Ex Global Consumer Fund Manager: 16 years at Citi, Alliance Capital in NYC, London, Singapore. Founder, Neev Capital. Strictly personal musings & not advice...
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$AMZN free cash flow awful at -$35 billion due to lumpy capex, despite operating cash flow +20%. Will spend more next year but Q4 '26 capex will fall to $45 billion & should generate free cash. Also note transformation of balance sheet as payables dramatically outpace inventory.
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While Jassy is sticking to his capex plans, he gives unusually long defence of what $AMZN is doing as feeling some heat. He's spot on about retail. Still growing 11% in very cash generative US retail even with $110 billion in sales every quarter, with new, high margin streams.
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Adjust for 500bp Prime Day shift = $AMZN Retail Q3 strong: US still double digit +11% & International +13%. Subscriptions steady +12% & 3P best in 2 years 13%+. Ads +12% with higher shift impact. Margin at new Q3 high. Fret about AI capex but core isn't problem here unlike $GOOGL
This Services revenue number is disappointing. But saying it raises questions about future of Search is extreme. +12% is in line with the strong uptrend $GOOGL began to post from 2024. It's a step-down from the mid-teens growth it stepped up to exactly a year ago & now has to lap
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$GOOGL paid clicks decelerated to +8% from +13% in H1, with cost per click steady at +4%. While 500bp is substantial, barring the last two quarters, it is still the best growth number on paid clicks since Q2 2023.
This Services revenue number is disappointing. But saying it raises questions about future of Search is extreme. +12% is in line with the strong uptrend $GOOGL began to post from 2024. It's a step-down from the mid-teens growth it stepped up to exactly a year ago & now has to lap
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Mastercard in line with Visa; US accelerated 100bp to +7% with international steady +11%. Cross-border ex travel also picked up but web very robust +15%, despite Prime Day shift into Q2. $MA $V $AXP $AMZN $WMT $XLY $XLF
What is lost amid Visa & Mastercard consistent & healthy reports is that US card spend has accelerated from +5-6% to +8-10% in recent years. $V cites strong economy as it manifests in strong jobs market & real wage gains. 💪 $MA $AMZN $WMT $WSM $XLY $XLF $XRT $DAL $CCL $MAR $ABNB
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This Services revenue number is disappointing. But saying it raises questions about future of Search is extreme. +12% is in line with the strong uptrend $GOOGL began to post from 2024. It's a step-down from the mid-teens growth it stepped up to exactly a year ago & now has to lap
Solid $GOOGL topline in Search with advertising +11%. Some loss of momentum from H1 at both Youtube & Search, but still decent on 2-year stack. But despite TAC still growing slower than revenue, Services margin down hefty 180bp y/y, lowest in 7 quarters to 40.7%, underwhelming.
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$GOOGL total revenues accelerated 200bp y/y on Cloud. That was focused in US, which accelerated 700bp from Q2 to +39%. All other regions slowed 200-400bp, reflecting that slowing in Search & Youtube, although still up double digit.
Solid $GOOGL topline in Search with advertising +11%. Some loss of momentum from H1 at both Youtube & Search, but still decent on 2-year stack. But despite TAC still growing slower than revenue, Services margin down hefty 180bp y/y, lowest in 7 quarters to 40.7%, underwhelming.
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$GOOGL free cash flow was negative $8.9 billion, $3 billion worse than in Q2, though magnified by working capital movements. Still, it retains best cash generation profiles among hyperscalers, coming closest to funding itself.
Culprits for margin downside? $GOOGL is stepping up pace of hiring - headcount hit 204,757 up 3% QoQ & +8% YoY, fastest since Q4 2023, before it slammed brakes. Plus pressure on margin from surging capex & 50% higher depreciation.
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Culprits for margin downside? $GOOGL is stepping up pace of hiring - headcount hit 204,757 up 3% QoQ & +8% YoY, fastest since Q4 2023, before it slammed brakes. Plus pressure on margin from surging capex & 50% higher depreciation.
Solid $GOOGL topline in Search with advertising +11%. Some loss of momentum from H1 at both Youtube & Search, but still decent on 2-year stack. But despite TAC still growing slower than revenue, Services margin down hefty 180bp y/y, lowest in 7 quarters to 40.7%, underwhelming.
