Displaying items by tag: Covid19
Zoom profits double as revenue quadruples
Zoom shares soared after the video-meeting service reported that quarterly revenue rocketed as its ranks of users more than quadrupled.
Revenues leaped 355% to $663.5m for the three months ending 31 July, beating analysts' expectations of $500.5m.
Profits soared to $186m, while customer growth rose 458%, compared with the same period in 2019.
Video conferencing apps remain crucial due to the increase in remote working.
Zoom's shares hit a record high, closing at $325.10, as the firm raised its annual revenue forecast by more than 30% to the range of $2.37bn-$2.39bn, from its previous projection of $1.78bn-$1.80bn.
Key to Zoom's success was its ability to add paying customers - high-budget corporate clients - as opposed to those who use its services for free.
"Organizations are shifting from addressing their immediate business continuity needs to supporting a future of working anywhere, learning anywhere, and connecting anywhere on Zoom's video-first platform," founder and chief executive Eric Yuan said in an earnings release.
Zoom shares were up more than 22 percent in after-market trades that followed release of the earnings, which beat market expectations.
The company reported that it ended the quarter with approximately 370,000 customers that had more than 10 employees, more than four times as many than it had in the same period a year earlier.
The increase in customers built on a surge in the previous fiscal quarter, and appeared to offset investor concerns that Zoom's popularity would decline when restrictions on movements ease and people can get back to seeing one another in person.
The earnings come with Zoom still under pressure to deal with security and privacy. It has taken heat over uninvited cyber guests disrupting online meetings with a tactic called "zoombombing."
Zoom was originally built for businesses with dedicated IT teams to handle implementing security features, but first-time users flocked to the service to work or socialize from home due to the pandemic.
Yuan said on a previous earnings video call with analysts that Zoom "learned a hard lesson" that it should have provided more tech support.
"We should have played the role of IT for first-time users. We learned a hard lesson; this was a mistake I made." As a result, the company has poured resources into privacy and security.
WEF summit rescheduled over COVID-19 fears
The 2021 World Economic Forum (WEF) meeting of business leaders and politicians has been called off for January due to the coronavirus pandemic, with organizers planning to reschedule the event sometime early next summer.
“The advice from experts is that we cannot (host the event) safely in January,” WEF said in a statement.
Traditionally, the WEF holds its annual summit in the Swiss ski resort town of Davos in January.
The high-profile event is attended by thousands of global leaders from fields of business, governance, politics, art and culture, civil society and academia, among others.
In a statement, the Geneva-based organization said it has decided to reschedule the Annual Meeting 2021 to early next summer.
"Details concerning the dates and location of the rescheduled Annual Meeting 2021 will be shared as soon as the Forum is assured that all conditions are fulfilled to guarantee the health and safety of our participants and the hosting community," it said.
"The decision was not taken easily, since the need for global leaders to come together to design a common recovery path and shape the 'Great Reset' in the post-COVID-19 era is so urgent. However, the advice from experts is that the Forum cannot do so safely in January," it added.
During the week of January 25, the WEF will digitally convene high-level 'Davos Dialogues' where key global leaders will share their views on the state of the world in 2021.
The WEF said it continues to engage its partners and constituents in manifold, collaborative activities to address global, regional and business challenges.
It further said since February this year, almost 1,800 organizations from business, government and civil society have joined the WEF's 'COVID Action Platform' following the outbreak of the pandemic.
In September, the WEF's Sustainable Development Impact Summit will bring the core principles of the Great Reset into focus, asking how everyone can contribute to a more sustainable and inclusive future.
Earlier in June, the WEF had said it will adopt a new twin-summit format for its next annual Davos meeting by bringing together leaders from across the globe for in-person as well as virtual dialogues with a theme of the 'Great Reset'.
The 50th WEF Annual Meeting, which was held from January 21-24, 2020, was one of the last high-profile gatherings this year before the coronavirus pandemic brought almost the entire world to a halt.
Microsoft announces permanent closure of retail stores
After temporarily closing its Microsoft Stores in March because of the pandemic, the company has decided to make it permanent.
The company said that the move will “result in a pre-tax charge of approximately $450 million” which “includes primarily asset write-offs and impairments.”
Microsoft will move its retail operations online, keeping just four locations and transforming them into "experience centers."
"Microsoft will continue to invest in its digital storefronts on Microsoft.com, and stores in Xbox and Windows," the statement said.
The four locations that will become Microsoft Experience Centers are in London, New York, Sydney and at the company's Redmond, Washington headquarters.
Retail team members will "serve customers from Microsoft corporate facilities and remotely providing sales, training, and support," the company said.
"Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location," said Microsoft corporate vice president David Porter.
Microsoft in recent years has been relying more on its services such as cloud computing, with the retail locations focusing on its Surface tablets and laptops as well as Xbox gaming gear. But the physical stores failed to gain momentum.
