Procore Technologies, Inc. (NYSE:PCOR) Q4 2024 Results Earnings Conference Call February 14, 2025 5:00 PM ET Company Participants Alexandra Geller - Head, Investor Relations Tooey Courtemanche - Founder, President and Chief Executive Officer Howard Fu - Chief Financial Officer Conference Call Participants Brent Bracelin - Piper Sandler Joe Vruwink - Robert W. Baird DJ Hynes - Canaccord Brent Thill - Jefferies Saket Kalia - Barclays Dylan Becker - William Blair Adam Borg - Stifel Daniel Jester - BMO Capital ...

Financial Data and Key Metrics Changes - In 2024, net revenue increased by 6% year over year to $1.41 billion, with net income growing by 34% year over year to $133 million and adjusted EBITDA increasing by 8% year over year to $358 million [2][3][33] - The company expanded net income margin by two percentage points and adjusted EBITDA margin by one percentage point from 2023 [3][20] - For Q4 2024, net revenue was $362 million, net income was $42 million with a 12% margin, and adjusted EBITDA was $101 million with a 28% margin [16][46] Business Line Data and Key Metrics Changes - Revenue from services increased by 11% year over year to a record $879 million, while RRNO revenue declined by 3% year over year to $470 million [4][34] - Advertising revenue in services rose by 11% year over year in Q4 to $225 million, while RRNO locations decreased, leading to a 4% decline in paying advertising locations to 521,000 [17][47] - Self-serve advertising grew approximately 15% year over year in Q4, while multilocation revenue remained flat year over year [18][47] Market Data and Key Metrics Changes - The home services category showed strong performance with annual revenue growth of approximately 15% year over year [4][34] - Consumer projects increased by approximately 25% year over year, with project submissions through the AI chatbot Yelp Assistant up by more than 50% from Q3 to Q4 [6][35] - Yelp users contributed 21 million new reviews in 2024, reaching a total of 308 million cumulative reviews, up 7% from the prior year [9][39] Company Strategy and Development Direction - The company plans to focus on three strategic initiatives in 2025: leading in services, driving advertiser value, and transforming the consumer experience, leveraging AI capabilities [10][40] - Following the acquisition of RepairPal, the company aims to accelerate growth in the auto services category and enhance its product focus on multilocation services businesses [12][41] - The strategy emphasizes creating a best-in-class experience for consumers and service professionals, with a strong commitment to disciplined expense management [19][50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth opportunities, particularly in the services sector, despite challenges in the RRNO category due to macroeconomic pressures [25][26] - For Q1 2025, the company expects net revenue to be in the range of $350 million to $355 million, reflecting typical seasonality, and for the full year, net revenue is expected to be between $1.470 billion and $1.485 billion [26][55] - Management acknowledged the impact of inflation and uncertainties in the economic environment on their guidance for 2025, reflecting a cautious outlook [96][97] Other Important Information - The company acquired RepairPal for approximately $80 million in cash, which is expected to contribute positively to the auto category [24][120] - Stock-based compensation expense was reduced as a percentage of revenue by two percentage points in 2024, with plans to further decrease it to less than 6% by the end of 2027 [22][53] Q&A Session Summary Question: What are the abilities to invest behind demand generation for RRNO? - Management acknowledged headwinds in RRNO due to inflationary pressures but emphasized ongoing investments in the business and alignment of product roadmaps towards services [63][64] Question: What are the key investment areas for growth in services? - Management highlighted strong performance in services, particularly home services, and the introduction of a leads API to enhance opportunities for multilocation services [66][67] Question: What is the contribution of RepairPal to the guidance? - Management indicated that RepairPal's performance is integrated into the overall guidance, with expectations for significant growth in the auto category [101][122] Question: How is AI impacting the business? - Management noted that AI has improved consumer experience and operational efficiencies, with specific mention of the Yelp Assistant driving project submissions [78][82] Question: What are the thoughts on Yelp's positioning in the current environment? - Management expressed optimism about leveraging trusted content in the evolving AI landscape, emphasizing the importance of local search capabilities [87][90] Question: What are the drivers behind the performance this quarter? - Management noted better-than-expected performance in Q4, with seasonal increases contributing to revenue growth [91][92] Question: How does the company view sustainable long-term growth in services? - Management is confident in the continued strong performance in services, supported by trusted content and AI applications [125][127] Question: What are the competitive dynamics in the restaurant and retail sectors? - Management attributed challenges in these sectors to macroeconomic factors rather than competitive pressures, expressing optimism for future recovery [131][132]

