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Mostly Borrowed Ideas

5 Nov, 15 tweets, 6 min read

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"

4/ On Meredith deal: "The two businesses are also complementary in how they generate revenues."

This whole paragraph makes me think there is a lot of low hanging fruits for Dotdash/IAC to work on Meredith.

5/ Long-term margins for Dotdash+Meredith is likely to be similar to what Dotdash has posted historically. LTM operating margin for Dotdash is 26.2%.

Tough comp expected, but expects 20% topline growth LT.

Expects $450 mn Adj. EBITDA from digital publishing in 2023.

6/ $ANGI

"Good news is Angi is growing, bad news is HomeAdvisor is still declining. But overall, the trend toward Angi is encouraging The Angi brand now comprises almost 60% of North America revenue up from less than 40% this time last year"

7/ "the services business up 160% year-on-year, about half of that organic, half of it from our Roofing acquisition."

The three things ANGI thinks about:

8/ Some changes in disclosure given their focus on services. Now revenue is segmented in Angi Ads and leads, and Angi Services.

I've been following ANGI for a year, and still requires quite a bit of an effort to follow/understand the numbers with all these changes. Not fun.

9/ sounds like Angi's roofing acquisition is showing good signs, and they may be willing to acquire more to create liquidity in the marketplace.

10/ expects 35% margin for core ads and leads business. Higher take rate/margins for low ticket items and lower take rate/margin for jobs >$10k jobs.

"This is about margin dollars"

11/ "I don't know any large consumer marketplace that's been built recently that doesn't have payments as a core part of the product. So we're going to continue to push on that."

Some discussions on payments and financing as well.

12/ "We have so much opportunity in data that it is almost embarrassing."

13/ Care dot com

Subscribers are up ~33%. As people start going back to work, some macro tailwinds are there.

14/ Following the Meredith deal, IAC expect to have $1.5 Bn pro-forma. IAC also has some Turo warrants which they expect to exercise at some point.

End/ All my twitter threads can be found here: mbi-deepdives.com/twitter-thread…

Have a great weekend, everyone!

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Mostly Borrowed Ideas

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5 Nov

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

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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%."

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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!

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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

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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.

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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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