Bloomberg Audio Studios, podcasts, radio news. Bloomberg Tech is alive from coast to coast with Caroline Hyde in New York and Eva Low in San Francisco.
This is Bloomberg Tech coming up in Video's latest sale forecast draws a bearish response from investors, with concerns over a potential bubbles still weighing on the company.
Plus, we break down more tech earnings for the CEOs of Snowflake and Chime later this.
Hour, and Warner Brothers, Discovery and Paramount both out with earnings too. As the bidding war drama continues. Let's get right to our top story, and Video is now down around five percent. Earlier in the session, it had been down and on track for its worst day since April of last year. It is a change of direction and sentiment from where we traded in after our in its earning sprint, the forecast for the fiscal first quarter is sales of seventy eight billion dollars plus or minus two percent.
Interesting margin guidance that sales forecast does not include any contribution from data center revenues from China. Let's get to Bloombsie inking who leads our coverage of this name. It was all about the outlook. So that's the data points seventy eight billion dollars of sales there or thereabouts. Actually, Jensenwong and collect Crest. The CFO went beyond that to say that five hundred billion dollar guide, which is just
Blackwel and Rubin. Actually they're probably tracking ahead of that now. The SOCK is down five percent.
Yeah, you're breaking down the numbers. And we tried to do the same. I spoke to numerous people after the report yesterday, and nobody is pointing to any number and saying that's a problem. That's worse than what we're expecting. Across the board, they were saying other numbers were better than we expected if there is an identifiable problem. It was this amorphous idea that well, where's the news story, what's going to take.
This to the next and is that GtC ian.
That was the conclusion that people have come up with that. You know, they want Jensen to walk out on stage and santase like he does and tell them something new and exciting, show them a new path forward, and that was the end of it.
Really.
GtC is in Nvidia's big showcase for the audience and those aren't familiar with it, and often they do come out and say something quite big.
There were other bits in there.
For example, if we continue to talk about how this is a supply constrained industry, right detail about how they have inventory and capacity for several quarters, but are warning at the same time from collect press that actually supplies still something to think about, how are they managing the world of intense AI compute demand.
Yeah, I mean, that's just one of the questions that they had to answer and did. And the answer was, look, we've spent a lot of money, We've got a lot of inventory ready. We can support growth into twenty twenty seven, right, as an answered. At the same time, people were like, what about memory chips, what about you know, high end capacity, and she did said, look, it is tight, but we have what we need for now.
Glimpergsy and King with the breakdown. We thank you, let's get more in the video. Sereney Pajuria is with us OBBC Capital Markets research analyst. He has an outperform rating on the stock, has raised his price target from two
hundred fourteen to two hundred and fifty. And You're not alone, shoney, because I'm looking at True Securities raising their price target, City did JP Morgan did Morgan Stanley raise their price target, called it the largest cleanest beat and raised in the history of semis industry.
What was missing?
Right? I mean, they delivered on everything. You know, they checked all the boxes. You know, for Nvidia, given their track record, the expectations are always high, and they were high this quarter. And you know, they came in well well even the high end of the so called whisper numbers. And also they talked about visibility extending well into you know,
twenty twenty seven. And if you look at the breakdown of the quarter, you know what drew actually what led the growth was interestingly the non hyperscaler business, which is kind of you know, suggests that you know, the AI momentum is spreading into you know, the broader markets like enterprise and in a smaller cloud customers, et cetera. And then in addition to that, networking was particularly strong. That's also a positive sign in our view because networking is
a market where and video is actually gaining share. You know, they don't have as dominant as a position as they as they do in compute, So you know, I would say those are actually, you know, definite incremental positives in the quarter, and then there were some concerns about gross margins heading into the print, and you know, they guide it to mid seventy percent despite the fact that memory pricing is up, you know, more than one hundred percent this year. So you know, as I said, you know,
they checked every every box. I think I think the reason for the stock action, if I have to guess, is, you know, the concerns about the broader AI spending sustainability. So you know, that's more of a market concern as a post a thing that this said.
Call about that sustainability, because you've just outlined how they managed to diversify their end customer. About fifty percent of data center demand was from hyperscalers, but they are looking for sovereign AI and the like. Are we needing to hear more about growth in China for example, which again isn't being factored into the forecast. How much can we support that the capital expenditure is going to last through twenty twenty seven.
