Callouts & quotes from 1,434+ activist slides

""As you’ll be aware, 2025 Brent strip is at around $75 per barrel, and other commodities and prices, including refining margins, are under pressure. Were these prices to play out, the rule of thumb impact in 2025 would be around $4 billion – but that’s a price call that we don’t know at this stage" — BP CEO at the Q2 2024 results."

"“We’re going to have higher margins with the delivery of these cost synergies, and we haven’t quantified the benefits of any revenue synergies but we would clearly expect to be able to grow at higher rates over the longer term than we would independently”.... “And we see some very specific opportunities” — Amcor CEO, Aug 7, 2018"

"Heska's gross margins generally fall between those of high value-added diagnostic equipment companies and pure animal health distributors. Heska's EBITDA margins fall below those of nearly all possible comparable companies. We believe this is indicative of Heska's lack of proprietary technology and poor competitive position."

""Part of the reason we struggle to underwrite Box’s story of accelerating growth and expanding margins is the fact that Box has discussed initiatives to accelerate growth in the past, but not delivered on it, and has had several different target models, consistently needing to walk them back" — RBC Capital Markets, July 2021"

"In addition, these loans are priced at market rates, which not only helps to diversify our balance sheet, but also provides an additional return above our cost of funding and a yield similar to the net interest margin of our loans, which are unsecured. — CFO Lapointe, SOFI Technologies, Inc., Q4 2023 Earnings Call Transcript"

"Analyst: “We always talk about incremental margins with you.... You got all this operating leverage. How do we think about operating margin then?” Mark Donegan (PCC CEO): “And again they move, but I think that the range in which you should expect to see it move is somewhere between that 35% and 45%, 48%.” — December 3, 2014"

"As you’ll be aware, 2025 Brent strip is at around $75 per barrel, and other commodities and prices, including refining margins, are under pressure. Were these prices to play out, the rule of thumb impact in 2025 would be around $4 billion – but that’s a price call that we don’t know at this stage. — BP Q2 2024 Earnings Call"

"Spruce Point believes there is little margin for error in food manufacturing, since the slightest mistake can cause contamination, illness, and even death. The repercussions could be long-lasting and tarnish the manufacturer's brand. We've noticed a recent uptick in product recall notices by Saputo, particularly in Canada."

"Coca-Cola is an iconic world-wide American brand that also depends on its “trade secret” formula and brand equity. To put WD-40’s extreme valuation in perspective, we compare the two. Not only does Coca-Cola have broader diversification, but also significantly higher margins and growth potential despite being 88x larger."

"We believe the market wildly overvalues the entirety of BR by not considering that 40% of its business is tied to low/no margin distribution revenue and services such as credit statement printing. Its gross margins and capex spending (due to aggressive capitalization of costs) are vastly below financial technology peers."

"REZI has been talking up its growing relationship with home builders for the First Alert smoke detector business. However, based on our research interview of a former executive familiar with the business, it is a narrower product opportunity which depends on larger volumes and carries less margin than the retail channel."

"The fact that IONQ is using funds raised from investors hoping to get a first bite of the apple on a highly innovative, high-margin, secular growth story in quantum computing and using it to buy a highly cyclical low-margin business in a mature industry like semiconductor fabrication is an inconvenient fact to overlook."

""In the fourth quarter of 2022, we executed multiple restructuring programs to lower costs, increase margins and position us for growth resulting in restructuring and impairment expenses of $35 million. We expect to fully execute our restructuring initiatives and programs over the next 12-24 months." — Resideo 2022 10-K"

"In 2016, Deckers combined its e-commerce and retail segments into a single segment called Direct-to-Consumer (DTC). This combination in reporting makes it very difficult to isolate retail results. Allowing for a modest decline in e-commerce margins would still imply a single digit margin for retail in FY2016 and FY2017"

"Heska’s market cap grew 218% from the close of the scil transaction through the end of 2020. However, despite scil adding a relatively large chunk of negative-growth, ~30% gross margin revenue and Heska consensus 2021E EBITDA estimates not changing, the implied value of scil and CVM grew 282% over just eight months."

