WEBVTT - Oracle Shares Skyrocket On a Strong Cloud Outlook 0:00:02.520 --> 0:00:13.400 Bloomberg Audio Studios, Podcasts, radio news. Bloomberg Tech is live 0:00:13.440 --> 0:00:17.239 from coast to coast with Caroline Hyde in New York 0:00:17.520 --> 0:00:21.280 and edlave Low in San Francisco. 0:00:22.800 --> 0:00:26.520 This is Bloomberg Tech coming up. Oracle surges on big 0:00:26.640 --> 0:00:30.320 cloud contract wins and an outlook that left some analysts 0:00:30.360 --> 0:00:31.000 in shock. 0:00:31.640 --> 0:00:32.120 Coming up. 0:00:32.159 --> 0:00:34.560 It's also a big day for Klara, which is getting 0:00:34.560 --> 0:00:37.760 ready to go public with an IPO priced above the 0:00:37.800 --> 0:00:44.280 marketing range. And we will discuss with the CEO. 0:00:43.120 --> 0:00:45.760 And we'll bring you conversations from the primary summit right 0:00:45.760 --> 0:00:49.320 here in New York, everything from AI, tech, sports, investing 0:00:49.680 --> 0:00:50.120 and more. 0:00:50.320 --> 0:00:54.800 Ed Okay, let's get to our top story. Oracle is 0:00:54.840 --> 0:01:01.080 having its biggest jump since nineteen ninety two the chart forward. 0:01:01.200 --> 0:01:03.120 This was a stock that was already up forty five 0:01:03.120 --> 0:01:06.720 percent year to date and now has massive performance in 0:01:06.760 --> 0:01:07.160 the year. 0:01:07.240 --> 0:01:08.839 They gave us an outlook. 0:01:08.400 --> 0:01:10.800 For cloud not just for this year, but told us 0:01:10.800 --> 0:01:13.000 what's going to happen through twenty thirty. Then look at 0:01:13.000 --> 0:01:15.840 the market cap nine hundred and sixty billion dollars almost 0:01:15.959 --> 0:01:19.360 one trillion dollars. They have leap frog JP Morgan and 0:01:19.440 --> 0:01:23.160 propelled themselves into the top ten companies on the S 0:01:23.200 --> 0:01:26.679 and P five hundred analyst notes everywhere this morning, some 0:01:26.800 --> 0:01:29.160 of them saying that they are in shock at the 0:01:29.240 --> 0:01:32.120 numbers that we got. That is the market reaction. What 0:01:32.280 --> 0:01:34.840 is it the market's reacting too. Let's get out to 0:01:34.840 --> 0:01:38.479 Bloomberg Intelligence senior software analysts and a lag Rana. There 0:01:38.560 --> 0:01:41.280 is the backlog right of business, the order book, it's 0:01:41.319 --> 0:01:44.120 like four hundred and fifty billion dollars. Then there's the 0:01:44.200 --> 0:01:47.200 outlook for cloud this year, and then there's the trajectory 0:01:47.280 --> 0:01:49.880 through to the end of the decade. Why is the 0:01:49.920 --> 0:01:52.360 stock reacting like this? And what was the data that 0:01:52.400 --> 0:01:52.960 you jumped on? 0:01:53.920 --> 0:01:56.960 Yeah, it is the order book basically because that audiobook 0:01:57.040 --> 0:01:59.680 is going to lead into revenue over the next several years, 0:02:00.080 --> 0:02:03.040 depending on how soon Oracle can get those data centers 0:02:03.040 --> 0:02:04.960 live and get those workloads in. 0:02:06.760 --> 0:02:09.280 When we talk about AI in the context of cloud, 0:02:09.760 --> 0:02:12.720 we've been talking about the hyperscalers, and then we've been 0:02:12.760 --> 0:02:17.040 talking about neo cloud renting GBHU capasitying in data centers 0:02:17.040 --> 0:02:18.040 specifically for AI. 0:02:18.639 --> 0:02:21.040 Where is Oracle now sitting in that field? 