Callouts & quotes from 1,508+ activist slides

"Southwest is led by a team that has proven unable to adapt to the modern airline industry; the Company’s release today seems to admit as much by stating that the revenue guidance reduction was the result of “complexities in adapting” to the current environment — complexities that Southwest’s peers seem able to adapt to."

"The issue with the circular revenue with Synlogic, basically, they provided Synlogic $30 million, Synlogic turned around and paid it to them, so they were registering their own money as revenue, and then they tried to make a strain for Synlogic, and it didn't work, and then they had to go to Zymergen and get the strain."

"DV does not disclose the contribution to revenues from acquisitions to calculate organic growth. The CFO recently referenced M&A as accelerating organic growth. However, based on our analysis we disagree and find that absent the contribution from OpenSlate and Meetrics that organic revenue growth decelerated in 2022."

"Pramac has a troubled history. It was listed on the Italian stock exchange (PRA IM) in 2007 and its fortunes swiftly declined. The Company once issued lofty goals of achieving €322m and €48m of revenue and EBITDA by 2014. However, trading in shares were suspended indefinitely in 2012 and Pramac filed for bankruptcy."

"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."

"We believe that the FY25 revenue guidance increase earlier this month of $10 million is substantially explained by the expected contributions from the Ambry Genetics acquisition and the new Pathos/AstraZeneca deal, two factors that we estimate should have added nearly $46 million to projected revenue for the year."

"Decoupling the provision of the monitoring device from real-time cardiac event supervision and report preparation would dramatically alter the economics of iRhythm’s business, as it would likely result in reduced revenue and effectively relegate the Company to simply supplying a largely commoditized patch product."

"The average monthly GZ 1-1 revenue would be at most only Rmb 14.7 million, less than half of the Rmb 32.9+ million draw down needed to cover the difference between our low-end estimate of the deferred revenue’s Rmb ~75 million carrying value and the Rmb 42.1 million shown on the SAIC files as at December 31, 2016."

"Our metric of fully loaded customer acquisition costs as a percent of online revenue has barely declined from its Q4 2021 peak and remains materially above 2020 levels. In addition, we believe that calculating CAC based on net subscribers provides a useful reference point for a business like HIMS with high churn."

"If conscious of the full extent of the revenue headwinds of which management appeared to be aware, would Advent have still been willing to purchase Forescout for $33 per share, just one quarter after the stock fell as low as ~$25 after a posting a top-line miss similar to what it would have posted on the Q4 call?"

"If conscious of the full extent of the revenue headwinds of which management appeared to be aware, would Advent have still been willing to purchase Forescout for $33 per share, just one quarter after the stock fell as low as ~$25 after a posting a top-line miss similar to what it would have posted on the Q4 call?"

"To summarise, TFS’s mark-to-model approach to biological asset valuations and revenue recognition policies allow it to leverage real capital. Accordingly, we believe that the only factor that would prevent this business from being a Ponzi scheme is whether or not the underlying products are a feasible investment."

"Spruce Point believes Kornit Digital (“the Company” or KRNT) saw 2018 revenues, and particularly cash flow, driven entirely by Amazon’s expansion of its Merch program, which are likely to taper based on a slow-down of program growth, and would leave a gaping hole in Kornit’s aggressive revenue growth strategy."

"A simple re-rating of ACMR to its direct comparables set - other Chinese WFE national champions that will continue to be directed revenue by Chinese semiconductor customers for many years to come as the country aggressively builds out its homegrown industry - implies multi-bagger returns for ACMR shareholders."

"There are extreme reporting anomalies with AMR’s former Trading & Logistics (T&L) segment. Were 2017 revenues between AMR / ANR $478 or $566 million? Furthermore, why was no EBITDA eliminated in the merger when AMR shows $89.3 million of segment EBITDA with 84% of the segment’s purchased coal coming from ANR?"

"Perion’s PP&E, operating lease assets, and capital expenditures in relation to its revenues are so far below the advertising technology industry average that it raises material concerns that either they are wildly underspending to develop and maintain their technology assets, or that their sales are inflated."

"With KRNT’s share price up 55% YTD and near all-time highs, Spruce Point finds certain events concerning in the overall context of management touting record results and ‘game changing’ new product innovations, and promoting an Amazon deal where we find concerning revenue recognition and accounting anomalies."

"Kornit’s share price is effectively at the average analyst price target which is near all-time highs, yet none of the analysts have closely investigated the impact of Amazon payments and revenues tapering off, but instead anchor their estimates to management hitting ambitious long-term $500m revenue targets."

"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."

"As confirmation of this market opportunity, our illustrative analysis shows that across all the relevant markets, there is a total potential licensing revenue opportunity ranging between $750 million - $1.0 billion, with a potential current annual run-rate of more than $75 million based on device shipments."

