WEBVTT - Big Tech’s Big Earnings Week 0:00:00.280 --> 0:00:13.480 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is a 0:00:13.560 --> 0:00:17.279 live from coast to coast with Caroline Hide. 0:00:17.040 --> 0:00:19.920 In New York and Eva Low in San Francisco. 0:00:22.480 --> 0:00:25.920 This is Bloomberg Tech. Coming up, Apple and Amazon end 0:00:25.920 --> 0:00:29.240 this week. In tech earnings, we'll discuss Apple's global growth come. 0:00:29.080 --> 0:00:32.680 Back, plus Reddit surges on a record profit we discussed 0:00:32.680 --> 0:00:36.199 with the company's COO Gen Wong, and we'll. 0:00:36.040 --> 0:00:38.839 Be joined by Roadblock CEO Dave Bazooski to break down 0:00:38.880 --> 0:00:42.080 the company's earnings and it's advertising pushed later this hour. 0:00:42.240 --> 0:00:45.040 But let's get to the macro perspective first, ed because 0:00:45.040 --> 0:00:46.839 it's pretty ugly out there. In fact, we're having the 0:00:46.840 --> 0:00:49.199 worst day and announst that one hundred since April, the 0:00:49.240 --> 0:00:51.760 worst week since May. And that's as we get that 0:00:52.000 --> 0:00:55.880 so called resilient jobs market with some cracks showing and 0:00:55.920 --> 0:00:58.840 some revisions for previous months. When it comes to the 0:00:58.920 --> 0:01:01.880 labor force, that bagstown stocks sends bonds higher. But I'm 0:01:01.920 --> 0:01:04.800 also looking well the implications of tariffs when we are 0:01:04.800 --> 0:01:08.560 fifteen point two percent general average now for tariffs on 0:01:08.640 --> 0:01:11.800 goods coming into the United States. There's karity there, but 0:01:11.920 --> 0:01:14.240 is there long term negotiation still to come. What does 0:01:14.280 --> 0:01:17.000 it mean for tech stocks? More broadly, let's get to 0:01:17.080 --> 0:01:20.360 Klee lines, just the breakdown Klee of what we learned 0:01:20.600 --> 0:01:22.440 on where countries are standing right now. 0:01:23.520 --> 0:01:26.200 Well, Caroline, there's many different layers to this. The global 0:01:26.200 --> 0:01:29.360 baseline minimum teriff rate will stay at ten percent, despite 0:01:29.400 --> 0:01:32.080 some previous suggestions from the President that it could go higher. 0:01:32.080 --> 0:01:34.399 But indeed the teriff rates will go higher for countries 0:01:34.600 --> 0:01:37.679 that have larger trade surpluses with the United States, from 0:01:37.720 --> 0:01:40.319 fifteen percent to well beyond that for some countries who 0:01:40.319 --> 0:01:42.880 were able to secure deals with the United States an advancer, 0:01:42.880 --> 0:01:45.760 of course, had already received letters from the President. That 0:01:45.800 --> 0:01:48.040 includes the likes of Canada, for example, which will have 0:01:48.040 --> 0:01:50.120 a thirty five percent tariff on it's goods, though there 0:01:50.160 --> 0:01:52.160 is a carve out for those that are compliant with 0:01:52.240 --> 0:01:55.040 the USMCA Trade Agreement, or a country like Switzerland, which 0:01:55.040 --> 0:01:58.200 will see a thirty nine percent rate in aggregate. According 0:01:58.240 --> 0:02:01.160 to our estimates here at Bloomberg e if these tariffs 0:02:01.200 --> 0:02:03.520 go into effect and stick, it will take the average 0:02:03.560 --> 0:02:06.280 tariff rate for the United States up to fifteen point 0:02:06.360 --> 0:02:08.880 two percent from the current thirteen point three percent, which 0:02:08.880 --> 0:02:11.040 brings us back to levels last scene in the World 0:02:11.120 --> 0:02:13.880 War two era, and it's well above the little more 0:02:13.919 --> 0:02:16.400 than two percent rate on average that we saw before 0:02:16.440 --> 0:02:19.760 President Trump took office. That said, it is still an if. 0:02:19.800 --> 0:02:22.720 According to the orders that the President signed last night, 0:02:22.760 --> 0:02:25.600 these duties will not begin to be collected until August seventh, 0:02:25.639 --> 0:02:27.280 so about a week