WEBVTT - Amazon Shares Soar on Cloud Growth 0:00:00.080 --> 0:00:12.920 Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is live 0:00:12.960 --> 0:00:16.800 from coast to coast with Caroline Hide in New York 0:00:17.079 --> 0:00:20.240 and Eva Though in San Francisco. 0:00:21.520 --> 0:00:25.200 This is Bloomberg Tech coming up, Tech earnings Bonanza, Apple, Amazon, 0:00:25.239 --> 0:00:27.440 also Reddit and Twilio. Will break them all down with 0:00:27.520 --> 0:00:30.840 experts and their C suite, plus Nvideo CEO Jensen Wy 0:00:30.880 --> 0:00:33.400 I'm still hopes to sell it's blackweld chips to customers 0:00:33.440 --> 0:00:33.840 in China. 0:00:34.000 --> 0:00:36.680 We'll discuss that and a flurry of Korean deals. 0:00:37.320 --> 0:00:39.640 And we sit down with Carewe CEO Michael in Trader 0:00:39.720 --> 0:00:42.199 to talk AI infrastructure after a failed take of a 0:00:42.200 --> 0:00:44.800 bid for Core Scientific. But first we check in on 0:00:44.840 --> 0:00:47.840 these markets, which are not quite at a record high 0:00:48.080 --> 0:00:50.280 or we're back up and to the right when it 0:00:50.280 --> 0:00:53.479 comes on the day. We're looking at the AI bubble 0:00:53.680 --> 0:00:56.720 back in focus, but AI boom really what's driving these 0:00:56.760 --> 0:00:58.800 stocks high over the course of the week. We shrug 0:00:58.800 --> 0:01:02.120 off government shutdown. We're putting to one side geopolitical risks. 0:01:02.160 --> 0:01:04.080 We're up two point six percent on the NASA one 0:01:04.160 --> 0:01:06.840 hundred for this week alone. Let's move into what's happened 0:01:06.959 --> 0:01:09.520 on an individual basis and the key story of the 0:01:09.600 --> 0:01:12.240 day is Amazon Nook. We are at a new record high. 0:01:12.280 --> 0:01:15.840 We're up almost eleven percent for this particular company, and 0:01:15.880 --> 0:01:18.480 this is as they show that AWS cloud growth is 0:01:18.560 --> 0:01:20.880 back on top. It's a bitter pill for many to 0:01:20.920 --> 0:01:23.039 swallow who have lost their roles at this particular company. 0:01:23.080 --> 0:01:25.759 Remember we started the week talking about fourteen thousand jobs ago. 0:01:26.080 --> 0:01:27.959 Let's stick into all of that at the moment because 0:01:27.959 --> 0:01:30.399 I'm pleased to say Brad Erickson is here with us. 0:01:30.720 --> 0:01:32.800 RBC Capital Markets. 0:01:32.640 --> 0:01:35.240 Is of course a key Internet analyst there, and you've 0:01:35.240 --> 0:01:36.000 still got an out. 0:01:35.840 --> 0:01:36.920 Perform rating on the stock. 0:01:37.160 --> 0:01:39.120 You think the price could go higher from where we 0:01:39.160 --> 0:01:41.559 are currently ten point eight percent, you see it hitting 0:01:41.560 --> 0:01:44.640 three hundred. Brad, just talk us through what you liked 0:01:44.680 --> 0:01:45.640 in the numbers. 0:01:46.760 --> 0:01:47.040 Yeah. 0:01:47.120 --> 0:01:51.840 I think obviously the reacceleration to twenty percent on AWS 0:01:51.920 --> 0:01:55.880 and Q three was like the headline critical metric they 0:01:55.960 --> 0:01:56.440 had to do. 0:01:56.520 --> 0:02:00.400 They did it, and so that really got the stock going. 0:02:00.760 --> 0:02:02.400 And then I think as you think about, you know, 0:02:02.480 --> 0:02:07.560 going forward, they're getting this capacity deployed faster than we 0:02:07.600 --> 0:02:10.399 would have thought maybe a quarter ago. And they gave 0:02:10.480 --> 0:02:13.840 some nice detail around some of the power, you know, 0:02:13.880 --> 0:02:17.200 the gigawatts that they've been able to deploy and some 0:02:17.360 --> 0:02:19.840 forward commentary there, and it's and it just comes down 0:02:19.880 --> 0:02:22.680 to kind of simple math. They're not saying they're going 0:02:22.720 --> 0:02:26.280 to accelerate necessarily on AWS, but if you do the math, 0:02:26.360 --> 0:02:29.119 it implies that they probably will and that means there's 0:02:29.160 --> 0:02:31.120 probably a lot of upside to street numbers. 