Investment Pitches

Pitch Summary:
Sweetgreen, Inc. operates restaurants serving fresh and healthy foods in the United States. The salad-focused restaurant concept has invested heavily to develop a captive network of growers that help ensure the freshness of its produce, a distinct competitive advantage. Additionally, management's investment in automation technology, known as the "Infinite Kitchen," has shown strong promise of significant labor cost savings, a reduction of order fulfillment errors, and increased restaurant throughput. While Infinite Kitchen has only been tested in a handful of stores to date, initial data supports the potential for automation technology to significantly improve both margins and average unit volumes. The stock rose in the quarter on accelerating same-store sales growth and better than expected guidance from management. In addition, investors took notice that material margin improvements could quickly reduce Sweetgreen's cash burn, a prior source of concern. Sweetgreen was a new position for the Fund in the quarter.

BSD Analysis:
The manager initiated a new position in Sweetgreen based on the company's differentiated approach to fast-casual dining and promising automation technology. The investment thesis centers on two key competitive advantages: a captive grower network ensuring produce freshness and the innovative "Infinite Kitchen" automation platform. The grower network provides supply chain control and quality differentiation in the competitive restaurant space, while the automation technology addresses the industry's persistent labor cost and operational efficiency challenges. Early data from Infinite Kitchen testing shows significant potential for labor savings, error reduction, and throughput improvements, which could drive substantial margin expansion across the restaurant base. Accelerating same-store sales growth and improved guidance demonstrate strong underlying business momentum, while the prospect of material margin improvements addresses previous concerns about cash burn sustainability. The combination of differentiated positioning in healthy fast-casual dining, operational innovation through automation, and improving unit economics supports the bullish investment case. Key catalysts include broader rollout of Infinite Kitchen technology and continued same-store sales acceleration driving path to profitability.

Pitch Summary:
Neurogene, Inc. is a gene therapy company with a focus on rare neurological diseases. The company's novel and proprietary EXACT transgene regulation platform technology allows for the delivery of therapeutic gene expression levels while limiting transgene toxicity associated with conventional gene therapy. The company currently has two early-stage clinical programs focusing on Rett syndrome and Batten disease. During the quarter, the stock responded positively to the finalization of the company's strategic reverse merger and additional private financing that provided a nearly $200 million cash infusion to its balance sheet. The transaction puts Neurogene in a well-funded position to advance its clinical programs. We trimmed our position as the share price appreciated during the period.

BSD Analysis:
The manager maintains a positive outlook on Neurogene's gene therapy platform targeting rare neurological diseases, with the investment thesis centered on the company's proprietary EXACT technology that addresses key limitations of conventional gene therapy. The platform's ability to deliver therapeutic gene expression while minimizing toxicity represents a significant competitive advantage in the gene therapy space. The focus on Rett syndrome and Batten disease targets high unmet medical need areas with limited treatment options, potentially supporting premium pricing and accelerated regulatory pathways. The recent reverse merger and $200 million financing round provides substantial runway to advance clinical programs through key value-inflection points. The manager's decision to trim the position following share price appreciation demonstrates disciplined profit-taking while maintaining exposure to the long-term opportunity. The well-funded balance sheet reduces execution risk and provides multiple shots on goal across the clinical pipeline. Key catalysts include clinical trial readouts for both Rett syndrome and Batten disease programs, with potential for significant value creation upon demonstration of safety and efficacy.

Pitch Summary:
Byrna Technologies, Inc. is a leading at-home self-defense company that designs, manufactures, and sells non-lethal alternative defense solutions for consumers and law enforcement. Primarily sold through Byrna's e-commerce store and Amazon storefront, Byrna's non-lethal handheld and shoulder-fired personal security devices do not require a background check or firearm license. We believe the company's innovative solutions have an expansive opportunity for growth. During 2023, the stock experienced a significant pullback when restrictions imposed on its online advertising cut nearly half of its website traffic overnight, impacting sales. However, the company's recent pivot to an alternative advertising strategy appears to have successfully restored revenue momentum and the stock responded positively in the quarter. During the period, we trimmed our position in the company as the share price appreciated based on our risk-management discipline.

BSD Analysis:
The manager expresses confidence in Byrna Technologies' position in the growing non-lethal personal defense market, highlighting the company's innovative product portfolio and expansive growth opportunity. The investment thesis is built on the unique regulatory advantage of Byrna's devices, which don't require background checks or firearm licenses, potentially expanding the addressable market beyond traditional firearms customers. The direct-to-consumer model through e-commerce and Amazon provides scalable distribution with strong margins. While 2023 advertising restrictions created significant headwinds by cutting website traffic in half, management's successful pivot to alternative marketing strategies demonstrates operational adaptability and restored revenue growth momentum. The manager's decision to trim the position following share price appreciation reflects disciplined risk management rather than diminished conviction in the long-term opportunity. The combination of innovative products, regulatory advantages, scalable distribution, and proven management execution supports the bullish thesis despite temporary advertising challenges. Key catalysts include continued market share gains in personal defense and potential expansion into law enforcement applications.

