• GRIT
  • Posts
  • Our Stocks in Charts: Q2 Earnings

Our Stocks in Charts: Q2 Earnings

Quick Breakdowns of Hims & Hers Healthcare, Amplitude, & Monday.com

Let’s take a closer look! 

One of my favorite things to do is update you all on the most important financial and operational data being reported on a quarterly basis by the companies we know and love.

I’ve shared a “Our Stocks in Charts” post in the past, and it seemed to have been received well! So without further ado, let’s jump into this.

Hims & Hers Healthcare (HIMS)

For those of you who are unaware, is a platform that connects patients to doctors via telehealth — in efforts to prescribe medicine to treat a variety of ailments. This includes sexual health, hair, skin, mental health, everyday health, and more.

— Q2 Earnings Results:

  • Revenue: $113.6 million, an increase of +87% YoY

  • Operating Loss: -$20.2 million, compared to -$17.4 million last year

  • Net Loss: -$19.6 million, compared to -$9.1 million last year

— Q2 Operational Results:

  • Net new subscriptions: +107,000, an increase of +80% YoY

    • Total subscription count: 817,000

  • Net orders: 1.4 million, an increase of +76% YoY

  • Average order value: $78, an increase of +5% YoY

— My Thoughts:

When this company originally went public via SPAC, their goal was to grow revenue at +30% YoY — as shown on slide 35 of this investor presentation. Their guidance for 2022 revenue was $233 million, with about $175 million in gross profit, and a -$9 million loss on adj. EBITDA.

The company just raised their 2022 guidance to $480 million in revenue (2.1X higher than originally guided upon), $355 million in gross profit, and -$20 million in adj. EBITDA.

Incredible!

Sure, I’ll be the first to admit I jumped into this one way too quickly — but to be fair, valuation multiples have compressed like crazy across the board. Today, this company seems like such a no-brainer over a multi-year outlook. They’re growing twice as fast as originally expected, they’ll flip to adj. EBITDA positive within the next 2-3 quarters, and free cash flow positive in 2023.

If we zoom out and think about long-term (5-7 years) — the company partnered with CVS and Walgreens this year. Their subscribers are growing like crazy. The engagement in their new app is 3X higher than their website. They just launched 6 new supplements for women.

This company could theoretically see 5-7 million subscribers in the coming years ($1B in annual revenue)— and at 75% gross profit margins ($750M in gross profit), could absolutely begin spitting out a 10-15% free cash flow margin ($125M).

$125M in FCF = $0.70 in FCF / share. Stock price would skyrocket into the $20s.

Love HIMS at these prices and am going to accumulate — incredible execution by their management team. Wow. Of course, broader market sentiment can drag down the little guys. However, I’m really excited about this progress this company has seen since hitting the public markets.

Amplitude (AMPL)

For those of you unfamiliar with they're a company that allows digital businesses to optimize for business outcomes through data. Through Amplitude Analytics, Amplitude Recommend, and Amplitude Experiment — consumer-facing companies are able to optimize their digital products for whatever business outcome means the most to them.

— Q2 Earnings Results:

  • Revenue: $58.1 million, an increase of +46% YoY

  • Operating Income: $0.3 million, compared to $0 last year

  • Net Loss: -$24.3 million, compared to -$9.7 million last year

  • Remaining Performance Obligations: $227.6 million

— Q2 Operational Results:

  • Net new customers: +135

    • Total number of customers: 1,835

  • Dollar-based net retention rate: 126%

My Thoughts:

I originally got so excited about this company because of the “digital transformation” secular growth trend we’re seeing. Every single consumer-facing company is, or is in the process of, offering a digital product. If it’s your personal banking app, the digital interface in your car’s touch-screen dashboard, or literally any other digital product you come in contact with on a daily basis — Amplitude is able to help.

You can see the awesome new customers the company scored this last quarter — that’s on top of Venmo, Cash App, and Hopper last quarter.

The company is expanding like crazy — all from a single product. Likely to generate $230M in revenue this year, and $300M+ next year.

At time of writing this, the company is hovering around a $2B valuation — or roughly ~6.5X forward revenue. Which to me is really weird, since the median “high-growth” (>30%) SaaS company right now is trading closer to 11.6X (below).

The market seems to be mis-pricing Amplitude instead as a “medium growth” business (15-30% YoY revenue growth) — despite guiding to 32-40% growth next year.

I’m very optimistic about this “digital transformation” secular growth trend the company is operating inside of. I’ve used their platform firsthand and liked what I saw.

Finally, the company reported positive free cash flow this quarter — although, I don’t expect this to continue as they reinvest back into their business. This is more of a callout to show “Amplitude can hit FCF positivity, and when the time is right again — they will.”

With all things considered, I’m taking a “sit and wait” approach. My investment thesis hasn’t been broken, but unlike HIMS (above) I’m not seeing anything popping out to me that is making me go press the buy button. Happy with my current share allocation — if anything, I’ll average down a bit before the end of the year.

Monday.com (MNDY)

I’d imagine you’ve heard of, or even use, this company — but in case you’re unfamiliar they’re a collaborative workflow management software for businesses of all shapes and sizes.

— Q2 Earnings Results:

  • Revenue: $123.7 million, an increase of +75% YoY

  • Operating Loss: -$46.2 million, compared to -$27.5 million last year

  • Net Loss: -$45.6 million, compared to -$28.9 million last year

— Q2 Operational Results:

  • Total customers: 152,000 — across 200 countries & industries

  • Customers >$50K ARR: 1,160 — up +147% YoY

  • Dollar-based net retention rate: 125%

    • Customers with >10 users: 135%

    • Customers with >$50K ARR: 150%

My Thoughts:

As you all might remember from this post I shared about Monday.com several months back — I’ve been incredibly excited about the company's ability to grow. I directly compared their historical growth to Asana , and it’s been made extra clear after this most recent report that they’re still in the hypergrowth phase of their business.

If we zoom out and think about the macroeconomic environment right now — similar to data analytics on digital products with Amplitude — Monday.com’s customers see their products and services as a competitive advantage, therefore remain incredibly sticky.

Dollar-based net retention rates for all customers have increased or maintained the same since the turn of the calendar year, a huge positive for the company.

It’s hard to ignore this +200 increase in enterprise customers (ARR >$50K) — bringing their grand total now to 1,106. Historically speaking they’ve been able to capture and onboard 130-150 enterprise customers / quarter, so this jump (during a recession) is really interesting. I’d imagine it has to do with Monday.com launching four new products in Q2.

Finally, it’s wonderful to see the company expand margins the way they have. According to their earnings call, hiring will slow during this second half of the year and discretionary spending will shrink as well — so I’d imagine those margins will continue to see momentum.

Today they’re a $6B business on pace to do $700M in revenue next year with 88% gross profit margins. In every respect they deserve to be trading at (and above) their current 8.5X NTM revenue. Really excited to see this one flip FCF positive in 2023.

I’ll be accumulating shares. I’m excited.

Feel free to respond to this email or comment on the post if you have specific callouts / questions!

Disclaimer: This is not financial advice or recommendation for any investment. The content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

Reply

or to participate.