Aiera Investor Event Recap — Week of October 25, 2021
Tonal sentiment and deviations from this past week’s earnings events. Plus, commentary on Apple’s app tracking transparency headwinds for advertisers.
Introducing Tonal Sentiment and Tonal Deviations
This week, we’re excited to introduce the newest dataset and feature available within the Aiera platform: Tonal Sentiment Analysis. Now available thanks to a partnership between Aiera and Helios, Tonal Sentiment Analysis scores the tone of voice used by management teams while answering analyst questions during the “Q&A” portion of corporate earnings calls by leveraging the companies’ prepared remarks as a baseline. When combined with Textual Sentiment Analysis, this powerful combination yields deeper insights into areas and topics where management expresses a level of confidence or a level of uncertainty relative to the words spoken across Aiera’s market-leading universe of earnings call transcripts.
Below are some notable examples from this past week’s earnings calls.
Intel (Q3 2021 Earnings Call)
Speaking about Intel’s margin guidance and longer-term investments, Intel CEO Pat Gelsinger expressed a high degree of tonal confidence in his response to a question from Morgan Stanley Analyst Joseph Moore. While INTC pulled back following the announcements of the company’s Q3 results and the subsequent earnings call, CEO Pat Gelsinger and other insiders disclosed $2.5mm of share purchases just days later, affirming his optimism in the company’s outlook.
Facebook (Q3 2021 Earnings Call)
In response to a question about recent headwinds from Apple’s ATT (App Tracking Transparency), Facebook COO Sheryl Sandberg exhibited a negative tonal score when speaking about how these changes may affect Facebook’s targeting capabilities. This was in contrast to the positive underlying textual sentiment score assigned to the response.
Whirlpool (Q3 2021 Earnings Call)
While discussing Whirlpool’s Q4 guidance, Whirlpool CFO Jim Peters had both high tonal and textual sentiment scores in reference to the fact that the company now believes they will end up above their original guidance range as their “ability to produce and get product out of the door continues to increase.”
Interested in trying it for yourself? Join Aiera’s Tonal Sentiment Beta Program today!
Request Tonal Beta Access During Q3 Earnings Season
And now, more notable moments from the past week…
Apple’s ATT (App Tracking Transparency) Creates Varying Degrees of Headwinds for Digital Ad Platforms
“We’ve been open about the fact that there were headwinds coming, and we’ve experienced that in Q3. The biggest is the impact of Apple iOS 14 changes, which has created headwinds for others in the industry as well, major challenges for small businesses and advantaged Apple’s own advertising business. We started to see that impact in Q2, but adoption on the consumer side ramped up by late June, so it hit critical mass in Q3. As a result, we’ve encountered 2 challenges. One is that the accuracy of our ads targeting decreased, which increased the cost of driving outcomes for our advertisers; and the other is that measuring those outcomes became more difficult.”
- Sheryl Kara Sandberg, COO & Director, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“Overall, if it wasn’t for Apple’s iOS 14 changes, we would have seen positive quarter-over-quarter revenue growth. And while we and our advertisers will continue to feel the effect of these changes in future quarters, we will continue working hard to mitigate them.”
- Sheryl Kara Sandberg, COO & Director, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“There are 2 big challenges coming from these iOS changes. The one is targeting and one is measurement…On measurement, we think we can address more than half of that underreporting by the end of the year and make more progress in the years ahead. We estimate we’re underreporting iOS web conversions. We believe that real-world conversions like sales and app installs are higher. And so we have to do the work to help clients measure these properly in order for them to really understand the outcomes they’re getting and improve performance. And again, we think we can get a good chunk of that done this year and more in the next year. Targeting is a longer-term challenge. Our direct response products are built on user-level conversions. And as a result of the iOS changes, we don’t see the same level of conversion data coming through. So we have to rebuild our targeting and optimization systems to work with less data. So this is a multiyear effort. We are developing privacy-enhancing technology to minimize the amount of personal information we learn and using more aggregate or anonymized data while still allowing us to show those relevant personalized ads and measure ads effectiveness. In order for this to really work and benefit all businesses, it can require some cross-industry collaboration and more commerce tools, and those are going to be longer-term efforts.”
