Motley Fool Money - Big Tech, Huge Earnings

Episode Date: April 30, 2021

Alphabet, Amazon, and Apple report record earnings. Microsoft reports its biggest revenue growth in three years. Shopify rises on a strong quarter. Shares of Crocs, Facebook, and Waste Management hit all-time highs. Pinterest and Teladoc tumble. And Domino’s reports double-digit growth. Motley Fool analysts Ron Gross and Jason Moser discuss those stories and dig into earnings news from Starbucks, McDonald’s, and Visa. Plus, our analysts share a couple of stocks on their radar: Axon Enterprise and Skillz. Looking for more stocks for your radar? Get 50% off Stock Advisor by going to http://RadarStocks.fool.com. Learn more about your ad choices. Visit megaphone.fm/adchoices

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which makes it so much easier to stay on track. And you can get unlimited expert help at no extra cost, even on nights and weekends during tax season. Visit turbotax.com to get matched with an expert today, only available with TurboTax full service experts. Everybody needs money. That's why they call it money. From Fool Global Headquarters, this is Motley Cool Money. It's the Motley Cool Money Radio show. I'm Chris Hill. Joining me this week, Senior analyst Jason Moser and Ron Gross. Good to see you, as always, gentlemen. Hey, hey, Chris.

It is earnings paloosa. There are so many big earnings stories to get to. We don't even have time for a guest this week. But as always, we've got a couple of stocks on our radar. Let's start with the behemoths of big tech. Alphabet's first quarter revenue came in north of $55 billion. Profits were much higher than expected for Google's parent company. YouTube's revenue is starting to look a lot like Netflix's revenue. Jason Moser, where do you want to start with Alphabet? Well, I will say, I watch a lot more YouTube than I do Netflix, so it's nice to see that they're really capitalizing on that opportunity. It was hard to imagine this not being a strong

or given the signs that we've seen in ad spending. So, I mean, I wasn't personally, I wasn't really surprised by this report. Very impressed, not surprised. Because when you look at the global digital ad market, spending is forecast to grow from around $265 billion in 2020 to around $425 billion in 2024. So you're talking 12.5% annualized growth projected here over the next several years. And clearly, Alphabet and Google, they're going to be a part of capturing that. As to the numbers, revenue of $55.3 billion, it was up 32% in constant currency.

That outpaced the total cost of revenue growth of 27%. Operating income, $16.4 billion was up 106%. Operating margin for this company was 30%. To your point on YouTube, advertising revenues there with YouTube, $6 billion, up 49%. They noted an exceptional performance. They're a direct response. which was a challenge. That was ahead when they had been dealing with over the last year. So brand advertising, along with direct responses, they're really kind of hitting it with

that one-two punch there. Cloud segment continues to perform well. Revenue, $4 billion for the quarter, up 46 percent. Other bets, no surprise, big money loser, loss of $1.1 billion, but you can just kind of sweep that under the rug when you have that Google engine at play here. And they will continue to repurchase more shares, announced, authorized to repurchase of up to an additional $50 billion in stock. In this business, they're a believer in getting back to work. I mean, they are investing here in 2021, in the U.S. alone. They're going to invest $7 billion in offices and data centers and create at least 10,000 new full-time jobs.

So, these guys, they seem like they're really ready to get back to work. When you're recording numbers like they just did, I certainly understand why. Shares of Amazon heading an all-time high on Friday. Overall sales in the second quarter were $108 billion. Profits destroyed expectations, and Amazon's got 200 million members in prime. Ron, for all of Amazon's success, every now and then they put up a disappointing quarter, This was not one of them. I was wondering where you're going to go with that.

I'm going to call it a blowout quarter, and I just did. The numbers are awesome. Net sales up 44 percent, obviously benefiting from a surge in online shopping during their pandemic. They did get a $2 billion boost from favorable foreign exchange rate fluctuations, but even if you strip that out, net sales were still up an impressive 41 percent. As Bezos mentioned in the release, Prime Video turned 10 years. old. Streaming hours were up more than 70% year over year, again aided by the pandemic.

