Goldman Sachs analysts are underwhelmed by the new Goldman Sachs-Apple card

Goldman Sachs research analysts are less than impressed by their own bank's joint credit card with tech giant Apple.

The card, revealed Monday at an elaborate Apple event, is hamstrung by the still-limited reach of Apple Pay, according to analysts led by Rod Hall, a senior equity analyst at the bank. Users will get 2 percent cash back on purchases at merchants who accept Apple Pay, and just 1 percent where Apple Pay isn't accepted.

"Even though Apple Pay is becoming more available, we would still expect a large percentage of transactions to be done at the 1% return level (using the physical card) so we would expect the typical consumer to perceive the cash return rate to be OK but not great," the analysts wrote.

Apple Pay, the technology that allows people to use their iPhones to make digital payments, has steadily gained in acceptance since its inception in 2014. Apple CEO Tim Cook said Monday that it will be accepted at more than 70 percent of U.S. retailers and in 40 countries by year-end.

But it's still not as ubiquitous as traditional cards that run on the Visa or Mastercard network, some of which offer 2 percent or more in potential rewards. Apple had to create a titanium physical card for situations where Apple Pay isn't taken.

Part of the issue for Apple is that it's so massive, it's hard to move the needle with new products. The Goldman analysts assumed that Apple Card will garner 21 million users who spend $1,000 a month, generating $882 million in revenue. But that's a less than 1 percent boost to analysts' consensus earnings for 2020.

As a result, the card will probably have "little short term earnings impact" for Apple, according to the analysts.

— With reporting by Michael Bloom

You Should Pay Attention To This Ignored Trend...

Many traders ignore seasonal patterns, simply because they're based on the calendar. 

But I'm here to tell you that seasonal trends are important, and there's a particular one that I want to highlight this week. 

To find a seasonal trend, an analyst calculates how prices performed on a certain day in the past. For example, we know that since 1950, March has been an "up" month for the S&P 500 64% of the time. Since there's normally about a 59% chance of an "up" month, that's a slight seasonal bias to the "up" side. 

However, that's not really a tradable seasonal pattern because it doesn't offer a very strong signal. An example of a strong signal would be one that tells us there is a 75% chance for a market gain in the next week, or if the probability of a gain in the next week is significantly below average. 

...which is exactly what the charts are showing us right now. 

For the next two weeks, seasonals are weak and that tells us to expect a pullback in the broad stock market. 

There are several ways to look at seasonals. Two of the more popular techniques are shown below in the chart of the S&P 500. 

The solid blue line on the chart shows the seasonal trend based on how the index has performed each day. This is based on the percentage change in the price of the index. At the bottom of the chart, each bar shows how often the index delivered a gain on any particular day. The size of the price moves is ignored. Red bars indicate the index moved higher less than 50% of the time on that particular day. 

According to both techniques, seasonals are bearish into the end of the month. 

Now, many traders will likely ignore these patterns because they believe there is no relationship between the stock market and the calendar. They're wrong. 

One example of the relationship is the fact that companies deliver earnings reports at about the same time of the year each quarter. That's one reason why we see a seasonal pattern in individual stocks. That pattern can be less pronounced in broad indexes, but the current pattern is easily explained. Many investors are preparing for taxes and could be taking money out of the stock market to pay their upcoming bills. 

Based on the chart above, there is a bearish seasonal bias for the next few weeks. But, while seasonal patterns can be useful, I don't believe they are enough to drive trading decisions. They could be considered as just one factor in the trading process. 

Other Bearish Factors I'm Watching
I believe momentum is confirming a short-term bearish outlook for the market. The next chart shows the S&P 500 with my Profit Amplifier Momentum (PAM) indicator at the bottom. The 200-day moving average (MA) is also shown. 

PAM did not confirm the price action and remains below the level seen at the February highs. This is a small divergence, but, coupled with seasonals, it is enough for me to continue being cautious. 

Looking beyond technical indicators, a cautious outlook is reinforced by fundamentals and economic data. 

By almost every standard fundamental measure, the stock market is overvalued. That's not a "sell" signal by any means, but it does suggest that the decline will be deeper than average when selling does begin. If there is a recession, the average decline in the S&P 500 is more than 35%. 

Economic data is concerning, the latest example being last week's report that the core trend in industrial output remains weak. Economists with Well Fargo noted: 

Industrial production rose a modest 0.1% in February. This followed a decline in January, which was entirely due to weakness in manufacturing. This core weakness remained in February, as manufacturing output fell 0.4%. 

The Fed is no doubt watching the two consecutive declines in manufacturing. At the very least, this release reaffirms their patient stance on further policy tightening. 

In a separate release this morning, we learned that the NY Fed's Empire Index fell to 3.7 in March, suggesting a near-term rebound in manufacturing activity remains limited. 

Many analysts like to attribute weaker-than-expected economic reports to unique factors, and the government shutdown is proving to be a convenient scapegoat. Bullish analysts claim that the data collection process was affected by the shutdown and numbers just aren't reliable right now. 

However, last week, Austan Goolsbee -- a professor of economics at the University of Chicago's Booth School of Business (also a former adviser to President Barack Obama) published an article in The New York Times that gave me pause. 

Goolsbee noted: 

...recessions are hard to recognize at the start. Looking back, for example, we know that a recession officially began in April 2001, yet scarcely anyone understood that then. In June 2001, only 7 percent of economists in the monthly Blue Chip survey believed a recession was underway. In the months before that 2001 recession began, only 16 percent of economists expected that a recession would start within the next year. 

Action To Take
As I mentioned earlier, you shouldn't trade based on seasonal alone. But the weak economic data I'm seeing shouldn't be ignored either. 

Bottom line, we are at a perilous point in the stock market, and I believe we will see a decline that scares many investors before the end of the month. 

Investors would be wise to protect themselves in this market. My Profit Amplifier readers are doing just that, of course, but we're not holding back, either. Thanks to our proven strategy of using a conservative options technique to make outsized gains from bullish and bearish moves in stocks, we're placing carefully targeted trades on a weekly basis -- earning double-digit (and sometimes triple-digit) gains in the process. If you'd like to learn more, go here now.

A Big Shift In China: Consumers Are Trading Down, Author Says

&l;p&g;Slowing economic growth in China is taking some of the glow off of one of the country&a;rsquo;s greatest attractions for foreign businesses: consumers&a;rsquo; willingness to splurge on higher-priced goods as incomes rise.

So says Shanghai-headquartered business consultant Shaun Rein. &a;nbsp;&a;ldquo;Labor markets are bad,&a;rdquo; Rein said in an interview on Thursday. In addition, compared with the past, consumers are more accepting of better-made domestic goods. &q;They&s;re becoming more supportive and more nationalistic when it comes to Chinese brands,&q; he said. Apple, for instance, is running into problems in the country &q;due to the fact that they&s;re being outcompeted by Huawei, Oppo and Vivo at much better price points.&a;rdquo;

Rein is the author of &a;ldquo;The End of Copycat China,&a;rdquo; &a;ldquo;The End of Cheap China,&a;rdquo; and &a;ldquo;The War for China&a;rsquo;s Wallet: Profiting from the New World Order.&a;rdquo;&a;nbsp; Excerpts follow.

Q. What&a;rsquo;s your take on China&a;rsquo;s economy?

A. It&a;rsquo;s much weaker than people realize. Labor markets are bad. Starting in October, it became very difficult for even kids from top universities like Stanford and Columbia to get jobs. &a;nbsp;When we started our business in 2005, they would graduate from the U.S. in June, they looked for a visa in the United States for three or four months, couldn&s;t get one, and then came back to China. It used to take me a week in order for me to hire someone. I&s;d have to decide very quickly. Even in August 2018, we&a;rsquo;d have to decide in a week. Now, people that I interviewed in October are still looking for jobs. The labor markets collapsed in October.

So from a consumer spending standpoint, that&s;s hitting hard. They&s;re starting to trade down. They&s;re skipping the big-ticket items like houses and cars. They&s;re still travelling overseas, but they&s;re going not so much to America or the UK; they&s;re now going more closer -- so Thailand and Japan. We&s;re very bullish on domestic tourism.

The next thing is they&s;re just trading down in general. So instead of buying a Starbucks latte, they&s;re going to Luckin. Instead of going to Imax movie theaters, they&s;re watching on iQiyi and online videos. So in 2019, the premiumization drive that a lot of people said consumers would do is over, and they&s;re now trading down. A big shift.

Q. What does all of this mean for multinationals? To what extent are multinationals caught up in China&s;s mixed relations with the West?

A. You haven&s;t seen anti-American sentiment on the consumer side except for Apple. Because people feel that the United States is going into hostage diplomacy by arresting (Huawei CFO) Meng Wanzhou, people are supporting Huawei. But, in general, people aren&a;rsquo;t buying multinationals&a;rsquo; (goods) not because of the economy and not because they&s;re anti-American. It&a;rsquo;s because they&s;re becoming more supportive and more nationalistic when it comes to Chinese brands.

For instance, in 2011, we interviewed 5,000 consumers in 15 cities, and at the time 85% of consumers surveyed always buy a foreign brand over a local brand. In 2016, we did the same research. This time, 60% of consumers said they would always buy a domestic Chinese brand over foreign brand. I didn&s;t even do the research in 2017 or last year.

So Apple&s;s problems in China are not due to the economy. They&s;re not due to anti-American sentiment. They&s;re due to the fact that they&s;re being out competed by Huawei, Oppo and Vivo at a much better price points.

Q. How are multinationals as a group reacting to all of this?

A. They&s;re getting hit very hard. The only brands that are doing well would be heritage brands that have an incredible brand position &a;ndash; a Nike, Chanel, Estee Lauder. Other brands are in confused mode. They think it&s;s the economy, but it&s;s not. They need to adjust. They need to understand that the day Chinese just desire Western brands is over.

Q. How should they adjust?

A. They either need to buy a Chinese firm. They need to either go even more upmarket, in some cases they have to offer more value products.

Q. Any recent examples of a multinational buying a Chinese firm? Multinational?

A. No.

Q. Moving downmarket?

A. You don&s;t want to go too down. What you want to do is offer more like, &a;ldquo;Buy five, get five.&a;rdquo; It&s;s more of a value play.

Q. &a;nbsp;KFC, who you work with, seems to be trying to move up a little.&a;nbsp; (See related story &l;a href=&q;http://www.forbes.com/sites/russellflannery/2019/02/06/meet-the-force-of-nature-behind-yum-chinas-expansion/&q;&g;here&l;/a&g;.)

A. The food market is a difficult one because companies are getting hit by Ele.me and Meituan. &a;nbsp;Anything that&s;s 30 RMB and less is dead, because people can just buy something at half of the price. So you need to try to go more upmarket, be a little bit of premium, a little bit healthier. And then you&s;re able to win. It&s;s not easy.

Q. That&s;s what Yum is trying to do?

A. That&s;s what they&s;re trying to do. I&s;m very negative on say McDonald&s;s. All these guys earn a lot of trouble. For the first time in about a decade, I&s;m bullish on instant noodles. People are starting to buy the cheap three or four (yuan) noodles again.

Q. &a;nbsp;When is this going to end?

A. This is a long time period. The economy is a lot worse than people realize. None of my clients are making a lot of money. If nobody&s;s making money, how on earth are you getting six percent growth&a;#65311; I just I can&s;t figure it out.

Q. What about the auto industry&a;#65311;

A. There are two things hitting autos. First, prices are so high and people are concerned about their savings, and so they&s;re skipping autos. It&s;s hitting the American brands because of the tariffs. People are buying a Lexus and they&s;re still buying a BMW because China has lowered the tariffs from Germany and Japan, but people are not buying American brands. You saw Ford&a;rsquo;s sales dropped 50% year on year in the fourth quarter. And you also have the issue where people to use shared mobility. That&s;s a big trend in China because it&s;s very difficult to buy a license plate. It&s;s expensive. I&s;ve never been able to get one. My company has had to buy all of my license plates and they cost $30,000 each. So the American auto manufacturers are in a lot of trouble. They&s;re going to continue to double-digit (sales) drops this year.

Now the second thing is people are hoping for an end of the trade war and they&s;re saying if there is an end to the trade war China might lower the tariffs on cars even more. So people are taking a wait and see attitude to see is it going to be cheaper in three months. And that&s;s what&s;s happened with Tesla. They&s;re waiting for when Tesla opens their factory in China in May, or when they lower their prices which they just did last week by $20,000-30,000. So the market for American autos in China is in trouble because people have no money, or if they have money, they have a wait and see attitude.

Q. What does this shared economy mean for foreign businesses? &a;nbsp;It&a;rsquo;s easy to think of Chinese companies like Didi benefitting and maybe a Geely, which seems to be building up a fleet to supply that sector.

A. It&a;rsquo;s too expensive to own a car in China, and a lot of Chinese -- younger Chinese especially -- tell us they don&s;t even want to drive. It&s;s too stressful, too much traffic, too expensive and too much risk of an accident. They&s;d much rather outsource driving either to a driver or autonomous cars.

Q. Where can foreign companies fit into the shared space?

A. What they can do is sell fleets. But if they sell fleets to the taxi companies, that lowers their brand image. Hyundai did that with the taxi companies; now nobody wants to buy a Hyundai. They could invest in some of the Chinese Internet players and do co-partners partnerships with them.

