Industry Overview - The Internet-Software & Services industry is closely tied to the economy, with estimates declining due to tariffs, inflation, and interest rate uncertainties [1][7] - Companies are focusing on cost-saving measures, reducing operating expenses to maintain profitability despite revenue challenges [1][7] - Capital investments are being limited, with only a few companies making significant investments [1] Key Industry Themes - Companies like Criteo (CRTO) and RingCentral (RNG) are performing well by leveraging AI for revenue growth and client retention through subscription models [2][18] - The industry is characterized by a diverse range of players, leading to varied performance outcomes [2] - The Zacks Industry Rank for the Internet-Software & Services sector is 203, placing it in the bottom 17% of nearly 250 classified industries, indicating limited growth prospects [6][8] Economic Impact - The level of technology adoption by businesses is crucial for growth, with some companies advancing in AI while others lag behind [7] - Economic slowdowns lead to reduced expenditures on software and services, impacting industry performance [7] - Geopolitical tensions and tariff changes contribute to market volatility and uncertainty, complicating the operating environment [7] Financial Performance - The industry has shown strong stock market performance, returning 20.5% over the past year, outperforming the broader sector and S&P 500 [11] - The industry is currently trading at a forward 12-month P/E ratio of 24.96X, which is a 15.2% premium to the S&P 500 [14] Company Highlights Criteo S.A. (CRTO) - Criteo's AI-driven platform connects advertisers with retailers, helping to drive commerce despite macroeconomic challenges [18][20] - The company has maintained a client retention rate close to 90% and reported an 18% growth in Retail Media contributions [21][22] - Despite a projected decline in earnings due to the loss of a major customer, Criteo's existing customer spending has increased significantly [21][23] RingCentral Inc. (RNG) - RingCentral's AI-powered solutions have led to an average recurring revenue (ARR) exceeding $2.5 billion [26] - The company has successfully integrated its services into the Salesforce CRM ecosystem and secured significant customer wins [26] - RingCentral's shares have decreased by 26.5% over the past year, with analysts projecting revenue growth of 4.6% in 2025 [27]

Block (XYZ) is set to report its first-quarter 2025 results on April 30.The Zacks Consensus Estimate for first-quarter revenues is currently pegged at $6.18 billion, indicating growth of 3.81% year over year. The consensus mark for earnings is currently pegged at 88 cents per share, unchanged over the past 30 days. The figure indicates a 3.53% jump from the year-ago quarter’s reported figure.Block’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, missing once, and in line in ...

Nebius Group N.V. (NBIS) shares have lost 24.2% over the past three months, underscoring broader and company-specific challenges.  The broader market volatility over the past month has been due to the tariff and trade tensions between the United States and other countries, especially China. Though President Trump’s announcement of a 90-day pause on reciprocal tariffs and hinting at a possible de-escalation with China cheered investors, the volatility is far from over. Apart from that, company-specific facto ...

Financial Data and Key Metrics Changes - Revenue growth accelerated to 40% year over year in Q1 2025, up from 29% in Q4 2024, exceeding previous guidance of 28% to 31% [4][15] - Total revenue for Q1 2025 reached $143 million, with advertising revenue growing 63% and now representing two-thirds of total revenue [5][15] - Adjusted EBITDA was $32 million, with a margin of 23%, indicating increased profitability alongside revenue growth [6][15] Business Line Data and Key Metrics Changes - E-commerce was the fastest-growing vertical within advertising, achieving over 100% annualized growth, which offset typical seasonality [5][15] - Search revenue grew 8% year over year, indicating a slowdown compared to previous growth rates [5][32] - The user base remained stable at 293 million monthly active users (MAUs), with annualized ARPU increasing by 44% [7][15] Market Data and Key Metrics Changes - The U.S. market is experiencing greater uncertainty among advertisers, impacting growth potential [15][21] - The company has less exposure to U.S. e-commerce compared to competitors, suggesting significant growth opportunities ahead [22][63] Company Strategy and Development Direction - The company is focusing on high-value users and leveraging AI to optimize advertising and search revenue [6][10] - Opera is expanding its browser portfolio, including the introduction of AI-driven features, to enhance user experience and engagement [8][10] - The company aims to maintain aggressive growth in e-commerce while navigating macroeconomic challenges [21][63] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's ability to grow despite a volatile macro environment, highlighting a strong track record of navigating challenges [13][21] - The company raised its full-year revenue guidance to DKK 567 million to DKK 582 million, reflecting confidence in continued growth [24][21] - Management noted that the advertising revenue is primarily performance-based, making it more resilient in uncertain economic conditions [22][67] Other Important Information - The company celebrated its 25th anniversary in 2025, emphasizing its long history of innovation and adaptation [13] - Opera has distributed $2.4 in dividends per share since January 2023, indicating a commitment to returning value to shareholders [21] Q&A Session Summary Question: Search growth during the quarter - Management acknowledged that the 8% growth in search revenue is a slowdown but attributed it to a shift towards intent-based advertising, which is driving overall advertising growth [32][34] Question: Decline in GX ARPU - Management noted that the decline in GX ARPU is partly seasonal and that the introduction of AI and high-intent advertising options is expected to benefit overall revenue [32][36] Question: Impact of currency on growth - Management indicated that the strong U.S. dollar has been a headwind, estimating that growth would have been 5 to 6 percentage points higher on a constant currency basis [38] Question: E-commerce growth and seasonality - Management confirmed that the rapid growth of e-commerce has offset typical seasonality, but acknowledged that seasonality will still be a factor as the business matures [41][44] Question: Concerns about MAU count - Management clarified that the focus is on high ARPU users rather than total MAU count, emphasizing revenue generation over user numbers [46][48] Question: U.S. antitrust actions and broader ecosystem - Management expressed that ongoing antitrust discussions could benefit Opera by increasing focus on competition and innovation in the browser market [49][52] Question: E-commerce opportunity and geographic exposure - Management highlighted that the e-commerce segment is growing rapidly and that the U.S. market still holds significant potential for future growth [56][58] Question: Gating factors for e-commerce growth - Management stated that attracting performance-focused advertisers is key to expanding e-commerce revenue, with a focus on larger retailers initially [61][64]