Pitch Summary:
Forrester Research, Inc. is an independent market research and consulting firm widely known for its publications and insights on topics such as cloud migration, AI, cybersecurity, and customer experience. We like the business for its potential to generate high margins through a sticky, subscription-based revenue model. The company acquired SiriusDecisions in 2019, expanding its expertise beyond its customer base. Over the last few years, however, the company implemented several changes that negatively impacted results. First, they migrated the product away from their legacy strengths and pushed customers to switch to a combined offering. These changes had the unintended consequence of forcing customers to reconsider their overall research spend and, in some cases, consolidate and reduce spending, causing a negative impact on revenue. Second, the company underwent a salesforce transition to target decision-makers higher up in the organization with its expanded offering. The stock declined during the quarter as new sales and revenue weakened through the transition. We believe that the market has been short-sighted and overly punitive. The company currently trades at an attractive valuation and, with an upgraded salesforce aligned with broadened capabilities, is well-positioned to improve results into 2025. We maintained our position in the company during the quarter.

BSD Analysis:
The manager maintains a bullish stance on Forrester Research despite execution challenges from strategic transitions over recent years. The core investment thesis centers on the company's subscription-based research model with high margins and sticky customer relationships in high-demand areas like AI, cybersecurity, and digital transformation. While the SiriusDecisions acquisition and subsequent product integration created near-term disruption by forcing customers to reconsider spending, the manager views this as temporary execution issues rather than fundamental business deterioration. The salesforce restructuring to target higher-level decision makers aligns with the expanded capabilities from the acquisition, positioning for larger deal sizes and deeper client relationships. Current valuation appears attractive given the market's punitive reaction to the transition period, creating an opportunity for patient investors. The manager expects the upgraded salesforce and broadened service offerings to drive improved results in 2025 as integration challenges subside. The decision to maintain the position reflects confidence in the underlying research franchise and belief that current weakness represents a compelling entry point for a quality recurring revenue business.

Pitch Summary:
QuidelOrtho Corporation. QuidelOrtho is a global leader in the diagnostics industry. The merger of Quidel and Ortho Clinical Diagnostics has resulted in a top 10 player in the in-vitro diagnostics industry, combining Quidel's strong point of care platform with Ortho's blood chemistry and transfusion platform. Quidel declined during the quarter on weaker Q4 earnings and a reduced 2024 outlook. The company's financial shortfall can be attributed to a dramatic slowdown in its higher-margin respiratory business and in particular Covid-19 testing volumes. The company now anticipates Covid testing revenue of ~$200 million, down from prior expectations of $200-$400 million. However, this should serve as the new base as current testing is associated with an endemic state and a normal respiratory season. Outside of its respiratory business, the company's clinical diagnostic division continues to demonstrate steady performance. While the respiratory revenue and margin impact were disappointing, we continue to hold a position in the company given steady performance out of its core business, solid profitability (EBITDA margins north of 20%), and an exciting new product launch in Savannah that could accelerate top-line growth.

BSD Analysis:
The manager maintains a constructive view on QuidelOrtho despite near-term headwinds from declining COVID-19 testing volumes. The investment thesis is built on the strategic value of the Quidel-Ortho merger, which created a top-10 diagnostics player combining complementary platforms in point-of-care and clinical diagnostics. While COVID testing revenue has normalized to ~$200 million from peak expectations of $200-$400 million, this establishes a more sustainable baseline for endemic testing patterns. The core clinical diagnostics business continues to perform steadily with EBITDA margins exceeding 20%, demonstrating the underlying profitability of the franchise. The upcoming Savannah product launch represents a potential growth catalyst that could accelerate revenue expansion beyond the current COVID headwinds. The manager's decision to maintain the position reflects confidence in the diversified diagnostics platform and belief that current weakness is primarily cyclical rather than structural. The combination of steady core performance, strong margins, and new product innovation supports the long-term investment case despite temporary respiratory testing volatility.

