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Live from New York. This is Bloomberg Technology coming up. The NASDAQ one hundred plunges into correction territory as the rotation from big tech continues. Plus, we break down the results from tech heavyweights Amazon and Apple, and Intel shares falling by the most since nineteen eighty two as the company offers a grim forecast and slashes thousands of jobs. The picture in financial markets is severe this Friday. The focus is the technology sector. This is the NASA one hundred.
Over the course of the week, we are on track for our eight week of declines, matching the run that we saw in April of this year. We have entered a technical correction on the NASDAQ one hundred. In the moment, about eighteen names on that index in the red, fewer than twenty in the green. The story is about three names in particular. Let's bring them up. We're going to go into the earning story with Amazon and Apple with
our reporters, and later a detailed look at Intel. Yes, that is a twenty eight percent decline about fifteen thousand jobs will go reduction in CAPEX and op X. They basically have admitted that they were slow to respond to their reality that their market's not going well. From a top line perspective, we are going to get deeply into Apple, which is kind of a bright spot, and let's turn to that stock.
Now.
We're seeing a return to revenue for the quarter, but Apple not offering much in terms of clues about an upgrade cycle. When it comes to the iPhone sixteen. Bloomberg's Mark German is standing by and you and I manning the blog last night, a lot of emphasis on Apple Intelligence being a driver iPhone sixteen in the future. I think you and I have some doubts about that.
Right.
Apple knows that artificial intelligence, Apple Intelligence, because they call their sweet AI services are the buzzwords that gets Wall Street going right. For the past several quarters, Apple, even before announcing it i'd been teasing its new AI futures because it knew the market, knew Wall Street analysts were wanting this, it knew some consumers were wanting this, and so they focused a great deal of the call yesterday.
Tim Cook in particular as well.
As basically every analyst who ask the question talking about Apple intelligence. In my view, I think that Apple Intelligence, at least this year is still very nascent, and I don't believe it will or quite frankly, should drive iPhone upgrades this September. I think that's more of a next September and iPhone seventeen cycle thing, once all the features are available and we're a year out from that release, when more people are looking to upgrade.
Grade to China was a focus where there was a six percent decline in sales, but Apple told us about the impact of FX and on a constant currency basis, it would have been a three percent decline. See pass that mod What were the products stories for Apple in China.
Well, first of all, there was a time when Apple was drawing at such a big rate that they didn't need to get into FX, currency headwinds or anything like that.
They didn't have to contextualize.
These numbers to explain that they're better than they actually look on paper.
But that's one thing.
But the other thing to note is.
That they're doing better in China in the second half of the year so far than they were doing in the first half of the year according to them, So you're seeing a bit of an acceleration for them, and that is coming out a particularly good time given that this iPhone upgrade cycle is approaching at the tail end of this quarter, so they're going into that with a bit of momentum and that's certainly positive news for them.
So it's not all bad. I mean, if you look at the quarter in general and you look at the stock market today, it's clear why Apple's in the grain and almost everyone else in the Nasdaq.
One hundred is in the rey.
They beat Wall Street expectations, they grew revenue five percent, they returned to revenue growth after declining last quarter, and they beat on analysts forecasts for each of their major product categories plus services. So overall, pretty good day for the company.
Bloomberg's Mark Gumman, Chief correspondent, Thank you. Amazon has told investors that profits will need to take a back seat in favor of heavy spending on artificial intelligence. His CEO Andy Jase on his bullish view for the new technology.
It remained very bullish on the medium too long term impact AI and every business we know and can imagine. The progress may not be one straight line for companies. Genera AI especially is quite iterative, and companies have to build muscle around the best way to solve actual customer problems.
But Wall Street did not like that. Shares down more than eleven percent in today's trading session, on track for the biggest drop since April of twenty twenty two, wiping out about two hundred billion dollars. In mar Let's get analysis with Bloomberg intelligence analyst Punham Goyle, you and I were talking in real time after the numbers dropped, right, and I said, where's the capex number? We did get one. Your reaction to it, yeah, you know.
It's higher than we had expected. So they did thirty point five billion dollars in the first half. They expect two eh to be higher. We didn't expect them to continue.
To invest more.
So it is a bit of a shocker. But that said, if you think about Amazon for the longer term, the investments will pay off. The cloud business at one hundred billion dollars runway going to two hundred billion dollars by our estimate, it's going to need the investments, and also for Amazon.