Core Viewpoint - Meta Platforms (META) is expected to report strong first-quarter 2025 results, driven by robust advertising revenue growth and effective use of AI technologies [1][4][21] Revenue Expectations - META anticipates total revenues between $39.5 billion and $41.8 billion for Q1 2025, reflecting an 8-15% year-over-year growth or 11-18% growth at constant currency [1] - The Zacks Consensus Estimate for first-quarter revenues is $41.22 billion, indicating a 13.08% increase from the previous year [1][2] Earnings Projections - The consensus estimate for earnings per share stands at $5.21, down 2.3% over the past month, suggesting a 10.62% growth from the year-ago quarter [2] Advertising Revenue Growth - Strong advertising revenue growth is anticipated, with the Zacks Consensus Estimate for Q1 2025 advertising revenues at $40.44 billion, indicating a 13.5% year-over-year growth [4] - META's platforms, including WhatsApp, Instagram, Messenger, and Facebook, reach over three billion users daily, enhancing its position in the digital ad market [5] AI and Machine Learning Utilization - META is leveraging AI and machine learning to enhance user engagement and advertising effectiveness, with AI-driven feed recommendations being a key factor [6][15] - The deployment of deep neural networks has improved ad quality and recall rates significantly [18] Financial Performance and Valuation - The Family of Apps' operating income is estimated at $19.97 billion, reflecting a 13% year-over-year growth, while Reality Labs is expected to incur a loss of $4.70 billion, wider than the previous year's loss [7] - META shares have declined 6.6% year-to-date, outperforming the Zacks Computer & Technology sector's 11% decline but lagging behind the Internet Software Industry's 5.9% drop [8] Competitive Position - META is expected to capture a significant share of global ad spending, alongside Alphabet and Amazon, projected to absorb roughly 50% of the market by 2028 [5] - The company's focus on improving advertisers' return on ad spending through proprietary machine learning systems enhances its competitive edge [16]

