WEBVTT - New FTX CEO's Reaction and Cisco's Earnings Beat 0:00:12.840 --> 0:00:15.440 I'm Caroline Hyde of Brumberg's World headquarters in New York, 0:00:15.800 --> 0:00:18.599 and I'm Ed Ludlow in San Francisco. This is Bloomberg 0:00:18.600 --> 0:00:22.160 Technology coming up. The man behind everyone's liquidation and now 0:00:22.280 --> 0:00:25.560 f t X is CEO. He says the prior management 0:00:25.880 --> 0:00:29.080 of the disgraced crypto empire is the worst he's ever seen. 0:00:29.560 --> 0:00:32.160 This is lawyers overseeing the ft X bankruptcy, say Sam 0:00:32.240 --> 0:00:37.720 Mcminfred's tweeting is hurting their case. Then Cisco's CFO joins 0:00:37.800 --> 0:00:41.199 us to talk about their earnings, beak supply chain improvements 0:00:41.200 --> 0:00:44.000 and why they need for job cuts. And we're a 0:00:44.040 --> 0:00:46.560 week away from the official start of holiday shopping season 0:00:46.640 --> 0:00:50.360 and the digital strategy for retailers is more important than ever. 0:00:50.760 --> 0:00:55.560 Mac CEO joins exclusively to talk about expectations. But first, 0:00:56.040 --> 0:00:58.400 let's talk about the ft X empire collapse a little 0:00:58.400 --> 0:01:00.520 bit more if you can bear it, because d x's 0:01:00.560 --> 0:01:04.040 new CEO has been slamming the non existent oversight, the 0:01:04.120 --> 0:01:06.760 misuse of client funds, and saying that they're struggling to 0:01:06.800 --> 0:01:09.720 locate billions of dollars in missing assets. The most Katie 0:01:09.720 --> 0:01:12.720 Greifeld is here with the shock the ore when we read, 0:01:12.760 --> 0:01:16.800 of course that bankruptcy statement coming Finally, Katie, what did 0:01:16.840 --> 0:01:19.560 you make of some of the most sensational parts. Well, 0:01:19.560 --> 0:01:21.800 it's amazing because this is just day one. This is 0:01:21.840 --> 0:01:24.600 the first thing that we've seen from John j Ray 0:01:24.680 --> 0:01:27.200 the third and I like you highlighted at the top 0:01:27.240 --> 0:01:30.080 again this was the man who helped liquidate and Ron 0:01:30.120 --> 0:01:33.720 who drove that saying that this is a complete failure 0:01:33.800 --> 0:01:37.560 of corporate controls and such a complete acts absence of 0:01:37.560 --> 0:01:42.039 trustworthy financial information. So really slamming the record keeping that 0:01:42.120 --> 0:01:43.560 was going on and what it caught my eye, and 0:01:43.600 --> 0:01:46.440 I mean it was just a treasure trove, this war declaration. 0:01:46.520 --> 0:01:50.240 But he also took task to test the concentration of 0:01:50.280 --> 0:01:53.200 control as well. It sounds like a lot of it 0:01:53.520 --> 0:01:57.280 rested with SPF, which just a small handful of people. 0:01:57.520 --> 0:02:00.240 You combine that with sort of shoddy record keep and 0:02:00.280 --> 0:02:03.720 here you are a big part of this story. Katie 0:02:04.040 --> 0:02:06.720 is looking for things and not knowing where they are. 0:02:07.040 --> 0:02:10.200 The administrators are looking at ft x is Empire, the 0:02:10.280 --> 0:02:12.799 digital assets that they held on behalf of clients and 0:02:12.840 --> 0:02:18.040 themselves and saying where are they It's a very pressing question. 0:02:18.200 --> 0:02:20.440 So far, we know they were able to locate about 0:02:20.800 --> 0:02:25.120 seven hundred forty million worth of cryptocurrency in cold wallets. 0:02:25.280 --> 0:02:29.440 They also found about five hundred sixty million dollars in cash. 0:02:29.840 --> 0:02:31.760 You add that together. I'm not too good at math, 0:02:31.800 --> 0:02:34.840 but we're still missing billions of dollars there. And again, 0:02:34.840 --> 0:02:38.119 like we were saying, the record keeping, it was very halfhearted. 0:02:38.160 --> 0:02:41.639 It was very messy again according to the sore and declaration. 0:02:41.800 --> 0:02:44.720 So that's a puzzle that needs to be solved. And 0:02:44.720 --> 0:02:47.720 then you think about how this is actually going to 0:02:47.919 --> 0:02:50.880 be distributed to the different creditors, of which there are 0:02:50.919 --> 0:02:53.920 more than a million dollars, and it's quite a process. 