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Edited Transcript of SEIC presentation 6-Mar-17 7:30am GMT

SEI Investments Co at Raymond James Institutional Investors Conference

Orlando Apr 10, 2018 (Thomson StreetEvents) -- Edited Transcript of SEI Investments Co presentation Monday, March 6, 2017 at 7:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Dennis McGonigle

SEI Investments Company - CFO

* Mark Samuels

SEI Investments Company - CMO

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Conference Call Participants

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* Patrick O'Shaughnessy

Raymond James - Analyst

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Presentation

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Patrick O'Shaughnessy, Raymond James - Analyst [1]

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Good afternoon, everybody; I am Patrick O'Shaughnessy, the capital markets analyst here at Raymond James. Presenting next, we have SEI investments. From SEI, we have CFO, Dennis McGonigle and Chief Marketing Officer, Mark Samuels.

As far as format, they have a few brief slides that they will be reviewing, give you a quick introduction to the Company, then we will do a little fireside chat format and then we will open up to audience Q&A at the end. And with that, I will turn it over to Dennis.

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Dennis McGonigle, SEI Investments Company - CFO [2]

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Thanks, Patrick. Thank you all for spending a little bit of time with us this afternoon. Mark and I, we are really happy to be out of the cube at least for an hour or so before we have to go back in. I heard somebody yell get me out of here about 15 minutes ago, so having this break is probably good for my mental health.

What I want to do is just give you -- we were asked to give about a 5 to 10-minute quick overview of the firm, so as we try to boil it down to a couple slides, the first slide I wanted to put up is really a picture of our history as a firm and it does explain pretty well how SEI has developed and grown itself over the years.

We are a firm that's been in business since 1968, went public in 1981. As most firms, we started as a single product, single market type company, but over the past 40 years or so, we've continued to develop the firm and expand the firm both geographically, so at the bottom of the slide, you see regions in terms of markets and the markets we serve, in terms of the solutions that we offer to those markets and in terms of consistent innovation across our product and solution set that we then deliver through to the markets.

Without that top part, the innovation side, it's very hard to do the bottom three -- continue to expand your solutions, continue to expand your markets and certainly to continue to expand your geographic reach and we believe we've done that very well.

Our mindset as a firm really starts with our Board's perspective and our CEO's perspective who is the founder of the Company. We are very long-term-oriented in our thinking. We look for very large markets. We look to solve for the highest-level business problem in those markets that we can identify that fits our capabilities and our competencies and then building solutions to attack those business problems.

It generally leads to fairly comprehensive solutions that take a long time to sell and to get penetration in a market. In some cases, we wind up creating a market as a result because we are first to market with some of our solutions, but once a client commits to us to become a client of ours, our business is very sticky and that enables us to continue to think strategically and long term in the development of the firm.

The other slide I thought was important is really understand our business model and what are the key areas that we focus on when we look at new businesses. We look at new opportunities as we continue to run the firm.

We are very much an organic grower, so our growth predominantly and really I should say almost entirely has come from organic growth. So selling our products and services, our solutions into markets and growing our business one client at a time over a period of time.

We are very recurring revenue-oriented, so a segment of our clients, if they are in the processing space, the technology space, operational services space, BPO space, they are clients under long-term contracts and we have a very good track record of renewal of those clients, so the stickiness of those relationships is strong.

Probably our flagship example of that is Wells Fargo. They have been a client of ours for 40 years and a couple years ago signed a fairly extensive contract to extend that relationship for what essentially will work out to be at least another 10 years. So very much long-term oriented.

How you keep clients over the long term though is through innovation and being a thought leader and helping them see opportunities in their business and then supporting those opportunities with what you deliver and that's one of the things we focus on in not just attaining a client, but developing the business with that client and sustaining that client relationship over time.

Financially, we are very strong. Recurring revenue business model gives you much greater predictability into the business. We like businesses that are very scalable and have a lot of leverage embedded in them, which is why we like technology and why we like the asset management elements of our business. That helps us drive higher margins over time. It helps us then generate the internal capital to reinvest back in our businesses in that innovation space and in that growth space.

Because of our financial strength, one of the things that we are able to do is to provide a fairly consistent return of capital to our shareholder investor base. That is generally done through stock buyback and through cash dividend.

So on a fairly consistent basis, our investors not only get the return of the business, but they also get a return from the business as a result of our capital strength capabilities.

