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 2023 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 Goldman Sachs. They have multiple segments: Global Banking & Markets, Asset & Wealth Management, Platform Solutions. They discuss various businesses. Key points: They mention "financing" revenues in both FICC and Equities. They say "Our strategic priority to grow financing across both FICC and equities continues to yield results as these activities increase the durability of our revenue base and we continue to see attractive deployment opportunities to support further growth." They also mention "Equities financing revenues were a record $1.4 billion" and "FICC financing revenues were $622 million." They talk about growing financing as a strategic priority. Is financing a second avenue that grew out of their existing trading/banking operations? Financing is a core part of their markets business, not necessarily a separate avenue. They also mention "transaction banking" as a business they are building. David Solomon says: "I think it's a dispersed business where there are lots of providers for most people. These are our clients, so we have the right to kind of compete for and be engaged for this. They like our technology but making changes in payment flows takes time. So I think the team here is very focused on the long-term investment in building those relationships." That sounds like a separate business line that emerged from their existing client relationships and technology. But is it already generating real paying business? They say "It's been very constructive in bringing deposits to Goldman Sachs." But they also say "it's not making a meaningful contribution." They are investing in it. But is it a second avenue? They have multiple segments, but the question is about a second avenue that grew out of the first. Transaction banking is a distinct business that leverages their existing client base and technology. They are deliberately growing it. But is it already generating real paying business? They mention deposits, but deposits are not revenue. They might have fees. They say "it's not making a meaningful contribution" but that doesn't mean it's not paying. They are investing in it.
| 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.