Fortune Brands Innovations (FBIN) Q2 2025 Earnings Call July 31, 2025 05:00 PM ET Speaker0Afternoon, everyone. My name is Paul, and I will be your conference operator today. Welcome to the Fortune Brands Second Quarter twenty twenty five Earnings Conference Call. All lines are muted to prevent background noise. Following the speakers' remarks, we will open the call for a Q and A session.At this time, I'll turn the call over to Curt Worthington, Vice President of Finance and Investor Relations. Curt, please ...

Financial Data and Key Metrics Changes - Consolidated revenue from continuing operations for Q2 2025 was $47.6 million, up 8.1% year over year and above the midpoint of guidance [6][18] - Gross profit margin from continuing operations was 20.4%, down 2.1 percentage points from a year ago and slightly down from Q1 2025 [6][19] - Operating loss for Q2 was $7.4 million, compared to an operating loss of $5.7 million in Q2 2024 [21] - Q2 GAAP diluted earnings per share was $0.23, compared to a diluted loss per share of $0.06 in Q2 2024 [22] Business Line Data and Key Metrics Changes - Power Analog Solutions (PAS) revenue was $42.3 million, up 10.7% year over year and 6% quarter over quarter, representing nearly 90% of total revenue [9][18] - Revenue from Power IC was $5.4 million, up 11.1% year over year and 10.2% sequentially [19] - Design wins in Q2 totaled 71, up 61% from 44 design wins in Q2 2024, with 32% of wins for new products [10][11] Market Data and Key Metrics Changes - Communications segment revenue grew nearly 47% year over year, driven by flagship and mass market smartphone models [15] - Automotive segment revenue declined 25% year over year due to slower demand from EV makers [16] - The company expects automotive markets to represent over 10% of revenue by 2028, up from less than 5% in 2024 [11] Company Strategy and Development Direction - The company is executing a strategic pivot to become a pure play power semiconductor company [6] - The goal is to achieve $300 million in revenue and 30% gross margin in three years, with a focus on new generation products [7] - The company is targeting more than 50 new generation products by 2025 to drive higher revenue and margins [8] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing macro challenges and pricing pressure in China affecting older generation products [6][17] - The company anticipates a softer second half of the year due to tariff uncertainties and competitive pricing pressures [33] - Management remains committed to maximizing shareholder value and prioritizing a return to profitability [33] Other Important Information - The company has begun to provide limited support for remaining customer obligations related to the discontinued display business, expecting cash inflow of approximately $20 million over two years [25] - The company is targeting annual OpEx savings of $2 million to $3 million through headcount reduction initiatives [29] Q&A Session Summary Question: Impact of pull-ins and tariff on revenue - Management indicated that the pull-ins from customers have already been accounted for in Q2, particularly in the TV-related area [36] Question: Gross margin decline reasons - The decline in gross margin is attributed to pricing pressure and lower utilization rates due to older generation products [38] Question: Strength in communications applications - Growth in communications is driven by design wins in mid-range to flagship AI smartphones and new AI portable phones [42] Question: OpEx reduction and EBITDA breakeven target - Management targets to achieve close to adjusted EBITDA breakeven by Q4 2025, with expected OpEx reduction of $2 million to $3 million annually [46]

Financial Data and Key Metrics Changes - In Q2 2025, Roku achieved an 18% year-over-year growth in platform revenue, indicating the effectiveness of its revenue growth strategy implemented 18 months prior [8][12] - The company expects a full-year EBITDA margin improvement of 180 basis points compared to 2024, with further margin improvements anticipated in 2026 [12][13] - Roku is on track to achieve operating income positivity in Q4 2025, which is earlier than previously indicated [13][14] Business Line Data and Key Metrics Changes - Video advertising on Roku's platform outpaced the growth of the OTT and digital ad markets in the US, reflecting successful ad demand diversification efforts [8] - Roku built subscriptions, particularly premium subscriptions, continue to perform well, contributing positively to overall revenue [9] Market Data and Key Metrics Changes - The advertising market remains robust, with positive trends observed during the upfront advertising season, indicating a healthy demand for connected TV advertising [25][26] - The Roku Channel (TRC) saw an 80% growth in streaming hours in Q2, although this growth rate is expected to moderate in future quarters [73] Company Strategy and Development Direction - Roku's strategy focuses on growing platform revenue through deeper integrations with third-party partners and launching new products like Roku Ads