LT Weekly: Mar 7, 2025

It is hard to know where to start on the topic of tariffs, macro, and markets, which was all consuming this week and one not without twists and turns like the latest hot TV mini-series. We certainly don’t profess to be macroeconomic experts but we’ll do our best to provide some “need-to-knows” on what transpired this week and perspectives to consider as you assess the potential impacts to your company or investments. Big picture, we’d characterize this as a threading the needle environment as in…tariffs could lead to inflation and impact economic growth, cost efficiency efforts could lead to greater job eliminations, and slowing revenue for a swath of companies, but rate cuts will help offset and spur growth on the back-end (the market is now pricing in ~75 bp of rate cuts this year). It is all a fine line and as we have seen over many cycles, these things usually don’t happen on a straight path, thus we’d expect continued near-term volatility…

What Are The Quick Need To Knows Regarding The Course Of Events On Tariffs This Week? (link/link/link/link/link/link)

• March 4^th: The market didn’t think that the tariffs on Mexico and Canada would go into effect but they did Tuesday morning
  • For Canada, the 25% tariff applies to all Canadian imports to the US, with the exception of energy products such as oil and natural gas, which have a 10% rate
  • For Mexico, the 25% tariff applies to all Mexican imports to the US
  • Tariffs were imposed earlier than expected: Just last week, Trump on Wed (Feb 26^th) had said tariffs on Canada and Mexico will go into effect on April 2, but then a day later (Feb 27^th), said it will happen on Mar. 4^th

• March 4^th: Canada responded w/ Prime Minister Trudeau annc’ing a 25% levy on C$30bn ($20.8bn) worth of US imports, including cosmetics, tires, fruit and wine, effective immediately; He also said that tariffs on another C$125bn in goods, including US-made cars and trucks, aluminum, and food and agricultural products, will take effect in 21 days
  • Ontario also indicated it would impose a 25% surcharge on power exported to 1.5mn homes in Minnesota, Michigan, and New York in response to the tariffs, and said it may increase the surcharge or shut off electricity exports completely if the tariff situation is not resolved (link)
    • The province has also banned all US-based companies from government contracts, and Ontario’s Premier Doug Ford has ended his province’s contract with Starlink, the Elon Musk-controlled satellite network
    • Ford also said he was prepared to cut off nickel exports to the US – “It will shut down manufacturing because 50% of the nickel you use is coming out of Ontario”

Source

• March 4th: Mexico also said it plans to announce retaliatory measures
  • Mexican President Claudia Sheinbaum said she was “going to wait” to speak over the phone Trump and if no deal can be reached, she’ll announce the products Mexico will target on Sunday (March 9th)

• March 4th: In an address to Congress, Trump said further tariffs would follow on April 2, including “reciprocal tariffs” and non-tariff actions aimed balancing out years of trade imbalances
  • “Other countries have used tariffs against us for decades, and now it’s our turn,” Trump said, citing high duties imposed on US goods by India, South Korea, the European Union, China and others
• March 4^th: Second round of tariffs on good from China also took effect on Tuesday…: This is on top of the 10% tariff for goods from China came into effect on Feb 4^th
• …And China immediately announced more retaliatory tariffs:
  • Tariffs that came into effect March 10^th: 15% tariffs on US chicken, wheat, corn, and cotton, and 10% tariff on US soybeans, sorghum, pork, beef, aquatic products, fruits, vegetables, and dairy imports
    • China also put 25 US firms under export and investment restrictions
  • This is in addition previously annc’d tariffs that came into effect Feb. 10^th: 15% tariff on certain types of US coal and liquefied natural gas, and a 10% tariff on crude oil, agricultural machinery, large cars, and pick-up trucks
• March 4th: China also filed a lawsuit w/ the World Trade Organization against the US’s addtl 10% tariff on Chinese goods, according to a Commerce Ministry statement
• March 5^th: The US Auto industry gets a temporary reprieve – Trump will delay Canada and Mexico auto tariffs for one month (link/link/link)
  • Trump had spoken with the “Big 3” American automakers — Ford, GM, and Stellantis (formerly Chrysler) — and granted automakers that comply with USMCA a one-month exemption on paying the 25% duties on autos produced in their Canadian or Mexican facilities
  • “Reciprocal tariffs will still go into effect on April 2, but at the request of the companies associated with USMCA, the president is giving them an exemption for one month so they are not at an economic disadvantage,” confirmed WH Press Secretary Karoline Leavitt
  • Canada’s finance minister said the country would in turn hold off on its threatened second round of retaliatory tariffs on US products

• March 6^th: Trump delayed some tariffs on Mexican and Canadian goods, but the reprieve will expire April 2^nd (link): Imports that comply with the 2020 USMCA trade pact would be excluded from the 25% tariffs for a month
  • ~38% of U.S. imports from Canada fall under the USMCA ‒ a free trade deal Trump signed in 2019 ‒ meaning ~62% of goods from Canada will still be subject to tariffs, the Trump White House said
    • It was also agreed that potash, a key ingredient to make fertilizer used by farmers, has been levied a smaller 10% tariff
  • ~50% of imports from Mexico fall under the agreement, so about half of Mexican imports will be subject to the tariffs

What Were Some Of The Key Market & Company Reactions?

• The market has given back all its gains post-election
  • The S&P and Nasdaq are now down -0.7% and -4.7%, respectively, YTD
  • Nasdaq slipped into correction territory (down -10% from its 52-week peak) on Tuesday but closed the week -9.1% below the peak
  • The VIX spiked to 23, up 19% on the week
  • The best and worst performers in the S&P 500 this week were:
    • Moderna up +15%
    • Hewlett Packard down -20%

Source: Bloomberg

• Chip makers have been hard hit: The SOX Semiconductor index hit bear market territory closing the week down -21.5% from its 52-week high in July 2024
  • NVIDIA closed the week down -10%

• Retailers are warning of price hikes due to the tariffs –
  • Target CEO Brian Cornell told CNBC on Tuesday: “Those are really short supply chains… we depend on Mexico during the winter. We’re going to try and make sure we can do everything we can to protect pricing, but if there’s a 25 percent tariff, those prices will go up…certainly over the next week”
  • Best Buy CEO Corie Barry on this week’s earnings call: “If manufacturers pass along tariff costs to Best Buy and other retailers, it will likely result in higher prices for consumers. We’ve never seen this kind of breadth of tariffs, and this, of course, impacts the whole industry”

• AT&T CEO John Stankey is wary of the tariffs’ potential inflationary impact: “We’ve got to be very, very careful and precise about how we administer things like tariffs… and get the incentives appropriately structured… then you can have good economic trade and avoid the inflation dynamic, which is just not good for the American consumer”
• SiriusXM CEO Jennifer Witz weighed in on possible impacts on signing up new car owners as satellite radio subscribers on the back of the announced tariffs: SiriusXM has expected “relatively stable” new car sales at the beginning of the year but its “hard to say right now where that will land. The first two months were very strong, but again, with potential tariffs going in place, it could impact the new car side of the business” (link)

