Tencent Holdings’ (TCEHY) Q1 2017

Martin Lau – President

A good quarter for gaming

“looking at PC Client games the revenue was up 24% year-on-year and quarter-on-quarter…we view the strong performance of PC games in the first quarter as a pleasant surprise rather than a new trend and expect performance to return to prior trends later. We believe the strong first quarter performance illustrated that the popular content can indeed energize PC game activity in revenue if they are launched right.”

James Mitchell – CSO

Mobile accounts for 85% of ad revenues

“Online advertising segment revenue was RMB6.9 billion, up 47% year-on-year and down 17% quarter-on-quarter. Mobile contributed over 85% for advertising revenue.”

John Lo – CFO

On margins

“In terms of the margin, it varies by digital subscription products but in general the incremental margin on a digital subscription is lower than the incremental margin on a virtual privilege because the virtual privilege is generally piggybacking on our social networks and carry low incremental expense versus the digital content subscriptions carry incremental cost related to movie studio output deals to record label output deals and so forth.”

Seasonality impacted ad revenues

“For the first quarter, for the first time our digital subscription video revenue exceeded our video advertising revenue that’s partly a seasonal factor because the first quarter is seasonally weak for advertising and seasonally strong for consumer digital spend, so we wouldn’t necessary expect that to be the case in subsequent quarters….the video product for us is very much an investment mode, it is a heavy loss making and we expect to remain loss making for the foreseeable future but it’s gratifying that while we are incurring those losses, we are also seeing growth in traffic, growth some extent in video advertising revenues, and then substantial growth in video subscription revenues.”

Microsoft FY 3Q17 Earnings Call Notes

Satya Nadella – Microsoft Corp.

What’s happening at the edge is the most exciting part of cloud

“when everyone’s talking about the cloud, the most interesting part is the edge of the cloud. Whether it’s IoT, whether it’s the auto industry, whether it’s what’s happening in retail, essentially compute is going where the data gets generated, and increasingly data is getting generated at the volumes in which it’s drawing compute to it, which is the edge. So if you look even at our announcements over this quarter, a lot of what we have done with IoT is create an IoT edge. Of course, we have an amazing cloud with the SaaS services for IoT, but the edge compute, the ability to run a neural network at the edge, do inferences at the edge is exciting. Azure Stack is going to completely change what hybrid is and the expectations customers have with hybrid.”

Time to move CRM and ERP to the cloud but those are old concepts anyways

“But we do have a huge on-premise base. There is still a need for those on-premise products. That will continue, but our focus is on transitioning to the cloud. And you’ve seen us do this successfully with Office 365. You’ve seen us do that with Azure. And now we’re ready to do that mainstream across what has been traditionally known as CRM and ERP without in fact us thinking and talking about those suites because we think that is a pretty old concept to have suites like that, which is we have now really made the entire Dynamics 365 much more modular, modern, and much more efficient for customers. So that’s what’s happening in Dynamics.”

Alphabet 1Q17 Earnings Call Notes

Sundar Pichai – Alphabet, Inc.

Transitioning to an AI first company

” I’m really happy with how we are transitioning to an AI-first company. The Google Assistant is one of our first steps towards that future. This quarter, we brought the Assistant to your wrist with Android Wear 2.0, announced that it’ll soon come to Android TV, and began rolling it out to hundreds of millions of people with Android phones running Nougat and Marshmallow. We also continue to announce new integration partners for the Google Assistant, so you can now ask it to do things like dim the living room lights. Stay tuned for more to come.z’

Advances in machine learning are making many Google products better

“Advances in machine learning are helping us make many Google products better. One example from this quarter is the launch of parking predictions in Google Maps. Beyond that, we continue to set the pace in machine learning and AI research. We introduced a new technique for training deep neural networks on mobile devices called Federated Learning. This technique enables people to run a shared machine learning model while keeping their underlying data stored locally on mobile phones. DeepMind is bringing AlphaGo to China in May, pairing AI with the world’s best players at the Future of Go Summit. And it’s very exciting to see the incredible things that developers and researchers are building on the TensorFlow platform. There are more than 6,000 GitHub projects and counting.”

