Morning Report: Another quarter is behind us. Let’s examine how well the biggest American tech companies performed. After all, they are critical startup acquisition vehicles.
On the latest episode of Equity (out this morning), General Catalyst’s Steve Herrod and TechCrunch’s Matthew Lynley and I mulled over Apple’s results and discussed its aggressive cash plans. The world’s most valuable company, it turns out, intends to get to a net cash position of zero.
If it intends to pick up a host of startups with some of that cash as it looks to balance out its cash and debt was our question.
But Apple isn’t the only American tech company with a potentially aggressive post-tax-reform plan. So let’s do the quickest of dives through the biggest earnings to see how the Big 5 did. The better the performance, potentially the larger the chance that these tech behemoths find their checkbooks.
- Apple: Revenue of $88.3 billion, over expectations of $87.1 billion. Earnings per share of $3.89, above expectations of $3.83 per share. Apple missed on forward revenue guidance. Shares down 2.85 percent following.
- Alphabet: Revenue of $32.32 billion, over expectations of $31.87 billion. Earnings per share of $9.70, below expectations of $9.98 per share. The company also reported sequential-quarter and year-over-year decline in cost-per-click. Shares off 4.21 percent following.
- Amazon: Revenue of $60.5 billion, over expectations of $59.83 billion. Earnings per share of $3.75, above expectations of $1.85 per share. The company also posted $5.1 billion in revenue from its cloud division. Shares up 5.28 percent following.
- Facebook: Revenue of $12.97 billion, over expectations of $12.55 billion. Earnings per share of $2.21 per share, above expectations of $1.95 per share. The company reported slowing growth in its user numbers. Shares rose 2.6 percent in the day following its earnings report.
- Microsoft: Revenue of $28.92 billion, over expectations of $28.4 billion. Earnings per share of 96 cents, ahead of expectations of $0.86 per share. The company’s Azure cloud platform grew nearly 100 percent from the previous year in the quarter. Microsoft eased just over 0.5 percent in the day following its earnings report.
That was a host of numbers. But what they tell us is that, unlike the last quarter in which all of the Big 5 smashed expectations, there was more weakness present in the fourth calendar quarter. And that could put some of the big companies off aggressive startup purchases. Also, if the most valuable tech companies stumble, or even display weakness, it could lower market belief in the tech boom, potentially dinging valuations. And that brings the above earnings right back into startup-land.
From The Crunchbase Daily:
- Moderna Therapeutics, a Cambridge, Mass.-based developer of messenger RNA (mRNA) drugs and vaccines, raised $500 million in late stage funding at a reported $7.5 billion valuation. Investors include Abu Dhabi Investment Authority, BB Biotech AG, Julius Baer, Sequoia Capital China and others.
- Airbnb added its name to the list of unicorns that won’t be going public this year. The company made this clear after also disclosing that its CFO, Laurence Tosi, will be stepping down.
- After a staggering 2017, the tokens of the crypto world are having a tough start to 2018. Bitcoin is no exception, with its value dipping to below $8,000, off more than 50 percent from its former highs.
- Social broadcast startup Caffeine has raised $46 million to take on the likes of Amazon’s Twitch and Google’s YouTube Gaming. Andreessen Horowitz and Greylock partners led the financing.