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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive

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Speaker 1: from coast to coast with Caroline Hide in New York

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Speaker 1: and Eva Low in San Francisco.

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Speaker 2: This is Bloomberg Tech coming up arm ones of some

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Speaker 2: sluggishness in the smartphone industry, but shows AI data center

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Speaker 2: growth is there to offset the slump. We'll discuss the

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Speaker 2: CEO as Anthropics signs an agreement with Elon Musk's SpaceX

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Speaker 2: to access computing resources from its competitor, and we speak

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Speaker 2: with the CEO of Hawkeye three sixty. That's as a

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Speaker 2: satellite surveillance firm raises four hundred and sixteen million dollars

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Speaker 2: in its IPO.

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Speaker 3: But first we.

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Speaker 2: Check in on these markets that on the tech side

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Speaker 2: of the equation managed to sustain the rally.

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Speaker 3: We're at a new record high. We're up for a

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Speaker 3: third straight day.

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Speaker 2: Book Importantly, we're up on the week, and that's a

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Speaker 2: sixth straight week of gains.

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Speaker 3: Haven't seen that in a couple of weeks, in a

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Speaker 3: couple of years in fact.

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Speaker 2: And then as that one hundred, we're still seeing that

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Speaker 2: optimism around AI. We of course have the clouds of

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Speaker 2: geopolitics and in many ways, we are somewhat concerned about

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Speaker 2: whether or not a pe steel will be moving forward

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Speaker 2: with Iran and the United States. So otherwise traders taking

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Speaker 2: perhaps a little bit more cautious tone on other benchmarks.

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Speaker 2: But tech drives high, and let's look at how the

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Speaker 2: earnings continue to flow through. Look, I'm focusing in on ARM.

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Speaker 2: It's having a rough day. We're off by some eight percent.

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Speaker 2: But build into the context that this is a stock

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Speaker 2: that has rallied hard so far this year on optimism

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Speaker 2: of AGICPU, on optimism of applications in the AI data center.

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Speaker 2: But also there is still, of course the royalties the

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Speaker 2: licenses that go towards smartphones, and I want to talk

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Speaker 2: about just that at the moment because we're joined now

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Speaker 2: by the CEO of ARM. More broadly, Renee has I'm

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Speaker 2: pleased to say you're joining us from San Diego and

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Speaker 2: Renee the market perhaps digesting recent run ups in the stock,

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Speaker 2: but also digesting what you warned that you're seeing in

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Speaker 2: the smartphone arena, and that's because of memory prices. Just

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Speaker 2: dictate a little bit of what you've seen in the

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Speaker 2: space bag.

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Speaker 4: Good morning, Caroline, and I'm in San Jose, not San Diego.

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Speaker 4: But that's okay. You know, in terms of the overall

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Speaker 4: market and the quarter we are, we could not be happier.

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Speaker 4: In terms of the results that we had this last quarter.

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Speaker 4: It was one point five billion dollars in that neighborhood

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Speaker 4: of revenue, which not long ago used to be an

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Speaker 4: annual revenue number for the company. Our data center business

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Speaker 4: doubled year on year, and we're seeing huge, huge demand

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Speaker 4: for our new product, the arm Agi CPU. So all

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Speaker 4: of that is really added up to a terrific quarter.

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Speaker 5: To your question.

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Speaker 4: As far as smartphones, we have definitely seen a slow

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Speaker 4: down there as well. However, I would say compared to

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Speaker 4: some of the other folks in the market, we're not

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Speaker 4: really as exposed there, probably for two big reasons. Number one,

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Speaker 4: a lot of our volume comes from the premium segment,

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Speaker 4: where the royalty rates are quite rich using Version nine,

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Speaker 4: and where the slowdown has taken place we've seen as

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Speaker 4: mostly in the lower end of the market, where there's

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Speaker 4: not a large worldy contribution for US.

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Speaker 2: Okay, so not a large royalty perspective coming from the smartphones.

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Speaker 2: But where the dictation of growth seems to be coming

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Speaker 2: from is CPU not only CPU architecture that is used

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Speaker 2: broadly by you.

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Speaker 3: Name check the Googles, the Amazons.

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Speaker 2: The way in which we're seeing CPU further grow in

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Speaker 2: your customers, but also you're building the chip yourself.

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Speaker 3: How do you see that market expanding?

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Speaker 4: Yeah, we are, and you know, for thirty five years

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Speaker 4: the way we delivered product to our customers was through

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Speaker 4: with through IP, the blueprint that they used to essentially

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Speaker 4: build chips based upon the ARM technology. As you know

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Speaker 4: very well, we've seen huge growth in our data center

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Speaker 4: business over the last number of years. Amazon with Graviton

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Speaker 4: had just announced version five Graviton five, Google Axion, Microsoft

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Speaker 4: callbalt and the course and video with Vera. But what

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Speaker 4: we've seen, Caroline, you know, in the last number of

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Speaker 4: months has been this explosion of demand for agentic workloads.

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Speaker 4: And agentic workloads essentially mean that agents are now putting

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Speaker 4: queries on the data center that need to have answers

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Speaker 4: back very quickly. All of that work regarding the agentic

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Speaker 4: management orchestration, scheduling, etc.

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Speaker 5: That is the kind of work only a CPU can do.

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Speaker 4: Only a CPU this this is not something accelerated GPU

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Speaker 4: can manage. So what's happening Demand for CPUs is exploding,

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Speaker 4: and the timing of the ARMAGICPU launch, I think we've

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Speaker 4: just reinforced huge demand for that kind of product.

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Speaker 5: So we are now seeing demand for.

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Speaker 4: Not only the IP that people are used to build

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Speaker 4: chifts based on arm of the data center, but the RMAGICPU.

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Speaker 4: And I think I mentioned on the call we had

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Speaker 4: visibility to about a billion dollars of orders that we

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Speaker 4: had in our forecast. That number over the last five

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Speaker 4: weeks has doubled to two billion dollars. So demand is

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Speaker 4: certainly not a problem.

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Speaker 2: Extraordinary since you first announced the move towards building it yourself,

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Speaker 2: towards what we see as this focus on this particular CPU.

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Speaker 3: But where from. We know that Meta has.

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Speaker 2: Been a key puntner on this, but where else do

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Speaker 2: you getting demand from?

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Speaker 3: Rene?

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Speaker 4: Yeah, So the partners we talked about at launch was Meta,

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Speaker 4: of course, open Ai a large partner, Cerebras, sk Telecom, Rebellions, SAP.

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Speaker 5: So it's pretty broad F five networks.

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Speaker 4: We're seeing it across network infrastructure, but largely around simply

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Speaker 4: putting more CPUs inside the data center. The other thing

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Speaker 4: that we did, Caroline with this product is when you're

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Speaker 4: building something of this nature. It's not just a chip,

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Speaker 4: but it's a system, and we work closely with partners

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Speaker 4: like super Micro and Lenovo and ASRock who build the

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Speaker 4: systems and racks that customers can order.

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Speaker 5: And these thirty six kilowatt air cooled racks.

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Speaker 4: One of the beauties of the rm AGICPU is that

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Speaker 4: you can get twice to performance in the same power

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Speaker 4: versus the comparable X eighty six rack. So and of

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Speaker 4: course we're known for power efficiency, so that's not a surprise,

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Speaker 4: but it is one of the other things that's catalyzing demand.

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Speaker 3: We've got to talk a little bit about supply.

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Speaker 2: You'll talk about how you're built, making sure that the

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Speaker 2: servers are there.

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Speaker 3: The way in which we.

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Speaker 2: Can put them in the data centers is they're the

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Speaker 2: partners you're working with. But time and time and game,

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Speaker 2: we're hearing from everyone that the blocker really isn't demand,

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Speaker 2: that's supply.

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Speaker 3: Have you had any issues with that.

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Speaker 4: Yeah, So what we said on the range call was

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Speaker 4: the billion dollars of orders that we talked about, we

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Speaker 4: have the supply for that. Now we have as additional

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Speaker 4: demand for another billion dollars of demand of product, and

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Speaker 4: that is bringing it to a total of two billion dollars,

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Speaker 4: and we're working with everybody in the supply chain, whether

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Speaker 4: it's TSMC, the memory suppliers as Khinex, Micron and Samsung.

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Speaker 4: But the beauty of all this, Caroline is this is

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Speaker 4: not perishable demand. It's not something that if a window closes,

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Speaker 4: there's not going to be a need for compute. So

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Speaker 4: we are thinking about this in the long game. We've

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Speaker 4: talked about a fifteen billion dollar target by FYE thirty one,

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Speaker 4: so that's Calendar thirty for your viewers, And basically what

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Speaker 4: that means is we are very comf evident that we

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Speaker 4: are on track to that fifteen billion dollar number in

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Speaker 4: a very very short time, which is quite transformational for

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Speaker 4: the company relative to the size of opportunity and the

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Speaker 4: amount of revenue that will.

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Speaker 2: Deliver, size of opportunities, size of role for you. RENEE

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Speaker 2: has been expanding because you're still CEO of ARM, but

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Speaker 2: you're also taking on leading the soft Bank International part

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Speaker 2: of the business, and this is all about working with

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Speaker 2: other parts of SoftBank's ecosystem in the chip arena. I

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Speaker 2: just think of some of the acquisitions mPire has been

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Speaker 2: put into the portfolio.

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Speaker 3: You've got graph Core, how do you see.

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Speaker 2: Your role changing, How do you see the impact of

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Speaker 2: SoftBank more broadly in the chip space?

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Speaker 5: Yeah, thank you for the question.

