Speaker 1: Welcome to the Bloomberg Penel Podcast. I'm Paul swing you
Speaker 1: along with my co host Lisa Brahma Waits. Each day
Speaker 1: we bring you the most noteworthy and useful interviews for
Speaker 1: you and your money. Whether at the grocery store or
Speaker 1: the trading floor. Find a Bloomberg Penl podcast on Apple
Speaker 1: podcast or wherever you listen to podcasts, as well as
Speaker 1: at Bloomberg dot com. Paul, I am so excited we
Speaker 1: get to speak with the CFO of one of the
Speaker 1: hottest initial public offerings over the past few years, if
Speaker 1: not the hottest of public offering so far this year
Speaker 1: based on how much the price popped. We're talking, of course,
Speaker 1: about Zoom Video Communications. Kelly Stuckelberg, the chief financial officer
Speaker 1: of the company, joins us right now from San Jose, California. Kelly,
Speaker 1: congratulations an initial public offering that by most measures was
Speaker 1: absolutely a blowout success. Thank you. Good morning, Good morning.
Speaker 1: So I want to talk about profitability because Zoom was
Speaker 1: one of the few unicorns that is coming to market,
Speaker 1: is an I p O and actually making money. How
Speaker 1: important is that to you to continue to make money
Speaker 1: even as you invest in the business. Well, we're really
Speaker 1: focused on continuing to grow and indust for growth and
Speaker 1: taking market share. That is our primary objective. And yet
Speaker 1: we do that at the company with discipline and we're
Speaker 1: very thoughtful about it, so ensuring that the investments we're
Speaker 1: making in growth are giving us a proper returns. That's
Speaker 1: how we think about it. We're we're very frugal in
Speaker 1: the way that we approach it in general. So, Kelly,
Speaker 1: can you give us a sense of how you think
Speaker 1: about your business. I'm guessing it's more than simply video conferencing.
Speaker 1: So it gives a sense of what you view as
Speaker 1: your market opportunity that you your company goes after. Yeah,
Speaker 1: thank you. So we really view that video is the
Speaker 1: future of communications. Video is the new voice, is how
Speaker 1: we think about it. So we think that you it's
Speaker 1: going to become ubiquitous in the way that people communicate,
Speaker 1: and we're really changing the way that people use video
Speaker 1: every day. So, for example, when we did our road
Speaker 1: so a couple of weeks ago, Eric zoomed into all
Speaker 1: of the meetings. So I traveled, but he dooms. So
Speaker 1: I think this is the first time that a CEO
Speaker 1: has not traveled in the way and that it was
Speaker 1: really powerful. For example, we even we had a lunch
Speaker 1: in New York for two hundred people and Eric zoomed.
Speaker 1: He's done a huge screen there. Everybody could communicate with it.
Speaker 1: It was amazing. How much does your business model rely
Speaker 1: on an infrastructure upgrade to five G because I know
Speaker 1: people have been talking about how that will be a
Speaker 1: game changer in terms of how people interface with one
Speaker 1: another via video. So how are you sort of thinking
Speaker 1: about that evolution? Yeah, so we have our own data
Speaker 1: set of strategy and our platform which allows people to
Speaker 1: have a really high quality streaming video experience today, whatever
Speaker 1: networks that they're working on. That's one of the really
Speaker 1: unique things about Zoom. It's adaptable to people's device and
Speaker 1: network capabilities. So when we think about five G, we
Speaker 1: just think that this is bringing more opportunity earners for
Speaker 1: people to use video in other places on the go.
Speaker 1: We're not reliant on it though, We just think it's
Speaker 1: going to extend the opportunity for us. Kelly, give us
Speaker 1: a sense of the competitive landscape that Zoom participates in. Yeah,
Speaker 1: there are lots of legacy providers out there that we
Speaker 1: have seen. I think the thing to remember is that
Speaker 1: what's unique about Zoom. It was built from the ground
Speaker 1: up to the video first. So everything about our product,
Speaker 1: our user interfaced, our technology, our data center approach is
Speaker 1: geared towards being video first. And a lot of the
Speaker 1: legacy players that are out there today they were built
Speaker 1: for another purpose. They were built for screen steering, or
Speaker 1: they were built to be an audio first and video
Speaker 1: came later. And just think about it. You need a
Speaker 1: very different approach to have a high quality, real time
Speaker 1: streaming video and that's really what makes you so unique
Speaker 1: and so much better than some of the legacy providers.
