Charged Alpha Stock Encyclopedia

FTAI Aviation Ltd. (FTAI) Q2 2026 — Revenue $953.1M (+41%) beat the ~$895M estimate, but diluted EPS of $1.13 vs $1.57 missed the $1.38 consensus by 18% — a 4th straight miss. Adjusted EBITDA FELL 16% to $291.4M. Aerospace Products did $875.0M of revenue (+78%) and $249.7M of Adj EBITDA (+51%); everything else did $41.7M vs $182.9M, down 77%. FY26 Aviation Leasing guidance cut from $575M to $475M. Dividend raised to $0.50. Shares went $212.47 pre-print to a $179.11 intraday low, closing $197.50.

Three things nobody connected. (1) The remainder: total Adj EBITDA $291.4M less Aerospace $249.7M leaves $41.7M for the leasing fleet, FTAI Power and corporate — versus $182.9M a year ago. Q2 interest expense alone was $64.1M, 1.5x that. (2) The balance sheet trade: since December inventory rose $351M to $1.545B (34% of all assets) while leasing equipment FELL $399M to $1.146B. H1 produced $617M of Adjusted EBITDA, debt was flat at $3.45B, and cash rose $37M — the dividend and the inventory build were funded by shrinking the fleet. (3) The hockey stick: H1 non-Aerospace Adj EBITDA was $144.7M, so the cut-to-$475M leasing guide still needs ~$330M in H2, a 2.3x step-up. Street FY26 EPS of $6.59 needs $4.17 in H2 against $2.42 in H1. Shareholders' equity is $404M on a $20B market cap.

THE CALL: AVOID (3/5, A GREAT BUSINESS INSIDE A LEVERAGED HOLDING COMPANY) — base-case value ~$145.0 vs ~$197.5 today.

KEY METRICS:

- Revenue $953.1M +41% (beat ~$895M est); diluted EPS $1.13 vs $1.57, missed $1.38 est by 18%

- 4th consecutive EPS miss: Q3'25 $1.10/$1.21, Q4'25 $1.08/$1.24, Q1'26 $1.29/$1.50, Q2'26 $1.13/$1.38

- Adjusted EBITDA $291.4M, DOWN 16% vs $347.8M; net income attributable $117.6M vs $161.7M

- Aerospace Products: revenue $875.0M +78%, Adj EBITDA $249.7M +51% (28.5% margin), segment D&A just $4.9M

- Everything else Adj EBITDA $41.7M vs $182.9M — down 77%; Q2 interest expense $64.1M is 1.5x that

- Lease income $27.8M (-56%), maintenance revenue $25.8M (-65%), asset sales $16.9M (-65%)

- Gain on sale to the 2025 Partnership $2.5M vs $34.6M; gross margin 33.3% vs 45.4%

- Guidance: FY26 Aerospace $1,050M reaffirmed; FY26 Aviation Leasing CUT $575M to $475M (asset-light)

- FY27 segment guide $2.3B = Aerospace $1.4B + FTAI Power $450M + Aviation Leasing $450M

- H1: revenue $1,783.8M, Adj EBITDA $617.0M (Aerospace $472.3M), diluted EPS $2.42 vs $2.44

- Balance sheet: inventory $1,544.6M (+$351M since Dec), leasing equipment $1,146.4M (-$399M), cash +$37M

- Long-term debt $3,453.3M flat; shareholders' equity $404.0M; net debt ~$3.12B; ~50x book

- Dividend raised to $0.50/qtr (4th straight increase); 2026 module target raised to 1,200 from 1,050

What to watch: Watch Q3 Aviation Leasing Adjusted EBITDA in October — the $475M full-year guide needs ~$330M across H2 against $144.7M in H1. North of $150M with the guide held moves fair value toward $175. What breaks it: inventory outgrowing Aerospace revenue again, leasing equipment falling below $1B, or any slip in the FTAI Power delivery schedule.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Roblox Corporation (RBLX) Q2 2026 — Revenue $1,469M, +36% YoY — but bookings, the cash users actually spent, were $1,557M, +8%, at the LOW end of guidance. GAAP EPS $(0.26) beat the $(0.34) estimate; Adj EBITDA $152M vs $18M. Then the guide: Q3 bookings $1,576-1,653M, DOWN 14-18%, the first decline ever guided, vs ~$1.87B consensus — with Q3 FCF of $(60)M-$5M and full-year guidance withdrawn. The stock closed $48.62, then fell ~13.8% after hours to ~$41.94.

Roblox reports two top lines and only one is live: revenue releases Robux bought up to 27 months ago from a $6.9B deferral pool; bookings is this quarter. Three things nobody has connected. (1) The deferral wedge — Q2 2025's build was $365M vs $99M now, which is why Q3 revenue is guided UP 4-10% while bookings go DOWN 14-18%. (2) The cost table is published against both revenue and bookings and they disagree: DevEx FELL from 29% to 25% of revenue but ROSE from 22% to 23% of bookings; infrastructure and trust & safety went 11% to 15% of bookings (+450bps, +54% to $236M). (3) FY2025 free cash flow was $1,355M against $1,129M of stock comp — $226M of economic profit on $6.79B of bookings, a 3.3% margin in the best year ever. Q3 turns that negative.