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Speaker 4: Now, there's a lot of synergy to the kind of

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Speaker 4: work that soft Bank is doing when you think about

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Speaker 4: some of the announcements they've made recently around in Portsmouth, Ohio,

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Speaker 4: for example, a huge ten gigawatt data center facility working

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Speaker 4: with the US to Partnment Energy as well as soft

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Speaker 4: Bank Energy. And then we've got companies in the soft

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Speaker 4: Bank portfolio like Ampeer and graph Core. A lot of

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Speaker 4: synergy between the kind of work they're doing that could

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Speaker 4: fit into ARMS. So Masa has asked me to help

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Speaker 4: with that orchestration and that coordination across the companies. So

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Speaker 4: in one extent, yeah, it may look like, oh my gosh,

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Speaker 4: he's got two jobs, but on the flip side, there

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Speaker 4: is a lot of coordination that we get benefit from

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Speaker 4: both sides. So I'm happy to help in any way

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Speaker 4: that I can, and from.

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Speaker 2: San Jose and from wherever else you are in the world.

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Speaker 2: As we know, harm as UK based as well. We

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Speaker 2: so appreciate you joining today. I'm CEO Renee has on

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Speaker 2: the back of ARMS numbers now let's talk about where

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Speaker 2: all of this AI data center demand comes from, and

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Speaker 2: it keeps picking up. Anthropic has struck a deal with

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Speaker 2: Email Musks SpaceX, giving the claud maker access to computing

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Speaker 2: resources at a massive SpaceX data center known as Colossus

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Speaker 2: one for more. Bloomberg Ai editor Seth Figerman joins us, Now,

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Speaker 2: they're competitors, right, because it's not SpaceX, it's XAI that

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Speaker 2: has now passed of.

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Speaker 6: Space It's a bit of an odd bed below situation here.

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Speaker 6: Elon Musk has been critical of Anthropic before. Obviously they're

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Speaker 6: both competing to build more powerful AI models, but they

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Speaker 6: do both tend to benefit here. Anthropic has said repeatedly

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Speaker 6: that their demand as surge in the last few months,

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Speaker 6: and we've kind of felt that covering this company, and

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Speaker 6: they need computing Benigan now and Elon Musk's data center

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Speaker 6: is operational. It's not a theoretical multi gigawa facility three

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Speaker 6: years down the road. But Elon Musk's venture meanwhile, they

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Speaker 6: need revenue. Their you know face actually is planning to

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Speaker 6: go public imminently, and xais Groc is not really getting

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Speaker 6: that much business or as much business as they might like,

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Speaker 6: so here's a great way to supplement their revenue.

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Speaker 2: Because actually there's an awful lot of capacity that's not

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Speaker 2: being used at close this one, right.

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Speaker 6: That's right, So there's hundreds of megawatts there. I think

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Speaker 6: three hundred megawats is what Anthropic has agreed to lease here.

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Speaker 6: And again, this may not be a five gigawatt deal

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Speaker 6: on the scale that we sometimes report on, but it's

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Speaker 6: available now and I think that's the key differentiator.

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Speaker 2: There's also talk of I'm sure orbitals data centers, I

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Speaker 2: mean still to see you of Aanthropic Dario like speaking

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Speaker 2: into that eventual moonshot that's also on well he.

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Speaker 6: Twenty twenty six. But yes, Santhropic is saying they'll work

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Speaker 6: with SpaceX or SPACEXAI whatever they're calling themselves now on

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Speaker 6: multi gigawads of orbital data center capacity. This does not

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Speaker 6: exist today, but Elon has certainly suck it's a priority

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Speaker 6: for his emerged company.

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Speaker 2: What does exist today is rivalry between en O Musk

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Speaker 2: and Open AI men. He would say, of what we're

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Speaker 2: seeing playing out in court right now, what did heel

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Speaker 2: must say about? Look, his desire to allow Claude and

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Speaker 2: Anthropic to continue to grow using his own architecture.

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Speaker 6: There's certainly that of the egamy of my egamy, you know.

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Speaker 6: But he said elon sick. He went and visited senior

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Speaker 6: staff Aganthropic last week and decided they're not evil and that.

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Speaker 3: Some of his stuff like people have been leaving the trading.

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Speaker 6: Yes, but he has previously alleged that aanthropic is evil

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Speaker 6: or that they're misanthropic or any other term here. But

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Speaker 6: he's decided that Cloud can be a force for good.

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Speaker 6: But he's also indicating if that changes, he could just

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Speaker 6: cut this deal and change things.

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Speaker 7: Aroud.

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Speaker 2: Well, it's a deal that's cut so far and seemingly

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Speaker 2: a win win among frenemies. Figurement is always with all

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Speaker 2: the inside track when it comes to AI and compute me.

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Speaker 2: While coming up, we're going to the world of Quantum.

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Speaker 2: I encu Ceo Nicolo Divasi is joining us. They post

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Speaker 2: their first quarter revenue. It a bit, it was a

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Speaker 2: raised the shares down.

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Speaker 3: This is Bluemberg Tech.

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Speaker 2: As the clock ticks down on its acquisition by Paramount

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Speaker 2: One about the discovery reported and deeper than expected loss

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Speaker 2: in the first quarter. Shares user received just stuff about

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Speaker 2: a tenth five percent, putting into the details of Bluebergs

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Speaker 2: Hannah Miller the loss it is because they owe Paramount, right,

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Speaker 2: this is all tied up with the amount that was

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Speaker 2: given to Netflix.

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Speaker 8: Yes, it's definitely an anomaly. So basically, even though Paramount

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Speaker 8: has already paid that two point eight billion dollar termination

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Speaker 8: feed in Netflix, there are circumstances where Warner Brothers would

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Speaker 8: have to refund them. They would be unusual circumstances, but

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Speaker 8: Warner Brothers still has to report that and still have

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Speaker 8: it on its books.

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Speaker 2: Otherwise, though, if you strip that out, going to the

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Speaker 2: actual fundamental fundamentals of the business, how are they doing

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Speaker 2: in terms of content creation?

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Speaker 3: How are they doing in terms of streaming.

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Speaker 8: Yeah, so we've seen success on the streaming side, though

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Speaker 8: they are not reporting their specific subscriber counts. They're following

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Speaker 8: the footsteps of Netflix and Disney, but they are on

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Speaker 8: track to reach their goal of having more than one

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Speaker 8: hundred and fifty million subscribers by the end of this year.

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Speaker 8: We also saw some strength and streaming. They had some

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Speaker 8: hit shows, Season two of The Pit, A Night of

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Speaker 8: the Seven Kingdoms, and yeah, their studios revenue looked good

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Speaker 8: as a result.

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Speaker 2: What about the UK and international growth? They launched their

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Speaker 2: right in late Q one.

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Speaker 8: Yeah, this global expansion of their streaming platform plays a

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Speaker 8: lot into their goal of having you know, tons of

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Speaker 8: streamers around, streaming subscribers around the world. So you know,

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Speaker 8: this is all part of their strategy. They are a

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Speaker 8: very international company, so it makes sense for them to

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Speaker 8: just keep expanding abroad.

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Speaker 2: I meanwhile, we just keep all eyes on how the

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Speaker 2: deal progresses. Hannah Miller, We so appreciate you.

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Speaker 3: Thank you.

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Speaker 2: On the back of Warner Brothers discoveries earnings, there's more

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Speaker 2: earnings this time.

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Speaker 3: We're focusing in on Quantum Ion q Look.

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Speaker 2: Shares are down some five point seventy five percent, but

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Speaker 2: the quantum computing company posted first, got a revenue that

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Speaker 2: beat expectations. They had higher than expected second quarter outlook.

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Speaker 2: In fact, they raised the Fourier guidance. Nicolo Demasis with

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Speaker 2: us I'm QCEO. So maybe profit taking, maybe just appetite

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Speaker 2: from investors is so excited when it comes to quantum.

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Speaker 3: Do you think that's what's putting some pressure on the

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Speaker 3: stock today.

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Speaker 9: You know, Look, my job is to run the business

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Speaker 9: as best as one can. We're up probably seventy percent

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Speaker 9: from this time last year, and at the end of

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Speaker 9: the day, I think that we have tremendously great access

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Speaker 9: to capital, we're executing well, and we're demonstrating that Quantum's

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Speaker 9: got this fantastic strategic and financial inflection point.

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Speaker 5: Right.

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Speaker 9: So we just uplifted guidance for the full year to

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Speaker 9: be more than double last years revenue. At the high end,

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Speaker 9: we've tripled revenue last year. We're the first seven, eight

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Speaker 9: and the nine figure revenue quantum company in history. I

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Speaker 9: want to be the first to ten figures of revenue.

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Speaker 9: That's the goal right now.

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Speaker 2: Well, the goal longer term is for fault tolerant quantum computing.

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Speaker 2: It's to get to eighty thousand logical cubits.

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Speaker 3: The milestone you've got two five six. Why is that

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Speaker 3: a milestone? Why is that an inflection point?

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Speaker 9: Well, yeah, we launched actually the world's first fully sort

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Speaker 9: of shovel ready blueprint for fuld tolerant computing last week

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Speaker 9: as well. We call it the Walking Cat architecture, and

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Speaker 9: the two v six ship is actually our movement to

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Speaker 9: this architecture that we published and have obviously protected and

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Speaker 9: patented before we did so. It's a truly groundbreaking design

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Speaker 9: that I think will be in textbooks and history books,

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Speaker 9: I'm guessing in the coming decades, because it's modular and scalable,

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Speaker 9: and it takes advantage of what we call all to

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Speaker 9: all communication through this concept of sort of bell quantum

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Speaker 9: teleportation if you will, within.