There’s an understanding that we have pivoted to be a deep enterprise company

“In general, I think there is a very strong recognition that we are have pivoted to being a deep enterprise company, and our conversations are very strategic. We are engaging at the highest levels within companies. And so, overall, I can see qualitative lead and momentum there. When we are in the middle of deals, we find we are very competitive, and there are areas where customers perceive us as best-in-class already. So it’s been exciting to see.”

AI will help make text to speech much much better over time

“Now, artificial intelligence will help us push all that further. Just to give an example, we will make text to speech much, much better over time. Yesterday, we announced our Neural Machine Translation is launching in nine new languages. So all that starts accruing to the Assistant, and I think we’ll overall improve the customer experience pretty dramatically. We’ll talk about all this a lot more at Google I/O, so stay tuned.”

IBM 1Q17 Earnings Call Notes

Martin Schroeter – Senior Vice President and Chief Financial Officer

Not adjusting our guidance

“So, a couple of things Toni, one we’re not adjusting our guidance, we’ve reaffirmed that we see an at least $13.80 number for the year, and we also see free cash flow flat, roughly flat as we said. So same guidance as we talked about in January and quite frankly from my perspective the quarter played out you know pretty much as we expected, other than we thought we had a couple of more signings relationships in services that we could have gotten done, but by and large the quarter played out as we expected and we maintained our guidance.”

We’ve been making big investments

“And with that I’ll wrap up the call by saying, we have been making significant investments and now we’ve added, by the way, a ton of capabilities to the IBM company. We started new businesses, we made new markets, we’ve changed, as we always do, industries and professions and we’ll continue to do that. But now it’s with the business positioned very well for the long term, in terms of capabilities. Always opportunity to add a little bit here or there, but with the business positioned well for the long term, now it is time to focus on improving the returns on those investments. So thank you very much for joining the call today.”

Taiwan Semiconductor 1Q17 Earnings Call Notes

Mark Liu – President and co-CEO

Fabless inventory high

“We now estimate fabless DOI is still high, high above seasonal exiting first quarter ‘17. Our second quarter revenue guidance that reflects a quite severe inventory adjustment by our customers, particularly in smartphone and PC markets. However, the overall end market smartphone demand appears stable in second quarter ‘17.”

ARM and accelerator use in data centers driven by AI

“Artificial intelligence application and services and five key infrastructures are the major driving force with leading edge technology behind this HPC growth. For example, more than half of our customer product tape-outs with our 7-nanometer today we see our HPC products. Recently we are also very encouraged by the support of a major AI service provider on ARM-based processor or datacenter in Open Compute Project Summit this year. Accelerators used in datacenter are also increasing, adopting the GPUs, FPGAs and ASICS, we expect HPC to become our major growth engine from 2020. The trend of ubiquitous AI also shows up in many IoT and consumer devices such as robot, drones, surveillance devices, smart TV and set-top box. Ubiquitous AI will also be widely used in the fast developing autonomous car market.”

Weakness in smartphone and PC but most because of inventory

“Second quarter weakenings, smartphone is one. We think PC is another one. Mostly because of inventory though and industrial, I don’t see the weakness at all and to come to your question about the, what is your second question.”

Industrial is heating up

“I don’t typically noticed particularly the strengths that are in pocket. Industrial is considered heating up. We have – that’s the number. So showing the overall second quarter. Okay, automotive although a small percentage is heating up.”

Dell Technologies FY 4Q17 Earnings Call Notes

Tom Sweet

It’s a rising component cost environment

It’s Tom. So look, it’s obviously I think the people that you’ve talked to and what they are saying publicly is relatively consistent in the context of there is a rising component cost environment right now. On the Client side we see it in memory, we see it in glass and LCD panels. On the server side and storage side, we are seeing it in SSD drives and memory. So it’s all about balance, right.

David Goulden

Cloud isn’t a place it’s an operating model

So everything gets cloud washed, Steve, these days and I think I am aware of the particular report which you are talking about. So first of all, cloud is not a place, it’s an operating model and the operating model can be applied on-prem or off-prem. It’s really providing IT as a service. And I think that everybody is going to implement some form of hybrid cloud. So it’s also a combination of both. When you look at the kind of IT infrastructure marketplace, as we do that have service storage network, combined marketplace about $110 billion this year, we see strong double-digit growth in that infrastructure being sold into private cloud and into public clouds, but the biggest piece is still a non-cloud environment often virtualized.

