Financial Data and Key Metrics Changes - Shopify reported Q2 revenue of $2.7 billion, up 31% year over year, with a free cash flow margin of 16% [6][10][59] - Gross profit grew 25%, with overall gross margin at 48.6%, down from 51.1% in the prior year [54][56] - Operating income for the quarter was $291 million, representing an 11% operating income margin, compared to 9% last year [58] Business Line Data and Key Metrics Changes - Offline GMV increased by 29%, driven primarily by larger retailers joining the platform [31][49] - Merchant solutions revenue rose by 37%, while subscription solutions revenue grew by 17% [51][52] - GMV in Q2 was $88 billion, up 31%, with North America and Europe showing strong performance [47][48] Market Data and Key Metrics Changes - International GMV was up 42% year over year, with Europe leading the growth [6][36] - Cross-border GMV remained consistent at 15% of total GMV in Q2 [62] - Shopify Payments penetration reached 64%, up from 61% last year [22][51] Company Strategy and Development Direction - Shopify aims to expand its reach across all geographies, particularly in Europe, and is focused on building a unified commerce platform [6][10] - The company is investing in AI and product innovations to enhance the shopping experience and streamline operations for merchants [13][21] - Shopify is committed to supporting entrepreneurs worldwide, with a focus on international expansion and product localization [35][36] Management's Comments on Operating Environment and Future Outlook - Management noted that the merchant base has remained resilient despite macroeconomic challenges, with strong performance continuing into Q3 [60][61] - The company expects Q3 revenue growth in the mid to high 20s year over year, driven by continued growth in merchant solutions [63] - Management highlighted the importance of ongoing investments in product development and marketing to sustain growth [66][68] Other Important Information - Shopify launched several new products, including Universal Cart and CheckoutKit, aimed at enhancing the shopping experience through AI integration [15][93] - The company has expanded its payments product into 16 new countries this year, nearly doubling its market accessibility [22][24] - Shopify Capital is now available in Germany and the Netherlands, providing more merchants with access to growth funding [36][57] Q&A Session Summary Question: How would you characterize the demand in the US and any potential pull forward for consumers? - Management indicated that there has not been a significant pull forward of demand, with consistent performance observed in Q2 and July [70][72] Question: What is the status of international growth and product localization? - Management acknowledged strong international growth, particularly in Europe, and emphasized ongoing efforts to enhance product offerings for international markets [75][78] Question: How does the company view long-term growth potential? - Management expressed confidence in maintaining growth rates above 25% due to past investments and expanding product offerings [82][86] Question: Will Universal Cart and Checkout Kit be available for the holiday season? - Management confirmed ongoing development of these products, aiming for integration into AI platforms to enhance shopping experiences [90][93]

Financial Data and Key Metrics Changes - Payoneer reported revenues of $261 million, up 9% year over year, with revenue excluding interest income reaching a quarterly record of $200 million, up 16% year over year [25][33] - Adjusted EBITDA was $66 million, representing a 25% margin, with net income of $19 million compared to $32 million in the same quarter last year [31][32] - Customer funds held by Payoneer increased 17% year over year to $7 billion, reflecting customer trust in the platform [27] Business Line Data and Key Metrics Changes - B2B revenue grew 37% in Q2, driven by larger multi-entity customers with complex needs [14] - Checkout volumes surged 83% year over year, indicating strong product adoption [25] - SMB volume grew 9% year over year, with volume from B2B SMBs up 19% [25] Market Data and Key Metrics Changes - Approximately one-third of Payoneer's China revenue came from sellers selling to non-U.S. markets, indicating a shift in market focus [12] - In APAC, LatAm, and EMEA, mid-20% volume growth was achieved, with continued take rate expansion [14] Company Strategy and Development Direction - Payoneer is focused on building a financial stack for cross-border commerce, enhancing its product offerings, and expanding its global reach [7][8] - The company is exploring stablecoin functionality to enhance its service offerings and improve operational efficiency [19][20] - A strategic partnership with Stripe was launched to expand global checkout capabilities [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in navigating the dynamic macro environment and reinstated full-year 2025 guidance, expecting total revenue between $1.04 billion and $1.06 billion [33][38] - The company anticipates high single-digit growth in total volume and low double-digit B2B volume growth in Q3, accelerating to high teens in Q4 [34][38] Other Important Information - Total operating expenses increased 19% year over year, driven by labor-related expenses and investments in scaling card products [28] - The company announced a refreshed $300 million share buyback authorization, reflecting confidence in its business value [21] Q&A Session Summary Question: What