Daily Brief United States: Pegasystems Inc, Baillie Gifford US Growth Trust, Broadcom , Xerox Holdings , Generac Holdings, West Pharmaceutical Services Inc, Under Armour, Insulet Corp and more

• Pegasystems delivered disappointing results as the company could not meet Wall Street’s revenue and earnings expectations.
• Pega achieved a remarkable feat in the first half of 2023 by producing $114 million in cash flow from operations and $123 million in free cash flow.
• The free cash flow dollars produced in the first half of the year was $123 million.

The managers of Baillie Gifford US Growth Trust (USA), Gary Robinson and Kirsty Gibson, aim to invest in exceptional US businesses with the potential to grow substantially faster than the market and deliver exceptional returns over the long term. Businesses capable of such growth tend to operate at the cutting edge of technology-led change, and USA has exposure to companies focused on artificial intelligence, space travel and drone delivery. The fluctuating fortunes of growth stocks over the past couple of years, combined with some de-rating of USA’s unlisted holdings, mean that USA’s performance has undershot market returns during the first five years since inception. Cumulative returns over the five years ended August 2023 totalled 49.1% in NAV terms, lagging the market return of 73.8%. However, the managers believe the ‘phenomenal’ fundamental performance of many portfolio holdings, combined with their very good growth prospects, augur well for the company’s ability to realise its return target over the longer term.

• Broadcom managed to exceed analyst expectations in terms of revenue as well as earnings.
• Infrastructure software revenue increased 5% yearly to 9 billion, while semiconductor solutions revenue gained 5% yearly to $6.9 billion.
• Wireless revenue accounted for 24% of semiconductor revenue in the quarter and was up 4% sequentially but flat yearly.

• Xerox Holdings Corporation delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• This quarter, Quocirca recognized Xerox as a leader in cloud print services, recognizing the company for its breadth of customer service as well as its strategic vision.
• Xerox Holdings received the renewal of a leading healthcare service company this quarter, boosting the yearly contract value by about 40%.

• Generac Holdings delivered a mixed result in the recent quarter, with revenues above market expectations but failed to surpass the analyst consensus regarding earnings.
• The company faced challenges as residential product sales declined significantly by 44%, primarily due to a softer consumer spending environment impacting home standby generators and chore products.
• In contrast, the company’s Global C&I product segment achieved an all-time quarterly sales high with approximately 24% growth, driven by broad-based expansion across regions and channels.

• Under Armour delivered a solid result and managed an all-around beat in the last quarter.
• Revenue decreased by 1% after considering the adverse effects of foreign exchange brought on by the strength of the US dollar.
• Direct-to-consumer revenue climbed 4% to $544 million, owing to strong results in the e-commerce and retail channels.

• West Pharmaceutical Services delivered mixed results for the previous quarter, with revenues below the analyst consensus.
• Sales price increases provided $43.1 million or 5.6 percentage points of growth in the quarter.
• The base Proprietary goods business expanded by the mid-teens and was the main driver of the second quarter achievement.

• Under Armour delivered a solid result and managed an all-around beat in the last quarter.
• Revenue decreased by 1% after considering the adverse effects of foreign exchange brought on by the strength of the US dollar.
• Direct-to-consumer revenue climbed 4% to $544 million, owing to strong results in the e-commerce and retail channels.

• Insulet Corporation exceeded analyst expectations in terms of revenue as well as earnings.
• The company’s revenue for the second quarter surpassed its projections, growing by 33% overall at Omnipod, including 41% in the United States.
• During the second quarter, Insulet made significant progress in its clinical and innovation programs.