Apple's Earnings and Qualcomm's Upbeat Forecast

From the heart where innovation, money and power Collie in Silicon Valley, NBN. This is Bloomberg Technology with Caroline Hyde and Ed Ludlow.

I'm Caroline Heinder Bloomberg's weltad quarters in New.

York, and I'm Ed Ludlow in San Francisco. This is Bloomberg Technology.

Coming up. We push our head to Apple's results after the bell.

This is investors anxiously await iPhone sales numbers.

US.

We'll sit down with the CEO of qualcom Is the chip maker, offers an upbeat forecast.

And the CFO of door Dash joins us to run through the company's latest results.

All that and so much more coming up.

There is a wealth of micro data of company news today.

That we're going to be digging into.

Not to mention New York based Peloton, but I'm looking at what's happening on a broad index today.

Ed.

We're seeing the nasdak cup seven tenths of a percent post the FED. We're relieved that we're not going to see rate hikes coming, but certainly still no signal over those rate cuts as we still see a resilient US overall jobs picture, which we get the detail of come Friday.

Yes there's a calling.

Maybe the slowest increase in jobs since November, but still resilient. We're seeing a ten year yield just down one basis point. A little bit of movement into the mode market on the day post fed as we anticipate the jobs data and Bluemberg dollar index actually weaker as we see a little bit of a relief there. We're down by four tenths of a percent. What therefore is bitcoin doing the

Let's start with Peloton, an absolutely wild morning session in the market. So far CEO Barry McCarthy is going to step down the board. We'll find a new CEO. Fifteen percent of global headcount going to be cut. The story overall, things are not getting better for Peloton. Look at the chart two day chart to illustrate the point that when the market opened there was a session high of eighteen percent cheering. What is another restructuring and yet we're now

Market had hoped.

We're gonna get deep on that later in the show were Bloombos Mark German, but that is just a real ride that stocked this morning. The earning story is elsewhere as well. Quill Calm up almost ten percent. The smartphone market seems to be recovering. There's going to be a lot to talk about with CEO Christiano and on later in the program in the context of AI and also

Yeah, because we did actually see strong numbers for fiscal first quarter revenue on the higher side, but it was this worry about the forecast that is setting the shares lower. DoorDash CFO the perfect person to speak to about it, Rabbi in Conda. Thank you very much indeed for joining us, Rabbi and just talk to us about why this restrained outlook for adjusted a bit dark come the second quarter.

And why then the ramp in the second half.

Good morning, Carolina, thanks for having me this morning. Q one was a very strong quarter for US across the board. If you look at the results, demand on the platform continues to be very strong. All time highs in terms of users, all time high in terms of subscribers, all time high in terms of order frequency. In Q one, we fulfilled more orders than ever before in our history. Honestly, you've been one of the strongest quarters since I've been

So did you get frustrated when the shares full because the market wanted to see more in terms of profitability for the forecast.

Our goal has always been to continue to build the best product possible, and you're seeing that in our results.

Users, Like I said, I've been in an all time high.

We ended twenty three with over thirty seven million consumers and that number continues to grow considerably since that point. We're not seeing any weakness, whether it's the large, you know, enterprise merchants on the platform or the local merchants on the platform. You're seeing wrong double digits scapes, stores, sales growth across the world. Our grocery business is growing at one hundred percent year on ear for the third straight

Robbie, I'm building the best product possible. It's easier way in on the adjusteday with the forecast. There's some sense that you're investing in specific areas and that might be impacting the bottom line. Right you're investing at the technology layer. What are you doing and what's the goal there?

Yeah?

In Q one, you know, one of the key things that impacted the overall business is we did absorb some costs in New York as well as Seattle.

That cost is.

Going to continue to reduce as we go through the rest of the year, as we make the business more efficient, as we consider other opportunities to consider to make.

Those costs go down.

