WEBVTT - Tesla's Slower Growth Rate and ServiceNow's Strong Results 0:00:01.800 --> 0:00:04.560 From the heart where innovation, money and power. 0:00:04.680 --> 0:00:07.080 Collie in Silicon Valley, NBN. 0:00:07.400 --> 0:00:11.440 This is Bloomberg Technology with Caroline Hyde and Ed Ludlow. 0:00:25.640 --> 0:00:28.200 I'm Caroline Heidel Bloomberg's world headquarters in New York. 0:00:28.280 --> 0:00:32.000 And I'm Ed Ludlow in San Francisco. This is Bloomberg Technology. 0:00:31.560 --> 0:00:33.560 Coming up full. Earning's coverage ahead. 0:00:33.640 --> 0:00:37.400 Tesla shares they slum after warning about a notably slower 0:00:37.479 --> 0:00:38.040 growth rate. 0:00:38.360 --> 0:00:40.440 Details ahead, Plus. 0:00:40.120 --> 0:00:42.600 We stick with earnings and sit down with the CFO 0:00:42.960 --> 0:00:45.600 of service now as the company hits a record high 0:00:45.680 --> 0:00:47.080 on strong results. 0:00:46.720 --> 0:00:49.680 And Microsoft cunning nearly two thousand jobs in its gaming division, 0:00:49.720 --> 0:00:52.400 including Activision, will bring in the latest as the tech giant, 0:00:52.400 --> 0:00:55.000 slash is eight percent of its video game workforce, with 0:00:55.200 --> 0:00:57.520 key personnel leaving well a. 0:00:57.520 --> 0:00:58.960 Pretty ferocious news cycle. 0:00:59.040 --> 0:01:01.080 Intel is out with Ernie after the bell, but a 0:01:01.120 --> 0:01:05.520 deal announced this morning with UMC, the Taiwanese chip maker. Basically, 0:01:06.120 --> 0:01:10.760 UMC gets access to twelve nanometer technology. On the manufacturing side, Intel, 0:01:10.880 --> 0:01:15.040 in the context of its Arizona facilities, gets utilization of 0:01:15.120 --> 0:01:18.000 some prior gen hardware. This is a great win for 0:01:18.080 --> 0:01:21.240 onshoring manufacturing capacity in the US. You think the commerce 0:01:21.280 --> 0:01:24.280 department is pretty happy about it. We will look into 0:01:24.319 --> 0:01:27.640 that deal for Intel's foundry business later in the program. 0:01:27.720 --> 0:01:29.480 IBM up twelve percent. 0:01:29.520 --> 0:01:33.000 Touching a ten year high after a strong outlook in 0:01:33.040 --> 0:01:37.039 the sales context. They're warning about some workforce reduction, but 0:01:37.120 --> 0:01:40.200 the market likes the outlook on the enterprise side from IBM. 0:01:40.240 --> 0:01:43.600 And then there's Microsoft up nine tens one percent, cutting 0:01:43.680 --> 0:01:47.840 nineteen hundred jobs at both Activision and Xbox units. This 0:01:47.960 --> 0:01:50.240 happens though in M and A, doesn't it. Sometimes. We 0:01:50.280 --> 0:01:53.520 will go to Jason Schreier, our video games correspondent later 0:01:53.560 --> 0:01:56.840 in the program to really understand what's happening with Microsoft Activision. 0:01:56.840 --> 0:01:59.280 There is one single name the world's. 0:01:58.960 --> 0:02:01.880 Paying attention to today, and that is Tesla. Tesla is 0:02:01.920 --> 0:02:05.280 down significantly more than ten percent on an inch dai 0:02:05.360 --> 0:02:08.639 basis biggest drop since October. If it closes down now 0:02:08.680 --> 0:02:10.880 eleven and a half percent, that will be the biggest 0:02:10.919 --> 0:02:12.840 drop in more than a year. It's trading at its 0:02:12.840 --> 0:02:16.040 lowest level since May. Why, well, the market is zeroed 0:02:16.080 --> 0:02:20.320 in on the guidance Tessa gave that production or output 0:02:20.400 --> 0:02:23.920 growth in twenty twenty four will be significantly lower than 0:02:23.960 --> 0:02:25.680 it was in twenty twenty three, and at the same 0:02:25.760 --> 0:02:29.639 time they dropped this pretty long standing guidance of fifty 0:02:29.639 --> 0:02:32.880 percent compound annual average growth, which goes all the way 0:02:32.919 --> 0:02:35.800 back to the end of twenty twenty. Now, within that, 0:02:35.880 --> 0:02:39.519 there's a lot of optimism about AI, about Optimus, the 0:02:39.639 --> 0:02:45.760 robot FSD, and Elon Mask's role within the company, a 0:02:45.800 --> 0:02:48.400 lot to digest. Let's break it down with Tasha Kini, 0:02:48.480 --> 0:02:53.160 director of Investment Analysis in Institutional Strategies at ARC Invests, 0:02:53.240 --> 0:02:55.880 and Loatasha, I know you're super bullish on this name. 0:02:56.280 --> 0:02:58.480 Let's focus on what the market's looking at in the 0:02:58.480 --> 0:03:02.400 first instance, which is a next generation EV platform is coming. 