Fiscal Yeah, so look, you know it's it's the adaptation is broadening that there's no question about it. We are seeing that, you know, on the enterprise side. On this sovereign side, you know, China is going a little tricky because you know, there's a lot of geopolitical issues here. The good thing is that the management did not include any China revenue in the guidance. So if it comes through, it's it's upside to the model.
I think.
I think it's going to be incremental longer term. We're not counting on China. You know, look at the valuation. You know it's in the you know, a load of mid twenties today on forward numbers. You know, that's pretty attractive for a stock or a company that's growing. You know,
it grew a seventy percent plus. Obviously that's not sustainable, but our expectation is that even in twenty seven this company can grow at least thirty percent, and at this level of gross margins and profitability, I think that's a particularly attractive valuation.
In your risks rating column, in your research, not very clearly, hyper scale spending is a leading indicator for AI demand. Gensmung was asked that on the call. This is what he said.
I am confident in their cash flow growing. You need compute capacity, and that translates directly to growth, and that translates directly to revenues.
He was asked about capital expenditures growth going forward. His answer was confidence in cash flows because of course cash flows have been impacted by the capets commitment. He didn't really answer the question, but what did you interpret from what he did say.
Look, at the end of the day, you know, the spending has to have a return, right The ROI is very important, But we're still very early in terms of the AI cycle. And part of the reason we are speeing we're seeing this, you know, elevated spending, is that the competition among these big four or five hyperscalers is pretty intense. You know, it's still the battle for leadership
is still not settled. I mean, just recently, you know, Google took the lead in terms of the large language model performance, and you know you have open Ai Anthropic right behind them and x Ai. So there's the competition is quite intense and we don't expect that battle to settle anytime soon. So it's not so much about ROI
right now. Longer term, it does matter, of course, you know, we need we need to generate free cashlows for the investments that these companies are making but at the same time, right now, it's more about the competition and the battle for leadership in AI in my view.
Very quickly, Jensen Wong sprung to the defense of the software industry. Is the ecosystem of his other customers healthy.
Yeah, I mean, look, I'm not an expert in software, but at the same time, we are seeing broadening adaptation of AI in the enterprise. His views, as he stated yesterday, is that you know, AI is you know, it is more of an agentic in nature. You know, the software essentially the tools. Our software team agrees with that. You know, our software has been you know, positive on the sector. But at the same time, I'm not an expert in
that sector. So all right, I'll probably refrain from commenting on that.
Shinny Bajeria Barbously Capital Markets, thank you very much for coming up. Snowflake CEO joins us to talk about his company's earnings and the fears of AI driven disruption. That's one move is to the upside. This is Bloomberg Tech.
Snowflake another of the tech names that released earnings yesterday after the bell and as investors look for signs of AI adoption or disruption, it's forecast product revenue for the current quarter will be about one point two six billion dollars. That's up twenty seven percent. They reported more than nine thousand accounts using Snowflake AI features shares.
You can see three.
Point seven percent. Let's bringing the Snowflake CEO Shida Ramaswami Shida, I'm reading notes f mazoo Ho saying bookings were a standout. They're talking about the seven nine figure deals that have come. Where are those deals coming from? What are those customers demanding of you?
Great to see you, Caroline. Yes, we had seven nine figure deals, including a man of four hundred million dollar deal. It reflects the confidence that our customers have, both in where Snowflake is right now, but importantly where we are going. We all understand that software is being disrupted by AI in a very very big way. But what our customers understand is that what enterprise AI to truly succeed, they need a single source of enterprise true. They need built
in security, auditibility, trust and access. Of course, you also need the best models. That's what Snowflakes provides for them. And we're creating great products, products like Snowflake Intelligence that put the power of data into the hands of every business user. The healthcare company, I mean the health company loves using us, and there are lots of partners that are using products like Cortex Code to speed up what
can be done with Snowflake. They're really looking to the future and making sure that we can deliver value with Snowflake, and we are creating the products that help them deliver that kind of value, Dane, and they are. That's why you are seeing companies, as you said, make commitments of four hundred plus million dollars with Snowflick.
I'm really interested in codex code with something that was talked a lot about recall and people are adopting swiftly. But that partnership model that you have, the fact that you have integrations with Anthropic, Open ai Cloud, also Google how but some of these have very good coding tools of their own. How do you see this ecosystem evolving because customers get it, but the investments have been questioning whether they'll take away your market share.