And finally, I have mentioned innovation, but these are the four essentially pillars of the business. A couple years ago, that selective acquisition button probably would have said no acquisitions because we generally weren't an acquisitive firm. I would tell you more recently we are much more open to the market in terms of opportunities, generally in areas where we would enhance our technological capabilities, enhance our talent and speed up market entry in a market that we might find attractive and are in a de novo build process, but a way that gets us there faster. Maybe geographic entry. So there might be a specific country or region that's attractive to us for what we do, and buying something to get into that market might be a benefit. Now we haven't done an acquisition, but it is a change in our, I would say, how we speak to the market, if you will.

And then finally just some quick statistics. As CFO, we always have to have statistics, but we've had good revenue growth over the past five years, terrific net cash flow generation. You can see the return of cash flow relative to cash generation over the past four or five years, relatively strong. We are a big reinvestor in the business and we generally target an 8% to 10% of revenue reinvestment rate. That doesn't mean we force the issue, but it is something that we pay attention to in terms of one of our metrics.

If we drop below that 8% rate and drop below it fairly consistently, we really ask ourselves what are we missing because we are probably missing something and some future opportunity that's three, four, five years out that we need to be on today and begin to develop for.

And then stock return has been fairly attractive, particularly over the -- since the firm was started, or since we went public.

Just a little background. I have been with the firm a little over 32 years, so I've been with it throughout a lot of this formation. Mark has been with the firm for 25 plus years, so he also has been around for a lot of this formation.

When I started with the Company, we were very much that single product, single market firm, so it's been -- when you go back to that first slide, we generally have periods of investment and strategic innovation and then long periods of growth and then another cycle of strategic review, innovation, another period of growth and we feel like right now across the Company we have some very good growing businesses, but we also have one business in particular that's coming out of that strategic investment phase that we feel is very well-positioned for strong growth going forward.

So with that as background, Patrick, I will turn it back to you.

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Patrick O'Shaughnessy, Raymond James - Analyst [3]

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Perfect. Thank you, Dennis. So with the first slide that you had up, I think you did a pretty good job of explaining all the different things that you do and the client segments that you serve. And as I think about SEI, I think about -- it's a technology company. It's an asset manager, but how do you want the people in this room to think about SEI?

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Dennis McGonigle, SEI Investments Company - CFO [4]

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We started out as a technology firm way back in the 1970s really and how the business has evolved and how we have evolved and continue to think about the markets, I would say we are more of a business solutions company.

So when we look at a market, again, as I mentioned, we look to the highest level strategic problem or business issue that our potential clients are facing, or the particular market segment is facing and then try to develop as comprehensive a solution to that problem as we can.

And there's three bundles of services that we ultimately deliver to boil it down. One is investment processing/investment technology. Second is investment operations outsourcing or investment operational services and the third is asset management. And generally, in all of our markets, we are combining either two of those bundles or three of those bundles in the ultimate solution to the client.

And then there are certainly other feature functions that wrap around those things, those bundles. So in the institutional investor space where we were one of the early -- now the world calls them OCIOs, or fiduciary managers, or co-fiduciaries, we started in that business back in the mid-1990s coming out of the pension consulting world. And when we go to an institutional investor, say it's a $500 million endowment, we are promoting to that prospect to give all $500 million to us to oversee.

But we frame how we will manage that $500 million really around why does the money exist in the first place, their business problem, if you will or their reason for being and we've developed other feature functionality capabilities around that business problem, so donor activity, administrative-type functionality and services. The asset management component is just one piece of the overall offering. Although it is an important piece, it is just one piece, but it's all those wraparound services and all those other capabilities that lead to helping us solve problems for clients. And that's true really across all of our markets, that comprehensive solution set to solve the problem in its most complete form.

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Mark Samuels, SEI Investments Company - CMO [5]

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If I might, a lot of folks in the investment space, you are either an asset manager or you are an investment processing company and folks talk to us and say where do you fit. And the answer is we don't fit in either place. Because of what Dennis said, we are trying to take on a business problem. Those three core competencies we have are important and enable us to outoffer our competition in most cases.

And without sounding like a smart ass, we are really saying you need to think about another category, which is a diversified investment services company. It's a different way of thinking. It isn't out there in common thinking and we think we are well-positioned because of that.

