Big Tech Earnings: A 700-Word Summary
April 28, 2021
Recent Earnings Reports from Tech Giants: A Summary
Today’s trading saw a wave of earnings reports released by leading technology companies. To provide a concise overview, we’ve compiled the essential data from each major announcement, avoiding an overwhelming amount of detail.
Links to the complete earnings reports are included for your reference. We will be analyzing the implications of this week’s earnings for the startup ecosystem in a comprehensive report tomorrow morning, so please check back for updates.
Key Takeaways from the Reports:
- Facebook Exceeded Financial Projections, with Slight User Growth Discrepancy. Facebook’s stock experienced a roughly 5% increase following the release of its latest financial results. The report presented a contrast: significantly exceeding financial expectations, yet falling slightly short on user growth. Investors appear to be prioritizing the positive financial performance. Specifically, Facebook reported $26.17 billion in revenue, surpassing the anticipated $23.67 billion. Earnings per share also exceeded expectations by $0.93, representing nearly a 40% increase.
- Shopify Continues to Outperform, Driving Another Share Price Surge. The Canadian e-commerce platform, Shopify, maintained its impressive post-IPO trajectory, once again exceeding expectations. The company reported $988.6 million in Q1 2021 revenue, exceeding the projected $865.48 million. Profitability also significantly surpassed forecasts. This strong performance was largely driven by the growth of Shopify’s “Merchant Solutions” business, which expanded by 137%, outpacing the company’s overall 110% growth rate.
- Apple Reports Robust Growth Across All Product Categories, Boosting Share Value. Apple, similar to Facebook, surpassed investor expectations for the recent quarter. Revenue for the three-month period ending March 27, 2021, reached $89.6 billion, and earnings per diluted share were $1.40, considerably higher than the expected $77.35 billion in revenue and $0.99 in diluted EPS. This success was fueled by growth in every product category. iPhone sales reached $47.94 billion, a substantial increase from the $28.96 billion reported in the prior year. The company’s services business also grew, from $13.35 billion to $16.90 billion.
- Spotify Experiences Share Decline Due to Slower User Growth. While Spotify’s financial performance was generally positive, meeting revenue expectations of approximately €2.15 billion and reducing losses per share, its user growth fell short of projections. The platform reached 356 million users in the first quarter, falling within its guidance range of 354 million to 364 million, but below the market’s expectation of over 360 million. Consequently, its shares declined by around 12%. The difference in market reaction between Facebook and Spotify’s user growth discrepancies stems from Facebook’s strong financial results, while Spotify merely met expectations.
- GrubHub Demonstrates Revenue and Loss Growth Prior to Acquisition. GrubHub, nearing its acquisition by JustEat Takeaway, increased both its revenue and losses in the first quarter compared to the previous year. Revenue grew 52% year-over-year to $550.6 million, driven by increased demand for delivery services. However, the company also reported a negative Adjusted EBITDA of $9.3 million. GrubHub attributed this to temporary fee caps, rising delivery driver costs, severe weather conditions, and stimulus payments impacting driver availability. Active diners increased 38% year-over-year to 33.0 million, but the net loss grew to $75 million, or $0.81 per diluted share.
Further details on earnings reports from Microsoft and Alphabet, among others, can be found here.
