Core Points - Diageo plc has appointed Sir Dave Lewis as the new Chief Executive Officer and Executive Director, effective January 1, 2026 [1] - Sir Dave Lewis is recognized as a proven CEO with extensive experience in marketing and brand building [1]

Core Insights - The focus is on value investing with an emphasis on fundamental research across various sectors including chemicals, homebuilders, building materials, industrials, and metals & mining [1] - The investment strategy targets stocks that are undervalued and have potential catalysts within a timeframe of one quarter to two years [1] - The analyst has over three years of active investing experience, having worked as a buy-side analyst at a boutique research firm and family offices [1] Sector and Company Analysis - The sectors of interest include chemicals, homebuilders, building materials, industrials, and metals & mining, indicating a diverse investment approach [1] - The preference for stocks that are "cheaply available" suggests a focus on identifying undervalued companies with strong fundamentals [1] - The investment horizon of one quarter to two years allows for both short-term and medium-term investment strategies, accommodating various market conditions [1]

Core Insights - The Technology Services industry has experienced significant growth since the pandemic, driven by remote work adoption and technological advancements such as 5G, blockchain, AI, and ML [1][5][7] Industry Overview - The Zacks Technology Services industry includes companies that produce, develop, and design software support, data processing, computing hardware, and communications equipment [3] - This industry serves both consumer and business markets, offering a wide range of services including advanced analytics, clinical research, data storage technology, and technology-enabled financial services [4] Future Trends - The industry is mature with a healthy demand for services, and revenues are expected to return to pre-pandemic levels, supporting stable dividends for most players [5] - Economic recovery is benefiting the sector, with GDP growth of 3.8% in Q2 2025 and a strong Services PMI indicating robust non-manufacturing sector activity [6] - The global shift towards digitization is creating opportunities in markets like 5G, blockchain, and AI, with the GenAI market projected to reach $59 billion in 2025 and a CAGR of 37.6% from 2025 to 2031 [7] Industry Performance - The Zacks Technology Services industry has outperformed the broader Zacks Business Services sector and the S&P 500, with a 53% increase over the past year compared to a 7.5% decline in the sector and a 17.9% rise in the S&P 500 [10] - The industry is currently trading at an EV-to-EBITDA ratio of 17.19X, lower than the S&P 500's 18.33X, indicating potential valuation opportunities [11] Company Highlights - **Futu Holdings**: A digitalized securities brokerage with a 69.7% year-over-year revenue increase in Q2 2025, and a 1,570 basis points expansion in operating margin. The company added 262,000 funded accounts, totaling 2.7 million [12][13] - **Dave**: A financial services platform that added 843,000 members, resulting in a 60% year-over-year revenue increase. The company raised its full-year revenue guidance to $544-$547 million [15][19] - **Coherent Corp.**: A leader in photonics with a 16.4% year-over-year revenue growth in Q4 2025, driven by demand for 800G transceivers. The company introduced a new 1.6T transceiver, enhancing its market position [20][21]

Core Insights - Dave Inc. (DAVE) reported solid growth in Q3, with expanding margins, indicating a positive financial performance [1] - The company has a modest customer base, suggesting potential for future growth through its niche overdraft product [1] Financial Performance - Q3 results showed solid growth and margin expansion, reflecting the company's effective operational strategies [1] Growth Potential - There is still room for growth due to the company's niche overdraft product, which can attract more customers over time [1]