Manager [7][9] - The company is committed to operational efficiency while balancing investments in platform growth and margin expansion [12][13] - Roku aims to leverage its first-party data and proprietary content to enhance monetization and drive subscription growth [51][94] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining double-digit platform revenue growth while improving profitability in 2026 and beyond [11][12] - The integration of new partnerships, such as with Amazon DSP, is expected to enhance demand and optimize pricing, although the ramp-up period for these integrations is acknowledged [116] Other Important Information - Roku has initiated a $400 million share repurchase program to offset dilution and enhance shareholder returns [42][44] - The company is actively working on bundling opportunities with its newly acquired Friendly TV to enhance its subscription offerings [94] Q&A Session Summary Question: What drove the outperformance in Q2 and the full-year raise? - Management highlighted the success of their platform revenue growth strategy and the positive results from monetization initiatives [7][11] Question: Can you discuss the trajectory for 2026? - Management indicated confidence in achieving operating income positivity in Q4 2025 and sustaining growth in 2026 [12][13] Question: How is the advertising business performing? - Both Roku Ads Manager and third-party partnerships are performing well, with a focus on diversifying demand [20][24] Question: What is the outlook for platform growth excluding certain factors? - Management provided growth rates of around 17% for Q2 and Q3 when excluding political and Friendly contributions [30][34] Question: Can you elaborate on the gross margin outlook? - The company expects gross margins to remain in the 51% to 52% range, with potential upside if higher-margin activities pick up [35][36] Question: How is Roku managing ad inventory to maintain pricing? - Roku's scale and unique ad placements allow it to price inventory efficiently, maintaining value despite market fluctuations [87][89] Question: What are the early learnings from Friendly TV? - Friendly TV contributed 1.8 points of growth in Q2, with ongoing integration efforts to enhance visibility and subscriptions [78][79] Question: How does Roku plan to drive subscriptions? - The company is focusing on content recommendations and bundling strategies to enhance subscription growth [93][94]

Financial Data and Key Metrics Changes - MPS achieved record quarterly revenue of $664.6 million, which is 4.2% higher than Q1 2025 and 31% higher than Q2 2024 [3][4] - The company continues to see diversified revenue growth across all markets, reflecting a strong demand profile [4] Business Line Data and Key Metrics Changes - Storage and compute revenue grew sequentially, driven by demand for memory and notebook power solutions [4] - The enterprise data segment is expected to grow between 20% to 30% sequentially in Q3 2025, with a seasonal uplift in consumer markets [8][16] Market Data and Key Metrics Changes - The company is seeing strong demand across all end markets, with enterprise data and AI ASIC programs starting to ramp up [10][11] - The automotive segment is anticipated to flatten in the middle of the year but is expected to pick up in Q3 and Q4 as new content opportunities come online [32] Company Strategy and Development Direction - MPS is transforming from a chip-only semiconductor supplier to a full-service silicon-based solutions provider, focusing on innovation and solving customer challenges [4][5] - The company is investing in new technology and expanding into new markets to capture future growth opportunities [4] Management's Comments on Operating Environment and Future Outlook - Management remains cautiously optimistic about the outlook for the remainder of the year, citing strong demand across all end markets despite short lead times affecting backlog visibility [21][22] - The company is not currently seeing significant impacts from macroeconomic uncertainties or tariff-related activities [39][40] Other Important Information - The company is focusing on maintaining supply chain stability and adapting swiftly to market changes [5] - Inventory levels are low, and the company is expanding its supply chains to meet customer demand [75][76] Q&A Session Summary Question: Can you provide insights on the September guidance and the six end markets? - Management indicated enterprise data is expected to grow between 20% to 30% sequentially, with other lines of business showing high single-digit growth [8] Question: What is the status of AI ASIC programs? - Multiple customers are engaged, and the company has many design wins, indicating a positive outlook for the enterprise data market [10][11] Question: Can you comment on the enterprise data guidance for the full year? - The market remains dynamic, and while Q4 guidance is not provided, Q3 is expected to grow sequentially [16][18] Question: How does the company view macroeconomic uncertainties? - Management focuses on internal execution and customer demands, stating that market conditions are being managed effectively [20][21] Question: What is the outlook for the automotive segment? - The automotive segment is expected to see growth in Q3 and Q4, driven by new content opportunities [32][33] Question: Can you elaborate on customer concentration and growth opportunities? - The company is returning to a more diversified customer base, with no single customer expected to exceed 5% of sales [80][81] Question: What are the growth drivers for 2026? - The company anticipates broad-based growth, particularly in enterprise data opportunities [85]

