Speaker 1: From Mahart where Innovation, Money and power Collie in Silicon Valley, NBN.
Speaker 2: This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.
Speaker 3: Live from San Francisco. This is Bloomberg Technology coming up.
Speaker 3: I sit down with the CEO of Lyft, president of Shopify,
Speaker 3: and COO of Reddit, and we break down those companies'
Speaker 3: earnings results. Plus we stick with earnings as Airbnb sees
Speaker 3: a record plunge on a week outlook, and we dig
Speaker 3: into Disney as the Mousehouse offers a mixed picture in
Speaker 3: its earnings. Let's check in on the markets and as
Speaker 3: that one hundred up for a second consecutive day by actually, no,
Speaker 3: I take that back, I'm wrong. It's down two tens
Speaker 3: of percent. How things can change this session. The story
Speaker 3: right there is really about monetary policy, you know, And
Speaker 3: on a three day basis, we're flat, we're slightly hiring
Speaker 3: the session. We're still thinking about Monday and the selloff
Speaker 3: that happened on growth concerns and monetary policy intervention. So overnight,
Speaker 3: the bank in Japan basically said we won't intervene with
Speaker 3: a rate hike in the event that markets are unstable,
Speaker 3: and that's kind of having it not much to do
Speaker 3: with tech. There's one big tech name that is moving
Speaker 3: and that's Airbnb.
Speaker 4: Check out this chart.
Speaker 3: So in the session, Airbnb is on track for its
Speaker 3: biggest drop ever.
Speaker 4: We're worried about the outlook.
Speaker 3: We're worried about what Airbnb had to say about its
Speaker 3: peak holiday season, even though some executives took to the
Speaker 3: social medias to tell us things, all right, let's talk
Speaker 3: about Airbnb and bringing Bloomberg's man Deep Sing, senior analyst
Speaker 3: at Bloomberg Intelligence. So what they said was moderation sequentially
Speaker 3: of growth, and the growth wasn't that good in the
Speaker 3: courts have gone. So if you extrapolate, you're basically saying,
Speaker 3: hold on, this is the best time of year normally
Speaker 3: for Airbnb, the summer months. We're worried about what they're
Speaker 3: saying about business traffic.
Speaker 4: Yeah, look, and you're right.
Speaker 5: I mean, given its Olympics and you know, a lot
Speaker 5: going on in terms of holiday planning. They talked about
Speaker 5: shortening booking windows. And to me, you know, the biggest
Speaker 5: risk with Airbnb is not that they don't have a
Speaker 5: great mode. It's more about the saturation in the alternative
Speaker 5: accommodation's market and whatever new products that they have launched,
Speaker 5: whether it's rooms or experiences which they have had for
Speaker 5: a while, hasn't really driven incremental growth. So what they
Speaker 5: told us last night was look, the room night growth
Speaker 5: will be mid single digit and EBITDA growth will actually
Speaker 5: taper off because they plan to invest more to expand
Speaker 5: supply in new areas in Latin America and Asia pack
Speaker 5: and I think all those are signs towards you know,
Speaker 5: penetration being high in their existing markets and they just
Speaker 5: have to find new markets if they want to keep
Speaker 5: growing in alternative accommodations, or perhaps they need to make
Speaker 5: an acquisition, which I want to all out given the
Speaker 5: strength of Airbnb's balance sheet.
Speaker 3: Okay, so Mandy, your stocks down twelve to fourteen percent,
Speaker 3: the most on record. What do you do if you're
Speaker 3: the CEO? You go on social media and say it's
Speaker 3: a great time to buy. Would you agree with Brian
Speaker 3: Sheesky's thesis here?
Speaker 5: I mean, he had a floor last night and during
Speaker 5: the earnings call to talk about the plans, and nothing
Speaker 5: we heard was very exciting. Look, long term, as I said,
Speaker 5: this company has a great mode. It clearly is a
Speaker 5: category leader in alternative accommodations, but can it keep growing
Speaker 5: double digits? And I think there are question marks they
Speaker 5: can do it at least in the next two to four.
Speaker 3: Quarters, Bloomberg's Mandep saying at Bloomberg Intelligence, thank you.
Speaker 4: I want to get more on the market.
Speaker 3: Outlook is equities trade broadly in the green with Bloomberg's
Speaker 3: Emily Graffeo. You know, I don't know about you, m
Speaker 3: I'm kind of recovering a bit from Monday's the trauma
Speaker 3: of a near three percent decline on the Nasdaq one hundred.
Speaker 3: But in the market there's the growth concern, there's the
Speaker 3: central bank policy concern, and then there's probably earnings. What's
Speaker 3: the outlook of all of that in aggregate.
Speaker 6: Well, the outlook is that the volatility is not expected
Speaker 6: to subside, even though we are seeing this market rally
Speaker 6: yesterday and at least today. When you look at the
Speaker 6: Vicks volatility index, typically when we see a spike like
Speaker 6: we did on Monday, that means that for the next
Speaker 6: several trading sessions and even up to weeks, we'll see
Speaker 6: these big up days and these big down days. What's
Speaker 6: interesting this is Bloomberg Technology we'd been talking so much
Speaker 6: about a rotation into smaller cap names value names a
Speaker 6: few weeks ago, and we're actually kind of seeing that
Speaker 6: trade disappear now now that markets are rallying. Technology stocks
Speaker 6: are rallying the most. You look at the Nasdaq one
Speaker 6: hundred at least today, up almost two percent. The Russell
Speaker 6: two thousand, which was outperforming tech, is only up about
Speaker 6: zero point eight per right now. So you know, a
Speaker 6: few days ago we were talking about, oh, is tech
Speaker 6: no longer a safe haven? Is that no longer a
Speaker 6: place that investors want to hide? But it actually seems
Speaker 6: like we are still seeing an appetite to buy those
Speaker 6: megacap tech stocks.
