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Main Street Capital (NYSE: MAIN) Q3 2024 Earnings Call Nov 08, 2024 , 10:00 a.m. ET Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks: Operator Greetings, and welcome to the Main Street Capital third-quarter earnings conference call. Image source: The Motley Fool. You may begin.
Who wouldn't want to invest alongside him? Railroads require massive capital outlays to merely maintain their enormous infrastructure, and a tight labor market makes it difficult to attract workers without big pay increases. Free cash flow = 2023 operating cash flow – capital expenditures. Numbers in millions. and Canada.
steel import levels; construction activity; demand for finished steel products; the expected capabilities, benefits, and timeline for construction of new facilities; the company's operations; the company's strategic growth plan; legal proceedings; the company's future results of operations; financial measures; and capital spending.
In investing circles, Bill Ackman is a prominent figure. He's the founder of hedge fund Pershing Square Capital Management. The winner is: Alphabet That's right, the only AI-related stock held in Pershing Square Capital's ultra-concentrated portfolio is Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Image source: Getty Images.
Supported by our tenacious approach to innovation, I believe we're best positioned by far to capitalize on this billion-dollar market opportunity as dentistry quickly pivots to 3D printing technology for the future. Next question is coming from Greg Palm from Craig-Hallum Capital Group. Continuing this theme, let's turn to Slide 8.
A look at the company's terms and conditions shows it limits its liability to "fees paid" by the customer -- which could greatly reduce potential damages. All of these figures are extremely positive; they show that CrowdStrike is making wise investments and benefiting from them. But this is just a small part of the picture.
And as we go into 2025, year two, we remain well-positioned to continue to deliver mid-single digit or greater organic revenue growth, continued margin expansion in line with our historic performance, strong adjusted EPS growth, double-digit free cash flow growth, and disciplined capital allocation.
billion of cash flow this year and have reached a key financial milestone while returning to a fully unsecured capital structure that will support our growth ambitions and expanding capital allocation. And this quarter, we reached a key financial milestone by returning to a fully unsecured capital structure.
As Intel is pouring capital into manufacturing, the company is facing a weak PC market, competitive pressure from AMD , and a priority shift among data-center customers toward AI chips and away from standard CPUs. While the company is reducing its capital spending to a degree, nothing has changed about its long-term foundry targets.
And I'd like to acknowledge the work of our finance team for developing methods to track the retail industry standard metric gross margin return on investment, commonly known as GMROI, down to the category level for our own internal use. We expect to end fiscal 2024 with approximately 590 stores, consistent with our prior outlook.
Turning to our 2024 capital management position. We remain confident in our strong balance sheet and cash flow generation due to our efficient asset-light strategy that delivers attractive returns on capital. I would note that timing-related items impacted third quarter cash flow from operations. Your line is open.
Turning to capital deployment. We continue to successfully execute our disciplined capital deployment strategy to create tremendous value. We do this through a combination of strategic M&A and substantial return of capital to our shareholders. In 2024, we returned $4.6 billion after investing $1.3
Turning to capital spending, we invested a total of $112 million in capital additions during the second quarter, opening two Dave & Buster's in Port St. But we will continue to evaluate it as we always do and to make sure that hold ourselves to a strict return on investment threshold. Please go ahead.
I'm going to talk about the highlights of the third quarter, then we're going to do some -- a little bit of strategic updates and we're going to end up with Tony talking about the results and capital allocation. And the third is our capital allocation priorities. Our first capital allocation priority is to invest in the business.
We expect the combination of AWS' reaccelerating growth and high demand for GenAI to meaningfully increase year-over-year capital expenditures in 2024, which given the way the AWS business model works is a positive sign of the future growth. And as a reminder, we spend most of the capital upfront. We remain very bullish on AWS.
This resulted in higher realized iron ore premiums, but more importantly, higher margins and returns on investedcapital. We are also laser-focused on optimizing our capital expenditures. billion, leveraging optimization initiatives in certain capitalinvestments. Now let's start the Q&A session.
Turning to capital allocation. During the third quarter, we invested approximately $820 million back into our business in the form of capital expenditures. Compute on the average of beginning and ending long-term debt and equity for the trailing 12 months, return on investedcapital was approximately 31.5%, down from 38.7%
In Q3, we raised over $900 million in capital, including the undrawn loan facility. As a result, the new integration will position both of our companies to expand market share, streamline benefits, and drive higher return on investment for joint clients. So, it's a really, really good return on investment.
Moving to capital allocation. We continue to significantly reduce capital intensity while returningcapital to shareholders. And including our dividend, we're on track to return $3.8 In Q3, capital expenditures were $997 million. billion, supporting strong free cash flow and shareholder returns.
This strong improvement compared to last year is due to our operational actions on working capital, including lower inventory levels. Cash flow also improved as large customer projects move out of the intense rollout phase, something that affected working capital last year and is now behind us. in the quarter. Is it -- yes, sorry.
We're committed to helping shape the future of Macau as a global tourism destination through our concession commitments with investments being beginning this year. Think of Macau capital will cover a wide range of opportunities, including investments in art and culture, entertainment, and the expansion of our international customer base.
We are encouraged to see that this new user cohorts are purchasing bigger basket sizes than older cohorts, giving us better returns on investments and improving our unit economics. Regarding the second questions, regarding the question on the logistic investment. How much capital do you need to keep on the balance sheet?
