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- [00:01]
Ed Ludlow
For every six Chinese people, there's a Ping an customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
- [00:13]
Caroline Hyde
This is the Technology Empowered Growth at Ping an podcast. In our latest episode, Ping an is utilizing technology to provide integrated and personalized 24. 7 support for China's rapidly growing elderly population. Now available on Spotify, Apple Podcast and Ping An's website.
- [00:30]
Ed Ludlow
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.
- [00:39]
Cristiano Amon
Confident the cost of their medication won't hold them back.
- [00:42]
Ed Ludlow
Go to CMK Co Stories to learn.
- [00:46]
Cristiano Amon
How CVS Caremark helps members save just by being members.
- [00:50]
Ed Ludlow
That's CMK Co Stories. This holiday season is likely to be a roller coaster for logistics and manufacturing, but having the right staff in place can be when you choose Express employment.
- [01:04]
Cristiano Amon
Professionals, they can handle everything.
- [01:06]
Ed Ludlow
To ensure you have the right size contract workforce, go to expresspros.com solve your workforce challenges when you choose Express to.
- [01:14]
Cristiano Amon
Support your hiring in a variety of.
- [01:16]
Ed Ludlow
Roles, including two of our biggest areas, manufacturing and logistics, visit ExpressPros.com today. That's ExpressPros.com.
- [01:27]
Caroline Hyde
Bloomberg Audio Studios podcasts Radio News.
- [01:36]
Ed Ludlow
Bloomberg Tech is live from coast to coast with Caroline Hyde in New York and Ed Ludlow in San Francisco. This is Bloomberg Tech. Coming up, Qualcomm gives an upbeat forecast, but it fell short of investor expectations. We'll discuss why with the CEO.
- [01:56]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Plus, the earnings don't stop there. Executives from Figma, Robinhood, Chime and Lyft. They join us after reporting results and.
- [02:04]
Ed Ludlow
All eyes on Tesla as we await the outcome of a shareholder vote on a $1 trillion pay package for Elon Musk and Tesla.
- [02:12]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
It weighs on the broader markets Said let's get to those broader markets on the day because, well, overall we've got a lot of macro data to be digesting and that feeds in the angst that we've been seeing in tech stocks more broadly. We're off by 1.7% on the NASDAQ 100. We're still questioning valuations. It's interesting that the AI play moves into the macro in terms of jobs data not coming from the federal departments, but it is coming from Challenger Gray and Christmas and they're saying we've never seen an October as bad as this in 20 years in terms of 153,000 jobs losses. AI automation being blamed Bitcoin off by 1.7% we got some risk aversion at.
- [02:47]
Ed Ludlow
Yeah. In the chip sector, we have two very similar stories with two very different reactions. AAM has given us a bullish outlook for the current period, which is. Which basically suggests they're making traction in AI. The shares that opened a lot higher, we're now down 2%. Qualcomm, again, giving a pretty bullish outlook for the current period. Traction in traditional markets, diversifying revenue. But that stock is down 4% at the high end of. High end of estimates. They didn't quite get there. Then there's, in the media and entertainment space, Warner Brothers Discovery actually missed estimates on revenue in the quarter. But amid plans for a sale or some kind of transaction, that's really all the street really cared about.
- [03:25]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
It is. And let's dig into that street reaction, the stock reaction. Hannah Miller is here to covering all things media. And really almost these numbers vindicated the decision by David Zaslav to be separating out the businesses. Talk us through it.
- [03:37]
Ed Ludlow
Yeah. So this morning we heard David Zaslav really play up the strength of the studio segment. They had some big blockbuster hits this summer with Superman and Weapons. He wants buyers to look at the movie business, not the street, the TV network's business. Of course. Mr. Susslife was asked about what happens next, and his response was pretty straightforward. We have an active process underway. Are you able to tell us any more, Hannah, about what an active process underway means? Yeah, they want to move quick on this, and we're expecting to get more news in December about this deal. You know, the bids have to come in. They have to consider all the interest they're getting from players like Netflix, Comcast and Paramount. It's going to be really interesting to see how it plays out.
- [04:24]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
But, Han, are they the names that we're limited to, or could we see Big Tech throw its hat in the ring? Who else might be interested in a CNN on one side or more? The studios on the other side.
- [04:35]
Ed Ludlow
Yeah. We're also, you know, hearing whispers about Amazon. You know, they could come in as they try to continue building out their prime video streaming service. You know, there are these valuable assets. You know, there is the focus on the movie business, hbo, but we have to remember that there's still cnn. There's a valuable sports portfolio. There are some really nice assets up for grabs here. Bloomberg's Hannah Miller, thank you very much. Let's get back to the chip sector. AAM gave a bullish revenue forecast, helped by rising interest in designing chips to run AI data centers. Kunjan Sabani, senior analyst at Bloomberg Intelligence Writing operating expenses remained elevated on investments and four chip initiatives, but long term share gains and rising royalty content continue to support its outlook. Conjuren Sobhani joins us now. ARM makes money in two ways. It licenses the blueprints, the underlying technology for a chip and then it gets royalty in each unit of that chips that sold. The story here is about what AAM is offering in the accelerator space or in the data center context. Explain what you saw in the numbers that they gave.