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Speaker 5: The chip, which is super cool.

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Speaker 9: But if you're a quantum mechanics you know geek, you'll

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Speaker 9: you'll know what we're referring to. And so our systems

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Speaker 9: allow us to build more and more powerful individual computers.

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Speaker 9: But also the modularity means that we can build data

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Speaker 9: center size arrays as well. And so what I like

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Speaker 9: to remind people is where very much in the process

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Speaker 9: of building the most powerful ecosystem the quantum space. It's

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Speaker 9: not just computing, it's networking, sensing, and security. All of

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Speaker 9: these business lines were growing, and we talked about on

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Speaker 9: the range call. You know, just yesterday we beat Q

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Speaker 9: on you know, revenue guidance by about thirty percent. We

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Speaker 9: talked about the fact that the whole portfolio is growing.

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Speaker 9: We're growing internationally. It's about a third of our revenue,

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Speaker 9: but a third of our customers are taking more than

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Speaker 9: one product from us. So there's a lot of quantum

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Speaker 9: networks quantum computers that we're seeing demand for and hybrid

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Speaker 9: data centers as well, And that is.

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Speaker 2: Why you want and you say you want to be

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Speaker 2: the in video of quantum is effluly in the way. Look,

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Speaker 2: we're not going to compare like for like. Revenues are

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Speaker 2: still way off what and Video is currently bringing. But

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Speaker 2: you know you've got to start somewhere. And in that respect,

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Speaker 2: is it just you want to own the whole pie.

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Speaker 2: The fact that you are going to be in charge

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Speaker 2: of a lot of part of the ecosystem is where

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Speaker 2: the Nvidia sort of comparison comes.

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Speaker 9: Look, I'm a huge fan of Jensen, you know, hero

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Speaker 9: for anyone I think, to be honest, you know, tenacity

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Speaker 9: and building a business for the lasting a couple of decades.

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Speaker 9: We're going to do exactly the same thing. We've been

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Speaker 9: at it thirty years. We've built the world's first quantum

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Speaker 9: logic EATE in ninety five. Now we've built you know,

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Speaker 9: we've delivered the first blueprint for full fall tolerant machines

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Speaker 9: and we're demonstrating all aspects of that architecture. So it's

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Speaker 9: just engineering from here on out as we turn the

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Speaker 9: handle and scale. But yes, we want to make sure

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Speaker 9: that people learn on our architecture, stay in architecture, change

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Speaker 9: the world on our architecture and all aspects of applied science,

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Speaker 9: material science, pharma, defense, intelligence, logistics, chemistry and so on.

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Speaker 9: But we're going to be, you know, an open ecosystem,

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Speaker 9: so we work with Microsoft, Google, Amazon, et cetera. We

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Speaker 9: will plug into everyone's software stack, but end of the day,

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Speaker 9: we want it all to be sort of reciding on

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Speaker 9: our on our hardware, and so we we want to

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Speaker 9: keep control of the critical pieces of the software and

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Speaker 9: hardware stack and the al rhythm stack as we scale.

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Speaker 3: You're not the only one in the race.

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Speaker 2: And when I think about fidgets, for example, what others

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Speaker 2: are doing elsewhere? Who are you seeing in your peripheral vision?

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Speaker 2: Where are you seeing competition coming for what you're building?

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Speaker 9: Well, I think we're quite unique in the sense that

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Speaker 9: we've not always not only always had a technical lead,

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Speaker 9: but we now have a manufacturability and a robustness that's

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Speaker 9: really grabbing people's attention.

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Speaker 1: Right.

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Speaker 9: So I talked about technology readiness levels on the earnings

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Speaker 9: call last night and how our quantum sensors are on

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Speaker 9: submarines up to you know, spacecraft, and we're thinking about

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Speaker 9: the full quantum platform as something we want to deliver

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Speaker 9: to the war fighter in all war fighting domains. But

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Speaker 9: also that indicates the level of reliability and robustness that

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Speaker 9: our enterprise customers can benefit from. Right so, sensors have

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Speaker 9: very high what's called tenology readiness levels by the military.

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Speaker 9: Our quantum networks are also deployed quite high levels of TRL.

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Speaker 9: Quantum computers are very much you know, growing catching up

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Speaker 9: of all of the very quickly, and we're having to

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Speaker 9: trade off to some extent, you know, how much do

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Speaker 9: you harden the current generation or work on the next generation.

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Speaker 9: But we're doing all that in peril and we continue

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Speaker 9: to invest in manufacturing capacity because we've talked the last

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Speaker 9: two earnings calls about the fact that demand really has

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Speaker 9: been coming towards us and they've been coming to where

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Speaker 9: our product portfolio is, and so we're growing our manufacturing

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Speaker 9: footprint across the whole product family to meet that demand.

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Speaker 2: You've articulated a lot of the recent commercial wins in

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Speaker 2: the earnings, so appreciate you coming on and talking about

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Speaker 2: the longer term trajectory. It's always interesting to catch up

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Speaker 2: with Niccolod de Messi. He's an iron Q on the

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Speaker 2: back of his earnings. Let's take a look at today's

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Speaker 2: big number, eighty and eleven. That's the number of planned

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Speaker 2: cuts in the tech industry so far this year, up

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Speaker 2: thirty three percent from the same period in twenty twenty five,

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Speaker 2: in the total for twenty twenty six to three year high,

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Speaker 2: even as overall private sector layof announcements receded. This is

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Speaker 2: all coming from data from Challenger. Blumbo's US economy reporter

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Speaker 2: Julia Benzeries joins us now on the trend.

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Speaker 3: That we're seeing.

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Speaker 2: Look, whether it's anecdotal, whether you think of the announcement's

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Speaker 2: coming from block just over this week, we've heard from Coinbase,

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Speaker 2: from PayPal, but we then get the more macro piece

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Speaker 2: of data that yes, tech is the industry that has

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Speaker 2: the highest number of layoffs right now.

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Speaker 3: That's absolutely it.

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Speaker 10: You've been seeing a lot of headlines from Microsoft to

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Speaker 10: Meta to snap and that's what Challenger looks at. Challenger

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Speaker 10: tallies up these job cut announcements and the tech industry

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Speaker 10: is leading layoff announcements. And the reason is for the

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Speaker 10: second month in a row, artificial intelligence and you brought

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Speaker 10: up a great point. It's not necessarily at the moment

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Speaker 10: that artificial intelligence is replacing workers, but the spend that

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Speaker 10: is necessary, that is what is taking over.

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Speaker 3: And that's why job cuts have.

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Speaker 10: Been occurring, is because they these companies need that extra spend.

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Speaker 2: It's so interesting because I think everyone's got this anxiety

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Speaker 2: the AI is going to replace me, but actually maybe

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Speaker 2: it's just your salary that needs to be taken out

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Speaker 2: to be redeployed into AI investment judia. When I take

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Speaker 2: a step back, though, the hand ringing is getting more ferocious.

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Speaker 2: But when you look at Challenger data since twenty twenty three,

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Speaker 2: is it that they've been tracking how many jobs are

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Speaker 2: at the expense of AI, it's still only about three

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Speaker 2: and a half percent of all layoffs that have been

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Speaker 2: announced since that time.

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Speaker 3: Right, it's still only very small. It's only very small.

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Speaker 10: And if you look at the broader macroeconomic picture today,

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Speaker 10: we got initial jobless claims and they're still hovering near

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Speaker 10: decade lows. Even though they rebounded a little bit, continuing

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Speaker 10: claims are near two year lows. So that's showing that

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Speaker 10: even though we are having a lot of these announcements,

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Speaker 10: these job cuts are either not translating significantly to the

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Speaker 10: broader data, or also that's just not necessarily moving the

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Speaker 10: needle in the broader picture.

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Speaker 2: Yeah, I guess the question is whether this is a

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Speaker 2: leading indicator, whether it's just the start of something in

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Speaker 2: terms of a wave. Julia, just briefly, what are the

437
00:21:07,119 --> 00:21:08,720
Speaker 2: data do you look at to make sure that this

438
00:21:08,840 --> 00:21:10,440
Speaker 2: is real, whether this is AI washing.

439
00:21:12,760 --> 00:21:14,280
Speaker 3: I think that's the difficult question.

440
00:21:14,480 --> 00:21:16,719
Speaker 10: I mean, the numbers that we're looking at, even if

441
00:21:16,760 --> 00:21:19,560
Speaker 10: it is AI washing, what is significant is that there

442
00:21:19,600 --> 00:21:21,560
Speaker 10: are these job cuts, and so we're trying to assess

443
00:21:22,040 --> 00:21:25,360
Speaker 10: is the economy still in a low higher, low fire environment.

444
00:21:25,520 --> 00:21:28,320
Speaker 10: Because even if it is AI washing, if these jobs

445
00:21:28,560 --> 00:21:32,000
Speaker 10: are being removed from the economy, that is significant something

446
00:21:32,040 --> 00:21:33,239
Speaker 10: that you have to keep an eye on.

447
00:21:33,800 --> 00:21:35,840
Speaker 2: It is and it's something that workers to keep an

448
00:21:35,840 --> 00:21:37,000
Speaker 2: eye and at the end of the day, it might

449
00:21:37,040 --> 00:21:40,720
Speaker 2: be statistics, but it's actually really people's livelihoods that we're

450
00:21:40,760 --> 00:21:43,719
Speaker 2: talking about here Bloomers. Julia Panzera's it's great to have

451
00:21:43,760 --> 00:21:51,399
Speaker 2: you on. Welcome back to Bloomberg Tech. We check in

452
00:21:51,440 --> 00:21:53,680
Speaker 2: on these markets that are at a new record high.

