👻 Investors Ghost Snapchat

1) Uber’s Booking Boom 2) Spotify Premium Drives Revenue, 3) Snapchat's Streak Of Losses and more!

Author

Carbon Finance
February 09, 2024

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Some key data bites from this week that you should know: 

  • Roblox’s $RBLX quarterly bookings hit a record $1.13B.

  • Alibaba $BABA is expanding its share-buyback program by $25B.

  • The Magnificent Seven dominate the S&P 500 $SPY to a degree unseen in 50 years.

  • The tech industry has already cut 32,000 jobs in 2024.

  • Disney $DIS announced a $1.5B investment in Epic Games.

  • Eli Lilly’s $LLY weight loss drug, Zepbound, brought in $176M in sales in the fourth quarter.

In today’s newsletter:

  • 🚕 Uber’s Booking Boom

  • 🎶 Spotify’s Revenue Breakdown

  • 👻 Investors Ghost Snapchat

Let’s dive right in!

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🚕 Uber’s Booking Boom

The day has finally come.

This week Uber posted its first-ever annual profit and released fourth quarter earnings that outpaced analyst estimates.

Q4 2023 Key Figures:

  • Revenue: $9.9B (+15% YoY growth)

  • Net Income: $1.4B (includes $1B gain from equity investments)

  • Gross Bookings: $37.6B (+22% YoY growth)

  • Trips: 2.6B (24% YoY, 28M average trips per day)

  • Free Cash Flow: $768M

  • Cash On Hand: $5.4B

For first quarter 2024, Uber is anticipating gross bookings between $37B - $38.5B, surpassing the estimated $37.43B.

The company also sees adjusted EBITDA between $1.26B - $1.34B, beating the $1.26B expected.

Overall, there’s not much to say other than Uber delivered a very strong quarter with great guidance.

🎶 Spotify’s Revenue Breakdown

In a previous issue, I talked about Spotify and their struggles to reach profitability.

The company reported fourth quarter earnings this week and they may finally have profitability in sight.

Q4 2023 Key Figures:

  • Revenue: €3.7B (+16% YoY growth)

  • Operating Loss: (€75M) (excluding one time charges, the company saw an Operating Profit of €68M)

  • Monthly Active Users: 602M (+23% YoY, net additions of 28M)

  • Premium Subscribers: 236M (+15% YoY growth)

  • Ad-Supported Monthly Active Users: 379M (+28% YoY growth)

  • Gross Margin: 26.7% (up from 25.3% in Q4 2022)

This quarter's performance saw premium subscribers surpass the anticipated 235M target, with revenue hitting the expected marks.

Analyzing the data, it's clear that the lion's share of Spotify's revenue stems from its premium subscriptions, accounting for approximately 87% of its total revenue.

For Q1 2024, Spotify projected subscriber numbers that align with analyst estimates.

The company also sent a signal of a solid financial outlook with forecasted operating income of €180M, beating expectations.

Following the earnings report, Spotify's stock experienced an 8% uplift, reflecting investor satisfaction with the company's future prospects.

👻 Investors Ghost Snapchat

Unlike Uber or Spotify, things aren’t looking great at Snapchat.

Since the release of their Q4 2023 earnings report, shares have plummeted nearly 40%.

Q4 2023 Key Figures:

  • Revenue: $1.4B (+5% YoY growth)

  • Net Loss: -$248M (lost -$288M the year prior)

  • Adjusted EBITDA: $159M (-32% YoY decline)

  • Daily Active Users: 414M (+10% YoY growth)

  • Average Revenue Per User (ARPU): $3.29 (-5% YoY decline)

Despite the uptick in daily users, the report reveals significant challenges.

Revenue growth is lukewarm, barely hitting the mid-single digits.

More concerning are the steep declines in both adjusted EBITDA and ARPU, down 32% and 5% year-over-year, respectively.

Moreover, Snapchat's sales forecast fell below analyst expectations, targeting a midpoint guidance of $1.115B against predictions of $1.117B.

This is particularly glaring when compared with the likes of Meta and Google, which have seen their advertising revenues increase by 24% and 11%, respectively.

Investors are left hoping for a strategic pivot that will spur growth and steer Snapchat towards profitability.

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🏦 NYCB Downgrade. New York Community Bancorp $NYCB shares fell to a 27-year low following a Moody’s $MCO credit-rating downgrade - BB

🏀 Streaming Merger. ESPN, Fox, and Warner Bros. Discovery announced plans to launch a sports streaming platform in the fall - ESPN

🇨🇳 Government Intervention. Chinese stocks climbed ahead of Lunar New Year following recent government actions to bolster market confidence - WSJ

🤖 AI Rebrand. Google $GOOG rebranded its Bard AI chatbot to Gemini - E

Notable Companies Reporting Earnings Next Week:

  • Monday (2/12):

    • Arista Networks $ANET, Cadence Design Systems $CDNS, Waste Management $WM

  • Tuesday (2/13):

    • Coca-Cola $KO, Shopify $SHOP, Airbnb $ABNB, Datadog $DDOG

  • Wednesday (2/14):

    • Cisco $CSCO, Equinix $EQIX, Occidental Petroleum $OXY

  • Thursday (2/15):

    • Applied Materials $AMAT, Deere & Co $DE, DoorDash $DASH, DraftKings $DKNG, Coinbase $COIN

  • Friday (2/16):

    • TC Energy $TRP

All of the companies that are reporting earnings next week can be viewed here.

Major Trades Published 02/02 - 02/08

Buys

  • Charter Communications ($CHTR)

    • Insider: Christopher Winfrey (CEO & Chairman)

      • # of Shares Purchased: 5,050

      • $ Amount: $1,491,214

      • SEC Forms: [1]

  • Next Era Energy ($NEE)

    • Insider: Kirk Hachigian (Director)

      • # of Shares Purchased: 20,000

      • $ Amount: $1,116,700

      • SEC Forms: [1]

Sells

  • Meta Platforms ($META)

    • Insider: Mark Zuckerberg (CEO and COB)

      • # of Shares Sold: 385,467

      • $ Amount: $179,562,917

      • SEC Forms: [1], [2], [3], [4], [5], [6], [7], [8]

  • Stryker ($SYK)

    • Insider: Ronda Stryker (Director)

      • # of Shares Sold: 293,442

      • $ Amount: $100,349,381

      • SEC Forms: [1], [2]

  • Intuitive Surgical ($ISRG)

    • Insider: David Rosa (President)

      • # of Shares Sold: 80,710

      • $ Amount: $31,418,468

      • SEC Forms: [1]

  • Airbnb ($ABNB)

    • Insider: Brian Chesky (CEO and Chairman)

      • # of Shares Sold: 153,848

      • $ Amount: $22,132,442

      • SEC Forms: [1]

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