A top Dutch government minister said he’s confident the country’s coveted chip-equipment maker ASML will remain in the Netherlands following threats from the company to move its operations abroad.
Steven van Weyenberg, the Netherlands’ finance minister, told CNBC’s Karen Tso on Thursday that he isn’t worried by ASML’s statements threatening to leave the country. The company has since walked back the comments.
In a January call with investors, ASML CEO Peter Wennink said: “The consequences of limiting labor migration are large, we need those people to innovate. If we can’t get those people here, we will go somewhere where we can grow.”
His comments followed controversial plans by the Dutch to scale back tax breaks for highly skilled migrants and limit the number of foreigners who can attend Dutch universities.
ASML is core to the world’s semiconductor supply chain. The company makes extreme ultraviolet lithography (EUV) machines, which are critical to the semiconductor industry for manufacturing integrated circuits.
EUV machines generate an incredibly short wavelength of light in large quantities to print small, complex designs on microchips. The EUV light is created with tiny explosions of molten tin happening at extreme speeds and then bounced off mirrors that ASML says are the flattest surfaces in the world.
“I think many people, many countries would love to welcome ASML, but I think they’re strongly embedded in the Netherlands,” Van Weyenberg told CNBC Thursday.
The minster said he had been involved in discussions between the cabinet and ASML last month concerning the firm’s plans to grow in the Netherlands and whether there were enough roads, houses and skilled people from abroad to foster that growth.
“I’m very optimistic about ASML’s future and that it will be within the Netherlands,” he said.
ASML logo is seen at the headquarters in Veldhoven, Netherlands June 16, 2023.
Piroschka Van De Wouw | Reuters
The Dutch government last month launched a campaign dubbed “Operation Beethoven” in an attempt to address ASML’s concerns and convince them to stay in the Netherlands, Reuters reported.
The semiconductor-equipment maker has since ruled out a complete departure from the Netherlands, but the company remains unhappy with its home country’s approach to fostering growth.
“There is a considerable gap between the concerns of industry, and what we think is necessary, and what politicians think,” ASML CEO Peter Wennink told reporters after a meeting with the Dutch government in March, according to Reuters. If ASML can’t grow in the Netherlands “it can do so elsewhere”, he reportedly said.
Though the Dutch are still working to appoint a new government, plans previously approved by Parliament to cap the number of foreign students and scrap the skilled-migrant tax break have upset several businesses in the country, including ASML and Dutch chipmaker NXP.
More than 40% of ASML’s 23,000-strong workforce in the Netherlands are not Dutch.
The Netherlands has previously seen some of its multinational firms ditch its shores for greener pastures. In 2021, for example, oil major Shell decided to move its corporate headquarters and tax base to London from Amsterdam.
Meanwhile, Unilever, the Anglo-Dutch consumer goods firm, in 2020 moved forward with a plan to unify its headquarters in London, ending a hybrid structure that saw the firm dual-headquartered in both the U.K. and the Netherlands.
Britain’s high-growth technology firms have gripes of their own, however, in terms of how the government is encouraging foreign investment into tech startups, as well as the hiring of foreign labor following the country’s Brexit vote.
The trade block was imposed after the U.S. government tightened export controls on advanced semiconductors and chipmaking tools to China in October, building on previous rules.
Van Weyenberg said the Dutch government was cooperating with ASML and the U.S. on chip export controls on China.
“ASML is one of the crown jewels of the Dutch economy,” Van Weyenberg said. “They are really one of the basis of our growth model.”
“We want to support them, we actually help them to grow in the Netherlands. And I think there is a great future for them ahead also complying with all the rules that are on the playing table,” he added.
But he also warned that global fragmentation caused by fractures in the world economy puts a small and open economy like the Netherlands at risk.
He added that from a security risk perspective, “we have to also look at China and make sure they play by the same rules.”
Twilio CEO Khozema Shipchandler speaks at Twilio’s Signal event in Sao Paulo on Aug. 14, 2024.
Courtesy: Twilio
Cloud communications software maker Twilio on Thursday issued a hopeful profit forecast for the next few years.
The company sees its adjusted operating margin widening to between 21% and 22% in 2027 as part of a three-year framework for guidance. That’s higher than Visible Alpha’s 19.68% consensus. Twilio’s adjusted operating margin in the most recent quarter was 16.1%.
Twilio revealed its new guidance at a Thursday investor event. There, the company’s executives also committed to generating $3 billion in free cash flow over the next three years, compared with approximately $692 million in free cash flow for 2022, 2023 and 2024. The Visible Alpha consensus for Twilio’s 2025 through 2027 was $2.76 billion.
The company’s stock price rose more than 10% in extended trading after the company released its presentation for the event.
If 2024 was about rebuilding Twilio’s foundation, 2025 is all about execution, CEO Khozema Shipchandler told CNBC ahead of the company’s investor day.
“If we execute well in 2025, I think we write our own story from 2026 on,” said Shipchandler, who joined Twilio as finance chief after 22 years at GE in 2018 and replaced co-founder Jeff Lawson as CEO in January 2024.
Twilio, which sends text messages and emails for customers, did not issue a revenue growth target for 2027 at its Thursday event.
Management on Thursday also provided guidance for 2025. It called for $825 million to $850 million in free cash flow and the same amount in adjusted operating income, with 7% to 8% revenue growth year over year. The Visible Alpha consensus was $814 million in adjusted operating income and about $808 million in free cash flow. The 2025 revenue forecast was in line with LSEG consensus.
