This article includes detailed Lemonade, Hims and Coupang Earnings Reviews. It also features a brief AMD earnings snapshot. The full AMD review will come on Saturday. Shopify, Uber & Duolingo reviews are coming tomorrow. Trade Desk and DraftKings are coming after that.

In case you missed it:

AMD trades for 42x forward EPS. EPS is expected to grow by 20% this year and by 48% next year.

Lemonade offers renters, home, auto, pet & life insurance in the USA and parts of Europe. The company’s tech-and-AI-native foundation cuts out hefty fixed costs associated with legacy models to lower cost of service. This enables it to routinely outcompete substitutes on price. It builds on this edge by obsessively iterating on its underwriting algorithms to ensure accurate underwriting. This has enabled brisk top-line scaling with stable fixed costs and coinciding margin improvement for a couple of years now. Much more progress is needed, but they are on  a great path.

OpEx rose by 21% Y/Y and by 1% Y/Y excluding growth spend. Importantly, this was helped by an $11.7M one-time tax refund during the quarter that lowered GAAP operating expenses by that amount. Without this help, OpEx would have been up by 32% Y/Y due to 93% Y/Y growth spend. Technology development, other insurance expense, loss adjustment expense (LAE) and general and administrative cost buckets all enjoyed strong Y/Y leverage. Because the tax benefit is excluded from adjusted EBITDA, that’s the best metric to focus on to gauge structural leverage this quarter. And as always, loss ratios and GPM are how to view Lemonade’s underwriting quality and pace of improvements.

FCF margin was 15.2% vs. -20.5% Q/Q & 1.6% Y/Y. As a reminder, Lemonade finances the majority of its growth via something called a “synthetic agent.” This effectively finances the cost item and means growth spending is not a cash drain like it typically is for other companies. Plans naturally become more profitable as they season, so a younger book with a higher proportion of plans that are new will incur what it calls a “new business penalty.” It’s fully willing to accept this business penalty if lifetime and lifetime loss ratios keep giving it such great confidence in plans being profitable. Lemonade did this to enable faster, more aggressive pursuit of top-line expansion. Synthetic agents mean new plans are not a large cash drain and helps that specific margin. This is why the cash flow statement is inflecting positively before the income statement. It creates a non-apples-to-apples comp for Lemonade FCF and everyone else and makes the metric noisy in this specific case. Under this structure, the debt is also finite and paid off within 3 years. That means there’s no ongoing premium sharing associated with plans (like with traditional agents).

Reinsurance Change:

As discussed during the quarter, Lemonade renewed its reinsurance agreement in July. This came with the same terms as the old agreement, aside from its decision to lower its ceded premium rate from 55% to 20%. Importantly, all loss-sharing and capping structures under the new deal are identical, so this does not raise balance sheet risk for Lemonade. As leadership reiterated, this was entirely their decision. An identical contract was available to them, but they wanted to make this change. It will mean more retained revenue and more retained gross profit dollars, which Lemonade thinks it has earned the right to keep.

What is now making it confident enough to make this decision? Consistently strong underwriting improvements as seen in the charts above. Its insurance entities have now flipped from a profit drag to a contributor. Rather than gobbling up reserves and overall liquidity… they’re adding to it. That trend, powered by falling and outperforming loss ratios, significantly lowers the need to tie up more of its balance sheet to fuel growth and cuts the risk of capital reserves and its regulatory surplus not being enough to cover future claims. It means existing reserves are sufficient to handle expected claims and also diminishes the risk of incremental reserve requirements. As the books get more profitable, that growth entails slower associated growth in reserves and means top-line expansion is less of a liquidity drain for the company. That means their business can maintain a larger portion of its demand without those liquidity needs skyrocketing beyond what the balance sheet can handle. And while those needs will grow a tad (naturally as plans grow), they have two compelling offsets that make them confident the rising needs will not entail a capital deployment bottleneck. No change to its investment plans stemming from this. 

First, is the stronger underwriting already mentioned. Secondly, it now has two partially or wholly owned captive reinsurance entities that will allow it to more flexibly take up risk. And again, these entities are now profitable and supporting overall capital available for the overarching company.

One other note here. Bears talk about falling book value and retained earnings as eroding LMND’s capital base and preventing it from growing in the future. That argument was based on a 55% ceded premium rate. Clearly, as they cut that level to 20% and reiterate lofty growth expectations, they are not concerned. And again… that’s not based on hope… but a stellar pace of consistent underwriting progress. A year ago, this move would have led to losses piling up beyond what they could handle. That is no longer the case. It’s the right decision.

