Evidence & assumptions
Business Sources and Limits
Related analysis section: Business and Industry
The information statement and second-quarter filing supply the business mix, revenue recognition, financial history, risks and governance facts. Management’s earnings call and conference remarks supply attributed sales-execution, margin-timing, transition, tax and allocation expectations. Competitor pages establish available products only. [S1–S8]
No reliable numerical cohort-retention series, independent comparison of product accuracy, or separately verified incremental profit from listings or Germany was established. Exact future incentive weights, compensation settlement, September cash and customer-level economics remain uncertain. No statistical calibration of recession losses or severe-event probabilities follows from this short independent-company history.
The earnings-call transcript was read for substantive remarks and questions; conference reading was targeted. Neither was independently checked against original audio. Inaccessible presentation material does not substantiate a favorable claim. The final June information statement was checked in selected sections; extensive reading used the May HTML version, which the current 10-Q incorporates for audited statements. The two versions were not compared byte by byte. Source checks establish what documents say, not the truth of every underlying assertion. Full attribution and scope are in the source register.
Growth and Guidance
Related analysis section: Investment Thesis
H1 2026 revenue increased $64 million, from $859 million to $923 million. The filing attributes approximately $36 million to pricing and $20 million to new business. These amounts are not a unit-volume or customer-count series; the remaining increase is not assumed to be volume. [S3, MD&A revenue discussion]
The August 7 release gives 2026 revenue guidance of $1,870–$1,885 million and adjusted EBITDA guidance of $745–$760 million. Subtracting actual first-half revenue of $923 million and EBITDA of $386 million from the respective midpoints gives $954.5 million and $366.5 million for the second half. Their ratio is 38.3971%, approximately 38.4%. This is an implied ratio, not a separately issued H2 margin forecast or a guarantee. The modeled 39.5% rolling-year margin covers a different period. The fixed $745 million annual EBITDA test means meeting the low end of guidance. [S3]
Reported Earnings and Cash
Related analysis section: Financial Quality and Funding
All amounts below are USD millions. The H1 2026 adjusted EBITDA reconciliation is:
108 net income + 10 interest + 45 tax + 7 depreciation + 148 acquired amortization + 9 stock compensation + 57 transaction costs + 2 other adjustments = 386. [S3]
The operating-cash reconciliation is:
108 net income + 7 depreciation + 148 amortization + 2 receivables provision − 38 deferred tax + 9 stock compensation − 1 Other − 46 working capital/other balances = 189.
The −46 consists of receivables −16, related receivables −8, prepaid balances −15, payables/accruals −26, related payables −19, unearned revenue +25, other current balances +11 and other assets +2. Deducting capital spending of 12 produces reported free cash flow of 177. Reconciliation checks the filing’s arithmetic, not receivable collectability or the absence of fraud. [S3, statement of cash flows]
Earlier revenue context is 1,246 in 2021 and 1,351 in 2022, followed by 1,485, 1,613 and 1,750 in 2023–2025. The first two are predecessor non-GAAP pro forma figures, not the same basis as the later audited carve-out statements. The 2022 acquired-period revenue of 1,142 is not a full-year comparison. A five-year standalone cash-growth history has not been established. [S2, S20–S21]
| Quarter | Revenue | GAAP Operating Profit | Net Income | Adjusted EBITDA | Operating Cash / Capex | Basis |
|---|---|---|---|---|---|---|
| 2024 Q3 | 412 | 97 | ND | ND | ND | Parent segment [S22] |
| 2024 Q4 | 411 | 65 | ND | ND | ND | Parent segment [S23] |
| 2025 Q1 | 420 | 84 | 58 | 169 | 67 / 5 | Carve-out [S2, S24] |
| 2025 Q2 | 439 | 96 | 65 | 188 | 166 / 3 | Carve-out [S3, S24] |
| 2025 Q3 | 445 | 104 | 71 | 191 | ND | Carve-out supplement [S24] |
| 2025 Q4 | 446 | 55 | 26 | 163 | ND | Carve-out supplement [S24] |
| 2026 Q1 | 455 | 81 | 55 | 184 | 54 / 6 | Information statement and supplement [S2, S24] |
| 2026 Q2 | 468 | 82 | 53 | 202 | 135 / 6 | Q2 filing [S3] |
ND means no comparable separate figure established, not zero. H2 2025 operating cash of 252 and capex of 16 can be derived from annual less first-half totals, but cannot be divided honestly between Q3 and Q4 from these disclosures. The supplementary quarterly data are unaudited and preliminary, with issuer comparability warnings. Parent-segment 2024 revenue of 1,609 and operating profit of 312 differ from carve-out values of 1,613 and 298; they should not be silently joined. Only one independent-company earnings call/release existed through the cutoff; Q1 financial evidence is in the information statement.
