earnings report. cool flowing got a downgrade this morning activision, blizzard and take 2 which both report after the bell today. activision is going to be in focus given all of the question marks around microsoft >> we're keeping a close eye on. cma, regulatory authority in the uk that will do it for us on "squawk on the street. "techcheck" starts now good monday morning. welcome to "techcheck. i'm carl quintanilla with deirdre bosa jon fortt is on assignment. the nasdaq continues struggles to build on a five-week win streak which takes us to pinterest, take-two and activision exclusives with the ceos of bill and on semi. one warning a slowdown is here. >> that's helping to keep the nasdaq under water the index has come out swinging this year, notching five

straight weeks of gains. that is its longest winning streak since it reached record highs back in november of 2021 sentiment was a little different then this comes despite bumpy earnings from the biggest names in tech, including the mega caps which we've heard from over the last few weeks what can we look for for the rest of the quarter, the year? sara buller joins us thank you for being with us. what's going to be driving the tech trade for the next quarters, for the next year? earnings were bumpy to weak, but the market seems to have taken it in stride what keeps it working amid higher trades and the weakening macro? >> the climate is climbing a wall of worry and i think it takes into account that the stock market is a future price-discounting mechanism. a lot of the concerns that we saw surface early on in q4 earnings were fairly well priced

in by the buy side so, i think what you're seeing is, you know,'s sets that need to be put to work in a rising rate environment and people really looking at the software sector and evaluating it and saying, it sure is impacted by the macro, much like other -- all the other vendors and players in the market as well we continue to believe it's one of the best housings on the block with a very high base of recurring revenues, great free cash flow generation and improving profit margins. >> when it comes to cloud and enterprise spending, feels like it wasn't all priced in. less resilient than the market thought. has something fundamentally changed in the cloud story here that could lead to weakness later on i mean, can we still say that we're in the early innings, if it's so easy for enterprises to pull back on that spending >> i don't know that it's so easy a lot of the consumption-based products out there, such as the

azure and gcp and aws growth is slowing. it's not as easy to cut back. >> it's not? >> no. >> consumption-based model you heard all the hyperscalers say they're helping their customers cut back. >> yeah. it is an area where you can do some cost culling immediately. in particular where you're spinning up new workloads into your cloud infrastructure. i think what we also saw were certainly some project delays. remember, some of this is also contractually signed for multiple years of usage. we did see gpc fall back we saw it fall from 32% growth in the quarter aws dropped from 27%, and azure fell 31% in the prior quarter. i think what microsoft noted

that's worthwhile is they saw slowing in particular in the month of december where growth rates towards the end of the quarter decelerated closer to 30%. and they're calling for another four or five-point decline you are seeing some macro pressures here, but these are really sizeable businesses at scale. and they're very diversified you would expect and anticipate to see them being impacted by the war in ukraine and being impacted by inflation and rising interest rates >> or -- yeah, i was going to say the fed might be key among those. i noticed one large macro added 25-basis-point hike to march as their baseline they say if we get another jobs print like we got on friday, then you can start talking about 50s once again how much is at risk when it came to that late thesis last week, that rate volatility would go down and it would be an all clear by tech? >> you know, i think that there is still risk. i mean, i think that, you know,

we are still paying attention to the underlying fundamentals. as you noted, jay powell is determining where the stock market is going and what people are willing to pay for growth. the jobs report you noted was so solid. i was actually very pleasantly surprised by it. the 25-basis-point was certainly a breather from the 50s and the 75s and the other, you know, astronomical numbers we've been seeing, so i think that we're just going to continue to have to really watch powell really closely, what he's signaling and what the federal reserve is signaling. we take advantage of pullbacks in this sector because it is so well positioned in the overall market and economy to companies we think are outstanding and want to own. >> the earnings we've had so far, all the mega caps as you say, these are diversified businesses, so cloud is part of the story, even though it's a big part of it

when we get other cloud and software names, some smaller ones, the best of breeds in the coming weengz, what are you expecting? it seems unlikely they can be as resilient as the hyperscalers. what do you perform, a consumption-based model or discrimination-based one >> great question. i definitely prefer a subscription-based model right now. i think it's a little defensive. where you do see economic s over multiple years of invoice regeneration yeah, you're going to continue to see the midcap and some of the other large cap software companies that come forth and report results that would remind you, a good -- approximately 50% now are closing their quarters in january. so, their quarters actually closed last week we have several more weeks of earnings in front of us. where i expect we'll continue to have management teams tellus things much like we heard from the hyperscale providers, like deals were delayed, sales cycles