0:02:31.160 --> 0:02:32.920 And so that was the point we were making in 0:02:32.919 --> 0:02:33.280 our note. 0:02:33.360 --> 0:02:35.959 I mean think were eight gigawats is massive when you 0:02:36.000 --> 0:02:38.600 think about each gigawat potentially up to a million homes. 0:02:38.840 --> 0:02:40.840 That's how much they put on in the last twelve months. 0:02:41.200 --> 0:02:43.600 What are you making the vertical integration here as well? 0:02:43.600 --> 0:02:46.320 The fact that they're saying that their Trainium chips are 0:02:46.320 --> 0:02:49.120 already a multi billion dollar company. How much does that 0:02:49.200 --> 0:02:50.359 build to future revenues? 0:02:51.919 --> 0:02:56.200 Yeah, you know Trainium to go with your second part. First, 0:02:56.240 --> 0:02:59.679 Trainium two is largely being used for Anthropic, which is 0:02:59.840 --> 0:03:03.880 kind of the major enterprise player in the generative AI space. 0:03:04.960 --> 0:03:06.560 They're going to continue to grow a lot. They're going 0:03:06.639 --> 0:03:08.760 to double the number of chips at the at the 0:03:08.840 --> 0:03:11.839 at the Rainier site by the end of the year. 0:03:11.960 --> 0:03:14.600 So it's it's uh, you know that is going to 0:03:14.639 --> 0:03:17.000 continue to scale up and drive a ton of revenue growth, 0:03:17.000 --> 0:03:18.959 and it is material to next year. And this is 0:03:19.000 --> 0:03:21.520 one hundred and thirty billion dollar business. So it gives 0:03:21.520 --> 0:03:25.400 you a sense in terms of just you know, taking 0:03:25.639 --> 0:03:26.640 vertically integrating. 0:03:27.560 --> 0:03:28.960 It's massively important. 0:03:29.040 --> 0:03:30.840 Right the power grid is not set up for these 0:03:30.919 --> 0:03:34.760 data centers, and they have massive needs, massive cooling needs, 0:03:34.760 --> 0:03:40.400 massive water needs, and so it has and will always 0:03:40.600 --> 0:03:43.800 likely continue to make sense for these guys to to 0:03:43.840 --> 0:03:45.840 make sure they can do that on their own or 0:03:45.920 --> 0:03:47.880 at least become less tied to third parties. 0:03:47.960 --> 0:03:50.440 So it's I think it's the right thing to do. 0:03:50.760 --> 0:03:53.000 And in Jesse's time and time again been like supplies 0:03:53.000 --> 0:03:55.880 the issue here, not demand, Brad. What's interesting is that 0:03:55.960 --> 0:03:58.240 general to AI gets rippled through the entire business. 0:03:58.280 --> 0:04:01.280 We're looking at Rufous, of course, which is helping us 0:04:01.320 --> 0:04:02.040 decide what we're. 0:04:01.880 --> 0:04:03.600 Going to be buying on Amazon if we needed any 0:04:03.640 --> 0:04:05.960 more help on that. That's saying they can add another 0:04:06.040 --> 0:04:09.640 ten billion dollars. It's interesting to then dovetail that with 0:04:09.680 --> 0:04:11.960 what came at the beginning of the week. Look, corporate 0:04:12.040 --> 0:04:15.280 jobs are going at Amazon and many ways Andrew Jesse 0:04:15.400 --> 0:04:18.080 steered us to that four months ago. Is that inevitable 0:04:18.080 --> 0:04:19.880 when they're looking to bring general to ai. 0:04:19.800 --> 0:04:22.560 IS as a way to catalyze the business. 0:04:24.680 --> 0:04:26.719 Yeah, I mean kind of two parts of that, right, 0:04:26.800 --> 0:04:30.760 RUFUS is really intended to sort of you know, add 0:04:30.800 --> 0:04:33.360 a we'll call it a tailwind to your shopping experience 0:04:33.400 --> 0:04:36.919 and your conversion, so literally get you to buy more stuff. 