Pitch Summary:
Consensus Cloud Solutions, Inc., a leading supplier of both secure data delivery for enterprise healthcare interoperability and cloud fax solutions to small office home office (SoHo) customers, was spun out of longtime holding J2 Global (now Ziff Davis) in the fourth quarter of 2022. Consensus has historically enjoyed a high percentage of recurring revenues, low churn in the enterprise segment, and high margins. Much of the company's current strategic focus is to build upon its legacy digital cloud fax service for the enterprise healthcare sector where data security and interoperability are key concerns. Despite an earnings report in line with expectations, the stock declined during the quarter on lower-than-expected guidance. The healthcare business continues to be under macro pressure, largely driven by IT staffing issues that are slowing enterprise-level adoptions of Consensus' solutions. The company has rightly downshifted to a lower revenue reality and management is proactively shifting marketing spend from inefficient top-line growth efforts in its SoHo segment toward higher revenue generating customers in healthcare. We expect healthcare's macro issues to eventually ease, resulting in revenue growth accelerating from the low single-digit growth today towards low double digits. The stock was recently trading at an attractive three times earning multiple with more than a 20% free cash flow yield. We believe that even modest growth from here and continued deleveraging could result in a materially higher share price. We maintained our position in the company during the quarter.

BSD Analysis:
The manager maintains a bullish stance on Consensus Cloud Solutions despite near-term headwinds in the healthcare IT sector. The investment thesis centers on the company's strong fundamentals including high recurring revenue, low enterprise churn, and robust margins from its cloud fax and secure data delivery services. Management is strategically pivoting marketing spend from lower-value SoHo customers to higher-revenue healthcare clients, positioning for accelerated growth as IT staffing constraints ease. The valuation appears compelling at 3x earnings with a 20%+ free cash flow yield, suggesting significant upside potential even with modest revenue growth. The manager's confidence in maintaining the position reflects belief in the company's market position in healthcare data security and interoperability solutions. Key catalysts include resolution of macro healthcare pressures and successful execution of the strategic shift toward enterprise customers. The risk-reward profile appears favorable given the defensive characteristics of the recurring revenue model and attractive entry valuation.

Pitch Summary:
FIVN was a top detractor in 1Q24 despite better-than-expected 4Q earnings and guidance. FIVN reported $239 million of revenue, 15% year-over-year revenue growth and $1 million higher than estimates, and $0.61 of EPS, 13% growth and $0.13 better than estimates. Management guided 1Q24 and full year 2024 in line with investor expectations, but some investors had expected guidance to be raised. Five9 is a leader in providing cloud-based software to contact centers. The company's suite of applications provides contact center agents with a unified communication platform (voice, email, text, chat, web, social) and a desktop of tools to help agents engage customers more quickly and effectively. FIVN is well-positioned as contact centers transition to the cloud and has high customer retention (112% net revenue retention last quarter). The company doubled its strategic sales team over the past year and signed new partnerships with AT&T, CDW and Microsoft. We believe the company can grow its top line in the high teens, while improving on its 4Q 60% gross margin and 16% operating income margin, leading to 20%+ EPS growth for the foreseeable future.

BSD Analysis:
RiverPark presents a bullish thesis for Five9 based on its leadership position in cloud-based contact center software and strong secular growth trends. The fund highlights solid Q4 2023 results with revenue of $239 million growing 15% year-over-year and EPS of $0.61 exceeding estimates by $0.13, demonstrating consistent execution despite stock underperformance. Five9's unified communication platform integrating voice, email, text, chat, web, and social channels positions the company as a comprehensive solution provider for contact center modernization. The fund emphasizes the structural shift from on-premise to cloud-based contact center infrastructure as a key growth driver. Strong customer retention metrics with 112% net revenue retention indicate high customer satisfaction and expansion opportunities within the existing base. Strategic partnerships with AT&T, CDW, and Microsoft, combined with a doubled sales team, should accelerate market penetration and revenue growth. RiverPark projects high-teens revenue growth with margin expansion from the current 60% gross margin and 16% operating margin profile. The fund expects 20%+ EPS growth driven by operating leverage as the company scales its cloud platform and captures market share in the growing contact center-as-a-service market.

Pitch Summary:
Apple shares were a top detractor in the quarter. The company's stock was pressured by negative news items including a government antitrust case, an Apple Watch patent dispute, and slowing China iPhone sales. Ultimately the company's fiscal 1Q24 earnings report delivered a slightly better than expected quarter, but with guidance that disappointed investors. 1Q24 revenue and gross margin were better than feared, buoyed by stronger than expected worldwide iPhone sales which grew 6% despite a slight decline in China iPhone sales. Services revenue in the quarter was as expected and signaled the third quarter in a row of accelerating growth. Gross margins were also stronger than expected at 45.9%, the highest level in more than a decade. Guidance of $90 billion of revenue for 2Q24 was light however, due to weaker than expected iPhone sales in the current period and year-over-year declines in other hardware products facing difficult year-over year comps. Although near-term trends are a bit muted, Apple is carrying lean inventory into an iPhone refresh cycle later this year. With an installed base of 2.2 billion active devices and significant growth of the company's recurring revenue Services segment, we believe that Apple remains one of the most innovative, best positioned and most profitable companies in the mobile technology industry.