Financial Data and Key Metrics Changes - The company reported a net income of $1.1 million or $0.02 per diluted share for Q4 2024, a significant decrease from $129 million or $2.47 per diluted share in Q4 2023 [34] - Adjusted EBITDA for Q4 2024 was $53 million, down from $164 million in the same quarter last year, with an adjusted EBITDA margin of 18% compared to 45% in Q4 2023 [35][36] - Total revenues decreased to $297 million in Q4 2024 from $364 million in Q4 2023, primarily due to a 34% drop in average net selling prices [38] Business Line Data and Key Metrics Changes - Sales volume in Q4 2024 was 1.9 million short tons, up from 1.5 million short tons in the same quarter of 2023, driven by better production volumes [16][19] - Production volume increased to 2.1 million short tons in Q4 2024 from 2 million short tons in Q4 2023, with Mine 4 achieving a record high annual production of 2.8 million short tons [19][20] - The continuous miner units at the Blue Creek mine produced 170,000 short tons during Q4 2024, contributing to the overall production increase [21] Market Data and Key Metrics Changes - Sales by geography in Q4 2024 were 38% to Asia, 36% to Europe, and 25% to South America, with a notable shift from Europe to Asia compared to the previous year [17][18] - The primary index, PLD FOB Australia, ended Q4 at $178 per short ton, down $7 from the previous quarter, while the PLV CFR China Index ended at $180 per short ton [13] - Global pig iron production decreased by 1.8% in 2024, with China's production falling by 2.3% [14] Company Strategy and Development Direction - The company is focused on the Blue Creek growth project, which is expected to enhance production and profitability, with a total project investment of $717 million to date [25][29] - The company plans to ramp up production at Blue Creek to approximately 1 million short tons of high vol A steelmaking coal in 2025, with the longwall production expected to start no later than Q2 2026 [27][30] - The company maintains a disciplined capital spending approach and expects to complete the Blue Creek project within the estimated capital expenditure range of $995 million to $1.1 billion [29][28] Management's Comments on Operating Environment and Future Outlook - Management indicated that weak market conditions are expected to persist, with downward pressure on steelmaking coal prices due to excess Chinese steel exports and weak demand [11][49] - The company remains optimistic about its operational performance in 2025, anticipating higher sales and production volumes despite the challenging market environment [46] - Management emphasized the importance of maintaining strong customer relationships and a low-cost structure to navigate the current market dynamics [52][53] Other Important Information - The company generated cash from operations of over $370 million in 2024, with $43 million returned to stockholders via dividends [9] - Free cash flow for Q4 2024 was negative $88 million, primarily due to capital expenditures related to the Blue Creek project [44] - The company ended 2024 with total available liquidity of $655 million [45] Q&A Session Summary Question: Contribution from Blue Creek versus Mine 4 and Mine 7 - The company projects about 1 million tons from Blue Creek, with Mine 4 expected to produce over 2 million tons in 2025 [60][61] Question: Cash cost guidance reductions - The reduction in cash cost guidance is primarily attributed to lower net coal prices affecting transportation royalties [62][63] Question: Sales by geography and potential shifts - Tons that would have gone to China are still expected to flow into the Asian market, maintaining similar transportation costs [66] Question: Shipment timing for Blue Creek - The majority of Blue Creek's shipments are expected in the second half of 2025 [70] Question: Price realizations for High Vol A - Current realizations are expected to remain in the 85% to 90% range, with potential adjustments as volumes increase [72] Question: Inventory targets for year-end 2025 - The company aims to normalize inventory levels to a couple hundred thousand tons per mine by the end of 2025 [80] Question: New labor contract negotiations - Ongoing negotiations with the United Mine Workers are still in progress, with uncertain outcomes [93] Question: Future cash balance considerations - The company is evaluating the need for a higher minimum cash balance as Blue Creek operations ramp up [95]

Knowles (KN) Q4 2024 Earnings Call February 14, 2025 01:14 AM ET Company Participants Sarah Cook - Vice President, Investor RelationsJeffrey Niew - President & CEOJohn Anderson - SVP & CFOBob Labick - President Conference Call Participants Anthony Stoss - Analyst Operator Good afternoon. My name is Audra, and I will be your conference operator today. At this time, I would like to welcome everyone to the Knowles Corporation Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. Today's con ...