THE CALL: SELL (4/5, FREE CASH FLOW THAT STOCK COMP HAS ALREADY SPENT) — base-case value ~$30.0 vs ~$41.94 today.

KEY METRICS:

- Revenue $1,469M +36%; bookings $1,557M +8% (+7% cc), at the LOW end of guidance

- GAAP EPS $(0.26) vs $(0.41), beat $(0.34) est; net loss $185M vs $280M

- Adj EBITDA $152M vs $18M — but adds back $34M of youth-safety settlements ($91M 1H); ex that $118M

- DAUs 123M +10%; Hours 29B +5%; monthly unique payers 27M +15%

- Bookings/DAU $12.66 vs $12.86 (-1.5%); hours/DAU/day 2.59 vs 2.72 (-4.7%)

- Japan DAUs +67%, India +64%; US & Canada DAUs +6%, Hours +1%

- % of bookings: DevEx 23% (22%), SBC 18.1% ($282M), personnel ex-SBC 18% (17%), infra & trust/safety 15% (11%, +54% to $236M)

- Q3 guide: revenue $1,413-1,490M (+4-10%) but bookings $1,576-1,653M (-14 to -18%) vs ~$1.87B consensus

- Q3 FCF guided $(60)M-$5M on $170M capex (vs $22M in Q2); net loss $(348)M-$(307)M; FY guidance withdrawn

- Q2 operating cash flow $318M (+60%), FCF $294M (+66%) — but stock comp was $282M

- FY2025: FCF $1,355M less SBC $1,129M = $226M on $6.79B bookings — a 3.3% margin

- Cash & investments $6.08B less $1.01B debt = ~$5.08B net cash; shareholders' equity just $129M (was $394M)

- Buyback: Q2 bought 8.2M shares for ~$380M, more than the $294M FCF — yet diluted shares rose 2% to 752M

What to watch: Watch Q1 2027 bookings — the first easy comp, a full year after the RFY algorithm change and once Kids/Select annualise. Reacceleration through 15% with stock comp flat moves fair value to the mid-40s. What breaks it: SBC outgrowing bookings, capex at $170M/quarter, or the safety settlements escalating.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Boston Scientific Corporation (BSX) Q2 2026 — Net sales were $5.442B, +7.5% reported and +7.0% organic, at the TOP of a 5.5-7.5% guide. Adjusted EPS was $0.86 against a $0.82-$0.84 guide and $0.75 a year ago; GAAP EPS was $0.61 vs $0.53. Adjusted operating margin reached 28.4%, up 71bps. Cardiovascular grew +7.8% organic to $3,624M and MedSurg +5.4% to $1,818M. Yet management cut full-year guidance for the second time in six months, to 5.0-6.0% organic and $3.28-$3.32 adjusted EPS, and guided Q3 to just 3-5%. The stock closed at $46.00, about 57% below its September 2025 closing high of $108.14.

The quarter beat on both lines and the stock has still halved in eleven months — the market is repricing the story, not the earnings. Three things almost nobody has put together. (1) The second-half cliff: FY2025 revenue was $20.074B and the new guide implies $21.18-$21.38B; H1 2026 was already $10.646B, so H2 must land at $10.53-$10.73B against H2 2025's $10.350B — implied growth of just +1.8% to +3.7%, versus +9.5% in H1. Organic guidance has gone 10-11% to 6.5-8.0% to 5.0-6.0% since February, and sequential organic growth ran 9.4%, then 7.0%, with Q3 guided to 3-5%. (2) Why: CHAMPION-AF (NEJM, March 28) was meant to make WATCHMAN first-line versus blood thinners. It met every endpoint but won only on bleeding (10.9% vs 19.0%) and merely tied on efficacy (5.7% vs 4.8%), with more primary events in the device arm (81 vs 65) and more ischaemic strokes (45 vs 27) — a label filing, not a guideline change. (3) Capital allocation: ~$16B committed into the deceleration. One overlooked twist — the Penumbra exchange ratio is FIXED at 3.8721 BSX shares, struck off an implied ~$96.59 price, so at $46 the blended consideration is ~$321/share, not $374. Penumbra closed at $319.83.

THE CALL: BUY (3/5, THE DE-RATING WENT FURTHER THAN THE DOWNGRADE) — base-case value ~$54.0 vs ~$46.0 today.

KEY METRICS:

- Revenue $5.442B, +7.5% reported / +7.0% organic, at the top of a 5.5-7.5% guide

- Adjusted EPS $0.86 vs a $0.82-$0.84 guide and $0.75 a year ago (+14.7%); GAAP EPS $0.61 vs $0.53

- Adjusted gross margin 70.3% (vs 69.4%); adjusted operating margin 28.4% (vs 27.6%), +71bps

- Cardiovascular $3,624M +7.8% organic; MedSurg $1,818M +5.4% (Endoscopy +7.0%, Neuromodulation +12.2%, Urology just +0.8%)

- FY2026 guidance cut twice: 10.5-11.5%/10-11% and $3.43-$3.49 (Feb 4) to 7.0-8.5%/6.5-8.0% and $3.34-$3.41 (Apr 22) to 5.5-6.5%/5.0-6.0% and $3.28-$3.32 (Jul 29)

- The implied H2 cliff: H1 grew +9.5%, but the full-year guide requires H2 growth of only +1.8% to +3.7%