Speaker 3: And we remind our audience in Vidia doesn't report until
Speaker 3: August twenty eight, then everyone's kind of treading water till
Speaker 3: that point. Bloomberg's Emily Graffeo, thank you very much. Aside
Speaker 3: from this week's massive sell off, some of the world's
Speaker 3: biggest equity hedge funds lost hundreds of millions of dollars
Speaker 3: from piling in to popular tech stocks. Amid the stock
Speaker 3: route that hit markets in around mid July, Bloomberg Temma
Speaker 3: Palmer has been tracking it. There are some specific single
Speaker 3: names in that industry who were probably more hit than others.
Speaker 4: Who are they and what happened?
Speaker 7: Yes, so we saw a lot of pain over at
Speaker 7: Light Street, down nine percent and one month alone of July,
Speaker 7: still up forty for the year, but definitely a difficult
Speaker 7: month for them. That's likely due to their very big
Speaker 7: position in the video As of March, that stock for
Speaker 7: about seventeen percent of their portfolio. They also have sizeable
Speaker 7: stakes and other of the Magnificent seven. When we look
Speaker 7: across the world, you know the hedge fund space, specifically
Speaker 7: when it comes to the equity funds, you do see
Speaker 7: this concentration in Microsoft, Amazon, Navidio, and some of the
Speaker 7: other big tech names that have really struggled this month.
Speaker 3: Bloomberg's hemmapalma with the data and the hedge fund ownership
Speaker 3: of big tech.
Speaker 4: Really appreciate it. Thank you.
Speaker 8: So.
Speaker 3: Coming up on Bloomberg Technology, we're going to be joined
Speaker 3: by Reddits COO Gen Wong to discuss the company's results
Speaker 3: and their outlook for sales growth and interesting conversation. Gen
Speaker 3: really at the heart of some of the deals that
Speaker 3: Reddit is doing. One other name that I'm looking at
Speaker 3: is in the chip sector, Micron in particular, let's bring
Speaker 3: up the stock and take a look at it. There's
Speaker 3: several stories out there, one of largely around share buybacks.
Speaker 3: The company basically saying that they may resume a stock
Speaker 3: buyback program to offset some dilution from their employee stock
Speaker 3: comp programs.
Speaker 4: The stock up two point seven percent.
Speaker 3: Remember we've covered this really in the context of high
Speaker 3: bandwidth memory recently, but also it's one that is in
Speaker 3: a lot of end markets, smartphones, d ram and nan
Speaker 3: flash being one as well.
Speaker 4: This is Bloomberg Technology.
Speaker 3: Reddit beat analysts expectations on sales growth after expanding its
Speaker 3: data licensing partnerships and investing in new advertising technology. The
Speaker 3: company's revenue forecast for the third quarter also beat estimates.
Speaker 3: Delighted to say that Reddit's COO Gen Wong joins us
Speaker 3: live here on Bloomberg Technology. You know that the stock
Speaker 3: is lower an impressive set of numbers for a relatively
Speaker 3: newly public company, and everyone's kind of looking at the
Speaker 3: outlook and trying to extrapolate out understand the world that
Speaker 3: Reddit's operating in. Could you just get us a sense, Jen,
Speaker 3: in your conversations with advertisers, what the rest of the
Speaker 3: year looks like, the environment looks like, and why Reddit
Speaker 3: may or may not fare better with those advertisers compared
Speaker 3: to other social media platforms.
Speaker 9: Yeah, thanks for having me look at the markets of
Speaker 9: the markets. But when we look forward to the back
Speaker 9: half of the year, I think advertising is a pretty
Speaker 9: stable market, and what drives our growth is what drive
Speaker 9: our growth in Q two, which is delivering against our
Speaker 9: consumer and ad roadmap and continue to drive value for advertisers.
Speaker 9: So I think what's driven our user growth has been
Speaker 9: the work of making Reddit better, making it easier access posts,
Speaker 9: easier for people to connect with communities, easier for mods
Speaker 9: to do their moderation. And that's when we make the
Speaker 9: platform better, the users grow. And from an advertising perspective,
Speaker 9: it's been all the investments we made in our ad
Speaker 9: platform to improve usability and scalability so that we can
Speaker 9: address and serve more advertisers and grow the advertising base.
Speaker 9: Next is delivering quarter over quarter performance for our advertisers,
Speaker 9: and then delivering things that only Ready can do that
Speaker 9: are ready unique, like they ask me anything, format refresh,
Speaker 9: or testing things like ads and comments. Those strategies are
Speaker 9: working for us and will continue executing against that roadmap.
Speaker 10: As we head into the back half of the year,
Speaker 10: and we feel really good about the yield on that roadmap.
Speaker 3: Okay, Jen, you've been very busy since last week spoke,
Speaker 3: I think principally about the deals with NBA NFL. What
Speaker 3: I'm trying to understand is how those kind of video
Speaker 3: focused partnerships contribute to your ad revenue or ad growth
Speaker 3: going forwards from this point.
Speaker 9: So, Reddit is home to an incredible group of fan communities,
Speaker 9: and the sports communities are some of the most active
Speaker 9: engaged on the platform, and they're global, and so the
Speaker 9: idea of having those partnerships with the sports leagues was
Speaker 9: to bring in special content like highlights, like access to
Speaker 9: players for amas or to insiders, for those communities to enjoy.
Speaker 9: So that is really our starting place for it. Now
Speaker 9: what's great is that does create an opportunity for advertisers.
Speaker 10: To support that content.
Speaker 9: Some of those advertisers support that content and are aligned
Speaker 9: with that content on other platforms like television, et cetera.
Speaker 4: So it is a.
Speaker 9: Really nice win win win for users and communities and
Speaker 9: Reddit and advertisers. It's early, it's a program that we're testing,
Speaker 9: and we've done some work with the NFL.
Speaker 10: Now we've expanded it to more leagues.
Speaker 9: We are excited about it because I think the communities
Speaker 9: are excited about getting access to that content. And if
Speaker 9: you think about it, you know, we've done partnerships with
Speaker 9: US based leagues, but there are so many more sports
Speaker 9: and so many more global leagues that we could engage with.
