🗞️ This CEO is confident it's time to buy? (No cleaning fees)

Happy Sunday!

This week we’re digging into:

• Uber’s exceptional quarter 💰️ 

• Brian Chesky calls AirBnB stock “a good time to buy” 🤔 

• A Nintendo Deep Dive 🕹️ 

And plenty more. Let’s dive in!

Earnings Roundup:

• 🚗 Uber: Ride sharing giant Uber reported 2nd quarter earnings on Tuesday that crushed Wall Street’s estimates. The company delivered 16% growth in revenue and 144% growth in GAAP operating income.

  On Uber’s conference call following the strong report, CEO Dara Khosroshawhi stated “Based on what we’re seeing today, the Uber consumer is in great shape.” Additionally, Uber is becoming increasingly profitable. Despite much investor skepticism around Uber’s lavish expense-culture from when it was a private company, the leader in ride sharing is proving to have a very profitable model at scale. Uber’s stock was up 24% this week.

• 🐭 Disney: The house of mouse reported a mixed bag of earnings this week. Disney’s streaming business delivered its first ever quarterly profit which helped drive Revenue and EPS above analyst’s expectations.

  However, a slowdown in traffic to Disney’s theme parks has left investors concerned about consumer demand over the next few quarters. When discussing the parks business on the quarterly conference call, CFO Hugh Johnston stated “We saw a slight moderation in demand, I certainly wouldn’t call it a significant change.” Disney’s stock dropped 5% following the report.

• 🏠️ AirBnB: Unlike its fellow marketplace business Uber, AirBnB delivered a bit of an underwhelming quarter for investors. The company beat top-line estimates but warned that demand from US customers is starting to weaken.

  Despite the slowdown in bookings growth and the cautious guidance, AirBnB’s CEO Brian Chesky still appears to be extremely optimistic about the company’s long-term prospects. On the company’s conference call Chesky stated “The new Airbnb... will be about a lot more than short-term rentals" and after the stock dropped on the report, Chesky left a comment on a twitter post that said “I’m confident it’s a good time to buy.”

  AirBnB’s stock closed down 7% this week.

• 🛒 Shopify: E-commerce enabler Shopify saw its shares soar 29% after reporting better than expected earnings Wednesday morning. Shopify, which helps merchants sell online, saw its total gross merchandise volume grow 22% to reach $67 billion for the quarter.

  But it’s the company’s subscription business that continues to outpace its merchant solutions segment. Subscription revenue reached $563 million for Shopify this quarter, growing 27% compared to the same period a year prior.

• 📱 Duolingo: Language learning company Duolingo significantly outpaced expectations with its 2nd quarter report this week. The company grew its daily active users by 59% versus a year ago which helped to top analyst estimates for both revenue and profits.

  With 8 million paying subscribers, Duolingo is now generating $144 million in subscription revenue each quarter. That’s ~6x more than the company was generating just 4 years ago. Duolingo’s stock was up 18% this week.

FinChat Copilot v. LLMs

10 months ago, researchers at Patronus AI and Stanford University teamed up with 15 finance industry experts to build FinanceBench. 

FinanceBench is an open source dataset of more than 10,000 financial questions and answers designed to test LLMs.

Here’s how FinChat Copilot stacks up against others:

And… we’re always improving the FinChat Copilot!

This week, the FinChat team added a real-time news feed to FinChat Copilot so it can easily handle more time-sensitive queries such as:

• Why is Crowdstrike’s stock down this month?

• What’s the most recent news on Disney?

And many others!

Partner Spotlight: Brett Schafer

Is it finally time to own Nintendo?

Nintendo has dominated family-friendly video games for the last few decades. Mario. Zelda. Pokemon. Ask most people, and they can name numerous Nintendo entertainment characters.

And yet, its stock has only done mildly well since 1992. This was due to the boom-and-bust cycle of its previous gaming hardware systems. Nintendo has innovated time and time again with console hardware, which delights its customers. But then, it follows them up with a flop. Remember the Wii U? Yeah, most people don’t either.

In 2017, Nintendo launched a new innovative hardware device called the Nintendo Switch. The console is a hybrid system that allows players to play games on their TV or on the go with its handheld system. Players loved it, and it is now one of the top-selling gaming consoles in history.

Around this time, Nintendo's management made a philosophical shift to focus on retaining active players and building a more consistent business. It hoped to eliminate some of the cyclicality that comes with the gaming business, making profits more consistent. It also made plans to expand outside of just gaming entertainment to new form factors for its intellectual property.

So far, there is evidence this strategy is working.

1. Active players for the Nintendo Switch continue to grow year after year. They hit 128 million last quarter.

2. Nintendo’s software (i.e. game) sales have remained elevated even in 2023 and 2024, leading to elevated profits compared to before the COVID-19 pandemic. Profits are down from the pandemic due to the surge in demand for gaming during lockdowns and the Japanese Yen’s depreciation vs. the U.S. dollar.

3. Nintendo’s non-gaming income is growing, and it is seeing success in new entertainment form factors. It is opening four theme parks around the world in partnership with Univeral, and the Super Mario Movie released last year ended up being one of the best-selling animated films in history. These not only drive direct revenue but bring customers back to buy new games after engaging with the entertainment characters again.

Nintendo is planning to launch its new hardware system within the next 12 months. Is the stock a buy? Or is this another cyclical peak before another hardware flop?

Meme of the week

This week Disney, Fox Sports, and Warner Brothers Discovery announced that their new sports streaming package called Venu Sports will cost $42.99 per month.

Additionally, on Tuesday, Disney announced that the company is planning to raise the price of its streaming bundle by an extra $1 to $2 per month starting in the fall.

With many streaming services having raised prices over the last few years, switching to streaming is becoming less cost-efficient for cord-cutters that hope to have the same content coverage that they had on cable.