The Best One Yet - Uber’s 1st public earnings report, Firefly is the future of outdoor ads, and Dollar General & Dollar Tree’s epic days

Episode Date: May 31, 2019

In its 1st earnings report as a public company since this month’s IPO, Uber’s earnings report revealed it’s got a problem with 1 word: Growth. Firefly raises $30M and expands to NYC to forever change your cab ads. And Dollar General and Dollar Store stocks are close to all-time highs — And that says a lot about the US.Learn more about your ad choices. Visit podcastchoices.com/adchoices Hosted on Acast. See acast.com/privacy for more information.

This is Nick. This is Jack. This is snacks. Daily, it is the last day in May. We're talking, what, Friday in the 31 days in this month. Let's go with that. I can't cut my knuckles. Know the up down, up down. Oh, yeah. You know the one's day, but November. Well, this snacks happens to be the best one yet. We got three awesome stories for you. Glad you guys tuned in. What is the mix today? Kicking it off with Uber and at its first ever earnings report as a publicly traded company. It's like a first birthday, all the attention. It's my party. You can cry if you want. There's an album. People are taking. photos, they're gifts. It's kind of a fun thing. Second story is Firefly. It just raised $30 million. It is the future of outdoor advertising. It's kind of cool. It's kind of freaky. We're going to go into the business model. Third and final story. Yep. Dollar general, dollar tree. Pretty much the same company. Unrelated. They both announced earnings and it both illustrates a fascinating trend we're seeing play out. That's kind of sad.

Bifurcation, my favorite word in the English language. It's happening. Bifurcation. Exactly. Now, speaking of words, Jack, Selepsis. Yes. Can you use it in a sentence? I cannot. Selepsis was the winning word in the 1958 Scripps National Spelling Day. I think it's a noun.

I feel like 80% of words are nouns. Let's just go with that. So the finals for that spelling bee are... We're last night. Honestly, went to bed early. Congrats to whoever won. That's big. Great achievement.

Now, third place, what did that person win? Third place is a $20,000 cash prize. Very nice. Second place, what do you get? $30,000 cash price. Very nice, first place. 40 grand plus a bonus. I like this.

Where you going with it? The cherry on top is a $2,500 savings bond. You can't go. That is so wholesome for a kid. I like that. I mean, that's good. And you get like a big trophy. Get this.

In 2014, 2015, 2015, 2016. There was a tie. Ridiculous. Naturally, because it was past everybody's bedtime. Again. It just had to go to sleep. You call it a tie. That's what you got to do.

In the meantime, listen to these key words. And they want our story. You're tuned in the snacks daily. We spoke to the lawyers and we got to get something legal out the way. The snacks about to hear ain't food. It's air candy. They don't reflect the views of the Robberhood family. It's all informational just so.

We're not recommending any securities. Nope. It's not a research report or investment advice. Not an offer or sale of a security. Right. Snacks is digestible. Business news for you. Robahood Financial, LLC, member FINRA slash SIPC.

For our first story, Uber just had its first earnings report since its IPO earlier this month. Big one. And we have a big question about it. Tell me, is Uber a growth company? What is my Uber rating? Now, can we talk about the numbers here because there were some really key ones you got in it? Okay, it made $2.6 billion in revenues. And that's the part of your Uber fares that Uber keeps.

Exactly. Not the part the driver takes off. But it's also been spending a lot of money. How much money is it spent? It spent $3.6 billion on things. So easy to do the math. on that, its loss was a billion dollars. The loss was one billion dollars, just in three months. So how much, how does that compare to prior losses? It's more than doubled from last month.

And guess what? The stock rose, which is frustrating for a lot of people. So the company met its expectations of losing a billion dollars. Analyst expected to lose a money. And then somehow the stock rose. It's one of those confusing things. Sometimes Wall Street doesn't make total sense. It's kind of frustrating. The only bright sign in this earning. You got to find a good thing was Uber Eats. Please talk to me about this. Uber Eats, the delivery app, revenue jumped by 31%. Now, when you look at like Uber as a whole, it's like a whole company, Uber Eats makes up 10% of Uber's total revenues, which is a big number. And that slice of the pie is growing.

