Earnings, stock buybacks, Alphabet-HubSpot deal talks: Catalysts

Earnings are in focus as multiple companies, such as GoodRx (GDRX) and Roblox (RBLX), reported their latest quarterly results. Data reveals that stock buybacks have reached their highest level since 2018 during this earnings season. Alphabet (GOOG, GOOGL) is reportedly in talks to acquire software developer HubSpot (HUBS).

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Video transcript

It's 10 a.m. here in New York City.I'm John Smith alongside of Madison Mills and welcome to our new show.Catalyst for equities to commodities.Were the coding trends and uncovering the drivers behind today's market moves our team of experts.They are here to help you navigate all the possible outcomes, help you make the best decisions for your portfolio.It is Thursday, May 9th.Let's dive into the catalyst moving markets today, uncertainty about corporate earnings are sending stocks lower in the season's final stretch.The dow slipping for the first time in seven days as earnings continue to put pressure on the broader market.While tech mainly delivering on those high expectations, the focus now turns to the big consumer names that are going to come out next week.Plus shares of Warner Brothers discovery under pressure this morning after missing Wall Street expectations that BD like many other media companies is grappling with an unfavorable at environment network advertising revenue that tumbled 11% in the first quarter from a year ago.The studios business also struggling despite high profile movies like do to and corporate America is spending big on stock, buy back share purchases in the first quarter are up sharply to the tune of $181 billion during this earning cycle.Huge chunk of that is Apple, by the way, a potential signal that corporate America is bullish on the US economy first quarter earnings season is in that final stretch.And so far results have been far better than Wall Street had feared.One example of that company stepping up repurchases of their own shares for more on corporate America spending spree, we are joined by Scott Kroner, head of us equity strategy at city joining us in studio Scott.Thank you so much for coming in.So I want to start on these buybacks because as I mentioned, we've got Apple with a record breaking 110 billion.They got a company like bumble down over 30% year to date.They 260 million in cash, 600 million in debt and they announcing buy back.So should investors be viewing all buy backs as created equal here?Well, I think to a certain degree, yes, the bigger picture here that we want to be attentive to in our view anyway, is that we're looking for an acceleration earnings growth this year.With that, we're expecting a significant increase in free cash flow generation.So we're looking for free cash flow for the S and P 500 to grow to the tune of 10% this year.And uh what that does, it frees up a lot of financial flexibility.Share repurchase is something that's been going on on an ongoing basis for several years.Our math is that on a net basis, the S and P aggregate share accounts been reduced by about a percent a year over the past several years.We think that trend continues.OK, so what this does it, it, the, the, the the free cash flow improvement augments financial flexibility that leads to decisions between Capex dividend growth and repurchase.Many companies are viewing repurchase as a, as a, as a signal that they view their fundamentals as in a pretty attractive position looking forward.So Scott just zooming out also and just taking a look at earning season.What we've heard from corporate America, obviously, over the last several weeks, obviously, it has been a strong earnings season so far.But I'm so in terms of some of the guidance and the forecast numbers, what is that then?What does this set up look like for the current quarter?And then of course, the second half look at color is bullish on the S and P earnings outlook.Ok.So going into the quarterly reporting period, it's not uncommon to see expectations come down.So you get to a point where positive surprises are nearly a given.Ok.So the positive surprise dynamic with Q one earnings is not a surprise.Ok. First point, second point though is that when you look at what's happened with the aggregate consensus expectations for the full year?They haven't changed.Ok.So we call it a beaten hold.But what this does in turn, given, what we know or think we know about the economic condition right now is that we're going to be in a position for ongoing fundamental tail winds to support us equities as this year unfolds then, what does that leadership look like?Well, ok, so here's the trick.So uh last year, we know it was all about mag seven.OK.It was an important con you know, contributor to the aggregate index return if you look at the performance off of the uh November lows, OK.It, it began to reflect broadening, which has been a call of ours going back to last summer actually.And the view had been we want to barbell growth and cyclicals well off November lows, you've had industrials and financials right alongside tech as a leadership year, you've seen energy perform quite strongly.My point is that broadening has been happening under the surface.Where does it go from here?This is somewhat controversial, but we are still of the view that we're going to get a fed pivot as we get in the middle part of this year, perhaps later in the third quarter.What that does is set up for the rotation to continue down a path of those parts of the market that should benefit from lower fed funds that's going to include consumer.Ok, so we've gone overweight consumer discretionary.We recently upgraded utilities from a long standing underweight to a market weight.We've upgraded staples.We've remained positive on banks.We've upgraded autos.My point is is that we've begun to shift our focus towards those companies that should benefit from a gradual reduction in short term interest rates.But your market way on information technology have to