April 30, 2023: Markets Hanging On To Gains Despite Rocky Earnings Season

After a rough Tuesday, and a week full of earnings releases, the markets closed the week up. Dow Jones rose 0.9%, so did S&P 500, Nasdaq was up 1.3%. Meta’s Q1 revenue increased 3% as ad business slowly recovers, sending the stock surging after hours. Roku reported flat Q1 revenue, and expects the weak ad market to persist. Intel reported a 36% sales decline, and expects a second half rebound. Sales at Amazon’s cloud computing business grew 16% in the first quarter, the lowest year-over-year growth rate since it started breaking out that segment. Microsoft’s US$68.7 billion Activision takeover has been blocked by UK competition regulator. Apple won its appeal in the App Store legal battle with Epic Games: In one of the most significant battery breakthroughs in recent years, the world’s largest battery manufacturer CATL has announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year. Sophic Clients, Kraken Robotics (PNG-TSXV, KRKNF-OTC), OneSoft Solutions Inc . (OSS-TSXV, OSSIF-OTC), and UGE International (UGE-TSXV, UGEIF-OTC) presented at the Planet MicroCap Showcase in Las Vegas this past week, their presentations are available to rewatch in this post. UGE International achieved a notice to proceed milestone for 2.7MW community solar project in Oakland, Maryland. UGE has reached NTP on 12.7MW of projects and commercial operation on 1.4MW of projects so far this year. Sophic Client Clear Blue Technologies announced 2022 financial results. The Company does not need to raise capital, expects to be EBITDA positive by FYE2023, and significant order intake year to date of $3.5M, of which $3.2M to be realized in 2023. Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) filed 2022 results. 2022 set the foundation for 2023 player and global betting handle growth, both of which were up significantly following Q4 2022. University of Toronto, and Université de Montréal got a combined $325 million as part of $1.4 billion federal investment into university innovation. Smart display company E2ip Technologies raised $120 million. Ontario Teachers fund to steer clear of crypto after US$95 million FTX loss.

Sophic Clients, Kraken Robotics (PNG-TSXV, KRKNF-OTC), OneSoft Solutions Inc. (OSS-TSXV, OSSIF-OTC), and UGE International (UGE-TSXV, UGEIF-OTC) presented at the Planet MicroCap Showcase in Las Vegas this past week.

Rewatch the Kraken presentation as they share their story with investors and discuss the strong demand they have been seeing across their main end markets (naval defense and offshore energy), and across both product and service offerings.

OneSoft’s solutions are leading the SaaS market in cloud computing, data science and machine learning technologies for oil and gas pipeline integrity operations and are rapidly becoming recognized by the industry as the new de facto standard amongst U.S. pipeline operators. Watch COO Brandon Taylor discuss the business, outlook, and opportunities. 

2022 was a banner year for UGE, as the Company expanded their project backlog from 148 megawatts at the beginning of the year to 260 megawatts as they entered 2023 and 313 megawatts as of March 31. Already in 2023, UGE has set significant new project milestones, and expect their operating portfolio to grow almost 10X this year. Listen to CEO Nick Blitterswyk present at the link here.

Sophic Capital client UGE International (UGE-TSXV, UGEIF-OTC) achieves notice to proceed milestone for 2.7MW community solar project in Oakland, Maryland.

UGE has reached the ‘Notice to Proceed’ (NTP) milestone for a second ground-mount solar project in Oakland, Maryland, the first of which was announced last month. The Notice to Proceed milestone indicates that financing for the project has closed, and all necessary permits and interconnection approvals for the project are in place. Once operational the project is estimated to produce an average of $460,000 in annual revenue, with a total program life of 20 years. The Company currently expects average recurring revenue to carry gross margins at or around 85%. With this project, UGE has reached NTP on 12.7MW of projects and commercial operation on 1.4MW of projects so far this year. Construction on the Oakland project is set to begin this spring. https://bit.ly/3AzV6Sb