Speaker 9: And then the fan communities, they go beyond sports.
Speaker 10: On Reddit, there a gem.
Speaker 3: I am a I am a long serving, suffering and
Speaker 3: passionate Chelsea fan in football what you'd call soccer, and
Speaker 3: I dive deep into Reddit when I want to see
Speaker 3: what the fan base wants to know you. And I've
Speaker 3: discussed previously licensing of data to the AI companies Google
Speaker 3: Open Ai, but a few months have elapse and I'm
Speaker 3: wondering if you now have a better sort of vision
Speaker 3: for the long term potential of that business model away
Speaker 3: from advertising.
Speaker 9: Look, I think that landscape is still emerging and it's
Speaker 9: still early days for for AI, so it's a long arc.
Speaker 9: We've been I think, very thoughtful about how we structure partnerships.
Speaker 10: Our view. They're not one year, they're not long term.
Speaker 9: They're sort of midterm partnerships that allow us to learn
Speaker 9: and find a way to work with this new area.
Speaker 10: And see how it goes.
Speaker 9: So I don't think, you know, I think we still
Speaker 9: continue to learn in this process because I think it's
Speaker 9: a very long mark. I do think some of the
Speaker 9: things that we've done have established a foundation for having
Speaker 9: these partnerships. So if you look at our public content
Speaker 9: policy and you look at the changes.
Speaker 10: That we've made, I think we've made it really.
Speaker 9: Clear how we want the ecosystem work because we are
Speaker 9: stewards of Reddit data and user privacy, etc. Is really
Speaker 9: important in allowing scaled access to Reddit disk.
Speaker 4: Jen.
Speaker 3: When I sit at my computer in the morning, I
Speaker 3: use various search functions. It's often a Reddit post that
Speaker 3: will come up and it's quite easily discoverable, specifically Google Search,
Speaker 3: but going forward, Chat, GPT, there are platforms where that's
Speaker 3: not the case, being do you have a clear strategy
Speaker 3: for search expansion for Reddit content.
Speaker 9: Look, we have been beneficiaries of the open Internet. We
Speaker 9: believe in the open Internet and allowing people to get
Speaker 9: access to important information and reddits. Corpus has some of
Speaker 9: the best and most important answers regarding everything, product, services, life, etc.
Speaker 9: So we want ready to be open but we have
Speaker 9: to have a set.
Speaker 10: Of rules for doing that.
Speaker 9: And search and summarization and AI and data usage, they're
Speaker 9: sort of all merging right.
Speaker 10: This is part of what's changing in the world right now.
Speaker 9: So I think our view is we will have a
Speaker 9: conversation with anybody about having access to the data. But
Speaker 9: we've been very clear and transparent about our rules, which
Speaker 9: are our public content policy and protecting user privacies, being
Speaker 9: good stewards of data, and that we have to have
Speaker 9: a conversation where those policies and rules are respected.
Speaker 10: And then there's commercial alignment.
Speaker 9: So we're having conversations with every player large and small,
Speaker 9: and I think we've made it clear that what the
Speaker 9: rules are and how to make this work, and the
Speaker 9: fact that we've signed deals I think is a sign
Speaker 9: that we're sensible.
Speaker 10: There's a path here to do that.
Speaker 3: Jen, the stage is now very much set for a
Speaker 3: presidential election race for November.
Speaker 4: How does that impact Reddit?
Speaker 3: Do you kind of foresee boost from political ads or
Speaker 3: even just activity on the platform centered around the election.
Speaker 10: Yeah, we actually are not a big player in political ads.
Speaker 10: We never have been.
Speaker 9: Politics is obviously a big area that our community is
Speaker 9: engaged with on Reddit. So we do see conversation. But
Speaker 9: what I would say is on Reddit, because we have
Speaker 9: so many diverse communities, different communities have moments at different times.
Speaker 9: This is a presidential election year, so politics is going
Speaker 9: to be a little bit bigger, but then Olympics was
Speaker 9: a little bit bigger, and then there are seasons where
Speaker 9: other communities kind of have their moment. What happens with
Speaker 9: Reddit is that that kind of smooths out over time.
Speaker 9: So a community might be having a moment at one time,
Speaker 9: then another community than another community. But if you look
Speaker 9: at the arc of Reddit's growth, it sort of is
Speaker 9: all smooth over the trend reddits.
Speaker 3: COO gen One, it's great to have you back here
Speaker 3: on Bloomberg Technology.
Speaker 4: Thank you very much for your time. It's time for
Speaker 4: talking tech.
Speaker 3: And in the news, soft Bank announces a three point
Speaker 3: four billion dollar buy back. The Tokyo based firm said
Speaker 3: it would purchase up to six point eight percent of
Speaker 3: its free floating outstanding shares through August seventh of next year.
Speaker 3: The move comes as CEO Masayoshi's son prepares for a
Speaker 3: large scale push into AI and semiconductor investments. Plus Hewlett
Speaker 3: Packard's fourteen billion dollar deal to buy Juniper Networks gets
Speaker 3: the ok from UK watchdogs. The Competition of Markets Authority
Speaker 3: cleared the purchase after investigating if it would lessen competition
Speaker 3: in the UK.
Speaker 4: The deal was similarly.
Speaker 3: Passed just last week by the European Union, and Sony
Speaker 3: raises its revenue and profit forecast for the fiscal year
Speaker 3: to March.
Speaker 4: The company saw a successful.
Speaker 3: Court in its music and gaming divisions, with operating profits
Speaker 3: at one point nine billion dollars. It's PlayStation division saw
Speaker 3: a lift, but it's PS five consoles sold just two
Speaker 3: point four million units, significantly below the three million units
Speaker 3: that analysts had expected. Let's get back to the earning
Speaker 3: story and take a look at Shopify. The global commerce
Speaker 3: company reported earnings results before the opening bell this morning,
Speaker 3: beating estimates. Shopifive president Harley Finkelstein joins us now for more.
Speaker 4: Good morning to you, Harley.