Literally. Uber Eats is growing faster than Uber. You can ride. Thank your late night craving situation there. Now, there's one key word on top of those numbers that Jack and I could not stop thinking about. Growth. Please. Uber is desperately desperately.

fighting for growth. Now, it used to have, like, hockey stick. Hockey stick growth. You got to think of that visual. Econ 101. They'll tell you about hockey stick growth. We're not talking Stanley Cup playoffs, although we kind of are. Hockey stick growth is just a Econ finance thing. It means steep. It means fast growth. It's one of those things like some Econ professor thought of because it makes, like, you know, freshman year class more relatable. They bring in a hockey stick to class. It's a real thing. It's not even really shaped like a hockey stick. But it basically means the growth is on a chart going really, really steeply up. And if you look at Uber's revenue growth now, it's not that. steep anymore. Revenues from quarter to quarter, they're like flat-ish. So last quarter

revenues jumped by 20% if you compare it to last year's quarter. Okay, so let's put this story together. You got a $1 billion loss. It's double the previous loss. You've got questions about growth. So then the next question is, why is this happening and why isn't it growing? It's competition. Tons of competition. So Oprah's going to like launch a ride-hailing service. Both in ride-haling and in food delivery. It's facing it on all quarter. This is a straight-up game of throne situation. We got Westeros under attack. Now, the House Lannister is House Lift, which just raised $2 billion in fresh cash in March during its IPO to keep growing. That's on the right-hanging side. Then on the delivery side, no relief there. DoorDash last week raised $1 billion of fresh capital

in a private fundraise. And then like a month ago, we covered on Snacks Daily. Rappi, the Latin American version of Uber Eats, raised like a billion dollars too in a record fundraise for a Latin American company. And they're all spending all that money giving like drivers promotion or first time riders or first time delivers these promotions. Like those $12 off your first order, that adds up. A big time. They're taking Uber's lunch. Literally and figuratively. I like that analogy. So Jack, what's the takeaway for our buddies over to Uber? Dirty little secret about Uber. This is like, this is a, let's get into this. For Uber to ever become profitable, it has to do at least one of these three things. And these three things are not pretty things. The first. Thing number one, stop offering.

discounts to new drivers and new riders. Second thing, raising prices because they are artificially low from what they could be. Fares currently are causing losses. That's not sustainable. And then the third, and this is the most long term, the most controversial, and maybe the most inevitable. Replace human drivers with robotic drivers. They are literally investing in this big. If Uber can do one of those three things, or more than one, it could become profitable. Which it's never been before. That'd be nice. For our second story, bucks fly together. Both dollar. Dollar General and Dollar Tree, the two big dollar stores in the United States, just announced earnings. And actually, it says a lot about the United States, too. This is like a, this is a social history.

Dollar stores are doing really well in America. Can we talk about the latest innovation? Dollar Tree Plus is a new section of Dollar Tree. Throw an exclamation point on that. Things cost more than one dollar. The plus is in all caps. I love when a company needs an asterisk next to its name, Dollar Tree. It's always a good thing. How'd they actually do the stuff? So stock of Dollar General rose by 7%. Stock of Dollar Tree rose by 3%. Now, this is big because both have pretty significant trade war concerns. Right.

I mean, that $1. Snorkel and Mask combo, you're getting at Dollar General. Shocker. Not made in Pittsburgh. It's made in China and it's low-cost goods. So both companies managed to reiterate their earnings forecast despite the trade war. And the key there is that they prior said how they thought they would do for the rest of the year financially. And now they're saying, hey, despite the trade war, we're still going to do that well.

Right. So dollar stores are actually billion-dollar companies. We got to talk about this. Dollar General is the biggest dollar store chain in America. How many locations? It has 15,000 locations. Apparently not satisfied because they're adding a thousand more locations this year. That's the first one.

