Airbnb's Record Plunge, Disney's Mixed Earnings

From Mahart where Innovation, Money and power Collie in Silicon Valley, NBN.

This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

Live from San Francisco. This is Bloomberg Technology coming up. I sit down with the CEO of Lyft, president of Shopify, and COO of Reddit, and we break down those companies' earnings results. Plus we stick with earnings as Airbnb sees a record plunge on a week outlook, and we dig into Disney as the Mousehouse offers a mixed picture in its earnings. Let's check in on the markets and as that one hundred up for a second consecutive day by actually, no,

Check out this chart.

So in the session, Airbnb is on track for its biggest drop ever.

We're worried about the outlook.

We're worried about what Airbnb had to say about its peak holiday season, even though some executives took to the social medias to tell us things, all right, let's talk about Airbnb and bringing Bloomberg's man Deep Sing, senior analyst at Bloomberg Intelligence. So what they said was moderation sequentially of growth, and the growth wasn't that good in the courts have gone. So if you extrapolate, you're basically saying, hold on, this is the best time of year normally

Yeah, look, and you're right.

I mean, given its Olympics and you know, a lot going on in terms of holiday planning. They talked about shortening booking windows. And to me, you know, the biggest risk with Airbnb is not that they don't have a great mode. It's more about the saturation in the alternative accommodation's market and whatever new products that they have launched, whether it's rooms or experiences which they have had for

Okay, so Mandy, your stocks down twelve to fourteen percent, the most on record. What do you do if you're the CEO? You go on social media and say it's a great time to buy. Would you agree with Brian Sheesky's thesis here?

I mean, he had a floor last night and during the earnings call to talk about the plans, and nothing we heard was very exciting. Look, long term, as I said, this company has a great mode. It clearly is a category leader in alternative accommodations, but can it keep growing double digits? And I think there are question marks they can do it at least in the next two to four.

Quarters, Bloomberg's Mandep saying at Bloomberg Intelligence, thank you.

I want to get more on the market.

Outlook is equities trade broadly in the green with Bloomberg's Emily Graffeo. You know, I don't know about you, m I'm kind of recovering a bit from Monday's the trauma of a near three percent decline on the Nasdaq one hundred. But in the market there's the growth concern, there's the central bank policy concern, and then there's probably earnings. What's the outlook of all of that in aggregate.

Well, the outlook is that the volatility is not expected to subside, even though we are seeing this market rally yesterday and at least today. When you look at the Vicks volatility index, typically when we see a spike like we did on Monday, that means that for the next several trading sessions and even up to weeks, we'll see

And we remind our audience in Vidia doesn't report until August twenty eight, then everyone's kind of treading water till that point. Bloomberg's Emily Graffeo, thank you very much. Aside from this week's massive sell off, some of the world's biggest equity hedge funds lost hundreds of millions of dollars from piling in to popular tech stocks. Amid the stock route that hit markets in around mid July, Bloomberg Temma

Who are they and what happened?

Yes, so we saw a lot of pain over at Light Street, down nine percent and one month alone of July, still up forty for the year, but definitely a difficult month for them. That's likely due to their very big position in the video As of March, that stock for about seventeen percent of their portfolio. They also have sizeable

Bloomberg's hemmapalma with the data and the hedge fund ownership of big tech.

Really appreciate it. Thank you.

So.

Coming up on Bloomberg Technology, we're going to be joined by Reddits COO Gen Wong to discuss the company's results and their outlook for sales growth and interesting conversation. Gen really at the heart of some of the deals that Reddit is doing. One other name that I'm looking at is in the chip sector, Micron in particular, let's bring up the stock and take a look at it. There's several stories out there, one of largely around share buybacks.

The stock up two point seven percent.

Remember we've covered this really in the context of high bandwidth memory recently, but also it's one that is in a lot of end markets, smartphones, d ram and nan flash being one as well.

This is Bloomberg Technology.

