This earnings season, big tech equates to cars, baseball, and social media giants. It’s getting interesting.
Does Tesla (TSLA) qualify as big tech? When you get into a Tesla, it’s like sitting inside of a computer. But instead of a VR experience, you actually get to drive – or not, if you prefer autopilot. Then there’s Elon Musk’s current play for Twitter (TWTR) to “unleash the social media giant’s full potential” (his words). But the real story is how Twitter is handling its change in leadership and comparing it to its competitors. Speaking of, how is META (Facebook) handling its first decrease in users reported in 4Q21?
And we can’t forget about Apple (AAPL), which just inked an $85 million deal with Major League Baseball to air two games a week, dubbed Friday Night Baseball.
With all that in mind, how does 1Q22 look for big tech?
Good-bye gas pump, hello electrical outlet
Tesla already reported earnings, but Similarweb web traffic and segment data provide a unique look into the company’s sales funnel across each car model. Tesla’s web traffic since March 7 (the week gas prices spiked 32%), increased considerably.
The company’s March 2022 conversion rate was particularly strong, up 107% over February 2022. Similarweb digital alternative data also shows Q1 conversion in the U.S. is up 82% vs. the prior year (excluding Cybertruck), but down 11% vs. 2020’s Q4.
He said it with a tweet
A tweet is worth 280 characters, but Elon Musk rocked the Twittersphere with 15 and a link to the SEC documenting his $43B offer to purchase the company. But instead of focusing on the news cycle, let’s look at how Twitter is performing under its new leadership since Parag Agrawal took the reins from Jack Dorsey.
Visits to ads.twitter.com:
- grew 3.5% YoY in 1Q22
- are down from 9% in 4Q21 and 16% in 3Q21, according to Similarweb estimates
- decreased in ad traffic in Q1 2022 4.1% from 4Q21
Historically, the rise and fall of Twitter ad revenues have closely tracked traffic to the ads website on about a 3-month lag, according to Similarweb analysis. That held true for the company’s 4Q21 earnings report.
By comparison, Twitter’s ad portal lagged Facebook, which grew ad portal traffic by 22%. Visits to the public-facing twitter.com grew 6.4% in the first quarter, but haven’t translated into more ad buyer interest. Will Twitter be able to convert user growth into advertising dollars as the year progresses?
Video killed the social media star
Meta’s 4Q21 earnings report in February was the first time Facebook reported a decline in daily active users. And 1Q22 looks to be telling the same story.
But the decline in site visits hasn’t affected traffic to its ad network at all.
- January alone had 1.5M more visits from returning users than the previous year and 617K new users.
- February brought in 1.3M more visits from returning users and 360K new users YoY.
- March had 1.4M more visits from returning users and 440K new users YoY.
- The bounce rate remains low at 21.8% for both new and returning visits.
Still, TikTok looms on the digital horizon as it continues to gain market share with its growth, dwarfing that of Facebook.
The bigger conversation for Meta as 2022 progresses will be the Metaverse. As it continues to grow, it’ll have a significant impact on the company’s earnings.
Apple swings for the fences, inking an $85M deal with the MLB. This is in line with the company’s growth in services, as Apple has seen its annual services revenue more than double over the last five years from almost $30B in 2017 to over $68B in 2021. And with 27% YoY service revenue growth in 2021, this growth is expected to continue going forward.
Apple’s film Coda won Oscars for best picture and best supporting actor, which will positively impact its near-term subscriber growth.
As for its product sales, Similarweb traffic estimates to purchase pages on Apple’s website for each of its major product categories (except the Apple Watch) saw strong YoY growth during March. This growth in traffic may have been driven by Apple’s March 8th event, Peek Performance.
- The iPad page grew 81% in March 2022 with 3.5M more monthly visits than in March 2021.
- The iPhone page had 4M more visits YoY.
- The Mac page saw a 57% increase in March over the previous year but had a 3% decline in February YoY and a 5% decrease in January YoY.
- The Watch page only had a 4% increase in March, but it wasn’t part of the March 8th event.
Apple’s focus on its services will continue to have a positive impact on its product sales, but content is queen, so only time will tell if its Oscar success and the addition of baseball to its lineup will add up to an increase in subscribers.
Pre-earnings insights and earning reports: what’s next?
Of course, earnings season isn’t just about the first-quarter results. It’s also about the guidance for the coming months and quarters. A bullish or bearish outlook can be just as important to how a stock moves post-print as the actual 1Q numbers themselves.
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