Closing Bell - Closing Bell Overtime: CFOs From Coinbase, Deere and Doordash On Latest Quarters 2/15/24

Episode Date: February 15, 2024

We have you covered on the major earnings today, including Coinbase, Doordash, Roku and DraftKings. Coinbase CFO Alesia Haas on the latest quarter, bitcoin and the incredible move in the stock. Doordash CFO Ravi Inukonda on how the delivery company is managing higher rates. Deere CFO Josh Jepsen on the agriculture cycle, precision agriculture, automation, and subscriptions for farmers. 

Well, the bulls are back in charge as the S&P 500 closes at a new high. It looks like 5029 as stocks settle here at the rally. Very broad overall, though. Every major average higher. That's the scorecard on Wall Street. The action is just getting started. Welcome to Closing Bell Overtime. I'm Morgan Brennan with John Ford. Yeah, energy and real estate, the big winners today. Technology, ha, the only sector in the red. Now, brace yourself as we prepare to deliver you a wave of earnings. We're going to have instant analysis of results from Coinbase, DoorDash, DraftKings, Dropbox, Roku, Applied Materials, Toast, and Trade Desk. Plus, we will hear from the CFOs of both Coinbase and DoorDash before they speak with analysts on their earnings calls. As we await those earnings, though, let's bring in our first guest.

Joining us now is EMJ Capital founder Eric Jackson. Eric, it's great to have you on. We could talk about how broad-based this rally was today with the small caps up 2.3% and the equal-weighted S&P outperforming the regular S&P. But in general, it has been a tectonic year for the big cap tech stocks, at least to start. Your thoughts on what we've seen so far from earnings and as we await some more tech names with more results here in the next couple of minutes? Well, Morgan, I think at the end of January, there were a lot of people saying, oh, this is a replay of 2023. It's only the Mag7,

the broad-based rally we heard so much about in November, December. It's kind of petering out. And then all of a sudden, just in the last two weeks, we've had a big catch-up, a big broadening out. Basically, NASDAQ is still leading all the major indices for the year. But we have Russell positive on the year after today. And even ARK came back from, I think, they're down 14 percent earlier this year, and they're almost back to even. And that's in the face of the hot CPI number a couple of days ago. So you'd have to say it's really encouraging if you're hoping for this continuation of the broad-based rally and how that's going to affect other stocks besides the MAG-7, because the market does seem to want to go higher, even if rate cuts are off the table,

even if inflation is still stubborn. So for you, how does that mean that you're approaching the market right now, especially when we have seen such gigantic moves in some of the MAG-7, like, for example, NVIDIA, which we know reports next week. And there's a lot of attention around. Well, you have to pick and choose. Eric, sorry, I'm going to ask you to hold that thought. We do have some breaking news on Apple from our Steve Kovach. Steve? Hey there, John. Yeah, Bloomberg just reporting right now that Apple is working on a competitor to Microsoft's co-pilot for GitHub. Now, this is very specific and a little nerdy, but let me explain what that is.

It's basically a tool to help software developers code easier. I know you're familiar with this. It's a very or relatively popular tool, GitHub is rather, over at Microsoft. So this sounds like Apple is working on a tool, a version of that, rather, for Apple developers. We do know also that Tim Cook, during earnings two weeks ago, he teased a big AI announcement. This may be part of that announcement. You know, a lot of analysts are thinking maybe it's going to be a bigger thing, a more consumer-facing thing. But this report right now saying it's very developer focused. You see Apple shares here up about half a percent.

Still waiting to hear officially from Apple a response to this. Right now they have no comment, John. Steve, to put this into context, Apple does not make a significant amount of money, really revenue, selling developer tools. This is part of the kind of announcement that they would make at WWDC in the middle of the year that strengthens their ecosystems by getting developers to build directly to iOS, to the Mac OS platforms and get them to do that more quickly, right? Exactly. So more of an ecosystem play versus, hey, we're taking on Azure or we're coming out with chips to rival NVIDIA in AI.

