Speaker 1: From Mahart where Innovations, Money and Power Collie in Silicon Valley, NBN.
Speaker 1: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 2: I'm Caroline Hyde a Bloomgg's World headquarters in New York,
Speaker 2: and I'm Ed Ludlow in San Francisco.
Speaker 3: This has been by Technology.
Speaker 2: Coming up Peloton tumbling after predicting another decline in sales.
Speaker 2: We'll discuss where the companies come back efforts went wrong.
Speaker 3: The landscape for IPOs starting to heat up, or dig
Speaker 3: into m Are Sports which starts trading today.
Speaker 2: And the world's biggest seller of smartphone processes starting to
Speaker 2: see a recovery. We'll speak the CEO of Qualcom, Cristiano
Speaker 2: am But first that's checking on these markets and for
Speaker 2: a stick in the world of sports and health and
Speaker 2: exercise for a moment, and Amma Sports shares indicated at
Speaker 2: thirteen to fourteen dollars each. The IPO price, remember was
Speaker 2: thirteen dollars. That's actually way off the mid market range.
Speaker 2: So this is a company that's coming to the market
Speaker 2: selling new shares. Of course, this is Wilson Tennis Rackets.
Speaker 2: This is like a Solomon ski boots as well. And
Speaker 2: a big exposure to China. We'll dig into that IPO
Speaker 2: story and a little bit on the show, but first
Speaker 2: let's returned to the woes that are really expressing themselves
Speaker 2: in the share price of Peloton today. Mark German is
Speaker 2: here with more and look, they can't seem to catch
Speaker 2: a break in terms of people wanting to use the app.
Speaker 2: In particular, I mean, where are they seeing some of
Speaker 2: the pain points?
Speaker 4: Mark, They're seeing pain points essentially everywhere. A free cash
Speaker 4: flow is not where they want. Revenue beat Wall Street
Speaker 4: expectations by about twenty million, but of course it was
Speaker 4: another annual decline for the company. App subscriptions were down
Speaker 4: sixteen percent. They're still reporting a net loss. So this
Speaker 4: is not where the company once was. They were a
Speaker 4: high flyer at the height of the pandemic. They were
Speaker 4: a billion dollar plus quarter after quarter.
Speaker 5: Now their revenue, as you.
Speaker 4: Can see, it was in the mid seven hundred millions,
Speaker 4: down six percent even a loss. Just no real growth
Speaker 4: or momentum here for the company. And they're not expecting
Speaker 4: free cash flow to get to where they want, real
Speaker 4: profitability now, real growth until the end of the year,
Speaker 4: until their fourth quarter, right, so certainly they're not in
Speaker 4: a good place at this moment.
Speaker 3: Yeah, I think we're still asking what is Peloton right?
Speaker 3: Is it a content company? Is it a hardware company?
Speaker 3: They've had all these different strategies. They include partnerships, the
Speaker 3: TikTok one being the most prominent that Karen and I've discussed.
Speaker 3: And then they turn around to say, you know what,
Speaker 3: let's look at universities. That's a big market. You know,
Speaker 3: from a gym equipment perspective, that hasn't worked either. So
Speaker 3: sum up Barry mccarthyy's strategy here, Mark.
Speaker 4: Yeah, the strategy is to go all in on content
Speaker 4: and subscriptions. But this big revamp that they rolled out
Speaker 4: a few months ago was a failure. It led to
Speaker 4: a large decrease in subscribers. They had some issues with
Speaker 4: their algorithm as well. You know, my personal take is
Speaker 4: maybe you wind down the hardware business completely. That's a
Speaker 4: lot of where your lack of profitability, a lot of
Speaker 4: where your net loss.
Speaker 5: Is coming from.
Speaker 4: Go all in on content, but then you're just an app.
Speaker 4: But I think if you're a pure content play, you
Speaker 4: have this really nice, really great subscriber base of nearly
Speaker 4: seven hundred and fifty thousand users.
Speaker 5: Maybe that's something that's interesting to.
Speaker 4: A Spotify or a Netflix, or an Apple or an Amazon,
Speaker 4: where you can buy this pretty gigantic fitness content library,
Speaker 4: you can buy this application, You could buy the patents
Speaker 4: and the technology there, and you can make your Netflix
Speaker 4: subscription or your Spotify subscription or your Amazon product subscription
Speaker 4: more valuable and interesting to consumers by spending a few
Speaker 4: billion and buying all the Peloton's content arm Maybe that's
Speaker 4: the real long term play, at least if I was CEO.
Speaker 2: That's what it would be at this Until you are CEO, Mark, Well,
Speaker 2: we'll stick to on letting on also the areas the
Speaker 2: wealth of expertise you have in other companies. We are
Speaker 2: all waiting with baited brest and big earnings after the bell,
Speaker 2: and Apple is key among them. What are you expecting?
