Vikram Kesavabhotla

Vikram Kesavabhotla asked for more details on the co-commission deal with Sky, specifically why they were the right partner, and how Starz characterizes the international demand environment for its programming. He also requested elaboration on Starz's pricing strategy, including the potential for subscription price increases and the planned cadence of such adjustments.

Answer

Jeffrey Hirsch, President and CEO, stated that the U.K. and France markets show strong appetite for Starz content, and Sky is a valued partner with whom they have an ongoing relationship. He noted that the slate is designed with international revenue in mind, expecting growth as Starz gains more ownership of its library. Regarding pricing, Mr. Hirsch explained that Starz aims to be underpriced relative to broad-based streamers. As competitors raise rates ($1-$3), it creates room for Starz to consider price increases, which will be decided based on industry trends, the content slate, and consumer impact.

Vikram Kesavabhotla followed up on the co-commission deal with Sky, asking why they were the right partner and about the international demand environment for Starz's programming. He also requested more details on Starz's pricing strategy, specifically regarding the potential for subscription price increases over time.

Answer

President and CEO Jeffrey Hirsch stated that the U.K. market, and increasingly France, shows strong appetite for Starz content, and Sky is a valued partner with whom they have an ongoing relationship. He expects international revenue to grow with increased content ownership. Regarding pricing, Jeffrey Hirsch reiterated that Starz aims to be underpriced compared to broad-based streamers, and their price increases create room for Starz to consider raising rates at the right time, slate, and place.

Vikram Kesavabhotla inquired about GoDaddy's promotional .com offer, asking for the rationale behind the go-to-market strategy change, observations from February, and whether the booking headwind is a one-time event. He also asked about the visibility into AI costs and their potential impact on gross and EBITDA margins.

Answer

Aman Bhutani, CEO, explained the go-to-market evolution aims to open the top of the funnel for high-intent customers, noting February improvements in optimizing paths and attach rates. Mark McCaffrey, CFO, clarified that the shift to one-year terms impacts bookings more than revenue, with a slight reduction in average order size, expecting bookings to reach parity with revenue by year-end. Both executives emphasized disciplined AI cost management, with Aman Bhutani highlighting optimized AI solutions and strong visibility to maintain margin guidance.

Vikram Kesavabhotla inquired about the rationale behind GoDaddy's promotional .com offer, observed improvements in February, and whether this go-to-market change represents a one-time or ongoing headwind to bookings. He also asked about GoDaddy's visibility into AI costs and their potential impact on gross and EBITDA margins.

Answer

GoDaddy CEO Aman Bhutani explained that the go-to-market evolution aims to expand the top of the funnel for high-intent customers, with February improvements reflecting optimization of the path and marketing channels. CFO Mark McCaffrey clarified that the shift to one-year terms primarily impacts bookings, with less effect on revenue, and that the reduction in average order size due to discounts has a modest revenue impact. Both executives expressed confidence in managing AI costs through disciplined processes, centralized cost tracking, and product optimization to maintain margin guidance.

Vikram Kesavabhotla asked for the rollout timeline and initial feedback for the 'Ask Arrow' agentic tool, and requested more specific timing on the expected return to total customer growth.

Answer

CEO Aman Bhutani revealed that 'Ask Arrow' is already being tested on the site with positive user interaction, with more agentic capabilities to be added over the next quarter. CFO Mark McCaffrey reiterated the focus on high-intent customers and noted positive signals in customer count over the last two months, but did not provide a specific quarter for the return to overall growth, citing residual pressure from migrations.

Vikram Kesavabhotla asked for more detail on the vision for Agentic AI within Airo and for specifics on where the pricing and bundling initiative is seeing the most success, given it delivered ahead of expectations.

Answer

CEO Aman Bhutani explained that Agentic AI represents the next evolution for Airo, moving beyond deterministic automation to deploy personalized agents that can perform complex jobs across multiple products on a customer's behalf. On pricing and bundling, he stated the multiyear initiative is performing well, with ongoing tests of new bundles, including third-party products, setting the stage for future growth by enhancing the value of GoDaddy's one-stop-shop solution.

