🗞 Week 3 of Earnings: The 5 Most Impressive Charts

Happy Sunday!

Here’s what’s on the docket for this week’s newsletter:

• 📊 5 Most Impressive Charts From Earnings Season Week 3

• ☁️ The Cloud SuperCycle: Is this just the beginning?

Let’s dive in!

Earnings Season Week 3:

Charts of the Week

More than 3,000 companies reported earnings this week, which for the FinChat team, meant thousands of new data points to sift through.

Here are 5 of the Charts/KPIs that truly stood out:

1.) Spotify - Monthly Active Users

The world’s largest audio streaming platform got bigger this quarter.

Spotify added 35 million new Monthly Active Users, marking its 2nd highest quarterly increase ever.

Perhaps the most impressive part here is that over the last 18 months, Spotify has added 124 million users while reducing its operating expenses by 15%!

Performance since earnings: +17%

2.) Palantir - Commercial Customers

Data fusion platform Palantir came into this quarter with some of the highest expectations among all global companies as it trades at one of the most expensive multiples in the market.

But wow did they surpass those expectations. The data analytics platform, which started initially as a government software vendor, added more commercial customers than any quarter in its history.

Palantir has now grown its total commercial customers at an 85% CAGR over the last 4 years.

Performance since earnings: +38%

3.) Alphabet - Google Cloud

Search giant Alphabet continues to deliver solid growth across virtually all of its business lines.

But the division that stands out the most is its Google Cloud Platform. Over the last 5 years, Google Cloud has grown from $10 billion in ARR to $48 billion while improving its operating margins from -46% to 18%.

Performance since earnings: -10%

4.) Phillip Morris International - Zyn Volumes

One of the world’s largest tobacco businesses continues to rapidly grow its “reduced-risk product portfolio”.

Between its oral nicotine brand Zyn and its heat-not-burn technology called IQOS, Phillip Morris International is the clear leader in new age nicotine products.

This was evident during its latest earnings when it announced that it had delivered 165 million cans of Zyn from October through December. That’s almost 9x more volume than Zyn had 5 years ago.

Performance since earnings: +10%

5.) Uber - Free Cash Flow

Ride sharing leader Uber has been in the hot seat over the last several months.

Concerns over the rapid growth of self-driving startup Waymo has left some investors concerned about Uber’s long-term competitive positioning.

However, if Uber is losing share to Waymo, they’re having a hard time showing it. Uber added 10 million new monthly active platform customers this quarter, which has helped the company continue to drive improved profit margins.

Performance since earnings: +7%

Featured Story

The Cloud SuperCycle is just beginning

In 2008, wired magazine asked Jeff Bezos: “How much money are you willing to lose on AWS?”

Bezos responded: “We have the luxury of a long-term focus. It’s not that we’re just doing this because we’re passionate about it. It’s because we think it’s a huge opportunity. We think it has an unlimited runway."

He wasn’t kidding.

This year, the “hyperscalers” (Amazon, Microsoft, Alphabet, & Meta) spent a combined $228 billion on capital expenditures. That’s 55% more than they spent last year.

If that sounds like a lot then buckle up.

During each company’s quarterly conference calls, they all announced plans to significantly increase their CapEx next year. Combined, these companies now expect to spend more than $320 billion in total CapEx for 2025.

Where exactly is this spend going?

Brian Olsavsky, Amazon CFO: “the majority of the spend will be to support the growing need for technology infrastructure. This primarily relates to AWS, including support demand for our AI services.”

Amy Hood, Microsoft CFO: ”And so the investment you see us making CapEx. You're right, the front end has been this sort of infrastructure build that lets us really catch up not just on the AI infrastructure… but also some of the catch-up we need to do on the commercial cloud side.”

Anat Ashkenazi, Alphabet CFO: “we expect to increase our investments in capital expenditure for technical infrastructure, primarily for servers, followed by data centers and networking.”

Mark Zuckerberg, Meta CEO: “we expect to bring online almost 1 gigawatt of capacity this year, and we're building a 2 gigawatt and potentially bigger AI datacenter, that is so big that it will cover a significant part of Manhattan if it were placed there.”

I think you get the point.

While it might just sound like a competitive brag fest on who can spend the most, this isn’t just blind investment.

Cloud CapEx has historically been a byproduct of demand signals. In other words, the hyperscalers don’t just want this capacity, they need it.

The 3 largest public cloud providers (*Note: Microsoft doesn’t break out Azure specifically) are currently on more than a $300 billion annual revenue run rate (ARR), and that doesn’t even include Meta who runs their own cloud.

This ARR also fails to encapsulate the long term commitments.

For context, AWS alone has $177 billion in remaining performance obligations. That’s contractual commitments with terms extending beyond the next 12 months.

Talk about demand visibility.

Here’s what Amazon’s CFO had to say about it:

To boil this “SuperCycle” down to a sentence, as companies all around the world invest in AI initiatives, whether that’s customer facing conversational AI or internal agents for optimizing tasks, they will almost certainly lean on cloud vendors for storage, databases, compute, and other services.

And so far, there’s no sign of that slowing down.

Meme of the week

Over the weekend, US President Donald Trump announced new tariffs for incoming goods from Canada and Mexico. Investors feared the worst and the major indices opened down on Monday.

Concerns lasted all of about 24 hours as the tariffs were either redacted or delayed.