Financial Data and Key Metrics Changes - In Q2 2025, total volume decreased by 3% year over year to $4.2 billion, while consolidated gross profit declined by 5% to $232 million, falling below the previous guidance range [13][14] - Adjusted operating income increased by 11% year over year, indicating improved overall operating performance despite the decline in gross profit [14] - Operating expenses were $173 million, down 10% year over year and below the guidance range [18][19] - Operating cash flow was $28 million, and free cash flow was $13 million, contributing to a year-to-date operating cash flow of $143 million and free cash flow of $113 million [20][24] Business Line Data and Key Metrics Changes - Aviation segment volume increased by 2% year over year to 1.9 billion gallons, with gross profit rising by 8% to $138 million, driven by strong performance in Europe [14][15] - Land segment volume decreased by 7% year over year, with gross profit down 17% to $67 million, primarily due to the sale of UK and Brazil operations and lower volumes in North America [15][16] - Marine segment volumes also declined by 7% year over year, with gross profit decreasing approximately 26%, impacted by an unfavorable transaction tax settlement and weaker performance in certain locations [17][18] Market Data and Key Metrics Changes - The company noted strong demand for commercial and business aviation fuel and services, particularly in Europe, which is expected to continue into Q3 [6][10] - The land segment faced challenges due to global economic uncertainty and demand weakness in North America, prompting a strategic exit from underperforming activities [7][8] Company Strategy and Development Direction - The company is focused on streamlining its portfolio to reduce complexity and enhance execution in high-value areas, including divesting underperforming assets [7][10] - A balanced approach to capital deployment is being maintained, with an increase in quarterly dividends reflecting confidence in cash flow generation capabilities [9][20] - The company aims to concentrate on core markets that offer predictable earnings contributions and sustainable value creation [8][22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macroeconomic headwinds but expressed confidence in the ability to generate consistent cash flow and drive long-term value [10][24] - The company expects sequential improvement in land performance in Q3, although year-over-year gross profit will remain lower due to previous portfolio changes [17][22] - Management highlighted the importance of operational discipline and cost management in navigating the current market complexities [19][23] Other Important Information - The company generated $64 million in returns to shareholders through share repurchases and dividends in the first half of the year [20][24] - The balance sheet remains strong with $415 million in net debt and over $1 billion in available liquidity, allowing for potential strategic investments [21] Q&A Session Summary Question: Regarding land disappointment and potential asset divestitures - Management indicated that there are still parts of the land business that could be optimized or divested, focusing on activities that are not scalable or profitable [30][32] Question: Insights on third-quarter expectations for each business segment - Aviation is expected to benefit from government activity, while Marine may see profit declines due to ongoing market conditions. Land is anticipated to have lower gross profit due to recent exits from unprofitable markets [36][44] Question: Investment opportunities and strategies moving forward - The company is looking for both organic and inorganic growth opportunities, particularly in aviation and land, as valuations improve and interest rates decrease [56][58] Question: Impact of tax settlement on Marine segment guidance - Without the tax settlement, Marine gross profit would have been within the guidance range [59]

Nature's Sunshine Products (NATR) Q2 2025 Earnings Call July 31, 2025 05:00 PM ET Speaker0Good afternoon, everyone, and thank you for participating in today's conference call to discuss Nature's Sunshine's Financial Results for the Second Quarter Ended 06/30/2025. Joining us today are Nature's Sunshine's CEO, Terrence Moorhead CFO, Shane Jones and General Counsel, Nate Brower. Following their remarks, we'll open the call for analyst questions. Before we go further, I would like to turn the call over to Mr. ...