--Follow me @rflannerychina

&a;nbsp;&l;/p&g;

Mellanox Technologies (MLNX) Lowered to “Buy” at BidaskClub

Mellanox Technologies (NASDAQ:MLNX) was downgraded by BidaskClub from a “strong-buy” rating to a “buy” rating in a research report issued on Wednesday.

Other equities research analysts have also recently issued reports about the stock. Jefferies Financial Group boosted their price target on shares of Mellanox Technologies from $110.00 to $130.00 and gave the stock a “buy” rating in a research report on Monday, December 3rd. DA Davidson boosted their price target on shares of Mellanox Technologies to $124.00 and gave the stock a “buy” rating in a research report on Monday, January 28th. Barclays cut shares of Mellanox Technologies from an “overweight” rating to an “equal weight” rating and boosted their price target for the stock from $108.00 to $125.00 in a research report on Tuesday, March 12th. Zacks Investment Research cut shares of Mellanox Technologies from a “buy” rating to a “hold” rating in a research report on Monday, December 31st. Finally, Stifel Nicolaus cut shares of Mellanox Technologies from a “buy” rating to a “hold” rating and set a $117.95 price target on the stock. in a research report on Thursday, March 14th. Seven research analysts have rated the stock with a hold rating, seven have assigned a buy rating and one has assigned a strong buy rating to the stock. Mellanox Technologies presently has a consensus rating of “Buy” and an average price target of $110.00.

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Shares of Mellanox Technologies stock opened at $117.78 on Wednesday. Mellanox Technologies has a 52 week low of $65.68 and a 52 week high of $119.10. The stock has a market capitalization of $6.38 billion, a price-to-earnings ratio of 30.59, a price-to-earnings-growth ratio of 1.31 and a beta of 0.29.

Mellanox Technologies (NASDAQ:MLNX) last issued its quarterly earnings results on Wednesday, January 30th. The semiconductor producer reported $1.42 EPS for the quarter, topping the consensus estimate of $1.30 by $0.12. Mellanox Technologies had a net margin of 12.33% and a return on equity of 16.53%. The firm had revenue of $290.07 million for the quarter, compared to analysts’ expectations of $284.96 million. During the same period in the previous year, the business earned $0.82 earnings per share. Mellanox Technologies’s revenue for the quarter was up 22.1% compared to the same quarter last year. On average, equities analysts anticipate that Mellanox Technologies will post 4.82 EPS for the current year.

In related news, Director Amal M. Johnson sold 5,714 shares of Mellanox Technologies stock in a transaction dated Monday, February 4th. The stock was sold at an average price of $95.49, for a total value of $545,629.86. The sale was disclosed in a legal filing with the SEC, which is available at this link. Also, Director Glenda Dorchak sold 4,576 shares of Mellanox Technologies stock in a transaction dated Friday, January 4th. The stock was sold at an average price of $85.00, for a total value of $388,960.00. The disclosure for this sale can be found here. Company insiders own 4.20% of the company’s stock.

Institutional investors and hedge funds have recently modified their holdings of the stock. Private Capital Group LLC grew its stake in Mellanox Technologies by 259.4% during the 4th quarter. Private Capital Group LLC now owns 787 shares of the semiconductor producer’s stock valued at $73,000 after acquiring an additional 568 shares in the last quarter. QS Investors LLC grew its stake in Mellanox Technologies by 1,374.0% during the 4th quarter. QS Investors LLC now owns 1,813 shares of the semiconductor producer’s stock valued at $168,000 after acquiring an additional 1,690 shares in the last quarter. Tocqueville Asset Management L.P. purchased a new position in Mellanox Technologies during the 4th quarter valued at about $205,000. Dixon Hubard Feinour & Brown Inc. VA purchased a new position in Mellanox Technologies during the 4th quarter valued at about $217,000. Finally, SG Americas Securities LLC purchased a new position in Mellanox Technologies during the 4th quarter valued at about $238,000. 76.94% of the stock is currently owned by hedge funds and other institutional investors.

About Mellanox Technologies

Mellanox Technologies, Ltd., a fabless semiconductor company, designs, manufactures, and sells interconnect products and solutions worldwide. Its products facilitate data transmission between servers, storage systems, communications infrastructure equipment, and other embedded systems. The company offers InfiniBand solutions, including switch and gateway integrated circuits (ICs), adapter cards, cables, modules, and software, as well as switch, gateway, and long-haul systems; Ethernet solutions, such as Ethernet switch products and Ethernet adapters for use in enterprise data center, high-performance computing, embedded environments, hyperscale, Web 2.0, and cloud data centers.

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Tencent Stock Still Is at the Mercy of China’s Video Game Regulators

It’s best known as the owner of online messaging platform WeChat, and then for its stakes in dozens of other tech firms inside and outside of China. More than anything else, though, Tencent Holdings (OTCMKTS:TCEHY) is a video game publisher. Most prospective and even current owners of Tencent stock just don’t realize it.

Source: Shutterstock

It matters. Early last year, Chinese regulators stopped approving new games altogether.

Although they finally started to issue licenses again in December, curiously, none of those newly-approved titles came from Tencent. It did finally happen in late January, with two Tencent titles getting the green light.

Many more are in the queue though, and regardless, the damage has already been done. In the second quarter of last year, Tencent reported its first year-over-year earnings dip in thirteen years.

Things didn’t get much better in the subsequent quarter. Indeed, in November the company announced it was cutting its marketing budget for a handful of games until there was some clarity as to win the normal pace of approvals would be restored.

That still hasn’t happened, although there’s a light at the end of the tunnel.

Right Business, Wrong Time

For the record, while Tencent drives more revenue from video games, they still don’t account for a technical majority of its sales. During its third quarter of last year, 32% of its top line was driven by online games. The next-biggest contributor was its social networking platforms, mostly WeChat, accounting for 22.5% of its business. The rest is made up of online advertising revenue.

Still, games are its biggest business. In fact, the odds are good Tencent’s online gaming arm sports better-than-average profit margins.

Those margins have been pressured of late too, as the fast-moving and hyper-competitive mobile gaming market all but requires a flow of new titles.

Case in point? Fortnite, which was developed by Epic Games, which happens to be 40% owned by Tencent. The online battle royale hit caught rivals like Electronic Arts (NASDAQ:EA) and Activision Blizzard (NASDAQ:ATVI) off-guard. Both have since adapted, but those responses didn’t sway gamers or analysts at first, but eventually they did.

In July of last year, the game’s revenue growth slowed to a crawl, even before other game developers were able to begin marketing their rival games. It points to the limited life span of all video games.

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The game developer hasn’t been able to offset that headwind though, thanks to a seemingly-targeted effort to chip away at its dominance, perhaps for its partnerships with U.S. companies against a backdrop of strained trade ties.

Epic Games is based in North Carolina, while another partner called Glu Mobile (NASDAQ:GLUU) is based in California. Without explicitly saying so, China’s regulators are favoring home-grown developers and punishing publishers with American ties.

Or, perhaps China’s video gaming regulators are concerned with nothing more than the violence and game-addiction they say they are. Tencent’s game “Honor of Kings” is not only China’s favorite and best-grossing title, it’s also a violent fighting game.

Whatever the reason, it’s been slow, tough going for the company on this key front.

Looking Ahead for Tencent Stock

Although it will never be clear if it’s political, practical, or just coincidental, whatever the reason for the regulatory headwind it’s working against Tencent stock.

Still, working against Tencent stock. Although the company got a couple of new titles approved in January, the country’s regulators suspended new application acceptance altogether, hoping to clear out a backlog of at least 5,000 titles that had been submitted since China’s government stopped approving games in March of last year.

There’s no word as to when it will start accepting requests again, and only one new Tencent game called Journey to Fairyland 2 has gotten the green light since January’s two approvals.

In the meantime, Tencent only can wait.

Investors can’t wait though, not knowing when or even if the company will be able publish a new title. As is the case with all video games, Tencent runs the risk of its existing lineup of games losing players, chewing away at growth and profits.

The one upside? It will be anything but a secret if China’s overseers pick up the pace of new game approvals. The company will also be sure to share it when its games receive permission to be marketed.

Tencent knows the key people watching TCEHY stock are making buy/sell decisions largely based on how accommodative regulators seem like they’re going to be going forward.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities. You can learn more about James at his site, jamesbrumley.com, or follow him on Twitter

Best Performing Stocks To Invest In Right Now

tags:WEN,XCRA,GWRE,

August 28, 2018: The S&P 500 closed flat at 2,897.71. The DJIA closed flat at 26,067.27. Separately, the Nasdaq was also flat at 8,030.04.

Tuesday was a positive day for the broad U.S. markets, with the S&P 500 and Nasdaq hitting new all-time highs in the session. The DJIA again hit its highest level since early February. Crude oil backed off slightly. The S&P 500 sectors were mostly negative. The most positive sectors were real estate and consumer discretionary up 1.1% and 0.2%, respectively. The worst performing sectors were materials and energy down 0.5% and 0.4%, respectively.

Crude oil was last seen trading down 0.3% at $68.64.

Gold was last seen trading down 0.7% at $1,207.00.

The stock posting the largest daily percentage loss in the S&P 500 ahead of the close was Best Buy Co., Inc. (NYSE: BBY) which fell about 5% to $77.39. The stock's 52-week range is $51.61 to $84.37. Volume was about 4 million compared to the daily average volume of 3 million.

Best Performing Stocks To Invest In Right Now: Wendy's/Arby's Group Inc.(WEN)

Advisors' Opinion:

• [By Logan Wallace]

  BTIG Research started coverage on shares of Wendys (NASDAQ:WEN) in a research note issued to investors on Tuesday morning, Marketbeat Ratings reports. The brokerage issued a buy rating and a $20.00 price objective on the restaurant operator’s stock.

• [By Stephan Byrd]

  Wentworth Resources (LON:WEN)‘s stock had its “buy” rating reaffirmed by Peel Hunt in a research report issued to clients and investors on Thursday.

• [By Daniel Sparks]

  But what companies are paying out meaningful, growing dividends that are likely to keep seeing growth in the coming years? Two stocks that fit these characteristics are Home Depot (NYSE:HD) and Wendy's (NASDAQ:WEN), both of which announced significant increases to their dividends in February.

Best Performing Stocks To Invest In Right Now: Xcerra Corporation(XCRA)

Advisors' Opinion:

• [By Max Byerly]

  Element Capital Management LLC acquired a new stake in LTX-Credence Co. common stock (NASDAQ:XCRA) during the first quarter, according to its most recent filing with the Securities and Exchange Commission (SEC). The institutional investor acquired 12,132 shares of the semiconductor company’s stock, valued at approximately $141,000.

• [By Max Byerly]

  LTX-Credence Co. common stock (NASDAQ:XCRA) – Analysts at B. Riley increased their FY2018 earnings per share estimates for LTX-Credence Co. common stock in a research note issued on Tuesday, May 29th. B. Riley analyst C. Ellis now forecasts that the semiconductor company will post earnings of $1.03 per share for the year, up from their prior estimate of $0.99. B. Riley has a “Neutral” rating and a $14.00 price objective on the stock. B. Riley also issued estimates for LTX-Credence Co. common stock’s Q4 2018 earnings at $0.27 EPS, Q1 2019 earnings at $0.27 EPS, Q2 2019 earnings at $0.23 EPS, Q3 2019 earnings at $0.28 EPS, Q4 2019 earnings at $0.32 EPS, FY2019 earnings at $1.09 EPS and FY2020 earnings at $1.30 EPS.

• [By Max Byerly]

  Shares of LTX-Credence Co. common stock (NASDAQ:XCRA) have been assigned a consensus rating of “Hold” from the eight ratings firms that are currently covering the firm, Marketbeat.com reports. Six analysts have rated the stock with a hold recommendation and two have assigned a buy recommendation to the company. The average 1 year price objective among brokers that have issued ratings on the stock in the last year is $14.00.

Best Performing Stocks To Invest In Right Now: Guidewire Software, Inc.(GWRE)

Advisors' Opinion:

• [By Ethan Ryder]

  Guidewire Software (NYSE:GWRE) is scheduled to be announcing its earnings results after the market closes on Wednesday, September 5th. Analysts expect the company to announce earnings of $0.54 per share for the quarter.

• [By Logan Wallace]

  Guidewire Software Inc (NYSE:GWRE) CEO Marcus Ryu sold 14,033 shares of the business’s stock in a transaction on Friday, March 1st. The shares were sold at an average price of $92.21, for a total transaction of $1,293,982.93. Following the transaction, the chief executive officer now owns 15,354 shares of the company’s stock, valued at $1,415,792.34. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website.

• [By Ethan Ryder]

  Get a free copy of the Zacks research report on Guidewire Software (GWRE)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Max Byerly]

  Verition Fund Management LLC bought a new position in shares of Guidewire Software Inc (NYSE:GWRE) in the first quarter, according to the company in its most recent disclosure with the Securities and Exchange Commission. The fund bought 2,731 shares of the technology company’s stock, valued at approximately $221,000.