- CHAMPION-AF: superior on non-procedural bleeding (10.9% vs 19.0%) but non-inferior only on efficacy (5.7% vs 4.8%), with 81 primary events vs 65 and 45 ischaemic strokes vs 27

- Penumbra: $14.5B, ~73% cash, fixed 3.8721 exchange ratio; blended value now ~$321/share vs the $374 headline (PEN closed $319.83)

- MiRus: $1.5B for ~34% plus a $3B option on an investigational TAVR valve — a market BSX exited in May 2025 when ACURATE missed its endpoint

- New 2026 Restructuring Plan: $700-800M of charges to remove ~$500M of annual expense by 2029; $2B ASR completed (~40M shares), $3B left

- Net debt ~$9.5B at March 31, ~$11.8B pro-forma for the buyback and MiRus, and above $22B once Penumbra closes

- FY2025 free cash flow $3,658M (operating cash flow $4,534M less $876M capex, per the 10-K)

- At $46.00: 13.9x the $3.30 midpoint of FY2026 adjusted EPS guidance and a ~5.9% free cash flow yield — cheaper than Medtronic, which grows slower

What to watch: Watch Q3: management guided 3-5% organic and has beaten its own guide twice running — a 6%+ print breaks the deceleration narrative. The other levers are $500M of restructuring savings and closing Penumbra (~$1.4B of revenue growing ~17%). What breaks it: a badly integrated Penumbra, net debt settling above $22B with no deleveraging path, or evidence that the post-CHAMPION-AF debate is actively reducing WATCHMAN procedure volumes rather than merely failing to expand them.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Cohu, Inc. (COHU) Q2 2026 — Cohu reported Q2 2026 (the 13 weeks to June 27) after the close on July 30. Revenue was $149.0M, +38% y/y and +19% sequentially, against roughly $144M expected. Non-GAAP gross margin was 45.5% (GAAP 45.4%) versus a ~44% guide. GAAP operating income was +$0.292M — the first positive operating quarter since 2023, against -$17.2M a year ago. GAAP net loss was $0.159M, or $(0.00) a share; non-GAAP net income was $14.1M, or $0.26 a share, against $0.14 expected. Adjusted EBITDA was $18.4M (12.3% of sales) versus 3.6% a year ago. Management guided Q3 to $170M +/- $7M, raised the FY26 high-performance-computing revenue outlook to $100M-$110M, and lifted the AI-compute opportunity pipeline to roughly $850M. The stock closed at $46.45, already +18.1% on the day before the print, and traded near $54.90 after hours.

The quarter was genuinely good and we say so plainly — but the number that moved the stock was the guide, and almost nobody has done the arithmetic on it. Ninety days ago, on the April call, management told analysts to model the September quarter at about $144M-$145M with December weaker still. They just guided it to $170M — a ~17% raise to their own near-term view in one quarter. Follow that into the annual model: H1 revenue of $274.1M plus the $170M guide is $444.1M with one quarter to go, against a published FY26 consensus of $558.7M. That consensus implies a December quarter of roughly $114M — a 33% sequential collapse, below every quarter of 2026 including Q1. It is a stale model built on April's guidance. Two other things sit between the headline and a shareholder: all $0.26 of non-GAAP EPS is $14.8M of add-backs, $6.6M of which is stock comp (charge it back and the quarter earned about $0.14); and the widely-quoted '$498M of cash' is really about $202M of net cash once you count $296M of debt, almost all of it $287.5M of 1.50% convertible notes struck at ~$27.18 — which the stock now trades at twice.

THE CALL: HOLD (3/5, A REAL INFLECTION, PRICED FOR THE BULL CASE IN FULL) — base-case value ~$40.0 vs ~$46.45 today.

KEY METRICS:

- Revenue $149.0M, +38% y/y and +19% q/q, versus roughly $144M expected

- Non-GAAP gross margin 45.5% (GAAP 45.4%) against a ~44% guide, while ramping the Eclipse handler

- GAAP operating income +$0.292M — the first positive operating quarter since 2023 (Q2 2025: -$17.2M; Q1 2026: -$11.2M)

- Non-GAAP operating income $15.1M (10.1% of sales); Adjusted EBITDA $18.4M (12.3%) vs 3.6% a year ago

- GAAP net loss $0.159M, $(0.00)/sh; non-GAAP net income $14.1M, $0.26/sh vs $0.14 expected

- The $14.8M GAAP-to-non-GAAP bridge: $7.28M intangible amortisation (was $10.1M a year ago), $6.59M stock comp, $0.63M restructuring (was $7.8M in H1 2025), $0.28M other

- Share counts: GAAP diluted 47.3M vs non-GAAP diluted 53.4M — 12.9% of latent dilution from the convertible notes already in the EPS denominator

- Balance sheet at 6/27/26: cash and investments $498.2M, total debt $296.2M, net cash ~$202M (~$4.27/sh); inventories $140.3M (~157 days), receivables $122.7M (~75 days)

- $287.5M of 1.50% convertible senior notes due 2031, issued 9/29/25 at a ~$27.18 conversion price, plus $28.4M of capped calls; no shares repurchased in Q2 2026

- Q3 2026 guidance $170M +/- $7M (+14% q/q, +35% y/y) versus the ~$144-145M management guided for that quarter in April

