Weekend Update #275
Thank you for your continued support and engagement. Each week, we're sharing what companies we're researching and the what, the who and the how that we think makes the companies interesting and unique. This roundup is brought to you weekly by a group of interns, creative minds, artists and investors who believe that through best in class investing along with the democratization of financial education we can do great things together. Enjoy, Explore and Share.
Equity markets closed April with the strongest monthly performance since November 2020, with the S&P 500 gaining 10.4%. For the week, the S&P 500 ended at new all-time highs, with 5 consecutive weeks of gains. Strong growth results from big tech companies this week, in addition to continued negotiations between the U.S. and Iran on reopening the Strait of Hormuz, drove market gains. To start the week, equity markets wavered on reports that OpenAI missed internal sales and user growth targets, reigniting some AI angst. On Thursday, Brent crude oil traded up to $126.41 per barrel, a new high since 2022, as reports indicated a lack of progress on U.S.-Iran negotiations could lead to another round of U.S. strikes. Friday’s trading introduced a renewed sense of calm as Iran officially responded to the U.S. proposal, demonstrating a continued dialogue, and Brent closed the week at $108.17 per barrel.
In economic data for the week, the April Consumer Confidence report beat economists’ expectations following positive consumer reactions to the U.S.-Iran ceasefire, offsetting lingering concerns over economic conditions and the labor market. The March Personal Consumption Expenditures report, the Federal Reserve’s preferred inflation gauge, showed prices rose 0.7% in the month and 3.5% year-over-year. Excluding food and energy, core PCE rose 0.3% month-over-month and 3.2% year-over-year, showing inflation pressures were relatively contained to energy in the month. March Personal Income was a positive surprise on economists’ estimates, rising 0.6% for the month, and Personal Spending also showed strength, rising 0.9%. Although, adjusted for inflation, Personal Spending only rose 0.2% month-over-month, showing that much of consumer spending is going toward increased energy prices. The advance report for Q1 2026 GDP showed 2.0% annualized growth, slightly below expectations but demonstrating a resilient economy. In a surprising show of strength, Initial Jobless Claims for the week ended April 25th fell to just 189,000 — the lowest level since 1969. Continuing Claims for the week ended April 18th were 1.785 million, a low since April 2024.
On Wednesday, the Federal Open Markets Committee announced its decision to hold interest rates steady at 3.50–3.75%. The committee voted 8–4 in favor of the action, the most dissents in an FOMC meeting since October 1992. Governor Stephen Miran preferred a rate cut action while Beth Hammack, Neel Kashkari, and Lorie Logan all favored more neutral statement language over the future direction of interest rates. The press conference was significant as it was Chairman Jerome Powell’s final meeting as Fed Chair prior to his term expiration on May 15th. During the public address and Q&A, Powell stated that he will not vacate his seat on the Board of Governors when his chairmanship expires, citing the importance of central bank independence and a desire to see political intervention with the Federal Reserve cool down. This would be a first for a Fed Chair since Arthur Burns in the 1970s, and it denies President Trump a third appointment to the board. Following Powell’s term, the focus shifts to incoming Chair Kevin Warsh, who was confirmed by the Senate Banking Committee on Wednesday in a 13-11 vote. Warsh will inherit a committee with split views over future interest rate decisions at a time when he is expected to favor a rate cutting bias.
Big tech earnings results were the key focus of the week, showing capital expenditures on AI infrastructure continue to accelerate. The increased CapEx outlooks for Microsoft, Meta, Alphabet, and Amazon reflect higher memory pricing as well as updated estimates of the compute capacity necessary to bolster future AI products. Mixed big tech reactions following the results showed investors are demanding more visibility into monetization potential to quantify ROI on this spend, but core revenue growth results remained robust across the big tech landscape. Investors will look to another big wave of earnings results next week, including Palantir, AMD, Shopify, and Coinbase, as well as the April jobs report, set for a Friday release.
Friday’s Close (Weekly Performance)
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Thank you Blue Room Senior Analyst JARED FENLEY.
Steve Huffman — Co-Founder and Chief Executive Officer
We’re excited to start the year off with a strong first quarter. As we’ve been building Reddit over the years, I’ve often reflected on and been inspired by the unique opportunity in front of us and the fact that Reddit is truly a one-of-one company. That idea came up again and again during Q1 with one of the most tangible proof points being our strong commercial results.