Amazon Web Services turned 15 years old, 32% growth year over year from that segment, now at a $54 billion annual run rate for AWS. As you said, more than 200 million paid prime members worldwide, and then ad in other sales was up 77% not too shabby. That all translated into an operating increase of 123%, an earnings per share increase of over 200%. Producing cash flow of $26 billion. These are really incredible numbers. The guidance was strong. That sales expected to grow between 24 and 30 percent for the second quarter. Prime Day will take place in the second quarter this year. That should help their spring results. And this should be the final full period for Amazon with founder Jeff Bezos at the helm, AWS CEO,

Andy Jassy will take over that lead role that obviously has been expected with Bagesos kicking himself up to the executive chairman role. But a blowout quarter, really impressive. Apple had their own blowout results in the first quarter, and yet shares were flat this week. Overall sales were up 54%. Apple increased its dividend and announced a $90 billion stock buyback program. Jason, the stock is flat. Are we not entertained?

No, we're plenty entertained. We're plenty entertained. But I mean, this has also been a story of multiple expansion for several years now. So, I mean, you have to keep that in mind. We were certainly looking for a bit of a bounce bag for Apple from a year ago. Boy, we certainly got it. Revenue reached a record $89.6 billion. That was 54% growth from a year ago. And that was thanks, Chris, to strengthen everything. Literally everything Apple did, they just They brought it. They really brought their A game. It was the second quarter in a row with double-digit growth in all product categories. iPhone revenue up 65 and a half percent from last year. Services revenue of just under $17 billion. That was up almost 27 percent from a year ago. I was really impressed to see the gross margin number they recorded. 42.5 percent company-wide gross margin. That was 38.4 percent a year ago. And a lot of that I think can be. attributed. They're able to realize some pricing on their products and whatnot, but it's also, the more that services revenue makes up the overall revenue. That's higher margin revenue.

That's going to help Apple's margin picture down the line. So I think that watching them pursue that services opportunity makes a lot of sense. I think for me, when I think about what the big question for Apple going forward, and we've seen some news out just here at the end of this week, It's how they're going to navigate this App Store debate, because it's a phenomenal toll booth model that they've benefited from from so long. But it is under some scrutiny now. And I don't know that there's really a way for them to walk that back. There's going to be some kind of a negotiation here. And so that could be something in the near term that creates some questions.

But again, we're talking about a $2-plus trillion business, and it is that big for very good reasons. This quarter was just another good example. Microsoft's third quarter featured the company's biggest revenue growth in three years, but cloud revenue was flat and shares of Microsoft down 4% this week. Ron, I get that even with the drop. Shares of Microsoft are up 40% over the past year, so maybe this was some profit taking, but I really can't imagine owning Microsoft looking at these results and saying, I'm going to invest my money elsewhere.

Exactly. Exactly. They actually beat expectations, but it appears that investors wanted it even stronger beat, which is kind of funny. But I guess when you're a $1.9 trillion company, you've got a lot of expectations to live up to. But listen, results were strong. Total revenue up 19%. Revenue in that productivity and business process segment, which is the Office, Microsoft Office, and LinkedIn. That was up 15. Intelligent Cloud, up 23% driven by Azure, which was up 50%. More personal computing segment, which I always hated that name, more personal computing. That's terrible.

That's the Windows and the Xbox segment. Those sales were up 19%. Operating margins widened, so you got an operating income of 31 percent, an increase there, and adjusted net income of 38 percent growth. Those are very, very strong numbers for a company of this size. They've returned $10 billion to shareholders in the form of sharey purchases and dividends in the third quarter. I expect that will continue. Guidance was solid. You see the stock trading at around 32 times

forward earnings. That's not too bad for a company that is growing 30, 35, 40%. That's reasonable. So if you don't own Microsoft yet, I still think you can actually own it at a $1.9 trillion market cap. So, Jason, along those lines, we've just talked about these four behemists. The smallest of these four companies is Alphabet, and it's a $1.6 trillion company. So what do you say to someone who looks at these and says, well, I get these are good businesses, but I feel like the salad days are over for investors. It's a very reasonable thought to have. I would just encourage you to think about the

direction the world is headed, the tools that we're going to need to be able to do the things that we want to do. Recognize the fact that big tech, these are the companies that are providing most of those tools, both explicitly and the ones that we use and implicitly in the cloud infrastructure and stuff that we don't see day to day. And then just don't look at the market cap. Look at the numbers. Look at the revenue that these companies continue to chalk up. Look at the earnings that these companies continue to chalk up.