gave you the confidence to reinstate the higher guidance? - Management noted greater visibility into the tariff environment and a resilient business model, allowing for confidence in meeting full-year guidance [42][44] Question: What are merchants saying about their demand for stablecoins? - Management indicated that they are in the early stages of understanding merchant demand for stablecoins, but see long-term opportunities in supporting customers with new currencies [47][49] Question: How have merchants in China responded to tariffs? - Management highlighted that Chinese merchants are focused on expanding globally, with a third of revenue coming from non-U.S. markets [54][58] Question: Can you share metrics around churn levels? - Management reported improved revenue retention year over year, with higher retention among managed ICPs compared to non-managed ones [108][109] Question: How do you view the potential disruptive threat of stablecoins? - Management acknowledged that while stablecoins can be disruptive, Payoneer is well-positioned to integrate these innovations into its ecosystem [101][103]

Financial Data and Key Metrics Changes - In the second quarter, global system-wide sales growth was over 6% in constant currency, and global comparable sales growth was nearly 4% [5][20] - Adjusted earnings per share were $3.19 for the quarter, an increase of about 5% versus the prior year quarter in constant currencies [30] - Adjusted operating margin was nearly 47% for the first half of the year, highlighting the durability of the business model [30][31] Business Line Data and Key Metrics Changes - The Internationally Operated Market (IOM) segment saw comparable sales increase by 4%, with all markets driving positive comp sales growth [5][6] - International Developmental Licensed markets delivered comp sales growth of more than 5.5%, led by Japan [6] - In the U.S., comparable sales were up 2.5% in the quarter, outperforming near competitors [9][20] Market Data and Key Metrics Changes - In Germany, McDonald's defined good value with a clear EDAP menu and gained market share despite a challenging environment [7][8] - The U.S. QSR traffic remained challenging, particularly for low-income consumers, whose visits declined by double digits [10][20] - Australia saw its first share gains in a couple of years, driven by the Hot Honey Chicken campaign [25] Company Strategy and Development Direction - The company is focused on its "Accelerating the Arches" strategy, which includes enhancing value and affordability, menu innovation, and marketing execution [14][36] - The company aims to reach 250 million 90-day active loyalty users by 2027, having reached over 185 million as of this quarter [16] - The company is modernizing its operations through technology initiatives, including edge computing and a new finance system [15][19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging operating environment, particularly for low-income consumers, but expressed confidence in the company's ability to adapt and execute its strategy [10][20] - The company remains cautious about the overall near-term health of the U.S. consumer but is optimistic about the long-term potential in markets like China [26][35] - Management emphasized the importance of aligning value, menu, and marketing to drive consumer choice and market share [36][39] Other Important Information - The company plans to open approximately 2,200 restaurants globally this year, with a significant portion in the U.S. [34][35] - The company is adjusting its full-year margin target for company-operated restaurants to around 14.8% [31] Q&A Session Summary Question: Current value and affordability scores in the U.S. - Management indicated that loyalty members have exceptional value and affordability scores, but there is a need to improve core menu pricing to attract more consumers [42][45][49] Question: U.S. sales trajectory and underlying momentum - Management noted that while the industry environment remains challenging, they are confident in their marketing and menu activities planned for the rest of the year [53][58][60] Question: Key drivers for the IOM segment - Management highlighted the foundational elements of value and affordability in IOM markets, supported by successful menu and marketing execution [62][66] Question: Technology initiatives and their success - Management discussed the early benefits of technology initiatives, including improved speed of service and customer satisfaction, with expectations for further benefits in the coming years [73][78][80] Question: Consumer base weakness and diagnostics - Management explained that despite wage gains, real incomes for low-income consumers are down, leading to reduced visits to QSRs [90][92] Question: G&A spend for the balance of the year - Management clarified that G&A spending is typically back half weighted due to project ramp-up times [95] Question: Beverage opportunities and future menu integration - Management expressed excitement about the beverage market's growth potential and indicated that some offerings will be included in the value menu while others will be premium products [96][100]

