New Kraft Heinz CEO Pauses Split to Focus on Boosting Profit

Summary

Bloomberg Intelligence Podcast Summary

Episode: New Kraft Heinz CEO Pauses Split to Focus on Boosting Profit
Date: February 11, 2026
Hosts: Paul Sweeney, Scarlett Fu

---

Episode Overview

This episode delivers an in-depth review of recent earnings across four notable sectors and companies: Kraft Heinz, Hilton Hotels, T-Mobile, and streaming TV advertising platform Mountain. Analysts and company insiders joined the hosts to offer fresh perspectives on leadership decisions, business models, and industry trends, with particular focus on the Kraft Heinz leadership's surprising decision to pause the anticipated company split, the resilient asset-light strategies of Hilton and other hotels, T-Mobile's pivot in a maturing telecom market, and how AI and consolidation are shaping the digital advertising/TV landscape.

---

Key Discussion Points & Insights

1. Kraft Heinz: CEO Pauses Planned Company Split

Guest: Christina Petersen – Food Industry Reporter
Segment Start: [02:48]

• Background: Kraft Heinz was poised to split the company, freeing its faster-growing business lines from legacy brands, a move announced five months prior.
• New CEO's Decision: Steve Cahlane, in office since Jan 1, 2026, announced an indefinite pause—with no set end date—on the split.
  • Strategic Rationale:
    • Immediate focus on reinvestment into the company's brands ($600 million earmarked for R&D, marketing, and price reductions).
    • The belief that stronger brand support would better position Kraft Heinz for future strategic decisions.
  • Quote:
    • "There were brands that would respond to more investment ... that would bolster the entire company." (Christina Petersen, [03:18])
• Investor Sentiment:
  • Initial anxieties due to uncertainty, fueled by past experiences with similar food sector splits (e.g., Kellogg).
  • Some investors hoped for a repeat of the Kellogg split, with subsequent take-private deals.
  • Quote:
    • "The new CEO was seen as ... hopes that he would do what he had done with the Kellogg Company ... but [he said] basically not yet." (Christina Petersen, [04:16])
• Berkshire Hathaway's Role:
  • As Kraft Heinz’s largest shareholder, Warren Buffett was known to oppose the split; his successor, Greg Abel, reportedly considered reducing their 28% stake due to uncertainties.
  • Quote:
    • "[Buffett] made clear that the split was not a good thing in his mind." (Scarlett Fu, [04:46])
• Outlook:
  • Decision on split delayed at least until after 2026—future focus on growth and strengthening brands, including healthier and more affordable product launches.
  • Healthier product focus includes new launches like "Mac and Cheese Power Mac" with higher protein.
  • Quote:
    • "They talked about returning to growth in 2027. So it seems like this is a months away decision." (Christina Petersen, [05:40])

Timestamps:

• Investor Reaction & Shareholder Influence [04:06–05:28]
• Product Strategy and Industry Trends [06:05–07:58]

---

2. Hilton Hotels: Steady Growth with Asset-Light Model

Guest: Brian Nagar – Senior Gaming and Lodging Analyst
Segment Start: [10:27]

• Earnings Overview:
  • Hilton delivered mixed quarterly results due to a brief dip in U.S. inbound/government travel, but 2026 outlook is positive with forecast 1–2% RevPAR growth.
  • Quote:
    • "Although this is an aging upcycle in the lodging industry, it’s still got some legs to it." (Brian Nagar, [11:16])
• Business Model:
  • Emphasis on asset-light, fee-based (franchise/licensing) strategy, resulting in higher profit margins and nimbleness.
  • Quote:
    • "This kind of fee-based model is a very capital-efficient way to expand and grow." (Brian Nagar, [11:45])
• Brand Portfolio & International Expansion:
  • Hilton is expanding especially in the mid-scale segment and international markets (Europe, UAE, Asia ex-China).
  • Launching new "lifestyle category" brands to align with market trends.
  • Quote:
    • "A lot of conversions from other assets ... fit very well under the brand flags." (Brian Nagar, [12:46])
• Credit Card Partnerships:
  • Significant revenue stream comes from co-branded credit cards.
  • Potential risk: policy changes around interest caps could affect loyalty program economics.
  • Quote:
    • "A big part of that franchise fee line ... is actually fees from co-branded credit cards." (Brian Nagar, [15:32])

Timestamps:

• Asset-Light Discussion [11:14–12:42]
• Brand Segments & International Trends [13:06–13:56]
• Impact of Credit Card Regulation [15:15–16:01]