"Management claimed that Utiba’s revenue contribution was “immaterial” in Q2 FY 2014, when the business was first acquired. However, during its Q4 FY 2015 call – three quarters after it first launched the MFS segment – management confirmed that MFS was generating revenue “in the tens of millions of dollars”."

"Although NICE is larger than Verint on most metrics (revenue, EBITDA, EBIT) and more efficient (revenue per employee, EBIT per employee), average compensation per insider at Verint is over 3x that at NICE, and Verint insiders take home a far greater percentage of EBIT in compensation than do NICE insiders."

"Because we believe that IPX may be challenged to meet the revenue expectations set by analysts (and they may never produce any revenue in one possible scenario), we believe the best way to evaluate the valuation is price to book value. On this metric, IPX’s share price appears to be materially overvalued."

"Spruce Point believes that investors should take the CEO’s claims that SORT® will be a major contributor to revenue and EBITDA with a grain of salt. It is currently being given away for free. We believe that converting users accustomed to paying nothing into customers paying something is an uphill battle."

"Turner's affiliate efficiency(a) (affiliate revenues per primetime households delivered) is at the high end of the range amongst the peer group primarily due to TNT, which benefits from sports programming, and CNN which had a head start as the first all-news channel, but is facing increasing competition."

"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)."

"SMCI is currently trading at the highest revenue multiple in its sector, likely a reflection of investors perception that it is growing revenues the fastest. However, unlike its peers which have historically solid free cash flow generation, SMCI has not demonstrated any long-term free cash flow ability."

"Spruce Point believes that, with Penumbra U.S. Stroke revenue growth set to slow in the face of heavy competition, and with consensus peripheral thrombectomy sales expectations far too aggressive, company-wide sales growth is set to be cut almost in half from Street estimates, from FY19 through FY21."

"Spruce Point believes that, with Penumbra U.S. Stroke revenue growth set to slow in the face of heavy competition, and with consensus peripheral thrombectomy sales expectations far too aggressive, company-wide sales growth is set to be cut almost in half from Street estimates, from FY19 through FY21."

"As a distributor, or at best white label supplier, Heska does not control its own product destiny. While white labeling is an accepted business model, it seems wildly inappropriate to ascribe it a 9x revenue multiple since it is questionable that the Company has any sustainable competitive advantage."

"It's easy to see how Kratos has destroyed significant value. Since 2008, Kratos spent nearly $1bn on acquisitions that have contributed an estimated $801m and $129m of revenues and EBITDA, respectively. Yet, recent results suggest over $237m and $69m of sales and EBITDA losses, net of divestitures."

"Limbach’s management has heavily implied that a material portion of its ODR work is recurring in nature. However, we question the validity of this characterization given that less than half of the Company’s initial 2025 revenue guidance is supported by its next-12-month backlog as of year-end 2024."

"BR management has consistently touted Closed Sales as a key performance indicator (KPI), and it influences management's short-term cash compensation. But as we'll illustrate, it is fraught with holes and should not be relied upon as a firm measure of revenue that will materialize in the near-term."

"Despite having created little to no value, in our opinion, as a public company (including missing financial targets and spending $110m on a revenue-less venture SecurityMatters with no clear evidence that it succeeded), Forescout insiders are in line for a hefty payday – cashing out nearly $100m."

"Management has collected ~$35 million dollars in performance compensation, growing at an 11% CAGR vs. organic growth CAGR of ~1%, tied to revenue and EBITDA targets while PBH has missed organic growth estimates for 4 out of 5 years and missed FCF guidance in 3 out of 5 years between 2015 – 2019."

"The notion that AST has a financial opportunity remotely related to "$1.1 trillion" in global wireless service revenue as included in AST investor decks, or that 5.3 billion unique cellular subscribers on the planet is an appropriate figure to applying penetration rates to, is complete nonsense."

"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."

"Despite adding $4.7 billion of revenue over the past ten years, Skechers' General & Administrative expense as a percent of revenue has barely budged. Furthermore, often blamed supply chain expenses don't seem to be a major driver. We view this as a colossal example of poor financial management."

"We also double checked the numbers from the Consumer International and Direct segment reporting, which includes the FLAWLESS acquisition. Again, FLAWLESS revenues are estimated at $7.5m - $8.2m, slightly different than $7.2m - $8.1m we previously estimated from the consolidated net sales level."

"How did revenue contributed from a change in natural gas volumes go down in 2021 vs. 2020 given: 1) A full year of Peoples natural gas volume contribution in 2021 vs. 2020 (volumes increased substantially from 91,695 to 139,672 MMcf) and, 2) An increase in natural gas prices from 2020 to 2021?"

