In this episode of Motley Fool Money, Ron Gross chats with Motley Fool senior analysts Andy Cross and Jason Moser about the latest news and earnings reports from Wall Street. Disney surpasses investor expectations, so does a giant furniture retailer. They've got news of a possible acquisition in the healthcare space, and the guys also share some stocks to put on your watchlist and much more.
Also, Dan Kline interviews John Hope Bryant, an entrepreneur, author, and philanthropist, about economic empowerment, and Operation HOPE, the largest nonprofit financial inclusion organization in the country.
To catch full episodes of all The Motley Fool's free podcasts, check out our podcast center. To get started investing, check out our quick-start guide to investing in stocks. A full transcript follows the video.
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This video was recorded on Aug. 7, 2020.
Ron Gross: Today we're going to talk furniture, payment processing, the cloud and telemedicine, but we begin with the House of Mouse.
Disney (DIS 1.60%) reported better-than-expected third-quarter results, as weakness in the parks and resorts segment was offset by strength in streaming services. Andy, Disney+, getting it done, and the stock reacting nicely.
Andy Cross: Yeah, sure, Ron. It really was all about the direct-to-consumer. When you think about what Disney is doing on their streaming platform, they now have more than 101 million streaming paid subscribers; that's Disney+ at 57.5 million, actually, now more than 60 million as of this week, up from 33.5 million the previous quarter, or growth of more than 70%. It's not quite a third the size of Netflix. Interestingly, 15% of those are in India, Ron, with the Disney and the Hotstar partnership. ESPN+ was up to 8.5 million. Hulu has more than 35 million, up 27% from a year ago. That group is still losing money as they continue to invest into that business. They lost $700 million this quarter, up from a loss of $560 million last quarter. We saw the direct release of Mulan, so that was kind of exciting, for a $30 fee. I don't think we can expect, at least they said, we can't expect to see that every time, but it was interesting to see that.
Obviously, all of this is offsetting the parks business that really struggled. It was down 85%. They did more than $980 million in revenue, down from $6.6 billion last quarter. So, it really goes to show you the extent of the COVID-19 quarantine and the lockdown has affected the parks business. The media business with the NBA and the MLB shutting down, and live sports pretty much, in general. Although, we're starting to now see that come back, so that's exciting, as it hurt the media business.
And the studio entertainment business was down, because they just really haven't had any new releases and production schedule is shut down. So, overall, operating profit fell 72%, but most of that was from the parks business. Overall, a really nice quarter when you look at the streaming business and the continued investment that they're making into that streaming platform, and to be able to grow that way.
Gross: Yeah. You mentioned Star, their international streaming service. How big a part of this thesis, this investment thesis for Disney, do you think is in Star?
Cross: Yeah, I think it's important. I think so many of the headlines, obviously, are in the streaming side, because so much of the other business is so weak, right? Now, again, we saw continued excitement not just in streaming, but a little bit of some of the other businesses maybe starting to shape up. The Asian parks businesses started to come back, although I think Hong Kong had to shut down in July. So I think anything tied to streaming is going to be real excitement in the direction for Disney.
Interestingly, their advertising side had really affected some of the Hulu business and some of the average revenue per user [ARPU] on the streaming side, because the advertising markets have been so weak recently. But you saw the debut of Hamilton -- big success. So, a lot of headline excitement around Disney, I think investors expected that, but maybe not to this extent. And hopefully the parks business comes back, if you're a Disney subscriber or Disney shareholder, over the next few years.
Gross: Wayfair's (W -2.04%) second-quarter results crushed expectations. And Jason, the stock continues to hit new highs. Can this continue?
Jason Moser: [laughs] You know, Ron, I thought there was no way that Wayfair can see results this quarter that would give the market a chance to justify [laughs] the run-up on the stock this year. But, man! They did it, you know? This quarter, I think, gave us a window, really, into the potential profitability of this business and showing that there actually is a light at the end of the tunnel, assuming they continue to grow the top line like they did this quarter. Granted, this was a bit of an unusual quarter from that perspective, but it's not unusual that the numbers they've been reporting all along the way tell us this business is growing and succeeding.