From EBITDA to Owner Cash
Related analysis section: Financial Quality and Funding
USD millions; central rolling year after September 25, 2026. Future values are assumptions.
| Component | Amount |
|---|---|
| Revenue 1,975 × EBITDA margin 39.5% | 780.125 |
| Economic stock compensation, 1.5% of revenue | −29.625 |
| Cash coupons 110.6 + assumed fees 1.4 | −112.000 |
| Cash taxes | −183.743 |
| Ordinary capital spending, 2% of revenue | −39.500 |
| Working-capital investment, 0.5% of revenue | −9.875 |
| Transition cash, capitalized plus expensed | −50.000 |
| Owner cash | 355.382 |
Cash tax is rate × max(0, EBITDA − stock compensation − depreciation − acquired amortization − interest/fees) + 89. Depreciation is 0.8% of revenue, or 15.8 centrally; acquired amortization is 296. The central taxable-income proxy is 326.7; 29% of it is 94.743, plus 89 gives 183.743. The extra 89 is attributed to management’s cash-tax forecast, supported in direction by deferred-tax accounting, not a tax-return audit. [S2–S4]
Depreciation and amortization affect that tax calculation; they are not subtracted from cash again. Recurring independent-company expenses are already in the margin. Historical H1 transaction costs of 57 are not annualized or added again to future transition spending. Parent-assumed tax amounts of 83/196 and unbilled allocations of 60/109 are not additional forward costs. The historical accounting boundaries differ from the forward cash model. [S2–S3]
The model charges stock compensation as cash spent to neutralize dilution, with 294.821320 million shares fixed. It does not also assume extra routine dilution or buyback accretion. The disclosed 44 of unrecognized compensation over 1.63 years supports a recurring cost, but does not establish the modeled settlement schedule. [S2]
Debt and Other Claims
Related analysis section: Financial Quality and Funding
Three note tranches have principal/coupon combinations of 650 at 5.05%, 650 at 5.45% and 700 at 6.05%, producing annual coupons of 32.825 + 35.425 + 42.350 = 110.600. Debt principal is 2,000; its 1,981 accounting carrying value reflects 19 of discounts and fees, not a reduction in principal owed. Cash of 186 gives face net debt of 1,814. The model’s 1.4 of additional annual fees is an assumption. [S3, note 4]
The undrawn 500 revolving facility has a 3.5-times net leverage covenant and conditional acquisition step-up; the contractual definition must govern access. A Canada intercompany loan was eliminated within the group and is not additional external debt. Rents remain in operating expenses, so lease debt is not deducted a second time. Uncommenced lease commitments of 64 and disclosed purchase commitments warrant cost stresses; adding every future operating invoice to net debt would misstate the framework. [S2–S3]
Valuation Inputs and Formulas
Related analysis section: Valuation and Alternatives
All model money amounts are USD millions except per-share prices and dividends. Year 1 is the rolling twelve months after September 25, 2026; year 2 follows the September 25, 2027 endpoint. Neither is relabeled calendar-year guidance. The rolling estimate is approximate, not a monthly seasonal forecast.
| Assumption or Result | Adverse | Central | Favorable |
|---|---|---|---|
| Year-1 revenue | 1,850 | 1,975 | 2,050 |
| Year-1 EBITDA margin | 37.0% | 39.5% | 41.0% |
| Year-2 revenue growth | 2% | 6% | 9% |
| Year-2 EBITDA margin | 36.5% | 39.5% | 41.5% |
| Exit forward EV / adjusted EBITDA | 7.5× | 8.5× | 10.5× |
| Tax provision rate | 30.5% | 29.0% | 28.0% |
| Ordinary capex / revenue | 2.5% | 2.0% | 2.0% |
| Working-capital investment / revenue | 1.0% | 0.5% | 0.5% |
| Year-1 transition cash | 75 | 50 | 35 |
| Year-1 owner cash | 244.6452 | 355.3820 | 414.6020 |
| Year-2 EBITDA | 688.7550 | 826.9325 | 927.3175 |
| Exit excess cash | 259.8881 | 370.6249 | 429.8449 |
| Exit share price | $11.6191 | $18.3147 | $27.7004 |
| Dividend per original share | $0.24 | $0.24 | $0.24 |
| Twelve-month total return | −33.6370% | +3.8313% | +56.3539% |
Owner cash = EBITDA − cash-equivalent stock compensation − interest/fees − cash tax − ordinary capex − working-capital investment − transition cash.
Exit excess cash = 86 + owner cash − dividends paid.
Exit share price = max(0, year-2 EBITDA × exit multiple − 2,000 debt + exit excess cash) / 294.821320.
Total return = (exit share price + dividend per original share) / 17.87 − 1.