If you recall our business, the core restaurant's business has actually been profitable for many years now. We're taking the it's from that business and building two new businesses, grocery as well as international, both of which are growing extremely fast. They're growing faster than our restaurant's business. At the same time, the profitability of both of those businesses is going up. If you look at our new verticals business, the third party component of it has been gross profit positive for

Just really quick. You mentioned Seattle in New York. There's a kind of idiosyncratic factors in the quarter. Just explain the basics to audience of what happened there. On the policy front, Yeah, on the.

Policy, if I look up, our goal is always to work with policymakers and regulators. We do that in over hundreds of cities across thirty different countries to ensure we're protecting the flexibility and accessibility the doctors and couriers across.

The globe we're asking for. I just HELFU are.

Honestly like extreme examples of that regulation.

We've taken some action to.

Change the way in which we operate. We're making the business more efficient, and our goal is to continue to work with policymakers in.

That regard, Let's just get details on operating profits. You say they'll come in the near future. The market expects the third quarter, are they right to expect that?

Look, I mean, our gap net loss is the lowest in our history. What you're seeing in the business is the growth is strong. Profitability across all lines of business is improving. I do expect the trend to continue. And if that trend continues on both the growth as well as the profitability, the overall business is going to be gap positive.

It's just a question of time.

Our free cap flow has been very strong. If you look at the quarter, we've generated roughly about half a billion dollars of free cash flow. And that's truly our north star in being able to rabas in the business.

Robbi real quick, what are the specific consumer habits, the size of the basket that they're doing, Lots of frequency, little spend like little things like that.

Sure, what you're seeing in the business today is more consumers ordering from more categories. Historically, people thought of us purely as a restaurant delivery platform. Today are consumers roughly about twenty percent of our consumers are ordering from convenience grocery alcohol. We have increased the basket sizes across Robbi.

Rabbisfi, Robbi and a condo.

We've got to go.

Thank you.

Caron.

Yeah, if we have some breaking news, let's go to the President Biden delivering remarks right now.

The first is the right to free speech and for people to peacefully assemble and make their voices heard. The second is the rule of law. Both must be upheld. We are not an authoritarian nation where we silence people or squash descent American people are heard. In fact, protests is in the best tradition of how Americans respond to consequential issues. But neither are we a lawless country. We are a civil society. An order must prevail. Throughout our history.

It's against the law.

Vandalism, trespassing, breaking windows, shutting down campuses, forcing the cancelation of classes and graduations. None of this is a peaceful protest. Threatening people, instilling, firing people is not peaceful protest.

It's against the law.

Descent is essential to democracy, but descent must never lead to disorder or to denying the rights of others, so students can finish the semester and their college education. Look, it's basically a matter of fairness. It's a matter of what's right. There's the right to protest, but not the right to cause chaos. People have the right to get an education, the right to get a degree, the right to walk across the campus safely without fear of being attacked.

Thank you very much.

The protest forced you to be consider any of the policies in regard to the region.

No, thank you.

Do you think the national.

President might delivering remarks at the White House regarding protests student protests that's bring in Bluemug's Kaye lines for more and against violence and destruction, but well full peaceful protest.

Yeah, the President making it clear that he does stand by Americans' right to free speech and that that should not be interfered with. But yes, Caroline, essentially that it should be done peacefully. The President, and making these remarks in the Roosevelt Room, said descent must never lead to disorder or denial of rights, that the right to protest does not mean the right to cause chaos, going on to say that there is no place for anti Semitism

He said no.

He also said no to the question he was asked about whether the National Guard should be interfering in these instances on the college campuses. He said no to that as well. I would also point out we will be hearing from President Biden on the issue of anti Semitism again next week on Tuesday, May seventh. He is planning to speak at the Capital as part of the National Holocaust Remembrance ceremony that will be happening on that date.

Bloom bells Ka lines, thank you for the context on that. It's interesting because we've been talking about protests at different university campuses across the country and indeed across the world for several days at least. Now, what was the politics of this with the president, but what was the pressure on the hill and the conversation about whether or not Biden would come out and say anything, and the timing of it.

Well, we had heard President Biden speak on this before, saying that he condemns anti Semitism, although he also had suggested that people need to understand what's going on with the Palestinian people. But certainly the domestic political pressure has been growing. We have seen specifically Republican members of Congress

Talking of Israeli policy.

