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22-05-2025
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Q1 2026 Domo Inc Earnings Call
Peter Lowry; Vice President, Investor Relations; Domo Inc Joshua James; Chief Executive Officer; Domo Inc Tod Crane; Chief Financial Officer; Domo Inc RJ Tracy; Chief Revenue Officer; Domo Inc Yi Fu Lee; Analyst; Cantor Fitzgerald & Co., Inc. Jared Jungjohann; Analyst; TD Cowen Eric Martinuzzi; Analyst; Lake Street Capital Markets, LLC Operator Greetings and welcome to the Domo Q1 fiscal year 2026 earnings call.(Operator Instructions) As a reminder, this conference is being is now my pleasure to introduce your host, Peter Lowry, Vice President of Investor Relations. Thank you. Peter, you may begin. Peter Lowry Good the call today, we're joined by Josh James, our Founder and CEO; and Tod Crane, our Chief Financial Officer.I'll lead off with our Safe Harbor Statement. And then, on to the press release was issued after the market closed and is available on the Investor Relations section of our note this call contains forward-looking statements about our business, as defined under Federal Securities Laws. These statements involve risks, uncertainties, and assumptions, including, but not limited to, statements and projections about our future financial performance, growth prospects, cash position, sales efforts, technology developments, new business opportunities, transactions and initiatives, the potential impact of artificial intelligence, and other macroeconomic factors on our a detailed discussion of these risks and uncertainties, please refer to our public filings, including today's press release; our most recent annual report on Form 10-K; and quarterly report on Form 10-Q -- all available on the SEC website. These documents list important risk factors that could cause our actual results to differ, materially, from our forward-looking will also discuss non-GAAP financial measures during the call, which we use as supplemental indicators of Doma's performance. Other than revenue, unless otherwise stated, we will be discussing our results of operations on a non-GAAP measures should be viewed as complements to, not substitutes for, our GAAP results. Please see the reconciliation of our non-GAAP results to the most directly comparable GAAP measure on our Investor Relations website, at that, I'll turn it over to Josh. Josh? Joshua James Thank you, Pete. Hello, everyone. Thanks for joining us on the call, today.I am pleased to report that, in Q1, we demonstrated substantial operating leverage in the business, showing that our model is truly again, we exceeded guidance on billings, revenue, and non-GAAP EPS; and generated positive adjusted free cash flow. Notably, this marks the first time we've achieved a positive operating margin in a saw a significant increase in pipeline activity generated by our ecosystem, a dramatic increase in our sales efficiency, a substantial lengthening of our contracts, and an acceleration in RPO growth -- all reflecting the durable, trusted relationships we have with our a direct result of this momentum and due to continued strength in the business, we are raising our full-year guidance. Tod will have more to say about that, are confident that we have finally achieved a business model that will provide continued operating leverage for years to you'll recall, a few years ago, we identified cracks forming in our business and knew we needed to institute changes to our model. We rapidly converted our business to consumption-based pricing and reconfigured our technology and go-to-market motion to become very substantial changes our team has made, over the last few years, have led to measurably improved performance, with the following metrics highlighting that the new model is working:Subscription Remaining Performance Obligations', or RPO, growth accelerated to 24% year over year. Subscription Total Contract Value, or TCV, was up 69% year over Subscription RPO was up 61% year over year. Net retention was up sequentially for the third consecutive quarter and ARR was also up productivity was up over 60% year over year and up for the third consecutive quarter. Gross retention improved to 86%, from 85% last of these metrics support my belief that we are taking the right steps to return to sustainable long-term profitable growth and give me confidence in our Q2 and FY26 outlook for billings growth in RPO is a direct result of our unwavering commitment to our customers' success. By prioritizing their needs and building trusted collaborative relationships, we consistently deliver meaningful outcomes that lead to higher customer-first approach has led to longer-term contractual commitments, underscoring the trust our clients place in Domo as their strategic partner. The loyalty and confidence of our customers not only drive RPO growth but also strengthen retention, a strong proof point that the model is salesforce productivity increased over 60% in Q1. And, although we won't update this metric every quarter, I wanted to share it because it further reinforces my confidence in our ability to grow efficiently. This metric highlights the success of the improved in Q1. And we see ample opportunity for continued retention for consumption customers, in Q1, was significantly higher than for seat-based customers. Consumption customers now represent over 70% of our ARR, heading toward 90% by the end of the year. And as our renewal base increasingly shifts to consumption, we expect it to be another tailwind to positive retention consumption engine is an integral component that drives the success of this the past several quarters, we have made significant progress in transitioning from cash burn to achieving free cash flow positivity and expanding our operating we look ahead, we expect to exit this year at 5% billings growth and 5% operating margin. And we anticipate exiting FY27 at 10% billings growth and 10% operating achievements demonstrate not only our strengthening fundamentals but, also, substantial progress on our Rule of 40 profile. This shows that our model is working and positions us for sustained profitable growth, going held our annual user conference, Domopalooza, earlier this year. And I'm consistently inspired by the powerful ways Domo is driving transformation and delivering meaningful impact for our heard from a global technology and services firm, which highlighted the remarkable journey toward transformative data integration. Over just the past year, they have rapidly expanded their data capabilities by transitioning from fragmented legacy systems to a cohesive AI-enhanced platform, powered by Domo. This transformation has significantly boosted decision-making abilities for over 100,000 people across the CEO of Filevine, a leading legal technology platform, highlighted the transformative impact of AI on the legal industry, emphasizing the company's innovative strides, with products like Chat with Your Case, which efficiently manages vast amounts of structured and unstructured legal data to allow its customers to effectively manage their cases, at enhances its customers' operations with an analytics offering powered by Domo Everywhere. The CEO mentioned that Filevine's impressive retention rate of over 95% climbs to nearly 100%, when Domo is integrated, showcasing Domo's vital role in optimizing data-driven decision Domopalooza, we also outlined our strategic priorities for FY26, including driving adoption, innovating with AI across the platform; continuing to focus customer relationships and multi-year contracts; and developing our ecosystem of partners.I've already discussed the incredible impact that multi-year contracts are having on our business, which is evidenced by the growth we're seeing in metrics like RPO and the corresponding impacts on retention.I'd, now, like to give a brief update on each of the other three areas of it relates to adoption, the demand for our advanced product capabilities is greater than ever. We continue to accelerate customer adoption by focusing on AI agent deployment, governance best practices, workflow automation, and data pipeline optimization, which are driving deeper engagement and increasing the overall impact Domo has on our ongoing initiatives, including strategic consulting packages and extensive AI academy webinar series, and expanded technical enablement are empowering customers and partners to build sophisticated AI-driven solutions, while reinforcing governance and security are seeing a notable difference in the usage of our products by customers who are actively engaged with our technical teams. And we are actively working to provide more of that support across our customer the AI front, we launched Agent Catalyst at Domopalooza, which leverages our existing ETL data governance, security, and workflow capabilities to allow our customers to rapidly innovate with AI customers are AI-curious and have a sense of urgency about adopting AI. But they struggle with how to drive real business are leaning in to show how Domo is an ideal solution to capitalize on the promise of AI. In fact, in one of the general sessions at Domopalooza, we offered to build a free agentic AI solution for attendees and, unbelievably, over 200 customers signed up on the first day. It's amazing to see what some of those customers have been able to accomplish, so quickly, with Agent fact, just today, we hosted an Agentic AI Innovation Summit for data, AI, and tech leaders, focused on advancing intelligent AI agents that automate workflows and decision making, featuring expert speakers from Google, AWS, Domo, and more. With over 6,000 people registering, the event was a key gathering to explore how agentic AI is reshaping the future of the rapid success and the rapidly building momentum, we've already seen customers build agents that do the following: accelerate the ability to spot, classify, and take action, based on anomalies at solar farms; reduce dropout rates in schools by working with students that are at risk of not graduating; streamlining their charitable operations by making it easier to capture and process tax Information; optimize the performance of hotel locations by providing better summarizations and indicators on ways to improve, redefining