allow that the expectations had built pretty aggressively by the end of Q one going into Q one reporting period.So tactically, we pulled back um on tech, we'd been overweight for the better part of the past year.So we've been giving that part of the market room to catch its breath for fundamentals to grow into the price action.But uh yeah, let's be clear on this.We still think that longer term this mega cap growth cohort of the market is is gonna be mission critical to index levels, you know, moving higher over time.What's happening is these companies are the leaders of free cash flow generation as we've talked about and where they're deploying it is a combination of things, it's repurchased.It's we're starting to see cap X increase.Now, all of these are pretty constructive signals for longer term earnings growth.So we're in the game, we're just allowing for a bit of a rotation inside the market over next several months.Scott, how dependent is everything that you just said here in the last 90 seconds or so.How dependent is that on the fed cutting?And what happened if the fed does not cut that in the summer?Ok. Let me get controversial here.So, you know, we think with the fed, we have to be aware of unintended consequences.Ok.So higher fed funds been negative for those parts of the market, more debt laden real estate utilities as an example, it's actually been a positive for mega cap growth.These companies carry big cash balances and they're earning significant interest income now.Right.So, so what we would argue is that we have to be careful if the feds affecting different parts of equities differently.But at the same time, we're pretty big on this theme that uh the fed focus is mainly on uh main street and main street is not the same as what's fundamentally driving Wall Street, IE the S and P 500.So we think all told the feds in a position where it really should be positioning to pivot or at least become less restrictive that takes some rate, pressure off and risk of further things breaking.But under the surface, what we're arguing here is that we've seen it, you know, the the market is doing fairly well even despite the last couple 100 basis points of fed rate hikes.So if you look at some of these consumer names like a Starbucks, for example, that is showing cracks of the consumer do you think that's an idiosyncratic story?I don't know, I think it's probably, there's probably an idiosyncratic aspect.There's probably a price elasticity, demand aspect.There's probably many moving parts to the discussion when you step back and you look at the, the uh retail component in aggregate.Here's what I like to point out is that in aggregate, the retailers sold off very hard in the first half of 2022 as the FED was just going down its its hawkish trajectory and it has been flat lining for 18 months.Ok.The markets priced in a lot of the concern regarding the fed on consumer discretionary for some time now.So when you do see something emerge, you know, on, on one silo of the consumer, you know, we asked the question, is this a Tam issue?Is it a company specific?Is it a read through or broader consumer?And you know, where I'd like to go with this is that it's the same notion of the fed influence is happening differently in different parts of the economy.If you're a non saver living paycheck to paycheck, higher inflation combined with higher interest rates has been an issue if you've been a saver benefiting from interest on money market, funds and deposits.Now, it's a little bit different story.So I think, you know, we're, we're aware and we're watching, I don't know that we can say that uh fraying around the edges of the consumer in aggregate is a big negative for consumer discretionary fundamentals, Scott Kroner.Great to have you here in studio.Thanks so much for stopping by here with us.We appreciate it.Hope to see you again soon.Oil prices edging higher as a bigger draw down in inventories in the US.And Chinese import data help support crude in today's trade.Yahoo finance is in for a has been more on that story for us.And yeah, Shana those higher import data that coming out of China signaling demand growth and that's partly why you are seeing oil prices higher.We also have been seeing falling inventories here in the US.So that data yesterday sent oil higher but taking a look at wt I it's just below 80 dollars a barrel and Brent just above $84 a barrel.If I pull out a chart a two month chart, you can see that since the peak in April on April 5th, you saw oil coming down about 8%.That's a pretty big drop in a short amount of time and oil tends to overshoot and over correct as well.So there are some analysts that said that we are in too much of a correction territory so you can expect to see a little bit of a bounce when it comes to oil.But nonetheless, Goldman Sachs yesterday put out a note saying that they are expecting plus and their June meeting to extend their production cuts now and all eyes are really on that oil alliance to see where they go with their production cuts beyond June.The expectation is that they will extend them because Brent right now is trading at 84.But the range that a lot of analysts are seeing for the second half of the year is around 85 is between 75 and 9090 is really the ceiling.So basically saying that uh OPEC Plus doesn't want uh oil to go too much pa past 90 because then you cause a recession.So, nonetheless, we are seeing uh Brent 84 and the expectation is that that ceiling for Brent is gonna be 90 guys.All right.And now thanks so much for breaking down that trade and some of the movement that we're seeing here in early action.All right.Keep right here on Yahoo Finance.We got much more.Stay tuned.You're watching Catalysts, let's do a check of the market sponsored by Tasty Trade.Seen a mixed bag here.You got the dow up about 100 points.You've got the S and P 500 just barely above the flat line.The NASDAQ though, down about 1/10 of a percent here.Taking a look at some of the individual movers.We're seeing a lot of those weighing on