5 ms·

from the article: > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. revenue is not the same as profit. t

by kmlx 3y ago

from the article: > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. revenue is not the same as profit. this is basic stuff. from the same article: > Still, revenue is a more accurate depiction of a company’s size and profitability. it seems like this is rookie hour. then we look at the author's previous posts: https://proton.me/blog/big-tech-ipef https://proton.me/blog/big-tech-ipef With new trade deal, Big Tech wants to be above the law https://proton.me/blog/big-tech-bigger-fines https://proton.me/blog/big-tech-bigger-fines Why we need bigger fines for Big Tech got it. there is an axe to grind.

hef19898 3y ago
The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article.
- anticorporate 3y ago
  I don't think TFA failed to differentiate revenue and profit, though. I think the point is these companies have enough revenue to pay off the fines, and 358 days to return to profitability for the year, even starting out with an operating loss.
  - hef19898 3y ago
    And now you are mixing free cash flow, with revenue, with profits...
    - ethbr1 3y ago
      Instead of bikeshedding, you might suggest an alternative time-vs-income-based measurement that you think is better? It's obviously not profit, which it would be crazy to "require" to pay fines when looking at companies. So what would you suggest using as a meter stick?
      - hef19898 3y ago
        Revenue. Hard to manipulate (and doing so is illegal in itself), easy to measure and the top line is where it hurts. And no, I don't think fines should be high enough to destroy businesses the same way a speeding or parking ticket shouldn't bankrupt people.
        ethbr1 3y ago
        > The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article. I assumed from your earlier comment you had a problem with the article using revenue.
        hef19898 3y ago
        Base the fine on revenue, measure the time needed to pay the fine in profits or cash flow. That would show some basic financial and accounting literacy, the bare minimum I ask for if you want me ro take an article about financials seriously.
        ethbr1 3y ago
        Revenue + payment deadline based on cash flow makes sense to me too. If we're really serious about materially-impactful fines, they need to impact more than one quarter. And conversely, companies need to be free to amortize payment in ways that hurt but don't cripple them. F.ex. if Alphabet and Meta's entire 2024 would be down because of fines, the market would presumably apply more pressure on their leadership.
        luqtas 3y ago
        violating users privacy and acting as a hostile monopoly is ballparks different than receiving a ticket
        hef19898 3y ago
        The basic idea is the same so.
    - djbusby 3y ago
      Was the larger point (these companies are too damn big/powerful) so unimportant that it could be dismissed by lay-person usage of terms intended to highlight points of fact for gen-pop?
    - anticorporate 3y ago
      No one expects them to actually pay the fines with the exact pile of cash they've made in revenue this year (which, of course, isn't actually a pile of cash). You're missing the point, that the fines are nowhere large enough to be consequential. If the fines were anywhere close to large enough, the company would no longer able to operate their criminal business model profitably, and I would shed zero tears, even if it meant complete failure of the business. Any fine that merely reduces profit is effectively just a tax.
  - kortilla 3y ago
    7 days of pure loss on a company with 2% margin is enough to wipe out profitability for a year. People who use revenue are unqualified to spout any opinions on this stuff because it shows they lack a super basic understanding of how businesses function.
- lyu07282 3y ago
  I would be more surprised if HN didn't sprint to defend big tech, profit numbers are worthless because they can easily make those look however they want. Revenue is a much more useful indicator when looking at these giga corpos from the outside.
- chiefalchemist 3y ago
  Agree. It's safe to ignore such articles. On the other hand, we'd do ourselves a disservice if we ignored: a fine is not a fine if it doesn't cause pain. As it is, these relatively small fines to large companies are simply the cost of doing business. The behaviour does not change.
jsnell 3y ago
I don't expect it's about having an axe to grind, but about running a content marketing mill where neither factual correctness nor originality matters. (The proposed call to action for the "fines aren't big enough" problem is, after all, to sign up for a paid email service.) The poor guy has a quota to meet, and there was nothing in the news this week to use for rabble rousing, so the only option was to recycle some of the old content.
- hef19898 3y ago
  That is one field LLMs can disrupt for sure.
  - angra_mainyu 3y ago
    By automating producing more of the same drivel. "The more things change, the more they stay the same."
HumblyTossed 3y ago
> > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. > revenue is not the same as profit. this is basic stuff. And all of "Big Tech" isn't going to run and pay off their 2023 fines this week either. It's an illustration. This is basic stuff.
- subtra3t 3y ago
  It's an illustration that encourages straight-up incorrect financial ideas (like revenue = profit). This is basic stuff.
- pc86 3y ago