Customers still making tactical decisions

“what we’re seeing is in the marketplace customers are still making tactical decisions. There’s a lot of work going on to look at IT transformation and future architectures. So the customers who haven’t made those decisions yet in terms of what their IT transformation strategy is are still doing it very much by what they need and the more approach, different from how they were buying a couple of years ago. The customers who are moving forward with transformation are making longer term decisions, but that’s still a smaller piece of the marketplace.”

All flash is not deflationary

“So you’ve got a number of factors. I would comment that the move to all-flash is actually not deflationary for the storage marketplace because what happens is that all-flash is actually more expensive but then with data services, [indiscernible], compression, et cetera, you get the same dollar to gigabyte effectively as you do with the hybrid system. So that’s one of the things that people talk about that we don’t see being a factor.”

Accenture FY 2Q17 Earnings Call Notes

Broad based growth outside of a few areas

” Growth continues to be broad based with positive growth in the vast majority of our industries and geographic markets more than offsetting cyclical market pressures that continue in a few concentrated areas of our business specifically energy, chemicals, and natural resources and communications and media.”

Very positive for the second half of the year

“Yes, it’s hard to be a little bit of additional very well, I mean, to put it very simply we feel very good for the second half of the year. That’s it, based on stocks. We have very good bookings, we have good pipeline. We have great momentum in most part of our business, that will give you a clue. We are covering 13 industries. We’re big if you well, 13 industries, of these 13 industries 10 are positive and on the 10, six are high single, when I say high single is one is at 9.5, that’s 1 to 10 for simplicity, six would be the double digits. So you could only be positive when you see such momentum.”

David Rowland

A lot of green shoots in slow industries

“Yes, I would say it’s a combination of the two. I mean, just to be blunt it is a combination of the two. There is a benefit from the comps getting easier and that’s just the math, but more importantly, there are really underlying fundamental improvements that we see and the business activity, the dialog that we’re having with our clients. The investment and digitization in addition to the kind of the cost rationalization focus that those industries have had for so many quarters now. And so the comps are part of it, but there is some fundamental improvement in the business, a lot of green shoots that we see that I think have a much more optimistic about the trajectory.”

Oracle FY 3Q17 Earnings Call Notes

Larry Ellison

Cloud opens up more opportunities for ERP

“No, again, I couldn’t agree with Mark more. Our ability now to service much smaller customers than we could have serviced in the past is because the cloud allows you to deploy ERP in much, much lower costs. You don’t have to have ERP. You don’t have to build the data center. Obviously, you don’t have to hire programmers. You don’t have to hire a bunch of data operations people. We do all that for you, and therefore the available market has at least doubled what it used to be. And we’re also beginning to see, as Mark said, SAP customers moving their ERP and some very, very large SAP customers looking very closely at our ERP systems. So, we expect to have some big wins in the SAP install base, so we’re definitely going out from there in the coming month.”

Jabil FY 2Q17 Earnings Call Notes

Mark Mondello

We’re running a lot of simulations on tax stuff

“Hi Sean. It’s Mark. So since mid-January, Forbes and myself and other management have probably have been on about 60 to 80 calls from customers asking, hey, could we run some simulations, can we run some models, what if, what if, what if? One of the things that we are not doing is, is we are not offering the customers positions or thoughts about what may or may not happen in terms of tariff, tax, et cetera. But I think we are in a great position to run a bunch of different what-if scenarios. One of things we have encouraged our customers to do is run three, four, five scenarios so they kind of get it into muscle memory and therefore depending on whatever happens in terms of DC and the U.S. government, we are ready to act swiftly. I think we are very well positioned on an absolute basis and a relative basis. If you think about business coming back into the U.S., Jabil has a significant amount of capacity in the U.S. and resource and headcount. We have also been building product in the U.S. forever. If you think about Jabil from a political standpoint, we are an NYSE U.S. domiciled company. So I think both practically and politically, we are in a very, very good position to help. And then I would supplement that by saying, our digital cloud-based analytic tools in terms of supply chain analytics are being exercised quite heavily at the moment running a bunch of these different scenarios. So for us, it’s kind of being well prepared, helping our customers be well prepared and we will see what happens in the coming months out of Washington.”