- [05:43]
Kunjan Sobhani
The data center strength was really the highlight as you mentioned. And when you look at the royalty revenues from the data center lag last fiscal year it was about 10% of royalties. We expect this now to get to almost 18 to 20%. So a 2x increase in one year by the end of fiscal 26. What's really driving here in the quarter they signed a lot of success license deals. Basically they're licensing that IP to a lot of datacenter customers. Whether it's been the merchant customers, the ASIC designers, Softbank and even Chinese customers. A lot of these licenses eventually get converted into royalty revenues, hence creating a tailwind for layering more and more royalty revenues. Their share is significantly increasing quarter over quarter and is as we know Nvidia is going to launch their service with the Blackwell. The Blackwell servers are the CPU in that servers are going to be based on the rmip. And you look at Amazon ramping its Graviton chip that's based on the RM ip Google Saxon chip based on the rmi. So they're seeing significant share gains here which eventually sets them up to have strong royalty growth in the future from the datacenter segment.
- [06:52]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
You mentioned SoftBank and of course Softbank is the main owner of some of it trades on the public markets. Softbank, big player in just the broader air space. Stargate for example. Did you get enough detail from Rene Haas, the CEO of ARM about their role in Stargate in the big build out?
- [07:11]
Kunjan Sobhani
We did like. So if you look at the numbers this quarter, software brought in somewhere about 180 million in royalty revenues. 50 million jump from just last quarter. Also when we look at the revenues by Jio, Japan is becoming now almost 15 to 20% of revenue which until a few quarters ago Japan was merged into small category other. So that tells you that the amount of revenue both from royalty side and licensing that Softman is is bringing in to this company and going to become a significantly big concentrated customer going forward. Softman has a lot of portfolio companies that acquired Graph Core Set, Ampere, so you can imagine it's a leading indicator of where they would be using ARM ip. Also there's news about software and working with ARM to sort of develop their own chips.
- [07:59]
Ed Ludlow
Qualcomm strong outlook for the current period suggests strength in Android and efforts to diversify revenue sources doing well. We're showing your research on the screen. Can John, very quick give us your react?
- [08:11]
Kunjan Sobhani
Yeah, it was a good quarter but the concern here is the that the fear that they would go back to 75% of share at Samsung comes to be coming closer. That's I think what investors didn't like. We think that Apple share is higher than what we feared 70. It's close to 80 to 85% but that goodness got offset by the Samsung share drop.
- [08:31]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Questioning always great research from you and the team. We appreciate it. Of Bloomberg Intelligence shares of Qualcomm we check in on them because they reported last night they're trading a little bit lower today. But the chip maker actually really delivered an upbeat forecast. They had sales and profits handily topping Wall street expectations. But maybe the market got ahead of itself. Let's talk about it all and the real fundamentals with Cristiano Amon. He's Qualcomm CEO and I'm sure it's really frustrating to stock on the start of the stock market reaction but what do you think investors had done ahead of this? Have they got overexcited? We're seeing this play out with a few of the chip sector.
- [09:10]
Cristiano Amon
Look, it's really hard to predict the market right now but we're incredibly happy about the company. I think we're execut executing very well. Our strategy is playing out perfectly. Everything we said we're going to do, we're actually doing better. And like I could not be more excited about so many things. They're going well at Qualcomm right now and the new opportunities we have in the future, I think the company is very different. We had expanded beyond handsets into a number of different markets. The results are showing and there are very few companies like Qualcomm that can go from 5 watts chips for earbuds all the way to now 500 watts watts chips for a data center. And I think that's how we think about the opportunity.
- [09:53]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
We can't wait to get into more on the detail of how you're jumping into the accelerator offering. But just going to the smartphone business, which is the bread and butter, what are you seeing at the moment and particularly what inroads are you making in Android?
- [10:04]
Cristiano Amon
Yes. So you know, I think this Is a very interesting and it's, you know, every quarter we see this. I know there's a lot of conversation about it but is a trend that has happened to Qualcomm over the past several years. I want every buddy to step back and look at what's happening with the handset market in general. The handset smartphone is the most important consumer electronic purchase in the world. It's our inseparable device and people want always to get a better device when they buy a new device. What we see right now is the expansion of the premium tier. So the market Caroline didn't have the units of handset market is still smaller on an annual basis than used to be before COVID But what has happened and is driving a lot of growth from Qualcomm and Android over the past several years is the premium tier is expanding in size. So if you look at the United States market, most of devices are premium tier. Most people will buy like an iPhone or a Galaxy. That's now happening everywhere in the world. Is happening in China, it's happening in India. So we see premium tier expanding. That makes you know a much richer market for us. And then we see phones becoming more capable, more computer, more AI that is driving silicon content. That's why Android continues to grow with Snapdragon 8. And I think the upside that we have seen above expectations is really Android expansion for Qualcomm.
- [11:35]
Ed Ludlow
Cristiano, good morning. It's Ed. What you've tried to do is diversify away from mobile and away from Apple. Right? But there are so many categories now Datacenter but auto mixed reality. Which of those is is the fastest moving for you right now?