""In October, we acquired Antuit for approximately $145 million to further advance our Enterprise Asset Intelligence vision. This high-margin Software as a Service business generated sales of approximately $27 million in 2020, nearly doubling over a 3-year period." — CEO Gustafsson, Q3'21 Conf. Call, November 2, 2021"

"Mercury is now spinning excuses for gross margin contraction as related to acquisitions...while not quantifying any added costs related to the loss of its small business designation, DFARS compliance requirements, or potential recalls and/or new product costs related to replacing Supermicro as a technology partner."

"LSPD has cobbled together a motley collection of assets at increasingly expensive valuations. LSPD does not disclose target EBITDA margins, and generally hasn't disclosed historical growth rates. We believe a majority of the assets lose money and had already peaked in their growth cycle prior to LSPD's acquisition."

"“Last night, Rui Tiantian was fighting with a beautiful anchor. During the fight, Rui Tiantian got up and left her seat. Tycoon Yangyang appeared and brushed a jumbo jet, launching her into the lead in a matter of seconds, helping Rui Tiantian's defeat her opponent by a wide margin.” — https://www.yy.com/yue/182938"

"Revealing language buried in Twist’s SEC filings confirms our belief that Twist is misclassifying manufacturing expenses as R&D - the kind of language that lawyers add in an attempt to cover-your-ass, which nonetheless conflicts with the CEO and CFO’s strong, unambiguous statements using the phrase “gross margin.”"

"We start with the customer in all deals and saying what does this do from that standpoint. But naturally, costs come out. Normally, we'll see gross margin fall to EBITDA. And within 1 year to 1.5 years after the acquisitions, they're highly accretive -- to our margins. — Evoqua CFO, CS Industrial Conf, Dec 2, 2022"

"On your second question, so about 21% of our revenue in Q4 was spent on inventory, on our IoT devices and on inventory. And so with a minus 3% free cash flow margin, our free cash flow margin sans dollars going out the door for inventory would have been positive 18%. — Samsara CFO Phillips, Q4 FY2023 Earnings Call"

"Optically, PGNY would like investors to believe that it is achieving significant operating leverage. In reality, the largest contributor to its operating leverage story has been its aggressive use of stock-based compensation (SBC). Netting out the benefit of SBC uncovers that PGNY’s EBITDA margins are in decline."

"Not only has Heska had challenges growing organically, but the Company's profit margins have declined materially since peaking in 2017. Both absolute margins and margin expansion since 2019 trail IDEXX Labs by a wide margin. Investors should be concerned that margins are not expected to improve for several years."

"Smart2Pay’s margin increase is unlikely to be explained by its ability to rationalize its operational footprint. Using the Wayback Machine, we see that even through May 2021, it was still operating out of five global locations. The website has recently been updated and now omits operations in the U.S. and Spain."

"Spruce Point believes that Dollarama is significantly overvalued based on its undifferentiated and increasingly uncompetitive business model, inflated and unsustainable margins which are posed to decline, and its limited growth prospects which will restrain its ability to hit its long-term earnings expectations."

"In addition to receiving up to c.US$3.7 in potential value per share in the demerged US petroleum business(1), Australian tax-resident shareholders could receive additional value, depending on their marginal tax rate, of up to c.22%(2) per core BHP share that they tender into the discounted off-market buybacks."

"We're also adjusting the timeline by which we expect to achieve our longer-term margin targets laid out at our December 2020 Investor Day.... We remain committed to 60% gross margin and 31% adjusted EBITDA margin, and we'll provide an update on timing in 2023... — CEO Jeff Simmons Q2 2022 Earnings Call 8/8/2022"

"We estimate gross profit per system will continue to drop as the solar investment tax credit steps down over the next 2 years. Lower margins and a reduced benefit for tax equity investors look to pressure an industry which already has tight margins and relies on tax equity to support their negative cash flows."