Because once you look at those numbers, then the valuations start to make a lot more sense. And when you see the opportunity that's out in front of them, I mean, that really seals the deal for me. Coming up, we've got Facebook, Shopify, and a lot more. Stay right here. You're listening to Motley Full Money. Welcome back to Motley Full Money. Chris Hill here with Jason Moser and Ron Gross. One clarification I should make. Ron, when you and I were talking about Microsoft and I refer to their cloud revenue being flat, I was referring quarter over quarter year over year, cloud revenue. Looking pretty nice. Exactly. Sequentially,

not as impressive. Facebook's revenue in the first quarter grew nearly 50 percent. Profits were higher than expected. Facebook says they're expecting headwinds from Apple's new operating system, but with the stock up 8% this week and hitting a new high, Jason, investors don't seem to be too worried. No, and I kind of feel like they probably shouldn't be. I think they're doing the diplomatic thing and expressing the concern over that privacy issue and potential headwinds. To me, privacy makes for a great stance. People love to whine about it on social media, ironically. Also, it's a complicated issue that is becoming more and more difficult for consumers to understand and navigate.

And when you compare that to convenience, well, convenience by its very nature is simple. So I think the privacy thing is a bit overplayed. I think consumers ultimately, at the end of the day, are going to opt for convenience. You're probably not going to see many of them, you know, saying, I don't want my phone to track my behavior, whatever. Maybe that's something that plays out. I will see. But when you look at the numbers that Facebook recorded for the quarter, it was just, again,

really just amazing stuff. I mean, pricing power with price per ad up 30 percent. The number of ads served up 12 percent. Their family average revenue per user up 28.5 percent. They have almost three and a half billion monthly users of their family of apps. We're talking about Facebook, Instagram, WhatsApp, and all that other stuff that they own. able to bring expenses down a little bit. Operating margin was up 10 percentage points. I mean, the business just scales so well. I guess the biggest question for most is in regard to privacy.

I just think the privacy thing is a little bit overplayed. To me, I'm a little bit more interested in what's next. I mean, this is still an advertising company. They're dealing with, I think, a lot of the pitfalls of social media. They are making a lot of investments in immersive technology, AR, VR, stuff like that. We're not really seeing a lot of lot of the fruits of that labor yet. So, over the coming decade, that's what I'd love to learn more. I'd love to see more of that stuff. But as it stands, again, like I said, with Google, with Alphabet, they're pursuing just this massive market opportunity that is forecast to still continue growing here over the next several years. So clearly Facebook will be capturing some of that

opportunity. Shopify's first quarter was a dream come true for shareholders. Profits and revenue were higher than expected. Gross margins were up and shares of Shopify rose. 10% this week. Ron, this company is on fire in the best possible way. They might deserve the firing on all cylinders a category. Really impressive results. Total revenue up 110%. Subscription solutions up 71%. Merchant solutions up 137%. That monthly recurring revenue metric, the MER, as I like to call it, up 62% as more merchants join the platform and their POS Pro offering contribute. first full quarter of revenue, gross merchandise volume up 114%. These numbers are really impressive.

If you exclude a $1.3 billion gain on its equity investment in a firm, which resulted from a firm's IPO in January of this year, their adjusted net income was $254 million compared with adjusted net income of only $22 million this time last year. $7.9 billion in cash bolstered by a follow-on offering. in the first quarter. Guidance was unchanged. They do expect to grow revenue rapidly in 2021, but at a lower rate than in 2020, as the economy opens up and more people return to traditional offline, brick-and-border retail. But an incredible quarter, and the growth continues. Visa's second quarter profits in revenue came in higher than expected, but chairs of Visa were basically flat this week. And Jason, they put up some good numbers, but Visa

is not offering any guidance. And I think that is, among other things, a little unsettling. Perhaps. I mean, they did note in the call. I mean, they were up front saying, hey, listen, it's just difficult to forecast in this point in time. And they're assuming that if trends relative to fiscal year 2019 continue, then they see revenue growth in this third quarter in the high team. So we'll wait and see. They gave us a little bit of guidance, Chris. Let's not Let's not get too worked up here, okay? I wasn't worked up at all. Seriously, though.

I think the argument for Visa today, it's a singular point of contact and execution in a world where there seems to be a new FinTech on the block every other day, right? It's becoming a very fragmented space, and it's difficult to fully understand the value proposition they all bring. Having this massive global network already in place with Visa, oftentimes it's seen as an essential partnership in many cases, and I think it's helping to sense. simplify what is becoming a very fragmented space. There's the value proposition there.