Financial Data and Key Metrics Changes - Syncora reported consolidated revenue of $80.7 billion, an increase of 9% year-over-year, driven by growth in both reporting segments [18] - Adjusted operating income grew by 21%, while adjusted diluted EPS increased by 20% [7][17] - Consolidated gross profit was $2.9 billion, up 21%, with a gross profit margin of 3.55%, reflecting a 36 basis point increase [19] - Net interest expense rose to $82 million, an increase of $50 million compared to the prior year, primarily due to debt raised for the RCA acquisition [21] - The effective income tax rate was 20.7%, slightly down from 21% in the prior year [21] Business Line Data and Key Metrics Changes - U.S. Healthcare Solutions segment revenue was $72.9 billion, up 9%, benefiting from strong pharmaceutical utilization trends, including a 19% increase in GLP-1 sales [23] - Operating income for the U.S. Healthcare Solutions segment increased by 29% to $9.2 billion, driven by growth across distribution businesses and contributions from RCA [24] - International Healthcare Solutions segment revenue was $7.8 billion, up approximately 11% on an as-reported basis, but operating income declined by 13% due to softness in higher-margin global specialty logistics [25] Market Data and Key Metrics Changes - The U.S. segment is expected to see revenue growth in the range of 9% to 10%, while the International segment is projected to grow by 6% to 7% on an as-reported basis [28][29] - On a constant currency basis, International Healthcare Solutions segment revenue growth is expected to be 7% to 8% [30] Company Strategy and Development Direction - Syncora's strategy focuses on enhancing patient care, strengthening specialty leadership, and leading with market leaders [8][14] - The company is committed to digital transformation, talent development, and prioritizing growth-oriented investments [14][15] - Investments in technology and capabilities, including the acquisition of RCA, are aimed at enhancing service offerings and market position [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strong performance of the U.S. Healthcare Solutions segment, despite a loss of an oncology customer due to acquisition activity [31] - The company anticipates sequential improvement in operating income for the International Healthcare Solutions segment, expecting a return to growth in the fourth quarter [32] - Management remains engaged with policymakers to ensure access to community providers is maintained amid evolving healthcare policies [49] Other Important Information - The company raised its fiscal 2025 EPS guidance to a range of $15.85 to $16, reflecting continued strong performance [27] - Adjusted free cash flow guidance remains unchanged at $2 billion to $3 billion for the full year [22] Q&A Session Summary Question: Can you discuss the U.S. Healthcare segment's revenue growth moderation? - Management noted that revenue growth moderation was due to factors such as biosimilars impact, moderated GLP-1 growth, and the loss of a high-revenue but low-margin customer [36][38] Question: What is the outlook for the international business and clinical trial activity? - Management indicated that clinical trial activity has been subdued, impacting the international segment, but recent improvements in trial start statistics are encouraging for future demand [42] Question: How is the RCA acquisition tracking against expectations? - Management expressed satisfaction with the RCA acquisition, highlighting strong cultural fit and positive early customer feedback [46] Question: What are the potential impacts of the proposed hospital outpatient perspective rule? - Management acknowledged the ongoing political discussions but emphasized that it is too early to determine the full impact on the competitive environment [48] Question: How does the company view the competitive landscape in specialty distribution? - Management stated that they remain focused on their strengths in specialty areas like retina and oncology, and are continuously evaluating future opportunities [82] Question: What are the moving pieces for fiscal year 2026 guidance? - Management highlighted that while they expect continued strong performance, they do not anticipate the same level of rapid growth as seen in recent years [79]

Financial Data and Key Metrics Changes - For the second quarter, revenue was $184.6 million, up 14.6% year over year, with subscription revenue growing 15.7% and cloud revenue increasing by 29.9% [6][27] - Adjusted EBITDA rose to $38.4 million, representing an EBITDA margin of 20.8% [6][30] - Annual recurring revenue (ARR) grew 16.1% to $636.6 million, with average annual revenue per customer increasing 12.7% year over year to $142.6 thousand [6][28] Business Line Data and Key Metrics Changes - Subscription revenue increased to $157.8 million, while services revenue grew 8.3% to $26.7 million [28] - Cloud revenue was $86.2 million, up 29.9% from the previous year, with Ecosio contributing approximately four points to cloud revenue growth [28] - Net revenue retention (NRR) decreased to 108%, down from 110% in the previous year, attributed to lower growth of additional entitlements and regulatory changes in Brazil [7][29] Market Data and Key Metrics Changes - The company noted a slowdown in ERP migrations, elongating deal cycles, which is consistent with trends observed in publicly traded ERP providers [8][9] - In Europe, annual recurring revenue for Ecosio reached $10.8 million, a 33% increase from the prior quarter, driven by upcoming e-invoicing mandates [14] Company Strategy and Development Direction - The company is focused on leveraging internal technology investments and controlling expenses to maintain adjusted EBITDA margins while navigating macroeconomic challenges [9][10] - The ongoing cloud ERP upgrade cycle is