Latest news with #recurringRevenue
Yahoo
16 hours ago
- Business
- Yahoo
The Top 5 Analyst Questions From ADT's Q1 Earnings Call
ADT started 2025 with results that aligned with market expectations, driven by ongoing investments in its ADT Plus platform and improved operational efficiency. Management cited record recurring monthly revenue and historically low customer attrition as key factors supporting stability. CEO Jim DeVries pointed to the company's 'continued strong demand for innovative offerings and premium customer experience' as contributors to the quarter's performance, alongside a notable increase in installation revenue from outright equipment sales. Is now the time to buy ADT? Find out in our full research report (it's free). Revenue: $1.27 billion vs analyst estimates of $1.24 billion (6.5% year-on-year growth, 2% beat) Adjusted EPS: $0.21 vs analyst estimates of $0.20 (6.8% beat) Adjusted EBITDA: $660.8 million vs analyst estimates of $687.3 million (52.1% margin, 3.9% miss) The company reconfirmed its revenue guidance for the full year of $5.13 billion at the midpoint Management reiterated its full-year Adjusted EPS guidance of $0.81 at the midpoint EBITDA guidance for the full year is $2.7 billion at the midpoint, in line with analyst expectations Operating Margin: 25.2%, in line with the same quarter last year Customers: 6.4 million, in line with the same quarter last year Market Capitalization: $6.75 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Ronan Kennedy (Barclays) asked about the demand environment and macroeconomic uncertainty. CEO Jim DeVries emphasized ADT's resilience in downturns, noting that demand for safety can rise in uncertain times, and retention benefits when relocations slow. George Tong (Goldman Sachs) inquired about the 7% decline in gross recurring monthly revenue additions. DeVries attributed this to tightened credit standards in DIY and health segments, but highlighted growth in the core professional install business. David Page (RBC Capital Markets) sought updates on the State Farm partnership and AI initiatives. DeVries shared that State Farm pilots are progressing and that 90% of customer chats are now handled by AI, with voice AI set for expansion. Peter Christiansen (Citigroup) probed trends in the small business channel and the mix between monitoring and installation revenue. DeVries said small business performance was stable with flat attrition, while Likosar explained that installation revenue growth reflects outright sales via the ADT Plus platform. Yehuda Silverman (Morgan Stanley) questioned the sustainability of improvements in attrition. DeVries outlined ongoing retention initiatives and set a long-term goal to reduce attrition further, noting improvements are generally linear but can fluctuate. Going forward, the StockStory team will be monitoring (1) the pace of adoption and monetization of the ADT Plus platform and related product enhancements, (2) measurable cost savings and customer experience improvements from scaling AI-driven customer service, and (3) the effectiveness of tariff mitigation strategies and their impact on margins. The trajectory of customer retention and new partnership channels, such as State Farm, will also be important to watch. ADT currently trades at $8.11, up from $7.92 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it's free). The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Comfort Systems (+782% five-year return). Find your next big winner with StockStory today.
