Financial Data and Key Metrics Changes - The company generated $4.1 billion in revenue, with a gross profit of $724 million and a gross profit margin of 17.5% [12] - Adjusted operating margin was 5.8%, and adjusted earnings per share (EPS) was $6.82 [12] - Adjusted net income for Q1 2025 was $134 million, excluding certain non-cash items [21] - Adjusted SG&A as a percentage of gross profit was 64% [22] Business Line Data and Key Metrics Changes - Same store revenue for new vehicles was up 6% year over year, with units up 4% [14] - New average gross profit per vehicle was $3,449 [14] - Used vehicle unit volume was down 8% year over year, with used retail gross profit per unit at $15.87 [15] - Parts and service gross profit was up 5% for the quarter, with a gross profit margin of 58.3% [17] Market Data and Key Metrics Changes - Approximately 56% of new vehicle units sold in Q1 were produced in America, insulating them from tariffs [7] - The company experienced a wide range of approaches from OEMs regarding tariff impacts, making predictions challenging [7] Company Strategy and Development Direction - The company is focused on a disciplined growth strategy, highlighted by the pending acquisition of the Herb Chambers Automotive Group [10] - Plans to reduce leverage over the next 18 to 24 months following the acquisition [11] - The implementation of Techeon is expected to improve productivity and guest experience [9] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter faced challenges due to weather-related disruptions and tariff uncertainties [42] - The company remains optimistic about long-term growth, particularly in parts and service due to an aging vehicle fleet [19] - Management emphasized the importance of focusing on gross profit rather than volume during uncertain market conditions [42] Other Important Information - The company expects to close the Herb Chambers acquisition by the end of Q2 2025, pending OEM approval [10] - Free cash flow for Q1 2025 was $166 million, with liquidity at $964 million [25] Q&A Session Summary Question: Regarding TCA and tariff impacts - Management indicated that tariffs could slow down deferral impacts, affecting future earnings [30] Question: Integration of Techeon and SG&A savings - The rollout of Techeon is progressing well, with expectations of significant SG&A savings through reduced software costs and improved productivity [32] Question: Gross profit performance compared to peers - Management acknowledged weather impacts and emphasized a focus on maximizing returns rather than chasing volume [42] Question: Impact of tariffs on the Herb Chambers acquisition - The asset purchase agreement does not include a breakup fee for the company, and management sees no reason to walk away from the deal [50] Question: Front end gross outlook - Management believes the company is reaching a floor on front end gross, focusing on profitability rather than volume [56] Question: Parts and service growth outlook - Management maintains a mid-single-digit growth outlook for parts and service, with expectations of increased traffic as weather conditions improve [60] Question: Techeon and revenue opportunities - The integration of Techeon is expected to enhance communication and marketing efficiency, leading to potential revenue growth [66]

Financial Data and Key Metrics Changes - ProPetro generated total revenue of $359 million, an increase of 12% compared to the prior quarter [14] - Net income totaled $10 million or $0.09 per diluted share, compared to a net loss of $17 million or $0.17 per diluted share for the fourth quarter of 2024 [15] - Adjusted EBITDA was $73 million, representing 20% of revenue and an increase of 38% compared to the prior quarter [15] - Free cash flow was $22 million, with net cash provided by operating activities at $55 million [15] - Capital expenditures for the first quarter were $39 million, with a full-year CapEx guidance of $295 million to $345 million, down from previous guidance [17] Business Line Data and Key Metrics Changes - The company operates seven Tier four DGB dual fuel fleets, with two under long-term contracts, and four Force fleets in the field, with a fifth expected to be deployed under contract this year [6][7] - Approximately 75% of the fleet is now utilizing next-generation services, which includes Tier four DGB dual fuel and electric offerings [6] Market Data and Key Metrics Changes - The company anticipates operating between 13 and 14 fleets in the second quarter, a reduction from the 14 to 15 fleets operated in the first quarter [12] - The Permian Basin is expected to see a downtick in fleet activity, with projections of running 75 to 85 fleets in June, down from approximately 85 to 90 today [52][54] Company Strategy and Development Direction - ProPetro's strategy focuses on capital-efficient asset investments, disciplined M&A, and transitioning to electric fleets, which are expected to yield durable returns [5][10] - The company is positioning its Pro Power offering to capitalize on the growing demand for reliable, low-emission power solutions [9][10] - The capital allocation strategy emphasizes balancing investments in share repurchases, fleet conversion, and Pro Power investments while maintaining a strong balance sheet [19][48] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the near-term outlook is unclear due to recent declines in oil