For the central case, year-2 revenue is 1,975 × 1.06 = 2,093.5 and EBITDA is 826.9325. Exit excess cash is 86 + 355.382 − 0.24 × 294.821320 = 370.6248832. Dividends reduce cash in the business before they are added to the investor’s return, so their value is counted once. The severe case directly assumes terminal equity wealth equal to 10% of initial cost and no dividends, giving −90%.
At entry, equity is 5,268.457. Enterprise value using all cash would be 7,082.457; using only excess cash, as this model does, gives 7,182.457. Divide by central forward EBITDA of 780.125 to obtain the 9.206803-times entry multiple. The unchanged-multiple sensitivity retains that same excess-cash definition. Total cash between 100 and 300 instead of the June proxy of 186 changes value by about −$0.29 to +$0.39 per share; this is a sensitivity, not a cash forecast or bound. No interest income, acquisition gains or speculative transition tax benefit is assumed.
Central revenue is above 2026 guidance but below immediate realization of the upper end of management’s medium-term growth ambition. The 39.5% margin includes standalone costs and no 50-basis-point annual improvement credit. Ordinary capex exceeds the historical rate to allow for systems and reinvestment; working capital consumes cash. Exit multiples are valuation judgments, not peer averages.
The DCF cross-check uses five explicit years of unlevered cash—cash before financing costs—with 6% revenue growth, 39.5% margin, cash-equivalent stock compensation, depreciation of 0.8% of revenue for tax, and combined capex/working-capital investment of 2.5%. It charges 50 of transition spending in year 1 and none thereafter, then deducts face debt and adds excess cash. Cash tax before financing costs is used in this separate framework. Beyond year 5, it removes both acquired-amortization tax relief and the associated extra cash-tax charge; there is no 89 windfall. The earlier simplified switch rather than year 12 changes net annual tax by only 3.16 at the central tax rate, a smaller valuation effect than discount-rate sensitivity.
| Discount Rate | Long-Term Growth | Value Per Share | Share of Enterprise Value Beyond Year 5 |
|---|---|---|---|
| 10% | 2% | $16.86 | 70.87% |
| 10% | 3% | $19.41 | 73.73% |
| 11% | 2% | $14.19 | 67.98% |
| 11% | 3% | $16.10 | 70.69% |
| 12% | 2% | $12.05 | 65.22% |
| 12% | 3% | $13.53 | 67.79% |
Discount rates and growth rates are assumptions, not market-estimated parameters. Extra digits elsewhere support arithmetic checks; they do not imply comparable forecasting precision. Calculations use unrounded values before presenting rounded conclusions.
Benchmark Assumptions
Related analysis section: Valuation and Alternatives
SPY’s entry trailing P/E proxy is 25.07 × 771.35 / 767.18 = 25.206268. The first figure is State Street’s September 24 trailing ratio; the other two are September 25 and 24 closes. Holding the earnings base fixed yields an implied earnings unit of 30.601516, a valuation normalization rather than audited fund earnings per share. The published FY1 harmonic P/E of 21.29 and 3–5-year earnings-growth estimate of 24.68% are not substituted for a one-year forecast. [S10–S11]
SPY return = (1 + earnings growth) × exit trailing P/E / entry trailing P/E − 1 + gross dividend yield − expense.
| Outcome | Probability | Earnings Growth | Exit Trailing P/E | Gross Dividend Yield | Return After Modeled Fee |
|---|---|---|---|---|---|
| Severe | 5% | −25% | 16× | 0.70% | −51.7873% |
| Adverse | 20% | −5% | 22× | 0.90% | −16.2786% |
| Central | 55% | +10% | 25× | 1.09% | +10.0953% |
| Favorable | 20% | +18% | 27× | 1.10% | +27.4026% |
The 0.0945% fund expense is subtracted once from gross underlying dividend assumptions. It is not subtracted again from an already-net distribution yield or actual observed fund return. Central 10% earnings growth is a research assumption. Entry and exit earnings are trailing in both cases, over the same twelve-month investment horizon used for MBGL. [S11]
Sensitivity and Loss Limits
Related analysis section: Risks and Countercase
| Alternative Weights, Severe / Adverse / Central / Favorable | Weighted Twelve-Month Return |
|---|---|
| MBGL: 10% / 30% / 45% / 15% | −8.9% |
| MBGL: 2% / 18% / 55% / 25% | +8.3% |
| SPY: 10% / 25% / 50% / 15% | −0.1% |
| SPY: 2% / 13% / 60% / 25% | +9.8% |
Moving about 9.35 percentage points from MBGL’s central weight to favorable, leaving its other weights and all scenario returns fixed, matches the base SPY estimate. This is conditional algebra, not a universal buying threshold. Readers can replace the probabilities and sum weight × return to express different beliefs.