“The confidence to make such a move directly stems from a multiyear track record of improving loss ratios as key products and geographies have become more mature and predictable.”

Co-Founder/CEO Daniel Schreiber

Car Insurance:

For the second straight quarter (and for the first two quarters ever), car insurance materially outpaced overall company growth.

As a reminder, telematics entails granularly tracking driving actions and behavior to more accurately price risk. Some other companies have this in place, but most only collect data for a few weeks and assume that’s all they need to price risk in the years to come. Lemonade’s processes are permanent. And compellingly, it’s adamant that this will allow it to materially undercut competition. That’s especially the case for younger customers that are routinely overcharged and forced to subsidize the risk of those who are undercharged.

Last quarter, it changed onboarding flows and began collecting telematics data closer to plan onboarding. This improved risk scoring, augmented its ability to outcompete on pricing and boosted sequential conversion rates by 60% during Q1. They’re now unleashing this change to the whole car business and boosted car growth spend by 25% Q/Q to get the message out. Importantly, this boost to growth spend did not impact marketing efficiency. No diminishing returns. More productive dollars to spend.

Some are frustrated with a more gradual car rollout than hoped for. I’m not. They cannot rev this engine until it’s painfully obvious that underwriting is ready for scale. Losses can ramp in a hurry if that’s not the case… just like with their home book throughout 2023 and into 2024 that they’re now having to clean up. I do not want a future period of car book cleanup to slow down growth when momentum is rocking. They don’t either. Furthermore, state launches lead to loss ratio headwinds just like product launches do. Especially with the lower reinsurance usage, they need to make sure they control the severity of this headwind with a more gradual, intentional rollout. It’s the correct decision, in my opinion. For now, the Q1 Colorado launch came with its highest new business growth conversion rates out of any state launch. It sounds like they think these dynamics will keep improving, starting with the July 7th launch in Indiana. They expect to move from 50% USA population coverage to a “notably increased” level in 2026.

We should circle back to superior telematics vs. the field. That leads to lower losses and is a great efficiency complement to Lemonade’s lack of costs that incumbents endure. It has no agents all over the country to perpetually share premiums with. It has a tiny real estate footprint. And? It has a tech-and-AI-native foundation that allows it to malleably tweak existing products and interfaces for new segments and markets. Through one of many AI-powered apps within the company (called LOCO) they can do this with less work, less disruption and a shorter learning curve than competition. They can “rapidly build new products, launch new regions, iterate on pricing and experiment with different user experiences in hours.” Moving faster and more efficiently inherently leads to cost advantages, which are vital for competitive differentiation in insurance. It’s great that Lemonade’s UI is more slick and it handles claims more quickly, but price is the single larger lever they can pull to stand out. That lever requires these aforementioned cost advantages to ensure margins can keep expanding while prices stay low. Lemonade remains committed to using all of these items to keep distancing itself from the pack in terms of pricing. That should support margin accretive growth in this massive industry for a very long time.

“This strength illustrates a critical pillar of our strategy: broad telematics adoption yields enhanced pricing segmentation that allows us to evaluate risk with precision, driving down both prices for good risks and loss ratios.”

Shareholder Letter

Europe (Germany, the Netherlands, the UK & France):

Europe is now up to 250,000+ renters and home insurance customers. This continues to diminish its catastrophic event (CAT) exposure; it’s also helping with inflation risk, due to a more favorable regulatory backdrop for more flexible pricing updates. And for yet another benefit, the EU enables companies to freely update risk-pricing algorithms without requiring filings or bureaucratic delays. That’s why EU loss ratios are 20 points ahead of the USA at a comparable stage of business scale. All in all, European IFP rose by 200% Y/Y, marking the 3rd consecutive triple-digit growth quarter… and again with highly compelling underwriting improvements.

“We see rich [EU] potential: deeper penetration in existing markets, new product launches, and stronger cross-sell focus. We believe that Europe will continue to be a key engine of rapid, profitable growth for years to come.”

Shareholder Letter

Synthetic Agents:

This financing vehicle will remain a core part of business operations for at least the near-to-mid term.

