WEBVTT - Instant Reaction: Microsoft, Meta Earnings Results

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio, news and earnings Palooza.

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<v Speaker 2>Looking at shares of meta platforms right now. They are

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<v Speaker 2>lower in the after hours, but not by much. They

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<v Speaker 2>were bouncing around a little bit, but now down about

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<v Speaker 2>one point one percent. We got news at the company.

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<v Speaker 2>He's fourth quarter revenue coming pretty much in line with

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<v Speaker 2>estimates forty five billion to forty eight billion dollars. Mark

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<v Speaker 2>Zuckerberg himself calling it a pretty good quarter, a good

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<v Speaker 2>quarter in the press release. Let's see what Mandeep Saying

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<v Speaker 2>has to say about that. Mandeep joins us here in

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<v Speaker 2>the Bloomberg Interactive Broker Studio's Bloomberg Intelligence senior technology analyst.

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<v Speaker 2>He's looking at these numbers. What sticks out to you,

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<v Speaker 2>especially in the wake of what we heard yesterday from Alphabet.

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<v Speaker 3>Yeah, I think most of the numbers that I see

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<v Speaker 3>are in line with the expectations. I mean, the one

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<v Speaker 3>thing is ad pricing. So ad pricing continues to tick up.

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<v Speaker 3>If you look at this quarter, I think it was

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<v Speaker 3>around eleven percent. Impressions went down a little bit, and

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<v Speaker 3>it's just the function of how well they have been

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<v Speaker 3>executing in terms of, you know, implementing generative AI and

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<v Speaker 3>really making changes that compared to Snap who reported yesterday

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<v Speaker 3>we saw snaps at pricing decline. So you know, that

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<v Speaker 3>just goes to show at what scale care we really

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<v Speaker 3>compare the two well, I mean, digital ads is a

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<v Speaker 3>function of how much you are better in terms of

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<v Speaker 3>targeting versus the other platforms. So Google Search at pricing

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<v Speaker 3>grew seven percent, Meta platforms at pricing grew eleven percent,

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<v Speaker 3>Snap at pricing down seven percent. So it just goes

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<v Speaker 3>to show it's easy to monetize on Snap, but you

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<v Speaker 3>are not getting the ROI. In the case of Google

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<v Speaker 3>and Meta, you are getting an ROI on your ad

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<v Speaker 3>spend and that's why advertisers are willing to spend more.

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<v Speaker 3>So it's a function of scale, but the effectiveness is there,

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<v Speaker 3>and that's evident in meta platforms.

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<v Speaker 4>To talk about all kookie things that they're still spending

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<v Speaker 4>money on. Reality Labs posting a four point four billion

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<v Speaker 4>dollar loss in the third quarter, it's revenue did rise

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<v Speaker 4>twenty nine percent year over year to two hundred and

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<v Speaker 4>seventy million dollars in the third quarter. That was actually

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<v Speaker 4>below analyst expectations four point four billion dollars. What are

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<v Speaker 4>they doing over at Reality Labs.

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<v Speaker 3>Mean, we know, it's the investments in the VR headsets,

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<v Speaker 3>the ray bang glasses we have talked about at Land

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<v Speaker 3>and look, I think they will always be a drag

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<v Speaker 3>on the overall operating profit because even if they sell

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<v Speaker 3>you know, one hundreds thousands millions of these, the margins

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<v Speaker 3>will never be comparable to their core ADS business, which

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<v Speaker 3>is north of fifty percent. So hardware is a money

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<v Speaker 3>losing business for Meta right now. And that's what's evident

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<v Speaker 3>in that four point four billion dollar loss.

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<v Speaker 2>One of the headlines coming out of these numbers. Meta

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<v Speaker 2>still sees significant capital expenditures growth in twenty twenty five.

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<v Speaker 2>I feel like I'm talking to someone right now about

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<v Speaker 2>the Federal Reserve minutes. What does quote significant mean here?

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<v Speaker 4>Help us?

