1 00:00:02,720 --> 00:00:10,559 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. You're listening to the 2 00:00:10,600 --> 00:00:14,520 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 3 00:00:14,600 --> 00:00:17,840 Speaker 1: Eastern on Apple, Cocklay and Android Auto with the Bloomberg 4 00:00:17,920 --> 00:00:21,040 Speaker 1: Business App. Listen on demand wherever you get your podcasts, 5 00:00:21,360 --> 00:00:23,080 Speaker 1: or watch us live on YouTube. 6 00:00:23,800 --> 00:00:25,920 Speaker 2: Let's go back to the big headline that we were 7 00:00:25,960 --> 00:00:29,120 Speaker 2: just talking about UEFA members, and this is, of course, 8 00:00:29,120 --> 00:00:33,680 Speaker 2: the European body that governs football has agreed to boycott 9 00:00:33,680 --> 00:00:35,600 Speaker 2: the World Cup. There's a lot of conditions here, so 10 00:00:35,600 --> 00:00:37,239 Speaker 2: I want to bring in Randall Williams. 11 00:00:37,240 --> 00:00:40,280 Speaker 3: He is our global Business of sports reporter here. 12 00:00:40,200 --> 00:00:40,680 Speaker 4: In New York. 13 00:00:40,920 --> 00:00:43,479 Speaker 3: Randall, they had threatened to do this, to boycott the 14 00:00:43,520 --> 00:00:43,960 Speaker 3: World Cup. 15 00:00:43,960 --> 00:00:46,680 Speaker 2: And this is if FIFA moves ahead with spinning off 16 00:00:46,680 --> 00:00:50,159 Speaker 2: this commercial and media rights arm the way that the 17 00:00:50,159 --> 00:00:53,400 Speaker 2: PGA Tour has done with its businesses. Just walk us 18 00:00:53,400 --> 00:00:55,040 Speaker 2: through how significant this is. 19 00:00:55,240 --> 00:00:55,720 Speaker 5: It's huge. 20 00:00:55,760 --> 00:00:58,040 Speaker 4: So you think about the members of UEFA. It is 21 00:00:58,120 --> 00:01:01,120 Speaker 4: the world champion, Spain is one of the final four, 22 00:01:01,200 --> 00:01:03,240 Speaker 4: two three of the final four. And now that I 23 00:01:03,280 --> 00:01:06,520 Speaker 4: think about it, it is England, it is France, it 24 00:01:06,600 --> 00:01:10,480 Speaker 4: is Croatia, it is Portugal where Christiano Ronaldo plays and 25 00:01:10,560 --> 00:01:14,080 Speaker 4: so a lot of the superpowers in the global business 26 00:01:14,120 --> 00:01:16,039 Speaker 4: of football and the global sport of football are saying, 27 00:01:16,080 --> 00:01:18,400 Speaker 4: you did this and we're out. That strips the World 28 00:01:18,440 --> 00:01:21,000 Speaker 4: Cup of a lot of its popularity. And I do 29 00:01:21,040 --> 00:01:23,520 Speaker 4: think that in the matches that I went to, they 30 00:01:23,600 --> 00:01:25,759 Speaker 4: have a different culture than what we see in South 31 00:01:25,800 --> 00:01:29,240 Speaker 4: America that is more tribal in nature, and so I 32 00:01:29,280 --> 00:01:32,440 Speaker 4: think it's huge. It is a very very big deal 33 00:01:32,880 --> 00:01:36,240 Speaker 4: that UEFA is saying no, absolutely not. Now the next 34 00:01:36,319 --> 00:01:38,560 Speaker 4: question is what is CONCACAF going to do. And CONCACAFF 35 00:01:38,560 --> 00:01:41,720 Speaker 4: is over North America, Central America and the Caribbean. But 36 00:01:41,840 --> 00:01:42,720 Speaker 4: this is a huge deal. 37 00:01:43,080 --> 00:01:47,400 Speaker 6: So how radical is it for FIFA to propose selling 38 00:01:47,840 --> 00:01:49,200 Speaker 6: a steak in itself? 39 00:01:49,480 --> 00:01:51,760 Speaker 4: It's huge. I mean, look with the PGA Tour and 40 00:01:51,800 --> 00:01:54,560 Speaker 4: Live Golf comparison, the PGA Tour had to write some 41 00:01:54,640 --> 00:01:56,840 Speaker 4: things and Live Golf was exploiting some of maybe the 42 00:01:56,880 --> 00:01:59,640 Speaker 4: flaws previously in the PGA Tour. Now the PGA Tour 43 00:01:59,640 --> 00:02:02,160 Speaker 4: is writing is wrong. A lot of the players are happy. 44 00:02:02,360 --> 00:02:05,400 Speaker 4: There haven't been that many complaints on FIFA's side in 45 00:02:05,480 --> 00:02:08,359 Speaker 4: terms of how this tournament went. There are European nations 46 00:02:08,400 --> 00:02:10,440 Speaker 4: who weren't happy with it expanding the forty eight, but 47 00:02:10,480 --> 00:02:12,919 Speaker 4: now they're talking about going to sixty four. What does 48 00:02:12,960 --> 00:02:15,760 Speaker 4: that mean for those superpowered countries is that they play 49 00:02:15,880 --> 00:02:19,079 Speaker 4: more smaller teams and the group sty just get larger, 50 00:02:19,080 --> 00:02:21,120 Speaker 4: which you know, of course, we'll grow the money, but 51 00:02:21,160 --> 00:02:23,720 Speaker 4: it's growing the money that way the way that it's 52 00:02:23,760 --> 00:02:25,640 Speaker 4: supposed to happen. I'm not so sure. And that's what 53 00:02:25,760 --> 00:02:27,839 Speaker 4: UEFA is looking at this and saying, if we're going 54 00:02:27,880 --> 00:02:31,119 Speaker 4: to grow the business of soccer, in the business of football, 55 00:02:31,400 --> 00:02:32,920 Speaker 4: then we need to do it the right way, and 56 00:02:32,960 --> 00:02:33,960 Speaker 4: this is not the right way. 57 00:02:34,600 --> 00:02:35,840 Speaker 3: So the feud is escalating. 58 00:02:36,800 --> 00:02:39,560 Speaker 2: FIFA must have anticipated this, I mean, I can't imagine 59 00:02:39,560 --> 00:02:41,400 Speaker 2: that they didn't think UFA was going to blow up 60 00:02:41,400 --> 00:02:44,880 Speaker 2: in fury over this. What are you looking for in 61 00:02:44,960 --> 00:02:48,560 Speaker 2: terms of response from FIFA, how they navigate this well. 62 00:02:49,120 --> 00:02:52,600 Speaker 4: I would say UEFA and FIFA's relationship has long been strained. 63 00:02:52,600 --> 00:02:55,520 Speaker 4: They have always been going back and forth and this 64 00:02:55,720 --> 00:02:58,919 Speaker 4: was the last straw for UEFA And so at this point, 65 00:02:58,960 --> 00:03:01,959 Speaker 4: what I'm watching next is to see what Gianni Infantino does. 66 00:03:02,000 --> 00:03:04,600 Speaker 4: Like of course JP Morgan, who is running this deal 67 00:03:04,680 --> 00:03:08,480 Speaker 4: with Thrive Capital and Kushner. Of course they are the 68 00:03:08,520 --> 00:03:10,359 Speaker 4: recipients of this, They're the ones who are giving money. 