NVIDIA 4Q16 Earnings Call Notes

Jen-Hsun Huang

Enterprise is waking up to the power of AI

“And so I think the hyperscalers are going to continue to adopt GPU both for internal consumption, and cloud hosting for some time to come. And we’re just in the beginning of that cycle, and that’s one of the reasons why we have quite a fair amount of enthusiasm around the growth here. You mentioned Enterprise, and enterprise, it has all woken to the power of AI, and everybody understands that they have a treasure trove of data that they would like to find a way to discover insight from. In the case of real applications that we’re engaging now, you could just imagine that in the transportation industry, car companies creating self-driving cars, one car company after another needs to take all of their row data and start to train their neural networks for their future self-driving cars. And so they use our DGX or Tesla GPUs to train the networks, which is then used to run their cars running on DRIVE PX.”

We have to make VR headsets easier to use with fewer cables

“The early VR is really targeted at early adopters. And I think the focus of ensuring an excellent experience that surprises people, that delight people, by Oculus and by Valve and by Epic and by Vive, by ourselves, by the industry, has really been a good focus. And I think that we’ve delivered on the promise of a great experience. The thing that we have to do now is that we have to make the headsets easier-to-use, with fewer cables. We have to make it lighter, we have to make it cheaper. And so those are all things that the industry is working on, and as the applications continue to come online, you’re going to see that they’re going to meet themselves and find success. I think the experience is very, very clear that VR is exciting. ”

Deep learning is a breakthrough in the category of machine learning

“deep learning is a breakthrough technique in the category of machine learning, and machine learning is an essential tool to enable AI, to achieve AI. If a computer can’t learn, and if it can’t learn continuously and adapt with the environment, there’s no way to ever achieve artificial intelligence. Learning, as you know, is a foundational part of intelligence, and deep learning is a breakthrough technique where the software can write software by itself by learning from a large quantity of data. Prior to deep learning, other techniques like expert systems and rule-based systems and hand-engineered features, where engineers would write algorithms to figure out how to detect a cat, and then they would figure out how to write another algorithm to detect a car. You could imagine how difficult that is and how imperfect that is. It basically kind of works, but it doesn’t work good enough, well enough to be useful. And then deep learning came along. The reason why deep learning took a long time to come along is because its singular handicap is that it requires an enormous amount of data to train the network, and it requires an enormous amount of computation. And that’s why a lot of people credit the work that we’ve done with our programmable GPUs and our GPU computing platform and the early collaboration with deep learning.”

We haven’t found boundaries of problems that deep learning can solve

“Now, the reason why deep learning has just swept the world, it started with a convolution of neural networks, but reinforcement networks and time sequence networks and all kinds of interesting adversarial networks. And the list of types of networks, I mean, there are 100 networks being created a week, and papers are coming out of everywhere. The reason why is because deep learning has proven to be quite robust. It is incredibly useful, and this tool has at the moment found no boundaries of problems that it’s figured out how to solve. ”

You could achieve level 5 autonomous today with more chips

“DRIVE PX today is a one-chip solution for Level 3. And with two chips, two processors, you can achieve Level 4. And with many processors, you could achieve Level 5 today. And some people are using many processors to develop their Level 5, and some people are using a couple of processors to develop their Level 4. Our next generation, so that’s all based on the Pascal generation. That’s all based on the Pascal generation. Our next generation, the processor is called Xavier. We announced that recently. Xavier basically takes four processors and shrink it into one. And so we’ll be able to achieve Level 4 with one processor. That’s the easiest way to think about it. So we’ll achieve Level 3 with one processor today. Next year, we’ll achieve Level 4 with one processor, and with several processors, you could achieve Level 5.”

Colette Kress

Level 4 autonomy in Audi by 2020

“Jen-Hsun was joined on the CES stage by Audi of America’s President, Scott Keogh. They announced the extension of our decade-long partnership to deliver cars with Level 4 autonomy starting in 2020, powered by DRIVE PX technology. Audi will deliver Level 3 autonomy in its A8 luxury sedan later this year through its zFAS system powered by NVIDIA. We also shared news at CES of our partnership with Mercedes-Benz to collaborate on a car that will be available by year’s end. During the quarter, Tesla began delivering a new autopilot system powered by the NVIDIA DRIVE PX 2 platform in every new Model S and Model X, to be followed by the Model 3.”