have been somewhat elongated, customers are optimizing their usage. this is very much in line with the work that we did into the quarter and what we found to be true across the overall software space. you did see a slowing in the month of december, but the good news we did pick up is that some of those deals that slipped into january have started to close. and we saw that to be the case with service now in particular >> right some of the other names like monday goe db, snowflake, they have been weaker on the back of the aws, azure results we'll see how they report in the weeks ahead. thank you for being with us. >> thank you meantime, the big earnings mover tonight after the bell is pinterest, following opposite takes on sentiment from snap and meta last week julia boorstin joins us to talk about what those results may bring. we already noted some layoffs. >> pinterest has been the best

performer of the social media stocks, bucking the trend. looking over the past year, pinterest shares are flat while meta is down 20%, snap down 70%. now looking ahead to the closing bell and the earnings set to be reported, shares are typically volatile pinterest shares have popped by double digit percentages after the last four reports, earnings reports surprised on the upside. now analysts are expecting the company to grow revenue by about 5%, while meta's revenue shrank and snap's were flat analysts project the companies will guide to accelerating first quarter revenue growth all of this hinges in large part on what ceo bill reddy says about road map for driving pinterest's ad business which allows consumers searching for products to then make purchases. guggenheim with a neutral rating, writes digital

advertising results from snap, meta and alphabet continue to add pressure but noting the debate about pinterest's compelling ad platform and noted the companies had below average growth pinterest is well positioned to take market share, thanks in part to improvements to e-commerce modernization i'll be talking about this and more with bill ready w, pintere ceo. >> given what zuckerberg said about monetization efficiency, between snap and meta, which is the better analog? >> these are such different companies. snap is in so many ways a communication company, a tool people use to stay in touch with their friends, send videos and messages back and forth and have an entertainment component of that you watch entertainment while you wait for your friend to message back

pinterest is a search engine i think it's more comparable to what we see happening with amazon in the growth of amazon's ad business. people go to pinterest because they're searching for products, want to buy a new couch, looking for recipes. a lot of times that search is for people willing to buy something. there is that great opportunity to close that loop, they call closing that monetization loop and have someone go for searching for something to making a purchase. >> we'll see what happens tonight. not the only big name on deck. still to come on "techcheck," last week we learned not all chip names are created equal after intel and amd reported on semi ceo will join us next. bill, the stock coming off its worst day ever they have a simple warning to investors. customer spending is a problem another interview with their chief executive coming your way in a little bit.

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shares of on semi, all-time high

this morning, with this beat across the board, yet guidance came in a bit weaker than expected joining us is ceo hassane el khoury congrats on the all-time high. i think a lot of this is centered around auto, up 54, right? can you talk about how some of the silos are doing? >> yeah. thank you, first of all. i give credit to our worldwide team it has not been an easy year but we finished on a very high note. we set ourselves up for good, sustainable results even through noncertainty in 2023 that led to our performance in autom automotives. we see that outlook strong i always talk about how we keep increasing our content so we're not really sensitive to units of vehicles made, but more on the content that we provide into those vehicles that's really playing out nicely in our outlook for '23 >> you got revenue and gross margins beating here is the sense that any kind of

cost platform reduction you would need to do is already in progress >> yeah. we've been restructuring the whole company. we've had our transformation, second year through our transformation and a lot of it is manufacturing transformation having that efficiency into a very complex -- historically complex manufacturing footprint. we have four fabs, added one fab at the end of the year, december 31st that sets our -- sets us up for good, efficient deployment of, number one, our capital moving forward and also our existing footprint in order to deliver on incremental number of units in a very fixed manufacturing platform that gives us that efficiency that from which we can scale >> it's deirdre, good morning. how do you see a potential price war in the ev space playing out? is that a headwind to your