- Sheryl Kara Sandberg, COO & Director, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“In terms of the overall targeting, I think it’s hard to sit here and decide exactly where we’re going to end up at all of this. It is going to be a multiyear effort. We’ve definitely seen a hit already, and we’re definitely focused on tools to help advertisers. We think we have opportunities to strengthen targeting ourselves, both by the work we do ourselves and as part of an industry consortium. You’re right in your question in that advertisers have to make a choice of where they advertise. So the question for us is, how good can our targeting be compared to others? I think our targeting can suffer compared to others like Apple who have the direct data themselves, but I think our targeting still remains, I think, in very, very many ways, very good for advertisers. When you compare us on ROI, we’ve always performed well. We still do even though we’ve taken a hit, and we’re focused on continuing to do that for businesses.”
- Sheryl Kara Sandberg, COO & Director, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“Our advertising business was disrupted by changes to iOS ad tracking that were broadly rolled out by Apple in June and July. While we anticipated some degree of business disruption, the new Apple provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS. We have remained very focused on driving ROI for our advertising partners, and we continue to see strong, consistent performance on our ad platform based on first-party data and conversion lift studies, and are working on building flexible first-party tooling and measurement solutions to serve the diverse needs of our advertising partners.”
- Evan Spiegel, CEO, Snap Inc. | Q3 2021 Earnings Call, October 21st, 2021
“That said, we are seeing significant headwinds heading into Q4 that are driving a near-term deceleration in our top line, including the iOS ad changes that Evan just spoke about as well as the supply chain disruptions and labor market headwinds. While the challenges we face in the near term are significant, we believe they are transitory. We believe the fundamentals of our business remain strong. Our community is growing at the fastest rates we have reported in more than 4 years.”
- Derek Andersen, CFO, Snap Inc. | Q3 2021 Earnings Call, October 21st, 2021
“While we are excited about the continuing growth of our business and improvement in our cost structure, we missed the lower end of our guidance by $3 million due to a few key factors, including changes to advertising, tracking on iOS and macroeconomic factors that have impacted our advertising partners.”
- Evan Spiegel, CEO, Snap Inc. | Q3 2021 Earnings Call, October 21st, 2021
“Starting with the iOS 14 changes. So overall, as we said, we’re pleased with the strength across our business in the third quarter. It was broad-based. It was global. In terms of the iOS 14 changes specifically, they had a modest impact on Q2 revenues. That was primarily in Direct Response. I think as you all know well, focusing on privacy has been core to what we’ve been doing consistently… So from our standpoint, we see ATT as 1 aspect of the many broader ecosystem changes that are underway. And we’ve been investing in privacy preserving technology for many years. Our focus is on supporting developers, small and large advertisers, creators, publishers, so that they’re able to mitigate impact to their businesses. And we really see the future of digital advertising built on advances and privacy preserving on device technologies, which support the free and open Internet, and obviously, a robust ad ecosystem.”
- Ruth M. Porat, Senior VP & CFO / Phillip Schindler, Senior VP & Chief Business Officer, Alphabet Inc. | Q3 2021 Alphabet Inc Earnings Call, October 26th, 2021
“Since the launch of ATT in April, we’ve invested in supporting SKAdNetwork, opening up 30%-plus more inventory and scale on iOS and launch support for view-through attribution and SK Campaign ID management features in the Twitter ads manager. It’s still too early for Twitter to assess the long-term impact of Apple’s privacy-related IOS changes, but the Q3 revenue impact was lower than expected, and we’ve incorporated an ongoing modest impact into our Q4 guidance. We’ve seen our revenue product development, both related to and distinct from ATT, improved the performance of our products, and we expect that to continue.”
- Ned D. Segal, CFO, Twitter, Inc. | Q3 2021 Twitter Inc Earnings Call, October 26th, 2021
Supply Chain Challenges Begin to Rear Their Head in Advertising Demand
“On your supply chain question, I would say performance in Q3 was strong across ads revenue lines, regions and nearly all verticals, In line with the widespread reporting of supply chain weakness in the auto industry, we’ve seen some impact on vehicles within the auto vertical, which started earlier in the year, although the impact has really been offset somewhat by increased demand in related areas like parts, accessories, repairs and maintenance.”