69 00:03:10,360 --> 00:03:13,040 Speaker 4: And so this is on FIFA and Gianni to try 70 00:03:13,040 --> 00:03:15,040 Speaker 4: to get this thing across the finish line. But if 71 00:03:15,040 --> 00:03:19,720 Speaker 4: your superpowers, if England, France, Spain, Portugal, Croatia and so 72 00:03:19,840 --> 00:03:22,280 Speaker 4: many of them don't participate in the World Cup, is 73 00:03:22,320 --> 00:03:25,440 Speaker 4: anybody going to watch? Is that money that you're spending 74 00:03:25,480 --> 00:03:27,799 Speaker 4: that you could potentially be spending if they say we 75 00:03:27,840 --> 00:03:28,360 Speaker 4: don't want it? 76 00:03:28,639 --> 00:03:29,000 Speaker 5: Okay? 77 00:03:29,480 --> 00:03:32,640 Speaker 4: Now what you're going to do a World Cup with 78 00:03:32,680 --> 00:03:34,600 Speaker 4: a lot smaller nations? I just don't think that that 79 00:03:34,639 --> 00:03:35,920 Speaker 4: would be successful. Wow. 80 00:03:36,080 --> 00:03:37,800 Speaker 7: Interesting? All right? This is what I call. 81 00:03:37,840 --> 00:03:42,960 Speaker 2: Developing story, helping story, especially considering, like you said, three 82 00:03:43,000 --> 00:03:45,400 Speaker 2: out of the four countries that made it to the 83 00:03:45,440 --> 00:03:47,720 Speaker 2: finals were part of UEFA. 84 00:03:47,840 --> 00:03:49,760 Speaker 4: So the thought is that this money would be spent 85 00:03:49,800 --> 00:03:53,320 Speaker 4: to develop programs. But is this the right way to 86 00:03:53,360 --> 00:03:57,000 Speaker 4: do it? How many conversations did JP, Morgan and FIFA 87 00:03:57,200 --> 00:03:59,720 Speaker 4: have with other suitors? Did they go to private equity? 88 00:03:59,720 --> 00:04:02,440 Speaker 4: Did they have you know, billionaires who are interested in 89 00:04:02,480 --> 00:04:04,360 Speaker 4: this and not so sure? It looks like that, you know, 90 00:04:04,360 --> 00:04:06,400 Speaker 4: Bloomberg reported a couple of days ago, or maybe this 91 00:04:06,480 --> 00:04:09,640 Speaker 4: morning that this was already agreed to or where we're 92 00:04:09,680 --> 00:04:12,680 Speaker 4: talking about it long before the World Cup begins. And 93 00:04:12,720 --> 00:04:16,000 Speaker 4: that's a problem because for Uafoso stay with us. 94 00:04:16,040 --> 00:04:18,280 Speaker 3: More from Bloomberg Intelligence coming up after this. 95 00:04:22,400 --> 00:04:26,119 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 96 00:04:26,200 --> 00:04:29,279 Speaker 1: weekdays at ten am Eastern on Apple, Cocklay and Android 97 00:04:29,279 --> 00:04:32,599 Speaker 1: Auto with the Bloomberg Business App. Listen on demand wherever 98 00:04:32,680 --> 00:04:35,760 Speaker 1: you get your podcasts, or watch us live on YouTube. 99 00:04:36,600 --> 00:04:38,880 Speaker 2: Looking at the markets right now, we have green on 100 00:04:38,920 --> 00:04:41,400 Speaker 2: the screen in terms of equities, with the NAZAC leading 101 00:04:41,400 --> 00:04:44,200 Speaker 2: the way up two and a half percent. Within the NASAC, 102 00:04:44,680 --> 00:04:47,760 Speaker 2: one of the big decliners is Meta, although its losses 103 00:04:47,800 --> 00:04:48,279 Speaker 2: have been. 104 00:04:50,240 --> 00:04:50,720 Speaker 3: Moderating. 105 00:04:50,800 --> 00:04:52,160 Speaker 2: I guess that's the way to put it there. It's 106 00:04:52,240 --> 00:04:54,800 Speaker 2: down less than it was before. Meta currently down nine 107 00:04:54,839 --> 00:04:58,279 Speaker 2: percent right now. Investors not liking what they're hearing, So 108 00:04:58,360 --> 00:05:02,080 Speaker 2: let's bring in David Kirkpack, founder of Economy, also wrote 109 00:05:02,080 --> 00:05:05,039 Speaker 2: the book on the company formerly known as Facebook. His 110 00:05:05,080 --> 00:05:07,320 Speaker 2: book was The Facebook Effect, The Inside Story of the 111 00:05:07,320 --> 00:05:11,360 Speaker 2: Company that is Connecting the World. And David, you point 112 00:05:11,400 --> 00:05:15,760 Speaker 2: out that Meta disappointing investors not meeting financial expectations even 113 00:05:15,839 --> 00:05:19,960 Speaker 2: marshally is a major change because Mark Zuckerberg has run 114 00:05:20,040 --> 00:05:24,160 Speaker 2: this company to consistently and relentlessly top investor estimates. 115 00:05:24,279 --> 00:05:25,560 Speaker 3: What do you think is going on there? 116 00:05:26,839 --> 00:05:29,120 Speaker 7: Well, thanks so much for having me, Scarlett and Paul. 117 00:05:29,960 --> 00:05:33,920 Speaker 8: Well, we are in an extremely precarious time for any 118 00:05:34,000 --> 00:05:38,040 Speaker 8: of these tech giants, with the scale of capital investment 119 00:05:38,080 --> 00:05:42,840 Speaker 8: that they're throwing towards AI these days. And the precariousness 120 00:05:42,839 --> 00:05:45,560 Speaker 8: of the moment is compounded in the case of Meta 121 00:05:46,160 --> 00:05:50,880 Speaker 8: because among other things, they're being sued right and left 122 00:05:51,040 --> 00:05:55,280 Speaker 8: for many things, but especially for harming the mental health 123 00:05:55,320 --> 00:05:59,400 Speaker 8: of teenagers. I mean, it was interesting that among the 124 00:05:59,440 --> 00:06:03,200 Speaker 8: one analysis of these results yesterday was that if they 125 00:06:03,279 --> 00:06:06,440 Speaker 8: hadn't set aside to a zero point four billion for 126 00:06:06,760 --> 00:06:12,600 Speaker 8: legal contingencies, they would have made their earnings number, which 127 00:06:12,640 --> 00:06:16,000 Speaker 8: they missed. So that's a you know, two point four 128 00:06:16,040 --> 00:06:19,200 Speaker 8: billion for most companies would be a really serious problem 129 00:06:19,279 --> 00:06:21,840 Speaker 8: that you're expecting to pay that kind of money out 130 00:06:21,880 --> 00:06:25,279 Speaker 8: because of legal settlements for a company with sixty billion 131 00:06:25,360 --> 00:06:28,960 Speaker 8: in profits annually, that's not so huge, but it just 132 00:06:29,000 --> 00:06:32,840 Speaker 8: goes to underscore the complexity of this company's position in 133 00:06:32,960 --> 00:06:34,200 Speaker 8: society and business. 