Thursday, April 26, 2018

Amazon Web Services rockets ahead at 49% yoy pace

Amazon.com reported stellar net sales of $51.0 billion for Q1 2018, up 43% over last year, including $1.6 billion from favorable foreign exchange rates throughout the quarter. Net income was $1.6 billion in the first quarter, or $3.27 per diluted share, compared with net income of $724 million, or $1.48 per diluted share, in first quarter 2017.

As usual, Amazon Web Services (AWS) was a major contributor to this growth. AWS sales for the quarter amounted to $5.442 billion, up 49% year over year

“AWS had the unusual advantage of a seven-year head start before facing like-minded competition, and the team has never slowed down,” said Jeff Bezos, Amazon founder and CEO. “As a result, the AWS services are by far the most evolved and most functionality-rich. AWS lets developers do more and be nimbler, and it continues to get even better every day. That’s why you’re seeing this remarkable acceleration in AWS growth, now for two quarters in a row. A huge thank you to all our AWS customers, and you can be sure we’ll keep working hard for you.”

During Q1, AWS launched two Availability Zones and one Local Region in Osaka, Japan. It now operates 54 Availability Zones within 18 geographic Regions, and one Local Region, with announced plans for 12 more Availability Zones and four more regions in Bahrain, Hong Kong SAR, Sweden, and a second AWS GovCloud Region in the U.S. coming online between now and early 2019.

Nokia reports flat sales in Q1 but cites building 5G momentum

Nokia reported net sales in Q1 2018 were EUR 4.9 billion, down from EUR 5.4 bn in Q1 2017. On a constant currency basis, net sales would have been flat year-on-year. Non-IFRS diluted EPS in Q1 2018 was EUR 0.02.

  • Nokia’s Networks business net sales were EUR 4.3bn, with operating profit of EUR 43mn
  • Q1 net sales and profitability were impacted primarily by lower net sales in North America. However, order intake and backlog were excellent in Q1. Therefore, Nokia expects the net sales trajectory in North America, as well as profitability, to improve significantly in the second half of 2018.
  • Based on firm orders, Nokia sees customer demand for 5G accelerating further, particularly in North America, where we expect commercial 5G network deployments to begin near the end of 2018.

Rajeev Suri, Nokia's president and CEO, stated: "We also see a clear path to market share gains this year given our success in 4G expansion, 5G deals, IP routing in both the service provider segment and adjacent markets, and optical, driven by 5G and webscale customers. While our Networks gross margin in Q1 decreased on a year-on-year basis, the primary underlying reasons for that – regional and product mix – are largely temporary in nature and expected to improve in the second half
of 2018. It is also important to understand that we did not see significant degradation of margins at the overall product level. We remain on track to deliver on our EUR 1.2 billion cost savings commitment."



Facebook's reach continues to grow

Despite the well-publicized uproar about data privacy, Facebook continues to add users worldwide at a rapid pace.

  • Daily active users (DAUs) – DAUs were 1.45 billion on average for March 2018, an increase of 13% year-over-year.
  • Monthly active users (MAUs) – MAUs were 2.20 billion as of March 31, 2018, an increase of 13% year-over-year.
  • Mobile advertising revenue – Mobile advertising revenue represented approximately 91% of advertising revenue for the first quarter of 2018, up from approximately 85% of advertising revenue in the first quarter of 2017.
  • Capital expenditures – Capital expenditures for the first quarter of 2018 were $2.81 billion.

"Despite facing important challenges, our community and business are off to a strong start in 2018," said Mark Zuckerberg, Facebook founder and CEO. "We are taking a broader view of our responsibility and investing to make sure our services are used for good. But we also need to keep building new tools to help people connect, strengthen our communities, and bring the world closer together."

Microsoft Azure grows 89% yoy in Q1

Microsoft reported Q1 revenue of $26.8 billion, up 16% yoy, operating income of $8.3 billion, up 23%; net income of $7.4 billion, up 35% yoy; and diluted earnings per share of $0.95, up 36%.

Cloud revenue was a major factor in the performance, with Azure growing 89% yoy in constant currency.

