Most of this week’s content was already sent. My Nvidia (NVDA) & SentinelOne (S) Earnings Review can be found here; my Zscaler (ZS) Earnings Review can be found here; my updated portfolio & performance vs. the S&P 500 can be found here; 37 (told you I was a nerd) more earnings reviews from this season can be found here.

Table of Contents

• 1. Brief Earnings Snapshots – Salesforce (CRM), Ma …

  • a. Salesforce (CRM)

  • b. Marvell Technology (MRVL) 

  • c. Dell (DELL)

  • d. Okta (OKTA)

• 2. PayPal (PYPL) – CEO Alex Chriss Interviews with …

• 3. Meta Platforms (META) – Miscellaneous

• 4. SentinelOne (S) – More Sector Information

• 5. Headlines

• 6. Macro

Next week’s articles will include CrowdStrike & Broadcom earnings reviews, a Lululemon snapshot, conference coverage & more.

1. Brief Earnings Snapshots – Salesforce (CRM), Marvell (MRVL), Okta (OKTA) & Dell (DELL)

a. Salesforce (CRM)

Demand:

• Beat revenue estimate by 0.8% & beat guidance by 1.0%.

• Beat 7% foreign exchange neutral (FXN) growth guidance with 8% FXN growth.

• Beat subscription & support revenue estimate by 0.8%

• Beat current remaining performance obligation (cRPO) estimate by 1.9% and beat 10% FXN cRPO growth guidance with 11% FXB growth.

Profits & Margins:

• Slightly missed EBIT estimate.

• Beat $1.50 GAAP EPS guidance by $0.09.

• Beat $2.55 EPS estimate by $0.03 & beat guidance by $0.04.

• Beat free cash flow (FCF) estimate by 7%.

Balance Sheet:

• $17.4B in cash & equivalents.

• $4.94B in investments.

• $8.44B in total debt.

• Diluted share count fell by 1.5% Y/Y.

Guidance & Valuation:

• Raised annual revenue guidance by 1.1%, which beat estimates by 0.9%.

• Raised annual FXN revenue growth guidance from 7.5% to 8.0%.

• Reiterated 9% annual FXN subscription & support revenue growth guidance.

• Raised annual EBIT guidance by 1.1%, which beat estimates by 0.6%.

  • Reiterated 34% EBIT margin guidance, with the EBIT dollar beat related to revenue outperformance.

  • Reiterated 21.6% GAAP EBIT margin guidance, with GAAP EBIT dollar guidance rising by roughly 1%.

• Raised $11.16 annual EPS guidance by $0.19, which beat estimates by $0.14.

• Raised $6.99 annual GAAP EPS guidance by $0.19.

• Reiterated 10.5% annual operating cash flow (OCF) growth guidance.

CRM trades for 23x forward EPS. EPS is expected to grow by 11% this year and by 12% next year.

Quick Highlights:

Salesforce is buying Informatica for $8 billion. As Founder/CEO Marc Benioff told shareholders, this combines Salesforce’s Customer Resource Management (CRM) engine with Informatica’s Master Data Management (MDM) and Extract, Transform, Load (ETL) capabilities. MDM handles consistent, accurate and properly-gated sharing of a firm’s data. It uses GenAI to automate anomaly detection within these new assets, accelerate data tagging, streamline data ingestion and offer predictive insights to join the plethora of tools Salesforce already offers in that arena. Informatica’s GenAI engine is called CLAIRE AI. ETL facilitates the transport of data from disparate systems into large, aggregated ecosystems… such as Salesforce’s data cloud. 

Informatica should make migrating more of a company’s lucrative information to this enterprise software giant easier. As every software company will tell you, affordable access to large amounts of high-fidelity and relevant data is how AI apps become valuable. It’s how Salesforce will equip its commerce, marketing, service and every other cloud with actionable agentic workflows to vastly bolster utility (and potential monetization). The rationale for both purchases was to make Salesforce a more convenient and seamless end-to-end data vendor… which also makes it a better partner for embracing the AI revolution.