- FY26 high-performance computing revenue raised to $100M-$110M (from $80M-$100M); AI compute opportunity pipeline raised to ~$850M (from ~$750M)

- Test cell utilisation ~80% at the end of June, up from 78% at the end of Q1 — automotive and industrial, not just AI

- Recurring revenue was ~60% of sales in Q1 2026, at roughly a 50% gross margin versus ~40% on systems

- Street FY26 consensus of $558.7M implies a Q4 of about $114M against H1 $274.1M plus the $170M guide — a 33% sequential collapse nobody believes

What to watch: What would turn us bullish: one number. The CFO said in February that at roughly $160M of quarterly revenue gross margin should reach 48%. Cohu just guided to $170M. If the September quarter prints a 48% gross margin, our FY27 earnings estimate rises about 20% and our fair value moves into the fifties. What breaks the thesis: bookings that flatten while the pipeline number keeps growing, because a serviceable market that never becomes an order is just a slide; any slip in the Eclipse handler qualifications at the five accounts that have not signed yet; and inventory, already at $140.3M or about 157 days of cost of sales — building inventory into a ramp is correct, building it into a ramp that does not arrive is how semiconductor companies write down a quarter.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

AXT, Inc. (AXTI) Q2 2026 — AXT reported Q2 2026 after the close on July 30. Revenue was $47.6M, +164% y/y and +77% sequentially — the highest quarterly revenue in company history, against roughly $34M expected. GAAP gross margin was 44.9% and non-GAAP 45.0%, versus 29.9% in Q1 2026 and just 8.2% in Q2 2025. Indium phosphide revenue hit a record $30.7M on AI data-centre optical connectivity demand. GAAP net income attributable to AXT was $11.1M ($0.17 diluted); non-GAAP was $11.9M, or $0.19 a share, against about $0.07 expected. The stock closed at $46.94, already +27.0% on the day ahead of the print, and traded near $57 after hours.

The operating quarter was outstanding and we say so plainly. But three things sit between that headline and a shareholder. First, $4.7M of the $15.1M of pre-tax income — 31% — is interest income earned on the cash AXT raised in April, not the substrate business; strip it out and operating income was $10.4M. Second, $1.9M of the $13.0M consolidated net income (14.6%) belongs to minority partners inside Tongmei and the raw-material JVs, so only $11.1M reaches an AXT holder. Third, diluted shares went from 43.7M to 63.5M in a year, +45%, so while revenue grew 164%, revenue per share grew about 82%. And the widely-reported '$66M Q3 guidance' is not guidance at all: it is the revenue that already has a Chinese export permit or does not need one.

THE CALL: HOLD (3/5, THE QUARTER WAS REAL. THE AFTER-HOURS PRICE ISN'T) — base-case value ~$51.0 vs ~$46.94 today.

KEY METRICS:

- Revenue $47.6M, +164% y/y and +77% q/q — the highest quarterly revenue in AXT's history; consensus was ~$34M

- Non-GAAP gross margin 45.0% (GAAP 44.9%), versus 29.9% in Q1 2026 and 8.2% in Q2 2025 — a ~3,700bp swing in four quarters

- Product mix: indium phosphide $30.7M (a record, 65% of revenue), consolidated raw-material JVs $10.0M, gallium arsenide $6.6M, germanium $0.272M

- GAAP operating income $10.4M (21.9% margin) vs a $6.7M loss a year ago; non-GAAP operating income $11.2M

- Interest income of $4.7M was 31% of the $15.1M pre-tax income — earned on the April raise, not on substrates

- Minority interests took $1.9M (14.6%) of the $13.0M consolidated net income; $11.1M was attributable to AXT

- Diluted EPS $0.17 GAAP / $0.19 non-GAAP vs ~$0.07 expected; diluted shares 63.5M vs 43.7M a year ago (+45%)

- Cash and investments $748.8M (from $123M at March 31) after a ~$632M secondary that closed April 22; ~$665M net of $84.2M short-term loans, about $10.00/share

- Q3 2026: no revenue guide issued — $66M is the revenue that already has an export permit or needs none; non-GAAP EPS guided $0.30–$0.32 on ~66.5M shares

- Tongmei withdrew its Shanghai STAR Market IPO application on June 26 and is pivoting to Hong Kong (~1 year), which triggers a redemption right on $49M of 2021 private-equity money

- Inventory $96.3M (+$6.2M q/q); backlog above $100M but deliberately capped to planned capacity; top 5 customers ~30% of revenue, none above 10%; China above 50% of Q2 revenue

- Capacity plan: indium phosphide revenue capacity ~$60M/quarter exiting 2026 and ~$130M/quarter exiting 2027; capex ~$14M in 2026 and ~$100M in 2027; Q2 D&A only $2.5M