BSD Analysis:
RiverPark maintains a constructive view on Apple despite near-term headwinds and stock underperformance in Q1 2024. The fund acknowledges external pressures including antitrust concerns, patent disputes, and China market weakness, but emphasizes solid Q1 2024 fundamentals with revenue and margins exceeding expectations. iPhone sales grew 6% globally despite China softness, while Services revenue showed accelerating growth for the third consecutive quarter. Gross margins reached 45.9%, the highest level in over a decade, demonstrating Apple's pricing power and operational efficiency. While Q2 2024 revenue guidance of $90 billion disappointed due to hardware product cycles, RiverPark views this as temporary cyclical weakness. The fund highlights Apple's massive installed base of 2.2 billion active devices as a foundation for recurring Services revenue growth and future hardware upgrades. With lean inventory levels entering an anticipated iPhone refresh cycle, Apple is well-positioned for a product-driven recovery. RiverPark emphasizes Apple's innovation leadership, market positioning, and profitability profile as key competitive advantages in the mobile technology ecosystem, supporting long-term value creation despite current macro and competitive challenges.

Pitch Summary:
SNAP was our top detractor in the quarter despite reporting fourth quarter results generally in line with or better than expectations. Revenue growth of 5% was roughly in line with investor estimates and at the high end of guidance, and EBITDA of $159 million was $49 million better than estimates. Daily Active Users (DAUs) were also ahead of investor expectations, ending the quarter at 414 million (about 2 million better), driven by continued innovation in Snap's offerings. Revenue guidance for 1Q24 was also roughly in line with investor estimates, but EBITDA guidance of negative $55-95 million was well below estimates. The company pointed to increased infrastructure costs and a US focused marketing campaign for the lower-than-expected margin guidance. Although the company continues to face near-term macro headwinds, we believe SNAP can accelerate its revenue growth over the next several years. With 2023 revenue expected to be $4.6 billion (as compared with Meta's $134 billion), we believe SNAP has a long runway for both revenue growth and expanded profitability as it improves platform functionality, continues to grow its audience (daily active users continue to grow at a double-digit rate), and expands its monetization.

BSD Analysis:
RiverPark maintains a bullish long-term view on Snap despite near-term margin pressure and stock underperformance in Q1 2024. The fund highlights solid Q4 2023 fundamentals with revenue growth of 5% meeting guidance and EBITDA of $159 million exceeding estimates by $49 million. Daily active users reached 414 million, surpassing expectations by 2 million and demonstrating continued platform innovation and user engagement. While Q1 2024 EBITDA guidance disappointed due to infrastructure investments and marketing spend, RiverPark views this as temporary margin compression. The fund emphasizes Snap's significant growth runway, noting 2023 revenue of $4.6 billion compared to Meta's $134 billion, suggesting substantial market share opportunity. Double-digit DAU growth rates support the platform's expanding reach and engagement among younger demographics. RiverPark expects revenue acceleration over the coming years driven by improved platform functionality, continued audience growth, and enhanced monetization capabilities. The fund views current macro headwinds as transitory, positioning Snap for meaningful revenue growth and margin expansion as the advertising market recovers and the company scales its operations.

Pitch Summary:
DIS was a top contributor in the quarter following strong FY1Q24 earnings that included operating income 12% higher than expected and 24% better EPS. Operating income for all three segments (Entertainment, Sports, and Experiences) was better than investor expectations and the company reiterated guidance for $8 billion of free cash flow in 2024. The company's direct to consumer (DTC) business was a particular bright spot with improving losses and guidance for Disney+ net adds in FY2Q24 of 5.5-6 million, ahead of expectations of 2.2 million. DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands, including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network, which make it among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. In addition, its theme park, cruise and theatrical businesses continue to be generational rites of passages for children and young adults around the world. We think CEO Bob Iger is doing a steady job rationalizing investments in each of the company's segments, which should lead to higher and more consistent profitability at the theme parks, better value realization in the linear assets, and consolidation of the company's DTC assets leading to higher profitability sooner. We therefore expect DIS to grow its free cash flow significantly over the next 3-4 years, from its depressed $1 billion in 2022, to more than double 2023's $4.9 billion, exceeding its previous $10 billion peak in 2018.