0:04:37.320 --> 0:04:38.400 So that's that part of it. 0:04:38.640 --> 0:04:42.480 The head count thing is tricky because you're right, like 0:04:42.680 --> 0:04:46.480 initially you kind of follow the fact pattern, and then 0:04:46.520 --> 0:04:49.520 what we know of some other companies and the efficiencies they're. 0:04:49.320 --> 0:04:52.440 Getting clearly generative ai IS. 0:04:52.240 --> 0:04:55.680 It is very likely that it is contributing to job 0:04:55.720 --> 0:04:58.920 losses right now, and some companies are overtly saying it. 0:04:59.480 --> 0:05:04.000 Last night, you know, Andy Jasse, the CEO, said that 0:05:04.480 --> 0:05:07.040 largely it was kind of a function of over hiring 0:05:07.160 --> 0:05:11.080 middle management, you know, trying to sort of flatten the 0:05:11.160 --> 0:05:13.839 organization a little bit more so not related to jenerti 0:05:13.920 --> 0:05:16.839 AI But I think by all intent and purposes, you 0:05:16.960 --> 0:05:20.520 have to think that trend is going to continue. And yeah, 0:05:20.880 --> 0:05:24.760 it's a little concerning from a deflationary standpoint, I would say, 0:05:24.800 --> 0:05:27.680 but you know, that's what we know so far. 0:05:28.279 --> 0:05:31.839 Rad Erickson of RBC Capital Markets really appreciate your analysis 0:05:31.839 --> 0:05:32.239 this morning. 0:05:32.240 --> 0:05:33.920 Thank you very much. Indeed, Happy Halloween. 0:05:34.240 --> 0:05:36.880 Meanwhile, let's talk about Apple, which is looking a little 0:05:37.000 --> 0:05:38.800 uglier than it did earlier in terms of stock price. 0:05:38.839 --> 0:05:41.440 But earnings came out yesterday and the iPhone maker said 0:05:41.440 --> 0:05:44.040 that sales rose nearly eight percent in its fiscal fourth 0:05:44.040 --> 0:05:47.320 Courting predicted a jump in holiday sales. Chares actually did 0:05:47.360 --> 0:05:49.800 do very well after market, but they've come back down 0:05:49.839 --> 0:05:53.360 this morning. Let's discuss the results and what the share 0:05:53.360 --> 0:05:56.880 reactions is currently doing. Carolina Milanaisy, President, principal analyst over 0:05:56.920 --> 0:05:59.479 at Creative Strategies, you're really the person we turn to 0:05:59.520 --> 0:06:03.000 when you think about how they're innovating, where they're pushing forward. 0:06:03.240 --> 0:06:07.839 Were you surprised by the overall sales growth when many 0:06:08.080 --> 0:06:10.720 thought that iPhone seventeen wasn't gonna be the catalyst that 0:06:11.000 --> 0:06:11.960 we're hopeful. 0:06:13.320 --> 0:06:13.880 I wasn't. 0:06:14.320 --> 0:06:17.520 And the reason is because, as I talked to you 0:06:17.640 --> 0:06:22.599 in the past, hardware refresh when the actual hardware looks different, 0:06:23.240 --> 0:06:28.440 always drive upgrades. People still want to rely on the 0:06:28.520 --> 0:06:31.119 device that is in their pocket twenty four to seven, 0:06:32.040 --> 0:06:35.960 but make it look different. This year, we got that 0:06:36.120 --> 0:06:41.279 with the air which is not the main seller for Apple, 0:06:41.320 --> 0:06:44.320 But it doesn't matter is getting people back in the 0:06:44.360 --> 0:06:47.479 stores to see the rest of the portfolio. It was 0:06:47.560 --> 0:06:52.240 really interesting yesterday that Cook mentioned that supply issues on 0:06:52.279 --> 0:06:55.800 the sixteen model, not just on the seventeen, and that 0:06:55.920 --> 0:07:00.760 is a good reminder that a new model every September 0:07:01.240 --> 0:07:05.239 brings people back in stores. An upgrade to previous models 0:07:05.279 --> 0:07:08.880 as well, is not just the latest. Is the portfolio 0:07:09.040 --> 0:07:13.360 with maybe some price adjustment and some career promotions that 0:07:13.520 --> 0:07:15.120 drive the upgrade. 0:07:15.440 --> 0:07:19.240 Fewer upgrades going on in China, though, What did you 0:07:19.320 --> 0:07:20.440 make of the pullback? 0:07:20.440 --> 0:07:22.640 A surprising pullback in that particular region. 0:07:23.840 --> 0:07:27.160 I think part of it is the economic situation in China. 0:07:27.200 --> 0:07:29.640 We have seen kind of hot and cold. From a 0:07:29.640 --> 0:07:34.640 consumer perspective, the timing was later in the quarter, so 0:07:34.680 --> 0:07:37.440 it takes a little bit longer. From a supply chain perspective. 