the overall trade.You've Air B and B the second to worst performing name in the S and P 500.You've also got sales force accenture and MC I way down the S and P. But on the flip side of things, we take a look at Treasury.We are seeing some movement in yields to the upside this morning after some of that economic data.All right, let's turn to the streaming space shares of Warner Brothers Discovery moving to the downside after the streamer reported weaker than expected results for the 1st 1st quarter.That report coming on the heels of a big announcement, consumers are getting a new bundle option which includes the Warner Brothers, Max service, Hulu and Disney Plus here with more on the streaming space.We want to bring in Reef Ehrlich, a senior us media and entertainment analyst at Bank of America, Jessica.It's great to see you.So talk to us just about this quarter in this print that we're getting from Warner Brothers this morning because yes, they did miss when it comes to some of the top and bottom line numbers, but subscribers did beat the company is paying down its debt yet.It looks like investors are still disappointed.Why?Well, I mean, actually the numbers were pretty solid.Uh The the this in our view was based on a write down at the studio which happens.Um but the on the direct to consumer side, they beat the number, it was almost $90 million eta subs grew 2 million better than expected.And in this case, for, for Max, we'd say the best is yet to come.They're just rolling out in Latin America.They're rolling out in the next few months in Western Europe, most of Western Europe right before the Olympics.So they're really kind of rolling out globally and that will be a big part of the growth.And then don't forget there were the two strikes last year.So Max along with all of the other streamers did not have a lot of original content, Netflix, of course, buys a lot of content from third parties, but Disney Max and some of the others had a lack of originals and that will change in the second half of this year.So we'll see the Penguin and a lot of other original shows.We love to see the original content, Jessica.I know that you reiterated your by rating on the name, post those earnings, but I'm curious about this bundle announcement that we got to.What extent do you feel like they needed that announcement or were you going to be having this positive sentiment about this name regardless of that bundle announcement this morning?Well, we wrote in our, in our year ahead that one of the biggest trends that we expect to see in this year will be bundles.So we've seen maybe say the collapse, but the decline of the, the collapse would be too strong but decline of pay TV, which is ongoing.Um And then you're seeing a re bundling in streaming And so, you know, we've seen um Verizon offer, our Netflix and Max and Disney Put Hulu and eventually we put ESPN and that I think is a trend that will continue.So Warner Brothers discovered putting Macs with the Disney uh streaming platforms.I think it's very positive who's stronger than Disney.Um except for Netflix.So it w it should be a powerful bundle.We don't know the pricing, but what bundling does in general is it decreases.Churn it, you know, generally keeps people on a platform because there's so much content.Um And it helps with marketing costs overall.But churn is the biggest issue in streaming.It's so easy to get on and off the platform as opposed to cable.When you sit around and wait for the technician to take your box.It was just a pain, Jessica.One of the topics, one of the questions that was asked this morning on the earnings call was surrounding NBA rights.And exactly what exactly that looks like here for Warner Brothers.Discovery and David Zaslav answered that in part saying that he remains hopeful that they will be able to reach an agreement and have it make sense here for both sides.How critical are NBA rights here for Warner Brothers Discovery, you know, they didn't really get into NBA at all because they're negotiating.Um But it's, it's really important and it's, it almost feels like a no win at this point and maybe something maybe, you know, we'll, we'll just have to see.But when I say no win, they either keep the rights and pay a lot more than they expected.So our expectation going into this was they would pay a billion or so more than the 1.21 0.3 billion they're paying now for rights on average and get less content.NBC U reportedly, we don't know for sure is coming in with a bid of 2.5 billion.So Warner has the right to match.Um uh you know, Warner Brothers discovery has the right to match.We'll see what that means ultimately, but it may be more expensive if they don't kick the rights.That's a real problem because it really puts the future of TNT and T BS, the affiliate fees in question the profitability.So I think either way we really have to think about a step down in our 26 forecasts, but we just don't know at this point.Yeah, Jessica, I'm curious how big of a step down do you think it could potentially be?And then also just the immediate impact then potentially on the stock if they were not to get those rights?Well, in reality, it would be a one time impact, but it's a little bit different if they pay up a couple of 100 more than we expect versus completely losing NBA.Because so much of what's driving viewing today is live sports, whether it's the NFL or basketball, you can see even with the decline in the pay TV universe, the ratings are up dramatically.So this is what's driving uh affiliate fees, that's what's driving advertising.So NBA is really important.It's a global product.Warner Brothers Discovery has international sports properties.We'll see if that helps NBC U has a lot of very strong local, you know, domestic properties, they have a broadcast network, they, they, of course, they also have streaming um and cable networks.But, you know, so the, the, the acid mix between the two companies is, is a bit different.Um But it's important NBA is, is much younger sport than NFL.So I'd say it, it's