Facebook 1Q16 Earnings Call Notes

Mark Elliot Zuckerberg – Founder, Chairman & Chief Executive Officer

A “foundry light?” company

“Facebook has always been a foundry-light company, so we can focus on our mission and build long-term value. This structure has served our shareholders well. Early on, we received some generous offers for companies trying to buy Facebook, and our structure helped us resist that pressure. More recently, we navigated a challenging transition to mobile. But because we were a controlled company, we were able to focus on improving the user and product experience of our apps first and then build a strong mobile business over time rather than being forced to do something shortsighted. And over the years, our structure has helped us make big bets on acquisitions like Instagram that were very controversial initially but were good decisions for our community and our business.”

Facebook was built by a series of bold moves

“Facebook has been built by a series of bold moves. And when I look out into the future, I see more bold moves ahead of us than behind us. We’re focused not on what Facebook is, but on what it can be and on what it needs to be, and that means doing bold things. A lot of what we’re building today in areas like connectivity, artificial intelligence, and virtual and augmented reality may not pay off for years, but they’re important to our mission of connecting the world. And I’m committed to seeing this mission through and to leading Facebook there over the long term.”

There are more things I want to do that connecting the world

“While helping to connect the world will always be the most important thing that I do, there are more global challenges that I also feel a responsibility to help solve to create a better world for my daughter and all future generations, things like: helping to cure all disease by the end of the century; upgrading our education system so it’s personalized for each student; and protecting our environment from climate change.”

Shareclass split allows me to fund the Chan Zuckerberg initiative

“Today’s board proposal will allow us to maintain and improve the voting structure that has served us well and allow me to fund the Chan Zuckerberg Initiative. In December, I also announced that I won’t sell more than $1 billion worth of stock – Facebook shares per year over the next three years. That’s still my commitment, and I’ll update our shareholders on future plans beyond that”

Bots allow people to interact with businesses with lower latency

“one of the good things about bots that we’ve seen is that it can decrease the amount of time that you have to wait before you get a reply back from interacting with a message. So what we’ve seen – we’ve done some research on this. A lot of people every day in Facebook today are already messaging pages and businesses directly, and the businesses respond. But what we’ve actually also found is that through some of our AI research, we can look at the responses that businesses give to common questions and can confidently provide the right reply a lot of the time. And when we can do that, then that decreases the latency. And predictably, people want to do more of that activity.”

Acquisition strategy is to find things that will be ubiquitous tools and who are the most talented people in the world to build it

“” think that people come up from time to time and suggest, should we buy this company or that. And what we look at are what are the things that we think are going to be ubiquitous tools, and who are the most talented people in the world to build this. And so when you think about something like virtual and augmented reality, that’s how we thought about that.”

We’re focused on building AI that is better than people at things like seeing, hearing, language

“So the biggest thing that we’re focused on with artificial intelligence is building computer services that have better perception than people, so the basic human senses like seeing, hearing, language, core things that we do. I think it’s possible to get to the point in the next five to 10 years where we have computer systems that are better than people at each of those things. That doesn’t mean that the computers will be thinking or be generally better, but that is useful for a number of things.”

Sheryl K. Sandberg – Chief Operating Officer & Director

Consumers have shifted to mobile and businesses know they need to catch up

“First, capitalizing on the shift to mobile. Consumers have shifted to mobile, and businesses know they need to catch up. We hear from marketers that figuring out mobile today is like figuring out TV in its early days. But given where consumers spend their time, the question now is not if they should market on mobile, but how.”

David M. Wehner – Chief Financial Officer

The new voting structure is to allow Mark to fund the Chan Zuckerberg initiative while maintaining an active leadership role at FB

“As Mark mentioned, this structure will allow for the preservation of the voting structure that has served the company well to date while allowing for Mark to fund the Chan Zuckerberg Initiative over the course of his lifetime. Importantly, as part of this proposal, the preservation of the multi-class capital structure would be generally predicated on Mark continuing to maintain an active leadership role at Facebook.’

Alphabet 1Q16 Earnings Call Notes

Ruth Porat – Chief Financial Officer & Senior Vice President

US revenue up 21% y/y

“U.S. revenue was up 21% year-over-year to $9.4 billion and down 9% versus Q4. UK revenue was up 15% year-over-year to $1.9 billion and flat sequentially. In fixed FX terms, the UK grew 21% year-over-year and 5% quarter-over-quarter. Rest of world revenue was up 14% versus last year to $9 billion and down 2% versus Q4.”

