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Mostly Borrowed Ideas

30 Oct, 9 tweets, 3 min read

1/ Thread: $GOOG 3Q'20 Earnings Update

$GOOG has been a laggard among the Big Tech for quite some time. But not yesterday!

Among the Big Tech, the stock had the best reaction (+6.5%) to earnings in after-hours.

2/ $GOOG will break out Cloud as a separate segment from Q4, and they will also report ’18, ’19, and ’20 annual number along with profitability next quarter.

Usually a good sign when company wants to provide more disclosure; generally an indicator of driving a better narrative.

3/ In the last quarter,

Total Revenue +14%

Search +6%; YouTube ads +32%; Network ad revenue +9%

GCP +45%

Other revenues +35% driven by YouTube non-ad revenues and Play

Operating Margin ~24%

4/ $GOOG’s lead in search is here to stay. The product is not just the best right now, but it continues to be even better.

“We know our success in Search is not guaranteed. We are proud that people choose Google Search not because they have to but because it's helpful.”

5/ YouTube has >30 mn music and premium paid subscribers.

Google Meet saw a peak in Q3 of 235 mn daily meeting participants and >7.5 Bn daily video call minutes.

Waymo is open for business in Phoenix, AZ. cc $UBER $LYFT

6/ Thomas Kurian, CEO of Google Cloud since Jan 2019, has brought more focus to the game.

7/ YouTube is also important platform for e-commerce.

8/ Outlook: not much concrete outlook was given for topline.

Expect moderate deceleration in headcount, and sales & marketing.

Capex in 2020 will experience modest decrease compared to 2019 due to “reduced pace of real estate acquisitions”.

End/ I will cover $UBER earnings next week (Thursday night).

If you're curious, I published a deep dive on Uber two months ago: mbi-deepdives.com/deep-dive-on-u…

All quarterly earnings related twitter threads will be here: mbi-deepdives.com/twitter-thread…

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More from @borrowed_ideas

Mostly Borrowed Ideas

@borrowed_ideas

2 Nov

@Rich_Barton

1/ Notes from @Rich_Barton and @altcap episode at @InvestLikeBest

This was a wide range of conversation touching on many different topics. Let's start.

2/ First, a pitch for SPAC

3/ Loved this mental model of BHAG: Big, Hairy, Audacious Goal.

Read 12 tweets

Mostly Borrowed Ideas

@borrowed_ideas

30 Oct

1/ Thread: $FB 3Q'20 update

2.5 Billion people use one of the $FB apps everyday
200 Million businesses use free FB tools
10 Million advertisers

Every time I read these data, the scale still astounds me.

2/

DAU/MAU both +12% YoY
Revenue +22% YoY
APAC and Europe +30% and 25% respectively
North America +20%
RoW +12%
# of impressions +35%, avg price/ad declined 9%

3/ Operating Margin ~37%. FCF $5.9 Bn (FCF Margin ~28%)

Outlook: NA market likely to experience decline in DAU/MAU

Q4 YoY revenue growth likely to be higher than Q3 YoY growth

Some headwinds remain.

No slowdown in sight for $FB’s capex.

Read 13 tweets

Mostly Borrowed Ideas

@borrowed_ideas

30 Oct

1/ Thread: $AMZN 3Q'20 Update

Another quarter of mind-boggling numbers, but since it’s AMZN, that’s expected.

Let’s dive in.

2/ Few things stand out.

Most people understandably rave about AWS, especially given its high margin. But I was always amazed by AMZN’s 3P numbers.

Although we cannot “see” it, it’s highly profitable too (not as much as AWS though).

3/ International segment was again profitable for two consecutive quarters.

Strong volume in Europe and Japan.

AMZN is still in pretty early days in international markets. Launched AMZN Sweden yesterday. Also, launched Prime in Turkey.

Read 9 tweets

Mostly Borrowed Ideas

@borrowed_ideas

29 Oct

1/ Thread: $ETSY 3Q’2020 update

A month ago, I published a deep dive on $ETSY.

At that time, I hoped ETSY will make a complete mockery of my reverse DCF, and guess what, they are doing exactly that!

mbi-deepdives.com/etsy-a-handmad…

2/ Assuming mid-point of their GMS guidance for Q4, its GMS this year will be ~3% higher than my 2021 GMS estimates. This year’s FCF will be close to my 2023 estimates.

LOL.

Here’s snapshot of this quarter+ YTD numbers.

3/ Lots of interesting data points of buyers.

75% of current quarter’s GMS was from pre-covid buyer cohorts.

Non-mask GMS is +93%, but bit of a downer is people whose first buy was a mask are primarily buying only masks.

Mask is ~11% of total GMS and decelerating fast.

Read 12 tweets

Mostly Borrowed Ideas

@borrowed_ideas

23 Oct

1/ Thread: The Superpowers in Investing

Investing has been dubbed as the last liberal art.

Unless your name is Jim Simons, raw intelligence or brain power is perhaps not a sure-fire way to be successful investors.

2/ The more I think about it, the more convinced I am on just three superpowers in investing.

I. A bias for optimism
II. A better grip on time
III. The ability to imagine turbulent times

Let me elaborate.

3/ I. “Pessimists sound smart, optimists make money”.

Pessimism not only appears more rational, but it can also sound seductive to many.

Compared to pessimists' elaborate and complex theories, optimists often come up with very naïve sounding thesis.

Read 11 tweets

Mostly Borrowed Ideas

@borrowed_ideas

20 Oct

1/5 Thread: $AMZN vs The World

Last year, I started tracking America's top 15 brick-and-mortar retailers' sales vs $AMZN retail sales.

I just updated the chart. It's an astounding chart.

Please see below how I calculated this.

2/5 This is how incremental market share was calculated:

$AMZN conso sales-AWS Yr 1- Yr 0 divided by top 15 brick-and-mortar retailers' sales Yr1-Yr 0

The columns show $AMZN conso sales-AWS divided by top 15 brick-and-mortar retailers' sales

*AWS rev was available from 2012

3/5 These brick-and-mortar retailers generated ~$1.2 Trillion sales in 2019. The following companies were taken for the calculation:

$HD
$LOW
$WMT
$COST
$TJX
$DG
$ROST
$DLTR
$LB
$JWN
$BBY
$KSS
$GPS
$M
$TGT

Read 6 tweets

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