Right. And it also plays into this theme that we hear with AI about low code or no code, meaning someone like me who has no idea how to make an app or code a website or anything can use one of these tools. And it makes that a lot easier to do. So it also kind of opens up the ecosystem, both what Microsoft is doing and what Apple is reportedly doing as well. Makes it easier for people to just jump in and start developing apps, too. All right, Steve, thank you. Sure, thanks. Speaking of chips,

I believe Applied Materials earnings are out. And Christina Partsenevelis, here with the numbers. Yeah, it's a beat across the board for the largest semi-cap equipment maker in the United States. EPS of $2.13 on revenues of $6.71 billion, both a beat. Guidance for Q2, also strong. EPS was a beat guidance for q2 also strong eps was a beat the range for q2 revenue came into a range of 6.1 to 6.9 the midpoint at 6.5 which is higher than anticipated the company saying just the ceo was saying that the customers are ramping up their next generation chip technologies critical to ai and iot over the next several years so ai being a driver for the semi-equipment maker, and that's pushing shares up almost 8 percent. We've heard this commentary before from others. All right, Christina Parts Nevelis, thank you. Trade desk earnings are out. Julia Boorstin has those numbers. Julia.

Morgan, we see trade desk shares shooting higher on better than expected revenue and better than expected revenue guidance. Shares now up over 19 percent%. The company's revenues of $606 million, beating estimates of $582 million. Earnings per share falling short of estimates, coming in at 41 cents adjusted versus the 43 cents that was the consensus estimate. And in terms of first quarter guidance, the company guiding to first quarter revenues

of $478 million ahead of the $452 million estimated. Another key point here for the Trade Desk, they announced an additional share repurchase authorization, bringing the total amount of authorized future repurchases to $700 million of its Class A common stock. Stock's now up over 22, nearly 23%. Back over to you. All right, Julia, thank you.

Meanwhile, DoorDash earnings are out and there's some nuance here in these numbers. The algorithms aren't going to understand. So let me bring those to you. Revenue comes in at two point three oh three billion versus a two point two five billion dollar consensus expectation. So that is a beat. The confusion might be around EPS. Analysts were looking for 13 cents. And DoorDash reports, sorry, a 13-cent loss. Analysts were looking for a 13-cent loss. DoorDash reports a 39-cent loss. I was able to speak to DoorDash's CFO earlier.

Here's what he said. You have to look at overall adjusted EBITDA as well as the stock-based compensation. That's what's driving the overall net loss in the business. We also had one-time write-offs related to our Flink investment from years ago. That's also contributing to the overall net loss in the business. So if we look at adjusted EBITDA, that is actually a beat. DoorDash turns in $363 million in adjusted EBITDA. Analysts were looking for $356 million on that within a range of $320 to $380. So DoorDash also continuing to guide to stronger adjusted EBITDA. So pay attention to what they're saying, at least about operating versus gap. I'm going to have a lot more from DoorDash's CFO on those results before he dials into the call just a little bit later here on overtime.

All right. We're going to be looking forward to that. We're going to bring in Mike Santoli for reaction. We've also got Eric here as well. But Mike, just want to get your take on some of these earnings we just got reports for and how it speaks to the moves we've seen in the market overall today as investors have completely shrugged off that pullback we saw Tuesday. Yeah, it seems, I mean, when it comes to the reactions immediately on AMAT and trade deaths, this is the kind of market that has shown a new willingness to believe and to latch on to some of the big growth themes. So I do think that explains part of it. You've also seen a big hunt for heavily shorted stocks in the last couple of weeks as well. So all that stuff

seems to be in play right here. Also, the theme of companies that are not all that mature, emphasizing some of their share repurchase activity is also evident with TradeDesk, I would say. But in general, today was a market where, yep, it was a broad rally at things like financials doing well, and it was rebuilding some of the credence that the tape had maybe called into question on that Tuesday setback. But there's also definitely these speculative currents running through as well, finding its way into some of the old corners of the class of 2021, as I call it. Let me bring you a couple more DoorDash numbers, by the way. I didn't want to go on and on too long there, but contribution profit

from DoorDash came in at $689 million versus $692 expected, so just about in line. Contribution margin, 3.9% versus 4% expected. Also, the orders number overall, 574 million versus 461.3, sorry, yeah, 561.3 expected. Marketplace gross order volume, that number comes in at $18.7 billion for the guide in Q1 versus $18.61 expected. So that's the midpoint of the range that they give. It's a little bit above what the street was expecting. Eric, I want to go back to this risk environment because, you know, DoorDash aside, it hit a 52-week high today. But Supermicro, which is one of my new proxies for risk, was up 14% today on a price target hike, trading above $1,000 a share. You pair that with the fact that we got a hot CPI and, you know, Bitcoin is back well out of the basement. Do you hedge here or do you just ride the growth names? Well, I agree. It's a bit disconcerting to kind of see Supermicro go up 100 bucks every day,