And let's look at some of those numbers. I mean, 84% top-line growth; they brought in $4.3 billion in sales this quarter. This was kind of a George Costanza thing, Ron. I mean, we're used to no profits and no cash flow; they did the opposite. You've got positive GAAP net income, positive GAAP earnings per share. I mean, cash flow positive at 26 million active customers, now up 46% from a year ago. Repeat customers continue to get it done. You know, I will say, in the call they did note that the magnitude, they referred to the magnitude of efficiencies and margin levers they experienced -- it's not likely to fully repeat in quarter three, the current quarter, given that they see the top-line growth subsiding at least a little bit. But to that point, they did note that quarter-to-date gross revenue growth is trending at approximately 70%. So, still very impressive.
Understandable, right? I mean, we are in a bit of a new paradigm when it comes to retail, and Wayfair is one of the companies leading the way. So, it's been a phenomenal year for the stock, a phenomenal year for the business; it seems like that's going to continue. We can argue that it's overvalued all day long, I'm sure, but clearly the market is [laughs] very forward looking in this case and likes what it sees.
Gross: Arista Networks (ANET 4.03%) stock got smacked on Wednesday, even though the company beat top- and bottom-line expectations. Andy, what am I missing here?
Cross: Yeah, it was a pretty decent quarter for Arista that provides software and hardware for switching networks at big data centers mostly, but maybe looking at the growth for the third quarter, I think investors may not be quite so excited by that. They are seeing some supply chain challenges with the COVID impacts and some longer sales cycle. So, overall, revenue was a little bit better than what they expected -- down 11% from a year ago, but up more than 3% from the first quarter, so that was good. Gross margins down a little bit, but above guidance. And the adjusted EPS was down to $2.11 from $2.44 last year. They did see a record number of million-dollar clients, so that was good. Like I mentioned, they're seeing some of the supply chain challenges from the hardware side that kind of affects their business.
They are really getting a handle on some of the cost structures and making sure their cost structure for their sales cycle and for their businesses are manageable, and that's helping some of the margin on the side. But we did see a little bit of improvement from some of the cloud titans -- that's like Microsoft and Facebook that spend so much money with Arista. That's the largest vertical they have.
That started to see some rebound, I think, over some slowness over the past year or so. And the guidance, like I said, was still down; they're still looking for revenues to fall 11% this quarter, and gross margin about the same. So, it's very profitable, it is playing in a very large space. Seeing some challenges, I think, with some of the spending from some of their big clients affect their overall business with some of the guidance. So, some concerns there, but I think the long-term story for Arista is still pretty strong.
Gross: Yeah, that spending in capex, I would assume, is temporary COVID-related, I would imagine. There's nothing else going on to be concerned about?
Cross: No, I think that was the big question on the call is, is this really a temporary thing or are they starting to see some struggles? We're seeing some excitement around the 400 gigs from the 100 gigs solutions; that's still really early. And by the way, their campus business, that requires people to be around to be able to sell to, so implementation is better when no one is at your campus business, but from the sales side, a little bit longer than I think they had experienced maybe over the past year or so.
Gross: Square's (SQ 0.76%) stock had a good week, as the digital payment processor beat expectations. Jason, solid results from the Cash App but some weakness in its volume from merchants.
Moser: Yeah, that's a really good point. I think the big picture, the reasons why we all invested in this company, or many of us invested in this company to begin with, are all still very much there. And this was a respectable quarter from a number of angles. If you look at numbers, like, net revenue up 64% to $1.92 billion; that sounds great. Now, you have to back out that bitcoin revenue, and then you recognize that it was essentially flat with last year. So, you don't want to be misled there, but let's not hold the fact that Jack Dorsey is a believer of bitcoin against him or the company; maybe there is something there. Certainly, it seems like it's something that is creating a lot of engagement within their networks.
The number we always look at with companies like this, gross payment volume, which to me, this was a little bit, this was kind of an attention-getter -- gross payment volume is down 15% from year ago, to $22.8 billion. Now, $22 billion, $23 billion, that's a lot of money, of course. Let's put into context. PayPal just sent $222 billion through their networks, and that represented 30% growth. So, do with that what you will, but clearly, I mean, this isn't like everybody in the same boat, Square is not growing that payment volume like other companies are, but again, they have a pretty heavy exposure to small- and medium-sized businesses which are clearly feeling the pinch from this pandemic and the economic ramifications of it. Very notable, I thought, just the gross payment volume from online channels for Square was up more than 50% from a year ago, so that's encouraging. The Cash App ecosystem continues to drive a lot of engagement, profits up in that segment 167%. I like seeing that they're actually going to break out the two segments into the Cash App ecosystem and seller ecosystem. They're both very, very strong parts of the business, and so it's nice to see how each one is performing on its own. And then, finally, the Square Capital side of the business continues to serve as a point of assistance during this time, they put through around $875 million in Paycheck Protection Program loans, really helping a lot of individuals and businesses, kind of, keep their head above water during this difficult time. So, a good quarter, not a great quarter. I understand why the market is receiving it well.