Yahoo
4 days ago
- Business
- Yahoo
Former TCW Fund Manager Launches New Active Equity ETF
Former TCW fund manager Joseph Shaposhnik says it's his mission to inspire people to believe that active management can 'win again'—and he's hoping to do so with the Rainwater Equity ETF (RW). The exchange-traded fund launched Wednesday from Shaposhnik's new firm Rainwater Equity. RW offers long-term, tax-efficient exposure to high-quality, recurring revenue businesses. It invests in global public companies with 'durable, repeat-purchase business models and exceptional leadership, held in a concentrated, low-turnover portfolio,' according to a press release. The expense ratio is 1.25%. Some of the fund's top holdings include General Aerospace (GE), HEICO Corp. (HEI) and Microsoft Corp. (MSFT). The growth of products like thematic, quant and leveraged ETFs is evidence that investors have 'given up on active management,' Shaposhnik, RW's portfolio manager, told He believes the reason active management hasn't worked is that most portfolio managers manage to the benchmark and build portfolios based on the assumption that they can understand how businesses will perform. 'Our basic belief is that most businesses can't be predicted,' Shaposhnik said. 'So we built a strategy that's focused exclusively on investing in businesses that we think can be predicted—and those businesses are businesses that have recurring revenue business models.' Recurring revenue business models typically have contracted revenue for two or three years or longer, which makes it easier for management teams to manage the businesses and easier for analysts and portfolio managers to evaluate and value the businesses, he added. 'What that generates is a stable, predictable business that the management team can operate and the investor can evaluate,' Shaposhnik said. 'From the advisor's perspective, what they get is a portfolio that will help them grow their client's capital in a more predictable and consistent way with fewer negative surprises.' RW was seeded by a cornerstone investment from Bill Miller, former chairman and CIO of Legg Mason Capital Management. 'Our goal is to build a fund that delivers superior returns for investment advisors and their clients for a long period of time,' Shaposhnik said. He added that the firm is planning to run just one fund and 'stay focused on delivering the outcome that we believe investment advisors and their clients deserve.'Permalink | © Copyright 2025 All rights reserved Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Finextra
04-06-2025
- Business
- Finextra
Frisbii adds Shift4 to acquiring partner network
Frisbii, a leading recurring revenue management platform that handles subscriptions, billing, payments and revenue intelligence, has partnered with Shift4, a global leader in integrated payment solutions, to deliver a seamless unified commerce experience to their merchants across the EU, with a special focus on Germany, France, and the Nordics. 0 By adding Shift4 to their acquirer partner network, Frisbii can provide merchants with seamless, scalable, and efficient payments to grow their businesses and meet the evolving demands of the European market. Shift4 will provide processing services for Frisbii merchants to enable businesses within the sports and entertainment, gaming, travel, transit and food industries to accept card payments. Shift4's unified commerce solution will complement Frisbii's platform, which offers multiple payment methods for subscriptions, recurring revenue, or one-time transactions, creating a seamless payment ecosystem for merchants that simplifies financial operations and supports business growth in e-commerce. The partnership between Frisbii and Shift4 paves the way for merchants to benefit from immediate expansion into new markets: Key Benefits for European Merchants 1. Localized Expertise: With Shift4's growing footprint in Europe and Frisbii's deep understanding of the regional regulatory landscape, including European local payment methods and GDPR compliance, merchants can confidently operate within the EU's unique frameworks. 1. Market-Specific Features: Tailored solutions for the German, French, and Nordic markets empower merchants in dynamic and experience-driven sectors - such as digital entertainment, travel, and gaming - to seamlessly adapt to local preferences, including language-specific invoicing, regionally preferred payment methods, and customized customer service experiences. 2. Scalability for Growth: The partnership offers scalable solutions for businesses of all sizes, from SMEs to large enterprises, enabling merchants to grow their operations seamlessly across borders. 3. Enhanced Revenue Insights: Through Frisbii's revenue intelligence analytics, merchants can gain actionable insights into their subscription and payment data to make informed business decisions. Driving Innovation Across Europe "Our partnership with Frisbii represents a shared commitment to driving innovation and providing merchants with the tools they need to succeed in today's competitive landscape," said Ruben Nielsen, VP Sales and Business Development of Shift4. "Together, we're enabling businesses to grow their operations and deliver better experiences to customers across Europe." Gregory Herbert, CEO of Frisbii, commented, "Expanding our network of acquirers is key to ensuring merchants have the flexibility and coverage they need to scale effectively. Shift4's capabilities in acquirer underwriting bring a unique advantage, strengthening our ability to offer businesses a seamless and competitive recurring revenue management solution across the EU."
