Core Viewpoint - Danaos Corporation (DAC) is a significant entity in the shipping industry, recognized for its large fleet of container vessels and its role in global trade [1] Financial Performance - On February 9, 2026, DAC reported an earnings per share (EPS) of $7.14, exceeding the estimated EPS of $6.77 [2] - The company's operating revenues for Q4 2025 were approximately $266 million, an increase from $258 million in the same period of 2024 [2] Segment Performance - The container vessels segment generated $240 million in operating revenues, while the drybulk vessels segment contributed $25 million [3] - This segmentation allows DAC to assess performance based on net income, facilitating efficient resource allocation [3] Valuation Metrics - DAC's price-to-earnings (P/E) ratio is 4.04, indicating a low valuation relative to its earnings, making it appealing to investors [3] - The price-to-sales ratio is 1.82, suggesting investors pay $1.82 for every dollar of sales [4] - The enterprise value to sales ratio is approximately 1.97, and the enterprise value to operating cash flow ratio stands at around 3.19, reflecting DAC's cash flow efficiency [4] Financial Health - The earnings yield of 24.77% indicates strong potential returns for investors [4] - DAC's debt-to-equity ratio is 0.20, showcasing a conservative approach to leveraging debt and ensuring financial stability [5] - The current ratio of 4.62 demonstrates a strong liquidity position, allowing the company to effectively cover short-term liabilities [5]

Core Thesis - Danaos Corporation (DAC) is viewed positively due to its strong financial performance and resilience, trading at a deeply discounted valuation despite improved fundamentals [1][5]. Financial Performance - DAC's share price increased from around $18 in 2020 to approximately $92, with earnings per share rising from $6.50 to about $26, showcasing a significant turnaround from a loss of $46 per share in 2016 [2]. - The company has a trailing P/E ratio of 4.00, indicating a low valuation compared to its earnings [1]. Balance Sheet Strength - Danaos has reduced total liabilities from $2.4 billion in 2016 to $644 million by the end of 2024, with long-term debt now at only $382 million [3]. - Equity has expanded from $558 million to $3.4 billion during the same period, transitioning the company from a highly leveraged position to a net cash position [3]. Cash Reserves and Shareholder Returns - Cash reserves increased from $70 million in 2017 to $453 million as of December 2024, providing financial flexibility for share buybacks and maintaining a dividend yield of approximately 3.7% [4]. - The company's disciplined capital management and cash-rich profile position it favorably to navigate macroeconomic challenges [4]. Market Sentiment - Despite strong profitability, DAC trades at a low price-to-earnings ratio of roughly 3.5 and only 0.49 times its book value, reflecting market skepticism [3]. - The stock has appreciated about 15.70% since a previous bullish thesis, indicating growing recognition of its value [5]. Hedge Fund Interest - DAC is not among the 30 most popular stocks among hedge funds, with 17 hedge fund portfolios holding DAC at the end of the second quarter, up from 16 in the previous quarter [6].

Core Viewpoint Danaos Corporation reported strong financial results for the third quarter and nine months ended September 30, 2025, highlighting increased operating revenues, net income, and a robust charter backlog, while also announcing new vessel orders and a dividend increase. Financial Summary - Operating revenues for Q3 2025 reached $260.7 million, a 1.8% increase from $256.2 million in Q3 2024 [23] - Net income for Q3 2025 was $130.6 million, compared to $123.0 million in Q3 2024, with earnings per diluted share increasing to $7.11 from $6.30 [22] - Adjusted net income for Q3 2025 was $124.1 million, down from $126.8 million in Q3 2024 [17] - For the nine months ended September 30, 2025, operating revenues increased to $776.2 million, up 2.7% from $755.9 million in the same period of 2024 [47] - Net income for the nine months was $376.7 million, compared to $414.6 million in the prior year [46] Operational Metrics - Average number of container vessels increased to 74.0 in Q3 2025 from 71.1 in Q3 2024, with fleet utilization for container vessels at 98.1% compared to 97.7% [16] - Average daily operating cost per vessel was $6,927 in Q3 2025, up from $6,860 in Q3 2024 [24] - Adjusted EBITDA for Q3 2025 was $181.6 million, a 1.5% increase from $178.9 million in Q3 2024 [38] Newbuilding and Charter Activity - Two new 7,165 TEU containerships were added to the orderbook with expected delivery in 2027, contributing approximately $140 million to contracted revenue backlog [8] - Six new 1,800 TEU containerships were ordered in November 2025, with expected deliveries from 2027 to 2029, adding approximately $236 million to the backlog [12] - Total contracted cash operating revenues currently stand at $4.1 billion, with charter coverage for the container vessel fleet at 100% for 2025 [8] Financial Position and Debt Management - As of September 30, 2025, total cash liquidity and marketable securities amounted to $971.4 million, up from $806.7 million at the end of 2024 [3] - The company completed a $500 million unsecured bond offering with a 6.875% coupon, intended to refinance existing debt and support growth initiatives [13] - Net debt decreased to $164.5 million, with a net debt to LTM adjusted EBITDA ratio of 0.23x [3] Dividend Announcement - The company declared a quarterly dividend of $0.90 per share for Q3 2025, payable on December 11, 2025 [9]