Gross: On Wednesday, Teladoc announced that it would acquire chronic care provider Livongo Health for $18.5 billion. And, Jason, you've been a fan of Teladoc for a long time. What do you think?
Moser: [laughs] Yeah, well, if you're asking, why this is happening, and a lot of Livongo shareholders are, the goal for Teladoc all along has really to build this virtual care organization, this big healthcare company deliver and enable full spectrum of whole person care, primary care, chronic condition management, critical care, expert opinion, all this, all of this. So, I mean, it's not just a see-the-doctor-on-your-phone anymore company. Livongo is in the business of helping people manage chronic conditions, like, diabetes and hypertension among others. And if you look at some of those numbers. I mean, in the U.S., nearly 147 million people live with a chronic condition, 40% have two or more, 90% of healthcare spending is attributable to people with chronic conditions, and it costs the U.S. economy over $3.7 trillion per year. Internationally, one in three adults is living with one or more chronic conditions. So, you can see this is a very big market, I understand why Teladoc is interested in Livongo, because it expands their offerings. It's a very complementary acquisition, and there's only about a 25% overlap in actual customers there. So, it is very much a complementary deal. And Teladoc has a track record in the acquisition space too. So, I think you could be cautiously optimistic, at least, it is a very big deal, this is essentially a merger, I mean, it is a big deal for sure. It's going to take a lot of hard work, but they seem to feel that the cultures are very symbiotic, they feel like the cultures really work together well.
And so, maybe that's the case, we'll have to wait and see, but, you know, I do understand folks who were bullish on Livongo, a little bit curious as to the lack of a perceived premium on that stock price, but you got to remember, the market was paying that premium a lot on this way up, OK. I mean, this is a business that didn't make any money, was trading at 40 times sales. So, let's not forget that. I'd say, cautiously optimistic, but certainly, it has a chance to make Teladoc a much, much bigger company in a few years.
Gross: Wix.com (WIX 2.47%) reported strong revenue growth in its second quarter, but, Andy, results swung to a net loss, and the stock ended the day down a bit. What do you?
Cross: Yeah, I mean, it was just continued growth of what we've seen from the interest in online connections, communications, connectivity. Wix added 9.3 million registered users during the quarter, up 64%. Revenues up 27%. They crossed over the 5 million total paid subscriptions. And for all of this year, the first two quarters, the new ad of subscriptions excelled what they did all of last year, Ron. So, really, a lot of excitement around what is happening in online commerce. They launched a bunch of new tools including their Editor X for much more sophisticated Web designs.
The guidance, I think, you know, 26% to 27% revenue growth. Their collections was what the cash they got from their subscription business, up 31% to 34%. Free cash flow was knocked a little bit, expected to fall 40% to 50% next quarter, as they continue to invest more and more into that platform business. But overall, I think a really nice quarter for Wix, and shareholders, I think, should be excited about what's happening and for the future of this company.
Gross: COVID clearly accelerated the business, in the sense, pulled some business forward, I would imagine, but do you think that growth continues or will it stagnate because we got that pull forward.
Cross: Well, growth in July so far, and was not part of this quarter, really excelled. And they continue to see their subscription business, their net adds more than double, so. And they are seeing more conversion rates from their free to fee is accelerating from where it was historically too. So, I think we are seeing that. I think they are being a little bit cautious about how much is pulled forward and what the growth may look like, especially from the profit side, because they are investing a lot more in marketing and sales efforts.
Gross: Etsy (ETSY 0.34%) reported strong second-quarter results on triple-digit revenue growth, as the company benefited from more people shopping online and the strong demand for masks. But, Jason, CFO, Rachel Glaser, pointed out, it wasn't just about selling more masks.
Moser: No, it was not and much [laughs] like Wayfair. I mean, just wow! You said last week, I said last week, that it really still feels like it's Amazon's world after they recorded that 40% top-line growth, but then you see what companies like Wayfair and Etsy are doing and you realize that this is just another glimpse into the retail landscape of the future, and certainly Etsy is going to be one of those companies that helps define it.