134 00:06:34,680 --> 00:06:37,479 Speaker 7: So did they continue to say. 135 00:06:37,279 --> 00:06:39,080 Speaker 8: They're going to spend one hundred and thirty to one 136 00:06:39,160 --> 00:06:43,839 Speaker 8: hundred and forty five billion on capital expenditures. 137 00:06:43,120 --> 00:06:47,480 Speaker 7: For data centers this year. So wow, So I can. 138 00:06:47,360 --> 00:06:50,760 Speaker 6: Say, yeah, David was injuring last night for investors the 139 00:06:50,800 --> 00:06:55,719 Speaker 6: comparison to comparent contrast of Microsoft with their results and 140 00:06:55,839 --> 00:06:59,039 Speaker 6: the stock trading up dramatically today fourteen to fifteen percent, 141 00:06:59,120 --> 00:07:01,360 Speaker 6: yet Meta down about nine. 142 00:07:02,120 --> 00:07:04,960 Speaker 3: What is metas ai strategy? 143 00:07:05,000 --> 00:07:05,480 Speaker 5: Do you think? 144 00:07:06,520 --> 00:07:06,680 Speaker 7: Oh? 145 00:07:06,760 --> 00:07:09,520 Speaker 8: That's a great question, and I think a lot of 146 00:07:09,560 --> 00:07:12,200 Speaker 8: analysts on the call with Zuckerberg yesterday would have liked 147 00:07:12,200 --> 00:07:15,880 Speaker 8: to have gotten an answer for that. I mean, for example, 148 00:07:16,280 --> 00:07:20,800 Speaker 8: recently Bloomberg broke the news that they were considering renting 149 00:07:20,840 --> 00:07:24,280 Speaker 8: out data center capacity to other companies like possibly Anthropic 150 00:07:24,400 --> 00:07:26,840 Speaker 8: or open Ai, which they haven't yet done, and he 151 00:07:26,880 --> 00:07:30,960 Speaker 8: didn't say anything about it on the earnings call yesterday. 152 00:07:31,040 --> 00:07:33,760 Speaker 8: If they did, that would be a good way of 153 00:07:33,880 --> 00:07:36,880 Speaker 8: monetizing these extraordinary capital expenditures. 154 00:07:37,200 --> 00:07:39,120 Speaker 7: So far as Zuckerberg keeps. 155 00:07:39,160 --> 00:07:42,320 Speaker 8: Making funny noises about Hi, we probably have enough uses 156 00:07:42,360 --> 00:07:45,680 Speaker 8: for this capacity ourselves. 157 00:07:46,280 --> 00:07:47,800 Speaker 7: That wasn't a clear answer. 158 00:07:48,560 --> 00:07:51,160 Speaker 8: They have begun charging money for a lot of things 159 00:07:51,200 --> 00:07:53,520 Speaker 8: they never charged for before, So you can now pay 160 00:07:53,520 --> 00:07:56,520 Speaker 8: fifty dollars a month and get access to a human 161 00:07:56,560 --> 00:07:59,160 Speaker 8: if you have problem with your Instagram. If you don't 162 00:07:59,160 --> 00:08:00,760 Speaker 8: pay fifty dollars a month's good. 163 00:08:00,680 --> 00:08:01,160 Speaker 7: Luck on that. 164 00:08:02,600 --> 00:08:06,600 Speaker 8: But the answer is I don't think they fully know, 165 00:08:06,800 --> 00:08:09,520 Speaker 8: because I think they're waiting to see how the whole 166 00:08:09,560 --> 00:08:14,520 Speaker 8: industry settles out. But I do think that Zuckerberg published 167 00:08:14,520 --> 00:08:18,840 Speaker 8: a very strident and optimistic op ed in the Wall 168 00:08:18,880 --> 00:08:23,760 Speaker 8: Street Journal this week's talking about he believes personal superintelligence 169 00:08:23,880 --> 00:08:28,320 Speaker 8: is going to be the transformative force in the world 170 00:08:28,360 --> 00:08:31,240 Speaker 8: and people have to have individual access to that, and 171 00:08:31,320 --> 00:08:35,360 Speaker 8: big companies can't be gatekeepers into that sort of capability. 172 00:08:36,200 --> 00:08:39,440 Speaker 8: So if you read between all these lines, I think 173 00:08:39,480 --> 00:08:43,000 Speaker 8: their strategy is they want to more or less compete 174 00:08:43,040 --> 00:08:46,679 Speaker 8: head to head with companies like open Ai and dropic 175 00:08:47,200 --> 00:08:51,880 Speaker 8: by using advertising to subsidize the offering of free AI 176 00:08:52,040 --> 00:08:57,320 Speaker 8: services that they believe ultimately will go to individuals all. 177 00:08:57,200 --> 00:08:59,160 Speaker 7: Over the world to enhance their lives. 178 00:08:59,480 --> 00:09:02,160 Speaker 8: That's a long term statement, but I think that would 179 00:09:02,200 --> 00:09:04,359 Speaker 8: be a summary of how Zuckerberg thinks about. 180 00:09:04,440 --> 00:09:08,080 Speaker 2: And does Zuckerberg and Meta have the track record for that? 181 00:09:08,200 --> 00:09:10,880 Speaker 2: I mean, it does selling ads very well, but does 182 00:09:10,920 --> 00:09:12,920 Speaker 2: it do other things just as well. 183 00:09:14,600 --> 00:09:14,680 Speaker 7: No. 184 00:09:15,360 --> 00:09:17,719 Speaker 8: In fact, it has never done anything well aside from 185 00:09:17,760 --> 00:09:20,480 Speaker 8: sell ads. It's never had a growing business of any 186 00:09:20,520 --> 00:09:23,880 Speaker 8: size that really wasn't ad based. 187 00:09:23,920 --> 00:09:26,040 Speaker 7: I mean, they had sixty and. 188 00:09:26,040 --> 00:09:29,440 Speaker 8: A half billion in revenue and fifty nine point three 189 00:09:29,559 --> 00:09:35,240 Speaker 8: billion of that was advertising this quarter. So, but ads 190 00:09:35,320 --> 00:09:37,360 Speaker 8: can be used to pay for a lot of things. 