- [11:53]
Cristiano Amon
Look right now what you probably see in terms of the speed it's, it's automotive. I think we have been growing significantly on, on a year over year basis. And most of our growth again like the conversation with handset has nothing to do about the market size. It's just us gaining share those cars becoming really computer on wheels. And we build a digital platform for the car industry which is the Snapdragon digital chassis. So when you talk about diversification away from handset in an Apple a couple of things that actually came out in those results that are incredible and you show what we we've been saying we're doing it. We just close our fiscal year the non Apple related growth in the company about 18% and when you look at segments like automotive we're actually doing significantly higher than that. And that's also other segments as well. The other part of the question is what's moving faster? And we are incredibly optimistic about those new category of mobile devices which we call personal AI devices. As AI models in agent applications started to appear for consumers, that's materializing with devices that people wear like us Glasses for example, are really becoming agenta glasses. And we said 2 billion of revenue by fiscal 29. We're way ahead of that. Just looking off how is it performing right now, especially with matter?
- [13:29]
Ed Ludlow
This is the first opportunity we've had to speak to you since the big Data Center News AI 200 to start. And the question that I've had most often for you from the audience is what is quite different about Qualcomm's approach particularly to inference? You have the this accelerator family or npu. How is it different from an Nvidia AMD gpu, a Broadcom Marvel XPU or this large body of startups that are basically chasing rack scale solutions for AI?
- [14:00]
Cristiano Amon
Yes. So I'll start answering the question by saying the following. There's a lot of people that will love Qualcomm. There are people that are not going to like Qualcomm. But one thing everybody's probably going to say don't bet against Qualcomm being a technology competent I think look, just last year with the number one company in America in terms of patent applications and every market that we actually enter, we actually develop something very unique from a technology leadership. So now to answer your question, what are we doing? We're actually, we're very focused on the next phase of data center. The next phase of data center. If you expect all of those projections to materialize and all of those companies investing in data center and AI to deliver the profitability the market expects, they're going going to have to do inference. Inference is likely when you put AI into production at scale. And if you see just some of the conversations you see in the market right now about concerns of growth rates, power is one of the concerns. You need a lot of energy. So we coming from our DNA of building devices, they're very efficient in power and we think about what are the architecture that is dedicated for inference, especially for the post gpu. I think architecture and I think that's what we're doing. I think we're developing an architecture that is optimized to the highest possible compute density. You can put on a data center for a very efficient power and people are interested and we're just busy executing. I think the other part of the answer Ed is why we, why you not think that Qualcomm will have an opportunity to participate. The market is so big, we don't have to get a lot. Everything we get is a multiple of billions of dollars.
- [15:46]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Cristiano, you brought up a really interesting if, if, if some of the big numbers that are being bounded about by the big players come to light, $3 trillion by 2028 is what Morgan Stanley thinks is going to be needed in data centers. What if it doesn't? Is there a risk that we actually innovate? Because we have to innovate because it isn't enough power and suddenly that data center demand just isn't going to live up to that expectation.
- [16:11]
Cristiano Amon
Now for Qualcomm, for us is all upside down.
- [16:14]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
So do you think, can I just get a take on whether you think that $3 trillion figure even is reasonable? Do you have any negative worries, any concerns?
- [16:23]
Cristiano Amon
Look, I don't, I, I believe that the need for compute is very clear. That's not only, also not only on the data centers everywhere. I think we see that on phones, we see that on cars, we see that on PCs. AI needs a lot more computing power. And I think it's, I believe what that will actually do is create opportunity for innovation and there will be competition. Right now everybody's playing to win, everybody's building data centers to win and then there's going to be competition. And I think that's what our focus is. But I don't believe the trend and the need for a computer. You can have an argument about the timing, but the trend is very clear. Here's one way I'll describe it to you and I'll be very careful with my words. The Internet, when we thought about what the Internet will be back in 1999, is bigger today. It's much, the Internet's much bigger today than people thought. On the long run, AI is probably underestimated. Is going to be bigger. The question is always going to be about timing and we're preparing for when there's going to be competition.