Financial Data and Key Metrics Changes - Revenue grew 78% year over year to $500,000,000, marking the fastest quarterly growth rate since 2022 [6][29] - Daily active users increased to 110,000,000, up 21% year over year, with growth in both the U.S. and international markets [6][32] - Adjusted EBITDA reached $167,000,000, with a margin of 33%, up over 1,900 basis points year over year [30][32] - GAAP net income was $89,000,000, translating to $0.48 per basic share [41] Business Line Data and Key Metrics Changes - Advertising revenue grew 84% year over year to $465,000,000, driven by broad-based strength across the business [20][32] - Other revenue, including data licensing, reached $35,000,000, growing 24% year over year [32] - Average revenue per user (ARPU) grew 47% year over year to $4.53 [32] Market Data and Key Metrics Changes - Revenue in the U.S. grew significantly, with international markets also showing strong performance, particularly in Europe [32] - The total active advertiser count expanded by over 50% year over year [20] Company Strategy and Development Direction - The company is focusing on improving the core product, enhancing search capabilities, and expanding internationally [12][15] - Strategic investments are being made in sales, marketing, and machine learning to drive user engagement and revenue growth [35][36] - The company is deprioritizing certain initiatives, such as the user economy, to concentrate resources on areas that will drive immediate results [12][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, highlighting a unique opportunity for Reddit as a community-driven platform in an increasingly automated world [7][16] - The company is focused on building a more personalized user experience to enhance engagement and retention [84] - Future revenue estimates for Q3 2025 are projected to be between $535,000,000 and $545,000,000, representing 54% to 56% year-over-year growth [42] Other Important Information - Machine translation is now live in 23 languages, facilitating international expansion [15] - The company is investing in marketing strategies to increase user awareness and engagement [19][20] Q&A Session Summary Question: What is one memorable discussion you had at the Cannes Lions Festival? - Management highlighted a discussion where an advertiser realized a new customer segment opportunity and praised the quality of the team [44] Question: What projects are being prioritized over the user economy? - The focus is on improving user engagement through core app improvements and diversifying traffic sources [46] Question: What innovations are expected in the ad business? - Exciting innovations include Dynamic Product Ads and automation features to enhance advertiser onboarding and performance [57] Question: How are user trends evolving in the U.S.? - User trends improved throughout Q2, with better traction noted as the quarter progressed [55] Question: How is the advertising relationship evolving? - The company is seeing growth in active advertisers and has created a global accounts team to service larger clients [68] Question: What are the early learnings from testing Reddit Lite internationally? - The test showed that simplifying the app experience leads to better engagement, and the focus is now on incorporating these improvements into the core app [102]

Financial Data and Key Metrics Changes - The company reported a diluted earnings per share increase of 11.5% to $0.58 compared to $0.52 in the same period last year, reaching the high end of expectations [5] - Sales for the quarter rose by 7.1% to $1,214 million, with comparable store sales increasing by 0.4%, marking the first quarterly increase since 2022 [5][15] - Gross profit rose by 8.5% compared to the same period last year, driven by a 7.1% increase in sales and a 60 basis points improvement in the gross margin rate, which rose to 43.9% [26][29] Business Line Data and Key Metrics Changes - Connected Customer sales rose by 2% year over year, now accounting for approximately 19% of sales, with strong growth in weekly active users and conversions [18] - The design services segment delivered strong sequential and year-over-year sales growth, significantly outpacing the company average [18] - Spartan Surfaces saw sales rise approximately 7% year over year, with June marking the strongest month in the company's history [22] Market Data and Key Metrics Changes - Store sales in the West Division outperformed the company for the quarter and year to date [15] - The