Speaker 4: Yeah, so our estimates indicate that Apple is going to
Speaker 4: avoid a fifth quarter in a row of a decline
Speaker 4: in an earnings decline. That would be something that hasn't
Speaker 4: happened since the original iPod days over.
Speaker 5: Twenty something years ago.
Speaker 4: So any growth I think is going to be hugely
Speaker 4: impressive to the stock. What we're really looking for is
Speaker 4: a sizeable beat on iPhone. If you remember, at the
Speaker 4: end of twenty twenty two, the iPhone fourteen pro ran
Speaker 4: into some serious COVID related headwinds. So at this point,
Speaker 4: given the performance of the iPhone fifteen, concerns in China,
Speaker 4: given that this is a redesigned handset, given that they
Speaker 4: have not had any production issues, you should be looking
Speaker 4: at a pretty clear beat on iPhone.
Speaker 5: So that's what we'll be paying attention to.
Speaker 4: In addition to hopefully for the company a record around
Speaker 4: digital services given all the app store noise right.
Speaker 3: Now, highly recommend that you follow the top live blog
Speaker 3: on the terminal for Mark's reporting and also his ex
Speaker 3: because it's a big Super Bowl moment for him. After
Speaker 3: market close, thank you to Bloomberg to Mark German, but
Speaker 3: let's keep the convo going. Bring in all Spring Global
Speaker 3: Investments chief diversity officer and head of active Equity, and
Speaker 3: Meletti for more. You know, I said a little early
Speaker 3: in the show and that if there was a lesson
Speaker 3: to be learned from Alphabet and Microsoft, it was that
Speaker 3: this was a high bar earning supporter. Investors kind of
Speaker 3: wanted to see some tangible effect from all of the
Speaker 3: AI chat an investment of the last twelve months. Now
Speaker 3: we have Apple, Amazon, and Meta on deck. Do you
Speaker 3: frame this as a high bar order?
Speaker 6: I do, Thanks for having me on the show. It's
Speaker 6: a high bar quarter cause although fundamentals were really strong
Speaker 6: and twenty twenty three, multiple expansion also took place in
Speaker 6: a big way. And so when you have that multiple
Speaker 6: expansion and good earnings growth growth in twenty twenty three,
Speaker 6: the bar is now set for growth on top of
Speaker 6: what we saw, and that multiple expansion is gonna be
Speaker 6: harder to get. And so I think that's where, you know,
Speaker 6: the game of expectations really comes into play.
Speaker 3: There is other technology in the world outside of this.
Speaker 3: We call it the Magnificent seven, and maybe Tesla gets
Speaker 3: taken out and it's the Magnificent six. Are we not
Speaker 3: looking in the right place right now?
Speaker 6: We think the mar markets should broaden out, you know,
Speaker 6: we we really believe that in the t the back
Speaker 6: half of last year, and as we look forward, we
Speaker 6: think that's true. Look, there are really good earnings prospects
Speaker 6: for several areas of the market. If you look at
Speaker 6: historic discounts between small and in large cap companies, those
Speaker 6: historic discounts are really pretty wide, And you're right, there's
Speaker 6: really good companies, technology companies, healthcare companies, other companies that
Speaker 6: go down market cap that just don't have the multiples,
Speaker 6: that didn't get the multiple expansion. Even some that have
Speaker 6: really high free cash flow did put up good fundamentals
Speaker 6: last year. And so those are the parts of the
Speaker 6: market that we're much more attracted to right now.
Speaker 2: Do the same drivers of growth apply though, on the
Speaker 2: smaller side of the market capitalization is it that you
Speaker 2: want to hear from CEOs, how they're leveraging AI, how
Speaker 2: they're thinking about cost discipline, how ultimately they're replacing people
Speaker 2: with machine.
Speaker 6: Absolutely, AI is not something that's going to go away,
Speaker 6: and I think we saw the first wave of it,
Speaker 6: certainly led by these large companies. I still think that
Speaker 6: the large companies are going to lead. But what we're
Speaker 6: going to do is start to see AI application be
Speaker 6: applied across the broader economy. And when that happens, you're
Speaker 6: going to see productivity and other things continue to rise.
Speaker 6: But it does take a while for it to play out,
Speaker 6: and so we're looking for individual companies that are applying AI,
Speaker 6: but not just AI, also other tools, also other capabilities
Speaker 6: that they have to really work through the current environment,
Speaker 6: which we all know, you know, is likely to be
Speaker 6: still a little bit bumpy.
Speaker 7: Here, let's talk.
Speaker 2: About that current environment and on the macro for us.
Speaker 2: And because is it therefore the job's data that you
Speaker 2: look to at the moment, is it still any hint
Speaker 2: of direction of FED policy that really dictates trade here overall?