the future of their business with AI efficiencies related to data, inventory, tax equipment, and sales also heard from leading data and AI consultants who showcased that they were able to use Agent Catalyst to build powerful agents in less than two a leading Snowflake Systems Integrator, showcased Agent Catalyst's impact by creating an agent that revolutionizes conference networking through intelligent attendee matching, based on shared interests and complementary skills going beyond just job a leading Databricks SI, highlighted their success in using Domo's Agent Catalyst to optimize fleet management operations. By integrating with Databricks for real-time analytics, Koantek has adopted proactive strategies that ensure vehicle up-time and enhance route efficiency. This has been especially critical in a delivery-driven economy, where timely operations are many years of effort and investment, we have built a robust platform that includes seamless data access, advanced ETL capabilities, comprehensive data governance and security, streamlined workflows, automated alerts, approvals, and powerful visualization strong infrastructure positions us uniquely to support the development of AI-driven solutions that address real-world business challenges. Nearly every customer conversation that we are having aligns with some form of AI-driven workflow or agentic moving on to the ecosystem.I'm very happy to report that we continue to make significant improvements to our integrations with our Cloud Data Warehouse or CDW partners, including Snowflake, Databricks, Oracle, Google, and are seeing very encouraging trends in the partner metrics that we track. Conversion rates for partner source deals remains well above those for traditional marketing source early-stage partner pipeline continues to grow at a very rapid pace. Partner-sourced leads and the number of deals that moved from top of the funnel to later stages in the pipeline were up more than 200% from last from just one CDW partner. And we have several more partners we are just beginning to go to market with. So just imagine where that could lead. The model is we build strong relationships with System Integrators linked to several of these CDWs, expanding our ecosystem and market reach even Domo Everywhere solution has also helped us form new customer relationships by enabling Domo customers to securely share data with their customers, just like Filevine, who we mentioned let me highlight a few of our customer wins in the quarter, driven by our complete platform-advanced features and consumption in terms of new logos, a geospatial services company chose Domo, after completing a thorough self-guided POC that highlighted our extensive capabilities, AI/ML, pro-code features like Bricks, Jupyter Notebooks, along with the strong technical expertise of our engagement team. This was a former prospect that returned to Domo, following a failed Microsoft Fabric implementation, [boo].Another new logo in was with a mortgage company that chose Domo to gain deeper insights into their loan portfolios, branch performance, and risk management, addressing limitations in their current legacy reporting systems. They valued the company-wide analytics with unlimited user licenses provided under our consumption terms of upsells, a transportation technology company chose to expand with Domo by 10 times its original contract value, following a successful consulting project that built trust and enabled a company-wide roll-out of thousands of data sets and dashboards. They valued Domo's flexible consumption model, which allowed them to scale to 600 users, following an acquisition without traditional licensing constraints; and leveraged advanced features like Workflows, Governance, and Domo lastly, a healthcare company expanded with Domo to support wide-scale deployment and accelerated project implementation. Our consumption model was critical because the full-platform access and unlimited licenses are enabling rapid adoption and integration into core strategic business initiatives. With strong momentum from successful deployments, the company is positioned to expand further, with Domo, into new business units and embed Domo deeper in the organization through workflow automation and AI/ML has earned top honors, across several leading industry reports and awards. We were the top -ranked vendor in three Dresner Advisory Services market reports: the 2025 Wisdom of Crowds, Cloud Computing, and BI Market Study for the ninth consecutive year; the 2025 Self-Service BI Market Study for the seventh consecutive year; and the 2025 Collective Insights Report for the fourth time. And CRN recognized Domo on its 2025 Big Data 100 list in the Big Data Business Analytics effectiveness of our model is clearly on business delivered beats on all the important metrics and facilitated raises to our annual guidance. Virtually ,every important eternal metric is sales efficiency was stellar this quarter. The pipeline generated through our ecosystem partners has increased, just like we said it would. The strength of our customer relationships delivered outsized improvements in RPO and contract length, which should lead to substantial measurable improvements in gross and net transition to consumption is delivering higher usage, higher customer satisfaction, and higher retention. And our customers are leveraging AI agents at a rapid pace, demonstrating that our technology stack is perfectly set up to capitalize on the AI momentum in the model is dramatically different from three years ago and has us poised for profitable growth.I'm thrilled to be able to say that we're going to exit this year at 5% billings growth and 5% operating margin, on our way to exiting next year at 10% billings growth and 10% operating that, I'll hand it over to our Chief Financial Officer, Tod Crane. Tod Crane Thanks, exceeded our Q1 guidance for billings, revenue, and non-GAAP EPS; and were adjusted for cash flow positive. Total revenue was $80.1 million and billings were $63.9 a company, and in my role as CFO, a primary focus is driving operational efficiency and managing the company to achieve positive operating margins and free cash we leverage the early-stage success with our ecosystem partners, it further positions us for growth, while maintaining disciplined control over costs. It allows us to continue to scale our sales efforts effectively and achieve a stronger return on sales investments, supporting sustainable and profitable retention improved to 86%, from 85% in Q4 and 83% a year ago. This is the fourth consecutive quarter at 85% or above. And we continue to expect a 2 percentage point-improvement in gross retention for FY26, compared to the prior year-over-year net retention was 94%, up sequentially for the third consecutive quarter and up more than 4 percentage points year over improving retention rates are another important factor because profitable growth is difficult when retention rates are low. Retaining customers is far more cost effective than acquiring new RPO growth is also significant. Current Subscription RPO grew 5% year over year to $226 million. And our total Subscription RPO grew 24% to $408 million, an acceleration from 14% growth in salesforce productivity, higher retention rates, and accelerating RPO growth all support my confidence that we are well positioned to accelerate our billings growth over the remainder of the year, while also expanding our operating addition to improving operating margin, generating positive free cash flow remains a key focus. In Q1, adjusted for cash flow was $1.3 million, a significant improvement from Q1 last year. Our cash balance increased from $45.3 million in Q4 to $47.2 million at the end of forward, we expect our adjusted free cash flow to be slightly positive in Q2 and positive for the on to margins and profitability. Our non-GAAP Subscription gross margin increased sequentially to 81.6%, a level we expect to maintain in the near term and improve over time. Non-GAAP operating margin was 1.3% and non-GAAP net loss was $3.6 net loss per share was $0.09, based on 39.7 million weighted average shares outstanding. Because we are in a net loss position, all share and per share amounts are the same for basic and for guidance: for Q2, we expect billings of $69 million to $70 million, which represents growth of 1% to 2% year over year. We expect GAAP revenue of $77.5 million to $78.5 million and non-GAAP net loss per share of $0.03 to $0.07, assuming 40.5 million weighted average shares the full year, we are raising our guidance for billings, revenue, and non-GAAP net loss per share. We expect billings of $312 million to $322 million, GAAP revenue of $312 million to $320 million, and non-GAAP net loss per share of $0.18 to $0.26, assuming 41 million weighted average shares conclusion, I am very pleased with both our internal metrics and the results we have discussed today, which indicate that we are on the path towards sustained long-term profitable that, we will open the call for questions. Operator? Operator Thank you. We will now be conducting a Q&A session.