Taking Stock Of Tech’s Third Quarter

I trust that you are sated, smiley, and generally recharged by the recent Thanksgiving cycle. Earnings time. You may have thought that you were out of the non-GAAP woods. Not in the least. Certainly, Box still has yet report, but the majority of tech shops have dropped their digits, leaving it up to you and I to parse the mix.

Akin to our last little roundup, we will take a quick shot at each of the majors and then a few takes on smaller shops that have had interesting reports. Keep in mind that we have seen rather spirited share price declines at several companies and a spate of recent IPOs. 2015 continues to confuse, in other words.

So, to the big kids first, and then the kids table.

The Rich Crew

Google Alphabet

Alphabet had a big quarter, reporting $18.68 billion in revenue, and a massive $7.35 profit per share. Its stock popped, and That Was Once Google is now something just a bit more. For comparison, as TechCrunch reported at the time, Alphabet had revenue of $16.52 billion in its comparable, year-ago quarter.

Oh, and the shop did something that investors love: Promised a fat chunk of cash to repurchase its own shares. That activity constrains its per-share profit, meaning that investors who hold its stock stand to control a larger stake of its bottom line. The tab? $5.1 billion.


Ol’ Redmond had a solid quarter as well, picking up $0.67 in profit per share, off of $21.66 billion in top line. Investors had expected a slimmer $21.03 billion in revenue. Its shares climbed following the news.

The company, however, began to dig into the non-GAAP revenue zone and fired around 1,000 people so quietly it almost felt indecent.

The final scorecard was much of what you would expect: Windows revenue fell, cloud revenue grew, and lackluster sales of smartphones didn’t help its hardware business. Still, the company reported that its ‘commercial cloud’ business is now generating revenue at a run-rate of $8.2 billion.


From our live blog, three notes that tell the full story:

Screen Shot 2015-11-30 at 3.08.14 PM

Several eons pass, including an earnings call. Then:

It’s hard to be Apple. Most valuable company in the world? Check. Still beating investor expectations? Check. Cool new products? Of course. Shares? Flat.


This time, Amazon had a quarter for the ages. Instead of losing $0.13 per share, Amazon made $0.17 per share, also smashing revenue expectations by reporting $25.4 billion in total top line.

Its shares soared, with TechCrunch reporting at the time of earnings an 11 percent jump. The common complaint that Amazon may never generate profit was crushed under the boot of, well, profits.

Oh, and that AWS thing, it turns out, is a pretty good business. Here’s this publication:

With this earnings report, Amazon shares have about doubled in the year-to-date period. AWS was once again a huge strong point for the company, reporting a segment operating income of $521 million, compared to $98 million in the third quarter a year earlier.

Other Companies That Still Exist

Google and Apple alone are worth more than a trillion dollars. Add Microsoft and Amazon and the sheer wealth of the Big Four is hard to get your arms around. Happily, not all companies are so large. In fact, some are perfectly modest in scale. Let’s chat about a few.

  • Zynga! Beat! And a $200 million share repurchase program.
  • Twitter. Well, you can probably guess, but the company’s financial performance — as per usual — spanked expectations. But Twitter failed to post material user growth, so its shares tanked.
  • LinkedIn beat expectations, bringing in $780 million of revenue. It also went hard on profitability, reporting $0.78 per-share in the stuff. Result: Up!
  • Zendesk dropped its quarterly earnings roughly akin to how I drop a mic after besting Drew in a rap battle. It beat on profit and revenue. Investors were happy little munchkins, bidding up shares in the company sharply.
  • Oh, and Tableau smashed as well, reporting $170.8 million in revenue, above expectations of a slimmer $157.7 million. Its equity bounced a firm 17 percent in after-hours trading.

That is probably enough to get the picture.

Summation: Bam

If you think back to August, tech companies were under heavy pressure from the market. And in the most recent few months, we have seen the valuations of many of private tech companies recede. And yet, when you start to roll backwards through the earnings cycle, things are hardly too messy.

So if I were to take a turn at summing the quarterly cycle, I would probably give it a thumbs up. Big numbers, big beats and big bounces. The economic climate is shit, but at least for now, tech hasn’t managed to stumble much.

Disclosure: My partner works for an Alphabet subsidiary. I kept Alphabet in this post as it would be inane not to discuss its results in our current context.