What to watch: What would turn us bullish: an actual Q3 or Q4 revenue guide instead of a permit-secured floor, which would mean the China export-licence process has become predictable enough to forecast and removes the single largest discount in our model. A Hong Kong listing that completes without the $49M of Tongmei private-equity money being redeemed would do the same. What breaks the thesis: gross margin rolling over as new industry supply arrives, because 45% is a scarcity margin and AXT is about to triple the world's indium phosphide capacity; a quarter where the permit-secured floor comes in below the prior quarter's actual revenue; and any further equity issuance, since dilution has already cost holders more here than any operational miss.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Amazon.com, Inc. (AMZN) Q2 2026 — Amazon reported Q2 2026 after the close on July 30. Revenue was $200.6B, +20% y/y, about $4B above consensus. Operating income rose 43% to $27.5B — a record 13.7% operating margin. AWS grew 37% to $42.2B, its fastest in 18 quarters, with segment operating income up 64% to $16.6B (39.4% margin). Advertising grew 26% to $19.8B. Reported diluted EPS was $5.75 against ~$1.82 expected — but net income included $53.4B of non-operating pre-tax other income, which Amazon says is primarily the mark on its Anthropic investment. Q3 guidance: revenue $197–202B (+9–12%) and operating income $22.5–26.5B. The stock closed at $235.50 and traded up ~7% after hours.

Strip the $53.4B investment mark and the quarter looks very different. Pre-tax income ex-that-line was $27.4B; taxed at a normal 23%, that is roughly $1.94 a share — a real 7% beat, not a 216% one. Meanwhile trailing-twelve-month free cash flow turned NEGATIVE, to −$7.6B, from +$18.2B a year ago and +$25.9B five quarters ago. Operating cash flow actually rose 33% to a record $161.4B; the entire swing is capex, now $169.0B TTM (+64%). Depreciation is only $75.2B — 44% of capex — so the $94B gap between what Amazon spends and what it expenses is almost exactly its entire $93.7B annual operating profit. Two more things almost nobody checked: 89bps of the 226bps margin expansion came from stock comp falling in absolute dollars, and advertising grew $4.1B while North America + International operating income grew only $1.8B.

THE CALL: REDUCE (2/5, A GREAT QUARTER AT A DEMANDING PRICE) — base-case value ~$165.0 vs ~$235.5 today.

KEY METRICS:

- Revenue $200.6B, +20% y/y — fastest growth in four years; beat consensus by ~$4B

- Operating income $27.5B, +43%; operating margin 13.7% — the highest quarterly margin in Amazon's history

- AWS revenue $42.2B (+37%, fastest in 18 quarters); AWS operating income $16.6B (+64%), 39.4% margin

- Segment mix: AWS is 21% of sales but 61% of company operating profit; North America $116.2B (+16%), International $42.2B (+15%)

- Advertising $19.8B (+26%); third-party sellers $46.8B (+16%); online stores $70.4B (+15%); Prime subscriptions $13.7B (+12%)

- Reported net income $62.6B / $5.75 diluted EPS — includes $53.4B pre-tax non-operating gain, primarily the Anthropic mark. Ex-mark, ~$1.94/share

- Free cash flow TTM −$7.6B, vs +$18.2B a year ago; operating cash flow TTM +33% to a record $161.4B

- Capex TTM $169.0B net (+64%); depreciation TTM $75.2B — only 44% of capex

- Stock-based comp $6.04B, DOWN 8% y/y while revenue grew 20% — 89bps of the 226bps margin gain; headcount +3% to 1,595,000

- Balance sheet: total assets crossed $1.096T; long-term debt $128.9B (from $65.6B in Dec); net cash +$57B swung to ~−$6B net debt

- Q3 2026 guide: revenue $197–202B (+9–12%), operating income $22.5–26.5B vs $17.4B in Q3 2025

What to watch: What would turn us bullish: a capex plateau. Amazon has done this before — capex peaked in 2022, fell in 2023, and free cash flow exploded. If management signals FY2027 capital spending is flat rather than up, our fair value moves toward $225. What breaks the thesis further: AWS operating margin rolling over as depreciation catches up; a second and third quarter of negative FCF with capex still climbing; and evidence that retail segment profit ex-advertising is genuinely shrinking. We'd want the low $140s before calling it a buy.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Reddit, Inc. (RDDT) Q2 2026 — Reddit reported Q2 2026 after the close on July 30. Revenue was $804.9M, +61% y/y — the eighth consecutive quarter above 60% — and roughly $75M above consensus against management's own $715–725M guide. Diluted EPS was $1.25 vs ~$0.96 expected. Net income $252.8M (31.4% margin, +183%). Adjusted EBITDA $342.8M (42.6% margin). Free cash flow $260.7M. GAAP gross margin 91.3%. Ad revenue $762M (+64%); Other revenue, which is the Google and OpenAI data-licensing contracts, was $43M (+24%). Q3 guidance: revenue $860–870M and adjusted EBITDA $385–395M. The stock closed at $178.07 and fell to about $155.80 after hours, a drop of roughly 12.5%, after CEO Steve Huffman wrote that search referrals were "choppy in the quarter, and traffic was more volatile later in the quarter."

