Neil Cybart 2/16/24 Neil Cybart 2/16/24

Alphabet Earnings, Amazon Earnings

Monday’s update concluded with the following:

“Meta has reported more than $38B of operating losses on its AR/VR efforts. The company needs products like Quest 3 and Ray-Ban Meta to do well and generate revenue to reduce pressure on what are mounting losses.”

There is more to say about the mounting losses in Meta’s Reality Labs and why I think generating some revenue is important. We will focus on that topic today. Our Big Tech earnings reviews will continue tomorrow.

An Above Avalon membership is required to read this update. Members can read the full update here. (Members: Daily Updates are accessible via the archive. If you haven’t logged into the archive before, fill out this form to receive an invite.)

Subscribe $20/month

Subscribe $200/year

Payment is hosted by MoonClerk and secured by Stripe. Apple Pay and other mobile payment options are accepted. After signup, use this link to update your payment information and membership status at any time.

An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here. Special Inside Orchard bundle pricing is available for Above Avalon members. Additional membership customization is available via the Financial Models add-on.

Neil Cybart 12/12/23 Neil Cybart 12/12/23

Google Faked Its Gemini AI Demo, CNBC Pumped Alphabet Stock Due to Gemini Demo, Generative AI Demos Are Lacking

We kick off the update with Neil’s thoughts on Google’s Gemini demo and the discovery of the demo being faked. The discussion then looks at how the Gemini demo led to craziness, including CNBC pumping Alphabet shares solely because of a six-minute video. We conclude with why Neil thinks generative AI demos have been lacking to date.

Subscribe $20/month

Subscribe $200/year

Neil Cybart 10/27/23 Neil Cybart 10/27/23

Alphabet FY3Q23 Earnings, Microsoft FY1Q24 Earnings

Hello everyone. We conclude this week’s updates with Alphabet’s and Microsoft’s earnings.

Next week is shaping up to be a busy one with an Apple event on Monday evening followed by earnings a few days later. The current plan is to prepare for Apple’s earnings on Monday with the discussion possibly being continued on Wednesday. Let’s jump into today’s update.

Alphabet FY3Q23 Earnings

Alphabet’s earnings were fine with revenue up 11%. While that growth rate is up from the 6% reported last year, the difference is due to FX no longer being a headwind. Gross margins were up 300 basis points year over year. Operating income was up 25%. Free cash flow was $23B (which benefited from tax payment deferrals).

Diving deeper into the results, Google Search led the way with $4.5B revenue growth contribution (59% of total revenue growth). Revenue for Google – other, which includes everything from YouTube Premium and YouTube TV subscription revenue to Pixel, was up $1.4B (18% of the total), roughly the same as Google Cloud. YouTube proper (advertising) was up $0.9B.

An Above Avalon membership is required to continue reading this update. Members can read the full update here . An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Neil Cybart 6/2/23 Neil Cybart 6/2/23

Google I/O 2023

Hello everyone. Welcome to June.

Virtual Member Meetup on Monday. Following the WWDC keynote, there will be a virtual member meetup in the member forum in Slack on Monday at 5:30 pm ET / 2:30 pm PT. Hopefully that time will also allow some members in Europe to join. This meet-up will provide an opportunity for members to have conversations in real-time about everything that was announced. In addition to participating in the discussion myself, I moderate the discussion topics etc. The discussions are then made available afterwards for other members to read through in Slack.
Above Avalon Report. With Apple widely expected to unveil its first headset on Monday, my expectations for the device are found in the Above Avalon Report "Apple's Reality (Headset) Plans" published back on April 12th. You can read the report here. An audio version of the report is also available via the Above Avalon Reports podcast (part of the podcast add-on).

Today’s update will be focused on the Google I/O 2023 keynote. In addition to covering Neil’s thoughts on the keynote, the discussion goes over the weakest/strongest points of the presentation as well as the oddest parts. Given the discussion’s length, Spotify earnings was pushed off. We will circle back to Spotify post-WWDC.

Let’s jump right in.

Google I/O 2023

Google held its developer conference in mid-May. Like Apple’s WWDC keynote, Google’s I/O keynote (available here for viewing via YouTube) is geared toward consumers, developers, and the press. The company then held more developer-focused presentations afterwards.

