Has joined Founders Fund and where he will invest in the world of Venture Capital. And superconductivity is having a moment and we will explain where a potential breakthrough in technology has been driving both excitement and controversy. Lets get a quick look at the markets. We are treading water with the technology quarters. The nasdaq is flat and earnings are a big part of the story but we see a cell often treasuries. The yield on the u. S. 10 year treasury is the highest in nine months but there is a concern about the cost of bother of borrowing. The Philadelphia Semiconductor index is softer by 0. 3 and a big part of that is all come which is down by 10 . We will get to that shortly. The two big ones we are braced for, apple and amazon report after the bell. We will look ahead and think about what the macro environment for those two names both from the consumer perspective and the cloud narrative. Lastly, microsoft showed slowing growth in cloud which is their biggest direct competitor and does it translate to aws. Earnings are out and weighing on marcus this morning. Qualcomm is down 10 and concern about the Growth Outlook for them. We will talk about that in a moment and qualcomm is down 10 tracking on a closing basis for its biggest drop since march of 2020. This is the biggest maker of smartphone processors. In a market for smartphones that is having one of the most severe slowdowns for a long time and it continues. The outlook they gave was worrying for the current period. Lets bring in ian king. What was the main takeaways from their Earnings Call . The big focus was while there is a smartphone inventory correction, we are still in that correction. Everybody was hoping the Chinese Consumer would come back and that doesnt seem to be the case. Ed you forget that in china, there are many domestic layers who make android platform phones. The other data point we get from qualcomm is this for your shipments forecast. What did they say about 2023 relative to last year . Its a down year. We are looking high single digit percentages down from a year ago. That clearly indicates that not only have we still got inventory but also consumers just arent rushing back. Ed when i think of qualcomm, the biggest maker of smartphone processors, the other side of their business is modems. We are always asking questions about the future relationship between qualcomm and apple and the iphone. What did they say about that . This always comes up on their call. They had a massive legal fight and apple was forced to go back to them and ask for their technology. He confirmed that when we had the new iphone later this year, qualcomm will be in their. Their motive will be what takes the iphone3 into next year. Is this the end of the show . Will apple do their own thing as was reported . He refused to talk about that so that leaves open the potential that maybe we will see qualcomm in there in the future. Ed we are showing of what christiane is saying the other standalone story was cost at any measures was costcutting measures. They didnt say expressly on the call but they delved into the filings as we did. Decide they had more than 200 million of severance payments in the previous quarter and they said this is likely going to recur again in this quarter so clearly, they are moving around their workforce. They said they will trade their resources and what gets them going in the future but they will probably shed some jobs in other parts of the company. Ed its not just the earnings print or the call but the filings and thats where we find the details. Thank you very much. Etsy is falling with an outlet that failed to reassure investors on growth. Lets get more on the earnings. Lets bring in the evercore analyst. You got an outperform call. What were the main takeaways from that earnings print . Thanks for having me. There were some positives but clearly there are some negatives. Part of the reason why the shares may be trading off is that there was some runup into the expectations of modest corrections in addition to just a lower than expected die on fundamentals. In terms of the take away on the Earnings Call, there is the fact that buyers came in at an alltime high, the Second Quarter of yearoveryear growth and the habitual buyer which is 45 of their gms started showing signs of stabilization. Thats a key metric. The third is gms productive buyer which is more of a purchase frequency proxy and showed signs of stabilization and that is also a great contract in terms of looking at improvement. Etsy is a highly to gratian every company and they are starting to see pressure on the consumer wallet. They did say that households that make less than 100,000 in income are seeing a shift and spend away from discretionary. They also talked about some categories like home and living crafts and apparel but there are other discretionary categories that are under pressure. They also are talking just generally Consumer Spending being pressure because of the end of the student loan forbearance as well as the child tax credit. All of that is pressuring Consumer Spending. They are highly skewed toward that. Ed think about etsy as a technology platform. There is a place where the consumer meets small retailers all over the country and all over the world at different sizes but what is it that differentiates them from a technological perspective . There are couple of things. Its the type of product they offer on their platform. It is difficult to create a marketplace with a sticky set of sellers. Also a sticky set of buyers were coming to the platform at least once a year if not more on a regular basis. That itself is likely in a bottle. Is difficult to replicate