Well, so there are a lot of things that are specific to Snowflake and to data. Absolutely, there are coding agents that are often provided by the model companies themselves. But we know a lot about how data systems are supposed to work, about how Snowflake is supposed to work, and Cortex Code is super tightly integrated with the customer's Snowflake account. Data does not go anywhere. And remember we have earned the trust of all of these customers with certifications,
with the guarantee around things like AIUS. We never use customer data for things like training models. They get the superior models that we get through partnerships with these folks, but we also add the secret sauce of data of how Snowflake works into products like Cortex Code, and we are seeing amazing wins both internally and also externally. One of our partners told us that having Cortex Code was like Snowflake supplying them with bulldozers were previously they had shovels.
Shauda.
One of the core pillars for you to grow is to go out and find new customers. And I wondered, if you just give some detail on what's happening in the world of technology in ai that would bring a customer to Snowflake for the first time. What is it that they need that they didn't before.
Typically they come to us because they need better insight into data it is sitting somewhere. It's hard for them to get these insights. But increasingly what we're able to do is have our sales team build an honest to goodness customize demo of something like a Snowflake intelligence on data that on the kind of data that a customer is going to have. It is that easy access that really,
you know, is the big winner for our customers. And smart customers are also quickly realizing that having data in snow means that they can think about how this data is going to be used in ways that they had not done before. Santa Fe, which is an existing customer, is now is now using Snowflake intelligence our AI products to redefine a lot of workflows, replacing a lot of existing software. These are the use cases that drive these customers to come to Snowflake and adopt it.
Shrida.
Last night, Jensen Wang, who you know very well, talked about profitable tokens, the idea that the output of an AI model is worth paying for. Customers do pay, and they pay it a price that is greater than the compute used to generate it.
Are you able to give me any.
Evidence through snowflakes lens that you actually see that in the real world.
Well, what I can assure you is getting projects done as being changed dramatically. Something like setting up a pipeline used to be a multi week task, We can get that done in a small number of hours. My team's come to me just last weekend with speed ucks going from four weeks for a software engineering project that they did down to forty minutes. That is one hundred x speed up. And we are happy to spend any number of tokens in those forty minutes to save that kind
of time. I think coding agents are really quite magical in the value that they deliver, and I think it's only going to accelerate from here, and so these investments are going to be pretty foundational in every company you know succeeding and thriving. And that's why we're so bullish about codex.
Code and how much you have to invest in your own business. I mean, the bullet case for many is you need to keep up with a furious pace of innovation. Can you at this moment?
Briefly, we can because we are organized to drive rapid innovation. The team that is driving a product like Snowflake Intelligence is not that large, but we have structured it in such a way that they can make rapid progress. And it is more the meta structure of how you set up environments where people can get work done quickly and effectively. That matters a lot more than things like how much
hardware you are investing in and things like that. The current moment is magical because all of us have access to great tools. It really comes down to how effectively we set up teams on projects to get things done. And that's why we are very bullish on how we have set things up at Snowflake because we now have a demonstrated capability to be right at the cutting edge of where AI is having impact.
Snowflake SEO shreet A Ramaswami. Great to have you back on Bloomberg Tech. Thank you very much. Now coming up continues and this time it's with Hollywood. We'll discuss results from Warner Brothers and Paramount. That's next. This is Bloomberg Tech.
Ward continues to lead a rigorous, highly competitive and thorough sales process. We engage with four bidders which lent to eight pricing and have thus far achieved the sixty three percent increase in value for it's the first offer the seed in September, delivering significant value for WBD shareholders.
Throughout the process, Warner Brothers Discovery CEO Davids Aslav, they're
discussing the progress of deal talks. An increased offer from Paramount has renewed the take of attention, and it comes as Warner Brothers posted a six percent decline in revenue during the fourth quarter of Paramounts Guidance also came out with this numbers as bringing bring by media reporter Hannah Miller, and all of this speaks to still profitable cable companies where they're trying to subsidize basically revenue, well profits not
showing up and streaming thus far. But subscriber growth is there.
Yeah, this is subscriber growth is there, and you know, Warner Brothers has made a point that they want to build up that subscriber account. They're shooting for one hundred and fifty million people for their streaming services by the end of this year. And you know, we have seen these gains, but again they're overshadowed by the fact that revenue earnings have declined compared.
