good morning it is 8:00 a.m. at roku headquarters in california, 11:00 a.m. on wall street. "squawk alley" is live ♪ i'm just a love machine >> good friday morning

welcome to "squawk alley." i'm carl quintanilla with morgan brennan an jon fortt at post 9 of the new york stock exchange a flat market today but a lot going on we have a lot to get to with our first guest, pinterest moving lower, amazon with a judge temporarily lock bblocking jedia lawsuit. but roku up. yelp going the opposite way. mark mahaney joins us live from san francisco. happy friday good to see you. >> happy valentine's day >> absolutely. let's start with roku. your title is stream it loud, stream it proud. >> yeah. >> what's the important dynamic on this name right now >> right now it's active accounts they grew 4.6 million, more than they've ever added before. i heard jim cramer saying earlier today people shouldn't be surprised given the streaming wars people are somewhat surprised. this is a company that can sustain premium, i think 50% ad

revenue growth for the next several years. they generated about $700 million in ad revenue last year. i think that's less than 1% or just around 1% of total tv advertising revenuerated in the u.s. last year the market is going to streaming so we like roku. we think it's the single best derivative maybe after netflix with the move toward streaming >> we'll talk with anthony wood in a moment, but he did take a bit of a victory lap helping disney plus reach the subs they got. do they deserve credit for that? >> a little bit of credit. look, if you are an emerging or a launching streaming service and you want to get your product out, roku gives you an audience that cuts young, it's millennials, very heavy millennial focus, people already streaming. they're a target-rich environment. plenty of other places to advertise, but i don't know how you wouldn't advertise on

rescue an ad revenue share and subscription revenue share they are well positioned in the middle of what is i think the single biggest trend in consumer entertainment today, the move toward streaming >> mark, talk to me about pinterest. there's some consternation out there because facebook is doing something that reminds people of pinterest. weren't we just at the point where we saw their earnings? a lot ofpeople including you i believe were impressed and maybe investors don't quite understand pinterest's structure and model and how it's different from facebook >> i think you're right about that, john it comes down to the use case. these are fundamentally different as sets people go to facebook to entertain, connect, and distract pinterest is more of a hunter's place so people go there when they want to dig into ideas about barbecue recipes, fashion tips, home remodeling. it's just a different mind-set i don't want to be complacent

about it, but i don't think that the facebook copy app, the feature they're rolling out, i don't think that disrupts pinterest's growth at all. >> your thoughts on another big mover of the day, expedia, up 11% post earnings last night they said adjusted ebitda growth would be in the double digits this year. how big of a concern and risk is coronavirus? >> well, they did quantify it. they did say coronavirus is going to impact their march quarter ebitda by $30 million to $40 million. i think that's about 25% some i remember markets are seeing 50% decline in travel that's bookings, flights, hotel reservations, especially in asia and especially in china. it's an issue for expedia. it will be an issue for booking when they report in a few weeks. no question for any travel company, this is an issue. nobody knows how long this is going to last. he was very up front and candid

about it last night. in typical barry diller fashion, he said he doesn't know and nobody knows the advantage is if you're an expedia shareholder, valuation is de minimis, at a value multiple that spits back cash to shareholders, has a nice dividend and has consistent double-digit revenue growth. we think it's a good asset >> how long can barry diller stay at the helm versus bringing in a ceo what is that going to look like? >> i hope they bring in a ceo. barry is saying they have no formal plan to do so this year you know, i respect mr. diller i think that's a little bit too much hubris there. you need to bring in a full-time ceo. mr. diller has a lot of experience in the space and a good team, but they need to bring in somebody. he's given a pitch they don't need anybody this year, but he won't be in that role beyond this year. the sooner you bring in somebody

good, the better for expedia >> with amazon, jedi, stock sales by bezos i wonder, sort of help us frame the jedi news in the overall size of the business, its importance to overall growth and that unknown calculus of how much it risks antagonizing the white house. >> okay. let me go backwards. i think the white house was already antagonized. i think it's hard not to look at this from an objective third-party perspective and not conclude there was some sort of political interference in this decision, but i'll tlooefr i seed for now >> really. >> yes if i keep going on this for amazon shareholders, aws is half of the value of the company. clearly, i think, even though it's more than half of the profits, but it's at least half of the value of the company. so anything that denigrates that growth, if there's any questions about the appeal of aws in the