Industry Overview - The Technology Services industry has experienced significant growth since the pandemic, driven by the rapid adoption of remote work and advancements in technology such as 5G, blockchain, AI, and ML [1] - The industry includes companies that produce, develop, and design software support, data processing, computing hardware, and communications equipment, catering to both consumer and business markets [2] Future Prospects - The demand for services in the industry remains healthy, with revenues and cash flows expected to return to pre-pandemic levels, supporting stable dividends for most players [3] - The sector benefits from broader economic recovery, with GDP growing at an annual rate of 3.8% in Q2 2025 and a Services PMI remaining above 50% for 11 of the past 13 months [4] Technological Advancements - The global shift towards digitization presents opportunities in markets such as 5G, blockchain, and AI, with the GenAI market projected to reach $59 billion by 2025 and a CAGR of 37.6% from 2025 to 2031 [5] Market Performance - The Zacks Technology Services industry ranks 94, placing it in the top 39% of over 243 Zacks industries, indicating strong near-term prospects [6][7] - Over the past year, the industry has outperformed the broader Zacks Business Services sector, increasing by 53% compared to a 7.5% decline in the sector and a 17.9% rise in the S&P 500 [8] Current Valuation - The industry is currently trading at an EV-to-EBITDA ratio of 17.19X, compared to the S&P 500's 18.33X and the sector's 10.49X, with a five-year trading range of 8.85X to 17.19X [11] Company Highlights Futu Holdings - Futu Holdings, a digital securities brokerage, reported a 69.7% year-over-year revenue increase in Q2 2025, with a significant operating margin expansion [16] - The company added 262,000 funded accounts, reaching a total of 2.7 million, with a 42% year-over-year growth in funded accounts [17] - Futu Holdings has a Zacks Rank 1 (Strong Buy), with earnings expected to grow 74.7% year-over-year in 2025 [18] Dave - Dave, a financial services platform, added 843,000 members, resulting in a 60% year-over-year revenue increase in Q3 2025 [19] - The company raised its full-year revenue guidance to $544-$547 million, up from $505-$515 million [21] - Dave holds a Zacks Rank 1, with earnings expected to soar 98.5% year-over-year in 2025 [22] Coherent Corp. - Coherent Corp. experienced a 16.4% year-over-year revenue growth in Q4 2025, driven by demand for 800G transceivers [23] - The company introduced a new 1.6T transceiver, contributing to improved profitability with a non-GAAP gross margin increase of 290 basis points [24] - Coherent has a Zacks Rank 2 (Buy), with earnings expected to rise 30% year-over-year in fiscal 2026 [25]

Membership and Market Opportunity - Over 18 million Members have signed up for the Dave app, with nearly 14 million having used at least one product, and the company has provided nearly $20 billion in ExtraCash[203] - Approximately 185 million Americans are classified as financially "coping" or "vulnerable," representing 69% of the U.S. population, highlighting a significant market opportunity[206] Financial Performance - For the three months ended September 30, 2025, total operating revenues reached $150.7 million, a 63% increase from $92.5 million in the same period of 2024[230] - Total operating revenues for the nine months ended September 30, 2025, reached $390.5 million, a 59% increase from $246.2 million in 2024[254] - For the three months ended September 30, 2025, Adjusted EBITDA was $58.6 million, a significant increase from $24.7 million in the same period of 2024, representing a growth of 137.5%[285] - For the nine months ended September 30, 2025, net income was $129.9 million, compared to $41.1 million for the same period in 2024, indicating a year-over-year increase of 215.6%[285] Revenue Sources - Processing and overdraft service fees totaled $129.2 million for the three months ended September 30, 2025, representing a 120% increase compared to $58.7 million in the same period of 2024[231] - Subscription revenue increased to $10.0 million for the three months ended September 30, 2025, a 57% increase from $6.3 million in the same period