prices influenced by tariffs and production increases [12] - The company remains confident in its ability to generate free cash flow and maximize long-term value for shareholders despite market volatility [12][20] Other Important Information - ProPetro has retired approximately 13 million shares, representing about 11% of its outstanding common stock since the inception of the share repurchase program [18] - The company has secured letters of intent for approximately 75 megawatts of long-term Pro Power service capacity with two operators in the Permian Basin [9] Q&A Session Summary Question: Focus on Pro Power opportunities - Management confirmed that while the initial focus is on the Permian Basin, they are open to opportunities outside the basin as they grow [25][27] Question: Changes in fleet operation numbers - The reduction in fleet numbers is attributed to both customer activity reductions and the company's choice to avoid low pricing, with a focus on maintaining operational efficiency [28][30] Question: Pricing for pressure pumping equipment - Management noted that contracted pricing remains steady, while spot pricing is more fluid, with some competitors pricing unsustainably low [39][42] Question: Capital allocation framework - The power business and Force Electric offering are prioritized due to known returns, with ongoing flexibility to allocate capital across various opportunities [44][48] Question: Future fleet builds and returns on power generation - Management expects to transition to more electric fleets at a rate of one to two per year, with anticipated returns on power generation assets around four-year paybacks [71][74]

Financial Data and Key Metrics Changes - The company achieved fee revenue of $1,500,000,000, an increase of 4%, with organic fee revenue growing by 6% [13] - Adjusted EBITDA rose by 24% to $96,000,000, with adjusted EBITDA margin expanding by 100 basis points year over year [13] - Adjusted EPS increased to $0.09 from breakeven a year ago, with net leverage at 3.9 times EBITDA [13][18] Business Line Data and Key Metrics Changes - The leasing business grew by 9%, with Americas leasing showing a standout growth of 14% in Q1, marking the third consecutive quarter of double-digit growth [14] - APAC leasing grew by 16%, while EMEA leasing contracted by 26% due to tough comparisons from the previous year [14][15] - The services business achieved organic revenue growth of 4%, with The Americas organic services fee revenue growing by 6% [16] Market Data and Key Metrics Changes - In The Americas, the pipeline of large capital markets deals is now two times the size it was one year ago [8] - RFPs in Americas Leasing and the Multi Market Occupier Group are up by 35% compared to last year, and bid volume in the valuation business was up 30% in Q1 [9] - The APAC Services business demonstrated strong retention rates and five new sizable contracts coming online in the first half of the year [10] Company Strategy and Development Direction - The company is focused on building strength for long-term growth, with disciplined investments unlocking new areas of organic growth [5] - A flat organizational culture allows the company to adapt swiftly to client needs and market shifts, fostering a culture of problem-solving and trust [6][7] - The management believes they are at the beginning of a multi-year recovery in commercial real estate, positioning the company for compelling value opportunities for investors [22] Management's Comments on Operating Environment and Future Outlook - Management noted that tariff uncertainty has not materially impacted the sector, with strong demand for high-quality products continuing [28] - The company expects leasing growth in the mid-single digits for the full year, with capital markets growth anticipated to exceed the previous year's mid-single-digit growth rate [19] - Management remains confident in achieving EPS growth in 2025 that exceeds the growth reported in 2024 [20] Other Important Information - Free cash flow was a use of $167,000,000, consistent with historical working capital trends [17] - The company completed a repricing of $1,000,000,000 of terminal debt, lowering the applicable interest rate by 25 basis points [18] - The balance sheet remains strong, with $1,700,000,000 in liquidity and no funded debt maturities until 2028 [18] Q&A Session Summary Question: Margin improvement and its drivers - Management indicated that the margin improvement was driven primarily by top-line strength, with stronger than expected leasing and services contributing to the results [25] Question: Impact of tariffs on leasing and capital markets - Management stated that tariff uncertainty has not materially impacted the sector, with 90-95% of clients moving forward with decisions [28] Question: Outlook for office leasing in a potential recession - Demand for office leasing remains strong, with long-term leases being signed and lease terms averaging 77 months [34] Question: Recruiting and retention efforts - The company has strengthened its talent pool significantly, hiring multiple capital markets and leasing teams over the past year [36] Question: Trends in industrial leasing amid trade discussions - The company has been outperforming in industrial leasing, with positive trends continuing despite tariff discussions [41] Question: Capital markets sensitivity to interest rates - Management noted that large investors have alternative borrowing methods, and many clients are closing deals regardless of financing market conditions [44] Question: EMEA market performance - EMEA is currently the weakest economy for the company, but there are signs of recovery, particularly in capital markets in the UK [50] Question: Balancing growth and deleveraging - The capital allocation strategy remains focused on growth while continuing to deleverage, with a higher percentage of capital allocated to growth investments [51]