to go here. 0:02:27.320 --> 0:02:28.040 That does leave some. 0:02:28.000 --> 0:02:30.680 Wiggle room for countries to either continue negotiations, try to 0:02:30.680 --> 0:02:33.040 reach deal, or maybe get an extension, like we saw 0:02:33.040 --> 0:02:36.000 with Mexico yesterday, which was able to secure a ninety 0:02:36.080 --> 0:02:39.799 day extension of their current agreement. Also, we need to 0:02:39.840 --> 0:02:42.200 consider that China is still a question mark that August 0:02:42.200 --> 0:02:44.840 twelfth deadline is looming. The President has not signed off 0:02:44.919 --> 0:02:48.359 yet on an extension for the trade detente between those 0:02:48.400 --> 0:02:50.840 two countries, and he also had some measures that do 0:02:50.919 --> 0:02:53.560 seem aim specifically at China in what he signed last night, 0:02:53.600 --> 0:02:55.320 with a forty percent tariff that is going to be 0:02:55.320 --> 0:02:58.440 applied to so called transshipped goods, though it's not exactly 0:02:58.480 --> 0:03:01.079 clear how those rulings will be made or how that. 0:03:01.080 --> 0:03:01.840 Will be enforced. 0:03:01.880 --> 0:03:04.799 Also unclear is what sectoral terraces could still come into 0:03:04.800 --> 0:03:07.080 the picture, as they're still ongoing Section two thirty two 0:03:07.160 --> 0:03:11.240 investigations into things like pharmaceuticals and semiconductors, and we're awaiting 0:03:11.240 --> 0:03:12.240 those outcomes as well. 0:03:12.400 --> 0:03:15.200 Tailey lines with a breakdown. Thank you so much. Look, 0:03:15.360 --> 0:03:18.040 let's get to your micro picture because there's trade, but ed, 0:03:18.320 --> 0:03:19.359 you're looking at earnings. 0:03:20.120 --> 0:03:22.120 Yeah, and earnings is a big story in the world 0:03:22.160 --> 0:03:24.760 of technology this morning. Amazon is an AI story, and 0:03:24.800 --> 0:03:26.560 it's a cloud story. Look at the drop on the 0:03:26.639 --> 0:03:30.880 stock significant. The concern is the outlook for operating income. 0:03:31.240 --> 0:03:33.400 So much revenue comes from Amazon dot Com, but the 0:03:33.440 --> 0:03:37.200 majority of operating income from AWUS, and the outlook seen 0:03:37.240 --> 0:03:40.640 as weak or conservative. But AWS in the period Gone 0:03:40.640 --> 0:03:44.600 grew seventeen percent in a quarter where Microsoft Azure grew 0:03:44.760 --> 0:03:48.360 thirty nine percent and a quarter where Google Cloud Platform 0:03:48.440 --> 0:03:49.280 gained some territory. 0:03:49.280 --> 0:03:50.000 There's pressure there. 0:03:50.040 --> 0:03:54.000 Apple beat across every metric in the June quarter GONE 0:03:54.080 --> 0:03:56.920 and told us in the September quarter mid to high 0:03:56.960 --> 0:03:58.520 single digit percentage growth. 0:03:58.680 --> 0:03:59.360 But everyone this. 0:03:59.360 --> 0:04:02.840 Morning carrow asking about pull in or pull forward, And 0:04:02.840 --> 0:04:06.160 what Apple said was in April in the United States, 0:04:06.520 --> 0:04:09.640 one percentage point of growth was people front running tariffs, 0:04:09.840 --> 0:04:12.560 but they grew ten percentage points do we believe them. 0:04:12.640 --> 0:04:14.200 The market's down one point six percent. 0:04:14.520 --> 0:04:17.400 Let's get more analysis with an investor. Tony One's with 0:04:17.480 --> 0:04:19.920 us is t row Price Science and Technology Fund portfolio 0:04:20.000 --> 0:04:23.200 manager exposure to Apple. What do you think in terms 0:04:23.240 --> 0:04:25.960 of Apple's seeming resilience and growth in China. 0:04:28.200 --> 0:04:30.760 Yeah, I think that their you know, product is still 0:04:30.760 --> 0:04:34.040 in demand, and they did some pricing adjustments to make 0:04:34.040 --> 0:04:37.040 it more attractive to fitting the subsidies, and at the 0:04:37.160 --> 0:04:38.440 end of the day, I think it's still a really 0:04:38.520 --> 0:04:41.039 high quality of product and brand. I think that what 0:04:41.200 --> 0:04:45.200 matters going forward is their product innovation around AI and 0:04:45.480 --> 0:04:46.400 improving series. 