Sophic Client Clear Blue Technologies (CBLU-TSXV, CBUTF-OTC, 0YA-FRA) announces fiscal 2022 financial results. Watch the video replay at the link here. Sophic takeaways — the Company does not need to raise capital, expects to be EBITDA positive by FYE2023, and significant order intake year to date of $3.5M, of which $3.2M to be realized in 2023. Revenue was $2,626,972, a 68% decrease from $8,148,659 in F2021, due to delays in customer rollouts and deployments. Recurring revenue was $819,054, an 83% increase from $446,670 in F2021. Gross margin increased to 37% versus 28% in F2021. As at April 26, Clear Blue has access to around $7,000,000 via non-dilutive government funding and grants. As of end of Q1, Clear Blue’s bookings this year total $3.5 million in sales. Of that, the Company anticipates $3.2 million will be revenue in F2023. New orders are spread across all three of Clear Blue’s core businesses: North American solar lighting business having its strongest start ever in 2023, Nano-Grid’s telecom contributing to Q1 2023’s strong order intake, and Esite-Micro (acquired in Q1 2023) already contributing to revenue and order intake. https://bit.ly/3HmEAZj

Sophic Client LuckBox (LUCK-TSXV, LUKEF-OTC) files 2022 results.

2022 set the foundation for 2023 player and global betting handle growth. The Company ended 2022 with player registrations of 137,000 all driven from a negligible base at the end of 2021. 85% of this player base was driven from Q4 2022. The Company generated Global Betting Handle of over $3.2 million during the year, with the vast majority generated in Q4 2022. Total 2022 revenue was $159,992, up from $25,174 in 2021. Cash at the end of 2022 stood at $6,069,971 versus $14,398,356 at the end of 2021. CEO Thomas Rosander said: “In 2022 we created the infrastructure and systems that enabled us to grow our player base and Global Gaming Handle in 2023. Our March 2023 KPIs illustrate the speed at which Real Luck Group has grown since these foundations were laid.” https://bit.ly/3AAADg2

University of Toronto, Université de Montréal get combined $325 million as part of $1.4 billion federal investment into university innovation.

The University of Toronto and Université de Montréal have received a combined $325 million from the federal government for artificial intelligence (AI) research initiatives. The funding is part of a broader $1.4 billion investment into 11 universities across the country. It comes through the Canada First Research Excellence Fund (CFREF), which funds post-secondary research. The University of Toronto is receiving the largest grant with $199 million for its “self-driving” AI lab, Acceleration Consortium. The lab looks to combine AI, robotics, and advanced computing to discover new materials and molecules for applications that span medication to biodegradable plastics. The lab was created in 2021 with the aim of reducing the time and cost of bringing advanced materials to market. The Université de Montréal is also receiving funding for AI with a $124 million grant for a project that focuses on creating “robust, reasoning, and responsible” AI. The financing is going specifically to IVADO, the joint research group led by the Université de Montréal alongside its affiliated schools Polytechnique Montréal and HEC Montréal, and partners Université Laval and McGill University. With the federal grant, IVADO is launching R3AI, which is focused on preventing “potential dangers” of AI systems and implementing a “rigorous framework” to guide AI algorithm development. https://bit.ly/3Lfx4AF

Smart display company E2ip Technologies raises $120 million.

St-Laurent, Québec-based E2ip Technologies, which develops technologies for smart displays and surfaces, has raised $120 million in Series B financing. Export Development Canada and McRock Capital co-led the round. It also saw participation from new investor Fonds de Continuité DNA, as well as existing investor Investissement Québec. E2ip’s smart surface technologies can reduce devices’ carbon footprint as it reuses materials. https://bit.ly/3Lg8PSY

Practice Better raises US$27 million to grow client management software for wellness providers.

Earlier this year, Practice Better raised US$27 million to expand the reach of its platform even further. The financing came solely from Five Elms Capital, a Kansas City-based growth equity firm that invests in business-to-business (B2B) software companies. Practice Better called the US$27 million investment a growth round, and did not disclose whether Five Elms had acquired a majority stake in the company. Five Elms typically invests between US$5 million to $75 million for either minority or majority stakes in companies. Five Elms’ portfolio also includes Toronto-based Ten Thousand Coffees, for which the firm invested $75 million last year. Ten Thousand Coffees also did not disclose whether Five Elms Capital had taken a majority stake in the startup. Prior to this round, Practice Better had raised just $1 million from Disruption Ventures in 2021. Disruption is the Toronto-based venture firm run by Elaine Kunda that invests in women-led businesses. https://bit.ly/4493G7V

Vivid Machines raises $5.8 million to help growers virtually monitor fruit trees.