seemingly, for the last two weeks. How's that possible? I own it, by the way. And the reason why I do is that it's unlike the 90s. It's not valued on eyeballs. It's valued on earnings. And they're obviously growing like a weed, just the way that NVIDIA is. They're a key supplier, obviously, to the NVIDIA AI push. And so you can do the math and you can get to $1,000, $2,000 price targets, you know, one, two years out from now. So it hasn't gotten really silly lately, but it is crazy that it's basically going straight up for two weeks straight, 100 bucks a day. Yeah. Oh, we've got Coinbase earnings. Those are out. Kate Rooney has those for us. Hi, Kate.

Morgan, so yeah, it was a surprise profit for Coinbase and a massive beat, it looks like, on earnings on that EPS number driven by better than expected trading volume in the quarter. Also a revenue beat here for Coinbase on EPS. Company reporting $1.04. Consensus estimates were for a loss for the company of a penny. That was on revenue of $954 million. A beat as well, up 41% quarter over quarter. Operating expenses for the full year were down 45%, but they did rise 11% of the quarter. Trading volume, $154 billion.

That was stronger than expected, doubling essentially from the prior quarter. Consumer transaction revenue, basically retail trading and institutional, both looked stronger than expected. The take rate is lower. That's due, it looks like, to a higher mix of some of the professional traders, which tend to do more volume but at a lower fee for Coinbase. Subscription revenue is strong. They didn't disclose a user number, monthly transacting users. So we're looking out for that potentially in the 10K later. They are not giving a revenue or EPS guidance number for the current

quarter here either. But you can see shares up here slightly after hours, Morgan and John. Back over to you. All right. Kate Rooney, thank you. Shares up 2% right now. Coming up, Coinbase is a CFO. We'll break down those results in an exclusive interview. We got more earnings. Roku, those are out. Julia Borson has the numbers. Julia. Morgan, Roku earnings missed estimates by three cents per share coming in at 55 cents, a loss of 55 cents per share versus the loss of 52 cents estimated. You see the stock is now down about 14 percent, seemingly on pressure from that earnings miss, as well as some ambiguity about guidance for the full year, the full year profit guidance. The company also warning,

saying we remain mindful of near term challenges in the macro environment and an uneven ad market recovery. So that's really what seems to be weighing on the stock down 15 percent. But I do have to note that Roku's revenues beat estimates, the company reporting 984 million in revenues in the quarter versus the 968 million estimated. Also guiding to stronger than expected first quarter revenues, guiding to $850 million versus the estimate of $834 million. And then breakeven guidance for the first quarter is better than the loss that's expected. But this ambiguity around the full quarter, I'm sorry, the full year guidance does seem to be weighing on the stock. And then in terms of this key active account number, 80 million active accounts.

That's more than 1 million more than anticipated. But average revenue per user is down year over year and also lower than analysts' expectations. Back over to you. All right. We'll see how the stock moves as we get more information throughout the evening. Julia, thanks. And Toast earnings are out. Kate Rogers has those numbers. Kate. John, and that stock is flying after hours.

It was up nearly 18%. So Toast, a better than expected quarter here. Small unexpected loss at $0.07 per share. That's better than the $0.11 loss per share that analysts were projecting here. Revenue is also better than expected. $1.04 billion higher than the $1.02 billion analysts were looking for. The company's board authorizing a share repurchase program for up to

$250 million of its stock. And the company also confirming those layoff plans that we reported on earlier today, saying that it is a restructuring that will impact 550 workers. This restructuring plan will be finished by the end of 2024. And as you can see, the stock is higher by more than 12 percent now. Back over to you. OK, thanks, Mike Santoli. At least initially, a few stocks after hours here in overtime seem to be moving a lot on EPS versus revenue. Yep, that definitely, especially because you've had a pretty good delta in some of these EPS reports on companies you weren't sure were going to make it the Coinbase number, I mean, obviously, it was almost perfect conditions in the fourth quarter. There was that big revival of interest in Bitcoin.

