FoolishJeff Portfolio at the end of Feb 2021

YTD return 4.7%

Portfolio Breakdown

CRWD - 19.6%
NET - 10.0%
SE - 9.3%
ROKU - 8.3%
MELI - 6.9%
ETSY - 6.7%
TTD - 6.0%
MGNI - 5.4% (NEW)
FVRR - 5.4%
PTON - 5.0%
TWLO - 4.9%
DOCU - 4.5%
DDOG - 3.1%
FUBO - 3.0%
BAND - 1.1% (NEW)
ACUIF - 0.91% (NEW)

Brief Comments

CRWD (Crowdstrike) - It’s the perfect (Saul) stock

  1. It’s a category crusher in Cybersecurity - it has 49 of the Fortune 100 as customers, 11 of the top 20 banks, and 40 of the top global 100 companies

  2. High Revenue Growth - 80% plus over the past couple of years

  3. 98% retention rate and a 124% DBNRR

  4. High Gross Margin - 76%

  5. Subscription model with a large and expanding TAM with WFH/Hybrid tailwinds

NET (Cloudflare) - On 2/11 they reported a solid earnings report with Revenue up 50%, GM of 77%, and DBNRR up to 119%, from 116% last quarter. The Full year guidance of 37% was a bit soft, hopefully it’s just sandbagging. As for next quarter’s guidance of $130-$131 million, I’m hoping they can hit over 50% growth so there could be a slight acceleration. Still loving the 23B market cap and rapidly expanding product offering. Cloud is the future - They say to follow the developers and total user count now stands at 3.5 million.

SE (Sea Limited) - This stock is up 276% since I bought it on 5/12/20. It’s 3 operating segments, gaming, e-commerce, and payments have been offering sustainable triple digit or high double digit growth. The gaming arm has 65 million users, the most in the region. Shopee, the e-commerce arm, saw gross orders up 131% last quarter, and Sea Wallet had 17.8 million user last quarter. It had a very strong outlook last quarter “We are moving into the second half of 2020 firing on all cylinders” -Forrest Li, CEO. I can’t wait for the earnings call on 3/2/21. Moreover, Sea is expanding Shopee into South America. It’s leading Game, Free Fire, is the highest grossing mobile game in the region. Free Fire’s popularity boosted Sea’s Latin American revenue 218% year over year to $507 million, or 18% of its top line, in the first nine months of 2020.

ROKU - #1 streaming platform. Great earnings report recently. Platform revenue is the most important number as it doesn’t include the low margin boxes/sticks.

• Total net revenue grew 58% YoY to $1,778 million;

• Platform revenue increased 71% YoY to $1,268 million;

• Gross profit was up 63% YoY to $808 million;

• Roku added 14.3 million incremental active accounts (up 39%) in 2020 to reach 51.2 million

• Streaming hours increased by 20.9 billion hours YoY to a record 58.7 billion;

• Average Revenue Per User (ARPU) increased $5.62 YoY to $28.76 (trailing 12-month basis);

• In 2020, 38% of all smart TVs sold in the U.S. were Roku TV models

Shorter term, I am a bit worried about the tough comps in the 2nd half of 2021. Also, there are rumblings that Roku might start making original content. I don’t like that due to the competition and capital intensive nature of the undertaking.

MELI (MercadoLibre) - Powerhouse of e-commerce and payments in South America. A shift to more frequent purchasing amid a surge of new/reactivated buyers emerged as a pandemic tailwind, pushing e-commerce revenues higher. revenues have soared 85% on a USD basis to $1.1B for Q3, driven by 109% growth in commerce revenues to $724.5 million - consolidated revenues rose 112%, 260%, and 140% in Brazil, Argentina and Mexico on a local currency basis (adjusted for USD: 57% BR., 145% ARG., 111% MX.). This marked the third quarter of acceleration of YoY growth rates for geographical revenues. MercadoPago processed 147% more transactions at $14.5 billion in TPV, pushing 9M TPV to $33.8 billion.

Aside from that, MercadoLibre is poised for strong revenue growth potential in both commerce and fintech as its user base continues to grow, with 112 million unique uses through Q3, with nearly 50 million added; users could reach 250 million by 2023.

The best part is it is still very early days with only roughly 5% e-commerce penetration in Latin America and nearly half the population lacks a bank account so MercadoPago is in a strong position.

ETSY - Wow! What a blow out earnings call yesterday. 129% revenue growth for Q4 (vs 70%-90% Guidance) and strong Guidance of 115%-125% revenue growth in Q1. Net income was up 375%!

  1. Etsy is now the #4 e-commerce site in the USA w/ roughly 223 Million visits a month. This is only behind Amazon, e-bay, and Walmart. As Josh noted in the conference call, brand awareness is on the rise big time! This helps accelerate the flywheel affect and bodes will for the take rate in the future.

