Callouts & quotes from 1,434+ activist slides

"Spruce Point observes that Evoqua changed how it discussed gross margin post-IPO. At first, it gave a more detailed discussion about factors that drove costs, including the impact from acquisitions."

"We find that its prices are on average 15%-20% higher. Weis' prices decreased 8% relative to peers between mid-year 2017 and 2018. As a result, we expect Weis' gross margins to be pressured in 2018."

"MSCI first acquired 40% of Burgiss in Q1 2020. Spruce Point observes that MSCI avoids an explicit discussion of the true profitability of Burgiss, but rather focuses on its mid-teens EBITDA margin."

"We hypothesize that APP blends these high probability ad wins with low probability, low-cost ads to create the appearance of a high ROAS advertising platform while generating a high margin for APP."

"One stated his margin per case drops by more than 90%, from $100-120K to $10K with the device; the other stated “you are eating up a very, very substantial amount of the margin, no doubt about it.”"

"We conservatively estimate Porch booked $8.1m of revenue in 2019 with zero cost associated with it. As a result, we estimate Gross Margin % to be inflated by approximately 2.3% (230 basis points)."

"We conservatively estimate Porch booked $8.1m of revenue in 2019 with zero cost associated with it. As a result, we estimate Gross Margin % to be inflated by approximately 2.3% (230 basis points)."

"Post our reports, both Gentex and Caesarstone showed significant gross margin contraction leading us to believe that the capex anomalies were a strong indicator of future gross margin contraction."

"Sony's IP&S division has kept pace with top peer growth rates by maintaining #1 position in mirrorless cameras while being the only company in Japan to see margin expansion in its imaging business"

"When we asked him about trends in hardware margins, he responded by saying that ARPU as a whole had "dropped significantly". This is a completely different picture than management tells investors."

"The clinical literature is unequivocal, per another study: "steatotis in the donor liver has been identified as a predictor of graft failure...so these livers are often considered...marginal....""

"Since its IPO, it's evident that LSPD's business has become more competitive by analyzing hardware margins. Whereas before, it could make money on the POS systems, now they are sustaining losses."

"We said to our investors, in return for the privilege of having slightly lower but stable margins, you should expect some very strong, industry-leading revenue growth. — Cognizant, September 2015"

"As you'd expect, we pay a higher designer. Now they have a much higher ticket, better gross margin, better customer interaction, so you get a good return on those investments. — CFO Lang, Q3 2022"

"Our price target is based on the nature of a business unlikely to meet the market's overly optimistic expectations of captured market share, GGR revenue share and inflated target EBITDA margins."

"Once we calculate the incremental operating profit from the Mexico turnkey contract, we divide it by the incremental revenue from the contract. The result is an operating profit margin of 31.9%."

"Lone Star's Adj. EBITDA margins are set to decline in FY25 by 150bps and the fine print disclaimer around the projected margin gives us considerable hesitation in believing they can be achieved."

"Policy makers and mainstream economists are stuck in GroupThink that easy money always helps the economy, despite basic economic principles that suggest diminishing or negative marginal returns."

"There were already questions about the cost competitiveness of PHAs even before canola oil prices started to surge. We believe investors should discount added margin pressure from rising prices."

"While ODR has been positioned as a higher-margin, lower-risk growth driver, the heavy reliance on fixed-price contract work undermines that narrative and increases the risk of margin volatility."

"Spruce Point estimates that for the first time since coming public, Remitly's transaction margin, or the difference of revenue per send volume and transaction expense per send volume, declined."

"Opportunity of ~70 basis points of margin improvement based on redesigning Goodyear’s brand strategy. Achieving this improvement would equate to a 26% increase in Goodyear’s current stock price"

"According to a former high level Xylem executive we interviewed, digital sales are dilutive to margins. Yet, Xylem’s CFO suggested recently that a higher digital mix would bring higher margins."

"Within asset management, JP Morgan is delivering strong actual margins for shareholders, as opposed to adjusted, "pro-forma" illustrative margins that do not ultimately create shareholder value"

"We believe that GCP can improve its EBIT margin by ~600 bps on a run rate basis, more than recouping all of the deterioration that has occurred through poor performance over the last few years."

"Despite Herbalife's claim that its compensation structure in China is different from other markets, the pro forma Contribution Margin in China essentially mirrors those in the rest of the world"

"We see a large disconnect between the high costs and high margins and how they can co-exist with each other. This was our first clue that something might be amiss with the company’s financials."

"We believe that GCP can improve its EBIT margin by ~600bps on a run rate basis, more than recouping all of the deterioration that has occurred through poor performance over the last few years."

"Assuming 2% comps and the Company’s unit growth plan, if EBITDA margins were to improve 100bps by 2008 (returning to 5-year average levels), EBITDA could increase by 41% from “reported” levels"

"While the Company reported stellar results and a record EBITDA margin of 15.2%, the store manager says the sales were great but the store burned through cash and the bottom line wasn’t great."

