Motley Fool Money – “Earnings, Earnings, and (You Guessed it) More Earnings”

Date: February 19, 2026
Host: Tyler Crowe
Guests: Matt Frankel, Jon Quast

Episode Overview

In this episode, Tyler Crowe is joined by longtime Motley Fool contributors Matt Frankel and Jon Quast for a rapid-fire look at the latest earnings news. With the heart of earnings season upon them, the hosts explore a broad swath of consumer- and finance-focused companies, including Walmart, Booking Holdings, Etsy, eBay, Lemonade, and Klarna. The discussion highlights major financial moves, underlying consumer trends, and the outlook for several high-profile businesses. The analysts bring their signature blend of skepticism, optimism, and deep-dive insight to parse through the numbers investors need to know.

The Pulse of the Consumer: Quick Earnings Lightning Round

[00:05–07:39]

Walmart

• Beat expectations: Earnings of $0.74/share, with typically conservative guidance for the upcoming year.
• Omnichannel momentum: Significant progress in e-commerce and delivery, driven by operational efficiency.
  • Quote: “The fastest growing part of Walmart’s market share is households with annual income above $100,000… it could be a sign of a weakening economy.”—Matt Frankel [01:31]
• E-commerce record: Walmart’s e-commerce penetration hit an all-time high of 23%.
  • Quote: “Its digital business is quite strong… it’s leading to operating income growth that is outpacing revenue growth.”—Jon Quast [02:28]

Booking Holdings

• Stock decline despite strong results: Shares down ~7% post-earnings, despite beating expectations, raising its dividend, and guiding for 15% revenue growth.
• Stock split: Announced a 25-to-1 split, surprising some given the CEO’s past comments.
• Business highlights: Merchant revenue up 25% year over year (YoY), agency revenue down 7% YoY. The preferred merchant-driven revenue is accelerating.
  • Quote: “This is exactly the kind of quarter that Booking wants to see. It was good growth. It’s a head scratcher that the market didn’t like it.”—Jon Quast [03:31]

Etsy & eBay – The Depop Deal

• Ebay acquires Etsy’s Depop unit: Both stocks rallied after earnings and deal news.
• Win-win: Debate on whether eBay or Etsy emerges as the bigger winner.
  • Quote: “Ebay is acquiring Depop for a little bit more than its trailing gross merchandise sales… Etsy gets this huge cash infusion. So I say it’s the bigger winner.”—Jon Quast [05:12]
  • Matt Frankel adds: “I’m a little more toward the win-win idea… the market reacting positively for both of these companies tells me this is a good deal for both.”—Matt Frankel [06:55]
• Caution on eBay’s capital allocation: eBay returning more capital than it generates, which may squeeze future shareholder returns.

Macro Takeaways – The Consumer and Adtech Trends

[07:39–10:24]

Adtech Acceleration

• Major digital platforms (Walmart, eBay, Booking) are seeing an advertising boom.
  • Walmart’s ad business grew 46% in fiscal 2026 (including Vizio acquisition), eBay’s ad revenue reached 18% of total, and Booking’s advertising up 11% YoY.
  • Quote: “These are digital platforms with large user bases… enjoying an advertising revenue boom.” —Jon Quast [08:13]

Consumer Under Pressure

• Walmart’s customer base shift and booking’s cautious travel demand are early signals.
• The desirability of resale/secondhand platforms (Etsy/eBay/Depop) reflects budget-conscious shoppers.
  • Quote: “The fact that the used clothing retail platform is such a desirable asset… shows that consumers are looking for ways to maybe save a little money.” —Matt Frankel [09:28]

Deep Dive: Lemonade Earnings

[11:03–16:35]

