Big Tech report blockbuster quarterly results despite COVID-19

The last week has been a roller coaster ride for the market with Q1 results coming up. The Big Tech has also announced their results. Not exactly shocking, but despite Covid-19, these companies have reported competitive results surpassing their records. For example, Apple revenue at $89.6 billion for Q2 2021 hit a record high, up by 54% YoY. In line with the competition, Facebook's overall Q1 2021 revenue grew by almost 50% to $26.2 billion. A major chunk of the revenue (97.2%) for Facebook came through advertisement. This can be attributed to the pandemic led lockdown where people were forced to use Facebook, and companies increased their digital advertisement budget.

As for Amazon, the company now has 200 million Prime subscribers, up by 50 million from 2020. Two of Amazon's flagship products, Prime Video and AWS turn 10 and 15 respectively. Interestingly, the company had the highest net income growth amid all of the Big Tech - 3x YoY from $2.5bn to $8.1bn. Further, according to Microsoft's Q1 report, the company remains very rich despite what Wall Street predicted. In fact, the company showed the biggest revenue growth since 2018. And lastly, Alphabet. This Big Tech had very strong numbers on many fronts, but its cloud business showed a revenue of $4.047 billion (almost double YoY) and an operating loss of just $974 million.

Each of these Big Tech help us think about the state of the economy, the tech industry, and most importantly, the consumer behaviour amid the pandemic state. Here's a brief on which Big Tech scored how much:

Apple Q2 result ending March 27, 2021

The stock was up 4% following the report. Apple has also announced $90 billion in share buybacks and raised its dividend by 7%. Further, unlike other Big Tech (except Microsoft), the financial year for Apple ends in September. Thus, this was Q2 2021 and not Q1.

“This quarter reflects both the enduring ways our products have helped our users meet this moment in their own lives, as well as the optimism consumers, seem to feel about better days ahead for all of us,” Apple CEO Tim Cook said in a release. “Apple is in a period of sweeping innovation across our product lineup. We’re keeping the focus on how we can help our teams and the communities where we work emerge from this pandemic into a better world. That certainly begins with products like the all-new iMac and iPad Pro, but it extends to efforts like the 8 gigawatts of new clean energy we’ll help bring onto the grid and our $430 billion investment in the United States over the next 5 years,” he added.

Facebook Q1 Result ending March 31, 2021

Other Operational and Financial Highlights from Facebook Q1 Results:

• Daily active users - 1.88 billion
• Monthly active users - 2.85 billion
• Family Daily Active People - 2.72 billion
• Monthly Active People - 3.45 billion
• Capital expenditures - $4.42 billion (including principal payments on finance leases)
• Cash and equivalents/marketable securities - $64.22 billion
• Headcount - 60,654

Shares of Facebook were up around 5% after it reported its recent financial results.

“We had a strong quarter as we helped people stay connected and businesses grow,” said Mark Zuckerberg, Facebook founder and CEO. “We will continue to invest aggressively to deliver new and meaningful experiences for years to come, including in newer areas like augmented and virtual reality, commerce, and the creator economy.”

Amazon Q1 Result ending March 31, 2021

Other Operational and Financial Highlights from Amazon Q1 Results:

• Operating cash flow increased 69% to $67.2 billion
• Free cash flow increased to $26.4 billion
• Net sales increased 44% to $108.5 billion
• Operating income increased to $8.9 billion

“Two of our kids are now 10 and 15 years old—and after years of being nurtured, they’re growing up fast and coming into their own,” said Jeff Bezos, Amazon founder and CEO. “As Prime Video turns 10, over 175 million Prime members have streamed shows and movies in the past year, and streaming hours are up more than 70% year over year.”

“In just 15 years, AWS has become a $54 billion annual sales run rate business competing against the world’s largest technology companies, and its growth is accelerating—up 32% year over year. Companies from Airbnb to McDonald’s to Volkswagen come to AWS because we offer what is by far the broadest set of tools and services available, and we continue to invent relentlessly on their behalf. We love Prime Video and AWS, and we’re proud to have them in the family.”

Amazon shares climbed more than 3% after it announced the Q1 results. The company also announced that it will hold the Prime Day sale in June 2021.

Microsoft Q3 Result ending March 31, 2021

Other Operational and Financial Highlights from Microsoft Q3 Results:

• Operating income was $17.0 billion and increased 31%
• Net income was $14.8 billion
• LinkedIn revenue increased 25%
• Revenue in Intelligent Cloud was $15.1 billion
• Revenue in More Personal Computing was $13.04 billion
• Microsoft also returned $10 billion to shareholders in the form of share repurchases and dividends

Microsoft shares fell by 3% after it announced its Q3 earnings (despite being better than predicted). Further, unlike other Big Tech (except Apple), the financial year for Microsoft ends in June. Thus, this was Q3 2021 and not Q1.

“Over a year into the pandemic, digital adoption curves aren’t slowing down. They’re accelerating, and it’s just the beginning,” said Satya Nadella, chief executive officer of Microsoft. “We are building the cloud for the next decade, expanding our addressable market and innovating across every layer of the tech stack to help our customers be resilient and transform.”

“The Microsoft Cloud, with its end-to-end solutions, continues to provide compelling value to our customers generating $17.7 billion in commercial cloud revenue, up 33% year over year," said Amy Hood, executive vice president and chief financial officer of Microsoft.

Alphabet Q1 Result ending March 31, 2021

Alphabet share rose by 4% after it declared its Q1 results. The Big Tech also completed a $50 billion stock buyback.

Sundar Pichai, CEO of Google and Alphabet, said, “Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We’ve continued our focus on delivering trusted services to help people around the world. Our Cloud services are helping businesses, big and small, accelerate their digital transformations.”

Ruth Porat, CFO of Google and Alphabet, further added, “Total revenues of $55.3 billion in the first quarter reflect elevated consumer activity online and broad-based growth in advertiser revenue. We’re very pleased with the ongoing momentum in Google Cloud, with revenues of $4.0 billion in the quarter reflecting strength and opportunity in both GCP and Workspace.”

*Expectational figures subject to Wall Street, Refinitiv prediction and analysis.