| Here’s your daily business briefing. - 🚗 Uber beats revenue target, but posts Q1 loss
- 🔍 Deep Dive: AI revolution to boost natural gas
- 🌐 Amazon, Telefonica team up for Europe's 5G
Thanks for reading! Shriram
p/Shriram | |
| 1 | | Uber ($UBER) surpassed revenue expectations in the first quarter, reaching $10.13B, a 15% year-over-year increase. However, the company experienced a notable net loss of $654M, attributing it mainly to unrealized losses from the reevaluation of equity investments, resulting in a loss per share of $0.32 compared to an anticipated profit of $0.23. More: - Adjusted EBITDA for the quarter rose 82% YoY to $1.38B, slightly exceeding analyst forecasts.
- Uber's monthly active platform users grew to 149 million, while completed trips rose by 21% to 2.6 billion, marking significant YoY increases of 15% and 21%, respectively.
- Gross bookings from Uber's mobility segment rose by 25% to $18.67B, while delivery gross bookings increased by 18% to $17.7B yearly.
- Uber's mobility segment revenue surged 30% to $5.63B annually, while revenue from its delivery segment rose by 4% to $3.21B compared to the prior year.
- The company's freight business saw sales of $1.28B for the quarter, remaining flat compared to the previous quarter and declining by 8% YoY.
Note: Inside.com Founder and CEO Jason Calacanis is an investor in Uber. |     | |
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What the numbers say: Power demands for data centers are projected to rise due to cloud storage, cryptocurrency mining, and AI applications, with electricity usage expected to hit 480 terawatt hours by 2035, constituting almost 10% of total U.S. power consumption. More than 20 gas-fired power plants are slated to be operational in 2024 and 2025, supplementing the current 40% share of U.S. power generation to address the escalating demand. Relevance: Fossil fuel executives contend that natural gas's reliability in delivering continuous power makes it indispensable for meeting data centers' energy needs, diverging from intermittent renewables. This contradicts commitments by major tech firms to transition their operations to green energy, prompting concerns over the sustainability of expanding gas infrastructure amidst climate change mitigation efforts. More data: The International Energy Agency projects that global data center power demand could surpass 1,000 terawatt-hours by 2026, doubling 2022 levels and equivalent to Germany's entire power demand. Despite fossil fuel producers' optimism, analysts foresee a decline in gas-fired power generation by the decade's end, while green energy adoption is expected to surge. This threatens the long-term viability of fossil fuels as an energy supply. | | | |
| 3 | | Informa (INF.L) has secured a deal with Microsoft valued at over $10M in its initial year, granting access to its data to enhance Microsoft's AI systems. Spanning from 2024 to 2027, the agreement focuses on expanding AI utilization within Informa's operations, leveraging its intellectual assets, and emphasizing the significance of specialized data in securing recurring payments. More: - The Microsoft ($MSFT) partnership aids Informa in reaching the upper end of its market guidance for revenues, adjusted operating profit, and free cash flow.
- Informa's business is thriving across key regions like North America, Asia, India, the Middle East, and Africa, capitalizing on the rebound in global events following the pandemic.
- The company has boosted its share buyback program for 2024 by around 50% to $625M, demonstrating confidence in future performance and leveraging its strong financial position.
- The British exhibitions group expects revenue for the current year to reach nearly $4.4B, up from $4B in 2023, with adjusted operating profits close to $1.2B, compared to $1.06B the previous year.
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| 4 | | Telefonica Germany (TEF) aims to transfer one million 5G subscribers to Amazon Web Services (AWS) cloud, marking the first time a mobile operator has migrated its core network to a public cloud globally. This move signals Amazon's venture into the telecommunications industry as major cloud-computing companies like Amazon ($AMZN) and Microsoft ($MSFT) explore potential revenue streams. More: - Mallik Rao of O2 Telefonica Germany aims to shift 30–40% of the customer base to the cloud by 2025-2026, with undisclosed AWS deal details, serving 45 million customers in Germany.
- Transferring the core network to a public cloud is anticipated to cut costs, boost scalability, and enable maintenance without interrupting services.
- Nokia will furnish the software, while AWS will supply the infrastructure for Telefonica Germany's transition to the cloud.
- In 2021, Dish, a U.S.-based telecom firm, became the inaugural telecom firm to utilize the AWS cloud for its core network, leveraging the advantage of not needing to modify existing systems.
- The global telecom cloud market is expected to surge from $19.7B in 2021 to $108.7B by 2030, with Amazon targeting telco workloads as a key aspect of its business strategy.
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| 5 | | Toyota ($TM) projects a 20% profit decline in the current fiscal year due to planned investments despite surpassing market expectations in fourth-quarter earnings with a 78% surge in operating profit. Achieving a milestone in Japanese corporate history, Toyota attained a full-year operating profit exceeding $32B for the first time, reaching $34.39B. More: - The company profited from a depreciated yen and decreased demand for electric vehicles in certain markets, notably the U.S., where hybrid vehicles are favored.
- Toyota's sales of battery-only EVs constituted merely 1% of global sales in the previous year, falling short of the previously stated target.
- Toyota's "multi-pathway" strategy, endorsing hybrids, plug-in hybrids, and EVs, is deemed foresighted considering consumer worries about EV range and charging infrastructure.
- To fuel growth, Toyota intends to invest $10.92B in burgeoning sectors like artificial intelligence and software development.
- Despite its achievements, Toyota encounters challenges in markets like China, where local automakers swiftly introduce software-equipped EVs, presenting formidable competition.
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| 6 | | HF Sinclair ($DINO), the American refiner, surpassed first-quarter profit expectations, boosted by increased fuel sales, and revealed a new $1B share buyback initiative. Global fuel supplies faced constraints as Russian refinery disruptions ensued from Ukrainian drone attacks. More: - U.S. product supplied, serving as a demand indicator, averaged 20.10 million barrels per day (bpd) by the end of March, increasing from 19.7 million bpd a year prior.
- HF Sinclair experienced a 22.4% surge in refined product sales, reaching 631,470 barrels per day (bpd), alongside an uptick in renewable fuel sales.
- HF Sinclair's refinery utilization surged to 89.2% from 73.5% a year ago, with throughput averaging 643,300 bpd, a 15% increase YoY.
- Tim Go, the company's CEO, expressed optimism about the market conditions going into the summer driving season.
- Despite a decrease in refinery gross margin to $12.70 per barrel, HF Sinclair exceeded analysts' average estimate, posting an adjusted net income of $0.71 per share for the first quarter.
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| 7 | | Quick Hits: - Life Time fitness aims to expand its brand by investing in pickleball, the fastest-growing sport in America, and has partnered with Lululemon as the official apparel sponsor for its pickleball and tennis activities.
- Monzo, the British neobank, raised $190M from investors like Hedosophia and CapitalG, bringing its total funding this year to $610M and valuing the company at $5.2B post-money.
- Microsoft's $3.3B investment in a Wisconsin data hub will offer artificial intelligence training, with President Joe Biden visiting to underscore job growth initiatives.
- Kenvue Inc., the owner of Listerine, plans to cut approximately 4% of its global workforce, totaling around 880 employees, as its services contract with J&J expires, aiming to enhance competitiveness.
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 | Freelance Writer | | Shriram is pursuing Master’s in Business with Marketing at Warwick Business School. He worked as a Senior Consultant in Tech and Political Consultancies before his Masters. He is passionate about Tech, Marketing, Strategy, Anthropology and Politics. He is also the Postgraduate Ambassador for Warwick Business School. | | This newsletter was edited by Shriram Jeevakumar | |
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