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<v Speaker 3>Well, So, look at how much the capex grew in

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<v Speaker 3>twenty twenty four so far, and we're talking about already,

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<v Speaker 3>you know, a twenty percent bump. In the case of Microsoft,

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<v Speaker 3>it's fifty percent, so significant could be fifty percent from

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<v Speaker 3>you know, forty billion this year, and that would get

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<v Speaker 3>it closer to sixty billion. Now. The difference between Meta

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<v Speaker 3>and Microsoft is the capex intensity for Meta is already

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<v Speaker 3>north of twenty percent. Normally for large tech companies, CAPEX

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<v Speaker 3>intensity is like ten to fifteen percent. That's where Alphabet

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<v Speaker 3>is at.

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<v Speaker 2>So where are they spending this money? Katie mentioned that

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<v Speaker 2>about ten percent of in Nvidia's revenue comes from Meta platforms,

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<v Speaker 2>about twenty percent coming from Microsoft. Yeah, where's where does

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<v Speaker 2>Meta spend this money next year?

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<v Speaker 3>It's going towards GPUs. I mean it's every large tech

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<v Speaker 3>company right now is looking to build bigger data centers

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<v Speaker 3>where they can train their AI. And Meta has that

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<v Speaker 3>distinction of owning a large ANGLD model, their Lama language model,

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<v Speaker 3>which they didn't mention a lot in their release, but

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<v Speaker 3>it will come up on the call. And they have

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<v Speaker 3>talked about Meta AI having five hundred million monthly active

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<v Speaker 3>users that is powered by Lama. In fact, there was

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<v Speaker 3>some talk about Lama being licensed to an Amazon AWS

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<v Speaker 3>so they could start monetizing that. I mean, there's no

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<v Speaker 3>mention of it in the press release, but we will

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<v Speaker 3>hear about that on.

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<v Speaker 1>The earning spot.

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<v Speaker 4>I want to talk a little bit about the share reaction.

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<v Speaker 4>Meta shares currently down over three percent right now, but

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<v Speaker 4>I mean it's been an incredible run for Meta. You

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<v Speaker 4>talk about price to Perfection. I don't know if Perfection

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<v Speaker 4>exactly was priced in, but the bar was certainly high

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<v Speaker 4>for this stock.

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<v Speaker 3>And look at the multiple. The price to earnings multiple

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<v Speaker 3>of Meta is twenty five times forwardunnings compared to an

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<v Speaker 3>Alphabet which is still below twenty times forward earning. So

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<v Speaker 3>clearly there is that gap that Alphabet could catch up

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<v Speaker 3>to these guys in terms of multiples, and Microsoft is

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<v Speaker 3>close to thirty times earning. When you know, the setup

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<v Speaker 3>is such that expectations are higher. I mean, Microsoft had

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<v Speaker 3>thirty four percent growth in Azure. Still that wasn't good

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<v Speaker 3>enough to drive up those stock, So that's where expectations

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<v Speaker 3>come into play.

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<v Speaker 2>You mentioned Lama and the potential integration. Explain to everyone

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<v Speaker 2>what Lama is and how Meta Platforms is actually using

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<v Speaker 2>it outside of sort of internally. I mean, I know,

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<v Speaker 2>I don't know. Am I seeing Lama when I go

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<v Speaker 2>search on Instagram, when I search on WhatsApp?

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<v Speaker 3>Yeah?

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<v Speaker 2>So Lama.

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<v Speaker 3>We've started hearing about Meta getting into their own search business.

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<v Speaker 4>Yeah.

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<v Speaker 3>And look, Google and Meta have that distinction of owning

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<v Speaker 3>their large anglid model, whereas everyone else is dependent on

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<v Speaker 3>open Ai or Anthropic, which are independent companies. So in

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<v Speaker 3>the case of Meta, they've had a lot of success.

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<v Speaker 3>It's like Lama is on three point two release and

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<v Speaker 3>every release is getting better in terms of the native capabilities.

