Tweet

Mostly Borrowed Ideas

27 Oct, 10 tweets, 3 min read

1/ Thread: $GOOG 3Q'21 Earnings Update

Google continues to post numbers that would probably break analysts' DCFs.

What really boggles my mind is YouTube, a ~$29 Bn run-rate biz, is growing at ~40% 2-yr CAGR whereas $NFLX, a comparable topline company growing at ~22% 2-yr CAGR.

2/ Unlike FB, GOOG's incremental operating margin remains >50%.

Cloud's operating margin remains similar to last quarter, but clearly easier to imagine today profitability reaching sooner than what I thought after looking at negative 35-45% margin last year.

3/ "We recently surpassed 50 million music and premium subscribers, including those in trial, and YouTube shots continues to see higher adoption rates. In the past year, the average number of daily first-time creators more than doubled"

4/ "shoppers are returning to stores. brick-and-mortar isn't dead. Instead, omnichannel is in full force. Searches for open now near me are up 4x globally versus last year."

5/ Every GOOG call just makes me think barring DOJ's active involvement, GOOG will try to pull off an "Apple" in the CTV world. They will try to leverage their YouTube power and capitalize on their search and ad capabilities to dominate CTV. It's too important market to concede.

6/ "over 2 million creators are now making money and building their businesses on YouTube via YouTube partner program with 10 different ways to monetize their content"

7/ On GCP, GOOG remains focused on revenue growth.

"We've talked about ambient computing. And it's just a matter of time before beyond phones, you will see other successful form factors and AR is an exciting part of that future."

Sounds like AR/VR stuff is here to stay.

8/ Buyback $12.6 B in this quarter (vs $7.9 B last yr). YTD buyback $36.8 B (vs $23.2 B last yr). So, almost ~50% increase in pace of buyback.

Still has $142 Bn cash in balance sheet, lol

8/ Not much impact of iOS changes except on Direct Response for YouTube.

"150 million people across 40countries are now using Google Pay to manage transactions"

End/ I will cover $AMZN later this week.

All my twitter threads: mbi-deepdives.com/twitter-thread…

• • •

Missing some Tweet in this thread? You can try to force a refresh

This Thread may be Removed Anytime!

Twitter may remove this content at anytime! Save it as PDF for later use!

More from @borrowed_ideas

Mostly Borrowed Ideas

@borrowed_ideas

29 Oct

1/ Thread: $AMZN 3Q'21 Earnings Update

This call was the poster child of all the current macro hot topics (supply chain, labor constraints, inflation etc.). AMZN, ex AWS posted loss after quite some time.

My notes from the call.

2/ First, here’s the breakdown of revenue by segment (both product and geography)

3/ While AMZN bears raise their eyebrows with "slowing" growth, 2-yr and 3-yr CAGR depicts better underlying health because of the unusual last year.

I don't quite see much of a slowdown on 2-yr basis. AWS growth remains "size unconstrained" and ads continue to marvel.

Read 14 tweets

Mostly Borrowed Ideas

@borrowed_ideas

28 Oct

1/6 Bezos invested for couple of decades in building the retail infrastructure without showing much profits. Along the way, AMZN stumbled upon on AWS.

Once AWS came to light, investors stopped pestering on shipping costs/retail margin. FB is doing the same but in reverse order

2/6 FB has built an incredibly scalable AND profitable global communication platform. The fat margins anchored us to a certain kind of business model.

Perhaps psychologically it's more difficult to have the order (high margin and then low margin/loss making biz unit) reversed.

3/6 Of course, nobody is sure what the eventual economics of the Metaverse is gonna look like. It could end up being just as highly profitable.

But it is almost certain that this is going to be loss making for years, potentially this whole decade.

Read 6 tweets

Mostly Borrowed Ideas

@borrowed_ideas

26 Oct

1/ Thread: $FB 3Q'22 Earnings Update

When Evan Spiegel was busy cajoling Apple during the disruptive iOS changes, Zuck understood the gravity and prepared FB quite well ahead of the changes.

But the battle seems to change every quarter. Now it's capital allocation.

2/ 3Q'21 topline grew 33.2% but since spending ramped up, incremental operating margin fell a lot.

As you will see in this thread, it may take quite some time before we see ~60-70% incremental operating margin from FB.

3/ DAU and MAU both +6% YoY

Revenue by geography YoY
North America +35%
Europe +31%
APAC +28%
RoW +50%

# of Ad impressions and price/impression in '21
Q1: +12%/ +30%
Q2: +6% / +47%
Q3: +9% / +22%

Read 18 tweets

Mostly Borrowed Ideas

@borrowed_ideas

20 Oct

1/9 I have noticed a counterintuitive benefit from sharing my portfolio publicly. This isn't call for you to share your portfolio publicly; I'm aware it is not feasible/rational for many out there.

I'm just explaining how I think it helps *me*.

2/9 Before talking about the benefit, let me briefly mention the potential negative.

Well, the negative is probably obvious. Sharing my portfolio publicly may create a commitment bias. It's hard to change your mind once you propagate all the bullish pov on stocks you own.

3/9 There is truth to that, especially since I say I intend to be long-term investor.

It would create a cognitive dissonance if I get in and out of stocks every few months and yet claim myself long-term oriented simultaneously. So I kinda have to remain invested unless...

Read 9 tweets

Mostly Borrowed Ideas

@borrowed_ideas

14 Oct

1/8 Thread: Installation vs Deployment era investors

Ben Thompson recently wrote about Carlota Perez's theory related to "Technological Revolutions and Financial Capital".

Some thoughts on this topic.

2/8 As I kept reading and thinking on this, it occurred to me that the defining debate in investing for the next couple of decades may not be "value" vs "growth" investing rather "installation" vs "deployment" investing.

3/8 Perez identifies five distinct era for tech revolutions:

The industrial revolution
Age of Steam and Railways
Age of Steel, electricity, and heavy engineering
Age of Oil, automobiles, and mass production
Age of information and telecommunications

Read 8 tweets

Mostly Borrowed Ideas

@borrowed_ideas

9 Oct

1/ Final thread on $ETSY

Lots of thoughtful and gracious feedback (both in support and against) on my decision to sell Etsy. I’ll recap some of these discussions and share my thoughts in this thread.

For the uninitiated, here’s the original post: mbi-deepdives.com/etsy/

2/ Pushback #1: You should look at GMS/active seller instead of GMS/active buyer

If you followed my original work, that’s exactly how I modeled my GMS in future years. Now I believe that’s an inferior approach.

3/ Most marketplace literature comes from VCs who rightly focus on both sellers and buyers in a two-sided marketplace as it faces an acute chicken and egg problem. Since VCs take the marketplace from embryo to a toddler stage, BOTH buyers and sellers are of paramount importance.

Read 20 tweets

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal Become our Patreon

Thank you for your support!