of 2024[234] - Transaction based revenue, net increased to $11.5 million for the three months ended September 30, 2025, a 26% increase from $9.1 million in the same period of 2024[235] - Subscription revenue increased by 37% to $24.8 million, driven by growth in the number of paying Members and fee increases[257] - Transaction-based revenue, net increased by $6.2 million, or 24%, to $31.8 million for the nine months ended September 30, 2025, compared to $25.6 million for the same period in 2024[258] Expenses and Costs - Total operating expenses increased by $35.7 million, or 15%, to $268.3 million for the nine months ended September 30, 2025, compared to $232.6 million for the same period in 2024[260] - Processing and servicing costs totaled $9.4 million, a 12% increase from $8.4 million, driven by higher ExtraCash origination volume[242] - Financial network and transaction costs increased by 18% to $7.4 million, primarily due to a 25% rise in spend-related transaction volume[243] - Advertising and activation costs rose to $18.9 million, a 27% increase, driven by strategic marketing investments[244] - Compensation and benefits expenses decreased by 18% to $24.8 million, attributed to various cost-saving measures[245] Credit Losses and Provisions - Provision for credit losses rose to $29.8 million, an increase of 118% from $13.7 million year-over-year, reflecting growth in ExtraCash volume and Member base[236] - Provision for credit losses rose by $27.8 million, or 73%, to $65.7 million for the nine months ended September 30, 2025, reflecting growth in ExtraCash volume and an expanding Member base[260] Cash Flow and Investments - The company generated $196.7 million in cash from operating activities for the nine months ended September 30, 2025, compared to $83.4 million for the same period in 2024, reflecting a substantial increase of 135.5%[300] - Net cash used in investing activities for the nine months ended September 30, 2025, was $151.9 million, significantly higher than $19.0 million in the same period of 2024[303] - The company reported a net increase in cash and cash equivalents of $0.4 million for the nine months ended September 30, 2025, compared to a decrease of $6.5 million in the same period of 2024[300] Share Repurchase and Debt - The company repurchased 132,155 Class A common shares for a total cost of $25.0 million in August 2025, as part of a share repurchase program authorized for up to $125.0 million[292] - The company has authorized a share repurchase program with $125.0 million available for repurchases as of September 30, 2025[293] - The company expects to continue generating ExtraCash primarily using balance sheet cash and its Debt Facility, with $75.0 million of term loans outstanding as of September 30, 2025[296] Tax Provisions and Legislation - Provision for income taxes showed a significant decrease of $34.0 million, or 9,119%, primarily due to the release of a valuation allowance on deferred tax assets[252] - The provision for income taxes showed a decrease of approximately $27.9 million, or 1,556%, resulting in a provision of $(26.1) million for the nine months ended September 30, 2025, mainly due to the release of a valuation allowance on deferred tax assets[279] - California's new law effective for tax years beginning in 2025 is expected to reduce the company's California apportioned income and related state income tax expense[318] - The new U.S. tax legislation H.R.1 allows the company to accelerate previously capitalized and unamortized U.S. research and development costs over a one or two-year period, with an ongoing assessment of its impact on financial statements[319] Accounting and Reporting - The company is classified as an "emerging growth company" and will continue to utilize the extended transition period for new or revised financial accounting standards until December 31, 2025[320] - The company intends to rely on exemptions and reduced reporting requirements provided by the JOBS Act, which includes not providing an auditor's attestation report on internal control over financial reporting[321] - Recent accounting pronouncements and their impact are discussed in the company's condensed consolidated financial statements[322]