To last year.
There's also this idea of like what's happening with the bottom line, and we can't get away from what's happening in the background.
You know, it's awkward when you have.
Company earnings and all the players involved are in a kind of bidding war.
Did they explain any of that, Hannah.
Yeah, so, you know, all these earnings results, they've been overshadowed by this bidding war. And we saw on birth both earnings calls that you know, the CEOs were like, we don't really want to comment on this. Things are still underway. What's happening right now is the Warner Brothers board has to determine whether or not the most paramounts most recent offer could be considered superior to their current
agreement with Netflix. If they do make that declaration, Netflix has four days to respond with either sweetened offer or just bowing out.
Playbox.
Hannah Miller, who's been across all of this in real time, Thank you very much. Let's move on to another big media named Paramount. It posted eight point one five billion dollars in revenue in the shares again, and it's kind of interesting they're reacting significantly. We're up eleven percent? Are we up eleven percent? Because of the health of the business and the content of earnings, or are we up for another reason. Let's discuss with Laura Martin, senior Entertainment
and Internet analysts and Needham and Company. Laura, you're recommending fundamental investors. Hello, remain on the sidelines. I just showed the chart. Maybe they'll bring it back up sup eleven percent. Reconcile that please?
Right?
So, I think what Wall Street likes is the fact that this is company is subscale, and it looks like they're more likely to wish to win a bid for Warner Brothers, which would then not make them subscale because they would be like a third of total linear channels. They've owned two of the largest film studios and so
and really their revenue was up two percent. They had a lot of positive comments about UFC, which was their top rated streaming channel, and streaming revenue is up seventeen percent at Paramount Plus in the fourth quarter, and it should so, I mean all of those numbers, fundamentally we're better. At least this business is growing. Warner Brothers is shrinking, but Paramount Peace Guy is growing still.
I think we'll get to Warner Brothers in a moment, Like really simple question and it comes from a sincere place. A lot of our audience have this based on what you've just outlined with Paramount's guide. Once, what does doing the deal with Warner Brothers Discovery the whole entirety of it fix or improve or accelerate.
Okay, So if they don't win, if Netflix wins instead, they're an eleven billion dollar market cap company and their primary competitors will be Netflix, which if affuys Warner will be a five hundred billion dollar market cap, and Amazon and Google, which are three trillion dollars round numbers, So it's competitive. It will be more subscale than it is today. If it wins Warner Brothers, it suddenly combines and cut costs from several of the largest streaming companies, several of
the largest. It will be thirty percent of total linear TV ownership, and it will combine it will have two of the biggest studios, so there's a lot of cost cutting in that, and it will not be near a subscale round numbers, it will be around the same size as Disney and Netflix. If it wins Warners, so it basically it basically makes it a legitimate competitor to those other streaming companies.
And I think what Paramount's guide once Laura did in its numbers was showed they can cut costs. And then some Sunday, when it comes to the cable pot of the business, how much does it need Warner Brother's Discovery.
So good question because price is the thing you're not asking, but strategically it must have Warner Brothers Discovery. But of course, you know, we do stocks and we do valuations, and they're paying an awful premium for a shrinking business. As you saw, like every single business segment, every single advertising was down. You know, a lot a lot at Peace guys. So some of their businesses at Warner Brothers are shrinking
or a lot of them are shrinking. Actually so I mean they're buying a business is weakening fundamentally every single quarter, and they're paying piece guys bidding higher and higher values, which it implies they're not going to get a good price on this asset because of the bidding more.
I mean, Laurie, you're all about the fundamentals, but are we if they do have to pay over and above, they have to go to thirty two dollars for Warner by the discovery, is that a good deal fundamentally for the business longer term, and given maybe Netflix happens to be able to push them there.
You know, I think the answer is if they didn't have a billionaire behind this, I cannot imagine a investor, a you know, a venture capitalist, a private equity guy, or public markets funding this stock price. But you've got a billionaire sitting behind them and he can spend his money the way he wants.
I'm talking Larry Ellison, that of David Ellison, of course Laura Martin. So it's so great catching up with me. Thank you from Needham and Co. Coming up more earnings. How are results impacting the AI disruption fears that engulfed this market, particularly in the area of software.
We're discussing that next.
We're also talking hardware and in video we've got to talk about there.
Yeah.