• Data cloud and its AI suite were both in 60% of its largest 100 deals. This combination rose 120% Y/Y to cross $1 billion in ARR. Growth last quarter was also 120% Y/Y and it added more than $100M in net new ARR this quarter.

• 50% of data cloud bookings were from current customers, showing the up-sell opportunity for this tool.

Agentforce is CRM’s AI-powered platform for agentic AI apps. Agentforce functions as a full-service, out-of-the-box suite to turbocharge client GenAI adoption by making the embrace of this technology easier. It brings together all of Salesforce’s work in Data Cloud, Einstein AI (suite of AI tools for outcome prediction, chatbot building and more) and Customer360 (aggregated customer information to optimize interactions) to create an end-to-end platform that actually drives value. This is a giant piece of Salesforce’s end-to-end AI services, which it calls “ADAM” (Apps + Data + Agents + Metadata). Many companies offer help in pieces of some of these areas. Salesforce covers it all.

Agentforce has already crossed 4,000 paid deals vs. 3,000 Q/Q and $100M in ARR. This is the fastest product ramp to that ARR milestone in company history. Finnair is automating 80% of customer service interactions with it, while Falabella is using Agentforce and WhatsApp to automate 83% of its customer service work. And internally, Agentforce is reducing some CRM hiring needs worth about $50M in annualized savings. Just like CrowdStrike, Zscaler and pretty much everyone else, Salesforce is offering a flex style for buying this product, which lets customers use up commitments at their desired pace. Finally., FedRAMP High Authorization should be coming soon for Agentforce, allowing it to be sold to customers like the Department of Defense.

Platform-level adoption also remains strong, with around 80% of its deals including 6+ clouds. MuleSoft (app integration product) was in 50% of its $1M+ deals and Tableau (data visualization) was in 70% of them. Its industry-specific clouds were in 50% of its 100 largest deals vs. 75% Q/Q. Cross-selling means point solution displacement and vendor consolidation, which fosters better efficiency, product efficacy and retention. I think this is part of why Salesforce hasn’t seen any macro deterioration from trade wars.

Pretty good quarter, in my opinion. I’d love to see organic growth reaccelerate and it looks like that’s going to happen, considering forward guidance, easier comps and the firm’s tendency to beat its targets.

b. Marvell Technology (MRVL) 

Demand:

• Marvel beat revenue estimates by 0.8% & beat guidance by 1.1%.

• Data center revenue met estimates.

• Enterprise networking revenue missed estimates by 5.2%.

• Carrier Infrastructure revenue beat estimates by 18%.

Profits & Margins:

• Missed 60% GPM estimate & missed identical guidance by 20 bps each.

• Missed 50.5% GAAP GPM guidance by 20 bps.

• Beat EBIT estimate by 1.8% & beat guidance by 2.1%.

• Beat $0.19 GAAP EPS estimate & identical guidance by $0.01 each.

• Beat $0.61 EPS estimate & identical guidance by $0.01 each.

• Missed FCF estimates by 41% (very lumpy on a quarterly basis).

Balance Sheet:

• $886M in cash & equivalents.

• Inventory rose 29.6% Y/Y.

• $4.23B in total debt.

• Diluted share count fell slightly Y/Y.

Q2 Guidance & Valuation:

• Revenue guidance beat estimates by 1%.

• 59.5% GPM guidance missed estimates by 10 bps.

• EBIT guidance beat estimates by 1.6%.

• $0.67 EPS guidance met estimates; $0.21 GAAP EPS guidance missed estimates by $0.02.

MRVL trades for 20x forward EPS. EPS is expected to grow by 78% this year and by 28% next year.

c. Dell (DELL)

Demand:

• Dell beat revenue estimates by 0.9% & beat guidance by 1.7%.

• Infrastructure Solutions Group (ISG) revenue missed estimates by 1.5%.

• Client Solutions Group (CSG) revenue beat estimates by 4.2%.