Over 9,000 AI companies are already building on Twilio services. That includes OpenAI, which in December announced the 1-800-CHATGPT service that draws on Twilio voice tools.
“We want to be able to take a bunch more of those, as well as large enterprises on,” Shipchandler said. “We’re kind of open season on both.”
Since activist investor Sachem Head Capital Management won a Twilio board seat last April, Twilio’s stock has jumped about 81%, as revenue growth has accelerated and losses have narrowed.
Twilio has an opportunity to show double-digit growth in 2025 and beyond, Mizuho analysts said in a note earlier this month. The analysts have the equivalent of buy rating on the stock.
By expanding into new areas, such as conversational artificial intelligence, Twilio says it can sell into a $158 billion total addressable market by 2028, compared with $119 billion when only focusing on the communications and customer data platform categories.
The company doesn’t believe acquisitions will be necessary to reach its new total addressable market, a spokesperson said.
Twilio’s preliminary results for the fourth quarter show 11% revenue growth, with adjusted operating income that exceeds the top end of the $185 million to $195 million range that the company issued in October. Analysts surveyed by LSEG had expected 7.9% revenue growth, and according to Visible Alpha, the adjusted operating income consensus was about $190 million.
Google on Thursday blamed a “data error” after users reported that former President Joe Biden was missing from the company’s search results.
Users on Wednesday noticed that results for search queries that included “US Presidents,” “United States Presidents” and “US Presidents in order” did not include Biden, who concluded his four-year presidential term on Monday. Users reported seeing a list of presidents ranging from George Washington to President Donald Trump. Some users posted screenshots of their results showing how the lists omitted Biden.
CNBC tried searching for U.S. presidents on Wednesday night and also encountered the results that omitted Biden. The company restored Biden to its results on Thursday.
“There was a brief data error in our knowledge graph,” a company spokesperson said in an emailed statement to CNBC on Thursday. A knowledge graph is a broad term used to describe a system that holds connected information. “We identified the root cause and resolved it quickly.”
Google’s search results for “United States Presidents” omitted President Joe Biden, who ended his four-year term Monday.
The mistake comes after Google CEO Sundar Pichai sent a memo to employees on Election Day in November, asking them to remember that people turn to the company’s services for “high-quality and reliable information.”
“Whomever the voters entrust, let’s remember the role we play at work, through the products we build and as a business: to be a trusted source of information to people of every background and belief,” Pichai wrote. “We will and must maintain that.”
Google’s Biden omission error comes as the company undergoes a turbulent period that has included several product mishaps and global scrutiny.
“It’s not lost on me that we are facing scrutiny across the world,” Pichai said in a December all-hands meeting first reported by CNBC.“It comes with our size and success. It’s part of a broader trend where tech is now impacting society at scale.”
Amid a year of product mistakes, Google launched Imagen 2, which turned user prompts into artificial intelligence-generated images. Immediately after it was introduced, the product came under scrutiny for historical inaccuracies discovered by users. The company pulled the feature for months before relaunching it, and Pichai told employees the company had “offended our users and shown bias.”
Google also faced problems with its AI summaries product AI Overview atop Google’s traditional search results, where users were also quick to find problems upon that launch.
Pichai has been among tech CEOs getting closer to Trump, who has previously alleged that Google intentionally buried search results of him. Those allegations are unproven.
Google donated $1 million to Trump’s inauguration fund, becoming one of several tech companies working to curry favor with the new administration. Pichai had a prominent standing position on stage alongside other tech CEOs at Trump’s inauguration Monday.
A sign is posted in front of Electronic Arts (EA) headquarters on March 30, 2023 in Redwood City, California. Video game maker Electronic Arts announced plans to cut 6 percent of its nearly 13,000 person workforce.
Justin Sullivan | Getty Images
Shares of Electronic Arts headed for their steepest drop since 1999 after the video game publisher cut its full-year bookings guidance, due mostly to challenges with its soccer franchise.
The stock plummeted 19% to $115.86 as of mid-day on Thursday. That would be its worst day on the market since the dot-com bubble and the stock’s third-biggest drop since EA’s public market debut in 1990.
For the fiscal third quarter, which ended Dec. 31, EA said late Wednesday that it expects to report about $2.215 billion in net bookings, versus previous guidance of $2.4 billion to $2.55 billion. Revenue in the December quarter was about $1.88 billion, with $1.11 in diluted earnings per share, the company said in a statement.
EA said that “Dragon Age” and its EA Sports FC franchise “underperformed our net bookings expectations.”
“Weakness has been seen largely from the Global Football franchises,” analysts at Roth MKM wrote in a report on Thursday, calling the earnings pre-announcement a “big stumble.” They have the equivalent of a hold rating on the stock.
EA said it expects net bookings for the full fiscal year, ending March 31, of between $7 billion and $7.15 billion, below previous guidance of $7.5 billion to $7.8 billion. EA says net bookings include physical game sales as well as revenue from online games.
The warning points to weakness in the most prominent soccer video game franchise since 1993. It used to fall under the FIFA branding, but in 2022 EA’s deal with FIFA ended and the last two EA soccer games have been sold as EA Sports FC.
The company also said that role-playing game “Dragon Age” had 1.5 million players during the quarter, which was about 50% below its expectations.
EA said it expects Global Football sales to be down on a year-over-year basis, and said that bookings from online sales, or live services, would also decline in fiscal 2025. The company’s soccer franchise, accounted for the majority of the live services shortfall.
EA plans to release full third-quarter results on Feb. 4.