And I think as we see consumer spending come back, I mean, we're seeing Visa's numbers coming back, payments volume grew 11 percent. That was up seven percentage points from the previous quarter. Cross-border volume, still some headwinds there due to pandemic issues, of course. But that is improving. Processed transactions grew 8 percent. That was up four percentage points from the previous quarter. When you look at the actual size of this business, we're talking about all of big tech.

Visa is big in its own right. This is a $500 billion company. In the last two years alone, they've grown to 3.6 billion cards in the world in 70 million physical merchant locations. This is a massive business with a few different avenues of growth here, given this shifting space, as we see more fintechs and more ways for money to move around. round. So, again, yes, it's going to be a little bit difficult for them to forecast in the near term. Not going to really hold that against them. The stock is underperforming so far this year. But again, at $500 billion market cap today, still growing, a convincing position

in the value chain there. This seems like a business that still has some reasons to be optimistic. Shares of Crocs rose more than 20% this week after a record first quarter in terms of sales. And in case anyone thought this was just a great few months, Ron, management raised guidance for the full fiscal year. This is an amazing run for a company that sells rubber shoes. Yeah, I was going to say, let's move away from tech and FinTech and talk about ugly clogs for a minute. Ugly clogs, whose stock is up 1100% over the last five years. Really incredible. This was a great quarter. First quarter revenue up 64%. Direct to consumer up 93%. Wholesale, up 50%. Digital represents 32% of revenue now that's climbing slowly. It was 30% this time last year, but it's getting,

it's getting bigger. Asia was strong at double-digit growth with 26%. Sandals revenue increased 17%. It represents 17% now of footwear sales. They do sell other things other than sandals and clogs. There's many other offerings over at Crocs. Adjusted gross margins widened 720 basis points. Really strong results, expected revenue growth of 40 to 50 percent in 2021, selling it only 18 times, not too late to get into Crox as long as they put up these growth numbers in the future. Ron, I'm disappointed. I really thought you were going to make the argument that Crocs is indeed a tech company. Not distant. Wash your hands and bring your appetite. Food and beverage is next as earnings paloosa rolls on. This is Motley Full Money. Welcome back to Motley Full Money. Chris Hill here with

Jason Moser and Ron Gross. Second quarter profits for Starbucks came in higher than expected, but shares of the coffee giant down a bit this week over concerns about international sales. Jason, when you consider that more than half of their locations are outside the United States, I get the concern. Well, Chris, maybe so, but let's just focus on domestic sales. I am not concerned because I am doing my part. Let me assure you.

You know, going back to something Ron was talking about with Microsoft just a minute ago, I thought it reminded me a little bit of Starbucks and kind of what I was thinking with this business. I think the most interesting thing about Starbucks today is that even at its $130 billion market cap, it's absolutely still a stock worth buying and holding onto. I think indefinitely, to me, it's hard to imagine 10 years from now looking back and seeing this one as a loser. It could happen, but as a shareholder myself, I'm definitely not betting on it. Looking at the numbers, consolidated net revenues, $6.7 billion was up 11% from the year ago, global comps up 15%. That was driven by a strong ticket growth there, 19% increase,

an average ticket there that was offset by a small decline in transactions. But the US comps up 9%. That was driven by 21% increase in average ticket. There was a decline in incomparable transactions there, a little bit more pronounced there at 10%. But this is just such a big, wide-reaching business now, basically looking at around 33,000 stores globally, a pretty nice split there between company operated and licensed. Mobile orders represented 26% of U.S. company operated transactions in the quarter. That was up 18% from a year ago. I think we've, every quarter, it seems like we're pretty critical of their rewards program and how it seems to be sort of lagging on the member side. But I think they're starting to pick some ideas up there, 22.9 million

members here domestically. Now, you're looking at 16.3 million in China. Oh, and speaking of China, 91% comp growth there. And let's talk about tech companies. They have an AI initiative, believe it or not, known as Deep Brew. I'm not kidding. Their AI initiative is known as Deep Brew. This is taking customer data. It helps inform product development, inventory, order, suggestions, even predictive models to understand better what's going on around specific locations. I think all in all, I mean, given the nature of what they sell, clearly they are thinking about the future. I think the right way. This is just a business still is still poised to grow for a number of years to come. Domino's pizza keeps on rolling. First quarter profits