0:02:21.800 --> 0:02:24.239 Yeah, this is very much close to what Morviv is doing, 0:02:24.280 --> 0:02:27.800 basically renting out GPUs to customers to train their models 0:02:27.800 --> 0:02:31.359 to do inference workloads. It's the same kind of mindset, 0:02:31.520 --> 0:02:34.120 but the big difference is Oracle has a very high 0:02:34.200 --> 0:02:37.880 margin software and applications business that can fund some of this, 0:02:38.280 --> 0:02:41.920 you know, the expansion capacities, because the rest of the 0:02:41.960 --> 0:02:43.840 neoclouds don't have that. They have to go out and 0:02:44.080 --> 0:02:47.760 borrow that much money and at a much higher cost. 0:02:49.280 --> 0:02:51.040 This chart that we're looking at, let's keep it up 0:02:51.080 --> 0:02:53.280 for a second, guy, as if we can. It breaks 0:02:53.320 --> 0:02:57.000 down the outlook. It's almost like arr but they're basically 0:02:57.080 --> 0:02:59.560 saying that by the end of this decade there's going 0:02:59.600 --> 0:03:02.520 to be sick see billion dollars in upside based on 0:03:02.520 --> 0:03:06.000 what Oracle told us relative to consensus like what we 0:03:06.120 --> 0:03:09.960 saw happening. Anna Rag, you've built a deep coverage of 0:03:10.000 --> 0:03:12.840 this company as an analyst of Bloomberg Intelligence. Can you 0:03:12.919 --> 0:03:17.320 explain materially what has changed for Oracle, what it is 0:03:17.360 --> 0:03:20.160 they're actually doing in the real world that's driving the 0:03:20.240 --> 0:03:21.200 potential growth. 0:03:22.400 --> 0:03:24.360 I think the biggest thing is they are you know, 0:03:24.400 --> 0:03:27.200 they have their latest infrastructure right now. They were buying 0:03:27.320 --> 0:03:30.799 chips from Geo Nvidia. They are creating paymental computing for 0:03:31.520 --> 0:03:34.320 anybody to come out and host their application or if 0:03:34.320 --> 0:03:36.520 they want to train their large language model or small 0:03:36.560 --> 0:03:39.640 language model. You know, this capacity is up for rental, 0:03:39.960 --> 0:03:43.000 and then that's really the business Oracle is in. The 0:03:43.040 --> 0:03:45.840 big issue is right now there is a massive shortage 0:03:45.840 --> 0:03:49.320 of this kind of computing capacity, So everybody is trying 0:03:49.360 --> 0:03:53.240 to get as much computing capacity as they can, so 0:03:53.280 --> 0:03:55.880 they are rushing to you know, new clouds like Navieers 0:03:55.960 --> 0:03:59.600 or core Vive for Oracle, Amazon, everybody, and I think 0:03:59.600 --> 0:04:02.520 everybody to use the is beneficiary here, not just you know, 0:04:02.520 --> 0:04:05.640 one particular data center. It's just the only thing is 0:04:06.000 --> 0:04:09.520 Oracle's revenue base in cloud infrastructure was you know, roughly 0:04:09.560 --> 0:04:11.720 around ten billion a year ago or so in their 0:04:11.760 --> 0:04:14.560 last financial years, and then compared to let him, you know, 0:04:14.600 --> 0:04:17.680 Amazon one hundred and twenty five billion or Azure's seventy 0:04:17.680 --> 0:04:18.200 five billion. 0:04:19.160 --> 0:04:22.479 Just very quickly, Anna Rag, I've known Oracle as a 0:04:22.600 --> 0:04:25.359 databased software name, and there seems to be of a 0:04:25.440 --> 0:04:28.920 hard pivot. Is the hard pivot the right characterization? 0:04:30.080 --> 0:04:31.680 Yeah, but the hard pivot started, I'm going to be 0:04:31.960 --> 0:04:34.680 very honest twenty seventeen twenties. I mean, it's it's been 0:04:34.720 --> 0:04:36.440 going on for a while, but a lot of that 0:04:36.640 --> 0:04:39.400 was for their own database business, and you know, incomes 0:04:39.440 --> 0:04:42.440 AI and everybody is looking for computing capacity and they're 0:04:42.440 --> 0:04:44.400 there to you know, offer those services. 0:04:45.080 --> 0:04:47.200 Anarag stay with us because we have one other piece 0:04:47.240 --> 0:04:49.840 of news coming out of the Oracle story. After Oracle's 0:04:49.839 --> 0:04:54.680 results past expectations, it's co founder Larry Ellison has become 0:04:54.760 --> 0:04:58.480 the world's richest person for the first time, ending Elon 0:04:58.640 --> 0:05:02.240 masks nearly years long rain in the top spot. Elison's 0:05:02.279 --> 0:05:05.640 fortune sawed one hundred and one billion dollars as of 0:05:05.680 --> 0:05:08.719 about ten a m New York time, lifting his total 0:05:08.760 --> 0:05:13.320 fortune according to Bloomberg calculations and the Billionaires Index to 0:05:13.480 --> 0:05:15.599 three hundred and ninety three. 