191 00:09:37,480 --> 00:09:39,079 Speaker 8: And I think that's what I was trying to say 192 00:09:39,160 --> 00:09:42,600 Speaker 8: before that. You know, we've seen open ai, for example, 193 00:09:42,640 --> 00:09:44,240 Speaker 8: talk about how we're going to try to become an 194 00:09:44,280 --> 00:09:46,720 Speaker 8: AD company. They can do that, and they are already 195 00:09:46,760 --> 00:09:49,960 Speaker 8: doing it a tiny bit, but really that's a really 196 00:09:50,040 --> 00:09:52,960 Speaker 8: hard transition for a company like that to make. It 197 00:09:53,040 --> 00:09:57,280 Speaker 8: is the easiest thing. Zuckerberg and Meta are the in 198 00:09:57,320 --> 00:10:02,839 Speaker 8: some ways the world's best advertising base company, and as 199 00:10:02,880 --> 00:10:06,000 Speaker 8: they grow in other areas, if they can continue to 200 00:10:06,200 --> 00:10:11,520 Speaker 8: use that or competence, it could be a tremendous asset 201 00:10:11,720 --> 00:10:15,640 Speaker 8: in expanding out in the AI arena. Right now, they're 202 00:10:15,679 --> 00:10:18,559 Speaker 8: just using AI to make the ads more seductive and 203 00:10:18,880 --> 00:10:23,680 Speaker 8: their services more addictive. And I mentioned when I sent 204 00:10:23,760 --> 00:10:26,720 Speaker 8: you a note earlier, I think it's highly ironic that 205 00:10:26,760 --> 00:10:30,400 Speaker 8: they're being sued for making young people's lives worse because. 206 00:10:30,160 --> 00:10:31,960 Speaker 7: Of the addictivity of their services. 207 00:10:32,280 --> 00:10:34,480 Speaker 8: And yet what they're spending all their AI money on 208 00:10:34,600 --> 00:10:35,800 Speaker 8: right now is making their. 209 00:10:35,640 --> 00:10:38,040 Speaker 7: Services in effect more addictive. 210 00:10:38,480 --> 00:10:41,640 Speaker 8: So they're paying all this money to make their services 211 00:10:41,760 --> 00:10:44,120 Speaker 8: do more of what they're being sued for in some 212 00:10:44,480 --> 00:10:45,720 Speaker 8: weirdly ironic way. 213 00:10:46,559 --> 00:10:49,480 Speaker 3: Stay with us. More from Bloomberg Intelligence coming up after this. 214 00:10:53,800 --> 00:10:57,480 Speaker 1: You're listening to the Bloomberg Intelligence podcast. Catch us live 215 00:10:57,559 --> 00:11:00,640 Speaker 1: weekdays at ten am Eastern on Apple, Coq and Android 216 00:11:00,679 --> 00:11:03,960 Speaker 1: Auto with the Blueberg Business App. Listen on demand wherever 217 00:11:04,040 --> 00:11:07,120 Speaker 1: you get your podcasts, or watch us live on YouTube. 218 00:11:08,000 --> 00:11:10,560 Speaker 6: All right, let's switch gears. Get back to the market 219 00:11:10,600 --> 00:11:13,400 Speaker 6: here again. The SMP's up sixty points, the NASHDAK one 220 00:11:14,040 --> 00:11:16,480 Speaker 6: feigner ninety points two percent, and the Nasdaq one hundreds 221 00:11:16,520 --> 00:11:17,880 Speaker 6: up two point six percent, So a little bit of 222 00:11:17,880 --> 00:11:22,080 Speaker 6: a rebound for the tech names. More on earnings Front's Robinhood, 223 00:11:22,200 --> 00:11:25,640 Speaker 6: the digital health management firm, reported some numbers that beat estimates. 224 00:11:25,840 --> 00:11:28,360 Speaker 6: Stock trading down a little bit today. Not to worry, 225 00:11:28,400 --> 00:11:31,680 Speaker 6: we have the chief financial officer of robin Hood in 226 00:11:31,800 --> 00:11:35,280 Speaker 6: our studios. Ship Verman, CFO of Robinhood. Chap talked to 227 00:11:35,360 --> 00:11:37,559 Speaker 6: us about your quarter that you guys reported. What was 228 00:11:37,600 --> 00:11:40,080 Speaker 6: the message to the street these days about robin Hood. 229 00:11:40,280 --> 00:11:43,679 Speaker 5: Yeah, thanks for having me so. First record quarter, it 230 00:11:43,760 --> 00:11:46,040 Speaker 5: was our best quarter ever in terms of net deposits. 231 00:11:46,080 --> 00:11:48,880 Speaker 5: Customers trust us twenty two billion of their hard earned assets. 232 00:11:49,600 --> 00:11:53,360 Speaker 5: Really incredible to see. Second flow, the Financial Profile record 233 00:11:53,400 --> 00:11:55,959 Speaker 5: revenue one point three billion, up thirty two percent year 234 00:11:55,960 --> 00:11:58,120 Speaker 5: over year, so not just on the assets side, but 235 00:11:58,200 --> 00:12:01,679 Speaker 5: also the revenue. And third, we are launching a ton 236 00:12:01,760 --> 00:12:04,320 Speaker 5: of new products. We just hit thirteen businesses with one 237 00:12:04,400 --> 00:12:06,320 Speaker 5: hundred million of arr We had a two new ones 238 00:12:06,320 --> 00:12:08,360 Speaker 5: this year, our web product called Robinhood Legend and the 239 00:12:08,400 --> 00:12:11,360 Speaker 5: credit cards, so across the board. Really great engagement from 240 00:12:11,400 --> 00:12:13,520 Speaker 5: customers and translating into Financial Profile. 241 00:12:14,040 --> 00:12:15,440 Speaker 3: One of your existing businesses. 242 00:12:15,480 --> 00:12:18,679 Speaker 2: Crypto is not doing as well, and partly because of 243 00:12:18,800 --> 00:12:21,040 Speaker 2: the price action that we've seen in bitcoin and the 244 00:12:21,120 --> 00:12:25,080 Speaker 2: other digital coins. Overall, the crypto revenues beat, but they 245 00:12:25,120 --> 00:12:27,719 Speaker 2: were down about thirty eight percent year over year, and 246 00:12:27,960 --> 00:12:31,160 Speaker 2: weaker volumes may be an issue going forward. 247 00:12:31,320 --> 00:12:32,480 Speaker 3: What turns that around? 248 00:12:32,840 --> 00:12:35,240 Speaker 5: Yeah, so it's a great question. First, we are long 249 00:12:35,320 --> 00:12:37,400 Speaker 5: term bullish on crypto. We believe in the asset class 250 00:12:37,520 --> 00:12:39,720 Speaker 5: we believe it's here to stay. What are we focusing 251 00:12:39,800 --> 00:12:42,120 Speaker 5: on the infrastructure layer? And so a couple things that 252 00:12:42,160 --> 00:12:45,280 Speaker 5: we announced this quarter. The Robinhood Chain fastest chain ever 253 00:12:45,400 --> 00:12:47,920 Speaker 5: to hit one hundred million transactions. We also launched the 254 00:12:47,960 --> 00:12:49,959 Speaker 5: Robinhood Earned product. You can lend your crypto out on 255 00:12:49,960 --> 00:12:52,720 Speaker 5: stable coin and get seven percent, So the asset class 256 00:12:52,760 --> 00:12:54,520 Speaker 5: and the coins. It's great for customers you want to 257 00:12:54,520 --> 00:12:57,520 Speaker 5: provide access, it'll EBB and flow. I've been there eight years. 