Independent technology analyst Neil Cybart said the closures were because "the Surface business increasingly looks to be losing momentum in the consumer space."
The impact of the pandemic has not yet been reflected in Microsoft's financial results. It posted a net profit of $10.8 billion from January to March, up 22 percent year-on-year, on a turnover of $35 billion.
Huawei announces pandemic-inspired smartphone with built-in thermometer
Chinese tech giant Huawei announced that its new smartphone will include built-in sensors that can measure body temperature.
The fever can be an early indicator of infection during times like these where the COVID-19 pandemic is a major concern. Huawei intends to integrate this thermometer in the Honor Play 4 Pro phone.
The infrared technology built into the smartphone will have the ability to measure temperatures up to 100 degrees Celsius.
In a video posted on Chinese social media site Weibo, Huawei demonstrated the phone and how the built-in thermometer would work on a person, via pointing the sensors at the individual’s forehead for a few seconds.
While IR sensors are not as accurate as thermal cameras, it is cheap to use and was in fact already integrated into most smartphones for facial recognition unlock and other camera effects. It was due to this that the tech giant was able to react to the pandemic very quickly.
The phone is expected to be available in China for around $420.
Microsoft revenue rises as remote work boosts cloud
Microsoft reported higher results for its fiscal third quarter to end March, powered by sharp demand for its Teams chat and online meeting app and cloud computing services as the world shifted to working and playing from home because of the novel coronavirus pandemic.
Microsoft Teams now has 75 million daily active users. This comes as the coronavirus pandemic has forced businesses to operate remotely, and has boosted the demand for Microsoft's products that enable communication and collaboration.
The company said net impact was minimal and that cloud usage increased. There was a slowdown in transactional licensing, particularly among SMEs, and a reduction in advertising spends on LinkedIn.
In the More Personal Computing segment, Windows OEM and Surface benefited from increased demand for remote work and learning, but supply chain constraints in China offset that rise, though these improved late in the quarter.
Gaming benefited from people in lockdown, but Search was negatively impacted by less ad spend. Microsoft noted that the full effects of the pandemic may not be fully felt until later in the future.
Revenue for the quarter climbed 15 percent from the year before to USD 35.0 billion, the operating profit increased 25 percent to USD 13.0 billion and the net profit rose 22 percent to USD 10.8 billion or USD 1.40 per share. Commercial Cloud helped lift results, generating USD 13.3 billion worth of revenues, up 39 percent.
Total Intelligent Cloud revenues went up 27 percent to USD 12.3 billion, with server products and cloud services going 30 percent higher and Azure leaping 59 percent. Enterprise Services revenue increased 6 percent.
Productivity and Business Processes was the next largest division, with revenues rising 15 percent to USD 11.7 billion. These included Office Commercial products and cloud services revenue up 13 percent, driven by Office 365 commercial revenue growth of 25 percent. Office Consumer products and cloud services revenue strengthened 15 percent, also helped Office 365, with consumer subscriber numbers growing to 39.6 million. LinkedIn revenue went up 21 percent while Dynamic products and cloud services had revenues rising 17 percent, driven by Dynamics 365 revenue growth of 47 percent.
Microsoft said it returned USD 9.9 billion to shareholders in the quarter, in the form of share buybacks and dividends, an increase of 33 percent from the year earlier.
Samsung net profits down by 3% in Q1
Samsung has reported its financial results for the first quarter of 2020 which showed decreased profits due to the pandemic.
Iridium announces first quarter results; lowers 2020 outlook
Iridium Communications reported financial results for the first quarter of 2020 and updated its full-year 2020 outlook. Net loss was $31.7 million, or $0.24 per diluted share, for the first quarter of 2020, as compared to net loss of $18.0 million, or $0.18 per diluted share, for the first quarter of 2019.
This increase in net loss was primarily the result of debt extinguishment costs associated with Iridium’s refinancing of its senior unsecured notes. Operational EBITDA for the first quarter was $92.1 million, as compared to $78.0 million for the prior-year period, representing a year-over-year increase of 18% and an operational EBITDA margin of 63%.
Iridium reported first-quarter total revenue of $145.3 million, which consisted of $116.0 million of service revenue and $29.3 million of revenue related to equipment sales and engineering and support projects. Total revenue increased 9% from the comparable period of 2019, while service revenue grew 8% from the year-ago period. Service revenue, which represents primarily recurring revenue from Iridium’s growing subscriber base, was 80% of total revenue for the first quarter of 2020.
The Company ended the quarter with 1,332,000 total billable subscribers, which compares to 1,151,000 for the year-ago period and is up from 1,300,000 for the quarter ended December 31, 2019. Total billable subscribers grew 16% year-over-year, driven by growth in commercial and government IoT customers.