- Phillip Schindler, Senior VP & Chief Business Officer, Alphabet Inc. | Q3 2021 Alphabet Inc Earnings Call, October 26th, 2021
“These factors have been compounded for many advertisers by major global supply chain issues and labor shortages, which have left many consumer businesses with less inventory. This has reduced their appetite to generate demand from consumers, which has impacted advertising spend. Businesses in every region and across a range of verticals have been affected.”
- Sheryl Kara Sandberg, COO & Director, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“We’re giving sort of specific quantitative revenue guidance on Q4. I think if you look at the range, it’s from a sequential growth basis on a seasonal basis Q3 to Q4. It’s lower sequential growth than we’ve seen historically. So I do think that reflects some of the uncertainty that we’re seeing out there as it relates to how IDFA — sorry, with the iOS 14 and ATT and IDFA impacts play into pricing during the holidays and also the macroeconomic factors like the supply chain issues. So I do think that kind of the seasonal sequential growth is lower than we’ve seen in the past. And with the range, I think that reflects that uncertainty.”
- David M. Wehner, CFO, Facebook, Inc. | Q3 2021 Earnings Call, October 25th, 2021
“This [ad tracking] impact was compounded by the ongoing macroeconomic effects of the global pandemic with our advertising partners facing a variety of supply chain interruptions and labor shortages. This, in turn, reduces their short-term appetite to generate additional customer demand through advertising at a time when their businesses are already supply constrained. The ongoing magnitude and duration of these global supply and labor disruptions are inherently unpredictable. And in the meantime, we are focused on supporting our partners in this uncertain environment. While it is difficult to predict the trajectory of these challenges, the growth of our audience, the adoption of our new products and platforms by our community and the underlying efficacy of our advertising products for performance advertisers gives us confidence in the future of our business and our ability to navigate this environment as we continue to invest in our long-term vision.”
- Evan Spiegel, CEO, Snap Inc. | Q3 2021 Earnings Call, October 21st, 2021
Cloud Leaders (AWS, Azure) Exceed Expectations, While GOOGL Remains “Focused on Revenue Growth”
“We again saw healthy growth in our Azure consumption-based business and increased usage across products, such as Teams and Power Platform, as Satya reflected in his comments. Azure and other cloud services grew 50% and 48% in constant currency, ahead of expectations driven by our consumption-based services.”
- Amy E. Hood, Executive VP & CFO, Microsoft Corporation | Q1 2022 Microsoft Corp Earnings Call, October 26th, 2021
“On AWS, the acceleration, I would, again — I would say that what we’re seeing is, again, a lot of customers accelerate their journey to the cloud based on the pandemic. Some of their spending was suppressed in 2020 as they — is different. Some companies were booming. Disney, Zoom, Netflix, others that were more travel-related were suppressed in their demand. And I think there’s a general level of recovery across a lot of our customer base.”
- Brian T. Olsavsky, Senior VP & CFO, Amazon.com, Inc. | Q3 2021 Amazon.com Inc Earnings Call, October 28th, 2021
“Turning to Google Cloud. We remain focused on revenue growth and are pleased with the trends we are seeing. In GCP, our customer wins, as Sundar noted, reflect our multi-year investments in products and solutions that are purpose-built to solve for the biggest opportunities within our targeted 8 industries. The benefit of these solutions to our customers is clear, and they are choosing to work with us as their long-term transformation partner.”
- Ruth M. Porat, Senior VP & CFO, Alphabet Inc. | Q3 2021 Alphabet Inc Earnings Call, October 26th, 2021
Cloud Growth Strategies Focus on Expanding Services into Different Workflows and Customer Sizes, with Particular Focus on AI/ML Use Cases
“We are building Azure as the world’s computer, with more data center regions than any other provider, delivering fast access to cloud services, while addressing critical data residency requirements. We are rapidly innovating in AI, and our large-scale models are powering everything, from meeting recaps in Teams, to helping developers code in GitHub, to the next best action in Dynamics 365. And as machine learning continues to mature, managing the life cycle of models or MLOps has become more prevalent, and Azure ML is now the go-to tool for data science teams. And large organizations, from Ecolab to Providence Health Care, are relying on Azure AI to better meet customer needs.”