Operating income $5.3B

“On a GAAP basis, operating income was $5.3 billion, up 20% versus last year. The operating margin was 26%. Non-GAAP operating income was $6.8 billion, up 21% versus last year. The operating margin was 34%.”

Mobile continues to outperform

“what’s hopefully clear from the opening comments, is that Mobile continues to outperform. Desktop growth did pick up modestly in Q1, but, from opening comments, should be clear that Mobile Search revenue was up significantly.”

TAC is higher on mobile and mobile is growing at a faster rate

“And on your TAC question, as I’ve indicated a number of times already on the call, the TAC rate is higher on Mobile. Mobile’s growing at a faster rate and what you’re seeing here is a mix shift. So there is a delta between the two. But I think, importantly, we are benefiting from an important secular trend behind Mobile, and like the revenue dollars and the gross profit dollars that come as a result of that, and we’ll continue to innovate on mobile and are excited about the opportunity, in particular with all the changes that we continue to see in the way users use the phone and the opportunities.”

Sundar Pichai – Chief Executive Officer, Google, Inc.

We have just scratched the surface of what’s possible

“Google’s mission is to organize the world’s information and make it universally accessible and useful. And after 17 years, we have just scratched the surface of what’s possible. We are reinvigorated around this mission and, as you will hear, we are making solid progress across many of our products.”

Three main reasons why we’re ramping up cloud

“Just on the first one, I would say there are three points of inflection for us, and that’s why we are really ramping it up. The first is we’ve always been doing cloud. It’s just that we were consuming it all internally at Google, but as we have grown, really matured in terms of how we handle our data center investments and how we can do this at scale, we have definitely crossed over to the other side where we can thoughtfully serve external customers. So that’s the first point of inflection. The second point of inflection for us is as we’ve been investing in machine learning and AI for years, but I think we are at an exceptionally interesting tipping point where these technologies are really taking off. And that is very, very applicable to businesses as well, and so thoughtfully doing that externally, we view as a big differentiator we have over others. And third, is definitely Diane Greene coming in. And I think I want her to scale our efforts here thoughtfully when it is set up with a great leader who understands this space deeply. And so those are the three main reasons why we are significantly ramping up what we are doing there.”

Baidu 4Q15 Earnings Call Notes

Robin Li – Co-Founder, Chairman and Chief Executive Officer

Service and domestic consumption are growing faster in China

“Even as China’s overall gross slows, service and domestic consumption are growing faster. This growth in service is outpacing overall GDP in 2015. Providing an additional tailwind is the Chinese government’s Internet Plus initiative, which is pushing traditional industries to work more closely with Internet companies, bringing structural change to those sectors.”

Baidu largely services these growing sectors

“Baidu largely services these growing sectors. With our top revenue verticals by broad classification including retail ecommerce, local services, healthcare, financial services and education. We are confident in our outlook for Baidu and China’s growing sectors. Baidu plays a vital role as the platform to connect users and merchants in these verticals. ”

Investing in autonomous driving

“We see a very bright future for autonomous driving, especially here in China where we face severe pollution, frequent traffic jams and high mortality rates from traffic accidents. Baidu believes, we can transform transportation as we know it. We’ll keep you updated with new divestments from this exciting area.”

Search algorithm is pretty much all machine learning today

“Our machine learning is a fundamental technology to (40:20). Five years ago, search was pretty much based on statistical tactics. These days, the search algorithm itself is pretty much machine learning. So far, a lot of our existing products and services including the algorithmic search, pay search, the query side based on voice, based on images, those are all very heavily driven by machine learning, especially deep learning technologies. And I’m actually very proud of our speech recognition capability.”

Self driving car can probably become a commercial product within five years

I think self-driving car can become a commercial product probably within the next five years. So that is very dependent on our machine learning and artificial intelligence capabilities.”

Yelp 4Q15 Earnings Call Notes

Jeremy Stoppelman

Seat Me is 20% of OpenTable size in SF and LA

“And I mentioned earlier in the call, when we are looking at San Francisco now and L.A., we have about 20% of OpenTable size. And that’s looking at that, that full service front of house solution. So we are seeing a lot of really high quality, high traffic restaurants moving over and doing quite well in the product, which as an order of manage less expensive generally than OpenTable.”