(Operator Instructions)Yi Fu Lee, Cantor Fitzgerald. Yi Fu Lee Thank you for taking my question. Congrats on a very strong start, Josh, Todd, and Josh and Todd, can you just flip back to the macroenvironment, just to start off [conversation].Does it seem like with all the trade, tariffs, right, negotiation that's coming along, that's affecting the business? That the fundamentals are clearly affected, positively?And then, on the Domopalooza event, obviously, well attended; you were there, as well. Can you comment more on, like, the -- when you talk about one of the partners who, 2x, in terms of -- who, 2x, (inaudible), how do you get the other partners to be on the same track?Maybe, start with that. And, also, I have a couple more follow-ups. Joshua James Yeah. From a macro perspective, it's definitely not a great environment. But our team seems to be marketing through it. I think that the way that customers view is as a way, a path forward, when it comes to we mentioned, almost every conversation we're having with customers, right now, is how to leverage the data that they have inside Domo and how they can create agents. So that's been a very positive development and, it's driving activity.I think, from a macro perspective, people are definitely more hesitant than they were five years ago. But I don't think it's changed a lot in the last 12 have a few customers that talk about tariffs. But it hasn't been a large issue.I think when it comes to the partners that you're talking about, we do have one partner that's moving faster than the other one, so far. But that's been mostly tied to where we've made the investment and our product was most ready for. And we had to serially go through and get it ready for different so, we've had a lot of activity with Snowflake. And that activity, we expect also, with Databricks and with Oracle and with IBM and with Google and others, internationally. So we're having, actually, a lot of success and a lot of stuff in the pipeline, just that one's further ahead. So we do expect to see the same kind of activity from the other partners and expect that the partners are going to end up being equal amount of new logo activity as all other marketing activities, combined. Yi Fu Lee And then, Josh, can you just tell me a little bit more: like, a 6x increase on self-productivity. Obviously, feel free to have RJ comment, as well, like, in terms of: if you could break it down, why is it that it's 6x better this quarter, that? Is it because you're working more with the partner ecosystem or the combination with the consumption model that's driving it -- the 6x?And then, flipping back to Domopalooza: in terms of the pipeline building activity, obviously, you were on the floor, speaking with all your partners and some of your customers, as well. How is the pipeline building efforts on that? And how does it translate into second-half closure? Joshua James Yeah. Consumption is definitely an important component of our model. And we're, I think, seeing, in this Q1, just, really, leverage in the model work. We worked really hard on changing our model, over the last several years. And we're really starting to see the fruits of that -- and actually get operational leverage, at the same time. So we think there's going to be good profitable growth from the efficiency that we're seeing in the sales organization is, first of all, obviously, interest because of what we're doing, from an AI perspective; and then, also, what we're doing with the CDWs, that really has made our business more defensible and it's created more opportunities and when we look at our pipeline, this will be the quarter that we actually see a meaningful amount of deals closed that have been in the pipeline for the last few quarters. And so, close rates are higher; deals are a little bit think retention is going to be higher. And we go in with relationships with a partner who's espousing the positive attributes of our business and how we help the that's been a really positive development that we've been talking about for a while. This quarter, we're seeing the numbers actually hit. And we'll see those numbers in with the pipeline that we also see building for Q3 and Q4, we feel very good about the fact that, as we enter next year, we'll probably have the same amount of business that's being generated from our partners as we do from all other marketing what we're seeing, right now. And, as that plays out, we'll give more guidance around that. But I think that's what gives us the confidence that we can say, hey, for the last three years, we've been saying we're going to reconfigure the model, we're going to invest, and we're going to get back to growth. And you saw us this last quarter, we -- first-time ever, we've been positive in a Q1, net margin then, the other thing is: we're sitting here saying, not only that, we're going to be 5% margin positive and 5%, growth exiting this year; and double those numbers for exiting next year. There's a lot of upside to we're finally in a different category of company than where we've been the last three years. And this because of all the reconfiguration; the consumption model being able to get the multi-year deals because customers love what we're doing with them; and then, also, all the efforts that we put into those partnerships with CDWs. Yi Fu Lee Thanks for that, Josh. And just one -- the last one on the technology side, before I move on to talk on the financial side, is, obviously, you talked a lot about agentic saw Catalyst launch at Domopalooza. And then, there was another thing called, ML Model Management. Can you discuss what are you most excited about, in terms of the product adoption?And I think it's going to tie into my question later for Tod, like RPO, right? What is it that the customers are adopting, in terms of (inaudible) that leads to the longer duration, long contract sizes? Joshua James Yeah. I think the thing that I'm most excited is that we're teaching customers how to build their own agents. And they're doing a text message I got just this morning, from our team, and it was a customer that said, I just want to provide some feedback on the recent AI agent training, hosted by you, guys, last Wednesday. I followed along the video. I paused only to make a few data sets to use. And by the time I got to the 37-minute mark, I actually had a working AI agent that was looking at my data sets, invoices, intakes, contracts; and composing and delivering a combined weekly category management summary for sourcing managers, based on the little bit of direction I gave boom! 37 minutes, they got an agent working inside their organization because they're already using Domo. The data is already governed. It's already secure. We allowed them to use LMs inside their then, this guy goes on and says, I tried another one today from scratch; specifically to see if I could just ask the AI to iterate through a list of items for me and act on each one. It is nearly production ready. A few hours later, this AI agent accesses a data set of associates who've been recently transferred to another manager and who are corporate cardholders. The AI agent looks at a row of data containing the new manager, the old manager, and the worker who was transferred. It then generates an email based on the prompt I gave it. It then sends the email; then, it does it again until it's done with all the rows. It worked, beautifully, the first time. It composed an absolutely lovely email, even identifying more information from the data, without me telling you you see that kind of stuff. There's two agents that were created by an individual that got trained on our agentic platform. All of that is driving consumption in our product. They're much we're not seen as a visualization tool so we are definitely, here, primetime ready, for the AI agent world. Yi Fu Lee Excellent Josh. I'm going to move on -- thanks for that. I'm going to move on to Tod on the obviously, subscription RPO is a key focus, right? Short term is up 24% this quarter, up from 14% last quarter; long term, even better, 61%. Can you help us break it down, Tod? Why is this metric inflecting so much better? And what are the factors that driving customers go long term with Domo?And, also, you also upped your guidance, right, in terms of, like, beating it, as well as you raised it a little on the EPS side. What gives you confidence that you're able to gain the operating efficiency for the rest of the year? How conservative are you with the model?That's it from me. Thank you, gentlemen, for taking all my questions. Tod Crane Thanks for the question, RPO: very happy with the result there, coming in at over $400 million for Subscription RPO. That's growth of 24% year over year, with current growing 5%, long term growing 61%.I think the technology and the things -- the example that Josh just gave is very powerful, in terms of the ability of our customers to get value from our product very then, you pair that with consumption, which allows them to quickly unlock that value, not being limited by seeds, not being limited by not having access to the full platform, they can try anything. They can go in there and we're seeing that powerful combination of our good technology, our consumption model, contributing to stronger customer relationships, which is, in turn, allowing us to get longer-term the story of RPO. Very happy with the growth terms of the leverage in the model: if you look at our operating expenses over the last four or five quarters, there's been a steady improvement and a steady demonstration that we're getting leverage continuing to do that. We've made great progress there. And, as we look ahead and model out what the rest of this year looks like, we see an opportunity to continue to expand margins. And we will continue to do that. Yi Fu Lee Okay. Thanks, again, Josh. Congrats. Operator Derrick Wood, TD Cowen. Jared Jungjohann Hi, team, this is Jared Jungjohann, on for Derek we incorporate new consumption dynamics and AI elements into your cost of goods sold, how should we be thinking about gross margin trajectory over the medium term? Tod Crane We were at 81.6% subscription gross margin this quarter. We expect it to remain around that level for the near term, with the long-term goal of having it increase from terms of the dynamic related to consumption, it does tie the revenue more closely with the cost. So that's, in large part, the reason why we're expecting that to increase over time, going forward. Jared Jungjohann Awesome, appreciate that color. And then, can you talk to some of the trends you're seeing in your enterprise space versus commercial base?And then, maybe, how do these evolving partnerships impact that? Are you seeing these partnership deals skew larger or -- just some color there? Tod Crane Yeah. I'll jump in on that one. And, Josh, feel free to chime in, On the enterprise side, it's a large portion of our business. It's an important part of our business. We've had great success there over the years. We have a lot of great enterprise if we look at the leads that are coming in from partner, a significant portion of those are enterprise leads. And so, we're seeing this as a real opportunity to continue to expand our presence in the enterprise and to continue to have success there. So we're definitely encouraged by that. Jared Jungjohann Awesome. And then, as you gain more traction with these cloud partners and get adopted