what we all think it's really important.And if it, if there's a step down, how much of a step down depends on the outcome, they lose it completely.How much more do they pay if they keep us?We just don't know right now.Well, speaking of another broadcasting network, CBS, according to the New York Times, Sony and Apollo's plan for Paramount would involve a little bit of a break up selling off CBS.I'm curious from your perspective, who would a potential buyer be for CBS?Look, uh the, what's happened in the last few years.Um You know, but in traditional media, there's been a slow decline in, in, well, in the broadcast viewership, of course, I mean, I've also moved from linear to streaming.Um unquestionably having said that broadcasters are really powerful.There's, there are four broadcast uh networks in the country and they have tremendous reach.So I think it would be a very attractive property.The question is, who can afford it and who could own it from a legal perspective.The reason why this is being discussed as something for sale is that Sony can't own it.We have foreign ownership rules, they can only only own a small piece of it.Um So they would have to sell it.So we'll see, we'll see if Sony um and Apollo are successful in the end or if Sky Dances or if nothing happens, just not to put you on the spot.But I'm curious though, from your coverage, obviously, within the space and clearly your extensive knowledge, how do you think this is going to play out?I I mean, look, it's really hard to say the private negotiations, this can go on for a long time.You know, we've seen this playing out for months and months and they're very different offers the Sky Dance offer with Redbird and, and um KKR supposedly Kr we don't even know for sure.Um But that would be more uh you there, there with all of these things, there's a step one and a step two.So step one is they buy out na I but then they want to, you know, merge their studio Sky Dance into Paramount and so the Paramount would have to pay them.So there's that, but it would stay a public company and you would have operators in a much bigger studio.Um And, and presumably they would do a lot of the heavy lifting that Paramount has not done whether it's selling assets or cutting costs.We watched Warner Brothers Discovery go through two years of restructuring that would have to be done.So there's really a lot that would have to go into um a new Paramount, but it would say a public company under the Sky Dance, you know, the proposal under Sony and Apollo, it it it would not be a public company.Um Sony would run it presumably would run the studio and then sell off most of the other assets.So um we're not sure like how do you do, what, what step step one would be buying the company and then would the government allow them to sell it later on?I mean, like what is the process would, would they get through the government scrutiny of combining two major studios who would run this?Sony has amazing management.It's a really well run studio for the first time almost ever.And so, you know, how long will Tony Vin Pera and Tom Rothman run the company?Tony is the chairman of Sony Pictures Entertainment.Tom Rothman is the head of, of the studio.How long would they stay?So, I mean, there are a lot of questions and nobody's speaking to the public at this point.All right, Jessica, thank you so much.We're gonna have to leave it there.Really appreciate you joining us so much this morning, Jessica Reef Ehrlich joining us from Bank of America.Thank you.Now, taking a look at some of the other trending tickers here.Good Rx shares down this morning after the drug pricing comparison software company posted its latest earnings report coming in below analyst estimates for more.We've got our very own.That's right man.We know that good Rx has been under pressure for the last year or so.Really looking at the subscriptions has been a key part of that while revenues are up year over year, they did miss on earnings per share.But meanwhile, looking at what the core business is, there have been some increases such as the integrated savings program.The company has now linked up with major insurers like CVS and Cigna but has not not with United Health.Notably, in order to allow those pharmacy benefits managers to automatically apply good Rx savings to to patients prescriptions.That's been one area of growth for the company.Meanwhile, the general subscriptions that the company had, they have seen a 6% decrease year over year from 200 sorry, 22.6 million to now to 24.1 million.And that is in large part due to Kroger.That has been one of the key areas that has pressured the company for the past couple of years of the decrease in that savings plan with those Kroger members, there's even a lawsuit that's been filed against them so that there's been a lot of problems with that area.But general speaking, sort of flat, we know the markets are responding poorly down 7% already in the day.But the company has been up year over year right now.In the past year, up more than 50%.And in the year to date, more than 20% 25%.So, you know, sort of mixed signals on the stock right now.Some of it may be just a valuation questions and at this point and thanks so much.Well, Alphabet Google's parent company is continuing to progress in talks to acquire the marketing software provider, Hubspot.This is according to people familiar with the matter, according to recent reports on the sources, emphasizing that no agreement has been reached.Hubspot shares are up almost 40% over the last year.We're taking a look at shares not moving so much here today.Given that massive run up that I just mentioned, you're looking at up to here of 3/10 of a percent.But again, what exactly does mean here for alphabets and business overall where they're seeing the growth, where they're seeing the opportunity you see when they focus on a name like Hubspot.Just exactly some of that strength that we're seeing play out here within the tech sector.That's exactly right, Shana and this is hubspot as a reminder, this