Toronto-based agtech startup Vivid Machines, which provides monitoring technologies for the fruit supply chain, has raised $5.8 million in seed funding. The round was led by BDC Capital’s Thrive Venture Fund, with participation from StandUp Ventures, Algoma Orchards, Tall Grass Ventures, Entrepreneur First, BoxOne Ventures, Conexus Venture Capital (Emmertech), the W Fund, Cornell Capital, Freycinet Ventures, N49P, and MaRS IAF. In January, Vivid Machines was awarded more than $810,000 from the federally supported Canadian Food Innovation Network for its project with Ontario-based farms Algoma Orchards and Blue Mountain Fruit Company, which both specialize in apples. Under the partnership, Vivid Machines is creating digital twins, or virtual models, of the orchards to determine ideal harvest timings to meet the demands of grocers and food processors. Vivid Machines previously took part in Entrepreneur First Toronto’s initial cohort in 2021, where it secured a $1.4-million investment from the program and a grant from the Canadian government. It also received funding from the Ontario government in 2022, made through the Agri-Tech Innovation Program, which invests up to $100,000 for each selected project. https://bit.ly/44abVjX

Well Health looks to invest $2.5 million into AI companies developing healthcare solutions.

Well Ventures, the investment arm of Canadian healthtech company Well Health, has launched an “investment program” for artificial intelligence companies that are developing solutions for healthcare providers. Well said it aims to make a minimum of 10 AI-related investments of at least $250,000 each. The Vancouver-headquartered, Toronto Stock Exchange listed company pulls its venture money from its internal pool of capital Well’s interest in AI for healthcare comes as the market for it is estimated to reach a valuation of nearly US$188 billion by 2030, driven by its capabilities to automate various tasks. Strategic acquisitions represent a key part of Well Health’s growth strategy. It made several acquisitions in the past, including Ontario-based MyHealth, Intrahealth, ExecHealth, and Vancouver’s CRH Medical. https://bit.ly/41KNVSS

Binance.US cancels deal to buy bankrupt crypto firm Voyager.

Binance.US, a U.S.-based crypto exchange that is majority owned by Binance CEO Changpeng Zhao, has called off a deal to buy now-bankrupt crypto lender Voyager Digital’s assets, Voyager said in a tweet on Tuesday. Voyager did not elaborate on why Binance.US terminated the agreement. It marks the second failed deal for Voyager, and the bankrupt lender said its next step would be to distribute cash and crypto directly to customers. Binance.US agreed to acquire Voyager’s assets in December. That came after FTX, which initially had won an auction for Voyager’s assets, filed for bankruptcy. https://bit.ly/3VkXTIj

Ontario Teachers fund steers clear of crypto after US$95 million FTX loss.

OTPP was among a number of big-name money managers to back FTX, with investments in 2021 and early 2022. The move was widely seen as a sign that high-profile, blue-chip investors were giving their stamp of approval to the fast-growing but lightly regulated crypto sector. But in November 2022 OTPP wrote off its entire stake, following FTX’s dramatic collapse. The exchange’s high-profile founder, Sam Bankman-Fried, is now facing fraud charges. While OTPP’s investment was relatively small at less than 0.05 per cent of its total assets, the fund has nevertheless like many other FTX backers come under scrutiny for investing in a company whose founder is accused of securities fraud and looting the platform for personal gain. “We took our time and did a lot of due diligence on the business. It didn’t turn out the way we thought,” said Taylor, whose fund delivers pensions for around 330,000 teachers and school workers. OTPP was not the only Canadian pension fund to be burnt by crypto failures. Caisse de dépôt et placement du Québec, the country’s second-largest pension fund manager, wrote off a $150mn investment in crypto lending platform Celsius, after its collapse last year. CDPQ has also since said the Celsius investment marked the end of its foray into crypto. https://on.ft.com/3Ljn1ul

Satellite-to-phone race heats up with voice calls and cross-Canada access.

