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| Here's your daily business briefing. - 📈 Netflix added 13.1 million subscribers in Q4, reaching 260.8 million paid subscribers and surpassing Wall Street's revenue expectations.
- 🛒 Deep Dive: Instacart will display ads on its high-tech shopping carts sold to grocery stores, signaling a move beyond grocery delivery and expanding its ads business.
- 🔍 California c-store ExtraMile partners with Samsung for an AI-powered "digital human" and signage display program, deepening its tech involvement.
- 📉 Kimberly-Clark missed fourth-quarter sales and profit expectations on Wednesday as price-hike benefits softened.
- 🖥️ SAP plans to restructure, impacting 8,000 jobs focusing on artificial intelligence.
- 💊 Sanofi will acquire assets and liabilities for Inhibrx's INBRX-101 therapy in a deal valued at up to $2.2B, enhancing its pharmaceutical portfolio.
Thanks for reading! Shriram
p/Shriram | |
| 1 | | In Q4 2023, Netflix ($NFLX) gained 13.1 million subscribers, totaling 260.8 million paid subscribers, surpassing Wall Street's expectations of 8 million to 9 million. Netflix reported fourth-quarter earnings of $2.11 per share, slightly below the expected $2.22 per share, while the company's revenue for the quarter was $8.83B, exceeding the expected $8.72B. More: - Netflix raised its operating margin prediction for 2024 to 24% from the prior range of 22% to 23%.
- Following the news, American video-on-demand over-the-top streaming service's shares increased by more than 10%.
- For the first quarter of 2024, the business anticipates profits per share of $4.49, which is more than the $4.10 predicted.
- Netflix intends to persist in funding its content pipeline, distinguishing itself from competitors who are scaling back on content expenditures.
- Netflix continues to work on enhancing its advertising-based model and sees live entertainment as a significant source of revenue, even as it expands into live entertainment with the streaming of WWE "Raw."
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What the numbers say: About 30% of Instacart's total revenue in the third quarter came from its advertising division, which generated $222M in sales. Instacart will initially display ads on its Caper Carts, equipped with self-checkout, cameras, and sensors, at Good Food Holdings' Bristol Farms stores in Southern California, aiming to offset macroeconomic pressures affecting its primary online grocery delivery business. Relevance: Instacart's strategy to diversify revenue includes advertising on smart carts to attract brands even as consumers return to physical stores. Recognizing that a substantial portion of grocery sales still happen in physical stores, shared advertising revenue enhances retailer partnerships. More data: Instacart's Caper Carts, developed after a $350M acquisition of Caper AI in 2021, provide personalized recommendations during grocery runs. With brand partners like Del Monte Foods, Dreyer's Grand Ice Cream, and General Mills, Instacart aims to scale smart cart deployment amid competition from Amazon and Walmart, positioning itself as a technical partner to brick-and-mortar retailers in online delivery. | | | |
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| 3 | | ExtraMile Convenience Stores in California partnered with Samsung to launch AI-driven initiatives at three locations, incorporating digital signage displays for real-time interactions, online polls, and weather forecasting. The San Diego store features an AI-powered "digital human" named "Sam the Sommelier," enhancing interactive customer experiences and providing recommendations. More: - The pilot integrates FastSensor's foot traffic analytics software to analyze customer shopping journeys, providing insights on traffic flow, purchase intent, sales conversions, and popular store sections.
- The c-store industry's growing emphasis on utilizing cutting-edge solutions for productivity and customer experience is in line with ExtraMile's usage of AI and technology.
- The initiative seeks to improve the overall shopping experience by providing customers with tailored messaging at the correct times.
- Additionally, social media advertising driven by AI is a component of the effort to engage tech-savvy consumers effectively.
- Operating over 1,000 outlets, mainly in the Western U.S., ExtraMile Convenience Stores is a joint venture between Chevron USA and Jacksons Food Stores.
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| 4 | | Kimberly-Clark ($KMB), known for Kleenex tissue, fell short of Q4 net sales and profit expectations, with the earnings miss attributed to slowing price hikes, mirroring a trend observed in larger competitor P&G. Consumer goods firms, including Kimberly-Clark, P&G, and Unilever, encounter challenges from the impact of cheaper private label brands on shelf space. More: - Kimberly-Clark's volumes improved from a 1% fall in the prior quarter to a flat in the fourth quarter.
- According to CEO Mike Hsu, "Pricing is no longer as effective in mitigating inflation as it once was."
- In the three months leading to December, price increases decreased to 2% from 5%.
- Adjusted earnings per share of $1.51, lower than projected, and net sales of $4.97B in Q4 fell short of the estimated $4.98B.
- Kimberly-Clark projects a high single-digit percentage increase in adjusted per-share earnings for 2024 and low to mid-single-digit percentage growth in organic sales.
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| 5 | | German business software company SAP ($SAP) intends to initiate a restructuring program, impacting approximately 8,000 jobs and focusing on artificial intelligence. Estimated at $2.17B, the restructuring costs will be recognized in the year's first half, primarily addressing affected positions through voluntary leave programs and internal re-skilling efforts. More: - SAP's dedication to AI technology is demonstrated by its recent investments in generative AI startups and hiring a global head of artificial intelligence.
- The reorganization aims to increase funding for strategic development sectors, especially business AI.
- By the end of 2023, the company employed 107,602 people; by the end of 2024, it anticipates having a similar number of employees.
- SAP exceeded analysts' expectations for Q4 revenue and operating profit, driven by growth in its core cloud business, resulting in a more than 7% rise in its shares on Tuesday.
- SAP is moving from software licenses to subscription-based cloud services for a more predictable and profitable model, with notable cloud revenue growth in Brazil, Germany, France, India, and South Korea in the quarter.
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| 6 | | Sanofi (SAN) plans to acquire assets from Inhibrx ($INBX) for up to $2.2B, including the potential treatment INBRX-101 for a genetic disorder. The acquisition, set to enhance Sanofi's rare disease treatment pipeline and diversify its product base, is expected to conclude in the second quarter. More: - The agreement aligns with Sanofi CEO Paul Hudson's plan to spin off its consumer healthcare division and focus on research and development as the company transforms into a pure-play biopharmaceutical company.
- In addition to a delayed payment of $5 per share subject to regulatory milestones, Sanofi will pay Inhibrx owners $30 in cash for each share.
- A new publicly traded company will be formed out of Inhibrx's remaining assets and liabilities unrelated to INBRX-101 before the deal's completion.
- As businesses aim to bolster their pipelines and portfolios, this deal is in keeping with the current trend of acquisitions in the pharmaceutical sector.
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- TIME magazine cut around 15% of its union-represented editorial employees on Tuesday, aligning with other major news outlets downsizing their reporting staff, such as the L.A. Times, which announced 115 layoffs on Tuesday.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Aaron Crutchfield | |
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