• Even sports leagues are flagging impacts – National Hockey League Commissioner Gary Bettman pointed out potential impacts from tariffs (link)
  • “All players, no matter which country they play in, get paid in US dollars…so if the impact of the tariffs is to see the Canadian dollar drop relative to the U.S. dollar, it will make it more difficult and more painful”
  • The league currently has 7 Canadian teams

• BUT it sounds like Trump is ok with some near term market volatility…saying Americans should be prepared for “a little disturbance” from tariffs
  • “Tariffs are about making America rich again and making America great again, and it’s happening and it will happen rather quickly…there will be a little disturbance. But we’re okay with that. It won’t be much”

As we wrap up a relatively drawn out Q4 earnings season, we always like to take a look across our LionTree TMT and Consumer Universe of ~200 companies across 32 sub-sectors with market caps of $1bn+ to pull out the key trends.

A key theme we’ve focused on over the past several quarters has been companies’ focus on profitability, with a significant portion of our LionTree stock universe outperforming expectations on adj EBITDA, and in many cases, by a wide margin. That continued to be the case in Q4, but the percentage was a step down from previous quarters. More specifically, for Q4 results, 74% of companies surpassed adj EBITDA estimates, but this was down from 84% in Q3, 82% in Q2, and 83% in Q1.

In terms of the magnitude of these profitability beats, that has also been in a downtrend.  While still a high 31% of companies beat adj EBITDA estimates by double, triple, or quadruple digits, that is lower than the 35% in Q3, 45% in Q2 and 48% in Q1. Additionally, the median adj EBITDA beat in Q4 dropped to +3.3%, down from +7.0% in Q3, while the avg adj EBITDA beat was +12.1%, down from +20.3% in Q3.

What about revenue trends relative to expectations? The opposite trend emerged, with a higher number of companies beating forecasts. 73% of companies in our LionTree Universe beat revenue forecasts in Q4, up from 69% in Q3 and 70% in Q2, though in-line with 74% in Q1. The median beat vs expectations was +1.4% in Q4, up from +1.0% in Q3, while the avg beat was a +1.7% vs +1.0% in Q3.

Despite the still very high number of companies that topped Wall Street’s Q4 forecasts, the majority of stocks traded down post results, suggesting that some of this upside was already priced in and/or there were concerns about the forward outlook. See below for more on Q4 financial and stock performance of companies and sub-sectors within our LionTree Universe of TMT and Consumer stocks…

The Majority Of Stocks In Our Universe Traded Down On The Back Of Q4 Results

• Less than half (46%) of stocks traded UP post their reports, which is a continued step down from 50% in Q3 and 53% in Q2
  • 15% traded UP double-digits in reaction to earnings, also down from 20% in Q3, and 18% in Q2
  • 12% traded DOWN double-digits in reaction to earnings, which is down from 16% in Q3 and 10% in Q2

• The top 3 BEST performers in reaction to earnings were –
  • Doximity, up +36%
  • Unity, up +30%
  • Udemy, up +28%

• The bottom 3 WORST performers in reaction to earnings were –
  • The Trade Desk, down -33%,
  • Hims & Hers, down -22%
  • Block, down -18%

Of The Companies & Sub-Sectors That BEAT Expectations In Q4…

• Adj. EBITDA – overall, 74% of the companies in our Universe beat consensus on adj. EBITDA, and 31% had double, triple, or quadruple-digit beats (vs 84% & 35%, respectively for Q3); The median adj EBITDA beat dropped to +3.3%, from +7.0% in Q3
  • Hardware/Handsets had the highest adj. EBITDA beat for the second qtr in a row, up +49.6%, on avg, which was mostly driven by Peloton (+119% beat; $58.4mn vs cons $26.7mn) and Sonos (+66% beat; $91.2mn vs cons $55.1mn)
  • HealthTech had the second highest adj. EBITDA beat, up +45.3%, on avg, which was largely driven by Clover Health (+259% beat; $7.8mn vs cons -$4.9mn) and Doximity (+22% beat; $102mn vs cons $83.8mn)
    • That said, there were some misses in the sector, including Teladoc Health (-9.6% miss) and Hims & Hers (-0.2% miss)
  • EdTech, which had the second highest avg adj. EBITDA beat last qtr, was pushed down to the third spot this qtr and had an avg beat of +33.1%; Similar to the last three qtrs, the substantial avg beat was mostly driven by Udemy (+65% beat; $19.5mn vs cons $11.8mn) and Coursera (64% beat; $9.5mn vs cons $5.8mn)   

• Sales – overall, 73% of the companies in our LionTree Universe beat consensus on revenue (vs 69% for Q3), but only 2% of those companies beat expectations by double-digits or more; The median sales beat was +1.4%, up from +1.0% in Q3
  • Hardware/Handsets had the highest avg sales beat in our Universe, topping cons by +6.6%, which was mostly driven by Sony (+17% beat) and Sonos (+6% beat)
  • Payments/FinTech stocks had an aggregate sales beat of +4.7%; Coinbase posted the highest beat (+23% beat), followed by Affirm and Robinhood (both Cos beat expectations by +7%)
    • Smaller beats were posted by Lemonade (+2.6% beat), Visa (+1.8% beat), Toast (+1.6%), Mastercard (+1.4%), and PayPal (+1.3%)
    • That said, Block did come in below consensus estimates (-4.1% miss)
  • Semis stocks beat by +3.7%, on avg, with the biggest beat coming from QUALCOMM (+7.0% beat)
    • Arm and NVIDIA also posted notable beats (+3.5% and +3.2%, respectively)

Of The Companies & Sub-Sectors That MISSED Q4 Expectations…

• EBITDA – overall, 26% of the companies in our Universe missed consensus on adj. EBITDA
  • Advertising Agencies saw the largest avg miss amongst the sectors, down -1.6%
    • The biggest disappointment came from IPG (-3.8% miss)
    • Omnicom and Publicis also posted some small misses
  • Telecom Infrastructure stocks missed expectations by -0.4%, on avg
    • Equinix and Digital Realty Trust missed by -1.9% and -1.5%, respectively
    • That said, American Tower and SBA Communications posted small beats of +1.2% and +0.6%, respectively
  • Pay-TV / Broadband stocks had the third largest adj EBITDA miss, down -0.4%, on avg, which was mostly driven by Altice USA’s miss (-4.0% miss)
    • The sector had some small beats, including from Charter and Comcast, which beat by +0.7% and +3.0%, respectively