expected to accelerate over the next two and a half years, with increasing demand for solutions due to global tax complexities [11][12] - The company is investing in AI and automated workflows to enhance its global compliance platform, which is expected to drive future growth [15][16] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macroeconomic factors impacting customer activity and necessitating a reduction in full-year guidance, but expressed confidence in long-term growth expectations [5][10] - The company highlighted strong underlying demand and customer commitment, with churn lower on a dollar basis compared to previous quarters [13] - Management remains optimistic about the long-term growth drivers, including e-invoicing mandates and cloud migrations [34][50] Other Important Information - The company ended the second quarter with over $284.4 million in unrestricted cash and cash equivalents, along with $300 million of unused availability under its line of credit [32] - The guidance for the third quarter is expected to be between $190 million to $193 million in revenue, with full-year revenue guidance adjusted to $750 million to $754 million [33] Q&A Session Summary Question: Impact of macro factors on guidance - Management indicated that the macro impact is primarily affecting on-premise and services revenue, while cloud revenue guidance remains intact [37][38] Question: E-invoicing adoption rates - Management noted that the end-to-end offering is differentiating and that early customers are expanding their coverage, indicating a strong land-and-expand model [42][43] Question: Long-term growth outlook - Management expressed confidence in long-term growth due to strong transactional volume in e-invoicing and ongoing cloud migrations [49][50] Question: Changes in hiring plans - Management stated that most hiring pullbacks are in non-strategic areas, focusing on efficiency and core strategies related to e-invoicing [51][52] Question: Deal progression in Q2 - Management observed a softness in deal activity towards the end of Q2, with elongation in sales cycles impacting revenue [56][57] Question: Delayed deals from Q2 to Q3 - Management clarified that delayed deals are not indefinitely postponed but are tied to customer migration processes [63][64] Question: Guidance philosophy - Management confirmed that guidance adjustments reflect observed trends in the second quarter without changing their overall conservative philosophy [66][67] Question: SAP comments and visibility - Management noted that the softness is primarily in the US market, impacting their larger market opportunity, while European performance remains strong [74][75] Question: E-invoicing competition in Europe - Management highlighted that the mid and enterprise market seeks a single provider for multiple jurisdictions, which aligns with their strategy [97][98]

Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $154.5 million, a decrease of $34.5 million compared to the same quarter last year [15] - Gross margin improved to 35%, up from 19% in the prior year's quarter, reflecting operational efficiency [16] - Net income for Q2 2025 was $28.9 million, compared to $30.6 million in the same quarter last year [16] - Cash and cash equivalents stood at $833 million as of June 30, 2025, indicating strong liquidity [16][23] Business Line Data and Key Metrics Changes - The LEU business generated $125.7 million in revenue, a decrease of $43.9 million compared to the same quarter last year, primarily due to reduced SWU sales volume [17] - Technical Solutions segment revenue totaled $28.8 million, an increase of 48% from the prior year, driven by LEU feedstock and cylinder costs [19] - Gross profit for the Technical Solutions segment was $3.2 million, a decrease of $0.3 million compared to the prior year's quarter [20] Market Data and Key Metrics Changes - The company reported a total backlog of approximately $3.6 billion, with the LEU segment backlog at about $2.7 billion [21] - The LEU segment backlog includes $600 million in future SWU and uranium deliveries, primarily under medium and long-term contracts [21] - The Technical Solutions segment backlog was approximately $900 million, including funded and unfunded amounts [22] Company Strategy and Development Direction - The company aims to secure sufficient public and private capital to expand its enrichment capacity, emphasizing a fully American technology and supply chain [11] - Centrus is positioned to meet the growing demand for nuclear fuel, driven by government actions and private investments [8] - The company is actively pursuing investments in manufacturing capabilities while awaiting the DOE's decision on funding [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the nuclear industry's growth, supported by government actions and private sector investments [7][8] - The company is optimistic about the DOE's decision regarding the allocation of $3.4 billion for domestic nuclear fuel production [10] - There is a strong consensus among customers and policymakers on the need for more competition in the enrichment market [14] Other Important Information - The company achieved a production milestone of 900 kilograms for Phase two of the HALEU operation contract [13] - The DOE extended the HALEU operation contract through June 30, 2026, with a target cost and fee for the first option period set at approximately $99.3 million and $8.7 million respectively [21] - The company has invested $60 million in supply