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 2021 call → NOWe need to determine if management describes a second, distinct way of making money that emerged from existing operations, is already generating real paying business, and is being deliberately grown. Looking at the transcript, Tom Caulfield discusses various technologies and end markets. He mentions silicon photonics: "In silicon photonics, our 45CLO platform delivered first customer prototypes that demonstrated in 8 lambda 32-gigabit per second optical link with extremely low bid errors. We are the technology leader in silicon photonics as we are the only provider of integrated CMOS RF SOI and optical devices in a monolithic solution. This unique capability will drive a whole new upgrade of connectivity in data centers over the next decade." This is a technology platform that is part of their offerings. Is it a second distinct revenue stream? It's part of their foundry services, not a separate business. They also mention resistive RAM bit cell for 22FDX+ which is an enhanced version of FDX. That's still part of their core. They also mention customer prepayments and LTAs, but that's not a second revenue stream, it's financing. They talk about government incentives, but that's not a revenue stream. They mention "non-wafer revenue" which includes reticles, NRE, etc. That's part of their business but not a second distinct avenue. The question is about a second way of making money that grew out of existing operations. For example, licensing technology, selling services on installed base, etc. I don't see that in the transcript. They are a foundry, they sell wafers and related services. They have multiple end markets but that's not a second way of making money, it's the same way (selling wafers) to different customers. They mention "customer-funded NRE" in R&D, but that's part of their normal business. They also mention "silicon photonics" as a technology, but it's still part of their foundry offerings. No mention of a separate business like selling software, data, or a spin-off. Thus, the answer is NO.
| 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.