While Google unveiled AI-driven features in prior years, the difference found with this year’s Google I/O keynote is that it took place in the shadows of ChatGPT and Microsoft's AI push. One got the sense that Google felt insecure about the AI attention being given to others. It was hard to ignore the “we are actually the AI leader” tone emulating throughout the presentation. The thing is, very little that was shown on stage struck me as “only Google.” AI will be adopted by all of Big Tech – it already has been.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Neil Cybart 5/24/23 Neil Cybart 5/24/23

Alphabet Earnings, Pichai Comments on Google's Mobile Search Deals, Microsoft Earnings

Hello everyone. We wrap up Big Tech earnings reviews with Alphabet and Microsoft. There are a handful of earnings from smaller companies worth going over – we will do that at some point next week. We kick off today’s update with Neil’s thoughts on Alphabet’s 1Q23 earnings. The update goes over Sundar Pichai’s comments on Google’s various services partnerships with Android OEMs as well as Apple for mobile search. We conclude with a look at the main takeaways from Microsoft’s FY3Q23 earnings.

Let’s jump right in.

Alphabet Earnings

Alphabet reported 1Q23 earnings back on April 25th. From a financial perspective, results were good. In a quarter that won’t be remembered for any particular financial line item, Alphabet reported $17B of free cash flow. That is testament to Google’s ad machine kicking off an incredible amount of cash quarter in and quarter out. The company possesses some of, if not the most, valuable pieces of digital real estate. As seen with a growing list of much smaller companies, most other ad-funded digital paths are nowhere near as attractive as Google’s.

Here are Alphabet’s major financial line items compared to those of Apple, Meta, and Amazon:

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.

Neil Cybart 10/26/22 Neil Cybart 10/26/22

Alphabet 3Q22 Earnings, Three Google Yellow Flags, What Apple May Say About FY1Q23 (Daily Update)

We begin today’s update with Neil’s thoughts on Alphabet’s 3Q22 earnings. The discussion then turns to three yellow flags found in Google’s numbers. We conclude with a few of Neil’s closing remarks heading into Apple’s earnings release. The update includes access to Neil’s updated Apple earnings model.

Hello everyone.

As a reminder, there won’t be a daily update published tomorrow due to Apple earnings. Instead, the update will be pushed to Friday. In today's update, we will conclude our Apple earnings preview discussion.

CY3Q22 earnings season is in full swing. Tesla reported results a few days ago. Alphabet, Microsoft, and Spotify reported earnings yesterday. Meta reported results today.

The game plan is to go through these earnings reports with an eye out for trends and developments that will either have a direct impact on Apple or cause Apple competitors to change / modify strategies. We will kick things off with Alphabet earnings.

Alphabet 3Q22 Earnings

Heading into Alphabet’s earnings release, consensus was already aware of various headwinds impacting digital advertising trends. Macro issues were clearly hitting advertising revenue growth. In addition, temporary behavioral change caused by the pandemic was still producing an overhang on year-over-year revenue growth metrics. The unknown was found with how competition, namely TikTok and Apple, were impacting business trends.

In a nutshell, Alphabet’s 3Q22 numbers were alarming. Revenue growth has imploded.

The following exhibit contains the primary financial metrics for Alphabet’s 3Q22.

An Above Avalon membership is required to continue reading this update. Members can read the full update here. An audio version of this update is available to members who have the podcast add-on attached to their membership. More information about the podcast add-on is found here.

(Members: Daily Updates are always accessible by logging into Slack. If you haven’t logged into Slack before, fill out this form to receive an invite.)

Above Avalon Membership

Subscribe $20/month

Subscribe $200/year

Payment is processed and secured by Stripe. Apple Pay and other mobile payment options are accepted. Special Inside Orchard bundle pricing is available for Above Avalon members.

The daily updates have become widely read and influential in the world of Apple and technology. They are unmatched in the marketplace in terms of comprehensive analysis and research on all things Apple. Members reside in 60 countries and hold a diverse range of backgrounds and occupations. They include Silicon Valley executives and investors, the largest Apple shareholders, and the leading Apple journalists in the business.

More information about Above Avalon membership, including the full list of benefits and privileges, is available here.