To your point about masks, yeah, I mean, they sold $346 million worth of masks over 110,000 sellers sold at least one mask, but to your point, non-mask sales actually grew 93% in the second quarter from a year ago, which is an acceleration from the 79% that they witnessed in the month of April. And so, the business itself continues to just really perform well. They added more sellers in the quarter, somewhere in the neighborhood of 36% growth on the seller side. And yet, with that addition, gross merchandise sales per active seller actually grew 15%, really impressive stuff. So, sellers are becoming more successful, buyers are happy because they're buying it, and management continues to invest in that, sort of, craft niche nature of the platform, which is really starting to resonate with a lot of folks.
And, Ron, I'd be remiss if I didn't remind people that Etsy is part of my stay-at-home basket I presented a couple of months back at FoolFest. To date, Ron, it's the best performer in the basket, up 67% versus the market 7.5%. I'm a happy shareholder and I'm not letting these shares go anywhere.
Gross: Can't argue with the results. Twilio (TWLO 3.25%) reported record second-quarter results, beating expectations, but shares sold off a bit on the news. Andy, are investors just taking a break from what has been really a tremendous ride here, or was there something that kind of caused some concern?
Cross: No, I think a little bit of a break, maybe a little bit concerned where they issued 5 million shares at $247. The stock is at like $255 now. Revenues up 46%. Dollar-based expansion rate is still at 132%, down a little bit from last quarter and down from last year. They added 24% more customers to cross over the 200,000 subscribers mark. So, overall, a really nice quarter. The growth toward more online digital communication is really benefiting Twilio and will benefit shareholders, I think, going forward, of which I am one.
Gross: You know, we've seen some companies actually issue third quarter guidance, where a lot of companies had suspended guidance completely. And some of these cloud businesses fall into that category, management guided for revenue growth of 36% to 38%. What about these businesses gives them that visibility?
Cross: Yeah, well, I think they have that consistency and some of the excitement about these businesses that are specially benefiting, or at least seeing some trends. Twilio put out a survey interestingly to more than 2,500 enterprises. And they saw a 97% have seen an acceleration in the digital transformation. And their digital communications strategy basically accelerated by six years, Ron, by six years. So, I think Twilio is seeing that. And with all that that they've been doing on their platform, I think, some excitement about the prospects going forward.
Gross: John Hope Bryant is the Founder, Chairman and CEO of Operation HOPE, Bryant Group Ventures and The Promise Homes Company, and he's the author of How the Poor Can Save Capitalism, Love Leadership, and The Memo.
Last week, Motley Fool contributor Dan Kline interviewed Bryant on Motley Fool Live Video. They talked to entrepreneurs, economic empowerment and financial dignity. But Dan kicked things off by getting an overview.
Dan Kline: For the benefit of anyone who doesn't know about Operation HOPE. Could give us a quick overview?
John Hope Bryant: We were founded after the Rodney King riots in 1992 in South Central Los Angeles by me. It was founded as America's first nonprofit social investment banking organization with the mission to eradicate poverty and to change the world through financial literacy, education, mentorship, financial and capital access, access to education, low cost of capital, high-quality education, and opportunity.
And we now have invested, through our partners, about $3.5 billion 28 years later in thousands of small businesses and homeowners that we created with prime market rate capital for many clients, raising credit scores 120 points in 24 months. Nothing changes your life more than God or love and moving your credit score 120 points, is my opinion. And we're in 25 states as of this week; we just opened a few more offices. And so, we are the Starbucks of financial inclusion.
Kline: I want to go into your background, your origins, but let me ask a little bit more about Project HOPE [sic]. Give me an example of some of the programs you run in a community and the types of communities you're serving?
Bryant: OK. Sure. Well, we are in or have been in 4,000 intercity underserved schools for financial literacy education, that's, sort of, easy stuff that we do, 30,000 volunteers. That needs to be. We have a New Marshall Plan I wrote; your viewers can pull it up, John Hope Bryant the New Marshall Plan to review it. But I think that actually, that needs to be taken over from us and adopted by Congress and signed into a law, so that every child gets financial literacy K through college, not K through high school. We also need education K through college, because you cannot have the leading superpower in the world with half the people who have a high school education, that's where discrimination, bias, backwards thinking and hopelessness dwell. We need to bring the light and that comes through education and exposure.
So, I think financial literacy education needs to go from our model, I got President Bush to sign it into federal mandate, but it needs now to be, in my opinion, federally funded and embedded in the school systems as a national norm.