Rob Krolik

Expect adjusted EBITDA of 90-105m, stock based comp 83-87m

“For the full year, we expect adjusted EBITDA to range between $90 million and $105 million. Similar to 2014, we expect adjusted EBITDA to ramp up throughout the year with significant increases in the third and fourth quarters, in particular. In addition, we plan to spend slightly less in marketing in the second half of 2016 and also expect lower sales headcount growth in the fourth quarter of 2016 compared to the same period in 2015. We expect stock-based compensation to range between $83 million and $87 million and depreciation and amortization to be approximately 5% of revenue. We expect CapEx to be approximately $30 million.”

Expecting 700m in revenue in 2016. $7B is being spent on Yellow Pages

“I think we want to focus on 2016. And we have given our guidance of about 34% revenue growth, $685 million to $700 million. And that’s today what we are focused on. We think there is a huge opportunity in the market if you look at the fact that there is $7 billion in 2016 that’s being spent on Yellow Pages alone. I mean, most of that money is going to move online and we think we are the perfect place to grab that, given our high ROI.”

Geoff Donaker

It’s a good thing when we hear people say they use Google or Facebook

“Hey, Jason, it’s Geoff. I will take the competition question first. I think what I hear from our sales team is that Google and Facebook do come up, but in general, when they hear Google and Facebook from a local advertiser, that’s a really good sign. That means that the local advertisers who has already started to shift online and it’s a great opportunity for us to talk with them about Yelp advertising as well and we are very confident with the ROI that we offer the typical advertiser. More often frankly, we are dealing with prospects who don’t advertise online at all yet and that’s a more difficult conversation, because you are trying to get somebody effectively out of print and online, which is happening over time, but is a more gradual process.

Yahoo 4Q15 Earnings Call Notes

Yahoo! (YHOO) Marissa A. Mayer on Q4 2015 Results

In a turnaround you must literally turn around declining revenue

“In a turnaround, you must literally turn around declining revenue and get it to grow. There are two ways to do that: by returning current business lines to growth, or by adding new business lines that grow. When I arrived at Yahoo!, I reviewed all the lines of business. Each one was in decline and had been for years.”

We want to be known for discovery

“Let’s go into more depth on each of these. Our vision for Yahoo! isn’t changing and is rooted in our beginnings as Dave and Jerry’s Guide to the World Wide Web. To consumers, we want to be known for discovery. We are guide to digital information discovery. We inform, connect and entertain them with our Search, Communications and Digital Content products. Search, Communications and Digital Content form a three-legged stool for Yahoo!”

We have 1B monthly users

“Our total user population exceeds 1 billion monthly users. While we have one of the largest audiences on the web, 2016 is about growing how much each user uses Yahoo!, in other words, engagement. ”

Addressing “blatant falsehoods” in the press

“I want to take a moment to discuss some blatant falsehoods that have been circulating in the press about the company’s spending. I have found these untruths to be upsetting, and I’m sure our investors have as well. And while we do not have time on today’s call to address all the inaccurate information, I want to touch on a few. For example, there have been reports of a $7 million holiday party and a $450 million spend on food over the past few years at the company. Both numbers are exaggerated by more than a factor of three. Our holiday parties globally cost approximately $150 per invited attendee. Our food program is extremely well run and all of our employee perks are standard for our industry, in line with other companies in our area and generally run less expensively here than elsewhere.”

Tech is an acquisitive industry

” tech is an incredibly acquisitive industry, and when I first arrived at Yahoo!, I felt it was very important to do many small talent acquisitions, in terms of really bringing new talent, new ideas, more entrepreneurial spirit into the business. We’ve done a good job bringing that talent here, and we have a lot of entrepreneurial spirit here in the company. And so we’ll continue to hire and we will continue to acquire. In the case of exceptional talent, I feel the need is slightly less acute now, because we have really excellent teams helming each of these areas that I have a lot of confidence in.”

We think search is a lot different in mobile than in desktop

“We think that the profile of how mobile search evolves will be somewhat different than web search evolved. Obviously, the web is really large. In some ways it’s nearly infinite. And so crawling all information that’s out on the web is publicly available, that’s privately available is something that is really challenging and very capital intensive. In Mobile search, it’s much more about your personal information. How can we make you more efficient, more effective, and know where you might want to be going, how to get you there most efficiently, what apps can help you accomplish the task that you ultimately want to accomplish? The search space is basically much smaller, the required disk space, the conversation space is smaller. “

Alphabet 4Q15 Earnings Call Notes

Alphabet (GOOG) Q4 2015 Results

Ruth Porat – Chief Financial Officer & Senior Vice President

“Other Bets” says something about Google’s psychology

“With a move to our new Alphabet structure, we conducted a detailed review of business opportunities and investment levels across Google and Other Bets. ”

Sundar Pichai – Chief Executive Officer, Google, Inc.