“In the first quarter, Iridium delivered solid growth in total revenue and billable subscribers, driven by strong gains in service revenue, engineering and support services, and equipment sales. New revenue from Iridium Certus® broadband, along with increases in contractual revenue from the U.S. government and Aireon also aided our results,” said Matt Desch, CEO, Iridium. Desch added, “Iridium is pleased to have completed all planned refinancing activities in recent months, and we remain confident in our ability to generate significant free cash flow in 2020 and beyond. Accordingly, we continue to be committed to undertaking shareholder-friendly activities in due course.”
Commenting on the impact of COVID-19 to the business, Desch said, “In March we began to see a reduction in the pace of subscriber additions, and heard from some of our many partners about varying levels of business impact depending on their industry. Into April, these trends accelerated. While we continue to forecast overall growth in service revenue and Operational EBITDA for 2020, we are updating our full-year outlook to account for these unfavorable impacts.”
Desch continued, “Iridium’s satellite services are used for mission-critical applications across the globe, and our revenue base has, historically, been more resilient than many businesses to exogenous shocks and economic cycles, though the current economic shutdown is unprecedented. The timing of the shutdown coincides with Iridium’s peak season and will impact us accordingly. Still, we remain confident in Iridium’s ongoing financial position and our capacity to generate significant free cash flow.”
Commercial service remained the largest part of Iridium’s business, representing 63% of the Company’s total revenue during the first quarter. The Company’s commercial customer base is diverse and includes markets such as maritime, aviation, oil and gas, mining, recreation, forestry, construction, transportation and emergency services. These customers rely on Iridium’s products and services as critical to their daily operations and integral to their communications and business infrastructure.
Commercial service revenue was $91.0 million, up 7% from last year’s comparable period due to an increase in revenue primarily from hosted payload and other data services, broadband and IoT.
Commercial voice and data subscribers were up 1% from the year-ago period to 351,000 customers. Commercial voice and data average revenue per user (“ARPU”) was $40 during the first quarter, unchanged from last year’s comparable period. Commercial IoT data subscribers grew 22% from the year-ago period to 830,000 customers, driven by continued strength in consumer personal communications and tracking devices. Commercial IoT data ARPU was $9.71 in the first quarter, compared to $11.32 in last year’s comparable period.
Commercial broadband revenue was $8.7 million, up from $6.8 million in the year-ago period. This rise was primarily attributable to the introduction of Iridium Certus broadband service. Commercial broadband average revenue per user (“ARPU”) was $267 during the first quarter, compared to $233 in last year’s comparable period.
Iridium’s commercial business ended the quarter with 1,192,000 billable subscribers, which compares to 1,036,000 for the year-ago period and is up from 1,165,000 for the quarter ended December 31, 2019. IoT data subscribers represented 70% of billable commercial subscribers at the end of the quarter, an increase from 65% at the end of the prior-year period.
Hosted payload and other data service revenue was $16.3 million in the first quarter compared to $13.9 million in the prior-year period, which was primarily due to increased Aireon data service fees related to a contractual step-up.
Iridium’s voice and data solutions improve situational awareness for military personnel and track critical assets in tough environments around the globe, providing a unique value proposition that is not easily duplicated.
Under the Enhanced Mobile Satellite Services contract (the “EMSS Contract”), a seven-year, $738.5 million fixed-price airtime contract with the U.S. Air Force Space Command signed in September 2019, Iridium provides specified satellite airtime services, including unlimited global standard and secure voice, paging, fax, Short Burst Data®, Iridium Burst®, RUDICS and Distributed Tactical Communications System services for an unlimited number of Department of Defense and other federal government subscribers. Iridium also provides maintenance and support work for the U.S. government’s dedicated Iridium gateway under two other contracts with the U.S. Air Force Space Command. Iridium Certus airtime services are not included under these contracts and may be procured separately for an additional fee.
Government service revenue was $25.0 million and reflected increased revenue from the Company’s EMSS Contract.
Iridium’s government business ended the quarter with 140,000 subscribers, which compares to 115,000 for the year-ago period and is up from 135,000 for the quarter ended December 31, 2019. Government voice and data subscribers rose 11% from the year-ago period to 59,000 as of March 31, 2020. IoT data subscribers increased 31% year-over-year and represented 58% of government subscribers, an increase from 54% at the end of the prior-year period.
Equipment revenue was $22.3 million during the first quarter, up 6% from the prior-year period.
Due to the combined effects of the current global shutdown, deterioration in the oil and gas market, and strength of the U.S. dollar, the Company now expects full-year equipment sales will be down from 2019 levels.
Engineering and support revenue was $7.0 million during the first quarter, compared to $5.7 million in the prior year’s quarter, primarily due to an increase in the volume of contracted work.