453
00:21:53,920 --> 00:21:56,800
Speaker 2: We're on pace for a sixth straight week of gains

454
00:21:56,840 --> 00:21:59,480
Speaker 2: and then astat one hundred, we're up five ten percent. Again,

455
00:22:00,000 --> 00:22:02,679
Speaker 2: did the clouds on the macroeconomy side of things, the

456
00:22:02,720 --> 00:22:06,520
Speaker 2: worry anxiety about US and Iran conflict. We're still managing

457
00:22:06,560 --> 00:22:08,520
Speaker 2: to see the AI trade still power a lot of

458
00:22:08,560 --> 00:22:09,120
Speaker 2: these stocks.

459
00:22:09,240 --> 00:22:10,080
Speaker 3: We've also staw.

460
00:22:09,920 --> 00:22:12,199
Speaker 2: Got earnings coming thick and fast, and for some we

461
00:22:12,240 --> 00:22:15,600
Speaker 2: are seeing absolute rocket chips in terms of moves and

462
00:22:15,800 --> 00:22:18,399
Speaker 2: focusing in on data dog up let's call it thirty percent.

463
00:22:18,720 --> 00:22:19,680
Speaker 3: They raised the guidance.

464
00:22:19,720 --> 00:22:22,520
Speaker 2: They're showing strong growth and in many ways this is

465
00:22:22,560 --> 00:22:25,480
Speaker 2: as see the biggest moves in some at one point

466
00:22:25,520 --> 00:22:27,960
Speaker 2: since twenty nineteen, and this is a.

467
00:22:28,119 --> 00:22:30,960
Speaker 3: Software really manages to sort of alleviate some of the

468
00:22:31,000 --> 00:22:32,240
Speaker 3: ants here. They had a strong report.

469
00:22:32,280 --> 00:22:34,600
Speaker 2: The guidance applying a healthy outlook for the second half

470
00:22:34,800 --> 00:22:37,200
Speaker 2: is however, qucayat call it in TDCAR and saying revenue

471
00:22:37,200 --> 00:22:40,320
Speaker 2: growth is nicely above consensus for the outlook, much better

472
00:22:40,400 --> 00:22:41,160
Speaker 2: than expected.

473
00:22:41,800 --> 00:22:43,439
Speaker 3: Less so for DoorDash, which had.

474
00:22:43,320 --> 00:22:47,280
Speaker 2: Been trading higher in earlier when certainly after it reported

475
00:22:47,280 --> 00:22:49,880
Speaker 2: earnings yesterday after the bell, the gains that we saw

476
00:22:49,880 --> 00:22:52,199
Speaker 2: in gross order value had impressed in many ways. They

477
00:22:52,520 --> 00:22:55,840
Speaker 2: the firm giving a second quarter marketplace gross order value

478
00:22:55,960 --> 00:22:59,600
Speaker 2: forecast that really beat average analyst expectations, but maybe expectations

479
00:22:59,600 --> 00:23:02,560
Speaker 2: got ahead themselves, as Uber's numbers have been strong as well.

480
00:23:02,560 --> 00:23:05,280
Speaker 2: We're just downs extensive percent, but earnestly one of the

481
00:23:05,400 --> 00:23:07,119
Speaker 2: key drivers in the market at the moment. And Sylvia

482
00:23:07,160 --> 00:23:10,119
Speaker 2: Jamonski's with their CIO at Defiance ETS and talking to

483
00:23:10,160 --> 00:23:14,000
Speaker 2: discuss invest appetite, whether it be for software in some

484
00:23:14,080 --> 00:23:16,840
Speaker 2: respects for financing, some love for data dog, but you're

485
00:23:16,880 --> 00:23:19,119
Speaker 2: also seeing love for what's happening in terms of the

486
00:23:19,160 --> 00:23:21,919
Speaker 2: AI trade more broadly, infrastructure quantum. We just had IMQ

487
00:23:22,040 --> 00:23:24,320
Speaker 2: on what are the driving forces you're seeing in the ETFs.

488
00:23:24,520 --> 00:23:26,879
Speaker 11: Well, I think the driving forces are very much that

489
00:23:26,960 --> 00:23:29,120
Speaker 11: these companies are doing quite well. We just talked about

490
00:23:29,160 --> 00:23:31,080
Speaker 11: IMQF camera for a minute. There are seven hundred and

491
00:23:31,160 --> 00:23:33,639
Speaker 11: fifty five percent revenue growth. You know, this is a

492
00:23:33,640 --> 00:23:36,479
Speaker 11: company that's doing full s tax services. They're involved in defense,

493
00:23:36,520 --> 00:23:40,679
Speaker 11: they're involved in quantum infrastructure deals with Azure, deals with AWS.

494
00:23:40,720 --> 00:23:42,840
Speaker 11: And I think that a lot of these disruptive and

495
00:23:42,880 --> 00:23:46,359
Speaker 11: thematic themes are playing out because these companies are starting

496
00:23:46,400 --> 00:23:49,360
Speaker 11: to generate revenues they're starting to go from being science

497
00:23:49,400 --> 00:23:53,080
Speaker 11: projects to actually being commercial and that's really what the

498
00:23:53,119 --> 00:23:55,440
Speaker 11: retail investor needed to see. And I think why you're

499
00:23:55,440 --> 00:23:56,800
Speaker 11: seeing some momentum.

500
00:23:56,359 --> 00:23:58,800
Speaker 3: In these spaces. It's an interesting that a science project.

501
00:23:58,840 --> 00:24:01,320
Speaker 2: I mean, some days we can be very enthusiastic about

502
00:24:01,359 --> 00:24:03,880
Speaker 2: the project of AI and large language models more broadly,

503
00:24:04,119 --> 00:24:06,879
Speaker 2: we think that they're going to be driving absolute productivity games.

504
00:24:06,880 --> 00:24:09,119
Speaker 2: And then there's other days where we have anxiety about

505
00:24:09,480 --> 00:24:12,720
Speaker 2: just supply restrains, whether able to build out compute, whether

506
00:24:12,880 --> 00:24:16,000
Speaker 2: able to afford compute. How much are you seeing on

507
00:24:16,040 --> 00:24:17,520
Speaker 2: a day to day the shift and sentiment.

508
00:24:17,880 --> 00:24:20,199
Speaker 11: Well, I think what's great is actually if you look

509
00:24:20,240 --> 00:24:22,919
Speaker 11: at some of these themes AI and even quantum right like,

510
00:24:23,000 --> 00:24:25,200
Speaker 11: just look over the last two or three years, it's

511
00:24:25,320 --> 00:24:27,920
Speaker 11: good news comes out, earnings are positive, The stocks rally

512
00:24:27,960 --> 00:24:30,479
Speaker 11: thirty forty percent. You know, someone says, oh, we're ten

513
00:24:30,640 --> 00:24:33,240
Speaker 11: years away from this coming to fruition, and the socks

514
00:24:33,240 --> 00:24:35,399
Speaker 11: fall twenty thirty percent. So what I would say is

515
00:24:35,440 --> 00:24:37,520
Speaker 11: that opens up opportunities for investors. When you have this

516
00:24:37,640 --> 00:24:40,520
Speaker 11: uncertainty and it's a nascent field, you know, you can

517
00:24:40,560 --> 00:24:42,680
Speaker 11: actually buy dips here and hold these stocks for a

518
00:24:42,720 --> 00:24:45,080
Speaker 11: longer periods of time. Hold these AI power and infrastructure

519
00:24:45,160 --> 00:24:47,240
Speaker 11: ETFs and things like this. But you know, what I

520
00:24:47,240 --> 00:24:49,359
Speaker 11: will say is that it also just shows you how

521
00:24:49,400 --> 00:24:51,639
Speaker 11: much demand there is and what the runway is for

522
00:24:51,680 --> 00:24:54,400
Speaker 11: these companies. You know, you're now we're talking about photonics

523
00:24:54,400 --> 00:24:56,720
Speaker 11: that are needed to power data forward. We're to Corning

524
00:24:56,800 --> 00:24:59,639
Speaker 11: deal for a Corning deal, Lmentum, Coherent. You know, we're

525
00:24:59,680 --> 00:25:03,879
Speaker 11: talking about different forms of energy, whether it's nuclear energy,

526
00:25:03,920 --> 00:25:05,840
Speaker 11: and all of this is needed to drive this forward.

527
00:25:05,880 --> 00:25:07,560
Speaker 11: And we're in the early stages. So I think the

528
00:25:07,560 --> 00:25:09,399
Speaker 11: picks and shovels are going to have a long runway

529
00:25:09,400 --> 00:25:09,960
Speaker 11: ahead of them.

530
00:25:10,280 --> 00:25:12,960
Speaker 2: Where there has been a lot of anxiety has been software.

531
00:25:13,000 --> 00:25:15,640
Speaker 2: And look, Data Dog actually calls itself an AI powered

532
00:25:15,680 --> 00:25:16,640
Speaker 2: software provider.

533
00:25:16,680 --> 00:25:19,360
Speaker 3: They're giving tools for AI coding. They're also all about

534
00:25:19,400 --> 00:25:20,520
Speaker 3: the networking infrastructure.

535
00:25:20,560 --> 00:25:25,400
Speaker 2: But how all companies getting sort of wheat and shafted

536
00:25:25,440 --> 00:25:27,560
Speaker 2: by investors right now as to whether they can harness

537
00:25:27,640 --> 00:25:29,600
Speaker 2: AI growth or whether they're going to be left behind.