Financial Data and Key Metrics Changes - The company reported a full-year adjusted EBITDA improvement of $50 million, despite macroeconomic challenges such as geopolitical uncertainty and high inflation [12][19] - Fourth quarter adjusted EBITDA was $26 million, which was $6 million higher than the prior year, but negatively impacted by unfavorable net timing effects [25][19] - Cash provided by operations during the fourth quarter was $85 million, resulting in free cash flow of $64 million, marking the highest quarter of free cash flow generation in over two years [26][20] Business Line Data and Key Metrics Changes - Sales of recycled content products increased by 47% year-over-year, now representing 4% of total company variable margin in 2024 [15] - Engineered Materials segment saw a 3% increase in PMMA Resins sales volumes year-over-year, despite weak end market demand [15] - The Polymer Solutions segment faced significant negative timing impacts due to falling raw material prices, particularly styrene [25][19] Market Data and Key Metrics Changes - The company noted a significant decline in consumer confidence across major markets, particularly in Europe and China, affecting end markets such as automotive and construction [12] - The company anticipates a compound annual demand growth of at least 7% in target end markets through the end of the decade, particularly in India [18] Company Strategy and Development Direction - The company is focused on executing self-help actions and transformation strategies to navigate macroeconomic challenges [12] - Significant advancements in circular technologies were highlighted, including the commissioning of pilot facilities for polycarbonate and PMMA [16] - The company is pursuing a strategic partnership with Deepak Nitrite Limited, viewing India as a significant growth market [17][18] Management's Comments on Operating Environment and Future Outlook - Management does not anticipate meaningful demand recovery in major end markets in 2025, citing ongoing geopolitical issues [27] - The first quarter of 2025 is expected to be sequentially better than Q4, with anticipated adjusted EBITDA of $60 million to $80 million, including a one-time contribution from the licensing agreement [29] - Management expressed confidence in the actions taken over the past two years to position the company for eventual market recovery [30] Other Important Information - The company has restructured its reporting segments to better reflect its operational strategy [22] - A transaction was closed in January that increased available liquidity by approximately $150 million and extended debt maturity to 2028 [24] Q&A Session Summary Question: Follow-up on cash spends for 2025 - Management indicated that the increase in cash expenditures is primarily due to working capital changes and higher cash taxes resulting from increased profitability [33][36] Question: Impact of lower styrene pricing on profitability - Management explained that pricing on styrene-containing products is generally indexed, leading to a pass-through effect on profitability [39][40] Question: Guidance for Q1 and potential destocking - Management noted that they do not foresee significant destocking initiatives from customers and that demand in automotive is more related to consumer confidence than inventory levels [81][82] Question: Status of the AmSty sale process - Management clarified that the sale process is not halted but is being timed to optimize value [122] Question: Insights on the recycling platform and margins - Management reported that recycled products are seeing significant demand and margins are substantially higher than virgin products [75][76]

Financial Data and Key Metrics Changes - For Q4 2024, adjusted net income was $41.3 million or $1.52 per share, representing a 47.5% increase from $28 million or $1.11 per share in Q4 2023 [47] - Gross written premiums for Q4 were $373.7 million, a 23% increase year-over-year, and 39% growth excluding runoff business [48] - The annualized adjusted return on equity for Q4 was 23.1%, compared to 25.1% for the same period last year [48] Business Line Data and Key Metrics Changes - The earthquake franchise grew gross written premiums by 20% in Q4, maintaining a balanced approach between residential and commercial insurance [19] - The inland marine and other property category grew 36% year-over-year, with strong premium growth from builders risk and Hawaii hurricane lines [22] - The casualty segment saw a significant premium increase of 112% year-over-year, now representing 50% of the total portfolio [25] Market Data and Key Metrics Changes - The company exited 2024 as the third largest writer of earthquake insurance in North America, indicating strong market positioning [19] - The California homeowners market is experiencing