Wynn 2Q15 Earnings Call Notes

Competitors in Macau are very good

“Our fellow operators in Macau are intelligent, they’re extremely well-financed and they’re quick to learn and to accommodate the things that they see in other hotels and to accommodate changes necessitated by their own experience in that market. It’s a very, very sharp place.”

Las Vegas is comfortable

In Las Vegas, we’re enjoying a comfortable business, I think is the right word for it. It’s not an aggressive growth by any means, but we are enjoying non-casino revenue that is acceptable.”

Interesting discussion about the difference between where people buy chips in China vs. the US and how that changes calculation of hold percentage

“In China, and virtually no one buys chips at the cage in America, at least in our experience over the last 40-odd years, and then walks to a table and gambles. In China, they do, in fact, do exactly that. I don’t know whether it’s because they’re using their credit card or they’re cashing in whatever RMBs they have or whatever, but people go to the cage, buy chips, and then circulate around the casino and bring the gaming tokens to the table with them. That means that when we count the boxes, it’s not a measurement truly of the drop or activity in the casino. The handle, it’s referred to in the alternative.”

Vegas is a grind, particularly because of international business

“Las Vegas is, one month is good, and then you see June numbers come out, not so good here on the gaming side. So, Las Vegas is a grind right now, and we think we’re in a good spot in our position in the business. But there’s no accelerated growth going on here, in particular because of the international business.”

Rearranging the floor has meant that we win more money with less games

“I also rearranged the floor in the casino to put our specialty games that are very popular with the public that have a higher margin and I put them in the 100% location and I moved my games with less of a margin to secondary locations. Those changes have worked out favorably to us in the past three weeks, and that kind of re-examination – our slot floor has been redone. We win more money with less games now. These are some of the reasons why we make more money than anybody else in Las Vegas.”

We don’t pay very much attention to our stock price

“our stock can trade at level A or level B. We don’t pay very much attention to our stock price per se, we pay attention to the underlying performance of the company, and those factors associated with performance that are within our control, which is why every week we grind on everything in this building from the use of every square foot of our real estate and our structures, to our plans for the future.”

You’re hearing that the China stock market selloff is going to affect junket collections, but I think it’s just noise

“you’re hearing in the market that all these margin calls that are taking place are going to affect the junkets and their ability to collect the junkets themselves. Some of them were involved in the market. But all of this is in my opinion just short-term noise. And I don’t think it’s going to have any long-term effect.”

Big for the sake of big does not appeal

“As we sit here today, we’ve never had such a opportunity presented to us that we thought was acceptable. That doesn’t mean that at some point in the future such a thing couldn’t happen, or that such an M&A, to use your term, a merger and acquisition, would make sense. But big for the sake of big is not a thing that I subscribe to, as you know, and I’ve said so before. We have a certain kind of a brand. It is flexible and adjustable for sure.”

I’m more interested in tomorrow’s newspaper than yesterday’s

“I’m more interested about tomorrow’s newspaper than yesterday’s newspaper.”

For a price, you can buy anything, but it has to be 2+2=5 or it’s a lot of trouble for nothing

“M&A is the kind of option that of course always exists. I mean for a price you can buy anything, I suppose, and some people find it in their mutual best interests to join up from time to time, because the net result is that two and two equals five. But really it has to be two and two equals five. If two and two equals four, it seems to me a lot of trouble for nothing. I’d rather build our own stuff.”

We’re in the resort business with casinos included

“We build resorts that are much more extravagant and attractive than they would be were it not for the fact that somewhere down the hall there’s a gaming room. But we’re basically in the resort business that has casinos included”

Facebook 2Q15 Earnings Call Notes

1.5B people using facebook now each month

“We’ve continued to make good progress in the growth of our community with 1.49 billion people now using Facebook each month and more than 1.3 billion people using Facebook on mobile. We’ve also continued to make gains in engagement. More than 968 million people worldwide now use Facebook daily, and 65% of our monthly actives are daily actives.”

People now spending 46 minutes per day on Facebook properties

“when it comes to time spent across Facebook, Messenger and Instagram, people are now spending more than 46 minutes per day on average, and that doesn’t include WhatsApp.”

