Using machine learning and a set of linguistic algorithms that are specific to earnings calls, analyst firm CB Insights analyzes and visualizes millions of words in order to determine what gets the most mentions by companies on their earnings calls. These insights can help to determine where companies are headed and what the focus should be for their executives.
YouTube, for instance, has become a hot topic of conversation -- getting more mentions by Google on earnings calls than Google Search, Android, or any of Google's newer initiatives, according to CB Insights.
Google acquired YouTube in 2006, and for years analysts wondered how the company would generate revenue from the site. Now it has become a "primary revenue driver — and testing ground for new ad strategies," according to linguistic data analyzed. It's important to note that advertising agency executives say there has been a focus on search within YouTube.
Google chief executive officer Sundar Pichai, and Google chief financial officer Ruth Porat, however, focus on other topics during earnings calls. The data shows both have similar patterns across all four language algorithms with a sentiment rating of .90 and .82, jargon rating of .0249 and .0143, respectively.
Here’s how it works. The algorithms focus primarily on language rather than the subject. All scores can be applied to an individual response on an earnings call that was spoken by an executive. An analysis of the grade level of the conversation, sentiment, jargon and vagueness is provided.
Many insights that can be gleaned from the data. For example, Google began talking more about voice and “innovations” in 2018, compared with Microsoft, Apple, Facebook and Amazon. Microsoft talked more about innovation in 2017.
Microsoft’s cloud products overtake Windows, and businesses are passing up consumers. Amazon’s conversations highlight customers, Prime memberships and North America, and the company has been talking more about fulfillment and distribution lately.
Facebook founder Mark Zuckerberg has had the most positive outlook, but uses the most jargon and vague language of all the Facebook executives.
China is top of mind for execs at Apple, followed by Amazon. And finally, amazon doesn’t care about the competition, but Google and Apple talk about each other, according to CB Insights data.