0:03:02.680 --> 0:03:05.720 We're coming out the back of the Model. 0:03:05.400 --> 0:03:06.440 Three and why era. 0:03:06.919 --> 0:03:09.799 So output will be less in twenty twenty four from 0:03:09.800 --> 0:03:10.760 a growth perspective. 0:03:11.200 --> 0:03:12.239 Does that worry you? 0:03:15.000 --> 0:03:16.000 Yeah, well you said it. 0:03:16.040 --> 0:03:18.000 You know, we're really focused on the long term here 0:03:18.000 --> 0:03:20.560 at ARC invest which really you should be for a 0:03:20.600 --> 0:03:24.720 disruptive name like Tesla. So you know they did mention, yes, 0:03:24.800 --> 0:03:29.200 production growth for this coming year will be slower. You know, 0:03:29.520 --> 0:03:32.880 they are focused on this next generation vehicle platform and 0:03:32.919 --> 0:03:36.840 they're they're attributing you know, the part of the cautiousness 0:03:36.880 --> 0:03:40.520 on production to that and overall that's a great thing, right, 0:03:41.400 --> 0:03:43.839 you know as well as anyone that I'm excited about 0:03:43.840 --> 0:03:46.880 the robotaxi opportunity. So the fact that they're building a 0:03:46.960 --> 0:03:51.240 custom robotaxi vehicle is really exciting and shows their confidence 0:03:51.320 --> 0:03:56.080 and their autonomous capability. You know, we have FSD twelve, 0:03:56.200 --> 0:03:59.520 their latest version of the autonomous technology software in the 0:03:59.560 --> 0:04:03.760 car rolling out to customers. That again shows confidence and 0:04:03.800 --> 0:04:07.400 their capability. We also heard that Optimists might begin shipping 0:04:07.440 --> 0:04:10.120 next year, So I think, you know, Tesla is this 0:04:10.160 --> 0:04:12.800 behemoth in the AI space. It's going to be one 0:04:12.840 --> 0:04:17.400 of the greatest AI opportunities of our time, and I 0:04:17.400 --> 0:04:20.159 think to ignore that is frankly wrong when thinking about 0:04:20.200 --> 0:04:20.520 the stock. 0:04:20.600 --> 0:04:21.600 So I'm excited about it. 0:04:22.200 --> 0:04:26.680 Well, the next gen vehicle platform joins the traditional car 0:04:26.720 --> 0:04:29.120 making side of the story with the AI story, right, 0:04:29.160 --> 0:04:31.600 what did we learn? Must say it will be low cost, 0:04:31.960 --> 0:04:34.680 that they're making progress on start of production, which will 0:04:34.680 --> 0:04:37.720 start in Texas in the first instance. But he said 0:04:37.720 --> 0:04:40.599 take twenty twenty five with a grain of salt. Did 0:04:40.680 --> 0:04:43.120 you learn enough during the call about the next gen 0:04:43.160 --> 0:04:46.400 platform to fully understand where we go from here on 0:04:46.640 --> 0:04:48.799 this future ROBOTAXI concept. 0:04:51.240 --> 0:04:52.560 Yes, well, I'd say. 0:04:52.360 --> 0:04:54.640 You know, overall, I think Elon is a lot more 0:04:54.680 --> 0:04:57.000 cautious than he has been in the past with his forecast. 0:04:57.080 --> 0:04:58.560 I mean he said it on the call that he 0:04:58.680 --> 0:05:02.640 has been really optimistic with timelines, and honestly, who can 0:05:02.680 --> 0:05:05.080 blame them, because I think humans in general are pretty 0:05:05.160 --> 0:05:08.800 bad at predicting AI progress. But yes, we heard that 0:05:08.839 --> 0:05:11.080 they can start production next year on the next generation 0:05:11.160 --> 0:05:13.279 vehicle platform. You know, I think there's a lot of 0:05:13.320 --> 0:05:15.839 cause for optimism, and what they said around margins, so 0:05:15.880 --> 0:05:19.200 we saw automotive gross margins X credits tick up. 0:05:19.080 --> 0:05:19.560 In the quarter. 