Over 1 B monthly active users in 6 properties

“six of our consumer products, Search, Android, Maps, Chrome, YouTube, and Google Play, all have over a billion monthly active users each. ”

We believe we lead the industry in AI

“the next wave will be powered by big advances in machine learning and artificial intelligence, an area where we believe we lead the industry. Just last week, DeepMind published an incredible result, the first ever to master the game of Go with artificial intelligence. An amazing accomplishment, and I’m excited for the world championship in March.”

Machine learning already impacting products

“From image recognition in photos to eliminating email spam to better translation and voice recognition, our machine learning efforts are making a huge difference for people every day.”

Early innings for virtual reality

“It’s still incredibly early innings for virtual reality as a platform, and Cardboard is just the first step, but we are excited by the progress we have seen. Our partners have shipped over 5 million Google Cardboard viewers, and we recently teamed up with The New York Times on a virtual reality experience in which over 1 million Times subscribers received Cardboard. ”

YouTube reaches more 18-49 yo than any cable network in the US

“Not only does YouTube on mobile reach more 18 to 49-year-olds than any cable network in the U.S., but the time people spent watching YouTube in the living room more than doubled in 2015.”

Tough to predict what happens with AI in five years, but making significant strides

“On AI, we are obviously seeing incredible progress in this field. We make great strides, and we start taking it for granted and look to the years ahead. It’s always tough to predict what happens over a five-year timeframe, but I do see us making significant strides. Even a year ago, I wouldn’t have predicted that we would be in a strong position to mount a serious challenge to the world champion in Go this year. So looking at the pace of progress, I think we will have AI in a form in which it benefits a lot of users in the coming years, but I still think it’s early days, and there’s a long-term investment for us.”

We’ve driven 1.3m miles autonomous vehicles

“Look, on the self-driving cars, we have an extraordinary tech team. We’ve been working on it for many years, and the focus is developing technology with a real emphasis on safety and understanding what it takes to build and operate fully autonomous vehicles. We continue to make great progress. We’ve now driven 1.3 million miles with important data regarding the safety and utility, and that’s what we’re really focused on. We’ve got prototypes on streets in two cities. So we’re continuing to execute against that and continuing to build it out.”

We continue to invest in Google

“What we achieved here by pulling out the two pieces is providing, obviously, greater visibility into what we’re investing within the Other Bets, but want to underscore that we continue to invest in Google. We’re in early innings in many areas. And I already referenced back to the framework we use, which is to continue to push the frontier within Google as well to adjacent areas.”

Facebook 4Q15 Earnings Call Notes

Mark Zuckerberg

Free WhatsApp

“As WhatsApp has grown, we work to keep it fast, simple and reliable. And we’ve seen many communities come to depend on this as their main communication service. To serve these communities well, this month we announced that WhatsApp will now be free to everyone and will no longer charge the subscription fees that many people were charged after their first year. We think this is an important step towards creating and even more ubiquitous product without affecting our plans for building WhatsApp into important business in the coming years. Later this year, we’ll be testing new ways for people to use WhatsApp to communicate with businesses and organizations that they want hear from.”

We continue to make progress with AI

“With our working AI, we continue to make progress towards the new generation of computers that can see and under understand. Over the last year, we published dozens of research papers including some of the leading work on image recognition and language understanding. To drive the entire AI community forward, we’ve also open-sourced software and a lot of new AI hardware platform.”

We’re happy with Oculus preorders. Gaming is going to be the initial market

“I will take the Oculus one first. Yes, I am happy. I don’t show much joy, but I am happy. It’s going to be gaming for the beginning. That’s the initial market. There are about — I think it’s around 250 million people who have Xboxes, Play Station, or Wiis. That’s the initial marketer folks who we think are going to be most interested from the early VR experiences, especially at some of the higher price points.”

