Tech Companies Had a Good Q1

The biggest companies in the U.S. had a solid first quarter, given the circumstances. Here’s a breakdown, categorized by primary revenue streams.

Ads

Facebook: The company says “a record number of people” are using the FB family of services. Though it has seen a drawdown in its ad business, FB’s Q1 revenue was $17.7 billion, an annual leap of nearly 18%.

• FB’s non-ad revenues were up 80%. Translation: Users are buying Portals and Oculus headsets.
• “I’m quite pleased with how Quest is doing and I wish we could make more of them,” CEO Mark Zuckerberg said.

Google: Alphabet reported $41.2 billion in quarterly revenue; advertising accounted for 82% of that. Alphabet’s “Other Bets,” which tickle the imagination of emerging tech writers, pulled in $135 million in revenue (21% YoY decrease) and lost $1.1 billion (widening 29%).

• Alphabet hopes its Other Bets, most notably autonomous vehicle unit Waymo, will eventually shift from eccentric research projects into cash cows.

Twitter: “Monetizable” daily active users grew to 166 million in Q1, a 24% YoY leap. Twitter reported $808 million in quarterly revenue, beating expectations.

Hardware

• With both supply and demand disrupted by the coronavirus, Apple reported $58.3 billion in revenue, essentially flat from the year before. iPhone revenue was down 7%, while services revenue spiked 16%. But don’t worry about Apple—it has $192.8 billion of cash on hand.
• Qualcomm expects smartphone shipments to drop 30% below prior estimates this quarter. But the company still thinks its earlier estimates for 5G phone shipments will hold for 2020. I’m on record predicting the opposite.
• Tesla achieved a narrow Q1 profit of $16 million and reported $6 billion in revenue. Citing concerns about production, CEO Elon Musk referred to the Bay Area’s shelter-in-place orders as “fascist” during the earnings call. First and most likely last time that word will be in this newsletter.

A bit of everything

Amazon said it will sink its entire Q2 operating profit, around $4 billion, into coronavirus-related expenses. Net sales in Q1 rose 26% annually to $75.5 billion.

Microsoft, which had quarterly revenues of more than $35 billion, said COVID-19 had a minimal impact on business. The company reported strong growth in its cloud and personal computing lines.

Zoom out: We’ll see the fuller COVID-19 picture after Q2.