Ryan Sigdahl

Ryan Sigdahl inquired about Codere Online's marketing, CPA optimization, and go-to-market strategy in Spain following market changes, and the company's expectations regarding the VAT in Colombia, including its sustainability as a market if the tax continues.

Answer

Aviv Sher, CEO, noted positive trends and encouraging KPIs in Spain, expecting continued growth, and mentioned that past restrictions have sometimes benefited Codere Online due to its strong brand. Oscar Iglesias, CFO, added that the company is more constructive on the Spanish business now. Regarding Colombia, Oscar Iglesias stated that the extraordinary VAT measure theoretically falls away year-end but the company operates under the assumption it will continue, making it a tough market. Moshe Edree, Executive Vice Chairman, confirmed that Colombia is not included in their three-to-five-year plan for further investment unless the tax changes.

Ryan Sigdahl asked about Codere Online's optimized marketing and customer acquisition strategy in Spain, particularly after the reintroduction of welcome bonuses, and the resulting impact on key performance indicators. He also inquired about the future of the VAT on deposits in Colombia, whether it is expected to be removed or extended, and if the market remains sustainable for Codere Online under current tax conditions.

Answer

Aviv Sher, CEO, confirmed that Spain's KPIs are showing encouraging growth, returning to previous levels, and that past regulatory changes have sometimes benefited Codere Online due to its strong brand. Oscar Iglesias, CFO, added that the company is more positive on Spain's business outlook now, having refined its operating model. Regarding Colombia, Oscar Iglesias stated that the VAT is theoretically set to expire year-end but they anticipate its continuation, which negatively impacts unit economics and their investment appetite. Moshe Edree, Executive Vice Chairman, confirmed that Colombia is not part of their long-term strategic plan, and they will not invest further unless the tax situation changes.

Ryan Sigdahl focused on Colombia, asking about the specific impact of the VAT on user numbers and GGR, the long-term viability of the market if the tax persists, and why the company isn't more aggressively repurchasing shares given its growing cash balance.

Answer

CFO Oscar Iglesias stated that Codere Online prioritized mitigating the EBITDA impact in Colombia, which resulted in a significant top-line decline of roughly 40% versus expectations. He noted the market's long-term viability is something the company would need to analyze if the tax becomes permanent. Regarding share repurchases, Iglesias acknowledged it is a valid question and a recurring topic of discussion at the board level, which ultimately makes all capital allocation decisions.

Ryan Sigdahl asked about the company's view on the Italian market, given its parent company's recent acquisition there, and whether management expects the Spain segment to return to revenue growth this year.

Answer

Executive Vice Chairman Moshe Edree clarified that the parent company's Italy acquisition is a group-level strategy and Codere Online remains focused on its core market in Mexico. Regarding Spain, CFO Oscar Iglesias confirmed their objective is to resume year-over-year growth, and CEO Aviv Sher added that recent KPIs are positive and support this outlook.

Ryan Sigdahl asked if the recent launch of the Brazilian market has caused competitors to shift resources away from Mexico, thereby benefiting Codere Online, and requested a breakdown of the planned 2025 marketing spend between Spain and Mexico.

Answer

CEO Aviv Sher suggested that some European competitors found Mexico more challenging than anticipated and may have temporarily reduced focus, creating a short-term opportunity for Codere Online. CFO Oscar Iglesias clarified that the total marketing spend for 2025 is expected to be similar to 2024 levels and, while not providing a specific breakdown, confirmed that Mexico continues to account for over half of the investment.

Ryan Sigdahl inquired about the EBITDA impact of the Mexican peso's devaluation, the current regulatory and competitive landscape in Mexico, and customer behavior regarding cross-selling from sports betting to iCasino following major summer sporting events.

Answer

CFO Oscar Iglesias explained that the impact on EBITDA is naturally hedged as the cost structure in Mexico is overwhelmingly peso-denominated. CEO Aviv Sher added that the regulatory environment remains stable with no surprises from the new government, and while competition increased around the Copa America, the market has since stabilized. Sher also noted the company is successfully cross-promoting between sports and casino, with a surprising trend of casino players moving to sports betting.

Ryan Sigdahl asked about the impact of Serie A and European leagues rights on Q3 financials, specifically quantifying the delayed revenue recognition and any learnings from commercial negotiations. He also inquired about the media segment's margin flow-through, differentiating between programmatic and FanHub businesses, and the mix impact on Q4 guidance.

Answer

Mark Locke (CEO) highlighted the positive evolution of the rights market, enabling technology deployment and leveraging existing investments. Bryan Castellani (CFO) noted a temporary timing mismatch between expense recognition for new rights and revenue finalization, which will resolve in Q4. For media, Bryan Castellani explained that the strong growth, while positive, flows through at a lower margin than the betting business, and Q3's margin was impacted by this mix and rights timing, but full-year expectations remain on track for strong EBITDA growth.

Ryan Sigdahl asked about the impact of Serie A and European leagues on Q3 results, including quantification and commercial negotiation learnings, and also inquired about the media segment's performance, EBITDA flow-through, and the mix of programmatic versus FanHub strength.

Answer

Mark Locke (CEO) explained the positive evolution of the rights market, enabling technology deployment and leveraging investments. Bryan Castellani (CFO) noted a temporary revenue timing mismatch for Serie A and EPFL rights, with monetization expected in Q4, but declined to quantify the impact. For media, Bryan Castellani (CFO) attributed lower margin flow-through to the rights timing impact and media's inherently lower margin compared to betting, while Mark Locke (CEO) highlighted agencies and strong returns as drivers of outsized growth.

Ryan Sigdahl from Craig-Hallum Capital Group LLC questioned how much of the raised guidance is attributable to the new Serie A and European Leagues awards. He also asked about the opportunity to expand ad inventory for the NFL, given that it's already sold out for the upcoming season.

Answer

Nicholas Taylor (CFO) confirmed that all three recent major announcements are factored into the new guidance and are immediately accretive to EBITDA. Mark Locke (Co-Founder, CEO & Director) addressed the ad inventory question, explaining that growth levers include adding more sports to the BetVision platform and working closely with partners to create additional monetization opportunities within the existing product.

Ryan Sigdahl inquired about the reasons for the Q1 media revenue decline, asking if it was expected or due to softer ad spend, and questioned the strategy for monetizing BetVision for soccer with leagues that are not existing data customers.