  I'm sorry but the moment you say "revenue is a more accurate depiction of a company's...profitability [than profit]" you've lost all credibility.
  - Terretta 3y ago
    on the contrary, profit is an accounting treatment see amazon, who famously strive to show no profit by plowing profits back into growth expense so return (aggregate all forms) on equity, and revenue, are more interesting, since one gives you vector and the other gives you scale. so it's one of those statements that seems right, then seems wrong, then seems right again, depending on your level of thinking about it // making no claims about the blogger, they could be in the first camp rather than the third
louthy 3y ago
Profit can be made to be 0 very easily though (a big capital investment, for example). So, it's hard to use that as a barometer of size.
- hermannj314 3y ago
  In what situations does a Capex hit the income statement? I thought only depreciation or amortization would hit profitability.
  - hef19898 3y ago
    A merger, all cash, could work. Or a stock buy-back. Or all kinds of shennenigans. Within limits so, at a certain point it becomes fraud.
    - hermannj314 3y ago
      Accounting confuses me. I thought both of those would only be asset transfers and not hit income statement I guess the EPS line would be impacted in a stock buy back, and that is on the income statement. I know companies play games with good will write-downs in the years after a merger.
      - hef19898 3y ago
        Accounting is confusing, and I am dar from an expert. Some basic knowledge is extremely helpful so, IMHO. It explains a ton of things happebing in a company, and being able to read your employers balance sheet, if you work for a public company, is eye opening sometimes.
        rented_mule 3y ago
        To your point, in Jeff Bezos' 2004 letter to shareholders(1) he writes about how free cash flow and GAAP profit are not the same. It's easy to assume that profit would be the same as how much more is left in the bank at the end of the year vs. the beginning of the year, but it's not. And understanding these things illuminated how Amazon was operating. I joined Amazon shortly after this letter, and internally the strategy was to minimize profit as the IRS would calculate it in order to pay no taxes while maximizing free cash flow. And it was built as a conceptual "dial" that Bezos could turn at any time to start making a profit. Wall Street did not understand this about Amazon for close to a decade after the dot com crash (or half a decade after he broadcast it in this letter). As a result, Amazon's stock was hammered because investors thought Amazon couldn't find a way to make money. All the while, they were plowing tons of excess money back into long term bets like massive distribution centers, optimizing shipping logistics, AWS (be the internet equivalent of utility companies), and Kindle (don't let anybody else cannibalize the paper book business). These were all being done with an eye toward massive future scale (e.g., at the time, many thought AWS was designed to use Amazon retail's excess server capacity, but it was the opposite... Amazon retail should fit in AWS' excess capacity). Nobody expected all this from a "glorified book store" who "couldn't figure out how to turn a profit". But they were looking past the growing free cash flow and massive R&D investments in the financial statement, all unburdened by taxes. ---- (1) https://www.sec.gov/Archives/edgar/data/1018724/000119312505070440/dex991.htm https://www.sec.gov/Archives/edgar/data/1018724/000119312505...
jmyeet 3y ago
Revenue can't really be hidden. Profit is an accounting decision. Like how companies sell their IP to an Irish subsidiary and then "license" it and pay "royalties". Profit margins for Big Tech are pretty healthy too so even if it's 7 days of revenue, it's likely not many more days of "profit". Also, those fines are a taxable deduction so let's not forget that.
paxys 3y ago
Companies can (and do) report net losses while spending billions per year on stock buybacks and executive compensation. Revenue isn't some magic number for company health but profit isn't either.
u32480932048 3y ago
Per some ads I vaguely recall, Proton seems to be positioning itself as a super sekure place where the gubment can't spy on you; Big Tech Bad seems to be a no-brainer SEO blog theme.
1vuio0pswjnm7 3y ago
The author is publishing on a VPN company website; probably on the Proton AG payroll and performing her job. Sell VPN services. It's really obvious. It's like reading something about companies fined for performing illegal disposal of carcinogens that potentially contaminate drinking water on a water purification company's website. It does not take a genuis to figure out the connection. What is less obvious and decisively more deceptive, IMO, are Big Tech blog communications. There is no small amount of material about computer software and hardware, and various projects, but not all that much on programmatic advertising and its great utility to mankind. Big Tech might sell some software and hardware, not nearly enough to pay these fines, but its "axe to grind" is data collection, surveillance and delivery of advertising services. The hardware and software are a Trojan Horse to support an online ad services business. Most of what is being discussed on these blogs is not for sale. They are not pitching advertising services, they are trying to attract audiences that will, knowingly or unknowingly, be targets for or otherwise support their efforts to conduct surveillance. VPN companies do not seem nearly as conniving.