Breaking news that Turkey has indeed halted all trade with Israel. That's both exports and imports to and from Israel as of Thursday. That's according to two Turkish officials familiar with the matter. Katie Lines bringing us the latest from what the president has been saying. Meanwhile, now we want to return our attention toward is in an investor's focus right now.

We are still a mid earning season.

Today is Apple reporting quarterly results after the market closes later today, giving investors kind of a better sense of how the iPhone maker is weathering at sales slump. We've also, though, got to be talking about what on earth is happening over at Peloton. It's its shares slump too. Bloomberg's Mark Gum and for more on what to expect, let's just kick off with Apple because it is the huge company that many focus on.

What are we lining up for?

Yeah, Apple earnings? The expectation for the fifth time in six quarters, Apple is going to report an annual decline. Revenue is expected by Wall Street to come in at about ninety billion in change, which would be about a five billion dollar dip on year over year. The other

Mark Hardware and Services is a pretty wild story when it comes to Peloton Bluembo technology team. Let's show the two day chart and just go back over what happened. Opened up as high as eighteen percent, is now down more than ten percent in the session. The CEO is going after two years, another headcount reduction, and I think no sign really that Peloton's got a strategy to get itself out of trouble. Give me the details.

I don't think people realize how close Peloton is to bankruptcy. Right, they'll be lucky to remain on the stock market much longer. If you ask me, I'm shocked that Barry McCarthy stuck around so long. There is nothing he didn't try. There

Just looking at the Bloomberg terminal, and just to give some specifics, the stock is at a record low. They ended the quarter with about seven hundred million dollars seven hundred and thirty seven million dollars of cash, and they did say that because of the headcut count reduction, they'll say about two hundred million dollars a year and cash

Time now for talking tech.

First up, video game publisher Take too Interactive and plans to shut down two subsidiaries as part of a mass layoff across its divisions over in London and Seattle.

That's according to documents review by Bloomberg Now.

Last month, Take two said it would lay off five percent of its staff.

That's around six hundred workers. Meanwhile, let's take a look at Starlink, as it's still operating.

In multiple unauthorized regions even after the company issued warnings last month that its satellite internet will be shut down by.

May first in those areas.

These notices come after a March investigation by bloombag News, which first revealed the extent which Musk's satellites are being used in countries where it is illegal to operate, including in territories ruled by repressive regimes. And regulators moved to bar a Huawei lab from approving telecom gear.

For use in the United States.

Now it's a proposed similar moves now against other providers deemed a national security threat, including several Chinese companies. The SEC says this will ensure that these non government labs aren't quote influenced by untrustworthy actors.

And we've got more Hunhuawei.

This is another big Bloomberg story. Chinese seller communication as giant Huawei is secretly funding cutting edge research at American universities, including Harvard, through an independent Washington based foundation. Here with the scoop is Bloomberg's k O'Keeffe in Kate. At the heart of this reporting, like all good Bloomberg reporting, is you following the money. What did following the money tell you?

Right?

Well, what we saw is that over the past few years, Huawei has funded hundreds of researchers and spent millions of dollars and it was all really without their knowledge. They thought they were being funded by a foundation based in Washington, DC that is called the Optica.

Foundation competition administered by Optica and in fact Grant's I think you say, there are eleven opportunities on the Optica Foundation website to have early career prizes and fellowships, but all but the Huawei funded competition are basically clear about which backers are providing the money. What did ultimately the Optica Foundation save for its quietness on Huawei's money.

Right exactly, So the other ten opportunities are made clear that they were funded by an individual or a company or some combination. The Huawei funded prize appeared to all the people that I spoke with to be funded by the foundation's general funds, and the response from Optica's CEO was that, look.

You know, there's a lot of donors who.

Want to remain anonymous, including US donors, and you know, effectively, you know, there's no issue with it.

There is examples in other jurisdictions of Huawei being a bit more public having initiatives to make inbros in those markets, I think, particularly in Europe, Kate, explain what you learned there.

Yeah, that's right.

I mean, as we as we reported in countries like France, in Germany, Huawei is openly funding, you know, research centers.

