Motley Fool Money: Rule Breaker Earnings Roundup

Episode Date: February 10, 2026
Host: Emily Flippen
Analysts: Jason Hall, Toby Bordelon

Overview

This episode delivers a rare burst of positive news during an otherwise tough earnings season, spotlighting fourth quarter results from three so-called "rule breaker" stocks: Spotify, Datadog, and Ferrari. The analysts discuss what each company’s standout report signals for investors and examine whether these sparks of outperformance are fleeting or have staying power in challenging markets.

Key Discussion Points & Insights

1. Spotify: Breaking Records and Expectations

• Segment Start: 01:18

• User Growth & Monetization

  • Spotify added a record number of users, now at 750 million monthly active users (MAUs) and 290 million paid subscribers.
  • Operating margin topped 15% for the first time, the best in company history.
  • The gap between MAU and premium subscriber growth is narrowing: MAUs up 11%, premium subscribers up 10%.

• Resilience & Optionality

  • Continued shift from ad-supported to premium revenue, with ad revenues down 4% for the quarter but less impactful thanks to premium growth.
  • Management innovation cited: audiobook hours and upcoming integration with physical books for seamless user experience. (03:36)

• Upper Growth Limits?

  • Toby Bordelon: "At some point, sure, we're probably going to hit an upper limit. There is an upper limit to everything. That's just the reality, right? ...But the good businesses find ways to keep growing by expanding their business into other products and services, or increasing the value of what they offer so they can justify those price increases." (04:49)

  • Focus is shifting to profitability and efficiency, not just growth; it's the slowest revenue growth since 2018, but profitability is rising.

• The Rule Breaker X Factor

  • Emily Flippen: "The big mistake investors make with companies like Spotify ...is assuming that things do have to slow, right? We tend to discount innovation and optionality in business models." (06:04)
  • Discusses the trouble of modeling innovation and highlights belief in management vision as key for "rule breaker" stocks.

• Notable Quote

  • Jason Hall: "What year does Spotify buy Netflix? That's my question." (05:59)

2. Datadog: Beating the AI Apocalypse Narrative

• Segment Start: 08:25

• Earnings Outperformance

  • Despite widespread gloom around software and AI-driven disruption, Datadog posted nearly 30% year-over-year sales growth in Q4.
  • Management credits AI-powered features for customer demand and positions AI as a catalyst, not a headwind.

• Changing the Market Narrative

  • Toby Bordelon: "Datadog did that this quarter, showing how AI is a demand catalyst for them versus being a headwind. Management directly tied the momentum we're seeing in the raw numbers ...to their customers using their AI features." (09:22)

  • Datadog benefited from timing—reporting after the peak of recent market fear, allowing for a positive narrative shift.

  • The analysts note that framing and storytelling matter as much to short-term stock performance as real numbers, especially in volatile markets.

• AI and Enterprise Software: Overblown Fears?

  • There’s discussion around whether AI will erode margins or cause massive disruption across SaaS, with the consensus being that the threat is overhyped but not unfounded.

  • Jason Hall:
    "I don’t think AI is some panacea that turns steel companies into software builders. Companies want to utilize AI tools ...to help them do whatever their business is better, not rebuild every software wheel just because AI lets them do it." (12:24)
    Uses a vivid analogy comparing technological change in agriculture to AI’s impact on software.

• Profit Model Concerns

  • Concern expressed over historically high margins for software companies potentially coming down as AI lowers barriers to entry and increases competition, causing pricing pressure. (14:34, 15:22)

• Notable Quote

  • Jason Hall: "We don’t see McDonald’s moving into farming just because technology is making farming more automated. They're letting the farmers leverage those things to deliver better agricultural products." (13:06)

3. Ferrari: Scarcity, Brand Power, and the Electric Future

• Segment Start: 16:38

• Earnings Recovery

  • Ferrari shares rebounded ~10% after last quarter’s record drop caused by conservative guidance; new results affirmed strength and a solid order book extending through 2027.

• The Power of Scarcity

  • Jason Hall: "If we operate through that really important lens of Ferrari as a luxury brand and not a car company, then yes, I do think it can continue to deliver more of the long term success we've seen." (17:24)

  • Ferrari’s model—always producing one car fewer than demand—remains effective as the pool of ultra-wealthy grows globally.

  • Emphasis on Ferrari's ability to control price and maintain exclusivity even as revenue and net income have soared since its 2016 IPO.

• Electric Vehicle (EV) Transition

  • The company reduced long-term EV guidance from 40% to 20% of lineup, but demand for exclusivity is expected to buffer any transition friction.
  • Toby Bordelon: "They don’t actually need to transition to EVs. They need to be in the market because ...some of their customers want it. It needs to scream Ferrari. That’s critical. But the model is just very, very different than a typical automaker." (19:25)

• Designing for Brand, Not Volume

  • Reference to Jony Ive (formerly Apple’s lead designer) designing the new EV’s interior, signaling Ferrari’s commitment to quality and branding.

  • Process for obtaining a Ferrari is exclusive: “You don’t order it, they tell you that you can order it." (21:18)

• Notable Quote

  • Emily Flippen: "If you can't buy a Ferrari, buy Ferrari shares. It's a problem with the K-shaped economy that doesn't seem to be going away anytime soon." (18:46)
  • Toby Bordelon: "Pulling back from 40 to 20%, maybe that even raises the value. They're creating more exclusivity." (21:50)

Memorable Moments & Quotes

• Spotify’s Strength and Implied Optionality

  • Emily Flippen: "There's sometimes optionality and variability built into platforms that is simply unpredictable today...what you're doing in that case is really investing in a management team, investing in vision and innovation, the things that you quite literally can't put into a spreadsheet." (06:04)

• Datadog and the Role of Narrative

  • Toby Bordelon: "Should [the narrative] matter versus the actual numbers? Probably not, but it does." (09:22)

• Ferrari’s Brand Power

  • Jason Hall: "Supplying the market with exactly one less Ferrari than it demands." (17:24)

Takeaways

• Spotify is redefining expectations for digital streaming margins while innovating beyond its core product.
• Datadog serves as a counterpoint to AI-driven pessimism in software, buoyed by timely messaging and product innovation.
• Ferrari demonstrates the enduring power of scarcity and brand management, even amid shifts to EVs and macro volatility.

The commonality across these three companies is a deep understanding of their customers and an ability to innovate or defend their market positioning in turbulent times.

Episode Timeline

• 01:18 - Spotify Earnings Deep Dive
• 08:25 - Datadog’s Outperformance Amid AI Fears
• 16:38 - Ferrari as Luxury Icon and EV Contender
• 21:41 - Conclusion: Exclusivity and Customer Focus Are Keys to Rule Breaker Outperformance