Wasteland Capital
Insane Q4 print from $GOOG. Revenue accelerating yet again to +18% (+16 last Q). Cloud+48% (What. The. F*ck?) 😳. Search +17% (it was supposedly dead, hahaha). Margins strong, EPS +31%, scaling well. ‘26 Capex guide $175-185bn = demand driven. Gemini app now 750m users. 👏👏👏 https://t.co/0U3ET7cLw0
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The Transcript
e.l.f. Beauty double beat + raised FY 26 outlook

CEO: "We remain confident in our ability to grow market share and deliver best-in-class growth in beauty, as reflected by our raised fiscal 2026 outlook."

$ELF: +14% AH https://t.co/bPXqPRPq8X
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The Transcript
Snap CEO: "Our Q4 results began to reflect the impact of our strategic pivot toward profitable growth, translating into revenue diversification and meaningful margin expansion."

Authorizes a $500M buyback

$SNAP: +6% AH https://t.co/SII7Mnl3x1
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Bourbon Capital
$GOOG CEO: More than 120,000 enterprises use Gemini including AI unicorns
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Dimitry Nakhla | Babylon Capital®
56% incremental operating margins on 48% YoY growth for Google Cloud ☁️ — and the first quarter Cloud operating margins reached 30%.

$GOOG $GOOGL https://t.co/Hge7j1Z9E3

Chris Hohn, founder of TCI, views high incremental margins as one of the strongest signals of a company’s moat & pricing power💸

Incremental operating margin tells you how much additional operating income a business generates for every additional $1 of revenue.

Here’s how to calculate it:

Pick two periods (Year 1 → Year 2)

Year 1 Revenue: $10B
Year 2 Revenue: $12B
Δ 𝐂𝐡𝐚𝐧𝐠𝐞: $𝟐𝐁

Year 1 Operating Income: $2B
Year 2 Operating Income: $3B
Δ 𝐂𝐡𝐚𝐧𝐠𝐞: $𝟏𝐁

𝐈𝐧𝐜𝐫𝐞𝐦𝐞𝐧𝐭𝐚𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐌𝐚𝐫𝐠𝐢𝐧 = Δ 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐈𝐧𝐜𝐨𝐦𝐞 / Δ 𝐑𝐞𝐯𝐞𝐧𝐮𝐞

So: $1B / $2B = 50%

𝘔𝘦𝘢𝘯𝘪𝘯𝘨: 50 cents of every new $1 of revenue fell to operating profit.
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Why this matters: High incremental margins usually signal low incremental costs, pricing power, & structural operating leverage — the traits that allow a great business to compound faster as it scales. It’s one of the cleanest ways to see whether a company’s moat is strengthening & efficiently scaling.

I’ve included 4 high-quality stocks with their incremental operating margins since 2021 for further example 👇🏽

$FICO $MSFT $MA $NFLX - Dimitry Nakhla | Babylon Capital®
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The Transcript
$ARM: -8%AH

CEO: "Arm delivered a record revenue quarter as demand for AI computing on our platform continues to accelerate. Record royalty results in the third quarter reflect the growing scale of our ecosystem, as customers design the Arm compute platform into next-generation systems across cloud, edge, and physical environments to deliver high-performance, power-efficient AI. The fundamentals of the Arm business have never been stronger."
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The Transcript
Alphabet: "In February 2026, Waymo announced an investment round of $16B, the significant majority of which was funded by Alphabet" $GOOG $GOOGL https://t.co/2ussWBVTSE
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Bourbon Capital
$GOOG CEO: On Average, every day in Dec 2025, over 1 million Yt channels used our new AI creation tools
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The Transcript
Alphabet CEO: "We were able to lower Gemini serving unit costs by 78% over 2025 through model optimizations, efficiency and utilization improvements." $GOOG $GOOGL
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