by kmlx 3y ago

hef19898 3y ago

The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article.

anticorporate 3y ago
I don't think TFA failed to differentiate revenue and profit, though. I think the point is these companies have enough revenue to pay off the fines, and 358 days to return to profitability for the year, even starting out with an operating loss.
- hef19898 3y ago
  And now you are mixing free cash flow, with revenue, with profits...
  - ethbr1 3y ago
    Instead of bikeshedding, you might suggest an alternative time-vs-income-based measurement that you think is better? It's obviously not profit, which it would be crazy to "require" to pay fines when looking at companies. So what would you suggest using as a meter stick?
    - hef19898 3y ago
      Revenue. Hard to manipulate (and doing so is illegal in itself), easy to measure and the top line is where it hurts. And no, I don't think fines should be high enough to destroy businesses the same way a speeding or parking ticket shouldn't bankrupt people.
      - ethbr1 3y ago
        > The moment people fail to differentiate between revenue and profit, one can safely ignore the rest of the article. I assumed from your earlier comment you had a problem with the article using revenue.
        hef19898 3y ago
        Base the fine on revenue, measure the time needed to pay the fine in profits or cash flow. That would show some basic financial and accounting literacy, the bare minimum I ask for if you want me ro take an article about financials seriously.
        ethbr1 3y ago
        Revenue + payment deadline based on cash flow makes sense to me too. If we're really serious about materially-impactful fines, they need to impact more than one quarter. And conversely, companies need to be free to amortize payment in ways that hurt but don't cripple them. F.ex. if Alphabet and Meta's entire 2024 would be down because of fines, the market would presumably apply more pressure on their leadership.
      - luqtas 3y ago
        violating users privacy and acting as a hostile monopoly is ballparks different than receiving a ticket
        hef19898 3y ago
        The basic idea is the same so.
  - djbusby 3y ago
    Was the larger point (these companies are too damn big/powerful) so unimportant that it could be dismissed by lay-person usage of terms intended to highlight points of fact for gen-pop?
  - anticorporate 3y ago
    No one expects them to actually pay the fines with the exact pile of cash they've made in revenue this year (which, of course, isn't actually a pile of cash). You're missing the point, that the fines are nowhere large enough to be consequential. If the fines were anywhere close to large enough, the company would no longer able to operate their criminal business model profitably, and I would shed zero tears, even if it meant complete failure of the business. Any fine that merely reduces profit is effectively just a tax.
- kortilla 3y ago
  7 days of pure loss on a company with 2% margin is enough to wipe out profitability for a year. People who use revenue are unqualified to spout any opinions on this stuff because it shows they lack a super basic understanding of how businesses function.
lyu07282 3y ago
I would be more surprised if HN didn't sprint to defend big tech, profit numbers are worthless because they can easily make those look however they want. Revenue is a much more useful indicator when looking at these giga corpos from the outside.
chiefalchemist 3y ago
Agree. It's safe to ignore such articles. On the other hand, we'd do ourselves a disservice if we ignored: a fine is not a fine if it doesn't cause pain. As it is, these relatively small fines to large companies are simply the cost of doing business. The behaviour does not change.

jsnell 3y ago

I don't expect it's about having an axe to grind, but about running a content marketing mill where neither factual correctness nor originality matters. (The proposed call to action for the "fines aren't big enough" problem is, after all, to sign up for a paid email service.) The poor guy has a quota to meet, and there was nothing in the news this week to use for rabble rousing, so the only option was to recycle some of the old content.

hef19898 3y ago
That is one field LLMs can disrupt for sure.
- angra_mainyu 3y ago
  By automating producing more of the same drivel. "The more things change, the more they stay the same."