---

3. T-Mobile: Navigating Slowing Wireless Growth

Guest: John Butler – Senior Telecom Analyst
Segment Start: [18:31]

• Earnings Recap:
  • T-Mobile's Q4 growth in subscribers fell short due to aggressive promotions by Verizon under a new, volume-focused CEO.
  • Immediate market reaction was positive after management shifted focus from revenue to free cash flow, increasing 2027 guidance by $1.5 billion.
  • Quote:
    • "This has gone from a story of revenue growth ... now they're pivoting more to free cash flow growth." (John Butler, [18:57])
• Industry Context:
  • Recognized as a mature industry—growth slowing for all major players.
  • All big three wireless carriers (T-Mobile, AT&T, Verizon) now emphasize free cash flow over traditional subscriber growth.
• Expansion Strategies:
  • Diversifying via broadband (fiber, fixed wireless) and non-core businesses (advertising, financial products/credit cards).
  • Broadband/fixed wireless access cited as a key near-term growth engine; highlights push into adjacent revenue streams.
  • Quote:
    • "At the core of the broadband business is their fixed wireless access ... T Mobile remains a real leader there." (John Butler, [21:31])
• Capital Return Focus:
  • Preference for buybacks over raising dividends—announced $5 billion in share repurchases for Q1, doubling normal rate.
  • Quote:
    • "[T-Mobile is] leaning more into [share buybacks] than dividend growth." (John Butler, [22:50])

Timestamps:

• Industry Competition & Evolving KPIs [20:11–21:00]
• Broadband/“Side Hustle” Strategy [21:00–22:36]
• Capital Return/Dividend Policy [22:36–23:16]

---

4. Streaming TV Advertising & Media M&A

Guest: Mark Douglas – President & CEO, Mountain
Segment Start: [25:44]

• Company Mission:
  • Mountain helps small/mid-sized businesses access TV and streaming ad markets with self-serve, performance-based platforms.
  • Focused on making TV a measurable, cost-effective channel similar to digital/social advertising.
  • Quote:
    • "We pioneered this space, we call it Performance TV. We literally created the term.” (Mark Douglas, [28:17])
• AI's Role in Ad Creation:
  • Increasing use of AI to generate creative content for TV ads—faster turnaround, dramatically reduced cost.
  • Mark advocates for AI content labeling, stressing transparency.
  • Quote:
    • "We ourselves are now putting out two to three Mountain branded TV commercials a week that are being created like in under a day." (Mark Douglas, [28:28])
• Live Sports & Niche Content:
  • Streaming allows targeting of both mass-market (e.g., live sports) and highly niche audiences.
• Media Industry M&A:
  • Candid discussion about potential Warner Bros. Discovery sale—Paramount vs. Netflix as suitors.
  • Suggestion that Paramount's leverage makes an acquisition by Netflix “a must-have.”
  • Quote:
    • "The deal is a nice have for Netflix, it’s a must have for Paramount ... you kind of get to the finish line." (Mark Douglas, [32:54])
  • Skepticism about Paramount's ability to win deal unless capital structure improves.
    • "Even if they get it across the line at this level, they're so levered up ... it seems like a dead deal, like Netflix has won." (Paul Sweeney, [32:24])
• AI Content Transparency:
  • Mark Douglas' strong personal stance:
    • "My personal view is all AI video should be labeled AI period." (Mark Douglas, [29:48])

Timestamps:

• Performance TV/Ad Measurement [26:25–28:17]
• AI’s Impact/Content Creation [28:17–29:48]
• Media Industry Consolidation [30:39–33:14]

---

Notable Quotes

• Kraft Heinz Pause:

  • "There were brands that would respond to more investment ... that would bolster the entire company."
    — Christina Petersen, [03:18]

• Asset-Light Hotels:

  • "This kind of fee-based model is a very capital-efficient way to expand and grow."
    — Brian Nagar, [11:45]

• T-Mobile’s Strategic Pivot:

  • "This has gone from a story of revenue growth ... now they're pivoting more to free cash flow growth."
    — John Butler, [18:57]

• Streaming TV Ad Innovation:

  • "We pioneered this space, we call it Performance TV. We literally created the term."
    — Mark Douglas, [28:17]

• AI Content Ethics:

  • "My personal view is all AI video should be labeled AI period."
    — Mark Douglas, [29:48]

---

Summary Table of Major Segments (with Timestamps)

| Segment | Guest | Main Focus | Timestamp | |------------------------|--------------------------|----------------------------------------------------|-----------| | Kraft Heinz | Christina Petersen | Paused split, reinvestment, shareholder dynamics | 02:48–07:58 | | Hilton Hotels | Brian Nagar | Asset-light model, global franchise, credit card fees | 10:27–16:01 | | T-Mobile | John Butler | Subscriber slowdown, free cash flow focus, broadband growth | 18:31–23:16 | | TV/Advertising & Media | Mark Douglas | Performance TV for SMBs, AI creative, media M&A | 25:44–33:14 |

---

Conclusion

This episode distilled a cross-section of Wall Street strategy and industry dynamics.