Speaker 1: One concern that I'm sure a lot of companies have
Speaker 1: is privacy because if they are conducting meetings, uh and
Speaker 1: chats through the Zoom technology and that could potentially expose
Speaker 1: private information, how do you how do you counter those concerns?
Speaker 1: Of course, security and privacy is at the forefront of
Speaker 1: everything that we do. We have a c I O
Speaker 1: and a show that think about this every single day,
Speaker 1: and the product itself was architected to ensure that. Meaning data,
Speaker 1: it's your record, meaning data, you have the opportunity to
Speaker 1: either record it into your own for example, on your
Speaker 1: own premises or in our cloud, which is highly secure
Speaker 1: because it's our own private cloud data center that we're running. So, Kelly,
Speaker 1: just give us a sense of kind of what are
Speaker 1: the growth drivers for your company. Obviously the company has
Speaker 1: a tremendous valuation in the public marketplace officely, the market
Speaker 1: is certainly expecting strong growth. What are the growth drivers? Yeah,
Speaker 1: so there are really three key growth initiatives were focused
Speaker 1: on this year. It's continuing to move up market and
Speaker 1: expanding into the enterprise, which is a key opportunity for us.
Speaker 1: It is continuing to grow international. We have a flash year,
Speaker 1: we had a little less than our revenue came from
Speaker 1: international markets, and so there's tremendous opportunity head there as well.
Speaker 1: And then it's continued growth in zoom Phone, which was
Speaker 1: a new product that became g A in January. We're
Speaker 1: really excited about it extends our product suite from you
Speaker 1: know video and now into audio zoom phone as well.
Speaker 1: What's the barrier to entry at this point, given the
Speaker 1: fact that big companies are having their own in house
Speaker 1: kinds of operations where they can interface with each other
Speaker 1: via video. Yeah, I think it's it's one thing to
Speaker 1: do video, it's another thing to do video in an
Speaker 1: enterprise grade level and to do it really with reliability
Speaker 1: and quality every single time that somebody joins. The unite
Speaker 1: thing about Zoom and because of the way that our
Speaker 1: architection was built is you can have up to packet loss,
Speaker 1: so up to forty percent data loss and still have
Speaker 1: a great experience. Other providers we see you start to
Speaker 1: have a degraded experience when you're like at fifteen percent
Speaker 1: packet loss. So that really speaks to the investment in
Speaker 1: the in the infrastructure and the architecture that we have
Speaker 1: built and the adaptability of our platform to meet the
Speaker 1: needs of people that are again on the go using
Speaker 1: different devices in different locations. Kelly, is is M and
Speaker 1: A a part of Zoom's growth strategy going forward. You know,
Speaker 1: it hasn't been historically, but it's certainly something that we
Speaker 1: will continue to look for. If we could find a
Speaker 1: great company that could be additive either from a culture
Speaker 1: and a UM talent perspective and or technology perspective, we
Speaker 1: would certainly be open to that and we're always looking
Speaker 1: for great opportunities in that area. One thing that I'm
Speaker 1: curious about, just to quickly hear from you, you Kelly,
Speaker 1: as we see this roster of I p O is
Speaker 1: line up for later this year. What sort of the
Speaker 1: takeaway that you learn from the whole I p O
Speaker 1: process right now as a unicorn that you know there
Speaker 1: are many great companies you ship coming to market, and
Speaker 1: there's really strong investor demand for great companies and great performance,
Speaker 1: and you know, we're really focused on continuing to executecause
Speaker 1: that's what we can um we can manage, and we
Speaker 1: can control. And I think that's what I learned. That's
Speaker 1: what investors want to hear is the confidence in the
Speaker 1: management team that they're going to continue to focus on
Speaker 1: keeping the investors um I think interests at heart while
Speaker 1: continuing to grow into it thoughtfully. Kelly, just real quickly,
Speaker 1: what's the biggest risk to your growth story? It's it's
Speaker 1: our own execution, right. It really comes down to our
Speaker 1: team and our ability to continue to execute. This is
Speaker 1: what we focus on every single day when we get
Speaker 1: up and come to work. Kelly Stuckelberg, thank you very much.