Financial Data and Key Metrics Changes - Total adjusted EBITDA increased by $10 million, rising from $53 million in the fourth quarter to $63 million in the first quarter [24][5][6] - The Timberlands segment's adjusted EBITDA increased from $34 million in the fourth quarter to $42 million in the first quarter [25][24] - Wood Products adjusted EBITDA rose from $9 million in the fourth quarter to $12 million in the first quarter [27][24] Business Line Data and Key Metrics Changes - Timberlands harvested 1.968 million tons in the first quarter, exceeding the Q1 plan by almost 170,000 tons [26][25] - Wood Products shipped 290 million board feet of lumber, which was 10 million board feet over the upper range of Q1 guidance [12][28] - Real Estate segment generated adjusted EBITDA of $23 million in the first quarter compared to $19 million in the fourth quarter [28][24] Market Data and Key Metrics Changes - The Random Lengths Western SPF composite price rose by $60 during the quarter, while Southern yellow pine markets remained relatively firm [6][7] - U.S. housing starts averaged nearly 1.4 million units, with single-family homebuilding starts near 1 million units [20][19] - Existing home inventory has risen, but sales remain on pace with last year's low levels due to elevated interest rates [21][20] Company Strategy and Development Direction - The company is focused on natural climate solutions, including solar and lithium development, with an estimated net present value of around $475 million for solar options [14][15] - The capital allocation strategy remains balanced, with share repurchases prioritized over timberland acquisitions due to the stock trading at a significant discount to net asset value [17][18] - The company anticipates a favorable long-term outlook despite near-term volatility, driven by structural tailwinds in the housing market [22][23] Management's Comments on Operating Environment and Future Outlook - Management noted that the current lumber market is characterized by tepid demand, but expects price risks to be to the upside in the latter half of the year [41][40] - The company plans to harvest between 1.6 million and 1.7 million tons in the second quarter, with expectations for stable Southern sawlog pricing [32][33] - Management expressed confidence in the long-term fundamentals of the industry, despite current economic uncertainties [22][23] Other Important Information - The company has $447 million in liquidity, including $147 million in cash, and plans to refinance $100 million of debt maturing in August [30][24] - Capital expenditures totaled $23 million in the first quarter, with an anticipated full-year spend of $60 million to $65 million [31][24] Q&A Session Summary Question: Can you talk about demand trends in the new IT channel and the R&R channel? - Management described the current market environment for lumber as decent, with the South on firmer footing than the North, and noted that prices are higher in the South [37][38] Question: How would you characterize channel inventories? - Management indicated that the industry is operating at relatively low inventory levels, with some northern species experiencing a slight inventory hangover [42][43] Question: What impact did the recent tariffs have on order books? - Management stated that there was no significant change in end consumer demand, although some advanced ordering may have occurred [51][52] Question: What do you expect regarding Canadian lumber volumes with increased duties? - Management expects a mix of outcomes, with larger competitors potentially absorbing costs while smaller operators may face challenges [55][56] Question: Can you discuss the performance of the Waldo mill? - Management noted that the mill is running well, but pricing has not yet reached desired levels, with expectations for improvement as the year progresses [60][62] Question: What is the outlook for larger real estate transactions? - Management indicated that while smaller transactions are strong, larger transactions may see increased activity as clarity on NCS opportunities improves [66][68] Question: What is the timeline for solar and lithium opportunities? - Management anticipates that one or two deals may close next year, with option periods ranging from three to five years [85][86] Question: Are homebuilders switching to yellow pine due to potential duties? - Management confirmed that substitution has been occurring and is expected to continue as Southern yellow pine production grows [90][91] Question: What is the impact of cedar log prices in Idaho? - Management noted that cedar prices are driven by regional demand and customers being short on cedar [93][94] Question: How will Section 232 tariffs impact timberland valuations? - Management stated that the impact is uncertain and depends on the size and duration of the tariffs [95][94]

