Podcast Summary
Google's cookie phase-out impact on ad tech companies: Despite Google's announcement to phase out third-party cookies, ad tech companies like The Trade Desk and Magnite are prepared, and the sell-off in tech stocks is not solely due to this news.
While Google's announcement to phase out third-party cookies for targeted advertising has caused a significant drop in shares for companies like The Trade Desk and Magnite, it does not fundamentally change their business. Google has been discussing this privacy sandbox for several years, and these companies have been preparing for the change. The challenge lies in navigating this new environment, but the businesses are not caught off guard. Additionally, the sell-off in tech stocks, including The Trade Desk, is not solely due to this news. The communication skills discussed on the Think Fast, Talk Smart podcast, such as managing anxiety and harnessing nervous energy, can be beneficial in navigating the challenges that come with changes in the business landscape.
Advertising market's recovery and retail sales trends: The pandemic's impact on businesses brings both opportunities and uncertainties, with companies like The Trade Desk adapting to Google's new targeting methods and retailers like Target reporting strong sales but uncertain futures.
The advertising market's recovery during the pandemic has significantly benefited companies like The Trade Desk, as shown in their impressive stock performance. Google's shift towards cohort-based targeting instead of using personally identifiable information (PII) may impact these companies, but Trade Desk's investments and expertise in the industry give them a strong position to adapt. Additionally, retailer Target reported impressive 4th quarter sales with a 20% increase in same-store sales, but the lack of guidance for the current fiscal year led to a 8% drop in their shares. The pandemic has been a major tailwind for several businesses, leading to their success but also creating uncertainty for future growth. The shift in advertising strategies and retail sales trends highlight the dynamic business landscape in the current economic climate.
Retail giants Target and Costco thrive during pandemic: Target saw a 20% increase in comps, digital sales up 120%, and Shipt growth. Costco reported a 15% sales increase, digital sales up 76%, and membership fees up 8%.
During the pandemic, retailers like Target and Costco demonstrated exceptional omnichannel capabilities, resulting in significant sales growth. Target saw a 20% increase in comps, with digital sales accounting for nearly two-thirds of the overall growth. Shipt, an acquisition from 2017, experienced over 300% growth in sales and a 130% increase in memberships. Costco reported sales up 15%, with digital sales up 76% and membership fees up 8%. Despite these impressive numbers, both companies are focusing on execution rather than providing specific guidance for the coming year due to uncertain comparables. Costco took a $246 million charge for COVID premium wages, which affected their profits and caused a 6% dip in shares. Despite these challenges, both Target and Costco continue to be stakeholder-friendly businesses, with strong renewal rates and increasing hourly wages. The stocks of these companies have seen declines over the past year, making them more attractively priced at their current earnings multiples.
Exceptional business performance with 370% revenue growth: Zoom reported impressive Q4 revenue growth, expanded into telephony market, and boasts strong business fundamentals making it a long-term investment opportunity
Despite a recent pullback in Zoom Video's stock price, the business itself continues to perform exceptionally well. The company reported a 370% increase in Q4 revenue compared to the previous year, and boasts impressive growth in the number of large business customers. Additionally, Zoom is expanding beyond its video app offerings into the telephony market, which presents a significant market opportunity. The slight decrease in gross margin was due to an increase in free usage related to the pandemic. Overall, Zoom's strong business fundamentals and experienced leadership make it a compelling investment opportunity for long-term investors.
Okta acquires Auth0 for $6.5 billion to expand in client-side identity management: Okta's acquisition of Auth0 strengthens its market position and addresses growing demand, but comes with stock dilution and weaker guidance. Square purchases Tidal for $300 million to explore music industry opportunities and diversify offerings.
Okta, a leading enterprise identity provider, is expanding its business by acquiring Auth0, a rival specializing in client-side identity solutions, for $6.5 billion. This acquisition will help Okta address the growing demand for client-side identity management and strengthen its position in the market. The deal, however, came with a significant stock dilution and weaker-than-expected guidance, causing a dip in Okta's stock price. Meanwhile, Square, the successful financial services and digital payments company, made a smaller bet by purchasing music streaming service Tidal from Jay Z for $300 million. This move, according to Square's CEO Jack Dorsey, is aimed at finding new ways to support artists and explore potential opportunities in the music industry, such as non-fungible tokens. Despite the skepticism, these deals reflect the companies' strategic moves to diversify their offerings and potentially unlock new revenue streams.
MercadoLibre's Record-Breaking Quarter and Working Moms' Balancing Act: MercadoLibre saw record revenue, significant growth in GMV and TPV, but lower gross profit margin due to investments. Working moms in executive roles benefit from tech improvements and understanding workplaces for balancing work and life.
