Recently $FB / $META organized a Conference called Conversations 2022 which show cased their progress and strategy on messaging including Kustomer acquisition.
Seems like most of Fintweet and US investors are oblivious to it. Heres a thread with the highlights
1/ Zuck : "Businesses want to be where people are. We saw that with Feed, Stories, now Reels and Messaging. Already more than 1Bn users connect with a business account across $META 's messaging services every week. Users use messaging for discovery, checkout, etc"
2/ $META launching whatsapp cloud API. Key features - Any business can customize their experience on whatsapp, speed up response times - Customer to biz conversations grew 50% over last year - $META will provide hosting service, network, compute for free - results from partner
3/ Customer experience and improving touch points - 1800 numbers are 1960s technology - teenagers dont read email - 1-2 hours wait time connecting on phone - 7/10 people prefer to connect businesses via msg - 65% ppl feel more connected to businesses that respond over messaging
4/ Momentum behind this trend of customer business messaging - By 2025, 80% of customer service orgs will abandon native mobile apps in favor of 3rd party msging platforms - Gartner - 50% of US online adults use chat for commerce - Forrester
5/ Takeaway for brands : Brands that have made the switch by embracing messaging as a customer service strategy and are meeting where the customers are have experienced more agent efficiency, customer satisfaction and improvement in marketing and sales.
6/ Example 1 : KLM Royal Dutch airlines : call volumes increased by 500% during COVID-19 peak. KLM reduced wait times for most urgent calls to almost 0 by introducing Messaging based automated responses to simpler queries.
7/ Example 2 : C&A global fashion brand invested in whatsapp integration in brazil : 50% of their digital revenue in Brazil, which last year was 900M Reals came through Whatsapp
8/ Example 3 : Aldi reduced response times for what items are in stock from 3 mins to 3 secs by deploying an AI backed assistant on messenger
- 9/ Example 5 : Indosat inspired by customer service on whatsapp, introduced prepaid services, refills growing revenue 5x
10/ The sooner you are able to turn down your call centres (cost centres) to profit centres through messaging by enabling you to upsell and cross sell. Messaging is the best way to generate and qualify leads.
11a/ $META portfolio of products to help businesses - WA business app - small business and entrepreneurs. Lightweight business inboxes in messenger / insta - Meta business suite - for larger businesses - omnichannel capabilities to interact cross app wa/msngr/insta
11b/ $META portfolio of products to help businesses - Kustomer - omnichannel - messaging first CRM platform comes with many enterprise integrations. - META is working with 100+ partners that help build customizations on top of the APIs META recently closed this acquisition.
12/ $META launching a startup accelerator with PlugnPlay - a VC firm
13/ "For many businesses whatsapp is their business, its their website, store counter, their livelihood" - Ami Vora, WA VP. Example 6: of an ad on facebook that clicks over to a whatsapp chat. These first party conversions will also be ATT resilient and be first party data
14/ Example 7 : Test feature on whatsapp in Sao Paolo : Businesses can get listed in a directory, right inside whatsapp
15/ Example 8 : catalog feature enabling checkout on whatsapp in India. This is how mom and pop retailers are selling in India now, something which US investors have no idea about. "For many people WA is their first e-commerce experience, it is making commerce more accessible"
16/ Example 9 : $GM found a new way to sell cars through whatsapp when COVID-19 forced them to close stores and sales went from 15k to almost 0 across the country. If $GM closes Whatsapp today, they have to open 25 stores to mitigate the volume. The entire CAC can move to WA.
17/ $META launching Recurring Messenger Notifications to re-engage customers on Messenger. Throughout testing Recurring Notifications vastly outperformed other channels like email and sms driving sales. Most examples from emerging and developing markets.
18/ $META also batted for SMBs : 90% of all businesses and 50% of employment.
19/ $UBER CEO Dara also showed up in the conf. $UBER is now thinking as a messaging first company because the real world is messy, there are lot of stakehodlers : eater, courierer, restaurant, rider, driver and messaging works better fundamentally to give a delightful experience
20/ In India you can call $UBER on WA, its a product WA to Ride. 33% of the riders coming on WA are new riders (for such a well known app like Uber). Huge incrementality working with Whatsapp. Significant younger customer base. Expansion coming to delhi and brazil.