• Sales – overall, 27% of companies in our LionTree Universe reported sales in-line/lower than consensus
  • Video Game stocks had the highest sales miss in our Universe, with the sector missing expectations by -2.8%, in aggregate, which was mostly driven by Electronic Art’s miss (-11.8%)
    • Take-Two and Roblox also missed by -1.4% and -0.7%, respectively
    • However, Playtika did beat expectations by +2.7%
  • Theaters missed by -1.9%, on average, which was largely weighed down by IMAX missing expectations by -9.6%
    • AMC Entertainment and Cinemark actually beat expectations by +1.6% and +2.3%, respectively
  • Advertising Agencies took the third position in the Bottom 3 and missed expectations by -1.0%, on avg, with the biggest miss coming from IPG (-3.6% miss)
    • Both Omnicom and Publicis came in mostly flat

Following Spotify’s strong print and Warner Music Group’s relatively disappointing results last month, Universal Music Group (UMG) was the last major music company to report earnings for the December-ended quarter this week. Beyond UMG’s headline results, which beat consensus expectations across the board, all eyes were on the company’s Q4 streaming numbers, given concerns that growth in the space could be plateauing. However, UMG largely put those fears to rest (for now), as its subscription streaming revenue rose ~+8% y/y when excluding the impact of 1x items as well as a -1ppt drag from softness in fitness platforms. This was in-line with the company’s guidance range of +8-10% annual growth in subscription streaming revenue through 2028, and when accounting for all the various factors, the segment’s revenue grew +9% y/y and finished +0.5% ahead of estimates in Q4.

Conversely, trends were not as favorable on the ad-supported streaming side of the business. Although UMG continued to see robust user engagement and consumption trends, as well as strong advertiser demand, a shift in consumption from better monetized video platforms to short-form ones that aren’t yet as well monetized weighed on the company’s ad-supported revenue. This dynamic is expected to remain a headwind in the short-term but become an opportunity for UMG in the medium-term once monetization improves on short-form platforms. In the meantime, this will be partly offset by easing comps in H1:25 due to the impact from TikTok removing UMG’s content in H1:24, among other factors.

Otherwise, there is “some basis for even more optimism” on the road ahead for the company. Most notably, UMG’s management cited new consumer research reports that revealed that the total addressable market for global music subscriptions could be larger than it previously anticipated, consisting of 230mn potential paid music subscribers (vs the 220mn estimated at the company’s last Capital Markets Day). Furthermore, UMG has taken the initial steps of implementing its Streaming 2.0 vision by reaching expanded multi-year agreements with Amazon and Spotify that will “benefit the entire music ecosystem” by helping to reach superfans and laying the groundwork for the super-premium tier. This, along with opportunities with audiobook listeners and integrations with interactive voice platforms, could “deliver meaningful growth” for UMG moving forward.

See below for more of our key takeaways and highlights from UMG’s Q4 earnings release, including additional color on the company’s Music Publishing and Merchandising segments:

-> UMG shares rallied +6.3% y/y post-earnings and ended the week up +2.8%; That said, this follows a -11.6% drop in the Co’s share price from Feb 14 to Mar 6; YTD, UMG stock is trading up +11.7%, which compares to +10.9% for WMG stock and +18.9% for Spotify stock

UMG’s Q4 Headline Results Broadly Surprised To The Upside Due To Strength In Recorded Music

• Total rev was better than anticipated: Ex-FX, Q4 rev rose +7.9% y/y (vs +4.9% y/y in Q3) and beat cons by +4.9%; Ex-FX, FY24 rev was up +7.6% y/y
  • Excluding one-time items, ex-FX rev incr’d +6.1% y/y: These included –
    • €20mn of catch-up rev from a DSP partner related to new product rollouts in Q3:24 and Q2:24; This was booked in recorded music subscription rev
    • €40mn of rev from two legal settlements, one w/ the brand and one w/ the label JV partner, where has UMG has now exited the JV

• Adj EBITDA also surpassed estimates: Ex-FX, adj EBITDA grew +19.1% y/y in Q4 (vs +8.2% y/y in Q3) and topped cons by +9.5%; Ex-FX, FY24 adj EBTIDA incr’d +13.8% y/y, driven by rev growth, op leverage, and cost savings from the Co’s strategic organizational redesign
  • Excluding one-time items, ex-FX adj EBITDA was up +10.5% y/y: Including –
    • €12mn of catch-up income from a DSP partner related to new product rollouts in Q3:24 and Q2:24
    • €29mn of EBITDA from the two legal settlements
    • Q4:23 was also negatively impacted by a -€50mn hit to recorded music EBITDA related to a legal provision

Recorded Music Benefited From One-Time Items But Faced Structural Headwinds In Streaming

• Recorded Music rev growth accel’d seq due to one-time items and outperformed expectations: Ex-FX, Q4 Recorded Music rev grew +6.8% y/y (vs +6.2% y/y) and exceeded cons by +4.9%; Excluding the impact from DSP catch-up income and legal settlements, ex-FX Recorded Music rev incr’d +4.6% y/y
  • Recorded Music Subscription rev growth topped the Street’s forecasts…: Ex-FX, Subscription rev was up +9.0% y/y in Q4 (vs +8.2% y/y in Q3) and closed +0.5% ahead of cons
    • … BUT decel’d seq when removing one-time items: Excluding the impact from DSP catch-up income, Subscription rev rose +7.2% y/y; The Co lapped Q4:23 price increases, though this was partly offset by 2024 price increases; Fitness platforms were also a nearly a full point drag on growth
    • Subscription streaming rev is still projected to grow at an +8-10% CAGR through 2028
  • Ad-supported streaming rev growth underwhelmed estimates: Ex-FX, Streaming rev decr’d -4.1% y/y in Q4 (vs +0.3% y/y in Q3) and missed cons by -6.2%; Despite the miss, engagement and the consumption of music-based content continues to grow, and demand from advertisers remains strong
    • Changing consumption trends were a headwind: Particularly, the shift from better monetized video platforms to short-form platforms, which aren’t yet as well monetized; This is expected to a medium-term oppty but will continue to pressure rev in the near-term
    • Comps will ease in Q1:25 and Q2:25: UMG will lap the period where its content was off TikTok platforms as well as the loss of its premium music video license w/ Meta

• Physical rev was better than expected: Ex-FX, Physical rev incr’d +3.4% y/y in Q4 (vs -0.7% y/y in Q3), surpassing cons by +4.7%, as strong releases in Japan more than offset difficult comps in the US and Europe
• Licensing & other rev growth dropped seq but still topped the Street’s projections: Ex-FX, Q4 License and other rev was up +12.4% y/y (vs +21.7% y/y in Q3) and came in +11.5% above cons, driven by strength in neighboring rights, synchronization, touring, and audio-visual production income
  • Top sellers for the qtr: Included Taylor Swift, Sabrina Carpenter, Billie Eilish, Chappell Roan, and Wicked: The Soundtrack

