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- News of the Week (May 5 - 9, 2025)
News of the Week (May 5 - 9, 2025)
Brad Freeman
May 10, 2025
Most of the content from this week has already been sent:
Table of Contents
The Cloudflare Earnings Review will come on Tuesday alongside Nu Holdings.
1. Earnings Snapshots – Axon (AXON), Rocket Labs (RKLB), AppLovin (APP) & Coinbase (COIN)
a. Axon (AXON)
Results:
Beat revenue estimates by 3.0%.
Beat EBITDA estimates by 14.1%.
Beat GAAP EBIT estimates by 14.1%. Stock comp packages heavily impacted Q1-25, Q4-24 and Q1-24 GAAP EBIT.
Beat $1.24 EPS estimates by $0.17.
Guidance & Valuation:
Raised annual revenue guidance by 1.9%, which beat estimates by 1.1%.
Raised annual EBITDA guidance by 2.0%, which beat estimates by 1.2%.
Axon trades for 110x forward EPS. EPS is expected to grow by 2.5% this year and by 22% next year. It also trades for 76x EBITDA, with 28% EBITDA compounding expected over the next two years.
Balance Sheet:
$2.4B in cash & equivalents.
$2B in total notes payable.
5.6% Y/Y share count dilution.
b. Rocket Labs (RKLB)
Results:
Beat revenue estimate by 1% and beat guidance by 2.5%.
Beat 26.0% GAAP GPM guidance by 280 bps.
Beat 31% GPM guidance by 240 bps.
Beat -45M EBIT estimate by $9M & beat guidance by $4M.
Beat -$34M EBITDA estimate by $4M & beat guidance by $4M.
Beat -$0.09 EPS estimate by $0.02.
Cash flow is extremely lumpy on a quarterly basis.
Guidance & Valuation:
Revenue guidance missed by 1.5%.
-$29M EBITDA guidance missed by $9M
-$36M EBIT guidance missed by $2M.
RKLB trades for 17x forward sales (no profit). Revenue is expected to grow by 31% this year and by 55% next year. It is expected to turn EBITDA positive during 2026.
Balance Sheet:
$425M in cash & equivalents.
$77M in traditional debt.
$346M in convertible senior notes.
3.2% Y/Y share count dilution.
c. AppLovin (APP)
Results:
Beat revenue estimate by 7.4% & beat guidance by 8.0%.
Ad revenue beat guidance by 11.5%; apps revenue (far less important) missed guidance by 3%.
Beat EBITDA estimates by 15.1% & beat guidance by 15.5%.
Beat advertising EBITDA guidance by 15.7%.
Beat $1.96 EPS estimates by $0.42.
Guidance & Valuation:
APP sold its mobile gaming business after the quarter and only guided for the advertising portion of its business for Q2. That guidance led to revenue estimates rising by 2% (despite the sale) and EBITDA estimates rising by 11%. So we can call this a comfortable beat.
APP trades for 38x forward EPS. EPS is expected to grow by 44% this year and by 18% next year.
Balance Sheet:
$551M in cash & equivalents.
$3.7B in total debt.
Share count fell by 1.2% Y/Y.
d. Coinbase (COIN)
Results:
Missed revenue estimate by 2.1%. Missed subscription & service revenue guidance by 3.7%.
Slightly missed EBITDA estimates.
Beat GAAP EBIT estimates by 3.3%.
They technically missed $1.87 GAAP EPS estimates by $1.63. Net income is an irrelevant byproduct of crypto asset valuation changes in this specific case. Noise. Focus on GAAP EBIT & EBITDA.
This business model is violently cyclical. For context, its 4-year revenue CAGR from Q1 2021 to Q1 2025 is 5.2%. Massive peaks and valleys here.
Guidance & Valuation:
Coinbase guidance (doesn’t give overall revenue or profit guidance) led to Q2 revenue estimates falling by 13.8% and Q2 EBITDA estimates falling by 22%.
COIN trades for 16x EBITDA. EBITDA is expected to fall by 7% this year and rise by 14% next year.
Balance Sheet:
$8.05B in cash & equivalents.
$4.24B in debt.
1.2% Y/Y share count dilution.
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