Joining us now is Eric Mandal from Guggenheim. Eric, I mean, you got Warner Brothers Discovery, you've got Service Now that just closed a deal and was rumored to be doing another one. What's driving this pace.Why do you think it can continue. >> Yeah, it's great to be here with you, John Morgan. Thank you for having me again.There are two things going on right now that uh kind of feel like they fly in the face of one another, but creates an environment that likely drives more M&A. The first is we have this ...

Economic Impact of Government Shutdown - The government shutdown is causing limitations on economic data, which may affect the Federal Reserve's policy decisions moving forward [1][2] - The lack of data could create uncertainty in market trajectories, potentially leading to a slower rate-cutting path by the Fed until data is restored [2][5] - The market currently appears unconcerned about the lack of data, which may actually benefit bullish sentiment [2][5] ADP Report Significance - The ADP employment report is gaining importance due to the lack of government data, with expectations for its release this week [6][7] - ADP has adjusted its methodology in recent years to better align with government data, despite previous criticisms regarding discrepancies [7][8] - Analysts are hoping for a positive bounce in the ADP report to bolster confidence in the labor market, especially amid rising layoff announcements [9][10] M&A Activity: Kimberly Clark and Kenview - Kimberly Clark is set to acquire Kenview for approximately $48.7 billion in a cash and stock deal, with Kenview's stock rising by 19% in pre-market trading [13][14] - The acquisition price reflects a discount, possibly due to regulatory hurdles or market conditions affecting Kenview [14][15] - Kenview, known for brands like Tylenol and Neutrogena, is seen as a strategic acquisition for Kimberly Clark to enhance efficiencies [15][16] Market Trends and Outlook - The market is experiencing higher highs and higher lows, with earnings expectations being revised upward for Q1, which is favorable for equities [18][19] - November and December are historically strong months for market performance, aided by low trading volumes that can amplify price movements [20][21] - Concerns remain regarding potential policy reversals and increased debt offerings from major companies, which could impact market dynamics [22][23][24]

Financial Data and Key Metrics Changes - Total revenue grew by 14% year-over-year, surpassing $2 billion, with acquisitions contributing 8% to this growth [12][6] - Organic revenue growth was reported at 6%, consistent across all three segments [12][6] - EBITDA increased by 13% to $810 million, with an EBITDA margin of 40.2% [13][12] - Free cash flow grew by 17% to $842 million, representing 32% of revenue on a trailing twelve-month basis [13][12] Business Line Data and Key Metrics Changes - Application Software segment revenue grew by 18% in total, with organic growth at 6% [21] - Network segment revenue increased by 13%, with organic growth also at 6% [28] - TEP segment revenue grew by 7%, with organic growth at 6% [37] Market Data and Key Metrics Changes - Deltek's government contracting business experienced softness due to a government shutdown, impacting overall performance [22][51] - The freight market showed headwinds, particularly affecting the Network segment, but overall performance remained strong [52][72] Company Strategy and Development Direction - The company is focused on AI enablement across its product stacks, which is seen as a long-term growth driver [7][18] - A $3 billion share repurchase program was announced, marking the first of its kind for the company, reflecting confidence in its strategy [7][15] - The company continues to pursue M&A opportunities, with over $5 billion in capital deployment capacity available in the next twelve months [8][44] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing strong cash flow and AI progress as key growth drivers [9][42] - Concerns were raised about market conditions, particularly in government contracting and trade markets, which may affect future performance [9][51] - The company expects organic revenue growth to normalize in 2026, particularly in the Deltek segment following government spending increases [51][52] Other Important Information - The company highlighted the successful integration of AI features across its software offerings, with significant adoption rates reported [20][56] - The acquisition of SubSplash is performing well, contributing positively to the Network segment [31] Q&A Session Summary Question: Organic growth outlook and reacceleration confidence - Management acknowledged short-term dynamics affecting organic growth but expressed confidence in a rebound due to improving market conditions in 2026 [49][50] Question: AI strategy and product innovation pace - Management reported a strong pace of AI innovation, with numerous new features being rolled out across various software products [55][56] Question: Buyback strategy versus M&A focus - The $3 billion buyback is seen as a complement to the ongoing M&A strategy, reflecting confidence in the company's direction and execution capabilities [62][63] Question: Addressing setbacks in the portfolio - Management noted that while the portfolio is designed to mitigate cyclicality, recent setbacks were due to unique market conditions rather than systemic issues [68][69] Question: Software bookings performance - The decline in software bookings was primarily attributed to Deltek, with expectations for improvement in the coming quarters [72][73] Question: Timing delays at Neptune - Management clarified that delays at Neptune are due to tariff-related issues, with no loss of orders expected, just a push to the right in timing [113][114]