Answer

CFO Nicholas Taylor clarified the media revenue was broadly in line with expectations, primarily due to a difficult comparison against Q1 2024's 63% growth, and reiterated guidance for a return to growth for the full year. CEO Mark Locke added that the BetVision soccer expansion is a significant milestone, adding 18,000 games and driving high-margin in-play betting and user engagement.

Ryan Sigdahl asked about the drivers of the strong dollar-based net retention, questioning the mix between price increases and product upsells, and also requested early feedback on the FanHub platform.

Answer

CFO Nicholas Taylor attributed the strong net retention to a combination of factors including new products like BetVision, additional events, and higher pricing from recent contract renewals. CEO Mark Locke described FanHub as a strategic, long-term investment in a self-serve platform that is being well-received, though the company remains cautious in its 2025 forecast for the new product.

Ryan Sigdahl asked about the customer pipeline for the new FanHub product beyond sportsbooks and whether the company's current cost structure is sufficient to support its numerous growth initiatives into 2025.

Answer

CEO Mark Locke described FanHub as the 'trade desk for sports,' designed to attract any brand, such as Coca-Cola or Gatorade, wanting to target sports fans by leveraging Genius's unique data. CFO Nicholas Taylor affirmed the company's cost structure is well-positioned, highlighting the business's operating leverage, where incremental revenue flows through at a high margin (around 44% in Q3), supporting growth without significant new investment.

Ryan Sigdahl inquired about the updated outlook for Total Care Auto (TCA), specifically the significant reduction in projected EPS accretion by 2029, and the factors contributing to this change beyond the revised Seasonal Adjusted Rate (SAR) assumption. He also asked about SG&A leverage for Q4 and 2026.

Answer

Michael Welch (SVP and CFO) explained that the revised TCA outlook is primarily due to a lower projected SAR, delaying the $5 EPS target to around 2031. Other factors include the deferral headwind from the Herb Chambers acquisition, divested stores, and delayed Koons store rollout. He noted that SG&A levels should be maintained in Q4 and 2026, with future productivity gains expected post-Techyon rollout.

Ryan Sigdahl asked for clarification on the updated Total Care Auto (TCA) outlook, specifically the significant reduction in projected EPS accretion by 2029, linking it to changes in the Seasonally Adjusted Annual Rate (SAR) assumption and other factors. He also questioned the SG&A to gross profit leverage for Q4 and 2026.

Answer

Michael Welch, SVP and CFO, explained that the revised TCA outlook is primarily due to a lower SAR projection (high 15M to low 16M vs. 17M), delayed Koons store rollout, and the net effect of Chambers acquisition and store divestitures. He noted that the $5 EPS target is now delayed to around 2031, requiring higher SAR or additional acquisitions. For SG&A, he expects current levels to be maintained in Q4 and 2026, with potential for further reductions post-Tekion rollout.

Ryan Sigdahl from Craig-Hallum Capital Group LLC asked about Asbury's used vehicle strategy of prioritizing profitability over volume. He also posed a multi-part question on the Techeon DMS implementation, asking about any surprises, the costs incurred in the quarter, and the conversion timeline for the remaining stores.

Answer

COO Daniel Clara reiterated the strategy to maximize used vehicle gross profit due to constrained supply, with CEO David Hult adding that supply should begin improving in 2026. Regarding Techeon, David Hult described the complex conversion process and long-term efficiency goals, targeting full implementation by 2027. SVP & CFO Michael Welch quantified the quarterly cost at approximately $2 million, split between implementation and audit-related expenses.

Ryan Sigdahl of Craig-Hallum Capital Group questioned the 2025 new vehicle GPU guidance of $2,500-$3,000, noting it implies a significant deceleration from current levels. He also requested more detail on the ongoing headwinds from Stellantis and what improvements are needed.

Answer

SVP & CFO Michael Welch and President and CEO David Hult clarified that the $2,500-$3,000 GPU range represents a future 'new normal' run-rate, not the average for 2025, which they expect will be higher. Regarding Stellantis, Hult and SVP of Operations Dan Clara explained that while day supply improved, it was achieved via heavy incentives on less desirable inventory. They are now seeing improvements as they can order better-equipped models, which should help GPUs recover over time.

Ryan Sigdahl requested a breakdown of EV sales as a percentage of total sales and asked about the gross profit per unit (GPU) difference between EVs and ICE vehicles. He also inquired about any positive business impacts from the recent hurricanes.

Answer

SVP of Operations Dan Clara later provided that EV sales constitute 6-7% of total sales. He detailed that EV GPUs are holding up for luxury brands but are seeing steeper declines for domestic brands. President & CEO David Hult and SVP & CFO Michael Welch confirmed they expect a tailwind from replacement vehicle demand in Q4 due to Hurricane Milton, but any business interruption insurance recovery is not expected until mid-2025 or later.

Ryan Sigdahl questioned Gentherm's near-term production environment, asking about the impact of specific supply chain issues (JLR, Novelis fire, Nexperia) and why these were not included in guidance, and also inquired about the India market opportunity and other potential global adjacent markets.

Answer

President and CEO Bill Presley confirmed the JLR issue was largely resolved, noted potential Stellantis impact from the Novelis fire but no meaningful schedule shifts, and stated Gentherm had mitigated direct Nexperia impacts. CFO Jon Douyard clarified that guidance reflects current customer ADI schedules due to lack of broader visibility. Bill Presley explained India is an attractive new market due to scale and potential for alternative segments like two-wheelers, opening new revenue streams.

Ryan Sigdahl inquired about the impact of recent supply chain disruptions (JLR, Novelis, Nexperia) on Gentherm's near-term production environment and why these were not fully included in the guidance. He also asked about the strategic importance and potential of the India market.

Answer

Bill Presley, President and CEO, stated the JLR cyber issue was largely behind them, while the Novelis fire's impact was being mitigated with no meaningful schedule shifts yet. He noted Gentherm had mitigated direct Nexperia impacts but acknowledged potential broader industry effects. Jon Douyard, CFO, clarified that guidance reflects current customer ADI schedules, avoiding speculation beyond confirmed shifts. Bill Presley highlighted India's attractiveness due to its scale, lack of prior presence, and opportunities in two-wheelers and valve technology.

Ryan Sigdahl of Craig-Hallum Capital Group LLC inquired about the drivers behind Gentherm's Q3 guidance, which anticipates outperformance despite industry declines. He also asked for a comparison of content on the new Ford F-Series award versus the current generation and sought details on recent awards in the powersports adjacency.