This marks our seventh consecutive quarter with revenue growth over 60% with industry-leading gross margins over 90% and adjusted EBITDA margin of 40%, and record cash-flow of more than $300 million. At the same time, our capital expenditures remained low at just $1 million, underscoring the advantage of Reddit’s capital-light model. When you look across the more than 300 publicly-traded tech companies, there’s only one that combines this type of growth, profitability, and efficiency, and that’s Reddit.
Our commercial success is differentiated because our community product is differentiated. What powers these results are Reddit’s raw materials. First, we have deeply engaged users who come to Reddit for high intent uses, authentic recommendations and answers to questions like what should I watch next, and what type of stroller is best for two kids? Second, we have an ads business that is built on context, interest, and commercial intent.
Around 40% of conversations on Reddit are commercial in nature, where people are actively discussing products, services, and purchase decisions. And these conversations are uniquely influential. 84% of shoppers say they feel more confident in their decisions after researching on Reddit. When you combine these two things, engaged communities and commercial intent, you create a powerful environment for advertisers.
We see this in the outcomes we’re delivering and in the continued scaling of our ads business and ARPU growth. Another reason Reddit stands out today is our position in the AI landscape. Reddit is built on more than two decades of human conversation, over 25 billion posts and comments, and every month our communities generate the equivalent of Wikipedia’s entire content library in new content. As AI becomes more prevalent, people increasingly seek out real human perspectives and in turn, AI models rely on these perspectives to train and power their products.
Scarce assets tend to become more valuable over time and authentic human conversation at scale is becoming increasingly rare. Reddit’s conversations are like oil for the modern Internet, a foundational resource powering the next generation of technology. On the user side, we are making steady progress, but we still have work to do to increase frequency and accelerate growth toward the levels we see on leading platforms. We believe Reddit has the potential to be one of a handful of scaled global platforms on the Internet.
We've had a remarkable start to 2026. Our relentless member focus continues to drive innovation across our business, leading to our 18th consecutive quarter of the Rule of 40, with a score of 72 reflecting 41% revenue growth and 31% EBITDA margins.
Notably, this was the second consecutive quarter that we have generated more than $1 billion in cash revenue. In Q1, we generated over $1 billion in cash revenue, consisting of approximately $690 million in cash revenue from net interest income and about $390 million in cash revenue from interchange fees, brokerage fees, technology and loan platform fees, and loan origination fees.
In fact, in both 2025 and 2024, more than 100% of our adjusted net revenue was cash revenue at $3.8 billion in cash revenue in 2025 and $2.7 billion in cash revenue in 2024. Our durable growth, with an acceleration in revenue growth and strong returns and profitability, is fueled by our consistent focus on innovation and brand building.
Our mission remains the same. We help people reach financial independence to achieve their ambitions, helping them get to the point where they have enough money to live where they want, have the size family they want, the house they want, the career they want, and retire when they want.
Other financial institutions pick and choose the products they offer based on how much money they can make off of their customers. And as such, they don't deliver the holistic experience people need to make their ambitions a reality. That's why SoFi delivers the Everything Financial app with unquestionably the most comprehensive set of digital financial tools and resources to help our members get their money right.
Our critical success factor is helping people spend less than they make and invest the rest. Savings is not enough. Saving will help you get by, but investing is critical to get ahead to achieve your dreams. In order to achieve this critical outcome, we must help our members borrow better, save better, spend better, invest better, and protect better. We cannot just offer the products that are the most attractive financially. We need to be there for our members, not just for the large financial decisions in their lives, but all the days in between.
It's not just our opinion that SoFi is the best. We are hearing it from others as well. In March, we ranked number one in the J.D. Power 2026 U.S. Investor Satisfaction Study for Do-It-Yourself Investing. This award validates our approach to building our invest product in a thoughtful, member-centric way, and we're excited to now be helping a record number of members invest for a better future. Also just this month, SoFi was named the number one U.S. bank by Forbes in their World's Best Banks ranking, beating out institutions that have been around for decades.
Vladimir Tenev — Chairman and Chief Executive Officer
Shiv, they told us before we went public that earnings calls aren't going to be very much fun, that they're going to be a chore, that actually being public wouldn't be very much fun. And I think part of what we're trying to do is improve the branding of being a public company. I think that's going to be pretty important. The branding of it has been very negative and maybe that's contributing to companies staying private longer and longer and retail shareholders being left out of all those potential returns. Hopefully you guys find this informative and also entertaining, and we can shift the perception of what it means to be a public company slowly but surely.