0:02:54.320 --> 0:02:57.000 More questions and answers. We tried to get some answers 0:02:57.000 --> 0:02:59.200 from our view as you out there you responded to 0:02:59.280 --> 0:03:00.960 us on Twitter. We love it because we put the 0:03:00.960 --> 0:03:02.680 polls out to you earlier in the morning, and we 0:03:02.720 --> 0:03:05.360 wanted to get a gauge of really, what is the 0:03:05.400 --> 0:03:08.120 most extraordinary part of all of this thus far? Is 0:03:08.160 --> 0:03:10.960 it the CEO's new CEO's reaction that you just spelt 0:03:11.000 --> 0:03:13.560 out for us, Katie, Is it Sam Matman freed himself. 0:03:13.560 --> 0:03:16.600 The ongoing Twitter narrative, the cryptic tweets is it the 0:03:16.639 --> 0:03:19.480 fact that, of course he's now facing questioning in the 0:03:19.560 --> 0:03:22.720 US from a legal perspective. In fact, most people thought 0:03:22.880 --> 0:03:25.720 it's all crazy. It's then he feels all crazy. Whether 0:03:25.800 --> 0:03:27.520 the titbits can you bring us that have just been 0:03:27.560 --> 0:03:30.560 totally sensational. I mean it's got to be the tweets, right, 0:03:30.680 --> 0:03:34.520 the fact that it's just tweeting through it, it's really amazing. 0:03:34.560 --> 0:03:36.160 You combine that with the d m s to that 0:03:36.240 --> 0:03:40.760 incredible report from Vox. But just focusing on the tweeting again, 0:03:40.840 --> 0:03:45.560 FTXS lawyers citing his quote incessant and disruptive tweeting while 0:03:45.600 --> 0:03:50.520 accusing SPF of undermining the bankruptcy case. I mean, it 0:03:50.680 --> 0:03:53.960 escapes me. Another example of something like this, it's one 0:03:54.040 --> 0:03:57.160 I think there was potential photographic evidence and him just 0:03:57.200 --> 0:04:00.880 in a supermarket street. I saw section in the same 0:04:00.920 --> 0:04:05.400 Twitter circle late at night, too late at night. Katie Greifeld, 0:04:05.600 --> 0:04:07.520 we think of her being so on top of this story. 0:04:07.640 --> 0:04:10.640 I want to get you more really perspective here on 0:04:10.920 --> 0:04:14.080 the ramifications in the entire ecosystem. I'm really police and 0:04:14.120 --> 0:04:16.240 welcome back to the show, Jill Gunter. She is, of 0:04:16.240 --> 0:04:20.160 course chief strategy Officer and Espresso Systems, a company providing 0:04:20.480 --> 0:04:24.800 scaling privacy systems for Web three applications. Jill, great to 0:04:24.839 --> 0:04:27.839 have your voice on this because you've been someone who helped, well, 0:04:28.160 --> 0:04:30.360 really put money to work in this space. When you're 0:04:30.400 --> 0:04:33.240 slow ventures now really building out this ecosystem. How much 0:04:33.279 --> 0:04:36.000 of a knock has it had across the entirety of 0:04:36.080 --> 0:04:41.120 not just exchanges, but more broadly. Yeah, I've been fortunate 0:04:41.200 --> 0:04:43.760 to be in this space in some capacity for the 0:04:43.800 --> 0:04:46.640 last decade. Now, as you mentioned, whether that's on the 0:04:46.680 --> 0:04:50.240 investing side, were now on the building side with Espresso Systems, 0:04:50.680 --> 0:04:53.279 and I have to say, I have never seen a 0:04:53.360 --> 0:04:56.159 tragedy of this skill. I think it's a tragedy for 0:04:56.320 --> 0:04:59.440 the retail investors who came into this space and put 0:04:59.440 --> 0:05:02.839 money to work with SPF and with f TX, and 0:05:02.880 --> 0:05:06.360 who didn't fully understand what the mission of crypto was about. 0:05:06.839 --> 0:05:09.040 And I think it's also a tragedy for the crypto 0:05:09.120 --> 0:05:12.800 industry as a whole, that it's being dragged down by 0:05:13.160 --> 0:05:16.120 the acts that it seemed to be, at least at 0:05:16.120 --> 0:05:19.840 this point, fraudulent and criminal on on the part of 0:05:20.560 --> 0:05:23.560 just a few actors in the space. F t X 0:05:23.720 --> 0:05:26.880 is not crypto it's not representative of the industry, and 0:05:26.960 --> 0:05:31.159 it's not what the industry was founded to solve. Jill, 0:05:31.320 --> 0:05:33.600 I've been excited to talk to you because you cover 0:05:33.720 --> 0:05:37.440 basically the entire ecosystem of what's falling apart here right. Yes, 0:05:37.480 --> 0:05:40.800 your cso it Espresso, but you also are essentially a 0:05:40.880 --> 0:05:44.919 venture capitalists. You've invested in other crypto startups. Could you 0:05:44.960 --> 0:05:47.560 tell Caroline and I what conversations you're having with all 0:05:47.600 --> 0:05:50.159 your friends behind the scene, everyone that you know in 0:05:50.200 --> 0:05:52.920 this history industry. What are people talking to each other about. 