Reddit beat analysts expectations on sales growth after expanding its data licensing partnerships and investing in new advertising technology. The company's revenue forecast for the third quarter also beat estimates. Delighted to say that Reddit's COO Gen Wong joins us

Yeah, thanks for having me look at the markets of the markets. But when we look forward to the back half of the year, I think advertising is a pretty stable market, and what drives our growth is what drive our growth in Q two, which is delivering against our consumer and ad roadmap and continue to drive value for advertisers.

As we head into the back half of the year, and we feel really good about the yield on that roadmap.

Okay, Jen, you've been very busy since last week spoke, I think principally about the deals with NBA NFL. What I'm trying to understand is how those kind of video focused partnerships contribute to your ad revenue or ad growth going forwards from this point.

So, Reddit is home to an incredible group of fan communities, and the sports communities are some of the most active engaged on the platform, and they're global, and so the idea of having those partnerships with the sports leagues was to bring in special content like highlights, like access to players for amas or to insiders, for those communities to enjoy. So that is really our starting place for it. Now what's great is that does create an opportunity for advertisers.

To support that content.

Some of those advertisers support that content and are aligned with that content on other platforms like television, et cetera.

So it is a.

Really nice win win win for users and communities and Reddit and advertisers. It's early, it's a program that we're testing, and we've done some work with the NFL.

Now we've expanded it to more leagues.

We are excited about it because I think the communities are excited about getting access to that content. And if you think about it, you know, we've done partnerships with US based leagues, but there are so many more sports and so many more global leagues that we could engage with. And then the fan communities, they go beyond sports.

On Reddit, there a gem.

I am a I am a long serving, suffering and passionate Chelsea fan in football what you'd call soccer, and I dive deep into Reddit when I want to see what the fan base wants to know you. And I've discussed previously licensing of data to the AI companies Google Open Ai, but a few months have elapse and I'm wondering if you now have a better sort of vision for the long term potential of that business model away from advertising.

Look, I think that landscape is still emerging and it's still early days for for AI, so it's a long arc. We've been I think, very thoughtful about how we structure partnerships.

Our view. They're not one year, they're not long term.

They're sort of midterm partnerships that allow us to learn and find a way to work with this new area.

And see how it goes.

So I don't think, you know, I think we still continue to learn in this process because I think it's a very long mark. I do think some of the things that we've done have established a foundation for having these partnerships. So if you look at our public content policy and you look at the changes.

That we've made, I think we've made it really.

Clear how we want the ecosystem work because we are stewards of Reddit data and user privacy, etc. Is really important in allowing scaled access to Reddit disk.

Jen.

When I sit at my computer in the morning, I use various search functions. It's often a Reddit post that will come up and it's quite easily discoverable, specifically Google Search, but going forward, Chat, GPT, there are platforms where that's not the case, being do you have a clear strategy for search expansion for Reddit content.

Look, we have been beneficiaries of the open Internet. We believe in the open Internet and allowing people to get access to important information and reddits. Corpus has some of the best and most important answers regarding everything, product, services, life, etc. So we want ready to be open but we have to have a set.

Of rules for doing that.

And search and summarization and AI and data usage, they're sort of all merging right.

This is part of what's changing in the world right now.

So I think our view is we will have a conversation with anybody about having access to the data. But we've been very clear and transparent about our rules, which are our public content policy and protecting user privacies, being good stewards of data, and that we have to have a conversation where those policies and rules are respected.

And then there's commercial alignment.

So we're having conversations with every player large and small, and I think we've made it clear that what the rules are and how to make this work, and the fact that we've signed deals I think is a sign that we're sensible.

There's a path here to do that.

Jen, the stage is now very much set for a presidential election race for November.

How does that impact Reddit?

Do you kind of foresee boost from political ads or even just activity on the platform centered around the election.

Yeah, we actually are not a big player in political ads. We never have been.

Politics is obviously a big area that our community is engaged with on Reddit. So we do see conversation. But what I would say is on Reddit, because we have so many diverse communities, different communities have moments at different times. This is a presidential election year, so politics is going to be a little bit bigger, but then Olympics was a little bit bigger, and then there are seasons where

COO gen One, it's great to have you back here on Bloomberg Technology.

Thank you very much for your time. It's time for talking tech.

