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Avantor® Reports Second Quarter 2024 Results

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Net sales of $1.70 billion, decrease of 2.4%; organic decline of 2.0%Net income of $93 million; Adjusted EBITDA of $306 millionDiluted GAAP EPS of $0.14; adjusted EPS of $0.25Operating cash flow of $281 million; free cash flow of $235 million

RADNOR, Pa., July 26, 2024 /PRNewswire/ — Avantor, Inc. (NYSE: AVTR), a leading global provider of mission-critical products and services to customers in the life sciences and advanced technology industries, today reported financial results for its second fiscal quarter ended June 30, 2024.

“Our teams delivered another solid quarter with sequential improvements to all key financial metrics. Improved mix from increased bioprocessing revenue together with the accelerated impact of our cost transformation initiative drove more than 100 basis points of sequential Adjusted EBITDA margin expansion, while disciplined working capital management led to free cash flow conversion above 100%,” said Michael Stubblefield, President and Chief Executive Officer.

“We are reaffirming our fiscal year 2024 guidance and remain focused on executing our long-term growth strategy and delivering value to our customers and shareholders,” Stubblefield concluded.

Second Quarter 2024

For the three months ended June 30, 2024, net sales were $1,702.8 million, a decrease of 2.4% compared to the second quarter of 2023. Foreign currency translation had a negative impact of 0.4%, resulting in a sales decline of 2.0% on an organic basis.

Net income increased to $92.9 million from ($7.3) million in the second quarter of 2023, and adjusted net income was $168.0 million as compared to $186.4 million in the comparable prior period. Net Income margin was 5.5%. Adjusted EBITDA was $305.6 million and Adjusted EBITDA margin was 17.9%. Adjusted Operating Income was $277.2 million and Adjusted Operating Income margin was 16.3%.

Diluted earnings per share on a GAAP basis was $0.14, while adjusted EPS was $0.25.

Operating cash flow was $281.1 million, while free cash flow was $235.3 million. Adjusted net leverage was 3.9x as of June 30, 2024.

Second Quarter 2024 – Segment Results

Laboratory Solutions

Net sales were $1,155.7 million, a reported decrease of 3.2%, as compared to $1,193.8 million in the second quarter of 2023. Sales declined 2.7% on an organic basis.Adjusted Operating Income was $150.9 million as compared to $179.7 million in the comparable prior period. Adjusted Operating Income margin was 13.1%.

Bioscience Production

Net sales were $547.1 million, a reported decrease of 0.5%, as compared to $550.1 million in the second quarter of 2023. Sales declined 0.3% on an organic basis.Adjusted Operating Income was $144.0 million, as compared to $154.2 million in the comparable prior period. Adjusted Operating Income margin was 26.3%.

Adjusted Operating Income is Avantor’s segment reporting profitability measure under generally accepted accounting principles and is used by management to measure and evaluate the performance of our Company’s business segments.

Conference Call
We will host a conference call to discuss our results today, July 26, 2024, at 8:00 a.m. Eastern Time. The live webcast and presentation, as well as a replay, will be available on the investor section of Avantor’s website.  

About Avantor
Avantor® is a leading life science tools company and global provider of mission-critical products and services to the life sciences and advanced technology industries. We work side-by-side with customers at every step of the scientific journey to enable breakthroughs in medicine, healthcare, and technology. Our portfolio is used in virtually every stage of the most important research, development and production activities at more than 300,000 customer locations in 180 countries. For more information, visit avantorsciences.com and find us on LinkedIn, X (Twitter) and Facebook.

Use of Non-GAAP Financial Measures
To evaluate our performance, we monitor a number of key indicators. As appropriate, we supplement our results of operations determined in accordance with U.S. generally accepted accounting principles (“GAAP”) with certain non-GAAP financial measures that we believe are useful to investors, creditors and others in assessing our performance. These measures should not be considered in isolation or as a substitute for reported GAAP results because they may include or exclude certain items as compared to similar GAAP-based measures, and such measures may not be comparable to similarly titled measures reported by other companies. Rather, these measures should be considered as an additional way of viewing aspects of our operations that provide a more complete understanding of our business. We strongly encourage investors to review our consolidated financial statements included in reports filed with the SEC in their entirety and not rely solely on any one single financial measure or communication.

The non-GAAP financial measures used in this press release are sales growth (decline) on an organic basis, Adjusted Operating Income, Adjusted Operating Income margin, Adjusted EBITDA, Adjusted EBITDA margin, adjusted net income, adjusted EPS, adjusted net leverage, free cash flow, and free cash flow conversion.