- [17:28]
Ed Ludlow
Cristiano, I'm on of Qualcomm. Great to have you back on the show. Thank you very much. Figma delivered an upbeat outlook, projecting stronger than expected quarterly revenue and profit, citing strong demand and growing adoption of its new products. I sat down with CEO Dylan Field who began by explaining the impact of growth from acquiring weaving a startup focused on generating imagery with AI within a web browser. We've is this amazing product where you can bring in all sorts of models, you can compose them in a node based system which basically means drag and Drop visual programming and from there you can really start to explore what's possible with various models. So for us it's a bet that the starting prompt is just the starting prompt, it's not the end. What you need to do is shape these outputs almost like a medium, like clay, rather than try to go for the one shot and then the final destination should be what you get through. Throughout this process. The team itself is incredible. I mean they've managed to really balance simplicity with power. So they're able to achieve an incredible environment for creative exploration and process and workflow building and really excited to work with them and build this out further. It brings me back to the customer behavior question. So revenue for the full year will be 1.044 billion to $1.046 billion customers. But I guess it's is this existing customers using more products or is it a customer count growing higher because you're offering a wider range of products? Yeah, I mean definitely both and also new customers adopting. We are seeing an acceleration all that and our NDR for example went from 129 to 131% this quarter and that's on over 10k air our customers. The way that we look at just what's going on overall is people really like the platform aspect of Figma and that is something that drives adoption. But also the interoperability between the different products we have is really important and something that we are trying to make all the better. All the time in the quarter gone, net losses were driven by stock based compensation. Yeah, the one event related to the IPO in particular relates to the IPO in particular. But you know, stock based comp is part of this business in the world of technology. But it's also like part of the fabric and culture of the technology industry. Particularly now where we have this, this fixation on AI talent. What is your strategy going to be from this point Dylan? Just less stock comp or you just have to manage it differently? Well, I think that first of all it starts with making sure that you see and everyone sees stock stock based compensation as an actual expense. And I think that as we build out we will see that number normalize on a non GAAP basis. This is a profitable quarter for us and we continue to invest heavily in the short term in order to drive long term platform growth and capabilities for our customers. I think that every customer wants that and our investors want that as well.
- [20:47]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Dylan Field FIGMA CEO with you add. Meanwhile, Robinhood also reported earnings yesterday. Shares actually falling the morning though the company's crypto earnings, they were lower than expected. Meanwhile, operating costs, they were higher. Now, Robinhood CEO Vlad Tenev sat down with us yesterday and discussed the trading plan platform's plan to expand its offering.
- [21:07]
Ed Ludlow
The interesting thing about prediction markets is it rounds out the offering and sort of like completes the time at which Robinhood customers can continue to engage with the platform. For a while we were offering predominantly US equities, which is very much a US east coast working hours type of event. Markets are open, you know, nine to four east coast hours. And then we've expanded that over time with us introducing 24 hour market. We've added crypto and now prediction markets. A lot of the events, particularly in sports, are happening nights and weekends. So Robinhood is becoming increasingly a 24.7platform where you can trade and invest in global markets at all times of the day. And I think our customers do tend to be digitally native and quite savvy. That tends to lean younger. But we also have customers that are in their 70s and 80s. And as long as you're comfortable doing your finances on a mobile device and you want to be at the frontier of technology, I think it's something that transcends just young people. Of course we always want to be relevant to the next generation, but, but Robinhood, I feel like you should be at a disadvantage if you're using any other platform. That was Robinhood CEO Vlad Tenev speaking after the company's earnings call yesterday. Now, coming up, AI seems to be taking a toll on US Jobs. We'll talk about the October labor cuts next. This is Bloomberg Tech. For every six Chinese people, there's a ping on customer. We have accumulated a massive amount of the customer data, not just on the financial side, but end to end across channels thanks to our AI advancements.
- [23:08]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
This is the technology empowered growth at.
- [23:10]
Caroline Hyde
Ping An Podcast in our latest episode, Ping an is utilizing technology to provide integrated and personalized 24. 7 support for China's rapidly growing elderly population. Now available on Spotify, Apple Podcast and Ping An's website.
- [23:24]
Chris Britt
Hey, Ryan Reynolds here from Mint Mobile. Now, I don't know if you've heard.
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Ed Ludlow
But Mint's Premium Wireless is 15amonth. But I'd like to offer one other perk. We have no stores. That means no small talk. Crazy weather we're having. No, it's not.
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Chris Britt
It's just weather.
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Ed Ludlow
It is an introvert's dream.
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Chris Britt
Give it a try@mintmobile.com Switch upfront payment.
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Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
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- [23:49]
Caroline Hyde
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Ed Ludlow
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- [24:55]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
I'm now for talking tech and first up, Apple is turning to Google for help overhauling its Siri voice assistant. Now the iPhone maker is planning to pay about billion a year for an ultra powerful 1.2 trillion parameter AI model according to sources and the hope is to use the technology as an interim solution until Apple's own models are powerful enough. Plus, AI looks to be making its mark on the US labor market. Last month saw the most job cuts by US firms for October in two decades. So according to data from Challenger, Gray and Christmas, the firm pointed to AI reshaping industries. We're also acknowledging the impact of of cost cutting and rightsizing post pandemic that.
- [25:34]
Ed Ludlow
Okay, coming up, Tesla shareholders have voted on the proposed $1 trillion pay deal for Elon Musk and his future at the company off the market today. We'll find out the results of that vote. Stay with us. This is Bloomberg. Tech.
- [26:19]
Cristiano Amon
Companies worldwide are Projected to spend $375 billion on AI infrastructure in 2025, with that figure increasing to $500 billion in 2026. Meet New Era Energy and Digital a NASDAQ company symbol NUAI delivering energy resilient AI native infrastructure supporting the next wave of AI growth in Texas announced MOU for 1600 mile high capacity fiber network across Texas New air energy and digital symbol nuai.
- [26:51]
Ed Ludlow
Hi Julie, it's Pam.