• [By Stephan Byrd]

  TRADEMARK VIOLATION NOTICE: “Insider Selling: Guidewire Software (GWRE) Insider Sells 209 Shares of Stock” was first posted by Ticker Report and is the sole property of of Ticker Report. If you are viewing this story on another site, it was copied illegally and reposted in violation of international copyright and trademark laws. The correct version of this story can be viewed at https://www.tickerreport.com/banking-finance/3365485/insider-selling-guidewire-software-gwre-insider-sells-209-shares-of-stock.html.

• [By Ethan Ryder]

  Shares of Guidewire Software Inc (NYSE:GWRE) reached a new 52-week high and low during trading on Tuesday . The company traded as low as $96.19 and last traded at $94.10, with a volume of 46042 shares trading hands. The stock had previously closed at $95.82.

Investors Should Cheer Activision Blizzard's Latest Move

Last month, Activision Blizzard (NASDAQ:ATVI) made some interesting disclosures as part of its most recent earnings release. 

The company explained that it's going to ratchet up how much it's spending on the development of its "biggest franchises," which include Call of Duty, CandyCrush, Overwatch, Warcraft, Hearthstone, and Diablo. The company claims that, in total, the number of developers it'll have working on these game franchises "will increase approximately 20% over the course of 2019." 

Image source: Activision Blizzard.

In order to fund that increase, the company says, it plans to de-prioritize "initiatives that are not meeting expectations and reducing certain non-development and administrative-related costs across the business." 

Put simply, the company is allocating resources where they're needed most -- to the development of the products that fundamentally drive its long-term financial performance. 

Here's why these actions are in the best interests of Activision Blizzard stockholders.

It's all about the games

The costs of game development naturally rise over time. As games become more sophisticated, the amount of development effort necessarily increases, too. The underlying technology of games continues to grow in complexity, necessitating a greater number of skilled programmers to bring that technology to life. Games are also significantly defined by the quality and complexity of the virtual worlds that developers create, which means that more artists and level designers are going to be needed to deliver better experiences. 

It's also worth noting that in this day and age, game publishers don't just release a game and then wait several years to release a sequel. Instead, these games are constantly being updated with new features and content. For example, buyers of Call of Duty: Black Ops 4 can opt to purchase, in addition to the base game, a $50 "season pass" that promises customers additional content (e.g., new weapons, maps, player models) over time.

This fundamental transformation of games from one-off products to platforms that need to be supported over the long term has helped to smooth out game industry revenues and increase overall spending on games, and has been a clear boon to game developers. At the same time, that additional content doesn't come for free -- it takes skilled developers to make that happen. 

The other alternative

In this case, Activision Blizzard really had two alternatives to choose from. The company could choose not to dramatically expand its developer headcount, which could lead to at least one of several undesirable outcomes such as overworked developers (as the existing workforce would need to, collectively, put more time in),  game schedule slips, or a reduction in the scope of games being produced. 

Or, in the short term, Activision Blizzard could keep a lid on its operating expenses (the company could still have initiated the cost-cutting actions that it is currently implementing, leading to a profit increase), and investors might enjoy a temporary sugar high.

But over the long term, the business would be harmed. If workers are simply overworked, they may find jobs at other publishers or simply leave the game industry altogether. If game schedules slip, this can have a negative impact on the lifetime financial performance of the game -- something that investors aren't going to be happy about. Additionally, if its games aren't as interesting as they could have been, Activision Blizzard would risk seeing worse-than-expected reviews of those games, ultimately translating into lower sales for those games in the short term and potential damage to the franchise brand over the long term. Gamers do have plenty of games to choose from, after all.  

None of that should sound particularly appealing to long-term investors. That's why I'm glad to see Activision Blizzard making the move to invest more heavily in its developer workforce, as that investment should ultimately yield better games and, over the long term, an even healthier business.

Tarena International (TEDU) Q4 2018 Earnings Conference Call Transcript

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Tarena International (NASDAQ:TEDU)Q4 2018 Earnings Conference CallMarch 11, 2019, 9:00 p.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by, and welcome to Q4 2018 Tarena International Inc., Earnings Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and answer session. (Operator Instructions) I must advise you that this conference is being recorded today March 12, 2019.

I would now like to hand the conference over to your first speaker today, Ms. Lei Song. Thank you. Please go ahead.

Lei Song -- Investor Relations

Thank you, operator. Hello everyone, and welcome to Tarena's fourth quarter 2018 earnings conference call. The Company's earnings results were released earlier today, and are available on our IR website, ir.tedu.cn, as well as our newswire services.

Today, you will hear opening remarks from Tarena's Founder, Chairman and CEO, Mr. Shaoyun Han followed by our Chief Financial Officer, Dennis Yang, who will take you through the Company's operational and financial results for the fourth quarter 2018 and give guidance for the first quarter and full year of 2019. After their prepared remarks, Mr. Han and Mr. Yang will be available to answer your questions.

Before we continue, please note that the discussion today will contain certain forward-looking statements made under the Safe Harbor provisions of the US Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. Tarena does not assume any obligation to update any forward-looking statements except as required under applicable law.

Also, please note that some of the information to be discussed includes non-GAAP financial measures as defined in Regulation G. The US GAAP financial measures and the information reconciling these non-GAAP financial measures to Tarena's financial results prepared in accordance with US GAAP are included in Tarena's earnings release, which has been posted on the Company's IR website at ir.tedu.cn.

Finally, as a reminder, this conference is being recorded. In addition, a webcast of this conference call is available on Tarena's Investor Relations website. I will now turn the call over to Mr. Shaoyun Han, Tarena's Founder, Chairman and CEO. Mr. Han will speak in Mandarin and Mr. Yang will translate.

Shaoyun Han -- Chief Executive Officer

(Foreign Language) Thank you Lei and welcome everyone to our fourth quarter 2018 earnings conference call.

(Foreign Language) I am very pleased to report that our net revenues in the year of 2018 increased year-over-year by 13.5% to reach RMB2.2 billion. The fourth quarter revenue contributed RMB615 million which is consistent with in the same period last year.

During this quarter our key programming education business has once more achieved rapid growth, in both student enrollment and revenue recognition. We enrolled 15,233 students during this quarter. The total K-12 business recognized revenue of RMB67 million and received cash of RMB159 million during this quarter, both of which achieved a year-over-year increase more than 300%. For our adult education business we saw a rapid growth year-over -year in student enrollment where our university partnerships, which contributed to an acceleration of enrollment growth in overall adult education business achieving year-over-year increase of 6.3% reaching student enrollment of 36,394.

Meanwhile we continuously improve the profitability of underperforming centers as well as optimize the staffing structure which led to improvement in many efficiency indicators.

(Foreign Language) 2018 was a year of achievement for both new and the traditional business. Also it's very challenging year for us. I would like to present 2018 performances by the following three areas and I'll share with you our 2019 plan.

(Foreign Language) Let's look at retail channel first new revenue (ph). In 2018 the Company operational cost has increased, which resulted in a decrease in profitability. The main reason was that we opened more than 40 centers in 2017, many of which were impacted by market economy and IT training market environment and did not meet our expectations in 2018. We have closed or merged underperforming centers in the second quarter to respond to the unfavorable market conditions. At the same time we continuously optimize the cost structure staffing structure and acquisition channels.

These matters significantly lower the number of nonperforming centers. In addition we also put a lot of efforts to improve teaching quality, which led job placement result even better. Based on the recent business data six month post-graduation job placement rate growth improved to 97% and the employment speed also improved. We gained widely recognition from our students with good teaching service quality which helped us to recruit more students through student referrals.

(Foreign Language) In 2019 our retail business report some recovering profitability. Operating KPI were not limited to contract revenue and contract profits. It also emphasized on operating cash flow to encourage cash collection and to improve operating efficiency. We believe that our retail business will regain its profitability gradually.

(Foreign Language) For university training, 2018 is a year of transformation and capital investment for our university partnership business. With support from government policy encouraging cooperation between schools and companies we successfully explored a featured program business model that schools provide teaching venues and academic credit flexibility, while Tarena provides faculty resources and builds teaching facilities. Both parties operate the teaching -- training center together on campus. Different from joint major programs the enrollment of featured program is up to student's decision and does not need government approval.

In 2018, we have established featured program partnership with more than 100 universities and we have built more than 100 learning centers on campus. Upon completion of the centers we expect to have steady new student enrollment in coming years.

(Foreign Language) Student enrollments through the featured program business model will become a main driver for our adult business growth. In 2018, we recruited approximately 20,000 students through this model. The students are currently in their first year or second year. However, our training is provided in the graduation year. Therefore the corresponding revenue is going to be postponed to be recognized in the year of 2020 and 2021. So the university business net revenue grew -- lagged behind its enrolment growth and also lower than the operating costs increases which brought losses of the university channel business in 2018.

(Foreign Language) Looking forward into 2019 university channel business is going to bear fruit. From 2019 there will be revenues contributed from the students enrolled in a year of 27 university programs. We will also enroll more students in their final year on campus. We believe that these measures will significantly reduce losses from university business.

(Foreign Language) Let's move on to Kid business 2018 is a year of rapid growth for our Kid's Education business. By the end of 2018 after adding 118 new Kid centers in the year we operated 148 learning centers covering 53 cities. Kid's business recorded a full year net revenues of RMB176 million and the total cash received from tuition fees were RMB455 million, achieving more than 400% year-over-year growth.

(Foreign Language) Looking forward into 2019, Kid Education Business is going to enter in period of steady growth. We plan to open about 80 new centers and expect to receive cash of more them RMB850 million, with a 100% annual growth. At the same time we're going to improve existing learning centers' operational efficiency. The KPIs for core management team will include both business growth achievement and profit target completion. We are confident that these changes will gradually improve profitability of Kid centers.

(Foreign Language) To sum up through the adjustment optimization and the investment in 2018, Tarena is entering a period of steady development. Our operation will focus on profitability improvement.

(Foreign Language) With that I will now turn the call over to our CFO, Dennis Yang to discuss quarter operational updates and financial results and outlook for the first quarter 2019 and the full fiscal year.

Yuduo Yang -- Chief Financial Officer

Thank you, Han, and hello everyone on the call. First of all, I'm very pleased to see the higher than expected results in our Kid's Education Business. We believe that in the Kid technology education will become widely known in China, forming a huge market with significant potential and rapid growth. The market size of Kid's programming education in China is expected to reach approximately RMB40 billion in the next three years, with a CAGR of over 50%. In this quarter Tarena's Kid Education Business delivered outstanding results in student enrollment, centers lay out, course development, revenue contribution on the profitability growth for older standards. The student enrollment in Kid Education Business continued the rapid growth, achieving over 300% year-over-year increase, reaching 15,233.

The Company will continue the investment in Kid's Education Business. We newly built 31 centers for our Kid Education in the quarter. By the end of the fourth quarter the Kid Education Business reached 148 centers. On top of that there are also 20 shared learning sites from adult education business, which provides additional classrooms. Our Kid Education Business expanded into 53 cities by the end of this quarter. According to this quarter's financials, Kid Education Business has made greater contributions to the Group.

On one hand the cash received from enrollment reached RMB159 million this quarter, achieving a 400% year-over-year growth and representing approximately 27% of Group's total cash received. On the other hand this quarter net revenue under US GAAP reached at RMB67.2 million for our Kid's business taking around (ph) 11% of the total. We believe the contribution from Kid Education Business will continue to grow in the future and we expect it will gradually become one core driver for Tarena's business growth.

In addition, in 2018 the Company gradually upgraded and improved the course system. We have built a complete Kid's programming course system suitable for kids aged between 3 and 18. The course system will be modified and perfected with more and more practical class experiences. We have also accelerated optimization in the center operation, improved business process standardization and served quality consistency, by which we won wide and positive recognition from our students and parents and made the business model of Kid Centers very replicable.

We will continue our investment in this field. With its extensive education experience in IT area and the solid talent reserve Tarena will be able to keep its leading position in Kid's programming education market by developing diverse courses to maintain its advantage with diversified course system, by standardizing operating procedures to improve the success rate of opening new centers by enhanced operational efficiency and increasing the number of students in schools to improve probability.

We know the recent changes in government regulation related to Kid's education industry. These policies encourage quality oriented extra credit from (ph) education business in order to promote young people's versatile development. Tarena's Kid Education Program consists of computer programming and the robot programming in its goal of quality-oriented courses. These courses focuses on cultivating kid's interest in information technology, programming skills and other standard skills. Therefore we believe that these policy changes are generally good for Kid's programming business.

With the greater importance of information technology and artificial intelligence skills, programming courses are becoming more attractive to young people. We believe this industry is going to experience high speed growth. The Company will keep investing in this area in the next couple of years in terms of new course research and development, network expansion as well as talent recruitment.

Looking to 2019, we expect to continue to expand in K-12 business. We plan to open a total of 80 Kid's Education Centers in 2019, targeting the student enrollment of approximately 80,000 with the tuition cash of RMB850 million. The rapid growth of K-12 education business is also bringing certain short term impact to the financial profit. However in our view it is normal that new business generates temporary financial losses during its rapid growth period.

We closely monitor the cash flows and the probability of each learning center. In general it takes about six months for a Kid Center to have a positive operating cash flow and reach accounting breakeven in about 1.5 years period. We've seen a healthy growth in Tarena's Kid's Education Business and we expect it will start to record the profit in about two years, along with more Kid's learning center become mature and profitable.