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Patrick O'Shaughnessy, Raymond James - Analyst [6]

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So I like that definition of what you guys are, but a lot of the way that you monetize those different services is through asset-based fees. So how comfortable are you with the market exposure that that provides to your business model?

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Dennis McGonigle, SEI Investments Company - CFO [7]

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Sure. To Patrick's point, about 75% of our revenue streams are asset-sensitive and if you go back to that first or the second slide I presented, under the client relationships section, you saw something called win-win pricing. Well, we started to migrate most of our businesses to this asset-based model because that's where our clients live as well in terms of their business models and their revenue streams or their operating models are driven off of assets as well. So aligning our pricing to be consistent with their business model was we thought an important recognition of where we sit strategically with our clients.

That being said, when you look at the asset-based models, we all are in -- presumably everyone in this room generally is in this business at some level -- the world is going to continue to put pressure on that type of pricing model and has certainly put pressure on that type of pricing model.

One thing where we stand out is that, because of the completeness of our solution incorporated in that full stack of services, asset-based pricing is really the currency with which you pay for that full stack. There's a lot of embedded value in different points in the stack.

So we could price differently based on those value elements if we chose to, but that completeness of a solution helps us sustain our level of pricing to our clients through even this tougher compression environment we are in today, but really we've been in for a few years now.

If you look at our average price per asset, it's held pretty steady across all of our businesses I would say with the exception of our institutional investor business and there, if you do the math, you'd see a lower price point, but part of that is driven by the fact that we are signing much bigger clients.

So we might have thought the top of the market was a $500 million or $1 billion pool. We are now selling to multi-billion dollar pools and generating relationships at that level and obviously, they are, as a percentage of assets, they are going to pay a much lower fee.

So that being said, there is more pressure on that particular sleeve of the business relative to the market than I would say the others. Entrants into that particular space have also put pressure on pricing because they are starting from zero, if you will, so you can price a little differently when you don't have the business and you are getting into the market than if you have an established business and you are trying to sustain it.

But we still feel fairly comfortable with, given the completeness of our solutions, our ability to add value to our client relationships and our ability to get a higher price point frankly than the general market would get.

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Patrick O'Shaughnessy, Raymond James - Analyst [8]

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I want to turn to sales. So your net new sales number in 2016 was down a little bit from 2015 and I think you and the investment community would say probably not what you were striving for. So how are you looking at the outlook for net new sales for 2017 overall and then I think of particular interest to folks within your private bank segment?

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Dennis McGonigle, SEI Investments Company - CFO [9]

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Across the Company, last year, we had a good year, not as good a year as we had expected of ourselves frankly. We were still pretty good drivers of net positive cash flow, which is a function of sales activity.

In our advisor business, we had a good year of advisor recruitment. Net cash flow was a little bit under what we expect of ourselves, although it was still fairly healthy, $3.5 billion.

On the institutional investor side, we had a really good gross sales year. Particularly we had a terrific year in the UK markets. We had a really good year in the US in the noncorporate defined benefit space, but the corporate defined-benefit space which is, as maybe some of you in the room are experiencing, is in transition and there was some offset to our gross sales activity in the US because we report sales on a net basis. So when you hear our sales numbers, it's always net of cash flow, negative cash flow. If a client is leaving us, we net that out.

In the investment management services business, which is an operational outsourcing business, they had another really great sales year, $40 million plus of net recurring revenue sales and in banking, the net recurring sales were less than $20 million, which incorporated some losses, so gross sales were higher, but frankly we had an expectation we'd have a better year, a stronger year there last year.

The pipeline of activity in banking specifically is very supportive of a much more successful sales result and in some sense, we chalk up some of the agendas to timing on the client side to really make that final strategic decision to move the direction of our complete offering.

In some sense, it's waiting for -- we have two large implementations in flight. One is Regions Bank, which is going full BPO with us and one is Wells Fargo, which is moving from TRUST 3000, which is our legacy platform and that investor processing software-as-a-service space to SWP. That's a multiyear conversion. That's going to take a couple years. So there are some [flyers] in the market, prospects that are waiting for more progress on those two big events.

I think Regions, which goes live in the fourth quarter this year, will certainly put more propellant in the market or accelerant in the market for those PPO type agendas and Wells, as it progresses, our larger clients who pay a lot of attention to Wells, talk to Wells will move -- I'm confident they will start to move as that conversion takes more shape and the feedback from Wells, which is good and will continue to be good. So it's just a matter of time from our perspective. The market is not telling us no; they are just telling us keep working at it.