Dollar Tree. Yes. Has 15,000 locations as well. It's shabby. It's closing a few of them. These bucks really do fly together. Same day for earnings reports, same number of stores. By the way, the only reason it's closing a few is because it acquired another dollar store

family dollar like four years ago. In 2014, and those stores just weren't running as well. So it's just getting rid of the ones that aren't working, but it's still grown. So context, McDonald's. Yes. Pretty big brand. Very nice. And big chain. A lot of dollar prices. They have 14,000 locations. So there are twice as many of these dollar stores between the two companies as there are McDonald's in America. Now, we also know, if you listen to snacks daily, you're probably wondering, hey, when we were talking about retail stores yesterday, we talked about two types of retail stores that are seeing a lot of success. Right. We talked about small retail stores and experiential retail stores.

Now, those are the retail stores that are really succeeding in urban areas across the country. Where people have higher incomes. But in more rural areas, we're seeing a very specific trend for a specific type of retail store. In places of low income, it's not small, it's not experiential, it's low cost. It can be any size in fact. As long as the prices are low and they don't get much lower than a dollar, except for that dollar plus. So, Jack, what's the takeaway for our buddies over a dollar general and dollar tree? Economic inequality creates business winners on both sides, high and low.

We're talking rising inequality here, a sad, sad issue going on in the United States. It's a blessing for discount brands and luxury brands. We're going to talk about two companies that are on opposite ends of the price spectrum. Louis Vuitton Moe and NSE, LVMH, also known as, its stock is close to an all-time high. And they own some of the luxury brands that are out there that we're not wearing right now. We can't afford them. On the other end, you got dollar stores. They also have stocks at an all-time high.

Dollar General, Dollar Tree, all-time high. So high-end is doing really well. Low-end is doing really well. And sadly, this is the result of inequality. Right. You have more at the top, more at the bottom. Now, there is an amazing quote here that we love quoting from the CEO of Dollar General. I'm actually kind of sad about quoting this one.

It's sad, but it sums up the situation. In 2017, the CEO of Dollar General, he said, the economy continues to create more of our core customers. It's a trend. Low income, who need low cost. Our third and final story, Firefly, just snagged $30 million in funding to become the future of physical ads. You've probably seen a firefly. It's staring at you when you don't even expect it.

Actually, you might have seen a Firefly if you live in San Francisco and New York. Exactly, yeah. So these are digital, like, big TVs that they put on top of a cab. But not on your typical cab. They're throwing them on like Uber's and Lifts. They're on top of Ubers and Lifts and they're full of advertisements. Right. LAD screen advertising.

Boom, boom, boom. Very bright. And as the lift is cruising through your neighborhood, you're going to get like an ad for whatever. Right up in your face. Like an old school taxi ad, but this one's digital. And they get lift drivers to sign up because you want to make a few extra bucks while you're lifting.

And in case you're wondering, those lift drivers, they make like 300 extra bucks a month. So ad companies pay Firefly money to put ads up. Very nice. And part of that goes to the driver. Part of it goes to the company Firefly. Now, we've covered this company before when they had just raised a cool $21 million in their seed round, their first round. Right.

And that was when they were doing their company. beta version. And I think a beta version is like, don't get mad at us. We might screw up. It's after after. Just say beta and you can get away with anything. That was in December. But now they raised $30 million from their lead investor Google Ventures and they're expanding to New York City's famous yellow cabs. Right, because they just acquired an ad company in New York and that's the next step. Now, they have a very strategic approach to advertising. The ads you see on these cars, they are geo-fenced campaigns. Very fancy term. So if the cab is cruising through Soho in New York.

You got to be dressed. The ad machine knows that, and it's going to spit out ads that make sense for the neighborhood. Let's say it's going by Grand Central Station. It knows there going to be a lot of, I don't know, commuters there, so maybe it's showing ads for stuff outside of New York. It's showing ads for whatever is popular in Westchester and Fairfield County. Let's go. I mean, it's going to be Vineyard Vine.

So the average driver, good point. The average driver can make $300 a month on top of whatever they're making from Uber and Lyft. So it's a nice win-win. Now, this is not just an ad company, though. Really, Firefly is a technology company. I think we can call it an ad tech company. I don't want to lead into this technology thing. Google is the lead investor, we just told you.

And Firefly is going to start using Google data to optimize and make those ads that are on top of the lifts even more specific. So let's say you're in Soho again. Instead of just showing you a random fashion ad, it may notice that people are Googling in that area some nice Diane von Furstenberg tops and show you an ad. from her.