To play catch up on general to AI.
Right, they're lagging some of the other peers, so you need to see them step up a little bit at least. We didn't expect it to be in two h but nonetheless it's coming and we do think you'll position a better for the longer term.
I still focus on the AWS top line number. Nineteen percent was better than expectations, and like forget the financials. On this program, we hear a lot about how great Bedrock is, about the utilization of the platform for many different things in the world of llm's and generative AI. Why was that not a convincing enough number.
Well, we had expected mid to high teen so about seventeen percent going into it. And while nineteen percent was a good number, undoubtedly the thirty five percent plus profit margin was also great. I think the focus just shifted all on the guidance and that's where the miss was. So I wouldn't discount that two Q wasn't good. I think two Q was very good on AWS, especially.
My control room and producers are showing index level. Would point out that there is a lot of red in the market's Punham and Amazon is a big factor in that. Bloomberg's Punham Goyle fantastic analysis. Let's keep a conversation going with Helena Wang, research analysts at Philip Securities, and I think let's start with Amazon. There's a micro focus on AWS, how much money is being put into investment, and then how much money's coming out in the AI story. What did you make of it, Helena.
Well, I think the hot topic of the last few week has been the huge CAPPAC span, whether it's justifiable. I mean, Amazon has guided exceptional increase in CAPAC since the last quarter. In the first half of twenty pointy four, their CAPPACK was thirty point five billion. They're guiding even higher a month of the second half of the year. Just to put in comparison, their CAPPACK so the entire year last year was only forty point eight billion, So that is definitely a very significant increase.
So, like all the other big.
Tech companies, they're selling their story of strong AI growth, very confident in their AI game. They would like to have more capacity than they already have today, and they're claiming that they're seeing strong signals of high future demand. I guess also, if you're in the AI race, it's almost impossible for you to stop investing in AI because in the short period you would be obsolete with no means to catch up but two investors. It really requires
a lot of impatience. Everyone is telling the things, so it's hard to see whether in the short term whose investment will.
Pay off in the Laura Helena just focused on AWS. We've hardly discussed the retail business or even advertising. Did you see anything in those segments of the business that interested you?
For AWS, it has been accelerating nicely and nineteen percent of your year. So what we especially like about AWS is there a high operating margin compared to retails.
Because AWS operating.
Margin is thirty six percent compared to retails, which is only single Did you so AWS right now only contribute to eighteen percent of the total revenue, So we do believe was AWS scaling up so fast it is going to take up a bigger portion of the entire revenue. So we see the real kicker for Amazon in the future would be the margin expansion brought by AWS.
Let's talk about Apple. You know, I look at the numbers. It was basically a beat across the board apart from China. How much embasis do you put on China number?
Well, I would see Apple is saying they still see it already as an improvement compared to the first half of the year, but the numbers.
Are definitely not great.
Usually when a particular market.
Is not doing well, Apple will specifically point out it's not really the iPhone but actually the other product category that drag the sales. But they have not commanded like that for this particular time, so we can take it that Apple is actually iPhone is actually part of the reason, or in fact one major reason for the decline. So domestic competition from local brand is still playing a big part. Apple was giving a huge discount in order to fight
the competition. That will also be called the factor that hurts.
Therenny Tim Cook and Lukeimi Street got a lot of questions about how Apple intelligence will impact an upgrade cycle in October, probably when when the sixteen generation comes. Have you done the math on that.
Yeah, I did so.
iPhone sales still remain pretty muted. They're down one percent year of the year for the splatter, so if you actually do the mass, they're guiding for five percent.
Grocery in the next fluorter.
So factor in service sector which is continually growing double digit, an iPad which grew pretty well also double digit in this quarter, so we're probably not gonna give so much in the next floyer. In terms of iPhone, it's probably going to remain flat or actually perform more poorly. So we're thinking that Apple intelligence boosts for the product cycle that everyone's been waiting for. It's probably unlikely to be seen in twenty twenty four. It's more of a twenty twenty five story.