So we're back at our HQ in Menlo Park, with a growing audience of in-person folks, shareholders and analysts. Before I get into the meat of Q1, I want to highlight a historic milestone in our mission to democratize finance for all: Trump accounts. We announced a few weeks ago that Robinhood will be the broker and sole initial trustee for the Trump accounts under the direction of the US Department of the Treasury. Over 5.5 million American children are already signed up, and over 60 million are eligible. So these children will now experience the power of equity ownership in the US stock market, which we believe is the greatest engine of wealth creation in human history.
It's an incredible honor to be trusted by the United States Department of Treasury and to partner with BNY, America's oldest bank, which was appointed as financial agent to manage the program. By developing and managing the new Trump Accounts app, we're getting Robinhood technology in front of the next-generation of investors, 60 million of them. This is also a new way to extend Robinhood's mission beyond just retail and institutional to helping governments and building a public sector business, which we actually see as a big opportunity. Our hope and aspiration is that this should be the best technology product that the government has ever built or been associated with.
Now let's get to Q1. We're focused on a three-part strategy: number one in active traders; number one in wallet share for the next-generation; and number one global financial ecosystem. On active traders — if you're an active trader, we want you to feel like you're at a disadvantage trading anywhere besides Robinhood. In Q1 we saw record levels across prediction markets, futures, index options, shorting and margin. We also saw double-digit year-over-year growth in equity and option volumes.
Looking at prediction markets specifically, we're spending time getting ready for the Q2 launch of our JV with Susquehanna — our exchange Rothera — coming later this quarter. Robinhood is the largest retail brokerage firm in prediction markets and we've been one of the first to adopt the new asset class. Susquehanna is one of the largest market makers. With the launch of Rothera, this vertical integration gives us end-to-end control of the customer experience, including product selection and pricing.
Moving on to Robinhood Social: strong engagement. We've rolled out Robinhood Social to the first 10,000 customers. What we're hearing is they absolutely love verified profiles and verified returns and trades. The value prop for Robinhood Social, as opposed to other social media platforms, is you have a guarantee that customers have actual skin in the game with real positions and real returns. We're working to add new requested features on a weekly basis — things like livestream charts, expanded personal profiles, tools to find other traders — and we're bringing popular creators on the platform.
Cristiano Amon — President & Chief Executive Officer
Thank you, Brett, and good afternoon, everyone. Thanks for joining us today. In fiscal Q2 we delivered revenues of $10.6 billion and non-GAAP earnings per share of $2.65, with EPS coming in at the high end of our guidance. QCT revenues were $9.1 billion, with another quarter of record automotive revenues, as well as growth in IOT. Licensing business revenues were $1.4 billion.
Before I share key highlights from the business, I would like to provide some perspective on Qualcomm's current customer design cycles and the opportunities ahead. We are in a period of profound change, and it may not yet seem obvious to the financial community. The emergence of agentic AI workloads with OpenClaw as an early example are fundamentally changing user experiences across connected edge devices and reshaping our roadmap in every platform we develop. For agents to work efficiently, they must run continuously in the background, fuse sensor data into context, orchestrate multi-step tasks reliably, and deliver strong security. Today's install-based devices were not built for these new capabilities, and it represents a significant upgrade opportunity and expansion of our addressable market in the coming years.
Agent orchestration is predominantly CPU-bound, and Qualcomm has the world's best-performing CPU across smartphones, PCs, auto, and soon, the data center. Qualcomm's unparalleled connectivity solutions and power-efficient NPU for local models will also be key assets to delivering agentic AI experiences. No other semiconductor company matches the breadth and scale of our technology and product portfolio, which powers devices spanning milliwatts to kilowatts, from smart wearables to data centers. As a result, we're seeing a step function increase in strategic customer engagement, and it's changing how we think about the broad AI opportunity, as well as the speed of our diversification efforts.
Beginning with automotive. In Q2 we exceeded $5 billion in annualized revenues for the first time, and we expect to exit fiscal '26 at a run rate above $6 billion. This growth is driven by our fourth-generation Snapdragon Digital Chassis platform, which comprises connectivity, telematics, infotainment, as well as advanced driver assistance and automated driving. Notably, we have now enabled more than 1 million cars operating ADAS and autonomy on our Snapdragon Ride processors. By the end of the fiscal year, we will begin commercial shipments of our fifth-generation Snapdragon Digital Chassis platform. This represents the largest generation-to-generation content increase in Qualcomm's history, delivering 3x higher CPU throughput, a 3x increase in GPU capability, and 12x higher NPU performance while supporting in-vehicle agents and processing for Level 3 and Level 4 autonomous driving.