- Satya Nadella, Chairman & CEO, Microsoft Corporation | Q1 2022 Microsoft Corp Earnings Call, October 26th, 2021
“So when I think about what is going to be key in such a distributed world, is having that full suite of application infrastructure, right, all the way from the management and security control plane, something like Azure Active Directory managing the security principles and identities or — and to management control planes like Azure Arc. And so we feel well positioned for it. And I think that the multi-cloud, multi-edge world is sort of really how we build Azure in the first place. And I think we’re still very early in all of that playing out, but we feel well positioned.”
- Satya Nadella, Chairman & CEO, Microsoft Corporation | Q1 2022 Microsoft Corp Earnings Call, October 26th, 2021
“First, we saw a continuation of strong usage and revenue growth in AWS, with revenues accelerating to 39% year-over-year in Q3, driven by a broad base of services and customers. There are a number of areas we’re excited about, but let’s focus for a moment on our efforts in machine learning. Customers of all sizes and across all industries are using AWS as their preferred cloud provider for machine learning services. We’ve been investing in this area for several years, offer an extensive set of machine learning services, including ones that can be applied to common business problems like Amazon Connect for contact center intelligence or Amazon Kendra for intelligent enterprise search. We recently launched solutions specific to industries, including industrial machine learning services as well as Amazon Health Lake to help health care and life sciences customers seamlessly transform their data across disparate sources to understand and extract meaningful medical information. And Amazon SageMaker continues to help customers scale their use of machine learning to core workloads, making it one of the fastest-growing services in AWS history with tens of thousands of active external customers using it every month. We also continue to see strong interest in rapid adoption of our custom silicon and AWS design Graviton2 processors, delivering customers up to 40% better price performance than current x86 processors. Moving to Graviton2 means little to no code changes so that customers can quickly and easily migrate their workloads to access the best price performance in Amazon EC2.”
- Brian T. Olsavsky, Senior VP & CFO, Amazon.com, Inc. | Q3 2021 Amazon.com Inc Earnings Call, October 28th, 2021
“Customers of all sizes and across all industries are using AWS as their preferred cloud provider for machine learning services. We’ve been investing in this area for several years, offer an extensive set of machine learning services, including ones that can be applied to common business problems like Amazon Connect for contact center intelligence or Amazon Kendra for intelligent enterprise search.”
- Brian T. Olsavsky, Senior VP & CFO, Amazon.com, Inc. | Q3 2021 Amazon.com Inc Earnings Call, October 28th, 2021
“On to cloud, where we see continued momentum with Q3 revenue growing 45% year-over-year with GCP’s revenue growth rate about Cloud overall. At Cloud Next, 2 weeks ago, we unveiled hundreds of new capabilities, services and solutions. We also announced 20 new and expanded partnerships to support the growth and scale of our customers around the world. More than any other top cloud provider, Google Cloud has unique capabilities to meet the needs of enterprises, digital natives and SMBs around the world. I’ll highlight 3. First, our leadership in real-time data, analytics and AI is winning customers like Carrefour, Belgium, Deutsche Post DHL and Wendy’s, who are unlocking data to deliver unique business outcomes. BigQuery, our leading data warehouse solution, is reducing costs and driving productivity at Cardinal Health and ATB Financial. Second, customers see value in our open scalable infrastructure today enables them to run workloads anywhere on our cloud at the edge or in their data centers, road and fields, scale, let’s say, SAP environment. Third, as consumers, businesses and schools continue their shift towards hybrid work, the threats of cybersecurity continue to increase. Customers are turning to Google Workspace and our cybersecurity platform to provide the ease of use, collaboration and security they need.”
- Sundar Pichai, CEO & Director, Alphabet Inc. | Q3 2021 Alphabet Inc Earnings Call, October 26th, 2021
Note: All excerpts, highlights, and insights in this email were generated entirely using the Aiera platform.
Learn more about Aiera’s event access & real-time transcription here.
