Big Tech’s Big Earnings Week

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24:37We're actually still clinging on to some gains in a down market today even, Katie. It feels the demand is so insatiable. That's right. Clearly, the window is open for tech listings. We're especially open for Figma. Yeah, you ask a good question about the, was there money left on the table? VC's favorite debate. Obviously, the sell side, which is primarily the company, but also the top shareholders. Each sold 5 % of their stakes. Yes, they would have, I'm sure, loved to sell for higher and then, you know, they could have raised more money. But I think there's a real question over what time frame do you evaluate a first day pop on?

25:15If you look at 2021, a lot of those stocks eventually bottomed out.

25:19Caroline Hyde:Thinking about some of the conversations Caroline had yesterday down at the NYSE, just fantastic, classic IPO stuff, right? Adjusted gross margin of 92%. Is this just because everyone loves a high margin software name or is there some retail trading here? What's really happening? Well, I think if you look at it, it's not just this one. There have been several recent tech IPOs that saw big pops on the first day and in the recent trading. And so I think what you're seeing here is there's pent up demand for new tech listings. 2021 was a blockbuster year. And then there was an 18 month period where there were zero tech IPOs.

25:59And when they first started to come back, the market was a little bit skittish. But I think they've decided they want tech stocks and they want more of them.

26:07Caroline Hyde:I think that in 2025, we've already pipped 2024 in terms of volumes, which is exciting. Bloomberg's Katie Roof. Thank you very much. Now, coming up on Bloomberg Tech, we're going to be joined by the Roblox CEO, Dave Buzuki, to break down the company's earnings, its advertising push and much, much more. Just a fantastic way to end a week in big tech and big tech earnings. Stay with us. This is Bloomberg Tech.

26:51Caroline Hyde:Welcome back to Bloomberg Tech. There's some kind of macro-level economic concerns out there in the market. I'm looking at the Magnificent Seven, that collection of mega cap tech. Of course, within that, Apple and Amazon, which is actually the biggest points drag on most indices, is an earnings story. But at the same time, we covered off earlier in the show, Caro, tariffs and tariffs having an impact in different ways in some of those companies. We'll get to more of that later in the hour. One earnings we haven't got to yet is Coinbase. Revenue projection missing estimates. But what I find so interesting about Coinbase is that its performance is directly tied to volatility.

27:26Caroline Hyde:or in this case, a lack of volatility in crypto markets. But that stock drop of 16 % is its biggest drop since March. Very interesting recalculation on one single name. But there are so many to get in. There are. And let's go back to Roblox, because the gaming platform reported phenomenal booking increases, more than 50 % in the last quarter. Daily active user count topping 111 million. Shares, as you see, still trading higher after the earnings posted yesterday morning. Roblox CEO David Buzuki joins us now. Now, Dave, just across the board growth, daily active users, particularly the older cohort, I'm looking at hours engaged, revenue, bookings.

28:01We're seeing you raise your guidance. These viral experiences, Grow a Garden, for example, how much are they contributing to this growth? Hey, great to be here. And we have created an essential, really the conditions to grow a garden. In this case, growing amazing, creative new experiences on Roblox. In addition to Grow a Garden, which is a cultural meme right now, there's five experiences on Roblox with more than 10 million daily active users. And I want to highlight, in addition to that great growth we saw, we saw 13 and up users grow daily active users, 64 % year on year. We have a vision of 10 % of the global gaming content market running on our platform.

28:48And this really explosion of great new hits, it supports that thesis. I also want to highlight, even without Grow a Garden, we would have reported an amazing Q2 with great year-on-year growth rates. Brookhaven's there, Grow a Garden's there. Just delve into these hits that you have. How much revenue do they sort of supply to you? Can you break it out on an individual win basis? Well, I want to highlight these hits. A lot of them have been created in the last year. In fact, four of the top five experiences were created in the last year. Part of our vision is there's enormous headroom to innovate in the gaming space around how games are created, how people consume them, how they're social, all of this.

29:39And we believe this innovation is driving the ability for creators to make awesome new experiences on the platform. You know, we're starting to see some of these hits go global. Want to highlight, for example, APAC DAUs grew over 76 % year on year. And we still have a lot of headroom. We're only about 3 % of the global gaming market running on our platform. And our vision is to get to 10%.

