Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| Verathon was awesome in the quarter as well with double-digit order growth and tremendous operational execution |
| We expect it to be strong again this year |
| As it relates to the first takeaway, our continued strong performance, we saw total revenue growth 16% and organic revenue growth 6% |
| Consistent with our long-standing strategy, we continue to not only scale our enterprise, but also simultaneously improve as underlying quality and recurring revenue base with organic software recurring revenue growing high single-digits in the quarter |
| And so when the market's coming to us, we are doing a better job capturing that demand |
| As we've been highlighting throughout the year, we had very strong cash flow performance with free cash flow growing 19% for the most recent TTM period and 77% in the quarter |
| And the companies -- the combined company, now they've got the most of the cost synergy work is super excited about the new product development ideas they have to further monetize both the customer base and persona |
| We saw the strong cash flow in the quarter |
| So it's good |
| In terms of the new cross-selling or excuse me, net new customers, it's been very good on the sort of the run rate business at Frontline |
| But we expect Neptune to have another good year as a general matter, just given the momentum in the backlog, the market positioning, the capacity they have, the competitive advantage they have |
| So with that, Jason, let me turn the call over to you, so you can walk through our third quarter results and our very strong financial position |
| So there's market share gains and product advantage we have and also a cooperative market for sure |
| Like in the late summer of 2020, it was an -- it's a terrific business for us, a great asset for us, our largest deal because of our balance sheet strength and our flexibility, we were in business when nobody else was and the sellers need to sell |
| It's a very compelling value-creation opportunity |
| This was led by strength in customer expansion and net new logos across our enterprise software businesses |
| As we turn to page five, the four main takeaways for today's call are first, we continue to perform at a high level operationally, delivering another quarter of very strong financial results, definitively demonstrating the quality of our portfolio of businesses, our leaders and our governance system; second, we continue to be very active on the M&A front, deploying about $2 billion over last quarter; third, we're increasing our full year guidance; and fourth, we remain very well positioned for further disciplined capital deployment |
| So we feel good about sort of the -- you know, the fourth quarter and how it's going to close out the year |
| Margin expanded in the quarter to 41.7%, with EBITDA operating leverage of 46% |
| And just back on Foundry, I would say that what we've observed is the gross retention of the business has been extremely strong |
| Free cash flow was very strong in the quarter and came in line with our expectations |
| And you know, again, it's just been a good steady growth for us over the last 20 years absent, you know, sort of this exceptional period |
| So that, plus a terrific organic contribution drove the significant growth |
| I mean, the abnormality, if you do a straight line from 2019, you'd see the business has been up substantially, right? So we have sort of this exceptional growth |
| It's been exceptional |
| Third, based on the strong quarter performance, the recurring nature of our revenue stream and the importance of our solutions to our customers were increasing our full year total and organic revenue growth outlook and increasing our full year DEPS outlook to be between $16.62 and $16.66 |
| In addition, EBITDA margins were notably strong at 41.7% and cash flow was outstanding, growing 77% in the quarter and 19% on a TTM basis |
| This growth was underpinned with 6% organic revenue growth and high single-digit organic software recurring revenue growth |
| First, we delivered yet another solid quarter |
| And fourth, we continue to be very well positioned for further capital deployment by having over $4 billion of M&A firepower |
| Statement |
|---|
| That's less market and more just clearing through just a mountain of supply chain problems that plague the businesses for many -- a few quarters |
| As many of you know, US-based hospitals and health systems continue to face intense pressure from macro market trends, challenges resulting from care setting shifts, reimbursement rates, lagging rising costs and labor staffing issues |
| They continue to see sluggish activity in their GovCon Enterprise segment given the backdrop of federal government spending uncertainty |
| Though industry demand was temporarily paused given both the Hollywood writers and actor strikes |
| Relative to product development, and as we highlighted a touch last quarter, DAT launched Gen AI-enabled solutions, among other initiatives targeted to combat freight industry fraud, which is a problem that plagues the entire industry |
| It actually has a dampening demand driver for our business |
| Hard to recall a macro or a lack of execution |
| And just particularly given the -- some of the incoming data on construction is a little bit weaker, higher rates and so on |
| For the final quarter of the year, we expect to see low single-digit growth for this segment based on continued challenging freight market conditions and the actor strike impact on foundry |
| Obviously, the weakness at DAT given that we just talked about with just where freight markets are, so it's really a collection of bespoke things than it is sort of a broad brush macro across the portfolio |
| I think the large government -- the enterprise class government contractors based on just the uncertainty have -- or just are being very cautious in their activity |
| You have a little bit of weakness in GovCon at Deltek |
| There's increasing pressure from the LPs onto the sponsors to start thinking about getting some liquidity back to them |
| It's certainly reflected in our balance of the outlook for this year, sort of continued uncertainty |
| And what we say is what we said from the beginning of the year is we just expected from our January call that software would be a little slower because generally you're not going to buy new large software with uncertainty in the market |
| They've been cautious over, you know, fits and starts this year |
| In that case, it's less macro related and more tied to the uncertainty around what's happening to the federal government and budgets and what's going on there |
| When business is harder to find, there's fewer projects than the contractors are having to work harder and find opportunities |
| The larger deals have been a little slower to show up this year |
| There isn't -- we talked quite a bit getting rid of this call, Steve, about is there some broad brush pan room for macroeconomic impact |
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