solution suite they offer, that's a negative for amazon stock. if you step back, this contest is really -- it's probably a duopoly. maybe google cloud can gain some share, but you have two large behemoths here and they do well in the market, azure and aws our guess is that aws will remain the market share leader for the foreseeable future anything that changes that is a negative for amazon stock. >> give kwhan n what we're seein roku this morning, earnings last night, i want your asaysment on the challengers out there. some of the stocks including roku you could argue etsy, people thought, well, sonos, they can't win i don't know you don't necessarily look at sonos. but they can't win because netflix and amazon is dominant, facebook is dominant we were just talking about pinterest. what is your assessment on them

being able to find their niches, expand outside of them and that investors should be paying closer attention to those in 2020 >> well, let's see i want to be careful here. some of these markets are big enough that you can have one, two, three big winners in a space. streaming, i think disney, look at the phenomenal success disney had out of the gate. that's in part because netflix has paved this market. there is room in this market for two or three major global streaming providers. netflix will be one of those but there's room for disney and they're proving it you mentioned aws. this market is big enough and maybe only single-digit percent e penetrated, that's the percentage of enterprise databases in the cloud, that means there's plenty of growth in scale for aws and azure the question is if google can gain material share there. you could have a couple big players. i don't know that you can have four maybe three, definitely two.

>> mark, nice rapid-fire with so many of your names in the news this week. thanks mark mahanemahaney. >> thank you, carl >> the other big earnings mover of the morning, nvidia josh has more. >> morgan, bears getting wrecked. that's how one nvidia bull puts it describing that company's report, beat, and surge. nvidia surpassing expectations and that data center segment had a huge quarter with revenue of $968 million, a jump of 43%. investors focus on that segment because data center chips carry higher margins gaming sales climbing 56% to $1.49 billion. that's that q1 outlook there was a lot of interest as to what the company would say about the coronavirus. china is a significant market for nvidia, about 30% of the company's gaming segment management does expect a $100

million impact because of that outbreak >> our estimates are split between an impact on gaming and data center and split pretty much equally the $100 million also reflects what may be supply challenges or may be overall demand, but we're still looking at those to get a better understanding where we think that might be. >> bottom line, nvidia expects q1 revenue of $3 billion plus or minus 2% that forecast beat the street's estimate, hitting a new 52-week high this morning and most analysts think it can move higher from here 18 analysts think it goes north of 300 bucks it's not just nvidia, though the etf that tracks the chips hitting a new intraday high this morning. still on track for its west week for june 2019.

what's to nitpick in nvidia's approach not much but gaming and some on the street wonder whether that data center segment can sustain this kind of strong momentum. >> thank you, josh lipton, from innovation headquarters at one market in san francisco. meanti meantime, for a second straight day the number of confirmed cases of coronavirus is rising chinese authorities reporting more than 5,000 new cases and 120 more deaths. the death toll stands at over 1,400 after being lowered supposedly due to double counting in the province joining us now to break down that impact, director of m.i.t.'s supply chain management program and author of "the power of resilience: how the best companies manage the unexpected." thank you for being with us. so talk about the unexpected

i'm not even sure what you do from where you sit, from where the business is, and suppl chains, what you do with these shifting numbers how is that factoring into the way business is going? >> first of all, let's understand this disruption to business may be different than most disruptions in living memory it's not like sars or fukushima or thailand in that the effect may be relatively small but the uncertainty is huge. so it can be reasonable like those or it can be compared to 2018 or the 1918 flu, spanish flu epidemic that had millions and millions of people dying and it's -- let me just say a