In the US, it's a really different story.

Because several years ago the US government moved on multiple fronts to restrict restrict Huawei. One of the major restrictions that have been in place are at sport controls, and that blocks people and individual people and companies from sharing tech with Huawei.

But what's interesting about this.

Competition is it actually kind of falls through the cracks of all these different regulations because it deals with academic research, which is for the most part meant to be published, and therefore it is not subject to the current export controls that we have in place in the US.

Nevertheless, and as a great quote in your piece says, it's a bad look for prestigious research foundation to be anonymously accepting money from a Chinese company. So really, ultimately this is about sort of the feel of it rather than actually the letter of the law.

Well, right, there's nothing illegal about this as far as I could tell in my reporting. It does, though, put the universities who actually accept the money on behalf of these researchers, as well as the researchers themselves in an uncomfortable position because a lot of the university these have decided independently that you know, they don't want to work

Kate o'keith, first, great big deep dive for us here at Bridemerg.

We so appreciate you joining the show. Thank you very much.

Indeed, welcome to our Bloomberg television and radio audiences worldwide. Quowdcom stock significantly higher around ten percent the story. Things look like they're improving in the smartphone market globally, and within that there's a lot of nuance. There is specific action in China and there's strength also for the chips that go into cars in the automotive sector. Delighted to say that Quidcom CEO Christiana and one joins us. Now, good morning to you, Christiano, and let's start with China.

Very good good morning to you as well. It's a great morning I think today. But look the story on hints's in China. It's pretty simple. We've seen the market had stabilized. We had said about that a couple quarters ago, and users aren't buying better phones. It's really for us a story of flagship and high tiers within the Android, especially a lot of those flagships that are launching with Genai. I think we see the very beginning of Genai coming to devices and that actually drove you know, a lot

Christiana, As you know and our audience knows, we will talk about on device when it comes to generative AI. Let's just linger a moment longer on China. It looks like some of the domestic players that Android base are gaining market share against Apple and the iPhone. You see that in the I d C data, you see it in the counterpoint research data. If that is the case, where the domestic players are gaining that market share, what does it mean for Qualcom.

Look the way you should think about our position in China in the hinter market, we have been very focused on the premium in height tier word Snapdragon. So when when an Android OEM from our customers show me up a one plus Honor Vivo when they're selling a flagship device, we have a lot of content. Not only we have the more content, but we have a lot of the

Is there any anxiety from a political perspective, Christiano, You've obviously weathered the fact that you're.

Only in Huawei four G phones.

Now you're actually seeing basically ultimately revenue pull away by the end of this year for Huawei. But the geopolitical context is clear. How difficult is it to you to be so dependent on China.

Look, the first thing I want to say is our business is not just China, and I think what happened with the smartphone this is a phenomenon globally. I think you even saw Samsung when they talk about it the earnings called they have a commentary about the device AI opportunity for flagships.

It is real.

So the second part is the way we think about everything is if you have a leadership position in technology, you're going to have a big business in China. It's just a function of the size of the market. And I think that's been true not only for Qualcom, for a lot of other companies that have leadership product position.

And to this.

Point, I think we have been seeing our business in China can continue to be a stable business. We have not been restricted by like everybody else in the industry, you have to monitor the situation. I think this is how we have to navigate in the semiconductor industry. But we're happy with the results we have right now.

Let's go therefore to the technology that is winning out, and you talk about AI on device, how are people using it? You've got snaptrack at eight series Gen three mobile platform that's really meant to be supporting generative AI at the moment, basically with a personal assystement assistant potentially, But how is that a reality for any or many?

Look, I love talking about this and I wish I had a lot of time, so I'm going to try to summarize it in just a few minutes.

The first thing that is happening.

You need to think about AI running on the cloud and the device as a new way of doing computing. And we're just at the very beginning of the use cases. So right now we can see, for example, multiple tens of use cases, and I expect that within six months from now will be hundreds, if not more. What are people doing with it? You see some use cases of life translate. You can watch a video, you can add a subtitle in any language, you want. You can do

For a Bloomberg television and radio audiences worldwide, we're speaking to the culowdcom CEO, Christiano Amon, and I think you summed it up well. Christiana. We're in the very early stages of the world where we're running ten billion parameter models locally on device on the small inside. But we're already talking about the AIPC.