  2. 50% of people that bought masks in the 3rd quarter came back in the 4th quarter and bought something else! Masks now make up only about 4% of GMV so the growth is truly astounding and much more than just a mask story.

  3. Very strong international growth - 41% of GMS is now International, an increase of 152% YoY. Etsy is now top 5 in the UK as well and Germany is Etsy’s 2nd largest international geography.

  4. Etsy is becoming a cultural buzzword - Elon Musk recently tweeted about the company and the Bernie Sanders Mittens from the inauguration sold like crazy. 1.7M videos uploaded in Q4 vs 211K in Q2.

  5. Strong growth in Homewares & Home Furnishings - up 118%, many higher price point items in this category bodes well for revenue.

TTD (The Trade Desk) - Great earnings report. I am really excited about TTD as ad spends are clearly returning. They also have some easy comps from last year. The deal with Magnite sounds promising as well.

-Q4 Non-GAAP EPS of $3.71 beats by $1.83; GAAP EPS of $3.05 beats by $1.75. Revenue of $319.9M (+48.2% Y/Y) beats by $27.44M.

  • Re-acceleration in growth to 48.2% from 32% in Q3 and -13% in Q2

-“While 2020 was a uniquely challenging year, it was also a turning point for our industry and our company. We won more share in our fastest growing channels such as CTV and Audio, which helped drive record ad spend of $4.2 billion on our platform in 2020,” said Co-Founder and CEO of The Trade Desk, Jeff Green. “Perhaps just as important, in 2020 we saw several years of advertising disruption and innovation compressed into a few months. Marketers are being more deliberate and data-driven in everything they do, and as a result, they are gravitating to the advertising opportunities of the open internet. With CTV now offering a data-driven alternative to linear, with brands seeking a scalable and brand-safe alternative to user-generated content, and with new identity tools that provide a common currency for the open internet as well as enable better cross channel measurement, the industry is gravitating to the open internet and standardizing on our platform.”

MGNI - Magnite - This is a new position. I am trying to capitalize on the cord cutting trend and the push into CTV and programmatic advertising. Also, I wanted some smaller market caps, ie “young guns” in my portfolio. This is not an easy company to follow due to all the mergers and the turnaround nature of it. The main investment thesis is that over time the largest media publishers in the world will aggregate their ad inventory on to one supply-side advertising platform. Magnite revenue will mostly come from CTV. Once the SpotX deal closes, Magnite’s revenue will be 65% CTV, transforming it into a video-first SSP.

-Revenue was $82 million for Q4 2020, up 69% from Q4 2019 on an as reported basis, and up 20% on a pro forma basis

-CTV revenue for Q4 2020 was $15.3 million, up 53% on a pro forma basis

-Online Video (“OLV”) revenue grew 35% year over year in Q4 2020 on a pro forma basis(1)

-Full year 2020 total video (CTV & OLV) pro forma revenue was $106 million or 45% of total revenue on a pro forma basis

-Expected revenue for Q1 2021 to be between $58 to $62 million

-Disney is staying on for another 18 months. Hulu had been one of Telaria’s marquee clients. Magnite renewed the deal for another 18 months, with an expanded remit. If an advertiser buys cross-platform with Disney, like on Hulu and ESPN, Magnite’s tech will make that cross-platform deal happen. “We’ve built some great software for them,” Barrett said.

Here are 2 of the better articles I’ve found that I posted :

FVRR (Fiverr) - Great earnings report. I’m still getting to know this company but really excited about their new subscription services. Some market analysis firms estimate that 80% of work by 2030 will be Gig work.

-revenue grew 89% y/y and active buyers grew 45% y/y

-Reached 500+ categories: Fiverr added 30 new categories in Q4 and now offers digital services in more than 500 categories

-Fiverr’s first ever Super Bowl commercial: The commercial follows a successful new brand evolution last year and introduces Fiverr to the world on one of the biggest stages

“2020 was a landmark year for our business with 77% year over year revenue growth driven largely by bringing more freelancers and businesses together during a critical time of global change,” said Micha Kaufman, founder and CEO of Fiverr. “We are carrying that momentum into the new year and I’m thrilled about what lies ahead for us in 2021. We started this year with our first Super Bowl campaign, which allowed us to reach millions of people in a way that was unprecedented for our brand. In the year ahead, we also expect to continue to roll out significant products, features and capabilities and continue to help lead and power the global trend towards digital transformation and remote work.”

Ofer Katz, Fiverr’s CFO, added, “Our marketplace significantly scaled during 2020 and we achieved the important milestone of turning EBITDA positive as well. We believe the strong momentum is carrying into 2021 and the increased awareness and adoption of digital freelancing services will continue to provide tailwinds for our business. We are excited about the year ahead as reflected by our strong financial outlook for 2021.

