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Mostly Borrowed Ideas

5 Nov, 12 tweets, 5 min read

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

Cash App and seller ecosystem continue to grow at an impressive rate. My notes from this call.

2/ "mid-market sellers experienced strong growth in the third quarter of 2021, growing gross profit nearly twice as fast as the overall Seller business on a two-year CAGR basis. Mid market Seller GPV represented 37% of total Seller GPV, compared to 28% two years ago."

3/ "with more than three out of four Square Invoices getting paid within a day vs. the industry average of 25 days for small businesses."

A new software/subscription offering: SQ Invoices Plus.

New international market: France, second largest card markets in Europe

4/ Cash App is focusing on teens, a demography of 20 mn in the US.

5/ In August, SQ launched Cash App pay.

"Cash App Pay has become a top requested feature at both Cash App customers and Square Sellers."

3 initiatives related to bitcoin: TBD, bitcoin hardware wallet, bitcoin mining system.

6/ Analyst asked point blank whether SQ will allow other crypto trading or dabble into NFTs?

The answer is no.

"Our focus is on helping Bitcoin to become the native currency for the Internet."

7/ "we continue to see an increase in attach rates for products using Cash Card. In the third quarter, Cash Card active brought in approximately 70% more inflows each month in than non-Cash Card actives."

8/ "we've begun to increase our customer acquisition costs above the historical $5 range, which we believe is too efficient, given the opportunities that we see"

"we're going to make an enhancement to the overall referral program and use it as a way to cross-sell our ecosystem"

9/ "customer balances slightly down quarter-over-quarter, up 143% on a year-over-year basis. We would really orient you, though, to look at inflows more broadly"

"With a larger base of customers, we get more opportunity to introduce discovery features to our network"

10/ International is growing faster than US. The focus on international is to be close to parity in terms of products compared to how it is in the US.

11/ "rate of weekly usage had nearly doubled year-over-year, growing faster than the monthly active Cash Card customers"

"As of third quarter, customers can now use Cash Card in person and online in many countries outside the U.S."

End/ Paywalled deep dive on $SQ: mbi-deepdives.com/sq/

I'll cover $IAC/ $ANGI tomorrow.

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

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More from @borrowed_ideas

Mostly Borrowed Ideas

@borrowed_ideas

5 Nov

1/ Thread: $IAC/ $ANGI 3Q'21 Update

Probably not the best idea to post an earnings thread on Friday evening, but for the sake of consistency, let me post anyway.

Here are my notes.

2/ Dotdash

"Dotdash executed phenomenally well growing revenue double digits for 18 straight quarters while expanding margins and generally outpacing the growth of its competitors"

"Dotdash content has a relevant shelf life measured not in days or hours, but months or years."

3/ "of Dotdash’s top 25 advertisers in 2019, all
have spent in 2020 nearly all have spent in 2021 and their spend has grown 29%."

Not much of an impact of IDFA.

"Those advertisements perform cookie or not"

Read 15 tweets

Mostly Borrowed Ideas

@borrowed_ideas

4 Nov

1/7 Thread: $TRUP 3Q'21 Update

Even though I am not a pet owner, last month's deep dive on Trupanion introduced me to the fascinating business of pet insurance. My notes from today's earnings call.

2/7 Total revenue +40% YoY
Subscription business +28%; other business +78%

Total enrolled pet +22% YoY; avg monthly retention 98.72% or 78 months (vs 76 months last yr); ARPU +4.5%

Adj operating margin 14.6%, very close to long-term target of 15%

3/7 "In Trutopia, members adding pets or referring friends offsets pets churning off. In the quarter, we narrowed the gap to Trutopia to a mere 0.28%."

Read 7 tweets

Mostly Borrowed Ideas

@borrowed_ideas

31 Oct

1/8 I bought Oculus Quest 2 and wanted to share my first impression as user. Since I don't play much video games, this is going to be mostly non-gaming experience of Quest.

2/8 The first glimpse of my "home" at Oculus felt incredible. That "Oculus home" appears much more luxurious than my actual home.

Then I watched this. I'm the kind of guy who avoids roller coaster in theme parks at any cost. I felt sick watching this.

3/8 Before throwing my Quest 2 away, I decided to try more videos. I watched YouTube (non-VR) for a while. It felt nothing unspectacular. I mean it's large screen and all, so much better than watching on laptop/TV. But nothing too amazing!

Read 8 tweets

Mostly Borrowed Ideas

@borrowed_ideas

30 Oct

@LibertyRPF

1/ @LibertyRPF is one of those people who makes fintwit such a worthwhile experience. I've learnt invaluable life lessons from him which I frankly doubt I could get elsewhere.

I’m glad through @InfiniteL88ps podcast others could have a glimpse of his wisdom. My notes.

2/ “people work and they trade their time for money, but it works both ways, so if you have enough money, you can buy back your own time.”

3/ "humans are very bad at predicting what's going to make them happy. As you often talk about, we're super nomadic, so we just look around, look at what everybody else is doing and go, Well, that must be the way," so we copy each other and we chase what everybody else is chasing

Read 19 tweets

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

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