Speaker 1: Kelly as a chief financial officer from Zoom Video Communications
Speaker 1: joining us on the phone from San Jose. Right now,
Speaker 1: we are hitting new record highs on both the SMP
Speaker 1: and the Nasdak in the United States, which has been
Speaker 1: the sweet spot globally in terms of economic growth as
Speaker 1: well as asset flow at least in joining us now
Speaker 1: to talk about whether that can continue is Clive Gilmour.
Speaker 1: He's CEO and Group Chief Investment Officer at Mondrean Investment Partners,
Speaker 1: over seeing about fifty billion dollars from London usually, but
Speaker 1: he is joining us here in our Bloombergada Interactive Brokers Studios. Clive,
Speaker 1: I do want to ask, do you think from your
Speaker 1: vantage point that the US is still the place to
Speaker 1: go or that this rally is basically at its peak
Speaker 1: and is going to peter out. Yeah, it's an interesting
Speaker 1: question because I've been reflecting recently on the different forms
Speaker 1: of capitalism that exists in the United States and elsewhere.
Speaker 1: In the United States, the return to shareholder is sacrosanct.
Speaker 1: In Japan, In contental Europe in particular, they want to
Speaker 1: find a better balance between labor and capital. The argument
Speaker 1: they use is that's a better long term methodology, whereas
Speaker 1: the US one is used for short term gain. So
Speaker 1: the question is, are we still on a run of
Speaker 1: backing economic elements like low interest rates that support that
Speaker 1: short termism, Where are we going to see a gradual
Speaker 1: shift to the longer term? International markets trade at a discount,
Speaker 1: a significant discount in some cases, so perhaps we're at
Speaker 1: the pitch point where people should consider investing more internationally
Speaker 1: than in the United States alone. Well, it's interesting, I
Speaker 1: was I was looking at just the UAR today performance
Speaker 1: from you know, the STARKS or the CAC or the
Speaker 1: Dacks index of Europe. The performance there is essentially on
Speaker 1: par with the SMP. So we're seeing European equities, so
Speaker 1: it doesn't feel like there's quote unquote value in European markets.
Speaker 1: How do you view some of the developed European markets? Yeah, well,
Speaker 1: in answer to the first question, you know, I talked
Speaker 1: about that different form of capitalism. One way that reflects
Speaker 1: itself is in sectorial splits between markets on a global basis.
Speaker 1: So the US has a significantly larger piece in technology,
Speaker 1: and it's that technology part of the market that's driven
Speaker 1: to a great extent the u s higher through the
Speaker 1: NASDAC before outperforming the SMP significantly. If you look at
Speaker 1: the rest of the world, why has there been an
Speaker 1: adjustment just like there has been of the SMP. It's
Speaker 1: merely an adjustment back to an interest rate policy that
Speaker 1: seems to be underwriting stock markets. In other words, moved
Speaker 1: back towards either zero or negative real interest rates, which
Speaker 1: we personally believe is unsustainable on a long term basis.