So, we're sort of cultivating ideas that we expect others to adopt and to carry on. So, we went into banking and we became the first nonprofit allowed to operate inside of a bank branch in the history of the U.S. And now we're in 30 or 40 banks where we're getting the bank out of the "no" business and back into the "yes" business, by getting their credit score up, because half of Black folks, as an example, have a credit score below 620, which means that a lot of folks like me, with credit scores into 700s, but national average being dragged down by a lot of other folks who are in the 300, 400, and 500 credit score range. So, that means that half of Black Americans, Dan, can't get a decent mortgage, can't get a decent small business loan.
I'm sorry, you can't get any small business loan because you can't get a risky credit below 700 credit score, it's unsecured risky credit. You can't get a decent auto loan; an 18% auto loan is like a mobile bomb. You know, you get a Mercedes with 18% loan -- it's not a Mercedes, it's Mercedes payments.
So, we are in the banking sector, sort of, in the bank branch helping that person who would be declined, get trained up, so they can be approved and so the bank can say yes.
Now, we're also in the employer net, we are now in HOPE Inside the Workplace. We've gone to a lot of major companies, because financial well-being is the next big thing that's impacting their efficiency, effectiveness and performance. So, we're going where the kids are at schools, we're going to where the adults are at the workplace, to have an outsize impact on our cultural life. I could tell you much more, but that's some of the big ideas. And we've got some big things we're working on right now that any one of which will, I believe, change parts of the nation.
Kline: It's amazing work. So, let's go back to how you got started. I've been spending the past two days reading all about you. I cannot wait to read your book, but at the age of 9, you met with a banker and asked how you can become rich legally. John, that's not typical nine-year-old behavior. My brother, who's a very successful executive, at nine, wanted to be a skate guard at our local roller rink. So, you were a pretty advanced nine-year-old, sort of, what led you to that path.
Bryant: Well, I wasn't advanced. I was lucky. My mother told me she loved me every day of my life. You know, nothing is more powerful, as you know, Dan, than a mom and dad, particularly a mother, telling her child that they are loved. So, as a result of that, I was broke often, but I was never poor, because poor is a state of mind. I knew I was somebody, because my mother told me so. And so, I had a sense of, yes, I am. And then my dad owned his own business. So, I had a sense of, yes, I can. And that's why I knew I could be and do something and be somebody, I just didn't know what.
So, when this banker came into my classroom to teach financial literacy in home economics class, White banker, red tie, white shirt, blue suit, about 6-foot-2, a giant to, you know, a kid who's nine. And I only saw, Dan, a White guy who is a detective, police officer or maybe a teacher, and I never saw a guy like this before.
And he was there because of the Community Reinvestment Act, the law that requires banks to go into unserved areas and teach. So, I listened to this guy for a couple of sessions, and to your point earlier, I said, sir, what do you do for a living? And how did you get rich legally? [laughs] And he said, young man, I'm a banker and I finance entrepreneurs. Dan, I said, I don't know what an entrepreneur is, I never heard of that word before, which is pretty sad, by the way, that I never heard that word before. But whatever an entrepreneur is, if it's legal, and you're financing him, I'm going to be one. And you know, all these years later, that's who I am. But it started that day. I went home and opened the dictionary to the word entrepreneur and researched it.
Now, it is sad that, I think, that story can be recounted timeless times over, that in most underserved areas in America, Black and poor White, most kids 19 years old have never heard the word "entrepreneur" and if they heard, it's been on TV, and they don't even really know what it means, like, what do you -- like, back in my day, there was no internet and all that kind of stuff, we literally never heard it, the teacher didn't say it, it wasn't in their dictionary. But today, even though kids are hearing it because of the media, they don't really know what it means. And it's everything. I mean, you wouldn't be sitting here if not for a couple of entrepreneurs.
Kline: [laughs] I wouldn't be sitting here if not for a lifetime of entrepreneurs. You know, you mentioned parents who love you. You know, my family has a business and I didn't realize until I was about 20 that everybody's dad didn't get up at 6:30 in the morning on Saturday to go to work, you know? [laughs] So, you learn from example. But you mentioned in your bio, that banker, he didn't want to be there. Was that something you were aware of at 9 years old?