• Kraft Heinz's new CEO shook expectations by pausing the planned split, emphasizing near-term profit over bold restructuring.
• The hotel industry, led by Hilton, exemplified the stamina of asset-light business models, though regulatory headwinds loom.
• T-Mobile’s story highlights the telecom sector’s shift toward sustainable cash flow in a market that's grown up.
• Advertising in the streaming age is being upended by AI, lower barriers for SMBs, and looming media mega-mergers, with transparency and agility at a premium.

Through sharp analysis and candid conversation, the hosts and guests framed not just the news, but the critical business reasoning behind the headlines—delivering insight for investors and industry watchers alike.

Transcript

[Paul Sweeney]

Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete Disclosures available at public.comDisclosures Small businesses.

[Scarlett Fu]

Are the pulse of every community. They bring people together, create opportunities and drive growth. Chase for Business helps business owners like you with personalized guidance and convenient digital tools all in one place. With that guidance and your determination, you can take your business farther and help build a brighter future for your community. Learn [e-mail] business chase for business make more of what's yours the Chase Mobile app is available for select mobile devices. Message and data rates may apply JP Morgan Chase Bank NA Member FDIC Copyright 2026 JPMorgan Chase Co.

[Sponsor Voice]

This podcast is brought to you by Wise the Smarter Way to manage your.

[Paul Sweeney]

Money Internationally if you're getting a headache from juggling different currencies in different bank.

[Sponsor Voice]

Accounts in different countries, there's a better.

[Paul Sweeney]

Way to receive money in the need.

[Sponsor Voice]

Without the slow transfer times or hidden fees.

[Paul Sweeney]

Meet Wise the savvy way to handle your money internationally hold balances in up to 40 currencies with the mid market exchange rate on every conversion.

[Sponsor Voice]

Whether you're receiving payments from tenants abroad, earning as a digital nomad, or converting dividends from your international investments, the WISE Multi Currency Account is for you.

[Paul Sweeney]

Be Smart Get Wise. Download the Wise app today or visit.

[Sponsor Voice]

Wise.Com Terms and Conditions apply.

[Podcast Host]

Bloomberg Audio Studios Podcasts Radio News you're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Scarlett Fu]

It is earnings season right now and one of the most anticipated results set of results that came out today came from Kraft Heinz, mainly because the food company had been on this mission to split itself up into two in order to really free up its faster growing business from its slower growing business. Christina Petersen is our food industry reporter and has been reporting on Kraft Heinz. And Christina, the new CEO over at Kraft Heinz surprised everyone by saying, you know what? I'm not going to split up the company. What's the thinking here?

[Christina Petersen]

That's right. He's only been on the job since January 1st. So I think this came as a surprise to folks that the split was called off about five months after it was announced or paused. There is no end date to the pause, so we don't know if it will at some point resume. But the CEO Steve Cahlane said that he came on the job knowing that there had been levels of underinvestment in Kraft Heinz's brands and decided that after reviewing all of them that there were brands that would respond to more investment. So they announced that they would be putting $600 million into things like R and D marketing and lowering some prices in hopes that that would bolster the entire company and that that would be in a better position, put them in a better position to evaluate whether they should move forward with the split.

[Paul Sweeney]

So what do most investors want? Do they think they want the split up? Sometimes split ups work. A lot of times they don't. What have investors been saying over the past months?

[Christina Petersen]

There's clearly been some anxiety among investors since the news of the split was announced. I think that the new CEO was seen as there were hopes that he would do what he had done with the Kellogg Company, which split into two publicly traded entities and then were both, both of those companies were bought by privately held entities. So there was some speculation that the same thing would occur at Kraft Heinz. And Kaylaine said basically not yet.

[Paul Sweeney]

Really.

[Scarlett Fu]

There's another twist to all of this, which is that Kraft Heinz's biggest shareholder is Berkshire Hathaway. And Warren Buffett, who runs Berkshire Hathaway until he handed the reins to Greg Abel, said he was never a fan of that idea to split up the company. I mean, he was kind of the mastermind behind Kraft Heinz becoming the behemoth it was and that didn't work out so well. But he made clear that the split was not a good thing in his mind. Do we think that has anything to do with this about face?