Speaker 3: It's good to catch up and then have you batch
Speaker 3: on Boombog technology. Things are going right for Shopify. The
Speaker 3: environment's hard to understand. Is there something specific that Shopify
Speaker 3: is doing better or well in that environment?
Speaker 2: I think so. I think absolutely so.
Speaker 11: First and foremost, I think we've earned the trust of
Speaker 11: millions of merchants in business all over the world.
Speaker 2: We announced a month ago month or so we all
Speaker 2: go announced.
Speaker 11: Then we have now powered over a trillion dollars with
Speaker 11: a T in CUMULOGMVS and sart inception, which for us
Speaker 11: is is really incredible. But I think we're not just
Speaker 11: helping merchants compete. I think we're propelling them to victory.
Speaker 11: And in terms of you know, how Shopify is doing
Speaker 11: in particular, I think these results demonstrate that we can
Speaker 11: do we can create the serious combination of both growth
Speaker 11: and profitability. You know, when you exclude the sale of logistics,
Speaker 11: revenue is up twenty five percent for the quarter to
Speaker 11: two billion.
Speaker 2: Yes, our fifth consecutive quarter at least twenty five percent.
Speaker 11: Top lane growth when you look at free cash low
Speaker 11: or free CASHLW margin more than doubled from last year
Speaker 11: from six percent to sixteen percent. Now, in terms of
Speaker 11: sort of the more macro I guess you know, the
Speaker 11: sort of macro questions you're asking. Look from our vantage point,
Speaker 11: I'm hearing from other companies what you're hearing as well,
Speaker 11: But from our vantage point, our merchants, the merchants on
Speaker 11: Shopify are outperforming others in the market.
Speaker 2: They're growing at healthy rates.
Speaker 11: We're adding more merchants every day, and I think as
Speaker 11: a result, we're getting more market share.
Speaker 3: Harley, real quick, I just want to jump in because
Speaker 3: I you know, it did go well for me the quarter.
Speaker 3: You've kind of been suffering from slowing growth in prior quarters,
Speaker 3: and your emphasis was a marketing marketing, but something jumped out.
Speaker 3: You talked about a partnership with a social media platform
Speaker 3: that really helped out.
Speaker 4: What platform was that, What.
Speaker 3: Were the specifics around that as a catalyst for.
Speaker 11: You, Yeah, I mean the truth is the way that
Speaker 11: we think about marketing the same way we think about
Speaker 11: product ed we don't necessarily it's all about data, and
Speaker 11: so when we see a particular marketing opportunity, we take
Speaker 11: that opportunity and the way that we think about all
Speaker 11: our marketing channels that these are levers. So in Q one,
Speaker 11: we did an experiment with a new emerging marketing channel,
Speaker 11: emerging social platform. We put some money to work, we
Speaker 11: saw a great return. We double that in Q two
Speaker 11: and we saw about a fifty one percent increase in
Speaker 11: new merchants from that channel. At the same time, we
Speaker 11: saw other channels that historically did perform well, not perform
Speaker 11: as well, so we pulled back on it. But the
Speaker 11: way that we think about our marketing is as this
Speaker 11: incredible data driven engine that allows us to not just
Speaker 11: focus on SMBs in English speaking countries, but you think
Speaker 11: about our point of sale business, our B to B business,
Speaker 11: our international business. We're able to deploy capitals that have
Speaker 11: the highest return on those investments, all within an eighteen
Speaker 11: month average payback. And that's the sophistication that we've built
Speaker 11: into the growth of members of Shopify.
Speaker 4: So which big social platform was it.
Speaker 2: We don't go into specifics on that.
Speaker 11: It's just an example of something that we're constantly experimenting with.
Speaker 11: There's not that many emerging social platforms. I'm sure you
Speaker 11: can figure out which one. But the point actually that
Speaker 11: we want investors, we want the street to take away
Speaker 11: is that we are always looking for new ways to
Speaker 11: grow the business. And again, five consecutive quarters of above
Speaker 11: twenty five percent top plane growth while being profitable. There's
Speaker 11: not too many companies that can do that at our
Speaker 11: size and growth their market share. And I think this
Speaker 11: is the best version of Shopify you're seeing right now.
Speaker 3: I've spoken to so many businesses small and slightly bigger
Speaker 3: that use Shopify, I get the benefit of it. So
Speaker 3: this is about discoverability, right, adding new merchants or markets
Speaker 3: to your platform. But let's do the math. If we
Speaker 3: won't name the social platform, what ballpark was the spend
Speaker 3: because turn on that campaign seems to have been very
Speaker 3: definitive in the quarter.
Speaker 2: Well, think about this.
Speaker 11: When we started to we've been public now for just
Speaker 11: over nine years. Initially we were focused on e commerce
Speaker 11: for SMBs in very specific regions. We now have a
Speaker 11: point of seale offering that surve passed one hundred billion
Speaker 11: dollars in GMV International for example. Over fifty percent of
Speaker 11: merchants that join in Q two on Shopify we're from
Speaker 11: outside our core English speaking countries. You know, two years
Speaker 11: ago we didn't have a B to B product, and
Speaker 11: this past court a B to B Jimmy grew one
Speaker 11: hundred and forty percent year on year. So it's not
Speaker 11: just getting more people to use Shopify, it's more people
Speaker 11: and more geography so to use different products, and that
Speaker 11: is leading to the growth that you're seeing. At the
Speaker 11: same time as being focused on on profitability.
Speaker 3: Harley, we enter the summer months and then we have
Speaker 3: the holiday season here in North America. Do you kind
Speaker 3: of market hard in the summer in the hopes of
Speaker 3: having business transaction later in the year.
Speaker 11: Real quick, Look, I think the key is that I
Speaker 11: do think the holiday will be very good. But because
Speaker 11: we have so many different verticals of merchants. We have
Speaker 11: you know, Figs doing scrubs and pet products from bark Box.