Speaker 6: You know, I think the FED policy. You know, it's
Speaker 6: interesting the FED talk has maybe added a little bit
Speaker 6: of confusion, but the expectations for five to six rate
Speaker 6: because for the year we're just higher than what we
Speaker 6: believed would actually happen. So yesterday wasn't so much of
Speaker 6: a surprise to us here at all. Spring What I
Speaker 6: would say, though, is we are watching the labor market
Speaker 6: really carefully and how that might be tied to company profits.
Speaker 6: And if we just go back to twenty twenty two,
Speaker 6: the technology companies actually were cutting back on labor some
Speaker 6: of those meg seven stocks you talked about that led
Speaker 6: them and set them up pretty well to produce good profits.
Speaker 6: In twenty twenty three, with some recovery, we are, you know,
Speaker 6: at the end of an inflationary cycle, pricing power starts
Speaker 6: to slip away. There starts to get to be some
Speaker 6: margin pressure amongst many companies, and so what then tends
Speaker 6: to happen is they start to unwind labor because that's
Speaker 6: where the biggest costs come from. So how closely are
Speaker 6: profits and labor tied? I think they're pretty closely tied.
Speaker 6: So we'll have to watch profits very carefully and within
Speaker 6: each industry. Then also what that might mean for the
Speaker 6: labor market.
Speaker 2: There's been a lot of talk of cuts this particular
Speaker 2: earning season when it comes to the labor force. All
Speaker 2: Spring Global Investments Chief Diversity officer and of course head
Speaker 2: of actually Active Equity and Maletti. Great to catch up
Speaker 2: with you and what we got.
Speaker 8: Well.
Speaker 3: Coming up on the show, we're going to have a
Speaker 3: post earnings conversation with AMD CEO Lisa Sue. Really interesting
Speaker 3: AI name to watch right now, that's next, This is Bloomberg.
Speaker 3: Here's why AMD is optimistic well, revenue in the current
Speaker 3: period will be shorter of analyst estimates. The chip maker's
Speaker 3: confident is going to book more than three point five
Speaker 3: billion dollars this year from its line of AI accelerators.
Speaker 3: That's up from its earlier projection of two billion. I
Speaker 3: caught up with AMD CEO Lisa Su yesterday to understand
Speaker 3: why I have a listen.
Speaker 9: When I look at the potential of AI is really
Speaker 9: the single most important you know, sort of you know,
Speaker 9: technology innovation over the last fifty years. So AI has
Speaker 9: so much potential to change the way our business has work,
Speaker 9: to change our personal productivity, to really change the way
Speaker 9: we do research, and a whole bunch of things. You know,
Speaker 9: from our standpoint, we see the aim growing to upwards
Speaker 9: of you know, four hundred billion by twenty twenty seven.
Speaker 9: I think from an AMD standpoint, you know, you were
Speaker 9: at our launch ed in December.
Speaker 5: It was a great.
Speaker 9: Coming out party for the A M D you know,
Speaker 9: AI capabilities, and it's gone really well. I think our
Speaker 9: customer interactions, our product qualifications, our ramp have gone really well.
Speaker 9: So we were able to update you know, some of
Speaker 9: our numbers this this past week.
Speaker 3: I think a lot of folks focused on that ramp
Speaker 3: and how it went in the quarter. You know, you
Speaker 3: exceeded the four hundred million that you'd told me about
Speaker 3: at that event, So it's three point five billion dollars
Speaker 3: of sales this year form I three hundred. What's interesting
Speaker 3: here is kind of your ramp relative to what's happening
Speaker 3: on the supply side, And I wanted how big a
Speaker 3: factor supply will be in matching or beating that number
Speaker 3: in twenty four.
Speaker 7: Yeah.
Speaker 9: Absolutely, And this is the fastest product ramp you know,
Speaker 9: in our history. So you know, we exceeded our numbers
Speaker 9: in Q four over four hundred million. We're going to
Speaker 9: grow into Q one, and we update our full year
Speaker 9: forecasts from two billion to three and a half billion.
Speaker 9: The way we think about that is that's a customer
Speaker 9: demand statement, So that is customers that we've engaged in
Speaker 9: who have made commitments to us, who have placed orders
Speaker 9: with us. We're planning for a much larger number as
Speaker 9: it relates to the supply chain.
Speaker 5: This is what we should do.
Speaker 9: We always plan for success. So you know, my view
Speaker 9: is it's still very very early in the in the
Speaker 9: innings for AI accelerators and particularly for I three hundred,
Speaker 9: but this is an opportunity for us to you know,
Speaker 9: continue to build a major growth driver as we work
Speaker 9: with our top customers on their AI plans.
Speaker 3: That was a MDCO Lisa Sue. This is talking tech.
Speaker 3: Elon Musk is making moves to deepen his presence in Texas.
