Q2-2023 Earnings results: Part 2

Tuesday 15 August 2023

Portfolio updates

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This past week marked a productive period for the Swell Global Portfolio, with six portfolio companies reporting quarterly financial results. The earnings were heartening and reflected a positive momentum in their performances.

The Portfolio increased 4.33% in July, a testament to our investment process and long-term orientation. We take confidence in the initiatives being undertaken by each of our portfolio companies, particularly in the field of artificial intelligence.

Additionally, we wish to highlight our cloud investments, which we consider to be in the nascent stages of a transformative leap forward in productivity for knowledge-intensive industries. We see significant growth potential in this domain, which will accelerate the Portfolio’s performance and create value for our investors.

We look forward to delivering more updates on our Portfolio’s progress and performance in our forthcoming investor letter.


Amazon reported quarterly profit that shattered expectations, reflecting improving health in the retail business. The result was double analysts’ estimates, lifted by resilience in its core consumer e-commerce business. The e-commerce business is undergoing a significant transformation as management reorients the fulfilment network, transitioning from a national to a regional footprint, boosting productivity and lowering operating costs. Amazon shares rose 10% in after-hours trading following the earnings report.

Booking Holdings

Booking reported stronger-than-expected second-quarter results. Revenue grew 27% year-over-year to $5.46 billion and adjusted earnings per share came in at $37.62, topping consensus expectations of $5.16 billion and $28.87. Revenue outperformance was driven by robust leisure travel demand, which drove stronger-than-expected room nights and gross booking numbers. In addition, management upped third-quarter guidance for bookings growth as July room night bookings are trending 20% higher year-over-year, adding 26% compared to 2019 levels. Earnings outperformance was driven by better marketing efficiency as the company continues to optimise its marketing spend and increase the share of loyal travellers booking directly through its mobile app. Management continues to focus on building the connected trip vision and is experimenting with embedding generative AI capabilities to help travellers and supply partners.


Shopify reported better-than-expected second-quarter results, growing revenue by 31% to $1.7 billion and earning $0.14 a share on an adjusted basis, well ahead of the consensus forecast of $1.63 billion and $0.06. The commerce operating platform facilitated $55 billion of gross merchandise value (GMV), which is up 17% year-over-year, indicating substantial share gains compared to the single-digit growth of the retail market. Shopify continues to grow its global footprint. In the quarter, the platform saw significant growth in the EMEA region, where GMV grew over 40% in markets such as Germany, France, Italy and Spain. In addition, Shopify posted numerous outperforming metrics that signal its expanding commerce capabilities including in the social channel, business-to-business commerce and offline commerce.


Block reported stronger second-quarter results, with revenue and gross profit increasing 26% and 27%, respectively. Despite management lifting the full-year operating profit from $1.36 billion to $1.50 billion, the share price fell in after-hours trading. We continue to believe in Block’s long-term opportunity for Square, Cash App and Afterpay and are encouraged by their latest initiatives, including a deeper focus on efficiency and profitable expansion.

Intercontinental Exchange

Intercontinental Exchange (ICE) reported its second-quarter results overnight with revenue of $1.9 billion and earnings per share of $1.42 both beating consensus estimates. Despite ongoing macro headwinds in its Mortgage Technology segment, ICE proved once again it is truly an ‘all-weather’ business. The diversity of its revenue streams and their highly recurring nature enabled overall net revenue to grow 4% despite mortgage technology revenue declining 16% on the same quarter last year. Management refrained from taking questions about the pending Black Knight acquisition on the call but noted they remain confident it will close later this year, following their announcement of the divestiture of Optimal Blue, earlier in the quarter.


Zillow reported its second-quarter results on Thursday with revenue of $506 million and adjusted operating income of $111 million, both better than expected. Notably, it was the first quarter Zillow was able to achieve year-over-year revenue growth since the first quarter of 2022. The strongest segment for Zillow was Rentals which grew 28% while the Residentials and Mortgages segments declined less than last quarter, showing signs of recovery. Amid the tough real-estate market, Zillow’s management has been focused on improving their core offering which has benefited them through market share gains. We think this will pay off when the market begins to normalise and will lead to margin expansion that is underappreciated by the market.

About the Author
Swell Investment Team

Swell Investment Team

Members of the investment team contributed to this article.