HumblyTossed 3y ago

> > As of seven days and three hours into 2024, they had already earned enough revenue to pay it all off. > revenue is not the same as profit. this is basic stuff. And all of "Big Tech" isn't going to run and pay off their 2023 fines this week either. It's an illustration. This is basic stuff.

subtra3t 3y ago
It's an illustration that encourages straight-up incorrect financial ideas (like revenue = profit). This is basic stuff.
pc86 3y ago
I'm sorry but the moment you say "revenue is a more accurate depiction of a company's...profitability [than profit]" you've lost all credibility.
- Terretta 3y ago
  on the contrary, profit is an accounting treatment see amazon, who famously strive to show no profit by plowing profits back into growth expense so return (aggregate all forms) on equity, and revenue, are more interesting, since one gives you vector and the other gives you scale. so it's one of those statements that seems right, then seems wrong, then seems right again, depending on your level of thinking about it // making no claims about the blogger, they could be in the first camp rather than the third

louthy 3y ago

Profit can be made to be 0 very easily though (a big capital investment, for example). So, it's hard to use that as a barometer of size.

hermannj314 3y ago
In what situations does a Capex hit the income statement? I thought only depreciation or amortization would hit profitability.
- hef19898 3y ago
  A merger, all cash, could work. Or a stock buy-back. Or all kinds of shennenigans. Within limits so, at a certain point it becomes fraud.
  - hermannj314 3y ago
    Accounting confuses me. I thought both of those would only be asset transfers and not hit income statement I guess the EPS line would be impacted in a stock buy back, and that is on the income statement. I know companies play games with good will write-downs in the years after a merger.
    - hef19898 3y ago
      Accounting is confusing, and I am dar from an expert. Some basic knowledge is extremely helpful so, IMHO. It explains a ton of things happebing in a company, and being able to read your employers balance sheet, if you work for a public company, is eye opening sometimes.
      - rented_mule 3y ago
        To your point, in Jeff Bezos' 2004 letter to shareholders(1) he writes about how free cash flow and GAAP profit are not the same. It's easy to assume that profit would be the same as how much more is left in the bank at the end of the year vs. the beginning of the year, but it's not. And understanding these things illuminated how Amazon was operating. I joined Amazon shortly after this letter, and internally the strategy was to minimize profit as the IRS would calculate it in order to pay no taxes while maximizing free cash flow. And it was built as a conceptual "dial" that Bezos could turn at any time to start making a profit. Wall Street did not understand this about Amazon for close to a decade after the dot com crash (or half a decade after he broadcast it in this letter). As a result, Amazon's stock was hammered because investors thought Amazon couldn't find a way to make money. All the while, they were plowing tons of excess money back into long term bets like massive distribution centers, optimizing shipping logistics, AWS (be the internet equivalent of utility companies), and Kindle (don't let anybody else cannibalize the paper book business). These were all being done with an eye toward massive future scale (e.g., at the time, many thought AWS was designed to use Amazon retail's excess server capacity, but it was the opposite... Amazon retail should fit in AWS' excess capacity). Nobody expected all this from a "glorified book store" who "couldn't figure out how to turn a profit". But they were looking past the growing free cash flow and massive R&D investments in the financial statement, all unburdened by taxes. ---- (1) https://www.sec.gov/Archives/edgar/data/1018724/000119312505070440/dex991.htm https://www.sec.gov/Archives/edgar/data/1018724/000119312505...

jmyeet 3y ago

Revenue can't really be hidden. Profit is an accounting decision. Like how companies sell their IP to an Irish subsidiary and then "license" it and pay "royalties". Profit margins for Big Tech are pretty healthy too so even if it's 7 days of revenue, it's likely not many more days of "profit". Also, those fines are a taxable deduction so let's not forget that.

paxys 3y ago

Companies can (and do) report net losses while spending billions per year on stock buybacks and executive compensation. Revenue isn't some magic number for company health but profit isn't either.

u32480932048 3y ago

Per some ads I vaguely recall, Proton seems to be positioning itself as a super sekure place where the gubment can't spy on you; Big Tech Bad seems to be a no-brainer SEO blog theme.

1vuio0pswjnm7 3y ago

The author is publishing on a VPN company website; probably on the Proton AG payroll and performing her job. Sell VPN services. It's really obvious. It's like reading something about companies fined for performing illegal disposal of carcinogens that potentially contaminate drinking water on a water purification company's website. It does not take a genuis to figure out the connection. What is less obvious and decisively more deceptive, IMO, are Big Tech blog communications. There is no small amount of material about computer software and hardware, and various projects, but not all that much on programmatic advertising and its great utility to mankind. Big Tech might sell some software and hardware, not nearly enough to pay these fines, but its "axe to grind" is data collection, surveillance and delivery of advertising services. The hardware and software are a Trojan Horse to support an online ad services business. Most of what is being discussed on these blogs is not for sale. They are not pitching advertising services, they are trying to attract audiences that will, knowingly or unknowingly, be targets for or otherwise support their efforts to conduct surveillance. VPN companies do not seem nearly as conniving.