at scale. Now they have over 90 million impacted buyers of thats the scale in the core markets. Second is the uniqueness of the products that are offered. Often times like with amazon or ebay but they know what they stand for. It is not the typical commoditized product you can compare prices across different platforms whether its offer online. Its really a unique custom item that you want which is special which means something to the customers across different categories. They have created a place for themselves in that sort of ecommerce category. That is unique about them and the other thing about the technology is when you think about where etsy was and where it came from, several years ago, they didnt have the team they have today. This is a truly turnaround story and a huge reason why is because what they did to the product. The User Experience is phenomenally better and the search experience is so much better. They are constantly iterating on it to drive User Experience and engagement on their platform. So far, they have done a great job. Ed the fifa womens world cup is on now and thats got us thinking about fubar tv reporting before friday. They are teeny tiny but they are in is her thing platform and they stand out in the market. They do, we think they do have profitability issues. This was an asset and the business when businesses were given credit for just driving topline growth at the cost of the bottom line. That no longer holds true. We are not only do they have competitors bigger than them but they also are focused on reining and there topline growth so they can make it profitable. They also have debts they need to think about and they have limited liquidity. So they are trying to not have a capital rate and become selfsustaining and while they do that, they also have to show topline growth. That is the biggest challenge they have and thats why they are on the sideline. They typically guide conservatively. The tv engagement has been going up. We saw a pretty good beat at roku, for example. Overall, the demand for live sports because of the writers strike, viewers are shifting a little bit toward live sports as well as news because of the lack of content by the hollywood writers strike. That should benefit them ultimately. I expect a beat and a bracket sort of a quarter but fundamentally, this is an asset that has a big question in terms of the longevity of the business. Ed that Consumer Behavior question is where i wanted to go. I subscribe to every platform under the sun. I love all sports but you can get what you get onfubo elsewhere as part of a group a broader package. How do they survive in that landscape . Its so crowded and when you have a tough macro environment, consumers have to make a choice. Thats absolutely true. The Value Proposition is at the margin, they have some exclusivity on comment. Like regional sports, you can find only on fubo. At the margin, there is some exclusive content. The second thing is also just the user engagement. Fubo was built post this connected tv so their product is new and its not archaic and its easy to use as well as easy to navigate. Thats another reason why viewers are choosing fubo or some up over some of the other platforms. The third thing is that they have created a brand name around themselves were almost all viewers view them as a sports first offering. Its good branding on their part but its marginally exclusive content but sports first is where they offer a lot of engaging User Experiences when you watch football and thats a draw for them. Ed messy mania has hit this country and the streaming issue. We love having you on the show, thank you. Thanks for having me. Ed coming up, canadian online retailer shopify making attempts to refocus its core business. Our conversation with its president next. We talked about it, the big ones after the bell, amazon and apple to report earnings in the story for amazon is aws and cloud and apple is set to report its third sequential year on year decline in revenues, the worst straight back to 2019. Does the iphone come to the rescue . This is bloomberg technology. Fabulous surroundings. But everyones looking at their phones for Financial Insights from merrill. Is he hailing a ride to the concert hall . No. Hes making sure his portfolio and retirement plans work in harmony. They want to adopt a child and build a new home. So theyre talking numbers with their merrill adviser. Shes not researching her next role. Shes learning how to handle market ups and downs without the drama. Personalized advice so impressive your money never stops working for you with merrill. A bank of america company. woah. Constant Contact delivers the Marketing Tools your Small Business needs to keep up, excel, and grow. Constant contact. Helping the small stand tall. Ed shopify made progress in its attempt to prioritize its core business after costcutting and price changes. The canadian ecommerce giant provided secondquarter estimates that beat expectations. The results speak to their effort to improve shipping and expand its Global Merchant base. We are joined by the president. A beat in the quarter, somewhat negative share reaction and Morgan Stanley raised its price target on the stock to 59 but they point out that what was missing was a roadmap for investors to understand how youre going to grow in the future. Lets start there, how are you going to grow in the future . You started by talking about our announcement last quarter when we reported on q1 and we talked about that we are creating a new shape of marketing to make sure we can go faster with greater talent for focus on her main quest which is Commerce Software and retail software. The