- [26:53]
Caroline Hyde
Listen, I just saw the storm warning and they're saying it could be bad. I know the store is going to.
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Ed Ludlow
Be a mad house but we need to stock up on Food.
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Caroline Hyde
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Ed Ludlow
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Caroline Hyde
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Ed Ludlow
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Cristiano Amon
Well gah.
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Ed Ludlow
You sit on this all day.
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Kunjan Sobhani
How did you get in my house?
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Ed Ludlow
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Drew Hambly
Okay, my chair has lumbar support.
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Ed Ludlow
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Drew Hambly
Nice.
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Chris Britt
Two for one.
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Ed Ludlow
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Drew Hambly
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Ed Ludlow
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Ed Ludlow
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Caroline Hyde
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Ed Ludlow
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Caroline Hyde
I do not believe any company anywhere near this size has has ever.
- [29:17]
Ed Ludlow
Delivered a compound annual rate of growth.
- [29:22]
Caroline Hyde
For EBITDA, which is a bottom line number of 41% over 10 years.
- [29:28]
Ed Ludlow
No company has done that. So yes indeed the incentives are aligned. If he and his team are able to deliver on that number, the stock.
- [29:39]
Caroline Hyde
Is going to outperform enormously. Kathy, if by chance this proposal is.
- [29:45]
Ed Ludlow
Rejected market, would you consider shedding some of your Tesla position? So I'm happy that the prediction markets.
- [29:54]
Caroline Hyde
Are at 90 to 95% in terms of this is going through so we.
- [29:59]
Ed Ludlow
Don'T have to think about that clearly.
- [30:02]
Caroline Hyde
If Elon left, we think about it in two ways. One, we think Robotaxis. He has them at the starting gate as of June.
- [30:12]
Ed Ludlow
June.
- [30:12]
Caroline Hyde
And now they're rolling out and that.
- [30:15]
Ed Ludlow
AI project is well underway. If he had left five years ago, three years ago, it probably wouldn't be.
- [30:23]
Caroline Hyde
Anywhere near where it is. What we now think though is in order to capitalize on humanoid robots, which.
- [30:32]
Ed Ludlow
That'S a much more difficult project.
- [30:35]
Caroline Hyde
That yes, Elon's brilliance and the team.
- [30:38]
Ed Ludlow
He has attracted around him are going.
- [30:42]
Caroline Hyde
To be next necessary to pull that off.
- [30:46]
Ed Ludlow
That was ARK CEO and tester shareholder Cathie Wood. Her firm voting yes on Elon Musk's $1 trillion compensation package. What about firms that voted no? CalPERS, the largest public pension fund in the U.S. voted against the pay passage, citing the fact that the deal was far larger than CEO pay packages at comparable companies. Drew Hambly is their investment director and joins us now. Wood's argument that Drew, which you heard, is that if they continue and achieve the EBITDA goals, that this proposed package is set from us by the board, then the outperformance of the stock will make it in the interest of shareholders. You don't agree with that? Why?
- [31:30]
Drew Hambly
Well, thanks Ed. So you know, we can't predict what the market's going to do and we're, we're evaluating pay packages, we look at them vis a vis other comparable companies. So let's say he does achieve all those goals, but say the market does as well too. Are we really paying for alpha or you know, is that a market beta? When we looked at the last eight years of returns going back to when the original package was put into place, Tesla was one of our best performers. It wasn't our best, but it was in our top 10. And then when we compared, you know, the annualized pay of the 96 million they want to give him in the restricted stock award that vests in two years. And then we looked at median pay of these other high performers in our portfolio and that pat, that piece of the package alone is 73 times the median of other high performing companies and CEOs in our portfolio. And we just thought that multiple gap was too high through.
- [32:29]
Ed Ludlow
The board is going to argue, they have argued on this program that Tesla is not comparable to other companies. Elon Musk is the only person on the planet planet who has the skill set is what Robin Denholm told us. The real point of tension that you have with others is the concentration of voting power. You said at the time that you cast the vote or confirmed it that it put too much concentration of power in a single shareholder. That's exactly the rationale that Elon Musk is proposing investors vote in favor of the package. He wants the voting power in order to achieve the goal goals that the board have set him. How do you reconcile that going forward?
- [33:11]
Drew Hambly
Well, we look back and at one point he owned 25% of the company and then sold off half of it. And they've achieved goals with him being a 12 or 13% shareholder. So I don't see diluting shareholders by another 12 or 13% changes the dynamic. He also is a person with a huge stake in this company. I don't see why he to wants, would you want to do anything that would damage it? So I don't see why he needs any extra control over what he already has. I mean, he and the board together own about 16% of the company. And you know, we don't think diluting ourselves by another potentially trillion dollars, you know, changes that dynamic.
- [33:52]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
I suppose Elon's argument has been there at this inflection point and it's moving not just from cars and they still want to have, have what, 20 million cars on the roads, but it's going into the era of AI and into humanoid robots. The army of robots is going to be producing. Would you want him to have the most say over an army of humanoid robots?