258 00:12:57,559 --> 00:13:00,120 Speaker 5: I've seen probably four different crypto winters. But if you 259 00:13:00,160 --> 00:13:02,479 Speaker 5: invest in the technology and you invest in the infrastructure, 260 00:13:02,600 --> 00:13:04,760 Speaker 5: we believe that's here to stay. And the Robinhood chain 261 00:13:04,880 --> 00:13:05,839 Speaker 5: was a great example of that. 262 00:13:06,240 --> 00:13:08,080 Speaker 6: H If what's a typical or who is a typical 263 00:13:08,160 --> 00:13:09,440 Speaker 6: Robinhood investor? 264 00:13:09,520 --> 00:13:10,680 Speaker 5: Maybe how has that changed? 265 00:13:10,920 --> 00:13:11,120 Speaker 7: Yeah? 266 00:13:11,240 --> 00:13:14,280 Speaker 5: Great question. So who is our meeting customers today? They 267 00:13:14,360 --> 00:13:16,240 Speaker 5: tend to be thirty five years old, they tend to 268 00:13:16,280 --> 00:13:19,959 Speaker 5: be married, tend to be educated, extra discretionary income relative 269 00:13:19,960 --> 00:13:22,719 Speaker 5: to the US Wiley distributed across the US, not just 270 00:13:22,760 --> 00:13:25,319 Speaker 5: a coastal product. One of two kids or a cat 271 00:13:25,400 --> 00:13:29,199 Speaker 5: or dog. That is our prototypical customer. What they're doing 272 00:13:29,360 --> 00:13:31,840 Speaker 5: is as they're getting wealthier, They're using Robinhood for more 273 00:13:31,880 --> 00:13:33,680 Speaker 5: and more of their products. So we announced robin Hood 274 00:13:33,679 --> 00:13:37,200 Speaker 5: Banking last year just at three billion deposits growing really, 275 00:13:37,280 --> 00:13:40,520 Speaker 5: really nicely. Our customers also stay to us. Hey, I 276 00:13:40,640 --> 00:13:42,800 Speaker 5: bank with Robinhood even before we were bank. That's how 277 00:13:42,800 --> 00:13:45,280 Speaker 5: they thought about it. And so as they're getting wealthier, 278 00:13:45,400 --> 00:13:48,360 Speaker 5: they want the same products. Everyone wants retirement assets, those 279 00:13:48,360 --> 00:13:51,160 Speaker 5: are now above thirty five billion. They want ETFs. We 280 00:13:51,280 --> 00:13:53,360 Speaker 5: just launched custodial accounts. I have a young daughter. She 281 00:13:53,400 --> 00:13:55,920 Speaker 5: has an account on Robinhood Trump accounts. We're now supporting 282 00:13:55,960 --> 00:13:58,760 Speaker 5: all of the children. And so when I joined eight 283 00:13:58,840 --> 00:14:00,880 Speaker 5: years ago, the average age was around twenty seven or 284 00:14:00,920 --> 00:14:03,600 Speaker 5: twenty eight. We are growing with our customers. They are 285 00:14:03,640 --> 00:14:05,800 Speaker 5: getting more wealthy, they're asking for more products, and so 286 00:14:06,240 --> 00:14:08,439 Speaker 5: we always start with what do our customers want, and 287 00:14:08,520 --> 00:14:10,120 Speaker 5: then we build it for them. And as you do that, 288 00:14:10,240 --> 00:14:12,000 Speaker 5: you start to see them consolidate more their wealth. 289 00:14:12,160 --> 00:14:14,520 Speaker 2: Okay, so that median and customer, you were just describing 290 00:14:15,160 --> 00:14:18,400 Speaker 2: what is their interest level towards prediction markets? And you know, 291 00:14:18,679 --> 00:14:21,640 Speaker 2: when I ask about this, I'm curious beyond sports the 292 00:14:21,680 --> 00:14:24,280 Speaker 2: World Cup. You know, what is their interest in trading 293 00:14:24,360 --> 00:14:27,600 Speaker 2: futures contracts or these event contracts on I don't know, GDP, 294 00:14:27,840 --> 00:14:29,960 Speaker 2: the FED, inflation, something other than sports. 295 00:14:30,280 --> 00:14:32,880 Speaker 5: Yeah, So we just announced yesterday that we now have 296 00:14:32,920 --> 00:14:35,680 Speaker 5: two million customers of use it event contracts, smaller relative 297 00:14:35,720 --> 00:14:37,960 Speaker 5: are to our twenty eight million dollar twenty eight million 298 00:14:37,960 --> 00:14:39,920 Speaker 5: customer base, but that was a million and a half 299 00:14:40,000 --> 00:14:42,240 Speaker 5: customers just a few weeks ago, so growing really nicely. 300 00:14:42,680 --> 00:14:44,680 Speaker 5: We are seeing customers use it for a wide variety 301 00:14:44,680 --> 00:14:47,960 Speaker 5: of things. So you mentioned economics, yesterday was Fedday. You 302 00:14:48,000 --> 00:14:50,080 Speaker 5: tend to see a lot of contracts around interest rates 303 00:14:50,800 --> 00:14:52,800 Speaker 5: when there's a cultural moment, so whether it was the 304 00:14:52,840 --> 00:14:55,480 Speaker 5: World Cup, Taylor Swift's wedding, things of those natures you 305 00:14:55,560 --> 00:14:57,920 Speaker 5: send to do it. Their elections are really popular. So 306 00:14:58,000 --> 00:14:59,760 Speaker 5: we're starting to see a lot, not just for the midterms, 307 00:14:59,800 --> 00:15:02,800 Speaker 5: what primaries. We think we are at the beginning of 308 00:15:02,840 --> 00:15:05,840 Speaker 5: prediction markets supercycle, that this could actually be bigger than 309 00:15:05,880 --> 00:15:08,480 Speaker 5: the equities market. The fun part is use cases are 310 00:15:08,520 --> 00:15:10,440 Speaker 5: coming up out of the woodwork. So an example I've 311 00:15:10,440 --> 00:15:12,440 Speaker 5: shared before is last winter we saw a lot of 312 00:15:12,480 --> 00:15:14,600 Speaker 5: customers trading weather contracts. We were trying to for what 313 00:15:14,640 --> 00:15:16,840 Speaker 5: they were doing. They were hedging their flights. They were 314 00:15:16,880 --> 00:15:18,760 Speaker 5: waiting for way to delays and they thought that be 315 00:15:18,800 --> 00:15:20,920 Speaker 5: another way. We also saw that in a certain state 316 00:15:21,080 --> 00:15:23,760 Speaker 5: they were using it during hurricane season. They