Profits & Margins:

• Missed 22.1% GPM estimate by 50 bps.

• Missed EBIT estimate by 8.5%.

• Beat $1.26 GAAP EPS estimate by $0.11 & beat guidance by $0.08.

• Missed $1.69 EPS estimate by $0.14 & missed guidance by $0.10.

• Nearly doubled FCF estimates (lumpy metric on a quarterly basis).

Balance Sheet:

• $7.7B in cash & equivalents.

• Inventory rose 55% Y/Y to $7.4B.

• About $29B in total debt.

• Stock compensation fell by 9.5% Y/Y to under 1% of revenue.

Guidance & Valuation:

• Reiterated annual revenue guidance, which slightly missed expectations by 0.1%.

  • Q2 revenue guidance was 14% ahead of expectations.

• Raised $7.89 GAAP EPS guidance by $0.10, which beat estimates by $0.77.

• Raised $9.30 EPS guidance by $0.10, which beat estimates by $0.19.

  • Q2 EPS guidance was $0.14 ahead of $2.11 expectations.

DELL trades for 11x forward EPS. EPS is expected to grow by 14% this year and by 15% next year.

d. Okta (OKTA)

Okta does more rounding in their financial disclosures than most companies.

Demand:

• Beat revenue estimate by 1.2% & beat guidance by 1.3%.

• Beat current remaining performance obligation (cRPO) estimate by 2.1% & beat guidance by 2.0%.

Profits & Margins:

• Beat $0.77 EPS estimate by $0.09 & beat guidance by $0.095.

• Beat EBIT estimate by 8.6% & beat guidance by 8.9%.

Balance Sheet:

• $2.73B in cash & equivalents.

• $509M in convertible senior notes.

• Diluted share count rose by 8.5% Y/Y.

• Basic share count rose by 4.0% Y/Y.

• Stock comp dollars fell by 15% Y/Y.

Guidance & Valuation:

• Reiterated annual revenue guidance, which missed estimates by 0.2%.

  • Q2 revenue guidance was 0.3% ahead of estimates.

• Raised annual EBIT guidance by 0.7%, which beat estimates by 0.2%.

  • Q2 EBIT guidance was 4.3% ahead of estimates.

• Raised annual EPS guidance by $0.08, which beat estimates by $0.055.

• Raised annual FCF margin guidance from 26% to 27%, which beat 26.5% margin estimates.

Okta trades for 29x forward FCF. FCF is expected to grow by 5% this year and by 13% next year.

Quick Highlights:

Like Zscaler, Okta leadership told investors that macro did not incrementally worsen during Q1. They saw zero softness in April. Despite this, the team did bake some potential weakness into guidance, but was still able to reiterate its annual target.

Okta is finding better traction with newer products like Okta Identity Governance (OIG) and Okta Privileged Access. OIG gives clients a bird’s-eye view of identities and access across various apps to optimize computer hygiene and observe any potential vulnerabilities. This has been its most successful product cross-sell to date, as it is essentially an extension of the access management for corporate workforces. Privileged Access is Okta’s zero trust approach to identity. It offers access only as needed, doesn’t offer consistent privileges to any devices, flags unfamiliar usage patterns and demands verification at every turn. 

The company has struggled a bit to expand beyond its highly successful core workforce access management tool. Now, it thinks OIG is “ready to hit mainstream adoption.” Looking ahead, managing secure usage and build-outs of AI agents is another large opportunity Okta is aggressively pursuing. “ Auth for GenAI” (through its Auth0 acquisition) will be the central, developer-facing product to facilitate access to GenAI assets. While Okta specializes in workforce identity, Auth0’s tools are better suited for this product.

Like many peers, Okta tweaked its go-to-market strategy by splitting its teams into Okta sales and Auth0 sales. They’re also offering more pricing packages for more platform-level adoption.

