In today’s briefing:
- Cerebras. G42 Deal Is A Life Saver. Or Is It?
- Bumper Brazil Harvest To Depress Near-Term Sugar Price Despite Indian Export & Blending Restrictions
- Avid Bioservices (CDMO US): Q2 Result Falls Below Expectation; FY24 Guidance Lowered Amid Slowdown
- NTGR: ARR Enters the Conversation
Cerebras. G42 Deal Is A Life Saver. Or Is It?
- ~$900 million supercomputer deal is off the charts compared to all previous deals
- Without the deal, Cerebras would likely soon have run out of cash. With the deal, Cerebras is effectively working as a supercomputer contractor for G42 for the next several years
- Three supercomputers to be built in the US, we suspect the remaining six to be built in the UAE. That’s likely to raise some eyebrows.
Bumper Brazil Harvest To Depress Near-Term Sugar Price Despite Indian Export & Blending Restrictions
- India is top global sugar producer & exporter. India ordered mills to halt ethanol blending on domestic shortage concerns in addition to export restrictions imposed earlier this year.
- Sugar prices soared to a 12 year high in late Oct. Despite India’s order on blending, global sugar prices have tanked 13% since start of Dec.
- Brazil’s bumper sugar crop will depress near term prices. However, intensifying effects of El Niño could send sugar prices soaring during later part of next year.
Avid Bioservices (CDMO US): Q2 Result Falls Below Expectation; FY24 Guidance Lowered Amid Slowdown
- In Q2FY24, Avid Bioservices (CDMO US) reported 27% YoY and 33% QoQ revenue decline to $25.4M, due to annual maintenance shutdown and reduction in process development services from early-stage customers.
- During Q2FY24, Avid Bioservices signed $35M in net new business orders from both new and existing customers, resulting in a record high backlog of $199M, up 35% YoY.
- Avid Bioservices has lowered FY24 revenue guidance to $137–147 million from $145–165 million. For reference, the company reported revenue of $149 million in FY23.
NTGR: ARR Enters the Conversation
- NTGR has brought back the goal of achieving double digit operating margin after three years of underperformance while turning the business around.
- Unlike prior years where NTGR was relying on unit volume growth to drive operating leverage, NTGR now has a growing base of subscription revenue that is contributing to earnings
- NTGR’s annual investor day highlighted the expectation of exiting 2023 with annual recurring revenue (“ARR”) of $40 million and $50 million in 2024
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