Sales growth (decline) on an organic basis eliminates from our reported net sales growth (decline) the impacts of revenues from any acquired businesses that have been owned for less than one year and changes in foreign currency exchange rates. We believe that this measure is useful to investors as a way to measure and evaluate our underlying commercial operating performance consistently across our segments and the periods presented. This measure is used by our management for the same reason.Adjusted Operating Income is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) losses on extinguishment of debt, (v) charges associated with the impairment of certain assets, (vi) and certain other adjustments. Adjusted Operating Income margin is Adjusted Operating Income divided by net sales as determined under GAAP. We believe that these measures are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measures are used by our management for the same reason. Additionally, Adjusted Operating Income is our segment reporting profitability measure under GAAP.Adjusted EBITDA is our net income or loss adjusted for the following items: (i) interest expense, (ii) income tax expense, (iii) amortization of acquired intangible assets, (iv) depreciation expense, (v) losses on extinguishment of debt, (vi) charges associated with the impairment of certain assets, (vii) and certain other adjustments. Adjusted EBITDA margin is Adjusted EBITDA divided by net sales as determined under GAAP. We believe that these measures are useful to investors as ways to analyze the underlying trends in our business consistently across the periods presented. These measures are used by our management for the same reason.Adjusted net income is our net income or loss first adjusted for the following items: (i) amortization of acquired intangible assets, (ii) losses on extinguishment of debt, (iii) charges associated with the impairment of certain assets, (iv) and certain other adjustments. From this amount, we then add or subtract an assumed incremental income tax impact on the above-noted pre-tax adjustments, using estimated tax rates, to arrive at Adjusted Net Income. We believe that this measure is useful to investors as a way to analyze the business consistently across the periods presented. This measure is used by our management for the same reason.Adjusted EPS is our adjusted net income divided by our diluted GAAP weighted average share count adjusted for anti-dilutive instruments. We believe that this measure is useful to investors as an additional way to analyze the underlying trends in our business consistently across the periods presented. This measure is used by our management for the same reason.Adjusted net leverage is equal to our gross debt, reduced by our cash and cash equivalents, divided by our trailing 12-month Adjusted EBITDA (excluding stock-based compensation expense and including the expected run-rate effect of cost synergies and the incremental results of completed acquisitions as if those acquisitions had occurred on the first day of the trailing 12-month period). We believe that this measure is useful to investors as a way to evaluate and measure the Company’s capital allocation strategies and the underlying trends in the business. This measure is used by our management for the same reason.Free cash flow is equal to our cash flow from operating activities, plus acquisition-related costs paid in the period, less capital expenditures. Free cash flow conversion is free cash flow divided by adjusted net income. We believe that these measures are useful to investors as they provide a view on the Company’s ability to generate cash for use in financing or investment activities. These measures are used by our management for the same reason.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in the tables accompanying this release.

Forward-Looking and Cautionary Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created thereby under the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements discuss our current expectations and projections relating to our financial condition, results of operations, plans, including our cost transformation initiative, objectives, future performance and business. These statements may be preceded by, followed by or include the words “aim,” “anticipate,” “assumption,” “believe,” “continue,” “estimate,” “expect,” “forecast,” “goal,” “guidance,” “intend,” “likely,” “long-term,” “near-term,” “objective,” “opportunity,” “outlook,” “plan,” “potential,” “project,” “projection,” “prospects,” “seek,” “target,” “trend,” “can,” “could,” “may,” “should,” “would,” “will,” the negatives thereof and other words and terms of similar meaning.

Forward-looking statements are inherently subject to risks, uncertainties and assumptions; they are not guarantees of performance. You should not place undue reliance on these statements. We have based these forward-looking statements on our current expectations and projections about future events. Although we believe that our assumptions made in connection with the forward-looking statements are reasonable, we cannot assure you that the assumptions and expectations will prove to be correct. Factors that could contribute to these risks, uncertainties and assumptions include, but are not limited to, the factors described in “Risk Factors” in our most recent Annual Report on Form 10-K, and subsequent quarterly reports on Form 10-Q, as such risk factors may be updated from time to time in our periodic filings with the SEC.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. In addition, all forward-looking statements speak only as of the date of this press release. We undertake no obligations to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise other than as required under the federal securities laws.