company? maybe less pricing power with automakers, but on the other, accelerating the consumer adoption, perhaps? >> yeah, look, from our side, we anchor on the value. and what i explain value from the ev specifically that you bring up is range and weight those are the two big levers that automakers care about when we are engaging with them. those two don't change based on demand there's always value we put on range for electric vehicles and the weight so, what would help is obviously the volume we we do see volume increase in ev there are more ev models coming out in '23 than in '22 and '22 more than '21. that incremental adoption of electric vehicle, that's going to fuelsales s what we're anchoring on. >> finally, i wonder what your visibility is into the china economic reopening story

how are you viewing it for this year in terms of both supply and demand >> look, i look for '23 as a whole macro. obviously, china is a big semiconductor market for us. not just domestic consumption but a lot of our customers manufacture over there it's not a big exposure for us as far as percent. most of our revenue remains in china. however, we are sensitive to the macro, but macro in general is what i look for. when we talk about strategy, we look at what we are seeing from an overall macro and back to what i said earlier, automotive we see as strong, that's the worldwide view industrial, we see strong in our core industrial. and then the rest of the market we do see softness >> finally, i wonder if you think the auto business is going to get back to a period where we stop talking about cars that are in the final stage of production but missing that last piece of the puzzle is that still sort of endemic to

the production cycle right now >> look, it's getting better, but i talked about it on the call a little bit, where we're still not -- as far as demand versus what we're able to supply there's still some of that the relief for ourselves and our customers, we've engaged on long-term supply agreements. we actually increased that number in even the fourth quarter. we are bavenlgically partnering with customers on a very broad range of products we deliver to their end vehicles i gave some numbers where we have some agreements with 200, 300, 500 parts that's what's going to alleviate, giving us that visibility so we can build against it versus some really forecast that may or may not happen so, the committed revenue that we put into long-term supply, that we end up building for is what's happening our customers achieve their end goal from where we're concerned, we're making progress, we have areas where we are still oversubscribed but at least we are delivering to our customers

>> all-time high for a chip name, not exactly happening across the space, but congratulations on yours today hopefully talk soon. hassan el khoury, onsemi >> thank you. after the break, big banks may have a problem check fraud. up next, a cnbc investigation finds crooks are using popular messaging platforms to coordinate the crime we'll also get to the downgrade of lyft. shares are under pressure this morning, but they turned it around, up 0.6%. we'll dig into all of it get refunds.com powered by innovation refunds can help your business get a payroll tax refund, even if you got ppp and it only takes eight minutes to qualify. i went on their website, uploaded everything, and i was blown away by what they could do. getrefunds.com has helped businesses get over a billion dollars and we can help your business too. qualify your business for a big refund in eight minutes.

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because the good deal found you. ♪♪ let's get a gut check on lyft ha haskett downgrading it the firm likes uber over lyft in the near term, citing a challenging domestic regulatory

environment, which uber operations outside of the u.s. should provide cover from. that said, lyft has been on a tear this year it's up over 50% ahead of earnings later this week of course, carl, this is a stock that has been beaten down, not just over the last year, in recent years the ride-sharing companies never saw that pandemic surge. ipo'd, i think, north of $65, $72 maybe. there's a lot of questions if the valley of what happened to lyft i think it's raised more money in its history of a private company. but who could step in and acquire? the founders, zimmer and green still have voting rights it just raises questions if it's losing market share, what happens ultimately? uber can't take it over given regulatory landscape. >> on the flip side, dee, i know you know uber very well and there's this lingering argument

that they need to show the cost discipline we've seen across tech at large, although clearly -- i don't know if you watched the grammys, but they have some things going in the marketing department, too, with diddy. >> they are spending on marketing. i guess it speaks also to this moment where they may be winning market share over lyft and be sort of that -- pull away in terms of being the number one ride-sharing player. losses, you're right to point that out, for both of these companies. lyft's net loss over the first nine months of 2022, nearly $1 billion. we'll see how they add to that for the last quarter of the year >> yeah. we'll get those on wednesday morning. meantime, america's big banks say they have a huge challenge, and that is check fraud. one of the oldest crimes in finance being supercharged by some of these popular messaging platforms like telegram. it's become a one-stop shop for criminals. our eamon javers has details