0:05:15.560 --> 0:05:17.120 Billion US dollars. 0:05:17.279 --> 0:05:19.480 Anna, Rag, you're staying with us because I want to 0:05:19.520 --> 0:05:21.640 get back to another story that's top of mind. 0:05:21.800 --> 0:05:22.160 Apple. 0:05:22.680 --> 0:05:25.919 Yesterday, I was in Kupertino at Apple Park. You wrote 0:05:26.120 --> 0:05:29.960 that iPhone sales could still get a high single digit 0:05:30.040 --> 0:05:34.120 lift with this iPhone seventeen generation, and like everyone, you 0:05:34.120 --> 0:05:37.000 are focused on pricing. Build out the rest of your 0:05:37.000 --> 0:05:37.719 thesis on that. 0:05:38.560 --> 0:05:40.800 Yeah, so when you look at consensus right now in 0:05:40.960 --> 0:05:43.920 unit shipments, it's only building in you know, one percent 0:05:43.960 --> 0:05:46.840 increase of unit shipments and let's say two to four 0:05:46.880 --> 0:05:51.000 percent increase in iPhone sales. We have a slightly different view. 0:05:51.279 --> 0:05:54.120 We think the newer model, even though everybody says it's 0:05:54.120 --> 0:05:56.040 not the best thing out there, but I think it's 0:05:56.040 --> 0:05:58.839 still going to generate excitement in emerging markets. It's still 0:05:58.880 --> 0:06:01.680 going to force people that have not upgraded. A new form. 0:06:01.720 --> 0:06:04.039 Factor is an act of novelty. It's a new thing 0:06:04.240 --> 0:06:07.560 for people to hold. So you know, giving a unit 0:06:07.560 --> 0:06:10.120 shipments of three to five percent is not a big deal. 0:06:10.200 --> 0:06:12.760 And then when you get a price up lift of that, 0:06:12.760 --> 0:06:16.920 that increases your average revenue per user, and that actually 0:06:17.000 --> 0:06:19.479 takes it up to the seven eight nine percent that 0:06:19.520 --> 0:06:21.960 we are talking about for the next financial year, which 0:06:22.000 --> 0:06:22.920 is f five twenty six. 0:06:23.360 --> 0:06:25.120 I do want to point out that the Decline's and 0:06:25.160 --> 0:06:27.479 Apple in this session of really accelerated with down almost 0:06:27.520 --> 0:06:29.599 three percent on a two day basis, down four and 0:06:29.600 --> 0:06:31.960 a half percent, biggest drop on a two day basis 0:06:32.000 --> 0:06:35.200 since May. But it's always a sell the news event. 0:06:35.520 --> 0:06:38.200 And then we'll look further afield on how the handset resonates. 0:06:38.400 --> 0:06:40.640 How big a factor are the carriers here in the 0:06:40.720 --> 0:06:43.960 United States in terms of the discounts. 0:06:43.720 --> 0:06:46.360 No, they are very big factors because though those discounts 0:06:46.360 --> 0:06:48.320 are the one that forces people to go out and 0:06:48.480 --> 0:06:50.680 you know, go out and get the new phone. Now, 0:06:50.720 --> 0:06:53.080 what we have seen over the last several years, this 0:06:53.120 --> 0:06:55.280 is you know, a trend for that we have observed 0:06:55.320 --> 0:06:58.160 for the last three four years. The refresh cycle is 0:06:58.240 --> 0:07:01.680 getting extended. There was a time pell the average life 0:07:01.880 --> 0:07:04.719 was roughly around four years or so. Now that's moving 0:07:04.800 --> 0:07:07.200 up a little where people are keeping it longer. But 0:07:07.279 --> 0:07:08.960 if you give them the incentive to go out and 0:07:09.000 --> 0:07:11.560 get a new phone, you know, you could accelerate that. 0:07:11.800 --> 0:07:14.560 And the other thing that can accelerate that refair cycle 0:07:14.840 --> 0:07:17.200 is if they launch any new AI features over the 0:07:17.280 --> 0:07:18.400 next six to twelve months. 