Core Points - Danaos Corporation will release its third quarter results for the period ending September 30, 2025, after the market closes on November 17, 2025 [1] - A conference call to discuss the results is scheduled for November 18, 2025, at 9:00 A.M. ET [1] - The company is one of the largest independent owners of containerships, with a fleet of 74 containerships totaling 471,477 TEUs and 18 additional vessels under construction [4] Conference Call Details - Participants can join the conference call by dialing in 10 minutes prior to the scheduled time using specific toll-free numbers for the U.S. and U.K., as well as a standard international dial-in number [1] - A telephonic replay of the conference call will be available until November 25, 2025, with specific dial-in numbers and access code provided [2] - An audio webcast of the conference call will be available on the Danaos Corporation website, with an archived version accessible within 48 hours post-call [3] Company Overview - Danaos Corporation operates a fleet of 74 containerships and has recently invested in the drybulk sector with the acquisition of 10 Capesize drybulk vessels [4] - The company’s vessels are chartered to major liner companies on fixed-rate charters, highlighting its operational efficiency and environmental controls [4] - Danaos Corporation's shares are traded on the New York Stock Exchange under the symbol "DAC" [4]

Financial Data and Key Metrics Changes - Time charter revenues for Q2 2025 were $54.7 million, a 2% decrease from $56 million in Q2 2024, attributed to a smaller fleet size rather than market conditions [13][14] - Net income for Q2 2025 improved significantly to $4.5 million compared to a net loss of $2.8 million in Q2 2024, driven by decreased interest and finance costs [13][14] - Earnings per diluted share were $0.30 in Q2 2025, compared to a loss of $0.04 per share in Q2 2024 [13][14] - Cash reserves decreased to $149.6 million as of June 30, 2025, from $207.2 million at the end of 2024 [14] Business Line Data and Key Metrics Changes - Fleet utilization reached 99.5% in 2025, slightly down from 99.9% in the same quarter last year [17][21] - Vessel operating expenses decreased by 6% to $20 million in Q2 2025 compared to $21.3 million in Q2 2024 [21][22] - Daily operating expenses decreased by 1% to $5,944 in Q2 2025 from $5,993 in Q2 2024 [21][22] Market Data and Key Metrics Changes - The dry bulk market saw average sector earnings down by about 30% year on year amid weaker demand trends in key commodities [5][28] - The average time charter rate for Capes was around $20,250 per day as of July 28, 2025, showing an increase from earlier in the year [29] - The overall market outlook for 2025 indicates softer earnings than 2024 due to an estimated fleet growth of around 3% [30] Company Strategy and Development Direction - The company focuses on staggered medium to long-term charters to ensure earnings visibility and resilience against market downturns [11] - Ongoing fleet modernization efforts include the delivery of two methanol dual fuel new building Kamsarmax drybulk vessels expected in 2027 and early 2028 [8] - The company has initiated a position in Genco Shipping and Trading Limited, reflecting confidence in long-term value and aligning with broader investment objectives [15] Management Comments on Operating Environment and Future Outlook - Management noted that despite uncertainties in the geopolitical landscape, they secured three charters during the quarter, taking advantage of favorable market conditions [7][28] - The company remains confident in its ability to navigate market cycles, supported by a strong balance sheet and predictable cash flow [26] - Management highlighted ongoing ESG commitments, including promoting eco-friendly technologies and modernizing the fleet [45] Other Important Information - The company declared a quarterly cash dividend of $0.01 per common share, totaling approximately $1.16 million [10] - The average age of the fleet is 11.7 years, with a total deadweight capacity of approximately 4.1 million tons [8] Q&A Session Summary Question: Can you provide insights on the Genco transaction? - Management explained that Genco is a well-run dry bulk company trading at a discount to NAV, and the strategic positioning as a major shareholder offers additional value [48][50] Question: Why not buy back shares instead of acquiring Genco? - The decision to acquire Genco was based on its different chartering strategy and dividend-paying nature, which was considered a better option than buying back shares at a discount [50]