BSD Analysis:
RiverPark presents a compelling turnaround thesis for Disney, highlighting strong Q1 2024 results that exceeded expectations across all business segments. The fund emphasizes operating income beating estimates by 12% and EPS outperforming by 24%, with management reiterating $8 billion free cash flow guidance for 2024. Disney's direct-to-consumer business showed particular strength with improving losses and Disney+ subscriber additions expected to significantly exceed consensus estimates. The fund values Disney's unparalleled content library spanning Disney, Marvel, Pixar, and Lucasfilm franchises, combined with live sports programming that provides non-time-shifted viewing audiences. RiverPark credits CEO Bob Iger's strategic rationalization across business segments as a catalyst for improved profitability and operational efficiency. The theme parks and experiences division continues to benefit from its status as generational entertainment destinations with strong pricing power. The fund projects substantial free cash flow growth over the next 3-4 years, expecting a recovery from the depressed $1 billion in 2022 to potentially exceed the previous $10 billion peak achieved in 2018, representing a compelling value opportunity.

Pitch Summary:
Meta was a top contributor in the quarter following fourth quarter earnings results in which the company reported accelerating revenue growth and expanding margins driven by a rebound in online advertising and strong user growth. On February 2nd, Meta reported 4Q23 revenue of $40.1 billion (+25% y/y up from +23% in 3Q23) and EPS of $5.33 (+203% y/y), and the midpoint of 1Q24 revenue guidance was $35.8 billion (+25% y/y), all well ahead of investors' expectations. The company reported impressive revenue acceleration in its core advertising businesses, including new products like Reels and Threads. Advertiser adoption of Meta's AI targeting tools helped drive strong ROI and higher spend across multiple categories. META owns multiple social media platforms, each with more than one billion users, has an 81% gross margin, and generated $44 billion of FCF in 2023. Both its Facebook and its Instagram franchises have more than 2 billion Daily Active Users and generate the bulk of the company's revenue. Recently, the company's short form video offering, Reels, and public text-sharing app, Threads, achieved mass user engagement and growing advertiser adoption which have helped return the company to strong revenue and free cash flow growth. Even after the recent stock price advance, META shares trade at 20x Wall Street's consensus estimates for 2025 EPS, estimates that we think could prove to be too low.

BSD Analysis:
RiverPark maintains a bullish stance on Meta Platforms, citing accelerating revenue growth and margin expansion driven by advertising market recovery and user engagement gains. The fund highlights Meta's Q4 2023 performance with revenue growing 25% year-over-year to $40.1 billion and EPS surging 203% to $5.33, both exceeding expectations. The company's massive scale advantage is evident with Facebook and Instagram each boasting over 2 billion daily active users, generating substantial advertising revenue at an impressive 81% gross margin. Meta's newer products, including Reels and Threads, are gaining significant traction and contributing to revenue acceleration through improved advertiser adoption. The fund emphasizes Meta's AI-powered targeting tools as a key driver of advertiser ROI and increased spending across categories. With $44 billion in free cash flow generation in 2023, Meta demonstrates strong cash conversion and capital efficiency. RiverPark views the current 20x forward P/E multiple as attractive, believing consensus 2025 EPS estimates are conservative given the company's improving fundamentals and product innovation momentum.

Pitch Summary:
NVDA shares were our top contributor in the quarter following blowout 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above very high expectations. The artificial intelligence arms race kicked-off by ChatGPT and Alphabet's Bard, among others, has generated tremendous demand for Nvidia's next generation graphic processors. NVDA is the leading designer of graphics processing units (GPU's) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company's press release, "a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process."

BSD Analysis:
RiverPark presents a compelling bull case for NVIDIA based on exceptional Q4 2023 results and strong AI-driven demand. The fund highlights NVIDIA's transformation from a gaming-focused chip vendor to a dominant AI infrastructure provider, with quarterly revenue surging 265% year-over-year to $22.1 billion and EPS jumping 487% to $5.16. The company's forward guidance of $24 billion for Q1 2024 exceeded already elevated expectations by 8%, demonstrating sustained momentum in data center sales. NVIDIA's competitive moat in GPU design for AI workloads positions it as the primary beneficiary of the generative AI revolution. The fund emphasizes the company's asset-light business model and consistent 20%+ revenue CAGR over the past decade, which has driven expanding operating margins and free cash flow generation. CEO Jensen Huang's projection of a trillion-dollar infrastructure transition from general-purpose to accelerated computing validates the massive addressable market opportunity. RiverPark's conviction appears well-founded given NVIDIA's technical leadership and the structural shift toward AI-powered applications across industries.