Looking ahead to fiscal '27. We expect continued share gains and increased content, particularly in ADAS. We're pleased with the performance of our automated driving stack with BMW, and we're seeing broad customer engagement from other leading automakers. Our recent announcements with Bosch and Wave are good examples of what's to come as we build on our proven platforms and self-driving stack and scale ADAS.
In IoT, agentic workloads and Edge AI are driving major product renewal design cycles. Overall, our pipeline is healthy and there is clear momentum for Qualcomm solutions. In Personal AI, we expect a significant increase in the choice of new smart glasses starting in the second half of the year. We believe this launches, combined with a rapid progress in agentic AI, will catalyze an inflection point in customer demand across this category.
Our 2026 Snapdragon X2 PC platforms are currently in production, and our world-class Orion CPU unlocks powerful, always-on agentic experiences, making it a true competitive differentiator. Agentic orchestrators, such as OpenClaw, Claude Desktop, Claude Code, OpenAI Codex Desktop, Perplexity Computer, CrewAI, AirMesh Agent, LangGraph, and HUMAIN ONE running on Snapdragon X2 are early proof points. A recent PCMag review of the ASUS Zenbook A16 notes that Qualcomm is now a serious challenger in the PC space and states, "the generational leap from the original Snapdragon X Elite to the X2 series is particularly striking. Qualcomm hasn't just caught up to the industry. In some cases, it's now helping to set the pace." In addition, our Hexagon NPU is the world's fastest for laptops delivering up to 85 TOPS. Together with our industry-leading CPU, which has the best on-device token generation rate, Snapdragon X2 delivers the full agent experience end-to-end and outperforms Intel's Panther Lake by nearly 30%.
Brent Navon — Analyst, Bank of America Securities
Maybe just to start, can you explain some of the drivers for the strong 1Q results and maybe help us bridge that to your second quarter and full year guidance, especially given all the momentum you have and political in the second half.
And then, just as a follow-up question. Can you also discuss the impact of memory prices are having on the Devices segment and maybe how you’re thinking about the total Devices segment?
Anthony Wood — Founder, Chairman and Chief Executive Officer
I’ll turn it over to Dan in a second to answer your actual question, but let me just say a few things.
First, I just want to say, that I’m very happy, super happy with the trajectory of our business. We’re on a great path and I’m really excited with how things are going. We delivered an outstanding quarter and are executing against our monetization initiatives. For example, advertising revenue grew 27% and our third-party partnership strategy is working. Adoption of Ads Manager is growing. And overall, we’re building a highly performant connected TV ad platform.
And then, subscription revenue grew 30%, driven by premium subscription signups. And we’re obviously expanding our Tier 1 partners in premium subscriptions. We recently added Apple TV in March, and this week, we announced Peacock. And of course, we just recently passed 100 million streaming households, which I’m very excited about. It’s a huge milestone for us. So, we’re focused on execution and we’re super well-positioned.
But I’ll let Dan take your exact question.
Dan Jedda — Chief Financial Officer and Chief Operating Officer
Let me actually just add on to what Anthony said, then I’ll answer your question and then I’ll turn it back to Anthony on the second part of your question.
But just quickly, as Anthony mentioned, Q1 was an outstanding quarter for us. Platform revenue grew 28% coming in ahead of our outlook, benefiting from the Olympics and Super Bowl, which contributed to an increase in subscriptions and M&E spend.
EBITDA margins more than doubled year-on-year to nearly 12%. And our $148 million of free cash flow for the quarter was our second highest free cash flow quarter on record and near margins of, free cash flow margins of nearly 16%. So, very, very strong quarter for us. We’re very excited about it.
To your specific question, regarding the bridge from Q1 to Q2, let me just say a few things. Please keep in mind that regarding our Q1 versus our Q2 guide.
First, we started to lap Frndly, the Frndly acquisition in Q2. So, excluding Frndly in Q1, subscription revenue growth was 23%.
Second, Q1 had the easiest comp with advertising, growing 12% year-over-year in Q1 of last year. That growth stepped up to 19% in Q2 of last year. And we’re comping this higher growth rate for the rest of this year in advertising, once you back out political in 2025.
And third, as I just mentioned, Q1 benefited from the Olympics and the Super Bowl. All that said, we expect Q2 platform to grow at a strong growth rate of 20% year-over-year, and I expect subscriptions and advertising, both to be around this level of growth rate.
