

Answer

Stephen Tulenko, President of MA, affirmed a continued focus on value-based pricing, noting stable contributions from upgrades and price, which were around 7% in 2024. Regarding MIS, CFO Noemie Heuland stated that significant investments in automation are making analysts more efficient, meaning headcount is expected to grow at a slower pace than revenue. CEO Robert Fauber added that GenAI tools are enhancing the value proposition, enabling new conversations with clients about labor efficiency.

Pete Christiansen from Citigroup inquired about Coinbase's customer service strategy, particularly in light of the recent data breach, and how the company's efforts in this area could improve user satisfaction levels.

Answer

President & COO Emilie Choi stated that the company is re-evaluating its BPO strategy, bringing more functions in-house, and increasing its focus on AI and automation while ensuring quality control. CFO Alesia Haas added that they are hardening systems and investing in platform security. CEO Brian Armstrong also mentioned the opening of a new customer support office in Charlotte, NC, and a bounty offered to help catch the threat actors.

Pete Christiansen from Citigroup asked about Coinbase's customer service strategy, particularly in light of the recent data breach, and how the company's efforts in this area could improve user satisfaction.

Answer

President & COO Emilie Choi stated that the company is re-evaluating its BPO strategy, bringing more functions in-house, and investing heavily in AI and automation. CFO Alesia Haas confirmed the company is hardening its systems. CEO Brian Armstrong added that they have opened a new support office in Charlotte, NC, and issued a $25M bounty to aid law enforcement.

Peter Christiansen of Citigroup followed up on a previous question, asking how Coinbase balances its broad service aspirations against the risk of future legislation that might limit certain functions, specifically referencing a report about the company potentially seeking a banking license.

Answer

CEO Brian Armstrong clarified that Coinbase has no current plans to seek a banking license and does not see a need for one based on current draft legislation. He explained that a bank charter is primarily for fractional reserve lending, a model they view as riskier than their fully-reserved approach, and noted that the associated holding company structure could slow down product innovation.

Peter Christiansen of Citigroup Inc. inquired about Coinbase's consumer acquisition strategy and how its value proposition for traders differentiates from all-in-one traditional finance platforms.

Answer

CEO Brian Armstrong highlighted the company's trusted brand, crypto-first focus, and effective marketing with a targeted one-year payback period. President and COO Emilie Choi added that being 'crypto-native' provides a durable competitive advantage, comparing it to how digital-native companies like Amazon succeeded against traditional retailers that merely added an online feature.

Peter Christiansen inquired about Coinbase's market share in altcoins, noting a decline from earlier in the year and asking about any shifts in the company's ability to capture volume in lesser-traded tokens.

Answer

CFO Alesia Haas explained that the shift was primarily due to lower crypto asset volatility in Q3, which impacts trading in the long tail of assets. She added that the approval of Bitcoin ETFs has increased focus and volume on Bitcoin and Ethereum, affecting the overall volume mix.

Pete Christiansen inquired about Pagaya's discussions with potential new banking partners, particularly large card issuers, regarding BNPL capabilities. He also asked about the transformational impact of the recent successful bond offering on the company's capital structure and reputation.

Answer

Co-Founder and CEO Gal Krubiner confirmed that banks, including those with large credit card businesses, are increasingly looking to partner with Pagaya for growth initiatives like BNPL, driven by a stabilizing environment. CFO Evangelos Perros added that the bond offering is a transformational step, reducing risk, lowering debt costs, improving cash flow, and opening access to deeper institutional capital markets.

Pete Christiansen inquired about Pagaya's discussions with potential new bank partners, particularly large card issuers, regarding Buy Now, Pay Later (BNPL) capabilities. He also asked about the transformational impact of the recent successful bond offering.

Answer

Co-Founder and CEO Gal Krubiner confirmed strong interest from banks in growth collaborations like BNPL, noting a stabilizing regulatory environment and several signed term sheets. CFO Evangelos Perros described the bond offering as a pivotal, risk-reducing event that lowers debt costs, improves cash flow, simplifies the capital structure, and opens access to deeper institutional capital pools.

Peter Christiansen inquired about the expected scaling of the Prescreen product over the next 12-18 months and asked if the previously contemplated scenario for fair value marks remains a valid assumption.