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<v Speaker 2>But can I download Yama as at and alone app

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<v Speaker 2>right now?

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<v Speaker 3>No? No, So this is a large I can't.

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<v Speaker 2>I can't download it like I download Chat GPT and

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<v Speaker 2>use Chat GPT.

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<v Speaker 3>I mean, they're looking to go towards that model where

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<v Speaker 3>you can use Lama in that form. But right now,

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<v Speaker 3>Lama is just being deployed across their family of apps,

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<v Speaker 3>which is Instagram, you know, WhatsApp and Core Blue App.

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<v Speaker 3>But again, owning a large anglid model is such a

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<v Speaker 3>huge moat, and that's where you know, all these companies

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<v Speaker 3>spending on data centers, the compute capacity. What they're looking

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<v Speaker 3>to do is to really build on that large anglid

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<v Speaker 3>model mode.

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<v Speaker 2>There you go, There you go, and deep. We should

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<v Speaker 2>let him get back to work. Call to listen to.

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<v Speaker 2>He's got a report to write, he's busy after Alphabet

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<v Speaker 2>and Snap. Yesterday we made him talk about Reddit. He

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<v Speaker 2>didn't even know he was going to talk about Reddit. Yesterday.

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<v Speaker 2>We made you go everywhere Mannie, thanks so much for

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<v Speaker 2>joining us. Really do appreciate it. Okay, so Meta platform

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<v Speaker 2>shares moving in the after hours, they were down as

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<v Speaker 2>much as three percent, now down about two point seven percent. Katie,

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<v Speaker 2>help me out with Microsoft and what Microsoft is doing.

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<v Speaker 4>I mean, I think it comes back to those high

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<v Speaker 4>expectations as well. You see shares right now was a

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<v Speaker 4>pretty clean quarter overall, and I can't seem to quite

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<v Speaker 4>get off the ground in the after hours trade. We've

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<v Speaker 4>been toggling around what thirty four times earnings, that's what

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<v Speaker 4>it's trading at. That's a pretty high bar, tim.

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<v Speaker 2>Yeah, it is Microsoft clouds computing business, the office software fields,

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<v Speaker 2>stronger then expected quarterly revenue growth. It's a sign that

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<v Speaker 2>the company's heavy investments in AI are starting to pay off.

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<v Speaker 2>All right, let's get more.

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<v Speaker 5>Now.

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<v Speaker 2>We got aniog Rana joining us. He has been looking

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<v Speaker 2>at these numbers for the past thirteen minutes or so.

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<v Speaker 2>He's from Bloomberg Intelligence. Aniog what sticks out to you

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<v Speaker 2>from this report?

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<v Speaker 5>Yeah, the Azure number sticks out to us. That's thirty

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<v Speaker 5>four percent increase in constant currency. That's fairly impressive given

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<v Speaker 5>the size of that business. And another thing they basically

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<v Speaker 5>mentioned was it includes our twelve percentage points of growth

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<v Speaker 5>coming from AI related workloads, and Microsoft is the only

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<v Speaker 5>company that's really quantifying it at a very, very, i

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<v Speaker 5>would say, credible way at this point compared to any

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<v Speaker 5>of the other companies. So you know, But at the

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<v Speaker 5>same time, they're going to give guidance on the conference

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<v Speaker 5>call that's going to be an hour from now, and

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<v Speaker 5>I think that dictates what happens to the stock tomorrow.

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<v Speaker 4>Yeah, and of course it'll be interesting to see how

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<v Speaker 4>the market continues to digest these numbers bouncing around all

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<v Speaker 4>over in the after hours trade. Talk to us a

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<v Speaker 4>little bit more about the conference call, I mean, in

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<v Speaker 4>addition to some more details on the cloud, what else

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<v Speaker 4>will you be listening.

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<v Speaker 5>For capital expenditures and how much more are they're going

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<v Speaker 5>to spend and what is it going to do for margins.