If the question is if you have an iPhone fifteen or fifteen pro Promax, now do you get the iPhone sixteen? I think there's a lot more discussed around that. Helena Wang, research analyst at Philip Securities, Thank you so much for your time. Now, coming up on the show, we're going to be joined by Bernstein Research analyst Stacey Raskon to break down Intel's earnings. An Intel story that's next. This
is Bloomberg Technology. Intel shares suffering their biggest drop in more than forty years, this after the company gave a grim growth forecast and laid out plans to slash around fifteen thousand jobs, signaling that the chip maker is ill equipped to compete in the AI era. I want to bring in Stacey Rascon's senior analyst at Bernstein Research, leading
semiconductor coverage. I ask you where you'd like to start, Stacy, which of the many things announced and the sort of guidance given is the most important factor here?
Yeah? So so lok so.
I mean the quarter itself, revenues were actually not too bad. It was the gross margins that really killed them, and the guidance was clearly awful.
Revenues were bad.
I mean, they did a hockey stick in the back half from last quarter. Clearly the backup is not playing out the way they thought. Gross margins are are falling into the abyss as their uh, they get higher costs on their chips.
You know, clearly they're in a tough spot.
I mean they announced a number of actions to try to like salvage, you know, to stop the ship from sinking. They're cutting CAPEX, they're cutting off X. They actually finally suspended their dividend. You know, they had they had cut that by two thirds a year a year and a half ago, so they finally suspended it. And they're doubling down on bringing in partners that will co.
Invest on manufacturing capacity.
They sold recently, they sold half their fab in Arizona, they're building to Brookfield and they just sold half of their fab in Ireland Fab forty, fab thirty four to Apollo for eleven billion dollars and they got that cash flowing.
Now I'm on the right.
Look, this is why I've used the phrase worst earnings from Intel in my career a number of times over the last year and a half two years, and this.
One probably takes it. This time, probably the worst I've seen.
Yeah, as you you know, Stacey had the opportunity to speak to Intel's CFO Daves Insider when the numbers hit and we got into missed opportunity. I guess this is what he said about the data center business, and I'm trying to understand what he meant, but he basically is saying they were over exposed in CPU, and I guess therefore by extension under exposed in GPU. We all know the story. Anyone that lives or works in the world of technology knows that all of the investment is going
to high performance GPU or AI accelerators. Intel has one GALDI. So explain what Dave meant there, please?
Yeah, yeah, you bet so.
So they have been clearly over indexed, I mean almost entirely indexed to CPOs, and there's a few things going even within CPOs. By the way, you know, they've been losing a tremendous amount of share to their smaller competitor, so that's not been good.
And then over the last like you know, as the AI boom has happened, we've had a share of a shift in the spending patterns away from CPU who's toward GPS.
And other types of accelerats. And by the way, there's a broader question there. You could argue is that a cyclical trend or is that a structural trend? You're like, in five years, is the data center CPU TAM bigger or smaller than it is today? And like you can legitimately argue that it's smaller. So I mean that that's that's the issue. And the problem with Intel on that one is they don't really have that much of an AI or an accelerator play.
Like they have a product that's called Gouty. They said that.
They're going to sell five hundred million dollars worth of
it's called Gouty three this year. I mean, it's it's it's effectively a rounding error, right, I mean, you know, a MD said they're going to do four and a half billion in data center revenues, and I think people think they're going to do more than that in Nvidia, you know, data center they might be one hundred billion dollars this year, and the five hundred million doesn't make up anywhere near you know, like the the air pocket that's happened both as they've lost share in CPUs and
as that spending has shifted, so that that's that's kind of the problem and and freaking gouty at this point, is is baked like that that product is shipping like very clear the general demand for a relative everything else is very very minimal, Like it's just not enough to close that.
So they don't really have much of an AI story unfortunately.
On Stacey just real quick on cyclical end markets for them and non cyclical. I mean, the way that the CFO put it to me is that they just hadn't responded to the realities of their revenue, hence that the reduction opex capex and the head counts. But they did seem to be some glimmers of hope that coming into the current period and the rest of this calendar year, there are improvements in those markets.
Yeah, yes and no.
So I think PCs in general are better than they were.
Remember, though, they don't.
Sell PCs, they sell CPUs, right, And they talked about that there's inventory that's digesting in the backup, which is helping to impair it's impairing some of the revenue.
Now, this is something that I've been worried about.