0:05:20.360 --> 0:05:23.200 You know, we did hear that one they're they're cutting 0:05:23.240 --> 0:05:26.560 costs on a per car basis in a way that's 0:05:26.600 --> 0:05:29.040 really unprecedented in the auto industry. 0:05:29.760 --> 0:05:31.200 And they also said. 0:05:30.960 --> 0:05:33.800 That even though you know, on their current vehicle platform 0:05:33.880 --> 0:05:35.960 they're sort of reaching the limits of that cost reduction, 0:05:36.200 --> 0:05:38.720 that doesn't mean that they're done right. So we heard 0:05:38.760 --> 0:05:42.640 on the design side, you know, it's commodity prices that 0:05:42.760 --> 0:05:43.640 flows through to. 0:05:43.640 --> 0:05:45.960 The underlying costs of the vehicle. That takes some time. 0:05:46.320 --> 0:05:49.080 So there's still optimismism there, and I think that's amazing. 0:05:49.760 --> 0:05:51.520 I mean, when you look at EV's as a whole, 0:05:51.720 --> 0:05:55.240 traditional automakers are cutting back on their electric vehicle platforms. 0:05:55.279 --> 0:05:57.840 I mean that's a bad idea because evs are already 0:05:57.839 --> 0:06:00.880 cost competitive with guess power cars us what, it's. 0:06:00.720 --> 0:06:02.960 Only going to get cheaper. So this is the future 0:06:03.160 --> 0:06:06.120 and Tesla is the leader there your models. 0:06:06.839 --> 0:06:10.000 I mean the last time it was updated, you had 0:06:10.000 --> 0:06:12.120 an expected value for share of two thousand dollars in 0:06:12.160 --> 0:06:14.640 Tesla by twenty twenty seven, predicated on the idea of 0:06:14.640 --> 0:06:18.080 this robotaxi venture on the bull and the bear case. 0:06:18.120 --> 0:06:20.280 Where do you stand right now when he is saying 0:06:20.320 --> 0:06:22.360 take twenty twenty five with a grain of salt, how 0:06:22.440 --> 0:06:26.600 much do you think we will see robotaxis become in use, 0:06:26.760 --> 0:06:29.960 in place, revenue generating by twenty twenty seven. 0:06:32.040 --> 0:06:35.040 Yeah, So you know, we're currently updating our model lookout 0:06:35.080 --> 0:06:37.040 for let's say, over the next few months, and updated 0:06:37.040 --> 0:06:39.599 price target for a master for twenty twenty eight. And 0:06:39.640 --> 0:06:42.880 actually our big ideas deck or annual research presentation on 0:06:43.240 --> 0:06:45.159 you know, the technologies that we cover as a whole 0:06:45.440 --> 0:06:47.640 is coming out soon, so that'll give you a little preview. 0:06:48.240 --> 0:06:52.760 But I'd say overall, you know we are on economy, right, 0:06:52.839 --> 0:06:55.440 you think about it in the five year term, So 0:06:55.560 --> 0:06:57.279 could they be late a few quarters? 0:06:57.440 --> 0:07:01.599 Absolutely? And again humans are bad at predicting AI, right. 0:07:01.680 --> 0:07:04.680 I could have told you comfortably the night before CHATCHBT 0:07:04.880 --> 0:07:07.000 came out and was released to the world the chatbots 0:07:07.000 --> 0:07:07.560 weren't that good. 0:07:07.560 --> 0:07:08.920 But guess what had changed overnight? 0:07:09.560 --> 0:07:12.440 And we already see from players like Waimo that robotaxies 0:07:12.480 --> 0:07:15.560 are possible. We actually already see from Tesla that robotaxes 0:07:15.600 --> 0:07:18.520 are possible because you can watch the consumer videos online 0:07:18.560 --> 0:07:22.680 that show people that have virtually no interventions than full point. 0:07:22.440 --> 0:07:23.280 To point rides. 0:07:23.480 --> 0:07:25.920 So it's just a matter of when and do I 0:07:25.960 --> 0:07:28.440 think that'll happen in the next five years? Yeah, And 0:07:28.520 --> 0:07:30.760 I think we've heard again some of the confidence in 0:07:31.000 --> 0:07:34.400 f SD twelve, which is an important milestone for them 0:07:34.560 --> 0:07:36.880 in making the road to full economy. 