Business News

The app that grabbed Wall Road's consideration and made successful calls as simple as listening to podcasts

After Hadi Yousef began investing in stocks, he soon learned the importance of listening to a company's earnings call. It wasn't long before the then Indiana University student realized that tracking them down for a number of companies was a challenge.

"About that time, five years ago, I really got into podcasts, and that was our goal: to make listening to profit views as easy as listening to podcasts," Yousef told CNBC's The Exchange on Monday.

That's why Yousef created the aptly named Earnings Calls app, which compiles audio recordings of quarterly earnings calls for more than 2,100 publicly traded companies. The app has more than 10,000 active users.

Both numbers are growing. Yousef, 26, said the app is actively taking requests for new businesses and adding new users. Last week, earnings calls received resounding endorsement from money manager Josh Brown, who works for CNBC's "Mid-Term Report" and writes The Reformed Broker blog.

In a post titled "My Favorite New Investment App in the World," Brown lamented the challenges of searching corporate investor relations pages for records of earnings calls and then keeping web browsers open while listening. But Yousef's app largely solved those problems, Brown wrote, and "you should be using it today."

The earnings call for Darden Restaurants in Hadi Yousef's smartphone app Earnings Calls.

Kevin Stankiewicz

The growing attention for earnings calls comes after a wave of young investors started buying stocks during the Covid-19 pandemic. Online brokers saw a surge in new accounts as some investors viewed the coronavirus-induced declines earlier this year as a "moment to buy generations." At the same time, questions were raised as to whether first-time investors really know the basics of investing.

Brown, who is also CEO of Ritholtz Wealth Management, emphasized the importance of listening to the profit calls from retail investors trying to research stocks. He wrote on his blog post that he believed they were "the best bang for your buck in terms of time spent versus what you bring with you".

Yousef, who is from Evansville, Indiana, said he was in college when he started investing in the stock market. He tried to be an informed investor looking for information about companies in hopes of figuring out what makes a leader from a weak one in an industry.

"I would read news articles, maybe the random analyst report I could find, and I would see references to a profit call. At the time, I didn't really know what a profit call was … but eventually I continued to see references enough to where I finally found one and listened to it, "he said.

It was immediately clear how useful listening to management teams can be to investors, he said, "and the world of the difference it makes just trying to understand what a company is about."

Yousef, who said he's always been an entrepreneur, said he had an early prototype for earnings calls around August 2016, about a year after the idea hatched. To help develop the app, he introduced the concept to various entrepreneurial competitions, he told CNBC in a follow-up call, and ultimately secured just over $ 40,000 in cash.

Earnings Calls went through about 10 iterations to get to where it is today, Yousef said. The company he founded and operates the app, Borsa Finance, has two other employees and an intern.

"Really, we've grown organically to this point, just word of mouth, a person hearing about it and sharing it with their coworker or posting it on Twitter or something," Yousef said.

The app relies on an internal database that contains the data of the earnings reports and the times of the calls and it takes work to keep them up to date. "Planning is a very insane process, especially when you multiply that for thousands of companies," he said.

The footage will be uploaded to the app "within an hour … of the live call," said Yousef.

Last year, Yousef announced it was offering premium features on the app that allow subscribers to download calls and receive notifications when they are uploaded for $ 9.99 per month or $ 99.99 per year.

He said the central question for future earnings calls is, "What additional features can we build on this library that are only possible because we created this library?"

"In a way, solving the problem of making it easier to tap profit calls has created additional challenges that we can solve," he said.

Related Articles