is a marketing software provider so potentially play from alphabet to be working on that incredible advertising revenue that all the big tech firms have.Having said that off of this potential deal, taking a look at the reporting when it comes to hub spot, they did show some weaker customer demand conditions for the fourth quarters.Buyer urgency did dissipate.Barclay is keeping to equal weight for this name ever course saying that it was in line saying they delivered so you run results.But the macro environment remaining choppy could be a head when for the company to come cow and saying the same thing as well flagging that tougher macro conditions.Are we on the stock though?It is up off of that Google News for them as well this morning and Roblox shares are down this morning after the company lowered their annual booking forecast.That is a sign that consumers are pulling back on spending on the video game platform and this comes after Electronic arts also gave a week revenue forecast, the gaming industry as a whole deals with a lower engagement.And guys, we got to just take a look at this stock.It is down over 20% here.I just want to pull up what the stock has been doing year to date so that we can get some of that context.It's down 30% year to date.Obviously, huge part of that is today looking like the biggest drop year to date that this stock has had.So certainly a big market reaction here sea and when you take a look at what's going on with the Roblox stock today, you actually was off just over 30% ahead of the market open and had been on track for the worst day that we had seen here, I believe on record.But now it had paired some of those initial losses here off just about 22%.But again, this is a read on the consumer when you talk about falling engagement, when you talk about questions, just how to further monetize the platform, the number of people who are paying and willing to pay and willing to play video games right now and you see a bit of a pull back there in terms of bookings, obviously, some questions about what ultimately this means for the current quarter also for the second half of the year when we talk about that weakening consumer type of story.So Roblox obviously falling under a bit of pressure there day and you're seeing a massive sell off and this is a stock that is actually in the red as well since the start of the year.Given today's 22% drop, bringing that year to date loss to just around 33%.Yeah, another consumer name really struggling here.All right.Well, coming up.Speaking of consumer names, we are going to speak to the Krispy Cream, Ceo Josh Charles Worth on what's next for the franchise after its earnings report, topping estimates that's coming up after the break.Stick with us.We've seen fast food giants like mcdonald's and Starbucks all report this season saying slowing consumer demand is a headwind for the companies.But Chris Cream actually seen some growth in that consumer demand that we saw in their Q one earnings report out today.The donut giant, the net revenue grow 5.7% to over $442 million to break down.What's next for the company?Josh Charles Creams CEO president and our very own Yahoo Finance is to home here for this discussion.Josh, thanks for being here.Let's jump right into that mcdonald's partnership.You say that you expect over 80% incremental sales growth through that partnership.I'm curious how you anticipate getting to that number particularly given what we heard from mcdonald's and their earnings that they are seeing consumer slow down.How do you expect to see that amount of growth?Hi, good morning.Thanks for having me on.Uh yeah, it was uh great results that we reported this morning and they really reinforced that our strategy is is working our strategy to get our donuts out of more people and the mcdonald's uh national roll out is is all about that.Um Indeed, we can even uh with a national roll out to mcdonald's access other major customers.And at the same time, the results this morning showed that uh Krispy Kremer uh consumer is excited, excited about the brand, lots of exciting around our special occasion varieties and and hence why uh the confidence uh in a national roll out uh in the consumer and in our expansion strategy.Well, I'm curious then because you talk about that expansion strategy, but you mentioned something that I want to follow up on, which is the frequency of the consumer.To what extent is that a potential had one for you that you are seeing consumers potentially coming in once twice a year and not necessarily making crispy cream a habitual part of their lifestyle.Well, you know, our brand and our business is is pretty unique.People look uh to Krispy Kreme for a real special moment of joy, maybe to enjoy themselves, but actually usually you share and, and give to others.So, yeah, no, we, we don't base our business off of a habitual daily treat.Instead we wanna make it more convenient for people.Um We wanna keep reminding them the joy.It's Krispy Kreme, uh amazing new doughnuts.We got out minis for mum this week we had a total solar eclipse doughnut just a few weeks ago.These all put it top of mind.Uh And then for example, on Valentine's Day in uh in the first quarter, uh that was our biggest sales day in the history of the company because we reminded people uh, of these special occasions for, for them and their families.Josh, I do quickly want to way back in on that mcdonald's test, what exactly happened during that 160.So test that gave you the confidence that you could expand this nationally.Well, the first thing is our Krispy Kremers did an awesome job in getting uh three of our fav people's favorite Krispy Kreme doughnuts out to more than 100 and 60 mcdonald's uh uh across Kentucky and, and, you know, they were great quality fresh daily.Um And that, and that was the most important thing for us.Then we saw the consumer reaction and we also saw the partnership with the mcdonald's team and, and both worked really well.In fact, when we announced the national roll out, um both