Hunting Insights in Earnings Calls
Sometimes I forget how much I love earning calls. In fact, I never followed earnings calls as closely as during my first job as an equity analyst (then I transitioned to fund selection and allocation roles). I still follow my portfolio companies of course, but the universe I cover is much more reduced. I listened to a few of them in the past few days and got really excited about it, so I decided to share a bit with you.
Of course, there is a boring aspect to earning calls. Any normally constituted person on this planet would tell you that this is boring. Factually, it is. Listening to one or two people talking about financial numbers and, hopefully, business outlook for an hour, over a call that is barely audible (especially when covering small caps), due to approximate English and poor recording quality, and, cherry on top, hearing ridiculous questions from sell-side analysts satisfying their huge egos has not been the most exciting stuff around.
But for me, it is.
Sometimes, I pick a random company I know nothing about and listen to it for a while. The Quartr App is great for that!
Here are a few reasons why I think listening to earning calls is a great exercise:
- You always learn something you didn’t know, whether you know the company or not. An insight from the ground, another comment on the macro environment, a question triggering an unusual response from management.
- Hearing the voice of leaders and most importantly analyzing the tone, clarity and way of answering can be useful information as such if you are studying or invested in the company.
- Q&As are a market sounding tool. I like listening to investors’ questions just to understand their mindset and opinion about the stock. Many times, I noticed that when people ask questions it is not because they are interested in the answer but more about proving a point or shedding light on some worries or excitement. I always try to understand what the investor base is so I can make more sense of price volatility. Even if I adopt a buy and hold strategy, I consider that being curious about price dynamics is key in managing my emotions.
Beyond the micro information collected on these calls, this time I decided to share some information that I could link to previous insights from the ground or from the press. Lately, I am enjoying decrypting information since there is a lot of “intox” on all sides, especially in the press.
Mercadolibre – Latam consumers & fintech
Mercadolibre is the giant of e-commerce in Brazil and Latin America. It is also a fintech since it started offering credit, debit cards and consumer loans a while ago. I started following it a few years ago when working on it for a manager, so I wanted to catch up a bit with how the state of e-commerce and access to loans and payment means had developed lately in Latin America.
It seems that this is going well for the company since they are extending both regionally and on a product basis.
On the fintech side, we are talking about $12.5bn in loans lent by the company, with monthly active users of Mercado Pago growing by +30% for 10 consecutive quarters. Assets under management are close to $19bn, growing +78% year over year. The consumer credit portfolio constitutes the highest margin business, in the high 40s.
Some of the recurring questions to these new e-commerce giants providing fintech services often revolve around their provisions for NPLs or non-performing loans — in other words, the riskier loans that might not be repaid. And most of the time, they remain very evasive on how they treat these and balance the risk.
Beyond the systemic risk that this could trigger, I am still horrified by the way these earning calls go. On one side, management discloses the numbers without linking the reality of their business to the impact of what they sell on the end customer. On the other side, investors ask how many more loans they can sell and how much more profitable they can get, implying how much return and bonuses they can get by the end of the year.
No one ever talks about the end clients themselves, or the impact it has on them when the company charges a 400–500% annual cost for a 12-month loan. In a very recent article, a journalist explained that 1 in 4 people is not able to repay their loan. And those who do are probably struggling.
I remember that it horrified me when I first investigated that space, and listening to this call this week didn’t make me feel more comfortable. I don’t think capitalism should be about generating profits at all costs, especially when so many negative externalities emanate from these actions.
That being said, on the e-commerce side, they are expanding cross-border trading access to their platform to US and Chinese sellers. It is interesting to note that they are opening more opportunities for Chinese sellers also, something to keep in mind for shipping markets (see more below). Brazil is a huge market and I have been curious about finding a way to invest in it. It is still risky but has great potential thanks to its massive domestic consumer base.
Finally, they insisted on how AI has been revolutionizing their interactions and efficiency in customer service as well as automated campaign tools generating better revenues for sellers. 87% of Mercado Pago interactions with customers are managed by a robot. They intend to use these robots to cross-sell products: an e-commerce client could be offered financing or a credit card, for example.
