 | Oct 31, 2024 | | | | Supported by  | | | | | Happy Thursday! Microsoft's cloud computing unit grew at a slightly slower rate than in the previous quarter. Cryptocurrency exchange Coinbase announced a stock buyback of up to $1 billion. Meta's third-quarter revenue grew 19%.
| | | | Microsoft said Wednesday its revenue rose 16% to $65.6 billion in the third quarter—1 percentage point higher than in the second quarter—as its Azure cloud computing unit grew at a slightly slower rate than in the previous quarter. Shares fell nearly 4% in after-hours trading. Azure revenue rose 33% year over year, which CEO Satya Nadella attributed to "AI-driven transformation" among customers. Those customers include payments OpenAI makes to Microsoft to host ChatGPT and other AI products. Microsoft doesn't break out Azure revenue in dollars, but it was about half the size of Amazon Web Services in terms of revenue in recent years. Starting this quarter, Microsoft changed how it reports revenue across its different businesses and now includes Bing ad sales in its Azure results. Azure's growth this quarter was 1% slower than its growth last quarter as recalculated under the new reporting methods, which CFO Amy Hood attributed in part to a slight decrease in the contribution of non-AI products to Azure's growth. By comparison, Google's cloud server rental business, which is smaller than Microsoft's, grew just 2 percentage points faster in the third quarter. Google Cloud revenue rose 35% in the quarter, up six percentage points from its growth rate in the second quarter, boosting Google shares 3% Wednesday. (In terms of revenue, Google Cloud is about 40% the size of AWS, though the Google cloud business also includes productivity apps like Gmail and Google Docs.) Revenue in the business unit that includes Microsoft's Office 365 software rose 12% to $28.3 billion, a slight acceleration from 11% growth in the previous quarter. Microsoft investors have been awaiting word of revenue from the suite of Copilot AI tools that Microsoft is selling as add-ons to its Office software, but that has yet to appear in large numbers as customers remain cautious about the software and its cost. Overall, Microsoft said that its total revenue from AI products—including its sales of OpenAI models on Azure, AI Copilots, and other AI products—is on track to exceed $10 billion in annualized sales in the coming quarter, but did not elaborate about which products were driving that growth. | | | | Cryptocurrency exchange Coinbase reported its fourth straight quarterly profit and announced a stock buyback of up to $1 billion, showing the company is delivering on its promise of steadier profits even during crypto market swings. Revenue rose nearly 80% to $1.2 billion year-on-year in the third quarter, but dropped compared with the second quarter. A large part of Coinbase's revenue comes from fees on crypto trades, which tend to rise and fall in tandem with crypto prices. Coinbase noted that trading in stablecoins grew significantly compared to the previous quarter—it generated little or no fees from those trades, but executives said growing stablecoin adoption still helps its overall business. Coinbase also generates revenue through a partnership with Circle, which issues stablecoins designed to track the U.S. dollar. Coinbase shares in the interest generated by reserves backing the stablecoins, and revenue from the partnership was up 43% year-over-year and roughly flat from the prior period. Coinbase projected stablecoin and other non-trading revenue of between $505 million and $580 million in the fourth quarter, compared to $375 million the same period a year earlier and $556 million in the third quarter. | | | | Meta Platforms, the owner of Facebook, Instagram and WhatsApp, on Wednesday reported third-quarter revenue of $40.6 billion, up 19% from a year earlier. Growth slowed from the second quarter, when Meta posted annual revenue growth of 22%. The company again increased its estimate for capital expenditures for 2024 and forecast significant capex growth for 2025. Meta's income from operations was $17.4 billion, up 26% from a year earlier, and its net income rose by 35% to $15.7 billion. The company's share price fell in after-hours trading, at one point dropping more than 3%. Meta said in a press release that its capital expenditures would increase significantly next year to boost its computing capability. In prior quarters, the company said those expenses stemmed from artificial intelligence research and product development. Meta now expects capital expenditures this year to be $38 billion to $40 billion, up from a previous forecast of $35 billion to $40 billion. Meta also said it expects its operating losses for Reality Labs, which works on augmented and virtual reality, "to increase meaningfully" from $16.1 billion in 2023. Through nine months this year, the Reality Labs unit posted an operating loss of $12.8 billion, up from a loss of $11.5 billion in the same period last year. | | | | Google paid artificial intelligence startup Character.AI $2.7 billion in cash as part of a deal to license the startup's technology and hire its co-founders and employees, including former Google researchers Noam Shazeer and Daniel De Freitas, the company said in a regulatory filing. The payout is extraordinary, considering it essentially aimed to get Shazeer, a pioneer of conversational AI, back into Google in a leadership role. The Information first reported in August that Google's quasi-acquisition of Character included a licensing fee of $2.7 billion and that Google forgave a convertible note worth hundreds of millions of dollars, but Google and Shazeer didn't publicly confirm the figures. The filing said that in addition to the licensing fee, Google canceled convertible instruments, but didn't specify how much they were worth. Other AI startups struck similar deals with Google rivals Microsoft and Amazon, after receiving generous offers from the bigger companies, which have been hungry to add AI talent. Character continues to operate. Millions of people have used its chatbots. A Florida mother last week sued Character, Google, Shazeer and De Freitas, alleging a Character chatbot based on a "Game of Thrones" character contributed to her son's suicide. Character and Google previously declined to comment on the