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<v Speaker 5>This is the first year where we're going to see

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<v Speaker 5>Microsoft's operating margin dip probably about one hundred to one

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<v Speaker 5>hundred and fifty basis points because of all the investments

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<v Speaker 5>that they're doing, and they need to convince the street

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<v Speaker 5>that these investments are worth the effort.

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<v Speaker 1>That means they're.

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<v Speaker 5>Going to spend the money this year and over the

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<v Speaker 5>next few years, You're going to see that money come back,

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<v Speaker 5>and I think that's going to be a lot of

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<v Speaker 5>discussion around capital expenditure as well as you know, growth.

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<v Speaker 4>And ansure, and of course we're coming off the heels

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<v Speaker 4>a pretty strong alphabet results. I want to talk about

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<v Speaker 4>the search business in particular. It feels like BANG has

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<v Speaker 4>been the butt of the joke forever.

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<v Speaker 2>Really is it still you doing things?

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<v Speaker 4>I don't just bring it?

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<v Speaker 2>Yeah, you got a question, just bring it.

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<v Speaker 4>I'm going to start saying that. Are people saying that more?

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<v Speaker 2>Though?

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<v Speaker 4>You think about all these investments that Microsoft has made

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<v Speaker 4>in AI in particular, is the search business seeing the

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<v Speaker 4>fruits of that?

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<v Speaker 1>No, I would not say that.

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<v Speaker 5>I've been Their market share has remained kind of in that,

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<v Speaker 5>you know, same number compared to the pre AI era.

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<v Speaker 5>Microsoft made a big deal about it when they launched,

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<v Speaker 5>you know, their bing with AI features, and that was

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<v Speaker 5>the big thing that it's going to take down Google

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<v Speaker 5>or take some market share away from it. So far

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<v Speaker 5>it hasn't happened. But I think, you know, my Microsoft

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<v Speaker 5>is making a big noise about it. I also feel

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<v Speaker 5>they are trying to do this because they may want

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<v Speaker 5>to be you know, get a deal with Apple for

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<v Speaker 5>the search in that particular ecosystem. So it's a good business, frankly,

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<v Speaker 5>but that's not what's going to drive the stock. The

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<v Speaker 5>stock is going to be driven by how the cloud

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<v Speaker 5>growth is and how stable their office business is.

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<v Speaker 2>One thing that was pretty remarkable about yesterday's results on

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<v Speaker 2>IRAQ from Alphabet, the parent of Google, is the cloud

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<v Speaker 2>growth for that company. And men Deep was in here

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<v Speaker 2>reminding us that when it comes to the cloud race,

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<v Speaker 2>you got Aws, you got Microsoft, and then in third

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<v Speaker 2>place you have Alphabet. So you're focused on Microsoft, the

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<v Speaker 2>number two player when it comes to cloud. Why does

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<v Speaker 2>somebody go to Microsoft that somebody who isn't Open AI

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<v Speaker 2>for example, why do they go to Microsoft instead of

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<v Speaker 2>going to AWS or Google.

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<v Speaker 1>That's a very good question.

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<v Speaker 5>And you know, if you go back to the history

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<v Speaker 5>of cloud, Aws was the first company that really championed

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<v Speaker 5>the cause of public cloud services. Microsoft game and said, listen,

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<v Speaker 5>go back to the companies that have been doing a

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<v Speaker 5>lot of tech spending and say, you already have a

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<v Speaker 5>lot of your workloads on Microsoft's products, which is Microsoft servers,

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<v Speaker 5>Microsoft operating system in databases. Why don't you port over

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<v Speaker 5>that workloads?

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<v Speaker 1>To Micloud.

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<v Speaker 5>So they really sold a lot of services as a

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<v Speaker 5>function of hybrid cloud services, and that's really their bread

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<v Speaker 5>and butter. But while when it comes to AWS in

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<v Speaker 5>Google they're going after startups and trying to get more

0:11:29.679 --> 0:11:30.360
<v Speaker 5>money from them.