Prices were up a lot. So you did have a lot of it fall to the bottom line. I think the big question is, what's a real run rate of normal business? Because year over year, for the full year, for Coinbase, big drop in revenue over 30 percent. So an interesting response there. It seems pretty contained, over 30 percent. So an interesting response there. Seems pretty contained up 2 percent. And then these smaller names, you know, attempting for scale is the way I would put it. And DoorDash, I know you gave the context. They're guiding for another billion to a billion to an annual stock-based comp. It's a little bit of a tough treadmill to walk when you're in that

situation. OK, we got more earnings. Dropbox. Bertha Coombs has the numbers. Hi, Bertha. Hey, Morgan. Dropbox beating on the top and bottom line, earning 50 cents a share. The share was looking for 48 cents, 635 million in revenues versus 631 million expectations. They finished with 18.12 million paying users. A little bit light, but better than expected revenue per user at $138.83. Dropbox co-founder and chief executive Drew Houston said that they improved the overall profitability of the core business while investing in growth initiatives with new AI product experiences like Dash. They'll continue to look at AI. We'll get more on the call as far as Outlook for 2024.

Back to you. All right. Bertha Coombs, thank you. Eric, I'm going to go back to you. You own a couple of these names, including Coinbase and Trade Desk. Your thoughts? Well, what's interesting about those two, also DraftKings is reporting tonight, Opendoor. I own those two as well. All these companies, they're on the verge of profitability. And, you know, it's not a direct comparison, but last year, a lot of people were grumbling about Uber. You know, are they ever going to get to profitability? Are they ever going to get back to their IPO price? And then all of a sudden, once they flipped over into profits, you saw a big re-rating in that stock. I own all these names partly on that thesis because Coinbase was massively profitable

when they first IPO'd a few years ago. And so this shouldn't surprise people based on the transaction revenue. But I think it's going to take some time for people to adjust and say, hey, what's this thing worth? They've got a lot less competition now than they used to two years ago, three years ago. So it's that flipping to profitability, which makes me excited about a lot of these smaller tech growth names. Yeah, that's such a good point. so it's that flipping to profitability which makes me excited about a lot of these smaller tech growth names yeah that's such a good point and it's certainly a theme we're going to be digging into a little bit more here not only in the rest of the hour but across the rest of earnings on overtime eric jackson mike santoli thanks for joining us mike don't go too

far we'll see a little bit later in the show don't go anywhere we have much more on this wild hour of earnings still to come. Look at that screen. A lot of big moves today. The CFO of Coinbase will be here next in an exclusive interview before she speaks with analysts on the crypto exchange's conference call. Plus, DoorDash's CFO is going to break down the quarter in a first on CNBC interview when Overtime comes right back. Welcome back to Overtime comes right back. Welcome back to Overtime. Coinbase shares popping after surprise profit for the quarter and a massive beat on earnings driven by better than expected trading volume. We can see shares are up 4% right now.

Coinbase and Bitcoin seeing a run up into this report, both up more than 20% month to date. Joining us now exclusively before the analyst call is Coinbase CFO Alicia Haas. Alicia, it's great to have you on the show. Welcome. I do want to start with that massive EPS beat that was driven by better trading volume. Walk me through what you saw in terms of activity in the quarter and how it is carrying over now here into the beginning of 2024. Well, thanks for having me. And thanks for the first question. Yes, we've always said that crypto is a volatile space. And when we see increases in

volatility, it has long attracted more trading volume to our platform. And that's exactly what we saw in the late fourth quarter. Sparked by the Bitcoin ETF, sparked by a belief that the macroeconomic environment would improve in 2024. We saw more growth and we saw that across the platform on our retail institutions. And we saw excess growth in our advanced trading product, which drove to that strong trading volume. And as you can see with the unit economics of our product, when we see strong trading volume and activity, that translates to bottom line growth. So we had a strong fourth quarter with $273 million in net income in the fourth quarter.

That brought us to $95 million for the full year, 2023. And we posted nearly a billion dollars of adjusted EBITDA in 2023 and really met our financial goal where we told you in the beginning of the year we wanted to produce a positive adjusted EBITDA in all market conditions. And we're really proud that we delivered four quarters of positive adjusted EBITDA this year. Yeah. Well, I mean, you basically beat on just about every metric from what I can tell here, except maybe take rate being a little bit softer, a little bit lower. Walk me through what that means in terms of trading mix and whether that should be translated as fee concessions or something else. We did not change pricing in Q4. So in Q4, and we've shared this for many quarters, a lot of the results of our fee rate is just the mixed shift