Diane von Persenberg. Right. It's also very innovative in like an experimental way that I don't understand yet. Right, because technically remember there's the software showing the ad, but there's also the hardware,

like the thing you got to put on top of the cab. It's a big screen with like a little computer on top of the cab. So Fireflies pledge to use these hardware for good to basically do air quality tests while the cabs just driving around the city. We don't know what they're doing with that. Yeah, but it sounds nice.

I hope they give that air quality data to like city planners because they would appreciate it. I hope they're doing something with it. And then in case you're wondering, yeah, they're pretty principled here. They like to brag that they don't show strip club ads and they don't show cigarette ads. Right. And they're giving 10% of the ad space to nonprofits.

And sometimes they'll even pop up in Amber. This is the kind of company you could take home to mom and down. You really can. So Jack, what's the takeaway for our buddies over at Firefly? Old advertising is new again. We're talking about out-of-home ads, O-O-Hs. Those are ones you see on billboards, on the subway, on the bus stop. That industry grew 4.5% last year, which is pretty.

strong. Yeah, you might have thought that anything that's not digital is dying, but not out-of-home ads. The biggest spenders on these out-of-home ads, Apple and, like, McDonald's. I can see an iPhone ad a billboard from my window in my apartment. Who hasn't yet? We get it. Shot taken. Shot with an iPhone. We get people with iPhones. They like nature. They go on safaris and they use the camera. Also, I just want to say, you can't install ad blockers on human eyeballs. Stick it on a T-shirt. Jack, can you whip up the takeaways for us before the weekend? Uber's earnings show that the brutal price war in ride-hailing is still happening. Deterter profit. It's got to do one of three, like, really unpretty things.

None of them are pretty. Not nice. Dollar General and Dollar Tree, they are profiting from rising inequality in America. It's sad, but it's true. But it's mainly sad. And Firefly is bringing billboards to the tops of lifts and Uber so that drivers can make an extra buck or two. Yeah, we're talking about spamming pedestrians and it's worth millions of dollars. Now, before we get to the snack back of the day, you know what we're thinking?

We got to make a correction. A little bit of a correction here. Yesterday, we said that I-Robots, new Roomba and Bravo, like vacuum and Swiffer combo. Fancy set, great wedding give. $2,200 is what we said. We were wrong on the price. It was $2,200. Right, it's priced differently over there.

Or $1,800. They're just doing different prices. My bad. We're sorry. I think we should jump to the snack fact of the day. Please. Which I did not tell Jack about it. This is written as Nick's surprise.

I just pop this out over the weekend. All right, Jack, all right, here we go. The state of Vermont is the 14th state in the union. Lucky number 14. Pretty proud over here that New York was one of the original 13. Just kind of got in. It was like, you know. I know.

Not a big deal. We were the first out. But what a lot of people don't know is that Vermont was actually part of New York. And I really wanted to be in the United States. So New York made it pay $30,000 in order to leave and then become part of the United States. So we bought your land? We're talking 1791. We're talking what's,

worth a lot of money. So New York City fortunes are built off maple syrup money is what you're telling me? If you want to run with that, then you can run with that. It's a scary visual. All right. A couple other great stories we're covering in our snacks newsletter. We're going to cover Gaps' earnings report, which is kind of awkward because it's spinning off Old Navy. And then KFC happened to mention you know what? It could be interested in some plant-based chicken strips. I like that. Now, Snackers, thank you for snacking with us today. Great week. I was a really fun four-day week. This weekend, if you want to tell one of your buddies about Robin and Snacks, we'd appreciate it. We'd love that. Have an amazing weekend. We will snack with your money. Can't wait.

The Robin Hood Snacks podcast you just heard reflects the opinions of only the hosts who are associated persons of Robin Hood Financial LLC and does not reflect the views of Robin Hood Markets, or any of its subsidiaries or affiliates. The podcast is for informational purposes only and is not intended to serve as a recommendation to buy or sell any security and is not an offer or sale of a security. The podcast is also not a research report and is not intended to serve as the basis of any investment. investment decision. Robin Hood Financial LLC, member FINRA, SIPC.