0:07:19.760 --> 0:07:22.480 So here's the question, Ana, Rag, which phone do you 0:07:22.520 --> 0:07:25.080 go out and get. Everyone's focused on the air five 0:07:25.120 --> 0:07:28.200 point six milimeter thickness because it's a category in and 0:07:28.240 --> 0:07:31.800 of itself. Right Samsung has the Galaxy S twenty five Edge. 0:07:32.360 --> 0:07:36.000 People build this is the greatest hardware innovation from Apple 0:07:36.040 --> 0:07:39.680 on the iPhone in a long time. The technology matters, 0:07:39.800 --> 0:07:41.760 Does it matter to you and how you're modeling for it. 0:07:42.720 --> 0:07:44.840 Yeah, say, from our side, I think the Pro model 0:07:44.880 --> 0:07:47.280 gets sold in the US more than anything else. And 0:07:47.320 --> 0:07:50.040 that's the way you have an inherent price increase of 0:07:50.040 --> 0:07:52.440 one hundred dollars because the lower memory phone is not 0:07:52.480 --> 0:07:55.040 available anymore, you're going to have to pick the two 0:07:55.120 --> 0:07:58.840 hundred and fifty six, you know, gigabyte the phone which 0:07:58.880 --> 0:08:00.800 comes at one hundred dollars price increased. So that's the 0:08:00.840 --> 0:08:03.840 one where we think it would be most sold in 0:08:03.840 --> 0:08:06.280 the US where the benefits are the highest in terms 0:08:06.320 --> 0:08:06.920 of carriers. 0:08:07.720 --> 0:08:10.760 Anna rag Rana, who leads our research on both Oracle 0:08:10.960 --> 0:08:13.600 and Apple Bloomberg Intelligence, thank you very much. 0:08:14.280 --> 0:08:15.600 Now coming up, we're going to talk to. 0:08:15.640 --> 0:08:19.640 Klana CEO Sebastian shumir Kowski as the company prepares to 0:08:19.640 --> 0:08:20.920 go public today. 0:08:21.280 --> 0:08:22.960 Caro, what have you got later this hour? 0:08:25.920 --> 0:08:28.720 So much right here in New York City, Primary Summit 0:08:28.760 --> 0:08:32.600 is upon us. We've got founders, venture investors, but also 0:08:32.800 --> 0:08:35.520 sports people have become venture investors with us as well. 0:08:35.520 --> 0:08:37.360 We've got Larry Fitzgerald is going to be joining the 0:08:37.360 --> 0:08:41.160 conversation and his work alongside Vasu called Karnie, who's of 0:08:41.160 --> 0:08:45.800 course Courtside Venture's partner. Larry helps advise and thinks about strategy, 0:08:45.800 --> 0:08:48.439 whether it's about health AI, whether. 0:08:48.200 --> 0:08:49.520 That's the future of sports. 0:08:49.640 --> 0:08:52.200 Martine Mignon of Index Venture is also going to be 0:08:52.200 --> 0:08:54.560 with us. Really interesting day as we think about the 0:08:54.600 --> 0:08:57.400 IPOs in fintech. This is Bloomberg Tech. 0:09:06.840 --> 0:09:09.680 Shares of buy now, pay later firm Klana are set 0:09:09.720 --> 0:09:11.920 to begin trading today. The company, in some of its 0:09:11.920 --> 0:09:15.640 backers sold over thirty four million shares at forty dollars each, 0:09:15.679 --> 0:09:18.920 giving Klana a market value of about fifteen zero point 0:09:19.000 --> 0:09:19.760 one billion dollars. 0:09:19.800 --> 0:09:21.640 We're joined now by Klana. 0:09:21.400 --> 0:09:27.080 CEO, Sebastian, SHIMIIR and Koski Sebastian. First of all, congratulations 0:09:27.120 --> 0:09:30.160 to you, Caroline and I have quizzed you over the 0:09:30.240 --> 0:09:33.720 years on when an IPO happens, why it happens. I 0:09:33.840 --> 0:09:35.640 just want to bring you some news if I may, 0:09:36.160 --> 0:09:37.800 in the time that we've come on air. There's a 0:09:37.840 --> 0:09:40.960 headline on the Bloomberg terminal that the shares are indicated 0:09:40.960 --> 0:09:43.840 to open between fifty and fifty two dollars each. You 0:09:43.920 --> 0:09:47.320 price the IPO at forty. Just summarize your reaction to 0:09:47.400 --> 0:09:51.080 that and what it means to you on a daylight today. 