into the modern stack, what area of your solution set are you seeing these customers really dive into? Joshua James Yeah. One of the biggest things with the clouds is they're looking to get more and more information into their clouds. They want to hydrate their clouds. And we have a unique ability to do have more connectors than anybody in the industry. And we have a very robust system to be able to help them manage the we walk into an account, instead of the 100 or so people that might be using a CDW; when we're in an account, we might see 10,000, 50,000, even 100,000 so, if you can have all of those people also accessing that data and formats that they want in a secure way, then it just drives more adoption of that CDW and secures the CDW's relationship even of the CDWs are out there trying to build other use cases. And they're all trying to expand beyond IT central functions and go into creating marketing use cases and sales use cases and operations use cases. And that's our bread and it really is a good combination of us with the CDWs. And one of the things that we get out of that is we get a CIO-blessed relationship, which makes our relationship with that customer much stronger in our ability to weather different changes they are going seeing -- we have an ability to sit on top of multiple CDWs. And that's actually something that CIOs like; as well as, people are shifting their strategies or adopting one CDW and moving to others. And it really puts us in a unique position. Jared Jungjohann Awesome. I'll just finish up with one last one. But real positive commentary around the guidance and what you're seeing out of the CDW that strength in commentary, I'm wondering how you're thinking of investing in growth versus investing in margins. You've obviously factored in a little bit of op margin expansion. But, maybe, just talk to that a you. Tod Crane Yeah. It's a great question. It's always a balancing act. We feel confident that we're getting the right investments in place and that we have an opportunity to keep that momentum going with the CDWs, while still expanding we're not trying to get to 30% margins overnight. We're going to slow and steady expansion towards that 5% and then, that 10% level, over the next couple of that's going to allow us plenty of room to continue to invest in these partnerships. Operator Eric Martinuzzi, Lake Street. Eric Martinuzzi Curious to learn a little bit more about your pricing policy on your consumption-based contracts. Just as you've got -- as you've been at this for now: we're in our third year or so of the consumption-based pricing these come up for renewal, is there an opportunity to raise prices? Or is it really just more there's a natural -- as the customer uses the product more, they consume more and that's what drives a higher year-over-year growth in that consumption-based installed base? RJ Tracy Yeah. Our focus on consumption pricing is to make sure that -- this is RJ Tracy, CRO, with our real goal with consumption is to align the value that customers get with how they pay. And so, it's a natural motion for us to go work with customers and help them get more value out of the platform. Solve more use cases, get them using agentic AI solutions that help them to take action on the as they use the product, then it drives the usage up; which we want to go in and then, help them get a better rate on their consumption price. So it's a pretty natural motion for we're still figuring out the best methods for adoption. But it's a real natural motion for customers because as they get more value, then they pay more. Eric Martinuzzi Got you. And then, the cohorts: again, we're looking at -- this is a consumption-based question. As you've seen those cohorts come back for renewal, you already talked about, hey, we're up to 70% of the installed -- of the ARR is on a consumption-based pricing those cohorts -- are you seeing the consumption-based cohorts as more likely to adopt the AI and the newer products? Or is it an equal mix between the folks who aren't on consumption-based that are on the per seat-based pricing? RJ Tracy Yeah. They're a lot more likely to adopt because there's not a restriction or a paywall in front of them before they you buy Domo, the entire platform is available to our customers to use. When we were on seat-based pricing, any feature that they hadn't paid for was hidden behind the paywall. And so, it created a barrier of entry for customers to go in and adopt that technology; where, now, if they want to try -- like the customer example that Josh read, if they want to try out one agent, they can go in, and in 37 minutes, build an agent. And that might only take a couple of then, they'll decide whether they're getting value from that or not. If they keep it running, then it will consume more and more over the year. And if not, they can shut it off and they paid, maybe, a couple of credits to try something significant increase in adoption across the entire platform, including users. Eric Martinuzzi Got it. And then, last question is around the progression of the billings growth implied in the I take your Q2 billings growth, midpoint looks like a little over 1% growth. But you're talking about exiting the year: so a Q4 billings growth rate of 5%. Is that based on things that you already have in the pipeline? Or is that yet to be filled in at the top of the funnel? Tod Crane Yeah. It's based on a number of factors. We consider a number of different inputs in our financial is certainly one of them: the trajectory of the pipeline, pipeline generation, quality of the pipeline. And then, just historical trends: what we're seeing, in terms of rep productivity, those kind of yeah, based on everything we're seeing, we have confidence that we'll exit at 5%. And so, you can do the math between what we guided for Q2 and the 5% for Q4 and get to what we're going to be around for Q3. Eric Martinuzzi Got you. Thanks for taking my questions. Tod Crane No problem. Thanks, Eric. Operator Pat Walravens, Citizens JMP. Great. This is [Nick], on for Pat. Congrats on the at Domopalooza and on the call today, you mentioned the 200 customers who wanted to try Agent Catalyst. I was wondering if you could speak a little on what demand looks like today for that then, Tod, one for you. It's been almost nine months since you stepped into the role as CFO. What is one thing that's been harder than you thought? And what is one thing that has been easier than you thought, since assuming your new role? Joshua James Yah. I talked a little bit about the kind of conversations we're having with our customers. They're just ongoing and continual. And they're not just exploratory, right? Like I mentioned, they're actually making things in these trainings and in these I'm going to have RJ talk a little bit more about the opportunities and some of the activities that we're seeing in our pipeline. RJ Tracy Yeah. As we get leads, especially from the ecosystem, we're seeing a ton of customers that want to dive into AI and figure out what that looks like within their company, within their org. And a lot of those AI use cases require need access to data. They need to be able to transform that data. They need a way to surface it out or embed it to where their users are at or where their customers are we're seeing use cases all across our stack. And the great thing is that they can come in and buy just the components that they the entire stack is available to them. So ,at any time, they can start to use other components to help them and will help drive consumption and give more value to our customers. Joshua James From an AI perspective on the agents, talk about some of the ServiceNow stuff that we're seeing, as well. RJ Tracy Yeah. We have a customer, right now. They're surfacing particular use cases in ServiceNow. But it requires a human intervention to come in and to actually do all the work. So we're supplementing some of what they're doing in ServiceNow with our Agentic one of the use cases was helping get data to hydrate a warehouse. And, in this example, customers can start a ticket in ServiceNow. They want to bring data into their typically, that requires, now, a person to then take that ticket, go out, do an integration, upload data; where, now, Domo is automating that entire process. But we still allow for that human in the loop to approve or to reject a request. But if they approve it, then the data is uploaded immediately and that process now takes 30 seconds to a minute instead of, sometimes, several days or weeks to get that human seeing customers that want to automate labor management, where they want to automate the ability to help customer -- their employees that, maybe, can't work the next day and need to fill is helping them find a replacement. It's automating the process for that. It's immediately notifying people and asking if they can accept a shift that they weren't expecting to work. And that entire process can happen in seconds, instead of having someone have to go manage thousands of employees to figure out who can cover those are some of the examples and use cases that we're seeing. Got it. Thank you, RJ. Thank you, Josh. Tod Crane Yeah. And then, on your other question, in terms of (inaudible) harder and easier: I'll probably characterize that a little bit differently, if that's okay. I'll probably put it in categories of things I really want to -- something I really want to fix and things that I've been happy with how they've been for me, we're obviously pleased with the improvement in gross retention over last year and over last quarter. But that's a big, big focus for us, as an Executive Team, to continue that march toward 90%-plus gross retention. So that's the one thing that I'm really focused on in terms of very happy with our RPO performance. We've talked about that, already, a few times. But that 5% current RPO growth, not a huge number but it does point to that 5% exit rate that we talked about earlier and de-risk then, that longer-term portion of RPO also derisks our forward-looking revenue and our forecast beyond this year. Got it. Thank you for that. And congrats, again, on the quarter. Operator Thank that, that concludes today's may disconnect your lines, at this you for your participation.
