Summary of Earnings Calls: Week of 8/3 – Green Dot Corp, Five9, Sony, AMC, Ralph Lauren, Kratos

  • Green Dot Corp
  • Five9
  • Sony
  • AMC
  • Ralph Lauren
  • Kratos

Green Dot Corp Earnings Call Summary

Green Dot Corp 8/4
SummaryDespite setbacks with regards to COVID-19, digitlization of financial transactions and strong ecommerce recovery means that a much-changed leadership committee at Green Dot is confident of success in both the short and long term
GoalsRe-establish norms in terms of customer service, digitalize to keep up with increasing ecommerce, and increase exposure with small businesses
StrategiesPartner with companies working with financial transactions for small businsses
InitiativesCall-center staffing is back to normal and exceeding orignial efficiency and goals
important CEO Quotes“I have said that people are not our most important assets, the right people are. From a recruiting standpoint, work from anywhere has dramatically increased the quantity and caliber of applicants we are receiving for open positions.”
 Strong emphasis on new personell, as around half of the CEO’s speech is focused on personell rather than a shift in strategy for the company
important CFO QuotesDuring Q2, we saw a strong recovery from the combination of stimulus funds and incremental unemployment benefits provided under the Cares Act and the acceleration of many of the digital payment trends that existed pre-COVID. This resulted in a higher demand and usage of our products and services that has persisted into July.
 Gov’t stimuli has increased demand and forced the company to invest resources to digitalize and modernizetheir systmes
COVID update 
LayoffsJason Bibelheimer only exec in leadership organizations left due to large overhaul
Key hiresPhillip Lerma, chief risk officer
 Greg Quarles, former H&R CEO
 Brandon Thompson, Exec. VP of retail, tax, paycard
Funding or new fund allocation?None
Mergers or acqusition mentionsNone
Product Release mentionsNew partnerships with Kabbage and Intuit to give small businesses faster access to funds, great account visibility and convenience
Other major business updatesNone
Relevant Analyst Questions“New the what from what you see, what are you most excited about on the growth front? Where do you see the biggest opportunity to enhance growth and profitability over the next couple of years?” Short term focused on COVID recovery, while medium term is digitalization and penetration into consumers, while long term, it is to keep the same strategy as there will always be demand fo physical currency and financial transfers

Five9 Earnings Call Summary

Five9 8/3
SummaryDue to booming ecommerce and inability for in-person conducting of business, Five9 has seen unprescedented growth and will continue to due to the current situation, meaning the compnay has to focus their efforts on providing a trustworthy product for companies to continue to utilize post-COVID
GoalsStrengthen partnerships to ensure they can help keep up with those comapnies’ increased demand for customer service
StrategiesIncreased investment in systems integrations to increase efficiency in the face of huge growth
InitiativesDeliver and ensure customers retain trust in their services
important CEO Quotes“First, there are two trends that have been building for some time, the shift from on-premises to cloud and the importance of digital transformation, both of which COVID-19 is potentially accelerating. Second, our increased go-to-market investments are clearly paying dividends, most notably with systems integrators and AT&T. Third, our enhanced and expanded engineering leadership and the increased investments we’ve armed them with is resulting in faster and more product innovation.”
 With COVID-19 creating a need for companies to invest in cloud-based customer service, the factors listed above primed Five9 for a very positve quarter in these uncertain times
 “Given this favorable market trend and the proven ability to execute, we believe we can maintain 30s-level enterprise subscription growth.”
 Such large growth potential shows that there are still countless companies to be tapped for potential business
important CFO QuotesThe best-performing industry continue to be communications, education and technology. Our three largest industries, financials, healthcare and business services continue to grow steadily.
 With all of these industries moving online, education and communications are primed for the largest growth
 “Recurring revenue accounted for 92% of our revenue.”
 The strengths of Five9 include retaining existing customers, which the current climate makes easier to do
COVID updateVirus will accelerate demand for the company’s services
LayoffsNone, however mentioned that hiring process was slowed
Key hiresNone
Funding or new fund allocation?None
Mergers or acqusition mentionsNone
Product Release mentionsLaunch of AI virtual assistant
 “New packaged workflow automation applications” to facilitate and streamline conversation
Other major business updatesNew partnership with CDW
 Secured largest orders with retailing sales company, beating out companies like Amazon in the process, and a logistics company
Relevant Analyst Questions“So we’ve had increased interest in our Virtual Observer platform that we acquired and that’s, I think, going to be an increasingly important component of any work-from-home solutions. So we’re well set up for this transition however big it is.” Predicting a work-from-home scenario and readying themselves for the post-COVID world