We track the CPU channel pretty religiously, and you get over shipment, you get under ship and I've been concerned that at least in Q four and Q one, I think there was a fairly significant amount of overshipment of CPUs relative to PCs, and I think they're paying for that now. So you have some cyclical downside there, I think.
On the data center server side, you know, there's been some green shoots that hopefully demand is getting better again off of some awful years, but again people now having like recession worries and everything else, and again they're still losing share. The data center galuty lift isn't really enough. And then some of their other businesses. You know, they have an FPGA business called Altra, and all the FPGA companies that's the same thing. They're working off a ton
of inventory and that's not really getting better. Yet they still consolidate Mobile Eye, they own most of that. Compani's own Mobile Eye reported yesterday morning. We don't cover Mobile Eye, but just factually they slash their guidance for the rest of the year and so a bunch of revenue had to come up from there. It's just not great, and
part of it, I think is their own doing. Last quarter, they'd sort of suggested we'd be seeing above seasonal growth in the back half, and it's clearly clearly not having the macros.
The macro is getting worse.
And then on the cost side again, they've got some incremental cost headwinds that are pretty severe that are that are impacting gross margins and cash and earnings and everything else.
So Stacey resk On, senior analysts at Burnsteam Research, whether or not that is and will be the worst intel print of your career. I think you break up under this down okay, very quick. We have ten seconds.
Ten seconds the silver lining, the cash that they're saving from the cost cuts and the dividend you know, suspension, and the cap X cuts, and then all of the money they're bringing in they'll live.
I don't know what kind of a life that will be. They'll live. That's that's probably forty billion dollars of incremental cash over the next couple of years.
So they'll live. But what is what kind of a life that's going to be? I think that is the question that.
We're all okay with. Stacey Resk on Burnstein Research terrific. Thank you very much. There are some positive earnings prints talk about cloud communications company Twilio reporting earnings after closing bell Thursday. CEO because much Shipshander joins us for more from San Francisco. A big focus on growth. Growth that's coming in the second half. Growth that is kind of
evidence now. But this is the first time you and I have been able to speak since you've been CEO, So what have you done to change that growth trajectory?
Yeah, thanks for having me. I would say, you know, we're just like running the company with a lot more discipline, a lot more operating rigor, and as it relates to growth in particular, I think we've been very focused on some of the innovation bets that we've been making, and I think, perhaps most encouragingly, we're starting to see some real signs that this combination of communications which we're the leader in contextual data, which we're also the leader in
plus AI. That that combination to drive really personalized experiences for consumers visa VI the customers we support is starting to get some traction.
There's been a lot of emphasis well on sort of reorganization. What does the company Twilio look like now under the changes you've made, Kozma.
Look, I think the company organization is in pretty good shape. Actually, like about a year or so ago, we took steps to you know, kind of get our cost base in shape. But on the on the flip side, we also wanted to be really focused in the areas in which we wanted to grow, and so we have a communications business that we established at that time as kind of a proper business unit. We did the same thing with our segment business, establishing that with a proper business unit, they've
got kind of an aligned set of metrics. And I think the benefit of that is is that it also allows for a certain level of disclosure that investors were also asking for KOSM.
It is important to note that that where we are today is in part the result of activist investor interest in the company. You know, you seem to have responded to that positively taken action. Whild you just update the audience that's familiar with Twilio where we stand please, Yeah.
I just think fundamentally, like we're trying to run the company well well right, I mean, I think that's something that every single one of our shareowners want. It starts with financial discipline, you know, being smart about the bets that we're making. Obviously reaccelerating top line growth over time, we see positive signs about our ability to do that.
We're more optimistic about that. I think operating rigor just kind of the internal mechanics of the company, like doing that well, delivering on the things that we said we would do and actually you know, going and doing those things. And then I think when it comes to innovation, just
being really focused. You know. So we're taking a handful of bets, as I mentioned, one of those is really around this notion of contextual data, using that as a means to combine it with communications to drive interactions on the other side, like you know, we serve customers ultimately, and customers keep telling us that's what they want, and I think that's ultimately what's going to yield the success of the company as well as for our share owners.
Well, contextual data. But when we talk about AI and Twilio, a lot of it plays on what you're good at, right, voice intelligence, verify those products. Have you seen an AI driven acceleration or are you just saying we've been doing this a while, guys.