Yahoo
02-05-2025
- Business
- Yahoo
Q1 2025 Enviri Corp Earnings Call
David Martin; Vice President of Investor Relations; Enviri Corp F. Nicholas Grasberger; Chairman of the Board, President, Chief Executive Officer; Enviri Corp Tom Vadaketh; Chief Financial Officer, Senior Vice President; Enviri Corp Larry Solow; Analyst; CJS Securities Rob Brown; Analyst; Lake Street Capital Markets Davis Baynton; Analyst; BMO Capital Markets Operator Good morning. My name is Cindy, and I will be your conference facilitator. At this time, I would like to welcome everyone to the Enviri Corporation first-quarter 2025 release conference call. (Operator Instructions) Also, this telephone conference presentation and accompanying webcast made on behalf of Enviri Corporation are subject to copyright by Enviri Corporation and all rights are reserved. No recordings or redistributions of this telephone conference by any other party are permitted without the express written consent of Enviri Corporation. Your participation indicates your agreement. I would now like to introduce Dave Martin of Enviri Corporation. Mr. Martin, you may begin your call. David Martin Thank you, Cindy, and welcome to everyone joining us this morning. With me today is Nick Grasberger, our Chairman and Chief Executive Officer; and Tom Vadaketh, our Senior Vice President and Chief Financial Officer. This morning, we will discuss the results for the first quarter and our outlook for the year. We'll then take your questions. Before our presentation, let me mention a few items. First, our quarterly earnings release and slide presentation for this call are available on our website. Second, we will make statements today that are considered forward-looking within the meaning of the Federal Securities Laws. These statements are based on our current knowledge and expectations and are subject to certain risks and uncertainties that may cause actual results to differ from these forward-looking statements. For a discussion of such risk and uncertainties, see the Risk Factors section in our most recent 10-K. The company undertakes no obligation to revise or update any forward-looking statement. Lastly, on this call, we will refer to adjusted financial results that are considered non-GAAP for SEC reporting purposes. A reconciliation to the GAAP results is included in the earnings release and the slide presentation. With that being said, I'll turn the call to Nick. F. Nicholas Grasberger Thank you, Dave, and good morning, everyone. We delivered another solid quarter and saw mostly consistent execution in each of our segments. Clean Earth once again was a standout performer and delivered double-digit earnings growth. Despite challenging conditions in the global steel market, Harsco Environmental also performed well, exceeding our internal expectations in the quarter. For Rail, Q1 financial results were soft as anticipated. However, we were able to successfully renegotiate one of our major ETO contracts, and the segment continued to advance its operating agenda while building its backlog. Key highlights for the quarter include our two environmental segments performed well with revenues and adjusted earnings essentially unchanged on an organic basis, despite the impact of site closures and exits in Harsco Environmental. Second, Clean Earth delivered a record first quarter results. Third, cash flow was ahead of expectations, adding further support to full year cash flow guidance of $30 million to $50 million. And finally, we, during the quarter completed the rebuild of the Rail leadership team with the new President and the new CFO. Before turning to our segments, let me comment briefly on tariffs and recent global trade developments. As you know, we have a diverse group of businesses operating across many end markets and geographies. So many benefits and challenges can be expected. For example, our operations in Mexico and Canada may be impacted by US tariffs, while recent actions by the EU to support its steel industry are much needed and potentially helpful to our business in that region. We recognize the significant level of macroeconomic uncertainty driven by the ongoing global trade issues and are mindful that this may potentially lead to slower economic activity and demand. But overall, we currently do not believe that the direct tariff impact on Enviri will be material. And we have not yet seen a meaningful shift in the underlying business or customer behavior. Nonetheless, we will continue to closely monitor the situation. Now turning to each of our businesses starting with Clean Earth. CE's margins grew by over 100 basis points and exceeded 16% in the quarter. Our Clean Earth team continues to do a remarkable job executing against its strategic priorities with a focus on expanding service capabilities and business growth, as well as its industry leading customer service. The investments we've made in commercial resources are beginning to bear fruit. CE's business pipeline is very robust and its revenue growth in the first quarter included a good balance of price and volume, a shift we were expecting to see. Operational excellence also remains a focus, and we anticipate productivity improvements in the future for our ongoing investments in a common IT platform. Overall, the outlook for Clean Earth's earnings, margins, and free cash flow in the coming years is positive, outpacing that of our other segments and tracking ahead of the financial targets we established for the business at our analyst day last June. Turning to Harsco Environmental, the business is managing well through a difficult period in the global steel industry, which is marked by excess capacity and diminished demand in major-steel consuming regions around the world. Steel prices have recovered, and customer profitability has improved in recent months. We have not yet seen an improvement in volumes or any efforts to restart idle capacity. Trade protections that attempt to deal with excess steelmaking capacity in China and its steel exports are welcome. These protections are needed most in Europe, which is our largest market, and we're hopeful that recent actions by the EU are the beginning of positive change for our customers in that region. In recent years, US dollar strength has been a headwind for HE, so recent dollar weakness is a potential tailwind for this business. Roughly 80% of HE's revenues are generated outside the US. As a result, dollar strength has negatively impacted HE's revenues in EBITDA by roughly $100 million and $25 million over the past three years. Given these pressures, HE has been aggressively managing its capital spending, implementing cost reductions, and executing other improvement programs at our sites. These efforts have positioned HE well and will enable the segment to maintain underlying profitability this year and support cash flow while we await a recovery in the global steel market. Moving to Harsco Rail, demand for our standard equipment, parts, and adjacent services remains strong, as does the outlook for rails-based business. Healthy orders in the first quarter illustrate the strength of this business. Highlighting recent progress with our ETO contracts, we're pleased to have successfully amended our contract with Deutsche Bahn. We've been working on the amendment for a few quarters. Under this contract and collaboration with our customer, prototype development and testing are going well. Our technology continues to satisfy our customer requirements, and we expect to begin product homologation with this customer later this year. In short, the future risk on this contract has been diminished. As we said before, chief among the challenges in rail are a few ETO contracts which weigh in our consolidated earnings and cash flow. This amendment is a positive step forward and will continue to work with DB and our other ETO customers to reduce the risk related to these contracts. We're also pleased to have strengthened our Rail leadership team with the appointment of Gary Lada as our new President of Rail. Gary brings considerable rail industry experience and importantly a proven track record of operational excellence at various industrial companies as well as leading large ETO projects. We've also hired new leaders in finance and operations in recent months. The team is focused on executing a number of key priorities, including removing the bottlenecks in our operations, managing our supply chain, and advancing our ETO contracts. Turning to our 2025 outlook, we've maintained our guidance for the full year. Our organic growth in the year will be driven by Clean Earth, while HE's performance is expected to be stable on a like-for-like basis. This is an important transition year for the company's cash flow, and we expect lower net outflows on our rail contracts as well as lower pension contributions to help us generate positive cash flow. In future years, we anticipate earnings growth, and the completion of the ETO contracts and Rail will position us to generate annual free cash flow of $150 million on a consistent basis. As we communicated during our analyst day last June. I'll now turn the call over to Tom. Tom Vadaketh Thanks, Nick, and good morning, everyone. We're pleased with