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Cloud revenue accelerated further more than doubling +103% & margin hit a new high, both a touch ahead of expectations.
Solid $GOOGL topline in Search with advertising +11%. Some loss of momentum from H1 at both Youtube & Search, but still decent on 2-year stack. But despite TAC still growing slower than revenue, Services margin down hefty 180bp y/y, lowest in 7 quarters to 40.7%, underwhelming.
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Solid $GOOGL topline in Search with advertising +11%. Some loss of momentum from H1 at both Youtube & Search, but still decent on 2-year stack. But despite TAC still growing slower than revenue, Services margin down hefty 180bp y/y, lowest in 7 quarters to 40.7%, underwhelming.
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What is lost amid Visa & Mastercard consistent & healthy reports is that US card spend has accelerated from +5-6% to +8-10% in recent years. $V cites strong economy as it manifests in strong jobs market & real wage gains. 💪 $MA $AMZN $WMT $WSM $XLY $XLF $XRT $DAL $CCL $MAR $ABNB
Another healthy report on consumer from Visa on US (+10%) & International (+9%) spend with credit modestly outpacing debit. $V points out consistency and strength in spend. While higher end is spending fastest, lower end also growing steadily. $MA $AXP $XLY $XLF $COF $JPM $BAC
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Visa cross-border accelerated 300bp QoQ on travel, latest sign consumers remain keen on experiences even as prices soar. But $V also points to web driving cross-border past historical trends as $AMZN & peers expand into staples. $DAL $UAL $HLT $ABNB $CCL $BKNG
Another healthy report on consumer from Visa on US (+10%) & International (+9%) spend with credit modestly outpacing debit. $V points out consistency and strength in spend. While higher end is spending fastest, lower end also growing steadily. $MA $AXP $XLY $XLF $COF $JPM $BAC
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$UPS says its retail partners expect a strong holiday as consumers remain resilient, with volume +25% vs Q3 in line with seasonality. International also improving as is US inbound, despite tariffs & expected to stay positive. Encouraging all round. $FDX $XLI $XLF $XLY $XRT $AMZN
Call it inflation-led growth or pricing power, it's across a host of industries. But another key takeaway: consumer isn't fazed by it. On top of the airlines, runaway pricing at $UPS, Philip Morris, Hilton or advertising at $META. $PM $HLT $XLY $XLF $XLP $SPY $DAL $UAL
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Hilton shows travel appetite not limited to airlines or cruises. US revpar hot +7%, largely on rate but occupancy solid. Luxury brands had eye-popping rate rises, but in sign of broad strength, $HLT economy brands also very strong. $MAR $ABNB $XLF $XLY $ABNB $DAL $UAL $CCL
Goods spending slowed at Amex to +7% yet travel held at +10%, best level in 3 years. While all categories remain healthy, airlines spiked 300bp to +13% & lodging 100bp better. Consumer/Corporate lack of pushback to pricing in full view. $AXP $V $MA $CCL $ABNB $DAL $UAL $MAR
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Call it inflation-led growth or pricing power, it's across a host of industries. But another key takeaway: consumer isn't fazed by it. On top of the airlines, runaway pricing at $UPS, Philip Morris, Hilton or advertising at $META. $PM $HLT $XLY $XLF $XLP $SPY $DAL $UAL
Delta follows up $CCL with phenom demand update. Yield +14%(!) on flat capacity. Expects more Q4 acceleration to +20%. US consumers still happy to pay up big for travel, with even coach +17%. Both domestic & international strong. 🔥🔥 $DAL $UAL $AXP $XLF $XLY $V $MA $ABNB $MAR
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$AXP now reserving at 2.6%, 30bp lower than a year ago on premiumisation of base. More customers (with great credit profiles) starting with fee paying cards & new vintages doing better despite 'risky' Millennials bet. Deliquencies at present sub-Covid level since Q1 2023. 🔥
Many scare stories on Amex losing upscale client base on AI, competition at high-end. But picture on new accounts & fees very healthy; fee growth accelerates as guided. Fine franchise all round with exceptional credit quality. $AXP $JPM $V $MA $C $BAC $XLY $XLF
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