Look, it's clearly having a drag on the market. We're not down as much as we were, but it's still down four percent, and like it is a sentiment change. We've gone from basically muted on what was a be even against bullish by side expectations to a very bearish reaction to what Nvidia had to say about the durability of this AI spend, and there is a lot more to unpick, so much more analysis and reaction to come.
It is halftime and this is Bloomberg Tech.
Welcome back to Bloomberg Tech. It is a big day in the markets because it's a big day of earnings and the number one most valuable company in the world has failed to impress.
What more is in Vidia to do?
So by three point nine percent, they saw seventy three percent increase in revenue for the quarter that they posted for a giant that is worth four point eight million dollars. They say that that's going to accelerate to seventy eight percent. They see margins that are expanding as well. But yet the market isn't convinced, and still we see the stocks roll over across the board when you're looking at AMD down, Broadcom, Micron, the Force hardware lower. Let's look at software though, because
earnings have also been coming thick and fast. There both actually in the green snowplink. We just had the CEO one talking about how they're able to be at the epicenter of the enterprise AI adoption and the now investors believe that. But I'm looking at Salesforce managing to turn around. It was down after the market yesterday. They post a fifty billion dollar authorization to buy back shares. We're seeing an adoption of Agent Force that is now an eight
hundred million dollar run rate, up from five hundred. We're up two point five percent. But both of these stocks have been battered over the course of the last few months.
The Okay, let's get more on Salesforce's earnings and speak with Bloomberg's Brody Ford. In twenty four hours ago when you're on the show, we were saying this is going to be about them evidence seeing organic growth versus inorganic growth, and actually that did come up. They talked about, actually, you know, whatever's happening in AI, the thing that they're offering will help them grow as opposed to just buying up other companies that are growing fast.
Absolutely, so, I mean, the big concern is that the core Salesforce products for let's say, managing your salesforce or managing your service, these are slowing down quite a bit. And so they're new AI tools. They are making some money one hundred million dollars per year at this point. Is that enough to offset the slowdown in the core business?
I mean, they're in the green today, but we have to remember application software has been incredibly beat up this year, and if you zoom that chart out, it's still not an amazing picture as an ugly picture.
In fact, if you're looking over the course of the last twelve months, Brody and in terms of Agent Force adoption, in terms of that average revenue run rate, are we seeing them being able to prove out that they're so intertwined. No one's going to be forcing out the platform, and it's more just a question of how much they can much for it going forward.
They have proven at this point that agent Force is a real product. People are paying for it. That was an open question six twelve months ago. What's less clear is do they have a ton of pricing leverage our customers increasing total spend with salesforce?
Right?
I mean, is this a question of your spending money on agent Force but you're not expanding your seats on the core platform. The jury is still out on whether generative AI means that leading platforms remain this kind of center of gravity.
Ready forward, We thank you, as you always for talking us through software. Let's talk about how the markets are digesting all of these earnings. We're going to go back, of course in videos results as well, with none of them than Nancy Tegla CEO CIO Techno Investments, which joins us on our birthday and also our super Bowl day that is in video. But let's just start with software for a minute. Nancy, what do you make of the software numbers that we saw from CRM, that we see
from Snowflake as well. Did they manage to push back on this disastrous fear engulfing the market that General to AI is going to eat their lunch?
Yeah, thanks Caroline for mentioning my birthday. Goodness Saints pretending like I don't have them anymore. I do think that some of these companies are facing some really strong headwinds. We got out of Salesforce a while ago, not because we knew this narrative would prevail, but we just didn't see an exciting growth trajectory for the company. We also became a client. It was not a great experience, and
so we canceled our contract. But in terms of software in general, I think some of these companies are going to win. And I've talked with you in the past about Service. Now we still own it. We added to it recently. We think they are going to benefit from better margins in the future because they're pivoting and vertically integrating. But we got out of Adobe and that was because we didn't see the company pivoting, and that was a number of years ago.
About it over a year.
Ago, and so I think that's what investors have to digest is who are going to be the winners? And Salesforce will be in business, but they may not put up the kind of growth numbers they've put in the past, and we won't know for a couple of days because it was down pre market, then it's shot up.
And now it's calling back.
So I think you have to wait for the hedge funds and the algos to settle in and then we'll see if investors come back to the name long term investors.