the positive start of the year, with our Q1 performance exceeding our expectations for both adjusted EBITDA and free cash flow. Both Harsco Environmental and Clean Earth executed well in a less-than-ideal environment, which contributed to the better financial results. Also in Harsco Rail, as Nick has just said, we amended our large engineered to order or ETO contract with Deutsche Bahn that we've been working towards for a number of quarters. This amendment led to a favorable accounting adjustment in the quarter, and I'll come back to this impact in a bit. We're keeping our outlook for the year intact. While there is a tremendous amount of economic uncertainty currently, the direct net impact of US tariffs and other trade actions globally are expected to be minimal for Enviri. The recent US dollar weakness meanwhile is helpful to Harsco Environmental and the company. This positive, along with our favorable start in Q1, provides us some cushion against economic volatility in the coming quarters. Now let me turn to our first quarter performance details starting on slide 4. In the first quarter, revenues totaled $548 million which was down approximately 4% on an organic basis after adjusting for the impact of FX translation and business divestitures, as well as contract adjustments in Rail. Adjusted EBITDA was $67 million with our year-over-year comparisons skewed by negative effects and divestiture impacts of $7 million. Relative to guidance, Harsco Environmental benefited from better service and product volumes in certain regions, including North America, India, and the Middle East. HE's strong operational execution also contributed to the strong quarter. Clean Earth faced some weather headwinds, particularly in the Northeast during the quarter, which were offset by strong performance in the final two months of the quarter. Our adjusted diluted loss per share was $0.18 for the quarter, excluding the impact of special items. These special items included a favorable amount in rail, totaling $11 million as a result of the contract amendment with Deutsche Bahn. This amendment provides us additional revenue under the contract and a new delivery schedule which lowers anticipated penalties among other impacts. Our remaining special item charges in the quarter relating to project and restructuring costs totaled approximately $5 million. Lastly, on this slide, our adjusted free cash flow for the quarter was negative $13 million. Q1 is traditionally a weak cash flow period for the company. With that said, we are focused on delivering our cash flow targets and perform better than planned in the quarter, mainly in HE. Compared with the prior year quarter, our free cash flow was little changed, as the benefits of lower pension contributions, reduced capital spending, and the utilization of an additional $10 million under our accounts receivable facility were offset by divestitures and lower cash earnings. Now please turn to slide 5 and our Harsco Environmental segments. Segment revenues totaled $243 million and adjusted EBITDA totaled $39 million. The year-over-year change in earnings is the result of lower volumes due to site exits and closures, as well as FX impacts and divestitures. These items were partially offset by operating initiatives, including our efforts to improve performance at a limited number of underperforming locations. On a same store or continuing site basis, steel production at our customer locations declined less than 1% compared with the prior year, while our service volumes and earnings at these sites were up slightly year over year. Relative to the first quarter of 2024, steel production was weakest in Asia, the Middle East, and Latin America, with this impact offset by higher volumes in India and Europe. Operating rates or production rates at our customer sites in Q1 remained low and were little changed from Q4. And while customer production levels did improve somewhat late in the quarter, we don't anticipate volumes on average improving in the second quarter. Higher steel prices globally have yet to translate into higher steel output, but HE's operating leverage remains significant and it is poised to benefit when volumes recover. On US steel tariffs and related trade actions elsewhere, the direct impacts are mixed and likely not material as we currently view the situation which Nick mentioned earlier. Next, please turn to slide 6 to discuss Clean Earth. For the quarter, revenues totaled $235 million and adjusted EBITDA reached $38 million. EBITDA increased by 12%, supported by revenue growth of 4%, and this result is a first quarter record for CE. Price and volume contributed equally to the revenue increase, and Clean Earth's earnings growth is attributable to these factors as well as cost efficiencies. The volume gains were driven by retail and healthcare within hazardous materials, as well as higher soil dredge throughput. Hazardous materials revenues increased 3% to $198 million while soil-dredge sales rose 9% to $37 million. Now, please turn to slide 7 and our Rail business. Rail revenues total $70 million and it's adjusted EBITDA loss was $2 million in the fourth quarter. This was in line with our expectations for the quarter, with a year-over-year EBITDA change due to lower product and service volumes, as well as the less favorable mix. As Nick mentioned, we continue to strengthen our Rail team and address the operational and supply chain challenges faced by this business. We're looking forward to having Gary Lada join us. In Rail finance, I brought in a new leader, someone that is hard charging and who I've worked with successfully in the past. I'm confident his contributions will be significant. On our engineered to order contracts, the Deutsche Bahn amendment mentioned earlier is a key milestone that we are pleased to have completed. We continue to assess levers to limit our financial risk and exposures on these contracts. Moving to the base business, demand for Rail's standard equipment and services remains healthy with strong bookings in the first quarter. As we've said before, the base business in Rail is a valuable part of our portfolio. It's a profitable cash generative business with a strong reputation in the marketplace. Now let me turn to our full year outlook on slide 8. Our revenue and EBITDA guidance for the year is unchanged for the company and each of our segments. Company EBITDA is expected to be within a range of $305 million to $325 million. And free cash flow is projected to be $30 million to $50 million. As mentioned earlier, we likely have some upside from our strong Q1 performance and a weaker US dollar if sustained. However, given the current economic uncertainty, like most other companies, our visibility into the second half of the year is limited. So while we believe it's appropriate for us to continue to give guidance, we also believe it's prudent to keep it unchanged. Let me conclude on slide 9 with our second quarter guidance. Q2 adjusted EBITDA is expected to range from $65 million to $75 million. This range reflects what we know today and a stable global economy. HE results are expected to be below the prior quarter, reflecting primarily the impact of divestitures, site closures, and exits. And HE's performance should be similar to the just completed quarter. Clean Earth performance is projected to improve year over year due to price and volumes. And for Rail, adjusted earnings are anticipated to be similar to Q1. Our full year outlook for Rail reflects an operational improvement and higher throughputs in the second half of the year. Lastly, on Q2, we expect free cash flow to be negative as some of our favorability in Q1 becomes a use of cash in the current quarter. Thanks, and I'll now hand the call back to the operator for Q&A. Operator (Operator Instructions) Larry Solow, CJS Securities. Larry Solow Great, good morning and thanks for taking the questions. I guess first question just on the largest segment, obviously, environmental. It sounds like you're leaving -- you are leaving guidance basically unchanged. I guess you just run us through some of the puts and takes, I guess not a big impact -- direct impact from tariffs. What are your thoughts kind of on steel production and the economy going forward. I guess that's sort of a bad guy for you, but the offset there would be the currency benefit. Can you kind of just give us your sort of high-level view on environmental and what your volume -- what you're incorporating for volume projections this year. F. Nicholas Grasberger Yeah, hi, Larry. I guess my first comment would be that when you say HE is our largest segment, Clean Earth is kind of right on top of it now in terms of profitability and certainly generates more cash flow and revenue is about the same. So it's -- that has been shifting the last several quarters and we're basically there at the moment. So anyway. Yeah, so in HE, I -- we expect a little bit of volume growth the rest of the year. The comps to last year are relatively favorable for us. You mentioned the benefits of currency. We also have a number of efficiency and cost reduction programs that when added to a bit of volume growth will mitigate the impact of site shutdowns and exits last