Financial Data and Key Metrics Changes - Consolidated revenue in Q3 2025 increased by 17%, driven by a 23% increase in HDMC revenue, which was up $198 million compared to the prior year [16][22] - Consolidated operating income for Q3 was $475 million, primarily influenced by the HDFS transaction, while HDMC operating income decreased by 2% year-over-year [16][17] - Earnings per share for Q3 was $3.10, with a consolidated operating income margin of 35.4%, significantly up from 9.2% in the same quarter last year [17][23] Business Line Data and Key Metrics Changes - HDMC revenue rose by 23% in Q3, with motorcycle shipments up 33% to 36,500 units, while HDFS revenue decreased by 3% [16][22] - LiveWire revenue increased by 16%, but the segment reported an operating loss of $18 million [16][30] - HDFS's operating income surged by 472% year-over-year, primarily due to the HDFS transaction, with a significant benefit from the reversal of the allowance for credit losses [27][29] Market Data and Key Metrics Changes - Global retail sales were down 6%, with North America down 5% and international markets down 9%, reflecting soft demand amid high interest rates and inflation concerns [17][18] - In North America, the Softail family saw a 9% increase in sales, while Adventure Touring bikes were up 4% [18][20] - Latin America experienced a 16% increase in retail sales, marking the first quarter of growth since Q3 2024 [19][20] Company Strategy and Development Direction - The company is focused on improving dealer health and profitability, with immediate actions including better inventory management and market-responsive promotions [5][6] - There is a commitment to enhancing the product portfolio to balance aspiration with accessibility, particularly in light of the current interest rate environment [9][10] - The HDFS transaction aims to transform the business into a capital-light model, unlocking $1.2-$1.25 billion in discretionary cash through Q1 2026 [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed disappointment with the motor company's results but highlighted the positive impact of the HDFS transaction [6][16] - The CEO emphasized the need to attract younger riders and make the brand more accessible and fun [40][42] - The company plans to continue focusing on cost and capital efficiency while enhancing the dealer network's health [9][10][37] Other Important Information - The company has committed to returning capital to shareholders, having repurchased 6.8 million shares for $187 million year-to-date [32][33] - The global tariff environment remains uncertain, with an estimated full-year impact from tariffs expected to be between $55-$75 million [26][27] Q&A Session Summary Question: How does the company plan to address demographic headwinds? - The CEO noted the need to make the brand more fun and accessible, with plans to introduce lighter and more affordable bikes to attract younger riders [40][42] Question: Can you elaborate on market-responsive promotions? - Management indicated that high dealer inventory levels necessitate promotional activities to drive sales, particularly for touring models [43][44] Question: What is the expected impact of the HDFS transaction on future earnings? - The company confirmed that the transaction is expected to provide a $275-$300 million operating income benefit in the second half of the year [50][54] Question: What are the shipment expectations for 2026? - Management indicated that while they are not providing specific guidance for 2026, they expect to continue reducing dealer inventory and improving sales dynamics [56][61] Question: How is the company addressing inventory levels? - The company has seen a significant reduction in dealer inventory, with expectations to continue this trend into the next year [57][63]

Core Viewpoint - SoFi Technologies (SOFI) has experienced an 11% increase since the last coverage, with a positive outlook as the company transitions to a capital-light business model focused on fee generation [1] Group 1: Company Performance - The shift towards a capital-light business model is accelerating, indicating strong growth potential for SoFi [1] Group 2: Investment Strategy - The investment approach focuses on identifying high-potential opportunities with an asymmetric risk-reward profile, aiming for a minimum upside potential of 3-5 times the downside risk [1] - Emphasis is placed on leveraging market inefficiencies and contrarian insights to maximize long-term compounding while safeguarding against capital impairment [1] - A 2-3 year investment horizon is adopted to endure market volatility, promoting patience, discipline, and intelligent capital allocation for superior returns over time [1]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $106 million, a decline of 24% compared to the same quarter last year [7][12] - Gross margin improved from 37% to 42%, despite the drop in revenues [28] - Adjusted EBITDA for the quarter reached $15.4 million, down from approximately $24 million in the year-ago quarter [33] Business Line Data and Key Metrics Changes - **Crop Protection**: Revenues fell from $71 million to over $55 million, primarily due to performance in Argentina, with a year-to-date decline of 20% [17][18] - **Crop Nutrition**: Sales were $28 million in Q2, with declines attributed to micro-beaded fertilizer sales in Argentina [22][23] - **Seed & Integrated Products**: Revenue decline was anticipated due to strategic decisions, with growth in seed treatment solutions driven by soybean-based treatments [25][26] Market Data and Key Metrics Changes - The Argentine market faced significant challenges, with lower commodity prices and reduced farmer income impacting purchasing capacity [13][14] - Sales outside of Argentina grew during the first half, indicating progress in geographic diversification [16] Company Strategy and Development Direction - The company is transitioning to a more capital-light business model and exiting breeding, seed production, and commercialization, opting to partner with established seed companies [9][10] - A new agreement with GDM for soybean development and a revised partnership with Florimond Desprez for wheat were announced [10][46] - The focus is on enhancing profitability and cash flows while navigating market volatility [39][41] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges in the Argentine market as temporary and expressed optimism about mid to long-term prospects [38] - The strategic repositioning of the seed business and tighter inventory management are seen as initial steps to address short-term challenges [40] Other Important Information - Total net debt at quarter-end stood at $238 million, with a leverage ratio of 3.3 turns, above the target threshold [36] - The company is implementing a tighter inventory management policy, resulting in inventory levels being 18% lower than last year [37] Q&A Session Summary Question: Transition in the seed business and its economic implications - Management indicated that transitioning existing channels to key customers will improve cost structure and generate royalties over the next two to three years [54][60] Question: Impact on the balance sheet from the transition - The strategic pivoting is expected to free up working capital and reduce SG&A expenses, with cash returning to the balance sheet from grain inventory divestments [60][61] Question: Focus on biologicals and new trait development - The company is prioritizing biologicals where development costs are lower, while still pursuing incremental technologies through partnerships [64][66] Question: R&D platform and solutions for South American crops - Management is exploring solutions for challenges like target spot in soybeans and corn stunt, leveraging partnerships for regulatory clearances [68][72] Question: Expectations for OpEx related to the seed business - A meaningful reduction in OpEx is anticipated in the coming quarters, alongside a focus on stabilizing EBITDA margins [82][84] Question: Revenue from non-core third-party products - Non-core products account for approximately 25% to 30% of revenues, with a focus on maintaining high-margin products while reducing lower-margin offerings [95][99] Question: Cash balance and capital needs - The current cash balance of $29 million is deemed sufficient to support the revised business strategy without immediate capital raising needs [111][112] Question: Deconsolidation of revenue with new agreements - Revenue from new partnerships will depend on the structure of agreements, with royalties expected to contribute to the top line [120][121] Question: Inventory decline contributions - Both grain sales and tighter inventory management contributed to the decline in inventories, with both factors being equally significant [124][126]