0:04:47.400 --> 0:04:47.560 You know. 0:04:47.600 --> 0:04:49.880 I think that you had a period where Huawei came 0:04:49.920 --> 0:04:52.159 back and took share back, and it was a competitive 0:04:52.200 --> 0:04:54.919 environment made Apple kind of adjust a little bit to 0:04:55.000 --> 0:04:55.919 bring more value. 0:04:56.000 --> 0:04:58.640 But I think it's encouraging that things are getting better 0:04:58.640 --> 0:04:59.159 in China. 0:05:00.040 --> 0:05:03.800 They're growing again, Tony, I want you to help me 0:05:03.880 --> 0:05:06.839 with the map here a little bit. So April largely 0:05:06.920 --> 0:05:10.320 one percentage point of growth in the Gune quarter was 0:05:10.560 --> 0:05:13.840 pull in pull forward from tariffs, and then Apple told 0:05:13.920 --> 0:05:16.599 us that they would grow mid to high single digits 0:05:16.640 --> 0:05:20.080 in the September quarter. That would indicate that there isn't 0:05:20.080 --> 0:05:22.479 some kind of tariff front running here, that Apple's just 0:05:22.560 --> 0:05:25.040 growing because it's growing. Do you buy that? 0:05:27.000 --> 0:05:29.720 Yeah, well, I think that, you know, it's kind of 0:05:29.760 --> 0:05:31.039 hard to tell, to be honest. 0:05:31.320 --> 0:05:33.600 I think that there was a period when you were 0:05:33.680 --> 0:05:37.480 rushing to Apple stores to buy some iPhones before the terrorists, 0:05:37.480 --> 0:05:40.719 but I feel like that quickly subsided and you know, 0:05:40.760 --> 0:05:45.000 that was resolved relatively in short order. And so I 0:05:45.040 --> 0:05:48.640 think that what matters here is the forward look. You know, 0:05:48.720 --> 0:05:51.920 as investors, you're probably looking more towards what they do 0:05:52.000 --> 0:05:55.800 with the next iPhone cycle. Fold the ball in addition, 0:05:56.080 --> 0:05:59.120 like services was really strong, and so there was a 0:05:59.160 --> 0:06:03.400 fear that what happens with uh, you know, Google search as. 0:06:03.279 --> 0:06:06.720 Well as kind of the the app store ruling where 0:06:06.720 --> 0:06:08.000 people are circumventing the app store. 0:06:08.040 --> 0:06:10.520 It seems like that's like actually been okay, and so 0:06:11.320 --> 0:06:13.520 going forward, I think that it's less about like was 0:06:13.560 --> 0:06:15.760 there a little pull in or by more of the 0:06:15.800 --> 0:06:19.160 iPhone cycle coming coming up that people aren't focused on. 0:06:19.720 --> 0:06:23.320 So Tony, when does the real pivot point come? When 0:06:23.400 --> 0:06:27.279 is it that you have confidence to add exposure and 0:06:27.360 --> 0:06:30.239 feel that Tim Cook and the team are on top 0:06:30.400 --> 0:06:33.800 of generative AI, of the opportunity at hand of innovation. 0:06:35.680 --> 0:06:37.840 Look, I think Tim Cook and the team they're really 0:06:37.880 --> 0:06:43.120 talented and their world's class manufacturers and you know, their 0:06:43.160 --> 0:06:44.080 product leadership. 0:06:44.560 --> 0:06:46.039 You'll be built that over decades. 0:06:46.080 --> 0:06:48.520 And so I don't think you can count about in 0:06:48.600 --> 0:06:51.360 terms of where the stock at has been. It's like 0:06:51.560 --> 0:06:54.520 the market break considerably in a market that's been super 0:06:54.520 --> 0:06:59.200 beta fuel and risk taking. And so you know, if 0:06:59.200 --> 0:07:02.200 the market turned like Apple, I think is a safe table. 0:07:02.279 --> 0:07:04.599 And then if you look at kind of the momentum 0:07:04.640 --> 0:07:07.520 they're building like things, things are probably going to get 0:07:07.520 --> 0:07:10.560 better over the next twelve months. And I do think that, 0:07:11.480 --> 0:07:15.000 you know, they can do a lot within AI. They're 0:07:15.080 --> 0:07:20.840 probably you know, not rushing to commit to anyone one partner. 