538
00:25:29,840 --> 00:25:32,639
Speaker 11: Well, I think when the market had that chatshypt moment

539
00:25:32,800 --> 00:25:34,840
Speaker 11: so long ago, at this point, it was the Microsoft

540
00:25:34,880 --> 00:25:38,040
Speaker 11: investment news, all of a sudden, every single company in

541
00:25:38,080 --> 00:25:39,919
Speaker 11: the s and P five hundred tied itself to the

542
00:25:39,960 --> 00:25:43,320
Speaker 11: word AI. And when it tied itself to the word AI,

543
00:25:43,480 --> 00:25:46,200
Speaker 11: all that company tended to do well and the stock

544
00:25:46,280 --> 00:25:48,920
Speaker 11: price went up. And then the market has figured out like, okay,

545
00:25:48,960 --> 00:25:51,320
Speaker 11: not everybody is AI, and so I think data Dog

546
00:25:51,400 --> 00:25:53,960
Speaker 11: has done something differently, you know how that votes for

547
00:25:54,000 --> 00:25:56,080
Speaker 11: the rest of software. I think that if you see

548
00:25:56,080 --> 00:26:00,400
Speaker 11: these major software companies integrating AI into their infrastructure, they

549
00:26:00,440 --> 00:26:03,640
Speaker 11: will be potentially fine. And also you have larger companies

550
00:26:03,680 --> 00:26:06,159
Speaker 11: like Ibon for example. You know, they might suffer on

551
00:26:06,200 --> 00:26:08,640
Speaker 11: their software side, but they went on their quantum side, right,

552
00:26:08,680 --> 00:26:12,240
Speaker 11: So the diversified exposure to technology and these you know

553
00:26:12,280 --> 00:26:15,760
Speaker 11: again disruptive trends in AI will help move them forward.

554
00:26:16,000 --> 00:26:19,199
Speaker 2: This is all in the context of disruption from a

555
00:26:19,200 --> 00:26:22,600
Speaker 2: macro perspective. From a geopolitical perspective, how how does a

556
00:26:23,040 --> 00:26:25,560
Speaker 2: long term investor who loves the idea of AI and

557
00:26:25,680 --> 00:26:28,120
Speaker 2: quantum deal with the here and now of the straight

558
00:26:28,119 --> 00:26:31,240
Speaker 2: to Hoole moves, which does affect helium, which doesn't fight chips.

559
00:26:31,119 --> 00:26:33,280
Speaker 11: Right, And it's really interesting that the market has rallied

560
00:26:33,280 --> 00:26:36,399
Speaker 11: the way it has where we still have this geopolitical uncertainty.

561
00:26:36,480 --> 00:26:37,080
Speaker 3: Is the war over?

562
00:26:37,240 --> 00:26:37,560
Speaker 11: Is it not?

563
00:26:37,640 --> 00:26:38,439
Speaker 3: Where do we stand?

564
00:26:38,480 --> 00:26:40,199
Speaker 11: You know, I think that the market could turn at

565
00:26:40,200 --> 00:26:42,200
Speaker 11: any time, and that's something that investors.

566
00:26:41,840 --> 00:26:42,520
Speaker 3: Should be aware of.

567
00:26:42,800 --> 00:26:45,000
Speaker 11: However, when you think about, you know, the way that

568
00:26:45,040 --> 00:26:48,280
Speaker 11: you invest when specifically talking about disruptive themes. You want

569
00:26:48,320 --> 00:26:50,240
Speaker 11: to be a longer buy and you know, buy and

570
00:26:50,280 --> 00:26:53,120
Speaker 11: hold investor, right. You want to kind of weather the Covids.

571
00:26:53,119 --> 00:26:54,760
Speaker 11: You want to weather the Russia Ukraine. You want to

572
00:26:55,040 --> 00:26:57,800
Speaker 11: weather what's going on in the Middle East and keep

573
00:26:57,840 --> 00:27:00,159
Speaker 11: that long term outlook because you're not going to be

574
00:27:00,200 --> 00:27:03,160
Speaker 11: able to predict your politics. That being said, investors should

575
00:27:03,200 --> 00:27:06,760
Speaker 11: beware that there could be volatility and the things that

576
00:27:06,760 --> 00:27:08,480
Speaker 11: get hit could be the higher pro sectors.

577
00:27:08,680 --> 00:27:11,040
Speaker 3: Where are you seeing new appetite?

578
00:27:11,240 --> 00:27:15,200
Speaker 2: Like you're someone who thinks around opening new ETFs, like

579
00:27:15,600 --> 00:27:18,159
Speaker 2: you honess the appetite that there was in crypto, particularly

580
00:27:18,160 --> 00:27:20,160
Speaker 2: an AI infrastructure in space and quantum.

581
00:27:20,960 --> 00:27:22,320
Speaker 3: Where's the puck moving?

582
00:27:22,680 --> 00:27:25,440
Speaker 11: Well, the puck is moving to you know a lot

583
00:27:25,480 --> 00:27:27,560
Speaker 11: of these picks and shovels of AI.

584
00:27:27,760 --> 00:27:28,359
Speaker 3: It really is.

585
00:27:28,400 --> 00:27:31,080
Speaker 11: You know, you're talking about memory, you're talking about photonics,

586
00:27:31,119 --> 00:27:33,520
Speaker 11: you're talking about the AI infrastructure and build out the

587
00:27:33,560 --> 00:27:36,280
Speaker 11: picks and shovels. The last time we were on, we

588
00:27:36,320 --> 00:27:39,320
Speaker 11: talked about modern warfare because of what's going on in

589
00:27:39,320 --> 00:27:41,560
Speaker 11: Iran and around the world. There's been so much growth

590
00:27:41,600 --> 00:27:45,679
Speaker 11: in you know, drones, manless drones, you know polunteer, the

591
00:27:45,680 --> 00:27:48,120
Speaker 11: type of AI that is going to be funded by

592
00:27:48,119 --> 00:27:50,919
Speaker 11: governments to grow out. Defense is just you know, a

593
00:27:50,960 --> 00:27:54,320
Speaker 11: massive opportunity. So we really see investors starting to allocate

594
00:27:54,359 --> 00:27:57,239
Speaker 11: and look into the cousins of AI outside of just

595
00:27:57,240 --> 00:27:58,159
Speaker 11: straight ships.

596
00:27:58,240 --> 00:28:00,320
Speaker 2: And we've got a key IPO to be too about

597
00:28:00,320 --> 00:28:01,800
Speaker 2: in the world of satellites. And I know that you've

598
00:28:01,800 --> 00:28:04,240
Speaker 2: got exposure to the world of satellite and defense tech.

599
00:28:04,280 --> 00:28:06,680
Speaker 2: Sylvia Daemonsky, it's great to have you on of Defiance

600
00:28:06,760 --> 00:28:10,399
Speaker 2: ETF coming up. We talked to that CEO, Hawkey three sixty.

601
00:28:10,400 --> 00:28:12,600
Speaker 2: It's a satellite surveilance FERM. It just rade four hundred

602
00:28:12,600 --> 00:28:16,120
Speaker 2: and sixteen million dollars in its IPO. This is Bluemo Tech,

603
00:28:23,680 --> 00:28:25,960
Speaker 2: another tech company is going public today in the latest

604
00:28:25,960 --> 00:28:28,680
Speaker 2: sign that the IPO market is picking up steam. Hawkeye

605
00:28:28,680 --> 00:28:30,800
Speaker 2: three sixty priced at the top end of the range

606
00:28:30,920 --> 00:28:32,720
Speaker 2: and raise four hundred and sixteen million dollars in the

607
00:28:32,720 --> 00:28:36,960
Speaker 2: firm provides satellite based signals intelligence for US government agencies.

608
00:28:37,160 --> 00:28:40,320
Speaker 2: Hawkye CEO John Cerafini joins US now and look, your

609
00:28:40,360 --> 00:28:43,400
Speaker 2: shares are currently indicated to pop at the open thirty

610
00:28:43,440 --> 00:28:44,440
Speaker 2: dollars to thirty two.

611
00:28:44,880 --> 00:28:47,520
Speaker 3: And does that make you feel, John, Oh, it's a

612
00:28:47,520 --> 00:28:48,280
Speaker 3: wonderful day.

613
00:28:48,360 --> 00:28:50,640
Speaker 7: It's a wonderful day for our company and for our

614
00:28:50,680 --> 00:28:52,360
Speaker 7: customers around the globe.

615
00:28:52,480 --> 00:28:55,000
Speaker 2: Okay, so we could see that sort of movement higher.

616
00:28:55,040 --> 00:28:57,080
Speaker 2: Twenty six dollars is where you priced. You have are

617
00:28:57,160 --> 00:29:01,080
Speaker 2: twenty five times oversubscribed. So for those that didn't manage

618
00:29:01,080 --> 00:29:03,040
Speaker 2: to get in, what's the thesis here? What are the

619
00:29:03,040 --> 00:29:05,080
Speaker 2: growth opportunities for Hawkey three sixty.

620
00:29:06,240 --> 00:29:07,040
Speaker 3: Well, it's a very.

621
00:29:06,960 --> 00:29:10,520
Speaker 7: Durable all weather company. We obviously have a value proposition

622
00:29:10,680 --> 00:29:14,080
Speaker 7: of providing signals intelligence to the warfighter community during times

623
00:29:14,080 --> 00:29:18,800
Speaker 7: of geoplical volatility, but our capabilities are orchestrated to provide

624
00:29:18,920 --> 00:29:22,240
Speaker 7: value in all environments, in all business conditions, and we

625
00:29:22,280 --> 00:29:25,600
Speaker 7: have a track record of having built a very durable

626
00:29:25,640 --> 00:29:29,880
Speaker 7: company that works in any operating condition, in any economic environment.