Speaker 1: What you're saying is actually fascinating, which is, at a
Speaker 1: certain point investors aren't going to just look for people
Speaker 1: for for companies to give them as much money as
Speaker 1: possible in the form of shared by backs and dividends,
Speaker 1: and they're actually going to start looking at sort of
Speaker 1: the sort of social implications and the investments. And we
Speaker 1: have actually started to see a shift in that way
Speaker 1: in the United States. What makes you think that that
Speaker 1: shift will lead investors overseas well? That argument about sustainability
Speaker 1: is obviously a really really strong on and the way
Speaker 1: we analyze equities at Mandron is to use a dividend
Speaker 1: discount model, so that takes the dividends today and looks
Speaker 1: like the spected future growth in those dividends. So sustainability
Speaker 1: is a key element of what we do, especially as
Speaker 1: you look out after year three for example. So no
Speaker 1: one knows when the exact moment will be when that
Speaker 1: will change. All we can say is the skew of
Speaker 1: outcomes is increasingly on the upside for investing outside the
Speaker 1: United States relative to in the United States. And indeed,
Speaker 1: we do three DDM models, one on a central case,
Speaker 1: one on a worse, one on a best and even
Speaker 1: though central case real returns are lower because markets have
Speaker 1: gone up, the skew is still positive, whereas in the
Speaker 1: US increasingly that skew is looking negative. You mentioned Japan earlier.
Speaker 1: What is your view on Japan given that they've, you know,
Speaker 1: the stagnation that economies done with over the last decade
Speaker 1: or so. Yeah, that's a good question. I started my
Speaker 1: career in Japan in the early nineteen eighties, and pretty
Speaker 1: much from about onwards, Japan was a no go area.
Speaker 1: And it was a no go area because the market
Speaker 1: had become inflated, but more pertinently, perhaps because companies there
Speaker 1: gave little regard to shareholders and certainly had alarmingly low
Speaker 1: returnal equity. For example, what's happened over the last thirty
Speaker 1: years is perhaps testament to the fact that Japan has
Speaker 1: had died in the wall approach. In other words, it
Speaker 1: doesn't wish to change that much. However, in the recent
Speaker 1: past they have begun to embrace some of Arebe's reforms
Speaker 1: in the extent that they are now looking at trying
Speaker 1: to improve r o E and also look at dividends
Speaker 1: as a way forward for shareholders. And that's crucial because remember,
Speaker 1: the Japanese have a rapidly aging population with incredibly low
Speaker 1: bond yields and a demand for income from that aging population.
Speaker 1: Dividends from equities are becoming an increasingly large part of that.
Speaker 1: We're still actually underweight in Japan for choice, but only
Speaker 1: just and that is against a position of being significantly
Speaker 1: underweight for most of the last twenty years. Clud Gilmore,
Speaker 1: thank you so much. Clud Gilmore as a CEO and
Speaker 1: Group c i O of Montreal Investment Partners joining us
Speaker 1: today in New York on our Bloomberg Interactive Brooker Studio.
Speaker 1: Right now, I think we do have Bruce Levine from
Speaker 1: the Center for Soulomnia Therapies at University of Pennsylvania. Just
Speaker 1: let's get us started with a sense of what your
Speaker 1: team is working on. In Lehman's terms, but we're working
Speaker 1: on is using the patient's own immune system and retraining
Speaker 1: it to recognize cancer. Now, this is uh uh not
Speaker 1: intuitive because the immune system is designed to recognize foreign invaders,
Speaker 1: and cancer is derived from your own cells, So what
Speaker 1: we're doing is putting in a genetically engineered receptor that
Speaker 1: makes your immune systems recognized cancer. So PUS kind of
Speaker 1: give us a sense of kind of where you are
Speaker 1: in your research, where is it mat and a kind
Speaker 1: of go to market type scenario, where are you and
Speaker 1: your team right now? Well, we treated three patients in
Speaker 1: ten that had between three and a half and eight
Speaker 1: pounds of leukemia destroy These are patients that had no
Speaker 1: other options. Based on those reports, we signed an alliance
Speaker 1: with twenty in twelve with Novardes to develop this technology
Speaker 1: and commercialize at which they have. They conducted to global
Speaker 1: pivotal clinical trials, one in pediatric leukemia and other. Amphoma
Speaker 1: received FDA approval August for pediatric leukemia and May first
Speaker 1: for lamphoma, so this was the first FDA approve TEIN therapy.