Investor Relations Contact
Christina Jones
Vice President, Investor Relations
Avantor
+1 805-617-5297
Christina.Jones@avantorsciences.com

Media Contact
Emily Collins
Vice President, External Communications
Avantor
+1 332-239-3910
Emily.Collins@avantorsciences.com

 

Avantor, Inc. and subsidiaries 

Unaudited condensed consolidated statements of operations 

(in millions, except per share data)

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Net sales

$   1,702.8

$   1,743.9

$   3,382.6

$   3,524.2

Cost of sales

1,121.3

1,153.9

2,230.6

2,309.4

Gross profit

581.5

590.0

1,152.0

1,214.8

Selling, general and administrative expenses

405.7

357.5

829.9

751.1

Impairment charges

—

160.8

—

160.8

Operating income

175.8

71.7

322.1

302.9

Interest expense, net

(60.9)

(73.4)

(125.2)

(147.1)

Loss on extinguishment of debt

(1.9)

(1.6)

(4.4)

(3.9)

Other income, net

1.6

2.0

2.7

2.6

Income (loss) before income taxes

114.6

(1.3)

195.2

154.5

Income tax expense

(21.7)

(6.0)

(41.9)

(40.3)

Net income (loss)

$       92.9

$        (7.3)

153.3

114.2

Earnings (Loss) per share:

Basic

$       0.14

$      (0.01)

$       0.23

$       0.17

Diluted

$       0.14

$      (0.01)

$       0.22

$       0.17

Weighted average shares outstanding:

Basic

679.4

675.3

678.7

675.0

Diluted

682.6

675.3

681.9

677.9

 

Avantor, Inc. and subsidiaries 

Unaudited condensed consolidated balance sheets 

(in millions)

June 30, 2024

December 31, 2023

Assets

Current assets:

Cash and cash equivalents

$                272.6

$                262.9

Accounts receivable, net

1,129.0

1,150.2

Inventory

795.6

828.1

Other current assets

132.0

143.7

Total current assets

2,329.2

2,384.9

Property, plant and equipment, net

753.8

737.5

Other intangible assets, net

3,582.8

3,775.3

Goodwill, net

5,659.6

5,716.7

Other assets

368.1

358.3

Total assets

$            12,693.5

$            12,972.7

Liabilities and stockholders’ equity

Current liabilities:

Current portion of debt

$                258.4

$                259.9

Accounts payable

657.4

625.9

Employee-related liabilities

146.1

133.1

Accrued interest

49.9

50.2

Other current liabilities

352.8

411.2

Total current liabilities

1,464.6

1,480.3

Debt, net of current portion

4,856.6

5,276.7

Deferred income tax liabilities

575.4

612.8

Other liabilities

361.9

350.3

Total liabilities

7,258.5

7,720.1

Stockholders’ equity:

Common stock including paid-in capital

3,897.5

3,830.1

Accumulated earnings

1,644.8

1,491.5

Accumulated other comprehensive loss

(107.3)

(69.0)

Total stockholders’ equity

5,435.0

5,252.6

Total liabilities and stockholders’ equity

$            12,693.5

$            12,972.7

 

Avantor, Inc. and subsidiaries 

Unaudited condensed consolidated statements of cash flows 

(in millions)

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Cash flows from operating activities:

Net income (loss)

$      92.9

$      (7.3)

$    153.3

$    114.2

Reconciling adjustments:

Depreciation and amortization

102.6

102.6

202.2

203.7

Impairment charges

—

160.8

—

160.8

Stock-based compensation expense

11.1

9.2

23.8

21.9

Provision for accounts receivable and inventory

15.5

30.6

39.5

43.1

Deferred income tax benefit

(34.8)

(38.3)

(52.7)

(64.7)

Amortization of deferred financing costs

2.8

3.3

5.8

6.7

Loss on extinguishment of debt

1.9

1.6

4.4

3.9

Foreign currency remeasurement (gain) loss

(2.2)

(1.9)

3.1

(0.1)

Changes in assets and liabilities:

Accounts receivable

(2.7)

60.1

—

7.9

Inventory

(3.2)

(8.8)

(14.2)

(1.7)

Accounts payable

89.5

(75.0)

45.9

(74.4)

Accrued interest

9.2

9.9

(0.3)

(0.6)

Other assets and liabilities

(2.9)

(78.4)

6.4

(34.3)

Other

1.4

(0.2)

5.5

1.3

Net cash provided by operating activities

281.1

168.2

422.7

387.7

Cash flows from investing activities:

Capital expenditures

(45.8)

(30.1)

(80.5)

(58.1)

Other

0.9

0.7

1.4

1.4

Net cash used in investing activities

(44.9)

(29.4)

(79.1)

(56.7)

Cash flows from financing activities:

Debt borrowings

(28.9)

—

12.3

—

Debt repayments

(172.7)

(190.8)

(383.0)

(460.3)

Payments of debt refinancing fees and premiums

—

(2.3)

—

(2.3)