Financial Data and Key Metrics Changes - ProPetro generated total revenue of $359 million, an increase of 12% compared to the prior quarter [15] - Net income totaled $10 million or $0.09 per diluted share, compared to a net loss of $17 million or $0.17 per diluted share for the fourth quarter of 2024 [16] - Adjusted EBITDA was $73 million, representing 20% of revenue and an increase of 38% compared to the prior quarter [16] - Free cash flow was $22 million, with net cash provided by operating activities at $55 million [16] Business Line Data and Key Metrics Changes - The company operates seven Tier four DGB dual fuel fleets, with two under long-term contracts, and four Force fleets also under long-term contracts [8][9] - Approximately 75% of the fleet is now comprised of next-generation services, which are in high demand [7] Market Data and Key Metrics Changes - The company anticipates operating between 13 and 14 fleets in the second quarter, a reduction from the 14 to 15 fleets in the first quarter due to market conditions [13] - The Permian Basin is expected to see a downtick in fleet activity, with projections of running 75 to 85 fleets in June [54] Company Strategy and Development Direction - ProPetro's strategy focuses on capital-efficient asset investments, disciplined M&A, and transitioning to electric fleets to withstand market volatility [6][11] - The company is committed to maintaining a strong balance sheet and liquidity profile while pursuing growth opportunities in the power sector and fleet conversion [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the uncertain near-term outlook due to declining oil prices influenced by tariffs and production increases, but remains confident in the company's ability to generate free cash flow and long-term value [13][21] - The company emphasizes the importance of maintaining asset health and not compromising on operational standards during market downturns [13] Other Important Information - ProPetro plans to extend its share repurchase program for another year, having retired approximately 13 million shares since May 2023 [19][20] - The company has a strong liquidity position, with total cash of $63 million and total liquidity of $197 million at the end of the first quarter [19] Q&A Session Summary Question: Opportunities in Pro Power and focus on the Permian Basin - Management indicated that while the initial focus for Pro Power is on the Permian Basin, they are open to opportunities outside the basin as they develop [26][28] Question: Changes in fleet operation numbers - The reduction in fleet numbers is attributed to both customer activity reductions and the company's choice to avoid low pricing, with a focus on maintaining long-term contracts [29][30] Question: Pricing for pressure pumping equipment - Management noted that contracted pricing remains steady, while spot pricing is more fluid, with some competitors pricing unsustainably low [38][42] Question: Capital allocation framework - The power business and Force Electric offering are prioritized in capital allocation due to known returns, while maintaining flexibility for M&A and share repurchases [46][49] Question: Future fleet builds and electrification - Management expects to continue transitioning to electric fleets at a rate of one to two per year, emphasizing the long-term growth potential in this area [71][72] Question: Returns on power generation opportunities - Expected cash-on-cash paybacks for power generation assets are around four years, generating approximately $300,000 of EBITDA per megawatt per year [74][75]

Financial Data and Key Metrics Changes - For Q1 2025, the company reported revenues of $13.7 billion, a decline of 6% operationally, primarily due to lower Paxlovid revenues and changes in the IRA Medicare Part D redesign [26][27] - The diluted EPS for Q1 2025 was $0.52, with adjusted diluted EPS of $0.92, exceeding expectations due to strong gross margin and cost management [27][29] - Adjusted gross margin expanded to approximately 81%, driven by favorable crude royalties, despite an unfavorable product mix [28] Business Line Data and Key Metrics Changes - The Vyndaqel family of products showed robust growth, although competition from new market entrants is anticipated [20] - Nurtech revenue grew 40% operationally in the quarter, reflecting strong demand and effective engagement with healthcare professionals [20] - The oncology portfolio also performed well, with TACCEV growing 25% and LOBRENA growing 39% operationally [21] Market Data and Key Metrics Changes - International operations returned to growth in Q1 2025 across all divisions, driven by prioritization of key growth drivers [19] - The U.S. market demonstrated continuous improvement in execution, with strong performance from key products [18] Company Strategy and Development Direction - The company is focused on improving R&D productivity and advancing its pipeline with a disciplined approach to portfolio management [8][9] - There is a commitment to building the cardiometabolic pipeline, including obesity treatments, through internal programs and potential partnerships [9] - The company aims to enhance its oncology, vaccines, and inflammation immunology sectors while maintaining a strong focus on internal medicine [10][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the volatile external environment, emphasizing the