2. PayPal (PYPL) – CEO Alex Chriss Interviews with Bernstein

Macro:

Chriss called the macro environment through May consistent. It has seen some Chinese advertising spend shift from the USA to Europe, but the geographic diversity of its business makes it well-positioned to seamlessly overcome that pattern. The company remains confident in its quarterly guidance calling for mid-single digit branded checkout growth.

AI & Agentic Commerce:

Chriss walked us through his vision for where he thinks commerce is heading. And shockingly, this vision features agentic AI. If we’re asking Gemini or ChatGPT to plan a trip, find a shirt, track changes in concert ticket prices or book a tee time, the commerce potential is large. PayPal is investing heavily in creating actionable outcomes from these highly personal queries and stated preferences to extend question responses to actual sales. PayPal can make sure the query-to-product matching is uniquely targeted, considering it has dense shopping data on several hundred million consumers. This intimate knowledge is also readily being used to personalize actual merchant websites on a by-shopper basis, with 80 million consumers sharing their data through PayPal’s personalized commerce API.

Now, if a tree vendor has one of these people enter their site, they’ll have a much better idea of what product, checkout option and deal to surface to optimize revenue per visit. That scaled, yet granular level of understanding is only possible thanks to the humongous size of PayPal user base. And this massive audience (both consumers and merchants) means PayPal can create these higher-value experiences with higher authorization rates and more rewarding experiences. Merchants are naturally driven to offer this large base of customers better deals, considering they enjoy the benefit of incremental revenue and profit. Win-win.

Confidence in 2027 Schedule for Branded Growth Accelerating from 6% to 8-10%, Transaction Margin Dollar Growth Accelerating to 10%+ and EPS growth Accelerating to 20%+ (Investor Day Targets):

Chriss continues to be highly confident in PayPal’s ambitious investor day targets. He still sees upgraded checkout experiences adding a point to branded checkout growth over time, BNPL adding another 1-2 points and better Venmo monetization driving another point of acceleration. And this isn’t based on hope… it’s grounded in observed trends. For example, as previously discussed, Venmo has already boosted debit card adoption from 4% to 6% in Chriss’s 18 months as CEO. It took PayPal a decade to get from 0% to 4%. New cohorts are adopting the product at a 10% clip within 30 days of joining Venmo, offering clear evidence of 6% not being any form of ceiling. And generally speaking, Chriss continues to constantly assure investors that PayPal will not offer any guidance it’s not exceedingly confident in delivering.

So what happens if Chriss’s confidence continues to be well-placed. Large upward profit revisions. For context, sell-side consensus EPS forecasts in 2027 call for 14% growth and branded growth expectations are in the mid-single digit range. The company is already very cheap at 13x forward EPS (without a stock comp add-back). If they can deliver like I expect them to, I don’t see why this won’t earn at least a few turns of multiple expansion while profit growth adds to potential stock returns. This investment has been a dud since I started it, but I will remain very patient if the company’s trajectory remains as promising as it currently does.

Braintree:

As a reminder, under Chriss, PayPal aggressively changed Braintree’s (private label processing platform) approach. It shifted from seeking volume at putrid margin and undercutting competition for market share, to actually pricing to value. It raised prices with many customers and pushed cross-selling of its value-added services more prominently. The impact has been slower revenue growth, as it has lost share of some contracts due to price hikes. At the same time, this has also meant Braintree is actually contributing to profit growth for the first time in years. And encouragingly, Chriss told investors that market share losses from these somewhat uncomfortable merchant conversations and the philosophy change have been better than expected. They think they’re “pretty close to being at the end” of this transition, and he reiterated an expectation for unbranded volume growth soon “inflecting and starting to grow again.”

Branded Approach:

PayPal is working hard to use its consumer personalization and broad partner ecosystem integrations to drive competitive differentiation. Chriss will bluntly tell you that PayPal’s reliance on a branded checkout button and the friction it removed lasted far too long. The company got complacent and sleepy. Now, they’re finally using the unique assets that their scale provides to create delightful experiences. Examples include its new debit card, with 5% cash-back rewards for a chosen category and an ability to stack more rewards with other members of its broad partner network. This is how you stand out amid a sea of checkout buttons. Doing so requires the aforementioned two-sided network this company built for decades. They simply weren’t using the incredible value that the data from this network entailed. That has finally changed.