0:07:37.720 --> 0:07:40.400 We also need to remember the supply chain has moved 0:07:40.400 --> 0:07:44.280 away from China, so there is some adjustment to make 0:07:44.480 --> 0:07:50.880 as well because of the US and the production shifting 0:07:51.000 --> 0:07:56.560 to India. But the most important thing is what Tink 0:07:56.560 --> 0:07:59.120 Cook said, which is signals towards the end of a 0:07:59.240 --> 0:08:03.240 quarter was positive, people were going back into the stores, 0:08:03.640 --> 0:08:06.520 but the big quarter for China is always Q one, 0:08:06.880 --> 0:08:10.920 that is Chinese New Year by then there's hope that 0:08:11.280 --> 0:08:13.920 the supply constraint that Apple has said, especially in the 0:08:14.000 --> 0:08:17.120 higher models, which is usually where China gravitates s towards, 0:08:17.520 --> 0:08:21.160 will be resolved and that's where the big quarter should 0:08:21.200 --> 0:08:24.720 come in. And if it doesn't, that's when I'm going 0:08:24.800 --> 0:08:27.000 to start worrying. But for now I'm not worried, and. 0:08:26.960 --> 0:08:29.760 They digest the eSIM situation as well. I spy a 0:08:29.840 --> 0:08:33.640 cowboy Kata memorabilia behind you. I love that tour too. 0:08:33.720 --> 0:08:36.320 Let's just talk about the services side. The music side 0:08:36.360 --> 0:08:38.960 is part of that, but services really is what drove 0:08:39.040 --> 0:08:41.680 the strength at the moment. Can that be reliable going forward? 0:08:41.679 --> 0:08:43.880 When we think about the regulatory pressure on the app store. 0:08:43.720 --> 0:08:48.800 For example, I think it can because more and more 0:08:48.960 --> 0:08:53.800 is raelly content and is also advertising. We've seen Apple 0:08:53.840 --> 0:08:56.920 clothes a deal with f one, so they'll start streaming 0:08:57.160 --> 0:08:59.720 f one, which is becoming more and more popular in 0:08:59.760 --> 0:09:03.400 the US and across the globe. With the demographic that 0:09:03.480 --> 0:09:07.400 Apple is really really keen in keeping and growing which 0:09:07.440 --> 0:09:10.760 is gen zers and younger millennials. 0:09:10.960 --> 0:09:13.120 So I think that that is real. 0:09:13.320 --> 0:09:17.000 The opportunity for Apple is on the content side, is 0:09:17.040 --> 0:09:21.560 the engagement side, and they're also over time will coming 0:09:21.679 --> 0:09:24.440 to play with Apple Vision prog. 0:09:24.520 --> 0:09:26.320 I mean, very briefly, what about the AI side. 0:09:27.760 --> 0:09:31.840 Well, we have been promised and improved theory coming in 0:09:31.920 --> 0:09:36.600 twenty twenty six, and as we discussed before, Apple has 0:09:36.640 --> 0:09:40.000 some time to figure this out. I think that most 0:09:40.040 --> 0:09:42.560 of us have figured out what a I can do 0:09:42.679 --> 0:09:46.520 for us in a productivity setting, but not yet on 0:09:46.559 --> 0:09:49.480 a personal way. And I think that's where Serri is 0:09:49.520 --> 0:09:50.880 going to play the most. 0:09:50.920 --> 0:09:53.280 Parently and Melane saying always great catching up with your president, 0:09:53.320 --> 0:09:55.680 principal analyst, how creator strategies? 0:09:55.920 --> 0:09:57.800 Happy we kend. Meanwhile, coming up the. 0:09:57.720 --> 0:09:59.680 Parade of earnings that continue, is going to be talking 0:09:59.679 --> 0:10:01.559 to twin d CEO about their results. 0:10:01.559 --> 0:10:02.880 Next. This has been big tech. 0:10:06.160 --> 0:10:09.800 Shares of Twilio, as you see spiking today up seventeen percent. 0:10:09.880 --> 0:10:12.520 Let's call it after the company reported strong third quarter 0:10:12.600 --> 0:10:14.959 results gave a bright outlook as well. Let's discuss it 0:10:15.000 --> 0:10:19.880 all because aimership channelers with us, Twilio CEO, analysts, investors 0:10:19.960 --> 0:10:23.480 very excited about the Voice AI applications in particular for 0:10:23.480 --> 0:10:24.440 their customer engagement. 