Increasingly, public companies are experimenting with all sorts of new strategies to improve investor engagement, elevate transparency and reach new investors.
Many of these strategies revolve around earnings calls – which remain one of
the few opportunities public companies have each year to share their stories.
EARNINGS CALLS – NEW FORMATS
Look no further than Netflix (NFLX) which has led
the way in completely transforming earnings calls making them vastly more informative and substantive by doing the following:
Their calls are Q&A only (no reading of prepared remarks).
They tap 2 sell-side analysts each call to question (or "interview") management.
And they keep things fresh by periodically bringing on new analysts to
replace existing ones -- thus providing new perspectives.
Yahoo! (YHOO) management has similarly followed suit.
Like Netflix, they video webcast their calls – but host those calls on the
Yahoo! investor relations site (as opposed to YouTube).
They also employ a moderator – most recently a
savvy Yahoo! Finance writer named Mike Santoli – who introduces sell-side
analysts and their questions.
And then there’s real estate site Zillow (Z).
Zillow management has introduced a variety of changes to its earnings calls in an
effort to be more inclusive and generate more discussion.
They solicit questions from Twitter and Facebook (in addition to answering those questions from
call participants). Specifically, they encourage investors to submit questions on the Twitter platform by
tweeting @Zillow and using the ZEarnings hashtag.
And after concluding their call, Zillow CEO Rascoff hosts a follow-up Q&A session on
Twitter using the ZEarnings hashtag (you can find a link to those Q&A sessions on their IR website).
And then there’s Twitter (TWTR) itself.
Twitter management encourages investors to tweet earnings call Q&A questions directed to @TwitterIR using hashtag TWTREarnings.
In doing so, Twitter management not only encourages
investors and potential investors to engage with them but also hopes to persuade other public companies
to utilize its platform for their earnings call Q&As as well.
And, finally, there’s FedEx (FDX).
For years, FedEx management has used their
earnings call introduction to solicit questions from members of the investing site StockTwits.
EARNINGS CALLS – PREPARED REMARKS
Changes have also come to the prepared remarks section of earnings calls.
This, too, is part of a larger effort to
While some companies like Western Digital (WDC)
post prepared remarks on their IR website immediately after their earnings call, other companies are now publishing them at the same time they release quarterly results.
This appears a logical way to improve the quality
of earnings call Q&A discussion and limit the need for the lengthy, out-loud reading of prepared remarks (often simply a repetition of what can be found in the earnings release).
Because, ultimately, the Q&A session is why people attend earnings calls.
Some companies recognize this reality and have taken further action.
For example, Melco Crown's (MPEL) prepared remarks are remarkably short.
Other companies like Netflix got rid of them altogether.
Better to spend more time on Q&A.
Of course, there are times when prepared remarks are something to pay attention to.
Consider Steve Wynn, CEO of Wynn Resorts (WYNN).
Wynn provides prepared remarks seemingly off the top of his head. His remarks are typically useful, somewhat actionable, and ALWAYS entertaining. You never know what to expect.
Wynn provides prepared remarks seemingly off the top of his head. His remarks are typically useful, somewhat actionable, and ALWAYS entertaining. You never know what to expect.
BEYOND THE EARNINGS CALL
Finally, some companies are taking steps to increase investor engagement by attempting to move earnings discussion online once calls end.
Zillow (Z) has done a remarkably good job of this by announcing on their call and then delivering an extended post-call Q&A on Twitter. This provides the potential for discussion of their earnings results to continue far beyond the completion of their call.
Zillow (Z) has done a remarkably good job of this by announcing on their call and then delivering an extended post-call Q&A on Twitter. This provides the potential for discussion of their earnings results to continue far beyond the completion of their call.
I'll have more to say on this in a future post.
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