Financial Data and Key Metrics Changes - The company reported adjusted EPS for Q1 2025 of $6.04 per share, down from $7.15 per share in Q1 2024, reflecting a decrease in adjusted net income from $140 million to $113.4 million [10] - Total operating costs increased by $19.8 million, primarily due to a rise in the average number of vessels in the fleet [10] - Adjusted EBITDA decreased by 3.1% or $5.5 million to $171.7 million compared to $177.2 million in Q1 2024 [13] Business Line Data and Key Metrics Changes - The drybulk segment experienced a revenue decrease of $9.0 million due to a softer spot market in Q1 [10] - The container segment saw a revenue decline of $9.4 million attributed to lower contracted charter rates [10] - Fleet utilization decreased, contributing to a $6.4 million drop in revenues [10] Market Data and Key Metrics Changes - The drybulk market has shown modest recovery from its Q1 lows, but a meaningful recovery is challenging without further growth initiatives in China [6] - The Pacific market has seen a dramatic decline due to tariff uncertainties and ongoing armed conflicts, particularly between India and Pakistan [5] Company Strategy and Development Direction - The company is focusing on optimizing the performance of its existing fleet and investing in energy-saving devices to enhance competitiveness [19] - A significant growth backlog includes 15 container vessels scheduled for delivery over the next three years, all backed by profitable charter arrangements [9] - The company is holding off on new vessel investments due to high costs and uncertainty regarding future fuel options [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the U.S. economy remains resilient, with expectations of a rebound in trade flows as consumer spending continues [6] - The proposed IMO regulation on greenhouse gas emissions is seen as insufficient to drive meaningful progress in decarbonization [8] - The company remains committed to delivering superior returns to shareholders through disciplined execution and a long-term strategic focus [9] Other Important Information - The company declared a dividend of $0.85 per share for the quarter and has repurchased a total of $205.7 million in shares, with an additional $100 million authorized for buybacks [14] - As of Q1 2025, cash stood at $480 million, with total liquidity at $825 million, providing ample flexibility for capital deployment opportunities [14] Q&A Session Summary Question: Focus on cash generation or investment opportunities in the existing fleet? - Management confirmed that they are investing in energy-saving devices to enhance competitiveness while also generating significant cash [19] Question: Continuation of stock buybacks? - Management indicated that there is $100 million authorized for buybacks, but no specific targets or timelines were set [21] Question: Reason for increasing stake in Star Bulk? - The additional investment in Star Bulk was seen as a compelling opportunity, with no specific plans for further action at this time [22][24]

Core Viewpoint - Danaos Corporation reported strong financial performance for Q1 2025, with total operating revenues of $253.3 million, slightly down from $253.4 million in Q1 2024, while net income decreased to $115.1 million from $150.5 million in the same period last year [2][20][21]. Financial Summary - Operating revenues for container vessels increased by 1.2% to $236.2 million, driven by newbuilding additions, while dry bulk vessel revenues decreased by 14.5% to $17.1 million due to lower charter rates and utilization [21][23]. - Adjusted net income for Q1 2025 was $113.4 million, or $6.04 per diluted share, compared to $140.0 million, or $7.15 per diluted share in Q1 2024 [15][20]. - Adjusted EBITDA decreased by 3.1% to $171.7 million from $177.2 million year-over-year, attributed to increased operating expenses and finance costs [42]. Operational Metrics - The average number of container vessels increased to 73.7 in Q1 2025 from 68.0 in Q1 2024, with fleet utilization for container vessels at 97.2% compared to 97.3% in the previous year [14]. - Dry bulk vessel utilization decreased to 92.4% from 93.6% year-over-year [14]. Recent Developments - The company secured a syndicated loan facility of up to $850 million to finance newbuilding container vessels scheduled for delivery from 2026 to 2028 [11]. - Danaos has a backlog of contracted revenues totaling $3.7 billion, with a charter coverage of 99% for 2025 and 85% for 2026 [10][11]. - A dividend of $0.85 per share was declared for Q1 2025, payable on June 5, 2025 [44]. Market Insights - The dry bulk market has shown modest recovery, but significant growth is contingent on further initiatives in China [9]. - The company is currently focusing on optimizing its existing fleet performance rather than new vessel investments [13]. Environmental Regulations - Proposed IMO regulations on greenhouse gas emissions are seen as insufficient to drive meaningful progress in decarbonization, with limited incentives for using expensive green fuels [11][12].