Second engine igniting off the first: an unplanned-for adjacent revenue stream has started paying, and management is now
The model's full reasoning — Q3 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. Key points from transcript: - Bobby mentions new products: Nurse Residency Pathway, OB Risk program, Knowledge Q. These are new products but are they a second avenue? They are part of existing segments (Workforce, Patient Experience, Provider). They are product line extensions, not a distinct new way of making money from existing assets. - He talks about "new product concepts" introduced in Feb 2017, now being marketed and sold. All six products have shown revenue and sales orders. But these are new products within existing segments, not a separate revenue avenue. - He mentions "we've recently begun to market and sale some of those products" - that's just new product launches. - He talks about "our new award winning Nurse Residency Pathway" - a new product. - OB Risk program co-developed with MedStar SiTEL - a new product. - Knowledge Q - a new product. - These are all product innovations, not a second way of making money from existing operations. They are still selling to the same customers (hospitals) in the same way (subscriptions, content). Not a distinct stream like licensing data, selling services on installed base, etc. - He mentions "we have also increased our guidance on capital expenditures to reflect this increased level of software development activity" - that's investment in product development, not a second avenue. - He mentions "we are committed to broadening the scope and utilization of simulation technologies" - that's still within Workforce. - He mentions "we’ve signed two new strategic partners" for resuscitation - that's still the same business. - He mentions "we’re still in active business development mode to bring new partners" - again same. - He mentions "we’re doing lots of things there to improve the cash collections" - that's operational. - He mentions "we’re going to have pressures in growing the top line" due to transformations, but that's not a second avenue.
| 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.