43% y/y revenue growth

“This quarter, our total revenue is more than $4 billion for the first time, and advertising revenue grew by 43% year-over-year. ”

40m small businesses using pages on Facebook

“There are now more than 40 million small and medium-size businesses, using pages on Facebook. So we have a big opportunity to create value for communities all over the world, and Sheryl is going to talk more about this in a moment.”

We’re getting 1 of every 5 minutes spent on a smartphone

“We continue to get more than one out of every five minutes on smartphones in the U.S. and mobile usage is driving our growth globally as well. We believe we have the best performing mobile ad product in the market and video’s making it even better. With so many consumer videos being watched on Facebook, video ads are a natural part of the News Feed experience. For marketers, video has always been a compelling format. Now Facebook enables mass reach and cross device targeting and measurement abilities far superior to what other platforms offer. ”

Instagram, messenger and WhatsApp have a ton of users on their own

“We also saw strong growth in our next generation of services with Instagram, Messenger and WhatsApp now exceeding 300 million, 700 million and 800 million MAU respectively.”

Dollar had 300m impact on revenue

“The strengthening of the U.S. dollar has continued to have an unfavorable impact on our revenue. Had foreign exchange rates remained constant with Q2 2014 levels, our total revenue this quarter would have been approximately $330 million higher.”

Employees up 50% y/y

“We ended the quarter with 10,955 employees, up 52% compared to last year. With 873 additional employees, Q2 was one of our strongest quarters in terms of hiring, and the majority of the new employees were added in R&D.’

We expect y/y revenue growth rates to continue to decline

“Since the first quarter of 2014, we have seen year-over-year advertising revenue growth rates decline each subsequent quarter. We expect this trend to continue in Q3 and Q4 as we continue to grow off a much larger base and face currency headwinds due to the strong dollar. ”

$3B of stock comp expense, half of which related to WhatsApp

“We continue to expect stock-based compensation in 2015 to be in the range of $3 billion to $3.3 billion, approximately half of which is related to our prior acquisitions, most notably WhatsApp.”

Ramping CapEx v 2014

“we are ramping CapEx versus 2014. The guidance is $2.5 billion to $3 billion, and that’s up from $1.8 billion last year. We’ve got a lot of infrastructure investment that we’re making across data centers, servers, network. We are clearly investing for the growth of both Facebook at its core and then also the additional services that we’re bringing on.”

VR comes after video for ways that people want to share and consume thoughts and ideas

“there’s always a richer way that people want to share and consume thoughts and ideas and I think that immersive 3D content is the obvious next thing after video.”

In terms of engagement, news feed is continuing to do very well

“I think in terms of engagement the product is having, the biggest impact is News Feed continuing to do very well. So News Feed at the core is proving to be just a great experience for users. It’s getting better. We continue to invest in that. As people spend more time with News Feed, we get better about understanding what they like and getting the content that they care about in front of them. ”

The bet on Whats App is enabling people to have organic interactions with businesses

“the long term bet is that by enabling people to have good organic interactions with businesses, that will end up being a massive multiplier on the value of the monetization down the road when we work on that and really focus on that in a bigger way. So we’d ask for some patience on this to do this correctly, and the game plan will be more similar to what we did in Facebook with News Feed.”

I don’t believe this third person exists…

“Two out of three smartphone users check their phone as soon as they wake up in the morning.”

E-commerce is one of our top categories of advertisers

“So e-commerce is one of our top categories of advertisers, and we are already driving a lot of product sales through Facebook but importantly, our e-commerce initiatives are really about connecting consumers with marketers so that they can buy from companies. They’re not buying through us. We are testing a buy button in the new shop section on pages, but again, that buy button is letting people buy directly from their advertisers, not from us. It’s pretty early days. We’re excited by what we see in the e-commerce vertical and we’re going to continue to invest in growing that vertical as part of our ads business.”

Whole Foods FY 3Q15 Earnings Call Notes

Opened 8 new stores

“Year-over-year, our quarterly sales grew $255 million to a record $3.6 billion. We opened eight new stores, increasing our operating square footage 11% to 16 million and expanding our reach to 422 stores across 41 states and three countries.”