Capital expenditures were $9.5 million for the first quarter, which includes $1.2 million of capitalized interest. The Company ended the first quarter with gross debt of $1.65 billion and a cash and cash equivalents balance of $67.3 million, for a net debt balance of $1.58 billion.
Two noteworthy transactions have impacted the structure of Iridium’s debt financing over the last two quarters. In November 2019, the Company entered into a seven-year, $1.45 billion secured Term Loan. The proceeds of the Term Loan, along with the cash in the Company’s debt service reserve account and cash on hand, were used to prepay all of the indebtedness outstanding under its BPIAE Facility and premiums for early prepayment, net of amounts refunded, of $48.9 million. On February 7, 2020, the Company closed on an additional $200.0 million under its Term Loan. On February 13, 2020, the Company used the proceeds of this transaction, together with cash on hand, to prepay all of the $360.0 million in indebtedness outstanding under the Company’s senior unsecured notes, premiums for early prepayment of $23.5 million, and accrued interest.
Given the current global shutdown and macroeconomic uncertainties, the Company updated its full-year 2020 outlook and currently anticipates:
- Growth in total service revenue for full-year 2020. Total service revenue for 2019 was $447.2 million.
- Growth in OEBITDA for full-year 2020. OEBITDA for 2019 was $331.7 million.
- Negligible cash taxes in 2020. Cash taxes are expected to be negligible through approximately 2023.
- Net leverage of no more than 4.4 times OEBITDA at the end of 2020. Net leverage was 4.8 times OEBITDA at December 31, 2019.
Twitter’s CEO pledges $1bn to coronavirus relief
Twitter co-founder and chief executive Jack Dorsey has pledged $1 billion of his personal fortune to Covid-19 relief. The money comes from his share in Square and equates to almost a third of his overall net worth.
Dorsey said in a series of tweets that he would transfer his equity in his digital payments group Square to his limited liability corporation Start Small, contributing around 28 percent of his overall wealth.
The move could be the largest from a single individual for coronavirus relief and comes with the pandemic spanning the globe and inflicting a heavy toll in lives and economic devastation on the United States.
"Why now? The needs are increasingly urgent, and I want to see the impact in my lifetime," Dorsey said.
"I hope this inspires others to do something similar. Life is too short, so let's do everything we can today to help people now."
Dorsey said that after the pandemic ends, the fund would focus on health and education for girls and "universal basic income" efforts.
Dorsey, who is CEO of both Twitter and Square, has created a foundation as well as the Start Small LLC, a model similar to that established by Facebook founder Mark Zuckerberg in his Chan-Zuckerberg Initiative, to allow for flexibility in funding startups and efforts a foundation may be ineligible to fund.
A document link tweeted by Dorsey showed the new fund had already pledged $100,000 to a new initiative called America's Food Fund launched by Laurene Powell Jobs, the widow of Steve Jobs, and actor Leonardo DiCaprio.
Dorsey's net worth is estimated at about $3 billion including his stake in Twitter and Square.
He said he chose to use his equity from the payments group because "I own a lot more Square."
Other technology entrepreneurs have pledged relief efforts in varying amounts. Amazon founder Jeff Bezos has pledged $100 million to help food relief efforts during the pandemic, and Zuckerberg has offered more than $25 million to help research through the Bill & Melinda Gates Foundation.
The Gates Foundation last month pledged $125 million for research but is believed to be investing more in a variety of projects.
Twitter warns of Covid-19 impact on Q1 results
Twitter has announced it expects operating loss in the first-quarter, and quarterly revenue to be down on a year-over-year basis, as a result of the impact of the coronavirus pandemic.
"Twitter had a strong start to the year before the effects of COVID-19 began spreading more broadly...... it has impacted Twitter's advertising revenue globally more significantly in the last few weeks," said Ned Segal, Twitter's Chief Financial Officer.
Despite this, the crisis has significantly expanded its average daily user base — with a net gain of 12 million so far in the current period. The COVID-19 outbreak have boosted Twitter’s overall daily active users (DAU): According to the company, year to date average total monetizable DAU are approximately 164 million, up 23% from 134 million in Q1 2019 and an increase of 8% from 152 million in Q4 2019.
In the current quarter, “We’re seeing a meaningful increase in people using Twitter, and our teams are demonstrating incredible resilience adapting to this unprecedented environment,” Twitter CEO Jack Dorsey said in a statement. “We’ll continue to navigate this environment focusing on supporting our employees, customers, and partners, while strengthening our service for everyone around the world and adjusting to a new operating and economic environment.”
While announcing the fourth-quarter results, Twitter had expected operating income to be between break even and $30 million, and total revenue of $825 million - $885 million for the first-quarter.
The company said it withdrew its prior operating income and revenue guidance for the first quarter of 2020, due to the profound changes on the global operating and economic environment and the effect on advertiser demand.
Twitter expects to release financial results for the first quarter on April 30, 2020.