The prospect of contacting a satellite to send a text or contact emergency services may soon be an effortless reality as startups move from proof of concept to actual product. Canadians on the Rogers network, which just inked a deal with Lynk, will get direct satellite-phone connections across the country; and not to be outdone, AST SpaceMobile claims to have made the first satellite voice call using a regular cell phone as well. Connecting a stock smartphone like last year’s Samsung or iPhone to a satellite would have sounded like a fantasy a few years ago, when we all knew it was impossible. But now companies are jostling for position as it becomes clear that satellite services will be a compelling offering on any mobile plan or phone model over the next few years. https://tcrn.ch/3HoJzZs

Meta’s Q1 revenue increases 3% as ad business slowly recovers.

Meta Platforms’ revenue grew 3% year over year to US$28.6 billion in the first quarter of 2023, signaling that its advertising business is rallying after three consecutive quarters of revenue decline. Despite the growth, a 10% increase in spending cut net income to US$5.7 billion from US$7.4 billion a year earlier. In the past six months, Meta has made a series of cost-cutting measures including two rounds of mass layoffs, one of which is still under way. Meta is projecting it will spend US$3 billion to US$5 billion on restructuring and severance costs this year. Meta is also predicting a stronger second quarter, with revenue growth projected to pick up by as much as 11%. The company’s stock surged in after-hours trading following the earnings announcement. https://bit.ly/3Lcrv66

Roku reports flat Q1 revenue, expects weak ad market to persist.

Roku’s first quarter revenue remained roughly flat from the previous year, with a slight dip in its platform’s revenue segment—which includes money made from ad sales—offset by an increase in the revenue it makes from selling TVs and streaming players. Platform revenue, which accounts for about 86% of Roku’s business, hit US$634.6 million in the first quarter, dropping 1% from the previous year. Roku said this was driven by the weaker ad market, which has seen advertisers slash TV and other ad budgets. Ad spending toward streaming TV services, however, continues to be in demand among advertisers, which likely mitigated the economy’s impact on Roku’s ad business relative to the decreases in traditional TV. The company said its work with retailers and commerce platforms such as Best Buy and Instacart to improve ad targeting and measure how effective Roku ads are in driving purchases has also provided a boost to its ad business. The company also reported a net loss of US$193.6 million, down from US$237.2 million in the fourth quarter of 2022. The company said it is continuing to manage its expenses. Since November, it has announced two rounds of layoffs, of 200 employees each time, in an effort to cut costs. Looking ahead, Roku expects the ad market to remain weak in the second quarter and throughout the rest of the year. It projected total net revenue for Q2 of US$770 million, which would also be flat compared to the previous year. https://bit.ly/40O9dOg

Intel reports 36% sales decline, expects second half rebound.

Intel is continuing to grapple with weak demand for PCs and servers, with revenue declining 36% in the three months to March 31 compared to last year. But the chip maker seems to think the worst is over, predicting a “modest” rebound in demand for its processors and software in the second half of the year, according to a company presentation. The quarterly results—which included a net loss of US$2.8 billion, the largest in Intel’s 54-year history—underscore the magnitude of the challenges CEO Pat Gelsinger is facing. Sales of chips for servers and AI projects fell 39% compared to last year, while sales of PC chips dropped 38%. Intel forecast a loss of 4 cents per share on revenue of US$12 billion for its current quarter. Gelsinger has experienced a whiplash of challenges since taking the helm a little over two years ago, including a global chip shortage that prompted a number of steps to improve Intel’s production and chip design processes. Now his primary focus is to stabilize the business amid macroeconomic factors that haven’t hit rivals like AMD and Nvidia nearly as hard. AMD reports its first-quarter earnings on Tuesday, May 2. https://bit.ly/40O9gJW

AWS growth slows to 16%.

Sales at Amazon’s cloud computing business grew 16% in the first quarter, the lowest year-over-year growth rate since it started breaking out that segment in 2015, as the company said the macroeconomic environment caused customers to spend “more cautiously.” Amazon Web Services revenue grew 20% and 27.5% year over year in the prior two quarters. AWS’s operating profit fell to US$5.1 billion, from US$6.5 billion in the first quarter of 2022. Alphabet reported this week that Google Cloud’s revenue increased by 28%, a slowdown from 32% the previous quarter. Microsoft, which does not break out revenue for its cloud computing service, said the division that includes Azure saw revenue grow by 13%, an acceleration from 7% during the previous quarter, mostly driven by Azure. Amazon had already told investors that it expected economic problems to impact AWS in the first couple of quarters of the year. Chief Financial Officer Brian Olsavsky added in a media call on Thursday that AWS growth was “slightly better than we expected.” Olsavsky said he is “not sure how the next few months will play out,” in terms of when the growth numbers will improve. https://bit.ly/414joP7

Alibaba cuts cloud prices to spur growth before possible IPO.