Financial Data and Key Metrics Changes - Revenue growth increased from 29% in Q4 2024 to 40% in Q1 2025, translating to revenue of $143 million for Q1 2025, exceeding previous guidance [5][6] - Adjusted EBITDA reached $32 million with a margin of 23%, indicating profitability alongside revenue growth [7][18] - Annualized ARPU grew by 44% year over year, reflecting a focus on high-value users [8] Business Line Data and Key Metrics Changes - Advertising revenue grew by 63% in Q1 2025, now representing two-thirds of total revenue, with e-commerce being the fastest-growing vertical at over 100% annualized growth [6][8] - Search revenue was $7 million, growing 8% year over year, indicating a stable growth despite a shift towards e-commerce [6][30] Market Data and Key Metrics Changes - The user base remained stable at 293 million MAUs, with a focus on high ARPU potential users [8][47] - The U.S. market is seen as having significant growth potential in e-commerce, with the company having less exposure compared to competitors [22][64] Company Strategy and Development Direction - The company aims to leverage AI for optimizing user intent and enhancing advertising effectiveness, which is expected to drive future growth [7][50] - Opera is focusing on performance-based advertising, which is more resilient in volatile market conditions, allowing for continued growth [22][67] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic volatility but expressed confidence in the company's ability to navigate these challenges and capitalize on growth opportunities [21][24] - The company raised its full-year revenue guidance to DKK 567 million to DKK 582 million, reflecting optimism about continued growth [24][25] Other Important Information - The company celebrated its anniversary and highlighted its history of navigating market disruptions and competition [13][14] - The company has distributed $2.4 in dividends per share since January 2023, indicating a commitment to returning value to shareholders [21] Q&A Session Summary Question: Search growth slowdown and its impact - Management noted that the shift towards intent-based advertising is influencing search growth, which is still expected to grow strongly in the future [30][34] Question: Impact of currency on growth - The strong U.S. dollar has been a headwind, with growth estimated to be 5-6 percentage points higher on a constant currency basis [38] Question: E-commerce growth and seasonality - E-commerce growth has been strong enough to offset typical seasonality, but management expects some seasonality to return as the business matures [41][44] Question: User base concerns - The focus is on high ARPU users rather than total MAUs, with management confident in revenue growth despite a slight decline in user numbers [47] Question: U.S. antitrust actions and their impact - Management sees potential benefits from increased competition and focus on user intent, positioning Opera favorably in the evolving ecosystem [48][50] Question: E-commerce advertiser diversification - The e-commerce opportunity is growing rapidly, with a focus on performance-based partnerships, particularly in the U.S. market [56][64]

Summary of Tencent Holdings Conference Call Company Overview - **Company**: Tencent Holdings (700 HK) - **Sector**: Internet Software & Services - **Market Cap**: HKD 4,060,528 million (USD 523,190 million) [14][10] Key Points and Arguments Industry and Market Context - **Tariff Impact**: Tencent has immaterial direct revenue exposure to US tariffs, indicating limited financial impact from trade tensions [2][10] - **Consumer Recovery**: Potential uncertainty regarding consumer recovery in China may affect payment and advertising businesses, but ongoing adtech enhancements are expected to buffer this impact [2][3] Financial Performance and Projections - **1Q25 Expectations**: Revenue and non-IFRS operating profit are expected to grow by 11% and 13% year-on-year, respectively. Domestic and international games revenue is projected to grow by 19% and 18% year-on-year [4][10] - **Game Performance**: Domestic titles showed growth in Daily Active Users (DAU) during Chinese New Year. CrossFire Mobile and Peacekeeper Elite reported strong year-on-year gross billings growth in 1Q25 [2][3] - **Buyback Commitment**: Tencent's commitment to a HKD 80 billion buyback in 2025 is expected to provide valuation support alongside strong free cash flow generation capabilities [2][3] Investor Sentiment and Feedback - **Quality Preference**: Investors are increasingly seeking quality investments amid volatile market conditions, with Tencent being a top choice due to its defensive game portfolio and buyback commitment [3][10] - **Yuanbao DAU**: While the DAU growth for Yuanbao has slowed, improvements in retention rates are encouraging. The company plans to enhance features to engage users further [3][20] Financial Metrics and Ratios - **Earnings Projections**: EPS is projected to grow from CNY 23.67 in 2024 to CNY 36.96 in 2027, with a PE ratio decreasing from 17.7x to 11.3x over the same period [6][12] - **Dividend Yield**: Expected to increase from 1.0% in 2024 to 1.5% in 2027 [6][12] - **Free Cash Flow**: Projected free cash flow equity is expected to grow from CNY 162,676 million in 2025 to CNY 212,421 million in 2027 [11][12] Valuation and Target Price - **Target Price**: Maintain Buy rating with a target price of HKD 630, indicating a potential upside of 42.8% from the current share price of HKD 441.20 [4][14] Additional Important Insights - **Game Pipeline**: Upcoming titles such as Delta Force (mobile release on April 22, 2025) and Goddess of Victory (China release in 2Q25) are expected to contribute positively to future growth [3][10] - **Market Share**: Tencent's domestic mobile games market share fluctuated but remained strong, with a notable 54% share in January 2025 [32][10] This summary encapsulates the key insights from the conference call, highlighting Tencent's resilience in the gaming sector, financial projections, and strategic initiatives amidst market uncertainties.

GitLab (GTLB) shares have lost 27.1% year to date, underperforming the broader Zacks Computer & Technology sector’s 21% decline and the Zacks Internet Software industry’s 18.3% drop.GitLab’s recent share price decline reflects intensifying competition in the AI-driven code generation space, particularly from Microsoft's (MSFT) leading code repository platform, GitHub. With its vast developer base, GitHub has gained significant traction through GitHub Copilot, an AI-powered coding assistant developed in coll ...