0:07:37.160 --> 0:07:40.840 On the call, Patasha, your thesis, an ARCS thesis on 0:07:40.920 --> 0:07:44.720 the bet of Tesla is that it is inextricably linked 0:07:44.720 --> 0:07:48.560 with AI, with robotics. Yet we hear Elmask threatening to 0:07:48.600 --> 0:07:52.680 take those two key things that innovation elsewhere if he 0:07:52.760 --> 0:07:55.200 doesn't get the twenty five percent votings control that he 0:07:55.240 --> 0:07:56.000 wants in the company. 0:07:56.040 --> 0:07:57.360 Are you worried by that threat? 0:07:59.480 --> 0:08:02.800 I think that's really overblown the fear about that. I mean, one, 0:08:02.840 --> 0:08:06.400 we are very happy to have. Elon must be incentivized 0:08:06.640 --> 0:08:08.920 to change the world. I mean, this man is clearly 0:08:09.000 --> 0:08:12.000 capable of amazing things when it comes to robotics and AI, 0:08:12.560 --> 0:08:14.720 so we want his incentives to be aligned with the 0:08:14.760 --> 0:08:18.440 future of Tesla. Also, you know, Tesla's been investing in 0:08:18.480 --> 0:08:21.080 this for you know, the past decade or so. 0:08:21.600 --> 0:08:23.680 They are years ahead of the competition when it comes 0:08:23.680 --> 0:08:24.000 to AI. 0:08:24.120 --> 0:08:28.360 To give you an example, currently Tesla vehicles are able 0:08:28.400 --> 0:08:33.400 to access over two million miles per day driven in 0:08:33.480 --> 0:08:37.000 full self driving from customers. So that's very important training 0:08:37.080 --> 0:08:39.720 data that you need to make a fully autonomous car. 0:08:40.480 --> 0:08:43.600 You know, way mow in the course of the lifetime 0:08:43.600 --> 0:08:47.439 of the project as single digit millions worth of driving data. 0:08:48.200 --> 0:08:51.000 So this is you know, Tesla is so much further 0:08:51.000 --> 0:08:53.839 ahead when it comes to scale on a I already 0:08:54.880 --> 0:08:57.480 and again I'm really excited for this coming year. 0:08:58.160 --> 0:08:58.719 Optimists. 0:08:58.760 --> 0:09:01.559 We think could be you know, general purpose robots could 0:09:01.559 --> 0:09:05.960 be roughly a tenillion dollar mark market alone in manufacturing. 0:09:06.360 --> 0:09:08.840 Even more, when you look to, say like household tasks, 0:09:09.040 --> 0:09:11.560 which could be further down the line. So there's so 0:09:11.720 --> 0:09:13.760 many exciting things ahead for Tesla. 0:09:13.840 --> 0:09:16.240 So I think the focus on you know, demand production 0:09:16.320 --> 0:09:18.520 in the short term is really just that at its 0:09:18.520 --> 0:09:20.760 short term focus when you want to be long term focused. 0:09:20.760 --> 0:09:24.040 With this name, Tasha KINI still saying vilishly thank you, 0:09:24.040 --> 0:09:27.319 director of Investment Analysis and Institutional Strategies at ARC invest. 0:09:27.840 --> 0:09:29.400 Meanwhile, we're just talking about it. 0:09:29.440 --> 0:09:31.840 How Musk is pretty much persisting with his pursuit of 0:09:31.840 --> 0:09:34.120 a bigger controlling stake in Tesla, wanting the board to 0:09:34.120 --> 0:09:36.400 approve of an increase of twenty five percent holding from 0:09:36.440 --> 0:09:38.480 the thirteen percent he currently has. Of course, he is 0:09:38.480 --> 0:09:42.360 threatening that without it, Hilbill is ai and robotics products elsewhere. 0:09:42.960 --> 0:09:45.320 During the earnings call on Wednesday, he said that with 0:09:45.640 --> 0:09:48.200 so little influence at the company at this stage, I 0:09:48.240 --> 0:09:51.000 could be voted out by some random shareholder advisory firm. 0:09:51.679 --> 0:09:53.120 I think about whether. 0:09:52.960 --> 0:09:54.839 He could be voted out, whether he should be voted out, 0:09:54.840 --> 0:09:57.320 and indeed what is holding should be with kristenhal founder 0:09:57.360 --> 0:10:00.000 and CEO of Near Impact Capital, is a social impact 0:10:00.080 --> 0:10:03.040 fund that's owned about two n eighty two thousand dollars 0:10:03.080 --> 0:10:05.439 of Testa stock as on mid year, and has waged 0:10:05.480 --> 0:10:10.040 pressure campaigns against the company for years, including via shareholder resolutions. 