627
00:29:30,240 --> 00:29:33,080
Speaker 2: You ownly operate a constellation of more than thirty satellites.

628
00:29:33,320 --> 00:29:35,880
Speaker 2: How does that look to grow and what actually do

629
00:29:35,920 --> 00:29:37,880
Speaker 2: those satellites perform right now?

630
00:29:38,840 --> 00:29:42,160
Speaker 7: Yes, so our constellation today is over thirty satellites. That

631
00:29:42,240 --> 00:29:45,720
Speaker 7: provides an exceptional revisit rate over anywhere on Earth, as

632
00:29:45,760 --> 00:29:47,800
Speaker 7: well as very low data latency, so we can get

633
00:29:47,840 --> 00:29:51,360
Speaker 7: that data to our customers, the warfighters and timely manner.

634
00:29:52,040 --> 00:29:55,800
Speaker 7: All these conditions provide for capabilities that the warfighter is

635
00:29:55,880 --> 00:29:58,560
Speaker 7: using in places like the battlefield or in the South

636
00:29:58,640 --> 00:30:01,480
Speaker 7: China Sea to be able to and track dark vessels.

637
00:30:01,840 --> 00:30:05,880
Speaker 7: We have a very exquisite value proposition of being able

638
00:30:05,920 --> 00:30:09,920
Speaker 7: to geolocate, analyzed process RF data and deliver that to

639
00:30:10,000 --> 00:30:11,640
Speaker 7: warfires on a timely basis.

640
00:30:12,080 --> 00:30:13,120
Speaker 3: How does that expand?

641
00:30:13,720 --> 00:30:16,240
Speaker 2: Is it just the US government and it's more of

642
00:30:16,280 --> 00:30:18,720
Speaker 2: the budget that is an expanding budget coming from the

643
00:30:18,720 --> 00:30:19,840
Speaker 2: Pentagon or is.

644
00:30:19,840 --> 00:30:22,000
Speaker 3: It other allies that you work with. How you seeing

645
00:30:22,040 --> 00:30:23,360
Speaker 3: the growth of Hawky three sixty.

646
00:30:24,240 --> 00:30:26,480
Speaker 7: Well, we've orchestrated our company to be a very diverse

647
00:30:26,680 --> 00:30:29,200
Speaker 7: in our revenue base. So we have a US government

648
00:30:29,240 --> 00:30:32,880
Speaker 7: business that's significant today represents about seventy five percent of

649
00:30:32,880 --> 00:30:36,120
Speaker 7: our work. In the past, our international business has been

650
00:30:36,160 --> 00:30:39,720
Speaker 7: upwards of fifty percent of the Hawkeye heritage capability. We

651
00:30:39,800 --> 00:30:42,720
Speaker 7: have a number of great international customers. We're very pleased

652
00:30:42,720 --> 00:30:44,920
Speaker 7: to be able to support them, and the growth drivers

653
00:30:44,920 --> 00:30:47,880
Speaker 7: on the air national side are very robust.

654
00:30:48,720 --> 00:30:51,080
Speaker 2: You are using the money the funds raised to repay

655
00:30:51,120 --> 00:30:53,880
Speaker 2: debt and to help fund deferred payments related actually to

656
00:30:53,920 --> 00:30:54,680
Speaker 2: an acquisition you.

657
00:30:54,600 --> 00:30:56,920
Speaker 3: Made in December. What about that?

658
00:30:57,160 --> 00:30:59,160
Speaker 2: I mean you bought a data space provider of signal

659
00:30:59,200 --> 00:31:00,000
Speaker 2: processing technology.

660
00:31:00,240 --> 00:31:01,920
Speaker 3: Could you add on anything else?

661
00:31:02,080 --> 00:31:05,680
Speaker 2: Or is acquisitions in an inorganic.

662
00:31:05,080 --> 00:31:07,560
Speaker 3: Growth a way to continue to expand?

663
00:31:08,640 --> 00:31:11,400
Speaker 7: Well, we're quick to want to combine the organic growth

664
00:31:11,520 --> 00:31:14,360
Speaker 7: of over seventy percent last year in twenty twenty five

665
00:31:14,440 --> 00:31:17,840
Speaker 7: and the exceptional profitability of over twenty percent on adjusting

666
00:31:17,920 --> 00:31:21,400
Speaker 7: able the basis in twenty twenty five with continued inorgananic

667
00:31:21,440 --> 00:31:24,880
Speaker 7: growth opportunities. Now that we've acquired ISA, which is a

668
00:31:24,920 --> 00:31:29,320
Speaker 7: meaningful acquisition both in revenue and profitability and an exquisite

669
00:31:29,360 --> 00:31:32,800
Speaker 7: fit for our technologies, and we have the institutional muscle

670
00:31:32,880 --> 00:31:36,120
Speaker 7: to do this, we anticipate doing more acquisitions, and certainly

671
00:31:36,560 --> 00:31:39,080
Speaker 7: the IPO provides the proceeds for us to enable that.

672
00:31:40,000 --> 00:31:42,360
Speaker 2: What's interesting, John, I mean, you raised I think one

673
00:31:42,400 --> 00:31:44,640
Speaker 2: hundred and seventy three million in a Series A E

674
00:31:44,760 --> 00:31:47,880
Speaker 2: funding round. Who are nearly two billion dollars according to pitchbook.

675
00:31:48,280 --> 00:31:52,040
Speaker 2: Why not stay private? What we've seen is massive companies

676
00:31:52,080 --> 00:31:54,880
Speaker 2: wait for extraordinary lengths of time to eventually tap the

677
00:31:54,880 --> 00:31:55,760
Speaker 2: public markets.

678
00:31:55,960 --> 00:31:56,840
Speaker 3: Why was it right for you?

679
00:31:56,920 --> 00:31:57,040
Speaker 9: Now?

680
00:31:58,600 --> 00:32:01,320
Speaker 7: Well, the warfire who deserves the very best suppliers of

681
00:32:01,400 --> 00:32:05,520
Speaker 7: capability to them, and the IPO process provides exceptional validation

682
00:32:05,680 --> 00:32:08,880
Speaker 7: to ensure that a company like Hawkeye three sixty is

683
00:32:09,080 --> 00:32:12,959
Speaker 7: capable of delivering valuable intelligence to that war fighter. So

684
00:32:13,000 --> 00:32:15,320
Speaker 7: we appreciate that bone, the FIDIS and the validation that

685
00:32:15,360 --> 00:32:18,600
Speaker 7: we've gained from becoming a publicly traded company. And obviously

686
00:32:18,640 --> 00:32:21,160
Speaker 7: we appreciate the resources that are now on our balance

687
00:32:21,160 --> 00:32:24,520
Speaker 7: sheet that will enable us to execute against special initiatives

688
00:32:24,520 --> 00:32:26,600
Speaker 7: that will provide growth to support the warfighter.

689
00:32:27,760 --> 00:32:30,320
Speaker 2: John, it's great speaking to me. We look forward to

690
00:32:30,360 --> 00:32:33,800
Speaker 2: when the shares start trading. John Sarafini, he's the CEO

691
00:32:33,800 --> 00:32:35,080
Speaker 2: of Hawkekai three sixty.

692
00:32:35,120 --> 00:32:43,200
Speaker 3: Congratulations on the listing shows of chime.

693
00:32:43,400 --> 00:32:45,920
Speaker 2: We're actually trading lower today seven point nine percent, But

694
00:32:45,960 --> 00:32:48,880
Speaker 2: the company reported earning is that beat expectations? They raised

695
00:32:48,880 --> 00:32:51,640
Speaker 2: full your revenue outlook. It's kind of synonymous what we've

696
00:32:51,640 --> 00:32:53,920
Speaker 2: just seen with Armor a little bit earlier. The more

697
00:32:54,000 --> 00:32:57,400
Speaker 2: notable change that Blueberg Intelligence focuses it on is the

698
00:32:57,440 --> 00:33:00,880
Speaker 2: fintech raising is EBIDAR outlook up percent the midpoints. So

699
00:33:00,960 --> 00:33:03,080
Speaker 2: let's delve into all these numbers, the growth, the new

700
00:33:03,160 --> 00:33:06,360
Speaker 2: users with Chime CEO Chris Britt and look the.

701
00:33:06,360 --> 00:33:07,400
Speaker 3: Stop not doing the work.

702
00:33:07,480 --> 00:33:10,640
Speaker 2: But more broadly, we are seeing that you outperformed in

703
00:33:10,680 --> 00:33:11,640
Speaker 2: your fiscal first quarter.

704
00:33:11,720 --> 00:33:13,320
Speaker 3: How are you seeing growth for the company.