Fastlane:

The distribution deals PayPal signed with Adyen, JP Morgan Chase, Fiserv and others are only now beginning to ramp. PayPal remains highly confident in this being a future growth driver, but that will still take more time.

3. Meta Platforms (META) – Miscellaneous

Perhaps in response to the Llama 4 Behemoth delay, Meta is reorganizing its AI teams. The newly formed AI products team will cover Meta AI and AI Studio. Its new Artificial General Intelligence (AGI) Foundations team will handle Llama model progress. Meta’s existing core AI research team, for things like ad personalization, will remain as is. Sometimes giant companies need to change things to accelerate progress. Knowing Zuck is the leader in charge of making these changes makes me entirely unconcerned and confident in Meta’s future.

Meta and Anduril (defense technology disruptor) are partnering to make augmented reality hardware for the military. The new project is called “EagleEye” and comes with things like augmented “drone detection and target identification” – per the Wall Street Journal. Meta will provide the models… Anduril will provide the software.

4. SentinelOne (S) – More Sector Information

Hearing Okta and Zscaler talk about macro not worsening during the quarter makes SentinelOne’s macro excuse look worse. I have a strong feeling CrowdStrike is going to say the same thing the others did in terms of stable macro, but I’ll reserve final judgement until reading that report. There is a rising probability that I cut or reduce this position in the near future.

5. Headlines

Morgan Stanley named Coupang as a top pick this week, as its data makes it more confident in Coupang’s 20% foreign exchange neutral (FXN) Y/Y growth guidance. As a reminder, Coupang’s hedging practices mean FXN revenue growth is what is tied to profit growth… not GAAP revenue expansion. While large currency headwinds in Korea will greatly hold back top-line growth this year, it’s still expected to deliver 53% Y/Y EBITDA growth.

Shopify and DHL announce a new cross-border partnership. This gives Shopify merchants platform-native access to DHL’s global logistics platform for lower-friction work. The duo will streamline the overall shipping process and offer more compelling rates for merchants too.

Amazon formed a new “ZeroOne” team to create disruptive consumer products. J Allard, an Xbox co-founder who has been with Amazon for almost a year, will lead the team.

Alphabet’s Waymo is expanding to Houston, San Antonio & Waymo. I participated in a video podcast during the week where I spoke about this, Uber and Tesla a lot.

6. Macro

Output Data:

• Durable goods orders for April came in at -6.3% M/M vs. -7.6% expected and 7.6% last month.

• The most recent Q1 GDP reading came in at -0.2% vs. -0.3% expected and 2.4% last report.

• The Chicago Purchasing Managers Index (PMI) for May was 40.5 vs. 45.1 expected and 44.6 last month.

Consumer & Employment Data:

• Continuing Jobless Claims were 1.92M vs. 1.89M expected and 1.89M last report.

• Initial Jobless Claims were 240,000 vs. 229,000 expected and 226,000 last month.

• Michigan Consumer Expectations for May came in at 47.9 vs. 46.5 expected and 47.2 last month.

  • Consumer sentiment was 52.2 vs. 50.8 expected and 52.2 last month.

• Conference Board (CB) Consumer Confidence for May was 98.0 vs. 87.1 expected and 85.7 last month.

Inflation Data:

• The Core Personal Consumption Expenditures (PCE) Index for April rose 0.1% M/M vs. 0.1% expected and 0.1% last month.

  • Y/Y growth was 2.5% vs. 2.5% expected and 2.7% last month.

• The PCE Index for April came in at 0.1% M/M vs. 0.1% expected and 0% last month.

• Michigan 5-year Inflation Expectations for May were 4.2% vs. 4.6% expected and 4.4% last month.