Right.

You guys have your latest generation which will come to market Snapdragon ten Elite and plus, and it's very impressive combination of CPU, GPU, NPU. Give me a minute, we'll talk about MPU. But I still think a lot of people struggle to say, what am I going to do sitting in a cafe running allion dollar a ten billion parameter model while I have a cappuccino, Like, what's the actual real.

World use case?

Okay, you know, we could not be more excited about what's happening in PC. I really think PC is reborn with the Snapdragon ex Elite, and it's not only because of the performance, but because actually AI. By the way, we can run twenty billion parameter on the ax Elite. This is it's it's evolving very very fast. But the use case are really incredible. Think about now there's AI running all the time. Everything you're doing on your PC. It is running and it's private, it's your data, it's

But it's much more.

The AI is helping you recall documents that you have on that you've seen or you have on your computer. It's going to help you do things, going to reminding of things that you have to do or even it's going to help you with tasks that you need. You don't know how to do it, and they will help you one step of the way. That's going to change how we use our computers. And the interesting thing is how do you do this in a way that you don't compromise battery life.

A CPU and a GPU have a job to do.

And that's why when you buy a PC today, you want a fest CPU and a fast GPU, but you need a whole new engine that needs to do something else and needs to do it all the time and not compromise battery life.

That's the Qualcom story, and what is.

The market share story of Qualcolm.

We've been hearing a lot about other competitors getting into the AIPC space.

I think this is the great story for Qualcom because we're new, we're just entering the market. I think we're going to see a lot of the devices coming up in the second half of this year. I encourage everybody to watch the Microsoft build and the incredible things they're doing with the new Windows, and I think what's going to happen is Qualcom is coming in with the leadership product.

We like the design traction.

Financially, that's going to be more of a fiscal twenty five event because a lot of the laptops are going to be in the shelves for the second half and back to school. But the product momentum is great. And here's how you should think about Qualcom market share in general. One thing about the company, and it's been the history of the company, everything that we set ourselves to do.

The track record exactly not bad.

When we entered the Wi Fi or, we became number one, we entered the rfron end, we became number one automotive, we said we're going to go into automotive. I think our story there is very very good. We're becoming the prefer partner of the industry. We said we're going to enter the metaphorse we have every single design. Now we're saying we're going to enter the PC. And we started

Fart intwo call com CEO Cristiano Aman, We thank you for bringing the energy today.

Thank you great talking to both of you.

All right, let's get some news in the world of private markets and venture. Blood testing company carry Us raised one hundred million dollars in a new funding round from investors led by existing investor Coastal Adventures, alongside five AM Ventures and Glide Healthcare. The company declined to give its valuation, but says that we use the cash to get its technology for detecting hard to identify infections in to more hospitals.

Yeah, well, great to be back.

Last time I was here in January, we mentioned that we counted over one hundred companies that we felt were ip already, and I'm glad to report that that number is still holding strong. We've seen also some great activity in the public markets with Rubric going out first software IPO of twenty four. We saw some strength with the Sterei Labs, which is an AI infrastructure hardware play arm held.

Up post lock up.

These are all data points that would suggest that not only is the IPO market strong, but the M and A market is thawing as well. So with Hashi Corporate IBM and talks of informatic and salesforce, we feel that the big thoughts here were very optimistic for twenty four and into twenty five.

And the reason that we want to have you on the show, and I guess that you give yourselves a little put on the back is that you identify the names early that go on to be successful. It seems to me though, like even pre seed, but seed in Series A is becoming a very competitive space in the context of AI.

Absolutely.

You know, look, AI is one of those things that people are focused on.

Every VC in the valley is looking at AI.

We think of it not just as an innovation from a technology point of view, there is a technology you know, step function and change there, but also from a business model point of view. So let me give you an example. Most software today is sold via license model. Whether you use it or not, you pay for the license and you know that's that, or it's a seat based model where it's per set. What if that business model changes to a per consumption basis, so you pay for the

Max.