Alibaba Group is cutting the cost of its cloud services by as much as half, a move that could win users from rivals such as Tencent Holdings Ltd. at a time it’s considering spinning off the fast-growing Aliyun business. Alibaba and Tencent are vying to provide the raw computing power needed to train generative artificial intelligence models such as OpenAI’s ChatGPT, which has ignited a global race. Core products of the Aliyun subsidiary will see 15% to 50% cuts from May 7, an Alibaba spokesperson said on Wednesday. The company has said it’s committed to expanding its cloud business, now led by group Chief Executive Officer Daniel Zhang, which it sees as a potential driver of exponential growth. https://bloom.bg/3Hiuk4g

Russia’s Yandex buys Uber’s stake in taxi JV for US$703 million.

Russian tech giant Yandex said on Friday it had bought Uber’s stake in their joint taxi venture for US$702.5 million, becoming the sole owner of the Yandex.Taxi business and bringing Uber’s involvement in Russia to a close. “As a result of the deal, Yandex will become the sole owner of the group, which includes a taxi ordering service, carsharing and scooter rental,” Yandex said in a statement. Uber in 2021 divested its stake in a foodtech and delivery joint venture with Yandex. The companies joined forces in Russia in 2017 to combine their ride-sharing businesses in Russia and neighbouring countries. As part of that US$1 billion deal, Uber reduced its stake in a separate ride-hailing joint venture to 29%, with Yandex taking out a US$2 billion call option to buy out the rest. Corporate exits from Russia now require approval from a government commission, in light of capital outflows and unprecedented sanctions against Moscow over the conflict in Ukraine. https://reut.rs/426B3WZ

Microsoft’s US$68.7 billion Activision takeover blocked by UK competition regulator.

Microsoft’s US68.7 billion takeover of “Call of Duty” developer Activision has been blocked by the UK’s competition regulator, marking a devastating blow to the blockbuster deal. The UK’s Competition and Markets Authority (CMA) said on Wednesday that the deal, struck in January 2022, risked “stifling competition” in the market amid concerns that Microsoft would make Activision’s lucrative games exclusive to its services at the expense of consumers. According to the CMA, Microsoft already accounts for around 60-70% of global cloud gaming services through its Xbox platform and Azure. The deal, it said, “would reinforce Microsoft’s advantage in the market by giving it control” over games such as “Call of Duty” and “Overwatch.” In response, Microsoft president Brad Smith said the company remains “fully committed to this acquisition and will appeal,” with the CMA’s decision rejecting “a pragmatic path” to addressing competition concerns while discouraging technology innovation and investment in the UK. Activision’s shares fell sharply by more than 11% in pre-market trading. https://bit.ly/3LbaERb

Apple wins appeal in App Store legal battle with Epic Games: ‘A resounding victory’.

Apple once again has proven victorious in its ongoing legal battle with Epic Games. The US Ninth Circuit of Appeals has upheld the decision first handed down in November of 2021, which found that Apple is not a “monopolist under either federal or state antitrust laws.” Apple called the ruling a “resounding victory in this case” and touted the continued benefits of the App Store. The company did say, however, that it still “respectfully disagree[s]“ with the court’s upholding of the original decision that ruled Apple can’t forbid developers from directing users to third-party payment options. The company, however, stopped short of saying it will file an appeal. The decision reaffirms Apple’s resounding victory in this case, with nine of ten claims having been decided in Apple’s favor. For the second time in two years, a federal court has ruled that Apple abides by antitrust laws at the state and federal levels. https://bit.ly/3oPQa99

Apple captures nearly half of global refurbished smartphone market.