The beat was real and it was everywhere. What moved the stock was the user table. Global daily uniques rose 18% to 130.3M — but logged-IN daily uniques rose only 7%, and in the U.S. logged-in daily uniques grew 1% (23.1M vs 22.9M). All of the growth was logged-OUT drive-by traffic: +27% globally, +41% internationally. That traffic arrives through search results Reddit does not control. Revenue grew 61% on 18% user growth because ARPU rose 36% to $6.18 — U.S. ARPU rose 51% to $11.85 on 6% user growth. Reddit is monetizing the audience it already has, very hard, very fast. Two more numbers almost nobody flagged: Reddit paid $4.0M of tax on $256.8M of pre-tax income — a 1.6% effective rate — and the accumulated deficit is down to $214.3M from $671.1M six months ago, so that shield runs out within a quarter (fully taxed, this quarter's $1.25 is about $0.98). And Q3 stock-comp guidance of $140–155M against $107M in Q2 means adjusted EBITDA of ~$390M converts to roughly $238M of GAAP operating profit, barely above Q2's $231.7M on $60M more revenue. Finally: this is the last quarter Reddit will report the logged-in versus logged-out split at all.

THE CALL: HOLD (3/5, FAIR AFTER THE FALL — NOT YET CHEAP) — base-case value ~$160.0 vs ~$178.07 today.

KEY METRICS:

- Revenue $804.9M, +61% y/y — 8th consecutive quarter above 60%; beat consensus by ~$75M and management's own $715–725M guide

- Advertising revenue $762M (+64%); Other revenue (Google + OpenAI data licensing) $43M (+24%) — just 5.4% of total

- U.S. revenue $638.1M (+56%); International $166.8M (+84%)

- GAAP gross margin 91.3% (vs 90.8%); operating income $231.7M, a 28.8% margin vs 13.6% a year ago

- Net income $252.8M (31.4% margin, +183%); diluted EPS $1.25, basic $1.31

- Adjusted EBITDA $342.8M (42.6% margin, +106%); operating cash flow $261.9M; free cash flow $260.7M; capex $1.1M

- Income tax expense $4.0M on $256.8M of pre-tax income — a 1.6% effective rate; fully taxed at 23%, EPS is ~$0.98

- Accumulated deficit $214.3M, down from $671.1M at Dec 31, 2025 — the NOL shield runs out within about a quarter

- Stock-based comp $101.0M (12.5% of revenue); SBC + related taxes $106.8M; Q3 guided to $140–155M

- DAUq 130.3M (+18%); logged-in DAUq 52.6M (+7%); logged-out DAUq 77.7M (+27%)

- U.S. DAUq 53.2M (+6%); U.S. logged-in DAUq 23.1M (+1%); U.S. logged-out DAUq 30.1M (+10%)

- WAUq 514.6M (+24%) — crossed half a billion; International logged-out DAUq +41%

- ARPU: global $6.18 (+36%), U.S. $11.85 (+51%), International $2.26 (+31%)

- Cash + marketable securities $2.79B, zero debt; repurchased 1.5M shares for $235M at an average $157.57

- Diluted weighted shares 202.0M (+1.3% y/y); total fully diluted shares outstanding 207.0M (+0.2%)

- Opex: R&D $231.3M (+18%), S&M $195.9M (+62%), G&A $75.7M (+10%), cost of revenue $70.3M (+53%)

- Q3 2026 guidance: revenue $860–870M (+47–49%); adjusted EBITDA $385–395M

- Reddit will stop reporting the logged-in / logged-out DAU split after Q2 2026

What to watch: What we're watching: evidence the weekly-to-daily conversion is working — new app-user retention was up 50% y/y off a small base, and total U.S. daily users compounding at double digits without help from search would dissolve most of the bear case. The risks: total daily uniques going flat as referrals fade; stock comp outgrowing revenue for a second and third quarter; and the new blended user metric being used to obscure a deteriorating mix. We'd want the low $130s — a genuine ~20% margin of safety — before calling it a buy.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Monolithic Power Systems, Inc. (MPWR) Q2 2026 — Monolithic Power Systems reported Q2 2026 after the close on July 30. Revenue was a record $980.6M, +21.9% q/q and +47.6% y/y. Non-GAAP EPS was $6.50, about 10.5% above consensus; GAAP diluted EPS was $5.22. GAAP gross margin 55.2%, non-GAAP 55.6% (UP 10 bps q/q). Non-GAAP operating income $367.7M, a 37.5% margin. Q3 guidance of $1.14–1.16B came in roughly 16% above the Street, and the board added $500M to the buyback (now $1B authorized). The stock closed at $1,316.18 and rose about 10% after hours. But Enterprise Data (AI/server power) supplied nearly all the growth — +164.3% y/y to $380.6M, now 38.8% of revenue — while the other five end markets grew a combined 15.3%. And operating cash flow was $227.9M, BELOW the $237.6M generated a year ago on a third less revenue. Our owner-earnings DCF lands near $900. Our call: HOLD, 2/5.

The headline is spectacular and it deserves to be. What the headline hides is where the growth came from and where the cash went. Enterprise Data — power management for AI accelerators and servers — went from $144.0M to $380.6M, up 164.3%. Strip that single end market out and the other five combined went from $520.6M to $600.0M: 15.3% growth. Storage & Computing grew 2.3%. Consumer shrank 4.8%. In four quarters, one end market went from 21.7% of MPWR to 38.8%. Meanwhile operating cash flow fell year over year — $227.9M against $237.6M — as receivables rose 76%, inventory rose 38% to $675.8M, and capex climbed to fund a capacity goal management just pushed beyond $6B. Cash conversion went from 35.8% of revenue to 23.2%. Three things almost nobody covered: (1) ex-Enterprise Data, MPWR is a mid-teens grower, not a 48% grower; (2) the standard 'hyperscale mix will crush gross margin' bear case was falsified this quarter — non-GAAP gross margin went UP as AI mix jumped six points, and Q3 is guided to 55.4–56.0%; (3) the earnings are real but they are not yet cash, and at ~$65B of market cap the price already embeds roughly 26% annual free-cash-flow growth for a decade.