Medtronic 2025 Conference Summary Company Overview - **Company**: Medtronic (NYSE: MDT) - **Date**: September 24, 2025 Key Industry Insights - **Growth Opportunities**: Medtronic is positioned for an inflection in growth, particularly in areas such as Cardiac Ablation, Ardian, and HUGO [3][4] - **Market Leadership Ambition**: The company aims to become the number one player in the electrophysiology (EP) market, leveraging strong product demand and upcoming innovations [63] Core Financial Insights - **EPS Growth Commitment**: Medtronic is targeting high single-digit EPS growth for the upcoming year, with a clear path to achieve this based on internal assessments [6][7] - **Gross Margin Recovery**: The company aims to recover gross margins to pre-COVID levels, currently about 380 basis points lower than before the pandemic [12][8] - **Operational Improvements**: Significant improvements in pricing and cost management are expected to contribute to gross margin recovery, with a target of 1% to 1.5% annual net cost reductions [14][15] Strategic Focus Areas - **Innovation Reinvestment**: Medtronic plans to reinvest a portion of the benefits from growth into innovation through both organic R&D and M&A activities [4][10] - **M&A Strategy**: The company is looking to pursue tuck-in acquisitions in the range of €1 billion to €4 billion, focusing on companies just before or after commercialization [51][52] - **Free Cash Flow Generation**: Medtronic generates over €5 billion in free cash flow and aims to improve this through better operating margins and working capital management [59][61] Operational Enhancements - **Supply Chain Optimization**: The company is working on reducing the number of suppliers and SKU reduction to enhance operational efficiency [33][34] - **Digital Surgery and HUGO**: The HUGO platform is expected to create a comprehensive ecosystem for surgical procedures, enhancing margins and competitiveness [68][69] Market Dynamics - **Cardiac Ablation and RDN**: The company sees significant potential in the RDN market, with a large patient base and expected rapid commercialization [72][73] - **Diabetes Business Divestiture**: Medtronic is in the process of divesting its diabetes business, which is expected to alleviate margin pressures [15][16] Governance and Shareholder Engagement - **Board Enhancements**: Following engagement with Elliott Management, Medtronic has added medtech expertise to its board and established dedicated committees for growth and operations [40][41] - **Shareholder Value Focus**: The company is committed to improving shareholder value through disciplined execution and strategic investments [49][50] Conclusion - Medtronic is strategically positioned for growth with a focus on innovation, operational efficiency, and shareholder value enhancement. The company is committed to recovering gross margins, achieving high EPS growth, and leveraging M&A opportunities to drive future success.

Market Overview - The market is currently positioned well, with positive earnings breath and operating leverage, alongside a weaker dollar benefiting US earnings [2][3] - Capital markets activity is increasing, with 150 IPOs and a nearly 40% rise in M&A activity, indicating a robust market environment [3] Federal Reserve Impact - The Federal Reserve's actions are seen as providing a tailwind for market growth, although there are concerns about whether the market has priced in all the good news too quickly [4][5] AI Spending and Infrastructure - There are indications of peaking AI spending, with concerns about the lack of significant adoption translating into revenue [6][8][10] - The need for improved energy infrastructure and efficiency is highlighted as a critical area for future investment, particularly in relation to AI [12][13] Investment Strategy - The company is adjusting its investment strategy by reducing exposure to private credit and increasing investments in infrastructure, which is deemed essential for supporting AI development [14] - There is a belief in maintaining a diversified investment approach, particularly favoring financials, industrials, and alternative players, as these sectors are expected to perform well [15][16]