Answer

CFO Jonathan Douyard attributed the Q3 outlook to company-specific factors, including new program launches and stable customer production schedules. President & CEO Bill Presley clarified that the Ford F-Series award is a continuation of similar content, highlighting the strategic win of being sourced directly by the OEM before a seat supplier was chosen. Presley also confirmed the powersports awards were for valve technology on UTV platforms with a single OEM.

Ryan Sigdahl inquired about the 2025 guidance, asking for the amount of tariff pass-through revenue included and how much of the lower EBITDA margin is due to pass-throughs versus core performance. He also questioned how Gentherm's current strategy to expand into adjacent markets like medical differs from less successful attempts in the past.

Answer

CFO Jonathan Douyard clarified that the current tariff impact on guidance is limited, with the primary uncertainty stemming from future industry volumes. President and CEO William Presley explained that the current expansion strategy is fundamentally different, as it focuses on scaling existing core technology platforms into new markets, rather than developing new products. He cited using identical automotive heating components for new medical applications as a key example of leveraging existing capital and processes for growth.

Ryan Sigdahl asked how Gentherm is balancing its strategy between established European OEMs and rising Chinese domestic manufacturers, and whether the strong new business awards of recent years imply an acceleration in market outperformance.

Answer

Phillip Eyler, President and CEO, emphasized the company's strong partnerships and outperformance with European OEMs like BMW and VW, driven by new technology rollouts. He described the strategy with Chinese OEMs as a disciplined approach of working with select partners. Regarding future growth, Eyler expressed confidence that the strong awards position the company for solid, long-term outperformance, pointing to the nearly 800 basis points of outperformance in Q3 and similar expectations for Q4 as evidence of this trend.

Ryan Sigdahl asked about the performance of Electric Vehicles (EVs) in the quarter, specifically regarding the impact of tax credit expiration on sales and Gross Profit Per Unit (GPU), and the future outlook for the EV category. He also inquired about the UK operations, focusing on SG&A, margin and labor challenges, and the effectiveness of company-specific initiatives versus broader market conditions.

Answer

Bryan DeBoer, President and CEO, explained that electrified vehicles returned to 43% of the new car mix, with 4,000 first-generation BEVs pushed out in September, largely through leases, impacting affordability. He noted manufacturers are replacing the USD 7,500 credit with their own incentives. Regarding the UK, DeBoer detailed that labor market impacts (minimum wage, payroll tax) cost USD 20 million, with USD 11 million curbed through headcount reductions and productivity. He highlighted growth in Chinese brands (BYD, MG) and their shift towards ICE and plug-in vehicles, indicating the UK team is responding well to market conditions despite external pressures.

Ryan Ronald Sigdahl asked about the performance of Electric Vehicles (EVs) following the tax credit expiration, including sales and Gross Profit Per Unit (GPU) trends, and the future outlook for the EV category. He also inquired about the UK operations, specifically regarding SG&A, margin challenges, labor costs, and the impact of Chinese brands.

Answer

Bryan DeBoer, President and CEO, explained that electrified vehicles comprised 43% of the new car mix, with 4,000 qualifying EVs cleared in September. He noted that manufacturers are incentivizing to offset the expired tax credit, leading to the highest lease penetration ever. DeBoer also detailed the UK's labor market impact of $20 million, with $11 million already curbed through productivity. He highlighted growth in Chinese brands, with seven stores currently and five more opening, primarily driven by ICE vehicles rather than electrified ones, and noted that the UK's profitability was only down 2.4% year-over-year.

Ryan Sigdahl of Craig-Hallum Capital Group LLC inquired about the SG&A to gross profit ratio, seeking clarity on the financial impact of operational efficiencies in H2 2025 and 2026. He also asked about the performance and outlook for Lithia's UK operations amid industry challenges.

Answer

SVP & CFO Tina Miller addressed SG&A, emphasizing that volume growth is key and the company is focused on productivity and cost controls, leading to a slightly increased outlook for the year. President & CEO Bryan DeBoer commented on the UK, stating it performed as expected with a 3% year-over-year profitability increase, noting the network is now cleaned up and positioned for future growth.

Ryan Sigdahl inquired about the current automotive tariff environment, including monthly trends for demand and GPUs, and how Lithia's inventory levels position the company. He also asked about the potential impact on earnings power if the SAAR were to decline to 14-15 million.

Answer

President and CEO Bryan DeBoer explained that Lithia is well-positioned, with 45% of its inventory unaffected by current tariffs, and noted that inventory days supply dropped significantly in Q1. He highlighted that the company's business model, which is built around affordability and includes a 39% year-over-year increase in value auto sales, provides resilience against SAAR fluctuations. DeBoer also mentioned that diversification from Driveway, GreenCars, and a profitable DFC helps reduce earnings volatility.

Ryan Sigdahl inquired about the current market environment, including SAAR trends and the potential impact of tariffs, and questioned if the 2025 new vehicle GPU outlook was conservative compared to peers.

Answer

President and CEO Bryan DeBoer expressed optimism about volume tailwinds, seeing a path to a 17 million SAAR. He noted that while tariffs could impact 36-38% of their vehicles, a high inventory level provides a buffer. DeBoer confirmed the new vehicle GPU outlook is intentionally conservative to enforce cost discipline, stating the $2,500-$2,700 range is for the year, while the long-term normalized level is closer to $2,300-$2,500.

Ryan Sigdahl inquired about Lithia's strategy to improve its used vehicle inventory position and sought details on the loan loss provision trends at Driveway Finance Corporation (DFC).

Answer

COO Adam Chamberlain explained that sourcing core used models remains a challenge due to lower industry-wide trade-ins, but noted growth in the value auto segment. CEO Bryan DeBoer added that vehicle acquisitions from customers are up. Regarding DFC, SVP of Driveway Finance Charles Lietz stated that while the market shows some stress, DFC's prime-focused portfolio is well-provisioned and profitability is not expected to be impacted.

Ryan Sigdahl questioned whether the accelerating NICS sell performance and the company's increased focus on non-lethal products like Tasers and Byrna are related, or if separate factors such as assortment and store layout are driving growth in both areas. He also requested an update on the company's strategy for optimizing its existing store portfolio and plans for adding new stores, particularly concerning underperforming locations.

Answer

CEO Paul Stone clarified that non-lethal products primarily attract a new customer segment, with strong upside potential from expanded inventory and new partnerships like Taser. He stated that real estate focus remains on debt reduction before growth, emphasizing sweating existing assets and monitoring non-productive stores for potential lease exits based on cash flow.