UMG Sees “Some Basis For Even More Optimism” Ahead

• New consumer research found the TAM for global music subscriptions is larger than previously estimated: The Co now sees a TAM of ~230mn (vs the 220mn estimated at UMG’s Capital Markets Day)
  • One-third of global subscriptions will be in developed mkts and two-thirds will be in emerging ones: UMG’s current geographic mix is 45% in developed mkts and 55% in high growth mkts

• UMG has executed two major deals w/ Amazon and Spotify: These expanded partnership deals will pave the way toward Streaming 2.0 and unlocking the super-premium tier as well as the superfan oppty; They represent an “important development” for the segmentation of the mkt
  • UMG still believes that superfans could comprise ~20% of the current subscriber base

• Across 2024 and for the second straight yr, UMG had 9 out of the top 10 most commercially successful recording artists globally: Including all of the top 5 artists, w/ Taylor Swift at the #1 spot; The Co also had 4 of the top 5 artists on Spotify
  • UMG is also seeing “enormous success w/ developing artists” in 2025: Cited Lola Young as an example

• Other avenues of growth: Include audiobook bundling (60% of audiobook subscribers in the US are not music subscribers) and integrations w/ voice interactive platforms, like Alexa, that offer a greater ability for users to personalize their music experience

A Breakdown Of Other Operating Segments – Music Publishing + Merchandising & Other

• Music Publishing revenue growth accel’d seq but missed expectations: Q4 ex-FX Music Publishing rev incr’d +7.0% y/y (vs +2.2% y/y in Q3) but fell -1.6% short of cons; Excluding the benefit from the two legal settlements, ex-FX Music Publishing rev grew +5.6% y/y; Note, all growth rates below are ex-FX –
  • Digital rev – BEAT: Rose +12.2% y/y in Q4 (vs +0.7% y/y in Q3) and beat cons by +2.5%
  • Performance rev – MISS: Was up +4.1% y/y in Q4 (vs -3.8% y/y in Q3) but missed cons by -6.1%
  • Synchronization rev – MISS: Declined -5.7% y/y in Q4 (vs +18.5% y/y in Q3) and ended -12.2% below cons
  • Mechanical rev – MISS: Dropped -22.6% y/y in Q4 (vs +12.0% y/y in Q3) and missed cons by -22.8%
    • Declines in Synchronization and Mechanical rev were largely timing driven: These rev lines can be variable and that the Music Publishing segment would be better viewed over the course of a yr

• Merchandising & Other rev comfortably topped estimates: Q4 ex-FX Merchandising & Other rev grew +23.4% y/y (vs +3.5% y/y in Q3) and finished +20.1% above cons; Strength was driven by “robust super fan demand that is driving strong growth in both DTC and touring rev”
  • However, a slight decline in the segment is anticipated in 2025: The Co is facing a very difficult comp due to the timing of major artist tours

Investments Weighed On FY24 FCF

• FY24 FCF was down significantly y/y: FY24 FCF of €523mn fell -47.5% y/y; The Co spent just over €1bn on investments in FY24, including €266mn on catalog acquisitions (vs €178mn in FY23) as well as spending on other deals that furthered its strategic initiatives, including the Nigerian Label, Mavin, and others
  • BUT FCF generation improved dramatically in H2:24, as expected: FCF of €983mn in H2:24 (vs an outflow of -€460mn in H1:24), as net advances “were meaningfully lower”

Notes On Recent M&A Activity + Efforts To Expand Globally

• Virgin Music’s acquisition of Downtown Music Holdings is expected to close later in 2025: Virgin Music and Downtown will offer a broadened and enhanced suite of svs to clients, including digital and physical distribution, release mkting, biz intelligence, neighboring rights, synchronization, royalties, and royalties mgmt

• UMG Japan’s acquisition of A-Sketch will further bolster in-house artist mgmt capabilities: The deal, which was annc’d in Feb, will create new oppties both domestically and globally for artists and fans
• The Co has also been signing deals w/ local labels in music mkts w/ a high potential for growth –
  • Universal Music Greater China closed a “landmark” deal w/ Modern Sky: The two Cos annc’d a strategic distribution agreement in late Nov that will provide Modern Sky’s catalog and roster of artists w/ access to UMG’s worldwide distribution network
  • Virgin Music partnered w/ Hungama in South Asia: Hungama is a leading digital entertainment Co w/ a content library of 45mn+ assets and a presence across 75 countries and 150 platforms; Deal was annc’d in Dec
  • Virgin Music also partnered w/ RainLabs in Africa: RainLabs, which is based in Ghana, is a distribution and label svs Co; The deal was annc’d in Feb and will help African artists reach global audiences
  • Universal Music Greater China signed an exclusive global agreement w/ Liu Huan, the “King of Chinese Pop”: The multi-year deal, which was annc’d in Feb, includes both recording and music publishing rights for Huan’s work

AI agents are all the rage. Recall Meta CEO Mark Zuckerberg’s comment on the Co’s last earnings call, “2025 will be the year of AI agents, as we integrate them more deeply into our ecosystem, transforming how people interact with our platforms.” But he is not the only one gunning in this direction. Several companies made some big moves this week in this area. Despite the competitive jabs, Microsoft and Salesforce seem to have similar visions for the potential of AI agents to change the nature of work and the workforce. The core idea is to augment human capabilities and automate tasks to boost productivity, efficiency, and overall business results. Aside from both these company’s Agentic AI announcements this week, updates from Scale AI and Meta itself were also of note and we highlighted a few updates on AI valuations and use cases as well. See below.

 Agentic AI Updates Were At The Top Of The List This Week

• Microsoft annc’d 2 new AI agents for sales and is helping businesses create and implement agents (link)
  • Sales Agent: Identifies and qualifies potential customers, schedules mtgs, and follows up on leads; It can complete some basic sales independently; The tool gathers info from customer databases, Co pricing sheets, and Microsoft 365 emails & calendars to personalize its responses
  • Sales Chat: Gives sales reps summaries & insights based on CRM records, emails, mtg notes, and online sources; Users can request info w/ natural language prompts, such as identifying at-risk deals or preparing for upcoming mtgs
  • Accessibility: Works with Microsoft’s Dynamics 365 and Salesforce and can be accessed via Microsoft 365 Copilot and Copilot Chat for businesses
  • Availability: May
  • Also annc’d “Microsoft AI Accelerator for Sales”: Helps businesses create & implement agents, w/ help from Microsoft AI experts

 -> Last fall, MSFT intro’d 10 AI agents for its Dynamics 365 applications, including a prior version of its sales agent