It's interesting, Natcy, you called out service. Now we know that you've caught out before, and indeed Jensen Hang has been on calling out service now himself. I'm the winner. Nazie, go back to your own well experience with using the Salesforce product. Why didn't you like it? Why didn't you cut it? What was it that we're not getting offered? That keeps it sticky.
So this is interesting, Caroline.
I think this is the story of this market. So we were going to use it internally and as for the obvious reason.
And it took almost a year.
They assign you to someone who helps you get set up and customize the product. Before we were even up and live, we had a price increase. It was very clunky. It was not a smooth process. A lot of hard sell, not a lot of delivery and service. We are shifting our investment management software away from Advent to Ridgeline. Ridgeline was founded, built from scratch, new technology, founded by David Duffield.
He made the pivot.
I mean he still obviously owns tons of shares in workday, but that firm is a joy and a privilege to work with. So I think that's what software providers are.
Going to have to do. They're going to have to.
Service and show that they add value to the underlying business.
There is a link here between that and Nvidia's earnings. Your main takeaway from the call last night is the same that we've been talking about all morning. Computes equals inference, which equals revenues, and the way that Jensen Wong explained that was profitable tokens. In other words, customers of all kinds are willing to pay for the output of an
AI model, and that actually the economics have improved. The thing is, I don't see any evidence of that in any of the software company's earnings yet, do you not?
Yet?
I don't think so.
Part of that is capacity though, ed I mean, you heard Microsoft say they took some of their own capacity, but you heard them say and Amazon two, we can fill whatever we get immediately in terms of demand, but they don't have enough capacity. So I guess I would.
Look at it two ways.
One is, if you go back and look at Capex in the nineties, it was about a two standard deviation above the means spend in tech capex, we're not even one standard deviation away from the mean. And one man's Capex spend is another man's revenue. So AMD, Nvidia, broadcom names we all own will continue to benefit.
And here's the last thing.
I'll say, sixty percent earnings growth at Nvidia, a pe of somewhere around twenty three to twenty four Procter and Gamble, two percent earnings growth on next year's earnings, and a pe of twenty four, so I know which one I want to own for the long term. But there's a lot of trading going on. There's a lot of hiding in the defensive names. That's what happens during this period. It happened last year if you look at all these names after Deep Seek, where we thought the world was ending.
I mean, we were buying a video at just over one hundred dollars a share. That's still a good investment.
But you are in a video shareholder, I think you continued to like the name. Right, So what was your big takeaway from any of the earning sprint or the cool Yeah, I think.
No one's really talking about the growth and Sovereign, which is just getting started. So I understand it's a small portion of total revenues. It was thirty billion dollars last quarter, up three x a year over year, though.
And I think excluding China, right, yes.
Yes, excluding China, I think that's important and the company It's just like when Tesla's megapack business got started, it became the fastest growing, most profitable business. I think we will continue to see these companies expand their reach and more compute is going to be more demand and we are going. You know, I think he made a really
interesting comment. What if or what what if? When we have one hundred percent autonomous calls cars let's call it fifty or even thirty five cars that are autonomous, the compute demand is going to be great, and those data centers in space while super intriguing intellectually and capture the imagination, that's not going to happen very quickly.
Nancy Tengler from LAFA Tengler Investments, thank you very much. Now, coming up more earnings, we're going to speak with chime CEO Chris Britt following that company's report.
This is Bloomberg Tech Okay.
Shares of chime Or up almost eleven percent, more than ten percent, on track for their best days since November earlier in the session of almost seventeen percent, and on track for their best day since the company ipoed last June. The fintech firm issued guidance that toppden this expectations, driven by rising user growth strong demand for digital banking products. Chime CEO Chris Britt joins us, Now, actually, the other thing you're getting a lot of credit for is a
technology story. A lot of the transition to your own tech stack. How you've managed the company. You don't need to grow headcount necessarily because of the focus and investment you've made on take Do you mind if we start with that and explain a bit about the strategy behind that.
Yeah.
Absolutely, And first of all, thanks for having me today.
I'm so proud of this team and the way that we've executed. I think we're shipping faster than ever. And you know, if you just think about this first year of this is the first time we're reporting as a public company our full year results, and they were outstanding. You know, we added a million five new active members
who are now at nine point five million actives. We took the company public, we launched a range of new products, we launched a new business in our enterprise channel, and yes, to your point, we completed the conversion of our core processing and ledtering system onto our own in house tech stack, top to bottom, and that's really unleashed not only lowered costs, but also unleashed a whole set of new products and
services for our members. That drove awesome results for the year of two point two billion dollars of top line revenue.