>> it's a big problem that's getting worse. >> reporter: paul is the senior vice president of cyber security and risk at the american bankers association. and he says that paper checks are one of the financial system's weakest points. would you say every single bank is experiencing this right now >> i think that would be a legitimate statement. >> reporter: in 2021 banks reported nearly 250,000 cases of check fraud nationwide but by 2022, that number skyrocketed to nearly 460,000 cases. that's an 84% increase in just one year >> it's concerning it really is. >> reporter: in many cases, checks are stolen out of blue postal boxes like this one then crooks will change the recipient's name and the dollar value of the check using forgery techniques next, they'll open an account at a bank in a phoney name and hire someone to deposit the check that's what happened here. this surveillance video shows an

elderly homeless man depositing a fraud lept check that was cashed for nearly $3,000 organized games are using technology like telegram to organize thefts, connecting those who have stolen the checks with people that will walk into banks and deposit them they are known as walkers. let's talk about the item of walker >> exactly what it says, someone who walks into a bank to cash the check. they're you're mule. >> reporter: users can message on private and and public chats. they can use an anonymous user name and encrypt their messages, meaning police can't trace them. we found group chats with lots of posts from criminals advertising their network of walkers to help other crooks who want to cash out their stolen checks. >> this particular individual is being advertised as a walker. >> reporter: maria, cyber

intelligence analyst at the firm q6, a consultant to cnbc >> you can see by the caption here, good walker, that's ready, all spammers tap in. meaning everybody who wants to get with this walker to contact the threat actor that has posted this. >> reporter: this is a criminal advertising, i've got this guy, he's a walker, ready to go into the bank and deposit a bogus check. call me if you want to use him >> basically, yes. >> reporter: cnbc viewed dozens of advertisements for walkers. some asked for specific genders. someone wanted elderly this crook boasted about buying a new hat for my walker. >> when i say grooming, they're not just brushing their hair a lot goes into trying to make these guys look at legitimate as possible you can see here, this guy is getting his hair bleached. >> reporter: this is a dye job, right? >> it looks it. >> reporter: the big banks say all of this is causing enormous headaches for the industry. >> we can't do it alone. we need the postal service to get better at protecting the mail we want law enforcement to step

up their game and prosecute more of these cases. >> the walkers we saw advertised were often the elderly and homeless it seems clear they're getting the smallest cut of this crime, which can produce big money. we saw crooks posting receipts for more than $20,000 in some cases. telegram says it proactively moderates public channels and bans any that violate its terms of service we also see claims by the crooks that they're getting help from what they call insiders at the banks and the postal service who are helping those gangs get away with it. to stop this fraud, the u.s. postal service says it's been actively educating the public about how to prevent check theft. back over to you, carl >> eamon, it raises the question of whether or not check use is antiquated or what percentage of americans use checks, especially in the mail. >> that's the same question i had going into this story because you think, you know, everyone is using paypal or venmo or whatever. you see the number of checks in

the mail has declined over time. certainly over the past ten years. but actually the value of those checks is relatively high. people aren't sending $5 checks. they're using the apps for that. but rent check, the business check, all those things are still circulating in the mail. the average value of the checks that are still out there is higher than it was maybe a decade ago. >> i bet you every viewer watching right now knows exactly what you're talking about when it comes to that change. fascinating, eamon thank you. that's our eamon javers. >> thanks, carl. >> to your point, carl, i have never written or cashed a check into i moved to the u.s. about seven years ago. coming up on the show, the epics and earnings implications of chatgpt, that's next. more job cuts in tech as dell slashes 6500 jobs. "techcheck" continues after a quick break.

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a couple hours into the trading day. let's get a look at markets. stocks are off the worst levels. we had a bit of a cautious open. you see the dow shaving what was a 200-point loss down to 54 points today some big movers at this hour the china internet. >> tyson did get hit as eps and operating income were missing. margin pressures by falling beef prices may be good for consumers. rh the worst performer after receipt stating eps following

three quarters following this call clags error the company lowering its previous full-year guidance. we'll watch that down 7%. contessa brewer with a news update. here's what's happening right now. in ohio officials are trying to prevent derailed train cars from exploding and launching deadly shrapnel as far as a mile away the national guard has been called in to create an evacuation zone around the area. newmont is down 4% after making a $17 billion bid for australian gold miner newcrest mining newmont shares are still up 16% over the last three months. and the national enquirer has been sold to a group including the former ceo of movie pass the terms of this deal weren't announced but "the new york times" reports the price was a