word about it. it's different because it affects both supply and demand it's not just manufacturing in china that is affected it's not just parts of manufacturing in china for example, we talk about getting parts from countries that go in to assemble the phones now we have travel restrictions, we lost all the cargo, most of the freight, 52% of the on the kilometers of freight fly in the belly of passenger planes. we're losing most of this capacity in addition to u.p.s. and fedex. then there's demand. the demand in china is down. so supply and demand are affected >> as you've just said, we don't know exactly what the short-term impact really is but even long term, if you were

a company that was thinking about diversifying your supply chain out of china because of trade you shall sh trade issues, does coronavirus accelerate a timetable, tip the scale one one or another what is the legacy going to be on supply chains in general? >> it depends. if it's a short-term impact, not much is going to change. however, as i said, this can be a very long-term impact. let me describe what might happen in supply chain management, we call it the bullwhip effect. let me explain in a few second to your audience what it's the bullwhip effect. say a retailer sees its sales slow down by x percent he has too much inventory. he thinks it will continue so having too much inventory order less from his whole saler. the wholesaler using the same

logic, he's ordering 4x less percent. there are suppliers, many of them are small in leverage, and they're the just going and drove out of the business. so this will be a longer term effect that will work directly to what you're saying because the loss of some of these suppliers in the supply chain may force companies to move out of china, move to other places it's not clear they'll mover to other places in asia, but get out of china to some extent. >> we have to wait and see great perspective. thank you, yossi, director of m.i.t. supply chain management program. still to come, an exclusive with roku ceo anthony wood and next, the ceo of virgin galactic live from the mojave desert don't go anywhere. at fidelity, online u.s. stocks and etfs are commission-free.

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welcome back to "squawk alley. virgin galactic completing another vital step on its path to commercial space tourism. traveling tucked under the wing of a special aircraft from mojave this ushers in the final stages of testing and preparation for the launch of service. virgin's stock has skyrocketed and trading at double the price

it began trading publicly last october. today up 11% again, trading about $26 a share and a new high joining us, the ceo, george whitesides thanks for being with us congratulations on this move >> in terms of your timetable for testing and being able to launch this commercial service, are you still on track for summertime >> well, you know, morgan, in this business we have to take every step, step by step, and do it safely, so yesterday's flight was huge in a sense that we took our beautiful spaceship down to spaceport, america we'll check out the vehicle and move through the progression of tests. i like the engineers to take each test step by step because that's the right thing for our test program >> in terps ms of those tests, a happens to finally send sir

richard up to the edge of space? >> number one, we brought the vehicle down so we were able to do a nice cold soak test of the vehicle for about three hours up at altitude that's not something we do on a traditional space flight that was important the next thing, we were able to train a new pilot on board, nickola, a longtime pilot on board our system, but the first time that he's actually flown in the spaceship. he flew along with our chief pilot. you'll see going forward incrementally more ambitious flights. we'll have glide flights and look at the data, then go to powered flights. at that point would be the place we could think about flying sir richard. >> investors are excited, showing a lot of interest in virgin galactic's stock. stock's up over 100% year to date that's of course before the service has even actually started. it's getting comparisons to tesla on wall street and the parabolic move we've seen in

that chart as well how closely are you watching this are you concerned? >> well, you know, i come from the space business and i'm just going to keep my head focused on executing what we can do and to fly safely that's the core of our business. you know, the market attention is, you know, interesting. but i think the main thing is that we just keep our focus on good engineering and, you know, and start to get ready to fly the amazing people that have signed up over the years we have over 600 folks signed up and a lot more than that who want to fly with us. we're excited where we are >> you're in a quiet period ahead of earnings at the end of the month, but when we sat down together in january, we were talking about that order book and the interest as well can you give us any kind of update in terms of whether you see the number of folks reaching out, seeking more information about service, if you've seen that grown >> we'll provide an update on some of those figures at the earnings call, but we're still

very optimistic about the overall size of this market. >> got it. one other question for you it was a big week in d.c. in terms of that fiscal 2021 white house budget proposal. nasa's looking for a 12% jump in funding for next year. it's one of the biggest increases we've seen for the space agency in i think decades. how closely are you assessing that and potential opportunities to work more closely with the federal government >> well, you know, morgan, i was chief of staff at nasa so i was paying a lot of attention. >> i'm sure. >> it's news for the artemis program, the lunar program, but other parts got increase, in science. part of our contract base is with nasa for the flight opportunities program. that's an exciting area, buying suborbital flights from us that top-line growth is exciting because it will feed down through a variety of programs throughout the space ecosystem >> george whitesides, ceo of virgin galactic, thanks for joining us today >> thanks, morgan.