mcdonald and expressed that the consumer demand exceeded our expectations, which is great to see.So give us a lot of confidence for a national roll out at mcdonald's, but also the incremental of that business for Krispy Kreme overall.So I'm curious about these additional touch points here, you mentioned that you're going to have 12,000 of them.What is the single biggest thing that you're focused on in your leadership to increase capacity to be able to meet the demand that's going to come with that.That's a big shift.Well, actually, we, we grew um points of access, um nearly 20% just in the first quarter of this year.So for some time, we've been uh pursuing this expansion strategy by making our doughnuts more available.Number one reason why people say they may not purchase a Krispy Kreme still is, it's just not convenient.So we're working to address that.So our team has been working on that.Um We're accelerating indeed.We're not just the National partnership with mcdonald's, but other major players are, are looking to distribute our doughnuts.And so our focus is on getting those awesome doughnuts uh made uh and moved and, and in the hands of our customers as fast as possible and talk to me about international expansion.I know you've expanded nationally, of course, through the mcdonald's partnership.Why not go international?Well, uh first of all, I mean, the brand is a global brand.People are always surprised when I talk to them about how we're in 39 countries already regarding mcdonald's.Yes, indeed.That's a US partnership.But we're growing all the time.We just announced we've added Germany uh selling sales and, and uh Krispy Kreme in Germany next year.I was just recently at the Paris opening uh there which uh the prisons just loved our doughnuts and we do think the quick service restaurant opportunity is relevant around the world right now with mcdonald's, we're just focused on supporting the roll out there in the US with this roll out here in the US.What sort of opportunity does this give you to say, go to those local Walmarts, those local targets that are near these mcdonald's?No, I'm really glad you hit on that.It's, it's, it's, it is a really big opportunity for us.In fact, when we've spoken to those partners, they've actually been excited to hear the news of how Krispy Kreme is, is growing profitably and scaling in a way that enables us to support more of their stores.Uh We're in Walmart.They're a great customer.We're only in about quarter of the Walmarts today.Think of the opportunity we'll have by driving past every Walmart in the country on the way to mcdonald's and it's not just Walmart, other customers uh uh are excited to, to list a fresh daily.Awesome Krispy Kreme Doughnut, especially given all the new doughnuts, we bring out all the innovation that the team is able to create.When you think about what we're seeing here in the US, we have been seeing a consumer slow down from so many other companies.It seems like Krispy Kreme is immune to that.Would you say that's the case?I, I'd say we're always mindful of the consumer environment.It's important to, to, to be aware of it.Um But really, we're focused on making sure that the doughnuts uh are really top of mind and unique.Um For example, in the first quarter, we're able to generate over 17 billion m your impressions uh by communicating our new doughnuts or reacting to them uh situations like, I don't know if you recall the AT&T uh outage.We, we, we brought out a doughnut especially that day of free doughnut uh for those impacted.So we're always adapting to the environment and reminding people of joy.It's Krispy Kreme and, and, and that's what makes us special.I think.I know you announced a third party delivery partnership in DC.I'm curious about why not going with a bigger name for that partnership like an Uber.Well, um uh we are exploring a few alternatives right now.Um DC, we're also doing something similar in L A right now our, our test to understand how we can get our doughnuts uh to uh the delivered fresh daily doors to these grocery uh doors uh to mcdonald's indeed as, as we roll it out.Um And so we, the partner we've chosen right now is a test and we'll be looking at different providers and seeing if we can maintain the quality and service uh whilst retaining the economics as well.So we'll see how that goes all the while our focus is on how do we modernize the making and moving of doughnuts so that we can make sure the company is supporting this expansion profitably at the highest quality Josh.We really appreciate you joining us after this earnings print this morning.Thank you so much for making the time to chat with Yahoo Finance.That was Josh Charlesworth, the CEO of Krispy Kreme and of course our very own Brooke Dipalma rebound.A rebound in advertising sales is giving companies a boost this quarter.Latest results from Instacart showing a 9% jump in ad revenue from a year ago.Coming after reddit meta, Amazon and alphabet all seen double digit growth.The company still dealing with a cautious consumer.Recent data from Mick Mac showing a pull back and purchase sizes from a year ago.Joining us now is Rachel T Mac, Ceo Rachel.Great to speak with you.Thank you for coming in studio with us.So M Mac as a reminder of leading platform for e commerce and you have a lot of analytics that help you understand and really get a picture of what's going on with the consumer.So what are you seeing?Yeah, absolutely.Advertising is definitely back the investments that the platforms have made in A I have lowered the barrier to entry for businesses of all sizes.And the reality is what every consumer company is focused right now on is profitable growth and they're willing to invest in channels that will deliver a strong return on ad spent.And as platforms have become more sophisticated in advertising brands are seeing greater results.I'm talking about platforms like meta like tiktok, like the trade desk, even reddit has seen a boom lately.So Rachel, when you talk about the fact that you think ad revenue growth