For the full year, we increased our platform revenue guidance by over $100 million, or approximately 3 points of growth to nearly 21%. And we’re increasing our EBITDA and EBITDA margins. And I fully expect free cash flow to again be above adjusted EBITDA for the full year.
All that said, we have much stronger visibility into Q2. I said this last quarter into Q1, we just have much stronger visibility into Q2 versus H2, just given the macro environment. And so, as we gain better visibility into political and into other initiatives, we’ll provide updated guidance for H2. So, we’re just being a little conservative on our H2 outlook.
Mark Zuckerberg — Chief Executive Officer
All right. Hey everyone. Thanks for joining today. We had a strong quarter for our community, our business and our progress towards AI.
More than 3.5 billion people use at least one of our apps every day. We saw a small decrease in total family dailies due to internet outages in Iran and blocks in Russia, but otherwise trends across our apps are strong. Daily and monthly actives on Instagram and Facebook continue to grow, with video driving all time high engagement across both apps. WhatsApp continues to see strong momentum too, including in the U.S., and Threads continues on its trajectory to be the leading app in its category.
Our biggest milestone so far this year has been the release of our Muse family of models and our first model, Muse Spark, along with a significantly upgraded new version of Meta AI. This was the first release from Meta Superintelligence Labs, and it shows that our work is on track to build a leading lab. Over the past ten months, we have built the strongest research team in the industry and established the scientific and technical foundations to scale very advanced models. Spark is just one step on that scaling ladder, and we are already training even more advanced models.
But Spark has already made Meta AI a world class assistant that leads in several areas related to our vision of personal superintelligence, including visual understanding, health shopping, social content, local creating games, and more. We're hearing very positive feedback on it so far. We've seen large increases in Meta AI use since releasing the updates, and the Meta AI app has consistently been near the top of the app stores as well. Now that we have a strong model, we can develop more novel products as well.
Since I first wrote about our vision for personal superintelligence last year, we've been focused on delivering personal and business agents to billions of people around the world. Our goal is not just to deliver Meta AI as an assistant, but to deliver agents that can understand your goals and then work day and night to help you achieve them. My view of AI is very different from many others in the industry. I hear a lot of people out there talk about how AI is going to replace people.
Instead, I think that AI is going to amplify people's ability to do what you want, whether that's to improve your health, your learning, your relationships, your ability to achieve your personal career goals, and more. My view is that human progress has always been driven by people pursuing their individual aspirations, and I believe that this will continue to be true in the future. People will be more important in the future, not less. Meta believes in empowering individuals, and those are the kinds of products that we're going to build. And I believe that they're going to be some of the most important and valuable products of all time.
We are building a personal agent focused on helping people achieve the diverse goals in their lives. We are also building a business agent focused on helping entrepreneurs and businesses across the world use our tools and others to grow their efforts, reach new customers, and serve existing customers better. These agents will work together to form an ecosystem, and whether you use our personal or business agents to achieve your goals, I believe that the future will see a massive increase in entrepreneurship from people creating new things that they've always wanted to exist, but previously didn't have the tools to bring into the world.
We're already testing an early version of business AIs, and weekly conversations have grown 10x since the start of this year. We're also working on using Spark in our upcoming models to improve our recommendation systems and core business in Facebook, Instagram, and ads.
Kevin Engel — President and Chief Executive Officer
Amkor delivered a strong start to the year, achieving record first quarter revenue of $1.68 billion, up 27% year-on-year. We saw growth across all end markets and were encouraged by the breadth of demand we’re seeing across our technology platforms.
Communications delivered the strongest growth and mainstream posted its fourth consecutive quarter of both sequential and year-on-year growth. Leading chip companies continue to trust us for their advanced packaging and test needs. We are clearly benefiting from our partnerships and our leading technology as we execute on a growing set of advanced packaging programs.
Earnings per diluted share were $0.33, significantly higher than last year, reflecting disciplined execution and continued progress on our margin initiatives. Overall, this was a quarter that reflected momentum and demand, disciplined execution by our teams, and continued preparation for the advanced packaging ramps we expect in the second half of the year.
As we discussed last quarter, overall semiconductor demand is robust. The industry backdrop remains dynamic. We are closely monitoring export controls and evaluating trade policies. We see supply dynamics around advanced silicon, advanced substrates, and memory, and are managing these risks with agility alongside our customers and suppliers.
Some customer supplied materials are being delayed, causing non-linear loading, this has been expected, and we are prioritizing production where materials are available to minimize impact.