• Salesforce launched Agentforce 2dx which marks a shift from reactive AI interactions to proactive agents that operate in the background (link/link): Salesforce is focused on creating a “multi-agent framework” where personal AI assistants interact with enterprise agents to complete tasks
  • Agentforce 2dx: Aims to embed AI agents that can anticipate needs, monitor data changes, and take action autonomously across any business process; It doesn’t just wait for user commands, but actively monitors systems and initiates processes when needed
    • The platform includes a low-code interface, allowing businesses to customize AI agents w/o extensive technical expertise and includes out-of-the-box agents for various roles, including customer service, sales development, personal shopper, and marketing campaign optimization
  • Launched AgentExchange: A marketplace with over 200 initial partners and hundreds of pre-built agent components
  • Intro’d a suite of new tools aimed at both developers and administrators
    • These include a free Agentforce Developer Edition environment for creating prototypes
    • AI assistance in Agent Builder to help configure agents more quickly
    • A Testing Center for automated evaluation of agent configurations at scale
  • Availability: The Agentforce 2dx platform will be generally available in April, with some features starting this week; The Agentforce Developer Edition and AgentExchange are available immediately
• Scale AI has partnered with the Dept of Defense to use AI agents for US military planning and operations: The flagship program, named “Thunderforge,” will work with Anduril, Microsoft, and others to develop and deploy AI agents (link)
  • Size of the protype contract: A “multimillion-dollar” contract, though the exact amount is not disclosed
  • Capabilities: Thunderforge will incorporate modeling and simulation, decision-making support, proposed courses of action, and automated workflows; Thunderforge aims to ensure U.S. forces can anticipate and respond to threats with speed and precision
    • The program will accelerate decision-making and spearhead AI-powered wargaming
    • But will still operate under human oversight
  • Availability: Will initially be rolled out w/ U.S. Indo-Pacific Command & US European Command, then scaled to other areas

 -> “Our AI solutions will transform today’s military operating process and modernize American defense. … DIU’s enhanced speed will provide our nation’s military leaders with the greatest technological advantage,” per Scale AI CEO Alexandr Wang

• Meta is targeting “hundreds of millions” of businesses for agentic AI deployment (link)
  • The upcoming open-source Llama 4 AI will help power AI agents capable of new levels of reasoning and action, such as surfing the web and handling tasks for consumers and businesses
    • Meta’s Llama LLMs have been downloaded 800mn times
  • Meta’s AI is already used by over 700mn consumers but the Co aims to bring these technologies to businesses, especially small ones that can’t afford large AI teams
    • In the future, every business, large or small, will have a business agent representing it and acting on its behalf, similar to how businesses have websites and email addresses today

Other Interesting AI Updates Regarding Funding Rounds/Valn + Use Cases

• Anthropic raised $3.5bn in a Series E round @ a $61.5bn post-money valn (link/link/link): Apparently the Co aimed to raise $2bn but incr’d the size due to investor demand; Total funding is now $18.2bn
  • Round led by: Lightspeed Venture Partners, w/ participation from Bessemer Venture Partners, Cisco Investments, D1 Capital, Fidelity Mgmt & Research, General Catalyst, Jane Street, Menlo Ventures, & Salesforce Ventures
  • Other recent raises:
    • Jan 2025: Google invested $1bn as part of round at $60bn valn
    • Nov 2024: Amazon invested an addt’l $4bn (to a total of $8bn) as part of a strategic collaboration, but valn details were not disclosed
  • Financial data: Per sources Anthropic expects the below (but the Co has not confirmed) –
    • Revenue base case for 2027 is $12bn, but high case is $34.5bn, up from $2.2bn in 2025
    • Burning $3bn this year (vs $5.6bn burn in 2024); Mgmt expects no cash burn in 2027

• Amazon intro’d an AI-powered tool called Complete TV which is built for upfront TV advertising negotiations (link)
  • The tool provides recommendations for TV buyers to allocate their budgets across Prime Video and other premium streaming svs
  • Marketers would input campaign details & target audiences, and the AI models handle the rest, adjusting spend in real-time
  • This automation would help marketers fulfill their upfront commitments more effectively and the tool aims to address a common industry challenge of delivering on upfront commitments in full

• Deutsche Telekom & Perplexity annc’d a new AI Phone priced at >$1,000 (link)
  • Availability: H2:25 and will start selling in 2026, initially targeting the European mkt
  • Features: New AI assistant app called Magenta AI, developed in collaboration with Perplexity, Picsart, and others; Perplexity’s AI will transition from just answering questions to performing tasks like booking flights, sending emails, and setting reminders

• Google Search’s new experimental ‘AI Mode’ lets users ask complex, multi-part questions and follow-ups directly within Google Search (link)
  • Uses a custom version of Gemini 2.0 w/ advanced reasoning, thinking, and multimodal capabilities
  • AI Mode provides detailed comparisons and real-time information from multiple data sources
  • This experimental AI Mode in Search is available for Google One AI Premium subscribers
  • Google aims to enhance search experience by addressing more complex queries and providing AI-powered answers

-> ALSO, Google this week launched Gemini 2.0 for AI Overviews in the US to help w/ harder questions, starting w/ coding, advanced math and multimodal queries

Top executives from across the US connectivity industry took the stage at this week’s Morgan Stanley TMT Conference to recap highlights from their businesses in 2024 and share some insights on how they’ve been performing so far in 2025. Although much of the discussion with Verizon CFO Tony Skiadas, AT&T CEO John Stankey, T-Mobile CFO Peter Osvaldik, Comcast CEO Brian Roberts, and Charter CEO Chris Winfrey reiterated color that was previously shared on their respective Q4 earnings calls, there was still a fair amount of incremental commentary. Some interesting themes included the telcos’ optimism about the health of the wireless industry, convergence and how each company is attempting to differentiate itself within the broadband space, and the opportunities that they see ahead in business services, among others.

See below for what we thought were the most interesting connectivity-related comments from the conference, and see Theme #6 for additional insights on the industry from Mobile World Congress, plus other key updates from the satellite space.

-> On the telco side, Verizon shares ended the week up +6.9%, while AT&T shares closed -1.1% lower and T-Mobile shares were down -1.7%; YTD, Verizon stock is trading up +15.2%, AT&T stock is up +19.1%, and T-Mobile stock is up +20.2%

-> On the cable side, Comcast shares closed the week up +4.8%, and Charter shares were up +4.4%; YTD, Comcast stock is trading up a slight +0.2%, and Charter stock is up +10.7%

Commentary On The State Of The Wireless Industry Was Constructive

• Verizon sees a “robust and resilient” wireless biz: Cited population growth, as well as Verizon’s success w/ SMBs and w/ younger demos; Also sees a “very robust” Brazilian mkt
  • BUT the wireless industry will return to “normal levels… over time”: Indicated the timing of which is “dependent on how the pre-to-post migration base” develops
    • Verizon’s three core prepaid bizs are “contributing positive volume growth”: Straight Talk, Visible, and Total Wireless are all “performing well” following efforts to improve “operational rigor”; Prepaid is expected to become a tailwind to svs rev in H2:25
    • “Customer behavior has not changed” regarding handset upgrades: Verizon’s avg upgrade cycle is now at 42 months (previously said 40+ months on the Q4 earnings call)

