The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how consumer subscription stocks fared in Q3, starting with Roku (NASDAQ:ROKU).
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.3% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 11.7% since the latest earnings results.
Best Q3: Roku (NASDAQ:ROKU)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.21 billion, up 14% year on year. This print was in line with analysts’ expectations, and overall, it was a strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations and full-year EBITDA guidance exceeding analysts’ expectations.
Roku delivered the weakest full-year guidance update of the whole group. The company reported 36.5 billion monthly active users, up 14.1% year on year. Interestingly, the stock is up 12.1% since reporting and currently trades at $105.53.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free for active Edge members.
Duolingo (NASDAQ:DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $271.7 million, up 41.1% year on year, outperforming analysts’ expectations by 4.3%. The business had a satisfactory quarter with an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations.
Duolingo achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 135.3 million users, up 19.6% year on year. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 20% since reporting. It currently trades at $209.17.
Is now the time to buy Duolingo? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: Bumble (NASDAQ:BMBL)
Started by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $246.2 million, down 10% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a decline in its buyers and a significant miss of analysts’ number of paying users estimates.
As expected, the stock is down 31.4% since the results and currently trades at $3.73.
Read our full analysis of Bumble’s results here.
Match Group (NASDAQ:MTCH)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $914.3 million, up 2.1% year on year. This number met analysts’ expectations. However, it was a slower quarter as it logged revenue guidance for next quarter missing analysts’ expectations significantly and a significant miss of analysts’ EBITDA estimates.
The company reported 14.53 million users, down 4.5% year on year. The stock is up 5% since reporting and currently trades at $33.81.
Read our full, actionable report on Match Group here, it’s free for active Edge members.
Chegg (NYSE:CHGG)
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $77.74 million, down 43.1% year on year. This print beat analysts’ expectations by 1.9%. Zooming out, it was a slower quarter as it recorded a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
Chegg had the slowest revenue growth among its peers. The company reported 2.18 million users, down 43% year on year. The stock is up 1.4% since reporting and currently trades at $0.90.
Read our full, actionable report on Chegg here, it’s free for active Edge members.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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