Thursday's Headlines: Spotify Hits Its Rhythm

Thursday's Headlines: Spotify Hits Its Rhythm

1. Spotify (SPOT) reported a Q3 beat across all metrics during last night's earnings call. Monthly active users (MAUs) are up to 381 million, and premium subscribers 172 million, growing 19% each and making Spotify the largest U.S. podcast platform now. Total revenue came in at €2.5 billion ($2.9 billion), and ad revenue specifically grew a whopping 75% year-on-year (YoY) from €185 million ($214 million) to €323 million ($374 million). On top of that, the company unexpectedly made a profit for the quarter of €2 million ($2.3 million). Partnerships with brands OnePlus, and others were announced, allowing new users to trial its service and grow in more markets. Artists like Drake have also teamed up to encourage more sign-ups. Read more here.

2. Ford (F) jumped 9% after hours following an earnings beat, guidance raise, and a reinstated dividend. Total revenue came in at $33.2 billion v.s. $32.5 expected, and earnings per share (EPS) was $0.51 v.s. $0.27 expected. Full-year guidance for EBIT (Earnings Before Interest and Tax) has been raised from $9-$10 billion to $10.5-$11.5 billion, and the reintroduced dividend will be $0.10 per share following the temporary cut during the 2020 downturn. The Mustang Mach-E has launched in Europe with 10,200 sold in the third quarter, and deliveries will begin in China by the end of the year. Ford eventually expects 200,000 unit sales per year on this vehicle. Chip shortages are expected to continue into 2022, with pressure to reduce in 2023. Read more here.

3. Twitter(TWTR) took a big hit yesterday, falling over 10% despite a huge boost in ad revenue and meeting earnings estimates. Its ability to navigate Apple’s iOS 14.5 privacy update wasn’t good enough, with negative sentiment on growth prospects driving the stock down. Twitter’s $1.28 billion in Q3 revenue was a slight miss compared to estimates of $1.29 billion, but daily active user (DAUs) numbers expectations were flat at 211 million. Guidance for Q4 was the main catalyst behind the dip, with revenue projected to come in at $1.5-1.6 billion. Twitter CFO Ned Segal maintained that the platform has plenty of room to grow and the main focus now is monetization for content creators on the platform, and transforming Twitter into a hub where transactions can take place for businesses. Read more here.

Some more earnings from last night:

Align Technology (ALGN)

It was a good quarter for teeth as Align surpassed its 11 millionth Invisalign patient, helping revenue to jump 38.4% YoY to a record $1.02 billion. Despite supply chain issues, Align president and CEO Joe Hogan hailed strong sales amongst teens in North America and growing doctor sales for the positive results. Read more here.

Coca-Cola (KO)

A slow but steady return of restaurants and theaters has seen Coca-Cola post earnings of $0.65 per share, beating analysts’ estimates of $0.58, on revenue of $10.04 billion. “While the global recovery remains asynchronous, our people and our systems are leveraging the learnings to deliver good results and emerge stronger,” said CEO James Quincey. Read more here.

Cognizant Technology (CTSH)

It was another earnings beat for the business consulting and IT services provider after it reported earnings per share of $1.06 on revenue of $4.7 billion, up 11.8% YoY. While the industry faces an unprecedented competition for talent, we attracted a record number of employees to Cognizant, and stayed focused on delivering against our client commitments and our strategic repositioning,” said Brian Humphries, CEO. Read more here.

iRobot (IRBT)

Despite the ubiquitous excuse of the global supply chain going kaput, the robotics leader reported EPS of $1.67 on revenue of $440.7 million, up from $413.1 million a year earlier. Happy with these results, CEO Colin Angle commented: “We were also pleased to see that our iRobot Select subscription service is building momentum in the U.S. and our connected customer base continues to expand globally.” Read more here.

Retail Opportunity Investments Corp (ROIC)

It was a quarter of relief for ROIC after it beat estimates to report a profit of $0.25 per share on $32.6 million in Funds From Operations (FFO).  “Looking ahead, we are poised to have a solid finish to 2021 and are diligently working to position the company for a strong 2022,” said CEO Stuart A. Tanz. Read more here.

ServiceNow (NOW)

Failure to meet Wall Street’s exceedingly high expectations for the upcoming holiday season has caused ServiceNow’s stock to dip, despite posting an earnings beat of $1.55 per share on revenue of $1.51 billion. President and CEO Bill McDermott credited ServiceNow’s “unmatched customer and employee experiences” during the call. Read more here.
Teladoc (TDOC)

Teladoc suffered a drop in price despite posting another earnings beat. In a familiar trend to investors, its stock dropped by 5% after posting a loss of $0.53 per share, beating analysts’ estimates of -$0.67, on revenue of $522 million. “We are confident in our ability to innovate, anticipate and solve for the evolving whole-person health needs of consumers and healthcare professionals globally,” said CEO Jason Gorevic. Read more here.

Twilio (TWLO)

Twilio shares plummeted by over 12% despite beating estimates on both earnings and revenue yesterday. Revenue of $740.2 million, a 65% rise on last year, wasn’t enough to overcome subpar Q4 forecasts, and investors responded by selling. “We delivered another quarter of strong growth at scale in the third quarter as companies continue to turn to Twilio in this digital-first world,” said co-founder and CEO Jeff Lawson. Read more here.

There are 10 companies on the MyWallSt shortlist that will report earnings today:

Amazon (AMZN)

American Tower (AMT)

Apple (AAPL)

Atlassian (TEAM)

Axos Financial (AX)

IMAX (IMAX)

Mastercard (MA)

Shopify (SHOP)

Starbucks (SBUX)

Texas Roadhouse (TXRH)

Zendesk (ZEN)

Get this week’s full earnings calendar here

David GranahanDavid Granahan

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