year. But I think that the wave of site shutdowns in the second half of last year, we think is over. And so, and we saw that in the first quarter where the business very much performed as we expected it to when there were no significant customer surprises. Larry Solow Got it. And on Clean Earth, sounds like things are still going very well there. What are your sort of assumptions as you go forward this year? Sounds like you're still getting some price. How do you view volume, hazardous waste in the -- with the economic drop -- the backdrop the way it is today. Are you concerned of a slowdown? What are your customers telling you? Clearly you're mostly domestic, right? You're all domestic, but do any of your customers have international exposure which may impact them and then be a kind of indirect impact to you? F. Nicholas Grasberger Well, first of all, I'd say that more so than the past couple of years, we're looking for volume to be a larger contributor to earnings growth this year. We saw a bit of that in the first quarter. We have reasonable visibility to that in the second quarter. And so that's -- you know, as we move forward relative to how we've generated significant EBITDA growth the past two or three years, you know, volume and you know, we'll play a bigger role as well as what we expect to be significant benefits from what we call the One Clean Earth IT initiative, which focuses on order to invoice. We've not yet seen a slowdown yet. Oftentimes our soils business is sometimes an early indicator of a downturn in the economy because many of the projects that are in our backlog don't start and get deferred. We haven't seen that yet. So that's to say across Clean Earth and each of the components, there's really no signs yet that the economy is slowing, that our customers are being more cautious and are cutting back production, or consumers are limiting their spending. We haven't seen that yet. But of course, we're concerned about it. We've not built it into our into our guidance those concerns we feel that we have levers at our disposal to enable us to mitigate the impact of a slowdown and still achieve our numbers for the year, but at this point that's not an assumption that we're making. Operator Rob Brown, Lake Street Capital Markets. Rob Brown Hi, good morning. I just wanted to follow up on the the rail ETO contract renegotiation that know you risk has come way down. What's sort of the remaining risk there and I guess what's the status of the other contract that you're working on improving? Tom Vadaketh Yeah, just, hi Robert, it's Tom Vadaketh. I can speak a little bit to that. So the -- I touched on it briefly in my prepared remarks, but the essence of the amendment, it recognizes some of the cost inflation that we've experienced, and the customer has agreed to offset that on for us with higher revenue, higher pricing effectively on the vehicles we have to deliver. And then we also mutually agreed on a new delivery schedule, which is a lot more realistic and therefore reduces the risk of future penalties for being late. In terms of remaining risk, it's sort of what we've talked before. For all of these long-term, very highly complicated engineering projects, until the first one or two vehicles is produced, it's tested under regulations in the country where we're delivering it to and the customer has accepted it until that happens there's always a risk that we need to go back and tweak the design and that sort of thing. In this particular case the customer and us have been sitting side by side as we've built the vehicle. The very first one is built and it's being commissioned right now. We'll go start going through the testing later on in the year. And so at this point, we feel fairly comfortable that the risks are minimal, but the larger part of them remain until that testing process or what is called homologation is completed, which will be towards the middle to Q3 or so of next year. Rob Brown Okay, great. And then on the Clean Earth's business, you had good margin expansion. I guess how sustainable is that and I guess how much further can you get with these CIT improvements that you're working on? F. Nicholas Grasberger Well, as you've seen, we've been steadily improving margins in Clean Earth for three years or so. The X factor in a given quarter oftentimes is the mix within our soil and dredge projects. And so you can get a little bit of noise quarter to quarter driven by that. But we, I think last year at the analyst Day, we kind of projected margins, EBITDA margins for Clean Earth at 17% or so by 2027 and we're certainly tracking ahead of that. And even though we've not kind of officially updated our view on margin potential, I think it's safe to say that we now expect margins in Clean Earth over time to be above that 17%. I think it's also important to keep in mind, we said this before, that if you compare the Clean Earth EBITDA margins to others in the industry, we're a few points lower, but we do not have those capital-intensive disposal assets that our peers have. So if you look at EBITDA minus CapEx margins, we compare favorably. Tom Vadaketh Rob, are you there still? David Martin Cindy, you can move on. Operator (Operator Instructions) Davis Baynton, BMO Capital Markets. Davis Baynton Hi, good morning. This is Davis on for Devin Dodge. So you've noted some of the pressure in the steel industry coming from that excess capacity. I know you touched on this a bit, but just wondering if you could expand on that a little bit and maybe what you're seeing in some of the underlying markets early on following the closure of Q1. Any changes there? F. Nicholas Grasberger Well as you know, the excess capacity in the steel industry, driven by that of China has been a factor in this industry for many years at this point. And we are seeing encouraging signs that would mitigate the impact of that, primarily in the EU, which as we've said is our largest market. So that should have an impact on our customer profitability. It doesn't really, of course, impact demand for steel. And so we've not yet seen a lift. We are expecting capacity utilization at our sites to be a bit higher this year and volume growth to be a little bit up against a fairly easy comparative second half of 2024. But I think it's fair to say that what we've seen in the first quarter and what we expect in the second quarter is largely what we expected, which is fairly flat volume growth driven by lackluster demand for steel. Tom Vadaketh I'll just build on that, and Nick touched on it on an earlier answer to another question. But when we look at the makeup of the profile for the year. On HE we are expecting a stronger second half than the first half. What's underpinning that is, as Nick said, we don't assume a change in the macro environments. We assume that's going to stay about the same in terms of volumes, et cetera. But we have several new sites that we're bringing on that will ramp up. We have a more favorable compare year on year because we exited those other sites in the second half of last year. And then -- and so we expect that to drive additional revenue and EBITDA. And then we have operational improvements. So procurement initiatives, operational excellence initiatives that will also increase margins in the second half. And so that's how we see that business progressing this year. Davis Baynton Okay, got it, thank you. I appreciate the color there. And then -- so solid results in Clean Earth business continues to progress nicely. So you noted a lot of that is from better pricing and volumes, but also some efficiency initiatives as well. Are most of those efficiency initiatives due to the IT improvement or is there anything else that you can call out there? F. Nicholas Grasberger No, we continue to gain efficiency from how we're routing the material that we that we handle inbound and outbound. We're also gaining efficiency from how we're disposing of some of the waste, finding lower cost outlets and executing some further processing that enables us to avoid the more costly disposal options. So yeah, it's broad based. I think going forward, let's say in 2026, when this One Clean Earth initiative is mostly behind us, we expect that to drive pretty significant efficiencies in our SG&A structure. But I think we continue to be pleasantly surprised by margin enhancement opportunities. And we're not yet reaching that point of kind of diminishing returns on margin growth potential. And that's very encouraging. I won't say we're just getting started because we've had three years of this, but we're certainly not in the later innings, I'll put it that way, of realizing margin growth in Clean Earth. Davis Baynton Awesome thank you appreciate that. That's it from me. I'll turn it over. Operator This concludes our question-and-answer session. I would like to turn the conference back over to David Martin for any closing remarks. David Martin Thank you, Cindy, and thanks for everyone joining us this morning. Feel free to contact me with any follow-up questions. We appreciate your interest in Enviri and look forward to speaking with many of you in the coming weeks. Thank you. Operator The conference has now ended. You may please disconnect. Thank you.
