As earnings season continues, many companies are reporting results this week. But three companies that will be particularly interesting to watch are media and theme park giant Walt Disney (NYSE:DIS), customer service platform Zendesk (NYSE:ZEN), and social network Twitter (NYSE:TWTR). Disney and Zendesk both report their results on Tuesday and Twitter reports its results on Thursday.
Ahead of these companies' latest quarterly updates, here's a quick preview of some key items to look for when each company reports its results.
Two key areas to watch when Disney reports results after market close on Feb. 5 are the company's studio entertainment and direct-to-consumer and international (DTCI) segments.
In fiscal 2018, Disney's studio entertainment business saw revenue surge 19% year over year. Did the segment keep up its strong momentum in the company's first quarter of fiscal 2019?
The other area of Disney's business to watch is the company's new segment: DTCI. Constituting revenue from the company's ESPN+ streaming service, Disney's 30% interest in Hulu, and Disney- and ESPN-branded international television networks and channels, the segment includes some of Disney's most-important long-term growth opportunities. The segment's quarterly revenue was $825 million in the fourth quarter of fiscal 2018, down $2 million sequentially. Will revenue in the segment pick up in fiscal Q1 as the company's 2018-launched ESPN+ service gains traction?
Customer service software provider Zendesk saw its stock price soar in 2018, rising about 72%. And shares have risen an additional 18% in 2019. With such strong performance from the stock recently, investors will be looking for the company's sharp business growth to persist in Q4.
That's why investors will want to pay close attention to the company's revenue growth when Zendesk reports fourth-quarter results. Worse-than-expected revenue growth could mean investors are overestimating the company's long-term growth prospects.
For its fourth quarter, management said it expects revenue between $164 million and $166 million, representing 33% to 35% year-over-year growth.
Revenue growth will also be an important metric for Twitter's results. Revenue growth has been accelerating recently, with third-quarter revenue rising 29% year over year -- up from 24% growth in the second quarter of 2018. While investors should expect more strong growth from Twitter in Q4, growth will likely be more moderate. Analysts, on average, expect this growth to decelerate in Q4 to a growth rate of about 19%.
Another key metric for Twitter investors to watch is the company's year-over-year growth in daily active users.
"[G]rowing daily active usage on the platform is critical to our long-term success, it's the lifeblood of the company," said Twitter CFO Ned Segal in the company's most recent earnings call.
Twitter's daily active users rose 9% year over year in Q3 -- a slight deceleration from 11% growth in the prior quarter. When asked during the company's third-quarter earnings call whether this deceleration was likely to continue, Segal didn't give a direct answer but did say the company remains focused on growing daily active users.
Twitter reports its results before market open on Thursday, Feb. 7.