THE CALL: HOLD (2/5, A SUPERB BUSINESS AT A PRICE THAT NEEDS A DECADE TO GO RIGHT) — base-case value ~$900.0 vs ~$1316.18 today.

KEY METRICS:

- Revenue $980.6M, +21.9% q/q and +47.6% y/y — a company record

- Non-GAAP diluted EPS $6.50 (beat by ~10.5%); GAAP diluted EPS $5.22

- GAAP gross margin 55.2% (−10 bps q/q); non-GAAP gross margin 55.6% (+10 bps q/q)

- Non-GAAP operating income $367.7M — 37.5% margin, +2.7 pts y/y; GAAP operating income $303.9M

- GAAP opex $237.2M / non-GAAP opex $177.6M; stock comp $53.5M (incl. ~$1.8M in COGS)

- End markets: Enterprise Data $380.6M +164.3% | Storage & Computing $199.8M +2.3% | Automotive $157.1M +8.2% | Communications $131.5M +78.3% | Consumer $56.8M −4.8% | Industrial $54.8M +17.3%

- Enterprise Data is 38.8% of revenue, up from 32.7% in Q1 2026 and 21.7% in Q2 2025

- Ex-Enterprise Data revenue: $600.0M vs $520.6M a year ago (+15.3%)

- Operating cash flow $227.9M vs $250.3M in Q1 2026 and $237.6M in Q2 2025 — cash conversion 35.8% -> 23.2% of revenue

- Cash + short-term investments $1,413.8M, no debt; AR $343.6M (32 DSO); inventory $675.8M (140 days, 121 on next-quarter revenue)

- Q3 2026 guide: revenue $1,140–1,160M; non-GAAP GM 55.4–56.0%; non-GAAP opex $201.2–205.2M; 15% non-GAAP tax; 49.1–49.5M diluted shares

- Board added $500M to buyback ($1B authorized, ~1.5% of market cap); FY2025 actual repurchases were under $8M

- Dividend raised to $2.00/quarter (from $1.56) — ~$394M/yr, ~0.6% yield

- Capacity goal extended 'significantly beyond $6B'; initial DDR5 memory-component orders; sampling high-voltage AC-to-DC for 800V data centers; >1,500 new automotive sockets shipped YTD

What to watch: What we're watching: Enterprise Data holding this growth rate into 2027 with revenue tracking toward ~$7B; and — more important — operating cash flow re-converging with net income as the working-capital build normalizes. Either would move us more bullish. The risks: AI power orders digesting (one flat Enterprise Data quarter removes roughly two-thirds of company growth), the other five end markets staying stuck in the mid-teens, and capex staying elevated to fund the >$6B capacity goal. At ~43x the earnings run-rate its own Q3 guide implies and a ~1.3% free-cash-flow yield, there is no cushion. Our add zone is $900–$1,000.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

Apple Inc. (AAPL) Q3 FY2026 — Apple reported fiscal Q3 2026 (quarter ended June 27) after the close on July 30. Revenue was $109.42B, +16% y/y, beating the ~$108.7B consensus. Diluted EPS was $2.02, +29%, versus ~$1.89 expected. Gross margin was 50.1%. Every geographic segment set a June-quarter record; iPhone (+21.7% to $54.25B), Mac (+28.7% to $10.35B) and Services (+12.1% to $30.74B) all set records, and Greater China grew 22.4% to $18.82B. The stock closed at $333.43 and then fell about 6% after hours, to roughly $313, on the September guide. Why: strip the tariff refunds and gross margin runs 49.3% (March) to 48.1% (June) to a guided ~46.5% (September) — 280 bps in two quarters, which the CFO said is more than 100% explained by memory cost. Our owner-earnings DCF lands near $230. Our call: HOLD, 3/5 — hold for the quality, don't buy here.

The headline was flawless and the market still sold it. Here is what the headline hides: $2.02 of EPS includes $0.11 from tariff refunds, and the 50.1% gross margin includes about 2 points of the same. Ex-refund, that's $1.91 and 48.1% — still June-quarter records, but a very different base for 2027. Tim Cook said Apple raised iPad and Mac prices because it is in "a 100-year flood on memory pricing, with exponential increases," that DRAM has three suppliers, and that memory pricing keeps climbing past September. The balance sheet shows the hedge: inventories nearly doubled from $5.7B at fiscal year-end to $11.1B while revenue grew 16% — and Cook said that carry-in benefit decays after September. Three things almost nobody covered: (1) the Services flywheel inverted — Products grew 18% while Services grew 12%, so Apple's margin expansion came from hardware, not from high-margin mix; (2) nine-month capex was $6.8B, DOWN 28% y/y, under 1.5% of revenue, while R&D rose 32% — Apple is the only mega-cap running its AI bill through the income statement instead of the balance sheet; (3) the September revenue guide-down to +9-11% is a demand-forecast problem, not weak demand — Cook said iPhone and Mac are outselling Apple's own forecast and advanced-node supply can't keep up. This was also Cook's 90th and final earnings call; John Ternus becomes CEO on September 1 and inherits the December quarter management refused to guide.