Negative publicity sharply impacted comps

“Comps dropped sharply in week 11, after our New York City weights and measures audit received national media attention, and averaged just 0.4% for the last two weeks of the quarter.”

The weights and measures issue was inadvertent human error

“I want to emphasize, these were not systematic, but rather caused by inadvertent human error. The audit included errors that were favorable to customers as well. These are weights and measures issues that can be found in any supermarket.”

$1B in EBITDA YTD

“Year-to-date, we have produced industry-leading sales per gross square foot of $990, over $1 billion in EBITDA, and $1 billion in cash flow from operations.’

Still see room for 1200 stores

“424 stores totaling more than 16 million square feet today, we expect to cross the 500-store mark in fiscal year 2017, and over the longer term, continue to see potential for 1,200 Whole Foods Market stores in the United States.”

First 365 store going to open in silver lake

“Our first 365 by Whole Foods Market store is scheduled to open in the Silver Lake area of Los Angeles, where we converted a lease in development from Whole Foods Market to 365.’

We’re victims here

“It’s a very small percentage of our total product. It’s just something that went viral in the media, and it has hurt our trust and yet, we do feel like we’re victims of – we don’t know exactly why the DCA went after Whole Foods like this, and we’re not sure why the media went crazy with it, but it did happen. We are taking steps to not give cause for this in the future.”

Slowed the rollout of the affinity program

“We have slowed down the rollout which we originally anticipated because we’ve gotten so much feedback from our customers about the features they like or the suggestions they have. So we’re on to a couple new markets and that’s where we are right now. We’re just going a little slower in order to get it right as we go’

We’re not going to slow down our growth unless we can’t find location that don’t produce ROICs that we’re looking for

“I think the key takeaway there is that we’re not going to slow down our growth unless we can’t find locations that are going to produce five-year EVAs on a present value basis and give us the returns on invested capital that we’re looking for. As long as we can, that’s how we’re going to continue to manage the business.”

Anadarko Petroleum 2Q15 Earnings Call Notes

Driven costs down by 35% and drilling the same number of wells with half the rigs

“More specifically, we’ve driven our drilling cost down in the Wattenberg field by almost 35% in the last six months and doubled our rig efficiency over the last year, drilling the same number of wells with half the rigs.”

Drilling wells for $1m a copy, completing and equipping for $3.5m

“If you listen to Al’s comments about our drilling performance, where we’ve now been able to get our well cost, at least the drilling portion, down to less than $1 million a copy. You look at the completions, they’ve done a really nice job there as well of getting our cost down. So for about $3.5 million now, we’re drill, completing and equipping these wells.”

Amazingly, it’s still a seller’s market for assets

“we’ve been reasonably unsuccessful, if I can use that as a term, in trying to buy things in the Delaware Basin where I think we have a cost advantage, we clearly through Western Gas have a processing advantage, and yet we see time and again, people coming in there and buying things at prices that surprise us. I will also say that we’ve been – we fought fairly aggressively on a couple of things and were bid or rather were outbid by 2X. So to Bob’s comment, it seems to be a seller’s market”

Going to have a lot of wells that are drilled but uncompleted

“because we have drilled the wells, we are going to have a significant uplift in what we would call the DUCs, the drilled but uncompleted. We went in last quarter saying we’d probably carry over 125 into next year and as we see it now, we’re probably going to do – carry over around 200, but I would say based on your comments, we do tend to be very flexible here. We’ll probably stand up at least one completion rig to complete some of the extra wells being drilled. ‘

Asset values are high, corporate values are low

“Asset values are high, corporate values are low, that would lead one to believe that the opportunities, the better opportunities may exist from a corporate standpoint. However, few corporate opportunities are actually perfect fits from a portfolio perspective, so you introduce execution risk and whether or not you’re making your company as efficient on a pro forma basis as it is going into a transaction.”

It’s tough to know what the majors are looking at

“You’re latter question on the majors, I don’t know, I mean, it’s hard to know what they’re thinking of and what they’re looking at. So we’re just trying to focus on the way we can build the best company and hopefully be as attractive to all our shareholders as possible.”

