Core Insights - Essent Group reported Q2 2025 GAAP EPS of $1.93, exceeding analyst expectations of $1.72, with GAAP revenue at $319.1 million, reflecting a 2.0% increase year-over-year [1][2] - The company experienced a 4.1% decline in net income to $195.3 million compared to Q2 2024, while new insurance written remained flat at $12.5 billion [1][2] Financial Performance - GAAP diluted EPS increased by 1.0% from $1.91 in Q2 2024 [2] - Revenue rose to $319.1 million from $312.9 million in Q2 2024 [2] - Net premiums earned decreased by 1.2% to $248.8 million [2] - New insurance written was unchanged at $12.5 billion [2] - Book value per share increased by 12.6% to $56.98 [5] Investment and Capital Management - Net investment income grew by 5.7% to $59.3 million, supported by a $6.3 billion investment portfolio [5] - The company repurchased 6.8 million shares for $387 million through July 2025, with $260 million remaining under the repurchase program [10] Risk Management and Credit Quality - The loss provision rose to $17.1 million, leading to a loss ratio of 6.6%, up from a negative 0.5% in Q2 2024 [7] - Loans in default increased to 17,255 from 13,954 a year ago [7] - The weighted average FICO credit score across the portfolio was 746, with new business scoring higher at 753 [6] Business Overview and Strategy - Essent Group provides private mortgage insurance, crucial for lenders and homebuyers with low down payments [3] - Key priorities include maintaining relationships with mortgage lenders, adhering to GSE rules, and managing credit risk [4] - The company emphasizes credit quality, capital efficiency, and shareholder returns [4] Title Insurance Segment - In the title insurance segment, Essent Group earned $14.9 million in GAAP net premiums, highlighting the cyclical nature of this business [9] Regulatory and Credit Ratings - Moody's upgraded Essent Guaranty's financial strength rating to A2 and the senior unsecured debt rating to Baa2, with stable outlooks [9] Dividend and Shareholder Returns - The quarterly dividend was maintained at $0.31 per share [10]

Financial Data and Key Metrics Changes - The company reported strong leasing activity with over 1.4 million square feet leased in Q2, bringing the year-to-date total to nearly 6 million square feet, addressing nearly 70% of 2025 lease expirations and driving blended cash rent spreads of over 13% [6] - Same store NOI grew 4.1% on a cash basis, supported by strong rent growth and renewal activity, with occupancy expected to end the year near 96.5% [7] - The company reaffirmed its full year 2025 core FFO guidance, expecting a stronger second half of the year supported by continued lease-up activity and embedded rent growth [9] Business Line Data and Key Metrics Changes - The company closed on $204 million of acquisitions in Q2, including the Ohio Light Industrial portfolio, acquired at an initial yield of 6.7% with in-place rents approximately 22% below market [6] - The focus remains on acquiring and operating smaller footprint infill industrial properties in dense supply-constrained submarkets, which continue to outperform bulk products with occupancy rates over 400 basis points higher than broader market averages [7] Market Data and Key Metrics Changes - The company noted strong demand from light manufacturing users seeking long-term space commitments in core markets, with particular strength in 3PL activity [6][34] - Market rents have been growing but at a slower pace compared to previous years, particularly for larger box products, which have muted overall results [40] Company Strategy and Development Direction - The strategic focus is on acquiring and operating smaller footprint infill industrial properties, which are well insulated from new supply and positioned to capture strong rent growth [7] - The company is actively engaged in a large off-market portfolio acquisition, which could significantly contribute to its acquisition volume for the year [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in tenant retention and renewal activity, with ongoing discussions for lease extensions and a strong pipeline for 2026 [12][13] - The company anticipates that as absorption picks up, interest in build-to-suit opportunities will increase, particularly in infill locations [49] Other Important Information - The company ended the quarter with over $285 million of availability on its unsecured credit line and 74.5% of its debt fixed, maintaining strong balance sheet flexibility [8] - The company executed a share repurchase program, acquiring over 805,000 shares in the quarter and another 225,000 shares post-quarter end [6] Q&A Session Summary Question: Update on lease expirations in Memphis and St. Louis - Management is working on a two-year extension for the Memphis expiration and expects the St. Louis renewal to finalize soon, with no risk of it not happening [12] Question: Expectations for tenant retention in 2026 - Management indicated that 2026 looks light so far, but there are two significant leases in the signature cycle, and