30:08Caroline Hyde:Dave, I've been able to get with your team and talk a little bit in recent months about advertising. And one of the things I think people don't necessarily understand about Roblox is advertising is a revenue stream for you, but also for the devs, the creators themselves. But I think I'm right in saying you've never really given us a dollar figure on how it's going. Would you just update us on the ecosystem and the wins that you see for Roblox? we do think there's a significant advertising opportunity on the platform and you're exactly right all of this growth we've been sharing you know bookings growth of north of 50 percent in q2 was driven not by advertising but by people spending robux on the platform that said there's several categories of experiences and creators that advertising may be the best way for them to make future revenue.

31:01Highlighting typically our vision is advertising for older users, not for younger users because we're already so healthy monetarily there. And we have launched video advertising on the platform. We just in the last week opened it up for more creators. I will assure you if and when we hit 10 % of the global gaming market space that advertising will be a key part of that top bookings line.

31:27Caroline Hyde:I kind of want to stick with the creators because I'm trying always to understand the ecosystem. So one thing that you've done is help creators get licensing deals. They might create a game. That game might be franchisable. Why do that? But also, are you kind of taking the liability on copyright and on legal and everything else that comes with a deal like that? We aren't really. And what we've seen, you know, two years ago, people might have thought, well, you're not going to have any prime sports brands on your platform. And then all of a sudden we have, you know, NFL Universe, a partnership between the NFL and an existing developer on the platform be extremely successful.

32:11What we've started talking about with our IP platform is the ability for great brands, whether it's, for example, Stranger Things or Squid Game from Netflix, being available for creators on the platform who want to integrate the brand and really create a win-win in that these brands can have a lot of people interacting with them. It can drive engagement within them. So there's a lot of opportunity in the future to connect great brands, great IP with the creative energy of the developers on our platform. I like that win-win idea and the revenue share that goes to the developers. Also what's interesting is developers are buying from these one-off makers, say like Grow a Garden.

32:55I think it's a teen who still owns about half, but he sold off the other half of his business over to New Zealand's Splitting Point studio. Are you helping facilitate that M &A? How do you see your role there? We would like to more and more make a very liquid market there. And at our Roblox developer conference a couple of years ago, I shared that as we have a larger proportion of the gaming market running on Roblox, it's not inconceivable that there will be a billion-dollar studio on the platform. We're well into the nine figures, hundreds of millions of dollar-type studios. and Grow a Garden was a great example of an initial small team working with Jendel who acquired part of it and it was a deal that was a win-win deal.

33:42The original creators did very well and Grow a Garden has been refined and tuned into now the largest simultaneously played game in the history of the Guinness Book of World Records going over 20 million concurrent players a few weeks ago.

33:58Caroline Hyde:Dave, about three weeks ago, you came onto the program and discussed with me generative AI video-based age verification. In the interim, on July 25th, we got the Online Safety Act, which will have an impact on you. Could you just quantify how those parameters might impact active users or engagement? Just quickly. I want to highlight we have always had safety as one of our top priorities, and we're not waiting for the law or legislation. We've innovated with age estimation on our own because we want to keep people on our platform. Roblox is a place where we filter all the text and the voice, where we monitor for critical harms, where there's no image sharing or any of the things that might happen from that.

34:45So age estimation, we took leadership here in innovating, and we think it's going to set the standard for the industry.

34:53Caroline Hyde:Roblox CEO Dave Buzuki, it's great to have you back on Bloomberg Tech. Thank you very much. Now, coming up, we're standing by for SpaceX crew Falcon 9 rocket launch headed to the International Space Station. Scrubbed yesterday. The countdown continues for today. We'll be right back. This is Bloomberg Tech.

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36:43This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using Chat GPT for Work. Download the Chat GPT desktop app or contact sales to learn more. Hi, I'm Tom Keen, inviting you to join me for the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of stocks, bonds, commodities, even crypto. All the information you need to excel in the markets. And I'm Alexis Christophorus. Listen to us for essential conversations with the smartest names in economics, finance, investment, and international relations.

37:23That's the Bloomberg Surveillance Podcast. Subscribe today on Apple, Spotify, or anywhere you listen.

