👉 Week in Review: 9/11/22
Europe's "Lehman Brothers" moment, the Kardashians take on PE, mortgage rates reach 2008 levels, and Fed presidents reinforce their interest rate plans.
Before we begin, two important callouts that have nothing to do with the markets:
“I still have the shoes I wore to work that day. The soles are melted and they’re caked in ash. I keep them in a shoebox with the word ‘deliverance’ written all around it. They’re kind of like my ark, a reminder of God’s presence and the life I owe to him.” — Stanley Praimnath, 9/11 Survivor
On this most difficult of days, we encourage you to spend some time in reflection on the tragedies from September 11th, 2001. If you’ve never seen the clip below about “The Man in the Red Bandana” — it shows just one of the thousands of remarkable stories to result from that dark day.
"We all need to get the balance right between action and reflection. With so many distractions, it is easy to forget to pause and take stock." — Queen Elizabeth II
On Thursday, the United Kingdom transitioned to its first new head of state in 70 years after the passing of Queen Elizabeth II. Think about that for a second — any British person under the age of 70 has only lived under one monarch for their entire lives. The Queen’s reign spanned 15 Prime Ministers and 14 United States Presidents.
The heir apparent to the throne is now King Charles's elder son, William, 40, known as the Duke of Cambridge. Next in line is William's eldest child, Prince George (9); and then Princess Charlotte (7); and Prince Louis (4). Rest in Peace to the Queen!
Week in Review — Too Long, Didn’t Read:
DocuSign sees relief after topping lowered expectations, a rising player in the outdoors space has caught our attention, Asana skyrockets after record-setting quarter & $350M cash infusion, Apple enhances its products, Kim K dives into private equity, Russia is crushing Europe, China is still a believer in ‘Zero Covid’, US mortgage rates hit their highest mark since 2008, Fed leadership gives us insights into their commitment to rate-raising, consumer credit cools, and the services industry feels some relief.
Key Earnings Announcements:
DocuSign's management team notes slowdowns in both the real estate and financial sectors, Academy Sports & Outdoors shared a laundry list of momentum drivers during their call, and Asana’s co-founder and CEO bet $350M on the business.
DocuSign (DOCU)
Key Metrics
Revenue: $622.2 million, an increase of +22% YoY
Operating Loss: -$41.1 million, compared to -$22.6 million last year
Net Loss: -$45.1 million, compared to -$25.5 million last year
Earnings Release Callout
“We enter this next phase with a clear set of vital few deliverables for our people initiatives and product roadmap, while driving sustainable and profitable growth at scale. We have a $50 billion market opportunity, an industry leading digital agreement platform, strong market position, and an experienced leadership team.”
My Takeaway
DocuSign reported a better-than-expected quarter after guiding to a lower range a few months ago. The company’s subscription revenue bump was the main catalyst for their revenue topping expectations — as well as a healthy bump from billings growth. Interestingly enough, the company’s international revenue grew +35% during the quarter.
Customers paying more than >$300K per year to the company increased +39% during the quarter to 992.
Management commentary mentioned the macroeconomic environment is indeed negatively impacting their business — as less and less deals are being completed in the real estate and financial sectors. Given this reality, I’m not sure I’m ready to begin accumulating shares at this point.
Academy Sports & Outdoors (ASO)
Key Metrics
Revenue: $1.7 billion, compared to $1.8 billion last year
Operating Income: $256.7 million, an increase of +1% YoY
Profits: $188.8 million, compared to $190.5 million last year