Ryan Sigdahl inquired if the accelerating NICS sell performance and the company's focus on non-lethal products like Tasers and Byrna are related, or if they attract different customer segments. He also asked for an update on the store portfolio, including plans for adding new stores, optimizing existing ones, and the status of underperforming locations.

Answer

Paul Stone, President, CEO & Director, believes non-lethal products attract a 'new new customer' and noted the effectiveness of online-to-store traffic generation for these items. He sees significant upside with new partners and in both non-lethal and lethal personal protection. Regarding stores, he emphasized prioritizing debt reduction before growth, focusing on improving performance within the current asset base, and continuously monitoring non-productive stores for potential lease exits.

Asked about the monthly breakdown of Q1 comp trends, the continuation of these trends into May, the drivers behind the sales growth (traffic vs. basket size), and the potential for expanding the "shop-within-a-shop" concept.

Answer

The company confirmed positive comp trends continued into May after a strong April, driven by a mix of improved traffic, transactions, and basket size, supported by e-commerce. They see significant opportunity to expand the "shop-within-a-shop" concept, particularly in the personal protection category.

Questioned what impact from tariffs is included in the guidance, whether there's a possibility of closing underperforming stores to optimize the footprint, and if the positive free cash flow outlook assumes stable inventory or a working capital benefit.

Answer

The guidance includes expected costs from direct imports (less than 2% of COGS), but downstream vendor impacts are a larger unknown that is being monitored. While there are some underperforming stores, the cost to exit their leases is currently prohibitive, so they are being managed for now. The company is confident in generating positive free cash flow even with stable year-over-year inventory, but reiterated that further working capital opportunities exist.

Focused on the hunting category's performance, seeking to understand why it didn't show growth, reconcile firearm sales with NICS data, and inquire about the impact of a recent ad campaign.

Answer

The hunting category's performance was impacted by lapping a major ammo sales event from the prior year, but firearm unit sales outperformed NICS as consumers traded down in price. The company was pleased with recent promotional ad performance and noted the election was a non-event for sales.

Ryan Sigdahl asked about the performance of the hunting category, questioning why it didn't show growth despite being a strategic focus. He also asked for a reconciliation of firearms sales performance against NICS data and inquired about the impact of a recent Second Amendment ad campaign.

Answer

CFO Jeff White explained the hunting category faced a difficult comparison due to lapping last year's conflict-driven ammunition surge, but noted that firearms unit sales actually outperformed NICS, indicating a consumer trade-down in price. CEO Paul Stone added that they were pleased with the results of the Second Amendment and Veterans Day promotions but saw no sales spike related to the election. Jeff White also mentioned that vendor deals from firearm manufacturers are improving.

Ryan Sigdahl of Craig-Hallum Capital Group inquired about the sudden emergence of inventory shrink as a headwind, asking whether it was due to an accounting methodology change or an actual increase in theft. He also questioned the strategy behind significant end-of-season discounting in the fishing category.

Answer

CFO Jeffrey White clarified that the shrink impact was primarily from an 'accounting/operational change' to improve inventory accuracy with more frequent cycle counts on high-velocity items, rather than a rise in theft. CEO Paul Stone explained that the discounting was a strategic decision to ensure seasonal and non-go-forward merchandise was cleared out before the next quarter, freeing up capital.

Ryan Sigdahl inquired about the monthly breakdown of comparable sales trends during Q1 and into May, the primary drivers of in-store performance such as foot traffic versus basket size, and the potential for expanding the 'shop-in-shop' retail concept.

Answer

CFO Jeff White confirmed that comp trends were positive through Q1, with a strong April, and that the positive trend continued into May. He attributed the growth to a combination of improved traffic, transaction growth, and higher basket sizes. CEO Paul Stone added that e-commerce growth was a key factor driving customers to stores and highlighted a significant opportunity to expand the personal protection category with various partners.

Ryan Sigdahl of Craig-Hallum Capital Group LLC asked for clarification on the revised EBITDA guidance, specifically the impact of the recent Google algorithm update, and requested historical financial performance details for the newly acquired Spotlight Vegas.

Answer

Co-Founder and CEO Charles Gillespie explained the guidance change was driven by a downward revision to search revenue due to the algorithm update, offset by growth in sports data and other non-SEO channels, impacting the channel mix rather than core margins. CFO Elias Mark added that Spotlight Vegas was profitable on over $30 million in 2024 platform turnover and is expected to be breakeven in 2025 before contributing meaningfully in 2026.

Ryan Sigdahl inquired about Gambling.com Group's strategy to maintain content visibility amidst the rise of AI search tools like ChatGPT and whether this trend is viewed as a risk or an opportunity. He also asked for an update on the cross-selling progress of the OpticOdds B2B data service to the company's global client base.

Answer

CEO Charles Gillespie stated that while traditional search remains strong, referrals from generative AI are growing rapidly and represent high-intent, incremental traffic. He views this as a potential boon, reducing reliance on Google and creating a cleaner consumer relationship. Regarding OpticOdds, Gillespie confirmed it is one of the fastest-growing parts of the business, with a recent productive European sales trip and a new senior salesperson hired in London to accelerate growth.

Ryan Sigdahl asked why Gambling.com Group continues to post exceptional results while peers seem to be struggling, and inquired about feedback from customers on the new OpticOdds B2B product, particularly regarding U.S. versus international traction.

Answer

CFO Elias Mark explained that the company's outperformance stems from its focus on traffic supply, accurately forecasting a challenging North American sports betting year, and making the highly accretive Freebets.com acquisition. He noted the company deliberately avoided the pre-regulation Brazilian market, which has become a headwind for others. Regarding OpticOdds, he stated that while the product originated with U.S. operators, the company is now leveraging its extensive international relationships to expand into Europe and beyond, addressing a critical risk management need for sportsbooks.

Ryan Sigdahl inquired about the drivers of strong iGaming growth in the U.K. and Europe, asking for a breakdown between organic performance and the Freebets acquisition. He also asked about the integration of Freebets and the company's competitive differentiation from peers facing market challenges.

Answer

CEO Charles Gillespie explained that about half of the 40%+ growth in the U.K. and Ireland was organic. He described the Freebets acquisition as 'fantastic,' noting it was fully integrated in six months, leading to substantially increased KPIs. Gillespie differentiated the company by highlighting its organic growth strategy, core technology, and fewer, more integrated acquisitions compared to competitors who pursued 'roll out' strategies, emphasizing there are no sector-wide headwinds.

Ryan Sigdahl of Craig-Hallum noted that the guided EBITDA loss for a new state launch in Missouri is double that of a peer and asked if Flutter's state launch playbook has changed.

