Financial Data and Key Metrics Changes - Second quarter net sales were $264.7 million, up 12.5% year over year, primarily driven by volume growth [18][26] - Adjusted gross margin in the second quarter was 46.9%, compared to 45.9% in the prior year period [18][27] - Adjusted EBITDA in the second quarter was $44.4 million, up approximately $9 million or 26% year over year [19][29] - Capital expenditures for the second quarter were $33.4 million, with cash on hand of $243.7 million at the end of the quarter [29] Business Line Data and Key Metrics Changes - Freshpet remains the number one dog food brand in the U.S. with a 95% market share in the gently cooked fresh frozen branded food dog segment [19] - Digital orders, previously referred to as e-commerce, grew by 40% in the second quarter and now account for 13% of total sales [16] - The company is expanding its product offerings with new complete nutrition bag products and multi-packs [17] Market Data and Key Metrics Changes - Household penetration as of June 29 was 14.4 million households, up 11% year over year [22] - The total buy rate was $110, up 6% year over year, with the heaviest users (MVPs) growing to 2.2 million households, up 18% year over year [22] - Freshpet's products are now in 29,141 stores, with 24% having multiple fridges [20] Company Strategy and Development Direction - The company is focusing on operational improvements and capital efficiencies to deliver long-term margin and free cash flow targets [5][12] - Freshpet is adapting its marketing strategy to better explain the benefits of fresh food and is launching a new media campaign [14][66] - The company is optimistic about expanding its presence in the club channel and has recently expanded its test in a leading club retailer [17][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledges economic uncertainty affecting consumer behavior, leading to hesitance in trading up dog food and deferring pet-related expenses [6][12] - The company has adjusted its net sales guidance for the year, now expecting growth of 13% to 16% year over year [23][30] - Management remains confident in achieving adjusted EBITDA targets of $190 million to $210 million despite the revised sales outlook [30][33] Other Important Information - The company is lowering its capital expenditure estimates for 2025 and 2026 by at least $100 million due to improved operational efficiencies [8][11] - Freshpet is removing its previous net sales target of $1.8 billion for fiscal year 2027 due to challenges in maintaining projected growth rates [24][33] - The company is confident in its ability to achieve long-term margin targets of 48% adjusted gross margin and 22% adjusted EBITDA margin [24][33] Q&A Session Summary Question: Path to 22% EBITDA margin in 2027 - Management believes mid-teens growth over the next couple of years will support the 22% EBITDA margin target, with potential upside from new technologies [36][38] Question: Clarification on net sales target removal - Management confirms that while the net sales target has been removed, the gross margin and EBITDA margin targets remain based on low to mid-teen growth expectations [45][46] Question: Dynamics between household penetration and buy rates - Management acknowledges that while household penetration is growing, the buy rate is impacted by consumers' reluctance to trade up, but there are still positive trends in premium product sales [47][50] Question: Competitive dynamics with Blue Buffalo's entry - Management views increased competition as validation of the category's growth potential and believes it will drive overall category growth, benefiting Freshpet [84][86]

Core Viewpoint - Otis Worldwide reported mixed results for Q4 2024, with adjusted earnings missing estimates while net sales exceeded expectations, marking the second consecutive earnings miss after a strong performance in prior quarters [2][5]. Financial Performance - Adjusted earnings were 93 cents per share, missing the Zacks Consensus Estimate of 95 cents by 2.1%, but increased 6.9% year-over-year from 87 cents [5]. - Net sales reached $3.68 billion, slightly above the consensus mark of $3.65 billion, reflecting a 1.5% year-over-year growth, with organic sales increasing by 1.9% [5]. - Adjusted operating margin expanded by 30 basis points to 15.9%, driven by favorable performance in the Service segment [6]. Segment Analysis - **New Equipment Segment**: - Net sales were $1.36 billion, down 7.4% year-over-year, with organic sales declining 6.8% [7]. - Orders decreased by 4% at constant currency, with significant declines in China and EMEA [8]. - Operating margin contracted by 140 basis points to 4.7% due to lower volume and unfavorable mix [9]. - **Service Segment**: - Net sales increased by 7.6% year-over-year to $2.32 billion, supported by a 7.8% rise in organic sales [10]. - Operating margin improved by 50 basis points to 24.5%, aided by higher volume and favorable pricing [11]. Annual Highlights - For 2024, Otis Worldwide reported annual revenues of $14.26 billion, a 0.4% increase from $14.21 billion in 2023, with adjusted EPS rising to $3.83 from $3.54 [12]. - Adjusted operating margin for the year expanded by 50 basis points to 16.5% [12]. Financial Position - As of December 31, 2024, cash and cash equivalents were $2.3 billion, up from $1.27 billion at the end of 2023, while long-term debt increased to $6.97 billion [13]. - Net cash flows from operating activities were $1.56 billion, down from $1.63 billion a year ago, with adjusted free cash flow totaling $1.57 billion [13]. 2025 Outlook - Otis expects net sales between $14.1 billion and $14.4 billion, with organic sales growth projected between 2% and 4% [14]. - Adjusted EPS is anticipated to be between $4 and $4.10, indicating a year-over-year growth of 4-7% [15]. Estimate Trends - There has been a downward trend in estimates, with the consensus estimate shifting down by 5.23% [16]. VGM Scores - Otis Worldwide has a Growth Score of A but lags in Momentum with an F, resulting in an aggregate VGM Score of C [17].