second quarter benefit to comparable store sales from Hurricane Helene and Milton was approximately 40 basis points compared to 100 basis points in the first quarter [15] - Existing home sales fell 2.7% in June to a seasonally adjusted annual rate of 3,930,000 units, marking the lowest level in nine months [32] Company Strategy and Development Direction - The company plans to open 20 new warehouse format stores in fiscal 2025, with a disciplined and agile growth strategy [7][8] - The company is focused on mitigating the impact of tariffs through vendor negotiations and product diversification [10][11] - The company aims to maintain pricing gaps and reinforce its everyday low price message while enhancing its product assortment [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about the resilience of the U.S. consumer, supported by a solid labor market, but acknowledged challenges in discretionary spending due to elevated mortgage rates [31][32] - The company does not expect significant changes in consumer behavior or housing activity for the remainder of 2025 [33] - Management highlighted the importance of internal initiatives to drive sales and improve in-store productivity amid a challenging macro environment [66][68] Other Important Information - The company ended the quarter with $876.9 million in unrestricted liquidity, consisting of $176.9 million in cash and cash equivalents [30] - The effective tax rate increased to 21.8% from 19.8% in the same period last year, primarily due to a decrease in excess tax benefits related to stock-based compensation [29] Q&A Session Summary Question: How much of the ticket increase was tariff-induced versus trade-up to better products? - Management indicated that much of the average ticket increase came from product mix, particularly in wood, with minor price changes affecting the ticket [41][44] Question: How does the company view pricing throughout the year given inventory cycles? - Management stated that modest price increases are expected in the back half of the year, with a focus on managing tariffs through SKU adjustments and vendor negotiations [45][46] Question: What is the outlook for fiscal 2026? - Management noted it is too early to react to 2026 estimates, emphasizing the need for improvement in existing home sales and the impact of new store maturation [52][54] Question: How does the company approach creating shareholder value in a challenging environment? - Management highlighted ongoing investments in in-store experiences and commercial opportunities to drive growth, even if existing home sales remain subdued [65][66] Question: How is the company performing across different income demographics? - Management indicated that the company attracts a wide range of income levels and is revisiting its studio strategy to appeal to higher-income consumers [88][90]

Financial Data and Key Metrics Changes - Revenue for the second quarter was $20.4 million, representing a 56% increase year over year, marking a record quarter for the company [8][10] - Gross profit increased by 55% to $5.9 million, with a gross profit margin of 29% for both periods, expanding by six percentage points from the previous year [10] - Net income for the second quarter was $2.7 million, compared to $0.9 million for the same period in 2024, benefiting from approximately $1.2 million in net credits from the federal government's employee retention credit program [11] Business Line Data and Key Metrics Changes - Shipment volume increased by 102% and production volume increased by 127% compared to the year ago period, indicating strong operational performance [16] - The company successfully resolved production issues with a new brand partner, leading to continued new orders from that account [16] Market Data and Key Metrics Changes - The company anticipates demand to slow in 2025 due to tariffs affecting global purchasing decisions and consumer buying habits, but still projects a record revenue year [20] - Current shipped and open orders are valued at over $60 million, compared to $50 million in 2024, indicating strong demand trends [22] Company Strategy and Development Direction - The company uplisted its common shares on NASDAQ, enhancing visibility and liquidity, and was added to the Russell 3000 and Russell 2000 indices [6][7] - The company is focused on leveraging patented technology and specialized formulations to maintain a competitive edge in the beauty market [23][24] - Financial flexibility was enhanced by amending