705
00:33:14,520 --> 00:33:16,280
Speaker 12: Well, thanks for having me, Caroline, it's great to see

706
00:33:16,280 --> 00:33:19,080
Speaker 12: you again. We felt great about the quarter. We once

707
00:33:19,120 --> 00:33:23,800
Speaker 12: again added a huge amount of new members into our

708
00:33:23,880 --> 00:33:27,760
Speaker 12: customer base. We added seven hundred thousand new actives, so

709
00:33:27,800 --> 00:33:30,040
Speaker 12: we got to ten point two million for the quarter,

710
00:33:30,440 --> 00:33:32,840
Speaker 12: which is a new high for US, and third party

711
00:33:32,920 --> 00:33:36,480
Speaker 12: data from Jdpower once again showed that Chime was opening

712
00:33:36,600 --> 00:33:40,040
Speaker 12: up more checking accounts than any bank in America, in fact,

713
00:33:40,480 --> 00:33:42,960
Speaker 12: almost fifty percent higher than the number two player in

714
00:33:43,040 --> 00:33:45,560
Speaker 12: terms of opening up new accounts. And you can see

715
00:33:45,560 --> 00:33:48,640
Speaker 12: that translate into our results twenty five percent year over

716
00:33:48,720 --> 00:33:53,520
Speaker 12: year top line growth and great outperformance on not just

717
00:33:53,600 --> 00:33:57,280
Speaker 12: top line but also in terms of efficiency and EBAITA.

718
00:33:57,480 --> 00:34:00,880
Speaker 12: We achieve an eighteen percent adjusted EBAITA margin and gap

719
00:34:00,920 --> 00:34:02,200
Speaker 12: profitability for the first time.

720
00:34:02,960 --> 00:34:04,960
Speaker 2: Look, this is all on the arc of having gone

721
00:34:05,000 --> 00:34:07,640
Speaker 2: public and continuing to build out as a company. There

722
00:34:07,680 --> 00:34:10,279
Speaker 2: was seasonality to your business in the second quarter brings

723
00:34:10,280 --> 00:34:12,680
Speaker 2: that seasonality, Perhaps revenue gets hit a little bit, maybe

724
00:34:12,680 --> 00:34:16,719
Speaker 2: acquisition costs. How do you continue to build through that seasonality.

725
00:34:16,760 --> 00:34:18,759
Speaker 2: What is it that you can bring in terms of

726
00:34:19,000 --> 00:34:21,440
Speaker 2: AI within the product and also within your business.

727
00:34:22,920 --> 00:34:23,600
Speaker 5: Yeah, that's right.

728
00:34:23,719 --> 00:34:27,720
Speaker 12: Q one is always a outperformance quarter for us because

729
00:34:27,760 --> 00:34:30,400
Speaker 12: we get outsized amount of spend and deposit as a

730
00:34:30,440 --> 00:34:32,960
Speaker 12: result of the tax refunds that come into our accounts.

731
00:34:32,960 --> 00:34:36,239
Speaker 12: So naturally Q two you see that start to fall

732
00:34:36,280 --> 00:34:38,000
Speaker 12: off a little bit. So I think the best way

733
00:34:38,040 --> 00:34:40,480
Speaker 12: to look at this company, and we try to educate

734
00:34:40,520 --> 00:34:42,160
Speaker 12: investors on is to really be looking at the year

735
00:34:42,200 --> 00:34:45,200
Speaker 12: over year results of the company. We feel really good

736
00:34:45,200 --> 00:34:47,920
Speaker 12: about the remainder of the year. In fact, we raised

737
00:34:47,920 --> 00:34:50,760
Speaker 12: our guidance for the year on revenue and adjusted EBITA

738
00:34:50,800 --> 00:34:53,520
Speaker 12: as you mentioned, and I think it's really the product

739
00:34:53,600 --> 00:34:55,960
Speaker 12: portfolio that's going to drive that. We were on the

740
00:34:56,000 --> 00:34:58,719
Speaker 12: show just about a month ago and we announced the

741
00:34:58,760 --> 00:35:01,720
Speaker 12: launch of Chime Cards or We're just I'm sorry Chime Prime,

742
00:35:03,200 --> 00:35:05,799
Speaker 12: and we're just about a month in and it's been great.

743
00:35:05,840 --> 00:35:09,080
Speaker 12: We offer five percent cash back on the category of

744
00:35:09,120 --> 00:35:13,920
Speaker 12: your choice, so you could pick fuel, restaurants, bills, you

745
00:35:14,000 --> 00:35:17,080
Speaker 12: name it, and it's really been a big hit with

746
00:35:17,160 --> 00:35:19,520
Speaker 12: our members so far. You also get three point seventy

747
00:35:19,520 --> 00:35:22,640
Speaker 12: five apy on your savings, and we've got a whole

748
00:35:22,640 --> 00:35:25,120
Speaker 12: host of other products, including AI products that we think

749
00:35:25,360 --> 00:35:27,520
Speaker 12: will be a nice tail wind for growth over the

750
00:35:27,520 --> 00:35:28,279
Speaker 12: course of this year.

751
00:35:28,440 --> 00:35:31,800
Speaker 2: It's all about member engagements, about cross selling. Talk to

752
00:35:31,840 --> 00:35:33,680
Speaker 2: me about how that AI that maybe shows up in

753
00:35:33,719 --> 00:35:36,120
Speaker 2: the product also is showing up in just the coding

754
00:35:36,200 --> 00:35:38,600
Speaker 2: or doing the work that those that work with you

755
00:35:38,640 --> 00:35:40,120
Speaker 2: are currently deploying.

756
00:35:41,040 --> 00:35:43,920
Speaker 12: Yeah, we really see AI as an accelerant to our business.

757
00:35:43,960 --> 00:35:47,520
Speaker 12: We've embedded it inside of the company. We've actually we

758
00:35:47,560 --> 00:35:51,920
Speaker 12: have a Chime built software factory called Archimedes, which allows

759
00:35:52,840 --> 00:35:58,400
Speaker 12: employees within Chime to create agents that can work simultaneously

760
00:35:58,480 --> 00:36:02,720
Speaker 12: to build products on our behalf. So literally from starting

761
00:36:02,760 --> 00:36:05,360
Speaker 12: from idea and conception all the way to product rollout,

762
00:36:06,000 --> 00:36:07,680
Speaker 12: we have agents that are now doing a lot of

763
00:36:07,680 --> 00:36:09,880
Speaker 12: the work for our members. It's over eighty percent of

764
00:36:09,880 --> 00:36:13,680
Speaker 12: our code that we shipped last quarter was AI was

765
00:36:13,719 --> 00:36:17,000
Speaker 12: done with AI, and so it's a huge accelerant to

766
00:36:17,040 --> 00:36:19,080
Speaker 12: the velocity of what we launch. But then in addition

767
00:36:19,120 --> 00:36:23,000
Speaker 12: to that, we have a service for our members, an

768
00:36:23,040 --> 00:36:26,000
Speaker 12: AI copilot that we call Jade that we think is

769
00:36:26,000 --> 00:36:29,879
Speaker 12: an opportunity to move the banking experience from looking back

770
00:36:29,920 --> 00:36:32,320
Speaker 12: at history and just getting reports on how you spend

771
00:36:32,360 --> 00:36:35,080
Speaker 12: and these sorts of things, but actually being more proactive

772
00:36:35,120 --> 00:36:38,839
Speaker 12: and helping people, helping drive behavioral changes that can help

773
00:36:38,920 --> 00:36:42,160
Speaker 12: drive people towards the best financial results. Paying off high

774
00:36:42,200 --> 00:36:46,400
Speaker 12: interest debt first, getting a savings account, making sure that

775
00:36:46,440 --> 00:36:49,480
Speaker 12: you're investing on a regular basis and not missing any

776
00:36:49,600 --> 00:36:51,640
Speaker 12: bills that are due at a particular time. We're really

777
00:36:51,640 --> 00:36:54,480
Speaker 12: excited about the opportunity to use AI to help our

778
00:36:54,520 --> 00:36:56,720
Speaker 12: members make financial progress inside the app.

779
00:36:57,120 --> 00:37:00,480
Speaker 2: How does your employee base feel This week has been

780
00:37:00,480 --> 00:37:04,640
Speaker 2: tough in fintech PayPal and they're not saying it's because

781
00:37:04,680 --> 00:37:06,600
Speaker 2: of AI, but they want to lean more into AI.

782
00:37:07,000 --> 00:37:09,960
Speaker 2: And you're seeing with Coinbase that is a total focus

783
00:37:10,000 --> 00:37:13,600
Speaker 2: on trying to rew reframe the business built around AI

784
00:37:13,719 --> 00:37:16,400
Speaker 2: with just humans at the edge what are you thinking

785
00:37:16,400 --> 00:37:17,719
Speaker 2: of it, Chris.

786
00:37:17,920 --> 00:37:21,520
Speaker 12: Well, look, we already operate a very efficient company. We

787
00:37:21,960 --> 00:37:24,800
Speaker 12: generate over one and a half million dollars of gross

788
00:37:24,800 --> 00:37:29,360
Speaker 12: profit per employee, so we feel like we have the

789
00:37:29,440 --> 00:37:33,000
Speaker 12: right sized company at this point in time. What's and

790
00:37:33,520 --> 00:37:37,719
Speaker 12: our employees here, our chimers are excited about this opportunity.

791
00:37:37,800 --> 00:37:40,960
Speaker 12: We are really entering into a golden era of what

792
00:37:41,040 --> 00:37:44,440
Speaker 12: can be done with software products as a result of AI.

793
00:37:44,719 --> 00:37:47,759
Speaker 12: All the attention goes to the sort of frontier tech

794
00:37:47,800 --> 00:37:51,759
Speaker 12: companies AI companies for good reason, But I think what's

795
00:37:51,800 --> 00:37:55,960
Speaker 12: often underestimated is just how AI can be leveraged by

796
00:37:56,080 --> 00:37:59,360
Speaker 12: industry leaders that are technology companies to create better products,

797
00:37:59,400 --> 00:38:01,839
Speaker 12: to make it happen faster. And our employees are really

798
00:38:01,840 --> 00:38:05,480
Speaker 12: excited about using this technology to create great outcomes for

799
00:38:05,520 --> 00:38:06,040
Speaker 12: our members.