Thank you for reading, here is the tweet thread
Monday, May 23, 2022
Meta Messaging and Commerce Strategy
Wednesday, April 27, 2022
Microsoft Q3, 2022 Earnings analysis
Summary
- Revenue : 49.4B up 18%
- Operating income : 20.4B up 19%
- Net income : 16.7B up 8%
- EPS : $2.22 up 9%
- Microsoft Cloud 23.4B up 32%
Segment Breakdown
Productivity and Business Processes (15.8B up 17%)
- Office commercial products and cloud services up 12%
- Office 365 revenue up 17%
- Office consumer products and cloud services up 11%
- Linkedin revenue up 34%
- Dynamic products and cloud services up 22% and Dynamics 365 up 35%
Intelligent Cloud (19.1B up 26%)
- Server products up 29%
- Azure up 46%
Personal Computing (14.5B up 11%)
- Windows OEM revenue increased 11%
- Windows commercial products and cloud services up 14%
- XBOX content and services revenue increased 4%
- Search advertising revenue up 23%
- Surface revenue increased 13%
Subscriptions
- Microsoft consumers subscribers up 58.4MN
- Paid office commercial seats grew 16% to 345M
- Developer SAAS
- Visual studio has more than 31M active users
- 90% of fortune 100 use github
- Azure Cloud
- Microsoft is the market leader for all SAP applications in the cloud
- The number of 100M+ azure deals more than doubled YoY
- Cosmos DB transactions and data volume grew 100% YoY for the third year in a row
- Synapse data volume more than doubled year over year
- Azure ML inference requests grew 86% YoY
- Power platform
- 2BN in revenue in the past 12 months up 72% YoY
- Power BI has more than 200k customers
- 830M professionals
- Talent solutions up 43% marking 6 consecutive quarter of accelerating growth
- 28M subscribers to atleast 1 newsletter, up 51% YoY
- Teams
- differentiation : only solution with meetings, chat, video, collaboration and business process automation
- 1000+ collaboration apps like asana and zendesk
- Teams is a platform and companies have built custom apps on teams to bring business processes into workflows
- Viva has more than 10M MAUs
- Linkedin's glint employee engagement tool also got added to viva
- Windows
- More than 100M PCs have shipped in each of the last 8 quarters
- Windows 11 and windows 365 enabling switch between cloud and local PC
- 500M MAU of Microsoft personalized content feed - Microsoft start
- Flywheel : content consumption and commerce, microsoft edge helping people save through commerce deals
- Security
- 24 Trillion threat signals each day
- Azure active directory has 550M MAUs
- 785k customers for security solutions, grew 50% YoY
- 15k partners in security ecosystem
- Gaming
- XBox cloud gaming - 10M people have streamed games
- Azure gaming revenue fiscal grew 66% YTD
Tuesday, April 26, 2022
Google Q1, 2022 Earnings Analysis
Numbers
- Revenue: $68.1B vs $55.3B in Q1, 2021 (up 26%)
- Operating Income: $20.1B vs 16.4B in Q1, 2021
- Net Income - 16.4B vs 17.9B in Q1, 2021
- Operating margin - 30% vs 30% in Q1, 2021
- Finished with 134B of cash and purchased $52B of stock in the last 12 months
Segment Breakdown
- Google search 39.6 vs 31.8B in Q1, 2021 up 24.5%
- Google Cloud revenue: $5.8 billion vs. 4.0B in Q1 2021 up 43%
- YouTube ads: $6.8 billion vs. $6.0 billion in Q1 2021 up 14%
- Traffic Acquisition Costs (TAC): $11.99B billion vs. $9.7B
- Google Network 8.1B vs 6.8B in Q1, 2021 up 20%
- Google Other(hardware, playstore, non-advertising youtube revenues) 6.8B (6.4B in Q1 2021) up 5%
Operating Income breakdown
- Google Service - 22.9B
- Cloud lost 930M in Q4. Prediction is that in 2022 Cloud will be cash flow positive
- Other bets lost 1.1B
- Google ends the quarter with 139B in cash
- Stock split 1:20 coming soon
- 70B new buyback announced
- Multisearch - people can search using both images and text
Search to help people find health care providers who take their insurance and book appointments online.