Answer

CFO Rob Coldrake stated that Flutter's approach to new state launches has not changed and remains consistent. He reiterated the formula set out at their Investor Day, which projects a contribution loss of approximately $35 million per 1% of the U.S. population, and expressed confidence in their own economic calculations.

Ryan Sigdahl asked for Flutter's perspective on media tie-ins and the potential impact of a competitor's acquisition of the World Series of Poker IP on Flutter's poker strategy.

Answer

CEO Peter Jackson emphasized that strong media partnerships have been historically important for customer acquisition, especially when backed by a superior product. Regarding poker, he acknowledged the competitive move but highlighted the significant opportunity for PokerStars in the U.S. through shared liquidity. CFO Rob Coldrake added that the PokerStars transformation is progressing well, with positive results from pricing and loyalty changes.

Ryan Sigdahl asked about Flutter's perspective on media tie-ins and potential M&A, and how a competitor's acquisition of the World Series of Poker IP might affect Flutter's poker strategy.

Answer

CEO Peter Jackson stated that media tie-ins are beneficial for customer acquisition when backed by a quality product. Regarding poker, he expressed confidence in PokerStars' U.S. opportunity and its strong position in regulated markets globally. CFO Rob Coldrake added that the PokerStars business transformation is progressing well, with positive impacts from pricing and loyalty initiatives.

Ryan Sigdahl requested a breakdown of the financial impact in the last two weeks of March beyond the stated hold impact, questioned the timing of disclosures, and asked what drove the change in the FOX Bet option's mark-to-market value.

Answer

CEO Peter Jackson explained the FOX Bet option's value increased because the value of FanDuel itself has grown. CFO Paul Edgecliffe-Johnson added that the financial impact in late March included both sports losses and significant investment in the North Carolina launch. He stated the reporting cutoff date was based on when reliable data was available.

Ryan Sigdahl from Craig-Hallum Capital Group requested a detailed breakdown of the financial performance in the last two weeks of March, questioned the disclosure timing around the March Madness results, and asked what drove the change in the FOX Bet option's mark-to-market valuation.

Answer

CEO Peter Jackson explained the FOX option's value increased because the value of FanDuel itself has grown. CFO Paul Edgecliffe-Johnson attributed the late-March performance to both unfavorable sports results and significant investment in the North Carolina launch, and stated that disclosures were made with the most current reliable data available at the time.

Ryan Sigdahl of Craig-Hallum asked about the new wager tax in Illinois, which DraftKings is passing on to consumers. He inquired about the company's assumptions regarding the impact on market share and the total addressable market (TAM) in the state.

Answer

Co-Founder & CEO Jason Robins described the situation as 'unprecedented' and admitted the impact is hard to predict. He explained that passing the tax through was deemed a better alternative to imposing minimum bet sizes but acknowledged there is no perfect solution. He hopes Illinois will revise the tax structure and confirmed the potential impact is factored into guidance.

Ryan Sigdahl of Craig-Hallum Capital Group LLC asked about the new Illinois wager tax, inquiring about the company's assumptions for how passing the tax on to consumers will impact market share and the total addressable market (TAM) in the state.

Answer

Co-Founder & CEO Jason Robins described the situation as 'unprecedented' and admitted he doesn't know the full impact yet. He explained that the per-wager tax structure left no good options, and DraftKings chose a pass-through to allow customers to continue making low-dollar bets, unlike some competitors who opted for minimum bet sizes. He hopes Illinois will fix the tax structure and confirmed the potential negative impact is baked into guidance.

Ryan Sigdahl of Craig-Hallum Capital Group asked to clarify if the $55 million in promotion optimization was a result of favorable sports outcomes or a structural change in strategy.

Answer

CEO Jason Robins stated definitively that the optimization had 'nothing to do with sport outcomes.' He attributed it to two structural factors: mitigation of the Illinois tax increase and progress in identifying and optimizing promotions for lower LTV customers. He noted this change should be a permanent gain.

Ryan Sigdahl from Craig-Hallum Capital Group LLC questioned the second-half 2025 guidance, which implies a slowdown despite strong Q2 momentum, and asked for the rationale behind the U.S. market exit, including potential asset sales and the change in expected cash costs.

Answer

CEO Neal Menashe clarified that the guidance reflects a disciplined approach, not a deceleration, with performance in H2 dependent on the new football season's outcomes. He explained the U.S. exit was a strategic decision based on the high cost of revenue and a lack of a clear path to profitability. CFO Alinda Van Wyk detailed the financial impact, including a $63.9M non-cash impairment and a projected $15M in cash restructuring costs, while highlighting future cost savings.

Ryan Sigdahl of Craig-Hallum Capital Group LLC asked about the SciPlay segment, questioning if marketing spend could be shifted to states cracking down on sweepstakes gaming. He also inquired about the drivers of margin benefit in the quarter, seeking to distinguish between shifts in spending and the impact of the direct-to-consumer (D2C) platform.

Answer

President & CEO Matt Wilson acknowledged that sweepstakes gaming is having an undeniable impact on the social casino market but emphasized focusing on controllable factors. He highlighted the growth of the D2C platform to 18% of SciPlay revenue, up from 13% in Q1, as a key controllable driver. CFO Oliver Chow added that the team is now focused on targeted UA opportunities to drive daily active users back into the ecosystem sustainably.

Ryan Sigdahl inquired about the early performance in Brazil since its launch and whether interest is greater for technology and platforms or for iGaming content.

Answer

CEO Matt Wilson described Brazil as an established market with unique content preferences, noting the company is now working to tailor its offerings for the local player base. He said they are leveraging their aggregator platform for data and insights. On the technology side, he highlighted the recent launch of marketing jackpots with Penn as an exciting new offering they plan to scale across more operators.

Ryan Sigdahl inquired about the expected timing for the next iteration of the Dragon Train franchise and the overall strength of the game development pipeline heading into 2025.

Answer

President and CEO Matthew Wilson confirmed they are actively developing new versions of Dragon Train but declined to provide a specific launch timeline to maintain a competitive advantage. He stressed that the company's strength lies in its diverse portfolio of over 130 games and its robust R&D platform, which supports the 2025 financial targets.

Ryan Sigdahl inquired about the betting performance of the Club World Cup, particularly within the MTS business, and asked about a competitor winning European league rights previously held by IMG Arena, questioning if those rights were part of the pending acquisition.