were supplementing 317 00:15:23,800 --> 00:15:26,960 Speaker 5: their home insurance. Now customers won't explicitly saying I'm buying insurance, 318 00:15:27,000 --> 00:15:29,000 Speaker 5: but that they were starting to use. So there are 319 00:15:29,160 --> 00:15:31,720 Speaker 5: so many different use cases. There's no doubt sports has 320 00:15:31,760 --> 00:15:34,920 Speaker 5: found product market fit. But if you look overseas, actually 321 00:15:35,000 --> 00:15:37,440 Speaker 5: the majority of contracts are nonsports and it tends to 322 00:15:37,520 --> 00:15:40,440 Speaker 5: be cultural moments, lifestyle things of that nature. What we're 323 00:15:40,480 --> 00:15:42,440 Speaker 5: really excited is for how do we make our brokerage 324 00:15:42,480 --> 00:15:45,400 Speaker 5: product better. Say, for example, you have a view on Apple, 325 00:15:45,800 --> 00:15:48,960 Speaker 5: you can buy the equity, you can buy derivative or 326 00:15:49,040 --> 00:15:50,960 Speaker 5: in time you should be able to buy an event contract. Well, 327 00:15:51,000 --> 00:15:53,560 Speaker 5: Apple be earnings, how many iPhones where they ship? That's 328 00:15:53,560 --> 00:15:56,200 Speaker 5: where we think it's going. And so again sports is 329 00:15:56,200 --> 00:15:57,720 Speaker 5: a great use case, but there are a lot of 330 00:15:57,760 --> 00:15:59,080 Speaker 5: other areas that we're starting to see. 331 00:15:59,840 --> 00:16:03,600 Speaker 6: Is AI agentic trading? How's that impacting your business? 332 00:16:04,040 --> 00:16:05,960 Speaker 5: So we're at the forefront of we believe in AI 333 00:16:06,120 --> 00:16:08,760 Speaker 5: and so our urgentic products. We just announced about one 334 00:16:08,800 --> 00:16:12,200 Speaker 5: hundred thousand customers. It's really early. This first wave was 335 00:16:12,320 --> 00:16:14,280 Speaker 5: for customers who are AI native, so you have to 336 00:16:14,320 --> 00:16:16,160 Speaker 5: plug into your MCP and you have to your own 337 00:16:16,360 --> 00:16:18,880 Speaker 5: LMS such as Codex or clock Code. Even with that, 338 00:16:18,960 --> 00:16:21,360 Speaker 5: we still one hundred thousand customers to sign up. Where 339 00:16:21,400 --> 00:16:23,360 Speaker 5: we're going is we're going to make it more native 340 00:16:23,360 --> 00:16:25,760 Speaker 5: in the app. What does an agent actually do? All 341 00:16:25,800 --> 00:16:28,320 Speaker 5: it does it eb stracts away a pain point. Let's 342 00:16:28,360 --> 00:16:29,960 Speaker 5: say you're a customer and you have a view I 343 00:16:30,040 --> 00:16:32,240 Speaker 5: want to buy energy stocks. Okay, can you help me 344 00:16:32,320 --> 00:16:34,480 Speaker 5: do research on that. Great, here's a list of things 345 00:16:34,520 --> 00:16:36,800 Speaker 5: you could do. Now, can you help me actually execute 346 00:16:36,800 --> 00:16:39,440 Speaker 5: the trade. That's the next step. And so we're not 347 00:16:39,560 --> 00:16:41,600 Speaker 5: building agents just for the sake of agents, it's how 348 00:16:41,640 --> 00:16:44,040 Speaker 5: do you solve customer pain points. So we started with 349 00:16:44,080 --> 00:16:46,160 Speaker 5: the really techno native. Now we're going to make it 350 00:16:46,520 --> 00:16:48,840 Speaker 5: native in the app, and then going forward, we have 351 00:16:48,920 --> 00:16:50,560 Speaker 5: some really fun things that we're cooking. I don't want 352 00:16:50,560 --> 00:16:52,760 Speaker 5: to front on the products side, but we think across 353 00:16:52,880 --> 00:16:55,960 Speaker 5: all of our products, not just brokerage, payments, banking, credit card, 354 00:16:56,000 --> 00:16:57,360 Speaker 5: et cetera. There's a lot of things you could do. 355 00:16:58,120 --> 00:16:59,880 Speaker 2: I'm glad that you mentioned the Trump accounts, and I 356 00:16:59,920 --> 00:17:02,680 Speaker 2: just want to circle back to that momentarily because you 357 00:17:02,800 --> 00:17:05,560 Speaker 2: said that this is something that we're focused on bring 358 00:17:05,680 --> 00:17:08,679 Speaker 2: in customer retention, of course, and let's see this as 359 00:17:08,720 --> 00:17:10,960 Speaker 2: a driver of future growth. What's the timeline for a 360 00:17:11,040 --> 00:17:13,720 Speaker 2: meaningful contribution from the Trump accounts roll out? 361 00:17:13,800 --> 00:17:15,600 Speaker 5: Yeah, so it just start in early July, and the 362 00:17:15,720 --> 00:17:18,119 Speaker 5: uptick has been phenomenal. So some numbers we shared yesterday, 363 00:17:18,160 --> 00:17:20,680 Speaker 5: over seven million children have already signed up and about 364 00:17:20,680 --> 00:17:22,840 Speaker 5: one and a half billion of contributions have already been made, 365 00:17:22,920 --> 00:17:25,440 Speaker 5: So in the first three to four weeks of being live, 366 00:17:25,520 --> 00:17:28,040 Speaker 5: that is phenomenal. We are getting in balanced on so 367 00:17:28,200 --> 00:17:30,880 Speaker 5: many different use cases. So employers, for example, Robin Hood 368 00:17:30,920 --> 00:17:33,040 Speaker 5: said we will match any of our employees. Many other 369 00:17:33,080 --> 00:17:35,040 Speaker 5: employers have come out and said that, so we're building that. 370 00:17:35,800 --> 00:17:38,119 Speaker 5: Donors Michael Dell and Susan Dell have said they're going 371 00:17:38,160 --> 00:17:40,240 Speaker 5: to make a big donation, so we're building that. We 372 00:17:40,359 --> 00:17:42,480 Speaker 5: think this will be one of the most powerful ways 373 00:17:42,520 --> 00:17:45,240 Speaker 5: to help children grow their wealth. The US stock market, 374 00:17:45,240 --> 00:17:46,960 Speaker 5: as you guys will know, is the greatest creator of 375 00:17:47,040 --> 00:17:50,080 Speaker 5: human wealth and history. Getting customers to start early is 376 00:17:50,160 --> 00:17:50,919 Speaker 5: so impactful. 