they are seeing strong interest in early expirations [13] Question: Additional acquisitions in the second half - The acquisition pipeline currently stands at about $750 million, with a focus on markets where the company already has an operating presence [15] Question: Context on remaining lease expirations - Approximately 80% of the remaining lease expirations are in active discussion, with a mix of active negotiations and ongoing communications with tenants [21][24] Question: Insights on leasing activity and market dynamics - Management noted that manufacturing firms are solidifying long-term space commitments, driven by expectations of future rent increases and strong 3PL activity [33] Question: Capital allocation priorities - The company has about $90 million left to deploy across acquisitions or share repurchases, with a balanced approach to both [45]

Financial Performance - The company reported record revenue growth of 29% year over year, with adjusted EBITDA increasing by 9% year over year [6][21][22] - Net product revenues reached $188 million, with Jornay PM contributing $32.6 million, BELBUCA at $52.6 million (up 1%), Xtampza at $52.6 million (up 18%), and Nucynta franchise at $46.4 million (up 4%) [22][23] - GAAP net income was $12 million, down from $19.6 million in the prior year, while non-GAAP adjusted earnings per share increased to $1.68 from $1.62 [23][24] Business Lines Performance - Jornay PM prescriptions grew by 23% year over year, with record quarterly revenues of $32.6 million [6][22] - The pain portfolio generated record revenues of $155.4 million, up 7% year over year, with all three core pain medicines showing growth [6][18] Market Data - Jornay PM's market share in the long-acting branded methylphenidate market grew to 23%, up 7.6 percentage points year over year [15] - The company expanded its prescriber base for Jornay PM to over 26,000, a 23% increase compared to the previous year [15][35] Company Strategy and Industry Competition - The company aims to build a diversified biopharmaceutical portfolio, focusing on significant growth for Jornay PM and maximizing the pain portfolio [4][9] - The company is committed to strategic capital deployment, including share repurchases and business development opportunities [7][11] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver on financial and strategic commitments, raising 2025 revenue guidance to approximately 19% growth year over year [8][28] - The company is focused on increasing awareness of Jornay PM among healthcare providers and patients, particularly in the adult ADHD market [12][17] Other Important Information - The company completed a $25 million accelerated share repurchase program and announced a new $150 million share repurchase program [7][26] - The company ended the quarter with $222.2 million in cash and cash equivalents, while reducing debt by $16.1 million [10][24] Q&A Session Summary Question: What is the target goal for additional prescribers for Jornay PM by year-end? - Management indicated that there is no specific goal for prescribers but expects continued growth in prescriber breadth [34][35] Question: What are the specific levers for growth in the third quarter? - Management highlighted the importance of raising awareness among healthcare providers and patients to drive prescriptions [51] Question: Any updates on generic competition for the pain portfolio? - Management noted that there are no immediate threats from generics due to regulatory and manufacturing barriers [53][56] Question: How does the company view potential business development opportunities? - Management stated a commitment to disciplined assessment of potential opportunities, focusing on commercial-ready assets [60][61]

Financial Data and Key Metrics Changes - The company generated revenue of $1,308 million, an increase of 10% compared to the previous year [17] - Adjusted EBITDA was $526 million, reflecting a significant increase of 75%, with an adjusted EBITDA margin of 40%, up from 25% in the prior year [17] - UFC segment revenue increased by 5% to $416 million, while adjusted EBITDA rose by 6% to $245 million, maintaining a 59% adjusted EBITDA margin [18] - WWE segment revenue increased by 22% to $556 million, with adjusted EBITDA growing by 31% to $330 million, resulting in a 59% adjusted EBITDA margin, up from 55% [21] - IMG segment revenue decreased by 4% to $37 million, but adjusted EBITDA improved significantly to $29 million from a negative $120 million, achieving a 9% adjusted EBITDA margin [25] Business Line Data and Key Metrics Changes - UFC's live events and global partnerships contributed to robust double-digit growth, with significant partnerships established with Meta and Monster Energy [9] - WWE's live events saw a 29% increase in revenue to $186 million, driven by higher ticket sales and site fee revenue from major events [21] - IMG's production capabilities were highlighted, with significant events covered across multiple continents, although revenue declined due to the loss of FA Cup rights [25][26] Market Data and Key Metrics Changes - The company reported strong performance in international markets, with WWE's premium live events consistently ranking in the top 10 in 37 countries [11] - UFC's site fee strategy is gaining traction, with new partnerships and events being hosted in emerging markets like Azerbaijan and Qatar [9] Company Strategy and Development Direction - The company is focused on capitalizing on sustained demand for premium content and live events, raising its full-year guidance for revenue and adjusted EBITDA [6][29] - The recent ESPN media rights deal for WWE's premium live events is expected to secure a pivotal recurring revenue stream, enhancing the company's strategic positioning [6][35] - The integration of IMG On Location and PBR is progressing well, with anticipated savings and revenue growth from these segments [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain strong performance, citing the successful execution of live events and partnerships [16][36] - The outlook for the remainder of 2025 remains positive, with expectations of continued growth driven by UFC and WWE [29] - Management highlighted the importance of maintaining a balance between capital returns to shareholders and organic investments [28] Other Important Information - The company generated $375 million in free cash flow during the quarter, with a free cash flow conversion rate of 71% [27] - The company ended the quarter with $2.769 billion in debt and $535 million in cash and cash equivalents [27] Q&A Session Summary Question: Discussion on the WWE deal and its impact - Management emphasized the importance of not putting all assets with one partner, highlighting the value of having multiple distribution channels for content [41] - The ESPN deal is expected to enhance audience reach and provide a stable revenue stream with annual escalators [44][46] Question: Timing of the WWE and UFC deals - Management clarified that the timing of the deals was not indicative of challenges with UFC, and they are in the final stages of negotiations [61][63] Question: Incremental margins and profitability - Management discussed the strong performance in the first half of the year and the expected continuation of growth in high-margin areas [100][101] Question: Sponsorship opportunities - Management highlighted the significant potential for increasing sponsorship revenue, particularly with the shift to ESPN's direct-to-consumer model [91][92]

Financial Data and Key Metrics Changes - Consolidated revenue for Q2 2025 was $37.5 million, down from $41.3 million in Q2 2024, primarily due to lower small scale fabrication revenue and weaker services activity [15] - Adjusted EBITDA for Q2 2025 was $1.9 million, a decrease from $2.5 million in Q2 2024, excluding $1.8 million of transaction costs related to the ENGlobal acquisition [15] - Cash and short-term investments at the end of Q2 2025 totaled approximately $62 million, reflecting the impact of capital expenditures and share repurchases [17] Business Line Data and Key Metrics Changes - Services division revenue for Q2 2025 was $22 million, a decrease of 3.5% compared to the previous year, mainly due to lower offshore maintenance activity [15] - Fabrication division revenue for Q2 2025 was $15.8 million, down approximately 15% year-over-year, attributed to lower small scale fabrication activity and delays in new project awards [16] - Corporate division adjusted EBITDA was a loss of $1.2 million for Q2 2025, an improvement from a loss of $2 million in the prior year [17] Market Data and Key Metrics Changes - The company is seeing extended decision cycles for new project awards in certain end markets due to market uncertainty, particularly in the fabrication business [10] - There is a noted pickup in dialogue with customers regarding large projects, particularly in the LNG and petrochemical markets, driven by stabilizing tariff positions [25][28] Company Strategy and Development Direction - The company has focused on reducing risk, growing services and small scale fabrication businesses, and strengthening project execution, which has led to more stable core business performance [5] - The acquisition of ENGlobal is expected to broaden product and service offerings, expand the customer base, and diversify into new end markets [6][7] - The company remains committed to a balanced capital allocation framework, prioritizing investments in business growth and potential acquisitions [12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about long-term competitive positioning despite near-term challenges, including ongoing trade and macroeconomic uncertainty [20] - The company anticipates that consolidated results will improve significantly in Q4 2025 and into 2026, particularly for the fabrication division [19] Other Important Information - The integration of the ENGlobal acquisition is progressing as expected, with initial positive reception from customers and potential strategic partners [8][9] - The company expects operating losses from the