on our platform. Who traded what product in the quarter? And so in Q4, when we saw higher volatility, we grew simple trading, but advanced grew more. And so the growth of those advanced trading customers and the volume per trader led to the fee rate coming down on average in the quarter. But it's purely mixed shift, just math, no change to fees in the fourth quarter. We're a little over a month into all these Bitcoin spot ETFs trading. We've got Bitcoin trading at a more than two year high and other cryptocurrencies surging as well. But specifically around the ETFs, on the one hand, you're custodian for a majority of them. And on the other, at least

according to a number of analysts, they could compete for some of the investor and trader activity that traditionally has gone to Coinbase. What has the impact been so far? We've seen crypto come up across the board, and it's largely been driven by the Bitcoin ETF excitement and then the momentum. So when we look at the ETFs in particular, we've seen net $4 billion of inflows into Bitcoin ETFs. This makes it one of the fastest growing ETF categories that we've ever seen in the history of ETFs. It's now surpassed silver in terms of total size. We're the proud custodian now of 90% of total ETFs. It's now surpassed silver in terms of total size. We're the proud custodian now of 90% of total ETF crypto. And that's really benefited our platform directly. But what I would

say is we've seen growth writ large across the space with this excitement. More people are now getting into crypto. People are excited about the asset class again. And we've seen growth in our simple, in our advanced trading, as well as in the institutional platform, which really is supporting the Bitcoin ETFs. So it's been good for the industry. And we've seen that momentum carry through now into the first quarter. OK, so at least a level set for us here. Look at the S&P. The market has been almost straight up through all of Q4 of 2023 and the first two months of Q1 thus far, how much are your results really tied to retail and just general investor excitement about the market? And how does that set you up for comps? It's a great question. It's definitely an and. So I think that when I said earlier we saw

excitement around Bitcoin ETFs in Q4, we also saw just a broader risk on mentality because of the broader macroeconomic environment, which speaks to the markets being up in Q4 and also in Q1. So I think we're seeing both. I think we're seeing risk on mentality, which is driving up the price of Bitcoin. We're seeing interest in our stock. We're seeing interest in our platform. But it is translating to financial results on our platform, as we pointed out in our Q4 results. And if you look at our outlook for Q1 that we included in our shareholder letter that was posted, we've generated $320 million of transaction revenue through February 14th. So about halfway through Q1, we're at 320. And our outlook for subscription and services is between $410 and $480 million.

So that would be the highest subscription and services revenue print that we've had and showing meaningful growth year over year. So I think we're seeing the benefit to the bottom line as well as just interest in the platform. Yeah. I just want to get your take on the regulatory landscape, because I know you're in the midst of a legal fight with the SEC. And then, of course, there is the comments that we got from SEC Chair Gary Gensler just earlier this week, where he basically begrudgingly acknowledged greenlighting the Bitcoin spot ETFs, but said that it wasn't necessarily going to be the same dynamic for the Ether spot ETFs that we're now seeing applications for. Just in terms of whether it's in the U.S. or whether it's

internationally, what your expectations are around regulations this year? Well, we are proud to be advancing efforts for regulatory clarity. We've made good progress internationally. Eighty-three percent of the G20 and financial hubs now have made progress towards crypto-specific regulation, which we're really grateful for. And we're still fighting in the U.S. We're fighting on behalf of ourselves, on the crypto community, and behalf of the 52 million Americans that own crypto in the United States. And we're very confident we're going to get this right. We're confident the law is on our side. And whether it takes a short time or a long time, we're just working through the process

through legislation in the House, where we still have two bills that are working their way through Congress or through the court system with our own SEC case. But we have confidence we're going to get this right. We have confidence the U.S. will get this right on behalf of the American citizens that hold crypto. Alicia Haas of Coinbase, thanks for joining us. Now, DoorDash shares are under pressure after the quarter of the report. The company's CFO is going to join us next and first on CNBC interview before joining the call with analysts at the top of the hour. Plus, Deere is one of the worst

performers in the S&P 500 today after issuing weaker guidance. The company's CFO breaks down the quarter in an exclusive interview. That's coming up later on Overtime. Welcome back to Overtime. We've got more earnings, this time from DraftKings. Contessa Brewer has the numbers. Contessa. We have a bare miss on revenue here coming in at $1.23 billion, Morgan. The expectation on the street was $1.24 billion

on earnings per share. We have a loss of $0.10, where the street was expecting earnings of $0.08. There was a pretty big miss on adjusted EBITDA here. It came in at $151 million versus the street's estimate of $178 million. We knew already that DraftKings had a tough time in the fourth quarter because of customer-friendly results on the football games. They had said it would be about $100 million hit to the bottom line. They also said that they saw a 37 percent increase year-on-year in monthly new unique payers and news that they have acquired for $750 million Jack Pocket, which is an online lottery site. Really, the reason why they're doing that is because it gives them opportunities

to cross-sell to people who are already gambling. It was widely rumored in the industry that that was a deal that was going to happen. And so they've announced it today, $750 million. There you're seeing the shares down a percent on this. The call is tomorrow morning, so we won't get much more color than what we're getting from the release here. John. Contessa, thank you. Meanwhile, let's look at DoorDash stock.