"A 15% decrease in the price of product requires a substantial volume increase - even for high margin businesses such as Box - to contribute the same gross margin dollars to the company. Compare this to the volume needed for a price increase - decreasing price hurts a company worse than increasing price helps."

"There's Chinese companies making this stuff really cheap all day long. And that's a threat because whenever there's a market like the rugged tablet market is a good example and even the video conferencing market that I'm in, those are very high-margin businesses, like 40%, 50%, 60%, even sometimes 70% margin."

""We also acknowledge activism could create an opportunity to highlight value that is even higher at $40 (and in the range of the activist target) to account for significant margin expansion from current levels, premised on a market P/E of 17x and earnings of $2.37." — Morgan Stanley Research, February 1, 2017"

"Spruce Point does not believe that BR is justified in calling itself a SaaS company with margins that scale. In fact, its financials look nothing like a high quality SaaS company. When we benchmark BR's gross margins and deferred revenue relative to its recurring revenue, we find it to be wildly below peers."

"The senior employee noted that inventory mis-valuation in the semiconductor equipment industry “is a common thing, unfortunately, that I’ve seen across multiple companies in the space...to manipulate earnings: “they defer out...that impairment...because they don’t want to record a hit on their gross margin.”"

""It's about the size of your arm from your elbow to your fingers. Half of it is just a metal stick with the scope part. The other part is molded plastic with a tiny chip on it, so it's probably double-digit dollars to make. So, the margin is infinite. It's a huge margin." — Major Hospital Urologist, Nov 2024"

"Spruce Point believes Heska Corp (Nasdaq: HSKA or “the Company”), a $2.8 billion market cap animal health equipment distributor, has been struggling to grow organically and has been using low-quality acquisitions as a means to deflect market share loss and margin erosion and to generate investor enthusiasm."

"At DuPont’s 2013 Investor Day, management was not transparent about reducing margin targets, suggesting that reduced margin targets were correlated to the accounting change. Were DuPont’s independent directors aware of this? Trian’s nominees will seek to ensure that the board holds management accountable."

"At DuPont's 2013 Investor Day, management was not transparent about reducing margin targets, suggesting that reduced margin targets were correlated to the accounting change. Were DuPont's independent directors aware of this? Trian's nominees will seek to ensure that the board holds management accountable."

"At DuPont’s 2013 Investor Day, management was not transparent about reducing margin targets, suggesting that reduced margin targets were correlated to the accounting change. Were DuPont’s independent directors aware of this? Trian’s nominees will seek to ensure that the board holds management accountable."

"While clear aligner producers can ship anywhere, their increasingly broad distribution across the US highlights the fact that, collectively, individual labs are quickly growing capacity and achieving national scale. Even individual orthodontists with in-house printers are offering capacity at the margin."

"Spruce Point believes that Rollins' gross margins reporting is also opaque. Recently in 2022, the Company provided no qualitative discussion at all about factors affecting its performance. While we applaud recent efforts for more transparency, we believe gross margin discussion could be enhanced further."

"At an average sensor and transmitter revenue per patient per day of $2.00 – close to the Libre’s current level of $2.04 – Abbott would realize a gross margin of 59% on the Libre 2 (vs. our estimate of 60% today), while Dexcom would realize a gross margin of -7% on the G6 (vs. our estimate of 70% today)."

"With no gross margin volatility, EBITDA margins consistently expand. USCR has offered an identical boilerplate explanation that it is related to volume, pricing, and efficiencies, up until recently. We will explore how aggressive use of capital leases likely explain some of the EBITDA margin expansion."