chain readiness to support large-scale deployment of its technology [12] Q&A Session Summary Question: Expectations for federal programs stemming from May's executive orders - Management indicated no specific information on incremental federal programs but acknowledged strong support from the executive orders for the nuclear fuel industry [32][33] Question: Progress on the $60 million investment in centrifuge manufacturing - Management reported that the investment is progressing well, with efforts focused on ordering long lead items and preparing for a large centrifuge build [34] Question: Opportunities for additional customer commitments in LEU production - Management emphasized the importance of customer commitments for sizing up the plant and building out enrichment capabilities [41][42] Question: Continuation of HALEU production rate until DOE decisions are made - Management confirmed that operations would continue at the current enrichment rate [43] Question: Potential for smaller build-out of a low enriched facility - Management stated that they continually evaluate opportunities based on DOE decisions and customer conversations [47][49] Question: Target cash balance for the next year - Management did not disclose specific target amounts but emphasized the importance of maintaining financial flexibility [55][56] Question: Profitability of the entire portfolio given current pricing - Management indicated that while margins are strong, variability in quarterly results is expected, and they do not provide future earnings guidance [59][60] Question: Expectations for uranium sales in the next quarters - Management reiterated that they do not provide guidance on individual shipments but believe they are on track with internal projections [64] Question: Insights on HALEU processing capabilities and CapEx plans - Management confirmed they are the only Western HALEU producer and are working under the DOE contract, but did not provide specific insights into future CapEx [66][67] Question: Government intervention in setting market structure for LEU - Management acknowledged the relevance of the question but did not speculate on future government actions [107][108]

Financial Data and Key Metrics Changes - The company exceeded the top end of guidance for revenue by $16 million and adjusted EBITDA by $15 million in Q2 [18] - Grow revenue was $287 million, down 4% year over year but up 1% sequentially, with strong performance from the Unity ad network [18][19] - Create revenue was $154 million, reflecting a 2% increase both year over year and sequentially, with a 16% growth when adjusting for non-strategic revenue [19][20] - Adjusted EBITDA for the quarter was $90 million, representing a 21% margin [20] - Free cash flow reached a record $127 million, an increase of $47 million year over year [21] Business Line Data and Key Metrics Changes - The growth segment saw a 15% sequential revenue growth driven by Unity Vector, which is expected to continue into Q3 [6][9] - The Create segment experienced double-digit subscription growth, with Unity 6.2 showing strong adoption [13][19] - The Unity ad network now comprises approximately half of total grow revenue, with expectations for this percentage to increase [8][22] Market Data and Key Metrics Changes - The company reported significant growth in China, with a $20 million sequential increase in revenue, driven by improvements in both Create and Grow segments [57] - The advertising business is seeing broad-based growth, with 85 of the top 100 mobile games in the world using Unity [10][11] Company Strategy and Development Direction - The company is focusing on accelerated product innovation and enhancing customer value, particularly through Unity Vector [5][12] - Major partnerships were announced with Tencent and Scopely, aimed at strengthening Unity's position in the gaming ecosystem [14][15] - The company is also expanding its presence in non-gaming sectors, with automotive and healthcare applications showing strong growth [16][17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the future growth potential, particularly with the integration of AI and data-driven insights into their products [11][12] - The company anticipates that the full impact of its competitive advantages will be realized starting in 2026 [11] - Management highlighted the importance of maintaining operational efficiency while investing in high-impact initiatives [21][22] Other Important Information - The company is implementing a developer data framework to enhance transparency and control over data usage [12] - Adjusted gross margins are at 83%, with expectations for further margin expansion as the business scales [23] Q&A Session Summary Question: Potential to expand Unity ad strength to other products - Management confirmed that Unity Vector is modular and can be applied to improve other ad products [28] Question: Rate of improvement with Vector - Management indicated that Vector is a significant upgrade, with ongoing improvements expected over time [31] Question: Next steps in product evolution for Grow - Management emphasized that improvements will be gradual and ongoing, leveraging AI capabilities [35] Question: Clarification on a $12 million perpetual deal in Create - Management explained that this was a small component of a larger contract and does not represent recurring revenue [38] Question: Guidance on Grow revenue - Management expects mid-single-digit growth in Grow, with strong performance anticipated from the Unity ad network [46] Question: Growth in China - Management noted that the growth in China is primarily due to improvements in the Create business [56] Question: Incrementality vs. cannibalization in ad spend - Management stated that cannibalization is minimal, with growth driven by increased value provided to customers [64] Question: Scalability of ad spend on Vector - Management acknowledged that while there are strong performance improvements, there is still work to be done to optimize scalability [96]

