Episode Details

Bending Spoons (BSP) Q2 2026 — Q2 2026 (ended June 30; 6-K accepted 7:07am ET Aug 13, BEFORE the open): revenue $704.2M vs $682.8M, adjusted EPS $0.46 vs $0.24, GAAP diluted EPS $0.28, adjusted operating margin 54%, organic revenue growth just 3%, net debt $4.09B. The stock fell 16.5% that session, to $40.92, then to $39.31. Bending Spoons beat on revenue, nearly doubled the adjusted EPS bar and posted a 54% adjusted operating margin - and the stock fell 16.5% the same morning. Strip out the businesses it bought and organic growth was 3%, after 13% in 2025. First-half adjusted operating income of $689M produced $250M of free cash flow: 36 cents on the dollar. THE CALL: AVOID (3/5, GREAT OPERATOR, DEMANDING PRICE) — base-case value ~$20 vs ~$39.31 today. KEY METRICS: - CALL: AVOID, 3/5. Fair value about $20 vs the $39.31 close on Aug 14 - roughly 48% below. Bear $13, base $19, bull $35, weighted 30/50/20, on an 11.6% cost of equity (1.48 beta). Every branch sits under the price. The Street disagrees: 6 buy, 3 hold, 0 sell across the 9 firms we can name, mean target $47.55. A price call, not a quality call. - THE QUARTER (3 months ended Jun 30, 2026): revenue $704.2M, UP 126%, vs a $682.8M estimate - a 3.1% beat. Adjusted EPS $0.46 vs a $0.24 bar; GAAP diluted EPS $0.28 vs $0.11. Adjusted operating income $381.1M, a 54% margin vs 49%. Net income $177.0M, up 171% - helped by a $19.5M other-income credit and a $26.2M income tax BENEFIT. - THE ORGANIC SPLIT - THE WHOLE EPISODE: organic revenue growth was 3%, against 7% in 2024 and 13% in 2025. So 123 of the 126 points of growth were BOUGHT: AOL, Eventbrite, Harvest, MileIQ, Tractive, Vimeo. Tractive and WeTransfer led organically; Remini and Splice shrank. The prospectus says they underwrite on returns, not organic growth. - CASH CONVERSION: first-half adjusted operating income of $689M produced $254.2M of operating cash flow and $250.3M of free cash flow - 36 cents on the dollar, and 35 cents in the same half of 2025, so it repeats. The bridge: $177M of reorganisation and deal cost, $161M of interest paid, a receivables build. Acquisitions took $2.29B, new debt $2.57B. - LEVERAGE - READ FOOTNOTE 3: net debt $4.09B ($4.88B of borrowings less $793M cash). The reported 2.4x ratio is struck against an adjusted EBITDA that is pro forma for a full year of ownership and credits achieved savings plus certain EXPECTED savings. On trailing REPORTED adjusted operating income of $1,055M it is 3.9x. Cost of debt: 10.7%. - GUIDANCE AND VALUATION: Q3 revenue guided to $733M-$745M; FY2026 to $2.78B-$2.82B, a midpoint 2.8% BELOW the $2.88B consensus - that is what moved the stock. Our FY2026 owner earnings: $1.49B guided adjusted operating income, less $297M of recurring reorganisation and deal cost, less $430M interest, taxed 25% = $560M, or $0.83 a share. 47x. What to watch: UP: a full year of cash conversion held above 50%, or an acquisition disclosed under 6x post-transformation cash operating income. DOWN: organic revenue growth staying near 3% while the purchase multiple rises toward the Airtable end of the range. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.