Speaker 3: After asking followers on x he plans to bring shareholders
Speaker 3: in for a vote to shift its incorporation from Delaware
Speaker 3: to Texas. This comes after a Delaware judge voided his
Speaker 3: fifty five billion dollar compensation package. And in other news,
Speaker 3: this is something I reported last night. A battery plant
Speaker 3: in Nevada's in the works. According to our sources, the
Speaker 3: plant will use equipment from China's c ATL, otherwise the
Speaker 3: biggest company making sales in the world. The move comes
Speaker 3: mid heightened scrutiny by Washington and collabs with Chinese firms.
Speaker 2: S go quick check on his market, said Apple on
Speaker 2: deck for after the bell, We're up five tens percent,
Speaker 2: but could we have a fifth straight decline in revenue?
Speaker 2: We have seen those sorts of consecutive declines and revenue
Speaker 2: sin's all the way back to nineteen ninety eight. We've
Speaker 2: had four straight. But can they inch out that one
Speaker 2: percent revenue growth that the market is anticipating qualcom of
Speaker 2: by more than four percent. We've got a key conversation
Speaker 2: coming in Cristiano and Man just in a few moments time.
Speaker 2: But this is they managed a guide that Look Mobile
Speaker 2: is recovering in terms of their chips, but what about autos,
Speaker 2: what about connected devices? Not so good? Peloton of by
Speaker 2: twenty three percent after of course, what has been a
Speaker 2: painful set of well lack of growth numbers once again. Meanwhile, though,
Speaker 2: we want to be talking about some other areas of sport,
Speaker 2: not just Peloton exercise area, but what about Wilson tennis rackets,
Speaker 2: what about well areas of well the areas are skiing
Speaker 2: for your boots. A Mere Sports they've just been ipoing
Speaker 2: and look, it's below the marketed range in terms of
Speaker 2: the midpoint, but they are coming out. It seems to
Speaker 2: be pricing in the thirteen to fourteen dollars per share mark.
Speaker 2: Let's talk about what this means to the rest of
Speaker 2: the IPO market and some of the tech names within
Speaker 2: Itationalit in vessects with us. And what's interesting about a
Speaker 2: Mere Sports is that they have big Chinese backers in particular,
Speaker 2: and they have exposure to the Chinese market. What does
Speaker 2: this read across the rest of the IPO market.
Speaker 10: Yeah, a listen, we did see this becoming the biggest
Speaker 10: IPO since we've seen berkenstackt so big consumer names coming
Speaker 10: to market. It's not just about the Chinese consumer. If
Speaker 10: you look at where a bulk of their revenues come from,
Speaker 10: they're very heavily exposed to your Caroline, to the Americas
Speaker 10: as well as the Europe, Middle East and Africa region,
Speaker 10: the EMEA region, And so this is a very large
Speaker 10: global brand going out of public, going public at a
Speaker 10: time where people are kind of worried about the global
Speaker 10: economy and the strength of the consumer. Now, some of
Speaker 10: these brands tend to lean more affluent, like Arctics. Anyone
Speaker 10: who's bought Arctics gear knows that you're paying a little
Speaker 10: more for it than say you are a Patagonia. But
Speaker 10: it shows in the numbers, and they've really been able
Speaker 10: to expand revenue as people get back on the slopes
Speaker 10: and back out there playing sports and traveling around the
Speaker 10: world for a lot of these types of categories here
Speaker 10: in athletics.
Speaker 3: All right, Bloomberg Shnaali Bassite with the breakdown on MS Sports.
Speaker 3: We're still watching that for the opening, but it's certainly
Speaker 3: one to watch and don't miss Lady Shnali's live interview
Speaker 3: with the CEO of MS Sports, James Sheng, which coming
Speaker 3: up in the next hour. Let's keep Agun. The IPO
Speaker 3: landscape is a conversation that we need to have and
Speaker 3: we're joined by Greg Martin, co founder and manager director
Speaker 3: of rain Makers Security. It's a curious one, right sports.
Speaker 3: I'm into my pickleball, so Wilson, that's an interesting read over.
Speaker 3: But the back is of some big Chinese tech names.
Speaker 3: Your view on what this is is a signal to
Speaker 3: the market. This I PO from m A Sports.
Speaker 8: Well, I mean it is. It is a data point
Speaker 8: for sure. You know the brands and a Mare Sports owns.
Speaker 8: You know, our venerable brands have been around for a while.
Speaker 8: The company showed good growth in both revenue and EBAD,
Speaker 8: but it was laiden with debt. It was a highly
Speaker 8: leveraged company. And you know, the market has been punishing
Speaker 8: highly leveraged companies for a long time. Even though rates
Speaker 8: have come down, there's still there's still you know, still
Speaker 8: relatively high, relatively where there were a few years ago.