>> now take a look at shares of roku this morning. continuing its surge after a big beat on earnings you see it up nearly 4%. aewines unthony wood, joinss in f mut

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european markets about to clock out for the week dominic chu has a breakdown. >> they ole clowill clock out a mixed measure. you can see a mix of red and green. across the eurozone, data showed an uptick in employment growth, at least at the end of last year, though that came alongside an expected slowdown in overall economic growth there, so kind of a mixed picture in germany, the economy stagnated in the fourth quarter. better news than some had feared but not the growth hoped for in europe's second largest economy overall. part of the problem for germany in particular is a broader

slowdown in the auto industry, but that's also hitting othe european automakers, not just the germans as well. you have france right now reporting its first loss in a decade that broader slowdown coupled with internal troubles related to carlos ghosn. in another big west. they're slashing the size of its investment bank. if the changes weren't enough to convince investors today, those shares at rbs are down 6% in london trading so far today, so it may still keep some sell ambulance of it, but it will be fully nat west for many clients soon enough. >> sue herera has a news update. >> good morning, everyone. here's what's happening at this hour president trump ignoring his attorney general's public request to stop tweeting about the justice department the president saying he has the legal right to ask the agency to intervene but has chosen not to. the president's comments come

after attorney general william barr complained the president's tweets were making it impossible for him to do his job. the u.s. embassy in tokyo says the government is working to ensure the safety and health of all u.s. citizens aboard the "diamond princess" cruise ship that has been quarantined in yokohama >> all of us share the same goal, to ensure your health and safety the japanese government is committed to keeping you safe and is coordinating with the embassy andthe on-board medica team, including to supply any medications you ma>> a drug pre loss is being pulled from the market due to a possible cancer risk the fda requested the removal of belv i.q. following a clinical trial. the manufacturer will fly comply with that request. back downtown to "squawk alley." carl, back to you. >> sue, thanks still to come, comcast venture's newest partner andre iguodala with investments

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miami heat forward and nba champion andre iguodala's more than just a basketball player. the former nba finals mvp has been an avid investor in the likes of casper, zoom, just to name a few earlier this month he joined comcast ventures catalyst fund as a venture partner

he joins us from san francisco welcome to the family. thanks for the time today. >> thanks for having me. >> what's the comcast ventures partnership going to do for you and for us >> well, it's a unique partnership that i'm really excited about, and, you know, comcast ventures and, you know, i beal vp at the catalyst fund and the catalyst fund the focuses on entrepreneurs and founders of african-american, latin, and female founders, which is an underrepresented group. we're focusing on come super and enterprise software companies and start-ups. we have many people within the company that are from start-up backgrounds and have expertise in helping companies grow. there's a lot of capital out there being sent, a lot of vcs, and we're trying to bring unique ways of helping these companies grow we have, you know, a start-up called -- not start-up but we have an initiative called the

forecast labs, which helps companies in unique ways grow in a different type of way and just bring in more than just capital to these companies but expertise in the fields and helping them grow, not just growth at all costs but responsible and sustainable. >> that's important. we'll talk about individual names in a second, but in general, can you talk about how many candidates you're seeing that make sense, and are you seeing valuations right now that looking at you know, like i said before, we have am wo with start-ups and being entrepreneurs themselves so there's a lot of expertise that goes into it. we're seeing, you know, companies daily get a lot of feedback, and that's something i'm trying to bring to the table is, you know, leveraging not just my basketball talents but my i.p. to get in the doors or get in these companies as early as possible. we're very early stage