0:09:51.200 --> 0:09:52.840 I'm happy, I didn't hear what you said on the 0:09:52.840 --> 0:09:54.480 price or a pretendin not to hear it, so I 0:09:54.480 --> 0:09:57.160 don't have to comment on it. We'll find out. Like 0:09:57.280 --> 0:09:59.840 I'm you know, I'm very I'm very much looking forward 0:09:59.880 --> 0:10:02.800 to welcome new shareholders to the company, and I think 0:10:02.840 --> 0:10:05.719 there's decades of growth and opportunity ahead of ourselves, So 0:10:05.720 --> 0:10:06.800 I feel very excited about this. 0:10:06.840 --> 0:10:10.480 Today we introd you as a buy now, pay later firm, 0:10:10.679 --> 0:10:13.839 but increasingly when you've come on this program, we've talked 0:10:13.880 --> 0:10:17.640 about Klana is an everything app. How does this IPO 0:10:18.760 --> 0:10:20.600 reposition you into that domain? 0:10:21.800 --> 0:10:24.560 Well, look, I think that was actually my biggest happy 0:10:24.600 --> 0:10:25.560 moments from the IPO. 0:10:25.640 --> 0:10:27.280 There were two from the road show. One. 0:10:27.520 --> 0:10:29.920 I got very few questions about buying oppu later and 0:10:29.960 --> 0:10:31.959 a lot about our card and how it's growing. We've 0:10:32.000 --> 0:10:35.200 signed up seven hundred thousand new Americans in the last 0:10:35.240 --> 0:10:36.920 six weeks to our card. We have five million people 0:10:36.920 --> 0:10:38.959 on the waiting list. But the best part of the 0:10:39.040 --> 0:10:41.040 road show, I tell you, was when we signed into 0:10:41.040 --> 0:10:43.160 one to the reception at one of our investors. The 0:10:43.200 --> 0:10:45.840 guy in the reception said, oh, you're from Clana. He's like, yes, 0:10:45.880 --> 0:10:46.480 do you use it? 0:10:46.600 --> 0:10:47.040 I love it. 0:10:47.080 --> 0:10:49.160 I use it all the time and I was like, oh, 0:10:49.200 --> 0:10:51.079 but what can we do better? He's like, nothing, just 0:10:51.120 --> 0:10:54.240 get me the card. So that was the best moment 0:10:54.240 --> 0:10:55.120 from the whole road. 0:10:54.920 --> 0:10:59.280 Show, Sebastia. 0:10:59.360 --> 0:11:01.840 It's like a man getting event. When one goes public, 0:11:02.160 --> 0:11:05.800 you get your name in other people's mindset. Here in 0:11:05.840 --> 0:11:08.400 the United States, will you go for a banking license? 0:11:08.480 --> 0:11:11.720 Talk us through where the growth story is going forward? 0:11:12.840 --> 0:11:13.120 Sure? 0:11:13.200 --> 0:11:15.480 No, Look there, we have a bank license in Europe, 0:11:15.480 --> 0:11:17.439 as you're well aware of. We've had it for ten years. 0:11:17.559 --> 0:11:20.120 It's fantastic, gives us access to deposits. It's a very 0:11:20.320 --> 0:11:22.920 effective way of funding our banags sheet allows us actually 0:11:22.960 --> 0:11:25.600 to do it more cheaply than our competitors. But I 0:11:25.640 --> 0:11:28.319 think the key thing is in the US there's this 0:11:28.400 --> 0:11:31.200 group McKinsey showed us in a study already ten years ago. 0:11:31.280 --> 0:11:33.800 They're called self aware of voids. These are people who've 0:11:33.840 --> 0:11:36.000 tried the credit card. It actually makes slightly more than 0:11:36.040 --> 0:11:39.480 your low income household and medium houses in household income. 0:11:40.080 --> 0:11:43.120 They are they try the card, they tried revolving. They 0:11:43.120 --> 0:11:45.679 say it's it's the product of the devil. They don't 0:11:45.679 --> 0:11:47.760 want to get in four thousand dollars of credit card 0:11:47.800 --> 0:11:50.640 debt with you know, twenty thirty percent interest. They love 0:11:50.880 --> 0:11:52.520 by an appulator, and they love our card. 0:11:52.559 --> 0:11:53.079 They love the. 0:11:53.000 --> 0:11:56.199 Opportunity to put most things on debit and then occasionally 0:11:56.200 --> 0:11:57.800 put it on interest free installments. 0:11:57.920 --> 0:11:59.079 Very cost effective. 0:11:59.559 --> 0:12:03.160 So that's the target audience, twenty percent of the American households. 0:12:03.200 --> 0:12:05.320 And you know, now we have twenty six million users 0:12:05.320 --> 0:12:07.320 in the US, so we're seeing a lot of pickup. 