Our objective is to get better, not bigger

“I’ll go back to a comment I’ve made on prior calls. And that is, our objective is to get better not bigger, and if getting bigger allows us to get better then that’s okay, we like the position we’ve got, we like the assets we’re in, we like the exploration opportunities that we have in-house. If we see a company that has assets that are complementary, then I think that would cause us to take a harder look at them, but just buying somebody that’s distressed with assets that don’t fit the piece of the puzzle the way we see the puzzle looking, probably should be considered way outside the white stakes.”

We may outspend cash flow next year in Capex

“as we get some little bit better clarity on where we think what that cash flow number is going to look like in 2016. We’re going to be working with the board to decide whether it’s within cash flow or something in excess of it. Either way we expect that we’ll be able within cash flow plus asset sale proceeds. And so, therefore, we avoid putting any pressure on the balance sheet or adding any incremental financial risk to the company’s profile”

These are permanent improvements in drilling cost

“We still see some improvement from the service sector in terms of our abilities to improve margins. I think there is a lot of things we’ve done that are permanent, as it relates to the efficiencies that we’ve put in place. So it’s not just price reductions from various service vendors that in a different hydrocarbon price environment would come back to us as a higher price, these are actually sustainable improvements that will weather the storm of higher prices when we have those.”

We’re still waiting for a production decline in the US

“The last time we were on this call, we were at about 9.4 million barrels a day. I think as most of you know we’re at 9.7 million barrels today. That was one of the reasons we were being very cautious last quarter. We did not see the drop off occurring in the second quarter. At some point the lack of capital being deployed into assets in the U.S. will cause 9.7 million to decline. I think like others, we’ll continue to watch that in terms of understanding how to deploy capital, as simple as that. “

Mastercard 2Q15 Earnings Call Notes

Environments in US and Europe have continued to improve but consumer still not spending all of their gas savings

“I’m going to just briefly touch on global economics this quarter. And overall, the environments in the U.S. and Europe have continued to improve, as key economic indicators remained healthy. But the U.S. consumer is still not spending all of their gas savings. Latin America and Asia-Pacific remain challenged, most notably in Brazil and in China, and our business continues to be impacted by the strong U.S. dollar. But our fundamentals remain strong, with double-digit volume and transaction growth in spite of these economic situations.”

Seeing better trends in July so far

“let’s discuss what we have seen in July through the 21st. Most of our business drivers are showing a higher growth rate compared to what we saw in the second quarter. The numbers through July 21 are as follows. Starting with processed volume, we saw global growth of 13%, up from the 11% in the second quarter. In the U.S., our processed volume grew 7%, up two PPT from what we saw last quarter, even after a continued 2 ppt headwind from lower gas prices. And we saw an increase in both our credit and debit programs.’

There are a lot of people competing to be a gateway for payments, but we’re not going to pick a winner

“PayPal is much more than a gateway. And Stripe is a different – they’re different. People use gateway very loosely. So in that whole space of digital transactions, whether they be through m-commerce or e-commerce channel or in-app or browser-based or whether they be through physical contactless, there are going to be a lot of players playing in this space to connect to the merchant, to connect to the acquirer and to connect to the issuer and the digital vehicle that they use. We’re just keen to be a regular player playing with all of them. We’ve had a view through many earnings calls and investor meetings. But we’re not going to pick winners and losers in this because this thing is evolving at a rate that’s very fast and people who looked like winners three years, four years ago are no longer relevant players there. So rather than placing bets, we’re being relatively agnostic in all these spaces”

Akamai 2Q15 Earnings Call Notes

Over the top TV viewing could mean an explosion of data across the internet

” the world’s major broadcasters and Internet companies are working to create over-the-top, or OTT, services and packages for popular video content. This has the potential to create an enormous amount of traffic on the Internet. Typical subscribers watching OTT video delivered across the Akamai platform could consume 10 megabits per second or more of traffic while they’re watching. This means that an audience size of only 5 million users, which is the equivalent of about four Nielsen points, could generate 50 terabits per second of demand, far more than we deliver today for all of our customers combined. And if OTT becomes commonplace, the demand could increase by an order of magnitude or more. This is why we are investing in growing the capacity of our platform and why we are working on new technologies to decrease the cost of delivering large volumes of video.”

