Ryan Reeves Profile picture
Oct 1, 2020 • 15 tweets • 3 min read
Guess how much Amazon, Alphabet, Apple, and Microsoft have spent on CapEx and R&D over the past decade?

💰 $818 billion 💰

Add Facebook in there and it's $915 billion

Some clarifications:

1. All numbers are in billions
2. Source = annual reports
3. Years are 2010-2019

Let's dive right in...

CapEx (inc. capitalized lease payments): $89.8
R&D (tech+content): $141.1

Total: $230.9 Image

CapEx: $111.1
R&D: $123.0

Total: $234.1 Image

CapEx: $92.5
R&D: $78.3

Total: $170.8 Image

CapEx: $64.4
R&D: $118.0

Total: $182.4 Image

CapEx: $48.1
R&D: $48.4

Total: $96.5 Image
Add that up and you get $915 billion.

And that's just CapEx and R&D.

So the top 5 big tech companies have invested nearly $1 trillion back into innovation over the past decade.
If you total the amount of operating cash flow for the same period for all 5 companies, it's:

💰 $1.48 trillion 💰

For free cash flow:

💰 $1.03 trillion 💰

That means these 5 giants invested roughly 90% of their free cash flow into CapEx and R&D.
A few more observations:

1. Apple hauled in ~ 10x the amount of free cash flow vs. Amazon.

Apple = $486 billion
Amazon = $50 billion

Amazon did spend $60 billion more on CapEx+R&D but the scale of Apple is pretty unbelievable.
2. Facebook grew its CapEx+R&D from less than $440 million in 2010 to $28.7 billion in 2019.

That's a CAGR of nearly 60%.
3. Every one of these companies had a free cash flow conversion rate of over 100% (cumulative FCF/cumulative net income).

Alphabet was the lowest at 103%.
4. Amazon and Microsoft had the biggest disparity between R&D and CapEx spend.

Both of them had $50 billion more in R&D.

The next closest was Alphabet with $10 billion more.

Facebook was about the same for each.

Apple had $14 billion more in CapEx.
5. The disparity was surprising in R&D vs. CapEx because AMZN and MSFT are the #1 and #2 in the cloud.

I would've guessed CapEx to be higher to build out all those data centers.

The combined market caps for these 5 companies is now about $7 trillion.

That's equivalent to the GDPs of India, France, and Italy...COMBINED.

Just mind-blowing scale 🤯

• • •

Missing some Tweet in this thread? You can try to force a refresh

Keep Current with Ryan Reeves

Ryan Reeves Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!


Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @RyanReeves_

Aug 12

Jeff Green being his usual self.

Here were three great sections in TTD's call:

Green (paraphrased):

Oh you think Netflix picking Microsoft is cool? Yeah, well I initiated that Xandr-Microsoft connection.

"we have gained more market share...than at any period in our history"
Read 4 tweets
Aug 11

Will try to post 5 interesting sections from earnings calls as we finish out earnings season...
2/6 Progyny on why a recession won't hurt them: Image
3/6 From yesterday's JP Morgan conference. Buying customer-sourced cars now makes up the "lion's share" of retail inventory: Image
Read 6 tweets
Jul 2
I've probably read 1,000 annual reports (10-K's).

Here's how to read one efficiently and effectively.

1/ The first step is finding them!

Use EDGAR (Electronic Data Gathering, Analysis, and Retrieval system): sec.gov/edgar/searched…

Then type in the company name.
2/ In this case, after clicking on Alphabet Inc (GOOG, GOOGL), you will come to a page that looks like this.

You would then click on the link that reads: "February 2, 2022 - 10-K: Annual report for year ending December 31, 2021"
Read 16 tweets
Jun 23
Texas Pacific Land Corp. is the most profitable public business I've ever seen.

Over the past 12 months, the company had 83% EBIT margins and 86% EBITDA margins.

So why are they so profitable?

1/ It all started 150 years ago.

In 1871, Texas & Pacific Railroad Company (T&P) was created through a federal charter to build a transcontinental railroad, extending west into what is now California, Texas, Arizona and New Mexico.
2/ After a decade, T&P had completed nearly 1,000 miles of track, giving them 3.5 million acres of land.

7 years later, T&P had gone bankrupt and that land was placed into a trust for the bondholders of the railroad.
Read 10 tweets
Jun 7
4 interesting sections from Cloudflare's investor day

1. Why they don't include Workers in the TAM
2. Why they are excited about Shopify as a partner
3. More optionality in connectivity down the road
4. Why Zscaler is inferior
1. They don't want to add Workers into the TAM for fear of "losing credibility"

Basically, the numbers get too big.
2. After studying platforms, one shortcut is getting embedded in another platform.

That's why they are working closely with Shopify. It's a shortcut to get more devs familiar with Workers.
Read 5 tweets
Jun 6

In July 2020, Nubank bought Cognitect, a software consultancy that created the programming language, Clojure.

Why does this matter?
In Nubank's 1st earnings call, the CEO said:

"We build our own technology, including our proprietary core banking system using our own programming language & that ultimately gives us the ability to control our destiny, continuing to scale our platform with lower and lower cost"

When Nubank started, the team used a database called Datomic which created an audit trail of all the data. And Datomic was built in the Clojure language.
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!


0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy


3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!