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Compass Diversified (CODI) Q3 Earnings call transcript Oct 30, 2024

Daily EarningsThursday, Oct 31, 2024 3:58 pm ET

1min read

CODI --

In a recent earnings call, Compass Diversified (CODI) reported a strong third quarter performance, showcasing double-digit revenue growth and over 25% increase in adjusted EBITDA compared to the same period last year. The company's robust performance is a testament to its innovative and disruptive business model and strategic value creation strategy.

Financial Performance and Guidance

CODI's Q3 revenue reached a record high of $582.6 million, representing an 11.8% increase from the previous year. The company's adjusted EBITDA grew by 28% to $114 million, surpassing expectations. For the full year, CODI raised its guidance for subsidiary adjusted EBITDA to be between $510 million and $525 million, with a significant portion of this growth expected from the branded consumer vertical.

Strategic Outlook and Challenges

Despite ongoing economic and geopolitical uncertainties, CODI remains optimistic about its future. The company's proprietary CODI Momentum Index, which measures shifts in market sentiment, indicates a stable economic outlook for the remainder of 2024 and into 2025. CODI's diverse business portfolio, including its focus on high-growth middle market companies, positions it well to navigate through challenges and capitalize on opportunities.

Innovation and Acquisitions

CODI's strategic approach to partnership and empowerment of its subsidiaries is evident in its recent acquisitions. The acquisition of Lifoam by Altor is expected to drive faster growth and support the company's long-term strategy. Additionally, CODI's investment in the $100 million repurchase program signifies confidence in its strategic plan and growth prospects.

Investor Confidence and Future Prospects

CODI's strong financial performance, strategic initiatives, and collaborative approach to working with its businesses and management teams have earned it recognition, including the Inc. Magazine's Founder-Friendly Investor Award. This accolade highlights CODI's commitment to fostering innovation and value creation, setting the stage for continued growth and success.

Looking ahead, CODI is well-positioned to capitalize on opportunities and navigate challenges. The company's focus on strategic investments, operational excellence, and long-term capital support positions it for continued success in a dynamic business landscape. With a clear vision and a strong execution strategy, CODI remains a compelling investment opportunity for those seeking to capitalize on the potential of disruptive, high-growth businesses.

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