0:12:10.120 --> 0:12:12.839 Seeing pickup, You're seeing pickup in your shares. You are 0:12:13.000 --> 0:12:16.640 significantly oversubscribed, as we told you, and you chose not 0:12:16.760 --> 0:12:19.439 to hear that. You're currently seeing shares being indicated much 0:12:19.480 --> 0:12:20.960 higher than even at they priced at. 0:12:21.920 --> 0:12:23.520 Did you sell too low? 0:12:23.640 --> 0:12:25.800 I know you're a man that's had to stomach variations 0:12:25.800 --> 0:12:28.160 in your market capitalization in history. What does it mean 0:12:28.200 --> 0:12:30.360 to you to have a valuation out there in public? 0:12:30.440 --> 0:12:33.000 More broadly every day cool? 0:12:33.040 --> 0:12:35.720 Look to be honest personally, I'm not selling a single 0:12:35.760 --> 0:12:38.719 share in this IPO. I am, you know, a long 0:12:38.800 --> 0:12:41.360 term shareholder. I love this company, been doing this for 0:12:41.360 --> 0:12:43.280 two decades. It's a long period of time. But fortunately 0:12:43.320 --> 0:12:45.280 I was twenty three when we started, so I'm not 0:12:45.320 --> 0:12:47.440 that all yet and I hope to continue for a 0:12:47.440 --> 0:12:50.000 few decades. And if you're truly going to disrupt retail 0:12:50.040 --> 0:12:54.360 banking and you know, and change this industry that has 0:12:54.960 --> 0:12:57.600 you know, a mass so much excess profit because of 0:12:57.640 --> 0:13:00.600 the lack of competition, the lack of customer focus, and 0:13:00.640 --> 0:13:02.199 you want to bring that back and you want to 0:13:02.200 --> 0:13:04.120 create a better service for customers. That's going to take 0:13:04.160 --> 0:13:05.959 some time, though, This is not something you do overnight, 0:13:06.360 --> 0:13:08.120 and I just look forward to doing that, and then 0:13:08.480 --> 0:13:12.840 investors will occasionally lean more into the future and occasionally 0:13:12.960 --> 0:13:15.960 lean more into profit today and so forth, and that 0:13:16.040 --> 0:13:18.240 will vary, and you know, it's up to everyone to 0:13:18.280 --> 0:13:19.880 take that decision for themselves. 0:13:20.480 --> 0:13:21.120 Sebastily. 0:13:21.360 --> 0:13:24.000 The mechanism in this IPO is really important because you 0:13:24.000 --> 0:13:26.800 didn't raise like a huge amounts of money, and on 0:13:26.800 --> 0:13:29.720 this program recently we've done all the reporting on some 0:13:29.760 --> 0:13:35.199 of your peers, like Revolute doing transactions to stay private deliberately. 0:13:35.600 --> 0:13:38.280 So you faced a choice and you chose to go public. 0:13:38.600 --> 0:13:39.880 What was the main motivation? 0:13:41.200 --> 0:13:43.360 I think, you know, again, to your point, we only 0:13:43.440 --> 0:13:46.400 raised two hundred million dollars right in this IPO because 0:13:46.400 --> 0:13:50.600 the company is you know, self sustainable from a capital 0:13:50.640 --> 0:13:53.800 perspective doing really well, so there's no real need. I 0:13:53.840 --> 0:13:56.520 think that the key thing is we've had twenty years 0:13:56.600 --> 0:14:01.040 of private investors, employees bought into the Star, and over 0:14:01.120 --> 0:14:04.120 time it became quite an effort to keep track of 0:14:04.160 --> 0:14:07.160 private transaction in Google sheets, right, So now it's a 0:14:07.200 --> 0:14:09.920 little bit more efficient to trade the stock on the market. 0:14:10.160 --> 0:14:12.480 Gives people who's been with us for many decades the 0:14:12.559 --> 0:14:14.720 ability to get some liquid out, but most people are 0:14:14.760 --> 0:14:17.240 not selling much. And at the same point of time, 0:14:17.280 --> 0:14:20.480 fantastic to welcome new shareholders to the cap table who 0:14:20.640 --> 0:14:24.480 want to join what we're trying to revolutionize in retail banking. 0:14:24.560 --> 0:14:26.120 So I'm super excited about. 