Speaker 11: We have Nestlie and Heinz and Mattel and Stables are
Speaker 11: using Shopify. We're not relying on one particular type of merchant,
Speaker 11: but I think the merchants that are on Shopify are
Speaker 11: doing disproportionately well.
Speaker 3: Harley Finkelstein, President of Shopify. Great to have you back
Speaker 3: on Bloomberg Technology. Thank you so much. Welcome back to
Speaker 3: Bloomberg Technology. Ed Ludlow Here in San Francisco. Disney gave
Speaker 3: a mixed picture as it reported third quarter results, with
Speaker 3: weakness at its famed theme parks, though it made its
Speaker 3: first ever profit in streaming, but with so many bundles
Speaker 3: our consumers getting streaming fa Tegue. Disney CFO Hugh Johnston
Speaker 3: joined Bloomberg earlier.
Speaker 4: Listen to this.
Speaker 1: Consumers do seem to appreciate having a limited number of bundles. Now,
Speaker 1: what we've tried to do with they're on offering is
Speaker 1: offer the individual pieces or if people want to get
Speaker 1: a discount by bundling, we're happy to do that.
Speaker 4: So that said, I think you do see.
Speaker 1: A trend where there's probably going to be a few
Speaker 1: big competitors in the marketplace and streaming as we see
Speaker 1: right now between Netflix, Amazon and ourselves, and then there'll
Speaker 1: be some smaller competitors out there and they'll have to
Speaker 1: decide how they're going to run their businesses.
Speaker 12: Are you concerned that consumers right now potentially are going
Speaker 12: to shrug off the price increases, because what we hear
Speaker 12: from a lot of companies is that we do see
Speaker 12: consumers trading down. Why do you think they're willing to
Speaker 12: pay for a higher price point?
Speaker 1: Well, I think the biggest reason is it's always important
Speaker 1: to focus on this. The consumer receives value and what
Speaker 1: they pay is price. And because we're delivering so much value,
Speaker 1: I mean, really an enormous amount of value in terms
Speaker 1: of the hits that I just mentioned. But then in
Speaker 1: addition to that, the combination of Disney plus Hulu and
Speaker 1: then we're going to have an ESPN tile and ultimately
Speaker 1: ESPN flagship on our streaming service. That's a huge amount
Speaker 1: of value for consumers, and as they're allocating their entertainment dollars,
Speaker 1: I think they're going to view US as as a
Speaker 1: great place to put them.
Speaker 4: That was Disney c FO Hugh Johnston. Take a look
Speaker 4: at Disney shares.
Speaker 3: We're off session lows, but we're down one point nine percent.
Speaker 3: The company also commented on its negotiations with Hulu in
Speaker 3: a filing today, saying it may have to pay five
Speaker 3: billion dollars more to acquire comcasts thirty three percent minority
Speaker 3: stake in Hulu. The two sides have disagreed over the
Speaker 3: fair value of Hulu and entered into arbitration. Proceedings to
Speaker 3: stock by the way down two percent so far in
Speaker 3: the year. Let's discuss all this with Lightshed partner Rich Greenfield.
Speaker 3: Let's park Hulu for one second, first ever profit for streaming.
Speaker 3: Is this the Rich Greenfield slow clap? Or are you
Speaker 3: not so overwhelmed by that news?
Speaker 13: When you see subscriber growth slow of actively to a
Speaker 13: halt and the price has gone up pretty traumatically, it's
Speaker 13: you know, it's pretty clear. I guess in many ways,
Speaker 13: it's sort of this, Hey, we don't know how to
Speaker 13: get more subscriber growth, so we'll raise the price and
Speaker 13: you know, hope that people won't and we'll even cut
Speaker 13: back on programming. There's obviously a lot less programming. Disney's
Speaker 13: essentially going to rely on their movies to drive the
Speaker 13: streaming service and hope that the movies are strong enough
Speaker 13: when they flow to the streaming service that people don't
Speaker 13: cancel because they're not expecting a lot of growth in
Speaker 13: subscribers over the next few quarters.
Speaker 14: And so it's.
Speaker 13: Basically trying to you know, you know, get to profitability,
Speaker 13: drive profitability of the existing base. But it doesn't really
Speaker 13: seem like there's a tremendous growth story here, and I
Speaker 13: think that's.
Speaker 14: Sort of you know, I mean, look, everyone's focused on
Speaker 14: the parks.
Speaker 13: I don't think anyone's really focused on Disney Plus at
Speaker 13: the moment.
Speaker 14: The streaming is a nice data point.
Speaker 13: I think it's less about getting to profitability and like
Speaker 13: how big a business can this actually be ed? Like
Speaker 13: can this be a multi billion dollar free cash flow
Speaker 13: generating business the way Netflix? Or is this you know,
Speaker 13: going to essentially tread water, you know, at a low
Speaker 13: single digit margin.
Speaker 14: I think that's what investors are really going to focus
Speaker 14: on over time.
Speaker 3: I mean you and I have discussed the past, right,
Speaker 3: achieving profitability by cutting you know, cutting cost out of
Speaker 3: the equation.
Speaker 4: So let's bring it back to you.
Speaker 10: Do.
Speaker 13: What you really want to see is people. You really
Speaker 13: want to see people who are so passionate. They love
Speaker 13: this service. They're willing to pay more because they're spending
Speaker 13: so much time. Like you want to see consumer love,
Speaker 13: and based on that love, you can keep raising the
Speaker 13: price getting more people to subscribe because there's great buzz.
Speaker 14: And word of mouth.
Speaker 13: That's not what's happening here nor any of these other
Speaker 13: streaming services.
Speaker 4: So then let's talk about Hulu.
Speaker 3: I just finished Star Wars Acolyte on Disney Pass, and
Speaker 3: like everyone else, I love the Bear on Hulu. You know,
Speaker 3: we did the reporting on the negotiation for that, the
Speaker 3: remainder of Comcast stay. Is it important if the idea
Speaker 3: is to achieve volume and get stuff that people want
Speaker 3: to watch? Do you see Hulu as being a sort
Speaker 3: of something that needs to be resolved as part of that.