diagnostic with our fund, and when we want to invest in these companies. >> andre, i believe you're on the board of julia, the e-commerce company that went public about a year ago. >> yes >> i wanted to ask you about that one of the things that concerned me when they went public, and i asked them about it, they have lots of logistics operations in africa, doing a lot of business in africa, but their engineers are in portugal. i'm wondering from the board perspective, are youable to do anything to get a company like that, perhaps other companies to do more investing in talent and r&d and engineering in africa, especially if ey there >> well, you're seeing a lot of funding going into africa from other companies -- or from other countries, excuse me if you're look agent china, you're looking at the thin tech sector, there's been a lot of movement and a lot of spending going into that area

jumea pate is one of our initiatives we're pushing and getting a lot of the customers, a lot of the consumer, the sellers on tha it makes the process of moving goods and services within the platform that's an area that we've been continuing to focus on, and, you know, africa is one of those countries a lot of people are trying to tap into because it's a market that will continue to grow with so many people being not just in the country, nigeria, but within the continent of africa. we've been doing well in the last quarter hasn't quite shown in the stock price, but i think we're moving in the right direction >> you're invested in so many companies. many have gone public. zoom, pay dog, jumia, allbirds, investments in apple, netflix,

alphab alphabet, and zinga. what's been the best so far? >> great question. zoom has done really well. i have a great relationship with the ceo, eric, and they've just been getting after it. it's shown in the stock price, but i think it will continue to move into, you know -- continue to grow. data dog has done really well with its tools in the enterprise software space just beat analysts' expectations and moved up expectations for next quarter as well the enterprise software space is a space i've grown to learn and put a lot of my thought and effort into, learning space and b playing cap-up being a basketball player, professional athlete, you tend not to know about that space because it's not the sexy, something that everyone's talking about, but in terms of growth, i think that's what's moving the tech sector more than

anything else. >> you're invested in casper that went public here at the stock exchange last week currently trading below the ipo price. i think the last round of valuation in the private market was $1.1 billion i think the market cap is about $420 million i wonder how you're assessing that investment right now and also whether it will affect or color how you approach direct to consumer investment opportunities moving forward now. >> well, as you spoke about earlier, valuations are, you know, at an all-time high with the market hitting all-time highs. and you have to be -- i wouldn't say concerned, but you have to be a little bit more -- pay closer attention to direct to consumer you know, the space has become a little crowded but i think you have to learn about what exactly your brand is, and i think casper has the right idea in terms of not just being a mattress company but being in the sleep economy and

how that's a much larger space than just a mattress you've seen it with a few other companies such as uber you've seen it with lyft in terms of valuations and hovering around ipo price or just below it but, you know, the overall stance with the company and being within the sleep economy has a much larger space and building something much bigger than what people are seeing early on >> andre, i wanted to come at you with a question about winners and losers from a different angle. i'm looking here, miami, the miami heat, first in the southeast right now. your former team, golden state warriors play not far from where you're sitting right now, last in the west. i imagine there are a lot of people, maybe including yourself, wondering about the impact on your brand of changing coasts what's your assessment on what that move hasquickly things ca

change >> well, that's just the nature of professional sports you can move anytime you can move to a coast or any part of any region of the country. with so much technology out there, it makes it capable to be able to sustain your brand, whatever it may be for me, companies like zoom make it easier for me to tap in with the team at comcast ventures and the catalyst fund and to make sure i'm staying up to date, i'm able to be at the all hands, all deck meetings so make sure we're all on the same page i can be at meetings at any given time from a different location i'm full speed ahead >> e finfinally, kobe bryant waa guest on our show several times. he said a few times he thought his investing career would in the end surpass what he had done on the court

i wonder if you feel the same way, the degree to which kobe was an inspiration for you in business, and then how you intend on paying that forward to others >> yeah. well, kobe and i actually had the same agent throughout our careers. so i was able to see some things he was doing on and off the court. i think vice versa he was able to see some of the things that i've been trying to accomplish off the court you know, i think we both had the same mind-set in terms of how we go about doing our business and take the same approach that -- we put the same intensity, the same focus that we put in on the basketball court. and, you know, it's for the long haul like i said, like you spoke on it, valuations are at all-time highs right now, and we just didn't join a space for the vanity play or the sexy play but doing it for long-term growth and understanding the process and, you know, kind of seeing the future when we go and look at company, we're looking at ten years down