Growing up, we're.
Thirty percent and we got to a ten percent EBITA margin in Q four, So feeling good across the board, and this technology platform really is an enabler for our future growth.
Last month I was on your own website. You did this kind of blog post. It was what is chime? Chime is not a bank, and if you consider, you know what the products you're offering are a big part of where the streets focused on is new products coming to market and how you've monetized that. So you take Chime card for example, through that lens, explain what you are, but also how you've been able to launch a sort of wider offering of financial services.
Is a fintech company.
Right, Chime at our core, we're a technology company.
We partner with banks, and so when you sign up for a Chime account, think of it you're basically doing. There's a three way relationship between the consumer, Chime as the technology enabler and brand and the design and deliver delivery of all the actual experience, and then the bank. So we have some community bank partners that actually hold
the deposits in FDIC insured accounts for our members. And this approach has worked really, really well, particularly for mainstream American people that oftentimes live paycheck to paycheck, basically the population that makes up to about one hundred thousand dollars a year. That's the segment that we serve, and we offer a range of core banking services, fee free checking accounts, the ability to get access to short term lines of credit at low cost or no cost, the ability to
build your credit and to earn high real savings. And because we're a technology company, we don't have physical branches and a heavy infrastructure physical infrastructure, we're able to operate at a really low cost tr sure and we deliver that value back to our consumers, and that's allowed us to really outmaneuver the big banks.
We've been continuing to increase.
Our share of new accounts, new checking accounts in America, and third party research continues to show that we are having an outsized impact and increasing our share.
Let's go to swipe fees because that is where you get a lot of the revenue. Is there any issue, any concern longer terms you scale that will become a regulatory issue as you hit certain benchmarks and pounds of money that you manage.
Yeah.
I think as we've grown over the past few years, you've seen an increasing balance in our business. So we were historically very heavily reliant on fees that we learned from Visa when our debit cards get used for everyday transactions, and we've now have a secured.
Credit card product.
We launched a product called Chimed Card last year that's a reward a secured card that has rewards, and that's kind of change the game for everyday transactions in America for average people, you know, average sort of mainstream consumers, and so that's also contributing revenue line. And then increasingly we have other services, our short term overdraft services, and our my pay product has been announcedstanding you know, just one year in. It's almost a half a billion dollar
revenue run rate. That allows our members to get access to their paycheck essentially on demand, and that's also been a nice added, some additional balance to our revenue mix.
I'm going to ask a sort of more complex and maybe a more emotive question. In some way, You've talked clearly about how your partnerships with banks. You're not the bank, you're not taking the details of the customer in so many ways. But there has been a consideration from the Trump administration that maybe banks should collect citizenship. Now, given the people that you serve at the moment, briefly, Chris, is this an issue for you?
It's absolutely not an issue.
First of all, we open up FDIC insured checking accounts in partnership with our bank partners, so we comply with the rules and regulations that are required as occ chartered banks that offer these FDIC insured accounts. So for every new Chime member, we collect the full Social Security number and comply with the Patriot Act and all of the KYC requirements to open up a checking account. So this any rule changes in this area have no impact on our business.
I'm CEO Chris Britt. We thank you for joining us today. Now coming up, we'll come back on today's big story in video earnings. How investors are digesting the numbers at the moment. You can see they're pushing down the stock on the back of it. This is a blue bag tech.
Nvidia continues to surprise and delight the market.
Nvidia hit it out of the bar. Get again.
We saw phenomenal result.
It was a solid set of earnings and more importantly, they had a very confident outlook for how that we're going to sell more AI chips and data center product going forward, and I think we're all looking forward to seeing is that going to be a thing.
I think what was particularly maybe not surprising, but impressive was seventy five percent growth you're owning, you're on the data center space.
As the marketplace.
Tug of war over is the AI economy booming or are there concerns around the A economy? And video continues to be regardless of what you know, this debate is concluding the stock just keeps getting cheaper and cheaper to the point where it's becoming an obvious vibe.
They're still investing and these are going to, you know, signal good times to come for in video in our.
Opinion, could it be any bigger than this? And they basically said yes.