And in the news, soft Bank announces a three point four billion dollar buy back. The Tokyo based firm said it would purchase up to six point eight percent of its free floating outstanding shares through August seventh of next year. The move comes as CEO Masayoshi's son prepares for a large scale push into AI and semiconductor investments. Plus Hewlett Packard's fourteen billion dollar deal to buy Juniper Networks gets

The deal was similarly.

Passed just last week by the European Union, and Sony raises its revenue and profit forecast for the fiscal year to March.

The company saw a successful.

Court in its music and gaming divisions, with operating profits at one point nine billion dollars. It's PlayStation division saw a lift, but it's PS five consoles sold just two point four million units, significantly below the three million units that analysts had expected. Let's get back to the earning story and take a look at Shopify. The global commerce company reported earnings results before the opening bell this morning,

Good morning to you, Harley.

It's good to catch up and then have you batch on Boombog technology. Things are going right for Shopify. The environment's hard to understand. Is there something specific that Shopify is doing better or well in that environment?

I think so. I think absolutely so.

First and foremost, I think we've earned the trust of millions of merchants in business all over the world.

We announced a month ago month or so we all go announced.

Then we have now powered over a trillion dollars with a T in CUMULOGMVS and sart inception, which for us is is really incredible. But I think we're not just helping merchants compete. I think we're propelling them to victory. And in terms of you know, how Shopify is doing in particular, I think these results demonstrate that we can do we can create the serious combination of both growth

Yes, our fifth consecutive quarter at least twenty five percent.

Top lane growth when you look at free cash low or free CASHLW margin more than doubled from last year from six percent to sixteen percent. Now, in terms of sort of the more macro I guess you know, the sort of macro questions you're asking. Look from our vantage point, I'm hearing from other companies what you're hearing as well, But from our vantage point, our merchants, the merchants on Shopify are outperforming others in the market.

They're growing at healthy rates.

We're adding more merchants every day, and I think as a result, we're getting more market share.

Harley, real quick, I just want to jump in because I you know, it did go well for me the quarter. You've kind of been suffering from slowing growth in prior quarters, and your emphasis was a marketing marketing, but something jumped out. You talked about a partnership with a social media platform that really helped out.

What platform was that, What.

Were the specifics around that as a catalyst for.

You, Yeah, I mean the truth is the way that we think about marketing the same way we think about product ed we don't necessarily it's all about data, and so when we see a particular marketing opportunity, we take that opportunity and the way that we think about all our marketing channels that these are levers. So in Q one, we did an experiment with a new emerging marketing channel, emerging social platform. We put some money to work, we

So which big social platform was it.

We don't go into specifics on that.

It's just an example of something that we're constantly experimenting with. There's not that many emerging social platforms. I'm sure you can figure out which one. But the point actually that we want investors, we want the street to take away is that we are always looking for new ways to grow the business. And again, five consecutive quarters of above twenty five percent top plane growth while being profitable. There's not too many companies that can do that at our

I've spoken to so many businesses small and slightly bigger that use Shopify, I get the benefit of it. So this is about discoverability, right, adding new merchants or markets to your platform. But let's do the math. If we won't name the social platform, what ballpark was the spend because turn on that campaign seems to have been very definitive in the quarter.

Well, think about this.

When we started to we've been public now for just over nine years. Initially we were focused on e commerce for SMBs in very specific regions. We now have a point of seale offering that surve passed one hundred billion dollars in GMV International for example. Over fifty percent of merchants that join in Q two on Shopify we're from outside our core English speaking countries. You know, two years ago we didn't have a B to B product, and this past court a B to B Jimmy grew one

Harley, we enter the summer months and then we have the holiday season here in North America. Do you kind of market hard in the summer in the hopes of having business transaction later in the year.

Real quick, Look, I think the key is that I do think the holiday will be very good. But because we have so many different verticals of merchants. We have you know, Figs doing scrubs and pet products from bark Box. We have Nestlie and Heinz and Mattel and Stables are using Shopify. We're not relying on one particular type of merchant, but I think the merchants that are on Shopify are doing disproportionately well.