This was a very good quarter. But? It has been delivering very good quarters for well over a year now. It’s often funny when Mr. Market chooses to reward stocks. This is surely somewhat related to a short-squeeze, but I think there’s more to it. This is bears and skeptics seeing the writing on the wall. This is them coming to terms with the income statement profit inflection and more growth acceleration being all but inevitable. They are firmly in control of their cost structure and their growth rates. Non-growth OpEx has compounded at a 3-year clip of 1% (excluding the tax help this quarter). They’ve delivered 7 straight quarters of accelerating demand, while posting 7 straight quarters of underwriting improvements too. They are executing and they are marching to and well beyond next year’s breakeven moment.

Lemonade is leading the customer service and experience race in a massive industry with incumbents moving woefully slowly. This is a company that can grow at a rapid clip for a long time and is now showing clear signs of that eventually coming with compelling margin. It is why Lemonade is the only unprofitable company in my portfolio. For several years, this team has been executing and meeting (or exceeding) their promises. And for several years, through steady financial progress, they’ve built my confidence in them and their company… higher and higher.

With all of that said, it is still the only unprofitable company in the portfolio. For that reason, I don’t really want it to be one of my largest positions just yet. While I am increasingly bullish every quarter, I love it at 4.2% of holdings like it is right now. No plans to add and zero interest in trimming.

Hims sells men’s and women’s health products with a direct-to-consumer business model. It aims to allow users to more comfortably access sensitive prescriptions within areas like erectile dysfunction or hair loss, without going to an office or a pharmacy. Products are mailed right to a consumer’s door.

It offers standard and personalized medicine and subscriptions. Personalization is enabled & amplified by its electronic medical record (EMR) system. From its early days, it sought to build this EMR foundation to enable scalable data ingestion, automate tedious provider work and foster rapid product expansion. That will remain absolutely vital in the firm’s future. It paved the way for MedMatch, which is the company’s tool to actually use all customer interactions and data to uncover valuable consumer insight and nudge best provider practices. It also enabled Clever Routing, which contextualizes individual user needs to prioritize and match demand with proper levels of care.

As a reminder, semaglutide was removed from the FDA shortage list earlier in the year. That now blocks Hims from selling commercially-available, non-personalized doses of semaglutide, which were quite popular on its site and app. It can still sell personalized semaglutide (custom dosages, excluded ingredients, added vitamins etc.) for those with side effects to the commercially-available options. And there’s some legal gray area for how flexible it can get with determining who needs this personalization. The elimination of this product finished affecting existing subscribers by the end of June, so had a significant impact on quarterly revenue. Specifically, GLP1 revenue fell from $230M during Q1 to $190M in Q2 – powering the entire company-wide sequential decline.

As another reminder, it’s also moving its sexual health subscriber to daily solutions, which will take a few more quarters. This disruption is creating some temporary churn and was another material revenue headwind during the period. Leadership thinks the long-term impact will be positive and, considering increased usage frequency usually is, I agree. 

-$69M in FCF sharply missed expectations by nearly $100M. This was due to a near doubling in Q/Q inventory, which reduced FCF by about $70M. The spend was for supporting product launches and stockpiling goods to avoid tariffs for as long as possible.

Sales & marketing enjoyed 6 points of Y/Y leverage. That was partially related to Hims being forced to remove commercial doses of semaglutide on the site. This led to worsening marketing efficiency, so it pulled back mid-quarter. Expect lower levels of leverage here in the coming quarters. Operations and support delivered 1 point of Y/Y leverage; G&A was flat Y/Y; R&D deleveraged by 1 point Y/Y. They will likely keep leaning into R&D in the near-to-mid-term. Finally, as part of organizational evolution we’ll dig into below, it incurred $7M in severance and signing bonuses, as it swapped some underperforming talent for new hires. The EBITDA beat was despite this item (severance was not excluding from EBITDA like it sometimes is).

Interestingly, Hims announced its acquisition of a company called Zava (more on them later) a month after it offered guidance on the Q1 2025 call. This deal is closed and is expected to add $50M to 2025 revenue and contribute positive to EBITDA. I do not think it was part of the guide given in Q1, which it just reiterated for Q2. That means reiterated 2025 guidance was only made possible from this M&A. Nobody asked them about this on the call to clarify. $50M is just 2% of current 2025 revenue guidance, but still worth noting.

Hims trades for 52x forward EPS. EPS is expected to grow by 13% this year and by 29% next year.

The Current Formula – Personalization & Great Service:

Hims continues to see personalization as the single most important thing for its differentiation. Its ability to do things like customize doses and eliminate ingredients to minimize side effects help it stick out in a crowd of competition. It’s how it can better match customers with medications and provide unique, not identical, offerings compared to the field.