- [34:12]
Drew Hambly
Well, I think he already has tremendous say as the largest shareholder of the company. You know, as a, you know, governance person. Do we want so much risk in one person? You know, maybe he is the visionary that the board thinks he is, but we don't know what could happen to anybody. And to have this much risk placed in one person and to dilute ourselves just to one person. There's tens of thousands of people working at Tesla creating value and if it is, you know, so key on just one person, key person risk, you know, that's a worry for me as a shareholder.
- [34:49]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
You are all about stewardship and of the pension fund holders that you report to ultimately. But you've done this job for a long time over at Morgan Stanley and other players. If Elon Musk was to walk, would that be in your role of stewardship? How do you manage to balance that out of what the risk is if indeed he did leave?
- [35:10]
Drew Hambly
Yeah. So we do think of ourselves as long term shareholders and a lot of our portfolios indexed and so we plan to hold this company for a long time. So, so we try not to worry too much about if, you know, one person leaves today or tomorrow, we're in it for the long haul. So if he left tomorrow, would that be a short term Hit to the business, possibly. But if we're going to hold this company for a long time and the board, you know, has to replace him and get somebody in, you know, terrific. Maybe not as good as Elon, but pretty terrific. We still think we're going to benefit over the long term by holding the stock.
- [35:47]
Ed Ludlow
Drew, we got many, many questions from our audience for you. One of them is what Caroline just asked, what happens if Elon leaves tomorrow? I think the other one is people would really appreciate an explanation of the criteria by which you cast your vote. So you explained on the comparisons, historic patterns. But one, one way that it was put to me is in the context of CalPERS is do you understand the company? Did you look at the, the mandatory goals set by the board and say, okay, this could be to the benefit of all of our stakeholders in our pension plan?
- [36:22]
Drew Hambly
Yeah. And we evaluate every pay plan, you know, case by case. And so we did look at those things and what we're trying to do when we're, you know, paying a CEO is what part of that return is, is beta, and then where is the actual skill? And so it's hard for us to predict, predict what the bait is going to be 10 years from now at the end of this award period. And, you know, he might do very well. He might increase it by six times. The market could go up by six times, and that would be, you know, how would he be any better than anybody else? And so to give up that much control and dilute ourselves that much for one person, we think is a risk as well.
- [37:02]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
There's a risk that he might never achieve these goals. And you've seen that with other similar pay packages echoed. We've seen it in Airbnb. We've seen other players where they haven't managed to top the goals. Do you think a million robotaxes is achievable in the timeframe? Do you think the FSD is. Do you think the cars are.
- [37:19]
Drew Hambly
Well, it's possible that all those things are. And I think this time to the competition is greater than when Tesla came to market with their first car in terms of EVs, you have Google working on Robo taxis, you have the Chinese working on them. So it's going to be a more competitive marketplace. Certainly they are in a position to be one of the key players in this. But, you know, 10 years from now, we might be talking about, you know, three other companies that dominate Robotaxis. That's hard for us to know today.
- [37:47]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Drew Hamley. It's been great. Speaking with you. Thank you for your time. Investment director for Global Public Equity over at Calpers. Now let's take a quick look at the broader markets. Right now Tesla is actually a key drag on the NASDAQ 100 off by 1.8%. There's also the macro data, the jobs data that's got people a little bit worried for the month of October coming coming from Challenger Gray and Christmas. Let's move over though to some individual movers because earnings have come thick and fast and boy have they moved the stock doordash actually having a record drop at the moment. This is after their numbers came through. That really echoing to Uber. They are reinvesting in the business, reinvesting in Deliveroo. But that's going to crimp margins and therefore maybe not the growth story that many had anticipated. From a margin and profitability perspective, it's up by 15%. Snap though gets a little bit of I love why? Because, because, well, they've got a deal with perplexity surging under that $400 million perplexity ideal. And we see up almost 10% data dog as well having a pretty phenomenal day, up 21%. And this is as a software company look manages to keep on selling even though we do see a whole new era of cohorts coming for the eat their lunch. Thus far they're not eating it.
- [38:54]
Ed Ludlow
This is Bloomberg Tech and you're looking at a live shot of the principal room. Check out the Bloomberg Tech podcast. You can find it on the terminal as well as online on Apple, Spotify and Iheart. This is Bloomberg.
- [39:13]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Back to earnings now. Chime. It's just posted strong member growth, stable revenue per member and disciplined cost execution earnings. They beat expectations. It raised guidance and announced a share buyback plan. And yet the stock falls. Chime CEO Chris Britt joins us now. And you clearly think your shares are undervalued. That's why you're thinking about up to a $200 million share buyback. Chris, how do you digest this sort of market move now you're a public company.
- [39:39]
Chris Britt
Well, thanks for having me on guys. It's great to be with you again. I remember being with you on our on our IPO day. Yeah, look, we're recently issued stock. We've had two quarters now where we've the team's done an amazing job executing. We just announced 29% revenue growth year over year, 21% growth in our member base. We added 400,000 new active members so and we're improving our profitable profitability program profile at the same time. So we feel like we're executing really, really well. And I think it's incumbent upon us as a newly minted, minted public company to just continue to educate our investor base on the enormous opportunity ahead of us. You know, there's about 200 million Americans that make up to $100,000 a year that are not well served by the incumbents. And so as a newly minted public company, there's always a little bit of volatility in the stock. But I think it's incumbent on us right now just to continue to execute. And if we do that, I think the share price will take care of itself.