Proceeds received from exercise of stock options

5.3

2.1

50.8

4.7

Shares repurchased to satisfy employee tax
     obligations for vested stock-based awards

(0.8)

(5.2)

(7.4)

(13.3)

Net cash used in financing activities

(197.1)

(196.2)

(327.3)

(471.2)

Effect of currency rate changes on cash and cash equivalents

(1.6)

(0.7)

(7.3)

4.1

Net change in cash, cash equivalents and restricted cash

37.5

(58.1)

9.0

(136.1)

Cash, cash equivalents and restricted cash, beginning of period

259.2

318.9

287.7

396.9

Cash, cash equivalents and restricted cash, end of period

$    296.7

$    260.8

$    296.7

$    260.8

 

Avantor, Inc. and subsidiaries 

Reconciliations of non-GAAP measures 

Adjusted EBITDA and Adjusted EBITDA Margin 

(dollars in millions)

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

$

%

$

%

$

%

$

%

Net income (loss)

$ 92.9

5.5 %

$  (7.3)

(0.4) %

$  153.3

4.5 %

$  114.2

3.2 %

Amortization

74.9

4.4 %

78.9

4.5 %

150.2

4.4 %

157.3

4.5 %

Loss on extinguishment of debt

1.9

— %

1.6

0.1 %

4.4

0.1 %

3.9

0.1 %

Integration-related expenses1

—

— %

(0.6)

— %

—

— %

8.1

0.2 %

Restructuring and severance charges2

9.7

0.6 %

7.2

0.4 %

32.9

1.0 %

11.9

0.3 %

Transformation expenses3

16.2

1.0 %

—

— %

29.5

0.9 %

—

— %

Other4

(0.3)

— %

(0.7)

— %

(0.8)

— %

(0.8)

— %

Impairment charges5

—

— %

160.8

9.2 %

—

— %

160.8

4.6 %

Income tax benefit applicable to
     pretax adjustments

(27.3)

(1.6) %

(53.5)

(3.1) %

(50.9)

(1.5) %

(73.6)

(2.1) %

Adjusted net income

168.0

9.9 %

186.4

10.7 %

318.6

9.4 %

381.8

10.8 %

Interest expense, net

60.9

3.6 %

73.4

4.2 %

125.2

3.7 %

147.1

4.2 %

Depreciation

27.7

1.5 %

23.7

1.4 %

52.0

1.6 %

46.4

1.4 %

Income tax provision applicable
     to Adjusted Net income

49.0

2.9 %

59.5

3.4 %

92.8

2.7 %

113.9

3.2 %

Adjusted EBITDA

$  305.6

17.9 %

$  343.0

19.7 %

$  588.6

17.4 %

$  689.2

19.6 %

━━━━━━━━━

1.

Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.

2.

Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

3.

Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.

4.

Represents net foreign currency (gain) loss from financing activities, other stock-based compensation expense (benefit) and charges and legal costs in connection with certain litigation and other contingencies that are unrelated to our core operations and not reflective of on-going business and operating results.

5.

Related to impairment of the Ritter asset group.

 

Avantor, Inc. and subsidiaries 

Reconciliations of non-GAAP measures (continued) 

Adjusted Operating Income and Adjusted Operating Income Margin 

(dollars in millions)

Three months ended June 30,

Six months ended June 30,

2024

2023

2024

2023

$

%

$

%

$

%

$

%

Net income (loss)

$ 92.9

5.5 %

$  (7.3)

(0.4) %

$  153.3

4.5 %

$  114.2

3.2 %

Interest expense, net

60.9

3.6 %

73.4

4.2 %

125.2

3.7 %

147.1

4.2 %

Income tax expense

21.7

1.3 %

6.0

0.3 %

41.9

1.2 %

40.3

1.1 %

Loss on extinguishment of debt

1.9

— %

1.6

0.1 %

4.4

0.1 %

3.9

0.1 %

Other income, net

(1.6)

(0.1) %

(2.0)

(0.1) %

(2.7)

— %

(2.6)

— %

Operating income

175.8

10.3 %

71.7

4.1 %

322.1

9.5 %

302.9

8.6 %

Amortization

74.9

4.4 %

78.9

4.5 %

150.2

4.4 %

157.3

4.5 %

Integration-related expenses1

—

— %

(0.6)

— %

—

— %

8.1

0.2 %

Restructuring and severance charges2

9.7

0.6 %

7.2

0.4 %

32.9

1.0 %

11.9

0.3 %

Transformation expenses3

16.2

1.0 %

—

— %

29.5

0.9 %

—

— %

Other4

0.6

— %

0.9

0.1 %

0.9

— %

1.0

— %

Impairment charges5

—

— %

160.8

9.2 %

—

— %

160.8

4.6 %

Adjusted Operating Income

$  277.2

16.3 %

$  318.9

18.3 %

$  535.6

15.8 %

$  642.0

18.2 %

━━━━━━━━━

1.