0:07:21.160 --> 0:07:24.680 You know, they own the ecosystem and so to me, like, 0:07:24.760 --> 0:07:27.480 as long as the iPhone is still the main, you know, 0:07:28.000 --> 0:07:30.600 channel for AI, I think that's that's really important. 0:07:32.600 --> 0:07:36.680 Talent wasn't mentioned on the call, but the final question 0:07:36.880 --> 0:07:39.239 was about M and A in the context of AI 0:07:39.840 --> 0:07:41.720 and what Tim Cook said, And I know because I 0:07:41.760 --> 0:07:43.560 put it in the top live blog and then I 0:07:43.640 --> 0:07:46.880 screenshotted it. We are very open to m and a 0:07:47.240 --> 0:07:51.360 Tim Cook two fifty seven pm Pacific time, Thursday, July first. 0:07:52.240 --> 0:07:55.000 Is that a starter gun or signal particularly to investment 0:07:55.040 --> 0:07:57.920 bankers or do you expect Apple to stay sort of 0:07:58.040 --> 0:08:01.560 muted in disciplined on that front, I think. 0:08:01.360 --> 0:08:04.200 The Apple is very muted, and I always say muted, 0:08:04.280 --> 0:08:07.840 but they're very disciplined, and I think that they have 0:08:08.160 --> 0:08:11.520 like a very very strong focused in what matters in 0:08:11.600 --> 0:08:14.200 their direction. I mean, for a long period of time, 0:08:14.280 --> 0:08:16.840 you can put all their products on one table and 0:08:16.920 --> 0:08:20.120 to be really great at what they do. And so 0:08:20.360 --> 0:08:22.160 I don't think they're going to be muted. I think 0:08:22.160 --> 0:08:26.240 they're going to be disciplined and focused, and they have 0:08:26.360 --> 0:08:30.320 made acquisitions that can really I think, plug into the 0:08:30.360 --> 0:08:32.280 ecosystem enhance their talent. 0:08:32.360 --> 0:08:34.760 I don't think they're going to go to a really. 0:08:34.480 --> 0:08:38.439 Big, splashy acquisition, but if you take a step back, 0:08:38.440 --> 0:08:41.520 they're generating a ton of capital and there's a lot 0:08:41.559 --> 0:08:43.280 of potential for improvement. 0:08:43.440 --> 0:08:47.000 And via em and a Telly one on the tray price. 0:08:47.080 --> 0:08:48.960 Great to have you back on Bloomberg Tech. Thank you 0:08:49.040 --> 0:08:52.040 very much. Let's stick with earnings and turn in part 0:08:52.080 --> 0:08:52.520 to Amazon. 0:08:52.520 --> 0:08:53.120 I'm actually going to. 0:08:53.160 --> 0:08:56.480 Keep going with Apple as well with Laura Martin, who 0:08:57.040 --> 0:09:00.960 covers the broad gamut of tech. But and listened you 0:09:00.960 --> 0:09:03.640 were listening there to Tony Wright. I just wondered if 0:09:03.679 --> 0:09:06.640 you had any response difference of opinion on any of 0:09:06.679 --> 0:09:07.720 the ground that we covered. 0:09:08.640 --> 0:09:10.360 Yes, I would be much more negative. 0:09:10.760 --> 0:09:14.280 I think the Apple stock cannot work without an Apple 0:09:14.360 --> 0:09:17.720 iPhone replacement cycle. And Tim Cook said on the call 0:09:18.080 --> 0:09:23.560 that they have twenty AI jenerative AI capabilities involved in 0:09:23.600 --> 0:09:26.840 its current iPhone. But next year we're going to get 0:09:26.920 --> 0:09:28.679 really the Apple intelligence step up. 0:09:28.720 --> 0:09:29.840 So that's two years after. 0:09:29.760 --> 0:09:32.240 I originally promised it, which means we're not going to 0:09:32.280 --> 0:09:35.920 get an iPhone replacement cycle this year in September. It 0:09:35.920 --> 0:09:38.000 would be next year at the earliest, which means I 0:09:38.040 --> 0:09:39.559 don't think the stock can work. I don't think it 0:09:39.600 --> 0:09:44.160 can outperform. Meanwhile, when you listen to Alphabet, they've got 0:09:44.160 --> 0:09:48.520 Google Gemini, and they are incorporating jenerative AI features in 0:09:48.679 --> 0:09:51.480 every one of their products, including Android, which is the 0:09:51.520 --> 0:09:55.040 primary competitor here. So you and I aren't incentive to 0:09:55.040 --> 0:09:57.840 go out and replace our iPhones, which means our iPhones 0:09:57.840 --> 0:10:01.320 are getting another year older, another a year older, and 0:10:01.400 --> 0:10:04.600 at some point, if the one of the Android version 0:10:05.080 --> 0:10:08.160 runs ahead with some cool feature that all of us 0:10:08.200 --> 0:10:10.560 want to try or can't live without, we are more 0:10:10.760 --> 0:10:15.040 likely to shake loose from that iOS ecosystem because they 0:10:15.080 --> 0:10:18.160 aren't showing us anything that keeps us there as these 0:10:18.160 --> 0:10:20.959 iPhones age and we want to replace our iPhones with 0:10:21.040 --> 0:10:21.560 something new. 0:10:21.800 --> 0:10:25.079 Meanwhile, don't She's doing a lot for Sansung foldable phones 0:10:25.280 --> 0:10:27.600 and plenty of others on the market right now. I 0:10:27.720 --> 0:10:31.320 just pivot therefore to Amazon, which does have hardware. But look, 0:10:31.320 --> 0:10:33.520 we're looking at the growth story of cloud right now. 0:10:33.520 --> 0:10:36.880 In AWS, seventy percent was exactly where Amnis wanted it 0:10:36.920 --> 0:10:40.040 to be, but did just pale into comparison compared to 0:10:40.080 --> 0:10:43.320 where Azure was and where Google is in terms of cloud. 0:10:44.679 --> 0:10:48.040 Yeah, so what they said was that there was real 0:10:48.080 --> 0:10:50.800 margin pressure here, right. Margins went to thirty two percent, 0:10:51.400 --> 0:10:55.559 down from thirty nine percent last quarter, and like Google's 0:10:55.720 --> 0:10:58.240 cloud margins were through the roof, so were Microsoft. 0:10:58.400 --> 0:11:01.760 So when you have they're all capacity constraints. 0:11:01.800 --> 0:11:04.720 So we would have forgiven Amazon the seventeen percent growth 0:11:04.760 --> 0:11:07.400 rate and revenue if their margins had stayed at that 0:11:07.559 --> 0:11:09.800 very high sort of forty percent level, because they're out 0:11:09.800 --> 0:11:12.559 of capacity, so they should be like charging a lot 0:11:12.640 --> 0:11:15.480 for anybody that uses demand in their cloud. 0:11:15.559 --> 0:11:16.199 But they didn't. 0:11:16.240 --> 0:11:19.000 They were under margin pressure, so I think people didn't 0:11:19.080 --> 0:11:22.320 like that. I think that My opinion is they're losing 0:11:22.400 --> 0:11:26.600 business because their competitors are price competing and taking away clients. 0:11:27.280 --> 0:11:29.760 You know, Apple's still the biggest. There's sixty five percent 0:11:29.800 --> 0:11:31.719 bigger in cloud than the next closest guy they in 0:11:32.080 --> 0:11:34.400 the business. And he made the point that eighty five 0:11:34.440 --> 0:11:37.480 percent of companies are still on physical servers on premise 0:11:37.480 --> 0:11:39.760 and all of those companies need to move to the cloud. 0:11:39.800 --> 0:11:41.720 And Amazon it's the biggest. So I think this is 0:11:41.720 --> 0:11:44.440 a short term problem. But boy is the market mad. 0:11:44.520 --> 0:11:47.040 I mean, investors are mad about these numbers coming out 0:11:47.080 --> 0:11:48.080 of Amazon, but. 0:11:48.240 --> 0:11:51.640 They're quite often mad at Amazon because Amazon is willing 0:11:51.720 --> 0:11:55.160 to say sorry, profit tomorrow, profit the next quarter, for now, 0:11:55.200 --> 0:11:58.040 I invest in my business. Did he sound bullish enough 0:11:58.360 --> 0:12:01.679 on the general to ay opach opportunity, because goodness, they're 0:12:02.040 --> 0:12:04.080 intertwining it left, right and center as well. 0:12:05.559 --> 0:12:08.240 You know, maybe I think, look, I think this is 0:12:08.280 --> 0:12:09.600 the right guy in the seat right. 0:12:09.640 --> 0:12:12.479 This guy is the one who started founded cloud. 0:12:12.559 --> 0:12:15.880 And did extent Cloud is either under siege or doing 0:12:15.920 --> 0:12:17.880 something wrong, or Wall Street's just mad. 0:12:17.960 --> 0:12:19.640 This is the guy to fix it like this isn't 0:12:19.640 --> 0:12:22.400 a CEO from a different business, this is his core business. 