Speaker 14: I mean, Hulu is going to be resolved. We're just
Speaker 14: talking about the number now.
Speaker 13: And I think investors are expecting several billion dollars.
Speaker 14: Whether it's four to five, we'll obviously see.
Speaker 13: But I don't think this is you know, I think
Speaker 13: obviously it probably Comcasts would love more, Disney would love less.
Speaker 13: But I don't think investors are stressing over what this
Speaker 13: number ultimately is. Investors are just surprised that the option
Speaker 13: was exercise last October.
Speaker 14: I think it's sort of crazy that.
Speaker 13: We're still talking about this not resolved here in August.
Speaker 3: Rich If you could ask one thing of Bob Eiger,
Speaker 3: or give one piece of advice to him to fix
Speaker 3: this in a way that you think would be positive,
Speaker 3: what would that be.
Speaker 13: Look, I think the bottom line is if Disney is
Speaker 13: really serious about being a long term and you heard
Speaker 13: Hugh saying they're going to be and the clip you
Speaker 13: played earlier, if they want to be a long term
Speaker 13: winner in the streaming game, it's not about discounting through bundling,
Speaker 13: it's not about cutting back on marketing. What they really
Speaker 13: need to do is invest very aggressively. Stop playing this
Speaker 13: near term Wall Street game of trying to get earnings growth.
Speaker 13: They need to invest aggressively in making great content all
Speaker 13: the time. That gets consumers to engage with the Disney
Speaker 13: streaming platforms every single day for hours a day, Like
Speaker 13: that should be their north star versus trying to figure
Speaker 13: out alternative ways to manage churn.
Speaker 14: That's what we'd like to see.
Speaker 13: And look, you've got all of these theme park concerns
Speaker 13: that are sitting with the company right now, Like that's
Speaker 13: what investors are really worried about, is how did the
Speaker 13: theme park slow down this fast in the span of
Speaker 13: just the last few months when Disney historically has pretty
Speaker 13: good visibility.
Speaker 4: I want to get some times talk about another name. Reddit.
Speaker 3: We had Gen Wong Coo on the show earlier, very
Speaker 3: sort of patient, sanguine, calm about the ad environment, but
Speaker 3: sees a lot of opportunity in sports.
Speaker 4: I know that you like that name a lot.
Speaker 2: We do.
Speaker 13: I mean, you know, if you think about what Reddit is,
Speaker 13: they really understand what consumers are interested in. And they've
Speaker 13: got one of the biggest companies in the entire world
Speaker 13: alphabet Google is in their corner. You know, you can't
Speaker 13: do a Google search and not see Reddit results rising
Speaker 13: higher and higher and higher. Google's paying them for AI
Speaker 13: Like Google is a firm believer in Reddit, If Google
Speaker 13: believes in Reddit, everyone watching this show and investing should
Speaker 13: believe in Reddit.
Speaker 4: Like I think that is.
Speaker 13: A really important data point, is that there is this
Speaker 13: increasing visibility reddits getting within Google and Jen Wong, who
Speaker 13: is now building out an ad business.
Speaker 14: Reddit was very slow to get going. They've got it
Speaker 14: going now.
Speaker 13: And we've seen other companies, whether it's Snap, Pinterest, go
Speaker 13: back x which used to be Twitter when those companies
Speaker 13: crossed a billion, Getting from one to three can happen
Speaker 13: very very rapidly, and especially at Reddit, where they really
Speaker 13: know who you are. They don't need third party cookies
Speaker 13: or data. They know exactly who Ed and Rich are.
Speaker 13: They have all of this interest data because you are
Speaker 13: searching Reddit for a topic, whether it's the giants or
Speaker 13: whether it's video games, like, they really know who you
Speaker 13: are and it allows for really well targeted advertising. I
Speaker 13: think Reddit is a must own stock. We just put
Speaker 13: a buy on it with an eighty four dollars price target.
Speaker 13: I know people are worried about the lockup ending on Friday.
Speaker 13: It is a great opportunity. People are gonna regret not
Speaker 13: buying it today.
Speaker 3: Like you said, partner Rich Greenfield, really great to have
Speaker 3: you here. On Bluembog technology. Really appreciate it.
Speaker 4: Thank you.
Speaker 3: So coming up on the show, we keep the earnings
Speaker 3: conversation going with David Risher, the CEO of Lyft, discuss
Speaker 3: the company's earnings results, which reported before the opening bill
Speaker 3: this morning. Timely this is Technology. Let's get back to
Speaker 3: earnings and Lift the right check company reported before the
Speaker 3: bell this morning. CEO David Risher joins us live from
Speaker 3: New York City to discuss and the basics of it
Speaker 3: are that bookings, the outlook, missed estimates or street expectations,
Speaker 3: that the stock is down significantly. What is happening right
Speaker 3: now with Lift? The environment that Lift finds itself in.
Speaker 15: Yeah, so hey, it's good to see you again. I mean, look,
Speaker 15: it's to me, it's a little curious, right, and this
Speaker 15: is sort of the way the world works sometimes. So
Speaker 15: we just had our first profitable quarter ever, which is
Speaker 15: an enormous accomplishment thanks to a lot of work for
Speaker 15: the team. Revenue group forty percent year on your bookings
Speaker 15: and rides around midteen seventeen percent, two hundred and fifty
Speaker 15: six million dollars of free cash, so just and service
Speaker 15: levels that are fantastic, fastest pickups, we've had in a
Speaker 15: long time, fastest or more drivers than we've ever had.
Speaker 15: So all those things are incredibly strong, and they indicate
Speaker 15: a strong marketplace. And and we reiterated our full year
Speaker 15: guidance and our multi year guidance as well.
Speaker 4: Yes in team growth, So.
