Fintechs Coinbase & Upstart Report Massive Revenue Growth

Plus, Southwest lowered its revenue and profit forecast as the COVID-19 delta variant impacts bookings, Rocket Labs announced a deal to provide three of its photon spacecraft to Varda Space Industries, and the Labor Department reported July’s CPI came in at 5.4% year-over-year.

Stocks were higher at the open on Wednesday with the Dow adding 36 points, or 0.1%. The S&P 500 rose by 0.1%, while the Nasdaq jumped 0.3%.

Coinbase shares are up 6.5% at the time of writing after the cryptocurrency exchange reported a 12-fold increase in revenue year-over-year. The company reported earnings per share of $3.45 on revenue of $2.23 billion, while analysts were expecting earnings per share of $2.33 on revenue of $1.78 billion. Coinbase’s net profit for the quarter came in at $1.6 billion, up nearly 4,900% from a year earlier. While the company’s fate is tied to the performance of digital assets like Bitcoin, which dropped around 41% in the quarter, Coinbase said its transacting users grew to 8.8 million in the quarter, up 44% from the previous quarter, and transaction revenue rose to $1.9 billion. Not to be outdone, online lender Upstart Holdings saw its revenue rise 11-fold year-over-year to $194 million, pushing the stock up 22% this morning. “Our second quarter results continue to show why Upstart has the potential to be among the world’s largest and most impactful FinTechs,” CEO Dave Girouard said in the earnings release. “Lending is the center beam of revenue and profits in financial services and artificial intelligence may be the most transformational change to come to this industry in its 5,000 year history.”

In other earnings news, Doximity shares are up more than 19% this morning after the telehealth and professional networking platform for medical professionals reported that its revenue doubled last quarter. Doximity reported earnings per share of $0.11 on revenue of $72.7 million versus estimates for revenue of $63.6 million. The company also said it now expects sales for the full fiscal year will be between $296.5 million and $299.5 million, marking an annual increase of at least 43% from $206.9 million. “We’re pleased to report strong financial results in our first quarter as a public company — triple digit revenue growth and record profit margins. The shift to digital among our clients continues, as we generated 167% net revenue retention (for the trailing 12 months), as they see our network is well-built for the highly specialized information flows in medical marketing,” Jeff Tangney, co-founder & chief executive officer of Doximity, said in a statement. “As frontline physicians grapple with high caseloads and outbreaks, we’re proud our productivity tools were able to help. Our e-signature and fax products saw record usage this quarter and we expanded our enterprise telehealth platform to 24,000 more physicians. We now serve over 30% of all US physicians with our paid telehealth offering.”

Southwest became the latest airline to lower its revenue and profit forecast as the COVID-19 delta variant slows bookings. The carrier said it now expects August operating revenue to be down 15% to 20% compared with the same month in 2019, up from an earlier forecast for a drop of between 12% and 17%. It also said September revenue will likely be down 15% to 25% from 2019. “The Company has recently experienced a deceleration in close-in bookings and an increase in close-in trip cancellations in August 2021, which are believed to be driven by the recent rise in COVID-19 cases associated with the Delta variant,” Southwest said in a filing.

Rocket Lab announced a deal with Varda Space Industries to provide the start-up with three of its Photon spacecraft to support Varda’s first in-space manufacturing missions. “The Varda team is undertaking ground-breaking work that really opens up new possibilities and markets for in-space manufacturing and we couldn’t be more excited to make their mission possible with Photon,” Rocket Lab Founder and Chief Executive Officer, Peter Beck, said in a press release. “Photon enables our customers to unlock the full potential of space. It removes a massive barrier to the growing small satellite market by delivering our customers a versatile and configurable spacecraft platform that they don’t need to build themselves. Our customers get to orbit faster and can focus purely on their mission while there, rather than worrying about developing and operating a spacecraft.” 

And the Labor Department reported that July’s Consumer Price Index showed prices jumped 5.4% year-over-year, while economists had expected a reading of 5.3%. On a month-to-month basis, the CPI rose 0.5% in July. “Today’s CPI data should help assuage investor fears that the Fed is too laid-back about inflation pressures,” wrote Seema Shah, chief strategist at Principal Global Investors. “The details of the data release suggest some easing in the reopening and supply-shortage driven boost to prices, and tentatively suggests that inflation may have peaked. Investors in the transitory camp will feel slightly vindicated.”

Stocks We’re Watching

3D Systems Corp (NYSE: DDD): 3D Systems shares jumped as much as 42.5% yesterday after the company reported second quarter earnings results. “Our second quarter performance reflected continued positive momentum, with results that greatly surpassed those of a year ago from both a revenue and profitability perspective. Perhaps even more importantly, we also saw double-digit revenue growth on a consecutive quarter basis, an important indicator of the momentum we are now experiencing,” President and CEO Dr. Jeffrey Graves said in the earrings release. “Further evidence of our momentum is our results versus our 2019 pre-COVID second quarter performance. We were pleased to deliver over 11% organic revenue growth against the second quarter 2019 results, which in this case means exclusive of businesses we have divested, along with a dramatic improvement in profitability. From a cash perspective, we again were pleased with our performance in the quarter, having generated $13.5 million in cash from operations. We believe this performance is the result of our exclusive focus on additive manufacturing, bringing together our printers, materials and software technologies to solve specific key customer applications that drive market adoption in both Healthcare and specific Industrial markets such as semiconductors, space systems, and advanced transportation systems.”


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