I think it's kind of early days, to be honest with you. But you know the nature of it is sort of in the product vernacular that you just referred to, right, So voice intelligence, right, I mean it's a little bit different than from where we were, let's say a few
years ago. Like, actually, what's taking place inside these calls now is the ability to harvest some of the data always with consumer consent, I might add, but harvest the data inside those interactions to pick up keywords, feed that back into an AI engine such that that information can be used to both make that particular conversation more interesting, more engaging for one of the consumers that our customers are engaging with, as well as at the same time
taking that data and feeding it back in so that over time that results in a more delightful customer engagement.
Coz of a Ship Chandler, CEO of Twilio, who stocks up five percent on a day when tech is down big Welcome back to Bloomberg Technology, Ed Ludlow in New York City. Let's get a check in on the markets. Big tech is under pressure yet again, with Intel and Amazon leading the way lower. They're disappointing results, pushing the Nazek one hundred into correction territory. That means falling more than ten percent since hitting a record high just last month.
But a different story for Apple this morning. It's in the green despite some disappointing numbers, particularly out of China. Now and listening investors are like are applauding the company's return to revenue growth emerging from a sales slump with five percent growth year over year. There are a lot of product stories within that, joining us for more deep water asset management, managing partner, Gene Monster and Gene. At the heart of your thesis is the debate around the
osborne effect technology or consumer electronics fan. We'll always think about Apple and the iPhone in that way, But why and what is the conclusion you've drawn?
Well, and maybe taking a step back, the osborne effect is a phenomenon that I'm sure any Apple user and any tech user is familiar with, but they may not know that defined as such. And that's this concept of if there is a pending big product coming, it's likely that you hold off on buying the existing product. Now, every year there's a slight Osborne effect, but the more anticipation there is for a next version of an iPhone,
the greater the Osbourne effect. And so I in my years of covering Apple, have seen quarters where they have guided down before a major product cycle. In the case of their guidance for September, they guided for similar revenue growth five percent for the September quarters they just reported in June, and so effectively they are bucking the Osbourne effect in front of what is a highly anticipated cycle.
And why that's so important is that's a sign that consumers simply can't live without Apple devices, that they still, even though it makes sense for them to hold off for just another month or two, they can't do it because they need these phones to continue to basically live their lives. And so I think that this was even though the guides was effectively in line for September, I think it really sent a powerful message to investors the
strength of their product line. I think that's why the stock is up today.
Gene. The top thing here is Apple Intelligence and the impact it will all won't have. Several analysts had multiple stabs of getting Tim Cook and Luke of Maistrie the CFO, to talk about the direct impact of Apple Intelligence on an upgrade cycle. I think Tim Cook went the furthest maybe in saying that there will be a meaningful cycle, but that no sort of data. What did you make of that?
And he added that they just don't know until they know, And I think he was being reasonable.
I think when I make of it.
As I think it's a kind of a responsible, judicious response from him. At the end of the day, it comes down to I think going forward here, you know, you take his comments and you kind of set him aside, and you have to ask yourself a very basic question. Do you think that these features basically embedding genitave I
throughout many, if not all features of the iPhone. Do you think that they are going to get people excited enough that they upgrade more often and they kind of create this super cycle for the next couple of years. And well, we don't have the confirmation from management on that.
I think that that is the central question, just One other piece to add ed that you alluded to is that there is these features are going to come out over the next year, and so it's not going to be this kind of aha moment on at the end of September. It's going to be where people will get the new phones, they'll get a feature, they'll get another feature, and I think collectively in fiscal twenty five, we're going to see momentum around this cycle build, but it will
not be a rocket ship type of a takeoff. It's going to be more of something that's going to build momentum over the next year.
In China, there has been much may gene of the third party data. If I've learned a lesson, it's probably be cautious about the third party data because sometimes Apple executives then prove you wrong. But it has been hard to gauge the iPhone's performance against some of the domestic handset makers. Did you learn anything about that market from the call? And indeed, when we spoke to the CFO Luca Maistrie on the phone, Bloomberg's Emily Chang did that one.
He's saying that the underlying demand is better than it's previously been in China.
Luca's comments Tim comments were that this is the most fierce competitive environment of anywhere in the world, and they've seen a macro piece to it too.
And so if I.