dislocation due to recent wildfires, which may lead to increased opportunities for the company's earthquake insurance products [15][72] Company Strategy and Development Direction - The company aims to integrate and operate effectively, build new market leaders, and maintain a conservative risk appetite while focusing on profitable growth [40][41] - The acquisition of First Indemnity of America (FIA) is expected to enhance the company's casualty product group and provide growth opportunities in the surety market [36] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the reinsurance market, noting that recent wildfires may slow the pace of rate decreases but could also create opportunities in the earthquake insurance market [16][37] - The company anticipates adjusted net income guidance for 2025 to be in the range of $180 million to $192 million, reflecting a growth of 39% [60] Other Important Information - The company reported a stockholders' equity increase of 55% year-over-year, reaching $729 million [58] - The adjusted combined ratio for the full year was 73.7%, with a loss ratio of 26.4% [59] Q&A Session Summary Question: Clarification on reinsurance pricing expectations - Management indicated that the guidance range for reinsurance pricing is built around a flat renewal to a potential decrease of 5%, reflecting a conservative approach given market conditions [68] Question: Opportunities in the disrupted California market - Management noted that the disruption in the California market could lead to opportunities in residential earthquake insurance as insurers reduce their exposure [72] Question: Impact of 6/1 pricing on outlook - Management stated that lower pricing on excess of loss reinsurance would positively impact results, especially since it constitutes a significant expense [79] Question: Elasticity of demand for earthquake insurance - Management highlighted that the residential earthquake market remains underpenetrated, and rising homeowners' costs could lead to increased opportunities as insurers nonrenew policies [85] Question: Crop insurance exposure and reinsurance structure - Management confirmed that the crop business will focus on core Midwest states, with a shift towards a combination of quota share and stop loss in reinsurance [136]

Financial Data and Key Metrics Changes - Net sales for Q4 2024 were approximately $668 million, a 2% decline from $681 million in Q4 2023, and a 2.3% decrease on a currency-neutral basis [23] - Full-year net sales for 2024 were $2.557 billion, representing a 3.9% decline from $2.671 billion in 2023, with a 3.6% decrease on a currency-neutral basis [30] - Q4 reported GAAP gross margin was 51.2%, down from 53.8% in Q4 2023, primarily due to restructuring expenses and reimbursement reductions [26] - Non-GAAP net income for Q4 2024 was $81 million, or $2.90 diluted earnings per share [30] Business Line Data and Key Metrics Changes - Life Science Group sales in Q4 2024 were $275 million, a decline of 5.5% from $291 million in Q4 2023, with a 6% decrease on a currency-neutral basis [23] - Clinical Diagnostics Group sales in Q4 2024 were approximately $393 million, an increase of 0.9% from $389 million in Q4 2023, driven by demand for quality control and blood typing products [25] - Full-year sales for the Life Science Group were approximately $1.028 billion, a decline of 12.8% from $1.178 billion in 2023, while Clinical Diagnostics Group sales increased by 3.3% to $1.538 billion [31][32] Market Data and Key Metrics Changes - The Asia Pacific region saw a decline in diagnostic performance due to a reimbursement change for diabetes testing in China [13] - In Europe, funding remains mixed, with modest increases in Germany and the UK, while France continues to be soft [18] - The US academic and government segment represents approximately a high single-digit percentage of total revenue, with federally funded research exposure estimated at about 4% [41] Company Strategy and Development Direction - The company aims to enhance its digital PCR portfolio through the acquisition of Stilla Technologies, expected to close by Q3 2025 [11] - Focus on operational and commercial excellence, increasing consumables attachment, and prioritizing e-commerce as part of the growth strategy [19] - Continued investment in innovation, including new product launches and acquisitions to broaden offerings in digital PCR and other focus areas [50] Management's Comments on Operating Environment and Future Outlook - Management expects a gradual recovery in the biopharma sector and anticipates growth in process chromatography in 2025 [15][20] - The company acknowledges a soft academic environment and does not expect significant changes in dynamics for 2025 [17] - Management views 2025 as a stepping stone towards stronger, profitable growth, with a focus