Uncertainty related to the geopolitical events in the Middle East have increased over the last few months. To date, we have not seen any supply disruptions related to these dynamics. However, conditions in the region are putting additional pressure on material pricing. We’re working closely with our customers to offset these increases across the supply chain.
Now, let me share an update on our strategic initiatives. First, elevating technology leadership. We continue to invest in advanced packaging platforms, including HDFO, Flip Chip, and Test. These are critical to next generation AI and high performance computing.
As discussed last quarter, we are engaged on several HDFO programs this year, and the newest data center CPU program is expected to be ramping this quarter. Our preparations in Korea remain on track to scale this program into high volume the second half of the year. Overall, we see increasing opportunities for the compute market from a diverse customer base.
Second, expanding our geographic footprint. In 2026, our priorities include meeting construction milestones of our Arizona facility and expanding manufacturing space in Korea.
In Arizona, we are excited to see the progress as we wrap up foundation work and move towards building steel construction. Construction of Phase 1 is planned to be completed in 2027.
In Korea, the new test building is on track for completion at the end of this year. This will provide incremental space to support data center demand going into 2027.
Third, enhancing our strategic partnerships and key markets. We continue to strengthen collaboration with customers across the ecosystem, including foundries, fabless companies, IDMs, and OEMs.
As part of our partnership engagement model, our customers are making contributions that help align technology roadmaps, support our capital investment, and enable rapid ramps as new capacity comes online.
Across all three pillars, we remain focused on margin improvements driven by operational excellence, increased utilization, favorable pricing, and a sustained mixed shift towards higher value advanced packaging. Our mainstream factories in the Philippines are seeing improving demand, and we’re continuing to optimize cost in Japan. Utilization of our advanced sites in Korea and Taiwan is increasing, improving profitability.
In just over three weeks, we will host our 2026 Investor Day. This will give us an opportunity to provide a deeper view into our strategic pillars. We will explain Amkor’s position as the semiconductor industry turns to advanced packaging for value creation.
We are well-positioned for this shift, and we are at the beginning of a multi-year value creation journey. We’re excited about our future. We look forward to sharing more of our story at the event on May 21.
I’ll now turn the call over to Megan to provide more details on our first quarter performance and near-term outlook.
Peter Huntsman — Chairman, President & Chief Executive Officer
Ivan, thank you very much. Thank you all for taking the time to join us this morning.
Before I begin my remarks about our company and recent events, I want to simply say, that I hope there is a quick and peaceful resolution to the ongoing conflict in the Middle East. Over the past 40 years, I've had the opportunity to visit every country bordering the Persian Gulf with the exception of Iraq. I have always been treated warmly and fairly by the people I've encountered. I hope that my comments do not come across as being callous in any way to the suffering and fear emanating from this region, as I address the economic impact of these events to our bottom line and industry.
From the first hours of this conflict, our number one commercial priority has been to increase prices enough to offset rising costs. I believe we've been successful in doing this. This will require continued communications with our customers and suppliers. And also, the discipline to make sure that we are not a shock absorber between raw material costs and finished product pricing.
Our next priority is operating our plants in a reliable manner to make sure that we have the product to meet our demand. Our operations during the first quarter and going into the second quarter have been excellent. From a sales perspective, we're seeing stronger than expected demand going well into the second quarter.
I would say that this is being brought about by three factors:
Number one, seasonality, as we move into the second quarter and the building season resumes across North America, Europe, and Asia.
Number two, customers who are buying ahead of the expected price increases that are being announced.
Number three, disruptions that have been seen in certain trade flows that have impacted supply.
An example of this would be some of our Maleic customers in Europe, who have become overly dependent on Chinese supplied maleic have seen a disruption in supply as raw materials and shipping costs have increased from that region.
These refactors are also happening at a time when most inventory levels are very low across many supply chains. These improved order patterns are being seen as we enter into the second quarter in most of our regions and across many of our products.
The obvious countervailing point to all of this is how long does it continue. I can't see order patterns that go through the month of June. But the guidance that we have shared from each division in Q2 reflects what we've seen to date.
Today that visibility is less clear as we look further into the quarter. I struggle to see how inflationary pressures, particularly in areas reliant on imported energy like much of Asia and Europe, will not see an inevitable downward pressure later in the year as consumer spending gradually shifts towards higher prices. To what degree this occurs is yet to be seen.
I am heartened to see the housing starts and durable good orders in the United States better than expected for the month of March. But I'm also keeping an eye on residential permits, a step that precedes construction starts down 11% for the month of March.
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