The reaction very positive from some of Bretting Big TV's guests after in video posted. It's whopping numbers, but the reaction in the shares is not or by four point five percent, that's bring able to make equity reporter common Rani King, but what your sources.
Are telling you?
Because the numbers with SELLA everyone agrees, So what more were they not able to demonstrate?
Yeah?
What I'm hearing from investors is that they're really worried about the cyclicality here. That's sort of what they're seeing is, you know, the thing that might be still concerning people. So obviously in Vidia continues to beat and raise, and Johnson even said, you know, they think that, you know, the hyperscialers are going to continue to spend, but investors are worried about that. They're worried that that's going to stop at some point and that then in Video will be impacted.
Calm, and the market is now moving and the move is significant. What are the single names that you're tracking and what's the impact bim from in Nvidia's move lower.
Yeah, so obviously in Vidia is the big one, but we're also looking at other chip makers, so shares of Broadcom, Micron we're also down today. You know, they spiked with in video sort of in after hours and then followed them lower. The other thing that's really interesting today is that software names are getting a little bit of buying here. So we saw salesforce up that's a reverse from what they're where they were after hours after their own earnings report.
And then we're seeing things like service now higher. So that's interesting. We've obviously been seeing a lot of weakness in software and maybe a little bit more strength on you know, in the Nvidia side. All those shares have been in range for quite some time, so seeing a switch there today is really interesting.
Was interested in some parts of the supply chain or other areas that have benefited from the AI capex spend are still showing resilience. I'm looking at some song traded in London, for example, is still holding on to gains. Schaheinis had whopping day over in Asia.
So the still areas that resilient.
The optical part of the equation for example.
For sure, I think people still are looking at those sort of second derivative picks and shovels, kind of the other place where capex is going to be directed and saying, okay, we still think that there is strength here. There's still building data centers that's going to continue, and so maybe moving into that piece of the puzzle a little bit more. It's so interesting though, because Nvidia is getting really cheap. That's something we're going to keep watching. I mean, it's
like twenty three times forward earnings. That's barely a premium to the s and P five hundred.
Bimbos common Ranicky, thank you very much. Bloomberg Intelligence out within video earnings reaction, noting the beats in the fourth quarter, but more impressively that first quarter outlook, pointing to a stronger ramp of the GB three hundred system. Bloomberg Intelligence seen around this, congen Sabani with us. This was what they used to explain margins, you know, the Blackwell ramp. But then later this year we're going to get Vera Rubin.
There will be a transition of technology for their biggest customers.
How have you modeled for that.
Yeah, So usually at the start of a new product ramp, your margins will get hit. But one key thing is different this time is the ramp of improvement of margins with the black Bel has been very impressive. We all know about the rising memory cost, the rising wavefor and package costs. Despite of that, and they don't pass on the cost to their customer. Despite of that, they've been able to hold that seventy five percent margins a software
level growth margin. So that speaks to two things. Their pricing power and that ability to optimize for costs in their supply chain. Hence that large purchase commitment increase, which really lets them employ their balance sheet in their supply chain.
I mean it's even the costs that they identify for stock recompense to those that work for them. I mean people saying, that's a really classy act from the CFO, from investor relations to be making that clear within the gap numbers congin. But where therefore are we lacking clarity? Is it from the China perspective? Is it future build? Where did we need a little bit more?
I couldn't find anything negative in this print. I mean, looking at by set expectations, it very clearly cleared the most lofty bogies on the byside. I think this is just the reaction seems to be overall AI fritig on one end, when the top five customers who are raising CAPEX targets are being punished for spending that money. You can't have it both ways, where the company that's capturing all that revenue also does not gets rewarded for taking a lot of that high spend.
Which is very quickly networking provided a lot of the outside just explain it.
Yeah, you know, people have people don't pay it. A lot of attention to the networking. But networking has been surpassing expeditions every single quarter, and I think it will greatly because now they're networking, they can sell it even where their.
GPUs don't go.
So even like a six for an Amazon, which are supposed to be growing and taking share away from the Nvidia GPUs, they're going to plug it with Nvidia networking. So that's a new source of revenue even where they don't have the chips in the servers.
Qunjian Savani is a bullish take from Bloomberg Intelligence, just not a bullish reaction on the stock.
That does it.
For this edition of Bloomberg Tech, Extraordinary day on these market seat, Yeah.
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