Oracle FY 3Q17 Earnings Call Notes

Larry Ellison

Cloud opens up more opportunities for ERP

“No, again, I couldn’t agree with Mark more. Our ability now to service much smaller customers than we could have serviced in the past is because the cloud allows you to deploy ERP in much, much lower costs. You don’t have to have ERP. You don’t have to build the data center. Obviously, you don’t have to hire programmers. You don’t have to hire a bunch of data operations people. We do all that for you, and therefore the available market has at least doubled what it used to be. And we’re also beginning to see, as Mark said, SAP customers moving their ERP and some very, very large SAP customers looking very closely at our ERP systems. So, we expect to have some big wins in the SAP install base, so we’re definitely going out from there in the coming month.”

Blackberry (BBRY) Q2 Fiscal 2017 Earnings Call

Blackberry (BBRY) CEO John Chen feels like the turnaround at the company is gaining traction

“Coming out of Q2, I feel that we are reaching a good inflection point where our financial picture is stable and our pivot to software taking hold.”

And he announced they no longer will be manufacturing phone handsets

“BlackBerry will focus on providing state-of-the-art security and device software. BlackBerry will discontinue internal hardware development and fully outsource this function to the third-party. BlackBerry will receive royalty per unit.”

By outsourcing their hardware manufacturing, they hope to increase returns on capital and reduce expenses 

“So with what I announced today, we will end that activity and rely completely on partners. So working with partners, relying is too strong a word, and working with them to make sure their hardware portfolio is up to spec and competitive, is of course reduce a lot of expenses, not only on operating expenses, but capital that we talk about, we don’t have inventory we need to carry anymore. So it’s a long list of savings, you know, people, equipment and so forth.”

Microsoft (MSFT) CEO Satya Nadella

Microsoft (MSFT) CEO Satya Nadella explained why he bought Linkedin for $26 billion in a letter to employees

“We are in pursuit of a common mission centered on empowering people and organizations. Along with the new growth in our Office 365 commercial and Dynamics businesses this deal is key to our bold ambition to reinvent productivity and business processes. Think about it: How people find jobs, build skills, sell, market and get work done and ultimately find success requires a connected professional world. It requires a vibrant network that brings together a professional’s information in LinkedIn’s public network with the information in Office 365 and Dynamics. ”

Microsoft (MSFT) CEO Satya Nadella is allowing LInkedin to keep their separate brand

“A big part of this deal is accelerating LinkedIn’s growth. To that end, LinkedIn will retain its distinct brand and independence, as well as their culture which is very much aligned with ours.”

 

 

Source: Microsoft/Linkedin Acqusition Announcement

Microsoft (MSFT) X-Box CFO Kevin McCarty

Microsoft (MSFT) X-Box CFO Kevin McCarty discussed how game downloadable extra content is increasing the amount players are spending

“I see the industry having more micro transactions in game, that way there’s no cap as to how much a player could spend in the game.  For example, a player might spend $15 on on buying the physical disc to play the game and then may spend an additional $15 or more to acquire certain in game abilities such as map packs or rec packs.”

Microsoft (MSFT) X-Box CFO Kevin McCarty how he sees virtual reality evolving

“For VR, the big publishers have a chicken or egg problem.  They tend to not make big bets on any platform until it has traction.  So I think with VR you’re going to see a lot more indy developers make games to start out with until the concept is more proven.  I think it’s ultimately going to take a real deep in game experience to launch the VR industry to where it needs to be and draw in the large video game publishers.”

 

 

Source: E3 Gaming Conference, Group analyst meeting at JW Marriott Hotel


SK Additions:

Changed our KPIs from sales volumes to monthly active users

Need to get to 6 teraflops for high res VR

Consumers who buy consoles like the appliance like elements of it

Oculus and HTC vive are both running on Windows….the true spirit of Windows is allowing anybody to run anything on top of it.

There’s a fine line between monetization and annoying

VR is going to be tricky for the publishers. There’s not a big installed base so there going to have to produce things without guaranteed returns. They will probably do micro experiences to experiment in VR. You’ll see a lot more indie development early on. Smaller studios. It will take a breakout experience to get VR really going.

First gate to the digital world is to have some sort of payment instrument on file. You do have bandwidth constraints in some regions.

I don’t want to use the word generation…We’re hoping to move away from a generational approach to a monthly active user base

It’ll take prices coming down and broader content to get mass adoption of VR

We spent the last few years refocusing on the gamer. We had focused on broader entertainment with Kinect etc.

If Sony also says they’re 6 teraflops and they’re $100 cheaper that would be concerning.