Speaker 8: And so you know, I think the market is still
Speaker 8: taking away and see approach. I think underwriters clearly misjudged demand.
Speaker 8: In fact, in this case, what was interesting is sixty
Speaker 8: percent of the IPO was bought by insiders. Normally that's
Speaker 8: a really strong signal that should stimulate demand. So this
Speaker 8: this IPO is almost you know, completely carried by inside investors.
Speaker 8: There was very shockingly little outside of interest. So this
Speaker 8: is a data point. It's a different type of company.
Speaker 8: I think when we see some more traditional, you know,
Speaker 8: companies that are you know, maybe a little bit earlier,
Speaker 8: but with real growth stories and unlevered, I think that'll
Speaker 8: be a better benchmark as to how the IPO market
Speaker 8: really is right now.
Speaker 3: Is it a starter gun for the five or so
Speaker 3: actual technology companies that are waiting in the wings as
Speaker 3: IPO candidates.
Speaker 7: Well, I wouldn't.
Speaker 8: It doesn't really feel like a big breath of wind
Speaker 8: when they priced, you know, twenty three and a half
Speaker 8: percent below the midpoint of their filing range.
Speaker 7: We'll see how they trade today.
Speaker 8: I mean, you know, let's let's let's hold out a
Speaker 8: verdict until we see.
Speaker 7: How it trades.
Speaker 8: But I wouldn't say it's it's it's a big starter gun.
Speaker 7: Doesn't mean the IPO market's going to close.
Speaker 8: And we had another sort of poorly performing IPO last
Speaker 8: week with bright Spring that's traded down fifteen percent in
Speaker 8: a week and also price below it's midpoint.
Speaker 7: Of its range. But both of those companies, as I said,
Speaker 7: were highly levered.
Speaker 8: So I don't draw a lot of conclusions frankly from
Speaker 8: either of these two IPOs. I would like to see how,
Speaker 8: you know, I think Reddit might be one of the
Speaker 8: next companies to come out. I would like to see
Speaker 8: how more traditional tech companies that are venture backed, that
Speaker 8: you don't have a long history and have significant leverage.
Speaker 7: I'd like to see how those companies price.
Speaker 8: So I don't think there's a ton to learn right
Speaker 8: now from either of these two IPOs.
Speaker 2: Let's therefore focus in on the reporting that was of
Speaker 2: this week. The Reddit is looking at coming in the
Speaker 2: near future at a trying to get a sense of
Speaker 2: what market capitalization, whether it's five billion or so, which
Speaker 2: is a significant haircut from where they last raised money at.
Speaker 2: But you've been highlighting some of the names that might
Speaker 2: well come to the market as well as Reddit. You've
Speaker 2: got Striped, churo Chime, Data, Bricks Service, Titan. Are we
Speaker 2: likely to say see some pain for previous rounds of
Speaker 2: late stage investors and what recompense did.
Speaker 3: They get it?
Speaker 8: It's a really interesting question. You know, reddis last round
Speaker 8: valuation was ten billion. You know, in sort of the
Speaker 8: height of the market in twenty twenty one. You know,
Speaker 8: I think that given their they performed reasonably well. They
Speaker 8: bolved for IPO at the end of twenty one, they
Speaker 8: said they were going to do a billion of revenue.
Speaker 8: In twenty twenty three they did sounds like by reports
Speaker 8: somewhat closer to eight hundred million.
Speaker 7: So they are growing growing reasonably well.
Speaker 8: But you know, I think that would suggest evaluation, you know,
Speaker 8: in an IPO in the you know, four to six
Speaker 8: billion range. So how do last round investors who paid
Speaker 8: ten billion feel about that. It'll be an interesting discussion
Speaker 8: between last round investors and current investors and potentially you know,
Speaker 8: IPO investors. But this is a problem that's good that
Speaker 8: a lot of companies are facing. We saw, you know,
Speaker 8: Instacart when they went public, they had a thirty nine
Speaker 8: billion dollar you know, last round valuation. Then they went
Speaker 8: public at around ten billion. So this is the medicine
Speaker 8: that I think companies are going to have to take
Speaker 8: to get to the I p O markets. But we're
Speaker 8: going to see a lot of interesting negotiations between last
Speaker 8: round investors and and underwriters at this point.
Speaker 2: And the reason Greg we have your expertise on the
Speaker 2: show is because you are there helping make markets in
Speaker 2: pre i PO names, and I'm interested is to what
Speaker 2: appetite is like at the moment, what sort of valuations
Speaker 2: you're tending to see in these transactions.
Speaker 8: Yeah, I mean we've we've definitely seen a significant drop
Speaker 8: off and valuations over the last couple of years, you know,
Speaker 8: with with a couple of exceptions. Clearly the AI space
Speaker 8: has been a rocket ship, as has the rocket company SpaceX,
Speaker 8: you know, so there's been a couple of exceptions, but
Speaker 8: generally speaking, we've seen you know, significant uh, you know,
Speaker 8: devaluation and a lot of these high flying companies, you know, Brettit.