Can interpret or translate Luca's comments kind of going forward here is that essentially a Chan's been tough. It's been down for three consecutive quarters, down seven percent, US quartered down eight, down thirteen in December. The good news is, and maybe this kind of gets to Luca's point, he's probably looking forward at these camps and the comps start to get really easy in September and even easier in December, and so the probability that China returns to growth is high going forward.
So I think that that is a little bit of a relief.
We kind of got through what is the trough I think ultimately of China. And just to put some perspective of how much that can impact the business is if you would exclude China from the overall business. So just look at the other eighty two percent of their business. It grew about seven percent in the quarter. As you mentioned, their overall business grew at five that was reported globally, and so China has a big weight on it, it
has been a weight. I think that this will convert to a tailwind in the September or highly likely the December quarter.
How important were services Jane to take to the bottom line, which is where I was looking, you know.
Another nice surprise is that a few quarters ago services growth dipped to just under eleven percent. It was fourteen percent in the June quarter. They guided to just over thirteen percent growth for the September quarter. And that's all in the face of what's going on in terms of
this talk of regulation. There has been some more substance to regulation in Europe, and they highlighted that the europe app store accounts for about seven percent of total app store revenue, which translates to about less than one percent.
Of overall revenue.
But the point is is that despite these changes, these headwinds, this concern, this anxiety around investors over the past year that somehow the services segment is going to slow, it just continues year in year out. I think it's testimony to just the flywheel of their products, the ecosystem, them continuing to add, and that services number next year should get a nice boost. With this opening eye arrangement. They will likely charge for a premium version of Chat GPT
next year twenty bucks a month. Apple is going to take their cut on that. I think that that is going to continue to put the services segment in kind of this mid teens growth for through end of twenty five or twenty six.
Depal's asset management managing part of the gene monster, the osborne effects. That's what it's all about, thank you very much. That we're tracking is snaps snapshares falling today after revenue for the quarter missed estimates, and there's the social media company's forecast disappointed amid weakness, particularly brand spending joining us now is eMarketer. To Prince v analyst Jasmine Emburg, you just go back to the original business, the advertising based business,
and where they did well and where they didn't. What was your conclusion, Well, it.
Does feel like a big step back for snap given all of the work that it's been doing in overhauling its ad business. There were some positive signs in the report. We saw growth in the number of active advertisers. We saw that it was successfully able to diversify its revenue streams.
The Snapchat Plus now bringing in over one hundred million dollars in revenue, and there were some improvements in its direct response advertising business, which is of course what it's been really focused on fixing and improving.
The Fact that brand advertising.
Though, is still so much of a headwind for Snap, tells me that there is a lot more work to do within its direct response advertising business, both to get more advertisers on board and to get them to commit more budget to the app.
Just looking at the stock down almost twenty five percent, that does put it on track for its biggest drops since February, and a number of analysts cut their price targets on it. We have to kind of frame Snap in I guess the context of competition with Meta Jasmine. Is that fair to do and what would we learn if we did that?
Yeah, I mean, I was actually just having this conversation yesterday about whether it's still fair to compare Snap to Meta because they really are playing in very different leagues. And one of the reasons we saw investors reward Meta despite all of that AI spending and metaverse spending that it continues to push is because it has this massive ad business and it was able to show a lot
of improvement there. Snap is a much smaller ad player and so and it has struggled to keep up and it's still working to catch up with Meta, and so it really needs to be focusing on that now. It's not small by any means. We also heard that eight hundred and fifty million monthly active users were the number of users on the app now, so I think a lot of times it's framed as being the small player, but certainly isn't. But in terms of scale, definitely still smaller than Meta.
Jasmin M Burger b Markets are great to have you back here on Bloomberg Technology, Thank you very much. Now coming up, we continue earnings discussions, and we're joined by rab In Aconda, CFO of door Dash, to discuss his company's earnings, which were released after the bell Thursday as well, and again a rare bright spot in what's a pretty big day of red on the screen for markets this Friday.
That conversation's next. This is Bloomberg Technology back to earnings door Dash, which reported Thursday after the closing bell strong outlook, particularly on the bottom line for the fiscal third CFO Rabi and Aconda join us now for more. I'm going to do something a bit different here, Rabbi. We know
the numbers, the outlooks good. I actually just want to talk a bit more about the platform and where this growth is going to come from beyond restaurants into new product categories, because I think that's a real point of emphasis for a lot of investors this morning. So give me the near and long term future of how you're going to be driving that growth.