• AT&T CEO is feeling “more buoyant” about the wireless biz than four years ago: Referenced comments by FCC Chair Brendan Carr at Mobile World Congress (see below) about freeing up more spectrum for the wireless industry and getting rid of “burdensome legislation” to accel investment in new tech
  • However, nothing has changed in the wireless industry backdrop since last yr: The mkt is still “incredibly competitive,” but the Co feels “very confident” in its 2025 guidance
    • AT&T anticipates that its growth in 2025 will be driven by “a combination of things”: Including growing customers, increasing ARPU from existing customers via repricing and upselling to higher value plans, as well as performing better in the value segment of the mkt
  • The Co saw “a bit” higher postpaid voice churn in Jan: This was originally expected to occur in Dec, given maturities on AT&T’s existing contract base, but “came a little bit later”
    • BUT was “right back” to normal levels of churn in Feb: AT&T “tweaked up promos a bit… to address exactly where [the churn] was occurring”

• T-Mobile sees a “very healthy and growing” wireless industry: Although the number of postpaid phone net adds at an industry level has dropped since 2021, the number of switchers has gone up, which is the “most important element,” given that T-Mobile is the “switcher leader”
• Comcast said adding mobile to broadband-only customers increases their CLV by +80%: Given its strategic value, Comcast is focusing on accel’ing its converged product offering as well as “making it simpler and easier for customers to onboard”
  • The Co has been testing offloading traffic from its MVNO w/ Verizon: Explained that 3% of geography can account for more than half of the volume that Comcast buys from a wireless provider, so “the more penetration [the Co] gets to, the more that becomes an attractive oppty”
• Charter sees mobile ARPU as a growth oppty moving forward: The roll-off of free mobile lines from Spectrum One has driven a “mechanical increase” in Charter’s mobile ARPU “b/c more of those lines are being migrated to $30”; A “very large percentage” of new lines are coming through the $40 Unlimited Plus package
  • Mkting Spectrum Mobile “continues to be an area of investment”: Charter has been funding these through lower transaction costs and a lower cost to serve, but it doesn’t see a need to significantly increase its current mkting spend
  • Charter’s wireless growth isn’t just coming from prepaid anymore: The Co’s “port rate will tell you that’s not the case”
  • The Co is in the “full deployment phase” w/ CBRS: Charter deployed a couple mkts in 2024 and will deploy several more in 2025; CBRS enables the Co to provide a higher quality svs and more seamless connectivity as well as lower operating costs by offloading traffic from MVNOs

Competitive Dynamics Were A Key Focus Within The Broadband Space

• Verizon has “taken share in broadband” w/ Fios and FWA, which is “putting pressure on cable”: “If cable wants to get aggressive and if they want to give away a free line, that’s certainly their prerogative… but whether they charge for it or not, they still have to pay Verizon for the free line”
  • Verizon doesn’t see a lot of overbuilding in its Fios footprint: Though 3P data has shown that ~10% of the US now has two fiber providers as well as cable
  • The regulatory process around Frontier is “on track”: The Co has approvals from the DoJ and three states but still needs approvals from the FCC and ten more states
  • Verizon’s new converged offering is “a lot simpler for customers”: The new offer, which was annc’d last week, is also easier to sell for the Co’s sales team
    • Only 16% of the Co’s mobile base has the converged bundle right now: This figure “hasn’t moved very much in the last yr”

• AT&T “feel[s] really good” about its ability to compete in the broadband mkt –
  • AT&T has numerous competitive advantages vs cable –
    • Broadly speaking, AT&T has “a better product,” “an improving cost structure,” and “customers like [its] svs more than [cable’s] svs”
    • AT&T’s wireless franchise has been built on group & family dynamics, which is more difficult to compete on pricing for cable’s one- and two-line constructs
    • Cable also lacks the “capabilities to differentiate the product” and presence to match AT&T’s net adds in biz segments as well as w/ FirstNet and govt accounts

• T-Mobile is “very bullish” on the FWA biz: The Co believes it’s a “durable product,” as avg speeds for FWA have incr’d threefold since launch, and customer satisfaction is “very high”; T-Mobile is “comfortable” it won’t run out of fallow capacity anytime soon
  • Two-thirds of T-Mobile’s new FWA customers are coming from the top 100 mkts: Most of these customers are “prime” and continue to come from cable operators; The Co’s plan is to cross-sell them into mobile later
  • T-Mobile’s view of convergence is “rooted in the reality of the US mkt”: Highlighted that T-Mobile’s penetration has been higher in competitors’ fiber mkts vs non-fiber mkts, “so it hasn’t impacted the growth b/c frankly the convergency story and thesis have been here for five yrs”
    • “That said, in and of itself, fiber can be a great biz from a convergence perspective”: Which explains T-Mobile’s decision to pursue fiber JV arrangements that are still pending
  • T-Mobile believes it will “generate stronger returns than a pure financial investor” w/ its fiber JVs: Given that T-Mobile will handle the retail side of things and has the mechanisms to acquire and svs customers at a lower cost and leverage its brand and existing relationships

• Comcast CEO Brian Roberts “continue[s] to be an optimist”: Acknowledged some “instability” around the world but believes that the US, where most of Comcast is focused, “is still the best country where you can grow your biz”
  • Comcast has been seeing “more” competition in broadband”: The Co is “taking a long-term lens having been through some of these cycles when competition comes and then it has to cycle itself a few times and people get disillusioned… it pushes you to be better”
    • “Hopefully in the long-term, it’s a two and a half player mkt”: Including the telco incumbent and the cable Cos w/ “fixed wireless at the half”
    • The Co’s top priority has been its rev profile: Emphasized that Comcast’s competitors “look like hits and page views and streams and things that weren’t money”; Believes it’s “hard to compete if you’re being judged one way and someone else is being judged another”

• Charter CEO Chris Winfrey is “really optimistic about the future for not just Charter but for the industry” –
  • 2025 “better be” a better yr of broadband growth for the Co: Given Charter’s investments in improving the speed of its network, rural expansion efforts, ACP being fully behind it, as well as less competition
    • “External factors” could also be a driver behind the broadband biz: Including mover rate and household formation as well as a normalization in non-pay for the previous ACP remaining base; Video can also become a tool for the acquisition and retention of Internet customers
  • “Hopefully, a little bit of lightening of [the] competitive environment sets [Charter] up for growth” –
    • Fixed wireless “continues to be painful picking off at the low end: Caveated that FWA is “capacity-limited… both from a supply & demand perspective” but has “had its peak in terms of net add rate’
    • Charter “compete[s] very well” against wireline overbuilders: “History is littered w/ Cos that went bankrupt try to go do that… even some well-branded Cos have really struggled”
  • “It’s too early to… declare victory” in mkts w/ high-splits: There’s been “attractive” preliminary evidence, but Charter hasn’t been highly mkting in these areas; The Co will “be louder later on” and expects to eventually see a “significant benefit” from its network evolution initiative