Workday (WDAY) Q1 2017 Earnings Call

Workday (WDAY) CEO Aneel Bhusri said the senior leadership team has a plan to get to profitability

“I wanted to address the topic of profitability as many of you know profitability has been a core value of the company since Dave and I started Workday back in 2005. For the past several years we have been primarily focused on growth but have always kept our eye on our path to profitability.  To that end, the senior management team spent a few days offsite earlier in the quarter planning our path towards profitability over the next few years both from an operating margin and cash flow generation perspective. We came out of that session with a clear strategy that has since been shared with the whole company.”

Workday (WDAY) CEO Aneel Bhusri said they’re starting to get momentum for their software in international markets

“We are particularly pleased with the progress we’ve made in Europe and are beginning to see similar levels of success in the APJ region.  During this past quarter, I personally spent a week in Australia and New Zealand and came away very excited and with a belief that we can be a leading player in that region.”

Workday (WDAY) CEO Aneel Bhusri said they are able to attract better talent now that the startup growth in Silicon Valley has slowed 

“I suspect we’ll continue to hire well, I actually think the hiring environment is pretty attractive right now, the draw for many of the startups in Silicon Valley is not what it was just a year or two years ago.”

Workday (WDAY) CEO Aneel Bhusri stated that the key to cross-selling software to large enterprises is having a relationship with the Chief Information Officer

“On the sales side you know the relationships that the reps have at the CIO level and the CHRO level are really valuable as we sell financials in many cases back into that installed base and frankly the key player in that equation is the CIO, if we’ve got that CIO on our side after a successful HR deployment in many cases that individual actually opens up the door for the finance side and the sales cycle looks very, very similar to the HR sales cycle.”

Workday (WDAY) CEO Aneel Bhusri highlighted his competitors product shortcomings

“That’s a no from a competitive perspective, when we look at the landscape SAP still does not have a cloud offering for financials. Their strategy is S/4HANA, HANA’s a database, HANA does not equal cloud and far as I can tell they don’t have a multitenant true cloud offering what’s even underway for financials, so that’s a big win for us. And from the Oracle perspective, I think they claim Hyperion hosted as cloud. So we just see a lot of run rate, a lot of opportunity and that two comes out in the same cycle.”

Workday (WDAY) CEO Aneel Bhusri believes getting the company to profitability will help mute the volatility in the stock price

“When we saw what was occurring with our HCM product line and the level of profitability we’ve been achieving, we looked at it and said, this is a clear pathway here and frankly I don’t like the gyrations in the stock price when these markets swing wildly and I think frankly profitability is a buffer, I watched how sales versus stock traded when the market was melting down and how our stock traded, and fully there is a premium based on profitability.  And while we’re very focused on the market opportunity and the growth from a shareholder perspective and employee perspective having that level of profitability is important, and the Company that I admire most in the tech world like Amazon and Google and Facebook and Salesforce, it’s a rite of passage, they’ve passed it and it’s the next in our growth and evolution for being a long-term player in this market.”

Workday (WDAY) CEO Aneel Bhusri believes a company’s human resource private data is more important than it’s financial data

“When you sit down with Chief Security Officer at a Fortune 500 company, they’re so-so sensitive on the loss of any employee data. And finance data has a time value to it, it’s valuable for only a short amount of time and in many cases it’s not even, it’s not even that useful in the hands of other people, but people’s self-security numbers and personal information, are things that are near and dear to the hearts of every Chief Security Officer and there’re frankly privacy and security rules again around it. And I think what’s happened in that marketplace is they’ve come to a conclusion, there’s cloud actually far more secure and private than anything that was being done on premise and I think the same thing is happening with finance.”

 

Box (BOX) Q1 2017 Earnings Call

Box (BOX) CEO Aaron Levie said they’re continuing to add customers at a terrific pace but they’re also choosing to stay 

“We had strong customer momentum adding more than 5000 new customers in Q1, our largest number of new customers in a quarter. We also had wins and expansions with leading companies like Airbnb, GEICO, Whirlpool and Wyndham Hotels and Resorts. We now have more than 62,000 total paying customers.  In addition, we continue to improve our already best-in-class customer retention with our customer churn rate improving to just below 3%. These metrics showcase how valuable and essential Box is to our growing global customer base.”

They’re often storing users data on IBM and Amazon Web Services servers 

“In April, we launched Box Zones which for the first time will enable our customers to store their Box data in regions outside of the US beginning with Europe and Asia. We’ve been working on the architecture for Box Zones for over two years which allows us to leverage public cloud providers like IBM Cloud and Amazon Web Services to meet our international customers’ data residency requirements while minimizing CapEx investments.  Storing data in-region addresses many data residency and compliance concerns for global companies, enabling Box to serve previously unreachable enterprises for the very first time.”

