In today’s briefing:
- Unpacking First Mover OpenAI. Can It Avoid the Fate of Netscape and MySpace?
- Key Takeaways from OpenAI DevDay
- ARLO: Picture of One Word, Buy
- Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says
- MariMed, Inc. – 3Q23 Revenue Exceeds Estimates; Adjusted EBITDA In Line
- UPDATE NOTE – Bakkt Holdings, Inc.
- IRDM: QCOM Partnership Terminated
- AEye, Inc. – 3Q23 Earnings Show Expenses Now in Line with Automotive-First Strategy
Unpacking First Mover OpenAI. Can It Avoid the Fate of Netscape and MySpace?
- First mover advantage is half-truth. For every academic study proving that first-mover advantages exist, there is a study proving they do not.
- Engineers at OpenAI, scaled up a special machine learning method using large data sets to create GPT or “Generative Pre-trained Transformer.”
- Launch of ChatGPT has put OpenAI revenues on steroids with reports suggesting USD 1.3B this year (versus USD 28 million before ChatGPT was rolled out).
Key Takeaways from OpenAI DevDay
- OpenAI held its first developer conference on November 6th. The event announced the launch of OpenAI’s latest model and feature upgrades.
- The latest OpenAI model, GPT-4 Turbo offers drastically lower costs, updated knowledge cutoff, better vision and voice support, and improved API.
- Event unveiled custom chatbots called GPTs for specific applications, showcasing expanded domain knowledge. They’ll be sold in a digital store, adding a new revenue stream for OpenAI.
ARLO: Picture of One Word, Buy
- ARLO reported third quarter results underscoring the continued growth in paid subscribers leading the Company to another quarter of positive free cash flow.
- ARLO has maintained its rate of quarterly net subscriber adds throughout 2023 and is poised to cross 3 million paid subscribers by the middle of 2024.
- ARLO reported third quarter revenue of $130.0 million compared to our forecast of $127.5 million.
Qualcomm Sees No Threat From Huawei-Developed Chips, CEO Says
- Qualcomm Inc.’s handset chip business in China will not be affected by Huawei’s push for semiconductor self-sufficiency, said chief executive Cristiano Amon.
- Despite Huawei’s return to the mobile arena spotlight with an in-house chip, the growth trajectory of Qualcomm’s business with Android handset-makers in China will remain unchanged, according to Amon on a post-earnings call on Wednesday.
- Chief Financial Officer Akash Palkhiwala cited an estimated jump of more than 35% in chip sales to Chinese smartphone-makers in and outside China for the fourth quarter of fiscal 2023.
MariMed, Inc. – 3Q23 Revenue Exceeds Estimates; Adjusted EBITDA In Line
- MariMed report 3Q revenue of $38.8 million, which was slightly ahead of our estimate of $38.5 million.
- This represents a 6.3% increase Q/Q and a 14.4% improvement Y/Y.
- The revenue increase was driven primarily by Maryland. MariMed has a dispensary in Annapolis that converted to adult-use on July 1 and sales grew 88% Q/Q.
UPDATE NOTE – Bakkt Holdings, Inc.
- On November 9, Bakkt announced the expansion of its international footprint and custody client base.
- Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end.
- CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.”
IRDM: QCOM Partnership Terminated
- IRDM has announced the termination of its partnership with Qualcomm (QCOM). The news is disappointing, but not a surprise.
- IRDM has not included revenue from the partnership within its guidance for 2023 nor its 2030 free cash flow target
- We were hopeful QCOM was looking to make a bigger splash at CES in January 2024 with a new update
AEye, Inc. – 3Q23 Earnings Show Expenses Now in Line with Automotive-First Strategy
- 3Q23 revenue of $0.2 million was slightly below expectations, but EPS was slightly better than expected at a loss of $0.05 versus consensus of a loss of $0.06.
- CEO Matt Fisch said, “the lidar market has shifted from a ‘battle for the best technology’ to a ‘battle for the best path to commercialization.’”
- Fisch continues to be bullish and upbeat as AEye’s technology continues to win awards.
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