0:10:10.080 --> 0:10:11.840 So, Kristin, we know the era with which you come. 0:10:11.840 --> 0:10:13.840 In fact, the last time you joined the show, it 0:10:13.880 --> 0:10:17.480 was surrounding the anti Semitic controversy surrounding and Lamask and 0:10:17.559 --> 0:10:18.360 you said, he's got to go. 0:10:19.160 --> 0:10:19.840 What do you think of him? 0:10:19.880 --> 0:10:23.200 One and twenty five percent control of the company? 0:10:23.320 --> 0:10:23.680 Carline. 0:10:23.720 --> 0:10:26.360 Thanks for having me today. This is such an interesting 0:10:26.400 --> 0:10:30.560 and of course complicated CEO. So when we were talking 0:10:30.559 --> 0:10:33.520 about anti semitism, there just isn't any room in corporate 0:10:33.520 --> 0:10:36.439 America anywhere for those types of comments, and so that's 0:10:36.440 --> 0:10:39.719 where that was coming from. Of course, this CEO is 0:10:39.880 --> 0:10:44.000 very unique both on the innovation, the ability to step 0:10:44.000 --> 0:10:46.800 outside the box and completely go against the status quo, 0:10:46.920 --> 0:10:50.040 and in lots of ways that's really important. That's really 0:10:51.000 --> 0:10:53.080 you know, he's not tied to how we've done things 0:10:53.080 --> 0:10:55.000 in the past, and he wants to do things differently 0:10:55.280 --> 0:10:59.320 where we're cautious are some of these inflammatory statements. So 0:11:00.440 --> 0:11:04.080 he wants twenty five percent ownership, and yet you know 0:11:04.120 --> 0:11:06.520 he had almost that, He's had almost that in the past. 0:11:06.559 --> 0:11:09.640 I think he's down to about thirteen percent now, having 0:11:09.720 --> 0:11:14.079 used some of that money to purchase X And so 0:11:14.160 --> 0:11:16.720 what do we mean about incentives. I'd say we're also 0:11:16.960 --> 0:11:19.160 very much in agreement that we want the CEO to 0:11:19.240 --> 0:11:22.600 have incentives for the long term of the company. And 0:11:22.760 --> 0:11:26.480 yet money isn't an incentive to the world's richest man. 0:11:26.679 --> 0:11:29.480 So having those voting rights is going to be really interesting. 0:11:30.160 --> 0:11:32.960 He did make some comments in the earnings call yesterday 0:11:33.000 --> 0:11:38.600 about ISS and Glass Lewis. They do make recommendations about 0:11:38.679 --> 0:11:41.880 and many of the institutional investors follow those recommendations as 0:11:41.880 --> 0:11:46.240 far as voting rights, and so we like to have 0:11:46.720 --> 0:11:49.200 some of these recommendations coming out so that we can 0:11:49.320 --> 0:11:51.640 rein in a CEO who may need that from time 0:11:51.679 --> 0:11:52.040 to time. 0:11:53.440 --> 0:11:53.760 Kristin. 0:11:54.040 --> 0:11:56.840 What mus said about ISS was that his nickname for 0:11:56.880 --> 0:12:00.960 them was Isis, which clearly is an inflammatory comment. I 0:12:01.000 --> 0:12:03.479 know that our audience just want to understand the basics 0:12:03.520 --> 0:12:09.720 here from impact investors like NIA on their rationale, right, 0:12:09.760 --> 0:12:12.960 if there are many that just say Elon Musk says 0:12:13.040 --> 0:12:16.319 things that upset people, he says things that are controversial, 0:12:16.440 --> 0:12:18.800 but at the same time, over a ten year period, 0:12:19.440 --> 0:12:22.120 he has grown Teslas to be the clear market incumbent 0:12:22.200 --> 0:12:27.320 in evs. He's changed the game for space technology and 0:12:27.640 --> 0:12:29.840 mankind's ability to get to lower orbit. 0:12:30.000 --> 0:12:32.280 Excuse my voice, So. 0:12:33.280 --> 0:12:36.200 How important to you is that you kind of get 0:12:36.240 --> 0:12:40.280 some result here without offsetting you know what? Is quite 0:12:40.360 --> 0:12:41.760 clearly a capable leader. 