Speaker 8: We've recently seen trading you know, start to pick up
Speaker 8: a little bits as investors feel that an I p
Speaker 8: O is forthcoming. But we're seeing pricing in you know,
Speaker 8: just below five billion range.
Speaker 7: But as a general rule, you know.
Speaker 8: We're starting to see a little bit of an uptick
Speaker 8: in both demand and in valuations, and I think that
Speaker 8: modes well for a healthy IPO market, should you know,
Speaker 8: most of the other economic indicators sort of stay stable
Speaker 8: as they.
Speaker 2: Are now all about the macro sometimes too. Greg Martin
Speaker 2: brilliant to get your perspective. Thank you. Co founder and
Speaker 2: managing director of Rainmaker Securities. Coming up, well, we're going
Speaker 2: to talk about the private market a little bit more.
Speaker 2: Data Snipper has just nabbed one billion dollar valuation on
Speaker 2: the promise of using AI to automate some of your
Speaker 2: more tedious tasks in the world of auditing. We'll get
Speaker 2: into it. Next to the CEO is the roommate technology.
Speaker 2: Let's talk venture. Data Snipper has raised one hundred million
Speaker 2: dollars in a Series B and a billion dollar valuation.
Speaker 2: It's been led by Index Ventures in the round. The
Speaker 2: company uses AI to make audit and data reconciliation more efficient,
Speaker 2: basically serving users across brands like Deloitte. Ey Zeman's here
Speaker 2: with more is the c that business video pieces and
Speaker 2: VideA I love in the release about this phrase. You say, basically,
Speaker 2: you've made their job fun for the first time. You're
Speaker 2: talking about customers about auditors. Make it sexy for us.
Speaker 2: How are you making financial audit that much easier?
Speaker 11: Caroling? First, thanks for having me here. It's a pleasure
Speaker 11: to talk to you about Data Snipper. It's an exciting
Speaker 11: day here and here's why every day you and I
Speaker 11: wake up and we operate on trust for the products
Speaker 11: and services we use, we buy the stocks we invest in,
Speaker 11: and yet there are armies of people behind the scenes
Speaker 11: making that possible that are essentially in thankless jobs. Audit
Speaker 11: has been under tremendous pressure. This is an industry that
Speaker 11: has seen unprecedented attrition. There are fewer people joining the
Speaker 11: industry and there are more people leading it, and there
Speaker 11: are the same number of hours to do the work
Speaker 11: that they have been doing. And yet the auditing standards
Speaker 11: have been going up, and there have been very few
Speaker 11: software solutions in tools built for auditors. And that's what
Speaker 11: Data Snipper looks to solve. We use AI to help
Speaker 11: automatically match a lot of data, whether it's structured or
Speaker 11: unstructured sources, to really validate some of the transactions that
Speaker 11: they're looking to cross reference, to reconcile, to match, and
Speaker 11: to validate, really taking hours days of manual work and
Speaker 11: doing that in seconds for them.
Speaker 5: FIJA.
Speaker 3: In your case, the why you raise money is interesting
Speaker 3: because your revenue growth is impressive, and my understanding is
Speaker 3: you want to go to all of those long suffering
Speaker 3: internal audit folks that are daily worrying about Sarbaine's Oxley
Speaker 3: or Soft's management compliance and controls programs. But why did
Speaker 3: you need one hundred million dollars to do that? Why
Speaker 3: couldn't you just do it off your own cash flow?
Speaker 7: Ed?
Speaker 11: We absolutely could have done it from our cashflow. We've
Speaker 11: been profitable from the beginning and very proudly growing sustainably
Speaker 11: while doing this at a high growth, Here was an
Speaker 11: opportunity to accelerate our vision. It was about being able
Speaker 11: to build and ship great new products faster to solve
Speaker 11: more problems for our customers. It gives us the opportunity
Speaker 11: to expand. We're opening our first office in pu Lumpur
Speaker 11: and in Latin America while strengthening our presence in the
Speaker 11: United States. And it's about ensuring that we have to
Speaker 11: go to market muscle to be able to reach customers
Speaker 11: like your wife. So we couldn't be more excited to
Speaker 11: be able to serve customers across external audit, interl financial control.
Speaker 11: Anyone who's looking to match and reconcile data data snipper
Speaker 11: can be a hole.
Speaker 2: One hundred million. Where does that get allocated? Is that
Speaker 2: what you can do to get into the hands of
Speaker 2: more financial auditors right here, right now? Is it marketing?
Speaker 2: Is it people? What are the bottlenecks you're facing?
Speaker 6: Video?
