Business Breakdowns

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Boeing. Founded in Seattle in 1916 by William Boeing, the company has produced thousands of commercial and military aircraft over the past century. It is an important national and global asset and one-half of arguably the most famous duopoly in business, alongside Airbus. To break down Boeing, I’m joined by Jon Ostrower, founder and editor-in-chief of The Air Current. You can split Boeing’s business into three segments: commercial, defense, and services. For this discussion, we focus mostly on Boeing’s commercial business, which accounted for nearly 40% of its revenues last year. We talk about the cost and complexity of building new airplanes, how the 737 MAX disaster changed the business, and why the future of commercial planes may look radically different. Please enjoy this business breakdown of Boeing. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:38) - (First question) - An introduction to the aerospace industry and Boeing's role in it (00:05:41) - Boeing's business model today (00:09:52) - How the aerospace industry settled into a duopoly (00:12:30) - Costs associated with airplane manufacturing (00:14:02) - The life expectancy of an aircraft (00:14:46) - Dealing with the supply coordination problem (00:17:39) - The Boeing and McDonnell Douglas merger (00:20:51) - Problems Boeing has faced over the past five years (00:25:44) - How leadership turnover has permeated through Boeing (00:28:03) - Competitive headwinds Boeing can face (00:33:10) - How Boeing will grow in the aerospace industry (00:37:39) - Boeing's eVTOL strategy (00:41:42) - What is impacting the profitability of the business (00:43:38) - The biggest challenge facing the aerospace industry (00:44:57) - Lessons learned from studying Boeing Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Dom Cooke and today we’re breaking down an Irish business that has become the global leader in insulation products for buildings. Founded in 1965, the business is called Kingspan and today it has a market cap of nearly 13 billion euros. The bulk of their business comes from insulating big, commercial new builds – Tesla Factories, Apple’s Headquarters, the Emirates Stadium in London – all places where you’ll find Kingspan’s products. To break down this business, I’m joined by Nick Griffin, the Founding Partner and CIO of Munro Partners. We talk about the ESG tailwinds behind this business, how they’ve grown through acquisitions, and their interesting go-to-market motion. Please enjoy this Business Breakdown of Kingspan. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:35) - (First question) - He gives us a detailed description of Kingspan (00:03:28) - Investing in a company based on the other side of the world (00:05:14) - Whether Kingspan is more commercial or residential driven  (00:05:55) - Kingspan’s origins (00:08:35) - Description of an insulated panel and how it is used (00:12:38) - What makes their panels the best in the world (00:15:25) - The benefits of doing both commercial and residential panels (00:16:08) - Industry characteristics and its overall market share (00:17:54) - The pricing mechanism and pricing power behind the product (00:21:26) - Kingspan’s expansion into the world market  (00:22:53) - The secret sauce behind the success of Kingspan  (00:25:01) - Kingspan’s economy to scale (00:27:42) - What he finds interesting about Kingspan’s financial profile  (00:29:15) - Splitting revenue growth between organic and inorganic growth (00:32:35) - The visibility of Kingspan’s products and their measurable efficiency       (00:34:50) - His expectations for Kingspan’s growth over the next 10 to 15 years (00:34:05) - The margin structure of the acquired businesses (00:37:12) - The life expectancy of the insulation product (00:38:35) - Risks behind insulated panels and the industry (00:42:22) - His evaluation of business modeling for acquisitions  (00:43:23) - Which competitors does he watch most closely    (00:44:49) - The lessons learned from studying Kingspan for 10 years  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Dom Cooke and today’s breakdown is a little different. Last week we looked at the most popular sport in the world in Football. Today, we break down the business behind a sport in its relative infancy - Padel. This racket sport started in the late 60s in Mexico and became big in many Spanish speaking countries. It then got a significant COVID bump and momentum has remained strong since. To break down this burgeoning sport, I’m joined by Alan Flatt, CEO and President of EEP Capital. We look at the dynamics of the sport that are making it popular, the investment characteristics of Padel Clubs, and how sustainable its recent growth is. We also cover the differences to a sport that has become big in the US, Pickleball. Please enjoy this business breakdown of Padel. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:41) - (First question) - A background on the sport of Padel (00:03:38) - The size and scope of Padel today (00:05:35) - The origins of the sport and its growth around the world up until now (00:06:31) - Covid and Pickleball’s impact on the growth of Padel over the last 5 years (00:07:08) - The main differences between Padel and Pickleball (00:09:12) - Padel’s universal attraction being its ease of entry for beginners (00:10:41) - Alan’s story of how he became involved with Padel as an investment (00:12:16) - Investing in Padel clubs and looking at Padel’s previous growth in other territories  (00:15:53) - What makes an attractive location for a Padel club (00:18:14) - The costs involved with starting a Padel club (00:21:53) - A look at the Padel Brooklyn location’s business model (00:25:12) - The margin profile of a Padel club (00:26:51) - Other sports and businesses with comparative models (00:28:55) - How the current supply issue can be resolved (00:33:06) - The current state of the US Pro League and how it might change (00:37:50) - A breakdown of the teams and schedule of the US Pro League (00:39:32) - The makeup of a Padel Pro League team (00:40:49) - The strategic priority list for the Pro League in order to meet its growth goals (00:44:28) - As a whole, how the sport of Padel can grow and the target markets for adoption (00:46:07) - How close the sport is to becoming an Olympic sport (00:48:20) - The risks that Padel faces (00:51:46) - The lessons Alan has learned and can share with operators and investors Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Dom Cooke and today we’re breaking down the business behind the most popular sport in the world, Football or Soccer. It’s a vast market. 