Both Telcos & Cable Operators See Significant Oppties In Business Svs

• Verizon is aiming for “positive improvements” in Business margins in 2025: In Q4, the Co saw “a good inflection point” in biz margins “for the first time in a long time” and will look to build off this
  • Drivers will include: Rev mix shifts toward wireless and FWA, private network deployments, moving customers off legacy products, being disciplined about low-margin deals, uptake of AI Connect, and the Co’s voluntary separation program

• AT&T “can be successful in the biz [wireline] segment”: To do so, the Co must change its distribution by working w/ more partners and better enabling them; Sees declines getting “smaller and smaller” over the next few yrs as the Co approaches an “inflection”
• T-Mobile’s B2B biz will “continue to unlock new things” in 2025: The Co will continue to deliver better self-svs capabilities to be enterprise grade and deliver “more and more” of what they expect; T-Mobile’s main focus is “solving CIO problems in biz”

• Comcast – Biz svs is now 25% of the Co’s broadband biz: The Co has “done really well” w/ small bizs and sees “a lot of runway” to grow, given that it has $10bn of the addressable $60bn footprint
• Charter’s new operational structure “is going to allow [it] to accel growth” in commercial: The Co annc’d it was combining SMB and enterprise sales operations in Dec and believes this will enable it “start svsing that space in a better way”; It will continue to move upstream and provide a wider array of products to customers of all sizes
  • Temporary pressures affecting the small biz segment are expected to “abate”: The segment has been exposed to “short-term pressures” from FWA but has still been neutral/growing in the meantime, remaining “highly underpenetrated”

Satellite Connectivity Looks To Play A Bigger Role In Closing Gaps In Telcos’ Bizs

• Verizon views satellite as “complementary” to its network: The Co’s network currently covers more than 99% of “where people work, live, and play”; Partnerships w/ Apple and Globalstar, Skylo and Android, as well as AST will help cover the remaining less than 1% of uncovered rural areas
  • Verizon sees “monetization oppties” w/ satellite connectivity moving forward: “Whether it’s voice, video, data, etc.”

• T-Mobile’s long-term exclusive relationship w/ Starlink is “value accretive” and another differentiator: The Co’s satellite product started w/ texting and will bring on voice and data later; Touted that T-Mobile and Starlink have 500+ satellites in the air, compared to just five for the next closest D2C satellite Co
• Charter believes “LEO satellite is a great product for the right mkt and the right circumstances”: Satellite is the “much better product” in areas “below a certain amount of density”; Charter sees Starlink “having the most success” in rural regions
  • “It does not make sense… for the govt to provide $20,000, $25,000 per passing of subsidy to go build something that could actually be serviced by LEO satellite”: Given the “low amount of density” of those areas, which has deterred Charter from competing in them

• See Theme #6 for a couple other key updates on Starlink & AST as well

Some Addt’l Color On Strategies Surrounding AI

• Verizon sees AI from three dimensions –
  • An operational efficiency perspective: The Co has been using AI to serve customers in a more efficient and effective way as well as to optimize its network
  • Product enhancement: Cited the personalization w/ myPlan as an example
  • Rev generation: AI Connect, which as a $1bn+ pipeline, falls in this bucket, and the Co also sees oppties w/ dark and lit fiber, power space and cooling, as well as programmable networks, or the ability to move workloads around a footprint

• Charter – AI is a “net benefit to the P&L”: The Co has a “long runway” to reduce transaction costs inside the biz via investments in employees as well as investments in tools, systems, and AI
  • Charter is “not doing any gen AI today”: The Co started out investing in machine learning and has been investing in AI, which will be the foundational investments to eventually incorporate the tech into customer experience and the agent experience
  • The Co is also exploring monetization oppties w/ AI edge compute and localized CDNs: Cited financial transaction svs as an industry that “really need[s] that proximity, low latency” and believes the Co’s fiber network and wide distribution of physical hub locations can support that

Other Highlights

• Verizon has “a lot of programs underway” on the cost transformation front: Including AI to improve the efficiency of customer care, a new deal w/ HCL on the managed svs side, removing legacy elements out of the network, and a full yr benefit from the voluntary separation program
• T-Mobile’s foray into the advertising biz: The Co’s closing of the Blis and Vistar acquisitions will add $250mn of svs rev, $75mn of EBITDA, and $50mn of FCF in 2025, mainly beyond Q1; T-Mobile plans to sell its own ad inventory as well as third-party ads
• Charter said the activation of DTC apps within the video product “is going to take a little time”: Although the DTC apps are all “essentially available today” for consumers, the Co has not been mkting it just yet b/c of ongoing efforts to work w/ programmers to “make sure the activation process is customer friendly and doesn’t create frustration”

The connectivity industry was certainly front-and-center this week. Alongside Morgan Stanley’s TMT Conference, which contained a flurry of interesting updates on the connectivity space (see Theme #5), Mobile World Congress 2025 was also hosted this week, bringing together many of the leading companies in the mobile technology ecosystem to showcase the future of the industry. There was a lot to cover, given that the conference represents the world’s largest gathering for the mobile industry, but we did our best to distill some of the main highlights from the event, including the new FCC Chairman Brendan Carr’s stance on spectrum and deregulation as well as other key updates regarding AI-RAN and 6G development. We also included some noteworthy news items pertaining to the satellite industry that could shake things up in the space moving forward. See below for more details:

Takeaways From Mobile World Congress – The FCC’s New Vision + Developments Regarding AI-RAN And 6G

• FCC Chair Brendan Carr touched on spectrum regulation and the EU’s efforts to rein in Big Tech Cos (link) –
  • Carr wants to grease the wheels for spectrum investments: “The most important thing… w/ spectrum is that we need to ensure that we have a regulatory environment that incentivizes billions and billions of dollars to be invested in that network”; “We need more certainty both in the US and Europe to justify those moves”
    • The FCC is evaluating freeing up higher portions of C-band spectrum: The prior Trump administration previously freed up the lower portions of C-band
    • “The other issue is simplicity”: “The more difficult we make it for broadband providers and tech Cos to invest and build in our mkts, the less likely they’re going to be to do it”; Cited the efforts to enact “heavy-handed regulation of the internet” w/ net neutrality as a lesson against regulation
    • “Scale is king”: “We have to create the incentives for carriers to amass the size necessary to actually compete at scale”; Highlighted the approval of the merger between Sprint and T-Mobile
  • Core principles for the development of AI were laid out –
    • The US wants to create an “open system” and is looking to partner and work w/ allied nations the globe to do so
    • The US doesn’t want these systems to develop w/ any “ideological bias”
  • Carr also took issue w/ the EU’s attempts to regulate US tech Cos –
    • The importance of free speech was underscored: The FCC views the “censorship that is potentially coming down the pipe” from the EU’s Digital Services Act as a way of limiting free speech and the ability of US tech Cos to operate in the region
    • The Trump administration is insisting on a “level-playing field”: “If there is an urge in Europe to engage in protectionist regulation and give disparate treatment to US tech Cos, the Trump Administration had made it clear that we are going to speak up