Answer

President Sanjiv Das described Prescreen as a key initiative that helps lending partners grow by proactively offering credit to their existing customers, noting that proofs of concept have been very encouraging with a rollout planned for H2. CFO Evangelos Perros advised that the earnings supplement should be the guide for potential future losses and that the Q1 credit-related losses are considered normalized levels for the business.

Peter Christiansen from Citi asked for clarification on comments about redemption rights and inquired about the expected evolution of the network volume mix in 2025, particularly the impact of point-of-sale growth on risk retention.

Answer

CFO Evangelos Perros clarified that his remark was about exercising existing early redemption rights in the fair value calculation, not about overcoming any issues. He stated that the high end of the volume guidance assumes faster ramp-up from newer partners, with auto and POS being the highest growth areas. President Sanjiv Das reinforced the strong growth in POS, noting a robust pipeline and conservative forecasts for the new Elavon partnership.

Peter Christiansen of Citi followed up on the bulk account purchase, asking about the potential to upgrade these customers to new systems. He also inquired about the initial customer feedback and adoption of the new 'Trusted Neighbor' offering.

Answer

CEO Jim DeVries described a well-established playbook for converting bulk accounts, focusing on high-density geographies and quality equipment. CFO Jeff Likosar added that while future upgrades are an opportunity, they are not factored into the initial deal underwriting. On 'Trusted Neighbor,' DeVries reported positive feedback, noting it accounts for over 10% of 'do it for me' installs and drives average installation revenue above $2,500.

Peter Christiansen of Citigroup asked for a comparison of macroeconomic impacts on the small business (SMB) channel versus the residential side and inquired about the expected revenue mix between monitoring and installation for the full year.

Answer

CEO Jim DeVries stated that the small business segment is 'holding its own,' with attrition remaining generally flat, and is viewed as a growth opportunity. CFO Jeff Likosar reiterated full-year guidance, expecting monitoring and services revenue to grow around 2%, which implies significantly higher growth for installation revenue. This mix shift is driven by the transition to outright equipment sales with the ADT+ platform, which recognizes revenue upfront.

Peter Christiansen from Citigroup asked about the outlook for subscriber acquisition spending (SAC) on a normalized basis and whether it's expected to decline. He also questioned if ADT should be more aggressive in upgrading existing customers to the new ADT+ platform.

Answer

CFO Jeff Likosar confirmed that the company's cash flow guidance relies on continued SAC efficiency, driven by the ADT+ rollout and other cost reduction efforts. CEO Jim DeVries responded that it is 'absolutely' advantageous to upgrade existing customers to the new platform to standardize operations and that the company is 'cautiously optimistic' about developing cost-effective solutions to do so.

Peter Christiansen of Citigroup asked about client behavior, specifically if there's evidence of trading down in accommodations, the contrast between rising SME new wins and lower SME transaction volumes, and the upcoming milestones for the CWT merger.

Answer

CEO Paul Abbott stated there is no significant client trade-down, with premium and international travel holding up well. He explained that while SME organic growth is slower due to macro pressures, new client wins are driving sequential improvement in the segment. Chief Legal Officer Eric Bock outlined the CWT merger timeline, noting fact discovery completion in June, a trial in September, and an expected close by year-end 2025.

Peter Christiansen from Citi inquired about the CWT legal challenge dynamics under a new administration and the facts used in the complaint. He also sought clarification on the 2025 free cash flow guidance, asking if the M&A provision was for legal costs, and looked for signs of 'green shoots' in the SME segment.

Answer

Chief Legal Officer Eric Bock confirmed the DOJ and CMA arguments were similar and that dialogue with the new administration continues. CFO Karen Williams affirmed the free cash flow guidance includes a one-time provision for M&A-related legal costs. CEO Paul Abbott added that while there was a slight SME uptick late in the year, he would not yet call it 'green shoots' but remains optimistic for gradual improvement in 2025.

Peter Christiansen of Citigroup inquired about the primary drivers for future free cash flow expansion and whether the recent slowdown in SME activity was broad-based or concentrated in specific verticals.