0:12:22.840 --> 0:12:25.200 I think Wall Street's a little mad that they're spending 0:12:25.240 --> 0:12:28.680 money on Kuyper, which is not making revenue. Alexa plus 0:12:29.280 --> 0:12:31.240 ten years, we still don't have a dollar of revenue, 0:12:31.240 --> 0:12:34.040 but a ton of expenses, and they're doing same day 0:12:34.040 --> 0:12:36.839 delivery in urban centers, all of which feels. 0:12:36.600 --> 0:12:39.600 Like a lot of capital to spend where you're a price. 0:12:40.480 --> 0:12:43.440 Can I ask you, Andy Jesse said, quote very early 0:12:43.559 --> 0:12:47.560 days in artificial intelligence across all businesses, very quickly. Do 0:12:47.640 --> 0:12:50.679 we have any better understanding of Amazon's AI story than 0:12:50.720 --> 0:12:54.080 we do Apples, which gets, of course scrutinized a lot. 0:12:55.360 --> 0:12:57.479 Yes, much better. They're incorporate. 0:12:57.559 --> 0:13:00.400 They have a very clear AI strategy w is to 0:13:00.480 --> 0:13:05.359 host everybody else's AI cloud on theirs. Remember Google's proprietary, 0:13:05.360 --> 0:13:10.480 Microsoft proprietary. Amazon's strategy is to host all large language models. 0:13:10.559 --> 0:13:11.840 It just wants the cloud fees. 0:13:12.960 --> 0:13:15.240 Laura Martin Kimming it shortened sweeten to the point we 0:13:15.280 --> 0:13:18.840 so appreciate stay well, have the good rest of the weekend. Meanwhile, 0:13:18.840 --> 0:13:21.600 coming up we stick with tech earnings one that actually 0:13:21.679 --> 0:13:24.120 Laura Covers has read it. The COO Jen Wong was 0:13:24.200 --> 0:13:25.880 fair to discuss explosive sales. 0:13:25.880 --> 0:13:27.439 Both as a bluebo. 0:13:27.240 --> 0:13:48.400 Tech shares have Reddit absolutely surging today, up more than 0:13:48.400 --> 0:13:50.960 twenty percent, biggest jump since the first week of April. 0:13:51.000 --> 0:13:55.199 The company reported its most profitable quarter today and projected 0:13:55.240 --> 0:13:58.240 sales for the third quarter that were above and this estimates. 0:13:58.280 --> 0:14:00.719 Reddit COO Gen Wong joins. 0:14:00.480 --> 0:14:02.079 Us now for more and it's like one of those 0:14:02.120 --> 0:14:05.200 quarters where should we just start with the basics. Advertising 0:14:05.320 --> 0:14:08.000 was really strong in the cord of gone. Why was 0:14:08.040 --> 0:14:11.120 it so strong? Which geographies were good? What are you 0:14:11.200 --> 0:14:14.640 doing that makes Reddit so attractive relative to other platforms? 0:14:15.000 --> 0:14:15.840 And thanks for having me. 0:14:15.880 --> 0:14:18.400 It was a really strong quarter across the board for Reddit, 0:14:19.040 --> 0:14:21.760 and in terms of revenue, we saw broad based strength 0:14:21.880 --> 0:14:27.280 across all the verticals. We saw geographic strength in the 0:14:27.480 --> 0:14:30.880 US and in the rest of world, growing over seventy 0:14:30.920 --> 0:14:33.520 percent in both geographies, we. 0:14:33.440 --> 0:14:35.520 Saw users grow twenty one percent. 0:14:35.920 --> 0:14:39.640 Obviously, advertising revenue group by eighty four percent year year, 0:14:39.720 --> 0:14:44.680 which is truly differentiated. We grew active advertising by fifty 0:14:44.720 --> 0:14:49.280 percent year every year and you can see across the 0:14:49.320 --> 0:14:53.840 funnel both our lower funnel convergent objective plus brand, we're 0:14:54.000 --> 0:14:57.720 both big contributors to the results in Q two. 0:14:57.840 --> 0:14:59.840 So again, broad based strength in. 0:14:59.840 --> 0:15:02.760 The it's surprised and investors a surprised analysts. 0:15:02.800 --> 0:15:05.120 Did any of it surprise you, Jen, any verticals that 0:15:05.160 --> 0:15:07.080 surprised you, any geographies that surprised you. 0:15:08.440 --> 0:15:09.160 I think this is. 0:15:09.120 --> 0:15:12.800 A continuation and an output of our investments. 0:15:13.120 --> 0:15:16.520 We feel really good about our strategy and our roadmap. 