800
00:38:06,600 --> 00:38:08,879
Speaker 2: I think many of your members might not think it's

801
00:38:08,880 --> 00:38:11,879
Speaker 2: a golden age for their economic circumstance when I think

802
00:38:11,880 --> 00:38:13,759
Speaker 2: of the pressure there runner from all prices, and you

803
00:38:13,800 --> 00:38:15,640
Speaker 2: talk about how you're trying to help some of your

804
00:38:15,640 --> 00:38:19,480
Speaker 2: customers get money back when they spend on gas for example,

805
00:38:19,680 --> 00:38:20,760
Speaker 2: how is the customer feeling?

806
00:38:22,480 --> 00:38:22,680
Speaker 5: Well?

807
00:38:22,719 --> 00:38:25,719
Speaker 12: I think you know, for the past few quarters there's

808
00:38:25,840 --> 00:38:28,640
Speaker 12: been a lot of questions about the health of the consumer,

809
00:38:28,920 --> 00:38:31,920
Speaker 12: and I think for good reason. Obviously, the geopolitical uncertainty,

810
00:38:32,160 --> 00:38:35,680
Speaker 12: the sort of broader macro pressures, but we aren't seeing

811
00:38:35,680 --> 00:38:38,640
Speaker 12: it in the results. We're seeing a healthy consumer in

812
00:38:38,719 --> 00:38:43,200
Speaker 12: terms of spending, double digit increases in areas like entertainment,

813
00:38:43,280 --> 00:38:49,759
Speaker 12: streaming services like Netflix, home delivery like door Dash and Instacart,

814
00:38:50,320 --> 00:38:52,360
Speaker 12: and then also big box purchases. These are all up

815
00:38:52,400 --> 00:38:54,359
Speaker 12: double digits for our members year every year. We're also

816
00:38:54,400 --> 00:38:58,600
Speaker 12: seeing balances that are higher, sure because of the tax

817
00:38:58,640 --> 00:39:01,720
Speaker 12: refund season, but even beyond that, we're seeing elevated savings

818
00:39:01,719 --> 00:39:04,839
Speaker 12: account and checking account balances. And we have not seen

819
00:39:04,840 --> 00:39:08,960
Speaker 12: an uptick in unemployment benefits. And we see we are

820
00:39:09,320 --> 00:39:12,279
Speaker 12: the primary account for millions of our members, so if

821
00:39:12,280 --> 00:39:15,360
Speaker 12: there was a bump in terms of the labor market,

822
00:39:15,400 --> 00:39:18,120
Speaker 12: we would see that among our customer base. They just

823
00:39:18,160 --> 00:39:20,080
Speaker 12: haven't been affected yet by it. And I think you've

824
00:39:20,120 --> 00:39:22,879
Speaker 12: seen in the recent numbers that have come out around

825
00:39:22,960 --> 00:39:27,799
Speaker 12: labor for everyday consumers, we're close to full employment still.

826
00:39:27,800 --> 00:39:29,239
Speaker 12: I think a lot of the gloom and doom is

827
00:39:29,280 --> 00:39:32,400
Speaker 12: more around the white collar work that is starting to

828
00:39:32,440 --> 00:39:33,400
Speaker 12: be replaced by AI.

829
00:39:34,280 --> 00:39:36,400
Speaker 2: I'm CEO Chris Britt, so always great to catch up

830
00:39:36,400 --> 00:39:38,000
Speaker 2: with you. Thank you for joining on the back of

831
00:39:38,040 --> 00:39:40,799
Speaker 2: your earnings. Let's turn our attention to more earnings that

832
00:39:40,840 --> 00:39:44,359
Speaker 2: are coming out. Coll Weave shares to see wow here

833
00:39:44,400 --> 00:39:48,439
Speaker 2: today up seventy nine percent, surging in twenty twenty six,

834
00:39:48,520 --> 00:39:52,120
Speaker 2: and look, AI demand fuels the need for compute capacity.

835
00:39:52,160 --> 00:39:55,000
Speaker 2: Of course, investors are looking for proof that the neocloud

836
00:39:55,000 --> 00:39:57,800
Speaker 2: provider can execute on his ambitious plans and its reports

837
00:39:57,840 --> 00:40:00,600
Speaker 2: results after the closing bell, Dinabas joins us now and

838
00:40:00,600 --> 00:40:05,520
Speaker 2: look phenomenal appetite for compute phenomenal appetite for the stock

839
00:40:05,600 --> 00:40:08,279
Speaker 2: that's been volatile, though, Dina, what do we need in

840
00:40:08,360 --> 00:40:10,000
Speaker 2: terms of fundamentalsrom core Weave.

841
00:40:11,080 --> 00:40:14,440
Speaker 13: Sure, I think that people want to see continued signals

842
00:40:14,440 --> 00:40:17,440
Speaker 13: on the demand. The demand signals last month from all

843
00:40:17,440 --> 00:40:20,680
Speaker 13: of the large cloud providers that reported as particularly Google

844
00:40:20,719 --> 00:40:24,080
Speaker 13: but also a WS and Microsoft, where that demand for

845
00:40:24,120 --> 00:40:27,799
Speaker 13: AI capacity, as you said, remains extremely extremely strong. We

846
00:40:27,840 --> 00:40:30,960
Speaker 13: just saw Anthropic sign a deal with Xai to take

847
00:40:31,040 --> 00:40:33,919
Speaker 13: up some of their capacity. Everyone's looking for as much

848
00:40:33,960 --> 00:40:37,320
Speaker 13: as they can. Core Weave themselves in April signed deals

849
00:40:37,400 --> 00:40:41,560
Speaker 13: with Anthropic, Meta and Jane Street. So people want to

850
00:40:41,600 --> 00:40:44,239
Speaker 13: see further details on what the demand looks like, but

851
00:40:44,360 --> 00:40:47,400
Speaker 13: so far all indications are that it remains really strong.

852
00:40:47,800 --> 00:40:53,080
Speaker 13: The question is, how is core Weave paying for expanding capacity?

853
00:40:53,160 --> 00:40:53,319
Speaker 8: Right?

854
00:40:53,360 --> 00:40:55,359
Speaker 13: In order to meet all that demand, you have to

855
00:40:55,520 --> 00:41:00,440
Speaker 13: acquire bill develop more AI cloud capacity. And that's pracy

856
00:41:00,640 --> 00:41:03,120
Speaker 13: and you know and has been a little bumpy for Corey,

857
00:41:03,160 --> 00:41:04,600
Speaker 13: EVN and others in the industry.

858
00:41:05,200 --> 00:41:09,120
Speaker 2: Yeah, there is this on again off again anxiety is

859
00:41:09,120 --> 00:41:12,520
Speaker 2: to bottlenecks or as to how good customers are for

860
00:41:12,600 --> 00:41:15,520
Speaker 2: the money, Dana. But when they're branching out and it's

861
00:41:15,560 --> 00:41:18,520
Speaker 2: not say an open Ai exposure so much, but it's

862
00:41:18,560 --> 00:41:21,480
Speaker 2: a jump streets as you say, it's finance, it's other enterprises.

863
00:41:21,520 --> 00:41:23,520
Speaker 3: How much the investors understand that opportunity.

864
00:41:24,520 --> 00:41:27,760
Speaker 13: I think Corey has tried really hard all along since

865
00:41:27,880 --> 00:41:31,000
Speaker 13: their IPO to both diversify their customers then make sure

866
00:41:31,040 --> 00:41:34,440
Speaker 13: investors understand that. Early on, the concern was the very

867
00:41:34,520 --> 00:41:37,440
Speaker 13: large percentage of their revenue is tied to Microsoft. Then

868
00:41:37,480 --> 00:41:40,880
Speaker 13: we saw, you know, with reports of open Ai possibly

869
00:41:40,920 --> 00:41:43,440
Speaker 13: not selling as much as they might help. You know,

870
00:41:43,480 --> 00:41:47,160
Speaker 13: core We've shares and other providers reacted to that, and

871
00:41:47,200 --> 00:41:49,680
Speaker 13: Corey came out pretty pretty quickly to say, look, we

872
00:41:49,719 --> 00:41:52,120
Speaker 13: have we have a lot of other customers, and so

873
00:41:53,040 --> 00:41:55,880
Speaker 13: they're trying to make that clear. They're also trying to

874
00:41:56,040 --> 00:41:59,439
Speaker 13: sell more software services. You know, part of their deal

875
00:41:59,440 --> 00:42:02,719
Speaker 13: with Nvidio involves figuring out, you know, having in video

876
00:42:02,800 --> 00:42:05,640
Speaker 13: market other things that Corey you can sell besides the

877
00:42:05,960 --> 00:42:07,440
Speaker 13: wrong you know, compute power.

878
00:42:07,920 --> 00:42:10,080
Speaker 2: Jana bas it's gonna be busy after the bell. Thanks

879
00:42:10,080 --> 00:42:12,000
Speaker 2: for joining us on it. That does it for this

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00:42:12,120 --> 00:42:14,800
Speaker 2: edition of Bloomberg Tech. Don't forget to check out our podcast.

881
00:42:14,640 --> 00:42:16,680
Speaker 3: Find on the terminal as well as online on Apple.

882
00:42:16,440 --> 00:42:18,520
Speaker 2: Spotify, and iHeart. And don't forget to tune into those

883
00:42:18,600 --> 00:42:21,000
Speaker 2: numbers breaking after the bell. This is Bloomberg Tech.