Financial Data and Key Metrics Changes - The company reported a record Q3 revenue number for Walt Disney World, indicating strong performance in the experiences segment [46] - Operating income growth for the experiences segment is expected to be around 8% for the fiscal year [44] Business Line Data and Key Metrics Changes - The film studio segment has seen renewed momentum with the live-action "Lilo and Stitch" crossing the $1 billion mark at the worldwide box office, marking Disney's fourth billion-dollar film in just over a year [8][9] - The integration of Hulu into Disney+ is expected to enhance the streaming offering, providing a more comprehensive entertainment package [10][29] Market Data and Key Metrics Changes - Domestic parks have experienced an 8% year-over-year increase in per capita spending, the best growth in over two years [90] - Forward bookings for Disney Cruise Line are reported to be very strong, with high occupancy rates [47][78] Company Strategy and Development Direction - The company is focusing on quality and innovation, with plans to expand its parks and experiences globally [6][13] - ESPN is being developed into a leading digital sports platform, with a direct-to-consumer offering launching soon [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's trajectory, citing a robust portfolio of growth businesses and a deep library of beloved IP [13] - The NFL deal is expected to provide ESPN with more games and enhance the overall viewer experience, which is anticipated to be accretive in the first year after closing [20][23] Other Important Information - The company is launching two new cruise ships, which are expected to enhance its offerings and brand presence in new markets [52][75] - The integration of Hulu into Disney+ is aimed at improving consumer experience and reducing churn [28][29] Q&A Session Summary Question: Can you elaborate on the NFL relationship and its impact on ESPN's growth? - The NFL deal will provide ESPN with more games than ever before, increasing audience engagement and revenue potential [17][20] Question: How will the integration of Hulu into Disney+ accelerate DTC growth? - The integration is expected to enhance consumer experience, lower churn, and improve advertising revenue opportunities [27][28] Question: What are the expectations for engagement with the new ESPN app? - The new ESPN app is designed to provide a more compelling experience for sports fans, with features that enhance engagement and reduce churn [39][40] Question: Can you discuss the trends in domestic theme park attendance and spending? - Attendance and per capita spending have both shown positive trends, with strong performance despite competitive offerings [90][92] Question: What is the outlook for content spending in the upcoming fiscal year? - Content spending is expected to focus on international growth opportunities rather than a significant increase in domestic content [85][86]

Financial Data and Key Metrics Changes - Total company revenue decreased 6% year-over-year to $797 million, with earnings per share at $0.50, reflecting a sequential improvement in trends across all regions [6][29][40] - Net income was $60 million, driven by better-than-expected results at both Michael Kors and Jimmy Choo [29] - Gross margin was approximately flat at 63%, with higher tariffs negatively impacting it by 30 basis points [32][33] Business Line Data and Key Metrics Changes - Michael Kors revenue decreased 6% year-over-year, with retail sales showing encouraging signs of momentum, including improved traffic trends and stronger full-price sell-throughs [6][8][30] - Jimmy Choo revenue decreased 6.4% year-over-year, with retail sales declining mid-single digits and wholesale sales declining double digits [17][31] - Accessories at Michael Kors saw strong full-price sell-throughs, while footwear revenue was down double digits [14][21] Market Data and Key Metrics Changes - Revenue in The Americas decreased 9%, while EMEA revenue increased 6%, and Asia revenue declined 15% [30] - Michael Kors experienced a decline of 8% in The Americas, while EMEA saw a 9% increase [30] - Jimmy Choo's revenue in The Americas decreased 12%, with EMEA revenue increasing by 1% [31] Company Strategy and Development Direction - The company is focused on stabilizing its business in fiscal 2026 and establishing a foundation for growth in fiscal 2027, with strategic initiatives aimed at reenergizing its luxury brands [5][6][17] - A significant store renovation program is planned, targeting approximately 50% of the store fleet over the next three years to enhance consumer experience [16][79] - The company aims to achieve $4 billion in revenues for Michael Kors and $800 million for Jimmy Choo over time [17][26] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about early signs of strategic initiatives working, with expectations for trends to improve in the second half of fiscal 2026 [26][41] - The global macroeconomic environment remains