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Patrick O'Shaughnessy, Raymond James - Analyst [10]

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Can you talk about the incremental revenue opportunity as you upsell clients from the legacy platform, TRUST 3000 to SEI Wealth Platform? The numbers are pretty striking when you think about the like-for-like and then expand the market opportunity, etc.

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Dennis McGonigle, SEI Investments Company - CFO [11]

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Sure. For existing investment processing clients, whether they be software-as-a-service consumers or whether they be full BPO consumers, this is really the large and jumbo side of the market. I would say as you get down to the smaller community bank-type institutions, it doesn't necessarily apply.

But the bulk of our revenue is safe to say is in that regional -- large community regional jumbo space. We generally have experienced about a 20% to 30% lift. So on an apples-to-apples functionality standpoint, we able to get a 20% to 30% premium on what we are being paid today and the reason they are willing to pay that is because there's more embedded value to those clients by moving to new technology. It makes their operation more efficient so they get some cost benefit there. It helps them eliminate some surrounding technologies that they may be using to compliment TRUST 3000, so it makes our technological costs or footprint a little bit more tolerable.

So they get some real economic value, plus they're going to get much richer functional value and improve their technological -- modernize their technological infrastructure, if you will.

Above and beyond that, there's functionality and capabilities that exist on the SWP side of the fence that we don't have resident on TRUST 3000, we never built them and don't intend to build them. And there are certain services that we sell associated with the SWP side of the fence that aren't available on TRUST 3000 and we expect those to generate another 20% to 30% in incremental revenue lift. And we have seen that.

So in a service we offer on the SWP side, and this really would apply in the jumbo market, is advanced disaster recovery and advanced BCP capabilities, so more real-time data replication. So if there's a hiccup in the system somewhere, not the SEI system necessarily, but just the infrastructure in the US, if there's a problem, their ability to recover is fairly straightforward versus the standard is usually 4-hour recovery or in some cases maybe even a day to recover. So they are willing to pay more for that type of service and that type of capability.

The technological architecture of TRUST 3000 doesn't really allow for that type of service whereas SWP does. And it is probably safe to say a lot of legacy technologies are in the market today and our industry is really sitting on top of a lot of legacy technology systems that are not going to allow for that type of capability. They are just not architected that way or engineered that way, or it will take a lot of investment to get them to be capable that way.

So we feel like we can get sizable lift out of our client base, but more importantly we can open up a lot more market opportunity for SEI that doesn't exist prior to SWP.

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Mark Samuels, SEI Investments Company - CMO [12]

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If I might, if you look at the midsize up, we are moving from TRUST-centric to discretionary asset-centric. From the midsize up, we feel that the other opportunities, and there are two, three, four of them -- things like insurance, private banking, discretionary books inside of brokerages for instance -- the sum of those incremental opportunities is roughly double the TRUST opportunity.

So there is a much larger opportunity inside of the existing client base, as well as a much bigger reason to do switching in the non-client base. So there are really multiple layers of opportunity for us.

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Patrick O'Shaughnessy, Raymond James - Analyst [13]

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How are you guys thinking about margins across your businesses? So four primary segments. I would say three of them have pretty darn good margins and then private banks is clearly in investment phase right now. How sustainable do you think the margins are in advisors and institutional managers and what is the upside long term do you think for the private bank segment?

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Dennis McGonigle, SEI Investments Company - CFO [14]

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I would say generally we do have pretty healthy margins across our asset management-related businesses, as well as our other operational business, IMS. Margins are a function of revenue and cost and leverage and scale, so when you go back to our operating models, we are very clear that recurring revenue is important to us, entering businesses that over time as you grow them you can reach a point of scale and then get a lot of leverage as you expand those businesses.

We have a lot of technology-sharing in the Company, so multiple business lines run on similar technology so we get leverage on that fix cost infrastructure, if you will.

In the two asset management businesses that are for the most part 100% revenue streams off of assets under management, we expect those businesses to carry margins in that high 40%s, 50% range. Now the institutional investor business is there, has been there for quite some time. Certainly pricing pressure will put a little pressure on that, but we think we will sell through that and grow through that.