• Some key updates on the AI-RAN Alliance which was initially unveiled at last yr’s MWC: For context, the alliance’s mission is to enhance mobile network efficiency, reduce power consumption, and retrofit existing infrastructure
  • The AI-RAN Alliance has grown sevenfold over the past yr (link/link): The group now boasts 77 members, w/ Pure Storage being the latest to join; Arm, DeepSig, Ericsson, Microsoft, Nokia, Northeastern University, Nvidia, Samsung Electronics, SoftBank, the University of Tokyo, and T-Mobile were the original members
  • “This is actual engineering work we’ve achieved,” per SoftBank (link): This week, SoftBank annc’d, in collab w/ Fujitsu, the implementation of central unit functions on the NVIDIA Grace CPU Superchip platform, helping to accel the commercialization of AITRAS, solution that can host both AI and RAN workloads on the same NVIDIA platform
  • Nokia is establishing an AI-RAN center at its US offices in Dallas (link): At the center, Nokia will work w/ to develop and test AI-RAN solutions in real-world network conditions w/ a focus on creating new use cases, prototypes, and to validate AI-RAN reference architecture
    • T-Mobile President of Technology Ulf Ewaldsson joined Nokia to discuss AI-RAN’s utility on the enterprise side: “We need to be able to do this much, much faster, therefore … we’re moving over to a cloud native infrastructure and our partnership w/ Nokia is absolutely essential to do that”

• 6G was also a major theme at MWC –
  • “2030 is what we expect to be the start of commercial deployment,” per President of Nokia Bell Labs Core Research (link): “In order to really be ahead of the curve, it needs at least 10 yrs to get from the concept to the commercial deployment… 6G is no longer long-term research”
  • The Wireless Broadband Association (WBA) believes that 6G needs to include all wireless tech, not just cellular (link): “Of course, 6G new radio will happen. I have no doubt about it,” said WBA CEO Tiago Rodrigues, adding “But that new architecture should have easy plug-ins to integrate, either Wi-Fi or private cellular or even satellite”

Addt’l Updates From The Satellite Space

• SpaceX launched a cheaper option for its Starlink satellite internet svs dubbed “Residential Lite” (link): The more budget-friendly svs is aimed at smaller households w/ lower data throughput requirements and costs $80/mo, a -50% reduction from the Starlink’s standard $120/mo residential plan
  • Starlink is offering a $200 promo for the Residential Lite svs through Mar 31: The “regional savings” discount reduces hardware costs for eligible households to $149 from $349
  • BUT the new offering, unsurprisingly, comes w/ a few trade-offs: The Residential lite plan offers download speeds of 50-100 Mbps (vs the standard plan’s 150-250 Mbps) and provides “unlimited deprioritized data,” meaning lite users will have a lower network priority compared to other Starlink users
    • It is unclear whether users on standard plans can downgrade to Residential Lite: Conversely, users of the cheaper option can upgrade to a standard plan at anytime
  • Residential Lite is now available in 15 states: Including the ones in white in the image below, which were selected to due Starlink having excess capacity in them; The svs is also available in 29 other foreign regions

• AST SpaceMobile and Vodafone partnered to create SatCo, a new European satellite svs biz (link): The jointly-owned Co will aim to provide AST’s space-based cellular broadband svs to mobile network operators in all European mkts under a single turnkey arrangement
  • SatCo will be supported by a full network mgmt and network operations center capability: This will be based in Europe and will draw on Vodafone’s advanced engineering expertise
    • SatCo will also build and run a network of ground stations: To provide backhaul svs from MNOs across Europe to AST’s LEO satellite network
  • AST has also been expanding its presence in Spain: The Co launched a new space and land mobile broadband research and validation hub in Feb alongside Vodafone and the University of Malaga that is set to open this summer; AST is opening a 5,600 sq meter office and manufacturing space in Barcelona as well

-> AST SpaceMobile shares were down -5.5% following the annc’ment but finished the week up +23.2%; YTD, AST SpaceMobile stock is trading up +58.3%

DesignRush published some proprietary data analysis this week (based on traffic on its network) that showed that bots now account for 80% of all web visits…and OpenAI GPT bots made up 13% of all web traffic from nothing in 2023. They also calculated that companies wasted $238.7bn on bot-driven traffic in 2024, as every website visit incurs costs through hosting, security, and content delivery networks (CDNs) but are not getting compensated for all this web scraping. Also, with bot traffic so high, how much of a company’s pay-per-click budget is actually reaching real customers? (link)

• YouTube reached 125mn Music & Premium subscribers globally and intros a cheaper ‘lite’ tier without music in US (link/link)
  • YT Premium Lite Availability: US pilot has started this week and expanding pilot into Thailand, Germany, & Australia in “coming” weeks
  • Price: Ad-free for $7.99/mo (vs $13.99/mo for YT Premium and $10.99/mo for YT Music)
  • Offering: The Premium Lite plan provides ad-free video viewing but excludes songs and music videos; it also does not let users download videos for offline viewing or play videos in the background
  • The 125m Music & Premium subs is up from 100mn a year ago

• Academy Awards viewership was down -7.2% y/y: The ABC b-cast & concurrent live-stream on Hulu generated a combined 18.1mn viewers vs 19.5mn last year (link)
  • This would be the first y/y drop since 2021
  • It still ranks as the most-viewed TV event so far in 2025 and was the highest-rated Academy Awards in 5 yrs among the 18-34-year-old demo
  • Also, Hulu had some technical issues on its 1st live-stream of the Oscars

• Update on the TikTok sale – Trump says he’ll “probably” extend deadline for sale of the app if a deal is not reached by April 5^th
  • Trump said Thursday (March 6^th) that there was “a lot of interest” in TikTok and that “right now we have at least another month, so we don’t need an extension”
  • BUT he is willing to extend the deadline if necessary – “If I needed an extension, I’d probably get it extended,”
  • Deal talks are reportedly ongoing and China is involved: “We have a lot of interest in TikTok. And China is going to play a role, so hopefully China will approve of the deal, but they are going to play a role”
  • Also this week – Reddit co-Founder Alexis Ohanian joins bid to acquire TikTok (link): Ohanian joined Frank McCourt’s “The People’s Bid” as a strategic advisor