I reflected about where to have valuation model discussions and think the valuation model topic is the right choice. (So people can follow along how those discussions evolve and learn from them) Therefore i moved your post here and posted it into the Q1 2025 topic for reference.
When it comes to valuation models I think overall i prefer to simply include a screenshot of our valuation model than creating those simplified overviews. This is easier for you and gives me more details faster on the individual line items.
Reading your overview of numbers it struck me immediately as a bit strange seeing this huge drop in operating margin from 41% to 35% so i had a closer look into the individual quarters and think
- G&A costs are more likely relatively evenly distributed through the year(?) There is no reason why they should be as low as >$1billion in Q4 2025 unless you predict strong special effects like in Q4 2024?
- Growth in Cost of Revenue should rise a bit more gradually and not jump as drastically in Q4 2025 as depreciations from Capex/Ai Investments rise gradually? I think even in Q2 it might be already a bit higher than your projections. (We could have a closer look how they depreciate and try to make sense of it)
- As a result of depreciations Cost of Revenue in general might be higher than projected by you in 2025 and in 2026 for sure. (It will likely be progressively more than 19% of revenue going forward) At the same time R&D cost might grow somewhat slower.
Do you agree with that? Overall it is absolutely crucial to model things correctly in our models so that i and others can rely on them when taking investment decisions.
If i had to guess i would assume to see an operating margin somewhat higher in Q2 2025 maybe at 38%.