About half of refurbished smartphones sold globally were iPhones, as Apple’s sales in the category grew 16% year-on-year in 2022. The new figures arrives by way of Counterpoint Research, marking a stark contrast to ongoing declines in smartphone shipments. The market research firm said Monday that the global secondary smartphone market grew 5% YoY in 2022. The growth would have been more if China’s refurbished smartphone sales did not see a 17% decline, mainly due to the resurgence of COVID-19 and the arrival of COVID-Zero policies, the firm said. Nonetheless, the decline in China’s secondary smartphone sales has helped India take the top spot, with a 19% YoY growth, followed by Latin America with an 18% YoY growth. Apple captured over 49% of the secondary market in 2022, becoming the fastest-growing brand in the used and refurbished sectors globally. The market share of the Cupertino company grew from 44% in 2021, according to the research firm. https://tcrn.ch/3oNKWdU

Samsung loses billions on chips as overall profits decline 95 percent.

Samsung’s memory chip business just had a terrible quarter, as falling demand and high inventories contributed to a 4.58 trillion won (around US$3.4 billion) loss from the division. The loss at the unit, which is typically its largest profit driver, contributed to Samsung’s quarterly operating profit plunging 95 percent in the quarter to 640 billion won (roughly US$478 million). A few different factors contributed to Samsung’s losses at its memory chip division. Smartphone and PC makers stockpiled chips during the pandemic as a hedge against supply issues as demand boomed, but have since been left with large inventory excesses as consumer demand has dropped off amidst high inflation and broader global economic uncertainties. Samsung hopes that the chip business will start to pick up in the second half of this year. https://bit.ly/3LAW9r3

World’s largest battery maker announces major breakthrough in energy density.

In one of the most significant battery breakthroughs in recent years, the world’s largest battery manufacturer CATL has announced a new “condensed” battery with 500 Wh/kg which it says will go into mass production this year. “The launch of condensed batteries will usher in an era of universal electrification of sea, land and air transportation, open up more possibilities of the development of the industry, and promote the achieving of the global carbon neutrality goals at an earlier date,” the company said in a presentation at Auto Shanghai on Thursday. CATL’s new condensed battery will have almost double the energy intensity of Tesla’s 4680 cells, whose rating of 272-296 Wh/kg are considered very high by current standards. During the presentation, CATL said its working with partners on the development of electric passenger aircraft practicing aviation-level standards and testing in accordance with aviation-grade safety and quality requirements. https://bit.ly/3oVT6Rq

Cruise continues to burn GM’s cash as robotaxis expand to daylight hours.

Cruise, the autonomous vehicle division of General Motors, is now operating a “small” fleet of driverless robotaxis in San Francisco during daylight hours for the first time. The news comes as Cruise continues to operate in the red, losing US$561 million in the first quarter of 2023. The company earned just US$30 million in revenue for GM, though most of that money comes from interest and other non-operating sources. Cruise, which operates robotaxis in San Francisco, Phoenix, and Austin, says it remains on track to hit US$1 billion in revenue by 2025 and US$50 billion by 2030. Cruise CEO Kyle Vogt said the company expanded its driverless fleet size by 86 percent, from 130 to 242 “concurrently operating AVs.” The vehicles have since passed the 1.5 million miles mark and regularly conduct 1,000 driverless trips with passengers each day, Vogt added. https://bit.ly/3AyH9Uj

Spotify paid subscriptions grew faster than expected, but the company is still losing money.

Spotify paid subscriptions grew faster than expected in the first quarter of the year, but the company is still losing money. The good news for the streaming giant is that paid subscriptions were up 15% to 210 million, ahead of analyst expectations and the company’s own guidance. Monthly active users were up even more, a 22% rise to 515 million people (including free subscribers). Subscriptions, which make up most of Spotify’s revenue, climbed 14% to €2.71 billion. Revenue from advertising grew 17% to €329 million. Ad revenue, which has become a particular growth area for Spotify as it expands its podcast business, accounted for about 11% of total revenue for the quarter—a small downtick from prior periods. However, the company continues to lose money, reporting a loss of €225 million (US$248 million) for the quarter. A handful of individual quarters aside, this is almost always the case. Spotify has always insisted that this is expected – that it continues to prioritize growth and investment in new features over profitability. https://bit.ly/3VabPF6

DraftKings plans streaming video service with sports podcasts.

DraftKings Inc. is planning to launch its own streaming video service, the latest evidence that sports betting and media are converging. The service is expected to be free and supported by advertising, people with knowledge of the matter said. The shows will be videos of podcasts the company sponsors and are expected to debut in coming weeks, according to the people, who asked not to be identified discussing the details. https://bit.ly/3AzFyxH

Sony reports strong PS5 hardware sales as it closes in on 40 million units sold.