ENGlobal business in the second half of the year, estimated between $1.5 million to $2 million [20] Q&A Session Summary Question: Can you describe the industries and end markets where you're seeing a pickup in dialogue on large projects? - Management noted increased discussions in the LNG and petrochemical markets, with improved frequency and quality of conversations due to stabilizing tariff positions [25] Question: Is the large structural steel project a first of its kind for Gulf Island? - Management confirmed that while it is a new end market, Gulf Island is well-equipped for the project, leveraging their capabilities and experience [26] Question: How is the labor situation affecting the company? - Management indicated that there has not been a dramatic impact on labor availability, and they are confident in their ability to hire quality employees for upcoming projects [30][31]

Financial Data and Key Metrics Changes - The company achieved record sales and adjusted EBITDA for Q3 2025, with adjusted EBITDA at $58 million, a 20% increase compared to the previous year [10][23][26] - Revenue for Q3 reached $398 million, which is $65 million or 20% higher than the prior year [11][23] - Free cash flow for the quarter was $52 million, significantly higher than the previous year [23][30] - The company raised its full-year guidance for adjusted EBITDA to $210 million, reflecting a 14.5% margin [33][42] Business Line Data and Key Metrics Changes - The company sold 2,467 buses in Q3, marking a 15% increase year-over-year [23] - Electric vehicle (EV) sales reached a record 271 units, which is 33% higher than the previous year [25][26] - Parts revenue remained flat at $26 million year-over-year [26] Market Data and Key Metrics Changes - The backlog at the end of Q3 was nearly 4,000 units, indicating a slight decrease due to tariff uncertainties [24][25] - The average selling price for buses increased by approximately $7,700 per unit compared to the previous quarter [14][26] - The company noted that the fleet is aging, leading to a heavy replacement cycle, which is expected to drive future demand [13][54] Company Strategy and Development Direction - The company is focusing on enhancing its manufacturing strategy, including automation and production efficiency improvements [6][9] - Investment in differentiated products and features is planned to drive top-line growth [9][10] - The company aims to maintain a competitive edge in alternative-powered vehicles, particularly in the EV segment [7][36] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term outlook for EVs, despite current demand softening due to tariff uncertainties [7][16] - The company is well-positioned to navigate tariff impacts to achieve a margin-neutral outcome [10][90] - Management believes the current order drop is temporary and expects a pickup in orders as tariff uncertainties stabilize [54][90] Other Important Information - The company has initiated production at its new MicroBird plant, which will double small bus capacity [18][19] - A new share repurchase program of up to $100 million has been approved, reflecting strong cash flow generation [32][45] - The company is also working on a new commercial chassis, expected to enter production in 2026 [20][21] Q&A Session Summary Question: Order and backlog commentary - Management noted that the drop in backlog was consistent with industry trends and attributed it to tariff uncertainties, which are expected to stabilize [50][52][54] Question: Operational improvements and margin sustainability - Management confirmed that operational improvements have contributed to margin stability and that they are less sensitive to product mix changes [58][60] Question: EV sales visibility and backlog - The company has 500 EV units in backlog and projects to sell about 200 units in Q4, with additional opportunities expected from EPA funding [68][70] Question: Pricing strategy and market conditions - Management discussed their pricing strategy, emphasizing that tariffs are viewed as a tax and that customers understand the need for price adjustments [88][92] Question: Long-term growth outlook and chassis orders - Management highlighted that the new commercial chassis and MicroBird expansion will contribute to revenue growth and profitability [98][99]