The unchanged-multiple experiment keeps MBGL’s −90% severe return and SPY’s −51.787293%, each at 5%. MBGL’s ordinary adverse/central/favorable returns become −11.3236% / +14.9252% / +33.5919%; SPY’s become −4.1945% / +10.9955% / +19.0055%. With each investment’s original weights, totals are 6.850088% and 6.420360%, a 0.429727-percentage-point MBGL advantage. The experiment changes ordinary exit multiples only, not the credibility of the tail assumptions or the two earnings conventions.
Excluding severe outcomes and dividing the ordinary weighted sums by 0.95 gives 11.947461% for MBGL and 9.483921% for SPY. Those are conditional on excluding risks investors still face; they cannot replace the whole-distribution comparison.
Ordinary disappointment uses year-1 revenue 1,935, margin 39%, year-2 growth 4% and margin 39%, with other central inputs unchanged: −3.2784% at 8.5 times, or +7.2507% at the entry multiple. The linked setback uses revenue 1,800, margins of 35% then 34%, no following-year growth, a 7-times exit multiple, transition cash of 100 and no dividend: −51.5244%. Owner cash remains positive in that calculation; it is not a solvency guarantee.
Adding a hypothetical 300 equity raise at $8 increases shares to 332.321320 million and retains the proceeds once, giving −51.9428%. The model does not establish legal or market access to financing. This stress is separate from the normal stock-compensation dilution treatment. Each one-times change in the central exit EBITDA multiple changes value by approximately $2.8049 per share, larger than the cash-proxy sensitivity.
For fully paid long shares, without borrowing or derivatives, and with nonnegative terminal equity and distributions, (terminal value + distributions − original cost) / original cost ≥ −1. Under those conditions, loss cannot exceed 100% of the purchase cost; there is no finite universal upside bound. Financing, leverage, fees or other obligations can change the conditions. None of the model’s −33.6%, −51.5% or −90% outcomes is a mathematical loss floor.
Operating Tests and Return Rules
Related analysis section: What Would Change Our View
These are fixed prospective expectations, not a promise of automatic monitoring. Both conditions must be met wherever paired below.
| Test | Baseline and Threshold | Assessment Window and Treatment |
|---|---|---|
| Subscription durability | H1 2026 revenue 923; Q2 CARFAX subscription growth approximately 8%. Expect H1 2027 total revenue growth of at least 5% year over year and positive CARFAX subscription growth. | H1 2027 filing/release versus H1 2026, available by the endpoint. A lower result is a miss. |
| Standalone margin | Central rolling margin 39.5%. Expect FY2026 adjusted EBITDA of at least 745 and H1 2027 adjusted EBITDA margin of at least 38.5%. | FY2026 and H1 2027 results, with issuer reconciliation retained. Reconcile changed definitions before judging. The annual threshold is the low end of guidance. |
| Owner cash | Forward model about 355 after compensation and transition. Expect cumulative Q4 2026–Q2 2027 operating cash less ordinary and transition capex and reported stock compensation to be positive, with no new external borrowing necessary to fund the common dividend. | Q1/H1 2027 filings and FY2026 less nine-month 2026 cash flow for Q4. Do not invent a quarterly cash split. |
| Transition execution and allocation | Management described approximately 100 of total remaining cash transition costs from H2 2026. Expect no disclosed revision above 125 before the endpoint and no acquisition financed by a dilutive emergency equity raise during transition. | Official filings/releases through the endpoint. An explicit cost increase or described transaction is a miss. Missing cost reporting is unobservable, not success. |
Amounts are USD millions. Official SEC filings take precedence over issuer releases, which take precedence over attributed transcripts. Use corrected figures while preserving original observations and explaining restatements. If definitions cannot be reconciled, classify the test as unobservable; missing disclosure never counts silently as met.
The return comparison starts with one original share at each September 25, 2026 regular-session close: MBGL $17.87 and SPY $771.35. It ends September 25, 2027, using the last completed regular session on or before that date if necessary. It is in USD. Cash distributions with ex-dates after entry through the endpoint are held as cash without reinvestment. The September 10 MBGL dividend precedes entry and is excluded; the future $0.24 model dividend remains discretionary.
Treat splits, spin-offs, rights and acquisition consideration economically. Retain distributed securities to the endpoint at market value; an untradeable claim remains unresolved rather than being assigned zero. Prefer official exchange, fund or issuer records, then the same reputable adjusted corporate-action history for both investments. Do not add dividends to an adjusted close that already includes them. Observed SPY returns already embed the fund fee.
Brokerage costs, spreads and personal taxes are excluded for both. An actual execution has its own time and costs. Historical research marks are not executable purchases or the start of public performance credit. No reinvestment beyond the year is assumed for the alternative comparisons.