We lowered our capital intensity, reaching our FY '25 target of less than 6.5% With lower capex and higher free cash flow, we returned nearly $4 billion to stockholders. And we meaningfully improved our return on investedcapital. Capital expenditures for the quarter were $1.2 a year early.
Josh Wolfson -- RBC Capital Markets -- Analyst Josh Wolfson at RBC. Mark, if I can ask you a question on capital allocation. I think, historically, you've talked about prioritizing -- or wanting to prioritize financial liquidity for some of the copper growth portfolio, you know, development capital.
While we navigate through the current challenges and pursue growth opportunities, the company will remain focused on its three long-standing, long-term financial tenants, those being to maximize free cash flow, maximize return on investedcapital, and returning excess free cash to our shareholders. Christopher S.
Our investors benefit from our ability to utilize that platform to realize expanded market share of new business, drive best-in-class margins, and leverage cost of capital advantages derived from our global balance sheet. We've also previously commented on raising the hurdle rates for the deployment of additional capital in those markets.
As a result of the team's strong operational performance and disciplined capital deployment, we raised the bottom end of our full year earnings guidance by $0.20 Turning to capital deployment. billion of adjusted free cash flow with conversion of 102%, after investing $1.7 We've returned $2.7 to a range of $7.20
While we continue to pursue growth opportunities, the company will remain focused on its three long-standing, long-term financial tenets, those being to; maximize free cash flow, maximize return on investedcapital, and returning excess free cash to our shareholders. I'll now turn it over to. Christopher S.
We continue to position the company for long-term growth and profitability, and are making tangible progress on generating compounding earnings and free-cash flow growth, which will enable us to continue returningcapital to shareholders. With a business with that profile, you invest in it.
The increase in R&D was driven primarily by compensation, which was affected by lapping a reduction in valuation-based compensation liabilities in certain Other Bets in the second quarter last year followed by depreciation. And how are we thinking about the return on investedcapital with this AI capex cycle?
We have been and continue to be very focused on accelerating the continued adoption of our combined offer in order to capitalize on the attractive growth opportunities to add new clients and increase share of wallet. Operator Our next question is from Greg Palm with Craig-Hallum Capital Group. Thanks very much. Please proceed.
Today's discussion may contain forward-looking statements, including, without limitation, statements about our new organization and governance structure, strategies and business plans, as well as our belief and expectations about our business prospects, such as future growth of our business, revenue, and return on investments.
We will remain financially disciplined and evaluate each node in the network based on the return on investment and the timing of the impact to the P&L. We believe we have ample liquidity and have no intention or need to raise capital at current valuations. Ryan Sigdahl -- Craig-Hallum Capital Group -- Analyst Got it.
The Asset Approach: This approach looks at the company’s assets and liabilities to determine its value. Assets and Liabilities: The value of a landscape business’s assets and liabilities can impact its value. Apply a capitalization rate to the average annual net income to arrive at the business’s value.
Recycling capital in this way keeps our portfolio competitive, lower its capital expenses, and accelerates our return on investedcapital, driving long-term core FFO growth. Additionally, we will dispose of older, more capital-intensive assets and redeploy the proceeds into newer, faster-growing communities.
As you may know, there's a pretty heated debate in the market on your customers and customers' customers return on investment and what that means for the sustainability of capex going forward. What's on your dashboard as you try to gauge customer return and how that impacts capex? That's a tremendous return on investment.
We continue to believe in the strength of the brand and are actively investing in its long-term opportunities. Moving to capital allocation. Our first priority is investing in the business both in our brands and our operations with our Vue Forward. We're always with an eye on the strong return on investment.
We spent 132 million on capital expenditures. Turning to capital allocation. The answer is no, but all options are always open because we're trying to create the best value for our shareholders who have entrusted us with the capital to do that. So, that's the return on investment that attracts and keeps us going at this game.
Our investment strategy offers significant opportunities for growth across multiple verticals, including our core of retail and industrial and newer verticals such as data centers and gaming. At the same time, we are making progress toward the establishment of a private capital fund, which I'll touch on later in this call.
But we are confident in our ability to yield a strong return on these investments as we head into 2025. Our offerings are customized, and we believe that we are well positioned to capitalize on growth opportunities within a multibillion-dollar B2B market. Investments to drive organic growth are complemented by strategic M&A.
At Jumia, we are uniquely positioned to capitalize on this market gap by prioritizing high-demand products in categories including electronics, phones, home and living as well as fashion and beauty. Today, roughly 51% of our orders are outside capital cities versus 48% a year ago. million and working capital was $10.8
This will create focus and provide the chance to capitalize on all of our opportunities. And so, I guess it's our view that if there's a buyer out there who wants a strong platform, who's ready to invest in renewables for the future, who wants to invest around the Inflation Reduction Act, all those kinds of issues. Thanks, Sean.
I will now turn the conference over to your host, Vitalie Stelea, VP of capital markets and FP&A. See the 10 stocks *Stock Advisor returns as of March 10, 2025 Unless otherwise noted, all comparisons are year over year. Shifting gears a little bit and talking about your efforts to capitalize on market consolidation.
The Stock Advisor service has more than tripled the return of S&P 500 since 2002*. For Aon overall, in barely one month into 2024, we already feel the momentum from these actions, best demonstrated through the client benefits of our integrated risk capital and human capital capabilities.
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