Sony Earnings Call Summary

Sony 8/4
SummaryContinue current path of diversifying business and investments into digital entertainment streams, while anticipating large revenue in the winter with their PS5 launch
GoalsDigitalize their businesses and focus on at-home entertainment
Strategies/InitiativesImprove image sensing products which use AI to compete by next year
important CEO Quotes“Music Publishing space, revenue from all areas, except for streaming such as music licensing from movies and television, is being significantly negatively impacted by the spread of COVID-19. And in the Visual Media platform space, revenue is being significantly impacted due to a variety of factors such as decrease in physical media production and the postponement and cancellation of live events, primarily in Japan.”
 While the company has been overall successful this qurarter, one place where they were unable to succeed was in music revenue
 “We are preparing for potential second and third waves of COVID-19 by transforming the structure of our business into a more resilient one through an overhaul of our operations and further streamlining as well as enhancement of our e-commerce distribution channels.”
 The company has been plannning for a second wave and seems to be well set up if that occurs
important CFO Quotes None
COVID updateWith live events cancelled, music and rights sales have decreased, however use Stagecrowd to try and mitigate losses
Key hiresNone
Funding or new fund allocation?Can reduce investments in capacity until 2022 as current slowdown will suppply enough products until then
 Investments in Bilibili and Epic Games to increase investment in digital entertainment
Mergers or acqusition mentionsNone
Product Release mentionsLast of us part 2, Ghost of Tsushima,(games) Stagecrowd (paid live video distribution)
Other major business updatesNone
Relevant Analyst Questions“And secondly, as your future policy for Huawei, the risk for Huawei, I think it’s going to remain. But are you going to make any changes to your partners? Do you have any policies regarding your partnership for supply in the supply chain?” The strained relations between China and the US has kept Sony from collaborating with Huawei, which has negatively affected the company, however, it fails to get into more detail

AMC Earnings Call Summary

AMC 8/4
SummaryAlthough in person revenues have and continue to take a hit due to COVID-19, there is confidence in on demand video and cable in less urban populations. With the expansion into subscription and ad-based services, AMC tries to positon itself for increased at-home entertaintment
GoalsWith lack of in person theatre revenues, to focus on at-home entertainment services
Strategies/initiativesWork with other AVOD (ad-based video on demand), where initial results seem promising
important CEO Quotes“I’ll talk about subscription video on demand for a moment first. These platforms include our targeted subscription video on demand services, which are an increasing area of focus for our company.”
 We have a premium and diverse portfolio, and we’re increasingly the only place on basic cable that consistently delivers high-quality dramas in deeply engaging environments. We have a high concentration of hard to reach audiences who advertisers find very attractive, who of course cannot be reached on large ad-free streaming platforms.
important CFO QuotesBoth revenue and AOI were ahead of our expectations, primarily due to favorable domestic advertising performance and lower than expected expenses.
COVID updateSlated to begin production of their shows, such as The Walking Dead, in late August
Key hiresNone
Funding or new fund allocation?None
Mergers or acqusition mentionsNone
Product Release mentionsLaunched several SVOD services in specified genres to target specific audiences
Other major business updatesExpanded digital partnerships with Xandr, OpenAP, and 605
Relevant Analyst Questions“Given accelerating pay TV subscriber declines and some moderation in pricing that you said you’re seeing, should we expect subscription revenue declines next year to accelerate? Or is there anything you could share with us in terms of the affiliate renewal pipeline or nuanced expectations on pricing that could prove to be an offset?”
 Nothing to argue that subscription revenue declines, as AMC has had attractive contracts with TV shows to ensure they make profit