This ability is unlocked by what it sees as superior access to data, as well as utilization of it. I think Amazon and many others would disagree, but I digress. The aforementioned 1st party EMR mentioned in the 101 section is a big piece of these data capabilities. It can build extensive customer profiles with intake surveys and interactions so that Hims can better understand what works. That’s how personalization actually becomes compelling… by knowing exactly what we want and how current offerings aren’t quite providing it. Hims further leverages these data profiles in MedMatch (already defined), which makes providers better at their jobs, customers happier and saves everyone time.

62.5% of subscribers are now on personalized subscribers vs. 28.6% Y/Y and 70% of new subscribers use a personalized product, pointing to more upside. Personalized products for addressing multiple conditions also rose 170% Y/Y to 0.5M.

In terms of service, Hims offers access to convenient tools for things like drug adherence, health trackers/tips, 24/7 access to its support team and text-level communication with 1,500+ providers in the network. These providers are empowered with access to great patient data, a large userbase, and hundreds of personalized solutions. And this product offering is resonating, with subscribers that are utilizing a “holistic treatment plan” moving from 30% of total to 60% of total Y/Y. That should support retention. Hims also talked about its weight loss subscribers enjoying overindexing success, with below average side effects and a 75% user retention rate through 6 months. That compares to retention of 20% for other competitors, per leadership.

What’s Next?

After reviewing the value proposition, management walked through what’s next for the platform. There were several categories mentioned, all of which will require material spending. Hims is calling the next year an “investment period” with the cash flow numbers from this quarter being an early side effect. They parted ways with underperforming workers and leaned into adding higher-quality talent to enable their next chapter of growth. This chapter will be about “evolving from a telehealth company into a personalized health and wellness platform.” While that’s quite vague, they did walk through several examples of how this would look and where investment dollars will focus.

What’s Next – Adding More Products:

Behind new COO Nader Kabbani, Hims will be adding more products to its app. First, as previously teased, they plan to enter hormone health by the end of the year. The category impacts 50 million Americans and the company believes these people have been “under-recognized in traditional health care for decades.” This is where its lab testing vertical integration will first be deployed. Over time, the company will offer lab testing as a service for several different categories to bolster access and enter preventative care. A big piece of that preventative care push will be a longevity entry next year. This will likely feature immunity and metabolic optimization tools, among other things. To avoid creating interface clutter and confused consumers as more products join the roster, Kabbani will be working closely with Chief Product Officer Dheerka Kaur to ensure user interactions remain valuable and seamless.

What’s Next – Keep Getting Better At Collecting & Using Data:

New CTO Mo Elshenaway will be tasked with upleveling how much data Hims has on a user and how it's leveraged. The lab testing will inject a boatload of new data into the Hims ecosystem to improve MedMatch and upgrade its already precise ability to match patients with expedient care. It will focus on unleashing these valuable data profiles to offer preventative health tips. That will likely unlock more consumer subscription opportunities down the road, juicing engagement, monetization and retention. 

To power continued scaling while maintaining effective personalization, Hims will need to embrace automation-fostering AI. And it is. Elshenaway “will be focused on building AI-powered personalized agents that are always on.” THey will be able to emulate and automate some of the more basic interactions providers and support staff have with their consumers, elevating the user experience and operating efficiency simultaneously. 

What’s Next – Go Global:

Hims is purchasing Zava Global, a “leading European digital health provider” to expedite global expansion. This bolsters their product offering in the UK and gives them access to Germany, France and Ireland. With that growing footprint, over $1B in cash on hand and transferable learnings from its U.S. operations, Hims expects to turbo-charge ZAVA’s growth trajectory (under the Hims & Hers brands). That will start in Europe, with plans to enter Latin America and Asia “in the coming years as well.” Hims also will enter Canada next year, with generic semaglutide at less than half of the cost of competing offerings. With ⅔ of Canadians considered overweight, the opportunity there is large. All in all, international represents a multi-billion dollar opportunity in the eyes of leadership.

“We felt that the Zava team and their ability to build a platform that has been scalable in unique markets with unique regulatory challenges was a testament to their execution and operational abilities… And I think we've had the privilege of seeing dozens of companies that have tried this. And so the pattern recognition of what truly was unique was really there.” – Founder/CEO Andrew Dodum

Novo Nordisk Drama:

As a reminder, the partnership Hims briefly had to sell Novo Nordisk’s (NVO) Wegoyy quickly was eliminated. NVO accused Hims of unfairly pushing customers to personalized solutions, thus cutting NVO out of the sale and claiming more margin when doing so wasn’t necessary. It sounds like NVO will be taking more legal action with new lawsuits as recently as today. Keep an eye on that.