0:12:44.240 --> 0:12:48.400 And thanks so much for that question. So capable leader 0:12:48.480 --> 0:12:50.880 that I would say that's up for grabs. He's certainly 0:12:50.960 --> 0:12:52.960 leading quite a few, and of course he's leading in 0:12:53.000 --> 0:12:55.360 the AI and we actually were really interested in that 0:12:55.400 --> 0:12:58.520 battery play and he's shown that that's a really important 0:12:58.520 --> 0:12:59.959 part of what they want to roll out both into 0:13:00.000 --> 0:13:03.839 twenty twenty four, twenty five and beyond. Where we have 0:13:03.960 --> 0:13:07.280 questions and concerns are some of his statements. And so 0:13:07.400 --> 0:13:13.080 comparing ISS, which is Institutional Shareholder Services, to ISIS, that's 0:13:13.120 --> 0:13:16.120 inflammatory and it doesn't even make any sense. This is 0:13:16.160 --> 0:13:20.720 a group that puts out proxy recommendations based on what 0:13:20.760 --> 0:13:23.560 they believe is good for the long term of company. 0:13:24.240 --> 0:13:28.840 They have nothing to do with ISIS, so that that's problematic. 0:13:29.200 --> 0:13:34.000 He's also made some comments recently about DEI diversity equity 0:13:34.040 --> 0:13:38.240 inclusion that really do cause concerns, particularly because we need 0:13:38.280 --> 0:13:44.040 Tesla to be to have a really strong brand, both 0:13:44.440 --> 0:13:47.559 for the consumer side, because people need to be feel 0:13:47.559 --> 0:13:50.600 really strong and great about purchasing and driving that car 0:13:52.120 --> 0:13:57.079 using that battery, also the solar for rooving. And what 0:13:57.120 --> 0:14:00.680 we're concerned about is his ability to attract retained top 0:14:00.760 --> 0:14:03.960 talent if people don't see a place for them within 0:14:04.160 --> 0:14:04.800 this innovation. 0:14:06.000 --> 0:14:08.720 Okay, Kristen Hall, near Impact Capital, we're grateful for your 0:14:08.720 --> 0:14:11.560 time on the program. Thank you, Caroline. Let's just stick 0:14:11.600 --> 0:14:14.360 a little bit longer with Tesla. We talked about the 0:14:14.400 --> 0:14:17.760 Bingo card yesterday in advance of earnings, and I thought, 0:14:17.840 --> 0:14:19.840 you know what, I'm just going to go full send. 0:14:19.880 --> 0:14:22.760 I'm going to play the game. This was the end result. 0:14:23.040 --> 0:14:25.720 Look how close I came. 0:14:26.520 --> 0:14:28.920 It's fun. It's also though important. 0:14:28.960 --> 0:14:31.440 Some of the things that perhaps he didn't actually mention 0:14:31.640 --> 0:14:33.520 DEI one of them that you didn't get. 0:14:33.400 --> 0:14:34.040 To cross off. 0:14:34.680 --> 0:14:37.640 He did insult and Ana, did you feel he'd insulted analyst? 0:14:37.720 --> 0:14:39.560 I know he cut off an executive, that was it. 0:14:39.880 --> 0:14:44.440 But I think overall this was an elon that lived 0:14:44.520 --> 0:14:47.160 up to a lot of the anticipation. Dana Hale, we 0:14:47.160 --> 0:14:49.360 give great cutos for that for coming up with this game, 0:14:49.400 --> 0:14:51.160 but I know it's something that themes on Reddit. What 0:14:51.240 --> 0:14:53.800 was the one that took you most by surprise that 0:14:53.840 --> 0:14:54.479 he actually. 0:14:54.240 --> 0:14:54.920 Did say. 0:14:56.800 --> 0:14:58.760 By surprise, I guess. 0:15:01.120 --> 0:15:03.720 The fed and I was stretching there because he basically 0:15:04.480 --> 0:15:05.800 said about interest rates. 0:15:05.840 --> 0:15:08.080 But yeah, a fun game. That was my real card. 0:15:08.160 --> 0:15:08.640 Check it out. 0:15:09.000 --> 0:15:11.480 It was a great game that you played along in 0:15:11.600 --> 0:15:13.680 live time. You've always got to follow ed throughout Twitter 0:15:14.320 --> 0:15:16.400 x as it currently is when he has his earnings. 0:15:16.440 --> 0:15:18.640 Mean while coming up, we'll continue our and coverage the service. 0:15:18.680 --> 0:15:20.480 Now this is really big technology. 