These initiatives require more investment and may affect the margin levels in short term, as new centers are still in the ramp up period before they breakeven. However given the broad market prospect and rapid business growth, K-12 business will provide a strong foundation for the companies to grow in future years.

In addition to Kid's Education Business, Tarena's adult education business achieved RMB549 million net revenues in this quarter, representing an 8.7% year-over-year decrease. The year-over-year decrease in student enrollment through retail channel was the primary factor affecting the revenue. The enrollment of adult education business as a whole during this quarter was 36,394, achieving a year-over-year growth of 6.3%.

Enrollment through retail channels delivered 26,802, with a year-over-year decrease of 7.3%, while enrollment through university channels reached 9,592 with a year-over-year growth of 81%. Partnerships with universities become a main driver for the growth -- of growth in student enrollment, through student enrollment. With university partnership model we established deep cooperation with universities. And we are able to have a long-term student enrollment with high volume which will help us to enhance enrollment efficiency and to reduce the student acquisition costs. In this way our adult education business will maintain a continuous growth.

Usually the courses last two to four years under university partnership model, and revenue recognition period is also lengthened accordingly. Certain tuition with signed contracts is to be recognized in later years when education service will be delivered. This results in a gap between the rate of enrollment and the revenue growth. In terms of course contribution in adult business, Python, Big Data and the Linux Cloud computing course have become popular, contributing a total of 5,953 students in this quarter, or 59% year-over-year growth.

We expect that artificial intelligence-related courses will continue to grow in the future. Responding to current market changes Tarena starts to develop continuing education courses to meet demand from the large number of people to upgrade their skills for future career advancement through taking professional training.

Looking forward in 2019 Tarena plans to meet the diverse needs from different groups of people through a richer curriculum system, so that it can be better cope with the fluctuations in the market cycle, achieving steady growth in adult education business. During this quarter the Company continues to emphasize on resources distribution at the same time we made efforts to optimize human resources to improve operational efficiency.

In this quarter the Company closed or merged a total of 12 adult learning center, and entered into new one -- one new city, Baoding. By the end of this quarter we operated 184 adult learning centers in 70 cities. Seat capacity at the end of 2018 was 56,585, which represent 0.7% year-over-year decrease. By optimizing the seat layout the seat utilization rate improved to 71.6% as compared to the utilization of 69.6% in the same period last year.

This quarter we are further optimizing sales and marketing team and saw improvement in enrollment efficiency. For example, the student acquisition cost per student of adult education business was RMB 5,861, which is the lowest of -- in the past four quarters. The improvement in seat utilization rate and sales per capita productivity mentioned above proved the effectiveness of center resources optimization strategy. We believe that this strategy will have positive impact to future profit recovery.

And now let me address some more key item in income statement. Firstly gross margin in first quarter declined by 19 percentage points, year-over-year to 53.7%. Such a decline in gross margins mainly due to the following reasons. First, K-12 business gross margin dropped by approximately 800 bps. The Company built up 100 Kid's Learning centers in the past 12 months and by the end of this year we operated 148 centers, most of which have not yet reached an ideal utilization level.

Current gross margin of K-12 business is significantly lower than the margin of our traditional adult training business. Second less revenue recognized from adult business during the quarter brought around 400 to 500 bps impact on achieved margin. Because of slow down in retail channel and the referral (ph) of contract revenue from a student under university partnership programs, the revenue of adult business in this quarter decreased by RMB50 (ph) million as compared with the net revenue in the quarter a year ago. We expect the GP margin recovery for both adult and Kid's business, when the Company takes profits first strategy for adult business, where we focus more on operational efficiency than business expansion.

Meanwhile we expect GP margin improvement in Kid business because more Kid's learning centers are operated for more than one year and those learning centers start to make a profit.

Now let's take a look at G&A expenses. For the fourth quarter the Company record bad debt allowances for doubtful account receivables of RMB52 million to reflect the difficulties in the collection of account receivables from 2017 students. The Company believes that receivable collectability risk around 2017 students have been largely covered by better provisions in our books.

As Mr. Han said cash flow improvement is one of the key performance indicators for our operational team in 2019. Center managers are encouraged to expedite tuition collections from students. As the Company maintains long term partnership with a group of loan providers in our view, relatively high risk of account receivables from 2017 students is an isolated case and won't change long term outlook of bad debt provision levels in our adult business.

Our non-GAAP operating loss in this quarter was RMB166 million lower than non-GAAP operating profit, RMB99.6 million in the same period last year. On one hand in the past years rapid expansion of Kid's education business, more than 100 new learning centers opened and 21 centers were added through acquisition, many of these learning centers are not in the mature and kind of loss making, which led to greater non-GAAP operating losses for the Kid's Education Business in this quarter. We believe that more Kid's Education Centers will start making profit along with the number of students in schools increases.

On the other hand there are non-GAAP operating losses, RMB29 million from adult education business. The reason of a year-over-year decrease in the profits was due to the significant decrease in the revenue from adult business, caused by the smaller number of student recruited through retail channels and additional market cost to achieve the higher enrollment as well as a greater amount of bad debt expenses to doubtful account receivables.

Looking forward to the first quarter 2019, we expect the total net revenue are between RMB395 million and RMB415 million, representing a decrease of 2.9% to an increase of 2.1% on a year-over-year basis. The Company also expects its net revenues for the full year 2019 to be between RMB2,430 million and RMB2,580 million, representing an increase of 8.5% to 15.2% on a year-over-year basis. So operator?

Questions and Answers:

Operator

Ladies and gentlemen, we will now begin the question-and-answer session. (Operator Instructions) Your first question is from Mariana Kou from CLSA. Please ask.

Mariana Kou -- CLSA -- Analyst

Hi, good morning management. Thanks for taking my question. I have two questions. First one is about the Kid's business. I noticed that I think at as of end of 2018 we are covering about 53 cities. So just wondering what's our strategy there for the Kid's business, are we are looking to kind of do it more of a wider network? Was this going deep into existing cities because I think some of the leading players in like K-12 type children businesses, they are covering a similar range of cities, but definitely got a lot more like hundreds of centers. So just a bit of more thoughts on that would be quite helpful in terms of how we think about margins, operating revenues et cetera from an operational angle.

And a kind of -- more of a -- a little bit followup on the Kid's businesses. If you could also help us understand the breakdown on GP -- because I think just know you shared a bit on the margin driver at Group level but if you could help us get a bit more clarity on the GP margins between those two business -- like adult and K-12 for Q4, because I think Q3 there were some disclosures on the cost of revenues for kids so, we could kind of calculate that adult business was more in the 70s percentage, and K-12 was at a loss level for GP. But if you could help us kind of get some clarity on Q4 margin for those would be helpful.

And I guess lastly is just on the outlook for the full year and also kind of going forward for revenue, do we just expect this more of a high single-digit to low teens revenue growth to be the level that we should be thinking about in the next few years? Thank you.

Shaoyun Han -- Chief Executive Officer

(Foreign-Language) Okay Mr. Han, addressing Miriana's first question about our future Kid's business expansion plan, the Kid's business for Tarena actually leverage our human resources from adult business. As you may know that we operated our adult business in 70 cities. So out of 70 cities we are very quickly to expand our K-12 business in 53 cities. But look if we look into 2019 we plan to focus on first tier cities and those provincial capital cities. So well, we don't expect to expand our K-12 business into more new cities in 2019.

Yuduo Yang -- Chief Financial Officer

So Mariana second question is on margins of K-12 business. I can share with some data, but beware of those data are mostly based on our management report that K-12 gross margin, non-GAAP gross margin about in Q4, about minus -- no, sorry gross profit negative 90 million. So the GP margin about minus 29%.

In terms of operating -- non-GAAP operating losses, which was RMB137 million for the first (ph) quarter, K-12 business. So based on our forecast in the future we would -- if we look per learning center on the K-12 -- K-12 per learning center, we are expect the high teens or low 20s, margin level when the learning center can mature. So this is also the long term perspective, from management perspective for K-12 business.

But considering we have a big portion of the K-12 learning centers operated not reached to the mature level, so we expect still loss making from K-12 business, but we are -- we expect the operating losses from K-12 business will -- getting narrow over the future quarters and you will see those the net operating losses getting narrowed happening over the quarter in 2019. Mariana?

Mariana Kou -- CLSA -- Analyst

Yes. Thank you.

Operator

Your next question is from Alex Xie from Credit Suisse. Please ask.

Alex Xie -- Credit Suisse -- Analyst

HI, management. Thank you for taking my questions. Firstly I would like to ask about our adult business. So after closing down the 12 underperforming learning centers in the fourth quarter, how many learning centers are still underperforming in the adult learning center network? How many are we planning to close, say in 2019? And my second question is about the K-12 business. So for the overall K-12 business when do management expect the business to reach breakeven, yeah, thank you?

Yuduo Yang -- Chief Financial Officer

Thank you. Alex for the two questions. Your first question, talk about how many non-performing adult learning centers as of now. I -- in my view there are no more than 10 learning centers are still loss making or non-performing. So we about to further optimize those learning centers. However if that optimization doesn't happen, the good results we will continue to -- consider closing those learning centers, 2019.

Your second question about the K-12 business breakeven, as I mentioned that you will see that our operating losses from K-12 business getting narrowed in 2019. I expect we will see the quarter -- quarterly K-12 breakeven in 2020. So sooner or later in 2020 and 2021, our current expectation -- our current forecast shows that 2021 is the first year the K-12 business could be profitable.

Alex Xie -- Credit Suisse -- Analyst

Thank you.

Operator

Your next question is from Johnny Wong from Jefferies. Please ask.

Johnny Wong -- Jefferies & Co. -- Analyst

Hello. Good morning, management, and thank you for taking my call. My question is in regard to the traditional adult business. I recall that we had a strategy of hiring more sales people to try to increase the sell-through rate of inquiry. But it seems that I think in the fourth quarter our adult enrollment, I believe it probably decreased on a year-to-year basis, especially on the retail side. Can you let me know what the -- how the strategy of increasing the sales force is going, and whether or not we need to rethink about that strategy? Thank you.

Yuduo Yang -- Chief Financial Officer

Thank you, Johnny for the question about our sales strategy. We initially planned to recruit more salespeople to enhance our sales team to drive enrollment, but at the same -- but the overall IT industry saturated recently. So it's pretty challenging for Tarena simply to recruit more people to drive the enrollment. So we -- in doing that we try to focus more on profitability. So we make some changes in our strategy that we try to make more profits over to keep the business expansion.

Shaoyun Han -- Chief Executive Officer

(Foreign Language) Mr. Ham added that the sales people per learning center actually increased -- increases in the past quarters, but we downsized or closed the centers. So we have a chance to -- we have a chance to downsize the overall sales team in Q3 and Q4.

(Foreign Language) From the general sales and marketing costs for students in our adult business we've already seen some positive changes and the decrease of those per student acquisition cost.

Johnny Wong -- Jefferies & Co. -- Analyst

Thank you.

Yuduo Yang -- Chief Financial Officer

Yeah. I'm sorry, that I need to make a correction that addressing the Alex's question about -- just now, regarding the K-12 breakeven I would say, 2020, we'll see the quarterly breakeven -- sorry. Yeah, 2020, I should say in the 2020 it's likely that we -- we have seen quarterly breakeven for K-12 and 2021, it's likely that we'll see full year breakeven.

Operator

(Operator Instructions) We don't have any other questions as of the moment. Presenters please continue.

Yuduo Yang -- Chief Financial Officer

Okay, thank you, operator. If there are no further questions at present we would like to conclude by thanking everyone for joining our conference call. We welcome you to reach out to us directly by emailing at ir.tedu.cn. Should you have any questions or requests for additional information, we encourage you to visit our Investor Relations site at ir.tedu.cn. Thank you.

Operator

Ladies and gentlemen that does conclude our call for today. Thank you for participating. You may all disconnect.

Duration: 53 minutes

Call participants:

Lei Song -- Investor Relations

Shaoyun Han -- Chief Executive Officer

Yuduo Yang -- Chief Financial Officer

Mariana Kou -- CLSA -- Analyst

Alex Xie -- Credit Suisse -- Analyst

Johnny Wong -- Jefferies & Co. -- Analyst

More TEDU analysis

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This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

Trump's budget proposal would cancel public service loan forgiveness

President Donald Trump's budget proposal unveiled on Monday would slash funding for the U.S. Education Department by more than 10 percent.

The plan, titled "A Budget for a Better America," requests $62 billion for the Department of Education, or $7.1 billion less than the agency's allowance in 2019.

The budget eliminates subsidized student debt, in which interest doesn't accrue on the loans while borrowers are in school or in economic hardship. It also reduces the number of repayment plans for borrowers and scratches the popular, if challenged, public service loan forgiveness program.

"We have also reaffirmed our commitment to spending taxpayer dollars wisely and efficiently by consolidating or eliminating duplicative and ineffective federal programs," said U.S. Secretary of Education Betsy DeVos.

The plan would narrow the numerous income-driven repayment plans, which caps people's bills at a percentage of their income, to just one. Under that option, students' monthly payments would be limited to 12.5 percent of their discretionary income, compared with 10 percent now.

