Second engine igniting off the first: an unplanned-for adjacent revenue stream has started paying, and management is now
The model's full reasoning — Q3 2022 call → NOWe need to determine if management describes a second, distinct way of making money that emerged from existing operations, is already generating paying business, and is being deliberately grown. Looking at the transcript: Deverl mentions "we are not a food service distributor or broadline. We work with those companies and have many accounts in those types of customers. But we are a specialty beverage distributor that anything that complements the coffee, tea or cocoa products, we're going to sell and serve off of our RSR DSD routes." That's about cross-selling complementary products, not a distinct second avenue. There is mention of "Revive" - the CBE business that they white label and roll out. Scott says: "we're currently recruiting for a leader for this business. We have deemed that based on both customer response that we're seeing, manufacturer partnerships that we're seeing. And, quite honestly, we talked about the five geographies that we were operating in and doing this test and as we're rolling it out. And so many of those partners are just asking us to go beyond those boundaries." This sounds like a separate business line - CBE (coffee brewing equipment?) - that they are growing. But is it already generating paying business? They say "customer response" and "manufacturer partnerships" and "rolling it out" - but do they explicitly say it's generating revenue? They say "we'll start to give more insight on those numbers" - implying it's not yet significant. They are recruiting a leader, so it's still in early stages. They mention "test" and "rolling it out" - but no explicit statement of paying customers or revenue. The question asks: "ALREADY GENERATING REAL PAYING BUSINESS today" - management does not explicitly say that. They talk about customer response and partnerships, but not actual revenue. Also, they say "it's still -- we're not a huge company, but still, it takes a while for a new business to become meaningful enough to talk about." That suggests it's not yet meaningful. So it's not clearly paying today. Also, is it a second avenue that grew out of existing operations? Yes, it's their CBE business (coffee brewing equipment) that they white label and service. But the key is whether it's already generating paying business and being deliberately grown.
| Ticker | Company | Call | Date | Call grade |
|---|---|---|---|---|
| M | Macy's, Inc. | Q4 2022 | 2023-03-02 | D |
| CMLS | Cumulus Media Inc. | Q3 2022 | 2022-10-28 | D |
| GDRX | GoodRx Holdings, Inc. | Q2 2022 | 2022-08-08 | F |
| SOPH | SOPHiA GENETICS SA | Q4 2021 | 2022-03-15 | C |
| SLQT | SelectQuote, Inc. | Q2 2022 | 2022-02-07 | F |
| LC | LendingClub Corporation | Q4 2021 | 2022-01-26 | A |
| IRBT | iRobot Corporation | Q3 2021 | 2021-10-28 | D |
| T | AT&T Inc. | Q3 2018 | 2018-10-24 | C+ |
| LRN | Stride, Inc. | Q1 2019 | 2018-10-23 | B |
| MITK | Mitek Systems, Inc. | Q4 2017 | 2017-11-07 | C+ |
| IONS | Ionis Pharmaceuticals, Inc. | Q1 2017 | 2017-05-09 | C |
LRN · Q1 2019 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows career readiness as a distinct second revenue avenue that emerged directly from the existing MPS business: students already enrolled in Managed Public Schools are being moved into career readiness programs (over 5,000 students), and the initiative is built on the same platform, curriculum, and student base. Management explicitly describes it as a “career readiness line of business” and “robust career readiness business” that is already generating paying enrollments today while they are deliberately investing resources—dedicated executives, reallocation of funds, and plans to drive a major portion of next year’s enrollment growth.
M · Q4 2022 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows that Macy’s Marketplace is explicitly described as a distinct new revenue avenue that emerged directly from their existing e-commerce operations and customer base (macys.com, cross-shoppers, and omnichannel platform). Jeff Gennette states it “captures incremental sales opportunity,” “drives a larger average order value,” “allows us to quickly move into new and adjacent categories without inventory risk,” and “attracts a new younger customer,” while management is actively scaling it by adding 2,000 brands in 2023 and launching Bloomingdale’s marketplace in the back half.
GDRX · Q2 2022 → YESThe question is: Does management describe a SECOND, DISTINCT WAY OF MAKING MONEY that has recently emerged FROM the company's existing operations, assets, customers, or capabilities - an additional re...YES The transcript shows that Pharma Manufacturer Solutions is the second distinct revenue avenue that emerged from GoodRx’s existing operations. Trevor explicitly states: “Our distinct ability to reach both consumers and providers continues to be recognized by manufacturers as evidenced by the strong growth.” This capability originated from the core prescription-transactions platform and user base 3 years earlier (when other offerings were only ~5% of revenue). In Q2 2022 it generated $26.6 million (102% YoY growth) and is already producing real paying business.