It’s not easy to get the data over the networks

“making OTT successful involves a lot more than just capacity and scale. The quality of the viewing experience is also critically important. Delivering broadcast quality video over the Internet at scale is a lot harder than most people realize, especially considering the diversity of video formats, devices, operating systems, browsers, video players, DRM and ad insertion technologies, encoders, and carrier equipment in the ecosystem. And that’s just for the landline Internet.

The problem is even harder when you try to deliver high-quality video over cellular networks. That’s because cellular networks were originally built for voice, and voice uses about 1,000 times less capacity then video.”

Growing momentum for OTT

“It’s really hard to predict the rate of adoption and when new OTT services will become available. But we are in conversations with the country’s leading broadcasters, in fact, several global broadcasters and major Internet companies, and there’s a lot of buzz out there and a lot of interest in bringing major video content online over-the-top.”

Increasing our CapEx to prepare for OTT

“There is the possibility that it could have a significant impact on our financials next year. We are taking risk in doing this because there’s always a chance that the offerings will be delayed or there won’t be as much uptake among the users and subscribers as people are hoping for, but we’re willing to take that risk. The downside there is that if we just deploy the CapEx a little early we’ll be using it within a year anyway, but we really want to be ready if OTT takes off as a lot of people think it might.”

Most major media brands already use Akamai so potential is substantially more traffic from existing customers

“most of the major media brands already use Akamai. So I think less of new customers, more of new service and substantially increased traffic from our existing customer base”

Capex impacting gross margins via increased depreciation

“so year-over-year GAAP gross margins were down two points. Cash gross margins were down I think about a point. Certainly a point of that is depreciation. And as we mentioned, we’ve been doing some pretty substantive build-out of the network, so you can account for half of that. And as you can imagine, we’ve been doing very large build-out in the first half.”

A lot of big media companies will try to do this in house, but many have realized it’s better to just partner with Akamai

” We’ve got a lot of competitors. The very biggest media companies will have a do-it-yourself effort in-house. Pricing is always important, very competitive there. The only I’d say major change has been over the last few years we’ve developed much closer and better relationships with many of the world’s leading carriers, some of whom had large competitive or do-it-yourself efforts in the past and now have abandoned those efforts and decided to partner with Akamai.”

Want to do $5B in revenue by 2020

“I would say that we have certainly talked about a long-term model for the company is that we believe that we have an ambition to hit $5 billion by 2020. And if you do the math on that, it means you need to grow the company around 17% on a compound annual growth rate. “

Oaktree 2Q15 Earnings Call Notes

Continue to take advantage of opportunities in Europe

“This month, we began fundraising for the European Capital Solutions Fund, a successor to the first European Private Debt fund we raised just two years ago. The fund will primarily target proprietary direct loans to middle market companies requiring a customized financing solution. We continue to take advantage of opportunities arising from the prolonged dislocation in the European lending markets stemming from the global financial crisis and an evolving regulatory and legislative framework that has restricted bank lending to the middle market. And just this morning, we formally launched fundraising for European Principal Fund IV, which will target control investing opportunities where dislocation or distress creates attractive investment propositions.”

commodity related sectors are another area of focus

“additional areas of focus for our distressed debt funds are energy and other commodity related sectors such as metals and mining. With the recent uptick in U.S. high yield bond defaults in these sectors and with their fortunes tied to weakening commodity prices, these areas will likely remain stressed. Importantly, heightened regulatory pressures on leveraged loan issuance have eliminated a crucial liquidity avenue for overleveraged commodity producers.

We expect dislocations in the energy and commodity markets to continue, providing further opportunities for attractive risk adjusted returns in credit.”

High yield market fundamentals remain sound outside of commodity sectors

“apart from the weakening commodity and energy sectors, the credit fundamentals of the high yield bond market remain sound. Issuers of the bonds held in our funds in that strategy continue to post top line growth and solid EBITDA gains. However, this relative tranquility belies the fact that there’s still plenty to worry about.”

Tranquility belies that there is plenty to worry about though

“However, this relative tranquility belies the fact that there’s still plenty to worry about. The U.S. economic recovery remains tepid. Interest rates are poised to rise sometime in the coming year, and the global economic environment is quite unsettled with the overhang of the Greek debt crisis and a slowing Chinese economy.”