Financial Data and Key Metrics Changes - The company achieved over €500,000,000 in adjusted EBITDA over the last twelve months, with adjusted EBITDA growth of 4% to €133,000,000 and an adjusted EBITDA margin expansion of 70 basis points year over year to reach 21% [4][10][22] - Revenue for the quarter was up 1% year over year, reaching $631,000,000, which was above guidance midpoint [10][20] - Free cash flow generated in the quarter was $27,000,000, although it declined year over year due to one-time elements from the previous year [22] Business Line Data and Key Metrics Changes - Total transaction volume increased by 1% on a workday adjusted basis, with total transaction value (TTV) growing 3% to $7,900,000,000 [9][10] - The company reported a high customer retention rate of 95% over the last twelve months, with total new wins value reaching €3,200,000,000, including €2,200,000,000 from SME customers [5][10] Market Data and Key Metrics Changes - Transaction growth in The Americas reached 2% in May and June, while EMEA transactions improved dramatically to 3% during the same period [13] - Air transactions stabilized in May and June after a decline in April, with hotel transactions showing a 4% growth in May and June, outpacing air transactions [11][12] Company Strategy and Development Direction - The company is focused on efficiency gains and driving operating leverage, with a strong emphasis on increasing hotel revenues and digital transactions [12][21] - The pending acquisition of CWT is expected to create significant value, with anticipated net synergies of approximately $155,000,000 over three years [8][39] Management's Comments on Operating Environment and Future Outlook - Management noted that macroeconomic uncertainty impacted demand in April but improved in May and June, leading to confidence in the demand environment moving forward [10][11] - The company raised and narrowed its full-year 2025 guidance, expecting revenue growth of 2% to 4% year over year, with a midpoint of $2,488,000,000 [25][26] Other Important Information - The company has nearly $1,000,000,000 in available liquidity and plans to initiate a stock repurchase program under a previously announced $300,000,000 authorization [7][29] - The acquisition of CWT is valued at $540,000,000 on a cash-free, debt-free basis, with a portion of the consideration funded through cash on hand [9][28] Q&A Session Summary Question: Will ongoing share gains continue in the second half of the year? - Management confirmed that continued share gains are expected in the second half, driven by increased sales and marketing investments to accelerate net new wins [33] Question: Do you have visibility into CWT's 2025 performance? - Management stated that detailed information about CWT's financial performance will be available post-close, with an update expected during the Q3 results announcement [37] Question: What drove the deceleration in APAC? - The deceleration in APAC was primarily driven by Australia, influenced by the timing of tariffs and the mining vertical [42] Question: Are the declines in April recoverable? - Management indicated that the declines in April were due to macroeconomic uncertainty and not necessarily recoverable, as companies became more confident in planning in May and June [45]

Financial Performance - Fox Corporation reported a revenue growth of 17% to $16 billion, with adjusted EBITDA growth of 26% to $3.6 billion and adjusted EPS growth of 39% to $4.78 per share, all records for the company [6][16][18] - Free cash flow increased by 100% to $3 billion, marking another record [6][16] - Net income attributable to stockholders was $2.3 billion or $4.91 per share, up from $1.5 billion or $3.13 per share in the previous fiscal year [18] Business Segment Performance - The Cable Network programming segment achieved 7% revenue growth and 6% EBITDA growth, with cable advertising revenues up 15% [20] - The Television segment delivered 6% revenue growth, with advertising revenues growing 3% [21] - Tubi saw a 32% revenue growth in the fourth quarter, driven by a 17% increase in total view time [12][19] Market Trends - Fox News maintained over 60% share of the cable news audience, with total day audience up 25% and demo audience up 31% [8][42] - The overall advertising market for Fox remains healthy, with record-setting double-digit volume growth and strong pricing growth across the portfolio [7][74] - Tubi reached over 100 million monthly active users and generated over $1.1 billion in revenue, achieving a 2.2% share of total U.S. television viewings [12][13] Company Strategy and Industry Competition - Fox One, a direct-to-consumer streaming platform, is set to launch at $19.99 per month, targeting both cordless consumers and current pay TV subscribers [11][12] - The company plans to invest in digital-led growth initiatives, including Tubi and Latin America, while maintaining a focus on organic growth [23][66] - Fox's strategy emphasizes engaging viewers across various platforms, including traditional cable and digital offerings [14] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the trajectory of the business, citing strong operational and financial momentum entering fiscal 2026 [15] - The company anticipates challenges in fiscal 2026 due to the absence of political advertising and the Super Bowl, but expects strong performance from the FIFA Men's World Cup [36][75] - Management highlighted the importance of maintaining strong relationships with affiliates and local stations, especially with the launch of Fox One [85] Other Important Information - The company announced a $5 billion increase to its share repurchase authorization, reflecting a strong balance sheet [15][26] - Fox's advertising revenue growth was driven by a robust demand for sports programming