Speaker 15: All those things were good. I think what people are
Speaker 15: looking at is they're seeing what I would consider to be,
Speaker 15: you know, incredibly small, you know, sort of kind of
Speaker 15: adjustment around what we've said about the future the next
Speaker 15: next quarter, in the next couple of quarters. And this
Speaker 15: to me sort of signifies, you know, sort of the
Speaker 15: world we live in. Like the things that we think
Speaker 15: about are one hundred and sixty billion rides in the
Speaker 15: US in total private cars, and we are little by little,
Speaker 15: you know, in a very very disciplined and customer obsessed
Speaker 15: way growing our business. You know, I think Wall Street
Speaker 15: sometimes looks at short term things and gets a little
Speaker 15: bit overly focused on that. I'm thinking about the long
Speaker 15: term and super excited about.
Speaker 4: The prospects David.
Speaker 3: There's some David Risher's strategy and plans that I see
Speaker 3: playing out, like price lock. Yeah, a paid feature that's
Speaker 3: going to have an impact, maybe on the top and
Speaker 3: bottom line. But why, why is that the plan for you?
Speaker 15: Yeah? So, price lock is a way for riders to
Speaker 15: lock in a price just like it sounds like, on
Speaker 15: the same route and same time every day. It's really
Speaker 15: in first met for commuters, and it's available today. By
Speaker 15: the way, I encourage everyone to check it out. It's
Speaker 15: kind of in soft launch, and the idea is it
Speaker 15: takes away what I think is one of the most
Speaker 15: hated features of all ride share, which is surge pricing, right,
Speaker 15: and we're trying to get rid of it. Can never
Speaker 15: get rid of it completely, but we can certainly give
Speaker 15: riders a way to basically pay a small subscription fee
Speaker 15: and lock themselves into a consistent price. I think it's
Speaker 15: great and I think it's the sort of thing that's
Speaker 15: going to grow the business in the long term. Of course,
Speaker 15: it's an investment, right, and you always invest in new
Speaker 15: features that you have a lot of conviction around. But this,
Speaker 15: again is our customer obsession is what drives profitable growth. Again,
Speaker 15: we're profitable now and we think there's going to be
Speaker 15: a great growth driver for us.
Speaker 3: Advertising is a battleground as well. You know, I am
Speaker 3: so familiar with the lift at But why is advertising
Speaker 3: the way to go? And what with who with?
Speaker 4: Right? You think about parallel industries?
Speaker 15: Yeah, so you know, think about you know, of course,
Speaker 15: let's let's zoom way out for a second. Since the
Speaker 15: history of advertising, you know, brands have tried to come
Speaker 15: up with new ways to talk to their consumers, right,
Speaker 15: and one hundred years ago, maybe it was billboards, then
Speaker 15: maybe it was radio ads, then maybe TV ads. Obviously
Speaker 15: more recently internet advertising, we see this kind of mobile
Speaker 15: advertising literally advertising that comes to you in the car
Speaker 15: where you're going, as an incredibly important effectually a sector
Speaker 15: that we're really going to help build out. And because
Speaker 15: if you think about it and reflecting on some of
Speaker 15: the earlier conversations you were having around Reddit, for example,
Speaker 15: we have an enormous amount of first party data, right,
Speaker 15: two million rides a day, every one of them going
Speaker 15: to a seven to eleven or a Starbucks or you know,
Speaker 15: whatever it might be, and that's first party data that's
Speaker 15: very indicative of what it is that riders want to do.
Speaker 15: And so our media business has grown significantly. We're up
Speaker 15: significantly year on year, and we're really optimistic that it's
Speaker 15: going to be a whole new form of advertising and
Speaker 15: media that go super great.
Speaker 4: David.
Speaker 3: When I reported that Tesla was delaying its Robotaxi event
Speaker 3: to October, the shares of your company jumped in that session.
Speaker 3: The vision is a proprietary app from Tesla for ride hailing,
Speaker 3: but a fleet of cars that drive themselves.
Speaker 4: Tesla's Your stock.
Speaker 3: Went up on the basis that everyone was like, Okay,
Speaker 3: the competition from Tesla's not yet coming. Just your latest
Speaker 3: thinking on that, please, Yeah.
Speaker 15: Look, I think avs are going to be great for
Speaker 15: a lift, I really do. And I think it's because
Speaker 15: we're going to be the best way to commercialize what
Speaker 15: is a very very expensive asset. Different companies will try
Speaker 15: different things, but I think largely you'll have a lot
Speaker 15: of oms doing a lot in the av space and
Speaker 15: wanting them on our platform because of you know, millions
Speaker 15: of rides, all the technology we have to incorporate cars
Speaker 15: in our platforms and so forth. I don't want to
Speaker 15: comment on Tesla. I don't know, you know, we'll see
Speaker 15: kind of how that goes. But I do think that
Speaker 15: creating your own thing a kind of closed network is
Speaker 15: it's a front strategy and maybe a different strategy would
Speaker 15: be to figure out a way to get your cars
Speaker 15: that you've built in your technology, you know, as broadly
Speaker 15: available to as many as possible.
Speaker 3: David Richard, the CEO of Lyft, thank you so much
Speaker 3: for joining us in the studio in New York. Thank
Speaker 3: you now shares lower of Rivian. After the ev makers
Speaker 3: second quarter revenue miss analyst estimates, just cash firm for
Speaker 3: the quarter came in bigger than expected. Earlier, I sat
Speaker 3: down with the CEO RJ Scaringe, listen to this.
Speaker 16: We see that both through the excitement of our customers directly,
Speaker 16: but there's lots of ways to measure this. And we
Speaker 16: just had a JD Power as an annual appel study.
Speaker 16: We came out as a number one brand this year.
Speaker 16: We had a number one ranking on a JD Power
Speaker 16: study last year. So the reaction of the product has
Speaker 16: been great. We've in the second quarter we went through
Speaker 16: a big refreshed to the product where we've now launched
Speaker 16: what we call generation two of that vehicle of the
Speaker 16: RWE tRNS, where it made significant improvements in the product
Speaker 16: but also took us tremendous amount of costs out of
Speaker 16: the vehicle.