Sony says it shipped 6.3 million PlayStation 5 consoles in the three months ending March 31st 2022, bringing total sales of the console to 38.4 million, the company reported in its latest earnings release. That’s more than triple what the company shipped in the same quarter the previous year (2 million), and means the Japanese electronics giant shipped 19.1 million PS5 during fiscal 2022, beating its earlier forecast of 18 million. On the software side things were more mixed. Revenue from game software was up overall, but units shipped fell from 70.5 million in the fourth quarter of 2021 to 68 million in the same quarter of 2022. PlayStation Network monthly active users were up slightly from 106 million to 108 million, but the number of PlayStation Plus subscribers were flat at 47.4 million. CNBC notes that the company’s financials were strong overall, reporting an operating profit of a record 1.21 trillion yen (around US$8.9 billion) for the year. Revenue in the quarter rose 35 percent to 3.06 trillion yen (around US$22.5 billion). Sony hasn’t broken out sales of its PlayStation VR2 headset, which launched during the quarter. The company expects operating profit to come in at 1.17 trillion yen (around US$8.6 billion), which would represent a roughly 3 percent drop year-over-year. https://bit.ly/44fgWYz

Pinterest plans ad partnership with Amazon.

Pinterest announced a partnership with Amazon’s ad network on Thursday, a move that could bring more brands and users to the virtual scrapbooking site as it looks to revive revenue growth. The company reported first quarter revenue of US$603 million, up 5% year on year, and predicted the same level of revenue growth in the second quarter (Pinterest didn’t detail what impact the Amazon partnership would have on future growth). Shares of Pinterest were down nearly 8% in after-hours trading. While Pinterest has long been a site for users to browse and save items to buy, it’s recently focused its efforts on transforming into a place where users actually make purchases. The Amazon partnership will allow users to click links and be brought directly to the e-commerce giant’s site to complete their purchase. CEO Bill Ready said the partnership, which will begin rolling out later this year, would help Pinterest both increase the number of ads it shows as well as tailor its ads more closely to users’ interests. https://bit.ly/3Hqc09E

TSMC 3nm chip production can’t keep up with Apple demand.

TSMC 3nm chip production is well underway, with the latest process expected to be used for both the A17 chip in the iPhone 15 Pro, and the M3 destined for future Macs. However, the company told analysts that it isn’t yet able to keep up with customer demand. Apple’s chipmaker also said that yield rates (the percentage of chips that pass quality control tests) are not yet good enough to charge the iPhone maker for every wafer produced. The latest process to be offered by TSMC is three nanometer (3nm), which the company dubs N3. Samsung generally sits one to two years behind TSMC in process size, while Intel is many years away from 3nm. Taiwan Semiconductor Manufacturing Co. (TSMC) is straining to meet demand from top customer Apple for 3-nm chips. The company’s tool and yield struggles have impeded the ramp to volume production with world-leading technology. The next major step will be 2nm chips, and these are expected to begin production in 2025. The iPhone 17 is likely to be one of the first devices to use this upcoming process. https://bit.ly/41BCJrP

Google’s latest climate plan? Skip grid backlog, mimic community solar.

Corporations have become the biggest driver of new clean energy projects in the U.S., but many of the projects they’re bankrolling face years-long backlogs to get connected to the grid. And even when they do get plugged in, big corporate clean power deals aren’t necessarily helping drive down fast-rising utility bills for communities least able to afford them. On Monday, Google and clean energy developer EDP Renewables (EDPR) North America unveiled a novel approach to solving these challenges — what some are calling “synthetic” community solar. First, they plan to build utility-scale amounts of solar in community-solar-sized chunks that can more easily connect to the grid. Second, they’ll structure these solar projects to ensure that at least 10 percent of the money they make flows to at least 25,000 “high energy burden” households, including those located in communities that host the solar farms themselves. The plan calls for EDPR NA Distributed Generation, the developer’s distributed-solar arm, to build a 500-megawatt portfolio of solar across about 80 community-scale projects in the 13-state region served by grid operator PJM. Google will use that solar power to further its goal of achieving round-the-clock clean energy by 2030, with a focus on cleaning up the energy consumption of its data centers in Ohio. https://bit.ly/40QfjOd