0:10:24.480 --> 0:10:26.959 Is that what drives us well. 0:10:27.000 --> 0:10:29.240 We had a great quarter, and I would say across 0:10:29.280 --> 0:10:32.320 the board, Voice Ai was certainly a contributor, but every 0:10:32.360 --> 0:10:35.120 single one of our products contributed this time. I'd say 0:10:35.120 --> 0:10:39.199 messaging and Voice in particular were particularly strong. In addition 0:10:39.280 --> 0:10:43.920 to that, across channels, across geos, across customer segments. It 0:10:43.960 --> 0:10:46.320 was just a really good quarter for us, and fortunately 0:10:46.440 --> 0:10:50.000 we were able to beat on revenue, profit, cash flow as. 0:10:49.920 --> 0:10:51.800 Well as race for the year. So we're pretty excited 0:10:51.840 --> 0:10:52.480 about the results. 0:10:52.840 --> 0:10:54.920 You'd go into the detail of how the ten largest 0:10:55.000 --> 0:10:59.120 Voice AI startup customers are increasing by ten x, where 0:10:59.120 --> 0:11:02.240 particularly they finding the rewards because many you've questioned, really 0:11:02.280 --> 0:11:04.720 the sort of pilots, whether they're working or not, Where 0:11:04.720 --> 0:11:05.720 have yours been working? 0:11:06.800 --> 0:11:08.599 I think you've got two ends of the spectrum. 0:11:08.720 --> 0:11:12.360 So on the one hand, you've got Voice AI startups, 0:11:12.400 --> 0:11:16.680 and these are companies that want to get going super quickly, right, 0:11:16.800 --> 0:11:20.000 so we're an extremely well known brand. They come to 0:11:20.120 --> 0:11:22.800 us first in most cases, and so we're really lucky 0:11:22.800 --> 0:11:24.439 to be able to count on their business just to 0:11:24.480 --> 0:11:26.080 get their workloads out in the world. 0:11:26.559 --> 0:11:28.920 On the other hand, though, you've also got enterprises. 0:11:29.000 --> 0:11:33.240 Enterprises they definitely see an opportunity to take out costs 0:11:33.240 --> 0:11:36.280 but as well as enhance their revenue experience, and so 0:11:36.960 --> 0:11:40.600 I think more durably you're seeing enterprise customers begin to 0:11:40.640 --> 0:11:43.640 adopt these tools. It's probably happening at a slower rate 0:11:44.280 --> 0:11:46.400 than it is with the voice AI startups, but all 0:11:46.400 --> 0:11:47.559 the same, it's really exciting. 0:11:47.960 --> 0:11:49.960 I just think about some of your key customers lift 0:11:49.960 --> 0:11:52.320 Red at Dell, Resie, Uber, Shopify, some of the biggest 0:11:52.320 --> 0:11:56.120 brands out there, key bank analysts in particular, signaling that 0:11:56.200 --> 0:11:57.880 this is just a way that they think is just 0:11:57.960 --> 0:12:01.120 beginning to build. How much larger do you think this 0:12:01.160 --> 0:12:02.800 has become? How much am I just going to be 0:12:02.840 --> 0:12:05.480 talking in a customer relations perspective by voice? 0:12:07.120 --> 0:12:09.080 I think it's going to become pretty commonplace. I mean, 0:12:09.120 --> 0:12:11.480 you're already starting to see it. I'm sure you've experienced 0:12:11.480 --> 0:12:14.480 it a handful of times in your interactions. I think 0:12:14.520 --> 0:12:17.440 what's key about being able to deliver a good experience 0:12:17.520 --> 0:12:21.000 is being able to have contextual data underneath it all. 0:12:21.200 --> 0:12:23.200 If you have contextual data, which is a big part 0:12:23.240 --> 0:12:27.240 of our story in communications, plus contextual data plus AI, 0:12:27.880 --> 0:12:31.120 but that data is what really allows the customer's problem 0:12:31.160 --> 0:12:33.280 to get solved. Right, you don't want just cool tech? 0:12:33.720 --> 0:12:35.520 Do you want problems to get solved? Do you want 0:12:35.559 --> 0:12:38.240 to be able to create richer and richer experiences that 0:12:38.360 --> 0:12:40.160 actually create customer engagement? 