Core & Main (NYSE:CNM) Q4 2026 Earnings call March 24, 2026 08:30 AM ET Company ParticipantsBrad Cowles - PresidentGlenn Floyd - Director of Investor RelationsJoe Ritchie - Managing DirectorMark Witkowski - CEOMatthew Bouley - Managing DirectorMike Dahl - Managing Director, Equity ResearchNigel Coe - Managing DirectorRobyn Bradbury - CFOConference Call ParticipantsDavid Manthey - Senior Research AnalystMatt Johnson - Equity Research AnalystOperatorHello, and welcome to the Core & Main Q4 and full year 2025 ...

Core Insights - NETSOL Technologies, Inc. has successfully launched its Transcend Finance platform for a tier-one U.S.-based auto captive finance company in China, under a contract valued at over $10 million [1][3]. Group 1: Product and Implementation - Transcend Finance is designed with a modular architecture that allows for scalability and flexibility, enabling lenders and financiers to accelerate digital transformation and manage the complete finance lifecycle [2]. - The implementation of Transcend Finance represents a significant advancement in the client's modernization and technology-driven growth [2][4]. - The platform provides a modern solution for the full finance lifecycle, allowing the client to scale with market demands [3]. Group 2: Company Performance and Strategy - The successful go-live of Transcend Finance reflects strong execution by NETSOL's team in China and highlights the company's long-standing relationship with global OEM captives [4]. - NETSOL's unified, AI-enabled Transcend Platform empowers customers to innovate faster and deliver exceptional digital experiences in the competitive automotive market [5]. - The company has established a growing portfolio of premier clients in China, solidifying its reputation as a trusted partner for innovation and scalability in automotive finance operations [5]. Group 3: Company Background - NETSOL Technologies has been delivering advanced solutions for the asset finance and leasing industry since 1996, serving automotive and equipment OEMs, auto captives, and financial institutions across over 30 countries [6]. - The company is recognized for its deep industry expertise, customer-centric approach, and commitment to excellence, fostering strong partnerships to ensure client success [6].

Core Insights - The fourth quarter of 2025 saw mixed results for midcap stocks, with the Russell Midcap® Growth Index decreasing by 3.70% and the Russell Midcap® Value Index rising by 1.41% [1] - The growth index's materials sector achieved the highest absolute return at 17.51%, but its contribution to overall returns was limited due to smaller weight in the index [1] - Midcap stocks generated positive returns in 2025, with the Russell Midcap Growth Index rising by 8.66%, trailing the Russell Midcap Value Index's 11.04% return [1] - The firm anticipates a favorable year ahead for equity markets, highlighting potential opportunities in Cyclicals, Healthcare, Information Technology, Financials, and Consumer Spending sectors through 2026 [1] Company Insights: Axon Enterprise, Inc. - Axon Enterprise, Inc. is identified as a leading detractor in the fourth-quarter 2025 investor letter, with a market capitalization of $46.56 billion [2] - The stock closed at $579.09 per share on March 3, 2026, delivering a 34.47% return in the past month and gaining 8.25% over the past twelve months [2] - Axon reported softer than anticipated bookings growth, leading to a lag in its shares, but management expressed confidence in a strong rebound in fourth-quarter bookings for 2026 [3] - The company is focused on developing innovative solutions for law enforcement and has made significant strides in drones and AI-enabled solutions, while also expanding its offerings into new markets [3]

Financial Data and Key Metrics Changes - Consolidated revenues increased 10% year over year to $103 billion, with adjusted earnings per diluted share rising 39% to $9.86 [4][18][23] - Operating profit reached a record $1.6 billion, up 26% year-over-year, driven by growth across all operating segments [21][38] - Interest expense declined 6% to $68 million, and the effective tax rate was 17.5%, down from 21% in the prior year [22][23] Business Line Data and Key Metrics Changes - North American pharmaceuticals segment revenues were $86.5 billion, an increase of 8%, with operating profit increasing 13% to $851 million [23][24] - Oncology and multi-specialty segment revenues rose 32% to $12 billion, with operating profit increasing 71% to $397 million [24][25] - Prescription technology solutions segment revenues increased 9% to $1.4 billion, with operating profit rising 20% to $261 million [25] Market Data and Key Metrics Changes - Revenues from GLP-1 medications were $13.2 billion, a 24% increase year-over-year [24] - The oncology and multi-specialty segment's growth was supported by expanded distribution and contributions from recent acquisitions [19][24] Company Strategy and Development Direction - The company introduced a new reporting structure to enhance transparency and sharpen strategic alignment, focusing on oncology and multi-specialty segments [5][18] - The strategy includes significant investments in automation and technology to improve operational efficiency and customer experience [13][14][38] - The company is targeting to separate the medical-surgical solutions business through an initial public offering, expected to be completed by the second half of calendar 2027 [15][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the business outlook, raising the guidance for adjusted earnings per diluted share to $38.35-$38.85, reflecting strong second-quarter performance [4][31] - The company anticipates revenue growth of 11%-15% and operating profit growth of 12%-16% for fiscal 2026 [32][38] - Management highlighted the importance of maintaining operational discipline and strategic focus to drive long-term value creation [18][29] Other Important Information - The company ended the quarter with $4 billion in cash and cash equivalents, indicating strong liquidity [28] - Free cash flow for the second quarter was $2.2 billion, with $907 million returned to shareholders through share repurchases and dividends [28][38] Q&A Session Summary Question: Understanding revenue growth versus operating profit expansion - Management noted that operating margin expansion was seen across all segments, driven by a mix of new products and access programs [40][41] Question: Oncology and multi-specialty segment guidance - Management indicated that strong growth was anticipated, with half driven by acquisitions and organic growth at about 13% year-over-year [44][45] Question: Health system business performance - Management expressed satisfaction with the health system business, noting strong volume growth and market-leading share [46] Question: Tax rate guidance for the year - Management clarified that the tax rate for the second half is expected to be slightly higher, with specific guidance for the third quarter at 23%-25% [48] Question: Specialty trend expectations - Management confirmed continued good traffic and volumes in oncology, supported by new partners and complex therapies [49][50] Question: Impact of cash pay channel on prior authorization business - Management stated that the cash pay channel's impact is expected to be minimal, as the eligible population remains small [53][55] Question: SG&A and gross profit trends - Management highlighted the favorable mix of businesses and continued focus on efficiency as key drivers of the observed trends [56][58] Question: Market decisions and gains - Management clarified that the gains from market decisions were non-recurring and included in the reported figures [59][62] Question: Drug Supply Chain Security Act impact - Management noted that the implementation was smooth and added value to services, but it is not expected to be a material driver of growth [63]