37:36Caroline Hyde:We're just a couple of minutes away. Potentially four astronauts set to launch to the International Space Station. Live shots of NASA's Kennedy Space Center in Florida, Complex 39A. The astronauts on the SpaceX Falcon 9 rocket in Dragon Capsule. This Dragon capsule, Caro, has flown, will be at sick flight, which is an interesting data point and milestone in and of itself. I say potentially because I was looking at those clouds. They're a bit worrying. I know that SpaceX and NASA are a bit worried as well. Just talk about just what this means for Falcon 9, though, and the symbolic nature. It was but a few weeks ago that Elon Musk was threatening to decommission it, almost in his tête -à-tête with President Trump.

38:17Caroline Hyde:Absolutely right and absolutely so. So, you know, NASA and America rely on SpaceX to move astronauts and human beings to and from ISS. If this mission is successful and goes off today, 290 people will have been to ISS in its history. 68 of those will have been flown by SpaceX in the modern era. So it gives you a sense proportionately of how much SpaceX has dominated this space. SpaceX has been warning us about lightning. We were scrubbed yesterday. But that is the story that you need to understand. You know, SpaceX is the de facto market leader of moving not just humans, but payload to orbit, generally speaking.

38:56Yeah. And go back to the fact that this is a sixth flight. It was originally commissioned for five flights, but they're trying to sweat this asset right. This is all about bringing the cost down. Yeah.

39:07Caroline Hyde:I mean, look, the economics have changed vastly under SpaceX. I'm keeping an eye on the clock because if we tip over T-minus one minute, it's a pretty good signal that we will be launching in 60 seconds time. You know, the ISS has a limited shelf life. It's going to be decommissioned beyond 2030 and literally crashed into the ocean. But it needs servicing. And so, you know, SpaceX right now is the only option. We have some reporting this week that the interim chief of NASA, which is Transport Secretary Sean Duffy, met with his Russian counterpart. There will be a Russian astronaut aboard this Crew-11 mission.

39:43Caroline Hyde:But if SpaceX wasn't there, then the only other option for the United States would be Russia, which in this climate, yeah. They've been told to go for launch, Ed, and this is symbolic from a geopolitical perspective on who is on board. Yeah, we'll get to the crew, but I think this might be a first for Bloomberg Tech. Have we ever carried a launch live? I don't know. But with 10 seconds on the clock, let's listen in. T minus 10, 9. 8, 7, 6, 5, 4, 3, 2, 1. Ignition. Ignition to full power and lift off. Go Falcon. Go NASA. Go through 11. Together we rise as NASA's SpaceX crew 11 heads up to the International Space Station.

40:321.7 million pounds of thrust. Propulsion is nominal. Propelling Falcon 9 as the vehicle pitching downrange. and making its way up the East Coast, and will soon join Expedition 73 aboard the orbiting laboratory. So far, getting good call-outs on that first stage performance.

40:54We are now T plus 35 seconds into the Crew 11 mission onboard Dragon and Falcon 9. The Falcon 9 engines - Stage one throttle down. Are throttling down to help - Power and telemetry are nominal. To help pass through the period of max Q or maximum aerodynamic pressure on the vehicle during ascent. Max Q.

41:17We just had max Q right there. Falcon 9 is supersonic.

41:29One minute, nine seconds into what is a little bit less than a nine minute flight uphill.

41:35Caroline Hyde:as Dragon continuing. Sage one, brother. So currently traveling 1 ,500 kilometers an hour as the SpaceX Falcon 9 with Dragon on top goes through Earth's atmosphere or get up to around like 5 ,500, 5 ,600 miles per hour. When it gets to that orbital height, you're talking like 17 ,500 miles per hour. They called the moment of max Q, Caro, which is the moment where the rocket's under most stress, you know, from a G-Force perspective passing through Earth's atmosphere, that rough air that it passes through. But the next key moment is about, I don't know, let's say 30 seconds away. And that's where that first stage, the main booster, you have main engine cutoff or MECO.

42:19Caroline Hyde:And it's kind of an important moment because from there you'll get the two stages separating. And then it's like literally fully automated. I was going to say clockwork, but it's rocket science and it's pretty flawless most of the time. and as it might think he who's the pilot from nasa veteran on these three previous missions we understand managing to ensure that we get safely these people on board these four crew members up to iss so pretty integral moment and we wonder just how their bodies are feeling on board right now can you just give us a sense of what it's like to experience this sort of force i don't know because I've never been on a rocket.