on margin improvement and operational efficiency [20] Other Important Information - The company implemented a 5% workforce reduction, expected to yield savings of $50 to $55 million in 2025 [27] - Full-year free cash flow for 2024 was approximately $290 million, with a target of $310 million to $330 million for 2025 [38][47] Q&A Session Summary Question: Life sciences guidance and DDPCR growth - Management indicated that DDPCR growth is expected to be around 1% to 2%, with process chromatography projected to grow in the high single digits [56][57] Question: Process chromatography decline - Confirmation that the process chromatography product line declined more than 50% in Q4 and for the full year [65][66] Question: Operating margin bridge for 2025 - Management explained that the decline in operating margin is primarily due to China diagnostics and foreign currency effects, with additional impacts from R&D expenses [69][72] Question: Stilla acquisition rationale - The acquisition is seen as complementary, allowing the company to address both entry-level and high-end digital PCR markets [78][81] Question: First quarter sales forecast - Management expects Q1 sales to be down 5% to 7% year-over-year, with a gradual recovery anticipated throughout the year [91][93] Question: NIH funding impact - Management noted that researchers are in a wait-and-see mode regarding NIH funding changes, which may affect capital equipment spending [114] Question: DDPCR market growth and competition - The DDPCR market remains competitive, with the company focusing on maintaining market share through innovation and acquisitions [118][120]

Financial Data and Key Metrics Changes - The company reported GAAP earnings of negative $8.4 million for Q4 2024, compared to positive $13.1 million in Q3 2024, reflecting a GAAP return on equity of negative 3% [40] - For the full year 2024, GAAP earnings were positive $47 million, equating to a GAAP return on equity of 4.1% [41] - The book value per share decreased to $8.46 in Q4 2024 [41] - The total economic return for the full year 2024 was 5.7%, inclusive of common dividends, which were increased twice during the year [42] Business Line Data and Key Metrics Changes - The Sequoia platform achieved $9 billion in total lock volume for 2024, with 40% sourced in bulk form [26] - CoreVest fundings totaled $501 million in Q4 2024, up nearly 10% from Q3 2024, marking the highest volume since Q3 2022 [31] - The Aspire platform was launched in early 2024 to provide innovative solutions for homeowners, expanding its loan product offerings [14] Market Data and Key Metrics Changes - The company noted that banks represented 40% of its lock volume in 2024, doubling from 2023 [12] - The market for alternative loan products is growing, with the Aspire platform targeting a $100 billion addressable market [15][52] - The company expects a 30% plus year-over-year volume increase in its mortgage banking businesses in 2025 [50] Company Strategy and Development Direction - The company's top strategic priority is to capitalize on the downsizing of mortgage activity within the banking sector, which has accelerated recently [11] - The company aims to expand its bank seller network and expects to benefit from increased M&A activity in the banking sector [13] - The focus on GSE reform and addressing housing affordability is seen as a potential opportunity for the company [16][19] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for significant market share gains despite elevated mortgage rates and flat housing activity in 2025 [10] - The company anticipates strong profitability and growth in its core business and new initiatives aimed at expanding access to credit [21] - Management highlighted the importance of maintaining a strong liquidity position and the ability to capitalize on market opportunities [74] Other Important Information - The company reported a significant increase in unrestricted cash to $245 million as of December 31, 2024 [47] - The company has reduced its convertible debt as a percentage of equity from 65% two years ago to 31% at the end of 2024 [47] - The company is focused on optimizing its capital allocation and leveraging its strong liquidity to support growth [114] Q&A Session Summary Question: Current run rate EAD relative to the dividend - Management discussed the quality of EAD and the impact of nonrecurring income on the dividend, expressing confidence in future EAD growth [54][55][60] Question: Competitive environment in BPL - Management noted that the competitive environment is evolving positively, with a strong product mix and distribution capabilities [67][70] Question: Trends in leverage and liquidity - Management indicated that leverage could trend between 2% to 3% depending on the timing of portfolio activities, expressing confidence in their liquidity position [71][74] Question: Expansion of the credit box - Management highlighted the potential for expanding the Aspire platform and accessing a large addressable market for alternative loan products [76][78] Question: Capital allocation philosophy - Management discussed the flexibility gained from reduced unsecured debt and the focus on optimizing capital allocation for growth [82][86] Question: Mortgage banking results and delinquencies - Management explained the shift in income sources and addressed concerns regarding delinquencies, attributing increases to borrower issues rather than seasonal factors [120][128]