0:14:27.600 --> 0:14:31.840 Which you kind of illustrate outline what the competitive landscape 0:14:31.840 --> 0:14:34.320 looks like to you, who your competitors are, and also 0:14:34.400 --> 0:14:36.240 the regulatory headwinds that you're bracing. 0:14:36.280 --> 0:14:40.720 For sure, I mean, people will always mention a firm revolute, 0:14:40.920 --> 0:14:44.040 and we are very impressed by those companies, very inspired 0:14:44.080 --> 0:14:47.400 by them. But the truth is credit card industry is 0:14:47.560 --> 0:14:51.680 one point three trillion dollar revenue market. So I would 0:14:51.680 --> 0:14:55.280 say it's mostly the incumbents, the old banks that are 0:14:55.480 --> 0:14:58.000 you know, the opportunity and where the competition is and 0:14:58.040 --> 0:15:00.440 where we can grab tons of market share. And the 0:15:00.520 --> 0:15:01.760 problem for them is, you know, if you have a 0:15:01.760 --> 0:15:04.320 credit card program that's running at thirty percent interest and 0:15:04.360 --> 0:15:06.840 you're revolving people at four thousand dollars, and you look 0:15:06.880 --> 0:15:10.240 at Klona's payment model where our average outstanding balance is 0:15:10.280 --> 0:15:13.560 one hundred dollars and zero percent interest, you're not too keen. 0:15:13.600 --> 0:15:15.040 You don't want to jump into that. You don't want 0:15:15.040 --> 0:15:17.520 to lose all the profit you're making. But for us, 0:15:17.760 --> 0:15:20.480 it's just opportunity. It does upside, you know, grab more 0:15:20.480 --> 0:15:23.240 market share, become larger. It works well for us. We 0:15:23.320 --> 0:15:26.520 make money out of that, you know. So it's that's 0:15:26.520 --> 0:15:30.560 what we see as the primary competition on the regulatory side. Look, 0:15:31.760 --> 0:15:34.760 I think at the core of it, if ten years 0:15:34.760 --> 0:15:37.520 from now, less people use credit cards and more people 0:15:37.600 --> 0:15:40.080 use debit cards and occasionally buy an appay later, that's 0:15:40.120 --> 0:15:43.120 a better that's a better society. And as we get 0:15:43.120 --> 0:15:45.600 the chance to sit down and take all the noise 0:15:45.640 --> 0:15:47.560 away from media and so for it to actually explain 0:15:47.640 --> 0:15:50.920 and show our losses are thirty percent lower than credit cards, 0:15:51.160 --> 0:15:53.080 our consumers are borrowing much less. 0:15:53.680 --> 0:15:53.880 You know. 0:15:53.880 --> 0:15:56.240 I had this conversation to add a conversation with a customer. 0:15:56.440 --> 0:15:58.560 She was like, yeah, my mom called me and she 0:15:58.680 --> 0:16:01.320 was like, are you using this interesting called binacty lad 0:16:01.360 --> 0:16:04.120 with Klana And she told her moms like, Mom, you 0:16:04.120 --> 0:16:04.760 have a credit card? 0:16:04.840 --> 0:16:05.000 Right? 0:16:05.240 --> 0:16:05.480 Yeah? 0:16:05.800 --> 0:16:07.960 How much dep do you have? Four thousand dollars? What's 0:16:08.000 --> 0:16:10.560 your interest? Thirty percent? Which is like, Mom, I'm borrowing 0:16:10.600 --> 0:16:14.520 one hundred dollars a zero percent interest? Who is financially responsible? 0:16:15.080 --> 0:16:17.640 And you get those that message across, then you realize 0:16:17.680 --> 0:16:20.760 that regulators actually start embracing and seeing value in that 0:16:20.800 --> 0:16:23.880 we're bringing competition to a market that has, you know, 0:16:23.960 --> 0:16:27.200 extracted excess profit out of customers by tactics that are 0:16:27.200 --> 0:16:28.600 not in the customer's best interest. 