This earnings season, plenty of companies are reporting promising results.
But past results aren’t the only thing companies announce on these calls. They also reveal future targets and plans for growth.
And many companies report that they’re preparing for a huge shift in consumer behavior. They’re finding ways to adjust their business models to take advantage of this massive movement.
They know it could offer them explosive growth and profits. So, they’re going all-in on one mega trend…
3 Headlines for the Week:
Subscription Models Are the Way Forward
No. 1: Apple Reaches 660 Million Paid Subscriptions … and Subscription Revenue Soars 27%
Takeaway: Apple blew straight past Wall Street’s earnings expectations. The Big Tech giant reported its highest-ever revenue for a first quarter. And a big part of that revenue growth came from the Services side of its business.
The Services segment includes Apple’s subscription-based products — like Apple Music and Apple TV+. People pay a fee for these services every month. Revenue for this part of its business increased by 27% year over year. That’s an all-time record. And it doesn’t plan on slowing down.
The company grew its paid subscriber base by 28%, reaching a total of 660 million paid subscribers. And CEO Tim Cook commented that part of Apple’s objective will be to create more high-quality content to attract both subscribers and new content creators.
Apple is no stranger to profits and growth. It always does well with its popular iPhones and devices. But even this stable business is already benefiting from the subscription space. And it’s not the only big corporation jumping in…
No. 2: Tesla Is Aiming to Roll Out Its Own Subscription Service Soon
Takeaway: On its recent earnings call, electric vehicle maker Tesla revealed it’s also tapping into the subscription model.
The company intends to offer its semi-autonomous driving feature — called Full Self-Driving, or FSD — on a subscription basis. The FSD option on Tesla’s popular Model 3 and Model Y cars currently costs an additional one-time payment of $10,000. That’s quite a price hike on an already expensive car.
But the company believes that offering FSD on a monthly subscription will make it more accessible for customers. The pricing details for this new plan are still in the works, but Tesla’s confident it’ll be able to roll it out very soon.
Big-name, trendy companies like Tesla and Apple aren’t the only ones taking advantage of this business model, though. Smaller businesses are finding out just how beneficial it can be, too…
No. 3: Subscription Models Are Keeping Some Businesses Afloat
Takeaway: When you think of subscriptions, the first ones that come to mind are most likely your TV, music or other media services. But what about flowers?
Flower shops were among the businesses impacted most by the pandemic. They rely heavily on foot traffic and daily sales or big events like weddings. So, when COVID-19 hit and lockdowns went into effect, their sales evaporated almost overnight.
Yet, many have managed to survive against the odds — almost entirely thanks to online sales and subscription packages.
During isolation, people have turned to plants and flowers to liven up their homes and reach out to friends and family that they can’t visit. For those without a green thumb, recurring bouquets have been popular. In fact, Flowers for Dreams, a Midwest-based delivery service, recently saw its subscription orders quadruple in anticipation of Mother’s Day.
It goes to show just how powerful a subscription-based business model can be. But companies aren’t the only ones that can take advantage. Investors like you could see profits as well…
1 Way to Profit:
The Company at the Heart of the Subscription Revolution
Alpha Investor Founder and Wall Street veteran Charles Mizrahi calls this global stampede toward subscription models the Subscription of Everything (SoE) mega trend.
He tells me that subscriptions are the “Holy Grail of sales and profits.” Here’s what he said the other day:
Virtually any business can tap into the power of SoE and maximize its profits.
Unlike one-time sales, subscription-based models basically put a company’s sales and revenue on autopilot. And a steady, predictable flow of income helps create gigantic profit margins.
That’s why SoE is showing up in every industry you can imagine. From entertainment and fashion … to travel and financial services … and even to the agriculture and carpet industries.
And when it comes to services where there’s no physical product to manufacture, package and ship … costs are low to nonexistent. Profits can soar even higher.
We’re seeing it happen right before our eyes.
Big corporations like Apple and Tesla are either ramping up or plunging into SoE services. And even small businesses like struggling flower shops can use SoE to turn their companies around.
Just like the internet did in the 2000s, SoE is changing how we live. And this moneymaking industry could be worth $2.7 trillion by 2030.
The good news is that Charles has found the one company at the heart of this revolution. It provides the essential foundations for any company trying to take its business to the next level using SoE. And as the SoE space continues to grow, demand for this company’s systems will increase.
Investors who get in early today could see up to 1,000% gains over the next few years. That’s why Charles has put together a brand-new special report revealing all his research on his top SoE stock pick. You don’t want to miss out on this opportunity. Find out how you can access this report by going right here.
1 Question for You:
How Is SoE Transforming Your Life?
Charles and his family are subscribed to several media services, including Netflix, Disney+ and Apple Music. And I have several of my own subscriptions, including one for a plum tea that isn’t easy to buy in the U.S.
You’re likely a part of this subscription movement, too, even if you didn’t realize it before. Let us know how SoE is benefiting your daily life — or your portfolio — by writing in right here.
Regards,
Senior Managing Editor, American Investor Today