Lemonade’s Contradictory Picture

• Growth: In-force premiums up 31% YoY; customer base nearing 3 million. Nine consecutive quarters of accelerating growth and improved loss ratios.
• Profitability debate: Adjusted free cash flow is now positive, but GAAP profitability still out of reach.
  • Quote: “Lemonade is now profitable on an adjusted free cash flow basis… but I’d love to see them get their stock based comp under control.”—Matt Frankel [11:35]
• Concerns: High customer acquisition costs, especially with the Lemonade Car auto-insurance push. Overhead expenses rising; company still reliant on selling equity.
  • Quote: “All this fabulous growth… comes because they’re spending a boatload of money to acquire customers.” —Tyler Crowe [13:12]
• Customer love: Exceptionally high Net Promoter Score (~70)—outlier compared to an industry with negative averages.
  • Quote: “I don’t think this is a company you should take off your watch list entirely, because it does seem like its customers really do love it.” —Jon Quast [15:29]
• Summary: Both the bull and bear cases boil down to growth pacing ahead of sustainability—bullish on customer satisfaction and innovation, bearish on underlying profitability.

Klarna: Buy Now, Pay Later’s Rocky Quarter

[17:22–21:13]

Earnings Pain

• Market reaction: Shares plunge 26% after a quarter marked by 38% revenue growth but 53% increase in transaction costs.
• Rising risk: Higher reserves for credit losses, especially as Klarna pivots to “Fair Financing” (long-term banking products).
  • Quote: “The market hates higher risk and there’s higher perceived risk with Klarna… Rising reserves for credit losses are a concern.”—Matt Frankel [18:30]
• Stagnant revenue per customer: Flat YoY, despite efforts to deepen engagement.
• Strategic shift: Migration away from pure Buy Now, Pay Later towards broader, higher-risk banking products.
  • Quote: “It could be that the banking side of the business is simply growing too fast for comfort.” —Matt Frankel [18:30]
• Long-term optimism: Revenue has doubled and operating expenses dropped 8% over three years. Adoption trends remain strong, with analogies drawn to past concerns about delivery platforms like DoorDash and Uber.
  • Quote: “It is so hard for me to dismiss blindly… the adoption trends do appear to be in your favor.” —Jon Quast [19:52]
• Caveat: The challenge is balancing growth with acceptable risk profiles, avoiding the pitfalls of becoming “just another bank.”

Notable Quotes & Timestamps

• “The fastest growing part of Walmart’s market share is households with annual income above $100,000… it could be a sign of a weakening economy.”
  — Matt Frankel [01:31]

• “Its digital business is quite strong… it’s leading to operating income growth that is outpacing revenue growth.”
  — Jon Quast [02:28]

• “This is exactly the kind of quarter that Booking wants to see. It was good growth. It’s a head scratcher that the market didn’t like it.”
  — Jon Quast [03:31]

• “Ebay is acquiring Depop for a little bit more than its trailing gross merchandise sales… Etsy gets this huge cash infusion. So I say it’s the bigger winner.”
  — Jon Quast [05:12]

• “The market reacting positively for both of these companies tells me this is a good deal for both.”
  — Matt Frankel [06:55]

• “These are digital platforms with large user bases… enjoying an advertising revenue boom.”
  — Jon Quast [08:13]

• “The fact that the used clothing retail platform is such a desirable asset… shows that consumers are looking for ways to maybe save a little money.”
  — Matt Frankel [09:28]

• “Lemonade is now profitable on an adjusted free cash flow basis… but I’d love to see them get their stock based comp under control.”
  — Matt Frankel [11:35]

• “All this fabulous growth… comes because they’re spending a boatload of money to acquire customers.”
  — Tyler Crowe [13:12]

• “I don’t think this is a company you should take off your watch list entirely, because it does seem like its customers really do love it.”
  — Jon Quast [15:29]

• “The market hates higher risk and there’s higher perceived risk with Klarna… Rising reserves for credit losses are a concern.”
  — Matt Frankel [18:30]

• “It is so hard for me to dismiss blindly… the adoption trends do appear to be in your favor.”
  — Jon Quast [19:52]

Final Thoughts

The episode delivers rapid and insightful analysis of a jam-packed week in earnings, underscoring major trends for investors to watch: the resilience but pressure on consumer spending, the rapidly rising importance of platform-based advertising businesses, and the difficult transition that unprofitable innovators (like Lemonade and Klarna) face as they seek to scale. The analysts’ candid debates capture both the opportunities and the perils in today’s markets—making this a must-listen for any long-term investor looking to separate the signal from the noise in earnings season.