and revenue came in higher than expected. Global same store sales rose nearly 17% run. I guess we shouldn't be surprised. This is a very strong quarter. But if you look at the It appears that some we're hoping for just a bit more, those greedy folks that want even more out of their dominoes quarter. But this is, if you're running this business, you've got to be happy with these results. U.S. same store sales up 13 percent, international up almost 12 percent. I always like to bring these metrics in. 109th consecutive quarter of international same store sales growth and the 40th consecutive

quarter of U.S. same store sales growth. impressive. Total revenue up 12%. That was a result of net store growth of 175 stores, as well as those strong same store sales results we just mentioned. Operating margins widened just a bit, and operating income was up 14%. Now, earnings per share were actually down 2%. That was the result of significantly lower tax benefits. So I think it's better to focus on the operating income growth of 14%, or you lose the correct picture of how this business is doing. Total remaining authorized amount for share of purchases are a billion dollars. I expect them to continue to buy back stock.

Shares trading it 31 times. I'm not going to call that cheap. It's not a cheap stock for a company that's putting up 14, 15, even 20 percent earnings growth. But I still think it's not grossly overvalued, certainly not compared to like Papa Johns at 44 times or Chipotle at 56 times, but not screamingly cheap here. So we'll keep an eye on the stock. You know, Ron, you mentioned some investors out there wanting a little bit more.

Someday, that streak of international same-store sales growth, someday that streak is going to end. And when that happens, a few of those people are going to lose their minds. McDonald's did not fare quite as well with international same-store sales growth in the first quarter. But here in the US, comps are up more than 13 percent and shares of McDonald's hitting an all-time high on Friday, Jason. I think management put it well on the call, talking about where they shine and talking about themselves as one of the world's most global corporations with this global reach, but it's also very local. And that's a benefit of that franchise model, right? They are franchises that are

locally owned, locally managed systems. They're rooted in the communities where they operate. So they have a good understanding of what consumers are looking for wherever they may be around the world. And that really is translating into just impressive numbers for the business. You look at the Adjusted earnings per share, $1.92. That was up 27 percent, excluding currency effects. You noted strength in the U.S., yes, absolutely. The U.S. is driving the results right now. International operated markets, treading water, developmental markets, markets like China, for example. Those are coming back as well, thankfully as they continue to work their way through the pandemic as well. Lest you think that Omni Channel is just about retail, it is

absolutely about restaurants. If you look at a company like McDonald's, over the last four years, they went from just over 3,000 restaurants offering delivery to now more than 30,000 restaurants, which essentially is 75% of that global footprint. And they noted they're doubling down on what they refer to as the 3Ds, digital delivery and drive-through. And in the first quarter, they had nearly $1.5 billion in digital sales. That includes app, kiosks, and delivery. So, again, You talk about one of the bigger global restaurants out there. I mean, McDonald stands out. I like the promotions, things like the chicken sandwich.

That hasn't really excited. This new promotion with BTS, the Korean Pop Group. Listen, I'm not a member of the BTS Army, Chris, but apparently this thing is gaining some traction. So I suspect it's going to help boost that top line here in the next few quarters as well. of waste management hitting a new high after a strong first quarter report. Ron, we've talked a lot about cloud computing, collaborative software, e-commerce. Waste management provides a nice reminder that the business of trash is alive and well. Alive and well and recovering as the economy recovers. This was a nice quarter. Organic revenue up 2%, you know, not going to knock the cover

off the ball, but we're building on something here. They saw solid pricing. There were improved recycling results, but that had to overcome some small volume declines still. Organic revenue in the company's collection and disposal business fail $5 million, but they are continuing to improve sequentially as the economy opens. Acquisitions added $290 million of revenue. That was from the 2020 acquisition of Advanced Disposal for $4.6 billion, not a small acquisition by any means, but that is going well. The integration of that is going well.

We were able to approve their operating margins as a result of some real strict cost-cutting efforts. And the operating expenses as a percentage of sales improved 130 basis points. That's pretty good for a company like waste management. That resulted in adjusted operating EBITDA growth of about 14 percent, and they produced $865 million of free cash flow. Management increased their financial guidance that was provided in February for both the revenue, adjusted operating EBITDA and free cash.