On the investment advisor side, the margins are more in that mid-40%s or a little bit under that mid-40%s range. We expect that business to -- it will depend a little bit. If it continues to grow just based on SEI assets under management, the margin should continue to go up. We should get more scale and leverage in that way.

If we wind up with a bigger business, however, that has a more complementing revenue stream, some third-party assets, so right now, in that business, if we look at the legacy side that runs on TRUST 3000, we only support investment accounts invested in SEI Asset Management programs.

So if you are a registered investment advisor that has a practice and you have third-party assets, we won't process them. We only process the SEI assets and you are typically running your other part of your practice on another third-party system.

With SWP, though, we will provide the opportunity to consolidate that. If we get a lot of traction on the consolidation side and capture more revenue streams from third-party assets, they carry a lower price point and therefore probably carry a lower margin. So depending upon the business mix, we could see a bigger business, slightly lower margins versus if we just are relying on the SEI asset management side and maybe a little bit smaller business over time in terms of growth, but higher margins.

So it's just a matter of the business mix and it is safe to say I would accept the former rather than the latter. Much bigger business. It will be much more sustaining and stickier even though it might carry slightly lower margin rate than what we have today. But if it's still in that 40% plus range, which I think it can be, I think we will be happy -- happy with that.

And then banking is -- I wouldn't call it a breakeven business, but it is pretty close. There, it's all about margin lift and margin lift will come through. Top-line growth, which will be driven by large client implementation, so large chunks of revenue matriculating over time complemented by the smaller to midsized clients that fit in underneath that are highly profitable once you get that scale point that the larger ones help you get to.

Our expectation is over a longer period of time, so now we are talking five, seven years out, that that business will get to the margin range we expect of our operational-type businesses, which is in that mid-30%s range. So there's a lot of room for improvement there and it's going to be triggered really off of continued growth in revenue.

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Patrick O'Shaughnessy, Raymond James - Analyst [15]

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All right. With that, I think we have time for about one, maybe two questions from the audience. All right, I don't see any hands, so I will go with one more from my list. You alluded to this in your presentation, but you do have a lot of cash on your balance sheet. So how are you thinking about your priorities for utilizing that cash?

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Dennis McGonigle, SEI Investments Company - CFO [16]

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Capital allocation from our Board's perspective is pretty straightforward. It's reinvest in the business and that's where that 8% to 10% of R&D comes from. That and a -- late 1980s, early 1990s when we weren't reinvesting in the business and we ran out of runway and it cost us about two, three years to get back on track. So that's the other reason. I would say it's scars from the past.

And then second, it's return it to shareholders and that's generally through stock buyback, which we have been fairly consistent buyers of our stock over the past 20 or so years, 20 plus years. Some periods were heavier; some periods were lighter. And then cash dividend. And then we will see how the acquisition -- if anything pops up on our radar screen that we think is a good fit for SEI, a good fit for what we are looking for, what we would look for that would be attractive that would be another potential use of capital.

Strong balance sheet is important to our clients; certainly important to us, but important to our clients. We are very strategically embedded in the businesses of our clients. So when they look at us and they see strength and sustainability, they are even more committed to working with us long term.

If we were weaker financially and had a shakier situation, I think it would be hard for a large institution to commit their infrastructure to us, that they are going to run their wealth management business on into the future. So it's also important to us from a pure client relationship standpoint.

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Patrick O'Shaughnessy, Raymond James - Analyst [17]

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All right. With that, I believe we are out of time. Thank you, Dennis; thank you, Mark. We will have a breakout session downstairs.

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Dennis McGonigle, SEI Investments Company - CFO [18]

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Thank you all for coming.

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    Housing Stocks Tumble Midday; Home Depot Dents Dow

    Investing.com - Home Depot (NYSE:HD) and other housing-leveraged stocks fell in midday trading following disappointing data on home construction. Home Depot fell about 4.2% at 12:08 PM ET (16:08 GMT) and was a drag on the Dow Jones Industrial Average

  • Prince Harry Has Spoken Publicly About the Royal Baby for the First Time
    News
    Time

    Prince Harry Has Spoken Publicly About the Royal Baby for the First Time

    After Prince Harry and Meghan Markle touched down in Sydney, Australia, to kick off their royal tour, Harry spoke publicly about Markle’s pregnancy for the first time. “We’re both absolutely delighted to be here, and really impressed to see you serving beer and tea at an afternoon in true Aussie style,” Harry said, drawing warm laughs with his remarks at a reception at the Admiralty House in Sydney Monday. Prince Harry, the Duke of Sussex, says he and Duchess Meghan "genuinely couldn't think of a better place to announce the upcoming baby, be it a boy or a girl," on the first day of the couple's 16-day tour of Australia, Fiji, Tonga and New Zealand.