Box (BOX) CEO Aaron Levie said they’re often selling some of their services through partners such as Cognizant & IBM

“To further drive growth and utilization of Box platform in Q1 we announced the partnership with Cognizant naming them as a preferred systems integrator. Cognizant’s expertise in key verticals will provide an opportunity to develop and deliver more industry solutions for healthcare, life sciences, financial services and retail. We also work with IBM as they launch their IBM MobileFirst for iOS Expert Seller app built on the Box platform. IBM Expert Seller is both used and sold by the IBM Global sales force offering seamless management of sales and marketing collateral to help sales team securely access their content and make the most of every interaction they have with clients and prospects. Given our partnerships with both IBM and Apple we expect their joint MobileFirst program to be a strong user of Box platform moving forward with several other apps in the pipeline.”

Box (BOX) CEO Aaron Levie highlighted security as a competitive advantage

“Finally, we’re the uncontested leader in security. We provide robust administrative controls, watermarking, data loss prevention, customer managed encryption keys, document retention and compliance. Because of these unmatched capabilities we’re uniquely positioned to work with the world’s leading financial institutions, engineering companies, life sciences firms, healthcare providers and governments.”

Box (BOX) CFO Dylan Smith said he’s hoping to be cash flow positive by January 2017

“We’re committed to becoming free cash flow positive in our fourth quarter ending January 2017 and to remain free cash flow positive on an annual basis thereafter.”

Large user base but less than one fifth are paying for the service

“So we have 46 million users and about 13% of those users are now paying.”

 

 

 

Intuit (INTU) Q3 2016 Earnings Call

Intuit (INTU) CEO Brad Smith said consumers are increasingly choosing to do their annual tax returns themselves

“The second driver is the percentage of those returns filed using do-it-yourself software. This season, the category grew nearly 6% versus the assisted category, which was up only slightly. This suggests that do-it-yourself software category gained more than a point of share again this year, driving more than 3 points of revenue growth for TuboTax.”

And they’re increasingly trying to complete their taxes on their mobile devices

“Our seamless cloud-based experience drove increased mobile discovery and usage. Our mobile app downloads were up 85% versus last season and the number of completed returns through the mobile app and through mobile browsers doubled. This year, customers snap 5 million photos of tax documents with mobile devices. That is up 4x greater than it was last year. This represented 25% of all the documents imported into TurboTax, which save time and reduce errors while delighting customers.”  \

Intuit (INTU) CEO Brad Smith feels customers still want to ultimately connect with a live person who has expertise in accounting

“We know QuickBooks Online retention is 11 points better when a Small Business works with an accountant. So, we are tapping into our accountant network to make these connections. Nearly 600,000 QuickBooks Online subscribers are now linked to an accountant. That is up 70% versus last year. This all nets out to a strategically important, highly profitable business.”

Growing internationally but are taking a country by country approach as opposed to using the same strategy in each market

“So in each country, we have the different set of strategic outcomes. We fundamentally believe that certain markets right now we have a real advantage and we have momentum and we are going to invest to win in that market. In other countries, we know that we are moving in and we are the second placed player. And so we want to be a challenger in that market and for every specific country, Neil and I have sat with the country managers and we have agreed upon an LTV to cap and it’s a multiyear target. So, we actually have where should we be a year from now, 2 years from now, 3 yeas from now.  In some cases, we pushed that number a little further out for strategic reasons. In other cases, we say we think we can get the profitability a little bit sooner. But it truly as a country by country formula and make no mistake, we see a lot of upside and the number one focus we have is expanding TAM and accelerating customer growth, because we know lifetime value will come over time. We just want to mature we are doing that prudently with the right cost to acquire.”

Intuit (INTU) CFO Neil Williams said customers in the US are paying significantly more for the software than their international counterparts

“On the average revenue per user, there is a pretty big gap right now. We talked about around $425 a year for the U.S. subscriber versus something around $125 a year for a subscriber outside the U.S.  We don’t see a QBO subscriber outside the U.S. getting to the same average revenue per user we see in the U.S. for a considerable time period.  And so we think that disparity is going to exist for a while.”

Using data to improve customer acquisition and effective marketing

“We can use machine learning and data science to look for more creative ways to expose them to these kinds of offers. And so I have to tell you, TurboTax has been leading the way and using data as a way to attach products and services. And we are now bringing that same level of rigor to the QuickBooks Online team and we are trying to use that as a way to improve the attach rates for payroll and payments as well.”