43:00Caroline Hyde:No, it's immense stress on the body. We just saw that perfect shot of first and second stage separation. So what you're looking at is the single engine attached to the second stage at the base of Dragon Capsule. You raise a really good point, which is on the crew, and you asked me earlier, but we got interrupted by the flawless launch, frankly. But one of the interesting things about this is that the commander of this mission, Zina Cardman, she had been due to fly on crew nine. She's now leading Crew 11, but this is her first ever space flight. And that's notable because this shuffle was caused, if you remember, by the Starliner program and all the different tests that kind of went wrong and the timeline slipped.

43:40Caroline Hyde:But that's a really interesting and notable moment. We're about three minutes and 30 seconds into this sequence. The booster as it falls down to Earth, we're not seeing it in shot right now, will sort of do its burns and flips pretty soon before it comes into shot. But again, as it stands, this is all nominal, Caro, as they say, which means everything's going fine. Going fine for Crew 11 to then dock to relieve Crew 10 astronauts who've been on ISS for how long? Many, many months, I think, since the spring. The idea is that there's a handover period, right, which is really quite normal. and they, you know, in order to get there, have to dock and then there will be plans in place by NASA and SpaceX to bring the existing crew back down there online.

44:35Caroline Hyde:And, you know, like one of the good questions that you raised earlier and that people always ask in our coverage is like, what are they going for? And part of it is like, I'm repeating myself a little bit, ISS gets decommissioned in about six years' time. You know, it's the end of the agreement. It's served its life. But in the interim, it needs maintenance. And so as part of the cargo or payload that's going up with Crew 11, there'll be materials to service the humans on board, but also the scientific apparatus and equipment that's up there. And let's just dwell a little bit more. You mentioned Xena Cardman, commander, and one of the few active female commanders in recent years.

45:14We've got Mike the pilot. You've also got Japan involved, Russia involved. This is geopolitics at work here. Yep.

45:24Caroline Hyde:So JAXA, which is the Japanese space agency, has sent Kimi Ayui. This is his second space flight. He actually went up in space 2015. And then this is the bit, right, there's the reporting that we had today that the interim NASA chief, which is Transport Secretary Sean Duffy, had met with his Russian counterpart. because the context is, were SpaceX not around to do this, then America, because of what's happened with Boeing and Starliner, would probably rely on Roscosmos, the Russian agency, to take American astronauts to the International Space Station. Now, in this case, there is a Russian astronaut aboard the capsule.

46:04Caroline Hyde:His name is Oleg Platonov. It's his first trip to space as well. And away from whatever is happening in geopolitics and in markets, It's remember that the agreement between America and Russia, Caro, is longstanding. You know, the agreement literally to cooperate on not just ISS, but move astronauts from Earth into outer orbit in ISS. What's so interesting is the dominance of Elon Musk's SpaceX here. We also think about Japan being in the mix and indeed Russia, as you say, alongside the United States. It was, but this week earlier, so much has happened this week, but that Australia didn't manage to get its rocket off the ground.

46:45Just where do we stand in this so-called space race?

46:47Caroline Hyde:So SpaceX, as a private company, but an American company, dominates the vast majority of payloads to orbit, around 85 to 90 percent, including human and non-human payload. China is increasingly doing more. you will also remember that like there are other nations around the world some of the gulf states like uae have space ambitions um but it goes back to what we were talking about earlier right which is the economics of launch as we see the booster on the left hand side of the screen re-entering earth's atmosphere falling down using aerodynamics but also the paddles at the base to orient itself and slow itself down uh on the clock by the way i'm jumping around a bit but we're seven minutes in and the kind of key moment is about 40 seconds away where we should see that booster land back to the landing zone.

47:38Caroline Hyde:But to answer your question, yes, SpaceX dominates, but there is pressure coming from both government sector backed and private sector backed rivals around the world. And we're just losing some connection. There we have it. Will they make a landing? It's like art, Ed, there we have it. Well, it's rocket science. Art and rocket science at work. But just remind us, because we've just been so in awe of not only these landings and the reusable rockets, but the catch that we've seen in the next iteration of spacecraft coming from Elon Musk. Yes, so Falcon 9 is SpaceX's high volume vehicle and launch system.

