Week 5 DiscussionCOLLAPSE
Earnings Call Review
Listen to (or read the transcript of) your organization’s or any publicly traded company’s most recent quarterly earnings call and respond to the following questions:
TIP: To find an earnings call or transcript, go to the “Investor Relations” section of the company’s website. There you will find links to financial reports and recordings of recent calls.
- Identify the company you selected.
- Have you ever listened to an earnings call?
- What topics were included? Which were most helpful or insightful? Were there topics you wished were included or expanded upon?
- Was there a discussion of profit or EPS by Company Management? Explain what this implies, what is the driving force, and what actions you would recommend?
- Were the analysts’ questions aggressive and challenging or supportive and respectful? How well did management respond to the questions?
- What additional insights were you able to gain in regards to the company’s financial health, forward guidance, and strategic financial decisions?
- Was there any information or perspective shared that a competitor could benefit from?
- If you were an employee of this company, how could you leverage this resource to benefit you or your company?
Post your initial response by Wednesday, midnight of your time zone, and reply to at least 2 of your classmates’ initial posts by Sunday, midnight of your time zone.
1st person to respond to
Phil Charles RE: Week 5 DiscussionCOLLAPSE
Listen to (or read the transcript of) your organization’s or any publicly-traded company’s most recent quarterly earnings call and respond to the following questions: Tesla
I have never listened to an earnings call, so reading Tesla’s Q4 and FY2021 updates.
Before the topics and Q&A sessions, CEO Musk gave an overview and highlighted milestones that were accomplished and future outlook statement. The two critical milestones that Musk shared were 1) Tesla had the highest operating margin in the industry at above 14% GAAP operating margin, and 2) Generated $5.5B in GAAP net income.
Among the topics covered were;
Photos & Charts
I found information on vehicle capacity, core technology, key metrics, outlook, and other highlights helpful and insightful. Notably, on the one hand, Tesla was limited in operating its factories at total capacity due to the continuation of the global supply chain, transportation, labor, and other manufacturing challenges; however, their positive outlook still hinges on how well that challenge improves. I thought many of the issues were addressed, namely Autopilot and Full Self-Driving (FSD), very interested to see if FSD by the end of 2022.
Was there a discussion of profit or EPS by Company Management? Explain what this implies, what is the driving force, and what actions you would recommend?
Musk alluded to the company’s profitability in his opening statements, to where he dubbed 2021 as a breakthrough year for Tesla. He sees growth for 2022 going above 50%. The driving force hinges on improving innovations to reduce the cost of manufacturing and operations in the long term. Additionally, Musk considers Full Self-Driving (FSD) software a tremendous asset value, thus the focus. Robotaxis were mentioned, but not sure how viable that will be near term.
Were the analysts’ questions aggressive and challenging or supportive and respectful? How well did management respond to the questions?
Many questions were asked, and Elon and his CFO answered nine. I found the questions reasonable, many technical, but responded appropriately.
What additional insights were you able to gain in regard to the company’s financial health, forward guidance, and strategic financial decisions?
The answer to this question is very Muskesk. How is the progress of the 25k compact car? Can you give any updates? Answer: Well, we’re not currently working on a $25,000 car–we have enough on our plate right now — it’s sort of the wrong question. Really, it’s really the thing that overwhelmingly matters is when is the car autonomous? I think, at the point in which it is autonomous, the cost of transport drops by, I don’t know, a factor of 4 or 5 (Musk, 2).
Making all cars autonomous is the priority, which can dictate the cost, whether cheaper or more costly.
Was there any information or perspective shared that a competitor could benefit from?
Tesla’s forward-looking statement and outlook provided key insights that a competitor could benefit.
If you were an employee of this company, how could you leverage this resource to benefit you or your company
Tesla, in my view, did not offer much of anything that a company can use to their benefit. Much of what Musk said has been known for years. They can use the information to plan, maybe change course since Musk is constantly moving the goal post, which also forces them to do so.
1. Tesla Inc. 2022. Q4 2021 Earnings. Retrieved from: https://ir.tesla.com/#tab-quarterly-disclosure
2. Tesla Inc. 2022. Q4 2021 Earnings Q&A. Retrieved from: https://app.saytechnologies.com/tesla-2021-q4
2nd person to respond to
Gabriela Stamate RE: Week 5 DiscussionCOLLAPSE
Greetings Prof. Armstrong & Classmates,
I have chosen Shopify, the company to listen to their Q3 2021 earnings call. One, because it is a Canadian tech company whose own growth skyrocketed in the last two years, they finally met the ideal conditions to thrive. Two, as it is rather a new company, so I wanted to know what a company like that does with the success they have and what strategic plans they have for the future, as they do so much better financially. It was the first time I listened to such a recording- in almost one hour presentation; half was about the quarterly results about the company, plans, and achievements. The second half was opened to Q&A, which was the most interesting part.
There was no surprise when they announced a strong quarter, with higher revenues or GMV (Gross Merchandise Value) than the previous period. They announced their strategic partnerships with social media like TikTok, Spotify sales channel, Roque, and various platform features offered to their merchants, like Shopify Pay, Shopify Markets, Shopify Balance, or Shopify Capital. In the new normality, Shopify aims to serve as the essential internet infrastructure for eCommerce for a growing base of entrepreneurs around the world (Shopify, 1). Their goal is to make it easier for their merchants to sell anywhere by enhancing their platform to be more intuitive, allowing larger brands to migrate easier with Shopify and build a direct relationship with their customers. The Shopify charismatic trait targeted from the beginning the entrepreneurs who are passionate about their work, the small businesses, the backbones of economies by creating for these merchants the tools to support their businesses and be successful.
During this earnings call webcast, I would have preferred to hear how they plan to manage the situation if, near in the future, people go back to work and start traveling again, like in the old days. As they have mentioned, during summer 2021, the numbers dipped when people started to go back in the office; as an eCommerce tech company, their success is significantly related to the current pandemic situation. The Q&A half was very informative; the questions were smart and pertinent to the current context, questions about the supply-chain issues that affect the Shopify merchants, the future of retail, technological trends like Super Apps, and lastly, the retention rate of merchants with Shopify. Some of the questions were well supported and clearly responded, some not so much – three management representatives were participating in this call.
Overall, a fair, informative earnings call, where Shopify demonstrated their ongoing desire to bring solutions and make selling an easy process for everyone, whether is a small merchant or a large brand, locally or internationally.
Thank you. Gabriela
- Shopify. Retrieved from: https://investors.shopify.com/news-and-events/default.aspx.