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Tag: cloud computing

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Cloud Service Providers

Amazon Q1 Earnings: Solid Revenue and AWS Growth, But Lower Guidance for Q2

Source:Seeking Alpha

Source:Seeking Alpha

  • Amazon press release (NASDAQ: AMZN): Q1 EPS of $0.98 may not be comparable to consensus of $0.83.
  • Revenue of $143.3B (+12.5% Y/Y) beats by $750M – Positive.
  • AWS segment sales increased 17% year-over-year to $25.0 billion – That’s a good sized growth compared to Google Cloud and Azure since it’s so much bigger.
  • Second Quarter 2024 Guidance
  • Lower guidance – Net sales are expected to be between $144.0 billion and $149.0 billion vs. $150.09B consensus, or to grow between 7% and 11% compared with the second quarter of 2023. This guidance anticipates an unfavorable impact of approximately 60 basis points from foreign exchange rates. In the first quarter of 2024, the impact from Leap Year added approximately 120 basis points to the year-over-year net sales growth rate.
  • Operating income is expected to be between $10.0 billion and $14.0 billion, compared with $7.7 billion in the second quarter of 2023.

The stock is up about 3% to $180, but that’s not even recovered the 4% that it lost in the day.

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Semiconductors

Super Micro Q3 Earnings: Strong EPS Beat, But Revenue Misses; Upgraded Guidance Boosts Outlook

source:supermarco

Super Micro Earnings Release. Source: Seeking Alpha

  • Super Micro Computer press release (NASDAQ: SMCI): Q3 Non-GAAP EPS of $6.65 beats by $1.08.
  • Revenue of $3.85B (+200.8% Y/Y) misses by $50M.
  • Guidance is better: 
  • For the fourth quarter of the fiscal year 2024 ending June 30, 2024, the Company expects net sales of $5.1 billion to $5.5 billion vs $4.86B consensus, GAAP net income per diluted share of $7.20 to $8.05 and non-GAAP net income per diluted share of $7.62 to $8.42 vs $6.96 Consensus.
  • For the fiscal year 2024 ending June 30, 2024, the Company is raising its guidance for revenues from a range of $14.3 billion to $14.7 billion to a range of $14.7 billion to $15.1 billion vs $14.59B consensus and establishing guidance for GAAP net income per diluted share of $21.61 to $22.46 and non-GAAP net income per diluted share of $23.29 to $24.09.

The stock is down 1.5% to $846 after losing 3.5% during market hours.

Categories
Enterprise Software

Rubrik’s IPO: Evaluating the Potential of a Microsoft-Backed SaaS Player in Data Security

Rubrik’s IPO is priced at $32 per share. Microsoft is backing this company.

SaaS business – data and data-centric security – this is a growing business with overall industry growth in the low twenties, from migration of on-prem to cloud.

Co-founder is Ex Nutanix

Company-wide revenue growth was only 5%, and the company is still in an early growth stage to have decent profitability but has shown a lot of promise with declining losses last year. Sales and marketing expenses take away a lot of revenue – they’ll need to keep this high to convert pure license customers to SaaS customers, at least 2-3 years.

Net Retention Rate at 133% is good for SaaS customers but this number drops over total revenue because of the large license revenue base.

A lot of big competitors in this industry, including Dell EMC and IBM.

Overall, given the slowing revenue growth, I would prefer to wait. I suspect the valuation is coming in too hot at an estimated 8x sales without the growth. Let’s keep an eye out, it has promise but I think we’ll need a better price.

Categories
Cloud Service Providers

Microsoft (NASDAQ) Q2 Earnings Preview: AI Growth and Cloud Performance in Focus

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Microsoft (NASDAQ:MSFT) is scheduled to report its second-quarter results on Tuesday, January 30th, after market close, kicking off tech earnings.
Analysts expect a year-over-year increase in both the top and bottom lines, with earnings per share of $2.77 on revenues of $61.13 billion.

The Redmond, Washington-based company recently became the second tech giant, after Apple (AAPL), to cross the $3 trillion mark, buoyed by its artificial intelligence products. Its shares have surged nearly 63% in the last 12-months.

Microsoft (MSFT) has poured billions of dollars into OpenAI, making it the startup’s largest investor. This has let it get ahead of rivals Alphabet (GOOG)(GOOGL), Amazon.com (AMZN), and Meta Platforms (META) in the AI race.

The technology underlying OpenAI’s ChatGPT has become entwined in Microsoft (MSFT) products.

The Windows maker recently expanded access to its generative AI offering Copilot. The subscription plan is now offered to individuals and small businesses.

Copilot, which Microsoft (MSFT) dubs as an “everyday AI companion,” is intended to assist writers, programmers, creators, and designers.

According to investment firm Citi, a 5% adoption rate by its 77M customers using Microsoft 365 could add $925 million in revenue by fiscal year 2025. An adoption rate of 15% could add $2.7 billion in sales.

Analysts at Wedbush believe Microsoft (MSFT) will be the most important earnings report and conference call in all of earnings season.

The company is expected to handily beat expectations for the December quarter. Investors will be focusing on the Azure growth metric and the performance of its cloud business.

While AI be a dominant theme in 2024, analysts are of the opinion that 2025 will be the true inflection year.

Last week, Microsoft (MSFT) announced it was laying off 1,900 employees at its gaming division, primarily impacting employees at Activision Blizzard and Xbox.

Over the last three months, the company’s estimates have seen substantial upgrades. Its earnings per share estimates have been revised upwards seven times vs. one downward move, while revenue estimates have seen seven upward moves, compared to two downward revisions.

Seeking Alpha analysts at large consider MSFT a Buy. This compares with average Wall Street rating of Strong Buy and SA Quant rating of Hold.