Vikram Kesavabhotla asked for more details on GoDaddy's 2025 pricing and bundling strategy, its focus on presence and hosting products, and the drivers for the expected return to customer growth.

Answer

CEO Aman Bhutani explained the strategy is evolving from a product-centric view to a customer cohort-based approach, starting with the hosting business, and has a material target for 2025. CFO Mark McCaffrey added that customer growth will be driven by a focus on high-value customers as headwinds from divestitures and the end of deep discounting abate.

Vikram Kesavabhotla inquired about the outlook for Applications & Commerce (A&C) bookings growth in Q4 and the relationship between strong bookings and future revenue, questioning if the segment's long-term growth targets are now conservative.

Answer

CFO Mark McCaffrey acknowledged that accelerating bookings are a tailwind for revenue but highlighted that the conversion timing is complex due to varied product terms. He affirmed the company's comfort with its long-term 6-8% overall growth target, noting that A&C strength is expected to drive total bookings growth about two points ahead of revenue for the full year.

Vikram Kesavabhotla asked about the integration and performance of the Howdy launch and the Frndly acquisition, and Roku's plans for these businesses in 2026.

Answer

Anthony Wood, Founder and CEO, stated both are progressing well, with subscriber growth for Howdy and increased engagement/sign-ups for Frndly since acquisition. He explained they are part of Roku's owned and operated services, strategically expanding into subscriptions and leveraging the platform's user experience. Plans include launching Howdy on platforms outside of Roku, similar to Frndly, with Howdy having potential to become a very large service.

Vikram Kesavabhotla inquired about the performance of the Howdy launch and the Frndly acquisition, and Roku's plans for these businesses in 2026.

Answer

Anthony Wood, Founder and CEO, stated that both Howdy and Frndly are performing well, with subscriber growth for Howdy and increased engagement and sign-ups for Frndly since the acquisition. He highlighted them as strategic expansions into subscriptions, leveraging Roku's platform to drive engagement. He also mentioned plans to launch Howdy on platforms outside of Roku, similar to Frndly, and expressed excitement about Howdy's long-term potential.

Vikram Kesavabhotla asked about Dolby's key takeaways from CES, including partner and customer feedback on automotive in-car entertainment and Dolby Vision 2. He also inquired about the significance of Peacock integrating Dolby's full suite of premium picture and sound innovations, what drove that partnership, and its implications for future streaming relationships. Finally, he asked how Meta's support for Dolby Vision on Facebook (following Instagram) influences broader social media efforts and discussions with mobile OEMs.

Answer

Kevin Yeaman (CEO) highlighted CES as a valuable opportunity for ecosystem engagement, showcasing the full in-car entertainment experience with Dolby Atmos and early Dolby Vision, including gaming and audiobooks. He noted strong excitement for Dolby Vision 2. He emphasized Peacock's adoption of the full Dolby suite (AC4, Atmos, Vision 2) across movies, TV, and sports, including the Super Bowl and Winter Olympics in Dolby Atmos. For Meta, he explained that Dolby Vision support on Facebook (after Instagram) and Douyin's Android expansion drives demand for Dolby on mobile devices, fostering broader engagement across Meta's businesses, including Oculus headsets.

Vikram Kesavabhotla (Baird) asked for key takeaways from CES, including partner and customer feedback on Dolby's latest innovations, particularly in automotive and Dolby Vision 2. He also inquired about the significance of Peacock's integration of Dolby's full suite of premium picture and sound technologies and the impact of Meta's expanded support for Dolby Vision on Facebook on broader social media efforts and mobile OEM discussions.

Answer

Kevin Yeaman (CEO, Dolby Laboratories) highlighted CES as a great opportunity for ecosystem engagement, with strong focus on in-car entertainment (Dolby Atmos and early Dolby Vision examples in gaming, TV, movies, audiobooks) and enthusiastic reception for Dolby Vision 2. He noted Peacock's embrace of the full Dolby suite (AC-4, Dolby Atmos, Dolby Vision 2) across movies, TV, and sports, including the Super Bowl and Winter Olympics in Dolby Atmos, as a significant move. Kevin Yeaman also emphasized Meta's expansion of Dolby Vision support to Facebook (following Instagram) and Douyin's Android rollout, stating these drive demand for Dolby on mobile devices and strengthen relationships across multiple business aspects, including Oculus headsets.