0:15:30.800 --> 0:15:31.200 Service. 0:15:31.240 --> 0:15:33.640 Now let's talk about its own earnings. The results came 0:15:33.640 --> 0:15:35.800 after the bell yesterday and provided a revenue outlook for 0:15:35.840 --> 0:15:37.840 the current quarter, topping Wall Street estimates. 0:15:37.840 --> 0:15:39.280 In fact, they beat across the board. 0:15:39.480 --> 0:15:43.440 It's spurring optimism that the enterprise software provider will continue expanding, 0:15:43.720 --> 0:15:45.960 even as many peers have reported some slow and growth. 0:15:46.200 --> 0:15:48.760 Let's bring in service now, CFO, Gina Mauston two know 0:15:49.160 --> 0:15:51.480 for more and look, you do manage to outperform the 0:15:51.480 --> 0:15:53.640 rest of the sector, Gina. And what's notable is you 0:15:53.680 --> 0:15:55.440 say you've got one of the few offerings when it 0:15:55.480 --> 0:15:58.160 comes to AI with real product, real use cases, and 0:15:58.200 --> 0:16:02.360 real customers. Now I'm interested, is is there any cannibalization 0:16:02.440 --> 0:16:05.320 there when companies are thinking in this economic environment allocate 0:16:05.320 --> 0:16:08.480 towards technology. Does AI come an expense of anything else 0:16:08.600 --> 0:16:09.400 or is it in an addition? 0:16:10.640 --> 0:16:13.480 So great question, Caroline, Thanks so much for having me 0:16:14.280 --> 0:16:18.480 absolutely service. Now closed the year with another exceptional quarter. 0:16:18.960 --> 0:16:21.520 Revenues of twenty five and a half percent in constant 0:16:21.560 --> 0:16:26.240 currency CRPO, which is our current backlog basically twenty three percent, 0:16:26.360 --> 0:16:29.760 operating margin of twenty nine percent, all beating the high 0:16:29.840 --> 0:16:32.960 end of our guidance by about two hundred basis points, 0:16:33.200 --> 0:16:37.000 renewal rates of ninety nine percent, and large new logo 0:16:37.080 --> 0:16:41.320 growth continuing to accelerate, which is pretty remarkable. We achieved 0:16:41.320 --> 0:16:43.360 which she was super proud of. We achieved our long 0:16:43.440 --> 0:16:47.520 term goal of crossing ten billion in CACV, which only 0:16:47.560 --> 0:16:50.320 eight software companies have ever achieved in the past. 0:16:50.360 --> 0:16:51.440 And you're absolutely right. 0:16:51.880 --> 0:16:56.240 We have incredible Genai products in market, which launched just 0:16:56.280 --> 0:16:59.440 at the end of September, so our first full quarter 0:16:59.560 --> 0:17:04.399 of GENA and we basically saw the largest contribution for 0:17:04.480 --> 0:17:07.040 our first full quarter of any of our product released 0:17:07.160 --> 0:17:10.800 in our history. So Jennai is resonating with our customers. 0:17:11.080 --> 0:17:15.040 It's early days, but we're absolutely not seeing any cannibalization 0:17:15.200 --> 0:17:15.560 at this. 0:17:15.600 --> 0:17:20.680 Point, Gina, we were just playing bingo with Tesla's earnings call. 0:17:20.760 --> 0:17:23.080 If we had played bingo with your earning school, we 0:17:23.080 --> 0:17:26.200 would have had CRPO or in other words, current remaining 0:17:26.240 --> 0:17:29.919 performance obligations, and you like, really hit that number. But 0:17:30.080 --> 0:17:32.320 let's be honest. The street's looking at it and saying, 0:17:32.840 --> 0:17:36.200 why then, is the forward looking stuff so lukewarm. Why 0:17:36.240 --> 0:17:39.919 are you not more bullish about growth across the board 0:17:39.960 --> 0:17:40.880 for the rest of the year. 0:17:42.000 --> 0:17:46.080 Well, in fact, we actually raised our full year revenue 0:17:46.080 --> 0:17:49.480 guidance for the twenty twenty four to ten point five 0:17:49.640 --> 0:17:52.679 seven five billion from ten point four, so we actually 0:17:52.800 --> 0:17:55.600 raised our guidance for the full year given our results. 