and political advertising [17][74] Q&A Session Summary Question: Insights on fiscal 2026 expectations - Management acknowledged the challenges ahead, particularly with political advertising and the Super Bowl, but emphasized strong underlying business momentum [31][34] Question: Update on cable advertising trends - Management reported strong advertising demand, particularly for Fox News, with significant increases in ratings translating to revenue growth [41][42] Question: Tubi's competitive position - Tubi is outperforming the broader CTV market due to its extensive content library and strong engagement with a younger, cordless audience [50][52] Question: M&A participation - Management stated that while they are always looking for opportunities, they have not found any that meet their high internal benchmarks for capital use [71][72]

Q2 2025 Financial Highlights - Revenue reached $1.47 billion, a 2% increase Q/Q[14] - Gross margin was 37.6%, a decrease of 240 bps Q/Q[14] - Operating margin was 17.3%, a decrease of 90 bps Q/Q[14] - Diluted EPS was $0.53, a decrease of $0.02 Q/Q[14] Revenue Breakdown by Segment - Automotive revenue was $733 million, a 4% increase Q/Q[14] - Industrial revenue was $406 million, a 2% increase Q/Q[14] - Other revenue was $329 million, a 16% increase Q/Q[14] Q3 2025 Guidance - Revenue is expected to be between $1.465 billion and $1.565 billion[18] - Non-GAAP gross margin is expected to be between 36.5% and 38.5%[18] - Non-GAAP operating expenses are projected to be between $280 million and $295 million[18] - Non-GAAP diluted EPS is expected to be between $0.54 and $0.64[18] Long-Term Financial Targets (2027) - Revenue is targeted to grow at a CAGR of 10-12%[79, 86] - Gross margin is targeted to reach 53%[36, 79, 86] - Operating margin is targeted to reach 40%[79, 86] - Free cash flow is targeted to be 25-30% of revenue[37, 79, 86]

Financial Data and Key Metrics Changes - The company reported a decline in forecasted net cash flows by 0.5% or $56 million during the quarter [4][48] - The loan portfolio reached a record high of $9.1 billion on an adjusted basis, up 6% from the previous Q2 [4][48] - The adjusted return on capital was reported at 8.5%, with a cost of capital of 7.4%, resulting in a spread of 110 basis points [26][70] Business Line Data and Key Metrics Changes - Loan performance declined, particularly in the 2022, 2023, and 2024 vintages, while the 2025 vintage exceeded expectations [4][48] - The company financed over 85,000 contracts for dealers and consumers during the quarter [7][51] - The unit volume was impacted by a scorecard change in Q3 2024, resulting in lower advance rates [4][48] Market Data and Key Metrics Changes - The market share in the core segment of used vehicles financed by subprime consumers decreased to 5.4% from 6.6% in the same period of 2024 [4][48] - The competitive environment has intensified, affecting volume per dealer [39][81] Company Strategy and Development Direction - The company aims to maximize intrinsic value and positively impact five key constituents: dealers, consumers, team members, investors, and communities [5][49] - Continued investment in modernizing technology architecture and loan origination systems is a priority [8][52] - The company received recognition as one of the 100 best companies to work for, indicating a focus on employee satisfaction [9][53] Management's Comments on Operating Environment and Future Outlook - Management noted that forecasting models perform well during stable economic periods but struggle during volatility, with inflation impacting loan performance [15][58] - The company expects a different mix of business to drive future performance, adjusting expectations accordingly [22][65] - The competitive environment remains challenging, with expectations of potential pullbacks from traditional credit providers [39][81] Other Important Information - The company raised over $270,000 for charitable causes, supporting community engagement [10][53] - The engineering team has made significant progress in modernizing systems, enhancing operational efficiency [8][52] Q&A Session Summary Question: Collection trends and adjusted yield - The decline in forecasted collections typically drives adjusted yield down, but new loan originations have offset this decline [12][56] Question: Loan size trends - A different mix of consumers has contributed to the decline in loan size, not necessarily indicating lower quality borrowers [18][61] Question: Economic return on capital - The business model is designed to produce acceptable returns even with loan underperformance, with current vintages still generating economic profit [26][70] Question: Share repurchases - The company repurchased 530,000 shares at an average price of $490, with plans to review additional capacity for repurchases [30][74] Question: Competitive environment outlook - The competitive landscape is challenging, with expectations of increased costs impacting consumers, but it is too early to determine long-term effects [39][81]