It's now down 9% in overtime after touching a 52-week high today. I spoke earlier with DoorDash CFO Ravi Inukonda. He addressed the beats on revenues and orders, international growth, solid guide, and the EPS miss even as adjusted EBITDA beat. Yeah, our international business is growing really fast. When I look at our results compared to peers, we are growing substantially faster, sometimes even three to five times faster than peers, which is allowing us to gain share virtually in every market that we operate in. We are seeing progression across restaurants as well as grocery and international markets. In our international markets, there are some markets where grocery penetration is even higher than what we're seeing in the U.S.

And in the U.S. today, over 7 million consumers order from both groceries as well as restaurants. And that's just a small fraction of the over 37 million consumers that we have active on the platform. Tell me about earnings per share here, because I want to be sure I understand. I think I saw for Q4 expectations of a 13% loss. What are you reporting that that's comparable to? Our earnings, if you look at Q4 of 23, we have reduced the net loss by more than three times compared to Q4 of 2022 levels. And the growth in adjusted EBITDA plus the discipline we've had around operating expenses, where overall operating expenses have been relatively flat for the last four quarters, while we've continued to grow revenue north of 30% plus, is what's driving the reduction in net loss compared to last year.

Yeah, I saw that. I was just trying to reconcile it. It looked like you were reporting a non-gap $0.39 loss, and I thought I saw the street expecting $0.13. So I didn't know if I was comparing the right things. On the comparison, you have to look at overall adjusted EBITDA as well as the stock-based compensation. And that's what's driving the overall net loss in the business. And we also had a one-time write-off related to our Flink investment from a few years ago.

That's also contributing to the overall net loss in the business. Tell me about consumer behavior that you're seeing overall. We just got CPI numbers this week showing that inflation is still very much present. It's a concern. How are you seeing that affecting consumer behavior in either basket size, frequency, or the types of orders that they're making? Consumer behavior on the platform continues to be really strong. Today, what we're seeing is in a year in 23, when we thought consumers were pulling back, our users reached a record high of 37 million.

Order frequency also reached a record high. And what we're seeing is consumers, once they start using DoorDash across many categories, they're not going back. So basket size, I think I remember Tony telling me that people are still spending about as much, but maybe they're getting fewer things because things cost more. Correct me if I'm wrong there, but what are you seeing in that category? Yeah, inflation has not truly had an impact on our business. As the price per item has gone up, what we're seeing is people have ordered maybe slightly fewer items per order. But at the same time, our goal is to make the product more affordable by bringing fees down. When you put all of that together, the overall order value has not gone

up that much. Body language is a factor here, Morgan. DoorDash is C-suite, a lot more enthusiastic than this 10% drop thus far in overtime reflects, but we'll see how investors react to the call. Yeah. And this is why it's so important that these executives come on and speak with us and add that color because it's more than just the print to get that context. All right. Well, up next, Mike Santoli takes a closer look at the recent comeback of tech stocks like Coinbase, DoorDash and Roku as we await those earnings calls. Stay with us. Welcome back. Coinbase popping in over time. Meanwhile, DoorDash and Roku are going the opposite direction. Those three names are part of speculative areas of tech that Mike Santoli

is looking at in his dashboard. Mike? Yeah, John, we're about at the three-year anniversary of the all-time peak in that subsector of technology. At the time, you would have called them unprofitable tech. Some of them have matured toward profitability, but very, very similar trajectories that they've all had here. So cloud computing, ETF, the Renaissance IPO ETF. By the way, Coinbase still the largest holding there, even though it's been public for years because there haven't been enough IPOs to refill that IPO ETF. Online retail and then fintech as well. Coinbase, the second largest holding there. So in varying degrees, you've seen this boom, a crash and then a long sideways churning kind of volatile base. And with some trying to kind of nose above here and break out. So if you just sort of draw back, we're going back to, you know, a couple of years ago in terms of absolute levels,