377 00:17:52,520 --> 00:17:53,119 Speaker 3: Stay with us. 378 00:17:53,240 --> 00:18:00,399 Speaker 1: More from Bloomberg Intelligence coming up after this to the 379 00:18:00,440 --> 00:18:04,359 Speaker 1: Bloomberg Intelligence Podcast. Catch us live weekdays at ten am 380 00:18:04,440 --> 00:18:08,320 Speaker 1: Eastern on Applecarclay, and Android Auto with the Bloomberg Business App. 381 00:18:08,440 --> 00:18:11,680 Speaker 1: Listen on demand wherever you get your podcasts, or watch 382 00:18:11,760 --> 00:18:12,880 Speaker 1: us live on YouTube. 383 00:18:13,560 --> 00:18:16,120 Speaker 6: Red Brown Joints to hear. A consumer reporter for Bloomberg News, 384 00:18:16,400 --> 00:18:19,240 Speaker 6: Hey covers all these consumer companies talk to us about Starbucks. 385 00:18:19,680 --> 00:18:21,720 Speaker 5: Read what did you see? What did you hear? 386 00:18:21,800 --> 00:18:22,600 Speaker 6: With their earnings? 387 00:18:23,040 --> 00:18:24,720 Speaker 9: Yeah, I mean, I think Starbucks is a story of 388 00:18:24,800 --> 00:18:26,720 Speaker 9: just sort of continuing on this turnaround plan and it 389 00:18:26,800 --> 00:18:29,120 Speaker 9: seems to be really gaining some momentum. Now we've seen 390 00:18:29,160 --> 00:18:32,840 Speaker 9: a couple of quarters now of them out performing on 391 00:18:33,800 --> 00:18:36,000 Speaker 9: the top line and profits are going to start growing. 392 00:18:36,359 --> 00:18:38,560 Speaker 9: Is the idea, you know, of off the back of it. 393 00:18:38,720 --> 00:18:41,040 Speaker 9: So there was a lot of skepticism I think around 394 00:18:41,480 --> 00:18:43,800 Speaker 9: this turnaround plan. It's just you know, moving this behemoth 395 00:18:43,840 --> 00:18:47,000 Speaker 9: that is Starbucks. But some of the changes that they're making, 396 00:18:47,040 --> 00:18:48,879 Speaker 9: which is kind of really focusing in on kind of 397 00:18:49,200 --> 00:18:52,359 Speaker 9: you know, making their their product more valuable for customers, 398 00:18:52,440 --> 00:18:56,200 Speaker 9: especially when they're feeling this pinch, does seem to be resonating. So, yeah, 399 00:18:56,440 --> 00:18:58,240 Speaker 9: it seems like it's kind of full steam ahead for 400 00:18:58,600 --> 00:19:00,360 Speaker 9: Brian Nickel and Starbucks the moment. 401 00:19:00,520 --> 00:19:02,520 Speaker 6: It's interesting because I'll see, you know, when I come 402 00:19:02,600 --> 00:19:06,080 Speaker 6: up to my Starbucks, the drive through line is crazy long, 403 00:19:06,440 --> 00:19:08,239 Speaker 6: you know, and people they gotta be waiting. I think 404 00:19:08,240 --> 00:19:10,040 Speaker 6: for like, I don't know, ten fifteen minutes, I walk 405 00:19:10,080 --> 00:19:12,440 Speaker 6: into Storre, there's only like a handful of people in there. 406 00:19:12,880 --> 00:19:15,720 Speaker 6: It's crazy how the experience has changed since you know, 407 00:19:15,760 --> 00:19:16,879 Speaker 6: the last twenty twenty five. 408 00:19:16,760 --> 00:19:19,520 Speaker 9: Years with this yeah company, absolutely, and I think that's 409 00:19:19,600 --> 00:19:22,240 Speaker 9: kind of part of what they are kind of navigating, 410 00:19:22,400 --> 00:19:24,440 Speaker 9: is like the different ways that people consume coffee, you know, 411 00:19:24,560 --> 00:19:26,320 Speaker 9: like Starbucks needs to be able to do it across 412 00:19:26,320 --> 00:19:28,000 Speaker 9: all of the different platforms. And I think that's also 413 00:19:28,000 --> 00:19:29,760 Speaker 9: where they've made a lot of investments. I think we 414 00:19:29,920 --> 00:19:32,800 Speaker 9: just heard Brian nicol talking about how, you know, even 415 00:19:32,840 --> 00:19:35,920 Speaker 9: into shaving seconds off, you know, they do so you know, 416 00:19:36,000 --> 00:19:38,840 Speaker 9: probably millions and millions of transactions a day, like it 417 00:19:39,080 --> 00:19:41,720 Speaker 9: equates to a better experience for everybody. But look, they're 418 00:19:41,760 --> 00:19:43,800 Speaker 9: they're investing kind of across the board, across all of 419 00:19:43,840 --> 00:19:46,119 Speaker 9: their different channels, be it drive through, so they're definitely 420 00:19:46,119 --> 00:19:48,800 Speaker 9: trying to make some technology improvements there. You heard them 421 00:19:48,840 --> 00:19:51,399 Speaker 9: talk about about the staffing and stores things like that 422 00:19:51,600 --> 00:19:53,400 Speaker 9: that also kind of improves the experience. And then also 423 00:19:53,400 --> 00:19:55,639 Speaker 9: they're digital, they're trying to kind of find ways that 424 00:19:55,720 --> 00:19:58,879 Speaker 9: the digital experience is still quite seamless for people as well, 425 00:19:58,960 --> 00:20:00,480 Speaker 9: so they're not waiting for those drinks because these people 426 00:20:00,520 --> 00:20:02,680 Speaker 9: are obviously in a rush, just like the drive through line. 427 00:20:02,760 --> 00:20:05,800 Speaker 6: Yeah, and I would say again, just about my experience 428 00:20:06,080 --> 00:20:10,280 Speaker 6: at my local Starbucks, ninety five percent of the in 429 00:20:10,480 --> 00:20:12,320 Speaker 6: store orders are picked up. 430 00:20:12,440 --> 00:20:13,360 Speaker 7: Yeah, digital. 431 00:20:13,480 --> 00:20:16,400 Speaker 6: I'm the lone dude who goes up to the cashier 432 00:20:16,440 --> 00:20:19,240 Speaker 6: and actually orders it directly from the barista. And they're 433 00:20:19,280 --> 00:20:20,720 Speaker 6: kind of like a little shocked when they look up 434 00:20:20,720 --> 00:20:22,240 Speaker 6: and there's actually a person standing there. 