0:16:28.880 --> 0:16:33.560 Thank you, and your tactic in many ways has been 0:16:33.680 --> 0:16:37.200 to embrace efficiency, adopting generator of AI in the workforce, 0:16:37.240 --> 0:16:41.000 in particular within the product. How much more can you 0:16:41.240 --> 0:16:43.480 focus in on margins? How much more are you going 0:16:43.560 --> 0:16:46.000 to have to keep hiring to scale and to sell? 0:16:47.120 --> 0:16:49.080 Well, the truth is right, we haven't hired people for 0:16:49.120 --> 0:16:51.360 two years. We've shranked the company from seven thousand to 0:16:51.440 --> 0:16:55.800 three thousand, four hundred to three thousand people, which is fantastic, 0:16:56.160 --> 0:16:58.120 but I would say we probably over index a libit 0:16:58.120 --> 0:17:01.560 on efficiency, and now the last six nine months we've 0:17:01.560 --> 0:17:04.040 taken much more focus on how do we take all 0:17:04.080 --> 0:17:06.760 the learnings We've used ourselves as employees as guinea pigs 0:17:06.760 --> 0:17:09.800 for all these AI software, all these tools, we took out, 0:17:09.880 --> 0:17:12.520 all the SaaS software to salesforce and all that, and 0:17:12.600 --> 0:17:13.880 now what we want to do. We want to bring 0:17:13.920 --> 0:17:15.280 that to our customers. We want to bring that to 0:17:15.240 --> 0:17:17.199 the immersions. We're very excited in the coming weeks and 0:17:17.200 --> 0:17:21.760 months to launch AI powered customer retail banking apps that 0:17:21.800 --> 0:17:25.199 we believe are going to be tremendously more valuable and 0:17:25.200 --> 0:17:27.920 create more values, save time, save money for our customers 0:17:27.920 --> 0:17:30.119 and make them feel and control of their finances. So 0:17:30.119 --> 0:17:33.280 it's very exciting to use AI now to create the 0:17:33.320 --> 0:17:34.800 next generation of financial services. 0:17:35.960 --> 0:17:38.840 So Sebasti, you're a public company now, so you have 0:17:38.960 --> 0:17:42.160 coarsely earnings. But I want to end by asking what 0:17:42.200 --> 0:17:45.680 the metric is that you will gauge plan as success 0:17:45.760 --> 0:17:49.120 by what is the kind of milestone that you are 0:17:49.160 --> 0:17:51.200 holding your company to from this point? 0:17:52.320 --> 0:17:53.200 Well, it's very easy. 0:17:54.040 --> 0:17:57.040 You mentioned already resolute in the firm clan has focused 0:17:57.040 --> 0:17:59.400 in the last few years has been let's get as 0:17:59.440 --> 0:18:01.439 many users as possible. It's a litt bit like Facebook, right, 0:18:01.480 --> 0:18:03.480 you want to get as many users as possible. We're 0:18:03.520 --> 0:18:05.879 now at one hundred eleven million. That means, you know, 0:18:05.880 --> 0:18:09.040 a firm I think is less than thirty revoluted fifty. 0:18:09.720 --> 0:18:12.720 We're one hundred eleven million users. But our revenue for 0:18:12.800 --> 0:18:16.000 customer is not like as much as there and that 0:18:16.160 --> 0:18:18.600 is it. You know, revenue for customer is the one 0:18:18.640 --> 0:18:21.479 metric now because we know that when we start launching 0:18:21.480 --> 0:18:24.400 things like the card, we see massive pickup from our audience. 0:18:24.640 --> 0:18:27.880 So now obviously we want to reach similar revenue for customers. 0:18:27.920 --> 0:18:31.200 We're seeing our main competitors and that has the potential 0:18:31.320 --> 0:18:33.800 of bringing us from a revenue size company as well 0:18:34.200 --> 0:18:36.680 to a different level. So that is the key metric 0:18:36.760 --> 0:18:41.040 right now, revenue for customer. 0:18:41.160 --> 0:18:45.480 It's beast In Shimirnkowski Klan, a CEO the Blockbuster Hat. 0:18:45.840 --> 0:18:47.840 I hope that bodes about the IPO rather than the 0:18:47.840 --> 0:18:50.639 future business model. We so appreciate you being here with 0:18:50.720 --> 0:18:53.840 us today live from the New York Stock Exchange. Now 0:18:54.359 --> 0:18:56.520 we are here in New York City, the other part 0:18:56.520 --> 0:18:59.920 of town at Primary Summit Now this is all about 0:19:00.280 --> 0:19:03.320 the future of investing, the startups that you want to 0:19:03.320 --> 0:19:05.560 be in more broadly, and the way in which we're 0:19:05.560 --> 0:19:09.240 seeing investors take shape in the world of sports, in 0:19:09.280 --> 0:19:11.600