Retail was the largest contributor for YoY growth to the ads business followed by travel
- 2B monthly signed in users
Short form videos : 30B daily viewing hours, 4x in the last year
Current focus is on user experience and monetization will follow later
Youtube usage has continued to grow despite return to physical world post covid
135M people were reached via youtube on connected TVs
Youtube made the transition from mobile to TV, over 700M hours of content watched on TV daily
YouTube accounts for over 50% of ad-supported streaming watch time on connected TVs among people ages 18 and up. And over 35% of viewers in this group can't be reached by any other ad-supported streaming service. In other words, we're seeing that when users choose to watch ad-supported CTV, they choose to watch YouTube, and YouTube delivers CTV audiences that advertisers can reach anywhere else.
later this year, in partnership with Nielsen, we'll help brands directly compare their YouTube reach to linear TV, including the ability to measure co-viewing. This apples-to-apples comparison will be a game changer in helping advertisers make smarter investment decisions.
Warner Bros., who leaned to YouTube to help drive awareness among key audiences for The Batman. By using a combination of best-performing video creative, connected TV media and video ad sequencing, Warner Bros. expanded its target audience in the 2 weeks leading up to its release, helping contribute to its successful $134 million opening weekend.
For direct response, we continue to believe there's great opportunity to address commercial intent on YouTube between video action campaigns, app campaigns, product feeds and new live commerce features.
- 99% developers pay less than 15%
- Pixel 6 is the fastest growing Pixel in the portfolio
- Q1 revenue grew 44%
- Google maps searches for shops near me grew 100% YoY
- Omnichannel is still a winning strategy
- Waymo launched driverless operations in San Francisco expanding from Phoenix
- Wing started drone deliveries in Dallas Fortworth area completing 50k orders and growing 3x
Shoppers can now virtually discover and try on thousands of products from 90-plus brands, including Maybelline New York, MAC and Charlotte Tilbury as well as from retailers like Ulta Beauty right in Google Search.
$GOOG Q1 revenue:
2022: $68.0 billion
2021: $55.3 billion
2020: $41.2 billion
2019: $36.3 billion
2018: $31.1 billion
2017: $24.8 billion
2016: $20.3 billion
2015: $17.3 billion
2014: $15.4 billion
2013: $12.9 billion
2012: $10.6 billion
2011: $8.6 billion
2010: $6.8 billion
Sunday, February 27, 2022
ESPP
Employee Stock Purchase Plans are, like much in the stock-related world, a double-edged sword. Depending on how you swing them, they can either be a handy supplement to your paycheck or just another source of complexity and, in the worst case, a way to flush income down the drain. As many of my fellow geeks have access to them — though not as many as a decade ago — I’d like to take some time to talk about them. Even if you’re already familiar with ESPP’s, it’s a good idea to know what’s out there — not every company’s plan works the same as yours, and it’s handy to know what the possibilities are when you’re job-hunting!
The idea behind the ESPP is relatively simple: as part of the benefits your employer is showering upon you — like manna from the heavens — you are given the opportunity to buy their stock at a discount. Nothing in the world of employer benefits is ever that simple, of course, so I’ll walk through the caveats.
The money for purchasing this stock is withheld from your paycheck. In this way, ESPP’s are much like 401(k)’s: you allocate a certain amount of your paycheck to be withheld, and that amount never graces your bank accounts. Also, there are heavy restrictions on when you can change that allocation; generally you can jump out if you like, but you can’t jump back in until the beginning of the next ESPP period.
The stock is often (not always) purchased in one chunk, at the end of the ESPP period. In this case, rather than buying stock each time you get a paycheck, it’s all purchased at the end of an ESPP period (generally 3 or 6 months). You can expect to see fun little jumps in your employer’s stock price on that day, as some/many/most employees (depending on the company) turn around and sell their newfound shares (and speculators buy or sell in response to this).