suit. | | | | Dropbox and Miro said Wednesday that each would lay off around a fifth of its employees, signs that enterprise-focused software businesses are still contending with weak demand. "We continue to see softening demand and macro headwinds in our core business," Dropbox CEO Drew Houston said in a blog post. Dropbox, whose main product is a file hosting service for businesses, is laying off 528 people, Houston said. Meanwhile, Miro, which sells an online collaboration tool for businesses, is cutting 275 people in a bid to simplify its organizational structure, The Information reported. Miro, Dropbox and other companies with relatively simple product offerings have been hurt by customers' growing preference to buy suites of products, often from larger companies. And layoffs across the tech industry have reduced the number of software licenses companies need to buy for employees. Both Miro and Dropbox charge businesses using their services on a per employee basis. | | | | Shares of Reddit rose 42% to $116 a share on Wednesday, as investors applauded the social media firm's strong third quarter earnings report. Reddit shares have now risen 241% since its IPO in March. The company reported 68% higher revenues, and its first-ever net profit, of $29.9 million, fuelled by 47% growth in the number of people using Reddit daily compared with a year ago. And it projected fourth quarter revenues would grow between 54% and 60%. While most of the revenue growth flowed from higher advertising revenues, the company has also showed significant growth in data licensing revenues tied to deals with AI firms. At $116 a share, Reddit has a market capitalization of $20.4 billion. | | | | Super Micro shares fell 33% to just over $33 after the company, which makes servers for data centers, said accounting firm Ernst & Young had resigned as its auditor over concerns about its accounting practices. Demand for the Nvidia artificial intelligence chips that power Super Micro's servers has elevated Super Micro's market capitalization in the past couple years, but a short seller punctured the hype in August by arguing the company had manipulated its finances, which Super Micro denied. The company's stock has not recovered since the release of the report, which cited a former employee who alleged accounting violations. The Department of Justice opened a probe into Super Micro, according to a report from the Wall Street Journal last month. EY raised concerns about Super Micro's governance and transparency in late July, according to a securities filing by Super Micro. "We are resigning due to information that has recently come to our attention which has led us to no longer be able to rely on management's and the Audit Committee's representations and to be unwilling to be associated with the financial statements prepared by management," said EY in a resignation letter, which Super Micro quoted in the filing. Super Micro said the company disagrees with EY's decision to resign and said it has been investigating EY's concerns. EY was auditing Super Micro's financials for the fiscal year ended July 30, and Super Micro is now seeking a new auditor. | | | | Volvo Wednesday said it had taken ownership of a joint venture with troubled battery maker Northvolt because Northvolt had not made promised payments to fund the joint venture, in the latest sign of Northvolt's distress. The joint venture had planned to build a battery factory in Gothenburg, Sweden. Volvo, which previously said it would not participate in a $300 million rescue package Northvolt is seeking to keep its main battery plant operating in Skelleftea, Sweden, suggested in a statement that it does not plan to make batteries at the Gothenburg site. "Any battery production … is dependent on third party or other partner involvement," it said. Volvo's move came after Northvolt failed to meet payroll for employees of Cuberg, a shuttered Northvolt subsidiary, as The Information reported on Tuesday. Four former Cuberg employees said Northvolt told managers at the closed Cuberg plant to sell company assets to make the final payroll for approximately 200 workers earlier this month. On Oct. 8, another Northvolt subsidiary—Ett Expansion—filed for bankruptcy. | | | | The European Commission is set to launch a formal investigation into Temu, Bloomberg reported Wednesday. The EU on Oct. 11 requested Temu share information on how it addresses and prevents the sale of counterfeit, unsafe or illegal products on its site, and Temu's responses did not sufficiently address the commission's concerns, the report said. The investigation would be part of the EU's crackdown against big tech firms under the Digital Services Act, which requires large internet companies to take steps to control the spread of disinformation and illegal content on their platforms. Temu and other bargain e-commerce sites like Shein have faced mounting scrutiny around the globe over product safety. In September, federal safety regulators in the U.S. called for an investigation of Shein, Temu and other foreign e-commerce sites to better understand their safety practices, after The Information reported that unsafe and illegal children's products could be purchased on Shein and Temu. | | | | Crypto exchange Kraken said in a blog post Wednesday that it's cutting an unspecified number of jobs to reduce organizational layers, even as it's grown to generate "north of" $1 billion in net revenue. Kraken also announced that Arjun Sethi, co-founder of Tribe Capital and a Kraken board member, is joining as co-CEO alongside David Ripley, confirming a report from The Information last week. Kraken joins other crypto firms making job cuts despite a market rebound this year. Consensys, a software provider for ethereum, announced Tuesday it's cutting 162 jobs, or 20% of its workforce. Dydx Trading, which develops the decentralized crypto exchange, said on Tuesday it laid off 35% of staff. Kraken executives have said that the company plans to go public, though its timeline is unclear. | | | | | Popular articles
By Jon Victor and Aaron Holmes
| | | | | Opportunities Empower your teams to stay ahead of market trends with the most trusted tech journalism.
Learn more
Reach The Information's influential audience with your message. Connect with our team | | | | | |
0 comentários:
Postar um comentário