Financial Performance - The company achieved over 70% year-over-year revenue growth in Q1 2025, driven by new military programs and contributions from legacy platforms [7][20] - Gross profit increased approximately 20%, although margins were impacted by significant investments in growth initiatives [8][22] - Net income for Q1 was $700,000, or $0.04 per share, compared to $1.1 million, or $0.06 per share, in the previous year [27] - EBITDA for Q1 was $2.7 million, a 28% increase from $2.1 million last year, with adjusted EBITDA at $3.1 million, up from $2.5 million [27][30] Business Line Performance - Product sales reached $10 million, more than double last year's levels, primarily due to the recently acquired Honeywell military product line [21] - Service revenue was $6 million, driven by customer service sales from the Honeywell product lines and increased NRE revenue [21] Market Performance - The backlog as of December 31, 2024, was approximately $81 million, significantly up from $14.6 million in the prior year [8][27] - The company expects continued growth in military markets, which are anticipated to remain strong [7][17] Company Strategy and Industry Competition - The company is focused on its long-term value creation strategy, ISSCnext, which emphasizes commercial growth in high-value markets and disciplined capital allocation [9] - Significant investments are being made in infrastructure and systems capabilities to support defense customer requirements, including a modern ERP system [10][12] - The company aims to remain a strategic acquirer, focusing on complementary product lines and smaller avionics manufacturers [18] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in the growth opportunities across commercial air transportation, aviation, and military markets, with expectations for revenue and EBITDA growth of over 30% compared to fiscal year 2024 [19][17] - The company is optimistic about the integration of the Honeywell acquisition and the expected benefits from the new ERP system [19][86] Other Important Information - The company has increased its headcount by over 25% to support growth initiatives [14] - Capital expenditures were $300,000 in Q1, up from $200,000 in the same period last year [31] Q&A Session Summary Question: Strategies for gaining market share in military revenue - The company is working to become a Tier 1 supplier to the Department of Defense by ensuring compliance with DFARS and enhancing IT capabilities [38][39] Question: Margin profiles of foreign military engagements - Foreign military sales treated as commercial deals can yield better margins compared to domestic contracts [44][46] Question: Anticipated margin profile with military business mix - The company expects gross margins around 50% for military programs, focusing on EBITDA as a more relevant metric [52][100] Question: Balancing infrastructure investments with acquisitions - Current infrastructure and strategic initiatives are funded through operations and credit facilities, with a focus on maintaining a leverage ratio around three times [55] Question: Acquisition strategy and sourcing opportunities - The company utilizes a Business Development VP with M&A experience and maintains relationships with bankers to identify acquisition opportunities [62][66] Question: Transition of manufacturing from Honeywell - The transition is expected to occur in Q3, with potential revenue upticks anticipated from the Honeywell military product line [81][83] Question: Financial benefits from ERP implementation - The new ERP system is expected to improve data management and operational efficiencies, leading to better decision-making [86][88]

Udemy, Inc. (NASDAQ:UDMY) Q4 2024 Earnings Conference Call February 13, 2025 5:00 PM ET Company Participants Dennis Walsh – Vice President-Investor Relations Greg Brown – Chief Executive Officer Sarah Blanchard – Chief Financial Officer Eren Bali – Founder and Chief Technology Officer Conference Call Participants Jason Tilchen – Canaccord Genuity Ryan MacDonald – Needham Josh Baer – Morgan Stanley Stephen Sheldon – William Blair Curtis Nagle – Bank of America Connor Passarella – Truist Yi Fu Lee – Cantor Fi ...