Absolutely ed yesterday somebody on the media said we are redefining convenience.
That's truly what you are seeing on the platform.
We went from being one product in one country to be multiple.
Products in over thirty different countries.
We're really excited that more than twenty percent of our users today look to door Dash to order their groceries, convenience retail products, and that.
Was just from zero percent just a few years ago. And we are doing this.
Successfully in over thirty countries where the demand has been overwhelmingly positive.
But Rabbi, is it a specific category?
You know?
I think about the types of things you use an app based service to get to you conveniently, right? Is it alcohol delivery? Is it cosmetics? Beauty? Fashion? Even? What are the areas where you think, Okay, we're going to get big on this area.
Grocery has been a large component for US.
We have more number of users at today ordering grocery than ever before, and they're ordering more times than ever before.
And the reason is we've increased the selection.
On the East Coast, We've added major brands such as our hold in Wakeform. The improvement in selection is what you're seeing driving the growth in grocery.
At the same time, retail is an exciting part.
Consumers are very excited about getting their products instantly when they order beauty products from Sephora or Alt of Beauty, which are other.
Major brands that we've added.
Number Two, what we're seeing is the strength in new verticals, which is categories outside of restaurants, continues to be strong, not just in the US, but in many of our international markets as well.
So you seeing strength not just in grocery. You seeing strength in retail.
You're seeing strength in beauty, alcohol, many categories outside of our core restaurants business, while the restaurant's business.
Continues to grow quite nicely as well.
I think back to the earlier days of covering uber in this obsession with adjust sit in the ebit there was just, trust me, there was an obsession the question for door Dash is on operational profitability. You've given a pledge before on timeline. What's the latest.
Our financial nonstar is driving long term free cash flow. For sure, you're seeing the business do really well in continue to drive free cash flow higher when I measure and monitor the business. To me, free cash flow is truly the health of the business and when you look at it, just Ayba does well, that's at an all time high.
Robbie, you and I discussed this sort of technology side of the business as well. How do you scale by adding merchants using incentives in a way that doesn't kind of impact that maybe the more profitful side of the business on the back end solution side of things.
The key for us ed is scale is what drives profitability in the business. We have more than thirty seven million consumers that shop with us every single month. What we see is when we add new categories, the overall engagement on the platform goes up.
We are making the app more personalized.
When you search for something on DoorDash today, we remember your preferences and the search results reflect.
What's your preference on DoorDash.
All of this ultimately is driving users to come back more often.
They spend with us a lot more.
We're driving value not just to consumers but also to merchants, and you're seeing us driving growth for merchants as well. The combination of all this is what's driving ultimately the growth as well as the profitability in the business.
Rabi and Aconda DoorDash CFO. It's great to catch up. Have you back here on Bloomblight Technology. Thank you. There are other news stories. It's time for talking tech and first up, Nintendo profits free full seventy one percent. The gaming company posted just three hundred and sixty five point one million in profits in the three months through June. This is consumers hold off on purchases. Is the way a new flagship game console that replaces it's now aging
switch in its seven year plus. Billionaire Jack Marer scores a win as his ant Group backed Mint hits evaluation of five billion dollars. The fintech company raised new funds as its popular e wallet service reaches more than ninety million users in the Philippines. That's according to Bloomberg calculations, and ant Group were in one quarter of the entity shares, pricing the value of the stake at one point two billion dollars and in battled short seller Andrew Left's deleted
tweets are in the spotlight. The investors removed his research firm's entire tweet history last year in an effort to fend off what he called class action attorneys and trolls. Now the US Justice Department are digging through those messages, accusing Left of manipulating the market to benefit his own
trading and lying to investigators. Okay coinbased CFO Alicia has spoke with Bloomberg on Thursday to discuss her company's earnings, noting growth in subscription and services and driving developer creativity on the base network. Listen to this.
We're really pleased with the growth of subscription and services this quarter. As you note, we grew in every category of subscription and services and reached five hundred and ninety nine million, a new all time high for us. One of our goals has been revenue diversification, and we're pleased to see that mix play out over time. We don't
look at when it will cross shanally. We look at growth of each of our revenues, diversification of all of our revenue streams, and when I look at our transaction revenue.
It does EBB and.