0:05:54.200 --> 0:05:57.160 I think that the biggest takeaway amongst builders in this space, 0:05:57.240 --> 0:06:00.480 of which I'm lucky to be one, is that it end. 0:06:00.480 --> 0:06:03.680 This is not what crypto is about. Crypto is a 0:06:03.760 --> 0:06:09.120 technology that was founded to bring accountability, openness, transparency to 0:06:09.320 --> 0:06:12.600 financial systems. It was founded if you look back at 0:06:12.600 --> 0:06:15.560 the Bitcoin White Paper, which was sort of the advent 0:06:15.680 --> 0:06:18.640 of the space as a whole, created in two thousand 0:06:18.680 --> 0:06:21.479 eight in the wake of the financial crisis that was 0:06:21.520 --> 0:06:26.120 playing out then. It was created to reduce the necessity 0:06:26.240 --> 0:06:30.560 to trust middlemen with your finances and um and with 0:06:30.600 --> 0:06:34.320 your assets. And unfortunately, I will say that I think 0:06:34.360 --> 0:06:37.440 crypto is an industry has fallen short and a few capacities, 0:06:37.800 --> 0:06:39.599 one of which is that we have yet to build 0:06:39.640 --> 0:06:43.159 good enough user experience around the products that we've built 0:06:43.240 --> 0:06:46.960 that truly do take advantage of the openness, transparency, and 0:06:46.960 --> 0:06:50.800 accountability that it can offer. And because of that, people 0:06:50.880 --> 0:06:55.560 have trusted their assets to centralized exchanges like f t X, 0:06:55.960 --> 0:06:59.200 and they have gotten lost on what the actual core 0:06:59.360 --> 0:07:03.120 value proper position of the technology is. They've also gotten 0:07:03.240 --> 0:07:06.800 caught up in the speculative hype around crypto as an 0:07:06.839 --> 0:07:10.840 asset class while losing track of its value proposition again 0:07:10.880 --> 0:07:14.720 as a technology. And I think amongst builders in the space, 0:07:14.760 --> 0:07:17.760 amongst the entrepreneurs out there who have been building, whether 0:07:17.800 --> 0:07:20.280 it's for six months or six years, in this space, 0:07:20.640 --> 0:07:24.760 there is simultaneously a feeling of despondency that this is 0:07:25.120 --> 0:07:27.840 this is the mainstream view of crypto right now, is 0:07:27.880 --> 0:07:30.760 that SPF and f t X are somehow representative of it. 0:07:31.160 --> 0:07:34.040 But there is also a real feeling of galvanization that 0:07:34.160 --> 0:07:37.440 this is our opportunity and that if anything, this should 0:07:37.520 --> 0:07:40.640 drive home to people why the core value prop of 0:07:40.680 --> 0:07:44.920 crypto is actually necessary, why we do want technologies that 0:07:45.000 --> 0:07:50.480 reduce trust in middleman and trusted intermediaries that SPF purported 0:07:50.520 --> 0:07:54.400 to be among passionately, said Joe. And there is a 0:07:54.400 --> 0:07:56.920 lot of passion, and there is a lot of anger rising, 0:07:57.040 --> 0:08:01.360 but there's also a lot of committed capital that still there. Adventure. 0:08:01.400 --> 0:08:03.800 I'm interested as to whether we've heard of perhaps the 0:08:03.840 --> 0:08:07.720 institutional players who are looking at investing in the actual 0:08:07.760 --> 0:08:10.600 asset class perhaps pulling back. But what about those that 0:08:10.640 --> 0:08:12.680 are building like yourself at the moment. Are you worried 0:08:12.720 --> 0:08:15.320 about those checks that having been built up and I'm 0:08:15.480 --> 0:08:18.080 ready to be deployed, are still being cut for companies 0:08:18.080 --> 0:08:22.800 such as yours. My senses, yes, my senses that you 0:08:22.800 --> 0:08:26.720 know there will be, I think rightly an increase in 0:08:27.200 --> 0:08:31.520 scrutiny