PTON - Good earnings report. They noted no slow down in demand, despite the vaccines. They are the apple of fitness and the Tread rollout is exciting. Spending 100M over the next 6 months on supply chain issues is concerning, but its mostly not their fault.

Q2 21
Total Revenue $1,064.8 million +128%

  • Connected Fitness revenue $870.1 million, +124% YoY (82% of total revenue)
  • Subscription Rev $194.7 million +152% YoY (18% of total revenue)
  • Gross profit $424.8 million +115% YoY (39.9% of revenue)
  • Subscription gross profit $117.5 million, +163% YoY
  • Gross Margin 39.9% (Connected 35.3%, Subscription 60.3%)
  • Connected margin was down due to Peloton Bike price reduction and expedited shipping costs.
  • Subscription Contribution Margin 65.3%
  • Net Income $63.6 million, $0.18 per diluted share
  • EBITDA $116.9 million, 11.0% margin
  • $2.1 billion in liquidity

DDOG - Good earnings call

– revenue 178M, +56% YoY and above high end of guidance range
– ended with 97 customers of 1M+ ARR, almost doubled from 50 last year, and 3x amount in 2019
– 1,253 customers with 100k+ ARR customers, up from 858 last year, contributes 75%+ of ARR
– 14,200 customers up from about 10,500 last year
– added about 1,100 customers in the Q, 1,000 was added in Q3
– capital efficient, FCF 17M, DBNRR 130%+
– customers increasing usage and adding newer products
– full year 603M revenue, +66% YoY, above high end of guidance, free cash flow 83M or margin of 14% for the year

However, the stock still hasn’t come off it’s highs of last summer. I’m keeping a small position hoping that it can work off that high base and accelerate as the pandemic situation improves.

TWLO - Great Quarter as Jeff Lawson keeps things rolling. Good beat and raise.

-Fourth Quarter Revenue of $548.1 million, up 65% Year-Over-Year
-Fourth Quarter Revenue Dollar-Based Net Expansion Rate of 139%
-Full Year Revenue of $1.76 billion, up 55% Year-Over-Year
-Full Year Revenue Dollar-Based Net Expansion Rate of 137%

“Twilio’s 65% year-over-year total revenue growth in the fourth quarter continued the strength and momentum we saw throughout an outstanding year of results in which we delivered $1.76 billion in revenue,” said Jeff Lawson, Twilio’s Co-Founder and CEO. “These results reinforced that we are addressing a generational opportunity, and with our acquisition of Segment and strong traction with Flex, we are building the leading customer engagement platform to improve every interaction that businesses have with their customers."

DOCU (Docusign) - It gets lumped in with the stay at home stocks and CLM is a ways off so I’m not going big on this one. However, the recent reports have been strong so I’m hopeful it can continue its performance.

FUBO (FuboTV) - This is an exciting “young gun” that specializes in sports and has recently purchased a couple of gambling companies as it intends to build out a full sportsbook alongside its live tv streams. I like the potential and think the sports niche is a good way to compete with the big boys like Youtube tv and Hulu. Last Quarter Subscriber growth was up 58%, advertising revenue up 153%, ARPU up to $7.50 from $6.50, expects to see up to $20 in ARPU from here.

BAND (Bandwidth) I just bought this company a few weeks ago. Looks like a baby Twilio type and it seemed to report strong earnings yesterday. Revenue guidance suggests 41%, with usual sandbagging.

-Revenue: Total revenue for the fourth quarter of 2020 was $113.0 million, up 82% compared to $62.0 million in the fourth quarter of 2019.

-Within total revenue, CPaaS revenue was $98.1 million, up 84% compared to $53.4 million for the fourth quarter of 2019.

-Fourth quarter CPaaS revenue of $98.1 million, up 84% year-over-year

-Fourth quarter dollar-based net retention rate of 133% (up 10%!)

First Quarter 2021 Guidance: CPaaS revenue is expected to be in the range of $96.6 million to $97.6 million. Total revenue is expected to be in the range of $108.0 million to $109.0 million. Non-GAAP earnings per share is expected to be in the range of $0.00 to $0.02 per share, using 27.5 million weighted average diluted shares outstanding.

ACUIF (AcuityAds Holdings) - New small position recently, I am just getting to know it. AcuityAds is a programmatic DSP (Demand Side Platform) for online display ads. I believe there will be multiple winners on the Demand Side in the programmatic gold rush.

See article below for a write-up.…

SQ (Square) - Sold out. The earnings were underwhelming and I didn’t like the $170B Bitcoin purchase, as it is still early days in crypto. Also, with a market cap over $100 Billion, it’s becoming less and less attractive.

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