0:11:30.880 --> 0:11:33.600
<v Speaker 4>How do you gain share in the cloud business? Is

0:11:33.640 --> 0:11:36.880
<v Speaker 4>it a game of inches? I mean, what does that

0:11:36.920 --> 0:11:38.760
<v Speaker 4>look like? That competitive landscape?

0:11:39.920 --> 0:11:41.760
<v Speaker 1>This is probably the most important thing we try to

0:11:41.760 --> 0:11:42.400
<v Speaker 1>tell people that.

0:11:42.480 --> 0:11:44.000
<v Speaker 5>You know, if you go back and look at ten

0:11:44.080 --> 0:11:47.480
<v Speaker 5>years ago, AWS has held its market share just in

0:11:47.520 --> 0:11:51.040
<v Speaker 5>the cloud infrastructure space, there's somewhere roughly around thirty five

0:11:51.040 --> 0:11:53.679
<v Speaker 5>to forty percent, somewhere in that range. But the size

0:11:53.679 --> 0:11:56.160
<v Speaker 5>of the cloud market has become so big. When it

0:11:56.240 --> 0:11:58.199
<v Speaker 5>was about one hundred two hundred billion at this point,

0:11:58.240 --> 0:12:00.000
<v Speaker 5>you know, this is probably six hundred and seve hundred

0:12:00.040 --> 0:12:03.360
<v Speaker 5>billion and above at that point. So the whole market

0:12:03.400 --> 0:12:05.480
<v Speaker 5>is growing and I think one of the places where

0:12:05.520 --> 0:12:08.520
<v Speaker 5>people don't talk about because of Genai, we think cloud

0:12:08.520 --> 0:12:11.360
<v Speaker 5>growth is going to be even bigger. So in our view,

0:12:11.520 --> 0:12:15.120
<v Speaker 5>all three companies and for that matter, the fourth vender, Oracle,

0:12:15.400 --> 0:12:16.160
<v Speaker 5>they're all going to.

0:12:16.240 --> 0:12:18.160
<v Speaker 1>Make good money over the next few years.

0:12:18.400 --> 0:12:21.280
<v Speaker 5>Because it's easy to run those AI workload and experiments

0:12:22.120 --> 0:12:24.120
<v Speaker 5>on the cloud rather than doing it on premise.

0:12:24.960 --> 0:12:27.880
<v Speaker 2>Okay, so is there anything we should be focused on

0:12:28.400 --> 0:12:31.760
<v Speaker 2>in these results that don't have to do with Azure

0:12:31.840 --> 0:12:35.120
<v Speaker 2>or the cloud, the capital expenditures?

0:12:35.160 --> 0:12:37.560
<v Speaker 5>I think, yeah, well, you can talk about gaming and

0:12:37.600 --> 0:12:39.679
<v Speaker 5>a few other things. But to be very honest, the

0:12:39.760 --> 0:12:43.280
<v Speaker 5>valuation Microsoft and AWS and Google have at this point,

0:12:43.559 --> 0:12:46.120
<v Speaker 5>it's largely driven by how they're going to monetize the

0:12:46.200 --> 0:12:48.120
<v Speaker 5>AI investments.

0:12:48.640 --> 0:12:50.079
<v Speaker 1>Everything else is secondary.

0:12:50.320 --> 0:12:53.439
<v Speaker 5>The good thing about Microsoft is it has the Windows

0:12:53.480 --> 0:12:57.120
<v Speaker 5>operating system. It has office that provides a lot of

0:12:57.160 --> 0:12:59.800
<v Speaker 5>cash flow where they can invest without investors.

0:12:59.840 --> 0:13:00.840
<v Speaker 1>Get letty about it.

0:13:01.120 --> 0:13:04.600
<v Speaker 2>Okay, Katie reminding me throughout the day that twenty percent

0:13:04.640 --> 0:13:06.839
<v Speaker 2>of in Vidia's revenue.