Oil psychology turning negative but not diving in yet

“in the last quarterly call, I mentioned the psychology that there wasn’t outsized opportunities because the psychology was not really that negative. The psychology is starting to turn negative, but it’s just beginning and we haven’t dived in yet by any means. We have a lot of dry powder and we are right now accessing opportunities that again are structured to basically minimize the risk. But also want to take advantage of now happens to be in retrospect the right time to step in for part of the opportunity. So our instinct is that it’s not time to dive into the water completely, but it is time to take advantage of low oil prices and gas prices.”

Twitter 2Q15 Earnings Call Notes

stumbles are unacceptable and we’re not happy about it

“product initiatives we’ve mentioned in previous earnings calls like instant timelines and logged out experiences have not yet had meaningful impact on growing our audience or participation. This is unacceptable and we’re not happy about it.”

We need to do three things to right the ship

“Over the past few weeks, I’ve had a chance to get a deeper understanding of where I need to focus our team. We need to do three things. One, we need to ensure a more disciplined execution. Two, we need to simplify our service to deliver Twitter’s value faster. And three, we need to better communicate our value.”

What should you expect twitter to be?

“You should expect Twitter to be as easy as looking out your window to see what’s happening. You should expect Twitter to show you what’s most meaningful in the world to live it first before anyone else and straight from the source. And you should expect Twitter to keep you informed and updated throughout your day.”

MAUs grew just 12% y/y

“We reached 304 million MAUs in Q2, excluding SMS Fast Followers, compared to 302 million MAUs in Q1 for a growth rate of 12% on a year over year basis. Total average monthly active users, which as a reminder includes SMS Fast Followers, reached 316 million for the quarter, reflecting year over year growth of 15%.”

Twitter remains too difficult to use

“we have not delivered on meeting the new potential user’s expectations of Twitter when they try the product. Simply said, the product remains too difficult to use. As Jack mentioned, we need to simplify the product so everyone get value from Twitter faster. In short, we have not communicated why people should use Twitter, nor made it easy for them to understand how to use Twitter. This is both a product issue and a marketing issue.”

Ad load 1/3 of potential

“ad load, as measured by total ad impressions divided by total tweet impressions is approximately one-third of what we see as the long-term potential.”

Slowing growth rate in users, constrains ad supply growth

“because our growth rate in users is slowing quite dramatically. We’re giving you a sense in our load factor that there are scenarios where we can have a significant increase in daily revenue demand and specific mix shift towards one particular type of ad category. And if that happens, we could be more constrained than we have been in the past from a supply standpoint.”

The number one reason people don’t use Twitter is because they don’t know why they need it

“The number one reason from our market research that users don’t use Twitter because they don’t understand why to use Twitter. They don’t understand the value that Jack and I both talked about and we need to clearly communicate what that value is.”

We don’t have any update on the CEO search

“I know this is a trending topic on Twitter around the CEO search, but unfortunately we do not have an update to provide today. The search committee does feel the urgency of the search, but it is doing its work to make sure that we arrive at the best answer. And we’ll have updates when there is something meaningful to share. My focus is entirely on raising the bar of our execution and making sure that we’re focused on the right things. And as I said in my prepared remarks, it’s really around simplifying our service and making sure that people can get in and get to the value of Twitter faster and in a more immediate way”

Need to allow our teams to “ship product” faster

“focus has to be around not just particular individuals, but the best team dynamic. And great teams love shipping products to people who will use them on a daily basis And our focus is entirely around making sure that we unblock our team from shipping products faster, in a better way..So we definitely need to do a better job in ensuring an execution discipline to allow for people, enable people to ship faster. And I think our shipping cadence has improved over the past six months and we will continue to show improvements there.’

We need to provide a graceful entrance for people to get value from Twitter

“We need to make sure that we provide a really graceful and unfolding path to get to more value faster for anyone that comes into the service. And that means they don’t have to consider what Twitter is, they just have to consider what they are there for.”

Yelp 2Q15 Earnings Call Notes

This year hasn’t gone as smoothly as anticipated

“While this year hasn’t gone as smoothly as we anticipated, I am as confident as ever about our future, particularly about the success of our apps and local advertising products. With the strength in our core business, we continue to believe that we can be a $1 billion revenue company by the end of 2017.”