"“We (will) consider divesting of brands or products that generate five billion yen or less in sales, that have a profit margin of less than 15%, and that have no growth potential... We aim to complete this selection process within one to two years.” — Yoshihiro Hasebe, June 2021 Small Meeting with CEO"

"With gross margin in excess of 70%, FIGS is starting from a position of strength and in the company of TPR (historically 70%+) and LULU (which we estimate to have merchandise margin in excess of 70%). — Barclays FIGS report, “Initiating Overweight, The Path to 10x”, Price Target: $50.00, June 21, 2021"

"Lasertec is an extreme, textbook accounting fraud that checks off every box: claiming to have the highest margins in the industry; but alarmingly little cash flow and the lowest cash conversion among its peers; accompanied by the highest inventory level of any semicap equipment supplier in the world."

"There is certainly opportunity for operating margin expansion beyond '23, as we begin to leverage those operating costs more, but we'll still likely be based on where we're at today and closer to those single -- to close to double digit operating margin metrics. — Wilson at Investor Day November 2020"

"“The biggest problem with this class is with the CYP3A4 having a very narrow therapeutic margin, and metabolism is the biggest problem you have here. That's the enzyme that actually degrades it.” — Senior pharmaceutical executive/scientist, previously at Abbott and now at another major pharma company"

"“We are well on track in establishing the product, distribution, services, support, and marketing foundations to enable us to achieve our FY 2015 objectives, and over the next three years, to achieve our billion-dollar plan and maintain mid-20s operating margin objectives” — Commvault, January 2014."

""the cost of goods are pretty horrendous"; the gross margins "were pretty shitty...yeah, they were negative." — Gen9 executive; "you’re definitely going bankrupt"; "you’re going to lose money...it’s something I don’t think [investors] get...you’re not long for this world." — DNA manufacturing expert"

"“Yes, there are tons of players. If you don't want to manufacture on a global scale, there's a very low barrier to entry. There's always someone willing to do it for less margin than you'd like to make, so you have to do something to differentiate it.” — Ex-employee in senior product and sales roles"

"“We are well on track in establishing the product, distribution, services, support, and marketing foundations to enable us to achieve our FY 2015 objectives, and over the next three years, to achieve our billion-dollar plan and maintain mid-20s operating margin objectives” — Commvault, January 2014"

"“Margins will be the same because that is how they are managing the business. Net profit on legacy business may slowly shrink because as their costs come down, the total dollar or margin might shrink. 40% of a penny versus two pennies is just less money.” — Former Avery Dennison RFID Sales Manager"

"Spruce Point believes BR has also experienced operating expense bloat in the past few years that will amplify the downside risks. We observe that its SG&A margin has creeped back to levels not seen since the 2014-2016 period. This is even despite efforts to rationalize its real estate footprint."

"Lasertec's reported margin is significantly higher than every one of the five largest semiconductor equipment companies in the world by revenue – even eclipsing ASML's, a $350 billion market cap giant which invented EUV lithography systems and has a real monopoly unlike Lasertec's fictional one."

"Employer Services' overall margin increased from 30.4% to 30.6% for fiscal 2017, as compared to fiscal 2016. This 20 basis point increase was driven by operational efficiencies partially offset by 30 basis points of pressure from dual operation costs related to our Service Alignment Initiative."

"Part of the reason we struggle to underwrite Box's story of accelerating growth and expanding margins is the fact that Box has discussed initiatives to accelerate growth in the past, but not delivered on it, and has had several different target models, consistently needing to walk them back..."

"Assuming 5-year useful lives for the intangibles related to customer lists from the Credit Karma and Mailchimp acquisitions results in estimated 21% to 26% reductions in GAAP net income in each of the past three fiscal years and a near halving of GAAP net margins since FY 2020 from 24% to 14%."

"Beyond Meat explicitly tells investors: "we include outbound shipping and handling costs within SG&A expenses. As a result, our gross profit and gross margin may not be comparable to other entities that present all shipping and handling costs as a component of cost of goods sold" — Beyond Meat"

"Arconic originally projected that Firth Rixson would do $2 billion of revenue in 2019. At the same margins as originally projected for 2016 (i.e., conservatively assuming no incremental volume leverage), Firth Rixson will produce approximately 50% less EBITDA than originally targeted for 2019"