Speaker 1: There is another product on the market for lamphoma that's
Speaker 1: Gilead kites Yes Carda. At PEN, we're focused on the
Speaker 1: next generation of these therapies, making them smarter going into
Speaker 1: solid cancers, and we have a PEN spin out community
Speaker 1: that is developing some of these next generation therapies versus
Speaker 1: is incredibly exciting for me to hear what you're working
Speaker 1: on because there have been so many UH cancers that
Speaker 1: have killed people who we all have been close to
Speaker 1: sort of think that there could be some kind of
Speaker 1: remedy new remedy is very exciting. I'm just wondering about
Speaker 1: the sort of standardization of some of these cart c
Speaker 1: UH cart cell therapies, just considering the fact that you
Speaker 1: have to use people's own cells, they tend to be
Speaker 1: much more expensive, and I'm just wondering what the focus
Speaker 1: is and trying to sort of streamline ms they can
Speaker 1: be used in a more broad based level. Yeah, so
Speaker 1: the challenge here is the raw material is the patient's
Speaker 1: own cells, and it varies every time. As far as standardization,
Speaker 1: we are making improvements in the manufacturing, implementing automation, making
Speaker 1: the process shorter, but we will go from what is
Speaker 1: now a three week turned around to maybe a two
Speaker 1: week or shorter turnaround. Now, this does have implications and scale.
Speaker 1: It's not really scaling up. You can't scale to a
Speaker 1: five thousand leader or a ten thousand leader a lot,
Speaker 1: but we can improve what we're doing, and I would
Speaker 1: say I think of this as a remote organ transplant
Speaker 1: or remote stem cell transplant rather than something you're going
Speaker 1: to have on a on a shelf. I can speak
Speaker 1: to you about the so called off the shelf cell therapies,
Speaker 1: and there there is justification for that because there are
Speaker 1: patients from whom we don't get enough food cells to
Speaker 1: generate a product. But the issue for these is just
Speaker 1: like I can't give you my own liver without you
Speaker 1: being on lifelong I mean a suppression. Those of the
Speaker 1: show therapies don't last very long and patients have to
Speaker 1: transition to another definitive therapy. Bruce Levine, thank you so much.
Speaker 1: Bruce Levine is a Barbara and Edward nett Are Professor
Speaker 1: in gene a cancer gene therapy. He's at the Center
Speaker 1: for Cellular Immunotherapy is at the University of Pennsylvania. Is
Speaker 1: also a co founder of Community, a pen spin out
Speaker 1: working with nove artists. Let's switch gears right now to
Speaker 1: the home sharing business. It was reported today that Marryott
Speaker 1: International is expanding its home sharing business to the US
Speaker 1: as Airbnb diversifies its own business ahead of an expected
Speaker 1: initial public offering. To get us up to speed on
Speaker 1: this store. Are we welcome Patrick Clark Pat his real
Speaker 1: estate a reporter for Bloomberg News. He joins us on
Speaker 1: our Bloomberg Interactive Broker studio. Pat, thanks so much for
Speaker 1: being with us. So this is so Marriott already has
Speaker 1: a home sharing business, but they're just they're bringing it
Speaker 1: to the US. Is that the news here? That's right?
Speaker 1: What they've called they've called in the past home sharing
Speaker 1: pilot started in London. I think in May they they
Speaker 1: proclaimed that a success and expanded into Paris, Rome and Lisbon.
Speaker 1: Now they're bringing it to the U S and they're
Speaker 1: also expanding it outside the US. I think it's gonna
Speaker 1: be a hundred destinations around the world, many of them
Speaker 1: real sort of tourism spots um Bar harbor in the US,
Speaker 1: like Tahoe. I think I saw sat Bart's um the
Speaker 1: Amalfi coast of Italy. So those types is pretty good.
Speaker 1: It sounds pretty good to me too. I will say, UM,
Speaker 1: I have to wonder. I'm trying to understand they're trying
Speaker 1: to counter the air and b nb's of the world.