Business Wire
22-04-2025
- Business
- Business Wire
Lawsuit for Investors in shares of Venture Global, Inc. (NYSE: VG) announced by the Shareholders Foundation
SAN DIEGO--(BUSINESS WIRE)--The Shareholders Foundation, Inc. announced that a lawsuit was filed on February 17, 2025 for certain investors in shares of Venture Global, Inc. (NYSE: VG) in the U.S. District Court for the Southern District of New York (Docket number: 25-CV-01364). A lawsuit was filed for certain investors in shares of Venture Global, Inc. (NYSE: VG). Investors in Venture Global, Inc. (NYSE: VG) should contact the Shareholders Foundation. Share Investors who purchased shares of Venture Global, Inc. (NYSE: VG) have certain options and should contact the Shareholders Foundation at mail@ or call +1(858) 779 - 1554. On February 17, 2025, an investor in NYSE: VG shares filed a lawsuit against Venture Global, Inc over alleged securities laws violations. The plaintiff alleges on behalf of purchasers of Venture Global, Inc. (NYSE: VG) common shares who purchased NYSE: VG shares pursuant and/or traceable to Venture's registration statement for the initial public offering held on or about January 24, 2025, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that the IPO's offering documents were materially false and/or misleading and/or failed to disclose information concerning Venture Global's repeated confidence in Venture Global's ability to utilize its approach to deliver liquefied natural gas ('LNG') to the world. Those who purchased Venture Global, Inc. (NYSE: VG) shares should contact the Shareholders Foundation, Inc. The Shareholders Foundation, Inc. is a professional portfolio legal monitoring and a settlement claim filing service, which does research related to shareholder issues and informs investors of securities class actions, settlements, judgments, and other legal related news to the stock/financial market. The Shareholders Foundation, Inc. is not a law firm. Any referenced cases, investigations, and/or settlements are not filed/initiated/reached and/or are not related to Shareholders Foundation. The information is only provided as a public service. It is not intended as legal advice and should not be relied upon.
Associated Press
26-02-2025
- Business
- Associated Press
BIOA CLASS ACTION NOTICE: BioAge Labs Investors that Suffered Losses are Notified to Contact BFA Law before the March 10 Court Deadline (NASDAQ:BIOA)
NEW YORK, Feb. 26, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against BioAge Labs, Inc. (NASDAQ: BIOA) and certain of its senior executives for potential violations of the federal securities laws. If you invested in BioAge, you are encouraged to obtain additional information by visiting Investors have until March 10, 2025, to ask the Court to be appointed to lead the case. The complaint asserts claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of investors who purchased stock pursuant and/or traceable to BioAge's registration statement for its initial public offering held on or about September 26, 2024. The case is pending in the U.S. District Court for the Northern District of California and is captioned Soto v. BioAge Labs, Inc., et al., No. 25-cv-196. Why was BioAge Sued under the Federal Securities Laws? BioAge Labs, Inc. is a clinical-stage biopharmaceutical company specializing in the development of therapeutic products for metabolic diseases, with a primary focus on obesity. The Company's lead product candidate, azelaprag, is an orally available small-molecule agonist of the apelin receptor (APJ), designed to enhance weight loss. As alleged, BioAge's IPO documents discussed its ongoing STRIDES Phase 2 trial of azelaprag in combination with GLP-1R agonists for enhanced weight loss. BioAge stated that it was collaborating with Eli Lilly and Company ('Lilly') in connection with STRIDES, and that Lilly would be advising and assisting on all aspects of the trial's design and execution. BioAge also stated that it anticipated topline results in Q3 2025 and discussed the potential for a second Phase 2 clinical trial. As alleged, BioAge's statements conveyed to investors that there were no safety concerns and that it expected top line results to meet its primary endpoint goals. In truth, BioAge was forced to discontinue the STRIDES Phase 2 trial after several subjects exhibited elevated liver enzyme levels, indicating potential organ damage. Consequently, the Company terminated the trial and ceased further enrollment. The Stock Declines as the Truth is Revealed On December 6, 2024, BioAge announced that it discontinued its STRIDES Phase 2 trial for azelaprag, citing safety concerns, after liver transaminitis was observed in subjects receiving azelaprag. The Company stated that the decision to discontinue the STRIDES trial of azelaprag 'became clear' due to 'the emerging safety profile of the current doses tested[.]' This news caused the price of BioAge stock to decline over 76%, from a closing price of $20.09 per share on December 6, 2024, to $4.65 per share on December 9, 2024. Click here for more information: . What Can You Do? If you invested in BioAge you may have legal options and are encouraged to submit your information to the firm. All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses. Submit your information by visiting: Or contact: 212-789-3619 Why Bleichmar Fonti & Auld LLP? Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs' Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.'s Board of Directors, as well as $420 million from Teva Pharmaceutical Ind. Ltd.
Associated Press
24-02-2025
- Business
- Associated Press
BIOA LEGAL DEADLINE: BioAge Labs Investors that Lost Money are Reminded of Pending Class Action – Contact BFA Law by March 10 Court Deadline (NASDAQ:BIOA)
NEW YORK, Feb. 24, 2025 (GLOBE NEWSWIRE) -- Leading securities law firm Bleichmar Fonti & Auld LLP announces that a lawsuit has been filed against BioAge Labs, Inc. (NASDAQ: BIOA) and certain of its senior executives for potential violations of the federal securities laws. If you invested in BioAge, you are encouraged to obtain additional information by visiting Investors have until March 10, 2025, to ask the Court to be appointed to lead the case. The complaint asserts claims under Sections 11 and 15 of the Securities Act of 1933 on behalf of investors who purchased stock pursuant and/or traceable to BioAge's registration statement for its initial public offering held on or about September 26, 2024. The case is pending in the U.S. District Court for the Northern District of California and is captioned Soto v. BioAge Labs, Inc., et al., No. 25-cv-196. Why was BioAge Sued under the Federal Securities Laws? BioAge Labs, Inc. is a clinical-stage biopharmaceutical company specializing in the development of therapeutic products for metabolic diseases, with a primary focus on obesity. The Company's lead product candidate, azelaprag, is an orally available small-molecule agonist of the apelin receptor (APJ), designed to enhance weight loss. As alleged, BioAge's IPO documents discussed its ongoing STRIDES Phase 2 trial of azelaprag in combination with GLP-1R agonists for enhanced weight loss. BioAge stated that it was collaborating with Eli Lilly and Company ('Lilly') in connection with STRIDES, and that Lilly would be advising and assisting on all aspects of the trial's design and execution. BioAge also stated that it anticipated topline results in Q3 2025 and discussed the potential for a second Phase 2 clinical trial. As alleged, BioAge's statements conveyed to investors that there were no safety concerns and that it expected top line results to meet its primary endpoint goals. In truth, BioAge was forced to discontinue the STRIDES Phase 2 trial after several subjects exhibited elevated liver enzyme levels, indicating potential organ damage. Consequently, the Company terminated the trial and ceased further enrollment. The Stock Declines as the Truth is Revealed On December 6, 2024, BioAge announced that it discontinued its STRIDES Phase 2 trial for azelaprag, citing safety concerns, after liver transaminitis was observed in subjects receiving azelaprag. The Company stated that the decision to discontinue the STRIDES trial of azelaprag 'became clear' due to 'the emerging safety profile of the current doses tested[.]' This news caused the price of BioAge stock to decline over 76%, from a closing price of $20.09 per share on December 6, 2024, to $4.65 per share on December 9, 2024. Click here for more information: . What Can You Do? If you invested in BioAge you may have legal options and are encouraged to submit your information to the firm. All representation is on a contingency fee basis, there is no cost to you. Shareholders are not responsible for any court costs or expenses of litigation. The firm will seek court approval for any potential fees and expenses. Submit your information by visiting: Or contact: 212-789-3619 Why Bleichmar Fonti & Auld LLP? Bleichmar Fonti & Auld LLP is a leading international law firm representing plaintiffs in securities class actions and shareholder litigation. It was named among the Top 5 plaintiff law firms by ISS SCAS in 2023 and its attorneys have been named Titans of the Plaintiffs' Bar by Law360 and SuperLawyers by Thompson Reuters. Among its recent notable successes, BFA recovered over $900 million in value from Tesla, Inc.'s Board of Directors, as well as $420 million from Teva Pharmaceutical Ind. Ltd.