strength of the business and relationships with government leaders [7] - The company reaffirmed its 2025 guidance, expecting revenues between $61 billion and $64 billion and adjusted diluted EPS between $2.8 and $3 [35][36] - Management highlighted ongoing productivity improvement programs aimed at enhancing operational efficiency and margin expansion [32][34] Other Important Information - The company has monetized its Halion investment, contributing to an improved cash position [30][31] - A significant focus on cost management has led to a 12% decline in adjusted operating expenses compared to the previous year [28] Q&A Session Summary Question: Dividend Commitment Amid Tariff Uncertainty - The company reiterated its commitment to maintaining and growing the dividend, emphasizing improved operating margin performance to support this [39][43] Question: Stability of COVID Business - Management indicated that Paxlovid utilization trends closely follow infection rates, with expectations of multiple COVID waves throughout the year [45][46] Question: Future Obesity Asset Profile - The company is focused on clinical and commercial differentiation in obesity treatments, emphasizing tolerability and accessibility [52][56] Question: Tariff Impact on Manufacturing Investments - Management expressed that certainty regarding tariffs would encourage significant investments in R&D and manufacturing in the U.S. [99][100] Question: Cost Realignment Program Savings - The company expects to realize additional savings from its cost realignment program, with a focus on strategic cuts rather than across-the-board reductions [103][104]

Financial Data and Key Metrics Changes - The company generated $4.1 billion in revenue, with a gross profit of $724 million and a gross profit margin of 17.5% [13] - Adjusted operating margin was 5.8%, and adjusted earnings per share (EPS) was $6.82 [13] - Adjusted SG&A as a percentage of gross profit was 63.9% [13] - Adjusted net income for the first quarter was $134 million, excluding certain non-cash items [21] Business Line Data and Key Metrics Changes - Same store revenue for new vehicles increased by 6% year over year, with units up 4% [15] - New average gross profit per vehicle was $3,449 [15] - Used vehicle unit volume decreased by 8% year over year, with retail gross profit per unit at $15.87 [16] - Parts and service gross profit increased by 5%, with a gross profit margin of 58.3%, an expansion of 170 basis points [18] Market Data and Key Metrics Changes - The company estimates that approximately 56% of new vehicle units in Q1 were produced in America, insulating them from tariff impacts [8] - The Stellantis headwind to the company's performance was estimated at $125 per vehicle [15] Company Strategy and Development Direction - The company is focused on a disciplined growth strategy, including the pending acquisition of the Herb Chambers Automotive Group, valued at $1.34 billion [26] - The company plans to reduce leverage over the next 18 to 24 months following the acquisition [12] - The implementation of the Techeon system is expected to improve productivity and guest experience [10] Management's Comments on Operating Environment and Future Outlook - Management noted that the first quarter was impacted by weather-related disruptions and tariff uncertainties [41][44] - The company remains optimistic about long-term growth, particularly in parts and service due to an aging vehicle fleet [20] - Management emphasized the importance of focusing on gross profit rather than volume in the current market conditions [42] Other Important Information - The company generated $187 million of adjusted operating cash flow for the first quarter [24] - Free cash flow was $166 million for the first quarter [25] - The company ended Q1 with $964 million of liquidity [25] Q&A Session Summary Question: Inquiry about TCA and tariff impacts - Management indicated that tariffs could slow down deferral impacts, affecting future earnings [31] Question: Integration of Techeon and SG&A savings - Management reported that the rollout of Techeon is progressing well and is expected to lead to significant SG&A savings [34] Question: Gross profit performance compared to peers - Management acknowledged weather impacts and emphasized a focus on maximizing returns rather than chasing volume [42] Question: Impact of tariffs on acquisition agreements - Management confirmed that there is no breakup fee for the company in the acquisition agreement, and they do not foresee reasons to back out of the deal [48] Question: Front end gross outlook - Management noted that the company is different post-COVID and emphasized focusing on gross profit rather than volume [56] Question: Parts and service growth outlook - Management maintained a mid-single-digit growth outlook for parts and service, despite weather-related impacts [60] Question: Price versus car count in parts and service - Management indicated that revenue increases were primarily due to dollar increases rather than traffic increases [89] Question: Supply issues with luxury brands - Management expressed concerns about potential supply issues with luxury brands due to tariff-related shipment holds [90]