48:23Caroline Hyde:That's what we're looking at here with Dragon Capsule on top. But they also have Falcon Heavy, which is used for basically higher density satellite payload. It hasn't taken humans. And then Starship's the next phase. Starship, the biggest rocket that humankind's ever built. And I think Elon Musk has said on X that the next full test of Starship is going to be in the next month or so. The mechanism for the Starship booster in that system is, as you say, not to land it on a landing pad as we just demonstrated with Falcon 9, but to catch it. And, you know, we can't do this right now because we're carrying the launch live, but go on the Internet and look at how that works.

49:06Caroline Hyde:That bit they've kind of done. They've done it successfully. It's the ongoing spacecraft part of Starship that they're still working at. Let's talk a little bit about economics here of NASA as well. because we just see the energy behind wanting to put money to work behind Elon Musk's SpaceX, and the rounds get larger and the valuation just soars. But NASA itself is trying to do more with less. Well, I mean, and SpaceX has been at the core of that story, and it's something that started in the Obama administration. You know, again, the economics of space have changed. SpaceX has never disclosed the per seat cost, but you can do the math based on the disclosures that we do have.

49:52Caroline Hyde:And it's several million dollars per person. Compare and contrast with what else has been out there from United Launch Alliance. And let me just catch this key moment here. Look at that. As we see Dragon coast into its orbit.

50:13And a wonderful view there is Dragon Endeavor with crew 11 on board. Dragon separation confirmed. And safe and... Dragon, chief engineer on Dragon to ground. Christina, Mike, Kimya, Oleg, welcome to orbit. On behalf of the entire Falcon team, we thank you for flying with Falcon today and wish you a great mission. Dragon will take you from here.

50:38Caroline Hyde:over to launch director for a few words. So, Caro, what that was was Dragon, the capsule, on the left-hand side of the screen. You see the crew inside there separating from the second stage. And now they're in orbit, right? And I'm just going to give you a quick statistic, which is very interesting. We were scrubbed on Thursday. 23 hours later, we did launch on Friday. but because of where ISS was lined up with planet Earth for a layman's explanation, actually what's going to happen is that all being well and equal, Crew 11 and Dragon will arrive at the ISS at exactly the same time on Saturday morning, about 3 a.m.

51:20Caroline Hyde:Eastern time, as they would have done if they had launched yesterday. And that kind of speaks to rocket science, doesn't it? This view of space and analysis of curvature of Earth and speed at which we rotate in orbit, it sometimes works beautifully. It aligns, Ed, as this entire viewership has been seeing throughout the show of what's happening currently live with Falcon 9 and how we start to see the astronauts now relieved. Now, just go back to the economics a little bit, because what we're expecting now is they are going to reach ISS. They're going to be relieving Crew 10. but in the future will we see fewer astronauts on board?

52:02Caroline Hyde:Maybe. I mean, again, the movement here is for the private sector to build space stations. And so, you know, the cadence of that happening, who knows? This crew will be there for six months. NASA's thinking about maybe eight months. You know, Relieve Crew 10, they were there since March. They need to come home. But this mission's a success. So far. We continue to see how the astronauts celebrate on board, as you mentioned, Japan, the U.S. and Russia represented. That does it for this very global and very intergalactic edition of Bloomberg Tech. Out of this world, check out the podcast. You know where to find it.

52:40Caroline Hyde:We publish it everywhere. Lots of you listen to it. It's been a great week. This is Bloomberg Tech. Before you sign off, you tuned in for ways to help teams move faster, make sharper decisions, and turn scattered contexts into work they can use. ChatGPT for Business can help. ChatGPT for Business gives teams a shared workspace with admin controls, permissions, and access to work and codecs in ChatGPT. This means your business can move from question to answer and code to rollout quicker. Join over 10 million business and enterprise users worldwide already using ChatGPT for work. Download the ChatGPT desktop app or contact sales to learn more.

53:21Hi, I'm Tom Keen, inviting you to join me for the Bloomberg Surveillance Podcast. It's about making you smarter every business day. I'm Paul Sweeney. We bring you complete coverage of stocks, bonds, commodities, even crypto. All the information you need to excel in the markets. And I'm Alexis Christophorus. Listen to us for essential conversations with the smartest names in economics, finance, investment, and international relations. That's the Bloomberg Surveillance Podcast. Subscribe today on Apple, Spotify, or anywhere you listen.