little less than $100 million. we'll watch that. let's turn now to the arms race for ai as big tech's response to chatgpt dominated earnings over the last few weeks. microsoft doubling down on its investment in parent open ai while alphabet mentioned the term ai over 50 times on the last earnings call while telling employers to shop competitors. joining us to explain is ubs analyst lloyd wamsley. first, break down this stake that google took in a chatgpt rival, anthropic i thought it had its own chatgpt in-house >> it's a great question it does seem odd given everything we heard, that google has the best technology out there. i think it's largely just hedging their bets you know, the other thing that struck us is they have been

making investments in companies that migrate to the gpc cloud business it may be a way of ensuring that anthropic runs on gpc and the amount of money is peanuts for a company like alphabet. >> maybe a defensive move, then, i guess is what you're implying. lloyd, how do you ultimately monetize these tools i think you're saying that chatgpt maybe poses a risk or ai poses a risk for google in the sort term because they may not be able to monetize it as well is it through licensing or can you still make advertising dollars off such a product >> when you think about the industry as a whole, there's three ways you monetize. there's the models and licensing the models they're building apps on top of the models and basically powering the models with a cloud platform google has a chance to participate in all three and then, of course, they are already using this technology to

improve the search on the advertising side so, they'll also monetize is that way i think our near-term concern on google is that they will have to push this out faster than they'd like because of competition, which could be in the short term disruptive to monetization as it displaces ads on the page and then it's expensive to serve it uses a lot of compute resources. those are our near-term concerns the long term, they could end up spinning out new businesses on the back of this >> that's interesting. we have heard about concerns about operating margin if their hand is forced to maybe move faster than they had planned i have two questions, lloyd. one, is there anything exterminally through m&a you see them shopping for in this area, or is regulation just too intense at the moment? and do you expect sergei and larry to move the needle internally on this stuff >> yeah, i think they're hamstrung on m&a they are -- there's so much

scrutiny from the doj and ftc, that's not going to be a value strategy for them here or anywhere in terms of larry and sergei, i think the role they play in all these internal decisions is helping the company make bolder decisions and take more risks. they're the control shareholders you know, you need their blessing, i think, to do things, particularly if things are disruptive to financials in the short term you kind of want their signoff look, these guys are legends they've been through a lot of transitions. they're good to have on the team making these hard decisions. >> lloyd, outside of the mega caps, microsoft, google, even meta, what they're doing with artificial intelligence, are you seeing a bubble emerge i look at c3 ai, up 50% this year has anything fundamentally changed? have they always been on the forefront and now they're being

recognized for it? what do you think beyond the mega caps, what are some good names here and what should investors be a little cautious of >> yeah. that name's outside of my coverage i can't opine there. in terms of our explicit coverage, there's nothing that looks too frothy at the moment you know, the press coverage and, you know, there's clearly potential for that but, you know, i think the best analogy we've heard is, this is kind of like when the app store came out and the iphone was introduced and you had a browser, a calendar and an email app. you didn't really know what was going to get built on the platform it's that early. so, you know, i think it's a little bit premature to think that it's overhyped. yeah, that's -- >> wow >> it's just too early. >> premature to think it's overhyped, okay. well, there's a lot of hype going on lloyd, thanks for your insights.

talk to you soon. >> thanks for having me. coming up after the break, a $16 billion deal in banking. the ceo of bemo is coming up an exclusive with the ceo of bill despite a big earnings beat as the dow tridzes to get back to h flat line. thinkorswim® by td ameritrade is more than a trading platform. it's an entire trading experience. with innovation that lets you customize interfaces, charts and orders to your style of trading. personalized education to expand your perspective. and a dedicated trade desk of expert-level support. that will push you to be even better. and just might change how you trade—forever. because once you experience thinkorswim® by td ameritrade ♪♪♪ there's no going back. we planned well for retirement, but i wish we had more cash. you think those two have any idea? that they can sell their life insurance policy for cash? so they're