30% reach on smartphones

“Recent comScore report show that Yelp had, as of 2015, approximately 30% reach among the U.S. smartphone users. While this suggests that Yelp is the definitive leader among local search and discovery apps, it also means that we have significant room to grow.”

Exiting direct brand advertising

“Direct brand advertising sales is in decline, while programmatic advertising has its own challenges with privacy implications, ever declining CPMs, and lower ad quality. For example, ads that play video or audio intrude upon the consumer experience increasing load times and data usage on smartphones. We believe that prioritizing the consumer experience while delivering highly relevant native local advertising will provide us with the strategic long-term advantage. Given that our brand advertising as a percent of total revenues declined from 25% in 2010 to 6% in the second quarter of 2015 now is the right time for us to reallocate those resources to our highly differentiated core business.”

Max Levchin stepping down

“Before I turn the call over to Rob, I would like to take a moment to thank Max Levchin, Chairman of Yelp who has decided to step down from the board to pursue other interests. Given the demands on his time, we have mutually agreed this is the right time for him to transition off the board. Max provided the seed capital to start Yelp and I am forever grateful for all of his contributions and wish him all the best going forward.”

Website traffic down with SEO changes, but app traffic does continue to grow

“Now, website traffic internationally is down, that’s right, we mentioned 3% decline in website traffic and that is mostly a function of SEO and things that effectively we see Google having done with their algorithm there. The good news is that as with the rest of our business we do see app traffic growing very nicely in all of our markets. And given that, that is now majority of all kind of user activity, the good news is that their app traffic does continue to grow for us in cities all over the world not just domestically.”

The unicorn bubble is affecting us

“As to the unicorn bubble question and we certainly are feeling those impacts. What are we doing? I think we are trying in general take that Goldilocks approach we have always talk of trying to maintain a high-quality bar on hiring and retention and promoting from within. And we have been really delighted by general strength in our ranks across the sales force in the product and engineering group. And I think for the most part, it is something that we just have to ride out. That having said, you can see the cost in a couple of these areas have gone up, in particular, product and development as a percentage of revenue continued to creep up and that’s a function of compensation in the marketplace. So, we will do what we can to kind of hold the dam on that whole thing and not ride it out, as you said.”

Paccar 2Q15 Earnings Call Notes

Strong deliveries due to economic growth and strong freight demand in NA and Europe

“PACCAR delivered 41,600 trucks during the second quarter, an 8% increase versus the first quarter this year and slightly ahead of our expectations. The improvement reflects increased truck deliveries in North America and Europe due to economic growth and strong freight demand.”

European outlook continues to improve

The European economic and truck market outlook continues to improve. GDP growth expectations for this year are 2.4% in the UK, which is PACCAR’s strongest market in the region, with 1.5% GDP growth on the continent.

Freight transport activity on German highways is up 2.6% year-to-date through June compared to the same period last year and it’s at the highest level since the German toll system was launched in 2007.”

US Economic picture positive too

“The US economic picture remains positive with GDP forecast to grow 2.4% this year. The housing and automotive industries are bright spots in the economy and create a large amount of freight. Housing starts are projected to grow 11% this year to 1.1 million and the automotive industry is expected to deliver 16.9 million vehicles, near the record level of 17.3 million set in the year 2000.

US freight tonnage is at near record levels. We’ve raised our US and Canadian Class 8 truck industry retail sales estimate to a range of 270,000 to 290,000 units this year. The stronger market reflects expansion in industrial fleet capacity due to continued strong freight fundamentals.”

Not seeing any cancellations in the US

“Cancellations have been at a very low rate and vocational trucks are very active, lots of reasonable growth in housing construction, commercial construction. So it’s all been pretty steady.”

It’s a really good operating environment

“I think it’s a really good operating environment. I think we’re in a good position right now and obviously our teams in our factories do a great job of managing to the conditions in the marketplace and we expect that that will continue as we move forward of course this year and next.”

Lots of available capacity

“We have lots of capacity available in most of our factories to be able to produce trucks to meet customer demand. So it’s not a concern for us.”