Ralph Lauren Earnings Call Summary 

Ralph Lauren 8/4
SummaryWhile stores begin to reopen around the world and foot traffic begins to increase, COVID-19 has perpetuated RL’s increased investment into ecommerce and finding ways to drive online sales
GoalsDrive online sales while minimizing losses from their brick and mortar stores and increase their revenues
Strategies/InitiativesIncrease digital prescense through shopping experience and ads
important CEO Quotes“As stores reopened, we experienced significant traffic and comp declines initially, but strong growth in conversion rates and average basket size. In the weeks that followed, we saw sequential improvement in brick-and-mortar traffic and comps, although both metrics were still negative as we exited the quarter”
 While he states earlier that sales were better than expected, RL was unable to escape severe losses due to COVID-19
 These actions include: one, reducing our total penetration in off-price and bottom wholesale brick-and-mortar doors while driving faster growth in our direct-to-consumer and Wholesale Dot Com businesses; two, staying disciplined on inventories to reduce the need for discounting and heavy promotions; and three, we’ve continued improving our product offering and resetting our price value proposition across each channel in the marketplace.
 List of strategies to be taken to ensure brand value through the pandemic rather than quick sales
important CFO Quotes“we are continuing our strategic focus on elevating our brands and driving profitability as we reposition the company to return to sustainable long-term growth and value creation”
 The focus now is to extensively utilzie online marketing and increase conversions in their online stores to drive sales, realizing that their brick and mortar stores will not be profitable for a long time
COVID updateNearly all stores are open in North America, Euorpe, and Asia
Key hiresNone
Funding or new fund allocation?None
Mergers or acqusition mentionsNone
Product Release mentionsMen’s Purple Label, which debuted the virtual showroom
Other major business updatesDigitalization of work, including virtual showrooms, live stream selling, digital catalogs, and tailored marketing
Relevant Analyst Questions“As you consider life during and post-COVID, where are you focusing your organization’s energy to remain on the offense and when in this newer environment? You referred to upcoming adjustments to your strategy and operating structure. Can you provide more color on key considerations guiding this work?”
 The current plan is to focus on the younger generation, for example the “Pride” campaign and the utilization of digital marketing to target certain consumers with personalized ads

Kratos Earnings Call Summary

Kratos 8/4
SummaryWhile COVID has forced cuts on certain projects, by establishing a clear goal of cutting engine costs and with their biggest customer being the US Air Force, the company is set to suffer only minimal losses in the face of the current envoirnment
GoalsContinue partnership with the USAF and development of drones, along with reducing costs to help secure contracts
Strategies/InitiativesWith engines being their most expensive expense, they plan to prioritize cheaper engines
important CEO Quotes“designed to reduce financial and schedule risk, accelerate development, testing and fielding and lower costs continues to be strongly desired by our customers”
 By differentiating themselves from the others through an empahsis on lowering costs, it sets the company up perfect for the current envoirnment where money is tight everywhere for customers
important CFO Quotes“…reflect the continued reduction of approximately $3.6 million in the company’s legacy government services business and reductions of approximately $6 million in the company’s international satellite communications deployment business and $3.3 million in the company’s KTT commercial aerospace business area, which have both been impacted by COVID-19.”
 These are the notable cuts in response to COVID-19, in which especially legacy services will do well to usher in new services in the wake of the virus
COVID updateKTT (turbine divison) came below expectations and will continue to do so in 2020
Key hiresNone
Funding or new fund allocation?None
Mergers or acqusition mentionsASC antenna systems, Valkyrie (production to begin next march)
Product Release mentionsNew developmental products Hypersonic and Ballistic Space Tracking Sensor, or HBTSS, and Tactical Intelligence Targeting Access Node, or TITAN, with Gremlin drone testing to commence Q4
Other major business updatesNone
Relevant Analyst Questions“You talked about software-defined solutions. How do you see this developing? What are your thoughts about the market size? How much of it can you capture?”
 The belief is that they will be able to grow over 20% yearly starting next year, and that development of these software-driven satelites is behind the fact that they can be used for both military and commercial uses

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