then is back.What then does that growth look like going forward?Yeah, it's super competitive because there are more places to invest your dollars than ever before.It's no longer the digital and social platforms.It's the retailers too.Amazon Target Walmart Instacart.They've all woken up and realized that they have an enormous amount of first party data.Why?Because consumers every single day are shopping on those platforms.It's now actually giving them a competitive advantage over the digital and social platforms because of changes in I OS 14 and cookie less internet.So while advertising spend is back from a platform, they have more competition than ever before.Can we talk a little bit about Instacart because they have this new Uber partnership, which is a big deal for them?Obviously, I wonder in your data, what you're seeing that indicates to you that Instacart does have a stake in the game like a real position when you have those competitors like Amazon like Walmart.Yeah.So at Mic Mac, we work with over 1200 brands.These are the biggest brands in the world and on any given day, Instacart is our fourth most preferred retailer, meaning it goes Amazon target, Walmart, Instacart, why consumers want convenience?So Instacart teaming up with Uber, I thought that was brilliant because what's happening right now is because there's more fragmentation in the market and consumers want convenience.You're actually seeing channels converge.So for example, last year you saw Sephora and Coles's come together, Instacart and Uber coming together is a great value proposition for the consumer because what does the consumer want to do?They want to order Chinese food delivery and then add a pint of ice cream to it.Instacart and Uber can deliver on that.And doordash recognized that strategy a year ago.So this is gonna be really interesting in terms of being a competitive threat to doordash Rachel.Do you have to see more of those types of partnerships?Just given if we zoom out a little bit, there's a lot to be optimistic about like you're talking about.But then there are certainly macro concerns.We do see pressure on the consumer, we do see consumers beginning to pull back their spend.So are these top brands going to be more reliant than on those types of strategic partnerships?Absolutely.But the reality is margins are now being compressed across the board.What happened during the pandemic is that big consumer brands realized that they could raise prices because the need was there all of a sudden, consumers are like, wait a second, I'm not gonna pay more for avocados.And now there's resilience towards the increase in price.What that does for a brand manufacturer is it makes them think twice about their margins.The same thing is happening for retailers.And so as there's more competition and there's more convergence the reality is Instacart and Uber are now gonna share revenue.So if I'm on Wall Street, I'm just wondering where is the margin compression gonna stop?And how are brands and retailers gonna find growth in tomorrow's environment?Well, as we start to get to the end of our conversation here, I do wanna take a moment to talk about Tik Tok.Are you seeing any evidence of companies starting to prepare for a world where they may not have access to tiktok?So on any given day at Mic Mac.Tik Tok is typically now around our second most trafficked social platform, it goes meta then tiktok, then an environment like youtube, Pinterest Snap and then X is irrelevant.I share this because I'm not seeing brands pull back from Tik Tok.I think right now they're actually trying to put their pedal on the gas while Tik Tok's around Tik Tok is an amazing channel to drive consumer growth.You're we're seeing it in beauty, we're starting to see it in grocery.And so if Tik Tok was to go away, which personally, I don't think that's gonna happen.I think there will be a divestiture and my money's on Microsoft.But uh why is that?Because I think that the FTC is gonna block everything.But with Microsoft, there's an opportunity for them to truly become one of the biggest players in advertising, with their inroads in A I and if they acquire tiktok, this is a home run rich.I so I know this is in what you think is likely to happen.But let's just play devil's advocate if we were to see a band and they weren't to divest um that part of the business here in the US.What then does that ultimately mean here for some of these other social media players just in terms of gaining the edge?And I guess where do you see those ad dollars going if tiktok were to go away?Meta would win youtube would win C TV, would win.Tik Tok is really a play of brand awareness and video and so those dollars would just get real located.I saw it happen when Elon Musk took ownership over X our Twitter traffic plummeted and then overnight just reallocation and that's the thing.Consumer brands have a lot of choice of where to place their advertising dollars, but tiktok is so a part of culture.And so I do think it will have a, a big pullback from consumers because where is Gen Z gonna hang out?They don't wanna hang out on Instagram.Maybe they'll go back to snap, maybe Reddit has an opportunity.Well, Rachel, it's great to have you here in the studio.Thanks so much for stopping by here with us.Thanks for having me.Keep it right here on Yahoo Finance.We got much more of your market action ahead.Stay tuned.You're watching Catalyst, Elon Musk.Start up neuralink is facing some setbacks after announcing the brain implant, it placed in its first human patient has malfunctioned the company announcing in a blog post that it encountered a problem leading to a reduced amount of data that it could capture because of some of the threads can coming out.Now, just to explain this is sort of complicated, this is a brain computer interface that was implanted into this patient here, Shana and they have the interface has over 1000 electrodes across 64 threads.The implication here is that some of those threads are not functioning.We don't know how many.But that