Core Viewpoint - Japan Steel aims to reclaim its position as the world's leading steel producer within the next decade, with plans to increase crude steel production by 60% to 100 million tons, focusing on significant investments and strategic acquisitions to compete with Chinese companies [1][3]. Group 1: Strategic Plans and Investments - Japan Steel's CEO, Eiji Hashimoto, announced plans to increase crude steel production by over 20 million tons within the next 10 years, with a target production of 14.18 million tons in 2024 [3][5]. - The company will invest approximately $11 billion by 2028, building on the $14.1 billion acquisition of the U.S. Steel Company, and will focus on advanced equipment investments, including electromagnetic steel plates [3][5]. - Japan Steel aims to double its market share in the U.S. from about 15% by competing with Cleveland-Cliffs, the second-largest steel company in the U.S. [3][5]. Group 2: Market Dynamics and Competition - The U.S. steel industry is facing a long-term decline, with a significant shortage of skilled technicians, prompting Japan Steel to send 40 technical personnel to the U.S. to reduce costs [3][4]. - Japan Steel is concerned about China's potential overcapacity in steel production and its aggressive pricing strategies, which could threaten market share in emerging markets like India and Vietnam [5][6]. - The company has formed a joint venture with ArcelorMittal in India, aiming to increase crude steel production by 15 million tons over the next decade, positioning itself against Chinese competitors [5][6]. Group 3: Future Outlook and Technological Development - Japan's domestic steel demand is expected to decline, with projections suggesting it may fall below 40 million tons in the future, leading Japan Steel to focus on overseas markets for growth [6]. - The company plans to increase the number of technical personnel in the U.S. to 100 and expand opportunities for experience accumulation in India and Europe [6]. - Hashimoto emphasized the necessity of increasing production to maintain and develop technology, indicating interest in future mergers and acquisitions [6].

Financial Data and Key Metrics Changes - The company reported first quarter revenues of $212 million, up more than 100% year over year, marking the highest first quarter revenue in its history [5] - Adjusted compensation margin was 67% of revenues, consistent with full year 2024 accrual expectations [11] - Adjusted non-compensation expense for the quarter was $49 million, which included over $10 million in litigation-related costs, driving year-over-year and quarter-over-quarter increases [11] Business Line Data and Key Metrics Changes - Revenue in the U.S. and Europe doubled, driven by larger fees per transaction due to a focus on client coverage and business selection [5] - The restructuring, liability management, and financing advisory business saw a meaningful uptick in demand starting in April [7] Market Data and Key Metrics Changes - The company noted that while deal announcements have slowed, clients are not terminating processes but rather pausing, indicating a strong client engagement with all-time high stats in new business reviews and requests for meetings [6][7] - The announced impending backlog has declined from record levels, but the pipeline remains strong [7] Company Strategy and Development Direction - The company aims to showcase its strength and lean into growth initiatives, emphasizing a client-centric model that allows for quick resource allocation to meet client needs [9] - The firm is focused on recruiting talent, having added several managing directors in key sectors, indicating a strategy to capitalize on market disruptions [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term prospects despite current market volatility, anticipating that once clarity on policy actions is achieved, transaction activity will accelerate [6][10] - The company views the current environment as an opportunity to solidify client trust and strengthen its brand [10] Other Important Information - The company returned $121 million to equity holders in the first quarter, including over $14 million in open market repurchases [12] - The firm ended the quarter with $111 million in cash and no debt, and declared a quarterly dividend of $0.07 per share [13] Q&A Session Summary Question: Impact of M&A Environment on Business - Management noted that clients are pausing rather than terminating M&A processes, indicating ongoing interest in M&A despite market volatility [17][18] Question: Contribution of Non-M&A Businesses - Management highlighted strong performance in the liability management business, attributing success to both market conditions and gaining market share [21][22] Question: Regional Activity in M&A - Management observed a more unified M&A environment in Europe compared to the U.S., with a greater willingness for regional transactions [33][34] Question: Recruiting Environment - Management indicated that slower announcement activity in M&A could lead to better recruiting opportunities, with a focus on adding talent regardless of market conditions [36][38] Question: Clarity on Compensation Ratio - The 67% compensation ratio reflects the best estimate at the end of the quarter, with potential adjustments as the year progresses [42][43] Question: Non-Compensation Expenses - Litigation-related costs were over $11 million for the quarter, expected to be one-time in nature, with guidance for a single-digit increase in non-compensation expenses for the year remaining unchanged [44][45]