results exemplify that and we will use up to 31 , gmes was up to 55 billion. The thing that people missed is we are also earning more parts of merchant business. We use the product attach rate which measures the usage of our products by era merchants and that was above 3 for the second time. All that we also have the third consecutive quarter of positive Free Cash Flow me expect free clash Free Cash Flow profitability in the Third Quarter to be greater than the entire first half. In terms of the future and what we are looking to do next, we now know that most people considering starting a business do so with shopify. People that have ideas in the shower in the morning, shopify is the go to for them. Not always succeed but the ones that come to shopify and stay, thats the jim shark story, these homegrown success stories. We are also seeing large brands coming to shopify as well whether his company like mattel or staples. We are seeing the enterprise come to us as well. The second thing is when you look horizontally through our Merchant Solutions whether its payments are capital or audiences which help to buy ads more for effectively with things like collective, we are looking across every pain point a merchant may have. We were talking about offline earlier. In shopify, it powers 10 of u. S. Ecommerce retail which means if we were a retailer, we would be the second largest retailer in america. That means we can now get incredible economies to scale and give them to the millions of stores that you shopify. We are optimistic about the future. Ed i understand the story. The primary engine and business formation and those new businesses stay with you for a long time. What happened in a recession when new businesses are not forms . First of all, existing businesses look to one modernized Technology Software they use and they look to find the best value in the software they use. That is shopify. For 39 a month, you can build a multimillion dollar or multibillion dollar company. The value to cost ratio is so far on the side of value that even in times of recessionary pressure, we have seen more and more merchants migrate to shopify. The second thing is on the consumer side. What we see in the gm v this quarter, we saw 55 billion in shopify. Consumers in these recessionary times buy direct from the brands they care about them and all of those brands are in shopify as well. From a merchant side and a consumer side can we think weve been around for almost two decades now, we have seen we do well in boom and bear cycles. We will continue to do that. Ed can you quantify the exposure that shopify has two new business versus i suppose established online merchants . Thats the best part. We can do both. You can start with an idea in the morning and you can build a store on shopify in a couple of hours for 39. We see that happening every single day. At the same time, we are seeing much larger brands migrate to shopify as well. They come unto us to leverage this enterprise scale software. That is the great part of the Business Model. It is not simply one segment of the market. Its the entire ecommerce stack. When you think about the future of retail, we had an incredible quarter. We are now replacing old, dilapidated traditional pointofsale systems with shopify pointofsale. You end up with the fundamental retail operating system thats what modern retailers want. They want a single place where they have an entire view of their business regardless of sales channels. The previous guest talked about etsy being is great sales channel. You can push channels from shopify to etsy and instagram and offline everywhere but it all feeds back into one centralized retail operating system and that is the shopify product. Ed there is a relationship between shopify and amazon which is reporting after the balance focus on fulfillment. A lot of folks want to understand what progress is there come of the relationship of amazon and shopify. Too many its been a slow mover. I said this on the call yesterday, we are still progressing there. We have nothing to report and that just yet. Ed understood. We started talking about the cost cuts you made can, particularly in the context of profit and the roadmap, a lack of roadmap for future growth. Excuse me, cost cuts continue or will you start investment mode against to start growing the business . The important part to understand about shopifys we have always been very thoughtful on spending and have spent in a very discrete fashion. We were not raised on Venture Capital like our peers so from the early days, we always made sure we stretch every dollar. Spending will happen but in a very disciplined fashion. What we are seeing is that while optics remained stable, revenue will continue to grow which is up early 1 year on year. When we see opportunities where we can actually have incredible returns on things like offline marketing and pointofsale or the cost of Customer Acquisition profiles, they look in line with an optimal ratio. We will take those and we will spend their but we will always do so in an incredibly disciplined fashion. In terms of the team size, we want to make sure we retain the best and the brightest on shopify. We like the size of the company right now in weeks paid the we expect the head cant remain consistent and we dont expect to undo anything from last quarter but we want to make sure the best and brightest come here and stay here. Ed shopify president harley finkelstein. Thank you. Coming up on the show, a new high score for nintendo for the release of new summer games. You know the title im talking about and an earnings recap is coming up next. 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