"If, in order to maintain market share, Dexcom is forced to slash sensor and transmitter prices to achieve parity with the Libre's daily cost of use to the payor, the Company's gross profit would be wiped out in its entirety, even if revenue from up-front receiver purchases were to hold steady."

"Based on the $250-$275 million revenue range and $1 billion estimated backlog, the business looks incredibly cheap at 0.55x revenues and 0.15x backlog which leads us to question the quality of the deal especially in light of an industry source referencing “past due invoices” from contractors."

"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"

"Monster's AFF Ireland filings indicate that it intends to supply recipes and formulae for all the non-US companies within the group. Furthermore, management does not disclose where the revenue is derived by geography because it would be "seriously prejudicial to the interest of the Company.""

"Does Intuit deserve a premium SaaS multiple? As much as two-thirds of revenue is either episodic, usage-based, remnants of license, or from end-of-life product. And while a portion of Intuit's payroll revenue is volume based, we believe take rates in that market will be a race to the bottom."

"We find that Bunge makes it difficult to calculate organic growth by segment by not quantifying Viterra's contribution to its business segments. Moreover, the Company does not discuss FX or asset divestiture impacts on revenue. In 2025 alone, Bunge disposed of $953m of assets and businesses."

"Had Ginkgo included Synlogic’s foundry spend of $13.6MM, related party revenues as a percent of total would have jumped from 72% to 95% - that is, Ginkgo would have had to admit that its foundry is a flop and that it can’t get customers unless it gives them cash and round-trips the proceeds."

"Heska paid approximately 1.4x LTM revenues, in aggregate, for these six companies. We find it shocking to note that the market is currently valuing these revenues, which comprise well over one-third of Heska’s LTM revenues, at 9x only 1 to 1.5 years later despite questionable recent results."

"It's instructive to evaluate SafeCharge's valuation at the time of acquisition by Nuvei. For reference, Nuvei acquired the business for 7.3x and 21.7x 2019E Adjusted Revenues and EBITDA. Based on our primary research, SafeCharge could represent up to 30% of Nuvei's current business profile."

"With Hill-Rom already having posted new product revenue of "more than $300M" through Q3, management guidance of "more than $400M" of new product revenue for FY19 implies a Q4 new product revenue guide of just ~$90-125M, which would render YoY new product growth flat at best for the quarter."

"KLA’s actinic inspection tool was in development circa 2015/2017 but put on hold as they believed the market for such a tool was too small – a prescient view given the insignificant amount of Lasertec revenue that actually comes from EUV actinic tools versus its old DUV and other systems."

"Paul Phillips has been on C3's earnings calls as VP of Investor Relations. His LinkedIn biography says he's an "Advisor" and doesn't disclose he was formerly C3's CFO from 2017 – 2019 during a period we find revenue growth claims being inconsistent and Deloitte was appointed new auditor."

"We have specific concerns around ~$1 billion of revenue booked since 2020 with Frontier Communications (Nasdaq: FYBR), a material customer, which we argue should be evaluated as a related party because Dycom’s long-time CEO & Chairman has a brother that is a named executive at Frontier."

"Stryker's Orthopaedics segment had two acquisitions close in Q4 2020: Wright Medical (Nov) and OrthoSensor (Dec). Based on Stryker's reporting, the segment had $126 million of contributions from acquisitions. Yet, elsewhere it reported $129.2 million of revenue just from Wright Medical."

"Investors ascribe CHD the highest valuation in the consumer products sector, mostly on the misplaced belief that its growth is fastest among peers, but fail to account for the low quality contribution from acquisitions, and recent price increases that have temporarily boosted revenues."

"BR promotes itself as a “Global Fintech Leader”. But in reality, we believe at least 40% of its revenues are tied to mundane, low-valued added business process outsourcing (BPO) activities such as printing and distributing business statements, some of which carries literally no margin."

"RELY only reports period changes in transaction expense drivers such as direct costs and loss reserves. When we analyze the annual increases in these costs relative to annual increase in revenue and send volume, we see that trends mostly worsened in 2024 after a period of improvement."

"RINO claims to be the leader in selling desulfurization (“FGD”) and other environmental equipment to Chinese steel mills. It reported 2009 revenue of $193 million. In reality its revenue is under $15 million, and its management has diverted tens of millions of dollars for its own use."

"We struggle to explain how gross margins expanded in the face of a structural decline of inventory turnover, and a material drop in revenues in 2015 (from emerging market challenges), and the Swiss National Bank unexpectedly changing policy in early 2015 to strengthen the Swiss Franc."

"Current investors are paying a premium to the Company’s historical valuation. In addition, we believe the fundamental valuation of Aerojet is substantially higher than it appears given numerous off-balance sheet liabilities being ignored by the market and diminishing revenue programs."