Skip to main content
Oct 19, 2023

Three cheers for Netflix and other earnings innovators

A new wave of issuers is experimenting with the earnings call

I remember, back in 2013, writing about Netflix’s first video earnings interview. It certainly raised a few eyebrows at the time. The format, which remains in use today, sees a guest interviewer quiz management on the most pressing issues that quarter.

‘There has been a lot of criticism about your decision to format the call this way,’ said Julia Boorstin of CNBC in that first video. ‘How do you address concerns it actually minimizes the ability of investors to communicate directly with you?’

Certainly there are many barriers that stand in the way of companies innovating with earnings calls. Internal and external resistance are common. More importantly, you simply cannot risk something going wrong, technical or otherwise, during your interactions with investors and analysts. 

Netflix location

But that doesn’t mean innovation can’t happen. In fact, the last couple of years have seen a new wave of issuers rethink the quarterly results format.

There’s been an uptick in shareholder letters, for example. These combine various elements found across traditional earnings materials, such as results, prepared remarks and charts, but present them in a more engaging way. They can also free up time on the call for Q&A. Check out examples by Lemonade and Roku.

We’ve seen more video, too, including live calls. Axon and Duolingo are two companies that have switched to running quarterly earnings on Zoom, with analysts appearing on the screen to ask their questions.

Social posts

Yet another area of focus is social media, in particular LinkedIn. More and more, we’re seeing companies use the professional networking platform to share results updates.

LinkedIn ticks a lot of boxes as a communication channel. You can speak directly to your audience, all your stakeholders are there and there is far less fake news and negativity than on other platforms. Mercado Libre offers a good example where both the company and IR team are making good use of the site.

Some changes are easier to implement than others. Doing a live earnings show on Zoom requires a huge effort from multiple internal teams, plus buy-in from your sell-side followers. Not every company can pull that off.

It helps if you’re at a tech company, too, where innovation is expected. IROs in other sectors might get more pushback on experimental ideas, although the opportunity is greater to stand out from the crowd.

Whatever industry, we should all be inspired by the companies that choose to take the calculated risk of doing things differently, and seeing whether engagement improves as a result.

Going back to that first Netflix video, in response to the question about the format, former CEO Reed Hastings said: ‘Let’s see whether it’s productive or useful for investors.’

For me, that’s a great approach. Don’t be afraid to try something new and, if investors like it, you know you’re on the right track.