Speaker 1: That's sort of how this was framed. You're kind of
Speaker 1: shaking your head a little bit, and I'm wondering is
Speaker 1: it really because home rental that kind of concept is
Speaker 1: evocative of a different, different kind of model than airbnb
Speaker 1: s Perhaps all of these models are converging on themselves.
Speaker 1: I think, I mean, the Marriott will do something that
Speaker 1: is doing something that looks like home sharing. Um, I
Speaker 1: don't know that they're doing it for the reason why
Speaker 1: people use a homeshare to find a place to stay
Speaker 1: in New York, right, which is often because they want
Speaker 1: um a cheaper maybe also a slightly different version of
Speaker 1: what they would get um in a hotel in in
Speaker 1: You know, I stay in my rent homes with my
Speaker 1: family and we go on vacation because we want the
Speaker 1: space and we want you know, separate bedrooms in the
Speaker 1: kitchen and all of that, and we sometimes do it
Speaker 1: through Airbnb or v R B O. But but um, yeah,
Speaker 1: I think you're as you said, that's sort of a
Speaker 1: home rental business, which makes sense as an extension of
Speaker 1: of sort of Marriotts bread and butter. Right, If I'm
Speaker 1: a Marriott Loyalty Program member and I travel for business
Speaker 1: all all the time, and I accrue points, and now
Speaker 1: I want to go on vacation with my family, and
Speaker 1: what I want is a home rental, not a not
Speaker 1: a suite in a hotel somewhere. It makes sense for
Speaker 1: Marriott to be able to offer me that home rental. Now,
Speaker 1: is that direct competition with Airbnb? You know? Way it
Speaker 1: is because I would um, otherwise go and book that
Speaker 1: home on airbat me instead of uh, you know, instead
Speaker 1: of staying inside this sort of Marriot loyalty ecosystem. Now,
Speaker 1: um does Airbnb? You know? The amount of crossover is
Speaker 1: sort of a point of contention. I would say that
Speaker 1: the hotel companies have largely said many of them have
Speaker 1: said it's a different guest than the one that that
Speaker 1: were servant. So what has been just overall the Airbnb
Speaker 1: impact on the hotel business? Yeah, I mean there's you know,
Speaker 1: I think Airbnb says they have six million listings around
Speaker 1: the world, so that's just a lot of supply. Um.
Speaker 1: I think it depends on on the place there are.
Speaker 1: You know some places you could say there are. I
Speaker 1: mean in New York you have thousands, tens of thousands
Speaker 1: of more sort of places to stay than you would
Speaker 1: pre Airbnb. Uh, whether or not that has had an
Speaker 1: impact on how much a hotel in New York can
Speaker 1: get for its room. I guess it's a little bit murky.
Speaker 1: You would think it would have to have some impact. Uh,
Speaker 1: there's also seems to be, you know, virtually limitless demand
Speaker 1: for hotel rooms in Manhattan. They add, uh, you know,
Speaker 1: they had thousands of hotel rooms in New York every
Speaker 1: year and without seemingly a large impact on occupancy rates.
Speaker 1: So um, you know it's it's it's unclear who's threatening here?
Speaker 1: Who here? Right? Is Is Mary going to take a
Speaker 1: bite out of Airbnb's business with this new offering? I
Speaker 1: couldn't doubt it is is are they defending themselves? Do they?
Speaker 1: Are they worried about losing business? Pat Clark, thank you
Speaker 1: so much for that. Pat Clark is a realistate reporter
Speaker 1: here at Bloomberg News. Thanks for listening to the Bloomberg
Speaker 1: P and L podcast. You can subscribe and listen to
Speaker 1: interviews at Apple Podcasts or whatever podcast platform you prefer.
Speaker 1: M Paul Sweeney, I'm on Twitter at pt Sweeney. I'm
Speaker 1: Lisa abram Woyit's I'm on Twitter at Lisa abram Woits
Speaker 1: one before the podcast. You can always catch us worldwide
Speaker 1: on'm Bloomberg Radio.