loan agreements to increase borrowing capacity from $14.2 million to $23 million, allowing for better support of growth initiatives [21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term prospects despite anticipated near-term demand headwinds due to macroeconomic conditions [22][37] - The company is committed to continuous innovation and improving operational efficiencies to drive stronger EBITDA performance in the second half of the year [25][37] Other Important Information - The company showcased new products at Cosmoprof North America, highlighting its commitment to innovation and market leadership [12][13] - A search for a new Chief Financial Officer is ongoing, with expectations to announce a candidate soon [27] Q&A Session Summary Question: Insights on profit margins and scaling challenges - Management indicated that improvements in manufacturing efficiency and better utilization of production lines are expected to enhance gross profit margins in the coming quarters [30][34] Question: Further details on operational improvements - Management elaborated on the implementation of process improvements to achieve first-time quality, which is anticipated to lower costs and improve efficiency [33][34]

Financial Data and Key Metrics Changes - Total revenues for Q2 2025 were $381.1 million, down from $394.5 million in Q2 2024, primarily due to a $9 million (15.8%) decrease in residential video revenues and a $1.1 million (0.5%) decrease in residential data revenues [20][21] - Adjusted EBITDA was $203.2 million, representing 53.3% of revenues, compared to $212.4 million (53.8% of revenues) in the prior year [22][23] - Capital expenditures were $68.4 million, a decrease of $3.2 million (4.5%) year over year [23] Business Line Data and Key Metrics Changes - Residential broadband revenue increased by 1.9% sequentially, driven by a $2.39 increase in ARPU, despite a decline of 13,000 residential data customers in Q2 [6][10] - Business data revenue was $57.4 million, consistent with Q1 levels, with a year-over-year growth of 1.2% driven by high-value fiber and carrier segments [7][21] Market Data and Key Metrics Changes - Fiber to the home overbuilds now represent approximately 53% of the company's passings, indicating increased competitive pressure [12][13] - The company expects total residential broadband revenue for 2025 to be flat or decrease modestly compared to 2024 [13] Company Strategy and Development Direction - The company is focusing on innovation to simplify customer experience and enhance operational efficiency, including the rollout of AI-powered tools and a unified billing platform [14][15] - A pilot program for mobile services is being launched to complement wired broadband offerings, aiming to enhance customer lifetime value and reduce churn [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged competitive headwinds and seasonal softness in college markets but noted early signs of positive impact from new products and pricing strategies [6][13] - The company does not expect to grow total residential broadband customers in 2025 but is optimistic about long-term growth through strategic actions [13][18] Other Important Information - The company expects to realize approximately $40 million in cash tax savings in 2025 due to recent tax legislation [25] - A non-cash impairment charge of $586 million was recognized during the quarter, which does not impact cash flows or operational strategy [22] Q&A Session Summary Question: Competitive overlap with fiber - Management confirmed that competitive overlap with fiber increased from 50% to 53% and noted that losses are primarily due to competition from cell phone Internet [33][34] Question: Promo roll-off and customer retention tactics - Management indicated that promo roll-offs are expected to remain elevated and that retention tactics are being implemented to mitigate churn [40][42] Question: Priority between subscribers and ARPU - Management stated that both subscriber growth and ARPU stability are priorities, with expectations for ARPU to remain stable for the rest of the year [47][49] Question: Mobile service strategy - Management clarified that the mobile service pilot is not only economically viable but also aligns with the company's brand image, aiming to enhance customer convenience and profitability [57][60] Question: Billing system conversion - Management confirmed that the billing migration is complete and has gone through all necessary cycles without significant issues [63][65]