Represents direct costs incurred with third parties and the accrual of a long-term retention incentive to integrate acquired companies. These expenses represent incremental costs and are unrelated to normal operations of our business. Integration expenses are incurred over a pre-defined integration period specific to each acquisition.

2.

Reflects the incremental expenses incurred in the period related to restructuring initiatives to increase profitability and productivity. Costs included in this caption are specific to employee severance, site-related exit costs, and contract termination costs. The expenses recognized in 2024 represent costs incurred to achieve the Company’s publicly-announced cost transformation initiative.

3.

Represents incremental expenses directly associated with the Company’s publicly-announced cost transformation initiative, primarily related to the cost of external advisors.

4.

Represents other stock-based compensation expense (benefit) and charges and legal costs in connection with certain litigation and other contingencies that are unrelated to our core operations and not reflective of on-going business and operating results.

5.

Related to impairment of the Ritter asset group.

 

Avantor, Inc. and subsidiaries 

Reconciliations of non-GAAP measures (continued) 

Earnings per share 

(shares in millions)

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Diluted earnings (loss) per share (GAAP)

$      0.14

$     (0.01)

$      0.22

$      0.17

Dilutive impact of convertible instruments

—

—

—

—

Fully diluted earnings (loss) per share (non-GAAP)

0.14

(0.01)

0.22

0.17

Amortization

0.11

0.12

0.22

0.23

Loss on extinguishment of debt

—

—

0.01

0.01

Integration-related expenses

—

—

—

0.01

Restructuring and severance charges

0.02

0.01

0.05

0.02

Transformation expenses

0.02

—

0.04

—

Other

—

—

—

—

Impairment charges

—

0.24

—

0.24

Income tax benefit applicable to pretax adjustments

(0.04)

(0.08)

(0.07)

(0.12)

Adjusted EPS (non-GAAP)

$      0.25

$      0.28

$      0.47

$      0.56

Weighted average shares outstanding:

Diluted (GAAP)

682.6

675.3

681.9

677.9

Incremental shares excluded for GAAP

—

2.4

—

—

Share count for Adjusted EPS (non-GAAP)

682.6

677.7

681.9

677.9

 

Free cash flow 

(in millions)

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Net cash provided by operating activities

$    281.1

$    168.2

$    422.7

$    387.7

Capital expenditures

(45.8)

(30.1)

(80.5)

(58.1)

Free cash flow (non-GAAP)

$    235.3

$    138.1

$    342.2

$    329.6

 

Adjusted net leverage 

(dollars in millions)

June 30, 2024

Total debt, gross

$      5,148.3

Less cash and cash equivalents

(272.6)

$      4,875.7

Trailing twelve months Adjusted EBITDA

$      1,208.5

Trailing twelve months ongoing stock-based compensation expense

42.3

$      1,250.8

Adjusted net leverage (non-GAAP)

              3.9 x

 

Avantor, Inc. and subsidiaries 

Reconciliations of non-GAAP measures (continued) 

Net sales by segment 

(in millions)

June 30,

Reconciliation of net sales growth
(decline) to organic net sales growth
(decline)

Net sales
growth
(decline)

Foreign
currency
impact

Organic
net sales
growth
(decline)

2024

2023

Three months ended:

Laboratory Solutions

$   1,155.7

$   1,193.8

$      (38.1)

$        (5.4)

$      (32.7)

Bioscience Production

547.1

550.1

(3.0)

(1.3)

(1.7)

Total

$   1,702.8

$   1,743.9

$      (41.1)

$        (6.7)

$      (34.4)

Six months ended:

Laboratory Solutions

$   2,312.8

$   2,396.8

$      (84.0)

$         3.6

$      (87.6)

Bioscience Production

1,069.8

1,127.4

(57.6)

1.7

(59.3)

Total

$   3,382.6

$   3,524.2

$    (141.6)

$         5.3

$    (146.9)

 

Adjusted Operating Income by segment 

(in millions)

Three months ended
June 30,

Six months ended
June 30,

2024

2023

2024

2023

Laboratory Solutions

$      150.9

$      179.7

$      299.1

$      351.9

Bioscience Production

144.0

154.2

270.9

321.7

Corporate

(17.7)

(15.0)

(34.4)

(31.6)

Total

$      277.2

$      318.9

$      535.6

$      642.0

 

 

 

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SOURCE Avantor and Financial News

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Haloid Poll: Majority of Public Safety and Commercial Radio Administrators Would Consider Starlink Integration With LMR Two-Way Radio Networks, but Disruption Unlikely

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STONY BROOK, N.Y., Oct. 25, 2026 /PRNewswire/ — Following Starlink’s announced entry into the mobile communications space, Haloid’s consulting team polled government and business land mobile radio (LMR) administrators on whether Starlink could replace, or complement, their LMR systems. We found that most radio administrators were receptive to the nascent technology but did not see it as a replacement for their LMR networks.