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halfway mark on friday

fintech companies, affirm and paypal, are on deck this week. ahead of those reports i sat down with bank of montreal ceo darryl white they just closed a $16.3 billion to acquire deal of the west. white tells me that a larger san francisco footprint will help accelerate their digital shift >> there was a big attraction, actually, for us we've had a business in california for a long time but not with the scale we pick up with the bank of the west today. here you and i are in the bay area it's been exciting i've been here for a few days, spending time with our clients, in southern california, up here. i think that ecosystem is really valuable as we think about what we're trying to generate when we talk about a digital first bank. we mean it it's really at the end of the day, not about the product first, it's about the talent first. >> i also asked him if finteches themselves were looking more attractive given how valuations have come down white said they will continue to partner with tech but they're going to build organically. >> i don't think picking up a

fintech is high on our priority list effectively over the past ten years, we've been working together with fintechs we have lots of partnerships with fintechs and it's allowed us to be better. we are hiring. >> we also talked about the macro, of course white says there's cushioning in the housing market but geopolitics and the broader economy are concerning >> the notion that the canadian banks are a proxy for the housing market is a little bit shallow because it's a pretty -- it's not the majority of the lending exposure of any bank that i'm aware of, and certainly not the one that i represent when you look at the structural protections that you have in a mortgage book in canada, there's a lot of buffer for a downdraft in the housing market. we're seeing a little bit of that right now there's a lot of cushion i got a lot of things that keep me up at night - >> so what does keep you up at

night? >> the economy generally, as we talk about on -- in conversations like this every day. geopolitics. as far as the platform we're running and the choices that we've made to invest in north america first, i'm pretty confident. >> so, carl, the stakes for bmo's digital products are high. with this acquisition, $16 billion plus, it puts them in 30 plus states. many of those markets, not a very large branch footprint. so, they have to reach the consumer, keep them as customers through a digital product. and it kind of ties into eamon's story we were talking about earlier, with so many in the u.s. still using things like checks, how do you transition that demographic to banking online, which we know that other banks have had trouble with. we look at goldman's market product. it hasn't been that easy. >> it reminds me of what fintechs used to say about the non-bank we'll save them.

it's a far cry from that time really last year, dee, where you had legacy financials kind of on the run. as for housing, a great piece in the journal today about how rates have come from 7 to 6% and that's already warming up the housing market, at least in the u.s. >> and when it comes to the canadian market as well, i would just say that it didn't see the same kind of correction in '08-'09 as the u.s. market did that's why i think for canadian banks that may be a more interesting question, maybe a bigger risk. as he said, it doesn't keep him up at night. he thinks there's cushion. >> great macro radar good interview. coming up next, an exclusive with bill ceo. after the break.

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let's take a look at bill. shares are rebounding after losses of more than 25% on friday a weak overshadowed a beat on earnings a different story from payment companies. think about mastercard saying consumer spending has remained resilient or visa saying the pulse of the consumer is normal and healthy and very stable. here to discuss in an exclusive interview, bill founder rene

lacerte. thank you for the time you did mention last week these sort of atypical spending patterns, at least among businesses december kind of strange do you have theories as to what's going on? >> thank you, carl, for having me on the show it's always good to be on the show you're right we had very strong financial results. 66% year over year growth in revenue. we flipped from a net -- nongap net loss last june of up to profit of 19% this quarter so, with those results, it was the outlook we talked about. what we have is, just context for the audience out there, at bill we're creating a category that defines how business gets done we're automating financial operations for businesses. as a result, they're doing all the ap and ar and spend management that small businesses have we have a unique data asset that allows us to see exactly how businesses are thinking about their spend. we started talking about this two quarters ago where businesses were starting to pull back their spend what we saw in q2 for us, which

was the december quarter, we saw that spend was actually less this quarter than it was in the prior year so, businesses are preparing for this, you know, whatever the malaise is in the economy. the macro uncertainty that's been prolonged for so long is impacting businesses from our have, the more people

you have to think about that but s&bs think about this. they have food to put on the table. they have to think about 2 with all the announcement of tech layoffs, all the announcement of interest rates going up, supply chain challenges we've had, all of that weighs on the s&p i do think businesses prepare long before consumers prepare. >> we certainly saw that in the cloud numbers over the last few weeks as well. in terms of the consumption story, though, i wonder what you and the companies you serve are seeing that may be different than some of the larger payments companies. al kelly talked about stable even boring consumption trends obviously in the smb space, that's a little different. is that moving upstream in terms of your total payment volume