0:15:16.960 --> 0:15:20.359 We've been investing in our capabilities to make every impression 0:15:20.480 --> 0:15:23.240 more valuable for marketers over the last couple of years, 0:15:23.560 --> 0:15:26.760 working on that lower funnel objective, and I think now 0:15:26.760 --> 0:15:29.680 we're seeing the benefits of all the value we're. 0:15:29.480 --> 0:15:31.080 Delivering to our customers. 0:15:31.440 --> 0:15:34.320 The team's been executing really well. We've been making investments 0:15:34.360 --> 0:15:38.840 and expanding our sales team across verticals, across geographies that's 0:15:38.880 --> 0:15:43.200 coming in and supporting the broad based strength. So we 0:15:43.280 --> 0:15:45.680 feel really good about the investments we've made. I think 0:15:45.720 --> 0:15:46.920 our work is working. 0:15:48.120 --> 0:15:51.120 I just typed who is Jen Wong into Reddit answers, 0:15:51.200 --> 0:15:53.720 and it says Genwong is a prominent figure in the 0:15:53.720 --> 0:15:57.240 world of tech and business and COO of Reddit, but 0:15:57.520 --> 0:16:00.520 I find it an interesting tool. Rights supposed to be 0:16:00.640 --> 0:16:04.440 human led answers, but might we see ads place there? 0:16:04.640 --> 0:16:06.800 You know, people talk about this a lot. How we 0:16:06.960 --> 0:16:10.040 monetize on that, It's. 0:16:09.880 --> 0:16:13.360 A great question, I think Before we get to monetization, 0:16:13.480 --> 0:16:17.160 which I think is a huge opportunity for for Reddit, 0:16:17.200 --> 0:16:20.200 in that space and the area of search, I think 0:16:20.280 --> 0:16:24.440 we have an opportunity to build a very distinctive destination 0:16:24.640 --> 0:16:29.200 search experience. Reddit is where people come for real perspectives 0:16:29.240 --> 0:16:33.080 from real people, not looking for just the summary, but 0:16:33.200 --> 0:16:37.120 looking for what the context around. You know, why did 0:16:37.160 --> 0:16:39.120 you think that this was the best running shoe? Because 0:16:39.160 --> 0:16:42.480 you live in heavy trails a rocky area. You know, 0:16:42.640 --> 0:16:45.160 you're a long distance run or a short distance run. 0:16:45.240 --> 0:16:46.560 Like all those details of. 0:16:46.520 --> 0:16:51.240 Real human experience are brought to life in Reddit answers 0:16:51.280 --> 0:16:52.120 and Reddit Search. 0:16:52.480 --> 0:16:56.360 What we're doing is bringing together this capability. 0:16:55.640 --> 0:16:58.080 In Reddit Answers, which is an LM on top of 0:16:58.120 --> 0:17:01.880 the incredible conversation on Reddit, and integrating that with core 0:17:01.960 --> 0:17:04.720 Reddit search so that it becomes a more fulfomed experience. 0:17:05.160 --> 0:17:08.480 And then as we continue to grow the use of 0:17:08.520 --> 0:17:10.000 that destination search. 0:17:10.560 --> 0:17:12.560 I think monetization follows. 0:17:12.600 --> 0:17:15.280 I mean, it's a lot of those queries are incredibly 0:17:15.760 --> 0:17:19.040 just naturally commercial nature, or it's people trying to make 0:17:19.080 --> 0:17:22.919 decisions and allocate resources and buy things, you know, to 0:17:23.840 --> 0:17:24.919 that fit their lives. 0:17:25.080 --> 0:17:27.880 Yeah, I mean monetization has been something you've done well 0:17:27.920 --> 0:17:32.520 with other deals for licensing your own data to generative 0:17:32.520 --> 0:17:35.800 AI large language models. But Jen, there's a little bit 0:17:35.840 --> 0:17:38.159 of beef going on, perhaps with one with Anthropic. Can 0:17:38.200 --> 0:17:40.560 you give us any update as to what's happening with 0:17:40.880 --> 0:17:43.520 your relationships and further content licensing deals. 0:17:44.040 --> 0:17:47.119 Yeah, I mean, I won't comment on litigation, but I 0:17:47.160 --> 0:17:50.440 will talk about data licensing. I mean, you know, we 0:17:50.720 --> 0:17:53.560 these were our first commercial relationships. We're a year a 0:17:53.640 --> 0:17:55.960 year and a half in. I think we've learned a 0:17:56.000 --> 0:17:59.840 lot and we're still learning. I think we're open to conversation. 