Harley Finkelstein, President of Shopify. Great to have you back on Bloomberg Technology. Thank you so much. Welcome back to Bloomberg Technology. Ed Ludlow Here in San Francisco. Disney gave a mixed picture as it reported third quarter results, with weakness at its famed theme parks, though it made its first ever profit in streaming, but with so many bundles our consumers getting streaming fa Tegue. Disney CFO Hugh Johnston joined Bloomberg earlier.

Listen to this.

Consumers do seem to appreciate having a limited number of bundles. Now, what we've tried to do with they're on offering is offer the individual pieces or if people want to get a discount by bundling, we're happy to do that.

So that said, I think you do see.

A trend where there's probably going to be a few big competitors in the marketplace and streaming as we see right now between Netflix, Amazon and ourselves, and then there'll be some smaller competitors out there and they'll have to decide how they're going to run their businesses.

Are you concerned that consumers right now potentially are going to shrug off the price increases, because what we hear from a lot of companies is that we do see consumers trading down. Why do you think they're willing to pay for a higher price point?

Well, I think the biggest reason is it's always important to focus on this. The consumer receives value and what they pay is price. And because we're delivering so much value, I mean, really an enormous amount of value in terms of the hits that I just mentioned. But then in addition to that, the combination of Disney plus Hulu and then we're going to have an ESPN tile and ultimately

That was Disney c FO Hugh Johnston. Take a look at Disney shares.

We're off session lows, but we're down one point nine percent. The company also commented on its negotiations with Hulu in a filing today, saying it may have to pay five billion dollars more to acquire comcasts thirty three percent minority stake in Hulu. The two sides have disagreed over the fair value of Hulu and entered into arbitration. Proceedings to stock by the way down two percent so far in the year. Let's discuss all this with Lightshed partner Rich Greenfield.

When you see subscriber growth slow of actively to a halt and the price has gone up pretty traumatically, it's you know, it's pretty clear. I guess in many ways, it's sort of this, Hey, we don't know how to get more subscriber growth, so we'll raise the price and you know, hope that people won't and we'll even cut

And so it's.

Basically trying to you know, you know, get to profitability, drive profitability of the existing base. But it doesn't really seem like there's a tremendous growth story here, and I think that's.

Sort of you know, I mean, look, everyone's focused on the parks.

I don't think anyone's really focused on Disney Plus at the moment.

The streaming is a nice data point.

I think it's less about getting to profitability and like how big a business can this actually be ed? Like can this be a multi billion dollar free cash flow generating business the way Netflix? Or is this you know, going to essentially tread water, you know, at a low single digit margin.

I think that's what investors are really going to focus on over time.

I mean you and I have discussed the past, right, achieving profitability by cutting you know, cutting cost out of the equation.

So let's bring it back to you.

Do.

What you really want to see is people. You really want to see people who are so passionate. They love this service. They're willing to pay more because they're spending so much time. Like you want to see consumer love, and based on that love, you can keep raising the price getting more people to subscribe because there's great buzz.

And word of mouth.

That's not what's happening here nor any of these other streaming services.

So then let's talk about Hulu.

I just finished Star Wars Acolyte on Disney Pass, and like everyone else, I love the Bear on Hulu. You know, we did the reporting on the negotiation for that, the remainder of Comcast stay. Is it important if the idea is to achieve volume and get stuff that people want to watch? Do you see Hulu as being a sort of something that needs to be resolved as part of that.

I mean, Hulu is going to be resolved. We're just talking about the number now.

And I think investors are expecting several billion dollars.

Whether it's four to five, we'll obviously see.

But I don't think this is you know, I think obviously it probably Comcasts would love more, Disney would love less. But I don't think investors are stressing over what this number ultimately is. Investors are just surprised that the option was exercise last October.

I think it's sort of crazy that.

We're still talking about this not resolved here in August.

Rich If you could ask one thing of Bob Eiger, or give one piece of advice to him to fix this in a way that you think would be positive, what would that be.

