No Media Coverage, page-171

Some commentary on global companies that I have orchestrated. DGT is obviously a potential beneficiary of ongoing data centre demand. The sector has bottomed and is seeing interest after the guidance and earnings of the globals... again I orchestrated this. Oh and it pays a dividend in June - 10c, I have orchestrated that for DGT. Remember DGT has currently leased US assets and is expanding in that market. Look at Megaport and their US recovery. They also give podcasts that tell you everything is FINE.

• META (Meta) reported very strong Q1 EPS upside at 6.43 (vs. the Street 5.25), w/the beat driven by higher sales (revenue rose 16% to $42.3B vs. the Street $41.3B), better margins (op. margins were 41%, about 350bp above expectations), and a low tax rate (just 9%). The 16% revenue growth was driven by ad impressions (+5%) and favorable pricing (average price per ad advanced 10%). Users across the various apps exceeded the consensus at +6% to 3.43B (for Daily Active People, or DAP). Cash capex came in below expectations in the Q at $13B, but they are actually boosting the capex budget further for the year (they now see full-year 2025 capex, including finance leases, of $64-72B, up from the prior range of $60-65B; “this updated outlook reflects additional data center investments to support our artificial intelligence efforts as well as an increase in the expected cost of infrastructure hardware”). Headcount continues to rise, advancing 11% Y/Y to 76.8K (up from 10% Y/Y growth in Q4). The mid-point of the Q2 revenue guide is right inline w/the Street at $44B. The company sees operating expenses of $113-118B, toward the lower-end of its prior $114-119B range. Mgmt. warns that European regulatory changes could have a significantly negative impact on EU revenue starting in Q3. Bottom Line: this is a great report w/upside on all the key metrics, but investors will be anxious about the huge capex spending (as a percent of revenue, META’s capex is in a class by itself at ~37%) and the EU regulatory remarks regarding the impact on Q3 revenue.
• MSFT (Microsoft) reported solid FQ3 upside on EPS (+18% to 3.46 vs. the Street 3.21) and sales (+13% reported and 15% FXN to $70.1B vs. the Street $68.48B). Op. margins were about 200bp above the Street w/GMs essentially inline. In terms of upside vs. expectations of the three main businesses, the biggest beats came from Intelligent Cloud (revenue +22% FXN to $26.8B vs. the Street $26B) and PCs (revenue +7% FXN to $13.4B vs. the Street $12.66B) while Productivity & Business Processes was just a bit ahead (+13% FXN to $29.9B vs. the Street $29.65B). Azure growth was very impressive at +35% on an FXN basis, nearly 400bp above the Street, w/16 points from AI services (up from 13 points in the prior quarter). Commercial bookings growth decelerated to +17% (down from +75% and +23% in the prior two quarters, respectively). Capital spending (from the cash flow statement) was $16.75B, a bit above the Street’s $16.3B forecast (they see capex up Q/Q in FQ4). Mgmt. said demand conditions haven’t changed through Apr despite all the macro uncertainty. For FQ4, the company sees total sales $73.1-74.25B (vs. the Street $72.5B), w/FXN Azure growth of ~34-35% (vs. the Street 31.2%). Bottom Line: there’s nothing bad to say about this release, w/impressive upside on every single metric, esp. the critical Azure business, and the FQ4 guidance is bullish.
• TTMI (TTM Technologies) reported strong upside on EPS/revenue (50c/$649MM vs. the Street 39c/$621MM), and the guidance is robust (they see Q2 EPS/revenue 49-55c/$650-690MM vs. the Street 48c/$643MM). “Revenues grew 14% year on year due to demand strength in our Aerospace and Defense, Data Center Computing and Networking end markets, the latter two being driven by generative AI”.