0:13:07.160 --> 0:13:11.040
<v Speaker 4>Click eighteen point nine percent, but close enough, Almost twenty

0:13:11.080 --> 0:13:14.640
<v Speaker 4>percent of in Vidia's revenue comes from this one company,

0:13:14.760 --> 0:13:19.040
<v Speaker 4>Microsoft another roughly ten percent. Ten percent Meta.

0:13:18.800 --> 0:13:23.480
<v Speaker 2>Platforms is according to the SPLC function on the Bloomberg

0:13:23.600 --> 0:13:28.439
<v Speaker 2>terminal on IRAQ, how should we think about CAPEX from

0:13:28.600 --> 0:13:31.160
<v Speaker 2>and then, look, I know you don't cover in video,

0:13:31.640 --> 0:13:35.960
<v Speaker 2>but how should we think about CAPEX spend from Microsoft? Also,

0:13:35.960 --> 0:13:38.920
<v Speaker 2>what we heard from other companies this week with regard

0:13:38.920 --> 0:13:41.080
<v Speaker 2>to in Vidia, because that's certainly a focus for us

0:13:41.120 --> 0:13:42.600
<v Speaker 2>and for our audience this week.

0:13:43.760 --> 0:13:45.839
<v Speaker 5>Yeah, and again it's you know, it's very difficult to

0:13:45.920 --> 0:13:49.160
<v Speaker 5>tie at what part of capex is going towards data center,

0:13:49.280 --> 0:13:51.679
<v Speaker 5>what is going to GPU. Well, one of the analysis

0:13:51.720 --> 0:13:55.080
<v Speaker 5>that we did in recent weeks was from two thousand

0:13:55.080 --> 0:13:57.360
<v Speaker 5>and three to two thousand and five, we are looking

0:13:57.360 --> 0:14:00.160
<v Speaker 5>at an incremental ninety billion dollars from the life so

0:14:00.280 --> 0:14:04.240
<v Speaker 5>the top cloud providers and Apple and some other companies, and.

0:14:04.200 --> 0:14:06.520
<v Speaker 1>A lot of that is going to build the infrastructure.

0:14:06.880 --> 0:14:08.679
<v Speaker 5>I think one of the things that can you know,

0:14:08.760 --> 0:14:12.160
<v Speaker 5>break down some of the AI craze would be when

0:14:12.200 --> 0:14:14.000
<v Speaker 5>all these companies said, wait, we're not going to be

0:14:14.000 --> 0:14:15.040
<v Speaker 5>investing as much as.

0:14:14.920 --> 0:14:15.600
<v Speaker 1>We did before.

0:14:15.840 --> 0:14:18.520
<v Speaker 5>I think that brings it down. But at so far,

0:14:18.640 --> 0:14:21.920
<v Speaker 5>what we have heard, investments are just ramping up right now,

0:14:21.960 --> 0:14:23.120
<v Speaker 5>they are not slowing it down.

0:14:24.320 --> 0:14:26.680
<v Speaker 2>Okay, we got you for a couple more minutes. I

0:14:26.680 --> 0:14:28.520
<v Speaker 2>want to make sure we continue to pick your brain

0:14:28.560 --> 0:14:31.320
<v Speaker 2>before you have to go and write this note on IRAQ.

0:14:31.680 --> 0:14:34.920
<v Speaker 2>But give us an idea of what you'll be listening

0:14:34.960 --> 0:14:38.560
<v Speaker 2>for on the call a little later today, And how

0:14:38.600 --> 0:14:39.920
<v Speaker 2>are you thinking about the note that you're going to

0:14:39.960 --> 0:14:41.240
<v Speaker 2>end up writing tonight or tomorrow.

0:14:42.320 --> 0:14:45.080
<v Speaker 5>Yeah, So when you look at Microsoft results again, the

0:14:45.160 --> 0:14:47.800
<v Speaker 5>question is going to be where is this growth coming from?