435 00:20:22,320 --> 00:20:24,400 Speaker 3: Yeah, an old dude, yes, but with great hair. 436 00:20:24,480 --> 00:20:25,960 Speaker 5: But that's just the way it is. 437 00:20:26,040 --> 00:20:28,200 Speaker 6: And I think they've it's gotten so much better, I 438 00:20:28,240 --> 00:20:28,880 Speaker 6: think over time. 439 00:20:29,080 --> 00:20:31,720 Speaker 9: Yeah, yeah, I mean they have to be able to 440 00:20:31,760 --> 00:20:34,879 Speaker 9: do it all right, like they they It has changed 441 00:20:35,000 --> 00:20:37,680 Speaker 9: a lot, obviously, and they've been probably like a big 442 00:20:37,760 --> 00:20:39,720 Speaker 9: part of that change, you know. I think like Starbucks 443 00:20:39,760 --> 00:20:41,080 Speaker 9: has done a lot in the past to like kind 444 00:20:41,119 --> 00:20:44,919 Speaker 9: of train consumers like this is how you consume coffee 445 00:20:44,960 --> 00:20:48,920 Speaker 9: to some extent, but they're they're making the investments where 446 00:20:48,920 --> 00:20:50,560 Speaker 9: it matters right now to make sure that no matter 447 00:20:50,640 --> 00:20:51,960 Speaker 9: how you come in, if you are wanting to have 448 00:20:52,040 --> 00:20:53,639 Speaker 9: a chow with the barista, you know, they've done this 449 00:20:53,680 --> 00:20:56,440 Speaker 9: whole Green Apron program and training those people to even 450 00:20:56,520 --> 00:20:59,159 Speaker 9: be more kind of welcoming and smiling the cups on 451 00:20:59,280 --> 00:21:02,440 Speaker 9: the names on the cup, things like that. Like you know, again, 452 00:21:02,480 --> 00:21:04,480 Speaker 9: it's like all these sort of like marginal things. It's 453 00:21:04,520 --> 00:21:06,600 Speaker 9: sort of one of the opposite of a death by 454 00:21:06,640 --> 00:21:09,400 Speaker 9: a thousand cuts, is right, success five thousand cuts. That's 455 00:21:09,440 --> 00:21:11,639 Speaker 9: kind of this approach for something like this size. It 456 00:21:11,720 --> 00:21:14,920 Speaker 9: kind of requires that sort of intention to be looking 457 00:21:14,960 --> 00:21:16,800 Speaker 9: at every aspect of the business and making sure that 458 00:21:16,880 --> 00:21:18,840 Speaker 9: it's just it's it's what the customers needs. 459 00:21:18,880 --> 00:21:23,560 Speaker 6: Go from coffee to Burrito's Chipotle, they also raise their guidance. 460 00:21:23,680 --> 00:21:25,240 Speaker 6: I'm a big fan of the Chipotle I on Third 461 00:21:25,280 --> 00:21:28,200 Speaker 6: Avenue me too. What's going on at Chipotle. 462 00:21:28,440 --> 00:21:30,159 Speaker 9: Chipotle is kind of a similar story in a lot 463 00:21:30,200 --> 00:21:32,320 Speaker 9: of ways, which is interesting because like obviously Brian Nickel 464 00:21:32,440 --> 00:21:35,200 Speaker 9: had so much success there, but they're kind of instituting 465 00:21:35,320 --> 00:21:38,280 Speaker 9: a lot of similar they're kind of following the playbook 466 00:21:38,280 --> 00:21:40,359 Speaker 9: of Starbucks to some extent. You know, they're trying to 467 00:21:40,359 --> 00:21:43,359 Speaker 9: get their stores faster with a lot of these upgrades. 468 00:21:43,400 --> 00:21:45,040 Speaker 5: It's more back of the house with Chipotle. 469 00:21:45,119 --> 00:21:47,120 Speaker 9: They're making sure that their kitchens are kind of upgraded 470 00:21:47,160 --> 00:21:48,879 Speaker 9: and able to make sure that if you come in 471 00:21:48,920 --> 00:21:51,320 Speaker 9: and you want the whatever the lto is of the moment, 472 00:21:51,440 --> 00:21:55,159 Speaker 9: it's there. But they're also doing things similar to Starbucks, 473 00:21:55,200 --> 00:21:57,520 Speaker 9: which is expanding the menu and and trying to get 474 00:21:57,560 --> 00:21:59,840 Speaker 9: people coming in in different parts of the day, but 475 00:22:00,080 --> 00:22:02,080 Speaker 9: doing it in a way that is gonna, you know, 476 00:22:02,320 --> 00:22:06,000 Speaker 9: still fit with how people are feeling their budgets kind 477 00:22:06,000 --> 00:22:07,760 Speaker 9: of shrinking at the moment. So one of the things 478 00:22:07,760 --> 00:22:09,720 Speaker 9: that start excuse me Chipotle is having a lot of 479 00:22:09,720 --> 00:22:12,600 Speaker 9: success with is these these protein cups. It's just a 480 00:22:12,640 --> 00:22:15,399 Speaker 9: cup of chicken or steak or what have you, But 481 00:22:15,480 --> 00:22:17,399 Speaker 9: it's helping them do two things. First of all, it's 482 00:22:17,400 --> 00:22:19,200 Speaker 9: helping people just come in at different parts of the day. 483 00:22:20,000 --> 00:22:22,040 Speaker 9: They say that, you know, during the call, they kind 484 00:22:22,080 --> 00:22:24,520 Speaker 9: of made this point that it's not it's not sacrificing 485 00:22:25,040 --> 00:22:27,199 Speaker 9: your usual lunch. It's maybe now you're coming in at 486 00:22:27,200 --> 00:22:29,280 Speaker 9: two o'clock when you kind of need a little extra boost. 487 00:22:29,600 --> 00:22:31,679 Speaker 9: Similar things at Starbucks trying to push some of these 488 00:22:31,760 --> 00:22:34,680 Speaker 9: lighter drinks to try to expand the occasions. But also 489 00:22:34,720 --> 00:22:36,800 Speaker 9: for Chipotle, they say it's it's actually driving people to 490 00:22:36,920 --> 00:22:39,040 Speaker 9: like add more to their meal, so you know, maybe 491 00:22:39,080 --> 00:22:40,520 Speaker 9: I'll get the extra scoop of chicken as well. I'm 492 00:22:40,520 --> 00:22:42,040 Speaker 9: trying to hit my protein goals. So some of those 493 00:22:42,080 --> 00:22:45,520 Speaker 9: things right, like, those things are important to people right now. 494 00:22:45,600 --> 00:22:49,119 Speaker 9: And yeah, so Chipotle kind of following the sort of 495 00:22:49,160 --> 00:22:50,919 Speaker 9: Starbucks the Starbucks playbook here. 496 00:22:52,359 --> 00:22:57,000 Speaker 1: This is the Bloomberg Intelligence podcast, available on Apple, Spotify, 497 00:22:57,240 --> 00:23:00,440 Speaker 1: and anywhere else you get your podcasts list, and live 498 00:23:00,520 --> 00:23:04,200 Speaker 1: each weekday ten am to noon Eastern on Bloomberg dot com, 499 00:23:04,600 --> 00:23:08,080 Speaker 1: the iHeartRadio app, tune In, and the Bloomberg Business app. 500 00:23:08,560 --> 00:23:11,480 Speaker 1: You can also watch us live every weekday on YouTube 501 00:23:11,880 --> 00:23:14,120 Speaker 1: and always on the Bloomberg terminal