[Christina Petersen]

I don't know. It is clear that he had publicly expressed disappointment in the split and his successor had said in a filing that Berkshire Hathaway was taking steps to sell its 28% stake in Kraft Heinz. So clearly they were nervous about this and not fans of the news.

[Paul Sweeney]

So do we have any idea how long this pause will last? I mean, is he trying to turn stuff around, make it maybe better so if when they do split it up, it would be worth more? What do we know?

[Christina Petersen]

They clearly are not going to make the decision this year. They talked about returning to growth in 2027. So it seems like this is a months away decision.

[Paul Sweeney]

All the investment bankers who had that on their deal sheet for 2026, but.

[Scarlett Fu]

They get paid in the meantime for the work that they've done right now.

[Paul Sweeney]

You don't get paid to closes.

[Scarlett Fu]

Oh really? You can't build them along the way?

[Paul Sweeney]

We're not lawyers, okay? We get paid. We take a shot at the.

[Scarlett Fu]

I like how you still say we.

[Paul Sweeney]

Yeah, yeah, exactly.

[Scarlett Fu]

Because for these guys.

[Paul Sweeney]

What's next for Kellogg? What, what, what's the company want to do now is as a, you know.

[Christina Petersen]

Standalone company for Kraft Heinz? Yeah, well, they've talked about releasing some healthier products. They are launching a Kraft Heinz Mac and Cheese Power Mac. Nice protein.

[Scarlett Fu]

I knew it. I knew it.

[Christina Petersen]

And they will be lowering prices. They talked about the opening price points being important for low income families. So those are some of the areas that they're going to be focusing on. Some healthier options, more affordable price points.

[Scarlett Fu]

So Kellogg was the example of a company that split into two and then both got taken private. I mean, is that a trend overall in the food industry to split yourself up after being kind of a big overall food company?

[Christina Petersen]

You know, I think we're seeing examples of both of companies getting smaller and bigger. There's obviously a lot more criticism and focus on ultra processed foods. Packaged food companies are dealing with this. We saw the super bowl ad this weekend saying processed food kills. So I think Big Food generally speaking is trying to figure out what to do with these headwinds.

[Paul Sweeney]

So what is the story there? Is this a short term blip, this whole processed food thing? Or has this been brewing? Because I hear more and more and more about that being a cause for so many of the ills in health care and people's health.

[Christina Petersen]

I think this is the first time we've seen an administration come down so harshly on ultra processed food. That's clearly been a huge focus of health Secretary Kennedy and the White House has backed him up on this. Of course Americans don't always eat the way they say they want to eat, so you know there's plenty of Doritos still being eaten, even as people say they're trying to move away from processed foods.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index, and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures [e-mail] disclosures you need to.

[Sponsor Voice]

Make a huge presentation in an hour. Luckily, Adobe Acrobat Studio uses AI to take all your documents and generate a presentation with a single click, building slides faster than ever before. So if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that with Acrobat. Learn [e-mail] do that with Acrobat.

With Bali from iShares you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit WWares.com to view a perspective for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.

[Podcast Host]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul Sweeney]

Hilton Hotel reporting. Some numbers here today beat expectations. You know, people can't get a room anywhere. If you do, you got to pay through the nose. And the consumer seems to be doing fine. And look at some of that stuff. Brian Nagar, senior gaming and lodging analyst joins us here in our Bloomberg Interactive broker studio. Hilton Worldwide stocks up about 1% today, 52 week high today. So pretty good for them. It's got a market cap of 75 billion. What did Hilton report from an earnings perspective?

[Brian Nagar]

Yes, I mean what we saw in the quarter was kind of mixed in terms of us being down a little bit or maybe a little below revpar in the fourth quarter, mostly because of the government shutdown. So a bit weaker inbound travel to the US A little bit weaker government travel. But the outlook for next year, I should say for this year 2026 is pretty good. 1 to 2% RevPAR growth.

[Paul Sweeney]

That's revenue per available, per available room.

[Brian Nagar]

Yeah. And so leisure, group, luxury, all kind of strong international, a little stronger than the US but although this is an aging upcycle in the lodging industry, it's still got some likes to it.

[Scarlett Fu]

Now Hilton along with many of the other hotel companies like Marriott has a asset light business model which means that it's brand licensing. Right. They don't actually own and manage any of their own properties and that allows it to move more nimbly. The profit margins are much higher. What's the downside of that, Brian?