Any remaining debt would be cancelled after 15 years for undergraduate students, and 30 years for graduate students.

The federal work study prgram, which provides part-time jobs for undergraduate and graduate students with financial need, would also face cuts. Pell Grants would be expanded to cover short-term training programs, a priority of the administration.

"As college remains more crucial for economic opportunity than ever before and costs continue to rise, these proposals move in the exact opposite direction that students and our economy need," said James Kvaal, president of The Institute for College Access & Success.

The Public Service Loan Forgiveness Program is eliminated in the proposed budget.

That program, signed into law by President George W. Bush in 2007, allows not-for-profit and government employees to have their federal student loans canceled after 10 years of on-time payments. The Consumer Financial Protection Bureau estimates that up to one-quarter of American workers could be eligible.

"Eliminating public service loan forgiveness will hurt members of the U.S. Armed Forces, police, fire, EMTs and other first responders," said Mark Kantrowitz, the publisher of SavingForCollege.com. "It will also reduce the number of people pursuing careers in public interest law, such as public defenders and prosecutors."

Congress has rejected Trump's former budget proposals to cut funding for the Education Department. Now that the House is controlled by Democrats, the administration may only find it harder to realize its requests.

More from Personal Finance:

Here's what you need to qualify for public service loan forgiveness The government may forgive your student loans if you meet these demands
Education Department is failing to provide public service loan forgiveness, senators allege

Ross Stores Ends 2018 With a Solid Fourth Quarter

Late last month, off-price retail giant TJX Companies (NYSE:TJX) reported another quarter of strong results. Comparable store sales surged 6% in Q4, the company's third consecutive quarter of 6% or better comp sales growth. This allowed TJX to keep earnings per share roughly flat despite facing significant cost pressures.

On Tuesday, Ross Stores (NASDAQ:ROST) reported slightly less impressive sales results but stronger earnings growth than its larger rival. Furthermore, the No. 2 off-price retailer is on track to continue its momentum in 2019.

Consistent performance continues

Ross Stores reported a 4% comp sales increase for the fourth quarter, building on a 5% comp sales gain in the prior-year period. Comp sales also rose 4% for fiscal 2018 as a whole. It was the fourth consecutive year that comp sales growth held at that level.

EPS reached $1.20 at Ross Stores last quarter, or $1.13 excluding the impact of a one-time tax gain. That met the average analyst estimate and came in near the high end of management's most recent guidance range of $1.09 to $1.14. Adjusted EPS was $0.88 in the prior-year period. Most of Ross Stores' increase in adjusted EPS was driven by tax reform (which lowered the company's federal tax rate), but even on a fully comparable basis, EPS rose about 7% last quarter.

For the full year, adjusted EPS surged to $4.19 from $3.24 a year earlier, including a roughly $0.70 tailwind from tax reform.

Ross Stores posted solid sales and earnings growth last year. Image source: Ross Stores.

Management noted that the company could have done even better last quarter but was hindered by a merchandise planning misstep that impacted the company's ladies apparel business. Ross Stores didn't have the right merchandise assortments in its stores to fully meet customer demand, leading to lost sales and incremental pressure on its operating margin.

A solid 2019 forecast

Weakness in the ladies apparel business will continue to pressure sales and earnings in the first quarter. Ross Stores expects 0% to 2% comp sales growth this quarter, with EPS between $1.05 and $1.11 compared with $1.11 a year ago.

Fortunately, off-price retailers can typically recover quickly from merchandise mistakes. For example, TJX ran into trouble in the fall of 2017 but recovered to post strong results throughout the past year. Thus, Ross Stores is likely to be back on track by the second quarter.

For the full year, Ross Stores is projecting EPS between $4.30 and $4.50 on a 1% to 2% comp sales gain. This forecast is probably quite conservative. In recent years, the company has routinely exceeded the high end of its initial full-year sales and earnings forecasts.

Ross Stores plans to open approximately 75 Ross Dress for Less stores and 25 dd's DISCOUNTS stores during fiscal 2019, while closing or relocating 10 stores. That will expand its store base by more than 5% from the 1,717 locations it had at the end of fiscal 2018. The company also raised its quarterly dividend by 13% to $0.255 per share and announced that it plans to repurchase $2.55 billion of stock over the next two fiscal years, up from $1.95 billion over the past two years.

A solid choice for investors

Right now, TJX is posting more impressive sales growth than Ross Stores. TJX stock is also slightly cheaper, trading for 20 times forward earnings compared with 21 times forward earnings for Ross Stores.

However, Ross Stores probably has more runway for growth than TJX, due to its smaller size. Indeed, management believes the company could eventually operate 3,000 stores in the U.S., up 75% from its year-end total of 1,717.

Additionally, Ross Stores offers investors more stability than its larger rival. First, it earns higher margins. Last year, its pre-tax margin was 13.7% compared with 10.8% for TJX. Second, whereas Ross Stores operates stores only in the U.S., TJX gets nearly a quarter of its revenue from international markets -- introducing risks from exchange rate volatility, economic weakness abroad, and (in the near term) Brexit.

With that in mind, Ross Stores looks like a solid bet for investors who want to gain exposure to the booming off-price sector without taking on the additional risk associated with TJX's global footprint.

Top 5 Gold Stocks For 2019

tags:ORE,NXG,CME,GSS,NGD,

While money managers from Goldman Sachs Group Inc. to UBS Wealth Management still tout investing opportunities in emerging markets, the asset class has one notable critic: Harvard professor Carmen Reinhart.

The Cuban-born economist points to mounting debt loads, weakening terms of trade, rising global interest rates and stalling growth as reasons for concern. In fact, developing nations are worse off than during their two most recent moments of weakness: The 2008 global financial crisis and 2013 taper tantrum, when equities endured routs of 64 percent and 17 percent respectively.

"The overall shape they’re in has a lot more cracks now than it did five years ago and certainly at the time of the global financial crisis," Reinhart said from Cambridge, Massachusetts. "It’s both external and internal conditions."

Here’s what else Reinhart had to say on emerging markets:

Top 5 Gold Stocks For 2019: Orezone Gold Corp (ORE)

Advisors' Opinion:

• [By Jim Robertson]

  Finally, Richard Seville, the CEO of Brisbane-based Orocobre Ltd (ASX: ORE) which began lithium sales in 2015 from northern Argentina and also experienced difficulty boosting output, commented that an "inability to access traditional funds has delayed the development of the sector" and that "these projects aren't easy -- so the banks just don't want to go there."

• [By Stephan Byrd]

  Galactrum (CURRENCY:ORE) traded 1.7% lower against the U.S. dollar during the 24 hour period ending at 18:00 PM Eastern on August 31st. Galactrum has a total market capitalization of $866,847.00 and approximately $5,272.00 worth of Galactrum was traded on exchanges in the last 24 hours. One Galactrum coin can now be purchased for about $0.42 or 0.00006032 BTC on major exchanges including Stocks.Exchange and Cryptopia. In the last seven days, Galactrum has traded 12.5% higher against the U.S. dollar.

• [By Peter Graham]

  Sandstorm's due diligence is thorough, they don't just invest in any company. They like West Africa because they understand the area and the opportunities that exist there. Sandstorm is a royalty and streaming company, so they make these investments and receive cashflow deals that often kick in much later on. But they have already established a presence in Burkina and have deals in place with larger companies like Orezone Gold (TSXV: ORE) and Endeavour Mining (TSX: EDV). Sandstorm's investment also potentially gives us access to their marketing department through something they call Launch Lab, and it looks like it will really benefit our own marketing efforts and will expose us to more opportunities over the coming year.

• [By Shane Hupp]

  Galactrum (ORE) is a PoW/PoS coin that uses the
  Lyra2RE hashing algorithm. It was first traded on December 13th, 2017. Galactrum’s total supply is 2,781,952 coins and its circulating supply is 2,061,952 coins. Galactrum’s official website is galactrum.org. Galactrum’s official Twitter account is @galactrum.

• [By Stephan Byrd]

  Galactrum (ORE) is a PoW/PoS coin that uses the
  Lyra2RE hashing algorithm. It launched on November 11th, 2017. Galactrum’s total supply is 2,092,679 coins and its circulating supply is 1,372,679 coins. Galactrum’s official Twitter account is @galactrum. Galactrum’s official website is galactrum.org.

Top 5 Gold Stocks For 2019: Northgate Minerals Corporation(NXG)

Advisors' Opinion:

• [By Shane Hupp]

  Shares of NEX Group PLC (LON:NXG) have been given an average rating of “Hold” by the nine ratings firms that are presently covering the company, Marketbeat.com reports. One research analyst has rated the stock with a sell recommendation, four have assigned a hold recommendation and four have assigned a buy recommendation to the company. The average 1 year price objective among analysts that have issued ratings on the stock in the last year is GBX 696 ($9.21).

Top 5 Gold Stocks For 2019: CME Group Inc.(CME)

Advisors' Opinion:

• [By ]

  Chicago Mercantile Exchange (CME) : "That's an ideal stock for this market. I like the choice."

  Aqua America (WTR) : "This is not the stock for a hot economy, even though this is a well-run company."

• [By Max Byerly]

  Deutsche Boerse (OTCMKTS: DBOEY) and CME Group (NASDAQ:CME) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

• [By Logan Wallace]

  Cashme (CURRENCY:CME) traded down 0.1% against the dollar during the 24-hour period ending at 14:00 PM Eastern on August 31st. Cashme has a total market capitalization of $0.00 and approximately $0.00 worth of Cashme was traded on exchanges in the last 24 hours. One Cashme coin can currently be purchased for approximately $0.0003 or 0.00000003 BTC on popular cryptocurrency exchanges. In the last week, Cashme has traded 55.3% higher against the dollar.

• [By Motley Fool Transcription]

  CME Group, Inc. (NASDAQ:CME)Q4 2018 Earnings Conference CallFeb. 14, 2019, 8:30 a.m. ET

  Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

  Operator

Top 5 Gold Stocks For 2019: Golden Star Resources Ltd(GSS)

Advisors' Opinion:

• [By Max Byerly]

  Get a free copy of the Zacks research report on Golden Star Resources (GSS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Joseph Griffin]

  Get a free copy of the Zacks research report on Golden Star Resources (GSS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

• [By Max Byerly]

  Golden Star Resources Ltd. (NYSEAMERICAN:GSS) was the target of a significant increase in short interest in September. As of September 28th, there was short interest totalling 10,021,831 shares, an increase of 6.9% from the September 14th total of 9,371,344 shares. Based on an average trading volume of 1,038,207 shares, the short-interest ratio is presently 9.7 days. Approximately 4.7% of the company’s shares are sold short.

• [By Joseph Griffin]

  Golden Star Resources Ltd. (TSE:GSC) (NYSE:GSS) has been given an average recommendation of “Buy” by the six ratings firms that are presently covering the stock, Marketbeat reports. One research analyst has rated the stock with a hold recommendation and three have issued a buy recommendation on the company. The average 12 month price objective among analysts that have issued ratings on the stock in the last year is C$1.48.

• [By Max Byerly]

  Get a free copy of the Zacks research report on Golden Star Resources (GSS)

  For more information about research offerings from Zacks Investment Research, visit Zacks.com

Top 5 Gold Stocks For 2019: NEW GOLD INC.(NGD)

Advisors' Opinion:

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Check-Cap Ltd. (NASDAQ: CHEK) fell 23.3 percent to $9.87 in pre-market trading after declining 13.45 percent on Wednesday. SunCoke Energy Partners, L.P. (NYSE: SXCP) fell 12.8 percent to $16.00 in pre-market trading after reporting Q1 results. Briggs & Stratton Corporation (NYSE: BGG) fell 11 percent to $17.55 in pre-market trading after the company posted mixed Q3 results and lowered its FY18 guidance. New Gold Inc. (NYSE: NGD) fell 8.4 percent to $2.30 in pre-market trading following downbeat Q1 results. Quality Care Properties, Inc. (NYSE: QCP) fell 8.2 percent to $20.85 in pre-market trading. Welltower announced plans to acquire QCP for $20.75 per share in cash. China Customer Relations Centers Inc. (NASDAQ: CCRC) shares fell 7.5 percent to $17.25 in pre-market trading after climbing 18.73 percent on Wednesday. Nokia Corporation (NYSE: NOK) shares fell 5.7 percent to $5.58 in pre-market trading after reporting Q1 results. eBay Inc. (NASDAQ: EBAY) fell 5.6 percent to $38.66 in pre-market trading following Q1 results. Southw
• [By Stephan Byrd]

  JPMorgan Chase & Co. downgraded shares of New Gold (NYSEAMERICAN:NGD) from a neutral rating to an underweight rating in a research report released on Wednesday, The Fly reports.

• [By Maxx Chatsko]

  Shares of New Gold (NYSEMKT:NGD) fell by over 14% today after the company announced the surprise sale of its Mesquite gold mine. The business will receive $158 million in cash for the productive asset, which management says will "immediately crystallize several years' worth of future free cash flow as part of our strategy to prudently manage our balance sheet, providing the company with the financial flexibility to focus on our core assets".