Not as good as we’ve seen from them over the last several quarters, but still really not bad. The revenue growth engine is beginning to slow faster than most wanted it to, and that happening while a company is entering an “investment year” will always leave some shareholders antsy. Nonetheless, 45% Q3 growth guidance still puts them in elite territory for now, while margins will remain reasonably good and cash flow will normalize. 

And while that’s all nice, this is still just not my favorite investment case. I don’t like investing in healthcare and I remain skeptical about how legitimate a moat personalization truly is. While Amazon is the only mega-cap meaningfully entering this space today, healthcare is massive and service scores are very low. This is ripe for more disruption. It would be odd if more mega-caps didn’t join the fold in the years ahead. Beyond that, I continue to think GLP-1 legal risk will stick around and that the growth engine outside of this product category could struggle to reaccelerate. It’s also not cheap anymore, with the PEG nearing 2.50x.

Leadership deserves an immense amount of credit for getting Hims where it is today with this product suite. Investors also deserve a ton of credit for the fantastic returns you’ve made. I will continue to root for you all from the sidelines.

Coupang is an e-commerce and logistics giant in Korea. It’s quickly expanding into food delivery, entertainment, financial services and also more countries. The company “exists to deliver new moments of wow for customers,” which is why its membership program is called “Wow.” Coupang’s product commerce offerings include its budding marketplace and fulfillment business.

Fulfillment & Logistics by Coupang (FLC) is very similar to Amazon’s 3rd-party seller business. It’s where Coupang lets merchants tap into the world-class storage, packing, shipping and returns that its top-notch fulfillment footprint features. They can enjoy the same conversion-optimizing assets that Coupang has painstakingly built without enduring the hefty, risky CapEx to get there.

Rocket delivery is a Wow service where Coupang taps into all of its logistics capacity to power its own quick delivery. Rocket relies on Coupang’s fulfillment network to place more inventory closer to customers, which cuts cost to serve, shortens delivery times and raises conversion rates. In turn, that fosters unique operating efficiencies that unlock more investment in differentiated customer service. As all of these competitive advantages compound, it finds itself able to keep improving the user experience, pushing engagement higher and spinning the flywheel.

Developing offerings include everything else. Its food delivery business, streaming product, Taiwan endeavor, Farfetch and all other new bets preside here.

GAAP EBIT improved from -$25M to $149M. Of the $174M in improvement, 70% of it was related to lapping a one-off fine during Q2 2024 and the rest was due to structural operating leverage. GAAP operating leverage was also reduced by $20M due to Farfetch restructuring charges doubling Y/Y to $40M. Coupang expects other, general administrative (OG&A) leverage going forward, which should power continued GAAP income statement leverage. For now, OG&A deleveraged a tad Y/Y due to this item and more technology investments to support scalable growth.

Product commerce gross profit rose 26% Y/Y FXN, with segment GPM setting a new company record. That should be a consistent theme going forward, as years of supply chain and efficiency investments bear fruit and economies of scale keep building.

For developing offerings (DO), it’s greatly leaning into growth spend for extremely subscale products. This generates a significant drag for every margin (outside of product commerce segment margins), with spending significantly higher than it was supposed to be. That’s why profit missed expectations. They’re seeing promising demand signals in key growth vectors and they’re leaning in more heavily to capitalize. More later.

Year-to-date cash flow is sharply down due to CapEx and working capital timing. This will fully revert by the end of the year.

Coupang remains confident in 20%+ FXN revenue growth this year. It moved its developing offerings annual EBITDA guide from -$700M to -$925M due to early Taiwan success (more later) and told investors to expect more sequential product commerce margin expansion. They expect the tax rate to increase by roughly 68% this year (due to Taiwan expansion) before moving to 25% in future years. Finally, they’re not seeing any macro weakness.

Coupang trades for 73x forward EPS. EPS is expected to compound at a 200% clip for the next two years.

Constant Service Improvements:

Coupang is customer-obsessed. It aims to delight its users at every turn, thus building loyalty and earning the right to sell them more and more things. That formula is working, as improvements to assortment and service continue to uniformly improve engagement levels. 