[Brian Nagar]

So I mean there's some benefit to actually owning the real estate when you're really in an upcycle. But that this kind of fee based model is a very capital efficient way to expand and grow. You get your franchise fees and management fees. They've got a little bit of a hotel exposure as well. But most of the lodging companies separate from the REITs are actually asset light manager franchisers with some owned assets.

[Paul Sweeney]

Yeah, I'm looking at, you know, you got a company with you know, 13 billion of revenue. Call it, you know, 4 billion of EBITDA, 100 million of CapEx. Are you kidding me? That is awesome. So builds, who builds a. If Hilton wants to build a new hotel in south beach, they don't build it, somebody else builds it.

[Brian Nagar]

Yeah, so you have like ownership entities. Obviously you've got the rates like park hotels, resorts and others that own the real estate. So this is as you said, like an asset light franchise management tree driven business. With some owned hotels there is some onto exposure.

[Paul Sweeney]

So what do they do with all the free cash flow every year? They get you know, most of that EBITDA goes down to the free cash flow line.

[Brian Nagar]

They have been returning capital, right. So they've got capital returns and you know, there is real opportunity for growth within their business model. And a lot of that is international. A lot of conversions, you know, a lot of conversions from other assets that fit very well under the brand flags. And they have also been launching some new brands as well, kind of that lifestyle category.

[Scarlett Fu]

How many brands do they have right now?

[Brian Nagar]

So where are they now? I know Marriott's 31, I'm trying, remember.

[Paul Sweeney]

Well, that's all those 31. Is that just like it is?

[Brian Nagar]

I mean, yeah, I think overall if you slice the market segment wise, Hyatt and Marriott are more prominent in the luxury high standard. Hilton has some luxury, but it's also got a very solid mid scale limited service portfolio. What you tend to see is that in this environment, luxury upscale tends to outperforming and the limited services is somewhat weaker. Partly because that's where you've got the government travel, you've got the transient independent business travel. But stuff like leisure group luxury, particularly international markets, uae, Europe, non China, Asia, all have been really quite strong.

[Scarlett Fu]

I wonder, Brian, do you, I know you don't cover Airbnb as a company, but do you ever see any correlation between the performance of Airbnb and you know, a Hilton or Marriott? Because I'm sure in markets where Airbnb is not allowed, like New York City for instance, Hilton benefits.

[Brian Nagar]

Yeah, I tend to think of, you know, the OTAs, the Airbnb of the world as being a factor with respect to both Las Vegas lodging, particularly in kind of the value conscious consumer limited service. You know, you've got some extra inventory there where it's good for that kind of last minute inventory management. But the big focus of Hilton, Marriott, Hyatt has been the royalty programs and the strong correlation between loyalty members and kind of booking directly. So there's, there's that aspect as well.

[Paul Sweeney]

The Walt Disney company called out in their theme park business. Some weakness on inbound international travel is that. Are the hotels seeing that as well?

[Brian Nagar]

There is some of that, I mean some of that's from Canada, tariff related, I think kind of that globally the weaker areas maybe are inbound US travel, US government travel, China's kind of flat. A strong areas are all the other categories we talked about, you know, luxury, group travel.

[Paul Sweeney]

I always say to my Canadian friends, you know, the first time it drops like below 20 degrees or 10 degrees in like November, you guys are booking your flights down to Florida.

[Scarlett Fu]

You'll sing a different tune, a different Brian how exposed are the Hilton's and the Marriotts of the world to, you know, the whole credit card debate. You know, the president wanting to cap interest rates to 10% on credit card companies and that putting at risk all these reward credit cards.

[Brian Nagar]

Right.

[Scarlett Fu]

Well programs.

[Brian Nagar]

I mean it's a consideration partly because a big part of that franchise fee line you see for Hilton Merritt is actually fees from co branded credit cards. That's actually a big kind of fee source. So all else being the same, the royalty rates and the level of credit card activity are somewhat of a driver for these franchise fees. These I should say co branded credit card license fees which kind of find their way into the franchise fee line. So it is important.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from Public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index. With AI it all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year, you can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you back test it against the S&P 500. Then you can invest in a few clicks. Generated assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures [e-mail] disclosures you need to.

[Sponsor Voice]

Make a huge presentation in an hour. Luckily, Adobe Acrobat Studio uses AI to take all your documents and generate a presentation with a single click, building slides faster than ever before. So if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that with Acrobat. Learn [e-mail] do that with Acrobat.

With Bali from iShares, you get access to both monthly income and growth potential in one simple etf. It's the best of both worlds. Discover Bali ishares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss in the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.