• [By Ethan Ryder]

  Commerzbank Aktiengesellschaft FI raised its holdings in shares of New Gold Inc (Pre-Merger) (NYSEAMERICAN:NGD) by 5.3% during the second quarter, according to the company in its most recent Form 13F filing with the Securities & Exchange Commission. The institutional investor owned 2,015,289 shares of the basic materials company’s stock after buying an additional 101,852 shares during the period. Commerzbank Aktiengesellschaft FI owned about 0.35% of New Gold Inc (Pre-Merger) worth $4,192,000 at the end of the most recent reporting period.

• [By Lisa Levin]

  Check out these big penny stock gainers and losers

  Losers Teradyne, Inc. (NYSE: TER) fell 10.8 percent to $37.02 in pre-market trading after the company issued downbeat Q2 guidance. Edwards Lifesciences Corporation (NYSE: EW) fell 9.2 percent to $122.29 in pre-market trading. Edwards Lifesciences reported better-than-expected results for its first quarter, but issued weak earnings guidance for the second quarter. New Gold Inc. (NYSE: NGD) fell 8.8 percent to $2.30 in pre-market trading after rising 4.13 percent on Tuesday. Gold Fields Limited (ADR) (NYSE: GFI) fell 8.6 percent to $3.61 in pre-market trading. Natus Medical Incorporated (NASDAQ: BABY) fell 8.2 percent to $32.95 in pre-market trading after the company issued weak forecast for the second quarter. Atossa Genetics Inc. (NASDAQ: ATOS) shares fell 7.9 percent to $3.50 in pre-market trading after climbing 27.09 percent on Tuesday. Bright Scholar Education Holdings Limited (NYSE: BEDU) shares fell 6.7 percent to $13.58 in pre-market trading after reporting Q1 results. Sangamo Therapeutics Inc (NASDAQ: SGMO) fell 5.9 percent to $16.75 in pre-market trading following announcement of a $200 million common stock offering. Foresight Autonomous Holdings Ltd (NASDAQ: FRSX) shares fell 5.7 percent to $3.29 in pre-market trading after declining 3.32 percent on Tuesday. Euronav NV (NYSE: EURN) fell 4.8 percent to $8.40 in pre-market trading. Limelight Networks, Inc. (NASDAQ: LLNW) shares fell 4.3 percent to $4.69 in pre-market trading. Gaming and Leisure Properties Inc (NASDAQ: GLPI) shares fell 4.1 percent to $32.92 in pre-market trading after the company issued downbeat quarterly results and reported the retirement of CFO William Clifford
• [By Shane Hupp]

  News articles about New Gold (NASDAQ:NGD) have trended somewhat positive recently, according to Accern Sentiment Analysis. The research group ranks the sentiment of media coverage by monitoring more than 20 million blog and news sources in real time. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. New Gold earned a news impact score of 0.01 on Accern’s scale. Accern also gave media coverage about the company an impact score of 46.1175522193993 out of 100, indicating that recent media coverage is somewhat unlikely to have an effect on the stock’s share price in the near future.

Cardlytics, Inc. (CDLX) Q4 2018 Earnings Conference Call Transcript

Image source: The Motley Fool.

Cardlytics, Inc.  (NASDAQ:CDLX)Q4 2018 Earnings Conference CallMarch 05, 2019, 5:00 p.m. ET

Contents: Prepared Remarks Questions and Answers Call Participants Prepared Remarks:

Operator

(Starts Abruptly) Fourth Quarter and Full Year 2018 Financial Results Conference Call. Currently all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions)

At this time, I'd like to turn the call over to your host to Kirk Somers, Chief Legal and Privacy Officer. Please go ahead.

Kirk Somers -- Chief Legal and Privacy Officer

Good afternoon, and welcome to Cardlytics Fourth Quarter and Full Year 2018 Financial Results Call.

Before we begin, let me remind everyone that today's discussion will contain forward-looking statements based on our current assumptions, expectations and beliefs, including projected 2019 first quarter financial results and operating metrics, business strategies, and other forward-looking topics such as anticipated growth in Direct with new and existing customers, including those from Chase and Wells Fargo, the reduction in average revenue per user, the growth in monthly active users, expansion in new verticals, including travel, entertainment, grocery and e-commerce, expanding marketing budgets, consolidating the US banking market for Purchase Intelligence data, improving marketer adoption, delivering sustained growth, expanding our media capabilities, reducing friction and increasing automation and buying Cardlytics Direct, FI investments in consumer incentives, future revenue and profitability, and average length of our contracts with marketers.

For a discussion of the specific risk factors that could cause our actual results to differ materially from today's discussion, please refer to the Risk Factors section of the company's 10-K filed today March 5, 2019, and in subsequent periodic reports that the company files with the Securities and Exchange Commission.

Also, during this call, we will discuss non-GAAP measures of our performance. GAAP financial reconciliations and supplemental financial information are provided in the press release issued and the 8-K filed with the SEC today and in the company's 10-K, also filed. Today's call is available via webcast and a replay will be available for two weeks. You can find all of the information I've just described on our Investor Relations section of Cardlytics' website.

Joining us on the call today are Cardlytics' leadership team, including CEO and Co-Founder, Scott Grimes; COO and Co-Founder, Lynne Laube; and CFO, David Evans. Following their prepared remarks, we'll open the call for your questions.

With that, let me turn the call over to Scott Grimes, Cardlytics' CEO and Co-Founder. Scott?

Scott Grimes -- Co-Founder and Chief Executive Officer

Thanks, Kirk, and thank you to everyone for joining us in our fourth quarter and full year 2018 conference call. We've been a public company for just over one year and today we are excited to announce that we delivered strong fourth quarter results that exceeded guidance from our Q3 earnings call and are consistent with our results announced at January 14th.

Here are some highlights. Total revenue for the fourth quarter was $47.8 million and our core Cardlytics Direct revenue grew 23% year-over-year to $47.7 million. Our strong top line performance was driven by growth with existing marketers and from adding new marketers. Adjusted EBITDA in Q4 was a positive $300,000 and we added significant scale to Cardlytics Direct with 42% year-over-year growth in quarterly FI MAUs from $58.7 million to $83.2 million. Cardlytics Direct reached $99 million FI MAUs for the month of December 2018.

Our strong fourth quarter results capped off an exciting and transformational year for Cardlytics. Most notably, we have partnered with the three largest national banks in addition to many other financial institutions to deliver Cardlytics Direct to their customers. This is important to our marketing clients. We are very brand-safe privacy protected channel that profitably drives online and in-store sales with scale that is in line with other leading digital advertising solutions, and we believe we are well positioned to consolidate the US banking market for Purchase Intelligence, further strengthening our ability to drive, move the needle growth for brands across a range of verticals.

What's clear is that, during 2018, our team's efforts, along with our investments, built the foundation and the scale to support the opportunity to deliver sustained growth for years to come. In 2018, we've scaled our infrastructure and processes to serve $150 million FI MAUs to support our new national bank partners and future growth. And, in late Q4, the acceleration in the FI MAU growth began when Cardlytics Direct was made available to a large group of new customers from our most recent national bank clients. This step function increase in customer reach is the foundation for revenue growth, but it is important to understand that revenue per user lags FI MAU growth, consumers have to discover and learn to use our marketing. We have to secure larger budgets from current marketers and we have to bring new marketers in the channel. And we expect further MAU growth to come. We expect to reach 150 million FI MAUs by the end of 2019 based on completing both national bank launches. With this rapid FI MAU growth, we believe it will be 2021 before we bring ARPUs back to the levels that we achieve in 2018.

We know how to do this. New banks are launching with strong user experiences and we are consistently delivering strong return on the investments from our marketing clients. This provides the foundation to expand the breadth of marketers we serve and the amount they commit to our marketing solutions, but we are definitely not satisfied with just returning to 2018 ARPU.

Our native advertising channel can deliver a great deal more. We have important investments under way to position Cardlytics Direct as a strategic marketing platform. Over the next few years, we expect to enter new verticals about to and always an advertising model and expand our media capabilities to unlock the value of our proprietary native advertising channel.

Let me touch on a few highlights. We are bringing our capabilities to new verticals. We are now serving new clients in travel, entertainment, direct-to-consumer, e-commerce and grocery. While these relationships are new and modest in size, we believe it presents significant opportunity for us in 2019 and beyond. We've recently made key hires to help lead our sales effort in these new sectors, including a strategic leader to scale these growth verticals along with industry experts coming from travel and grocery.

In addition to expanding into new verticals, we are also making a multi-year investment to make Cardlytics Direct a questionless marketing tool and evolve to an always-on advertising solution.

In Q4, we delivered an important new capability to do this. As we grow budgets with our marketing clients, validating the return on their marketing spend has been a key point of purchase. This is because it often takes several months or clients to validate our reported results before launching a new campaign with us. To address this, we developed and launched a partnership with Nielsen to measure and validate the performance of our platform. This removes the key barrier for our marketers and accelerates their ability to scale their budgets with this. We are very pleased with the results of this initiative so far, but into 2019 we have several more brands under way to reduce the friction and increase the automation of the Cardlytics Direct buying process. Lynne will touch upon these -- about -- kind of few of these in her remarks.

In summary, as you look back in 2018, Lynne and I are extremely pleased with all that Cardlytics has accomplished over the past year. This is a testament to the strength and excellent execution of the entire Cardlytics team and we want to thank everyone for their hard work and their dedication. Looking ahead, we are excited about capitalizing on our significant growth opportunities in 2019 and beyond.

In 2018, we built the foundation and the scale to support our growth for many years. In 2019, we are focused on unlocking the value of the scale. We believe our scale, unique marketing and analytics capability and ongoing investments in our business will continue to deliver value to our marketing clients, our bank partners, and their customers and, of course, to our shareholders.

I'll now hand the call over to Lynne to provide greater detail into some of our recent accomplishments and our initiatives for 2019. Lynne?

Lynne Laube -- Co-Founder and Chief Operating Officer

Thanks, Scott. As Scott mentioned, I'd like to highlight a few success stories since the last the earnings call and provide an update on some of our 2019 initiatives. We've launched Chase mobile channels in November. We've seen strong initial engagement for the program and have been extremely pleased with the accommodation. We remain on target with both national bank launches in 2019. Once done, we expect to deliver marketing to a 150 million monthly active users.

At that point, we will analyze about one out of every two card swipes in the US. But, as a reminder, a national bank launch takes many months to scale and deliver results consistent with the network. We continue to invest in the partnership post-launch to ensure our customers and advertisers engaged in the platform. For example, we are allowing some advertisers have significant relationships with national bank to trial the network without cost for a period of time post-launch.

There is another exciting development with our national bank. Some are now taking a portion of the revenue we pay them and reinvesting it back into Cardlytics Direct. There are various ways they do this, including increasing the consumer incentive associated with an offer or rewarding purchases in a certain category like grocery or gas. This is a positive for bank partners and our advertisers. It drives increasing engagement and strengthens the return on marketers' investments.

Our progress with advertisers is equally exciting. This is especially important, because generally marketers will not budget for increased scale and so new customers are fully online. One of the key reasons ARPU growth lags MAU growth because of marketers media planning cycles. So early increases in commitments by marketers indicate how they are shifting budgets over time to Cardlytics Direct.

Let me give a couple of example. First, we've seen an increase in eight-digit client. In 2018, only one marketer invested over $10 million in total billings in Cardlytics Direct. In early 2019, we already have three clients with annual contract that exceeds $10 million in note. The number of marketers spending more than $1 million with Cardlytics Direct also grew significantly. This is probably the most important stat that highlights organizations that are learning how to leverage our channel.

In 2018, we had 34% increase in the number of marketers spending more than $1 million in billings in Cardlytics Direct when compared to 2017. As we enter new vertical from 2019, it creates even more opportunity to bring new brands into the channel.

Something we can uniquely do for marketers, help them understand how their customers spend with them and their competitors across all channels. We go beyond omni-channel and we identify the most valuable omni-channel customers. We help retailers understand exactly how valuable a customer is if they shop both online and in-store versus online-only or in-store. While marketers can see some of this themselves, we add a really important layer where else this customer shop? So the retailer is now able to see exactly how much headroom they have with very specific segments of customers, particularly those who are prone to switching among the brands. This knowledge help the marketers to develop a more robust omni-channel strategy. And, of course, with Cardlytics Direct, they can activate these strategy at the customer level.

For example, we're working with a leading retailer who is launching a grocery pick-up service. With Purchase Intelligence, we identify customer segments that have the purpose to do shop with this retailer but are spending with other online grocery stores. We then promote the new grocery service to pick-up to these customers, shift market share to the retailer and measure the return of the marketing investment. Cardlytics Direct ability to drive and observe in-store and online sale makes it a powerful tool for executing omni-channel strategy.

We also continue to work on eliminating the friction in the buying process, which has contributed to advertise egoism (ph). Our validation partnership with Nielsen is working. In just a few months, we've had several marketers increase the maximum amount they will spend with us and another major retailer for the use of our channel across the corporation, because the third-party can validate our results are real and excellent.