MercadoLibre had a strong quarter with record-breaking revenue of 1.3 billion, a 110% increase in gross merchandise volume, and a 134% increase in total payment volume. However, the company's gross profit margin fell due to investments in logistics and lower product margins during the holidays. Despite the dip in gross profit, the impressive revenue growth and expansion of Mercadopago's offline payments show promising signs for the future. On a different note, Joanne Lublin's research on working moms reveals that improvements in technology and a more understanding workplace have made it easier for moms in executive roles to balance work and life. These factors, along with the desire for family-friendly workplaces, are crucial for attracting and retaining talent from the millennial and younger generations.
Husband's Evolving Role in Executive Moms' Lives: Husbands now encourage careers, share parenting duties, and create 'work life sway' for executive moms, enabling them to balance jobs and family crises effectively. Choosing supportive employers is also crucial.
That the supportive role of spouses in the careers and family lives of executive moms has significantly evolved. These husbands not only encourage their wives' professional commitments but also actively participate as equal parents and partners at home. This dynamic enables these women to achieve a concept called "work life sway," which allows them to focus on their jobs when required while maintaining flexibility to handle personal and family crises. The idea of work life sway is essential for modern working mothers to balance their professional and personal lives effectively. Additionally, choosing the right employer is crucial for achieving work life sway, as supportive work environments can help women excel in their careers while managing their family responsibilities. Companies like Procter and Gamble, Nike, Home Depot, and Coca Cola, among others, have been recognized for their commitment to empowering working mothers.
8 words: Companies like American Express and PwC lead in supporting working parents: Companies American Express and PwC offer generous parental leave, mentoring programs, and normalize work-life balance for all primary caregivers, benefiting employees and setting a positive example for workplaces.
Companies like American Express and PwC are leading the way in supporting working parents, particularly working mothers, by offering generous parental leave, mentoring programs, and creating a culture that normalizes paternity leave and recognizes the importance of work-life balance. American Express went above and beyond by making leave applicable to all primary caregivers, regardless of gender or marital status, and providing additional resources and support for fathers. PwC, on the other hand, has had a mentoring program for mothers since 2008, which pairs new mothers with experienced mentors to provide support and guidance. During the pandemic, PwC established protected time for parents, allowing them to take breaks for caregiving responsibilities without fear of negative consequences. These companies' initiatives not only benefit individual employees but also create a positive ripple effect, setting an example for other workplaces to follow.
Executive mothers setting boundaries for work and family time: Executive mothers who have experience working remotely have found success in setting boundaries with their employers to protect family time. Amazon's potential entry into broadcasting Thursday night NFL games could add value for consumers and potentially grow Prime memberships, lowering risk due to diverse business model.
Executive mothers who have worked remotely before the pandemic have found effective ways to set boundaries and protect their time. One such mother, who worked for a company where all employees worked remotely, set ground rules with her employer about unreachable hours. This is a strategy that can be applied by working mothers to ensure they have dedicated time for their families and work. In the business world, the NFL is in negotiations with various networks, including Amazon, for broadcasting rights to Thursday night games. Amazon's potential entry into this market is significant as it is a large company with multiple revenue streams, including Prime membership, shopping, gaming, and advertising. The deal could add more value for consumers and potentially grow Amazon's Prime member base. Despite the reported increase in costs for Amazon, the risk factor might be lower compared to traditional networks due to the company's diverse business model.
NFL partners with Amazon, Lam Research is a tech investment opportunity: The NFL teams up with Amazon for content streaming, while Lam Research's non-cyclical business model and large market size make it an attractive tech investment. AppHarvest, a new player in the agriculture tech sector via a SPAC, is also worth watching.
The NFL is making strategic moves to stay competitive in the evolving content streaming market by partnering with tech giants like Amazon. This partnership could give Amazon an edge in the market, especially with the increasing popularity of NFL content and the potential impact of sports betting. On the other hand, Lam Research, a company that manufactures equipment for semiconductor chip manufacturers, is another investment opportunity due to the growing demand for chip technology in various industries, including 5G, entertainment, data centers, and driverless technology. The company's non-cyclical business model and large market size make it an attractive investment option. Additionally, there's a new player in the tech scene called AppHarvest, a SPAC that recently went public, which is worth keeping an eye on in the agriculture technology sector. Overall, these investments reflect the ongoing digital revolution and the importance of technology in various industries.
Connected agriculture: AppHarvest's tech-driven tomatoes: AppHarvest, a tech-focused agribusiness specializing in tomatoes, is growing and could be worth watching with predicted Q1 revenues of $2-2.5 million and full-year revenues of $20-25 million.
Connected agriculture is an emerging sector, and companies like AppHarvest are making strides in this space using technology such as connectivity and cloud edge sensors. AppHarvest, which recently went public via SPAC, is a small business with predicted net revenues of $2-2.5 million for Q1 and $20-25 million for the full year. The ag tech industry is growing and presents a significant opportunity. Despite the name being confusing with its reference to both apples and apps, AppHarvest specializes in tomatoes and could be worth keeping an eye on for tomato lovers. Dan, who expressed a preference for manufacturing over tomatoes, added Lam Research to his watchlist instead. Overall, the ag tech sector is an exciting area to watch as it continues to develop and innovate.