and diligence being done around companies. I think that 0:08:31.560 --> 0:08:34.679 the standards will also be raised to ensure that companies 0:08:34.960 --> 0:08:38.880 are not just building another casino, but instead are building 0:08:38.880 --> 0:08:43.200 for real utility, real value, and real sustainable revenue and 0:08:43.280 --> 0:08:46.320 business models that aren't just founded on a pyramid of 0:08:46.360 --> 0:08:49.760 tokens um and I, I, for one, welcome that. I 0:08:49.800 --> 0:08:52.440 think many builders in the space welcome that as well. 0:08:53.080 --> 0:08:56.559 I think that that level of diligence has been missing 0:08:56.600 --> 0:08:58.680 for a while. I think that there are many reasons 0:08:58.720 --> 0:09:01.320 for that. I think that people had the sense over 0:09:01.320 --> 0:09:05.080 the last decade really that there was easy money to 0:09:05.120 --> 0:09:08.559 be made. That was a combination of everything from interest 0:09:08.640 --> 0:09:13.160 rates to again a speculative bubble really around a nascent 0:09:13.440 --> 0:09:16.520 and poorly understood technology. And I think that that's all 0:09:16.559 --> 0:09:19.720 been washed out from the investors side, and I think 0:09:19.760 --> 0:09:22.280 that that's a good thing. I think we're just getting 0:09:22.280 --> 0:09:24.480 this conversation started. More to come. Do you're gun to 0:09:24.600 --> 0:09:43.080 Chief strategy officer at Espresso Systems thank you. Hardest part 0:09:43.200 --> 0:09:46.040 for me, as somebody being on the organization side of 0:09:46.200 --> 0:09:49.720 layoffs is that you know that people's lives are at stake, 0:09:49.920 --> 0:09:52.959 and if you are an empathetic person, which I for 0:09:53.080 --> 0:09:55.160 better or worse, m you can't help but think about 0:09:55.160 --> 0:09:56.720 the impact that this is going to have on the 0:09:56.760 --> 0:09:58.520 people who have a job one day and not the 0:09:58.559 --> 0:10:01.239 next day. This is Camilla Boya. She had the misfortune 0:10:01.240 --> 0:10:03.360 of working at three companies in the space of nine 0:10:03.360 --> 0:10:06.000 months that did layoffs. While there is definitely not a 0:10:06.040 --> 0:10:09.360 good way of firing people, there is absolutely a bad way. 0:10:09.559 --> 0:10:12.160 There's three really important things to bear in mind. First 0:10:12.200 --> 0:10:14.680 of all, don't fire a mass number of people over 0:10:14.760 --> 0:10:18.480 zoom or over email. Don't diminish their contributions to the company. 0:10:18.600 --> 0:10:21.840 Make sure you're showing gratitude for the time and effort 0:10:22.000 --> 0:10:24.360 and love in lots of cases that people have put 0:10:24.440 --> 0:10:27.480 into their jobs at that company. It's much harder to 0:10:27.559 --> 0:10:31.640 trust a leader who isn't capable of owning their own 0:10:31.679 --> 0:10:34.320 fallibility than it is to trust one who will own 0:10:34.400 --> 0:10:36.320 up to their mistakes and be willing to kind of 0:10:36.320 --> 0:10:39.880 take that on board and move forward. Accountability, empathy, closure. 0:10:40.080 --> 0:10:43.600 It's really important to treat the people who are being 0:10:43.679 --> 0:10:46.640 laid off with that respect. Giving the people impacted a 0:10:46.720 --> 0:10:49.600 chance to say goodbye. Treating them in that human way 0:10:49.679 --> 0:10:52.160 and not just cutting them off from every system right away, 0:10:52.440 --> 0:10:55.800 goes a long way towards the experience of both the 0:10:55.840 --> 0:10:58.120 people who are leaving and the people who were remaining 0:10:58.160 --> 0:11:03.480 in terms of that ability to move on. That was 0:11:03.559 --> 0:11:07.199 quick takes Alex Webb and checkout dot COM's Kamilla Boya 0:11:07.280 --> 0:11:09.840 and tech layoffs are in the air. Bloomberg TV also 0:11:09.880 --> 0:11:13.160 spoke to Airbnb s Brian Chesky earlier. Here's what he 0:11:13.240 --> 0:11:16.439 had to say about job cuts. Two and a half 0:11:16.559 --> 0:11:19.440 years ago. We lost eighty percent of our business. We 0:11:19.520 --> 0:11:22.600 laid off of our employees, and I said at that 0:11:22.640 --> 0:11:25.360 