Pitch Summary:
NFLX was a top contributor in 1Q24 following strong fourth quarter earnings and 2024 guidance driven by better-than-expected subscriber adds (+13.1 million versus estimates of +8.9 million). The company's subscriber growth continued to accelerate following the company's crack down on password sharing and the rollout of the lower cost, advertising supported subscriber offering known as the Ad Tier. ARPU came in below expectations, but recently announced price increases in the US, UK and France showed signs of moving ARPU higher. NFLX guided 2024 operating margins to 24%, ahead of prior guidance of 22-23%, and guided to 2024 free cash flow of $6 billion. The recent re-acceleration of subscriber growth, plus price increases on premium memberships and a stabilization of content investments, should position the company for low double digit annual revenue growth over the next few years while driving improved operating margin to more than 25%. We also believe that the stabilization of content spend should allow the company to continue to scale its FCF.

BSD Analysis:
The manager presents a bullish outlook for Netflix based on accelerating subscriber growth and improving profitability metrics. The company significantly exceeded subscriber addition expectations with 13.1 million net adds versus 8.9 million estimates, driven by successful password sharing crackdowns and the introduction of an ad-supported tier. While ARPU initially declined, recent price increases across key markets signal pricing power recovery. Netflix guided 2024 operating margins to 24%, above previous guidance, and projected $6 billion in free cash flow. The manager expects the combination of subscriber growth acceleration, premium pricing increases, and content spend stabilization to drive low double-digit revenue growth with operating margins expanding beyond 25%. The stabilization of content investments should enable continued free cash flow scaling, supporting the investment thesis for sustained profitability growth.

Pitch Summary:
UBER was a top contributor in the quarter following better than expected 4Q23 earnings and 1Q24 guidance. Gross bookings of $37.6 billion were up 22% year over year. Mobility gross bookings of $19.3 billion grew 29% over last year driven by a combination of product innovation and driver availability. Delivery gross bookings of $17 billion were up 19% from last year and continued to be strong throughout the quarter. 4Q Adjusted EBITDA of $1.3 billion, up $618 million year over year, was better than management's guidance of $1.2 billion, and the company generated $768 million of free cash flow, up from a cash loss of $303 million last year. Management guided to continuing growth in 1Q Gross Bookings (20% growth) and Adjusted EBITDA (of $1.3 billion). The company hosted a well-received analyst day in February during which it guided to three year compounded annual growth rates for gross bookings of mid-to-high single digits and EBITDA of 30-40%, both above investor expectations. The company also guided to free cash flow conversion of 90% of EBITDA. UBER remains the undisputed global leader in ride sharing, with a greater than 50% share in every major region in which it operates. The company is also a leader in food delivery, where it is number one or two in the more than 25 countries in which it operates. Moreover, after a history of losses, the company is now profitable, delivering expanding margins and substantial free cash flow. We view UBER as more than a ride sharing and food delivery service; we also see it as a global mobility platform with 142 million users (by comparison, Amazon Prime has 200 million members) and the ability to penetrate new markets of on-demand services, such as package and grocery delivery, travel, and hourly worker staffing. Given its $5.4 billion of unrestricted cash and $4.8 billion of investments, the company today has an enterprise value of $165 billion, indicating that UBER trades at 21x our estimates of next year's free cash flow.

BSD Analysis:
The manager presents a strong bull case for Uber based on its transformation from a loss-making startup to a profitable platform with expanding margins and substantial free cash flow generation. The company delivered impressive Q4 results with 22% gross bookings growth and $1.3 billion in adjusted EBITDA, exceeding guidance. Uber maintains dominant market positions with over 50% market share in ride-sharing across major regions and top-two positions in food delivery across 25+ countries. The platform's 142 million users provide a foundation for expansion into adjacent on-demand services including package delivery, travel, and staffing. Management's three-year guidance calls for mid-to-high single-digit gross bookings growth and 30-40% EBITDA growth, with 90% free cash flow conversion. The manager views the current valuation of 21x estimated next year's free cash flow as attractive for a global mobility platform with significant expansion opportunities.