Speaker 11: The first is to be able to build and innovate
Speaker 11: products at the pace our customers need. The auditing industry
Speaker 11: has long been forgotten as a vertical. They are some
Speaker 11: of the most underserved customers. Some of the work that
Speaker 11: they are doing is so manual you would be shocked
Speaker 11: that we are in the year twenty twenty four and
Speaker 11: there are such few solutions built for them. And our
Speaker 11: agenda number one is to build as many great inovative
Speaker 11: products to solve a many problems for them as possible,
Speaker 11: And so all of our resources, time and focus is
Speaker 11: on innovating all right.
Speaker 3: Data Stiffer, CEO of vijipeds one hundred million dollar Series
Speaker 3: B one billion valuation. Good to check in from Bloomberg
Speaker 3: Television and radio audience worldwide. More earnings and this time
Speaker 3: Qualcom delivering a solid earnings forecast for the current period,
Speaker 3: helped by a recovering market for smartphone chips, but some
Speaker 3: analysts also noting high inventory levels in other business lines.
Speaker 3: Solighted to bring in Qualcom CEO Cristiano am on and
Speaker 3: let's get right to the inventory narrative. Cristiano, so smartphone.
Speaker 3: You said the inventories have improved. The lingering concern is
Speaker 3: Internet of Things, which for our global audience is basically
Speaker 3: anything with a network connection, right from industry manufacturing through
Speaker 3: to connected devices in the home. And you're saying that
Speaker 3: they're still working through inventories there. But because that business
Speaker 3: line is so broad, what can you tell me about
Speaker 3: where the inventoryes linger, specifically geographically heavy industry retail.
Speaker 1: Very good, ed, good talking to you.
Speaker 12: First of all, I don't understand where this inventory commentary
Speaker 12: is really coming from.
Speaker 1: We saw this, I think in the press yesterday.
Speaker 12: Maybe I'll use this opportunity to explain the majority of
Speaker 12: our business hntsts. We're working very hard to diversify the business.
Speaker 12: We're making good progress, but stue the majority of the
Speaker 12: business hand sets and hence as we have seen that
Speaker 12: inventory had actually stabilized since last quarter. I think what
Speaker 12: we've seen in the results, especially with the beat and
Speaker 12: rais in EPs, is that.
Speaker 1: Hinses are getting back to normal.
Speaker 12: We're happy with the health of the Android Ecosystem premium tier.
Speaker 12: It's strong with h Entree and we still to say
Speaker 12: that in the numbers IoT we talk about industrial inventory
Speaker 12: actually before every other company. Actually we were some of
Speaker 12: the first ones to talk about it. Still a smaller
Speaker 12: percent of our business would like it to be bigger.
Speaker 12: But we had said that that is the lowest quarter
Speaker 12: and we expect to see growth in the coming quarters.
Speaker 12: So yeah, I don't understand this comment on inventory. We're
Speaker 12: happy with the results, and we're happy with a number
Speaker 12: of the analyst revisions that actually came out this morning
Speaker 12: on the stops.
Speaker 3: I'm just reading the transcript from the Aneen School, right,
Speaker 3: and you said second half of the fiscal year as
Speaker 3: we see the inventory kind of normalizing. In the IoT context,
Speaker 3: A positive area was China. You promised that we would
Speaker 3: get an uptick in China sales. We did get that.
Speaker 3: Does it reflect customers in China having been through inventories
Speaker 3: or is this a commitment to forward ordering signs that
Speaker 3: those end markets have demand.
Speaker 12: Yes, this is a great question, and I want to
Speaker 12: start by saying we have two vectors that are very encouraging.
Speaker 1: One vector is the.
Speaker 12: Premium tier has proven to be resilient even within the
Speaker 12: micro uncertainty. It is that users when they go buy
Speaker 12: their next phone. They want a better phone. The second
Speaker 12: thing is we're starting to see the first innings of Jenai.
Speaker 12: Some of the use cases are starting to come in
Speaker 12: and that has brought some excitement. Some of our customers
Speaker 12: had record pre sales of their new devices with agentree
Speaker 12: and what we see in China right now. I think
Speaker 12: there was a lot of concern in the past about
Speaker 12: Huawei come back to the phone business, but what exactly
Speaker 12: happening is Huawei is increasing the size of the tem
Speaker 12: and our customers are holding share in seeing opportunities in
Speaker 12: the premon teer and that's reflected in the quarter. We
Speaker 12: have a lot of orders of Agent three, especially for
Speaker 12: phones they launch or lounching in the market. We're happy,
Speaker 12: We're just cautiously optimistic since we don't know how the
Speaker 12: second half of the year in phones in China is
Speaker 12: going to unfold.
Speaker 2: Christiana, how do you navigate geopolitics when it comes to China,
Speaker 2: not just macroeconomy?
Speaker 1: We just do business. I think we focus on where
Speaker 1: we can control.
