Microsoft, Meta, Coinbase, Robinhood, and Uber earnings
Microsoft, Meta, Coinbase, Robinhood, and Uber earnings
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We’re in the absolute thick of earnings season. If you are less into earnings, don’t worry. The pace of releases will slow, and CO will return to its more regular fare. But, today, there’s too much fresh public-market data to avoid. So let’s get our hands dirty.
Key data from critical earnings
We will not examine DoorDash, eBay, Ubisoft, Samsung, or Huawei results. Unless you want me to — reply to this email if you want even more earnings coverage, we can always go longer! Instead, we’re focusing on a handful of mega-names in tech that I consider more illustrative of where the market is going: Microsoft, Meta, Coinbase, Robinhood, and Uber.
The big numbers:
Microsoft: Calendar Q3 2024 (Q1 fiscal 2025) revenue of $65.6 billion, earnings per share of $3.30. Analysts had expected $64.5 billion worth of top line and $3.10 in per-share profit. Shares down about 5%.
Meta: Q3 2024 revenue of $40.5 billion, earnings per share of $6.03. Analysts had expected revenues of $40.2 billion, and $5.25 worth of per-share earnings. Shares down 4%.
Coinbase: Q3 2024 revenue of $1.21, earnings per share of $0.28. Analysts had expected $1.26 billion worth of top line, and $0.41 worth of per-share profit. Shares down 15%.
Robinhood: Q3 2024 revenue of $637 million, earnings per share of $0.17. Analysts had expected $663 million worth of top line, and per-share earnings of $0.18. Shares down 16% in pre-market trading.
Uber: Q3 2024 revenue of $11.19 billion. Analysts had expected $10.98 billion worth of top line. Uber’s earnings per share are a bit wonky this quarter, more on its profitability in a moment. Shares down around 10%.
Inside Microsoft’s quarter
Revenue growth of 16% from Microsoft in the most recent quarter was nearly matched by a 14% gain in operating income, which beat an 11% in GAAP profitability, and a 10% gain in diluted earnings per share.
Microsoft Cloud revenue grew 22%, while the more focused category of “Azure and other cloud services revenue [posted] growth of 33%.” Microsoft Cloud revenue of $38.9 billion was up $2 billion from the preceding quarter, and $7 billion year-on-year.
“Search and news advertising” at Microsoft minus traffic acquisition costs grew 18% in the quarter, faster than the company as a whole.
CapEx of $20.0 billion, and cash outlays for “property and equipment” worth $14.9 billion. Both figures are far in excess of the $9 billion that Microsoft returned to shareholders in the quarter.
AI is driving growth at the company. Microsoft said in its slides that “12 points” of growth at Azure came from AI services. Even more, CEO Satya Nadella said on his earnings call that “all in,” Microsoft’s “AI business is on track to surpass an annual revenue run rate of $10 billion next quarter, which will make it the fastest business in our history to reach this milestone.”
The company claims “data centers in over 60 regions around the world,” in case you wanted to know what hyperscaler means.
Elsewhere in AI, Microsoft said that “Azure OpenAI usage more than doubled over the past 6 months,” and that folks building AI apps on Azure has led to an “acceleration of Azure Cosmos DB and Azure SQL DB hyperscale usage.”
Nadella pointed out that inference is its business. Here’s the key quote from the earnings call (emphasis added):
“If you sort of think about the point we even made that this is going to be the fastest growth to $10 billion of any business in our history, it's all inference, right? One of the things that may not be as evident is that we're not actually selling raw GPUs for other people to train. In fact, that's sort of a business we turn away because we have so much demand on inference that we are not taking what I would -- in fact, there's a huge adverse selection problem today where people -- it's just a bunch of tech companies still using VC money to buy a bunch of GPUs. We kind of really are not even participating in most of that because we are literally going to the real demand, which is in the enterprise space or our own products like GitHub Copilot or M365 Copilot.”
Finally, Microsoft also said that GitHub Copilot “enterprise customers increased 55% quarter-over-quarter,” and that “AI is also transforming search, browsers, and digital advertising [leading to Microsoft taking] share across Bing and Edge.”
Inside Meta’s quarter
Meta is still growing its userbase. In Q3 2024, “family daily active users” rose 5% year-over-year, to 3.29 billion.
Meta continues to grind on the efficiency front. The company’s revenues grew 19%, while its expenses only expanded 14% year-over-year.
Threads, Meta’s Twitter competitor, “has almost 275 million monthly active” users now, and is “growing [at a pace of] more than 1 million sign-ups per day,” per CEO Mark Zuckerberg on his earnings call. The company said that Threads is on “track towards [becoming its] next major social app.”