Core Insights - Dave Inc. (DAVE) reported quarterly earnings of $4.24 per share, significantly exceeding the Zacks Consensus Estimate of $2.29 per share, and up from $1.51 per share a year ago, representing an earnings surprise of +85.15% [1] - The company achieved revenues of $150.8 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 14.97%, and up from $92.49 million year-over-year [2] - DAVE INC shares have increased approximately 176.2% since the beginning of the year, outperforming the S&P 500's gain of 16.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $2.49 on revenues of $140.4 million, and for the current fiscal year, it is $10.40 on revenues of $511.27 million [7] - The estimate revisions trend for DAVE INC was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Technology Services industry, to which DAVE INC belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8]

Financial Data and Key Metrics Changes - Revenue grew 63% year over year to $150.8 million, with adjusted EBITDA reaching $58.7 million, reflecting a 137% increase year over year [4][20] - Monthly transacting members (MTMs) increased by 17% to 2.77 million, while average revenue per user (ARPU) expanded by nearly 40% [4][21] - Non-GAAP gross profit rose 62% year over year to $104.2 million, with a non-GAAP gross margin of 69% [18][20] Business Line Data and Key Metrics Changes - Extra Cash origination grew 49% year over year, surpassing $2 billion for the first time, with a 20% increase in average origination size [9][10] - Total card spend increased by 25% year over year to $510 million, driven by growth in MTMs and card spend per active banking customer [10] - High-margin subscription revenue grew 57% year over year, with a new $3 monthly subscription fee for new members [10][18] Market Data and Key Metrics Changes - The 28-day delinquency rate improved by seven basis points sequentially to 2.33%, with further improvement to 2.19% in September [15][17] - The company reported a stable customer acquisition cost (CAC) of $19, with improvements in marketing efficiency [8][24] Company Strategy and Development Direction - The company is focused on maximizing gross profit dollars across the platform and enhancing credit performance through the rollout of Cache AI v5.5 [4][7] - Strategic growth pillars include efficient member acquisition, strengthening engagement through credit, and deepening monetization via Dave Cards [8][10] - The transition to Coastal Community Bank is expected to reduce funding obligations and lower the cost of capital, enhancing liquidity for strategic opportunities [20][30] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future growth, citing strong performance across all aspects of the business and raising 2025 revenue and adjusted EBITDA guidance [4][21] - The company anticipates continued improvements in credit performance and expects the provision expense as a percentage of originations to improve in Q4 [18][20] Other Important Information - The company is in the process of transitioning to a new funding arrangement with Coastal Community Bank, expected to be completed by early 2026 [20][30] - The introduction of a new Buy Now, Pay Later product is in internal testing, with customer testing expected in Q1 [60] Q&A Session Summary Question: What is driving the improvement in delinquency rates with Cache AI v5.5? - Management highlighted the extensive data inputs in Cache AI v5.5, which has led to superior credit performance and better control over loss rates [23] Question: What consumer trends are being observed? - Management noted that consumer spending and income appear stable, with a consistent CAC of $19, indicating healthy business conditions [24] Question: What is the timeline for the transition to Coastal Community Bank? - The transition is expected to be completed by early 2026, with a full migration of funding arrangements targeted for the end of Q1 or early Q2 [30] Question: How does the company view its operating leverage and future growth? - Management expressed satisfaction with the current EBITDA margin and indicated plans for further investments to support growth [36] Question: What percentage of members are using the Dave Card? - Approximately 30% of total customers are sending Extra Cash to the Dave Card, which is seen as a way to drive incremental retention [58] Question: What is the expected impact of the new pricing model on revenue? - The new pricing model is anticipated to stabilize yields and enhance revenue growth, with improvements in unit economics [70]

Core Insights - Dave's Killer Bread is reintroducing its original Oats & Blues variety to celebrate its 20th anniversary, highlighting its legacy as the nation's No. 1 organic bread brand [1][2][3] Company Overview - Founded in 2005 at the Portland Farmers Market, Dave's Killer Bread has become a leading brand in the organic bread market, offering 33 varieties of whole grain organic bakery and snack products [5] - The brand is known for its commitment to using organic and non-GMO ingredients, and all products are certified USDA organic and Non-GMO Project Verified [3][5] - Dave's Killer Bread also emphasizes social responsibility through its Second Chance Employment program, employing individuals with criminal backgrounds, with one in three employees at its Oregon bakery having such a background [5] Product Details - The Oats & Blues variety features a crunchy crust made from oats and blue cornmeal, with a soft texture and a hint of sweetness, delivering whole grains in every bite [3] - In 2025, Oats & Blues will also be available in a Thin-Sliced version, maintaining the same taste and texture in a smaller slice [3] - The suggested retail price for Oats & Blues is $6.99, while the Thin-Sliced version is priced at $5.99, with prices varying by location [4] Consumer Engagement - The brand has cultivated a strong following, referred to as "BreadHead Nation," which consists of 1.5 million passionate fans who enjoy various bread products from Dave's Killer Bread [4]

Financial Highlights - Dave's Adjusted EBITDA Margin expanded approximately 1,200 bps year-over-year to 39%[19] - ExtraCash origination volume grew 49% year-over-year to $2 billion[19] - Total revenue increased 63% year-over-year to $151 million[19] - The company is raising 2025 revenue guidance to $544 million - $547 million, representing a year-over-year growth of 57%-58%[23] - The company is raising 2025 Adjusted EBITDA guidance to $215 million - $218 million, representing a year-over-year growth of 149%-152%[23] Business Performance - New fee model drove a step-change improvement in ExtraCash net revenue, increasing gross monetization rate by approximately 70 bps year-over-year to 64%[20] - Average ExtraCash size increased 20% year-over-year to $207[20] - Average revenue per ExtraCash (net) increased 32% year-over-year to $10[20] - Dave acquired 843,000 new members in 3Q25, up 17% quarter-over-quarter, while CAC remained flat at $19[50] - Total members reached 135 million in 3Q25, up 17% year-over-year[55]