Week 3 of earnings season brought with it some telling disclosures about online travel and video ad spend, 5G chip sales and e-commerce and payments activity, among other things.
Here's a recap of some notable things that were shared over the last few days by reporting tech companies.
Roku and The Trade Desk
The 32% annual YouTube ad sales growth that Alphabet (GOOG) reported on Oct. 29 already signaled that online video ad spend was (like many other kinds of online ad spend) on the upswing as brand ad budgets loosen up.
But Roku (ROKU) and The Trade Desk's (TTD) results and commentary arguably did more than just that: They suggested there's a major inflection in online video ad spend as dollars are grabbed from traditional TV ad budgets amid major TV ratings declines and accelerated cord-cutting.
Roku, which rose 12.6% post-earnings on Friday, reported that its monetized video ad impressions rose almost 90% annually in Q3 -- a much faster growth rate than Q2's 50% clip. And on its earnings call, CEO Anthony Wood asserted that " reassessed their TV upfront advertising commitments and moved significant portions of their investments to connected TV platforms like Roku." (CFO Steve Louden made similar comments during a post-earnings interview with TheStreet).
The Trade Desk, which rose 26.6% post-earnings, reported that its "connected TV" ad sales doubled annually in Q3, after having grown just 40% in Q2. On the earnings call, CEO Jeff Green claimed that TV ad spend had reached "a tipping point" as linear TV viewing continued falling and budgets moved to online channels.
Expedia, Booking and Uber
Online travel spend has improved from its spring lows, but is still pretty depressed. And on the whole, trends look better right now in the U.S. than in Europe. This was a message that both Expedia (EXPE) and Booking (BKNG) delivered on their earnings calls.
Expedia, whose revenue and booked hotel room nights were both down 58% annually, said that its North American hotel bookings have been "pretty steady and improving since July," while European demand "has been a little rockier." The company added that in the last couple of weeks, European demand "has been acutely hurt" by the recent spike in COVID-19 cases. North American demand, by contrast, was suggested to have fallen just slightly.
Booking, which has strong European exposure and respectively reported 48% and 43% annual drops in revenue and room nights, said that improving North American demand in Q3 was "offset by softening trends in Europe." The company added that October brought with it both a North American slowdown and additional European weakness, and that its booked room nights were down about 58% annually during the last 7 days, with larger declines seen in Europe.
"We believe that the recent increase in COVID cases in Europe and the US coupled with cold weather and travel restrictions in these geographies will likely result in a second dip being U-shaped and lasting until the early spring of 2021," said CFO David Goulden.
Meanwhile, Uber (UBER) reported that its Mobility (ride-sharing) bookings nearly doubled sequentially in Q3, but remained down 50% annually. Mobility bookings were also said to have risen another 10% month-to-month in October thanks to strong growth in Latin America and Asia-Pac, but EMEA bookings saw "a modest contraction" during the month.
PayPal, Square and MercadoLibre
As Amazon.com (AMZN) can attest, e-commerce trends still look very good. And this in turn remains a boon for digital payments platforms, as does strong growth for things such as peer-to-peer (P2P) payments and digital content transactions.
PayPal (PYPL) reported its total payment volume (TPV) rose 38% annually (36% in constant currency) to $247 billion, a healthy acceleration from Q2's 29% growth and Q1's 18% growth. The company also guided for TPV to be up by a low-to-mid 30s percentage in Q4, and that Venmo's TPV (fueled in large part by strong P2P activity) rose 61% to $44 billion.
Square (SQ) reported that its Cash App's revenue rose 174% annually to $435 million, if one excludes (low-margin) Bitcoin transactions, and 574% to $2.07 billion when counting Bitcoin transactions. It also noted that the Cash App has now been used (for better or worse) by more than 2.5 million people to buy stocks, and that the number of daily transacting Cash App customers nearly doubled annually.
Latin American e-commerce giant MercadoLibre (MELI) reported that TPV for its Mercado Pago payments platform rose 91.7% in dollars (161.2% in constant currency) to $14.5 billion, up from 72.1% growth (142.1% in constant currency) in Q2. Payment transactions rose 146.6%, after having grown 122.9% in Q2, and TPV for MercadoPago's mobile wallet app rose to $3.2 billion from $2.1 billion in Q1.
Qualcomm and Qorvo
It was already pretty clear prior to the arrival of Qualcomm (QCOM) and Qorvo's (QRVO) Wednesday earnings reports that it was a good time to be a mobile chip supplier. Nonetheless, Qualcomm and Qorvo's numbers did manage to pleasantly surprise a lot of people, thanks in part to how the silicon needs of 5G radios are boosting sales as 5G phone shipments surge.
Qualcomm reported that its chip unit (QCT) saw revenue grow 38% annually to $4.97 billion, aided by 5G modem and RF chip shipments to Apple (AAPL) and others. The company also guided for December quarter QCT revenue of $6.2 billion to $6.8 billion, and it reported that its mobile RF front-end (RFFE) chip sales rose 91% sequentially to $852 million.
Qorvo reported that its revenue rose 23% annually to $1.06 billion, and it issued December quarter guidance that implies about 22% sales growth. 5G RFFE design wins with Apple, Samsung and Chinese OEMs are growth drivers.
Also: Qualcomm and Qorvo both issued upbeat forecasts for 2021 5G phone shipments. Qualcomm expects 450 million to 550 million 5G phones to be shipped next year, up from 175 million to 225 million this year. Qorvo expects 250 million 5G phones to be shipped this year, and for that number to roughly double next year.
