State Of - Deutsche Bank Says Embedded Finance Is Changing Business Models

CE 100 Index Adds 1.9% as and Porch Lead Gainers

The Connected Economy 100 Index notched a 1.9% gain as February gave way to March.

And of the 10 pillars, only one — the Be Well segment — lost ground, off 0.2%.  United Healthcare shares gave up 7.1%.  A cyberattack on Change Healthcare, owned by United Healthcare, has reportedly affected a number of pharmacies.

“Once we became aware of the outside threat, in the interest of protecting our partners and patients, we took immediate action to disconnect our systems to prevent further impact,” the update from Change Healthcare said.

Communications-focused names, as a group, were up 5.4%.  Zoom was the standout here, up 11.8%.  The company reported results this past week that showed enterprise revenues were up 5% year on year to $647 million. Total revenues gained 3% to $1.1 billion.  The company also said that online average monthly churn was down year on year in the fiscal fourth quarter, from 3.4% to 3%.  The number of enterprise customers gathered 3% to more than 220,000. Leads the Rally was the standout in terms of individual company performance, adding 37.2%.  The company said in its most recent results for the fiscal third quarter that total revenue of $78.4 million grew 18% year over year, exceeding management’s guidance range. Customer engagement grew 80% year over year.  Subscription revenue for the quarter was $70.4 million, constituting 90% of total revenue, an increase of 23%.

The company noted that in the quarter it closed 50 agreements, up 85% year on year in the connected economy. It had 28 new pilots, surging 71% year on year.  Subscription revenue for the quarter was $70.4 million, constituting 90% of total revenue, an increase of 23%. Partner-supported bookings grew 337% year over year and 62% quarter over quarter.

But those gains were tempered a bit by Snowflake, which gave up 18% on the week.  As the company reported fourth quarter results, CEO Frank Slootman said he is retiring and will be replaced by Sridhar Ramaswamy. After a quarter that saw 33% revenue gains, the firm said that first-quarter product revenue will total between $745 million and $750 million, compared to analysts’ estimates of $759 million.  Operating margins will be 3%, below the 7.2% analysts expected, per reports from CNBC.

Porch Group tacked on 24.5%, ahead of an earnings report that is scheduled for later this week.  As reported last month, the company said that the quarter’s revenues should be ahead of guidance.  And as reported at the end of January, Porch signed a strategic business collaboration agreement with Aon Corp. and Aon Re, Inc. to provide a variety of services to Porch Group companies.  The agreements mean that Porch will get a $25 million upfront payment, with approximately $5 million earned over the following four years.

Ocado Group Focuses on Delivery

Ocado Group, which is in the Shop segment of the Connected Economy, lost 9% for the week.  As reported here, and as discussed on the company’s conference call, delivery is a key area of focus.

Discussing the company’s Ocado Retail joint venture with United Kingdom department store chain Marks and Spencer, Ocado CEO Tim Steiner contended that reliability remains a key challenge.

“We are over 99% items delivered as promised, 95% on-time delivery, and a great doorstep experience,” he said. “Getting the basics right in online grocery is the most critical thing. And it’s amazing — I’ve been in this industry now for 24 years — how few players there are in the world that can actually deliver what they promise to a customer on their doorstep on time.”  Ocado reported a 10% year-over-year revenue increase in fiscal 2023 and a 7% boost in Ocado Retail.