Answer

CFO Karen Williams explained that future free cash flow growth will be driven by continued margin expansion from cost controls, increased productivity from CapEx spending, and further reductions in interest expense. CEO Paul Abbott added that SME growth showed signs of stabilization and is expected to improve as macroeconomic conditions, particularly interest rates, become more favorable, noting this trend aligns with broader small business spending data.

Peter Christiansen requested an update on the 401(k) business, including growth and attachment rates, and its potential as a revenue synergy with the Paycor acquisition.

Answer

CEO John Gibson described the 401(k) business as a strong, double-digit grower, though asset values presented a minor headwind in the quarter. He noted that regulatory tailwinds from the SECURE Act are helpful but convincing clients and employees to participate remains a focus. Gibson confirmed that Paychex sees a significant opportunity to offer its 401(k) program to Paycor's client base post-acquisition.

Peter Christiansen inquired about the outlook for seasonal hiring trends and whether the new Recruiting Copilot tool could deepen relationships with staffing agency clients.

Answer

Executive Robert Schrader noted that hiring within the client base was positive and slightly above expectations for the second consecutive quarter. CEO John Gibson added that Paychex is aggressively working to help clients fill vacancies through new tools and consulting. Gibson clarified that the Recruiting Copilot is designed for all small and mid-sized businesses, not just staffing agencies, and serves as a new channel to acquire non-Paychex customers.

Peter Christiansen asked how the new strategy of focusing on user engagement over traffic volume impacts competitive market share and the company's value proposition to financial partners.

Answer

CEO Tim Chen responded that partners are highly analytical and value the high lifetime value (LTV) of customers from NerdWallet, who are well-informed and convert at a high rate. He emphasized that partners make decisions based on LTV-to-CAC calculations, where NerdWallet is a preferred channel, rather than viewing market share as a zero-sum game for traffic.

Peter Christiansen asked for details on the strength in non-auto insurance, the impact of insurance growth on registered users, and current trends in the banking vertical.

Answer

CEO Tim Chen clarified that the recent insurance surge was almost entirely driven by the auto segment, its largest market. He confirmed that the personalized nature of the insurance shopping experience is a significant driver of new user registrations. Regarding banking, Chen noted that while credit card underwriting remains tight, issuer appetite is improving. He explained that deposit account revenue is down year-over-year against tough comps from the 2023 rate-hike cycle but should establish a higher new baseline than pre-hike levels.

Peter Christiansen asked about the revenue synergy potential between Clarivate's three business lines and whether new products are aimed at value-added pricing or total addressable market (TAM) expansion.

Answer

CEO Matti Shem Tov explained that new products target both TAM expansion and increased wallet share. He provided examples, such as Web of Science Research Intelligence as a new offering for existing customers and a new IP product (IPCH) aimed at the corporate and law firm market. He expressed confidence that the VCP will free up resources to focus on these growth initiatives.

Peter Christiansen asked for an assessment of the potential for revenue synergies between the three business segments, which was a key part of the original investment thesis.

Answer

CEO Matti Shem Tov acknowledged the company's history with the 'One Clarivate' strategy and its subsequent reversal. He stated his belief that potential for revenue synergies exists but that he needs more time to conduct a thorough analysis before providing a specific answer, confirming it is an area of focus.

Peter Christiansen asked about the Fiserv partnership's potential to expand into adjacent markets like B2B payments and treasury management, and whether this represents a significant long-term total addressable market (TAM) expansion opportunity for ADP.

Answer

CEO Maria Black acknowledged that such adjacencies are part of their strategic considerations and that the Fiserv partnership will be a valuable learning experience. She emphasized that solving client needs is the primary driver for exploring these opportunities through partnerships or deeper integrations, and hinted that more details on future strategy would be shared at the upcoming Investor Day.

Peter Christiansen asked whether the WorkForce Software opportunity is more about adding new logos or scaling solutions to ADP's base, and inquired about plans for the debt from the transaction.

Answer

CEO Maria Black responded that the opportunity is 'both,' emphasizing the large total addressable market for workforce management and the growth potential from combining WorkForce Software's product with ADP's scale and distribution. CFO Don McGuire pointed to the recent $1 billion note issuance at 4.75% as the primary funding source for the $1.2 billion transaction.