Bryant: It's a good question. Yes, I was aware of it, but not because he was mean. He wasn't mean. He was indifferent. He didn't hate me. He didn't love me. He was there to do a job and check a box. And it was clear when he first got there that he was basically told to go, but after two or three sessions, Dan, after he felt our humanity, he began to relate to his own children, like, you kids remind me of my kids. And then a smile came to his face, and the warmth came over his body, and all of a sudden, we were just God's children, you know, and we were having a human conversation.
But, yeah, so it was -- I think the issue today is not love or hate. Dr. King dealt with love, those who supported him; and hate -- by the way, Black and White -- and hate, who tried to repel him and who tried to hurt him. Today we're dealing with really radical indifference. People who don't care about you, they hate you. Private, before COVID-19, we're separated by increasingly private streets, private security, private homes, private gated communities, private schools, private university. Education was becoming a private asset, not a public good. Private islands, private lives -- really a bifurcation of these two worlds, the investor economy and the workforce economy.
And COVID has illustrated and amplified those two differences. This one here is going to recover with this off you, and this one here is in a recession, it feels like a depression. And our society can't survive that way. We're all in this thing together, sort of, the economy is consumer spending, 70%. I tell my rich friends, my rich friends needing my poor friends to do better, if only to stay rich.
So, I would say today that that banker didn't necessarily love me, but now he would know that he needs me.
Kline: What's the biggest barrier to building wealth in the communities that are traditionally underserved?
Bryant: We never got the memo on money, my last book on racial literacy, free enterprise, capitalism. What your viewers probably don't know, and I know your viewers are really smart, but most people don't know this, is that, after the Civil War and right where I'm sitting in Atlanta, was burned down and the March to the sea by the Union army as they broke the spirit of the Confederate army and convinced them they couldn't win. That's a very important point; it broke the spirit. The same thing happened with Black slaves; their spirits were broken so that they could be manipulated to work on these plantations, not put up a fight. And that depression persists today, by the way.
But this place was burned down. After the Civil War, Abraham Lincoln created a bank, on March 3, 1865, called the Freedman's Bank, chartered to teach free slaves about money and the free enterprise system, and to finance their new farms and the crops. And unfortunately, I think he was killed the next month. So, Black America never got the memo on free enterprise, capitalism, economics, ownership, entrepreneurship, the difference between making money and building wealth -- those things are different -- getting rich. Making money is different from building wealth; what's the mindset.
Anybody can get rich. I mean, a drug dealer can get rich. A gangster can get rich. That doesn't mean it is sustainable. So, we just never got the memo. So, we've been doing so much with so little for so long, you know, almost do anything with nothing, but we have not built wealth and have not been able to pass down generational wealth, it's almost been like a black swan moment that's lasted for 400 years. And now, in this new environment, I think there's a social justice reckoning that recognizes that we got to make peace with our past and that all people, including Black people, need to be part of this resurgence and the rebirth and the regrowth of the American economy.
Kline: COVID-19 has exposed some structural flaws. It's hitting minority communities much worse than it's hitting affluent communities. Are we going to learn some lessons? I mean, at times I feel hopeful and at times, I don't.
Bryant: Well, we got to first acknowledge that we're at war, Dan. We're at war with the virus. And you do things in a war that you don't do in peacetime. You break down barriers, you stop the Republican and Democratic crap, you cut the mess, you cut the crap, you stop arguing about little things, you stop having small skirmishes and start talking about what's the war battle plan. What's the strategy, again, what's the New Marshall Plan? You can't cut yourself out of this crisis.
By the way, we're sort of hemmed in a little bit, Dan, the trillions of dollars. Let's look at the -- you know, you might remember the GM bailout under Obama. The whole nation got into a flurry over a $3 billion bailout. Remember that -- we would have national debates, right? Look at the global economic crisis of 2009. That whole thing was less than $200 billion. Dan, we're at $6 trillion now -- we're nowhere near the end. They're debating $1 trillion to $3 trillion right now. And that just gets us to January.
There's no way you cut your way out of $8 trillion, $10 trillion of debt. You only can get out of it, is to grow your way out of that. And that's what happened after World War II. We were slogging along after the Great Depression, and we didn't catch lift until after World War II, when the government put all the stimulus in the system, the private sector benefited from that, we reimagined everything, and you had enough education -- I'm sorry, the rule was, again, as much education shoved down your throat -- the GI Bill, a mortgage for every returning vet, and apprenticeship for a new job.