- [40:41]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
It is a macro picture that perhaps you fight here. We're suddenly worrying about fourth quarter. We're worried about a consumer, particularly perhaps a less affluent consumer. That is really the area you're trying to serve right now. What are you seeing in your customer base?
- [40:55]
Chris Britt
Well, we actually are serving the 70% of America that makes up to $100,000 a year. So this is a very large segment of the population. And if you look at our member base, the fastest growth that we're seeing is in the 75 to 100k earnings segment. And I think that's because of some of these new products we just launched like our Chime car, our new Chime card, which is a rewards card that gives 1.5% cash back on everyday spend and 3.5% on, on your savings account. But I think it is true that there's a bit of a malaise over a lot of consumer stocks that they maybe investors feel like are going to have a lot of pressure given that the tightening of the, of the economy as it relates to what we're seeing. We see a very healthy consumer. We don't see an uptick in unemployment or unemployment benefits coming to our accounts. We actually are seeing an increase in discretionary spend across our member base and people are, you know, going out there. We're seeing double digit increases in places like Costco, Amazon Respect, seeing people go to restaurants more. We're seeing people use doordash ubereats, paying for convenience. So we're not seeing the pressure that I think some companies may be experiencing out there. We see a fairly healthy consumer actually.
- [42:19]
Ed Ludlow
Chris, can you talk about how you're getting new customers to use more than one product? I think what's interesting is you are letting new clients who might not have a sort of direct deposit it set up with you experiment with my pay, for example, are you seeing evidence that they then go on to use other things. Absolutely.
- [42:40]
Chris Britt
We continue to see, if you look at our cohorts and we have this in the supplemental portion of our, of our earnings, you can see that as our cohorts age, they continue to not only adopt products at a faster clip early in the relationship, but they also continue to throughout, throughout the life cycle and over the course of, you know, these are primary recurring direct deposit relationships that we've really honed in, in our business model of being able to cultivate and that leads to many, many years of recurring revenue and more engagement over time. And as a result of that, you see expanding average revenue per active member. But yes, it's true. We're, you know, we're doing everything we can also to make our accounts easier to use right out of the gate date. And we've seen a lot of success with getting people to fund accounts and then eventually convert to direct deposit later.
- [43:31]
Ed Ludlow
Chris, quickly to finish, what's the next new product frontier for Chime?
- [43:37]
Chris Britt
Well, we announced on the call a great development for us which is that we converted all of our processing onto our own internally built tech stack called Chime Core. This is a huge unlock, not just a, a significant cost savings advantage for us, but also it will unleash a new era of innovation for us. We announced a number of new features that we're looking to launch over the course of the next year. We just launched our Chime card that I explained earlier. We're going to launch joint accounts, custodial accounts, investment services and importantly, we're going to continue to add more tiers so that our more premium members, those that, that engage with us, engage with us the most. And higher earning consumers get even more when they bank and do their every everyday payments with Chime. So you should expect to hear more on that front as well.
- [44:29]
Ed Ludlow
Time CEO Chris Britt, great to have you back on the program. Thank you very much. Coming up, we're going to speak with Lyft CFO Aaron Brewer after the company's latest earnings results. Don't miss it. This is Bloomberg Tech. Run a business and not thinking about radio. Think again because more people are listening to the radio and iHeart today than they were 20 years ago.
- [44:56]
Caroline Hyde
And only iHeart broadcast radio connects with.
- [44:59]
Ed Ludlow
More Americans than TV, digital, social, any other media, even twice as many teens than TikTok. And that reach means everything. Just think about the universal market marketing formula. The number of consumers who hear your message times the response rate equals the results. Now let's get those results growing for your business. Radio's here now more than ever. And iheart's leading the way. Think radio can help your business. Think iheart Streaming, podcasting and radio where.
- [45:29]
Caroline Hyde
The reach is real.
- [45:30]
Ed Ludlow
Let us show you@iheartadvertising.com that's iheartadvertising.com or call 844-844-Iheart one more time. Just call 844-844- Iheart and get radio working for you. There are two kinds of people in the world. People who think about climate change and people who are doing something about it.
- [45:54]
Chris Britt
On the Zero podcast we talk to.
- [45:56]
Ed Ludlow
Both kinds of people. People you've heard of, like Bill Gates.
- [45:59]
Drew Hambly
I'm looking at what the world has.
- [46:01]
Ed Ludlow
To do to get to 00 not.
- [46:03]
Drew Hambly
Using climate as a moral crusade and.
- [46:06]
Ed Ludlow
The creative minds you haven't heard of yet. It is serious stuff, but never doom and gloom. I am Akshat Ratty. Listen to Zero every Thursday from Bloomberg Podcasts on Apple, Spotify or anywhere else you get your podcasts. Shares have lift up about 7% on track for their biggest jump since middle September. The company projected an acceleration in bookings this quarter, easing investor concerns about the company's global expansion efforts. Here with more is Aaron Brewer, Lyft's cfo. I think will be really interesting. Is okay this current period the outlook is strong, but what are the underlying behaviors that you're seeing driving that from riders and the different products that they're using?