the road, not one or two years down the road, and how can we help these companies grow not as fast as possible but sustainable and the long play. >> yeah. we'll take sustainable over fast any day. we look forward to having you on a lot, the degree to which you're willing thank you very much. >> new york yankethanks for hav >> can't get enough "squawk alley" watch us live or anytime on the go a cc p.ndnbap of trading goods and services. nasdaq operates among the largest markets in the world. and our technology powers markets from indonesia to chile. great markets are built on a foundation of trust and integrity, forged through leading edge technology and a smart regulatory framework. as technology advances, regulation must keep pace to allow the markets to evolve. today we see an opportunity to modernize regulation, to make markets more accessible to investors

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after the break, we may have mentioned it but it bears repeating, an exclusive interview with the ceo behind the earnings mover of the morning, roku's anthony wood is with us next ♪ ♪ ♪ ♪

roku shares are higher this morning by better than 2% after revenue beat the street estimates with losses per share also doing better than expected.

joining us now is the ceo and founder of roku, anthony wood. anthony, good to see you >> good to see you >> so strong results the stock popped at the open since then, investors haven't been able to decide what to do so let's first talk about costs and guidance, because that seems to be the thing that perhaps people are puzzling over paint a picture for us of how data zoo is going to play into your longer term growth, why that investment is continue to make now >> we had a great year last year, added almost 10 million active accounts, revenue up 52% year over year and streaming became mainstream in the last decade but we think the 2020s is the streaming decade where most of the world will switch to streaming. there's a lot of growth potential, a lot of upside in streaming and that's -- you know, so we're investing in our

business we're taking our incremental gross profit and putting it back in the business, growing the business, solidifying the advantages we have and data zoo is a big area for us it's -- if you think about the way television ads are bought, it's still mostly insertion orders, people on the street talking to ad buyers, but it's moving more and more programmatically to self-serve tools so data sozoom positions well to the future as more and more television advertising starts using data, machine learning, an targeting to deliver more effective advertising, which is starting to happen but is tallas future >> another big factor, certainly recently and potentially going forward is disney. disney plus. talk more about roku's role as a big o teshgs

big over-the-top stream progress veider, how that provides revenue for you, what makes disney happy with what you can provide, and it will be a continuing benefit, not something that's just more important at the launch of that service. >> yes obviously, roku's business model is we aggregate streamer, customers, you know, over 36 million active accounts. we invest the platform, allowing -- building capabilities that allow our partners like disney plus to build an audience, monetize an audience, reach that audience. our model is as we help them grow their business, we share in the upside or, you know, when they succeed, we an the upside. when they succeed we succeed that's our business model, disney plus add 26 million accounts in less than three months that's incredible. they obviously have great content. they have good marketing, obviously, and they really are leaning into streaming we provide a lot of tools on our

platform to allow companies like disney to build an audience when they want to use those tools and they really leaned into that i think we were an important part of their ability to add subscribers so quickly and those tools will be important in the future as well, as they work on even more subscribers, managing turn, managing the life cycle of the customer we provide tools to help our partners manage that effectively. >> anthony, a couple weeks ago i had a deal dispute with fox coming to super bowl weekend with roku warning it may need to pull the fox channel's apps from the platform out matly it worked out and users were able to watch the big game on their roku devices how would you react to analysts that have suggested this highlights a risk when it comes to availability and also the potential for increasing cost of content? >> i would say that, you know, again our business model -- it's not -- it is very different from the traditional pay tv business model where there was a fixed