Well, my friend, the governor, Gina Raimondo of Rhode Island, just started a program similar to that, Rhode Island Back to Work, and we're a partner with her in that. She's adopting a lot of what I'm talking about. We have -- I think you're going to start to see a lot of folks, Republicans trying to look like Democrats, [laughs] Democrats starting to sound a bit like Republicans. I think you're going to have a radical movement of common sense, because we are forced now to reinvent ourselves. And, yes, I am optimistic.
Kline: How much of it is about just having hope? And I think we've all learned this in the last five months, that it's been bleak, and then a little something happens, like, you know, the NBA came back last night, and just that little spark of hope, that, hey, my life isn't what I wanted to be right now, but here's three hours of normal. If you're someone who's stuck in this economic trap of just working, just to eat, just to keep a roof over your head, but someone like you comes in and just gives a little spark of hope that it can get better, that has to light a fire, right?
Bryant: Oh, that's everything. You know, at Operation HOPE we do financial coaching and counselling for people. And you know, it's not that we give them the magic prescription to their life, it's that, it's like Oprah on money, we're listening, we see you, we're paying attention, we care. You know, you think about the average family that's watching your show, not the wealthy, just the average family. They got too much month, at the end of their money, they're struggling, both parents are working, the TV is raising their kids. Then they're feeling distressed about the future, they don't believe their kids are going to do better than they are, and there's no private banker for them. You know, I have a private banker but I don't need him, I've got him on my mobile phone. But the person who needs the private banker, gets no attention.
So, just having us talk to them about their credit, talk to them with their creditors, help them get some stuff from their credit report. I mean, help them raise their credit score -- when you raise your credit score 40 points, Dan, imagine what that does to a single mother, raise their self-esteem, her confidence, her belief in herself, her trust in the system, her trust in banking, her trust and her confidence in government. Just from raising her credit score; her optimism.
So, you know, Dr. King had 70 employees, Dan. Seventy employees in a total budget of half a million a year. And the man changed the world and did it without firing a shot. That's the power of hope. So, yes, it's incredibly important, and it's not just in my name.
Gross: Welcome back to Motley Fool Money. About 2.5 minutes left for stocks on our radar. And I'll bring in our man, Dan Boyd, for a quick question. Jason Moser, you're up first. What do you got?
Moser: LivePerson (LPSN -0.30%), ticker LPSN. LivePerson is a business using artificial intelligence to power what they have. It's called the Conversational Cloud, essentially helping brands to communicate with their consumers. Gone are the days, or hopefully at least soon, gone are the days of the call center where you call and sit on the phone for one hour on hold. We live in an on-demand world now; customer service should be no exception there. And certainly, the COVID-19 tailwinds for a business like this are playing into it, just reported a very strong quarter. I really do think they are onto something in regard to the future of customer service and how brands interact with customers. So, I'm going to be digging further into this one for a couple of the services.
Gross: Dan, you got a question about LivePerson?
Dan Boyd: Certainly, Ron. I was looking at their stock price today, Jason, and it seemed like this week they got a huge bump. Any reason as to why?
Moser: They did. Yeah, they reported earnings. It was a tremendous quarter. I think 29% revenue growth. And, again, going back to the pandemic there, it's really changed the paradigm there for call centers, a lot of call centers closing down and folks are using more mobile technology to communicate with the brands and consumers.
Gross: Andy, less than a minute left. What are you looking at?
Cross: Yeah, I like Health Catalyst (HCAT 2.95%), HCAT. It provides data analytics software to big healthcare organizations, reports earnings coming up in the next week or so, and has a massive data warehouse that they use and run analytics against. Had suspended guidance with all of the struggles that healthcare centers are facing right now, but I wanted to see what they are talking about from their clients, and if they are starting to see more and more interest from some of those big healthcare centers that are going to rely much more on data analytics going forward.
Boyd: Yeah, Andy, is Health Catalyst under any pressure under COVID-19, or they seeing some smooth sales?
Cross: Yeah, no, some pressure, definitely, because surgical procedures have dropped off so dramatically, and so many of their centers rely on that, but they also rely on data analytics going forward, Dan.
Gross: Dan, you got a favorite?
Boyd: Yeah, I'm going to go with Health Catalyst here. I think it's a good stock.
Gross: Jason Moser, Andy Cross, guys, thanks for being here.
Cross: Thanks, Ron.
Moser: Thank you.
Gross: I'm Ron Gross, thanks for listening, and we'll see you next week.