Answer

CEO Carsten Koerl stated the World Cup was very good for MTS and strengthened media partnerships. Regarding the European league rights, he clarified they were a loss-making deal for IMG, so Sportradar asked IMG to wind them up before the acquisition, meaning they are not in the financial projections. He added the rights were for data only, not audiovisuals, where Sportradar feels it has a strong position.

Ryan Sigdahl inquired about the IMG Arena acquisition, asking about the liabilities being assumed, included costs, and the potential for revenue synergies similar to past deals. He also asked about the drivers of outsized demand for Managed Trading Services (MTS) in the Brazilian market.

Answer

CEO Carsten Koerl described the IMG deal as a milestone that enhances their B2B sports offering and leverages their superior distribution network for monetization, similar to the ATP deal. CFO Craig Felenstein added that they are acquiring assets and liabilities, primarily the sports rights, and expect significant operational synergies. Regarding Brazil, Koerl attributed MTS success to a strong local team and the unique opportunity to pilot a 360-degree solution that includes customer acquisition and cross-selling into the adjacent iGaming market.

Ryan Sigdahl inquired about the drivers of the raised guidance and whether the implied 60% incremental margin suggests an acceleration of margin improvement into 2025 and 2026. He also asked if the 4Sight Streaming product is leading to higher in-play betting uptake.

Answer

CFO Craig Felenstein confirmed that significant margin expansion is expected to continue in 2025, driven by strong revenue growth and operating leverage across all cost categories, particularly as the sports rights cost increases lessen. CEO Carsten Koerl added that the 4Sight Streaming product has lower latency and is already showing a measurable uptick in stimulating live betting activity.

Ryan Sigdahl inquired about the breakdown of DAU/MAU declines between the social casino and casual game segments, sought quantitative KPIs for the new sweepstakes initiative, and asked why its full launch isn't being accelerated given market pressures. He also requested guidance for Q3.

Answer

Andrew Pascal, Co-Founder, Chairman, & CEO, explained that user declines were more pronounced in the casual portfolio, largely due to reduced user acquisition spending. Regarding sweepstakes, he noted that while early metrics on retention and monetization are promising, the company is taking a measured, state-by-state rollout approach to fully optimize the platform and marketing returns before a wider launch. He indicated that Q3 performance would likely be similar to Q2 and refrained from giving specific guidance on new initiatives until their performance becomes more predictable.

Ryan Sigdahl inquired about the launch timing and integration strategy for the new sweepstakes initiative, noting its exclusion from guidance and the time-sensitive market opportunity. He also asked for the reason behind the significant 38% year-over-year decline in the retail value of playAWARDS purchases in Q4.

Answer

CEO Andrew Pascal explained that the sweepstakes market is a material growth opportunity, viewing it as a promotional mechanic aligned with PLAYSTUDIOS' existing loyalty model. He detailed a phased rollout, starting with a separate solution in the coming months to build competency before deeper integration into native apps, which is why it's excluded from 2025 revenue guidance. Regarding playAWARDS, Pascal stated the decline was expected after a strategic cleanup of the rewards catalog to refocus on core value, which involved eliminating certain partners and digital rewards. This, combined with lower overall player volume, contributed to the drop in redemption activity.

Ryan Sigdahl from Craig-Hallum Capital Group LLC sought clarification on the financial impact of the Colombian VAT tax expiration, asked for an update on its potential extension or early repeal, and inquired about any business impact from the Club World Cup.

Answer

CFO Kyle Sauers confirmed that the tax's expiration should provide an immediate uplift to revenue and margins, as GGR and net revenue previously grew at similar rates. CEO Richard Schwartz detailed that the tax decree expires at year-end and requires congressional action to extend, which has failed before. A constitutional court case that could repeal it early is pending but has been postponed. Sauers noted the Club World Cup had no particularly impactful benefit.

An analyst on behalf of Ryan Sigdahl asked for a quantification of the impact from increased promotions related to the Colombian VAT tax on revenue and ARPDAU. He also sought clarity on the constitutional decree process and whether the tax could be renewed beyond the end of the year.

Answer

Executive Kyle Sauers detailed that while GGR in Colombia grew over 50%, net revenue was roughly flat year-over-year in recent months due to the bonusing, indicating a significant impact. CEO Richard Schwartz clarified that emergency decrees have time limitations and extending the tax beyond the year would likely require congressional support, which has been absent in the past, making a renewal unlikely.

Ryan Sigdahl inquired about the early performance of RSI's strategy in Colombia to counter the new VAT, asking how its 'middle ground' approach is affecting retention and competitiveness. He also asked about the strategy for Delaware in 2025, questioning whether the focus would be on continued investment or on driving margin.

Answer

CEO Richard Schwartz stated that RSI's proprietary technology platform allows for nimble and sophisticated bonusing to manage the Colombian tax situation effectively. Executive Kyle Sauers added that mitigation includes modifying promotions, reducing some marketing, and working with vendors. Regarding Delaware, Sauers explained that since margins are relatively fixed, the 2025 focus will be on driving new player acquisition and monetization, where significant growth opportunities remain.

Ryan Sigdahl of Craig-Hallum Capital Group LLC asked if the company's strong cash position changes its strategy on market expansion, particularly in Brazil, and sought early player feedback or metrics on the new PropPacks loyalty feature.

Answer

CEO Richard Schwartz responded that capital will be directed to the highest-return opportunities, with ongoing evaluation of exciting prospects in Latin America and North America, such as Alberta. He noted it's too early for specific metrics on PropPacks but shared that player enthusiasm is high, with positive feedback on the novel and engaging experience of combining sports cards with prop bets.

Ryan Sigdahl inquired about the impact of the repair-versus-replace trend, Hudson's role in the emerging A2L refrigerant aftermarket, current HFC pricing, the growth of the reclamation business, and the state of in-channel inventory.

Answer

SVP of Sales and Marketing Kate Houghton confirmed a benefit from repair activity and Hudson's participation in the A2L market, which is currently small. President and CEO Brian Coleman projected A2L volumes could double next year, noted HFC pricing stabilized around $8/pound, and explained that while reclamation activity is encouraging, specific data is reported at year-end.

Ryan Sigdahl asked about the drivers of recent refrigerant price increases, questioning if they are tariff-driven or due to other dynamics, and whether the stability is temporary. He also inquired about the margin impact from cylinder challenges and if macro factors are accelerating the reclamation business.