0:12:40.520 --> 0:12:42.280 And I think that's where the real unlock is. 0:12:42.640 --> 0:12:44.880 The real I'm not being about AI agents so many, 0:12:44.960 --> 0:12:46.720 and I know you've actually been making some acquisitions in 0:12:46.760 --> 0:12:50.280 that space. You think about stitch, the identity platform within 0:12:50.520 --> 0:12:53.480 AI agents, is M and A going to be a 0:12:53.520 --> 0:12:55.560 real use case here for you to bolt on to 0:12:55.559 --> 0:12:57.319 get the talent that you need to get the tech. 0:12:57.120 --> 0:12:57.560 That you need. 0:12:58.840 --> 0:12:59.960 I think we have optionale. 0:13:00.200 --> 0:13:02.840 I mean, we're generating so much cash that we've been 0:13:02.840 --> 0:13:05.480 buying back a lot of our own stock. We also 0:13:05.600 --> 0:13:07.920 just dipped our toe, as you pointed out, into M 0:13:07.960 --> 0:13:11.440 and A. Stitch was a great apposition from our perspective. 0:13:12.040 --> 0:13:15.720 A small tech and talent tuck in less than one 0:13:15.760 --> 0:13:18.199 hundred million dollars in purchase price, and I think it's 0:13:18.240 --> 0:13:20.520 exactly the right kind of asset that allows us to 0:13:20.600 --> 0:13:24.559 accelerate our roadmap with that one. In particular, they're very 0:13:24.640 --> 0:13:28.240 developer focused, which is very much in our DNA, and 0:13:28.280 --> 0:13:34.000 they also allow us to faster realize our platform ambitions 0:13:34.040 --> 0:13:39.920 in terms of delivering purely agent experiences that require identity 0:13:40.160 --> 0:13:41.800 to be a part of it for us to be 0:13:41.800 --> 0:13:43.200 able to trust who we're interacting with. 0:13:43.960 --> 0:13:47.000 Twilio shares just showing how much people loving this revenue 0:13:47.040 --> 0:13:49.880 and the numbers. Gross margin still an area that some 0:13:50.040 --> 0:13:52.080 called out is being pressured quickly. 0:13:52.200 --> 0:13:53.360 Is that something you'll focused on. 0:13:54.360 --> 0:13:56.120 I mean, of course we're focused on it right The 0:13:56.120 --> 0:13:59.040 commitment that we made last quarter to investors was that 0:13:59.080 --> 0:14:02.280 we would stabilize gross margins, and I think in Q 0:14:02.400 --> 0:14:04.960 three that's exactly what we did. Will continue to work 0:14:05.000 --> 0:14:08.400 to stabilize gross margins. I think it kind of overshadows 0:14:08.400 --> 0:14:11.000 the story in some respects. I mean, the reality is 0:14:11.000 --> 0:14:14.319 is that we maintain an incredible amount of price discipline. 0:14:14.760 --> 0:14:17.320 A lot of that gross margin pressure, frankly, comes from 0:14:17.360 --> 0:14:20.680 two areas. One is the success that we're having in 0:14:20.720 --> 0:14:23.720 our messaging business, which is growing super fast. I don't 0:14:23.720 --> 0:14:26.040 really think we should have to apologize for that, and frankly, 0:14:26.080 --> 0:14:29.000 I think that allows us to grow into other customer 0:14:29.040 --> 0:14:31.720 opportunities over time. And then the other area is just 0:14:31.840 --> 0:14:34.720 fees that get passed down by carriers. I think that 0:14:34.920 --> 0:14:38.200 is purely an optical element of the story. It doesn't 0:14:38.240 --> 0:14:42.080 impact our ability to generate gross profit and importantly has 0:14:42.120 --> 0:14:42.960 not impeded our. 0:14:42.880 --> 0:14:45.400 Ability to drive operating leverage and free cash flow. 0:14:45.520 --> 0:14:48.080 That's not impeding the stock today either, because Amoship Chandler 0:14:48.120 --> 0:14:51.240 great to have some time with the Trilia CEO now 0:14:51.280 --> 0:14:54.640 also delivering a better than expected forecast was Reddit. Social 0:14:54.640 --> 0:14:57.280 media platforms benefited from data licensing deals of course of 0:14:57.320 --> 0:15:00.400 open Ai and Google. That's really about growing advertising business 0:15:00.400 --> 0:15:01.280 that drives At this time. 0:15:01.400 --> 0:15:03.320 We spoke with the Reddit COO