In Q4, we also rolled out proprietary technology that laid heart of this foundation for an always-on automated buying and self-service solution. While marketers leverage Cardlytics Direct as a single digital advertising channel, we internally operates the channel by reaching consumers through online, mobile and in our touch points across many banks. Each of these banks and each of these touch points perform differently. The technology we launched in Q4 allow us to more easily and automatically direct how media is distributed across these various touch points. It's a critical tool as we simultaneously optimize campaign revenue and return on assets (ph) and as we're growing the number of average consumers in the channel, it enables us to increasingly automate and optimize these processes, thereby reducing cost and enabling always-on campaign acquisition.

As Scott mentioned, we could not be more excited about the future of Cardlytics. The investments we made in scaling our platform and our ongoing initiatives (technical difficulty) fully recognizing the ARPU potential of our business are exciting. This will take time, but the foundation is laid and now all we have to do is execute.

With that, I will turn it over to David.

David Evans -- Chief Financial Officer and Head of Corporate Development

Thanks, Lynn. Total revenue for the fourth quarter was $47.8 million. Revenue within our core Cardlytics Direct business was $47.7 million, representing a 23% year-over-year growth rate over the fourth quarter 2017. Our US Direct business was up 26% year-over-year in Q4 and our UK Direct business were 11% at constant currency.

For the full year, total revenue was $150.7 million, an increase of approximately 16% over 2017. For our core Direct, revenue of $149.3 million was up 22% over the prior year. Average FI MAUs grew approximately 42% from 58.7 million in the fourth quarter 2017 to 83.2 million in Q4 2018. Consistent with our recent commentary, we expect the FI MAU growth continue to grow this year, driven by the national bank launches, providing additional tailwind into 2020.

Our fourth quarter 2018 ARPU was $0.57, down 14% from $0.66 in the fourth quarter of 2017, primarily reflecting the impact of rapid growth in average FI MAUs. Full year 2018 ARPU was $2.30 compared with $2.23 in 2017.

As we've discussed, new MAUs have a maturation period before they reach their ARPU potential. We expect this dynamic to play out for the foreseeable future going forward, especially in 2019 where material FI MAU growth from national bank launches to cause a decrease in ARPU. As Scott mentioned earlier, we would expect to return to more normalized historical levels of ARPU in 2021 with revenues in excess of $300 million coupled with consistent profitability. Longer term, we continue to believe this ramp in FI MAU supports our revenue growth.

Total adjusted contribution profit was $22.1 million in the fourth quarter of 2018, up from $17.4 million in the fourth quarter of 2017. For the full year 2018, adjusted contribution in profit was $69.5 million, up from $58.7 million in 2017, and Cardlytics Direct adjusted contribution profit was $69.4 million, up 26% from $55.2 million in 2017.

Adjusted EBITDA was a positive $300,000 in the fourth quarter of 2018 compared to a $500,000 gain in the fourth quarter 2017. Our fourth quarter adjusted EBITDA was above our prior guided -- primarily due to the revenue outperformance in the quarter and to a lesser extent coming in under budget on bank implementation consensus.

For full year 2018, our adjusted EBITDA loss was negative $6.6 million, an improvement from a negative $7.2 million loss in 2017. We ended the quarter with $59.9 million in cash compared to $67.8 million in cash at the end of Q3 2018. Our cash balance includes, approximately, $20 million of restricted cash. We ended the quarter with $3.3 million in availability on our AR facility.

I'd also like to talk about a few positive trends we've seen thus far in 2019. We are seeing positive trends in the number of marketers who are spending more with us. Additionally, already this year, we have seen the average contracts' length increase by over 50% for our larger marketers, demonstrating our continued push to move marketers to longer-term contracts. We believe that these proof points position us well to continue growing and expanding existing advertiser budgets as well as sign new material notable advertising clients in the coming months and years.

Now turning to our 2019 guidance. While we have gone to great lengths to analyze Chase's impact on revenue and are very pleased with the results so far, we are still in the very early stages of measuring our performance and analyzing what the steady state will look like. Adding to that, while we are still on target for a Wells launch in 2019, precise timing remains fluid and modeling the impact to our 2019 results is therefore difficult.

These two significant factors create a wide range of possible scenarios for our 2019 results and, as a result, we are offering our full year 2019 guidance into our Q1 earnings release, we will have more experience with the expanded network and have an opportunity to analyze the new data and gain greater visibility. We will continue to provide quarterly guidance throughout 2019 and begin to provide guidance for adjusted contribution, which I'll explain shortly.

For the first quarter, we currently expect revenue to be between $34.5 million and $36.5 million. We expect adjusted EBITDA loss for the first quarter to be between negative $6.5 million and negative $5.5 million. We expect adjusted contribution for the first quarter to be between $15.5 million and $16.5 million. Our decision to guide adjusted contribution stems from the complexity and nuances surrounding our network of FI partners. As Lynne mentioned, we will always drive to ensure the successful launch of the national bank partner and in doing so will encourage and adopt various activities to ensure customers and advertisers engage with the platform. As we continue to monitor the effects, we've seen new developments take place, when in particular that impacts our GAAP revenue.

Our banking partners are embracing our program by reinvesting more of their FI shares into the program in the form of larger consumer incentives and attractive offers. We're referring to these as enhanced consumer incentives. Therefore, there can be a shift of dollars into consumer incentive from FI share. And, as you recall, our GAAP revenues, billings less consumer incentive, so while this does depress our revenue, it is important to understand that this has a netting effect to adjusted contribution and adjusted EBITDA.

Longer term, we believe this has a very positive effect on improving engagement and the stickiness of Cardlytics Direct with consumers. Therefore, providing adjusted contribution guidance, provides a better view as it relates to the performance of our business.

Separately, to help remodeling and as we've previously discussed, we currently expect FI should share commitment shortfall in 2019 to be between $5 million and $6 million. We expect this accrual to begin in the second quarter of 2019, in which case we would anticipate the shortfall in the 12 months thereafter.

With that, I'll hand it back over to Scott for his closing remarks before we open the call to your questions. Scott?

Scott Grimes -- Co-Founder and Chief Executive Officer

Thanks, David. 2018 really was a transformational year for Cardlytics. Cardlytics Direct is a brand, say, precision targeted, native advertising channel that profitably grows in-store and online revenues for advertisers adding scale comparable to other digital marketing solutions. I've spent a lot of time with our marketing clients over the past quarter. It is really exciting to see how we are one of the most important tools in their marketing mix.

In addition, our larger marketers increasingly rely on our analytics and insights to support their business overall. As we expand our client roster, we can really have an impact on the effectiveness in commerce going forward. David is exactly right, we are laser-focused on growing our marketer clients and budgets to achieve 2018 ARPUs at $2.30, once again in 2021. But, importantly, we will achieve these ARPU levels with a customer reach of 150 million FI MAUs delivered by adding two new national banks to Cardlytics Direct.

And we believe we are making the investments now to sustain strong growth well beyond 2021 by developing richer media capabilities, entering new verticals and evolving to a questionless always-on business model. Lynne and I are really proud of what our team accomplished in 2018 and we are confident in their ability to achieve our goals going forward.

With that, I'll open up the call for your questions. Thank you.

Questions and Answers:

Operator

Thank you. (Operator Instructions) Our first question comes from Doug Anmuth from J.P. Morgan. Please go ahead.

Daniel -- J.P. Morgan -- Analyst

Hi. This is Daniel on for Doug. Thanks for taking our question. I appreciate the color you guys provided on your Q1 guide and the fact that you guys are pushing out 2019 guide to 1Q because of uncertainties, but I mean 1Q guide is a little bit -- does signal some piece out on from 4Q level, but can you talk a little bit more about the drivers behind that? And how that could potentially compare to your full-year number? Just any color would be appreciated there. And then secondly on Chase, I realized the stir early, but can you talk about -- talk a little bit more about that, the performance of that channel and your progress toward activating outlook Chase channel beyond apps that you launched in 4Q?

Scott Grimes -- Co-Founder and Chief Executive Officer

Yup. Hey, Daniel, this is Scott Grimes. First of all, thanks for joining in the call. Appreciate it. Let me touch on both of those questions. One of the things that is that we -- a number that we don't guide on is our overall billings and what we are seeing right now are very -- are billings in line with what you guys would have expected and what we've expected, and a lot of the noise that makes it appear like a deceleration in Q1 is actually good news, it's similar things that David touched on both in terms of our FI reinvesting there, FI share into consumer incentives and also some of the work we're doing to bring some big advertisers into the network and the reason we believe both of those things are good news is, when we're making those investments it's causing two things to happen.

First, it's causing customers to engage with the channel sooner and more aggressively. And then, second, a lot of why we're making these investments with advertisers is, we have some very important large advertisers into the network for the very first time. We are doing that without media fees, but we are doing that to secure these and to let these advertisers testing network, to see the return on their network and, hopefully, become very large advertisers over the next year or two as we work with them.

So as much as you're seeing as anything. It does taken some fairly bold actions as part of the launch to really sort of set this channel up for great performance over the next decade and by simply Chase watching, then David, I'll let you to talk to the specifics, we're really pleased with the Chase launch. We have seen customer engagement levels certainly beyond expectations. We are seeing advertiser performance in the channel at levels that we hope to achieve the overall -- we're still very much in the middle of launching. I don't want to speak more to individual banks, but we are tracking in a way that gives us a lot of confidence -- in a way that gives us a lot of confidence of how to channel or perform with 150 million MAUs online over the next few years. Okay, David, do you want to add to that?

David Evans -- Chief Financial Officer and Head of Corporate Development

Yeah. Sure, Scott. Thanks. I think you'd asked a little bit of question. I'm sorry -- I think you asked a question about the sequential decline, that's usually fairly typical with the business, obviously, going from Q4 to Q1. So that's nothing of surprise there. Scott touched on a little bit. I think as I look at -- I think, Doug may be one of the few guys out there that kind of have billings number out there for Q1. We're not that far off from that, but, as Scott mentioned, there is a couple of things that we're doing to ensure a very strong bank launch here in this quarter, some of that is through the enhanced consumer incentive route, which has a netting effect. There are other things that we are doing that will compress all the numbers a little bit that you will see in the Q1 guide as well. But, again, I think all of this comes down to ensuring that we have a very successful launch with Chase.

On that same front, Scott made a couple of comments around some of the positive trends we're seeing. We're seeing longer contract terms, we're seeing more million dollar budgets in the pipeline, so a lot of good sound bites down the quarter so far.

Daniel -- J.P. Morgan -- Analyst

Got it. I appreciate the color. Thank you.

Operator

Thank you. Our next question comes from Tim Willi from Wells Fargo. Please go ahead.

Timothy Willi -- Wells Fargo Securities -- Analyst

Hi. Thanks. Good afternoon. A couple of questions. First, if I remember correctly, you had said that SunTrust is a customer. I'm curious, is BB&T currently a customer or is there any comment you can make around that?

Scott Grimes -- Co-Founder and Chief Executive Officer

Hey, Tim. This is Scott Grimes, and thanks for joining the call today. The answer is yes, BB&T and SunTrust are both customers. They both are great bank partners and we're really glad they are in the network and I'm sure they'll continue to think about the program as they drive the consolidation over the next couple of years.

Timothy Willi -- Wells Fargo Securities -- Analyst

Okay. And then another question I had was going back to Lynne's comments about the mark-to-market or is that you signed up in the billings, did that exceed expectations? Was it more in line with what you were thinking? I'm sort of curious how that played out versus your expectation for signing up and expanding budgets?

Lynne Laube -- Co-Founder and Chief Operating Officer

Yeah. So are you specifically referring to the increase in marketer spending $1 million?

Timothy Willi -- Wells Fargo Securities -- Analyst

Yeah, that and I think even the eight-digit ones where (multiple speakers) one to three.

Lynne Laube -- Co-Founder and Chief Operating Officer

Yeah. That not only exceeded our expectations specifically in the ones that are spending more than $1 million, that is nearly double the increase that we saw 2016 to 2017 versus the increase 2017 to 2018, so significant acceleration in the number of new logos that are spending enough dollars in the channel that they are taking it seriously. We know that they usually have to spend between $0.5 million and $1 million to get a really good read on the channel. So we are very excited about that. It is a very good early sign of what is to come. Same thing with the eight-digit clients. We went from one to three. So obviously, we're all small numbers, a significant increase and we are continuing to really push on signing large deals, annual plus level contracts with advertisers once they understand the power of the channel. It is a good predictor of what is to come.

Scott Grimes -- Co-Founder and Chief Executive Officer

As you know, Tim, just to add to what Lynne said, advertisers sort of don't really budget for the volume until they know it's real, because they don't want to run the risk of not spending their money and we, of course, launched in the middle of the Christmas season, which is really busy time for advertisers. I've been with a ton of CMOs over the past couple of months, right, well, January and February, and when you go in there and we can talk about how we can really move the needle and drive growth in their business with the scale we have, it's very different discussion. So while it's hard for you guys to see in Q1 results, what we can tell you from where we sit, walking them with a scale now and where the scale is going to be over the short period and what is that to their business, it's a higher level discussion and a much more backlog discussion. So we're pretty bullish on what we said.

Timothy Willi -- Wells Fargo Securities -- Analyst

Great. And I had one last one and I'll hop off. But sort of on the topic of the bigger contracts, is there a discussion at all about any kind of incremental customization or scope that would have an impact around near-term profitability and margin targets? I mean it's all good long-term, so we're on board with that. I just want to make sure we're not missing something around scalability if you really start to see big contracts like this really start to gain momentum.

