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    Sterling Auty

    Research Analyst at JPMorgan Chase & Co.

    Sterling Auty's questions to MASTERBEEF (MB) leadership

    Sterling Auty's questions to MASTERBEEF (MB) leadership • Q3 2018

    Question

    Sterling Auty of JPMorgan Chase & Co. focused on the dollar-based net expansion rate of 101%, noting a declining trend even before the Booker acquisition's impact. He asked about the drivers of this decline on the core MINDBODY platform and whether the subscriber count miss was due to sales execution or higher churn.

    Answer

    CEO Rick Stollmeyer attributed the expansion rate trend to the deprecation of lower-tier legacy software, while stating the rate for higher-priced tiers is stronger than ever. He confirmed the subscriber miss was due to sales execution challenges in closing new deals, particularly for the new beauty and wellness team, and not a churn issue, citing churn was at a seven-quarter low. CFO & COO Brett White added that a 1% FX headwind and Booker's sub-100% rate also impacted the metric.

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    Sterling Auty's questions to MASTERBEEF (MB) leadership • Q2 2018

    Question

    Sterling Auty requested more granular metrics to provide investors with confidence in the organic MINDBODY business growth, separate from Booker. He also asked about the company's confidence in its ability to deliver on guidance despite integration disruptions.

    Answer

    CEO Rick Stollmeyer explained that separating the businesses is no longer meaningful as leads are directed to the best-fit platform. However, he provided color by stating that MINDBODY software alone added 1,200 higher-priced tier customers in Q2. CFO & COO Brett White added that confidence in H2 guidance comes from completing the heavy lifting on integration and positive sales velocity in July.

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    Sterling Auty's questions to MASTERBEEF (MB) leadership • Q1 2018

    Question

    Sterling Auty inquired about market receptivity to recent pricing changes and sought clarification on how the Booker acquisition is integrated into financial guidance, specifically its impact on revenue and profitability.

    Answer

    CEO Rick Stollmeyer stated that the new pricing structure, from $125 to $395 per month, has hit a "sweet spot" and is driving adoption of higher-end products. He explained that significant investments in integrating Booker and FitMetrix are impacting near-term profitability to set up future growth. He also noted that since Booker is fully integrated into a new beauty and wellness team, its revenue cannot be broken out separately.

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    Sterling Auty's questions to MASTERBEEF (MB) leadership • Q4 2017

    Question

    Sterling Auty inquired about the rationale behind the 2018 software packaging changes and their anticipated effect on Average Revenue Per Subscriber (ARPS) and subscriber counts. He also asked about the timeline for localizing the platform for non-English speaking markets.

    Answer

    CEO Rick Stollmeyer explained that the strategy is to focus on high-value subscribers, which is expected to continue driving ARPS growth. He noted that while the software is translatable, the immediate focus remains on increasing density in the eight core English-speaking countries before expanding into other language territories.

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