Gen Wong. 0:15:06.360 --> 0:15:08.040 I think a lot of the things that we're doing 0:15:08.040 --> 0:15:13.080 are working. You saw our active advertiser account grow seventy 0:15:13.120 --> 0:15:16.040 five percent year every year in Q three, and I 0:15:16.040 --> 0:15:18.960 think that's the result of our go to market and 0:15:19.000 --> 0:15:23.680 acquisition investments, as well as making our platform more automated 0:15:23.720 --> 0:15:28.840 and simple to use, as well as really delivering more performance, 0:15:28.920 --> 0:15:31.280 particularly at the mid and lower funnel where a lot 0:15:31.280 --> 0:15:35.760 of mid market and SMB businesses like to transact. We 0:15:35.800 --> 0:15:39.480 also grew nine out of fifteen verticals over fifty percent 0:15:39.640 --> 0:15:42.880 year every year, and I think that shows the diversification 0:15:43.200 --> 0:15:47.280 of our business, how robust it is across every vertical 0:15:47.360 --> 0:15:52.080 and every objective, so every advertiser can find success on 0:15:52.120 --> 0:15:56.240 our platform. So those investments that we've made are really 0:15:56.280 --> 0:15:56.800 paying off. 0:15:56.920 --> 0:15:58.920 And the investments in translation when you're paying off, when 0:15:58.920 --> 0:16:01.920 you think about diversification and internationally, how is that still working? 0:16:01.960 --> 0:16:04.440 How much low hanging fruit is there to grow outside 0:16:04.480 --> 0:16:05.320 the United States? 0:16:06.840 --> 0:16:10.440 Well, I think there's this enormous headroom outside of the US. 0:16:10.600 --> 0:16:13.680 Our traffic today is about fifty five percent outside of 0:16:13.720 --> 0:16:16.280 the US and forty five percent in the US, and 0:16:16.320 --> 0:16:19.440 the rest of the world has been growing. And every 0:16:19.600 --> 0:16:22.760 country that is a non English country is just an 0:16:22.800 --> 0:16:27.240 opportunity to build another Reddit. And the process of doing 0:16:27.320 --> 0:16:32.720 that starts with machine translation, using AI to translate universal 0:16:32.760 --> 0:16:37.800 conversations so that somebody in France or Germany who operates 0:16:37.840 --> 0:16:41.200 in a non English language can have access to great 0:16:41.320 --> 0:16:44.680 content and communities on Reddit. And then the process of 0:16:44.720 --> 0:16:48.120 building local communities so that if you're in France you 0:16:48.120 --> 0:16:51.120 have a local bred community. German in Germany your are 0:16:51.160 --> 0:16:55.200 local football communities, so that it feels local, your city communities. 0:16:55.760 --> 0:16:59.400 All of that is opportunity for us, and opportunities to 0:16:59.440 --> 0:17:02.160 build another reddit for every language in culture. 0:17:02.480 --> 0:17:04.880 It's really interesting that AI is really the tailwind here, 0:17:04.880 --> 0:17:08.480 whether it's the ability to serve your companies, those that 0:17:08.480 --> 0:17:12.320 are advertising with you that much more sophisticated applications, the 0:17:12.320 --> 0:17:14.040 way in which they're able to advertise with you, whether 0:17:14.119 --> 0:17:16.000 or not it's the AI that's helping you do translation. 0:17:16.320 --> 0:17:17.760 But also we know that a big part of the 0:17:17.760 --> 0:17:22.760 business has started to become how you're used by AILM producers. 0:17:23.119 --> 0:17:25.240 How is that a stage priority? 0:17:25.280 --> 0:17:27.280 Can you just weigh it up for us, the prioritization 0:17:27.600 --> 0:17:31.000 of advertising versus a prioritization of making these deals with 0:17:31.040 --> 0:17:33.119 big lms if you already have done with Google and 0:17:33.160 --> 0:17:33.600 open Ai. 0:17:34.480 --> 0:17:36.600 Yeah, our core business is advertising. 0:17:37.040 --> 0:17:40.679 It's a business model that has a lot of TAM 0:17:40.760 --> 0:17:42.639 and you know is a big addressable market. 