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SA Editor Eric Jhonsa  

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  • Susquehanna: S6 Edge will account for over half of 2H S6 shipments [View news story]
    The 48M estimate is from the Susquehanna analyst, not Samsung.

    70M was an estimate given by a Samsung exec to the Korea Times, and it appears to be for lifetime S6 sales rather than 2015 sales.

    http://tinyurl.com/nmu...
    May 29, 2015. 10:11 PM | Likes Like |Link to Comment
  • Broadcom/Avago seen pressuring Qualcomm, possibly sparking M&A [View news story]
    Avago's wireless chip sales were up 66% Y/Y last quarter. Hardly my idea of "weak." And as its Q1 results show, BRCM's connectivity business is doing alright.

    One can also look at how well AVGO and BRCM's shares have performed over the last 12-18 months. These were hardly companies in distress.

    Cost synergies are what have been driving semi consolidation more than anything else. AVGO has already successfully acquired and integrated several companies. Now they want to take a shot with a much bigger fish.
    May 29, 2015. 02:54 PM | 1 Like Like |Link to Comment
  • Broadcom/Avago seen pressuring Qualcomm, possibly sparking M&A [View news story]
    I doubt QCOM had much to do with it. BRCM is still the biggest player in combo chips, and AVGO has been gaining RF share. Meanwhile, it doesn't look as if BRCM/AVGO has any interest in entering baseband, the place where QCOM does dominate.

    I'd say cost synergies (the reason BRCM and AVGO's shares took off) were the biggest driver for the deal, followed by enterprise/networking and mobile product synergies.
    May 29, 2015. 01:41 PM | Likes Like |Link to Comment
  • Palo Alto buys cloud app security firm; billings rise 56% Y/Y [View news story]
    Billings are payments invoiced to customers, typically with the expectation that they'll be paying soon. For companies that get a lot of revenue from subscriptions such as PANW, billings will often be higher than reported revenue (at least when the companies are growing), since they'll bill for one or two-year subscriptions while recognizing the revenue a quarter at a time.
    May 27, 2015. 06:29 PM | 1 Like Like |Link to Comment
  • Workday -8% on in-line guidance, slower unearned revenue growth [View news story]
    << actually realising the deferred revenue apparently necessitates incurring as much in (deferred) cost. >>

    Deferred costs are much smaller than deferred revenue, as the gross margins of cloud software firms demonstrate.

    << Non-GAAP profits are minuscule in relation to revenues, and GAAP profits are somewhere between non-existent and negative. >>

    Again, EPS (whether GAAP or non-GAAP) gives an inaccurate view of how much money these companies are taking in. Free cash flow, not EPS, is the true measure of a business' long-term profitability. EPS is simply more convenient for short-term reporting since it's less lumpy, but this usefulness is diminished with cloud software firms due to how they recognize revenue.

    << FCF is gross of SBC, which is diluting the stock at about 9% pa in the case of SFDC, and a great deal more than that in the case of WDAY. >>

    Agree share dilution needs to be accounted for, but it doesn't mean these companies are unprofitable on an FCF basis. It simply means one has to assume (using some kind of discount rate) an investor's share of future cash flows will be smaller than his/her share of present cash flows.
    May 27, 2015. 02:20 PM | Likes Like |Link to Comment
  • Fortinet acquiring Wi-Fi hardware/software vendor Meru for $44M [View news story]
    Aruba, not Arumba :). UBNT seems to have a quality product for the SMB market, but they don't have much enterprise penetration yet. Very ambitious roadmap though.
    May 27, 2015. 01:09 PM | 1 Like Like |Link to Comment
  • Castlight up 6% on strong volume (updated) [View news story]
    Thanks. Updated the post to note the disclosure.
    May 26, 2015. 08:22 PM | Likes Like |Link to Comment
  • Workday -8% on in-line guidance, slower unearned revenue growth [View news story]
    As I've mentioned to CRM bears, EPS will always understate how much money cloud software firms are taking in while they're growing. The reason being that they get paid for subscriptions (typically lasting one or two years) up-front, but only recognize revenue a quarter at a time. Whereas ORCL, SAP, etc. will recognize all of the revenue from traditional software license sales up-front.

    Though still richly valued, CRM and WDAY are cash flow positive. CRM's FY15 FCF was $883M. I have no position in either company, but I think those who short CRM/WDAY or other cloud software stocks while valuing them based on EPS instead of FCF are playing with fire.
    May 26, 2015. 06:30 PM | 1 Like Like |Link to Comment
  • Reports: Intel launching Skylake in late summer, subsidy for Rockchip CPUs [View news story]
    Thanks for the heads-up. Meant to say Skylake. The post has been corrected.
    May 22, 2015. 11:42 PM | 1 Like Like |Link to Comment
  • Solar ETFs hammered as China's Hanergy plunges [View news story]
    Yep. TSL's earnings are providing a lift.
    May 21, 2015. 03:41 PM | Likes Like |Link to Comment
  • CIRP: Amazon has 41M U.S. Prime subs [View news story]
    The fact that I disagreed with you about a company's financials shouldn't be taken as a sign of bullishness (or bearishness).
    May 20, 2015. 09:08 PM | 2 Likes Like |Link to Comment
  • Salesforce +4.7% on results/guidance; free cash flow rises 60% [View news story]
    23% revenue growth and 31% deferred revenue growth clearly played a role. The fact opex only rose 15% (less than rev. growth) also helped.
    May 20, 2015. 07:02 PM | Likes Like |Link to Comment
  • Salesforce +4.7% on results/guidance; free cash flow rises 60% [View news story]
    That's responsible for FQ1 being a seasonally strong quarter for FCF. But it's not responsible for the 60% Y/Y growth, since (as you noted) the same trend occurred last year. The drop in AR was 44% bigger this year than last, but revenue/deferred revenue growth have much to do with that.
    May 20, 2015. 06:10 PM | Likes Like |Link to Comment
  • Universal Display higher amid Apple speculation [View news story]
    I'm sorry if you feel that way. However, there are more than 3,900 subscribers to OLED alerts altogether. If there's some news or commentary that appears to be moving the stock, I think they should be made aware of it.
    May 20, 2015. 01:31 PM | 6 Likes Like |Link to Comment
  • Universal Display higher amid Apple speculation [View news story]
    Such a move is newsworthy when there appears to be news or commentary driving it.

    If one of your articles appears to be moving a stock, I'd be glad to cover that as well. But there's no need to disparage the work of others in order to promote your past writing.
    May 20, 2015. 01:00 PM | 6 Likes Like |Link to Comment
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