but trying to sort of build on that with obviously individual stocks within it doing a little bit better. So some of the sort of rhythms of the market right now resemble the early stages of what we had in 2020 and 2021, where there's a lot of belief and a lot of short-term money chasing some of these concepts. Yeah, I'm glad you do have that chart up, multi-year chart up, though, because it does give some context. We might be seeing an awakening, but it's certainly not a revisiting of what we saw in 2021. Mike Santoli, thank you. Up next, a top analyst tells us what he wants to hear on Roku's earnings call, which kicks off at the top of the hour. Stay with us. Welcome back to Overtime. Shares of Roku down 14.5% in overtime after missing earnings expectations in today's report. Joining us now to discuss Ken Leon, Director of Equity Research at CFRA.

Ken, profit forecast and the ad market really dragging here down to really last summer and falls levels. How bad is it? Great to be with you. So the disappointment on Roku is really more company specific. They're on the right side of the secular trend to streaming from linear networks, but they only had a disappointing net ad of subs of 4 million. They had 25 million in Q3. They also had a disappointing net add of subs of $4 million. They had $25 million in Q3. They also had a drop in what's called average revenue per user, or ARPU, down to $39 from 41.42. First quarter coming up for 2024 is the weakest quarter, but the guide is higher than the street on revenue. And they're going to have a positive with EBITDA. Put it together, it was really kind of a nebulous outlook of guidance. And also the disappointment why the stock is really to give comfort that the net ads will accelerate versus compress.

And really, John, having continually only three or four million net ads suggests that Roku is not a growth stock anymore. And the future years, you can't extrapolate big numbers, which the street does. So I think that's the concern. So is this a buying opportunity, given that maybe people are already positioned to be negative because of the Vizio, Walmart headlines and possibilities? And, you know, the excitement is not big over the advertising space. People are paying attention to AI. Or is this, you know, the shine just beginning to come off of this as a growth stock? And so there's a lot more downside possibility from here. Yeah, it's probably more

the latter. You know, I still think Roku has opportunity because they have a great operating platform. So many streaming viewers would like to have a unified way of really flipping channels. But at the end of the day, they're not of the size of a Netflix, nor do they have open field running in music like Spotify. So you put them really, John, a second tier where they have to demonstrate that they can still drive growth. And I think that's going to be the debate tonight on the call and what we see when the stock opens tomorrow morning. How much does it matter when we get reports surfacing that Walmart might be buying Vizio? When we talk about the smart and connected TV market, and we know competition has been increasing in general in recent years. Is that still meaningful?

I can't tell you how many times during the holiday season I would go into Best Buy and I'm looking for Roku TVs, which is another way to drive kind of, you know, incremental growth. And it really was not that significant. I don't think it's a Hail Mary for Roku, because at the end of the day, it's going to be subscribers that really drives their business model. And for Walmart, Vizio is probably smart because it's a higher margin than just selling food. You know, but I think for Roku, again, if they can demonstrate that we're a great pure play on streaming, they have to have much higher net ads each quarter, you know, certainly something north of 10 million. All right, quickly with the stock down 15 percent, do you buy here? We still have a hold on the stock. And again, you know, this is not a company that is open field running. There is competition and

we want to hear what the founder, CEO has to say tonight. Okay, Ken Leon, thanks for joining us. Up next, dear CFO, on why the company issued weaker than expected guidance and the outlook for agriculture equipment demand. And check out shares of Applied Materials, which are jumping in overtime

after beating Wall Street's top and bottom line estimates, 11 and a third percent. That's pretty good. Look at the trade desk, too, when you have a chance. Overtime will be right back. Welcome back to Overtime. Shares of Deere are lower today by about 5%. The maker of tractors and other farm equipment beat Q1 estimates despite lower volumes, but it did cut its full-year profit forecast sales lower than the street expected as well

amid falling crop prices, high borrowing costs. But Deere's fiscal first quarter still topped analyst expectations on the top and bottom line. Now, I spoke exclusively with Deere CFO Josh Jepson, and I asked him where we are in this current agriculture cycle. It's very different from what we've seen in the past, because the fundamentals for farmer financials are still really strong. Balance sheets are in some of the best shape they've ever been in. Land values are strong. Balance sheets are in some of the best shape they've ever been in.