0:18:00.720 --> 0:18:03.680 I think what we're learning is that we and frankly 0:18:03.760 --> 0:18:10.560 everyone can see reddits contribution to these lms, how often 0:18:10.640 --> 0:18:14.280 Reddit is cited, how important Reddit is for people to 0:18:14.320 --> 0:18:16.480 get the perspective that they're looking for. 0:18:17.080 --> 0:18:18.280 And when we see that, you. 0:18:18.200 --> 0:18:21.840 Know, I think it reveals that the fact that Reddit, 0:18:21.880 --> 0:18:25.400 I think has never felt more essential to the Internet 0:18:25.520 --> 0:18:26.760 and to helping people. 0:18:27.320 --> 0:18:28.480 I think what we get. 0:18:28.400 --> 0:18:30.719 Excited about is when we look at this is the 0:18:30.720 --> 0:18:34.960 opportunity for ourselves, the opportunity for us to build products 0:18:35.040 --> 0:18:40.760 around the decades of conversation on Reddit, Reddit answers and 0:18:40.880 --> 0:18:45.120 search is one area obviously growing those communities. 0:18:44.560 --> 0:18:48.040 In our core product. So we get really excited about that. 0:18:48.880 --> 0:18:51.600 And you know, I think overall the value of Reddit 0:18:51.640 --> 0:18:54.800 and conversation in this world of AI is going up. 0:18:55.440 --> 0:18:57.080 You know, a lot of your job is flying around 0:18:57.119 --> 0:19:00.600 the world. International markets just very quickly, how start going 0:19:00.680 --> 0:19:04.520 getting dollars from abroad and very quickly also languages as well. 0:19:05.960 --> 0:19:09.440 Yeah, I mean international is incredibly important to us. It's 0:19:09.480 --> 0:19:14.600 about twenty percent of our revenue, and international revenue from 0:19:14.640 --> 0:19:17.440 advertising grew over seventy percent in the quarter, so it's 0:19:17.440 --> 0:19:20.320 been a growth driver for us. We're particularly active in 0:19:20.359 --> 0:19:23.880 Europe and Amea. We're seeing really nice growth in our 0:19:23.920 --> 0:19:28.040 target countries where we're applying AI for machine translation to 0:19:28.119 --> 0:19:33.520 have global conversations in different languages so that people that 0:19:33.560 --> 0:19:37.800 don't have language friction. We're also growing local communities, which 0:19:37.840 --> 0:19:42.440 we're excited about doing some partnerships and sports and entertainment 0:19:42.560 --> 0:19:46.399 that are really simulating the growth of local communities like 0:19:46.440 --> 0:19:51.840 telenovelas in Brazil and football in Germany. And that user 0:19:51.920 --> 0:19:56.520 growth that we're supporting then obviously creates a monetization opportunity. 0:19:56.760 --> 0:19:59.240 Jen Wog, I've read it. It's wonderful to have time 0:19:59.240 --> 0:20:01.959 with you. Thank you very much. Indeed, now coming up 0:20:02.000 --> 0:20:05.119 Pigma shares, Actually are they managing to rise even on 0:20:05.240 --> 0:20:07.960 day two after that monumental launch. We'll talk about the 0:20:07.960 --> 0:20:09.400 IPOs big winners and what's next. 0:20:09.960 --> 0:20:11.120 This is blue Bag tech. 0:20:23.320 --> 0:20:23.639 Shares. 0:20:23.680 --> 0:20:26.800 A Figma sold a whopping two hundred and fifteen percent 0:20:26.840 --> 0:20:29.560 on their first day of training. That's the largest first 0:20:29.640 --> 0:20:32.080 day pot for a US trading company, raising more than 0:20:32.080 --> 0:20:34.840 a billion in at least three decades. That's according to 0:20:34.840 --> 0:20:39.159 Bloomberg Data. So is this positive, this strength or is 0:20:39.160 --> 0:20:41.320 that money left on the table for the design software maker. 0:20:41.400 --> 0:20:43.480 Let's get to Katie Ruth for her analysis. We're actually 0:20:43.520 --> 0:20:46.000 still clinging onto some gains in a downmarket to Dave, 0:20:46.160 --> 0:20:49.360 and Katie feels the demand is so insatiable her three. 0:20:49.560 --> 0:20:53.440