For example, Rocket Delivery grew selection by 40% Y/Y for its same-day and dawn delivery (order before midnight for 7 a.m. next-day delivery). That helped facilitate an acceleration in Y/Y customer growth and durable existing customer growth as well. Specifically, even Coupang’s oldest shopping cohort delivered 10%+ Y/Y revenue growth, showing just how long the runway is for more top-line expansion. These customers also interacted with more categories Y/Y. Considering how challenged Korean population growth is at this point, existing customer cross-selling through more assortment and more use cases is vital for the long-term financial engine. Beyond this item, produce, meat and seafood assortment growth for its fresh delivery business powered 25% Y/Y FXN growth.

“As we reflect on the quarter and our positioning across the markets we serve, we believe Coupang's opportunity is massive and still largely untapped.”

CEO Bom Kim

FLC:

FLC continued to grow “several times faster than the overall product commerce segment. To nurture the compelling growth driver, Coupang allocated more investment dollars to building merchant tools and services during the quarter.

Developing Offerings – Taiwan:

As briefly mentioned, this was the source of the material developing offering EBITDA guidance reduction. And the reasoning is extremely compelling. As a reminder, last quarter, they talked about struggling a little bit to ignite faster growth due to assortment and some user interface issues. It seems like those issues have all been resolved. Engagement trends and the revenue ramp this quarter was “dramatic,” in response to adding hundreds of popular brands to the marketplace. As a result, growth accelerated from 23% Q/Q in Q4 to 54% Q/Q this quarter and over 100% Y/Y. They expect this to keep rising next quarter, as new customers soared 40% Q/Q and existing users meaningfully boosted shopper frequency. Simply put, this business is thriving. Just like cross-selling extends the growth runway in Korea and alleviates the population growth bottleneck, effective expansion to Taiwan will too. GDP in that country is nearly half of Korea and is growing far faster. This also makes it obvious that Coupang’s service model transcends borders and can work in many places across the globe. Just like I want Mercado Libre to aggressively pursue their growth opportunities and am willing to accept lower near-term profitability for a higher long-term ceiling… The same is true here. Bom Kim is a highly capable founder and a wonderfully disciplined capital allocator. Go for it!

“Our Taiwan offering is growing faster and stronger than even the most optimistic forecasts we set at the beginning of the year.”

CEO Bom Kim

Other Developing Offerings:

Coupang Play is its digital entertainment library and live content offering. It’s part of the Wow membership, but now non-members can access this product with ads. During the period, the service beefed up with a new “SportsPass” option. This provides more access to the NBA, NFL, F1 Racing and more.

Coupang Eats enjoyed “high-double-digit revenue growth. 

AI & Automation:

AI is already quietly writing 50%+ of Coupang code. They expect to keep investing in AI technology, with two objectives. First, they will look to bolster operating efficiencies through investments in robotics, fulfillment algorithms and other areas. Second, they will focus on creating “high impact applications” for consumers. Customer service and updated product discovery are probably two safe bets for what this will mean. They see a significant opportunity to use AI to create a more compelling cost structure and better customer service and will pursue those win-wins wherever they surface.

“Similar to our strategy for investing capital in any facet of our business, you can be sure that we'll be disciplined in how we allocate those resources and increase levels of spend only when we see strong evidence of high potential returns.”

Coupang Founder/CEO Bom Kim

Public Cloud Computing?

There were reports that Coupang was bidding for a public cloud computing contract with the Korean government and formally entering the space. It sounds like these were overblown. It’s using all 1st party data center and compute capacity to improve its own operations, but is testing (at a very small scale) offering these cloud services to external customers. If this takes off, it could be a highly margin accretive growth opportunity. See AWS, Azure & Google Cloud for evidence.

Not yet. Maybe later.

Nearly identical quarter compared to Mercado Libre. Demand trends look great, customer growth is accelerating, new projects are working better than hoped for and its oldest cohorts point to a lengthy runway. The only thing to pick on this quarter is developing offerings margins, but it’s very easy for me to accept and support the reasoning for this. Growth opportunities are better than expected and require more funds to support proliferation. Saying no to that because we want to optimize a quarter of net income generation is short-sighted. When I hear a high-quality founder who is always conservative with investments say it’s time to get aggressive, I get excited. To me, this profit miss is a blip on the radar in exchange for a brightening long-term ceiling. If Mr. Market decides to punish this decision, I’ll likely accumulate more shares. $28 (0.75x PEG) looks like a great spot to do so. Big fan of this company and its fundamental execution.