being softer >> thank you for the question. in general what we have seen is that businesses are managing their business they're using the platform one data point we have on that is the number of transactions in a quarter has stayed relatively constant 77, 78 it's been pretty constant over the last few years and what that tells us is they're bringing the spend down. you're right, the total payment volume on the platform is not growing as fast. like we said, on a per customer basis was less this quarter than it was in the prior year so, businesses are managing spend. they're figuring out where to go it starts with discretionary i think we talked about it a few quarters ago starting with advertising, which isn't really a surprise it's kind of extended to areas of variable spend where they do have the ability to control using the platform to kind of manage the insights they have and be able to manage the business to be prepared for whatever is ahead. >> how are you managing spend at bill your stock base compensation more than doubled from a year ago. what is some of the lefers you can pull and does that

ultimately come back down? what does that mean for your free cash flow >> yeah. that's a great question, deirdre. for us, we've done a couple of acquisitions and the acquisitions, we had retention grants from employees to make sure we integrated well. that's gone very well. those retention grants impacted our stock based comps over the last year or so. we'll be lapping those retention grants in the next year. in addition, we'll be retentioning the four-year anniversary grants from the pre-ipo and ipo stocks we gave employees. that means our stock based comp will go down and the long term trend is to get this below 20%, which is where peers would be in general. >> we'll have you back to hopefully talk more about the pace of small business creation in this country the last couple of years, which has been by some measures pretty historic appreciate the time today. thank you very much. rene lacerte at bill >> thank you. add another to the list of tech companies cutting workers

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it is game night tonight earnings after the bell, activision, blizzard set to report after the bell. our steve kovach has a lot more on what to expect tonight. hey, steve. >> hey, carl it's all about mobile gaming, which has been on decline over the last few years we're talking about take-two and activision tonight we already know mobile gaming has been hurt by app store sales for apple and google look, we saw it a bit last week with electronic arts, unexpectedly canceling those two major mobile games after this downfall look, let's talk about take-two. they lowered guidance for the december quarter because of that weakness in mobile gaming, plus foreign exchange headwinds and some delays in expected game releases and on activision, it's with mobile, too. that's why microsoft is trying to pick that up for $69 billion. more injected into the closing "new york times" reporting

microsoft's legal team doesn't think uk regulators will approve the deal even if microsoft offers remedies and suggestions. microsoft didn't have a comment about that when i asked, but mobile is where the growth and vast majority of gaming profits come from. and as spending falls, it makes this activision deal look more expensive than ever. take a look at activision shares they're down over 3% now far below the $95 a share microsoft has offered, about 30% off that, carl guys, i'll send it back to you. >> steve, i'm interested in your thoughts on microsoft in general. we know, obviously, how important this deal is to them they told us it was going to take a while but since then, the bubbling up of the open ai partnership, chatgpt, this new addition of bing we're waiting for do you think it's becoming a smaller priority over time >> they're talking about it less, carl i mean, everyone there still says, we want to get this deal done it's important to the company. i think as recently as a few

weeks ago, xbox boss was doing interviews saying, we're all in on this deal still yes, it does look more expensive than ever. we do know where they're also putting their investment with the fresh $10 billion into open ai and this really -- there's just more energy behind their ai push right now than talking about cloud and gaming still, they want to get this deal done. if they can't, the uk regulators say no to it, it's a $3 billion break fee as opposed to paying $69 billion in cash. >> steve kovach, thanks. one more thing before we go, dell adding to the growing list of tech firms slashing jobs. announcing a reduction plan to trim 5% of its workforce in a new memo to employees, that is 6500 jobs, bringing dell's head count to the lowest in six years. blaming soft pc demand and market uncertainty saying, quote, the steps we've taken to stay ahead of the downturn impacts, which enabled

several in a row, citing nearly 6% on the news as we get into unprofitable tech earnings season, carl, you'll hear more calls for cuts and efficiency brad gerstner calling on uber. >> brad has been the cost police over the last couple of quarters let's get to the judge and "the half." carl, thank you very much. welcome to "the halftime report," i'm scott wapner. high stakes for stocks yet again this week. the key speech from fed chair jay powell what it means for this week's rally. joining us, sarat, jay, and check the markets, 12:00 noon in the east they're all over the place in this early session here. dow is still negative by 100 s&p, two-thirds of a percent nasdaq has been weaker throughout the