 

 

Salesforce.com (CRM) Q1 2017 Earnings

Salesforce.com (CRM) CEO Mark Benioff said the company experienced it’s best 1st quarter in its history

“It’s the best Q1 we’ve ever seen. There is some incredible numbers you’re going to see including the cash flow number. Revenue for the first quarter as you saw grew nearly to $2 billion that was up 28% in constant currency that was just above our expectations. Deferred revenue also grew more than $4 billion up 32% in constant currency that was also above our expectations to see deferred revenue grow with a three in front of it at this size and scale.”

Took some time to bash the competition 

“We’re well positioned for another great year. This is amazing I think that one of the reasons that we are doing so well is because Oracle and SAP are doing so poorly in the cloud, they just have not been able to make that transformation that we’ve made, that other companies have made, and we just continue to take market share from them and gain customers at a record levels and you can see that their growth numbers are nothing like we’re putting up here as we deliver our first quarter and it’s happened because Salesforce is really the only company totally focused on companies helping to connect with their customers in a whole new way.”

Salesforce.com (CRM) COO Keith Block said they are seeing larger and larger transactions

“So we began fiscal 2017 with a record number of large transactions more than any other first quarter in our history as a company. The value of these large transactions across our clouds continue to increase. We have built on our tremendous momentum from Q4 and in fact we closed yet again another nine figure transaction in the first quarter.”

Signed deals with Amazon & Uber

“An example, in Q1 we signed a significant and strategic agreement with Amazon. We are now their company-wide customer platform and this is a huge expansion of our relationship with them and we plan to use more Amazon services in the future.  Uber one of the world’s great innovative companies, another expansion in the quarter, they’re an incredible innovator with off-the-chart growth. They selected Salesforce to be their global customer success platform, so they can build one-to-one journeys at scale for millions of Uber riders worldwide. This is one of the most innovative companies as I said and they are driving their innovation by leveraging our customer success platform.”

Salesforce.com (CRM) CEO Mark Benioff highlighted some emerging trends which he thinks will help the company continue to maintain its lead

“When I look at kind of the next major trend for Salesforce and our industry that will drive tremendous growth is got to be artificial intelligence. And as we look out into the future and we start to look at extreme improvement and advances in artificial intelligence whether it’s machine learning, whether it’s deep learning, whether it’s machine intelligence itself, I think that those kind of capabilities appearing inside our applications that is going to be a major growth capability going forward.  So Heather, when I look forward, what I see is an AI first world and for every customer is going to be able to get whole another generation of productivity out of artificial intelligence, machine learning, and deep learning.”

Salesforce.com (CRM) CEO Mark Benioff emphasized his respect for Jeff Bezos and the rest of the AWS team

“Number one I’d say we love Amazon, we’ve got a great relationship with Amazon, they are a huge user of Salesforce and that certainly has been a huge part this quarter as well. We did a very significant and very large transaction with Amazon and Jeff Bezos, and I have a great meaning of the minds, the future of the cloud. I think that it’s been a great relationship and partnership for us. We are definitely exploring ways so we can use AWS more aggressively with Salesforce. Of course we know that we run one of the largest application development capabilities in the world on AWS which is Heroku. We also are building our new IoT cloud on AWS. We also introduced new capabilities for our marketing cloud last week on AWS. And we have a lot of research and development capabilities in AWS. When you look at Amazon today, there is no public cloud that is more sophisticated, more well used by enterprises ad one that has more robust capabilities than Amazon. They have done a spectacular job in defining this kind of infrastructure as a service market. They of course dominated.”

Continuing to take market share in CRM space

“But the third thing I would say is when you look at all the innovation Marc is talking about and you look at market share and you probably extend we took market share again in Sales Cloud but even more importantly we took market share at the CRM level. Number one again, I took a 150 basis point and our key competitors are falling behind and actually losing market share and so that’s exciting to but this is a continuing trend.”

Salesforce.com (CRM) CEO Mark Benioff said that being a cloud company isn’t just about technology

“As part of kind of the market trends, there is a lot of legacy on premise providers out there quite frankly that are still trying to figure out if and how they can possibly transition to the cloud which is very difficult, a lot of companies will claim that they are a cloud company. But the reality is being a cloud company is about technology, it is about a business model and it’s about a culture of driving customer success.”

Salesforce.com (CRM) COO Keith Block mentioned their partnership with Accenture as a resounding success

“I just last week I addressed the Global Partners Forum at Accenture in Munich and talked about digital transformation and how Accenture and Salesforce are doing so well together. And just to give you an example of Accenture, we just don’t have a go-to-market relationship with them which is terrific and they continue to build their practice, they’re also a very large customer of us, so they are leveraging the Lightning platform, they are rolling it out very aggressively, they are getting all the benefits of it and they are building products on top of our platforms. So with a beautiful 360 degree relationship with Accenture that has really served as a model for all of these great systems integrators.”