Vikram Kesavabhotla asked about Dolby's observations on the current macro environment, including potential impacts from tariffs and consumer spending, and how these factors were incorporated into the FY2026 outlook. He also inquired about the expected revenue cadence for FY2026 beyond the Q1 drivers and sought an update on Dolby's capital allocation strategy, particularly regarding share repurchase activity given the remaining authorization and strong balance sheet.

Answer

Kevin Yeaman, CEO, stated no specific identifiable impact from tariffs, noting device partners' resilience. He described the overall device market as flattish/sluggish but stabilizing compared to previous strong purchasing years. He emphasized Dolby's focus on controllable growth drivers for Atmos, Vision, and imaging patents, which have grown ~20% through the macro environment. Robert Park, CFO, reiterated that quarterly revenue fluctuates due to true-ups and minimum volume commitments, with Q1 FY2026 facing tough comparisons, but expects a more even revenue distribution between the first and second halves of the year. Kevin Yeaman, CEO, confirmed over $270 million in share repurchase authorization, stating the policy is to offset dilution from equity compensation and maintain a regular dividend, with quarterly reviews for additional buybacks.

Vikram Kesavabhotla asked for Dolby's latest observations on the macro environment, including potential impacts from tariffs and the state of the consumer, and how these factors were incorporated into the FY2026 outlook. He also inquired about the revenue cadence for the rest of FY2026, beyond the Q1 drivers. Lastly, he sought an update on Dolby's capital allocation strategy, particularly regarding share repurchase activity given the remaining authorization and strong balance sheet.

Answer

CEO Kevin Yeaman stated that Dolby has not seen specific identifiable impacts from tariffs in the past year, noting device partners' resilience despite a generally flat/sluggish overall device market. He mentioned foundational audio technology is stabilizing compared to previous declines and that Dolby Atmos, Dolby Vision, and Imaging Patents have grown at about 20% annually through these conditions. CFO Robert Park explained that quarterly results fluctuate due to true-ups, minimum volume commitments, and recoveries, and for FY2026, revenue is expected to be more evenly distributed between the first and second halves, unlike the previous year. Kevin Yeaman reiterated Dolby's capital allocation policy: offsetting dilution from equity compensation, a regular dividend (recently increased), and periodically doing more buybacks than necessary to offset dilution, with close board review each quarter.

Vikram Kesavabhotla asked about TKO's initial reactions to the new WWE relationship with ESPN, specifically how the first few Premium Live Events (PLEs) performed relative to expectations and the perceived benefits of the partnership.

Answer

Mark Shapiro, President and COO of TKO Group Holdings Inc, expressed thrill with the start of the partnership, highlighting the successful launch of WrestlePalooza, a new event. He noted the extensive wall-to-wall coverage across all ESPN platforms, including prominent shows like College GameDay. Andrew Schleimer, CFO of TKO Group Holdings Inc, added that ESPN is an excellent marketing partner, a benefit TKO has seen firsthand with UFC. He emphasized the importance of monitoring ESPN's distribution partner deals to ensure broad authentication for free direct-to-consumer access.

Vikram Kesavabhotla asked if the current 5-7% industry growth rate is the 'new normal' for pharma digital marketing, or if it could accelerate, and what customers would need to see for that to happen.

Answer

CFO Anna Bryson explained that while an acceleration is possible because pharma's digital spend (30-35%) is still heavily under-indexed compared to other industries (70%+), they are not seeing it happen yet due to generalized macro uncertainty. She stated that the timing for a potential re-acceleration is unknown.

Asked about the drivers for the sequential decrease in Q4 incentive fees and the outlook for them in 2024. Also inquired about the current trends in payer reimbursement timelines.

Answer

The Q4 incentive fee decrease was expected due to onetime items in Q3. For 2024, incentive fees are expected to be stable and consistent with 2023 levels. This is because payer reimbursement timelines, which stabilized in 2023 with only modest improvement, are not expected to change significantly in 2024.