Speaker 3: Oh, Jay, the kind of summary of the earnings print
Speaker 3: was that all of the guidance previously issued was reiterated,
Speaker 3: and there's a lot of positivity around that. Very simply
Speaker 3: loads of people asked me to ask you, can you
Speaker 3: define what modest gross profit means or what you're defining
Speaker 3: it by in order to achieve it?
Speaker 16: Yeah, I mean, ultimately, this has been the central focus
Speaker 16: for us as as a company that's a business, is
Speaker 16: driving cost efficiencies into everything that we do, into our
Speaker 16: bill of materials, into how we operate, run our plant,
Speaker 16: and ultimately driving towards getting our production of our r
Speaker 16: and t on RNs to positive growth, smart and ultimately
Speaker 16: to have the business gets a positive for cash flow
Speaker 16: and nonprofitability.
Speaker 14: So there's a whole series.
Speaker 16: Of steps we're making along the way in terms of
Speaker 16: improving costs, but the biggest singular step that we've made
Speaker 16: is what we did in the second quarter. We took
Speaker 16: the plant down for about a month or it, made
Speaker 16: meaningful changes to the operations and importantly changed a significant
Speaker 16: portion of our supply base, outs and new suppliers, in
Speaker 16: conjunction with a number of design improvements, and all that
Speaker 16: comes together to take us to a place where you know,
Speaker 16: the incremental countribution to every vehicle we sell is positive,
Speaker 16: and that's you know, that's what we're driving towards us
Speaker 16: where we continue to guide towards for the fourth quarter
Speaker 16: of this year.
Speaker 3: In the first instance, sorry, Matt, I was just going
Speaker 3: to hold DoD Jay to account on that one and say,
Speaker 3: in the first instance, is it just like more than
Speaker 3: zero or single digits gross profit? Just I think that's
Speaker 3: the answer we're looking for.
Speaker 16: You know, we haven't provided a specific number, but certainly
Speaker 16: by saying it's positive gross margin, it's more than zero.
Speaker 16: Our objective what we've guided to for a long time.
Speaker 16: We continue to maintain this guidance is the long term
Speaker 16: margin profile on our one should be around twenty five percent.
Speaker 16: And so that's what we you know, beyond just this
Speaker 16: this fourth quarter performance that we're we're tracking towards, seeing
Speaker 16: how we continued to improve in twenty twenty five and beyond,
Speaker 16: we still maintain confidence in the twenty five percent coross margin.
Speaker 4: My interview with RJ.
Speaker 3: Scaringe, the Rivian CEO.
Speaker 8: I was shocked by the evidence uncovered by the House
Speaker 8: Judiciary Committee that a group of companies organized a systematic,
Speaker 8: illegal boycott against X. It is just wrong and that
Speaker 8: is why we are taking action.
Speaker 3: That was Linda Yakarino, the CEO of X, after the
Speaker 3: company filed a lawsuit accusing an industry group of violating
Speaker 3: antitrust laws for an advertising boycott that costs the social
Speaker 3: media company billions of dollars in alleges in the filing.
Speaker 3: Let's bring in Bloombos, Kurt Wagner. An advertising boycott sounds
Speaker 3: severe federal filing in a court in Texas. Just explain
Speaker 3: the very basic accusation that X is making.
Speaker 17: Yeah, I mean, the claim is that this group, this
Speaker 17: industry trade group for advertisers essentially you know, did anti
Speaker 17: competitive behavior.
Speaker 13: Right.
Speaker 17: They came out and they advised all the members of
Speaker 17: the group not to spend on X. Kind of created it,
Speaker 17: as you know, Yakarino said, a boycott of the business.
Speaker 14: And they're claiming this is illegal.
Speaker 10: Now.
Speaker 17: I don't know exactly what an illegal boycott is versus
Speaker 17: a legal one, but ed you and I have seen
Speaker 17: boycotts of not only advertising but products all the time.
Speaker 13: Right.
Speaker 17: This is usually the way that consumers or businesses sort
Speaker 17: of voice their displeasure with someone, which is what happened
Speaker 17: in this case, shortly after Elon took over.
Speaker 14: I don't really know whether this lawsuit will.
Speaker 17: Succeed for them, but I think what they're doing here
Speaker 17: is sending a huge signal that, you know, one, the
Speaker 17: business is struggling, they need to do something out of
Speaker 17: a two picking a fight with the broader ad industry.
Speaker 3: Right now, we're showing some more of the comments that
Speaker 3: Linda Yakarino made. It was interesting, you know the video
Speaker 3: posted to X Elon musk amplified it. I guess the
Speaker 3: context is that X has been suffering in terms of
Speaker 3: revenue or financially in the period since Must took over
Speaker 3: and Lindy Yakarino was appointed CEO because of this, Like,
Speaker 3: I'm trying to understand why they would take action.
Speaker 14: Well, that's exactly right. They're saying that.
Speaker 17: Look, this group is, you know, collectively getting everyone riled
Speaker 17: up to intentionally hurt Ex's business. Now, I think what's
Speaker 17: sort of interesting here is what does this ignore. Well,
Speaker 17: this ignores Elon's own behavior, right, which we have talked
Speaker 17: about on the show several times over the last couple
Speaker 17: of years. Right, you may recall ed late last year
Speaker 17: went on stage at a conference and told advertisers to
Speaker 17: go f themselves.
Speaker 13: Right.
Speaker 17: He has been very proactively aggressive to certain advertisers over
Speaker 17: the years, and so they are saying, well, hey, look,
Speaker 17: this group is illegally creating this boycott. It doesn't take
Speaker 17: into account the fact that some of this decision making
Speaker 17: may simply be because people don't want to work with
Speaker 17: Elon given the things that he's done and said to them.
Speaker 3: Bloomberg's Kurt Wagner, thank you. I mean a complicated story.
Speaker 3: There will be a legal process will follow it here
Speaker 3: on Bloomberg Technology. That does it for this edition of
Speaker 3: Bloomberg Technology. Another busy day of earnings, fantastic interviews with
Speaker 3: executives from across the world of technology recap on the
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Speaker 4: This is Bloomberg Technology.