Sixty-seven percent of radio administrators said they would be willing to integrate Starlink technology if it allowed them to expand coverage or lower infrastructure costs. When asked whether Starlink could completely replace their LMR networks, fewer than 15 percent said yes; the vast majority believed Starlink is not as reliable as the custom networks they have built. Among administrators who already use two-way radio over cellular (also known as push-to-talk over cellular, or PoC), however, nearly 80 percent said that Starlink’s satellite coverage, combined with its newly acquired cellular spectrum, would make it more desirable than the industry’s wireless incumbents because it could eliminate dead spots where cellular does not reach.

In the U.S., hundreds of thousands of radio users rely on traditional cellular carriers for push-to-talk communications, and that number grows each year. While the migration to two-way radio over cellular has affected the LMR industry, it has not replaced it. Many public safety agencies never made the switch, citing the risk that cellular networks could go down during weather events, power outages, or cyberattacks and jeopardize emergency communications.

In fact, during recent cellular outages, Starlink was used to provide emergency communications to affected areas, because its satellite connectivity does not depend on cell towers. But Starlink’s integration with the 800 MHz cellular spectrum — “Starlink 2.0,” as some experts are calling it — exposes it to some of the same vulnerabilities as traditional wireless carriers.

While Starlink’s satellite service might still function if local cell towers go down, a critical portion of an agency’s communications might rely on local towers using the 800 MHz spectrum, leaving the agency vulnerable in a storm or outage.

Expect evolution, not disruption

“Just like cellular didn’t replace LMR, we don’t see Starlink as an existential risk,” said Jeremy Alicandri, President of Haloid Solutions. He expects Starlink to accelerate the industry’s evolution toward shared communications infrastructure, also known as hybrid LMR. “We have public safety customers already using Starlink in their vehicles to extend the coverage of their radios. This trend will continue as Starlink devices become more ubiquitous.”

The stock prices of Verizon, T-Mobile, and AT&T were affected by Starlink’s recent announcement. LMR stocks such as L3Harris, JVCKENWOOD, and BK Technologies, maker of the Bendix King brand, have been unaffected, as Wall Street views Starlink as unlikely to replace LMR technology for the same reasons cellular did not. “But it may be too early to predict the industry’s winners and losers,” Alicandri added. “The cellular incumbents have many advantages, including low-cost devices, existing infrastructure, and their own satellite ambitions.”

About Haloid Solutions Research

Haloid’s Starlink poll drew on respondents to its LMR brand loyalty study, which measures radio administrators’ sentiment toward the ownership and after-sales experience. Haloid’s LMR research is sponsored by investors in the mission-critical communications space.

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SOURCE HALOID SOLUTIONS

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Newborn Town and Viggle Launch AI-Powered 3D Interactive Game, Bringing World Models to Social Gaming

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HONG KONG, Oct. 26, 2026 /PRNewswire/ — Recently, Newborn Town’s game-oriented social platform TopTop has launched “Slap Showdown”, an AI-powered 3D interactive mini-game developed in collaboration with Viggle, a company specializing in physics-native world models. The launch brings world model technology into social gaming, offering users a more personalized and engaging interactive experience.

Developed by TopTop and powered by Viggle’s self-developed Joint Space-Time (JST) world model, “Slap Showdown” lets users turn uploaded photos into customized 3D characters and take them straight into the game.

Launched in September, “Slap Showdown” has gained particular traction in Japan, among Spanish-speaking users in North America, and across the Middle East. It is now available in multiple countries and regions worldwide.

From Better Gameplay to a Richer Ecosystem: How World Models Could Redefine Social Gaming on TopTop

In terms of gameplay, “Slap Showdown” combines AI-generated 3D characters with multiplayer interaction. Players can simply upload a photo from their phone and generate a personalized 3D character in around 30 seconds, whether it’s an anime protagonist, a cyberpunk cyborg, or a LEGO minifigure. They can then bring their custom characters into the game and face off against other players in fun, interactive battles.