 

 

Box (BOX) Earnings Call Transcript 4Q 2015

Box (BOX) CEO Aaron Levie said company’s continue to shift to the cloud to enhance productivity

“Enterprise IT is experiencing an once-in-a-lifetime shift to the cloud. And as businesses everywhere make this transition, they are increasingly recognizing the value of Box’s enterprise content management platform and our ability to make their organizations more collaborative, productive and secure.”

Continuing to gain momentum of their cloud products amongst the Fortune 500

“More than 3,000 new customers chose Box in Q4. We now have over 57,000 total paying customers.  We had major wins and expansions with leading companies like AIG, Bain Capital, Campbell Soup Company, The GAP, Genentech, The Home Depot, Intuit, Unilever and USAA.  Our growing list of new Fortune 500 customers is proof that we are broadening our reach as more and more organizations recognize the need for digitization, security and collaboration for their business processes.”

Company is benefitting from companies rationalizing and streamlining their corporate IT environment

“Our opportunity at Box is massive. Companies in every industry are going digital, adopting new mobile work styles and reimagining their business processes. To be successful in this transition, enterprises need new platforms and a new approach to IT. We believe that in this future, content need to be centralized and secured in a platform that underlies all the applications that a company’s employees, partners and customers use on a daily basis.”

Increased partnership efforts with IBM

“With IBM, we continue to enhance our go-to-market efforts with a couple of our largest customer wins in the quarter, driven by this partnership. Based on overwhelmingly positive interest from customers and prospects for the joint solutions we brought to market to-date and the many to come in the future, we extended the duration of our partnership agreement and gained additional sales commitments from IBM.”

Seeing good growth amongst a variety of sectors

So we are seeing the traction across multiple industries. So I don’t think we’re at a stage where we have the heavy concentration emerging in any particular industry. One of our bigger deals in the quarter was with a major real estate commercial and residential real estate organization. Another deal was with a legal technology company, the quarter prior our biggest deal was with a large financial services firm, so essentially any business that is trying to digitize its collaboration and sharing of content to its customers or to its partners is a very relevant potential customer of our Platform.

Points International (PCOM) 4Q 2015 Earnings Call Transcript

Points International (PCOM) CEO Rob McLean wants his company to be the go to firm for customer loyalty points

“We are committed to evolving point’s loyalty, commerce platform to facilitate growth and innovation for our loyalty partners. The point loyalty commerce platforms offers transaction level access to multiple loyalty currencies and powers innovative products and services that drive increased revenue and member engagement in loyalty programs. We will continue to leverage our platform to deliver a broad range of products and solutions that generate more revenue, broaden redemption opportunities and deepen member engagement as they transact with their valuable points and miles.”

Continuing to expand into Asia

“In the growing Asia loyalty market, we’ve announced new partnerships with Hainan Airlines, the largest privately owned air transport company and the People’s Republic of China and Shangri-La Hotels, China’s premier hotel brand, which is expected to launch in 2016.”

Points International (PCOM) CFO Michael D’Amico said they were able to demonstrate cost discipline despite growing their revenue and number of employees

“Moving to some of our key operating expenses for the quarter, we remain very disciplined in our management of the ongoing cost structure.  Total ongoing operating expenses which consist of employment expenses, marketing, technology and other operating expenses were approximately $7.8 million in the fourth quarter of 2015 compared to $7.7 million in the prior year period.”

The company claims to be an efficient allocator of capital

“In April, we were listed by Thomson Reuters as one of the 10 companies that most excel at putting capital at work based on our consistent ability to not only grow revenues but also generate increasing free operating cash and successfully reinvested with healthy returns.  Subsequently in December, we also listed as one of the best performers with respect to EPI or the economic performance index which is a measure of return on capital divided by cost of capital and is indicative of company’s capacity create wealth for the shareholders.”

Points International (PCOM) CEO Rob McLean reiterated that their business model is all about long term partnerships

“We have a very long term view with our partnerships. We had very good relationships really across the board, really on the couple of changes from the partner mix in one of the last ten years. And so, when we put out those announcements was recently about great relationships with Southwest and Air France KLM. I think you’ve heard in our prepared remarks that we’ve got 75% of our current revenues lock into long terms deals. It’s really just an indication of the times of relationships we have with our partners and really an opportunity for us kind of reinforce that with investors that we have a pretty sticky business and we’re going to be continuing to grow against that.”