0:17:42.680 --> 0:17:44.320 I think we've a lot of headroom there. 0:17:44.760 --> 0:17:49.400 Our ad platform is growing, our marketplace is growing, as 0:17:49.400 --> 0:17:52.560 I said, sixty percent plus year overy year, and we 0:17:52.720 --> 0:17:56.640 really like our roadmap there. There are thousands more advertisers 0:17:56.640 --> 0:18:00.440 that can be on our platform, in addition to more 0:18:00.520 --> 0:18:04.160 verticals and more geographies to come onto our ad platform. 0:18:04.200 --> 0:18:07.200 So we see a lot of opportunity there. Across the funnel, 0:18:07.480 --> 0:18:12.040 in automation, in ad formats, and even in delivering more 0:18:12.080 --> 0:18:14.280 performance for our advertisers. 0:18:14.359 --> 0:18:16.880 So that's our core business and that's where we're focused. 0:18:17.119 --> 0:18:20.960 What about the AI chatbots and then actually helping you 0:18:21.200 --> 0:18:22.440 in terms of driving traffic? 0:18:22.480 --> 0:18:24.080 When does that really start to bring to bear? 0:18:25.600 --> 0:18:28.480 You know, that's a space that is just under incredible 0:18:28.640 --> 0:18:32.800 heavy construction because it's also new and it's changing. The 0:18:32.960 --> 0:18:36.040 UI is changing, the products are changing, you know, how 0:18:36.080 --> 0:18:40.600 we think about you know, the use of AI, even 0:18:40.640 --> 0:18:43.480 on our platform on Reddit is changing. 0:18:43.600 --> 0:18:46.560 So you know, it's hard to say, I think, but 0:18:46.680 --> 0:18:47.240 I think. 0:18:47.400 --> 0:18:49.040 You know, I would say the relationships that we have 0:18:49.160 --> 0:18:52.240 with the lms are not partnerships. The relationships are really 0:18:52.280 --> 0:18:56.240 healthy and we continue to learn a lot through these partnerships. 0:18:56.640 --> 0:19:00.320 I think we've certainly learned that our data is highly appreciated, 0:19:01.240 --> 0:19:04.720 it's highly used insided. I think we're the top most 0:19:05.000 --> 0:19:09.320 source domain in Q three, So I think, you know, 0:19:09.359 --> 0:19:11.800 we're watching that area very very closely as it evolves. 0:19:12.400 --> 0:19:15.159 Jen Wong read it COO there talking of relationships with 0:19:15.280 --> 0:19:19.480 l lms. In video, CEO Jensen Wang says he's still 0:19:19.560 --> 0:19:22.400 hopeful that the company would be able to supply Blackwell 0:19:22.480 --> 0:19:24.120 type chips at least to China. 0:19:24.200 --> 0:19:25.080 Quote someday. 0:19:25.400 --> 0:19:27.560 This is the company caps off a huge week, hitting 0:19:27.560 --> 0:19:29.879 a five trillion dollar market capital. Marsine King, who covers 0:19:29.880 --> 0:19:33.000 it Semident Conductor Space, has been on this relentlessly. 0:19:33.080 --> 0:19:33.840 What a week in. 0:19:34.280 --> 0:19:36.199 And look, this is pushing back at some of the 0:19:36.200 --> 0:19:38.760 anxiety that brew yesterday that China just wasn't on the 0:19:38.760 --> 0:19:40.800 table when it came to a discussion between Trump and she. 0:19:42.200 --> 0:19:42.400 Yeah. 0:19:42.400 --> 0:19:44.720 I mean there's there's been so many twists and turns 0:19:44.760 --> 0:19:46.840 in this one, just in the space of this week. 0:19:47.200 --> 0:19:50.400 Jensen's been obviously making his case in Washington. Now he's 0:19:50.440 --> 0:19:53.439 making his case in person in Asia where the president is. 0:19:54.359 --> 0:19:58.480 President Trump mentioned this black Well chip, said, raised the possibility, 0:19:58.600 --> 0:20:01.240 raised everybody's hopes, and then kind of took it away 0:20:01.280 --> 0:20:03.560 a little bit. So we don't really know where we 0:20:03.600 --> 0:20:06.520 are now other than hoping that, you know, because it's 0:20:06.560 --> 0:20:10.240 being discussed that there is more possibility over in Vidio 0:20:10.280 --> 0:20:12.120 doing more business in China. 0:20:12.400 --> 0:20:14.240 Certainly more business in South Korea. 0:20:14.320 --> 0:20:17.159