As players use controls such as press-and-hold, tap, and drag, the 3D characters respond with realistic, physics-based movements. This takes AI-generated characters beyond visual customization, integrating them directly into the gameplay experience.

According to TopTop’s operations team, “Slap Showdown” has attracted a growing base of highly engaged, high-spending-potential players in its first month since launch. The game has recorded a 97% match completion rate, while its game-start rate has also exceeded the platform-wide average.

The depth of user engagement is further illustrated by individual player activity. One player in Japan completed 1,041 matches over 22 days, reaching a daily peak of 151 matches and averaging one match every 9.5 minutes. Another particularly avid player in Eastern Europe completed 735 matches in just 11 days, averaging 66.8 matches per day and peaking at 126 matches in a single day.

For a UGC-driven social gaming platform such as TopTop, mini-games serve as entry points and traffic drivers, while social features underpin retention and monetization. Personalized 3D avatars add another dimension to that experience. Beyond their visual appeal, they give users new ways to express themselves, interact with friends and share memorable moments. In turn, richer gameplay and more meaningful social interactions can help improve retention, attract new users and strengthen engagement across the platform.

“Slap Showdown” marks a successful step in TopTop’s efforts to deepen its application of AI technology, as well as a starting point for using world models to enhance gaming and social experiences. TopTop’s operations team said future game releases could make greater use of AI-powered 3D generation, extending beyond avatars to include customized environments. Existing games could also be revitalized by the introduction of new gameplay features, potentially driving stronger retention and user acquisition.

Beyond enriching gameplay, world model capabilities could also reshape social interaction itself, enabling more immersive, face-to-face experiences in virtual spaces. “We’re constantly exploring how AI can transform gaming and social interaction, while bringing new energy and capabilities to our UGC ecosystem,” TopTop’s operations team said.

Viggle Unveils Physics-Native Model JST-2, Setting Its Sights on Becoming the Infrastructure Layer for Physical AI

The world model technology powering “Slap Showdown” is provided by Viggle.

Founded in 2022, Viggle has focused on developing physics-native world foundation models. Its self-developed JST model can generate 3D characters, motion and environments directly, providing a foundation for gaming and a growing range of AI applications.

Viggle previously attracted widespread attention with Meme Maker, its AI-powered video creation product. The tool enables users to animate static characters and generate videos by applying specified movements, making AI character animation and video creation more accessible. In August 2024, Viggle raised USD 19 million in a Series A funding round led by Silicon Valley venture capital firm Andreessen Horowitz (a16z).

However, video creation was an early application of this technology. Viggle’s longer-term ambition is to make JST a foundational technology for AI-powered experiences across gaming, social platforms and other applications.

Viggle is now further expanding its technological boundaries. On 19 October, Viggle launched JST-2 in full, likening its significance for world models to GPT-2’s role in the evolution of language models.

Unlike many world models that infer physical structure indirectly from pixels, JST-2 is built around a physics-native architecture designed to learn the structure and dynamics of the 3D world directly. Its underlying representation consists of units resembling digital “atoms.” Each has a defined position in three-dimensional space, along with physical properties such as material, color and mass, and information describing how it moves and responds to forces. This allows the model to do more than generate convincing images. It can represent and generate 3D characters, motion and scenes with an underlying understanding of their physical properties.

To support this approach, Viggle has developed an integrated technology stack spanning tokenization, model architecture, data engine, pre-training and post-training. After four years of research and development, JST-2 can generate characters, motion and scenes within a single unified architecture.

Compared with other approaches, JST-2 also demonstrates cost efficiency. JST-2 can generate a 3D scene in seconds, at an inference cost of less than one US cent. Once created, the content can be rendered locally without repeatedly running the foundation model to generate each frame.

It is noteworthy that world model technology remains at an early stage, but Viggle is already working toward more advanced capabilities.

Its next-generation model, JST-3, is intended to become a comprehensive world simulator. Such a system could underpin future game and graphics engines, while also serving as a virtual training environment for robotics and other forms of physical AI.

The longer-term goal is for JST-3 to learn the physical rules governing its simulated world directly from data, rather than relying on rules explicitly written by developers.

For Newborn Town, its investment in and partnership with Viggle represents an important step in exploring how advanced AI can reshape social gaming, promoting a deep integration of AI technology with its business operations.

As a leading global social entertainment company, Newborn Town has continued to deepen the use of AI across key areas in recent years, including product R&D, social recommendation systems, intelligent operations, safety and risk management, and marketing and user acquisition, supporting ongoing business growth.