[Podcast Host]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Auto with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Scarlett Fu]

Let's get back to earnings right now because plenty of companies reporting we are past the point where big tech is reporting. Now it's consumer related companies. We have a telecom name reporting one of the biggest T Mobile adding fewer subscribers than anticipated, yet the stock is moving higher. John Butler is our senior telecom analyst. And John, in terms of the actual growth in its subscribers, this was a disappointing quarter for T Mobile.

[John Butler]

I was a bit of a disappointment for T Mobile, Scarlet. I think one of the things that really impacted them is we've seen Verizon, which now has a new CEO who's come in, he's very volume focused. So he's out there, they're promoting heavily, they're trying to win new subscribers. And I think it took a bit of a dent out of T Mobile's growth in the fourth quarter. And I think one thing T Mobile did which was smart is they combined the 4Q report with a capital markets day update, they updated their 2027 guidance and they increased their free cash flow outlook for 27 by 1.5 billion. And so when you saw them do that, you saw an inflection in investor sentiment almost instantly because again, this has gone from a story of revenue growth. Now they're pivoting more to free cash flow growth. They're really pointing investors to that bottom line to get the focus off of revenue growth as things get more promotional and as industry growth slows.

[Paul Sweeney]

So is this a new wave of just, I guess, across the board? If Verizon's getting a little bit more promotional, does T Mobile to att, do they have to respond or are there other things they can do?

[John Butler]

So great question, Paul. Right. We're in a mature industry backdrop now. Growth overall is slowing for everyone. T Mobile is not alone in pointing to free cash flow growth. You've got AT&T and Verizon doing the same thing. And so I think again with that new CEO in place, now you've got T Mobile sort of driving a growth story that centers on not only smart promotion but also driving into adjacent markets like advertising and even credit cards.

[Scarlett Fu]

Yeah, I'm a T Mobile subscriber and there's always a ton of emails from the company offering all kinds of different services and deals and it really feels like they're just trying to envelop you into their ecosystem. John I kind of call the effort to sell Internet access to ad broadband customers a side hustle for these telecoms companies. But this is some, this is how they can make sure that they continue to build out their customer customer base even as they try to fight for market share when it comes to mobile phone subscribers. How is that side hustle going for T Mobile?

[John Butler]

So this side hustle, as you call, and I think that's a good word for it, is still small right now. I think the real opportunity for them in the near term scarlet, lies in the broadband business. They're pushing into fiber. Another side hustle. It's small, but I think over the next couple of years it could increasingly contribute to growth. And then at the core of the broadband business is their fixed wireless access business. So delivering broadband to the home over cellular spectrum, that's been very popular and T Mobile remains a real leader there. It continues to be a growth engine for them. And so I think when you pair that with the, the ad business, the credit card business and more importantly the fiber business, it all adds up to help sustain that, that free cash flow growth and call it the 5 to 6% range, maybe even more as we go forward over the next three years.

[Paul Sweeney]

John About 30 seconds. Dividend policy T Mobile's got a 1.8% yield, Verizon 5.6% and AT&T 3.9%. So there's something for everybody in terms of investors. Does T Mobile, do they worry about their dividend yield?

[John Butler]

Little less so than share buybacks. In fact, one of the things they did with Capital Markets Day was announced that they're buying back 5 billion in shares over the course of the first quarter here, which is double the normal rate. So you know, I think they're leaning more into that than dividend growth, although it's part of that share buyback program and it's going to continue to be as we go forward here.

[Paul Sweeney]

Stay with us. More from Bloomberg Intelligence coming up after this. Support for the show comes from public on public you can build a multi asset portfolio of stocks, bonds, options, crypto and now generated assets which allow you to turn any idea into an investable index with AI. It all starts with your prompt. From renewable energy companies with high free cash flow to semiconductor suppliers growing revenue over 20% year over year. You can literally type any prompt and put the AI to work. It screens thousands of stocks, builds a one of a kind index and lets you backtest it against the S&P 500. Then you can invest in a few clicks. Generated Assets are completely customizable and based on your thesis, not someone else's. Go to public.com market and earn an uncapped 1% bonus when you transfer your portfolio. That's public.com market paid for by Public Investing Brokerage Services by Open to the Public Investing Inc. Member FINRA and SIPC Advisory Services by Public Advisors llc. SEC Registered Advisor Generated Assets is an interactive analysis tool. Output is for informational purposes only and is not an investment recommendation or advice. Complete disclosures [e-mail] disclosures you need to.

