Guide to Successful Earnings Calls (Part 2)

This week we bring you Part 2 of our three-part series on earnings calls. We follow on from our top tips for earnings calls with the pros and cons of different call formats, including the use of presentations and video on the call, as well as the services offered by different earnings call providers and the advantages and disadvantages of each.

The pros and cons of different call formats

Audio Only

Pros:

• • Simple, everyone’s used to it, can multitask more easily, communicate with colleagues during the call without risk of being observed, do not need WIFI etc…

Cons:

• • One dimensional and already becoming out of date. Post COVID, investors more familiar with video.

Presentation

A)   Speaker slides only – opening slide, slide for each speaker with their photo, Q&A slide and closing slide

Pros:

• • Adds a visual aspect and allows attendees to see a photo of the person presenting, helping them to picture who is talking and giving a little more insight into the company’s management.
  • Makes it clear who is presenting and what part of the call is currently happening for any late joiners.
  • Very simple to update each quarter.

Cons:

• • Doesn’t add much more than an audio only call.

B)   Full presentation including results

Pros:

• • Gives a good visual aid for speakers to use and attendees to follow.
  • It can make the prepared remarks appear more natural as the speaker follows the flow of the presentation.
  • The use of graphs and other visual aids makes the information easier to interpret than just spoken numbers.
  • Allows for visual aids e.g. graphs with no numbers to show general expected trends, without committing to exact numbers.
  • The earnings call presentation can be uploaded to the website on a quarterly basis with the earnings call recording.
  • We advise that the corporate presentation is updated on a quarterly basis and this presentation can form part of the quarterly corporate presentation.
  • The presentation makes it easier for investors and analysts to find information and provides them with additional information during the call at the relevant time e.g. through the use of graphs and tables.
  • It gives the impression of a well-organized company which has the capacity to produce an earnings report, hold an earnings call and produce a presentation all within a short space of time.

Cons:

• • Has to be updated quarterly, producing extra work at a very busy time. For many time stretched IR departments, it’s simply not doable.
  • Has to fit with the prepared remarks and therefore the script needs to be finished ahead of time to enable the presentation to be finalized around the script, or vice versa.

Video

Pros:  

• • Video allows you to use your body language as well as words to say “look at me and trust me” or “I’ve got this under control”, which can be particularly powerful after a bad quarter.
  • Video allows greater connection with your investors and analysts.
  • Reduced movement and face to face meetings as a result of Covid-19 has increased the importance of video. If your investors are local then it was less important in the past as you would often see them in person. A lot of investors in US companies are based in the US, but in Europe where there are more global investors, the use of video is much more common.
  • Video gives the feeling of a news bulletin rather than a radio broadcast.
  • Everyone is waiting for the body language in response to the difficult question and video can help you to make this work in your favor with a confident response and body language.
  • Investors invest in people, so show them your talent – use your earnings call as a PR and marketing tool.
  • Using video positions your company as forward thinking and embracing today’s technology. Associate yourself with what is new, exciting and innovative, not what is old and stale.
  • Using video makes the earnings calls more engaging and the additional option of allowing analysts and investors to turn their video on to ask questions can make them even more so.

Cons:

• • There are more considerations including what color to wear, the background and lighting. Requires good Wifi. Difficult to communicate with colleagues during the call, pass written messages.
  • If using a script, speakers need to have their script and camera positioned in such a way that it is not obvious that they are reading.
  • It’s new and with that introduces some risk. To mitigate this, we suggest doing a practice run and watching it back – e.g. do an internal presentation with video before starting to use it in your earnings call, or do a pure dress rehearsal of the earnings call.
  • If it’s not done well then it can look unprofessional.

Video and Presentation Together

Pros:

• • As mentioned above, plus…
  • The video is usually slightly smaller whilst the presentation is on screen, reducing the problem of where the script and camera are positioned for the prepared remarks.

Cons:

• • As mentioned above.

Miranda Zoom

Miranda Investor Relations has teamed up with Zoom to offer Mexican corporates an outstanding quarterly earnings call, via video or voice only, with or without a presentation, as the corporate prefers. We are more cost effective than most other providers, and provide our own operator (Emma, from England), who coordinates the call and questions. We prepare speaker slides (advantages detailed above) so that there is no blank or black space. Thanks to Zoom, there is no long wait to get onto the line, and you can access the webinar through a computer or smart device, or for audio only by dialing in from a phone line, as you prefer. (See one pager attached for more information).

In addition, as part of our conference call package Miranda IR:

·         Disseminates the video conference details.

·         Offers a pre-video conference test/run-through.

·         Provides live technical support.

·         Provides a list of video conference participants.

·         Provides a recording of the video conference.

Earnings Call Providers – Services and Costs

⁽¹⁾      Based on a call lasting approximately 40 minutes, with 50 participants (split between national and international dial in locations).

⁽²⁾      Issuer Direct, ViaVid and AudioWeb prices increase with call length, number of participants and number of international participants.

⁽³⁾      Including one-off initial fee of $365.

⁽⁴⁾      Price for a maximum of 100 participants. For 100-500 participants the price rises to $400.

*In the past security breaches have been reported, but since then Zoom has brought in new security measures which puts it in line with the best security protocols in the business, including end to end encryption for all users.

**Webex is not known for its ease of use, but it has been making updates. Blue Jeans is not as widely used as the other online platforms, meaning participants will be less familiar with it. (Zoom now has about 300 million active daily users, Teams about 115mn, Google about 100mn; Webex 60 mn. Blue Jeans had 15,000 clients but the user numbers were unknown).

Google Meet and Microsoft Teams are also good options, but as they work best when everyone involved uses Microsoft Office or has a Google account, we have not included them in our deeper analysis.   

So which provider comes out on top?  

We say Miranda IR with Zoom, but of course we are slightly biased as we think our own product provides a highly professional service at a very economical price. The added bonus for our current IR clients is that it cuts out the third party, making the organization of the earnings call far easier and more efficient.

Our analysis in the summer saw Webex and Zoom share the top spot for video conferencing providers. To give an independent view, DGI Communications has recently done a comparison between the two – this was their conclusion, “Considering all the powerful features and positive reviews given by experts and users alike, Zoom is the superior video conferencing software. Webex is packed with lots of quality features, and has upgraded their platform and free plan. Some companies that are used to Webex may stay due to its security and familiarity, but if you’re looking for a new or better solution, Zoom can be the ideal choice.” You can read their full article here.

Next week we will bring you our top tips for delivering standout virtual presentations in your earnings calls as well as other virtual presentations you may be giving, whether they be for Investor Days, NRDs, virtual AGMs or internal presentations.