If you show me a desktop product, I’m going to kick you out

“What happened is we realized that mobile was growing faster than desktop and that people were shifting their usage and that it was the more important thing for people’s consumer experience. And that’s when we made the shift, not in our business first but in how we develop products. And I told all of our product team and when they come in reviews really just coming with mobile. If you come in and you try to show me a desktop product, then I am going to kick you out; you have to come in and show me a mobile product. And that I think was just as a crude leadership tactic, somewhat effective and helping to motivate the organization to shift its energy towards focusing on mobile.”

Sheryl Sandberg

2.5m active advertisers

“Last quarter we announced that we had over 2.5 million active advertisers and since then our growth has remained strong. This represents small fraction of the over 50 million small businesses now actively using pages.”

Advertisers are still underindexed to mobile

“n terms of monetizing time spent, it’s certainly the case that consumers have shifted to mobile and businesses need to catch up. The exact [ph] percentage we can monetize that we’ll see, but we certainly think that we will continue to benefit from the consumer shift to mobile, because businesses are behind. If you ask even our largest clients, our largest clients, if they drew a pie chart of where their consumer spend their time and money and whether they spend their time, we’re still under-indexed.”

2016 election is a big deal for ad spend but so are a lot of events

“Yes, the 2016 election is a big deal in terms of ad spend but so is the World Cup, so Super Bowl every year, so are events like the Olympics. We are excited about the targeting we’re able to offer for our ad platform. ”

Dave Wehner

Non-GAAP measures exclude stock based compensation

“our non-GAAP measures exclude stock-based compensation and the amortization of intangibles.”

Mix shift driving changes in price and impressions

“in Q4 the average price per ad increased 21% while total ad impressions increased 29% on a year-over-year basis. It’s worth noting that this was the first quarter since Q3 2013 that total ad impressions increased on a year-over-year basis. This was driven by an increase in mobile ad impressions and was partially offset by a decline in ad impressions that were heard on personal computers, consistent with the ongoing declines in PC usage. The reported increase in price is being driven by the continued mix shift towards mobile which contains higher price newsfeed ads rather than the mix we have on PCs of both newsfeed ads and lower price right-hand column ads.”

Do expect tougher comps in 2016

“the overall macro-environment introduces the level of uncertainty around global growth and exchange rates that could impact our business in 2016. And we do expect to face tougher comparables as the year progresses, given the remarkably strong advertising performance in 2015.”

Quality of ads has allowed us to show more without harming hte experience

“ad load is definitely up significantly from where we were a couple of years ago. And as I mentioned, it’s one of the factors driving an increasing inventory. Really one thing to kind of think about here is that improving the quality and the relevance of the ads has enabled us to show more of them and without harming the experience, and our focus really remains on the experience.”

We think we’re benefitting from a strong secular shift to mobile

“We’re obviously benefiting from a strong secular shift to usage of mobile and we feel we’re very well positioned in that. We’re see more and more advertisers move to mobile; they realize that it’s no still longer question of whether they need to be on mobile, but it’s really how they’re going to be on mobile, and we think we’ve got the best solution for that and we’re investing to make it even better”

Akamai 3Q15 Earnings Call Notes

Akamai Technologies (AKAM) Frank Thomson Leighton on Q3 2015 Results

Slowing traffic growth in some of our largest accounts but rest of media business very healthy

“we are projecting some moderation in the growth of our U.S. media business, primarily due to slower traffic growth in a few of our largest accounts…To be clear, the rest of our global media business is very healthy. Our overall media traffic is still projected to grow at a substantial pace, and I am very optimistic about the future growth of our media business.”

We believe the slowing in traffic is overall slowing at these accounts, not do it yourself

“we are seeing a slowdown in those accounts off of very strong Q4 of last year, and it is magnified by the fact they do serve some of their own traffic. But we believe kind of the bigger slowdown in traffic here is that traffic overall is slowing, not so much an acceleration and kind of do-it-yourself.”

Bots have become a significant issue for customers

“Bot manager is our newest security service and is now in beta with 18 customers. Bots are automated software agents, and they have become a significant issue for our customers. On a typical day, Akamai sees over 10 billion requests from over 60 million bots. Some bots, such as search engine bots, are helpful, but many are harmful. Malicious bots can steal intellectual property and personal information, scrape prices, and consume significant bandwidth and server resources. Some of our customers have been surprised to learn that over half of their traffic is from bots.”

DIY doesn’t make sense for anyone except the giant media companies

“It’s not something that I think even makes any sense at all for somebody who is not a giant media company, just – it’s not going to be any kind of quality you’d want to have and it doesn’t even make sense financially, I think.”