time that we are going to be now prepared for 0:11:25.400 --> 0:11:28.679 anything to come, any storm. And so we stayed really 0:11:28.720 --> 0:11:31.520 disciplined for the last two and a half years, anticipating 0:11:31.559 --> 0:11:34.240 difficult times ahead, and we said, no matter what happens 0:11:34.240 --> 0:11:36.439 the economy, we do not want to have to change 0:11:36.480 --> 0:11:38.960 how we run the company. And that's only possible if 0:11:38.960 --> 0:11:41.440 we stay lean. And we stayed disciplined, and we only 0:11:41.440 --> 0:11:44.720 have about six thousand employees, so we're really lean. Begin 0:11:44.760 --> 0:11:47.440 the year, we were only planning to hire seven percent 0:11:47.480 --> 0:11:49.960 more people than the year before, when many other tech 0:11:50.040 --> 0:11:52.240 companies that weren't growing even as fast as us, we're 0:11:52.280 --> 0:11:56.280 gonna hire more people. So because of that and because 0:11:56.360 --> 0:11:58.960 the strength of our business, we are not stepping on 0:11:59.040 --> 0:12:01.360 the brakes. In fact, we're stepping on the gas. We 0:12:01.440 --> 0:12:04.160 are still hiring. We're not freezing, we're not cutting, We're growing. 0:12:04.960 --> 0:12:09.760 M That was Airbnb CEO Brian Chesky, and speaking of 0:12:09.800 --> 0:12:13.200 tech layoffs, Cisco closed four point seven sent higher on 0:12:13.240 --> 0:12:17.600 Thursday after giving an upbeat quarterly revenue forecast, and like 0:12:17.640 --> 0:12:20.960 many other tech companies right now, unveiling a plan to 0:12:21.080 --> 0:12:25.760 cut jobs. CFO Scott Heron joins us. Now for more, Scott, 0:12:26.320 --> 0:12:29.120 let's push this forward right, bullish outlook for the last 0:12:29.120 --> 0:12:31.560 three months of this year. But at the same time, 0:12:31.600 --> 0:12:36.040 you're acknowledging a changing macro picture, you're preparing for the worst. 0:12:36.640 --> 0:12:41.000 How do you balance that? Yeah, and in our case, 0:12:41.040 --> 0:12:42.640 I think it's a little bit different. And first of all, 0:12:42.640 --> 0:12:45.000 thanks for having me on the card. It's great to 0:12:45.040 --> 0:12:47.480 see you both again. I'm a big fan. I should 0:12:47.480 --> 0:12:50.480 start there. We had a great first quarter. It was 0:12:50.559 --> 0:12:54.959 record high red quarterly revenues for US earnings per share 0:12:55.080 --> 0:12:57.439 and revenues above the high end of our guidance range. 0:12:57.440 --> 0:12:59.360 And it's really on the back of a lot of 0:12:59.360 --> 0:13:01.560 hard work we've been doing over the last eighteen months 0:13:01.559 --> 0:13:04.360 to build a recurring revenue model and to manage the 0:13:04.400 --> 0:13:07.000 supply chain issues. So the performance is actually quite good 0:13:07.000 --> 0:13:09.760 at the company. We did announce a small restructuring today 0:13:09.760 --> 0:13:12.240 and it's really about two things, and I think it's 0:13:12.240 --> 0:13:14.480 a bit different than the way perhaps you've heard from 0:13:14.520 --> 0:13:18.240 other companies. Ours is really about rebalancing the number of 0:13:18.240 --> 0:13:20.360 headcount we had at the beginning of the year. We 0:13:20.400 --> 0:13:22.040 have today, we're gonna have the same number of heads 0:13:22.080 --> 0:13:24.040 at the end of the year. What we're doing is 0:13:24.040 --> 0:13:26.840 trying to marshal more resources and focus more into a 0:13:26.880 --> 0:13:29.160 couple of key areas, which of course means we have 0:13:29.200 --> 0:13:31.600 to come down in some other areas. So we're focusing 0:13:31.640 --> 0:13:35.400 more on platforms and cloud delivered capabilities within our networking 0:13:35.440 --> 0:13:40.400 business and insecurity. Our goal through internal placement, by the way, 0:13:40.480 --> 0:13:42.520 is to place as many of those who are displaced 0:13:42.960 --> 0:13:44.560 on the low end of that into some of the 0:13:44.600 --> 0:13:46.880 open jobs on the on the other end. So this 0:13:46.960 --> 0:13:51.240 is not a cost motivated, cost savings motivated restructuring for us. 0:13:51.679 --> 0:13:54.480 Talk to us there for about