THE CALL: HOLD (3/5, A MAGNIFICENT BUSINESS AT AN UNFORGIVING PRICE) — base-case value ~$230.00 vs ~$333.43 today.

KEY METRICS:

- Revenue $109.42B, +16.4% y/y (June-quarter record)

- Diluted EPS $2.02, +29% ($1.91 excluding $0.11 of tariff refunds)

- Gross margin 50.1% (48.1% ex-tariff refunds); Products 40.1%, Services 75.6%

- iPhone $54.25B +21.7% | Mac $10.35B +28.7% | Services $30.74B +12.1% | iPad $6.19B -5.9%

- Greater China $18.82B, +22.4% y/y (nine months +30%)

- R&D $11.73B, +32.3% y/y — 10.7% of revenue

- Nine-month capex $6.80B, -28% y/y; nine-month operating cash flow $117.0B, +43%

- Inventories $11.09B vs $5.72B at Sept 27, 2025 (+94%)

- Cash & securities ~$147B vs ~$84B debt (~$62B net cash); $25.8B buybacks + $4B dividends in the quarter

- Q4 FY26 guide: revenue +9-11%, gross margin 47-48% (incl ~1pt tariff refunds), opex $19.1-19.4B, tax ~16.5%

What to watch: What we're watching: DRAM pricing rolling over, which would let the ~46.5% underlying gross margin snap back toward 49%; the September supply constraints clearing so deferred iPhone and Mac revenue lands in December; Services re-accelerating once the ~2.5pt FX drag laps; and Siri AI actually driving iCloud+ upgrades. The risks: memory costs climbing past September as Cook warned, the inventory buffer emptying, gross margin printing a 45-handle in FY27, and Services decelerating below 10% as management's own guide implies. At ~38x trailing earnings and a 2.8% free-cash-flow yield there is no cushion.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.

FormFactor, Inc. (FORM) Q2 2026 — FormFactor (FORM) reported Q2 FY2026 (quarter ended June 27) on July 29. Revenue was a record $258.2M, +14.2% q/q and +31.9% y/y, $18.2M above the midpoint of the company's own $235-245M guide. Non-GAAP EPS of $0.82 crushed the ~$0.61 consensus (a 34% beat); GAAP EPS was $0.71 on $56.2M of net income. Non-GAAP gross margin hit 53.3% (+430 bps q/q). Q3 revenue is guided to $270M +/- $10M vs ~$247M consensus, with $0.86 non-GAAP EPS. The stock fell 27% in the eight sessions into the print, then rose 26.2% on it, closing at $105.28 — three cents below where it traded on July 20. Why we're cautious: the CFO said the sustainable non-GAAP gross margin is ~51%, not 53.3%; Q3 DRAM revenue is guided flat with a shift out of HBM into DDR; FY26 free cash flow is only ~$85M (a ~1% yield) after $140-170M of Farmers Branch capex; and $105.28 requires 18.2% owner-earnings growth for a decade. Our owner-earnings DCF lands at ~$70. Our call: HOLD, 3/5.

A genuinely outstanding quarter attached to a genuinely stretched price. The good: an all-time revenue record of $258.2M, a 34% EPS beat, non-GAAP gross margin up 1,500 bps over four quarters, EPS tripled, and a Q3 guide $23M above consensus. High Bandwidth Memory was ~two-thirds of DRAM revenue, the Systems segment set a record at $48.5M (+74% q/q), and co-packaged optics — guided at $10-20M for 2026 — will clear $20M by the end of Q3 alone. FormFactor is a real AI-supply-chain toll booth: a probe card is a consumable engineered for one specific chip design, so revenue tracks wafer starts AND the rate of design change. The catch: the CFO explicitly broke the 53.3% gross margin into thirds — a third durable, a third volume, a third non-recurring (IEEPA tariff refunds and precious-metal reclaim) — and said the sustainable baseline is ~51%. Q3 revenue growth decelerates from +14.2% to +4.6%, DRAM goes flat with a mix shift from HBM to DDR, disclosed 10%+ customers are 35% of revenue, and HBM share is strong at only two of the three major manufacturers. Buybacks are zero while $140-170M goes into the new Farmers Branch, TX plant, which isn't accretive until 2028. And in the last cycle, a 14% revenue decline produced a 39% EPS drawdown.

THE CALL: HOLD (3/5, A REAL TOLL BOOTH, ALREADY PRICED THROUGH ITS OWN 2030 TARGET) — base-case value ~$70.00 vs ~$105.28 today.

What to watch: The ~51% non-GAAP gross margin baseline actually holding in Q4 once the IEEPA tariff refunds are gone; DDR replacing HBM in the Q3 DRAM mix without giving back margin; the GPU probe card revenue that starts shipping this quarter showing up as a real number; and co-packaged optics running well past $20M for the year. The risks: the DRAM mix shift proving expensive, Farmers Branch inefficiency running past 2027, a competitor closing the gap at the third HBM manufacturer, and the memory cycle itself — in 2021-2023 a 14% revenue decline produced a 39% EPS drawdown.

Also on YouTube: @ChargedAlpha

DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.