0:17:55.600 --> 0:18:00.000 So we are bullish on our momentum. We're excited about 0:18:00.119 --> 0:18:03.280 what twenty twenty four is going to show. But let's 0:18:03.280 --> 0:18:06.119 face it, the macro is still uncertain. So from a 0:18:06.119 --> 0:18:09.000 guide perspective, we want to be prouded in how we're 0:18:09.000 --> 0:18:13.000 thinking about things. We're seeing great demand across the board. 0:18:13.080 --> 0:18:18.120 I talked to investors yesterday. Our pipeline looks strong. Demand 0:18:18.240 --> 0:18:21.480 is there? Jeni is on the forefront of what every 0:18:21.560 --> 0:18:25.000 CEO and CFO are talking about and looking to invest in. 0:18:25.359 --> 0:18:29.360 So our platform right now is in a very strong position, 0:18:29.480 --> 0:18:32.000 and our company is in a strong position to continue 0:18:32.119 --> 0:18:34.280 to build on the momentum that you saw in twenty 0:18:34.320 --> 0:18:34.959 twenty three. 0:18:35.119 --> 0:18:39.080 It's such a game of dare I say frenemies, Gina though, 0:18:39.080 --> 0:18:41.680 because you, of course have a relationship very much intertwined 0:18:41.680 --> 0:18:43.879 with Microsoft and open Ai when doing your offerings for 0:18:43.960 --> 0:18:47.520 Jenai here of course helping Amazon with its own offerings 0:18:47.560 --> 0:18:50.880 over there a ws in terms of it's marketplace, I'm 0:18:50.920 --> 0:18:54.240 really intrigued as to how you continue to offer something 0:18:54.320 --> 0:18:57.720 separate and different in comparison to companies that almost want 0:18:58.080 --> 0:18:59.320 want to eat your lunch. 0:19:01.119 --> 0:19:04.760 Well, I think it's the strength of our platform. It's 0:19:04.840 --> 0:19:08.800 our relationship with our customers, it's our people, it's the 0:19:08.920 --> 0:19:12.760 fast time to value that our platform delivers for our customers. 0:19:13.200 --> 0:19:17.320 We are such a customer centric company, really understanding the 0:19:17.359 --> 0:19:20.440 needs of our customers, understanding the outcomes that they're trying 0:19:20.480 --> 0:19:23.119 to get and how our platform can help them deliver. 0:19:23.800 --> 0:19:26.840 We're super excited about some of the partnerships that we announced. 0:19:26.880 --> 0:19:29.920 One of them you talked about with AWS Service Now 0:19:30.000 --> 0:19:32.560 is now going to be available as a SaaS offering 0:19:32.640 --> 0:19:36.119 on the AWS marketplace. This that opens up our whole 0:19:36.200 --> 0:19:38.879 new market for US, whole new tam and it's a 0:19:38.920 --> 0:19:42.280 partnership that we're really excited about. We also announced a 0:19:42.359 --> 0:19:46.280 strategic partnership with Visa, which is a five year strategic 0:19:46.320 --> 0:19:50.560 alliance to use our Genai products to help transform payment 0:19:50.600 --> 0:19:54.920 services and it's end to end dispute resolution for all 0:19:54.960 --> 0:19:59.080 of their customers. And so excited to continue to partner. 0:19:58.760 --> 0:20:00.160 With these great companies. 0:20:00.760 --> 0:20:02.600 No one has to lose for us to win, and 0:20:02.600 --> 0:20:04.160 we will continue to. 0:20:04.200 --> 0:20:08.400 Outperform Service Now, CFO, Gina Mastonto no great to have. 0:20:08.359 --> 0:20:08.920 You on the show. 0:20:09.359 --> 0:20:10.360 Time now for talking tech. 0:20:10.400 --> 0:20:13.440 First up, for the first time ever, the iPhone has 0:20:13.520 --> 0:20:16.199 ranked as the top selling smartphone series in China Now 0:20:16.240 --> 0:20:19.240 according to IDC, Apple's device had the most shipments in 0:20:19.280 --> 0:20:21.880 the fourth quarter and overall in twenty twenty three. Now 0:20:21.880 --> 0:20:24.920 this comes amid all those concerns from investors about plummeting 0:20:24.960 --> 0:20:28.800 sales in the region. Meanwhile, sales of ASML's chip making 0:20:28.840 --> 0:20:32.160 machinery it boomed in China last year. Now this comes 0:20:32.200 --> 0:20:34.600 despite a secret agreement between the US and the Netherlands 0:20:34.640 --> 0:20:38.320