is a very important part of the process of having this brain computer interface implanted into that patient's brain that allows this patient to do things like play chess without having to use his hands.If those threads are no longer functional, that's a huge issue.Yeah, it is a huge issue.When you take a look at this blog post here, it wasn't immediately clear or there.They did not disclose a reason for some of those threads.Uh the fact that they did react or retract here unexpectedly.Uh So when you talk about what exactly this means then for the patient who has a neural complaint in his brain, there's many unknowns when it comes to this obviously, since this is the first time that this has ever happened.But they are saying right now that the problem hasn't appeared to pose a risk right now to the safety of the patient.But there are talks at least initially here according to this journal piece, the possibility here of removing the implant, a so called explanation here was floated according to recent reports.So again, lots of questions just about what exactly this looks like here going forward, what exactly this means and for further adoption obviously.And so I think there's a lot of unanswered questions at this point.But again, the focal point being the safety of the patient, it looks like at least now some discussions are taking place just in terms of what ultimately would need to happen or about if there is this possibility of having to remove the implant.That's exactly right, Shana.Well, this is part of a broader push that we're seeing from big tech companies looking to invest specifically in what's called neurotechnology.And this is the focus of our upcoming episode of next.Take a look.I think we'll start getting some consumer neural interfaces soon.It's kind of like a Fitbit in your skull with tiny wires, CEO S from the world's biggest tech companies are touting a future that allows you to type and click using only your mind.It won't necessarily be due to a chip that's implanted into your brain.Rather experts say the next big thing in neurotechnology will be portable products that live completely outside of the body like this since 2021.Meta, CEO Mark Zuckerberg has touted an armband that can allow you to control devices using the subtlest of hand movements.Apple also filed a patent for air pods that could include electrodes to measure brain activity.As big tech firms circle around neuro tech one estimate says the industry could be worth $55 billion but questions remain about privacy concerns associated with the technology.This is our final fortress of privacy and we've given up every other aspect of privacy that exists and you can catch that full episode of next premiering here at 4:30 p.m. on Monday.Looking forward to that, man.All right, let's talk about one of our big takeaways here from the show and really what we have seen play out over the last 24 hours and that is first quarter earnings season.We are in the final stretch.Some of the focus that we've been talking about.We talked about it with, uh, Scott's, uh, Croner over at city earlier here this morning has been on buybacks and the uptick that we have seen in Buyback specifically this quarter and just to put it even more, uh, plainly here, put, uh, very, uh, I guess, right?Tell you exactly what this means here.When you compare it on your rear basis.We're actually looking at the fact that buybacks have ticked up, I believe just around 16% compared to what we saw a year ago.100 and $81.2 billion worth of buybacks have been disclosed here for the first quarter of results.So what does this mean?Obviously, the signals that executives are confident within their company and this comes at a critical time here when there is so much uncertainty when you talk about the economy and exactly what is going to happen with the fed moving forward.But what we heard from Scott Kroner over at Citi was he was talking about the fact that they're actually looking for a free cash flow here to rise by about to grow by about 10% this year, giving companies more choices when they have more choices.A lot of them are putting that money to work through buybacks.And ultimately what that means in terms of further supporting here, the market from current levels.I wrote that number down, I was thrown off by 10%.That just seemed like a lot particularly given his thesis that this season is gonna be a beat then hold because we're seeing good results.But then we're not necessarily seeing stocks rallying off of those results.So I thought that was super interesting, a great point for you to bring up sea.I also thought that what he said about how buybacks are another part of what's leading to the bifurcation in the consumer was interesting that those consumers that have the ability to have holdings in apple, for example, and they're getting the benefits of those buybacks that's giving them some form of income.Whereas on the lower end of the spectrum, we're seeing that people who are impacted by higher for longer environment, that's making their credit a little bit more expensive.And that's part of the dynamic that's leading to the separation here.Yeah, exactly.We can take into account why this is happening clearly that bullish signal that it is sending to the markets.And as a result, we see many of these companies who have announced buybacks, seen a tick up in their stock here the following day.And then even over consecutive trading days here, not necessarily a big surprise, but again, a trend that we have been noticing here at Yahoo Finance and certainly something that you wanna keep on your radar as we close out first quarter earnings season.Let's do a final check of the markets here, 90 minutes into the trading day.Now you're looking at gains actually across the board.You got the dow up nearly 200 be up about 3, 10 of a percent, the NASA back in positive territory.Now, up about 2, 10 of a percent and coming up wealth dedicated to all of your personal finance needs.Brad Smith is going to have you for the next hour.So stay t