That's partly a result of the acquisition of advanced disposal going really well. They think they can wring some additional savings out of it more than originally was expected. And management expects strong results as the commercial, industrial, and the landfill business continues to recover over the remainder of the year as more businesses get back and the economy opens up. So I think this business is looking good for waste management this quarter, and I think we'll continue to see good things later in the year. You know, it just occurred to me.

We talk sometimes about specific industries and the leaders within those industries and say, if you're looking at home improvement, you could do worse than to just buy shares of Home Depot and Lowe's or Visa and MasterCard. Between waste management and Republic services, those are two businesses that collect roughly 50% of the trash in America. It seems like you could do worse than to just own a couple shares of both of those. Yes, they absolutely, to a real extent, control the markets. Up next, we've got two radar stocks you'll want to take note of and one company name change, we're still trying to make sense of. Stay right here. You're listening to Motley Fool Money.

You probably took my hand. As always, people on the program may have interest in the stocks they talk about, and the Motley Fool may have formal recommendations for or against, so don't buy ourselves stocks based solely on what you hear. Welcome back to Motley Full Money, Chris Hill here with Jason Moser and Ron Gross. A couple of high flyers losing altitude this week, guys, Teledoc's revenue in the first quarter was 150% higher than a year ago, but guidance had the stock falling. Jason shares down about 5% this week, but Teledoc is more than 40% off of its high for the year. Yeah. Well, I mean, it's been a crazy past year. This was one stock that really stood

out among others a year ago. So it's not terribly surprising to see a little pullback. I think this is a great reminder for us to focus on the business and not the knee-jerk earnings reactions, right? We can try to explain those away when the tour are at odds, but I really, I care about what the business is doing. And really, when I go through this report in the call, I mean, Teledox business is doing very well. I think you just have to remember, there was a lot of growth pulled forward due to the pandemic. But to your point on the revenue, I mean, $454 million, that was up 151 percent from a year ago. Now, organic revenue, that excludes acquisitions. of course, that growth was 69%. Still, very impressive. At the end of the quarter with US

paid membership of 51.5 million members, that was up 20%. Visit fee-only access. They have 22 million members. Now, I think with Teledoc, there are a lot of metrics that matter, but to me, one that slips under the radar for a lot is utilization. That ultimately is telling us people using the platform or not. Utilization was 19.6%. That was up 620 basis points from a year ago. And utilization is simply total visits divided by paid U.S. membership represented on an annualized basis. So we'd like to see that number going up. And for the record, that number was 10.9% for the same quarterback in 2018. So clearly, we're seeing people going to this platform and the services that they offer.

I think in regard to the sell-off, it might have had a little something to do with guidance. I mean, they did raise guidance technically, but I think there was something. It's really two things. I think there's some good old-fashioned profit taking, not terribly surprising, short-timers getting out while they can. But there was a statement they made in the call that I think led to it as well. They said that they expect increased spending over the course of the years. They invest in the growth of the business, particularly in new product launches and expansions

in a new market, the integration of Lavango, and they're developing an integrated data platform to let them do more with all of that data that they're bringing in. So if you can take a step back and understand that the investments that they're making today are to ensure the sustainable long-term success of the business, then it seems a bit more reasonable to hang on to these shares and be excited about the future. But yeah, it's seen quite the pullback, but we also have to remember it had quite the tailwind over the past year, too. Shares of Pinterest down more than 10% this week, despite a strong first quarter report.

I don't know, Ron. Pinterest is growing revenue, monthly active users are up. This seems a little bit like what we talked about with Domino's, where it was a good quarter but not amazing. Yep, that's fair. Growth just wasn't where investors wanted to be. And to me, that's more about valuation than it is about operating results because you can't fault them for these operating results.

They're quite strong, and we'll talk about valuation, maybe after we cover some of those metrics. But listen, first quarter revenue up 78%. Monthly active users rose by 30%. That was in contrast to 37% last quarter, and I think therein lies what investors. investors are focusing on, that slowing in monthly active user growth, but still impressive at 30%. Management said, starting in mid-March, the easing of pandemic restrictions slowed

U.S., monthly active user growth and lowered engagement year over year as people spent less time online. I don't think that should necessarily have been a surprise to anyone. I think we should know that things like that are coming as the economy opens up and as vaccines get into arms and people start going out again. The average revenue per user, ARPU, we talk about, increased 34%. That's a very impressive number. The company lost $21.6 million for the quarter, but if we adjust for non-cash items, including stock-based compensation, which I'm actually not a fan of, but I'm going to do it just for our listeners. So we get a sense of how the business is doing. They actually did generate positive EBITDA of about $84 million. Guidance was strong,

105% revenue growth for the second quarter predicted. Stocks trading a 22 times revenue, though. So therein lies this price to perfection. If you don't put up those growth numbers, your stock's going to get punished. That's just the way the game is played. Our email address is Radio at Fool.com. You can send us questions or, like longtime listeners, Stuart Watson and Jason Free, you can send us a business story and say, have you seen this?