Meta AI now has over 500 million “monthly actives,” though I wonder what counts as active. Elsewhere at the company, “AI-driven feed and video recommendations have led to an 8% increase in time spent on Facebook and a 6% increase on Instagram this year alone,” and over “ a million advertisers” used Meta genAI tools “to create more than 15 million ads in the last month, and we estimate that businesses using Image Generation are seeing a 7% increase in conversions.”
Meta made noise about its investment in its quasi-open-source AI models: “Llama token usage has grown exponentially this year, and the more widely that Llama gets adopted and becomes the industry standard, the more that the improvements to its quality and efficiency will flow back to all of our products.”
While xAI wants to claim that it has the biggest NVIDIA H100 cluster in the world, Meta disagrees, telling investors that Llama 4 is being trained “on a cluster that is bigger than 100k H100s or bigger than anything that I've seen reported for what others are doing.”
Reality Labs revenue of $270 million, up 29%. Reality Labs lost $4.4 billion in the quarter.
Inside Coinbase’s quarter
Revenue fell 17% at Coinbase compared to the preceding quarter, driven by transaction revenue of $573 million, down 27% quarter-on-quarter.
Coinbase remained GAAP profitable ($75 million), and profitable on an adjusted basis ($449 million adjusted EBITDA).
Consumer trading revenue of $483.3 million in Q3 2024 was far below the $664.8 million recorded in Q2 2024, and the $935.2 million seen in the first quarter of this year. However, Coinbase did grow consumer trading revenues massively on a year-over-year basis, measured against a $247.0 million result in the year-ago period.
What drove the decline in consumer trading incomes? “[T]otal trading volume in the US spot market — where the majority of our revenue is derived — declined 18% Q/Q,” Coinbase said.
Stablecoin-derived revenue reached $246.9 million, which is at least a local maximum. Similarly, “corporate interest and other income” at Coinbase reached $76.6 million in the third quarter, also at least a local high watermark.
The company’s work to diversify its revenues is bearing fruit. The company is
“now on pace to surpass $2 billion in subscription and services revenue in 2024,” up from $1.4 billion last year.Coinbase is net hiring. While many tech companies shed staff or hold their staffing flat, the company reported “3,672 full-time employees, up 5% Q/Q” in the third quarter.
The company announced a $1.0 billion share buyback program. That’s a sop for investors who might be bummed that the company’s incredibly impressive recovery from the latest crypto slump has not continued in a similarly vertical fashion.
Inside Robinhood’s quarter
Revenue growth of 36% in the quarter, driven by 72% growth in “transaction-based revenues” to $319 million.
Robinhood is now comfortably GAAP profitable, with $150 million worth of net income in the third quarter, up from -$85 million in the year-ago quarter. (In non-GAAP terms, adjusted EBITDA came in at $268 million, up 96% year-on-year.
Robinhood continues to grow its user base, with funded customers growing by 1.0 million compared to the year-ago quarter to 24.3 million. (That growth rate feels low, frankly.)
Rising asset prices pushed Robinhood’s AUC up “76% year-over-year to $152.2 billion.” ARPU rose 31%, and subscribers to the company’s “Gold” service “increased by 860 thousand, or 65%, year-over-year to 2.2 million.”
Stronger asset prices also helped Robinhood attract more deposits, with Q3 “net deposits” coming in at “$10 billion or more for the third straight quarter.” Robinhood has seen $34 billion worth of net inflows this year, already above its full year 2023 tally of $31 billion.
Robinhood’s overall performance this year is a material improvement on its 2023-era results. The company’s CEO Vlad Tenev noted during his earnings call that “[l]ooking year to date, revenues of nearly $2 billion have already broken last year's record of $1.9 billion, and GAAP diluted EPS of $0.55 is multiples of any prior year. “
Elsewhere at Robinhood, the company’s retirement-focused accounts saw their AUC grow “9X year-over-year to $9.9 billion.” That number grew to $11 billion by October.
Robinhood has repurchased 7% of its “current diluted count” at a cost of $700 million.
Inside Uber’s quarter
Uber’s earnings call has yet to occur, so I can’t pull from that for you this morning. But, here are some highlights from official docs in the meantime!
Bookings growth has evened out between rides and food at Uber, with total gross bookings up 16% to $41.0 billion, rides gross bookings of $21.0 billion (+17%), and delivery gross bookings of $18.7 billion (+17%).
Uber did a total of 2.9 billion trips in the third quarter, or just under 1 billion per month. Or, about 32 million per day.
Uber continued to shit gold, as before. Operating income of $1.1 billion was up $667 million year-over-year, while adjusted EBITDA was up 55% to $1.7 billion.
Even more, Uber recorded free cash flow of $2.2 billion in the quarter, which is a lot.
Meaning that the company has ample cash to spend on anything self-driving related. Cars, partnerships, promotions, you name it. Uber will have all the funds it needs to be a real player in autonomy, even after selling its efforts thereof.
More tomorrow, and don’t forget: Earnings season doesn’t last forever! — Alex