Some highlights

Revenue in Productivity and Business Processes was $9.0 billion and increased 17% (up 14% in constant currency)
  • Office commercial products and cloud services revenue increased 14% (up 12% in constant currency) driven by Office 365 commercial revenue growth of 42% (up 40% in constant currency)
  • Office consumer products and cloud services revenue increased 12% (up 9% in constant currency) and Office 365 consumer subscribers increased to 30.6 million
  • LinkedIn revenue increased 37% (up 33% in constant currency) with continued acceleration in engagement highlighted by LinkedIn sessions growth of over 30%
  • Dynamics products and cloud services revenue increased 17% (up 14% in constant currency) driven by Dynamics 365 revenue growth of 65% (up 62% in constant currency)
Revenue in Intelligent Cloud was $7.9 billion and increased 17% (up 15% in constant currency)
  • Server products and cloud services revenue increased 20% (up 17% in constant currency) driven by Azure revenue growth of 93% (up 89% in constant currency)
  • Enterprise Services revenue increased 8% (5% in constant currency)
Revenue in More Personal Computing was $9.9 billion and increased 13% (up 11% in constant currency)
  • Windows OEM revenue increased 4% (up 4% in constant currency) driven by OEM Pro revenue growth of 11%
  • Windows commercial products and cloud services revenue increased 21% (up 17% in constant currency) driven by an increased volume of multi-year agreements and the mix of products that carry higher in-quarter revenue recognition
  • Gaming revenue increased 18% (up 16% in constant currency) driven by Xbox software and services revenue growth of 24% (up 21% in constant currency) mainly from third party title strength
  • Surface revenue increased 32% (up 27% in constant currency) against a prior year comparable impacted by product end-of-life-cycle dynamics
  • Search advertising revenue excluding traffic acquisition costs increased 16% (up 14% in constant currency) driven by higher revenue per search and search volume

Baidu's Q1 revenues rise 31%

Baidu reported Q1 2018 total revenues were RMB 20.9 billion ($3.33 billion), increasing 31% year over year. Mobile revenue represented 78% of total net revenues, compared to 70% for the first quarter of 2017. Total revenues of Baidu Core were RMB 16.1 billion ($2.57 billion), increasing 26% year over year. Operating income was RMB 4.6 billion ($728 million), increasing 128% year over year. Operating margin reached 22%, compared to 13% for the first quarter of 2017.

"We had a strong start in 2018, with our core business exhibiting robust growth, and we continue to execute on our strategy to strengthen Baidu's mobile foundation and lead in AI. Through innovation, search plus feed is powering strong monetization, DuerOS is showing accelerated momentum with hardware partners and Apollo has a great potential to become a world-class technology platform," said Robin Li, Chairman and CEO of Baidu. "I would also like to congratulate iQIYI on a successful IPO and hope to incubate more businesses with large market opportunities and strong synergies with Baidu."

Digital Realty's Q1 revenue of $744 million, up 35% yoy

Digital Realty, a leading global provider of data center, colocation and interconnection solutions, reported revenues for the first quarter of 2018 of $744 million, a 2% increase from the previous quarter and a 35% increase from the same quarter last year. Net income amounted to $110 million, and net income available to common stockholders of $86 million, or $0.42 per diluted share, compared to $0.26 per diluted share in the previous quarter and $0.41 per diluted share in the same quarter last year.

"In the first quarter, we signed total bookings expected to generate $61 million of annualized GAAP rental revenue, including a $7 million contribution from interconnection," said Chief Executive Officer A. William Stein.  "As we look toward the remainder of 2018, we are confident in our ability to deliver sustainable growth for stakeholders, driven by broad-based demand across regions, verticals and product lines, along with growing local origination in key growth metros around the world."

Interoute connects the Vatican to its fibre backbonev

Interoute's fibre network is supporting the launch of The Vatican Communications Secretariat’s new online portal www.vaticannews.va, which combines radio, TV and publishing into a single interface.

Interoute owns and operates a global private network encompassing 72,000 route kilometres of fibre across Europe.

Francesco Masci, Head of the Technology Department of the Secretariat for Communication of the Holy See, said, "The rethinking of the Holy See's communication system meant an important technological shift as the worlds of web, broadcasting and publishing merge. Alongside the portal we will launch other services, and we are also considering further projects to distribute quality multimedia content directly to users, such as documentaries or other important productions. Interoute's new fibre network is the infrastructure basis for enabling this cutting-edge project.”

Gareth Williams, CEO of Interoute, commented, "We are honoured to support the Secretariat for Communication of the Holy See with our decades of experience. Interoute has built the pan-European backbone infrastructure which powers the digital transformation of global organisations. From our experience building and managing one of Europe’s largest networks, Interoute has gained the knowledge and competence to support this unique project, respecting delivery times and the constraints imposed by the cultural and artistic heritage of this important site."

Intel hires ex-Tesla exec to lead silicon engineering

Intel announced the appointment of Jim Keller to lead the company’s silicon engineering, which encompasses system-on-chip (SoC) development and integration.

Keller, 59, joins Intel from Tesla, where he most recently served as vice president of Autopilot and Low Voltage Hardware. Prior to Tesla, he served as corporate vice president and chief cores architect at AMD, where he led the development of the Zen* architecture. Previously, Keller was vice president of Engineering and chief architect at P.A. Semi, which was acquired by Apple Inc. in 2008.

“Jim is one of the most respected microarchitecture design visionaries in the industry, and the latest example of top technical talent to join Intel,” said Dr. Murthy Renduchintala, Intel’s chief engineering officer and group president of the Technology, Systems Architecture & Client Group (TSCG). “We have embarked on exciting initiatives to fundamentally change the way we build the silicon as we enter the world of heterogeneous process and architectures. Jim joining us will help accelerate this transformation.”

See also