security, about clouds, Scott, 0:13:54.640 --> 0:13:58.199 Are they the two areas that a corporate, a government agency, 0:13:58.600 --> 0:14:02.640 a client of yours cannot do without. Why the bullishness 0:14:02.640 --> 0:14:07.320 into this deteriing outlet. Yeah, I think it's a couple 0:14:07.320 --> 0:14:09.520 of things. It's a great question, and one of them 0:14:09.520 --> 0:14:12.600 I just talked about. We are more than our revenues 0:14:12.640 --> 0:14:15.839 now are are recurring, right, and so we've built up 0:14:15.880 --> 0:14:19.560 more than thirty billion dollars of remaining performance obligations. You 0:14:19.600 --> 0:14:22.120 hear the phrase r p O, right, that's sales we 0:14:22.280 --> 0:14:25.520 that we've transacted that haven't yet shown up in our 0:14:25.560 --> 0:14:28.000 revenue stream, so we we we start each quarter with 0:14:28.080 --> 0:14:31.720 a nice recurring revenue base. We also, through the last 0:14:31.840 --> 0:14:34.960 year because of some of the supply concerns, have built 0:14:35.000 --> 0:14:38.400 up a significant order backlog. When you put those two together, 0:14:38.560 --> 0:14:40.920 and you know, demand is what demand is. We had 0:14:40.960 --> 0:14:44.160 the second highest Q one in terms of product orders 0:14:44.160 --> 0:14:46.080 that we've had in our history, second only to Q 0:14:46.200 --> 0:14:48.560 one a year ago, and so we continue to see 0:14:48.560 --> 0:14:51.600 good demand. We've got a base of recurring revenue, and 0:14:51.640 --> 0:14:54.880 we've got a backlog, so we have great visibility into 0:14:54.880 --> 0:15:00.840 the next several quarters. Traditionally, Cisco is viewed as this 0:15:00.920 --> 0:15:04.600 sort of legacy tech name, not so exciting Scott, if 0:15:04.600 --> 0:15:06.400 you don't mind me saying, you know, that's the Cell 0:15:06.520 --> 0:15:09.520 sides kind of take on Cisco. But you are trying 0:15:09.560 --> 0:15:13.720 to do something new, move into services, recurring revenue, be 0:15:13.960 --> 0:15:20.160 more in everyone's face every day. How's that going. It's 0:15:20.200 --> 0:15:22.560 going great. You know. It's one of the reasons that 0:15:22.600 --> 0:15:25.520 I think you hear the bullish outlook from us at 0:15:25.520 --> 0:15:28.160 a time when there's a fair amount of uncertainty um 0:15:29.320 --> 0:15:32.200 of our revenues. I'll say it again, of our revenues 0:15:32.240 --> 0:15:36.920 are coming from recurring revenue models. Um, that is subscriptions, 0:15:37.040 --> 0:15:40.680 it's sas, it's some of the the recurring revenue models 0:15:40.680 --> 0:15:42.880 attached to some of the hardware that we ship out. 0:15:43.400 --> 0:15:45.880 And frankly, as I said, we've built up a pretty 0:15:45.960 --> 0:15:49.320 large order backlog trapped in there is another two billion 0:15:49.360 --> 0:15:52.200 dollars worth of recurrent with the software revenue trapped in 0:15:52.240 --> 0:15:56.040 that backlog. So, um, I think it's gone. Well, there's 0:15:56.120 --> 0:15:58.120 room for us to get to accelerate that even further. 0:15:58.520 --> 0:16:01.280 Let's talk about what on this are saying. I like 0:16:01.320 --> 0:16:03.480 the way it sort of paraphrases it. But City is 0:16:03.560 --> 0:16:05.880 keeping you want to sell, and City Group is saying 0:16:05.880 --> 0:16:08.240 that weren't about the order growth remaining negative down four? 0:16:08.920 --> 0:16:13.120 What do you say to that? I say what I 0:16:13.120 --> 0:16:16.480 said earlier, Caroline, it's it was down in the first 0:16:16.560 --> 0:16:19.800 quarter on a year on your basis by four compared 0:16:19.840 --> 0:16:23.760 to a Q one last year that was up thirty four, right, 0:16:23.840 --> 0:16:27.520 and so it's hard to the compare. Point is actually 0:16:27.600 --> 0:16:30.560 part of why just the arithmetic gives you that. I 0:16:30.560 --> 0:16:32.160 think the better way to look at it then, is 0:16:32.560 --> 0:16:35.560 what's happening sequentially? Right when you can't when you've got 0:16:35.600 --> 0:16:38.560 an anomaly quarter that we're compared to. And by the way, 0:16:38.880 --> 0:16:42.320 our fourth quarter of last year, our first and second 0:16:42.400 --> 0:16:46.520 quarter both had greater than all three had greater than growth. 