Flow with volatility for spot trading. But we're pleased to see is continued growth of that other transaction revenue. Base has become one of the biggest contributors to other transaction revenue and the building blocks are just getting started for lower cost payments. USDC on Base now is free. We're seeing twenty billion dollars of transaction volume of USDC on Base over the last two weeks. And so as we think these building blocks come together, we could see diversification
of transaction revenue as well. But really please with our subscription services perform this quarter.
Base double down on that Base is a relatively new product here for coinbase, how is that going to start contributing to a greater scale At the bottom line, what exactly are people using on base that is creating more of a.
Cash flow stream for you?
So just to remind what everybody what Base is. Bases a layer two solution, which means that it sits on top of ethereum and it's enabling faster, cheaper transactions. And so that has been our goal, driving faster and cheaper transactions to a mission that we have of one second and one cent. As I said, over the last ninety days, we saw it come down under a cent for each transaction and what that led to is three hundred percent
transaction growth quarter over quarter. This is enabling developers to build new applications on top of Base that can benefit from embedded payments within that application. And we're seeing all sorts of creativity emerge in this space. We're seeing people build new social networks, we're seeing new types of games. Creativity is blooming on the Base network and that's what our focus is right now, driving that developer activity. Developers
will then bring users. Those users will drive transactions, and those transactions will turn the sequencer fees that will bring revenue.
To our P and L.
How long does it take for that to play out? What are you modeling right now, Alisha, Well, it's early days and so what we're pleased to see is that we've become the number one layer two in terms of contracts posted. So that focus on developer activity is where our energy is right now.
That was Alisha has CFO of coinbas Serah Brass Systems has start up making chips optimized for AI, has filed confidentially for an initial public offering sources say has picked the City Group as a lead bank on its IPO and that it's targeting a listing in the second half of this year. Bloomberg's Amy or here with me in New York City. You and I have been tracking this one for a little while with the teams. Interesting, let's start with the basics of what we know, timing, who's involved.
So the timing is going to be in early October, so that would kind of like be the group of IPOs that is going to list and go for an offering like after Labor Day, because right now the IPO kind of window is kind of slightly shut after the July kind of flow of IPOs, and then the next window is going to be September October before everything is probably going to slow down because of the election kind of volatility.
Yeah, let's see. It's an interesting decision to make, isn't it. I Mean, the reason that Cerbras is interesting as a startup as a company beyond the money it's raised and the people already on the cap table, is what it does. You know, it's very on brand for what's in vogue at the moment. What do you make of that? And and I guess it's shoppability or saleability in this market.
I think a lot of people have been like talking about AI, especially with the celldown right now, is talking about whether it actually does produce money, right, But because there's been quite a lot of like a adjacent plays like redded, they were trying to tap into that market. But Sarah Bras actually is right smack in the middle of it. It produces chips. It makes the largest chip on the market, is much bigger than the others. If you think about normal chips are the size of postage stem.
This one is in.
The size of a dinner plate. So with more memory, with more calls, so technically faster, it can handle more data. And then it uses those chips in a supercomputer that will handle a lot of data data analysis as customers include military, government and also pharmaceutical companies in the drctorscovery process. So that's like really at the heart at the core of what people are looking for in terms of AI uses.
Bloombergs Amy or breaking a lot of news recently, but this is one that's been interesting for me to be involved in as well. We have to go back to the markets. This is what it looks like this Friday. Remember on aggregate, the Nasdaq one hundred is headed for its fourth straight weekly decline, matching the run of drops we saw in April and is technically in correction territory. The big drags you see them on the screen. Amazon down nine percent, Intel down twenty six percent, on track
for its biggest drop since nineteen eighty two. And then bucking that trend is Apple up two percentage points to the upside where there was a return to growth. There are some big questions about how much money needs to be spent on the infrastructure side to get us to this world where AI is generating meaningfully on the top and bottom line. It's actually been a really wonderful week to be in New York City. That does it for this edition of Bloomberg Technology. Don't forget to recap all
the conversations we've had today on the podcast. They were dynamic and there is a lot going on. You know where to find it on the terminal, the Bloomberg platforms, as well as on Apple, Spotify and iHeart So right after the show, I'm jumping on a plane back to San Francisco. I'll see you next week. That does it for this edition of Bloomberg Technology. This is Bloomberg