Earnings analysis: Extract data and pinpoint information, faster

Kailey Raymond


June 3, 2021

Earnings season. The quarterly event that means quick turnarounds, tight deadlines and analyzing tiny, easy-to-miss details. 

The ultimate goal during earnings for many professionals is to spot the quarter-over-quarter differences in guidance numbers, performance metrics, and uncover the strongest viewpoints, positive or negative from commentary. These slight variations and small nuances are business-critical as they serve as the foundation for many investment decisions, financial models, due diligence reports, and corporate strategic initiatives. With today’s competitive markets, time is of the essence with the companies quickest to make relevant decisions based on the information available, often rewarded for their speed, agility and adaptability.

Reasons to analyze earnings documents

You might be among the diverse set of professionals that pay close attention to earnings calls to help inform your investment or strategic decisions. Maybe this sounds familiar?

The earnings workflow

Whether it’s a peerset, competitive landscape, portfolio, sector, client list, or coverage universe, if you’re paying attention to earnings, you’re likely tasked with the earnings season pre-work of looking back on the key insights from previous calls before combing through current earnings transcripts each quarter. After collecting every relevant document, you’ll identify how the company discussed key topics and share your findings with relevant stakeholders. The problem? With high call volumes in a condensed time frame, the manual task to synthesize the most salient information and report out on the critical details hidden within these calls means long hours and the potential for missing insights.

Advancements powering the future of earnings research

Technology advancements now allow you to automate much of the once-manual line-by-line read throughs that used to define earnings workflows. From understanding nuances in tone and extracting and aggregating key themes and performance metrics to highlighting quarter-over-quarter shifts in commentary, new technology is helping make quick work of detailed earnings research. At the forefront of these tech breakthroughs are AI algorithms that are now powering the future of earnings research.

Automatically extract changes in strategy

AlphaSense’s AI algorithms are trained in the language of business and can read through and analyze millions of data points within text-based documents like earnings transcripts, in real-time. As they scan through earnings calls, these NLP algorithms pick up on the nuances in human language and understand related terms to provide a comprehensive analysis. This ‘smart synonym’ AI technology also automatically aggregates and groups together the most relevant topics and KPIs from the transcript and showcases the most impactful commentary.

These easily digestible document-level themes and KPIs allow you to save time by navigating directly to the most critical topics and associated mentions throughout the transcript. AlphaSense’s algorithms then analyze these document-level themes quarter-over-quarter to provide a high-level understanding of the topics a company is discussing most frequently, whether mentions have a positive or negative sentiment, what topics are unique to them and how those themes have changed over time.

Pooling those document level insights into one single view, Company Topics enables quick insights, generates new ideas and compels deeper analysis on critical themes found within earnings transcripts. Allowing AI to be your guide and direct you to the most relevant information within an earnings call not only saves time, it also improves investment theses.

Benchmark language and analyze shifts in commentary

The NLP and Deep Learning algorithms powering AlphaSense’s theme extraction are also scanning through transcripts with an ear for shifts in executive commentary. In allowing AI to pinpoint minor inflections in tone, you can simplify the benchmarking process or easily uncover inconsistencies in how a company speaks to a topic each quarter – something that both financial services and investor relations professionals care about deeply.
Historical context, consistency in messaging and tonality were once tasks that only a human could accomplish. With NLP reading through millions of pages of text-based documents and proactively providing context, sentiment analysis and summaries, you can spend more time on strategic activities.

Simplify tedious workflows

While qualitative analysis is important during earnings season, quantitative measurements of a company’s performance are also critical. To mitigate the risk of inaccurate data and speed up the process of manual data-entry, AlphaSense allows you to export modeled time-series data on balance sheets, income statements, and cash-flow statements. The quantitative tools suite extends beyond modeling to extract or clip tables from SEC filings, broker research, global filings, company presentations, and ESG reports to boot.
In using AlphaSense’s suite of productivity tools, one analyst found that he saved 25% of his time by using AlphaSense during earnings, allowing him to reallocate his time to strengthen and refine his strategy.Check out this video of best practices in leveraging AI to increase productivity and beat deadlines during earnings season or unlock a 2 week free trial of AlphaSense here.

Here are a few scenarios and how AlphaSense’s smart AI can tackle your earnings workflow:

Role Why you care about earnings What you might be paying attention to in earnings documents
Investor Relations (IR) Earnings is a megaphone to communicate key performance metrics, strategic initiatives and growth plans to investors. IR professionals help write the script and pay close attention to the clarity and consistency of messaging over-time.
  • Tone of executive commentary
  • Analyst questions of peers / competitors / industry leaders
  • The sentiment around how key topics have been addressed
Competitive Intelligence (CI) Earnings is an insightful window for CI to discover new product releases, understand the impact of different business lines and map overall performance of your competitive landscape.
  • Announcements that might impact strategy
  • KPIs and performance of business lines of competitors
  • Key strategic themes and how they are trending
Corporate Strategy With eyes to the future, corporate strategy teams use earnings to assess potential threats and weaknesses of their current strategy and get smart on new companies or topics to generate new ideas.
  • Emerging themes industry leaders and peers are talking about 
Private Equity & Corporate Development During earnings season, they’re looking for unique insights to help improve their investment theses.
  • Changes in companies’ positioning on core topics over time
  • Emerging themes and risks within their market
Buy or sell side Earnings represents an opportunity to find data points that support investment recommendations or identify risk across their portfolio.
  • Changes in themes and tone in management commentary
  • Most recent financial performance information
Role Scenario

How to do it in AlphaSense

Investor Relations (IR) Identify inflection points in executive commentary from last quarter’s call Turn Sentiment on to gain a visual representation of the document tone
Competitive Intelligence (CI) Report on KPIs and biggest themes competitors are discussing Leverage document themes & KPIs to save time in identifying the most salient topics of the call
Corporate Strategy Discover emerging topics from industry leaders Find topics that a company is talking about more often this quarter, than last with momentum scoring
Private Equity & Corporate Development Uncover how a company has spoken about a topic on their past 10 transcripts Gain instant QoQ context by seeing every mention of a topic in one single view with Snippet Explorer
Buy or sell side Update models to reflect most recent earnings data Seamlessly export the past year’s worth of financial data into Excel with Table Extraction
Share this article

Kailey Raymond

A customer-obsessed and data-driven marketer, Kailey Raymond leads Customer Marketing at AlphaSense. Previously, she was an early employee at two high-growth tech startups, in charge of launching new markets and building local communities.

More like this

Market trends

S&P 500: Q4 2020 earnings roundup

Earnings season is in full swing, with nearly all of the S&P 500 holding earnings calls over the last few...

Clock Icon15+ min read