It’s tough to say why traffic is slowing for our customers

“I mean, that’s tough to tell. I mean, this is the nature of our business that we can’t control how many people are doing a download, how many people are doing various things. So that’s really an end user thing. So why it’s slowing for our customers is difficult for us to assess.”

These are big, big customers

“these top three accounts in our media business represent a reasonably large percentage because these are big, big, big media companies. So the biggest share of the revenue deceleration and actually these three accounts are declining year-on-year.”

Growth outside these customers is strong

“it’s fair to say that growth outside of these three customers in the media is doing very well. Our international growth is strong in the media business, and is strong in other segments of our U.S. market as well.”

Twitter 3Q15 Earnings Call Notes

300m MAUs

“We continue to grow the number of people who use Twitter, now totaling 320 million monthly active and 307 million excluding SMS Fast Followers.”

Smaller nimbler teams

“As part of this focus we made a decision to reduce our workforce by about 8%. While this decision was difficult, we strongly believe we can move faster with this new org structure and smaller nimbler teams.”

Moments re-reverses the chronological timeline

“Moments represents a real fundamental shift in our thinking and the reason why is a lot of Twitter is organized by a reverse chronological timeline. We make people do a bunch of work to find the right accounts to follow and then they actually see the world through those accounts. What Moments does is you can open it up, you can actually see everything that’s happened in the world, that’s most meaningful, it’s organized by topics, so you see topics first. You tap in to each one of those Moments and you can actually see really unique insight and commentary on the particular event that you’re interested in.”

Need to roll out measurement tools for advertisers

“The biggest opportunity in the near-term I believe is on the measurement side. For five years we just haven’t had any third-party measurement and attribution. I talked a little bit about some of the reasons why. It was hard for or almost impossible for third-party measurement attribution systems to measure mobile in-app activity accurately and connected downstream to the conversion.”

Conversations with CMOs have never been stronger

“Our conversations with agencies and also with CMOs have never been stronger. They also look at us as a strategic partner and not just the media partner and that’s really important, whereas other people just come in and talk about ad inventory or their scale. We can come in and talk about that and certainly now showing an audience size both on Twitter and across the network of over 700 million people, but we also come with analytics and insights, things around customer service or comps and PR, all these things that feed into the marketing engines of each one of these companies.”

People tune into Twitter when they are watching TV and vice versa

“We’ve seen great traction in terms of historically when people are watching TV, they also are tuning into Twitter, sometimes exclusively into Twitter. When people are having a conversation about a TV program, it will increase the chance that people turn into linear television. ”

Make twitter easier for people to understand and to tweet

“what you’ll see from us is against two themes and this is going forward, which is really how do we make Twitter even easier to understand for more people, so that we continue to see more of that usage, people can bring it up and see everything that’s happening in the world immediately. But also how do we get more power to people who are using it to tweet. And that’s not just Twitter but also our properties like Vine and Periscope. How we giving creators more tools to be more creative and to express themselves in a different way”

Alibaba FY 2Q16 Earnings Call Notes

Alibaba Group Holding’s (BABA) CEO Daniel Zhang on Q2 2016 Results

Added service to 4k rural villages

“we added 4,000 villages in this quarter and actually today we are – I think China is very big and we are still in early stage, but we believe the most important thing is to create the value for the farmers. So today we are focused on to help them to buy from our online marketplace to improve their lifestyle. ”

Online shopping accounts for 10% of retail in China

“For the first question, I would say today, if you look at the landscape in China, online shopping only accounts for 10% of the total retail in China. So I would say that is a huge potential”

The Chinese economy is under penetrated in terms of consumption

“we just don’t think that the current macroeconomic situation will fundamentally affect consumption patterns. You have a Chinese economy that is only 37% penetrated in terms of consumption relative to more developed countries, you’re looking at – over 60% of their economy is consumption. So there is definitely a secular tailwind driving consumption growth.”

The Chinese consumer is very liquid and has lots of savings

“When you look at the individual Chinese consumer, they’re very liquid, they have a lot of liquid cash deposits in their bank accounts. Over the last several years, wage growth has been growing over 10% year-on-year and there is a high savings rate. So people have lots of savings, lots of liquidity and we expect that this is not, so a temporary setback in the macro economy is not going to affect their consumption pattern and in a fundamental way.”