What's therefore the viewpoint when you bet on those founders of their exit right now? Because what we're seeing with AI startups is they're having these increasingly interesting partnerships with big legacy businesses that the likes of dwn Lobe are currently saying are actually going to be the winners of the artificial intelligence revolution. Do you think it's all about M and A when it comes to these AI bets.

Well, Carolyn, it's a good, great question.

If you look historically at the VC market, most of the exits have happened via m and A. Right, there's a few giant winners and the power to laws take effect with IPOs, but MNA is really important, which is why it's important for us and encouraging for us to see this big thaw that's happening. To your other question.

Two, of course, keep on raising fund to keep on allocating to the founders the very early. You've got to have this proof of track record, which you have. And I'm just interested as to if you've got any companies that you're thinking about to get out the gates, how you bracing yourself for your own IPO pipeline.

It's a great question.

A few things have to happen for an IPO to occur, and they happen often very far in advance. So one is often up leveling of leadership teams, right functional roles in finance, in marketing and sales and product et cetera. So we see that we see cap table fortification with the introduction of crossover investors that are both private and public investors that come on.

In Nvidia is big one doing at the moment.

That's right.

And you know, the other thing that we see, which is probably the strongest leading indicator is the number of independent board searches. Through our executive recruiting partners, we've been hearing the uptick in that and we feel at firsthand as well, and with many searches that are going on with our portfolio, a lot of companies are getting ready for this and it's happening, and it's you know, behind the scenes, but it will happen.

Ah, and boy do we brace ourselves for it. CRV general partner Maxkazor, thank you so much for spending time with us talking all things exits. Meanwhile, coming up, let's talk at AB and B revealing a new once in a lifetime stay and experience category.

I bring you all the details. Next, there's some good pictures. There's a bluebog technology.

The world's biggest record label, Universal Music, said it's entered a new licensing agreement with TikTok, ending a dispute that led to its artist songs being pulled from the social media platform Bluemos, Alex Brinka here, Rihanna Drake joining Taylor Swift back on the Tiktoks give me the deats.

They are Since February, basically the music from artists under You and g have disappeared from user speeds and from the artists themselves because this deal was not e play.

Well thank you from New Meg's Alex BURINCA brilliant get all the assessment but also going viral Airbnb announcing is the latest category Icons, a new vertical for extraordinary experiences, hosted by the greatest names in music, film, television, art, sports, and more joining us now at the details blue makes Natalie Lung, I mean, is this just a bit of good pr or is this actually going to bring in real money for Airbnb?

Right? This is definitely part of their marketing expense. It's expensive to build the house from up for example, from scratch and placing it in New Mexico and hosting it up a fifty of a crane fifty feet off the ground. So this is definitely a marketing expense for them, but they hope to be able to drive more traffic new users. A user account is required to sign up and also reach new audiences abroad.

This was a big thing that played out on social media, so they tried to do the thing from the movie up, but it was with a crane. And then I saw all these founders and people associated with Airbnb, pat Brian Chesky on the back. For him, this seems like a bit of a personal project, Natalie.

Right, It is definitely a personal project, something that he has done long long before this launch. They put an Ikia home up on Airbnb, and of course last year there was the Barbie Dreamhouse, which went viral. So this is really him taking Airbnb beyond some of the core experiences that we all come to know. He wants people to be inspired by these homes.

We'll see he starts wanting to get in on all of these one of the kind experiences. Natalie n thanks for bringing us a pretty fun story to end, as long as you're not afraid of heights or something.

Meanwhile, that does it for this edition of Bloomberg Technology.

Yet, what a big show, and I imagine there will be another big show in twenty four hours time because Apple Reports after the bell recap, all the conversations, so many stories, great Bloomberg reporting on the podcast. We're putting the pod on Apple's Spotify, iHeart and the Bloomberg platforms. And once again, just a big thank you from Karen and so many of you reach out saying that you listen to the show in podcast form and we'll keep