Second engine igniting off the first: an unplanned-for adjacent revenue stream has started paying, and management is now
The model's full reasoning — Q2 2017 call → NOWe need to determine if management describes a second, distinct way of making money that emerged from existing operations, is already generating real paying business, and is being deliberately grown. Let's analyze the transcript. The company is Cohen & Steers, an asset manager. They have various strategies: real estate, preferred securities, MLP, global listed infrastructure, etc. They have different channels: institutional, open-end funds, closed-end funds, sub-advised, etc. The question asks about a second, distinct way of making money that grew out of the first. For example, monetizing a capability, technology, process, data, byproduct, or infrastructure originally created for core business. Or an offering originally built for one purpose now being sold as its own line of business. In the transcript, management discusses several things. They talk about new product launches, like the low duration preferred fund, which is a product line extension. They talk about expanding into new markets like Japan institutional, DCIO, Europe. They talk about infrastructure strategies. But is there a distinct second revenue avenue that emerged from existing operations? One possibility: They mention "sub-advised portfolios in Japan" and "sub-advised accounts" - that's a channel, not a new revenue stream. They also mention "AUA" (assets under administration) for Taiwanese and Korean funds. They say: "Two new model delivery sub advisory mandates that I spoke of last quarter and whose assets are assets under administration, have begun to fund, these assets are not included in our AUM. The Taiwanese preferred securities fund is $203 million of AUA and the Korean midstream energy fund is currently $30 million of AUA, both represent strategically important entrees into their respective growth markets." This is about sub-advisory mandates that are not counted in AUM but are AUA. That might be a different kind of revenue? But it's still asset management fees, just on assets under administration rather than management. However, they are sub-advisory mandates, so they are managing money for other funds. That's still the same core business of managing investments. Not a distinct second way of making money. Another possibility: They talk about "model delivery" - that might be a service where they provide model portfolios to advisors.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| M | Macy's, Inc. | Q4 2022 | 2023-03-02 | D |
| CMLS | Cumulus Media Inc. | Q3 2022 | 2022-10-28 | D |
| GDRX | GoodRx Holdings, Inc. | Q2 2022 | 2022-08-08 | F |
| SOPH | SOPHiA GENETICS SA | Q4 2021 | 2022-03-15 | C |
| SLQT | SelectQuote, Inc. | Q2 2022 | 2022-02-07 | F |
| LC | LendingClub Corporation | Q4 2021 | 2022-01-26 | A |
| IRBT | iRobot Corporation | Q3 2021 | 2021-10-28 | D |
| T | AT&T Inc. | Q3 2018 | 2018-10-24 | C+ |
| LRN | Stride, Inc. | Q1 2019 | 2018-10-23 | B |
| MITK | Mitek Systems, Inc. | Q4 2017 | 2017-11-07 | C+ |
| IONS | Ionis Pharmaceuticals, Inc. | Q1 2017 | 2017-05-09 | C |
LRN · Q1 2019 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows career readiness as a distinct second revenue avenue that emerged directly from the existing MPS business: students already enrolled in Managed Public Schools are being moved into career readiness programs (over 5,000 students), and the initiative is built on the same platform, curriculum, and student base. Management explicitly describes it as a “career readiness line of business” and “robust career readiness business” that is already generating paying enrollments today while they are deliberately investing resources—dedicated executives, reallocation of funds, and plans to drive a major portion of next year’s enrollment growth.
M · Q4 2022 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows that Macy’s Marketplace is explicitly described as a distinct new revenue avenue that emerged directly from their existing e-commerce operations and customer base (macys.com, cross-shoppers, and omnichannel platform). Jeff Gennette states it “captures incremental sales opportunity,” “drives a larger average order value,” “allows us to quickly move into new and adjacent categories without inventory risk,” and “attracts a new younger customer,” while management is actively scaling it by adding 2,000 brands in 2023 and launching Bloomingdale’s marketplace in the back half.
GDRX · Q2 2022 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows that Pharma Manufacturer Solutions is the second distinct revenue avenue that emerged from GoodRx’s existing operations. Trevor explicitly states: “Our distinct ability to reach both consumers and providers continues to be recognized by manufacturers as evidenced by the strong growth.” This capability originated from the core prescription-transactions platform and user base 3 years earlier (when other offerings were only ~5% of revenue). In Q2 2022 it generated $26.6 million (102% YoY growth) and is already producing real paying business.