0:16:46.960 --> 0:16:48.920 So in each case the arithmetic is gonna look tough. 0:16:48.920 --> 0:16:51.360 I think the better way to gauge what's really happening 0:16:51.360 --> 0:16:54.440 in terms of customer customer demand is okay, how did 0:16:54.440 --> 0:16:57.640 the sequentials compared to what you've seen historically? And from 0:16:57.640 --> 0:16:59.880 that standpoint, it was pretty much in line, slightly below, 0:17:00.120 --> 0:17:02.720 pretty much in line what we've seen as a historical 0:17:02.840 --> 0:17:05.480 range going from it was our fourth quarter, by the way, 0:17:05.680 --> 0:17:07.560 to our first quarter that we just announced, So the 0:17:07.560 --> 0:17:09.920 sequentials look fine. And as I said, it was the 0:17:09.960 --> 0:17:13.160 second highest Q one in terms of product orders we've 0:17:13.160 --> 0:17:15.320 had in the history of the company. And to profess 0:17:15.640 --> 0:17:18.360 City Group doesn't say it's difficult year on year comps. 0:17:18.400 --> 0:17:19.919 We thank you for spelling that out for us to 0:17:20.040 --> 0:17:22.280 go CFO Scott Heron, great to have some time with you. 0:17:22.520 --> 0:17:24.879 Keep on watching, We appreciate it. In while coming up 0:17:25.240 --> 0:17:27.520 what's new in the VC world, we'll get the latest 0:17:27.520 --> 0:17:30.440 global headlines. That's next. And before we had to break 0:17:30.680 --> 0:17:33.960 a softer tone, apparently coming from one Elon Musk. According 0:17:33.960 --> 0:17:36.280 to people familiar with the matter, Musk is now attempting 0:17:36.640 --> 0:17:40.000 to retain Twitter staff is by actually softening his remote 0:17:40.000 --> 0:17:43.280 work mandate. This comes as apparently fewer workers are opting 0:17:43.400 --> 0:17:47.000 in to the next chapter of Twitter. It's a Blomberg. 0:17:57.320 --> 0:17:59.399 Let's take a look at the top headlines in the world. 0:17:59.440 --> 0:18:02.600 Adventure have toll VC Giant Tiger Global is raising six 0:18:02.640 --> 0:18:05.359 billion dollars for its next fund and looking to Morgan 0:18:05.480 --> 0:18:09.040 Stanley's wealth management arm for help. According to sources, the 0:18:09.080 --> 0:18:12.199 fun will invest in startups across the enterprise space and 0:18:12.280 --> 0:18:14.720 tech in Indian staying in that side of the world. 0:18:14.760 --> 0:18:18.359 Over in Singapore, I Globe Partners is raising two million 0:18:18.359 --> 0:18:20.760 dollars for a new fund that will back deep tech. 0:18:21.080 --> 0:18:23.000 Is the fifth fund for the VC, which is mostly 0:18:23.080 --> 0:18:26.119 led by women. I Globe was founded in Silicon Valley 0:18:26.119 --> 0:18:28.919 before moving to Singapore in two thousand nine in invest 0:18:29.000 --> 0:18:33.240 in startups with deep scientific backgrounds, and finally, members of 0:18:33.320 --> 0:18:36.800 Dubai and aber Dabby's Royal families adjoining forces with other 0:18:36.840 --> 0:18:40.639 investors to back London based AI startup the Applied AI 0:18:40.760 --> 0:18:45.199 Company that's according to sources. AI Code develops AI products 0:18:45.200 --> 0:18:56.000 for government, healthcare, and insurance sectors. Caroline, Welcome back to 0:18:56.040 --> 0:18:58.520 Bloomberg Technology. I'm Caroline Hide in New York. I'm blogs 0:18:58.560 --> 0:19:01.320 and Ludlow is with me in. Sam Francis go and Ed. Well, 0:19:01.400 --> 0:19:04.920 that's going to China. Take a giant story and as 0:19:04.960 --> 0:19:08.320 giant soaring today. Yeah, I'm looking at Alie Barba, the 0:19:08.359 --> 0:19:10.679 e commerce giant in China. It's interesting the stock up 0:19:10.720 --> 0:19:13.600 almost eight percent, right, but it posted a surprise loss, 0:19:13.640 --> 0:19:16.240 and in fact the loss it posted was the same 0:19:16.280 --> 0:19:19.119 dollar amount that analysts thought it would record in profit. 