[Sponsor Voice]

Make a huge presentation in an hour. Luckily, Adobe Acrobat Studio uses AI to take all your documents and generate a presentation with a single click, building slides faster than ever before. So if you need a last minute pitch deck, do that with Acrobat. Need to level up your presentation design? Do that with acrobat. You have 30 plus documents that need to be simplified into a proposal. Do that with Acrobat. Learn [e-mail] do that with Acrobat.

With Bali from iShares you get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit WW iShares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss in the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC.

[Podcast Host]

You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10am Eastern on Apple CarPlay and Android Aut with the Bloomberg Business app. Listen on demand wherever you get your podcasts or watch us live on YouTube.

[Paul Sweeney]

Let's check in with somebody who's in the TV business. In the TV advertising business, trying to make it easier for small and midsize businesses to really get their message out there versus via all these digital opportunities here, including television. Mark Douglas, President and CEO of Mountain that is a publicly traded company, a newly publicly traded company. Ticker's MNTN. They reported numbers just today. I think stock's up 30% so I guess just today. So I guess the market likes what they heard here. Mark, appreciate you coming in our studio here. Talk to us about Mountain. I know you guys are trying to work with small and mid sized businesses and help them get their advertising message out in a world that's got tons of digital and analog opportunities. So talk to us about what's going on in your business.

[Mark Douglas]

Yeah, absolutely. So what we do is television and streaming television in particular has been under underserved but for small businesses it's just been very hard, very expensive for small midsize businesses to use that medium. And what we did is we turned it into a performance marketing channel like something that they can add to their marketing, mix along, search along social and use streaming TV to get the next customers. And we've been consistently growing and you know we did earnings last night and, and I had a very strong quarter in Q4, very strong. Ended a very strong year. And, and we're, you know our focus is on continuing to just execute the business and do the same.

[Scarlett Fu]

And I am assuming for even the small businesses the opportunities lie in things like live sporting events because those are must view appointment washing that you don't get from other shows.

[Mark Douglas]

Yeah, absolutely. Well the nice thing about streaming is you can, everyone can find whatever is their, you know, thing that they love to watch. For me actually one of the things I love talking about in this business is just like the shows I like. So I'm a big fan of Traders right now. Love that show on Peacock. Cannot wait till they only release one episode a week. I'm like kind of damn you. I just get all 10 episodes at once. But you know, live sports, I watch the super bowl. You have March Madness coming up. You have a lot of dating shows for Valentine's Day. So all of that, we give our customers access to all of that kind of content, get their message and really target it. And most importantly measure the impact how much revenue that drive to their business. And so we pioneered this space, we call it Performance tv. We literally created the term performance tv. It's now ubiquitous in the advertising industry and we just kind of keep growing into the scaly opportunity which we think is enormous.

[Paul Sweeney]

Talk to us about AI. How's AI impacting the advertising business? Metta make calls it out, Google calls it out as it relates to their YouTube business and their search business. How do you see it impacting?

[Mark Douglas]

It's, it's having an impact across the board. The obvious is on the creative, the the time to get creative. Like meaning what does it take to get a TV commercial used to be a lot of costs, take, very time consuming, lots of people involved. That still occurs for some of the creative, but increasingly there's a creative. We ourselves are now putting out two to three mountain branded TV commercials a week that are being created like in under a day. We have what we now refer to as AI creators using our own tools to do that. And it's just substantially lowered the cost. We did a video last week for around the show Heated rivalry, which is kind of a hot show right now. So video has hockey players in it and so forth. Got created in under a day, cost $500. If we tried to do that in the physical world, that would have been like six weeks, 50 grand, 100 grand to film that. And so I think there's a mixture of still filmed video and AI video. And you use like, you use what's appropriate for exactly what you're trying to do.

[Scarlett Fu]

Does that mean that the images that the Viewer sees is AI generated?

[Mark Douglas]

Yes, fully. Fully generated. 30 second.

[Scarlett Fu]

Do you have to put a disclaimer disclosure on that or that? That doesn't come up.

[Mark Douglas]

We don't have to. I actually would like to. I. My personal view is all AI video should be labeled AI period. I actually, you know, there's a can spam act for email. I think there should be a similar act for AI content that if I'm on Instagram or watch a commercial on tv, I should know that this is, you know, I created. And that's, that's kind of a personal opinion. I don't see a downside to that. And I think people would appreciate the transparency. They don't want to guess what they're looking at. You know, is it kind of real? We, ironically, we ran another ad campaign the other day with Jamil White, who's famous child actor and now is involved in a lot of projects as an adult. And the campaign was. Is it AI So just putting it out there? Yeah, just. Yeah, yeah. And so.