David Evans -- Chief Financial Officer and Head of Corporate Development

This is David, Tim. It's a good question. And certainly there's a couple of things that are going to help drive operating leverage. One is just the size of the contract. The incremental effort that goes into running a significantly larger contract is minimal relative to this -- to being able to go out and secure a larger deal. The other piece is part of what Scott and Lynne talked about in there at the beginning and the outset here is around reducing some of the friction and we are making some headway there and that will only help paint a picture for better operating leverage in the future as well.

Timothy Willi -- Wells Fargo Securities -- Analyst

Great. That's all I had. Thanks so much.

David Evans -- Chief Financial Officer and Head of Corporate Development

Thanks, Tim.

Operator

Thank you. Our next question comes from Andy Hargreaves from KeyBanc. Please go ahead.

Andy Hargreaves -- KeyBanc Capital Markets Inc. -- Analyst

Thanks. So qualitatively, everything sounds pretty good, but the just general revenue has been lower than what we expected, say, a year or 18 months ago. So I'm wondering if you can comment at all, is there user engagement that, sort of, existing banks not lived up to your expectation with different product changes with the bank, so can you just comment on what sort of the gap is between what we thought a year ago and where we are right now?

Scott Grimes -- Co-Founder and Chief Executive Officer

Yeah. So, Andy, I'll think it at a high level and then David and Lynne add to this. For the overwhelming majority of our advertisers, MAU growth user engagement is not the constraint to the growth, the constraint is the number of advertisers that are in the network and besides of budgets that we're securing from this. And that's one of the reasons ramp in the scale is so important is because, we know, especially in the digital world, advertisers buy scale. We are now a few months into -- given them that kind of level of scale that they really want and so when I think about where we end up in 2021, it, to me, is simply a function of how many advertisers are in the channel, how big of way are they using the channel, which is why we focused so much on bringing the million-dollar advertisers in because we know those are kind of might (ph) land and understand that's the land and then the expand is how quickly can we get them from a seven-digit budget to an eight-digit budget.

David Evans -- Chief Financial Officer and Head of Corporate Development

And, Andy, it's a good question. I think it's something worth reiterating. I think back to a large part of the conversation we talked about the IPO and what the long-term plan look like five to six years out, which would be 2023 and what that looks like is, call it, $0.5 billion business with 20% EBITDA margin. I am -- as I look at our model today, I'm right on track. We are right on track with what exactly what we said we're going to do and it's partly why we alluded to returning to normalized ARPU levels by 2021. Just by looking at the model and you assume something north of $2 on ARPU and $150 million in MAU, we're now consistently profitable and we're now somewhere around $300 million of revenue, which then gets us directly on track with what we talked about at the IPO.

Scott Grimes -- Co-Founder and Chief Executive Officer

It just positioned to really keep accelerating growth.

Andy Hargreaves -- KeyBanc Capital Markets Inc. -- Analyst

And then just a follow-up on sort of the add-facing sales side, you guys have made a couple of hires, it sounds like, can you comment on what the total size of that sales forces is and where you would like to get as you try to land more advertisers and bigger budgets?

David Evans -- Chief Financial Officer and Head of Corporate Development

Yeah. I mean, Scott alluded this a little bit. I mean, so much of what we are doing is elevating the dialog with our advertisers. When you're talking about making the ask that we're talking about from six-figure to seven-figure to eight-figure, you could imagine that the dialog changes and therefore as we think about our sales force and our go-to-market that naturally has to evolve as well. We have made three or four significant hires at the senior ranks in the sales force, we probably have a couple more to go. As we laid out in November, we laid out a pretty specific game plan for, call it, six to eight months. We are right on track. We still have some things that we still need to go and execute on, but as I sit here today, everything is as we laid it out.

Andy Hargreaves -- KeyBanc Capital Markets Inc. -- Analyst

Okay. Thanks.

Operator

Thank you. Our next question comes from Nat Schindler from Bank of America. Please go ahead.

Nathaniel Schindler -- Bank of America Merrill Lynch -- Analyst

Yeah. Hi, guys. Can you just walk me through a little bit the process, the typical or at least the historical and I know it's not a whole lot behavior as a new advertiser comes on and how they work with the system early and how they evolve?

Lynne Laube -- Co-Founder and Chief Operating Officer

Yeah, Nat, this is Lynne. Let me take a shot at that. Our typical new advertiser is going to always start with the test IO, but test IO is usually 45 days in length. What we have seen pre versus post national -- the latest national bank launch is that IO side has gone up. So in the past that was maybe in the couple of hundred thousand dollars range and now we're seeing it in the $0.5 million to $1 million range, simply because they are really wanting to make sure they understand the full scale and potential of the network. That -- after the 45-day IO run, it usually takes another 45 to 90 days for the results to be sort of processed and absorbed by the organization, embedded and validated for lack of a better term and, as Scott has mentioned, our Nielsen partnership is really helping with that and also accelerating that timeline a little bit. And then it just depends on where we are in their annual or biannual media buying processes, most advertisers budget once a year with a kind of mid-year course correction and their fiscal year's can often be different than typical December to January year-end. So depending on where we are in the budgeting cycles, it can take another couple of months for us to get to a point where they're ready to actually put us in as a line item. So while we are excited by the number of new logos that are in the channel, we still kind of reiterate it's going to take six months on average, maybe longer, nine months, for new logos to start significantly expanding their spends. And as we mentioned in the very beginning, these new logos also don't tend to test until they actually see the volume is really there. So that is why the staffs that we introduced about what's worth -- what we're seeing with new logos with $1 million budget and with eight-digit budgets in January are really important precursors of what's to come.

Nathaniel Schindler -- Bank of America Merrill Lynch -- Analyst

Okay. Just -- can you walk me through a little bit historically, why have some of your advertisers -- is that you had for quite a while committed in guys and others haven't, what were the -- what was the differences between a star (technical difficulty) and a smaller (technical difficulty).

Scott Grimes -- Co-Founder and Chief Executive Officer

One of the really important part is making sure that we connect with the analytics organization in the client and I think where we work best with our bigger advertisers is when our analytic team is embedded with their analytic team, they really understood the return on our advertising investment. The highest level, I'd say, really believe, like, for every dollar they are paying as we're giving them $5, it's real incremental revenue back and I think every day we are getting better and better at doing that. I think the other thing that really drives the adoption by advertisers is when they use our analytics as part of their broader business, that's awesome and we are just frankly, simply more top of mind and more (technical difficulty) part of the market that (technical difficulty) we mix (ph) and why it's so important as we focus on things like taking the friction out of the process, enabling self-service, to make it just easier to use, all that is just part of what we do every day.

Nathaniel Schindler -- Bank of America Merrill Lynch -- Analyst

Okay. Thank you.

Scott Grimes -- Co-Founder and Chief Executive Officer

Thanks, Nat.

Operator

Thank you. Our next question comes from Matt Trusz from G.research. Please go ahead.

Matthew Trusz -- G.research -- Analyst

Good morning. Thank you. I'm sorry. Good afternoon. Thank you for taking the questions. So to tie-up the discussion on market or budgets, as we see here in March, how big does your marketer budgets for the full year given the dynamic timing of the ramp? And how much flexibility is there generally for them to go up and down over the next six to nine months?

Scott Grimes -- Co-Founder and Chief Executive Officer

Yes. That's a great question, Matt. What would add to this be, it's one thing that we're trying to find is marketing budgets for the first half of the year were set probably late half of the year or early last half of the year in 2018. So there are some flexibility in those, but those are largely nailed down. That being said that, we -- in the back half of 2019, we think there's a lot of ability to go in growth budgets, but they tend to operate in about a six-month cycle. So you get in there and you test, you prove the scale and you're working to get that budget increase the next six months, and that's a journey, because every time a marketer is shifting significant dollars to us, it probably means they're moving it out of -- another one of their digital channels, so they don't do that as a step function versus a series of increments over time.

One of the six-digit clients that was talking about, they have been working with us -- with the eight-digit clients -- when the eight-digit clients, Lynne was speaking to, started working with five years ago, it's been about $250,000 that for here, yet today they're spending significantly more but that took several years of growing that budget.

Lynne Laube -- Co-Founder and Chief Operating Officer

But the flip side is, another one of those eight-digit clients that I was referring to went from sort of zero to eight digits in about a year and a half. So we are seeing that the sales cycle is accelerating from where it was, sort of, pre-significant scale, but I still think it is wise to assume that the sales cycle is going to take, as I said, sort of six months to nine months depending on where you are in their media planning cycles from when they do that initial $502 million IO.

Scott Grimes -- Co-Founder and Chief Executive Officer

And it's why we speak of accelerating growth, because we know we're putting the foundation in place right now with a series of testing and we understand the rate at which we can go and grow that overtime.

Matthew Trusz -- G.research -- Analyst

Got it. Thank you. And then can you just discuss which product innovations are highest priority or most impactful for you in 2019? Thanks, again.

Scott Grimes -- Co-Founder and Chief Executive Officer

Yup. We -- it's -- the broad set of capability is around taking the friction out of the buying process. And if you sort of mapped out how organizations buy, there's a series of touch points starting from how they do their media mix modeling, how they set their media strategy, how they actually execute the media and how they report on it. And so, we have a whole series of initiatives going against those different touch points, which by the way is a couple of years of work to get from -- to where we are today to where we want to be and each quarter we'll talk to you about how we're releasing against that schedule.

Matthew Trusz -- G.research -- Analyst

Thank you.

Scott Grimes -- Co-Founder and Chief Executive Officer

Thank you.

Operator

Thank you. (Operator Instructions) Our next question comes from Youssef Squali from SunTrust. Please go head.

Sagar Vachhani -- SunTrust Robinson Humphrey -- Analyst

Hi. This is Sagar on for Youssef. I just want to make sure I got a couple of numbers correct. First that December had 99 million MAUs and second that there were -- there was no timeline associated with that 150 million number? And also similar (technical difficulty) can there be revenue noise with Wells Fargo when that starts ramping similar to what we're seeing now to ensure a good experience for advertisers? And, lastly, can you expand on that $5 million to $6 million number you gave around the FI shortfall commitment?

David Evans -- Chief Financial Officer and Head of Corporate Development

Yeah, sure. I got four questions. So we do may ask you to repeat this. The first on Wells...

Scott Grimes -- Co-Founder and Chief Executive Officer

Wells is 99 million.

David Evans -- Chief Financial Officer and Head of Corporate Development

Yup. So on Wells you talk about any change in their revenue outlook. I think what you would see there is just a change in campaign consumption more than anything and an adjustment from that. As I sit here today to again 99.3 million in December, 150 million MAUs by the end of this next year, we've got plenty of headroom to go out and run campaigns and consume budgets. It just changes and adjust how we go about doing that with regards to the timing of the Wells rollout. The $5 million to $6 million shortfall that is something I know we've been talking about ad nauseam and apologies for that for the last three quarters or so, that particular bank will start in the second quarter, so we'll start that accrual of that $5 million to $6 million, that won't be due until 12 months later, so April-ish of 2020. But that is correct, and I think those are the four questions...

Sagar Vachhani -- SunTrust Robinson Humphrey -- Analyst

Yeah. That's perfect. Yeah. And I just want to make sure that $5 million to $6 million basically you're seeing three quarters this year and one quarter next year?

David Evans -- Chief Financial Officer and Head of Corporate Development

That's right. Three quarter of (multiple speakers) this year and then one quarter in 2020.

Sagar Vachhani -- SunTrust Robinson Humphrey -- Analyst

Okay. Got it. Thanks.

David Evans -- Chief Financial Officer and Head of Corporate Development

Yup.

Operator

I show no further questions in the queue at this time. I would like to turn the call over to Scott Grimes, CEO and Co-Founder, for closing remarks. Please go ahead.

Scott Grimes -- Co-Founder and Chief Executive Officer

Thank you. Awesome, everybody. We really appreciate you joining in the call today. Hopefully, you hear the excitement in our voices about -- we had a great Q4 and we were really excited how we ended the year. And, more importantly, we really think 2018 laid the foundation for sustained and accelerating growth for many years to come and we are just at the very beginning of that journey, but we're really excited internally about how we're positioned and we're really excited about how our marketing clients are thinking about exactly how they incorporate and how they run their business to drive their sustained long-term growth. So, once again, thanks for joining in the call and we look forward to talking to you again next quarter.

Operator

Thank you, ladies and gentleman for attending today's conference. This concludes the program. You may all disconnect. Good day.

Duration: 45 minutes

Call participants:

Kirk Somers -- Chief Legal and Privacy Officer

Scott Grimes -- Co-Founder and Chief Executive Officer

Lynne Laube -- Co-Founder and Chief Operating Officer

David Evans -- Chief Financial Officer and Head of Corporate Development

Daniel -- J.P. Morgan -- Analyst

Timothy Willi -- Wells Fargo Securities -- Analyst

Andy Hargreaves -- KeyBanc Capital Markets Inc. -- Analyst

Nathaniel Schindler -- Bank of America Merrill Lynch -- Analyst

Matthew Trusz -- G.research -- Analyst

Sagar Vachhani -- SunTrust Robinson Humphrey -- Analyst

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