Pitch Summary:
DIS was a top contributor in the quarter following strong FY1Q24 earnings that included operating income 12% higher than expected and 24% better EPS. Operating income for all three segments (Entertainment, Sports, and Experiences) was better than investor expectations and the company reiterated guidance for $8 billion of free cash flow in 2024. The company's direct to consumer (DTC) business was a particular bright spot with improving losses and guidance for Disney+ net adds in FY2Q24 of 5.5-6 million, ahead of expectations of 2.2 million. DIS is blessed with a deep library of unique content that includes both live sports (providing large, non-time shifted audiences) and incomparable brands, including Disney, Marvel, Pixar and Lucasfilm, as well as the ABC network, which make it among the best-positioned media companies in the new landscape to combine multi-channel and DTC distribution. In addition, its theme park, cruise and theatrical businesses continue to be generational rites of passages for children and young adults around the world. We think CEO Bob Iger is doing a steady job rationalizing investments in each of the company's segments, which should lead to higher and more consistent profitability at the theme parks, better value realization in the linear assets, and consolidation of the company's DTC assets leading to higher profitability sooner. We therefore expect DIS to grow its free cash flow significantly over the next 3-4 years, from its depressed $1 billion in 2022, to more than double 2023's $4.9 billion, exceeding its previous $10 billion peak in 2018.

BSD Analysis:
The manager presents a compelling turnaround story for Disney based on improving operational performance and strategic repositioning under CEO Bob Iger. The company delivered strong Q1 results with operating income 12% above expectations and 24% better EPS across all three business segments. The direct-to-consumer business showed particular strength with Disney+ subscriber additions significantly exceeding expectations. Disney's competitive advantages include an unparalleled content library featuring iconic brands like Disney, Marvel, Pixar, and Lucasfilm, plus live sports content that provides non-time-shifted audiences. The theme park and cruise businesses maintain their position as generational experiences with strong pricing power. The manager expects significant free cash flow growth over the next 3-4 years, projecting a recovery from the depressed $1 billion in 2022 to potentially exceed the previous $10 billion peak by 2027.

Pitch Summary:
Meta was a top contributor in the quarter following fourth quarter earnings results in which the company reported accelerating revenue growth and expanding margins driven by a rebound in online advertising and strong user growth. On February 2nd, Meta reported 4Q23 revenue of $40.1 billion (+25% y/y up from +23% in 3Q23) and EPS of $5.33 (+203% y/y), and the midpoint of 1Q24 revenue guidance was $35.8 billion (+25% y/y), all well ahead of investors' expectations. The company reported impressive revenue acceleration in its core advertising businesses, including new products like Reels and Threads. Advertiser adoption of Meta's AI targeting tools helped drive strong ROI and higher spend across multiple categories. META owns multiple social media platforms, each with more than one billion users, has an 81% gross margin, and generated $44 billion of FCF in 2023. Both its Facebook and its Instagram franchises have more than 2 billion Daily Active Users and generate the bulk of the company's revenue. Recently, the company's short form video offering, Reels, and public text-sharing app, Threads, achieved mass user engagement and growing advertiser adoption which have helped return the company to strong revenue and free cash flow growth. Even after the recent stock price advance, META shares trade at 20x Wall Street's consensus estimates for 2025 EPS, estimates that we think could prove to be too low.

BSD Analysis:
The manager presents a strong bull thesis for Meta based on accelerating revenue growth and margin expansion driven by advertising recovery and user engagement. The company delivered impressive Q4 results with 25% revenue growth acceleration and 203% EPS growth, significantly exceeding expectations. Meta's competitive moat is evident through its massive user base with over 2 billion daily active users across Facebook and Instagram platforms. The 81% gross margin and $44 billion in free cash flow generation demonstrate exceptional profitability and cash conversion. New product launches including Reels and Threads are gaining traction with advertisers, while AI-powered targeting tools are driving higher ROI and increased advertiser spending. The manager believes the stock remains attractively valued at 20x 2025 consensus EPS estimates, suggesting potential upside if earnings estimates prove conservative.

Pitch Summary:
NVDA shares were our top contributor in the quarter following blowout 4Q results and 1Q guidance driven by strong data center sales. The company reported quarterly revenue of $22.1 billion, up 265% year-over-year, and EPS in the quarter of $5.16, up 487% year-over-year and 12% ahead of expectations. Revenue guidance for 1Q of $24 billion was 8% above very high expectations. The artificial intelligence arms race kicked-off by ChatGPT and Alphabet's Bard, among others, has generated tremendous demand for Nvidia's next generation graphic processors. NVDA is the leading designer of graphics processing units (GPU's) required for powerful computer processing. Over the past 20 years, the company has evolved through innovation and adaptation from a predominantly gaming-focused chip vendor to one of the largest semiconductor/software vendors in the world. Over the past decade, the company has grown revenue at a compound annual rate of over 20% while expanding operating margins and, through its asset light business model, producing ever increasing amounts of free cash flow. Following recent results, Jensen Huang, founder and CEO of NVIDIA stated in the company's press release, "a trillion dollars of installed global data center infrastructure will transition from general purpose to accelerated computing as companies race to apply generative AI into every product, service and business process."