Yahoo
25-05-2025
- Business
- Yahoo
The Best Industrial Technology Stock to Invest $10,000 in Right Now
This company's margins and recurring revenue are on an upward trajectory. AI growth and the increasing adoption of digitally connected technology will drive its higher-margin recurring revenue. The company does a great job of upselling and cross-selling solutions to its existing and new customers. 10 stocks we like better than Trimble › Workflow technology company Trimble (NASDAQ: TRMB) has several exciting growth drivers that can send its stock price higher in the coming years. Furthermore, they are already in place, and investors can see the evidence of their progression in the numbers. This isn't a speculative growth stock; it's a growth stock with established technology in the early innings of adoption. The average U.S. 40-year-old investor has over $150,000 in an equity portfolio. While there's no definitive agreement on the number of stocks you need to diversify a portfolio, around 15 stocks are often seen as typical of a more enterprising, risk-seeking investor. In contrast, a portfolio of 30 or above represents a more conservative investor looking to diversify. As such, investing $10,000 in Trimble will suit a more enterprising investor, but if you are a more conservative investor, $5,000 might suit you better. Alternatively, adjust the position size as appropriate to your portfolio size. Trimble's origins lie in its hardware solutions, which provide precise positioning using global navigation satellite systems. As such, it's a well-known name in architecture and construction, what management calls "field systems" (civil engineering, geospatial, and other advanced positioning), and transportation and logistics. However, its present and future lie in the growth of its software solutions, which use the data created by its hardware for modeling and data analytics purposes on an ongoing and connected basis. Consequently, Trimble's solutions are becoming an increasingly important part of its customers' daily workflows. Major hardware manufacturers across its target markets appreciate Trimble's capacity to generate value, as evidenced by its existing partnerships with Caterpillar, Liebherr, and Deere. Trimble also competes with Deere via its 15% stake in a joint venture with AGCO in the precision agriculture sector. The shift toward recurring revenue from software lies at the heart of five key growth drivers for the company: The change in revenue mix to software subscriptions from hardware and perpetual software implies improving profit margins, as (based on 2024 full-year numbers) the former has a near 84% gross margin compared to almost 46.5% for the latter. The shift to recurring revenue, measured by annualized recurring revenue (ARR), helps de-risk future revenue, improves financial modeling and the predictability of cash flows, and makes customers more "sticky," particularly if the software/services relate to daily workflows. Increasing recurring revenue also creates a significant cross-selling and upselling opportunity for Trimble as it introduces new solutions to new customers. The growth of artificial intelligence (AI) applications and the adoption of advanced analytics add more value to Trimble's solutions. Ultimately, the increase in ARR will improve free cash flow (FCF) as billing is automated, and the predictability of cash flows means Trimble doesn't have to keep cash on hand for contingency purposes. I will run through the bullet points in turn. The relative increase in subscription and recurring services has resulted in an upward drift in its overall gross profit margin. CEO Rob Painter revealed that net retention for Trimble's core architects, engineers, construction, and owners (AECO) segment remained at approximately 110% over a trailing 12-month basis, showcasing increased customer loyalty and upselling/cross-selling potential. A 100% retention ratio implies that a company's existing customers continue to spend the same amount in aggregate as in the previous period. However, a rate of 110% implies that Trimble is getting 10% more out of those existing customers compared to the last period -- a demonstration of its ability to increase ARR by cross-selling and upselling solutions to a loyal customer base. As for AI, Trimble is already selling AI-powered solutions to customers. While it's too early to see it demonstrably in the numbers, it's hard not to think that AI will add value to the solutions of a company whose key growth driver is data analytics, connecting the physical world to the digital world in real time. The improvement in FCF coming from mid-teens growth in ARR (management expects adjusted organic ARR growth of 13% to 15% in 2025) is implied in management's guidance and the Wall Street consensus. After adjusting for $253 million in cash taxes relating to the AGCO joint venture and $35 million in mergers and acquisitions costs, and adding it back to the Wall Street consensus for FCF in 2025 of $395 million, Trimble's underlying FCF in 2025 would be $683 million. The Wall Street consensus of $791 million and $906 million in 2026 and 2027 implies a growth rate in the mid-teens, making the stock look like an excellent value. It trades at less than 22 times expected FCF in 2026 and has many long-term earnings drivers, as outlined above. Whether you invest $10,000, $5,000, or just $1,000, the company's mid-teens FCF growth rate and long path of growth ahead make it an excellent stock for long-term investors looking for a growth stock to add to their diversified portfolio. Before you buy stock in Trimble, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Trimble wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $639,271!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $804,688!* Now, it's worth noting Stock Advisor's total average return is 957% — a market-crushing outperformance compared to 167% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 19, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Deere & Company. The Motley Fool recommends Trimble. The Motley Fool has a disclosure policy. The Best Industrial Technology Stock to Invest $10,000 in Right Now was originally published by The Motley Fool Sign in to access your portfolio