Financial Data and Key Metrics Changes - The company reported record revenue of $2.5 billion, record adjusted earnings of $770 million or $1.53 per share, and record adjusted EBITDA of $1.6 billion [18] - Gold production was approximately 874,000 ounces, with cash costs of $903 per ounce, which were similar to the previous year's first quarter [18][19] - The company returned $0.25 billion to shareholders through dividends and share buybacks [9] Business Line Data and Key Metrics Changes - The Detour mine achieved a new tonnage record, while Meliadine and Macassa also reported strong operational performance [29][44] - Hope Bay is projected to add 400,000 ounces per year in the 2030s, with significant progress made in project preparations [34] - The Malartic project aims to reach a production target of one million ounces per year, with ongoing construction and exploration efforts [37][41] Market Data and Key Metrics Changes - Gold prices have increased by over $1,000 an ounce, benefiting the company's financial performance [7] - The company maintained its cost guidance for the year, expecting cash costs to be within the range of $915 to $965 per ounce [20] Company Strategy and Development Direction - The company is focused on building a long-term, sustainable business, with significant investments in exploration and growth projects [12] - The strategy includes maintaining a strong balance sheet, increasing returns to shareholders, and investing in high-return internal growth projects [26][27] - The company emphasizes operational risk management and maintaining a disciplined approach to capital allocation [64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance for the rest of the year, supported by solid production and cost control [6][10] - The management highlighted the importance of sustainability and community engagement in their operations [12][17] - Future growth is expected to come from ongoing projects and exploration results, with a focus on regions with geological potential and political stability [66] Other Important Information - The company has largely eliminated its net debt, ending the quarter with close to zero net debt, significantly improving its financial flexibility [22] - Moody's revised the company's rating outlook from stable to positive, reflecting its improving credit profile [23] Q&A Session Summary Question: How might the medium-term mine planning and shaft positioning be impacted by Eclipse? - Management indicated that Eclipse will be more relevant in the mid-long term and could assist in the second shaft development [72] Question: What is the drilling plan for Marban? - The drilling is focused on the Eastern Extension, with an update on reserves expected by the end of the year [75] Question: What is the timeline for the second shaft at Malartic? - The second shaft is expected to be in production in the early 2030s [84] Question: How does the company view the potential for buying back royalties? - Management is open to evaluating opportunities to buy back royalties if it makes sense for shareholders [122] Question: What is the company's stance on moving into base metals? - The company remains gold-centric but is open to opportunities in base metals if they present a competitive advantage [130]

Financial Data and Key Metrics Changes - Total assets under management (AUM) decreased to $167.5 billion as of March 31, primarily due to market performance and net outflows [9][16][20] - Earnings per share (EPS) as adjusted was $5.73, a decline from the previous quarter but an increase of 6% year-over-year [13][28] - Operating income as adjusted was $54.6 million, down from $74.5 million sequentially, largely due to seasonal employment expenses [26][27] Business Line Data and Key Metrics Changes - Institutional AUM accounted for 34% of total AUM, with net outflows of $1.2 billion primarily from large cap equity strategies [16][20] - Retail separate accounts experienced net outflows of $700 million, largely due to the soft closing of a specific equity model offering [10][21] - ETFs saw positive net flows of $300 million, with a year-over-year organic growth rate of 73% [12][20] Market Data and Key Metrics Changes - Total sales for the quarter were $6.2 billion, slightly down from $6.4 billion in the previous quarter, with stable sales across products despite market disruptions [9][19] - Institutional sales remained relatively unchanged at $1.5 billion, while retail separate account sales were also stable at $1.7 billion [19][20] - The average fee rate was 41.7 basis points, consistent with the previous quarter, reflecting a mix of asset classes [22] Company Strategy and Development Direction - The company is focused on expanding its offerings in ETFs, global funds, and retail separate accounts, with several strategies under development [8][9] - Management emphasized the importance of active management in volatile markets, with over 70% of equity strategies outperforming their benchmarks [7][8] - The company aims to maintain a balanced approach to capital management, investing in growth while returning capital to shareholders [14][15] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing market volatility and uncertainty, which they believe provides opportunities for active managers to demonstrate value [6][10] - The company remains cautious about investor behavior in light of market conditions, with trends in retail investments remaining consistent [12][20] - Management expressed confidence in their investment performance, with a strong track record recognized by industry rankings [8][18] Other Important Information - The company repurchased approximately 146,000 shares during the quarter, reducing shares outstanding by 3% on a net basis [14][29] - The first quarter typically represents the highest cash utilization due to annual incentives and revenue participation payments [29][30] - The net present value of the tax asset is approximately $112 million, providing a cash tax benefit not included in adjusted EPS [31] Q&A Session Summary Question: Fee rate outlook and changes - Management indicated that the fee rate will be influenced by market conditions and the mix of assets, with a target range of 41 to 42 basis points for modeling purposes [32][34] Question: Capital allocation and share repurchases - Management acknowledged an increase in share repurchases compared to previous quarters, emphasizing the importance of stock performance in capital allocation decisions [36][38] Question: SMAs and capacity constraints - Management confirmed that the soft closing of a successful SMA strategy was a response to market challenges, but they have other strategies available to investors [42][44] - There are no current capacity constraints in other areas of the retail channel, with expectations for growth in mid-cap strategies [45] Question: Monetizing deferred tax assets - Management clarified that they are achieving economic benefits from tax attributes and will continue to provide transparency regarding their value [46][47]

Financial Data and Key Metrics Changes - Bread Financial reported net income of $138 million and earnings per diluted share of $2.78 for Q1 2025, reflecting a resilient business model despite macroeconomic challenges [6][7] - Revenue for the quarter was $970 million, down 2% year over year, primarily due to lower net interest income [17][18] - Average loans decreased by 2% to $18.2 billion, influenced by lower consumer spending and tighter underwriting standards [16][18] - Total non-interest expenses decreased by $5 million or 1%, driven by operational excellence initiatives [17][20] Business Line Data and Key Metrics Changes - Credit sales increased by 1% year over year to $6.1 billion, supported by higher general purpose spending [16][18] - Direct-to-consumer deposits grew by 13% year over year, reaching $7.9 billion, marking significant growth from just over $1 billion five years ago [8][23] - Non-interest income rose by $25 million, attributed to recent pricing changes for paper statements [19] Market Data and Key Metrics Changes - The delinquency rate for Q1 was 5.9%, down 30 basis points year over year, indicating improved credit performance [31] - The net loss rate was 8.2%, down 30 basis points from the previous year, reflecting better-than-expected credit trends [31] Company Strategy and Development Direction - The company is focused on optimizing its capital structure, having executed a $400 million subordinated notes offering to strengthen its balance sheet [7][24] - Strategic credit tightening actions are being implemented to manage credit risk effectively while expanding partnerships and product offerings [11][12][14] - The company aims to maintain flexibility to adapt to changing fiscal and monetary policies and evolving regulatory landscapes [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about economic uncertainty, including the impact of tariffs and inflation on consumer behavior [9][10][39] - The outlook for 2025 includes expectations of flat to slightly down average loans, with total revenue anticipated to be flat to slightly up [35][36] - Management remains confident in the company's ability to generate capital and cash flow, despite macroeconomic challenges [26][40] Other Important Information - The company completed a $150 million share repurchase program, repurchasing 3.2 million shares at an average price below tangible book value [7][25] - Total liquid assets and undrawn credit facilities were $7.4 billion, representing 33% of total assets [27] Q&A Session Summary Question: Insights on consumer payment behavior and credit trends - Management noted that while credit quality is improving, there is significant uncertainty in the economy, influenced by tariffs and inflation [42][44] Question: Unemployment rate assumptions and reserve guidance - The company has incorporated a 7% unemployment rate assumption into its reserve modeling, reflecting a conservative approach [57] Question: Discussion on late fee regulation and partner relationships - Management confirmed that discussions with partners have been positive, and changes made in response to late fee litigation are included in the guidance [58][62] Question: Factors behind improved late-stage roll rates - The improvement is attributed to wage growth outpacing inflation and better performance of newer vintages [66][68] Question: Impact of economic conditions on credit tightening actions - Management stated that while they are maintaining a consistent credit posture, uncertainty may delay potential credit unwind actions [86][88] Question: Capital management and buyback strategy - The company remains focused on responsible growth and will evaluate future buyback opportunities based on capital needs and market conditions [92][94] Question: Net interest margin trajectory - Management expects slight expansion in net interest margin despite headwinds from prime rate reductions and changing product mix [100][102]