0:14:47.920 --> 0:14:50.320
<v Speaker 5>Is it coming from directly the AI workloads or is

0:14:50.320 --> 0:14:53.440
<v Speaker 5>it coming from non AI related cloud spending as well?

0:14:53.600 --> 0:14:56.040
<v Speaker 5>Because that matters a lot for AWS, which is going

0:14:56.080 --> 0:14:59.760
<v Speaker 5>to report Thursday night, because AWS does not have that

0:15:00.240 --> 0:15:03.240
<v Speaker 5>level of AI related revenue coming in at this point.

0:15:03.520 --> 0:15:05.920
<v Speaker 5>So there's going to be a lot of discussion whether

0:15:06.960 --> 0:15:09.880
<v Speaker 5>Google and Microsoft are taking some share away from AWS

0:15:10.000 --> 0:15:12.200
<v Speaker 5>or not. So I think over the next day or

0:15:12.240 --> 0:15:15.200
<v Speaker 5>so we get a big clarity that have we seen

0:15:15.240 --> 0:15:17.760
<v Speaker 5>a big push in all cloud spending or are we

0:15:17.800 --> 0:15:20.400
<v Speaker 5>seeing some kind of a market share shift.

0:15:20.440 --> 0:15:22.720
<v Speaker 1>I think it's all the vendors are going to benefit

0:15:22.760 --> 0:15:23.040
<v Speaker 1>from that.

0:15:23.280 --> 0:15:25.600
<v Speaker 5>But I think for us today, when we are listening

0:15:25.600 --> 0:15:28.400
<v Speaker 5>to the call, the question is going to be where

0:15:28.440 --> 0:15:29.640
<v Speaker 5>is that spend coming from?

0:15:29.840 --> 0:15:32.080
<v Speaker 2>Okay, and before we let you go, one more question

0:15:32.120 --> 0:15:35.640
<v Speaker 2>on Amazon tomorrow? What's the most Obviously AWS is important,

0:15:35.680 --> 0:15:37.680
<v Speaker 2>but given what we heard from Alphabet and what we

0:15:37.680 --> 0:15:42.960
<v Speaker 2>heard from Microsoft, what's your expectation for Amazon and AWS tomorrow?

0:15:42.960 --> 0:15:45.600
<v Speaker 5>We should see an improvement in growth rate for AWS

0:15:45.760 --> 0:15:49.080
<v Speaker 5>because after these two companies, if they don't report that,

0:15:49.280 --> 0:15:50.720
<v Speaker 5>I mean to be honest, that's not going to be

0:15:50.760 --> 0:15:51.320
<v Speaker 5>good for them.

0:15:51.880 --> 0:15:55.680
<v Speaker 1>I don't think that's unlikely. But at the same time,

0:15:55.680 --> 0:15:57.240
<v Speaker 1>we also want to know what's going to happen with

0:15:57.320 --> 0:15:57.920
<v Speaker 1>their margins.

0:15:57.920 --> 0:16:00.200
<v Speaker 5>We have heard a lot about the company, you know,

0:16:00.240 --> 0:16:04.040
<v Speaker 5>trying to rein in extra expenditures, trying to keep boots

0:16:04.080 --> 0:16:06.680
<v Speaker 5>their margins. At the same time they're investing a lot

0:16:06.720 --> 0:16:10.000
<v Speaker 5>in GENEI. So I think those two elements almost for

0:16:10.080 --> 0:16:12.960
<v Speaker 5>every cloud company or any software company right now are

0:16:13.320 --> 0:16:16.080
<v Speaker 5>what's your GENI contribution and what is happening to your

0:16:16.120 --> 0:16:16.880
<v Speaker 5>margin structure.

0:16:17.400 --> 0:16:21.040
<v Speaker 2>Anna rad Rana, senior tech analogy analyst at Bloomberg Intelligence,

0:16:21.080 --> 0:16:22.800
<v Speaker 2>joining us from Chicago.