- [46:51]
Caroline Hyde
Absolutely, you know, a couple of things. One of the nice things is this acceleration and the foundation of our performance is multifaceted really. So we've got, we reported in the third quarter an 18% growth in active riders. And yes, that does incorporate our recent acquisition. But even in North America we're seeing the strongest active rider growth hitting all time highs. That's led to gross bookings at all time highs. Adjusted EBITDA up 29% for the quarter and then $1 billion in trailing, trailing twelve month free cash flow. We've got our partnerships with the highest penetration rate ever. That's even before we announced the United Airlines deal. We've got of course the acquisitions flowing in and we've got loyalty programs that are differentiated in the industry. And all of this is driving again, highest retention rates ever.
- [47:38]
Ed Ludlow
So your job's difficult. It's great to have you on the program, you know, and when we have a cfo, you have this balance right? Investing for growth and then discipline, discipline. So in Europe that's been the strategy. Invest M and A. In the United States, you're chasing Uber, you know, and you need to be disciplined. And you very keen to talk about the bottom line performance. You personally, how are you managing that right now? What's the priority?
- [48:01]
Caroline Hyde
Absolutely. You know, a couple of things that I would say we, our market is so large, right? That's what we focus on. The, the penetration and the opportunity that exists broadly in the market. 300 billion trillion personal vehicle trips that exist across the markets we serve. We're not even close to getting, you know, as an industry, even let alone Lyft, where we can potentially be as it relates to investment. You know, it's pretty easy when you're in a growth industry because you've got lots of opportunities. So you're right. As a cfo, you're thinking about how do you do that in a disciplined manner. The great thing is, is we're sitting here today in a position with the strength of our free cash flow to be able to do that, to take advantage of opportunities where we can drive shareholder value. We've also been buying back shares. We'll complete a $500 million million dollars share repurchase in 2025. So a nice balance. And we see that continuing going forward.
- [48:51]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
The opportunity many see, Aaron, at this moment is av. And you've taken interesting partnership routes. You're also doing things with Baidu and there's a real commitment here to almost own part of the fleet of Robotaxis. How does that change so of an asset light model that you've had thus far?
- [49:06]
Caroline Hyde
Yeah, you know, one of the things I think that's really interesting to highlight is that Lyft today owns cars across multiple cities in the US through our subsidiary Flex Drive, Drivers can come and rent. So we really understand this model of owning assets. We have assets on our balance sheet today and of course, as the market develops and we've been very purposeful about the partnerships that we are entering, delivering, you know, we're absolutely going to do that in certain cities as we scale, as we learn. Baidu, as you mentioned, is a portion of that. We'll be doing a little bit of that in some of our other partnerships. So it's something, again, we know how to do. We still see ourselves long term as an asset light company, but as the industry develops, we're going to make some of those investments.
- [49:52]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
What's interesting is I think it's by 2027, you want some of these eight EVs on the road. I mean, Uber's got a commitment for 100,000 car goal by 2027. How realistic are these?
- [50:01]
Caroline Hyde
Aaron, you know, that's you know, I'm not going to comment on necessarily their goals, but we absolutely see if you might, you know, look, five, seven years down the road, you know, perhaps 10% of the volume we serve could be served through AVS, both the combination of partnerships that we're in and maybe assets that we own. So, so it's a huge opportunity. I think the other important thing in that stat though, is you're still going to see huge volume served by drivers. That's why we're really focused on the hybrid network. That's what's going to make the difference and be economically viable.
- [50:35]
Ed Ludlow
Aaron, very quickly, what's the timeline to integrate the chauffeuring business into the core Lyft app?
- [50:40]
Caroline Hyde
Yeah, if it's all, well, look that it augments what we've been growing in terms of our own business. We have high value modes, premium modes on our platform today. They're up 50% year over year in Q3. So this is a great extension to, you know, continue to build out that offering as it relates to the way that TBR Global Chauffeuring will operate. They've got incredible clients all around the world. It's in fantastic business. It's not going to be on the app in the near term, but the synergies, synergies that we see with the 1500 independent fleet operators that they engage with across the globe, we're going to drive some synergies there. And the service capability they bring to our company is incredible.
- [51:20]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Aaron Brewer, a joy to have you on the show. Thank you, cfo.
- [51:23]
Caroline Hyde
Thank you. Thanks, Carolyn. Thank you, Ed.
- [51:25]
Host/Interviewer (possibly Ed Ludlow or Caroline Hyde)
Stay well. Meanwhile, that does it for this edition of Bloomberg Tech. Earnings second fast.
- [51:29]
Ed Ludlow
Earnings second fast. There's a lot more to come. Musk paved after the bell. Check out the pod. Shout out the pod. Lots of you. Listen to the pod. You know where to find it. It's on all the Bloomberg places and on the Internet that we're listing on your screen right now. Have a great afternoon. This is Bloomberg Tech.