Look, I think the bottom line is if Disney is really serious about being a long term and you heard Hugh saying they're going to be and the clip you played earlier, if they want to be a long term winner in the streaming game, it's not about discounting through bundling, it's not about cutting back on marketing. What they really need to do is invest very aggressively. Stop playing this near term Wall Street game of trying to get earnings growth.

That's what we'd like to see.

And look, you've got all of these theme park concerns that are sitting with the company right now, Like that's what investors are really worried about, is how did the theme park slow down this fast in the span of just the last few months when Disney historically has pretty good visibility.

I want to get some times talk about another name. Reddit.

We had Gen Wong Coo on the show earlier, very sort of patient, sanguine, calm about the ad environment, but sees a lot of opportunity in sports.

I know that you like that name a lot.

We do.

I mean, you know, if you think about what Reddit is, they really understand what consumers are interested in. And they've got one of the biggest companies in the entire world alphabet Google is in their corner. You know, you can't do a Google search and not see Reddit results rising higher and higher and higher. Google's paying them for AI Like Google is a firm believer in Reddit, If Google believes in Reddit, everyone watching this show and investing should believe in Reddit.

Like I think that is.

A really important data point, is that there is this increasing visibility reddits getting within Google and Jen Wong, who is now building out an ad business.

Reddit was very slow to get going. They've got it going now.

And we've seen other companies, whether it's Snap, Pinterest, go back x which used to be Twitter when those companies crossed a billion, Getting from one to three can happen very very rapidly, and especially at Reddit, where they really know who you are. They don't need third party cookies or data. They know exactly who Ed and Rich are.

Like you said, partner Rich Greenfield, really great to have you here. On Bluembog technology. Really appreciate it.

Thank you.

So coming up on the show, we keep the earnings conversation going with David Risher, the CEO of Lyft, discuss the company's earnings results, which reported before the opening bill this morning. Timely this is Technology. Let's get back to earnings and Lift the right check company reported before the bell this morning. CEO David Risher joins us live from New York City to discuss and the basics of it are that bookings, the outlook, missed estimates or street expectations,

Yeah, so hey, it's good to see you again. I mean, look, it's to me, it's a little curious, right, and this is sort of the way the world works sometimes. So we just had our first profitable quarter ever, which is an enormous accomplishment thanks to a lot of work for

Yes in team growth, So.

All those things were good. I think what people are looking at is they're seeing what I would consider to be, you know, incredibly small, you know, sort of kind of adjustment around what we've said about the future the next next quarter, in the next couple of quarters. And this to me sort of signifies, you know, sort of the

The prospects David.

There's some David Risher's strategy and plans that I see playing out, like price lock. Yeah, a paid feature that's going to have an impact, maybe on the top and bottom line. But why, why is that the plan for you?

Yeah? So, price lock is a way for riders to lock in a price just like it sounds like, on the same route and same time every day. It's really in first met for commuters, and it's available today. By the way, I encourage everyone to check it out. It's kind of in soft launch, and the idea is it takes away what I think is one of the most hated features of all ride share, which is surge pricing, right,

Advertising is a battleground as well. You know, I am so familiar with the lift at But why is advertising the way to go? And what with who with?

Right? You think about parallel industries?

Yeah, so you know, think about you know, of course, let's let's zoom way out for a second. Since the history of advertising, you know, brands have tried to come up with new ways to talk to their consumers, right, and one hundred years ago, maybe it was billboards, then

David.

When I reported that Tesla was delaying its Robotaxi event to October, the shares of your company jumped in that session. The vision is a proprietary app from Tesla for ride hailing, but a fleet of cars that drive themselves.

Tesla's Your stock.

Went up on the basis that everyone was like, Okay, the competition from Tesla's not yet coming. Just your latest thinking on that, please, Yeah.

Look, I think avs are going to be great for a lift, I really do. And I think it's because we're going to be the best way to commercialize what is a very very expensive asset. Different companies will try different things, but I think largely you'll have a lot of oms doing a lot in the av space and wanting them on our platform because of you know, millions of rides, all the technology we have to incorporate cars in our platforms and so forth. I don't want to

David Richard, the CEO of Lyft, thank you so much for joining us in the studio in New York. Thank you now shares lower of Rivian. After the ev makers second quarter revenue miss analyst estimates, just cash firm for the quarter came in bigger than expected. Earlier, I sat down with the CEO RJ Scaringe, listen to this.