BSD Analysis:
The manager presents a compelling bull case for NVIDIA based on exceptional financial performance and positioning in the AI revolution. The company delivered explosive growth with 265% year-over-year revenue growth and 487% EPS growth, significantly beating expectations. NVIDIA's dominance in GPU technology positions it as the primary beneficiary of the AI infrastructure buildout, with management guidance suggesting continued strong demand. The fund highlights NVIDIA's successful transformation from a gaming-focused company to a diversified semiconductor leader with over 20% revenue CAGR over the past decade. The asset-light business model generates substantial free cash flow while expanding operating margins. CEO Jensen Huang's commentary about a trillion-dollar data center infrastructure transition underscores the massive addressable market opportunity ahead.

Pitch Summary:
Year to date, HDFC Bank Ltd has been a drag on our performance in India, a market that continues to do well. This is a self-inflicted but short-run issue specific to the interest rate cycle. The Indian central bank has left rates high and unchanged and is unlikely to cut rates in the near-term, instead focusing on the last mile of disinflation. They are not promising cuts around the corner, either (like the U.S. central bank). This is having a cyclical impact on HDFC Bank, as lower margins (from higher borrowing costs) and slowing growth (from higher interest rates on loans) push back expectations for the bank's growth. Yet the long-term potential for the bank has not changed. In addition, the valuation is now at multi-year lows. We think when India cuts rates (or loosens liquidity, which could come sooner than rate cuts) the bank is spring-loaded to grow. We are holding our position but still waiting to add. We don't see any major long-term fundamental problems with the company.

BSD Analysis:
The manager maintains a constructive long-term view on HDFC Bank despite recent underperformance, framing current weakness as a cyclical headwind rather than structural deterioration. The investment thesis centers on the bank being negatively impacted by India's restrictive monetary policy, which has compressed net interest margins through higher funding costs while simultaneously slowing loan growth via elevated lending rates. The manager emphasizes that HDFC Bank's fundamental business quality remains intact, with no structural issues identified. They highlight the attractive entry point created by multi-year low valuations and position the bank as 'spring-loaded' for growth once monetary conditions ease. The strategy involves maintaining current exposure while waiting for better entry points to add to the position. This reflects confidence in India's long-term banking sector growth potential and HDFC Bank's market-leading franchise.

Pitch Summary:
We often wonder why Taiwan Semiconductor (TSMC) doesn't squeeze the designers of chips (like Nvidia). There really are very few alternatives to Taiwan Semiconductor's foundry for AI in the short run (and in accordance with Moore's Law, it will be hard to catch Taiwan Semiconductor in the long run as well). Perhaps, it was simply Taiwan elections holding the stock back relative to Nvidia. Now TSMC's stock is off to the races following a benign election. It remains our largest position. It trades at a big discount to Nvidia, but we think it is one of the world's most important companies (yet for risk management we still won't hold it at the index weight, as a war with China would devastate the company). We get the upside. It is a tremendous company.

BSD Analysis:
The manager presents a compelling bull case for TSMC centered on its monopolistic position in advanced semiconductor manufacturing. They highlight TSMC's irreplaceable role in the AI supply chain with few viable alternatives for cutting-edge chip production. The investment thesis emphasizes TSMC's structural competitive advantages and adherence to Moore's Law, making it difficult for competitors to catch up technologically. The manager notes that TSMC trades at a significant discount to Nvidia despite being equally critical to the AI ecosystem. Political risk from Taiwan elections appears to have been a temporary headwind that has now cleared. While acknowledging geopolitical risks from potential China conflict, they maintain TSMC as their largest position, viewing it as one of the world's most strategically important companies with tremendous long-term value creation potential.

Pitch Summary:
Meanwhile industrial lighting supplier Acuity Brands finished higher after reporting strong earnings that included rising gross margins and strong free cash flow. The company has the number one market share in lighting fixtures and controls in North America and is a leading supplier of energy efficient retrofit solutions for commercial buildings.

BSD Analysis:
Sound Shore highlights Acuity Brands' strong operational performance, with the company delivering robust earnings characterized by expanding gross margins and strong free cash flow generation. The fund emphasizes Acuity's dominant market position as the number one provider of lighting fixtures and controls in North America, providing competitive advantages and pricing power. The company's leadership in energy-efficient retrofit solutions for commercial buildings positions it well for the ongoing trend toward building efficiency and sustainability. Rising gross margins suggest successful pricing discipline and operational leverage, while strong free cash flow generation demonstrates the quality of the business model. Acuity's market-leading position in lighting controls and fixtures provides a stable foundation for growth as commercial real estate continues to modernize lighting infrastructure.