dynamic, with increased tariff rates impacting cost of goods sold [39][40] - The company anticipates a gradual sequential improvement in trends supported by new product deliveries and marketing initiatives [40][41] Other Important Information - The Versace transaction is expected to close in 2025, with proceeds aimed at reducing debt significantly [27][77] - The company is implementing a targeted price increase strategy to mitigate tariff impacts and improve gross margins [39][61] Q&A Session Summary Question: Can you elaborate on recent sell-through trends on product launches across direct-to-consumer and wholesale? - Management noted that consumer engagement with the new storytelling and marketing strategies has improved, leading to better sell-throughs and a positive response to new product designs [45][46][49] Question: How do you expect pricing strategy trends to translate to margins? - Management indicated that while tariffs are expected to impact margins negatively in the short term, strategic initiatives aimed at reducing promotional activity and increasing full-price sell-throughs will support margin improvement in the future [55][61][62] Question: Are you baking in growth in any quarter this year at Michael Kors? - Management confirmed that there is no year-over-year growth planned yet, but they anticipate growth in the full-price channel in the latter part of the fiscal year [68][70] Question: What do you expect the balance sheet to look like post-Versace sale? - Management expects minimal debt remaining on the balance sheet after the Versace transaction closes, allowing for a strong financial position moving forward [77][79] Question: What handbag families might be most important moving forward? - Management highlighted three handbag families—Layla, Nolita, and Bryant—as key products with strong sell-throughs, and emphasized the importance of storytelling around existing products [86][88]

Financial Data and Key Metrics Changes - The company reported a strong second quarter with product orders growing 10% year over year, reaching the highest level in three years [6] - Gross margins expanded by 50 basis points year over year and 120 basis points sequentially, driven by a favorable product mix and pricing discipline [7][22] - The company generated $13 million of free cash flow in Q2, marking the third consecutive quarter of positive free cash flow and the first time in the company's history for positive cash flow in the first half of the year [25][26] Business Line Data and Key Metrics Changes - In Banking, revenue increased by $50 million sequentially, with gross margin up 140 basis points year over year and 180 basis points sequentially, supported by favorable geographic mix and disciplined pricing [27] - In Retail, there was sequential growth in order entry, revenue, and backlog in Q2, although gross margin decreased by 70 basis points sequentially and 190 basis points year over year [28] Market Data and Key Metrics Changes - The company operates in a CHF 32 billion banking and retail automation market, with strong demand for advanced ATMs and AI-driven checkout solutions [9][10] - The North American market is showing promising growth, with a targeted pipeline of key accounts and increasing traction for AI-enabled solutions [44][47] Company Strategy and Development Direction - The company is focused on capitalizing on market opportunities through a three-year growth plan, emphasizing branch automation and AI-driven solutions [8][10] - The strategy includes local manufacturing to enhance competitiveness and service capabilities, particularly in the North American and Indian markets [14][58] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving strong operational performance in the second half of the year, supported by a robust backlog and positive market demand [6][20] - The company anticipates continued improvement in retail margins and revenue growth in Q3 and Q4, driven by a recovery in the retail business [29][60] Other Important Information - The company repurchased $30 million of shares during the quarter, reflecting a commitment to returning capital to shareholders [7][33] - The company maintains a strong balance sheet with approximately $620 million of liquidity and a net leverage ratio of 1.5x [33] Q&A Session Summary Question: Can you expand on the confidence regarding retail business inflection in the second half of the year? - Management noted a higher mix of point of sale revenue impacting margins but expressed optimism about recovery in retail, particularly with significant backlog wins expected to convert into sales [42][43] Question: What is the current status of Teller Cash Recyclers (TCR) adoption? - Management indicated that they are in the third or fourth inning of TCR adoption, with significant orders received and a strong value proposition for banks [51][53] Question: Can you discuss the opportunity in the Indian market? - The company is reentering the Indian market with compact, energy-efficient ATMs, aiming to grow its installed base and service annuity [57] Question: What are the expectations for retail and product gross margins in the second half? - Management expects improvements in retail margins and revenue growth in Q3 and Q4, driven by ongoing projects and market recovery [59][60] Question: How are tariffs impacting the company? - Management provided an updated estimate of tariff impacts, indicating successful mitigation strategies that have reduced expected costs significantly [61][66]