Speaker 12: I think we're happy that we have a strong relationship
Speaker 12: with China. Our technology is differentiated and is helping I
Speaker 12: think on both sides. One it's business is export of
Speaker 12: semis for the US. For China, it has been growth
Speaker 12: for technology. We have not been impacted to date by
Speaker 12: any of the restrictions. And as we diversify the company,
Speaker 12: going from hints to automotive and industrial, I think we
Speaker 12: see our China business expanding as well.
Speaker 2: Let's go back to the bread and butter that is phones, though,
Speaker 2: and I think about Apple's earnings coming after the bell,
Speaker 2: Everyone wanting to get some sort of steer on where
Speaker 2: the consumer is at right now, and ultimately you've said, look, consumer,
Speaker 2: we're recovering in phones. How excited are consumers to renew
Speaker 2: do you think? And how much will this manage to
Speaker 2: carry you on into the rest of twenty twenty four.
Speaker 12: Look, we don't want to make a prediction. Phone cycles
Speaker 12: is very difficult to make predictions. There are a couple
Speaker 12: of things that we know it will happen once over
Speaker 12: ten years. You have a generation of wireless. We've just
Speaker 12: been to the five G transition. But the early signs
Speaker 12: of Genai use cases are actually exciting. I think you
Speaker 12: saw Samsung launching S twenty four with a number of
Speaker 12: Gen Ai use cases running on the device.
Speaker 1: Same thing happened in China. Just mentioned about.
Speaker 12: That, So that could create an interesting opportunity for upgrade
Speaker 12: cycle in phones.
Speaker 1: It's just hard to predict the timing.
Speaker 3: Probably a bog television and radio audience is speaking to
Speaker 3: Cloudcom CEO Cristiano Amon Christiana, you and I have talked
Speaker 3: about on device processing of generatord ai tools and running
Speaker 3: of large language models on device airplane mode. When does
Speaker 3: that business that you're involved in show up in the financials.
Speaker 1: Yeah.
Speaker 12: The way you should think about the financial impact, especially
Speaker 12: if you think about phones is really a premium tier
Speaker 12: becoming a larger percentage of the market, and we're kind
Speaker 12: of starting to see that. And then the other one
Speaker 12: is more silicon content. I think our asps increase on
Speaker 12: the chipset and that has a positive contribution for the business.
Speaker 12: And the dynamic that we see with the success of
Speaker 12: Agent three is just the first signs of the opportunity.
Speaker 1: Just to be cautious that we still need to see
Speaker 1: a lot of use cases develop.
Speaker 3: Lots of partnerships and deals kind of talks about on
Speaker 3: the call. When we think about names like Apple and
Speaker 3: Samsung and the handset makers in China. Look at the
Speaker 3: history of Qualcom, can you kind of guarantee investors that
Speaker 3: you can continue forward on the deals and avoid the
Speaker 3: legal entanglements you've had in prior years.
Speaker 1: All right, so you mentioned partnerships.
Speaker 12: I think we have two very important conversations, and I
Speaker 12: want to make a distinctions. I think the first one
Speaker 12: is our licensing business, and we have been saying in
Speaker 12: the licensing business, which has been the reason we have
Speaker 12: been in a number of disputes in the past, is
Speaker 12: very stable. It's one of the most stable times that
Speaker 12: we had since the beginning of the licensing business.
Speaker 1: And in the quarter we.
Speaker 12: Announce three very important milestones. One is we saw an
Speaker 12: extension of the Apple license agrement. That means that Apple
Speaker 12: is paying license for the Qualcom standard cential patents and
Speaker 12: that's regardless of using or not using a Qualcom chip.
Speaker 1: We also saw two.
Speaker 12: Chinese significant customers renewing the license agreement, which speaks to
Speaker 12: the value of the Qualcom intellectual property portfolio, even in
Speaker 12: China in the middle of the geopolitics. That's a very
Speaker 12: positive side to investors. Now, the second part of a
Speaker 12: questions about partnerships, what's exciting about Qualcom? And I know
Speaker 12: we spend a lot of time talking about handsets, but auto.
Speaker 1: There is a lot of.
Speaker 12: Reports on the peers of a decline in auto. If
Speaker 12: you look at this score, we actually had record auto
Speaker 12: revenues with thirty one percent growth here over year when
Speaker 12: the whole market is downced and that speaks to the
Speaker 12: number of ships we've been making in auto for the
Speaker 12: future of the automotive industry and that's an important metric
Speaker 12: where the future of Qualcome is going to be.
Speaker 2: Still about our diversification, cole com CEO Cristiano Amon, great
Speaker 2: to have some time with you. We thank our radio
Speaker 2: and TV audiences that does it. From Bloem mag Edition
Speaker 2: and Blue Meg Technology. Do you remember to look at
Speaker 2: the podcast