Answer

Brian Coleman, an executive, attributed price stability and increases to supply chain disruptions and tariffs but noted uncertainty about their permanence until the cooling season's demand becomes clearer. He explained that while Hudson has advantages with its reusable cylinder fleet, challenges arise from new valve requirements for A2L refrigerants and steel sourcing for disposable cylinders. Coleman confirmed that Q1 reclaim volumes are up, driven by the company's educational and partnership efforts rather than just macro factors.

Ryan Sigdahl of Craig-Hallum asked about the DLA contract, including any impacts from administrative changes, the timeline for the new contract rebid, and potential margin implications. He also questioned the effect of tariffs and trade wars on 2025 refrigerant allocations and cylinder costs.

Answer

Executive Brian Coleman stated that no administrative activities are expected to impact the DLA contract, with 2025 revenue anticipated in the low to mid-$30 million range. He updated the timeline for the successor contract award to the latter half of 2025. Regarding trade, Coleman noted that while significant tariffs on Chinese HFCs already exist, the more immediate impact could come from steel tariffs affecting cylinder costs, which the company expects to pass through to customers.

Ryan Sigdahl asked about the long-term refrigerant pricing outlook, questioning if prices would remain lower for longer without an accelerated EPA phase-out. He also inquired about the specifics of the EPA petition process, the integration of the recent USA Refrigerants acquisition, and the nature of the litigation settlement gain.

Answer

Executive Brian Coleman acknowledged that without an EPA petition to lower consumption allowances, lower prices could persist, expressing concern about the 2025-2028 period. He explained a petition would be a formal challenge to the EPA to amend the rule, citing evidence like inventory data. Regarding the acquisition, Executive Brian Bertaux stated the integration is proceeding well, with Brian Coleman adding that USA's strategies are now being applied to Hudson's legacy customer base. Brian Bertaux clarified the litigation gain was from a settled commercial dispute.

Ryan Sigdahl followed up on the stock buyback, asking if the Poland sale process was no longer a restriction and if potential changes to Poland's online casino rules were impacting the sale. He also asked about cost-side optimization opportunities at the East properties, Rocky Gap and Mountaineer.

Answer

Co-CEO Peter Hoetzinger clarified that while Poland's iGaming is state-run, the potential for a buyer to add sports betting exists, but recent rule change discussions have not generated new interest. Co-CEO Erwin Haitzmann confirmed they are continuously working on cost optimization at the East properties and have achieved savings with more possible.

Ryan Sigdahl inquired about the Nugget's Q4 revenue underperformance, the impact of Alberta's suspension of U.S. gaming machine purchases, the potential sale of Canadian assets, and sought clarification on the deferred rent at Caruthersville.

Answer

Co-CEO Erwin Haitzmann attributed the Nugget's decline to hotel revenue and noted the conference pipeline is building for 2026 and beyond. He also stated Alberta's machine purchase suspension has no meaningful impact. Co-CEO Peter Hoetzinger added that divesting the Canadian operations is under consideration. Erwin Haitzmann clarified the Caruthersville rent deferral was always part of the VICI agreement.

Ryan Sigdahl from Craig-Hallum Capital Group questioned the significant sequential decline in Virtual Sports revenue, contrasting it with management's prior comments about stabilization, and requested details on the terms and interest rate of the new debt refinancing.

Answer

Executive Brooks Pierce explained that while weekly volatility exists, several more weeks of data confirm the Virtual Sports business has stabilized since the initial Q1 step-down. Executive A. Weil elaborated that the new 5-year floating-rate debt has a starting rate just over 10%, which is expected to fall to around 9.5% by year-end due to projected rate cuts. He noted the deal includes step-down provisions tied to deleveraging and projected a safe $30 million interest expense for 2026 modeling.

Ryan Sigdahl pressed for details on what gives management confidence that the Virtual Sports business has passed an inflection point, given similar past commentary, and asked for the status of the Hybrid Dealer game launch with FanDuel announced in October.

Answer

Executive Brooks Pierce provided assurance by citing real-time Q1 data showing the business has 'leveled out' and expressed strong belief in Brazil becoming a significant growth market. Regarding FanDuel, he explained it is a large, bespoke project that is not yet live and is expected to launch before the 2025 football season, anticipating it will be a significant product launch.

Ryan Sigdahl from Craig-Hallum Capital Group questioned why the customer count for Virtual Sports has remained flat while the Interactive segment's customer base has grown significantly, asking about the challenges in cross-selling Virtual Sports to Interactive clients.

Answer

Executive Brooks Pierce identified two main challenges: regulatory hurdles for Virtual Sports in certain markets and the need to onboard major North American sports betting operators like DraftKings and FanDuel, as the product appeals most to sports bettors. Executive A. Weil added that the lottery sector represents a significant and underexploited opportunity for expanding the Virtual Sports customer base.

Ryan Sigdahl asked for clarification on whether performance marketing was being turned back on for both iCasino and ESPN Bet. He also requested a timeline for the stand-alone iCasino launch in West Virginia.

Answer

CEO Jay Snowden clarified his comments were specific to the Hollywood iCasino app, for which they are now beginning to ramp up performance-based marketing after an initial focus on organic cross-sell. Regarding West Virginia, Snowden stated the launch is planned for 'sometime in the next couple of quarters,' pending regulatory processes, and noted it should be a strong market for them given their existing Hollywood-branded casino in the state.

Ryan Sigdahl from Craig-Hallum asked about the player profile for the new Hollywood Casino app, specifically whether users are new to the database or existing ESPN BET players crossing over.

Answer

CEO Jay Snowden explained that they are seeing a mix, but importantly, a significant portion are new to their iGaming offering rather than just shifting from ESPN BET, demonstrating strong incrementality. He credited this to effective marketing to their land-based database and the strong Hollywood brand connection, which has allowed for rational, low-inducement customer acquisition with high retention.

Ryan Sigdahl from Craig-Hallum Capital Group asked about the potential to offer ESPN+ memberships to drive account linking. He also questioned if the closure of Freehold Raceway signals further optimization of non-core assets.

Answer

Head of Operations Todd George confirmed they are working with ESPN on a promotional offer for their database to receive a trial ESPN+ membership. CEO Jay Snowden clarified that the Freehold closure was a one-off for a standalone horse racing track and that all casino properties are profitable with no plans for closures or sales, viewing some racing assets as future development options.

Ryan Sigdahl inquired about the specific nature of 'atypical' changes in performance marketing during Q1, the impact of competitive intensity on company strategy, and the reasons behind the revised industry outlook.