Vusion Group – Digital labels & trends in retail e-commerce
I was particularly looking forward to this earning call since the stock has been hammered lately! Nothing new on their side: they are still providing electronic tags to retailers and developing cloud solutions to help their clients becoming more efficient in managing their stock and e-commerce operations. The unequipped market in the US represents 2 billion paper labels outside of Walmart (their main client in this market).
Interestingly, they emphasized the fact that retailers are increasingly using their stores as warehouses to serve their e-commerce clients, as fully automated warehouses are shutting down due to costs. They said that the future of e-commerce happens inside the store rather than in a separate, dedicated warehouse.
After doing some scuttlebutt on the matter, I quickly realized that the US still does not have digitalized labels, meaning they still need to change labels every day or every week to update product prices, which is labor-intensive, especially in the massive stores that only the Americans seem to master. Post-Covid inflation accelerated the adoption of these new technologies that also allow retailers to optimize their stores.
Mader Group – Maintenance services & the state of the industry
Mader is an Australian service maintenance company that originally served mining companies. They have now diversified across sectors and regions.
This is probably the best operated company I know, and each interaction or earning call I have with them is a masterclass in entrepreneurship, innovation and business strategy.
Beyond company news, they always give a sense of how the broader mining market is evolving. With all the pressure on environmental matters, there are few news circulating on industrial, mining, commodities or energy sectors. But in reality, the activity is still very much alive. They talked about the massive addressable market that exists in the US and Canada. In Canada, they historically operated on oil sand fields but now see opportunities across gold, phosphates, coal and aggregates.
Codan – High tech communication equipping governments
Codan is also an Australian company that designs high technology electronics for communications and metal detection. They serve government and defense departments of large countries as well as NGOs. It is an amazing company to follow to get a sense of the state of the world, and this earning call was indeed insightful.
During the year, the defense unmanned systems (war drones) market increased by +30% in both conflict and non-conflict areas across Asia, Europe and the US. Even non-conflict environments are preparing for pre-conflict situations. It seems that they also serve some US government departments unrelated to defense, and their solutions are used for public safety.
They expect unmanned solutions to continue increasing. Many products are developed directly from demand itself, and feedback from the ground helps them improve their solutions very quickly.
While this does not bring very reassuring news, I find it interesting to get feedback outside of the press. There are few ways to know what is really happening inside governments regarding defense activities since it is a well-kept secret. Companies like Codan, Palantir or Dassault can help us see the reality behind governments’ silence.
Euroseas – Freight rates and a view on the world’s instability
Euroseas is an owner and operator of container ships providing worldwide ocean-going containerized cargo transportation services. They focus on transporting dry and refrigerated cargo such as manufactured products and perishables. Their fleet primarily consists of feeder and intermediate containerships specialized in transporting cargo between smaller ports or as part of larger shipping networks.
As I wrote before, I think the shipping industry is a great way to follow global growth and trade. Close to 90% of the goods we buy today are shipped by sea. The main thing ship owners look at is freight rates since they determine how much they can rent space for.
Covid disruptions, political instability and external events such as the closing of the Suez Canal have pushed rates to historical levels since 2021. Since then, the industry has been pricing in a return to historical averages… but it has not happened yet. The 2026 containership outlook points to oversupply, with fleet growth outpacing demand and potentially pressuring rates and profitability, particularly for very large vessels.
I find it insightful to follow these shipping companies because they operate very close to real-world dynamics: how tariffs impact trade, or how a climate event can shift flows and delay the arrival of goods.
Political tensions and natural disasters kept arising, keep impacting global trade so freight rates did not decrease. Will it be the case in 2026?
Amazon
I hadn’t listened to an Amazon call for years and, frankly, my comment will be very short: I didn’t understand much of what they were saying. It was just a continuous flow of cloud and data terminology. Clearly, a reminder that Amazon is no longer really about the consumer platform we know.
It made me recall a discussion I had with an Amazon employee last year about the core focus of the firm: finding ways to leverage and monetize all the data they collect every day.
Conclusion
Even if sometimes I find it hard to press play, I always find it insightful to listen to earnings calls. It reminds me why I loved studying companies so much: because I could see the world through the eyes of specialized operators from my desk.
Now that I can travel more and confront these insights with what I observe on the ground, I find it even more valuable.