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 2016 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. Look for examples: The transcript mentions several things. For instance, Checkout 51 is an app that helps consumers save money and generates data that can be leveraged across News Corp businesses. They are investing in it with a goal of reaching 10 million users. That seems like a second avenue from existing capabilities? But is it distinct? It's a digital app that generates data. They mention "leveraging and further monetizing data" as a strategy. Also, they mention "linking our U.S. audiences to create a powerful digital network for advertising clients" - that's a plan. But is it already paying? They say "we are seeing that virtuous cycle in motion now at Checkout 51." They expect to continue investing. But is it a distinct revenue stream? It's part of News America Marketing? They mention digital revenues doubled, but that's small. However, the question asks for a second distinct way of making money that grew out of existing operations. Another example: The Sun's website re-launched, now reaching 42 million unique users, and they are leveraging that brand across platforms, including through the offer for Wireless Group. But that's an acquisition. Also, they mention "sports betting" as an initiative. But is it already paying? They say "we expect to see driving incremental revenues in fiscal year 2017" - that's future. Another: Realtor.com and Mansion Global collaboration? That's cross-selling. Another: Factiva mobile app? That's product extension. Another: The global property network bringing together listings from REA, Realtor.com, etc. That's a new offering? But it's a network, not necessarily a separate revenue stream. The most promising is Checkout 51: it's an app that generates data which can be leveraged across businesses. They are investing to reach 10 million users. They say "we are seeing that virtuous cycle in motion now" - implying it's already generating revenue? They mention "helps consumers across the country save money and generates a wealth of data which can be leveraged across a number of News Corp businesses." That data monetization could be 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.