Better business coming in than going out: management describes the quality of new intake visibly exceeding what it is re
The model's full reasoning — Q4 2016 call → NOWe need to determine if management conveys that the business being taken in now is of visibly higher quality than the business it is finishing, replacing, or letting run off, and that as the old rolls off and new becomes a bigger share, results will improve on strength of business already being taken in. We need to look for a contrast between incoming and outgoing business quality, with the turnover real and current, and improvement coming from mix shift. In the transcript, management discusses orders, backlog, revenue, margins. They mention that gross orders were record, backlog up 8%. They discuss product mix, e.g., CyberKnife with MLC, TomoTherapy in single/dual vault settings. They mention pricing pressures in TomoTherapy due to single/dual vault and multi-system orders, but they say they are making a conscious decision to compete in those bunkers at modestly lower prices, but net benefit because they pick up bunker and service contract. That suggests they are taking lower-priced business, not higher quality. They also mention that they expect revenue growth in 2017 with product revenue growth 6-9%, but overall revenue growth 3-5% due to service revenue low growth. They mention that they are investing in cost reduction initiatives that will pay back in 2018. They don't seem to contrast incoming business quality vs outgoing. They mention that they have a record backlog, but they don't say that the backlog is higher quality than what they are recognizing. They talk about mix of products, but not necessarily better economics. They mention that they are shifting resources to sustaining engineering projects that should benefit cost of goods sold and margins later. That's about cost, not about incoming business quality. They mention that they expect gross orders growth of 5% for 2017, with orders weighted to second half due to Radixact and Onrad. But they don't say that these new products are higher quality or better margins. They mention that they are seeing pricing pressures in TomoTherapy due to single/dual vault and multi-system orders, but they are taking those orders anyway. That suggests they are accepting lower-priced business. They also mention that they had a record quarter for gross orders, but they also had cancellations and age outs. They don't contrast the quality of new orders vs old.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| ASB | Associated Banc-Corp | Q1 2024 | 2024-04-25 | A |
| GIII | G-III Apparel Group, Ltd. | Q4 2024 | 2024-03-14 | C |
| ALL | The Allstate Corporation | Q3 2023 | 2023-11-02 | C+ |
| SPT | Sprout Social, Inc. | Q2 2023 | 2023-08-04 | B+ |
| BRX | Brixmor Property Group Inc. | Q1 2023 | 2023-05-02 | A |
| OEC | Orion Engineered Carbons S.A. | Q4 2022 | 2023-02-17 | B+ |
| BBD | Banco Bradesco S.A. | Q3 2022 | 2022-11-09 | D |
| GFS | GLOBALFOUNDRIES Inc. | Q3 2021 | 2021-11-30 | A |
| KTB | Kontoor Brands, Inc. | Q3 2021 | 2021-11-04 | A |
| CYBR | CyberArk Software Ltd. | Q3 2021 | 2021-11-04 | B+ |
| EHTH | eHealth, Inc. | Q2 2021 | 2021-07-29 | F |
| ADSK | Autodesk, Inc. | Q3 2019 | 2018-11-20 | A |
| GECC | Great Elm Capital Corporation | Q3 2018 | 2018-11-13 | B |
| CUBI | Customers Bancorp, Inc. | Q3 2018 | 2018-10-26 | C+ |
| T | AT&T Inc. | Q3 2018 | 2018-10-24 | C+ |
| ESS | Essex Property Trust, Inc. | Q2 2018 | 2018-08-03 | B+ |
| MKC | McCormick & Company, Incorporated | Q2 2018 | 2018-06-28 | C+ |
| ALLY | Ally Financial Inc. | Q1 2018 | 2018-04-26 | B+ |
| ATI | Allegheny Technologies Incorporated | Q1 2018 | 2018-04-24 | B |
| HSTM | HealthStream, Inc. | Q3 2017 | 2017-10-24 | C |
| MTG | MGIC Investment Corporation | Q3 2017 | 2017-10-18 | B+ |
| BLKB | Blackbaud, Inc. | Q1 2017 | 2017-05-02 | B+ |
HSTM · Q3 2017 → YESThe question is about whether management conveys that the business they're taking in right now is of visibly higher quality than the business they're finishing or letting run off. YES The transcript shows management explicitly contrasting incoming business against outgoing: - Patient Experience: "Existing clients also continue to convert from a phone modality to email and SMS text surveying modality... This conversion trend to continue... expected to have a positive impact... on patient experience margins." (lower price, higher margin shift already happening) - Provider Solutions: "the move from installed software sales to software as service sales... challenge revenue growth... but not profitability growth" and "backlog of unimplemented customers... significantly reduced" - Laerdal/HeartCode: "the new product we believe is right now based on contracts.
GFS · Q3 2021 → YESThe question is about whether management conveys that the business they're taking in right now is of visibly higher quality than the business they're finishing or letting run off. YES The transcript shows management explicitly contrasting the incoming business with the outgoing: compute revenue is declining "as expected" due to customers shifting to smaller nodes, while "newer high-margin customer designs" are ramping in 2H 2022 to offset it. They tie this directly to mix improvement from "d differentiated solutions become a larger portion" and "feature-rich" platforms (FDX, RF SOI, silicon photonics) growing while feature-rich CMOS is flat or down. LTAs signed now carry "pricing improvements" baked in for 2022+, with new agreements committing future capacity at those better terms.
CYBR · Q3 2021 → YESThe question is about whether management conveys that the new business they're taking in is of higher quality than the old business they're replacing, and that as the old rolls off, results will impro...YES Management explicitly contrasts the incoming subscription business (new logos, SaaS bookings, Privileged Cloud, EPM) as higher-quality than the outgoing perpetual license business it is replacing. They describe it as delivering “faster type of value,” “higher lifetime value over time,” and “more users and more products faster ,” while noting that the current revenue and profitability headwind from the mix shift is “obscuring the P&L” and that results will improve once the transition completes.