Answer

CFO Larry Fey attributed the marketing challenges to an unannounced Google channel change that split ad auctions, compelling more aggressive bidding across the industry. He also confirmed persistent competitive pressure. CEO Stan Chia reiterated the long-term strategy of building capabilities to drive profitable growth and recapture market share. Fey added that while April saw a bounce-back, the company adopted a more conservative outlook due to broader economic uncertainty.

Ryan Sigdahl inquired about Vivid Seats' international expansion strategy, specifically which countries are being targeted first and whether the expansion is expected to be EBITDA-additive in 2025. He also asked for commentary on the North American concert pipeline.

Answer

CEO Stan Chia confirmed the international launch began in the U.K., with plans to expand further in Europe. CFO Larry Fey clarified that the initial international strategy prioritizes scaling volume over immediate profit, targeting contribution margin neutrality. Regarding the concert pipeline, Fey described it as mixed, noting that while supply looks better, industry volume growth has recently turned neutral to negative after a strong start to the year.

Ryan Sigdahl asked if high marketing intensity from competitors is causing Vivid Seats to rethink its customer acquisition strategy and questioned where the company is seeing the most excitement for its newly launched SkyBox Drive tool.

Answer

CEO Stanley Chia affirmed that the company will maintain its disciplined, long-term focus on strong unit economics and product differentiation, like its loyalty program, rather than chase uneconomic volume. Regarding SkyBox Drive, he noted rapid adoption and excitement across sellers of all sizes, with a slight skew towards existing SkyBox users who benefit from the turnkey integration.

Ryan Sigdahl questioned why American Place's margins declined year-over-year despite strong revenue growth and asked why the company isn't leaning more heavily into the convention business at Chamonix.

Answer

Executive Daniel Lee attributed the American Place margin pressure to the opening of its high-end steakhouse and growth in table games, which are lower-margin businesses. Regarding Chamonix, he acknowledged a slow start in building the convention sales team but confirmed they are now actively hiring to capture that midweek business. Executive Lewis Fanger noted that a $600,000 expense true-up in the prior-year quarter also made the year-over-year margin comparison less favorable.

Ryan Sigdahl asked about the expected timeline for the Chamonix property in Colorado to achieve over $20 million in annual EBITDA to justify its capital cost. He also questioned the confidence in the new leadership team, given that previous managers also had strong resumes.

Answer

CEO Daniel Lee projected that Chamonix could reach well above $20 million in EBITDA within a five-year timeframe, aiming for a positive upward trajectory. Regarding management, he detailed the specific, positive reasons for the leadership changes at Silver Slipper and Rising Sun. For Chamonix, he candidly stated the previous team was "in over his head" for a resort of that scale, leading to a necessary "restart" with a new team and outside consultants to unlock the property's significant potential.

Ryan Sigdahl of Craig-Hallum Capital Group LLC inquired about the drivers behind the unseasonal sequential revenue growth, the significant increase in operating expenses despite strong gross margins, and the progress on adjacent revenue opportunities like tires and protection plans.

Answer

CEO David Meniane attributed the sequential revenue growth to a combination of inventory management, strategic pricing actions, and marketing initiatives. He explained that the higher OpEx was driven by approximately $2.2 million in non-operational costs, including brand awareness campaigns and the Las Vegas facility transition, as well as a deliberate reinvestment of gross margin gains into performance marketing. Meniane justified this spend by highlighting strong customer acquisition and repeat purchase rates, particularly through the mobile app. He also noted that the company's new, more agile website infrastructure is now enabling the rapid rollout of high-margin adjacent services like product protection and tire sales, which are key to long-term profitability.

Ryan Sigdahl of Craig-Hallum Capital Group LLC inquired about the drivers of the unseasonal Q3 revenue growth, the reasons for the significant sequential increase in operating expenses, the rationale behind balancing price hikes with higher marketing spend, and the status of new adjacent revenue streams.

Answer

CEO David Meniane attributed the revenue outperformance to broad execution in inventory, pricing, and marketing. He explained that higher OpEx was due to $2.2 million in non-operational costs (branding, Vegas facility) and a strategic reinvestment of gross margin into performance marketing. Meniane defended the marketing investment by highlighting strong customer repeat rates and mobile app success, and noted that the new website platform is accelerating the launch of high-margin adjacent services like protection plans and tires to boost future profitability.

Ryan Sigdahl inquired about the drivers behind the unusual sequential revenue growth in Q3, the significant increase in operating expenses, the strategic trade-off between higher prices and increased marketing spend, and the progress on adjacent high-margin revenue opportunities like protection plans and tires.

Answer

CEO David Meniane attributed the Q3 revenue outperformance to relentless execution across inventory, pricing, and marketing, including the new website. He explained that higher OpEx was due to $2.2 million in costs outside normal operations for brand awareness and the Las Vegas facility move, plus a strategic reinvestment of gross margin into performance marketing. Meniane justified the marketing spend by highlighting strong customer repeat rates and mobile app performance, noting that the newly re-platformed website is now enabling the rapid rollout of high-margin adjacent services.

Ryan Sigdahl inquired about the drivers behind the unseasonal sequential revenue growth, the significant increase in operating expenses, and the status of adjacent growth opportunities such as tires, marketplace expansion, and protection plans.

Answer

CEO David Meniane attributed the sequential revenue growth to strong execution across inventory management, pricing actions, and marketing initiatives. He explained that higher operating expenses were driven by approximately $2.2 million in costs outside normal operations, including brand awareness and the Las Vegas facility setup, as well as a strategic reinvestment of gross margin gains into performance marketing. Meniane also highlighted progress on high-margin adjacent opportunities, noting that the new website platform has accelerated the launch of initiatives like the SimpleTire partnership, shipping and product protections, and an eBay Canada store, which are all showing positive early results.

Inquired about the composition of the consumer survey sample and the impact of new, low-cost competition from China versus broader macroeconomic headwinds.

Answer

The consumer survey was a comprehensive, double-blind study of over 2,200 diverse consumers, confirming high brand strength and consumer permission for category expansion. The primary headwind is the macro environment, not direct competition from cheap knock-offs, which are seen as expanding the market more than hurting sales.

Asked about the underlying reasons for booking deferrals, the potential impact of federal funding uncertainty, the origin of the contract in the Philippines and the company's international strategy, and the financial impact of the Allstate partnership.

Answer

Booking lumpiness is attributed to a focus on larger, more volatile contracts and agency staffing shortages, rather than federal funding uncertainty. The Philippines opportunity arose through the World Bank, and the international strategy remains opportunistic. The Allstate partnership provides critical data for new products and opens access to new markets like insurance, but immediate financial impacts were not detailed.