  • Disney vs Netflix: Here's which stock would have made you richer if you invested $1,000 10 years ago
    Business
    CNBC

    Disney vs Netflix: Here's which stock would have made you richer if you invested $1,000 10 years ago

    On October 16, 1923, Walt and Roy Disney founded The Walt Disney Company and, nearly a century later, the company is one of the largest and most successful media conglomerates in the world. The answer is Netflix. According to CNBC calculations, a $1,000 investment in Netflix in October 2008 would be worth more than $97,560 as of after the earning bell on Monday, or more than 96 times as much, including price appreciation and dividends reinvested.

  • Business
    TheStreet.com

    Jim Cramer: How These Five Tech Powerhouses Keep Coming Back

    if FAANG doesn't come back. Netflix added 1,09 million domestic subs which exceeded the 673,000 consensus, and internationally the company added a staggering 5.87 million subs versus the 4.46 million the analysts were hoping for. Netflix now has 130 million paid customers and it predicts another 9 million people will join in the fourth quarter.

  • Business
    Benzinga

    A Preview Of Bank Of New York Mellon's Q3 Earnings

    Bank of New York Mellon (NYSE: BK) releases its next round of earnings this Thursday. Get the latest predictions in Benzinga's essential guide to the company's Q3 earnings report. Earnings and Revenue Bank of New York Mellon EPS is expected to be around

  • GE to pay penalty if falls short of French job pledges: ministry
    Business
    Reuters

    GE to pay penalty if falls short of French job pledges: ministry

    General Electric's new CEO told France's finance minister on Wednesday that it would stick to his predecessor's French job pledges or pay a penalty, the Finance Ministry said. Former CEO John Flannery warned French Finance Minister Bruno Le Maire in June that the target was "out of reach", and the government raised the possibility of fines worth 50,000 euros ($57,570) for each job not created. GE's new CEO Larry Culp, who took up his post at the start of the month, told Le Maire in a meeting on Wednesday that France remained a strategic country for the company, the ministry said in statement.

  • AT&T (T) Q3 Earnings Preview: How Are Events Shaping Up?
    Business
    Zacks

    AT&T (T) Q3 Earnings Preview: How Are Events Shaping Up?

    The market expects AT&T (T) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 24.

  • Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know
    Business
    Zacks

    Nvidia (NVDA) Dips More Than Broader Markets: What You Should Know

    Heading into today, shares of the maker of graphics chips for gaming and artificial intelligence had lost 9.29% over the past month, lagging the Computer and Technology sector's loss of 4.86% and the S&P 500's loss of 3.08% in that time. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $3.25 billion, up 23.44% from the year-ago period. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

  • Where Will NVIDIA Be in 5 Years?
    Business
    Motley Fool

    Where Will NVIDIA Be in 5 Years?

    At one time, NVIDIA (NASDAQ: NVDA) floated under the radar in the technology sector. Its graphics processing units (GPUs) were then niche tech products that appealed mainly to graphic artists and hardcore PC gamers, but that all changed over the last

  • Business
    CNBC

    Walmart saves $200 million by changing its light bulbs and $20 million with a new floor wax

    Walmart says switching to LED lights in its parking lots cut its annual energy costs by $200 million. A change in the floor wax it uses cut costs by $20 million a year because the floors need to be buffed less often. It's exactly what Walmart WMT is doing.

  • Netflix is ditching freeloaders from subscriber forecasts after volatile stock moves
    News
    MarketWatch

    Netflix is ditching freeloaders from subscriber forecasts after volatile stock moves

    After two consecutive off-the-mark quarters, falling short of its own forecasts for subscriber growth, Netflix Inc. hopes to put an end to the big swings in its stock price with some changes to its accounting. Three months ago, Netflix reported weaker-than-expected subscriber growth, sending its stock tumbling about 12% in the next trading day. From last quarter: Is Netflix stock falling down a mountain, or just tripping over a molehill?