And this is the story that both of these gentlemen sent to us. It's about Standard Life Aberdeen, which is a fund management firm based in the UK, market cap of $8 billion, so not a small business. They decided they wanted to come up with a new name. Instead of Standard Life Aberdeen, they came up with a single word which is spelled ABRDN. Again, Standard Life Aberdeen would now like you to call it Aberdeen. They're telling us, A, B, R-D-N is pronounced Aberdeen and not, as I first looked at it, as a burden. But I don't know. I feel like with Truist and Tronk, and we talked recently about Kindrell, it's almost like, Ron, they're going out of their way to try and top one another.

This is getting out of control. I'm not giving them a pass on this. It's not acceptable. Let's pull it back. There's shortage of ease out there. I mean, what's going on? I'd like to buy a vowel, please? Yeah.

Apparently, vowels are too expensive. We're going to save money on letterhead. Let's get to the stocks on our radar. Our man behind the glass, Dan Boyd, is going to hit you with a question. Jason Moser, you're up first. What are you looking at? Yeah, one that I have been looking at for augmented reality and beyond service over the last several months, Axon Enterprise, ticker is AX-X-O-N.

In a world where accountability matters now more than ever before in regard to law enforcement. This, to me, is a company that really can help change things. You probably know them best for the Taser products that they produce and sell. They also have an interesting side of the business, the software and censor side of the business on officer body cameras, in-car cameras, cloud-based digital evidence management software through its evidence.com platform. I feel like there are a lot of opportunities for a company like this to help our our policing system evolved to help to keep up with the times. Of the 69 largest metropolitan

area police departments in the U.S., at least 47 are actually on the Axon network now. So, they've been around for a while. It's a familiar name. And what has me really interested in this business from the immersive technology side, they offer a suite of virtual reality training services for public safety. And ultimately, as they mentioned in their 10K, it's two obsolete bullets. They intend to drive training and adoption of best practices in modern policing through this virtual reality platform. So I just think this is a neat business of looking to the future for solutions. And it's one that I'm going to be keeping eye on next week as they have earnings coming out on May 6th.

Dan, question about Axon Enterprise? Absolutely, Chris. So, Jason, I'm looking at the all-time stock price chart on this company right now. And it starts a strong exponential curve. around 2019, the beginning of 2019, and I'm just curious, like, are we going to see growth for a company of this size like this in the near future? Or do you expect it to slow down? Like this? Maybe not. I mean, it could be something where it slows down, given their, the market share that they already hold today. I think that really they've become more and more part of the conversation for obvious reasons, given what they do and given the state of things today. So, there might be some enthusiasm from investors looking a little bit into the future that have caused that ramp up. But I do suspect we still have a company here that should see plenty of growth in the coming

years. You got a minute left from. What are you looking at? Looking at Skills. SKLZ came across my radar because it's a recent recommendation in our Stock Advisor service. They provide a mobile game platform. They offer tournaments and other competitive events to millions of players worldwide. Obviously, mobile video gaming is a huge growth industry.

The CEO has a substantial ownership stake here. They went public via a SPAC in December 2020. They did a following on offering in March. Stock has been real weak ever since that March offering. It's back down to around $17,18 from the 24, where it did the follow on. 25 times sales, not profitable yet, but it's growing pretty darn quickly, and I think it deserves some attention. Dan?

Chris, am I asleep? Am I dreaming? Did Ron bring a video game stock to stocks on our radio? on our radar, not tires or minerals or trains, but video games? What is happening? The answer to your question is, yes, I did. What do you want to add your watch list, Dan? You know what? I am too plugged into the Stock Advisor pipeline here, and I'm looking at skills, honestly. I think it's a very interesting company. All right, Jason Moser, Ron Gross. Guys, we're out of time. That's it for this week's show. We will see you next week.