There is a cap on how much you can purchase. The cap can be either a maximum percentage of your paycheck, or a maximum number of shares bought, or both.
The discount varies greatly with the employer. Most common is a range from 5%-15%; alternately, the company may “match” your contributions to the ESPP up to a certain percentage of your income. Also, the discounted price is not always the fair market value on the day the stock is bought; it could be the lower of that price and the price at the beginning of the period, or even the price at the beginning of a window of periods! For example: say your employer’s stock price was $10 when you joined a year ago, $20 at the beginning of the last period, and $30 today, the end of the latest ESPP period. Depending on your employer, the buy price could be 5%/10%/15% of $30, $20, or even $10!
Depending on the company, it may not be a guaranteed win. In most cases, if you sell immediately you’ll lock in your profit and get a nice bonus. However, if you work for a company with a highly-volatile stock price (e.g. a “microcap”), you can lose your discount (and more!) by the time you sell your stock.
Let’s start with the basic diagram below. At this level, the tax situation is rather simple: the difference between the price at which you bought the stock and the price at which you sold it is income, and thus is taxed.
Sounds simple, right? Well, the trick is how it is taxed. There are three options:
Compensation (ordinary income): Part of your ESPP income is taxed as compensation, i.e. at your normal income tax rate.
Short-term Capital Gains: If you held your shares for a year or less after you purchased them, the part of your ESPP income not taxed as compensation is taxed as short-term capital gains. Currently, that means they’re taxed at the same rate as compensation.
Long-term Capital Gains: If you held your shares for more than a year after you purchased them, the part of your ESPP income not taxed as compensation is taxed as long-term capital gains. As of September 2017, that means they’re taxed at 20%, 15% or 0%, depending on your income.
OK, that doesn’t sound so bad. So that means that all we have to do is figure out how much of the income is compensation, and we’re home free, right? Well, yes…and that’s the tricky part. There are two situations we need to go into: “disqualifying dispositions” and “qualifying dispositions”.
Disqualifying Dispositions: If you did not hold your shares for more than two years after the “grant date” (beginning of the offering window; see previous post) and more than one year after purchasing them, this is a “disqualifying disposition”. In a disqualifying disposition, the difference between the amount you paid for the shares and the amount they were worth when you bought them — in other words, your discount — is counted as compensation income. The rest — the difference between the amount the shares were worth when you bought them and the amount they were worth when you sold them — is capital gains; long-term if you held the shares for more than a year after purchasing them, short-term otherwise.
Sounds relatively straightforward, but what if your stock drops after you buy it? Well, the sad fact is that it the discount still counts as compensation income, even though you didn’t see a red cent of it! To be sure, the capital losses offset your income — but only up to $3,000. (The rest must be carried over to future years.)
Qualifying Dispositions: If you held your shares for more than two years after the grant date and more than one year after purchasing them, this is a “qualifying disposition”. In a qualifying disposition, your compensation income is equal to the difference between what you paid for the shares and what you sold them for or the discount (difference between what you would have paid for the shares and what they were worth) on the grant date, whichever is lower. The rest is long-term capital gains since, by definition, you held the shares for longer than one year. So an ideal situation would look like this:
That’s good — more of your income is taxed at the (lower) long-term capital gains rate. But here’s a bizarre twist: in the following situation, you would actually pay more in taxes for a qualifying disposition than for a disqualifying disposition!
Note that if this were a disqualifying disposition, your compensation income would be much smaller (look back at the second graph), and the capital gains much larger. Ouch — good things do not, apparently, always come to those who wait!
And that’s how ESPP taxes work. You’ll remember that forever, right? Well, if perchance you think something more important might displace its spot in your memory, feel free to bookmark this article and refer back to it later. (Heck, I’ll probably end up doing that myself!)
Reference
1. https://financialgeekery.com/2012/05/15/the-ins-and-outs-of-espps-part-2-fun-with-taxes/