0:19:19.119 --> 0:19:22.240 It's all about COVID zero policy, which is impacting consumer 0:19:22.280 --> 0:19:25.000 demand in China on the e commerce side, also about 0:19:25.280 --> 0:19:28.479 disruptions to supply chain, but they're seeing past that. You know, 0:19:28.520 --> 0:19:31.240 the stock trading at its highest level in six weeks 0:19:31.320 --> 0:19:33.040 or so. I thought that was really interesting, as we're 0:19:33.080 --> 0:19:36.240 kind of zeroing in now on the retail space on 0:19:36.320 --> 0:19:39.520 e commerce, but then looking to other opportunities. Valley Barber 0:19:40.080 --> 0:19:43.399 sticking with retail Macy's really interesting. Biggest jump in the 0:19:43.440 --> 0:19:46.359 stock for Macy's since May, the stock trading its highest 0:19:46.400 --> 0:19:50.040 level since June. Strong performance for me looking across the 0:19:50.040 --> 0:19:52.119 Bloomberg tunel. There's kind of two sides of the story. 0:19:52.480 --> 0:19:54.679 The e commerce side of the business kind of trading 0:19:54.720 --> 0:19:57.840 back towards pre pandemic levels, but we look at the 0:19:57.920 --> 0:20:01.720 role technology played Caro in how they manage inventories. This 0:20:01.880 --> 0:20:05.080 is a smart company and actually so many different names 0:20:05.119 --> 0:20:07.000 faring so differently in this space. I think this is 0:20:07.000 --> 0:20:09.280 one to watch as we head into the holiday season, 0:20:09.640 --> 0:20:12.600 think about the consumer, think about retail, start rising, keeping 0:20:12.640 --> 0:20:14.280 on it's dead as well as it gets an upgrade 0:20:14.280 --> 0:20:16.680 from SMP and in fact I managed to get a 0:20:16.720 --> 0:20:19.920 catch up with Macco chairman Jeff Gannett is an exclusive 0:20:19.920 --> 0:20:23.200 conversation all about digital strategy ahead of the holiday season. 0:20:24.200 --> 0:20:26.199 When you looked at our digital business back in two 0:20:26.240 --> 0:20:29.200 thousand and nineteen, it was about of our overall omni 0:20:29.280 --> 0:20:33.880 channel business during the pandemic. It was for we started 0:20:33.920 --> 0:20:36.240 the year expecting it was going to be like thirty seven. 0:20:36.520 --> 0:20:39.320 It's coming out at about thirty three, so thirty three 0:20:39.359 --> 0:20:42.600 percent versus a pre pandemic year of so it's still 0:20:42.800 --> 0:20:45.800 very robust growth. So even though our business was down 0:20:45.840 --> 0:20:48.040 to twenty one and digital in the third quarter it 0:20:48.200 --> 0:20:50.960 was up thirty percent to two thousand and nine. So 0:20:51.080 --> 0:20:54.359 I think this evolution of the customer omni channel journey 0:20:54.600 --> 0:20:57.240 and more of those transactions being in digital, that's going 0:20:57.280 --> 0:20:59.760 to continue. But there is a new baseline that has 0:20:59.800 --> 0:21:02.440 been established in twenty two versus where we were in 0:21:02.480 --> 0:21:05.400 twenty and twenty one when customers didn't feel as comfortable 0:21:05.440 --> 0:21:08.520 going to brick and mortar locations to buy. So what 0:21:08.640 --> 0:21:11.440 about that for Cyber Monday, for example? The predictions that 0:21:11.960 --> 0:21:15.119 is that something you lean into, Yes, like, as an example, 0:21:15.200 --> 0:21:17.679 we're looking very carefully at how much of our digital 0:21:17.720 --> 0:21:20.160 business was being done in late October and the first 0:21:20.240 --> 0:21:22.480 three weeks of November last year. How much of that 0:21:22.520 --> 0:21:25.000 do we believe is going to shift to Thanksgiving and 0:21:25.080 --> 0:21:28.920 Cyber Monday, Cyber Week. We do expect a deep higher 0:21:29.000 --> 0:21:31.920 spike there. We do expect the usual Christmas lull that 0:21:32.000 --> 0:21:34.879 goes after that. That first week of December, we go 0:21:35.000 --> 0:21:37.120 into a lull of two weeks and then it comes 0:21:37.280 --> 0:21:40.360 raging back more to brick and mortar traffic the last 0:21:40.400 --> 0:21:44.320 ten days before Christmas and therefore your investment and this 0:21:44.520 --> 0:21:46.760 is a time where maybe companies are putting back in 0:21:46.880 --> 0:21:49.639 terms of investing. Are you still looking to be committing 0:21:49.680 --> 0:21:52.760 money to digital. Is it more about smaller form up stores, 0:21:52.880 --> 0:21:55.560