size pie that was being fought over, a bundle, a bill for a bundle that was almost $1,000 a year being fought over by the networks and the distributors. in the case of streaming, it is a new business for everyone. we are really helping our partners build a new business. we are helping them succeed. you know, we are aggregating customers. we are providing tools to allow them to reach those customers. then we succeed when they succeed. we participate in the upside it is a different dynamic. in the case of fox, we have been a long term partner of theirs. we have -- you know, we have reached mutually acceptable terms. i think we are both happy with the deal we ended up with. there were actually lots of ways to watch the super bowl on roku. i watched it on fox sports on my roku tv. there were multiple ways to do that we have thousands of deals a year that renew. so, generally -- generally, we are able to renew them on mutually acceptable terms. >> you talk about the 2020s

being the true decade of streaming. some of our viewers want to know if it will be the decade of profits on more than an adjusted ebitda basis. >> you know, if you look at what we have accomplished so far, adding 10 million active accounts last year, 52% revenue growth and you think about, really this is just the beginning of streami streaming. there is a lot of upside early days we issued our outlook for 2020 we said we are going to invest our incremental gross profit back in the business we are confident that that's the right decision to maximize the opportunity. my goal obviously is to build a large profitable business. we think the decisions we are making are the way to to that. >> you had the sort of misfortune of posting guidance on adjusted ebitda on a week when munger called it not

worthy >> adjusted aabout it de is a prksy for cash flow. we said in 2020 we are going to run the business at a break even eye about it de, a break even cash flow. it is the streaming decade most everyone is going the switch their television viewing to streaming this decade investing for 2020 is the right decision at least for our business. >> anthony, i want to go granular again and zero in on something you just said about churn. something you also said on the earnings call, talking about roku's ability to help content partners like disney, fox, et cetera, et cetera, reduce churn. how exactly do you do that what's a differentiator, something that roku can do that keeps a subscriber from leaving a service or allows a service to

recapture a subscriber >> if you think about streaming and how it is different from pay tv one of the big differences, there is generally no contracts. it is easy for a consumer to switch they often turn off services and tornado them back on when their favorite tv shows come back on it is a different dynamic. one of the ways we can help with that is promoting content to our customers. we have a lot of different areas in our user interface that we can use to make customers aware that a new tv season is about to start, their favorite show is about to start that's something that keeps them engaged with the channel and helps reduce churn and helps them come back a lot of customers leave and then come back throughout the year we know who our customers are, we have data, machine learning algorithms, we can predict this customer is going to want to subscribe to the show when the new season coles on. then we show them ads in the interface.

the customer is seeing a promotion for a television show they would like to watch so they don't see it as ads. that's one of the ways we help our partners. >> how should investors and those of us watching the company and gauging the success of the a.i. and the data science that you are applying to the product -- how should we track how well that's doing, the extent to which that's improving your relationships with your partners and the happiness of your customers >> that ultimately shows up in the average revenue per user that we generate that has been ticking up as well it grows generally every quarter as well. >> lastly, anthony, the coronavirus risk given the fact that there is still a lot of uncertainties about how this to affect supply chains, how are you monitoring that, especially where something like tv manufacturing is concerned? >> we have a global supply chain just like a lot of consumer companies. you know, so far, we haven't

really experienced a big impact from the coronavirus but obviously, you know, if it keeps stretching on, it will eventually start to impact our global supply chain. we had a great holiday season last year. that means our inventory levels are low and we are replenishing those levels that's how it could impact us, if this keeps going. just like it is going to impact every consumer company, if that keeps going. >> anthony wood, founder, ofceo roku thanks for being with us. >> thank you. >> "squawk alley" returns in less than three minutes. ♪

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so far, session low, down 57 on the dow. session high up 39 it has been that kind of friday. next week things spice up a bit. we will get walmart. some flash pmis on friday, there is a democratic debate in there. we are not done with earnings season. >> yeah. love you, carl and it is per pell -- >> happy valentine's day. >> yeah, there you go. >> let's get to sully and the half >> thank you carl, morgan, and john welcome to the "halftime report," everybody happy friday i am brian sullivan in once again for scott. and the record-breaking rally trying to find some love again

on this valentine's day. the big question for investors, what's the next move for your money in it is very simple it is 12:00 noon, and this is the "halftime report." semis among a number of sectors hitting record highs of the but valuations soaring and warning signs appearing. what investors do from here. roku,