[Paul Sweeney]

So Mark, I know you guys with your company, you guys are so involved in the media space in general. From the advertising side, what do you make of what's going on with Warner Brothers Discovery? It just seems to be kind of out there. I don't know. Netflix is going to buy them, Paramount's.

[Scarlett Fu]

Going to buy them.

[Paul Sweeney]

If Paramount doesn't buy them, what happens to Paramount? What are you guys. What's the scuttlebutt out there?

[Mark Douglas]

Well, for full disclosure, I worked for Larry Ellison early in my career and I didn't see him Lose very often. And so, I mean, when he's determined, he's ferocious. But obviously Netflix is very capable. They have an incredible management team. I think ultimately it comes down to dollars. I don't know how it doesn't. I mean, and at the moment I believe that, you know, Paramount has a bigger offer on the table, but unless there's elements of the offer that haven't been published. So, you know, and I think Paramount strategy is let's take. Let's literally take it to the streets and do a tender offer. So we'll see how that plays out. I'm pretty bullish on Paramount, but I know a lot of people on Netflix and they're determined also. So unless they're going to come in over the top, I think Paramount has a real shot here.

[Paul Sweeney]

Can I just jump in here?

[Brian Nagar]

Okay.

[Paul Sweeney]

If I.

[Mark Douglas]

Absolutely.

[Paul Sweeney]

I just wanted to swing by Matt Miller from Bloomberg Television. I anchor open interest every weekday from 9 to 11.

[Scarlett Fu]

Bloomberg Intelligence, host and friend of the program.

[Paul Sweeney]

Yes, I've been friends at Mark Douglas for a number of years, and I feel like you're being really diplomatic. This does not look good for Paramount at all. Even if they get it across the line at this level, they're so levered up that they're going to have trouble meeting their payments. I mean, free cash flow isn't going to be that so strong. So it seems like a dead deal, like Netflix has won.

[Mark Douglas]

Well, I mean, Netflix certainly has access to a tremendous amount of capital and they have the capital. But I mean, Larry Ellison, if he's guaranteed, if he's providing guarantees, I think that carries a lot of weight.

[Scarlett Fu]

But he hasn't raised his price yet, and that's what everyone's waiting for.

[Paul Sweeney]

Nobody can. I think he can. And why isn't he? Well, because he's. He's doing everything but that, and he has the ability to do that. But as Matt was pointing out, you still got to do something to improve the pro forma capital structure. That's just a banker speaking. I don't know.

[Mark Douglas]

I also, my thoughts on the deal is the deal is a nice half and Netflix, it's a must have for Paramount. Like, it just literally is a must have for Paramount.

[Scarlett Fu]

Matter of survival.

[Mark Douglas]

Yeah. And so, so, you know, I think when something's a must have. Yep, you kind of. You kind of get to the finish line.

[Podcast Host]

This is the Bloomberg Intelligence podcast, available on Apple, Spotify and anywhere else you get. Your podcasts listen live each weekday 10am to noon Eastern on Bloomberg.com, the iHeartRadio app, TuneIn, and the Bloomberg Business App. You can also watch us live Every weekday on YouTube and always on the Bloomberg Terminal.

[Paul Sweeney]

So have you heard the story about the prescription plan? With savings automatically built in, it's where a family of any size can feel confident the cost of their medication won't hold them back. Go to CMK Co Stories to learn how CVS Caremark helps members save just by being members. That's CMK Co Stories.

[Scarlett Fu]

Foreign.

[Sponsor Voice]

From iShares. You get access to both monthly income and growth potential in one simple ETF. It's the best of both worlds. Discover Bali iShares Large Cap Premium Income Active ETF iShares the market is yours. Visit www.ishares.com to view perspectives for investment objectives, risks, fees, expenses and other information that you should read and consider carefully before investing. Risks include principal loss and the use of derivatives, which could increase risks and volatility. Monthly income is not guaranteed. Prepared by BlackRock Investments, LLC with 4.

[Paul Sweeney]

Imprint, finding the right promo products can be easy. They call it four Imprint Certainty, which means you get free samples, expert help, art assistants and their assurance your logo looks great. 4imprint offers thousands of options to choose from, including branded apparel, drinkware, outdoor and more. And it's backed by their 360 degree guarantee. That's 4imprint's promise that your order will be packed with care and delivered on time. Need your order faster? 4imprint offers quick turnaround options too. Visit 4imprint.com to explore 4imprint for certain.