Land values are strong. Debt equity is low. So I think the setup is very different than previous cycles. We don't have tremendous amounts of used inventory. So I think the setup for both farmer fundamentals and fleet fundamentals are much better than where we were a decade ago. I also asked you about the construction business amid infrastructure spending and reshoring trends. The construction segment for us, we saw it get incrementally a little bit stronger this quarter in terms of the full-year outlook, and it is driven by the things you mentioned.

Infrastructure, which impacts both our earth-moving and road-building equipment. What we're seeing on the manufacturing side, so those large projects that drive a tremendous amount of site prep. And then incrementally, some improvement on single family homes, which has been beneficial as well. And we've seen that benefit in particular compact construction equipment, which is an end market that's been particularly strong for us. Now, we also discussed precision agriculture and the role that Deere is betting its budding services business will play in helping to smooth out cyclicality in the future

after Deere recently inked a deal with SpaceX's Starlink to provide connectivity to farmers' machinery in rural areas. We think it's a really big deal for our future, and not only in Brazil, but in other markets around the world. But we're starting, we'll roll it out in the back half of 2024, focused on North America and South America. And that's because, you know, in our ag production land in Brazil, nearly 70% doesn't have cellular coverage. And even in the U.S. and Canada, almost 30% of ag land doesn't have connectivity. So that's where we're starting and with an opportunity over time move that across to other parts of the globe, which is significant.

What does it unlock? Like I said before, connectivity is foundational in terms of our ability to drive more precision ag automation tools and ultimately autonomy into our business, allowing machines to communicate to one another and have real-time communication via the cloud with our digital data platform. So it allows the farmer to run their operation from wherever they are, not necessarily having to be in the cab of of a tractor, for example. And this will be foundational to our journey as driving a monetization strategy around solutions as a service. So we're introducing more technology with a lower upfront cost and then an ongoing pay-as-you-go model. And we see this as another step in being able to unlock more value for customers as we go forward. We also talked about what he's seeing across the globe and some of the

softness and challenges in Europe, some of the softness and challenges, and this is in the ag market specifically, in Brazil, in South America. Very similar in terms of broader industry dynamics to what we heard from Scott Wine of rival CNH Industrial yesterday as well. So definitely seeing a normalization, if you will, a slowdown off of what was a very strong couple of years for the farm industry. We'll see how it goes out now. Yeah, higher for longer matters for big equipment as well. Yeah. Well, you can catch the full interview with Deere CFO on Overtime's LinkedIn page. We keep telling you we've got exclusive content there. Here's a good example. Just scan the QR code on your screen to watch that and more exclusive content. Lots of good stuff there. And it's the final countdown to the earnings calls from Coinbase, DoorDash, several others. Up next,

a look at some of the other overtime movers that need to be on your radar. We'll be right back. Yelp sliding right now in overtime. The company's latest quarter is in line with expectations, but weak earnings guidance. There it is again in the first quarter and full year. Revenue guide hitting the stock. The CEO saying the company is going to focus on the services category in 2024. And take another look at DoorDash. Shares are down just over 7% off the lows.

We should note the company also announced it was authorizing a $1.1 billion stock buyback. At current levels, that might pay for about the same number of shares they bought back in 2023. At an average $62.66 a share. And that call kicks off at the top of the hour. So a lot down on EPS this round. We had a lot up yesterday. And as I keep mentioning, the excitement around some of these AI plays, NVIDIA coming back with the S&P, and then Supermicro. You probably met them here, this latest iteration here on overtime,

topping $1,000 a share on the price target. Yeah. It's incredible. I mean, you're seeing, well, one of the names that is higher right now is Applied Materials along those same lines. You had the beat, you had the raise, and then you had that commentary in the release that basically they're ramping next-gen chip technology amid all of this AI demand. So that commentary in the release that basically they're ramping next gen chip technology amid all of this AI demand. So that commentary continuing. Here's an interesting contrast. The trade desk, right? They're kind of in the advertising market for video. Strong name. It's up 19 percent even

as Roku is down. So Roku has been more in the subscriptions space of being sort of an on-ramp to services like Disney+, like Peacock, that are trying to catch up with Netflix. You can see the shift in the media market right there. Yeah, you sure can. Also, Coinbase looks like the highs of the after-hours trading session here up 13% as well after that interview we had with the CFO. Huge, speaking of EPS, I mean, just a huge earnings beat for the quarter and just a surge, a doubling in trading activity for Q4. It looks like that translates over amid this crypto craze that we've been seeing as well. PPI tomorrow. I think that's going to do it for us here at Overtime. Bitcoin's back. Fast money starts now.