Meanwhile, the company also continued to invest across the AI ecosystem, backing projects in areas including world models, AI companionship, AI Agents and AI interactive gaming. These investments have further enriched its AI application ecosystem, with Viggle among the AI companies previously backed by Newborn Town.

“Slap Showdown” represents an early step in bringing world models into social gaming. For Newborn Town and Viggle, the next challenge is to turn increasingly sophisticated AI capabilities into experiences that users find genuinely engaging — and compelling enough to keep coming back.

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SOURCE Newborn Town

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HKICEC Launches First-Ever Global Mobile Exchange Pavilion at Mobile Electronics Show

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Charting a New Milestone with Outstanding Achievements

HONG KONG, Oct. 26, 2026 /PRNewswire/ — The Hong Kong International Communications Electronic Chamber (HKICEC) made a landmark debut at the Global Sources Mobile Electronics Show, held from October 18-21, 2026, with the inaugural launch of the HKICEC Global Mobile Exchange Pavilion. Spanning 600 square meters, the pavilion brought together nearly 60 industry leaders from mainland China, Hong Kong, India, Japan, the UAE, the US and the UK. As the largest themed pavilion in the mobile electronics sector and a premier highlight of the exhibition, this event marks a new developmental milestone for HKICEC. The pavilion underscores the chamber’s dedication to bridging global markets and serving the communications and electronics industry, injecting vital new momentum into the synergy between Hong Kong’s technology sector and international trade.

The grand opening ceremony on October 18 marked the official launch of the first B2B pavilion in Hong Kong and Asia dedicated exclusively to mobile communications equipment. The milestone event was officiated by a distinguished lineup of devices global business, including  Dr. the Hon. Starry Lee Wai King, GBS, JP, Member of the Standing Committee of the National People’s Congress and President of the Legislative Council; Mr. Zhu Xiaodong, Director of the Kowloon Affairs Department of the Liaison Office of the Central People’s Government in the HKSAR; Dr. the Hon. Horace Cheung Kwok Kwan SBS JP, Deputy Secretary for Justice, HKSAR; Mr. Liu Maozhou, Level 1 Bureau Rank Official, the Economic and Financial Department II, Liaison Office of the Central People’s Government in the HKSAR; Mr. Ho Lap Ki, Denny, JP, District Officer (Kwun Tong), Home Affairs Department; Mr James Liu, CEO of Global Sources; and Mr. Jacky Tse, Chairman of HKICEC, alongside HKICEC Management team. Together, they witnessed the official launch of the first B2B pavilion in Hong Kong and Asia dedicated to mobile communications equipment. The ceremony drew over a hundred political and business leaders, industry representatives, international exhibitors, and major media outlets, reflecting the event’s importance and the industry’s green trading development. Following the inauguration, officials toured the pavilion for high-level discussions with global exhibitors, signaling robust institutional backing for the industry and HKICEC’s strategic expansion.

During the four-day exhibition, the pavilion experienced a continuous flow of visitors. Communications and electronics suppliers and global buyers from overseas visited specifically for business matchmaking and negotiations, unlocking numerous commercial opportunities. Notably, the pavilion also featured a retrospective exhibit of 16 classic mobile phones, tracing the industry’s evolution from early ‘brick’ devices to Mainland China’s first official Apple release, the iPhone 3GS. The historical display proved to be a standout attraction, gathering large crowds throughout the event.

Beyond the exhibition floor, the chamber partnered with Global Sources to co-host an international forum on October 19. Under the theme ” From New Devices to New Life: Building a Global Mobile Device Lifecycle Ecosystem”, the event gathered experts from ecoATM, PCS Wireless, Cenwood, Our Hong Kong Foundation, and the Global Mobile Association. They engaged in profound discussions on cutting-edge topics including the global economic landscape, inventory management, ESG development, the circular ecology of new and used devices, and AI technology.  Attended by over 200 international representatives, the forum successfully catalyzed cross-border collaboration and established a new standard for sustainability discourse in the global mobile industry.

As a capstone to the comprehensive four-day events, HKICEC convened over 500 industry leaders, VIPs, and exhibitors for a high-profile networking banquet designed to accelerate cross-border business alliances. The gathering provided a premier platform for delegates to solidify collaborative ties and exchange strategic insights initiated from the pavilion. Ahead of the exhibition’s conclusion, a special ” Pearl Of The Orient • Victoria Harbour Cruise Party” was organized to showcase Hong Kong’s unique charm as a cosmopolitan city to global guests, providing a memorable networking experience against Hong Kong’s iconic skyline to formally cap off the week’s successes.

High-resolution images: https://bit.ly/3WqHMxu

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SOURCE The Hong Kong International Communications Electronic Chamber (HKICEC)

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