"Applying peer target compensation levels of 55% in advisory(1) and more than the peer average of 40% in asset management, we believe Lazard has the potential to achieve +30% margins over time"

"They tend to be in line with our consumables, and perhaps maybe a little bit additive....But you can think of them roughly in line with our consumables gross margin. — Kevin Wilson, Heska CEO"

"Despite a stellar 2019, we believe Chipotle still has significant unrealized growth potential, with average restaurant sales still 12% below peak levels and margins ~700bps below peak levels"

"In total, we believe our plan for Office Depot will improve operating margins from 0.9% to 7.3%, while providing Office Depot with a plan to successfully transform the future of the Company."

"[W]e believe BWLD company-owned stores could improve margins substantially, by up to 500 [basis points] based on our analysis, by adopting labor practices currently deployed by [franchisees]"

"By reclassifying WSP's net financing expense as an operational cash flow as opposed to a financing cash flow, we find that the Company's operating cash flow margin lags the industry average."

"For example, with clear evidence that EBITDA has been shrinking, margins contracting, and excess manufacturing capacity increasing, why has Saputo continued to add headcount year-after-year?"

"Based on peers, we conclude that there are potentially material opportunities to improve ADT's cost structure as a standalone public company, enhancing both EBITDA margins and free cash flow"

"If AMR is over-reporting production, there is a strong possibility its revenues and coal inventories are overstated. Overstated inventories can also to overstated margins and profitability."

"Spruce Point believes that analysts overvalue AOS because they believe its margins are superior, sustainable, and that the recent growth setback is "temporary" and not of long-term concern."

"As the currency hedge benefit has reversed through the last two years, underlying gross margins have purportedly risen by *EXACTLY ENOUGH* to keep total gross margins steady between 39-40%."

"Booz Allen acknowledges the Amazon recruitment threat and has reported recent challenges. Using LinkedIn data we see that Leidos new hire growth has been marginally worse than Booz Allen's."

"Wir vermuten stark, dass es sich dabei um Notfallreaktionen auf Margin Calls handelte, die jeweils auf einen deutlichen Kursrückgang folgten und mit einer sofortigen Zusage verbunden waren."

"GoDaddy is a scale-leading infrastructure business trading at 11x FCF; replaying Starboard's Splunk/Wix/Salesforce margin-expansion playbook can close a 37% peer gap and re-rate the stock."

"Sipex's shares fell >70% post disclosure of an investigation into revenue restatement. Revenues were restated 35% lower and gross margin was revised from -8.9% to -24.8% or 1,590bps lower."

"With sales growth from new products set to plateau and margin expansion opportunities largely exhausted, we believe that Hill-Rom growth and earnings will underperform sell-side estimates."

"When Nidec acquired ASI, it projected that it would increase the OP margin from the mid-single digits to 10%. ASI’s financials show this has not yet happened at least as of March 31, 2015."

"A sharp increase in operating expenses as a percentage of sales have resulted in AOL's EBITDA margins declining from 34% in 2009 to 16% in 2011 and falling substantially below peer levels."

""We really focus more on the overall operating margin of 20 or above, low 20s kind of thing is really how we focus anything on 2012 and beyond." — Thomas George, CFO, 2/24/11 earnings call"

"Because ADP participates in SMB, Mid-Market, Enterprise, and International, ADP’s structural margin potential can be best estimated by benchmarking against competitors in each sub-segment"

"As growth slows, companies should moderate expense growth such that margins improve and the combination of growth + profitability improves over time – Autodesk has been doing the opposite"

"Molton Brown has excellent brand equity and there is huge scope for margin improvement by expanding into less seasonal categories and reviewing its manufacturing and pricing architecture."

"Based on the City's assessor, Danimer's Kentucky facility remodel is only 10% complete. While there may be margin of error from the assessor's judgement, 10% is still far from completion."

"Spruce Point observes many signs of financial stress in Generac’s financial statements. Gross margins are declining, inventory turns are decreasing and earnings quality is deteriorating."

"BK's earnings are cyclically pressured by decade-low net interest margins due to a prolonged period of low global interest rates and a growing mix of excess deposits on the balance sheet"

"And then starting next year, the actual spend on these programs will start to decrease, and you'll start to have a margin pickup starting in ‘19. — CEO Kevin Lobo, JPM Conf, Jan 10, 2018"

"Second, our gross margins were healthy, exceeding 53% this quarter. We were positive on the price/cost equation and saw good performance across several key cost categories? — Rollins CFO"

"Dollar Tree has failed to execute on the turnaround of Family Dollar and the chain continues to languish, with flat-to-negative same-store sales growth and continued margin compression."

"Comparisons to ADP’s competitors are most appropriate at the revenue and gross margin levels given the higher operating expense levels of ADP’s sub-scale and rapidly growing competitors"

"Quantumscape projects a hockey stick revenue ramp in 4 years, reaching $3.2B and $6.4B by 2027/2028 with $808MM and $1.6B in EBITDA, respectively – approaching Google and Apple margins."