We see that both through the excitement of our customers directly, but there's lots of ways to measure this. And we just had a JD Power as an annual appel study. We came out as a number one brand this year. We had a number one ranking on a JD Power study last year. So the reaction of the product has

Oh, Jay, the kind of summary of the earnings print was that all of the guidance previously issued was reiterated, and there's a lot of positivity around that. Very simply loads of people asked me to ask you, can you define what modest gross profit means or what you're defining it by in order to achieve it?

Yeah, I mean, ultimately, this has been the central focus for us as as a company that's a business, is driving cost efficiencies into everything that we do, into our bill of materials, into how we operate, run our plant, and ultimately driving towards getting our production of our r and t on RNs to positive growth, smart and ultimately to have the business gets a positive for cash flow and nonprofitability.

So there's a whole series.

Of steps we're making along the way in terms of improving costs, but the biggest singular step that we've made

In the first instance, sorry, Matt, I was just going to hold DoD Jay to account on that one and say, in the first instance, is it just like more than zero or single digits gross profit? Just I think that's the answer we're looking for.

You know, we haven't provided a specific number, but certainly by saying it's positive gross margin, it's more than zero. Our objective what we've guided to for a long time. We continue to maintain this guidance is the long term margin profile on our one should be around twenty five percent.

My interview with RJ.

Scaringe, the Rivian CEO.

I was shocked by the evidence uncovered by the House Judiciary Committee that a group of companies organized a systematic, illegal boycott against X. It is just wrong and that is why we are taking action.

That was Linda Yakarino, the CEO of X, after the company filed a lawsuit accusing an industry group of violating antitrust laws for an advertising boycott that costs the social media company billions of dollars in alleges in the filing. Let's bring in Bloombos, Kurt Wagner. An advertising boycott sounds severe federal filing in a court in Texas. Just explain the very basic accusation that X is making.

Yeah, I mean, the claim is that this group, this industry trade group for advertisers essentially you know, did anti competitive behavior.

Right.

They came out and they advised all the members of the group not to spend on X. Kind of created it, as you know, Yakarino said, a boycott of the business.

And they're claiming this is illegal.

Now.

I don't know exactly what an illegal boycott is versus a legal one, but ed you and I have seen boycotts of not only advertising but products all the time.

Right.

This is usually the way that consumers or businesses sort of voice their displeasure with someone, which is what happened in this case, shortly after Elon took over.

I don't really know whether this lawsuit will.

Succeed for them, but I think what they're doing here is sending a huge signal that, you know, one, the business is struggling, they need to do something out of a two picking a fight with the broader ad industry.

Right now, we're showing some more of the comments that Linda Yakarino made. It was interesting, you know the video posted to X Elon musk amplified it. I guess the context is that X has been suffering in terms of revenue or financially in the period since Must took over and Lindy Yakarino was appointed CEO because of this, Like, I'm trying to understand why they would take action.

Well, that's exactly right. They're saying that.

Look, this group is, you know, collectively getting everyone riled up to intentionally hurt Ex's business. Now, I think what's sort of interesting here is what does this ignore. Well, this ignores Elon's own behavior, right, which we have talked about on the show several times over the last couple of years. Right, you may recall ed late last year went on stage at a conference and told advertisers to go f themselves.

Right.

He has been very proactively aggressive to certain advertisers over the years, and so they are saying, well, hey, look, this group is illegally creating this boycott. It doesn't take into account the fact that some of this decision making may simply be because people don't want to work with Elon given the things that he's done and said to them.

Bloomberg's Kurt Wagner, thank you. I mean a complicated story. There will be a legal process will follow it here on Bloomberg Technology. That does it for this edition of Bloomberg Technology. Another busy day of earnings, fantastic interviews with executives from across the world of technology recap on the podcast You know exactly where to find it on the terminal as well as on Apple, Spotify and IHEARTQ the Beautiful Pictures.

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