3 billion people around the world watch the sport and more than €30 billion euros are spent within the football ecosystem in Europe alone each year. But aside from a huge addressable market and reasonable revenue, is it actually a good business? Why do investors keep buying Football clubs? Is there any economic rationale behind that? Is there a link between sporting and financial success? Has middle-eastern money distorted the transfer market for good? These are some of the questions I asked our guest, Dr Rob Wilson, who is a football finance expert and Head of the finance, accounting, and business systems department at Sheffield Hallam University. I hope you enjoy us breakdown the business of football. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 drivable global models hand-built by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:03:16) - (First question) - Defining the European football market (00:05:12) - How the Premier League defined itself as the world’s best league (00:08:16) - The delegation of funds based on a team’s final position in the league (00:11:19) - A brief introduction to the breakaway European Super League (00:12:53) - The sale of Manchester United and how it affects the scope of the footballing world (00:18:34) - The role emotion plays when it comes to buying and selling of football clubs (00:20:47) - The makeup of a well run football club (00:23:54) - The four-pillar model and exploring new revenue streams in football (00:25:59) - The utilization of ‘access all areas’ type documentaries as a source of revenue (00:28:40) - Breaking down the return on investment for football clubs building new stadiums  (00:33:51) - Financial regulations in football and a brief history of UEFA’s Financial Fair Play (00:40:41) - The correlation between sporting and financial performance (00:42:23) - The different types of football club ownership profiles    (00:44:51) - Reasons why investors choose to enter the football market (00:48:12) - Changes to the football landscape since sovereign wealth funds have entered the market (00:51:36) - The importance of the transfer market to football clubs (00:53:03) - How the fans fit into the sport moving forward (00:55:52) - Potential opportunities for TV revenue streams by entering new market places  (00:56:55) - The relationship between the clubs and the leagues (00:58:20) - The lessons learned from researching the football industry Learn more about your ad choices. Visit megaphone.fm/adchoices

Today we are going into the land of convenience stores to break down Casey's General Stores. Casey's currently operates in 16 states in the Midwest and Southern US. As of this recording, they have close to a $10 billion market cap and are the number three player in their market. To break down Casey's, Matt Reustle is joined by Markus Hansen, portfolio manager and senior analyst at Vontobel Asset Management. We cover the industry of convenience stores, including the competition that exists in this market and the unique geographical considerations. We also discuss the financial model, drivers of gasoline performance versus in-store purchases, and margin profiles across the different segments of this business. This is another fascinating story hidden in plain sight. Please enjoy this breakdown of Casey's. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:42) - (First question) - The concept of Casey’s General Stores  (00:06:04) - Casey’s competitors and the market share in different regions (00:10:52) - The main differences between Casey’s and a regular gas station   (00:14:09) - A brief history on Casey’s beginnings and its founder (00:17:25) - A breakdown of the business’ revenue (00:19:14) - Casey's growth despite the changing environment standards raising operational costs (00:23:52) - The business’ margin profile (00:26:53) - How Casey’s General competes with its peers and fuel pricing (00:29:33) - The focus for Casey’s with regards to expansion opportunities  (00:33:06) - The hurdles involved with building new gas stations versus acquiring existing stores (00:35:08) - Casey’s stance on franchising (00:38:02) - The company’s attractiveness to buyers (00:40:52) - Casey’s General’s average stock performance (00:44:26) - Key risks of Casey’s (00:47:30) - The main lessons learned from Casey’s General Stores Important Information: Information provided represents the views of a company of the Vontobel Group (“Vontobel”) and should not be considered investment advice and/or legal, tax, financial or other advice. Further, not a recommendation to purchase, hold or sell any investment and no representation is given that the securities discussed are suitable for any particular investor. Although Vontobel believes that the information provided in this document is based on reliable sources, it cannot assume responsibility for the quality, correctness, timeliness or completeness of the information contained in this document. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are breaking down Take-Two Interactive Software. If you listened to our Business Breakdown on Electronic Arts, Take Two is another giant in the video game publishing space. They are best known for their Grand Theft Auto and 2K franchise. To break down Take-Two I'm joined by Eric Kress, principal at Gossamer Consulting Group. Eric spent multiple decades inside the video game market, both as an investor and as an operator, and we tap into his perspective from both sides of the table. We drill into historic IP, the strategy behind new releases and what mobile means for the market, and specifically for Take Two. Please enjoy this breakdown of Take-Two. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:35) - (First question) - Brief overview of Take-Two (00:03:32) - Take-Two's acquisition of Zynga represents a significant push into mobile gaming (00:05:05) - Mobile gaming faces challenges from Apple's IDFA removal and Google's changes (00:06:37) - Apple's privacy changes benefit them but hurt mobile publishers (00:07:50) - How Take-Two evolved from PC and console to mobile (00:10:48) - Console and PC target AAA games; mobile reaches a broader, less premium market (00:12:53) - Creating new iconic AAA gaming IP is nearly impossible due to high costs (00:15:08) - Big IP success in gaming historically depended on retail relationships and distribution (00:17:39) - Sports games have almost 100% revenue visibility; others like GTA fluctuate (00:19:31) - GTA's next release is anticipated and guaranteed to sell millions, but post-launch is uncertain (00:25:24) - Risk of new console alignment affects expectations for next GTA game release (00:27:57) - Updating titles for different consoles has become less complicated with PC architecture (00:29:44) - Pricing at $60-$70; new tech may boost in-game spending (00:31:30) - GTA's mature nature makes in-game advertising tough (00:32:59) - NBA license with 2K is a partnership, not exclusive (00:35:28) - Take-Two lacks profitable titles beyond GTA and 2K (00:37:57) - EA smartly bought Respawn and built studios; Take-Two lacks similar capability (00:39:29) - Gaming industry consolidated to fewer franchises; similar to film industry's trend (00:44:07) - Zynga's acquisition was ill-timed; it's a declining asset with no value (00:47:32) - Microsoft's deal may lead to Amazon or Comcast buying Take-Two (00:50:11) - Valuing these businesses often relies on traditional PE methods (00:52:06) - Key risks for Take-Two are overhyped GTA expectations and service burnout (00:53:37) - Lessons learned from studying Take-Two Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Nubank. The Brazilian-based neobank has gone from nothing to extraordinary scale in a short period of time. 10 years after its founding, the company counts 46% of Brazil’s adult population as customers, is the largest Fintech in Latin America, and has a market capitalization of $37 billion. The fact that it’s achieved this in an environment that heavily favored the large incumbent banks makes its story all the more impressive. To break down the business, I am joined by Daniel Bakalarz, Managing Partner at Unison Asset Management. Dan has a long history with this business and it shows in our discussion. We discuss the confluence of factors that made this business possible, the economics of a typical Nubank customer, and the competitive dynamics of banking in South America. Please enjoy this business breakdown of Nubank. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 drivable global models hand-built by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:44) - (First question) - A background on neobanks and how Nubank is unique (00:04:17) - The company’s origin story and how it moved up the value chain over time (00:09:43) - Nubank’s rise to a becoming a market leader in just a decade since its formation in 2013 (00:17:04) - The backdrop in Brazil that led to the opportunity for Nubank to enter the market (00:23:34) - A breakdown of Nubank’s revenue (00:29:06) - The makeup of a mature Nubank customer and the company’s average revenue from that customer (00:33:33) - Reasons for the business pricing its annual percentage rates so aggressively  (00:34:18) - The comparison between the business and traditional bank holding companies in the US and South America (00:43:40) - Potential opportunities for Nubank in the future (00:52:12) - The biggest risks to the company moving forward (00:57:30) - Brazilian regulator's opinion on Nubank’s rise in the market in context of its large established peers (00:59:54) - Lessons learned from studying the business (01:05:06) - Dan’s parting wisdom on Nubank and what he wants people to take away from this breakdown Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital. Today, we're breaking down Argenx, an immunology company founded in 2008 by its three founding partners. Today, it's a $30 billion company set to produce over a billion dollars in sales. They're known for their skill in developing antibodies for complex disease targets and owe a large part of their medical breakthroughs to llamas, which have similar antibodies in their immune system to those found in humans.  To break down Argenx, I'm joined by Julia Angeles, an investment manager at Baillie Gifford. Throughout this conversation, we'll discuss how Argenx navigates the complex world of drug development, clinical trials, regulatory approvals, and the ultimate commercialization of autoimmune therapies. We'll also learn more about their transition from a venture capital backed business to its 2017 IPO, and today, a meaningful revenue generating business. We hope you enjoy this business breakdown. Note: This conversation was recorded on 19 July 2023. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Shownotes (00:03:49) - (First question) - Ways the immune system protects us and fails us (00:06:00) - Current patient treatments and evolving solutions to existing problems  (00:07:52) - The key difference between how the biotech community is addressing big diseases versus autoimmune disorders (00:09:55) - What sparked Julia’s interest in Argenx (00:14:01) - Explanation how we use animal antibodies to help research progression (00:15:25) - The foundations of the business (00:17:57) - The evolution of the business and its commercial success thus far (00:20:22) - Transitioning from lab antibodies to a commercial product ready for consumers (00:23:42) - The infrastructure needed to maintain and grow Argenx (00:26:43) - Indicators of commercial success (00:29:27) - The basic revenue model for this business type (00:30:49) - Go to market strategies for developed drugs  (00:34:39) - Pricing and patient protection of these newly developed drugs  (00:37:46) - Cures versus creating treatments with recurring revenue streams (00:39:38) - The importance of the current team composition  (00:41:44) - Julia’s perspective on what they are willing to invest to grow the company (00:43:49) - Normalized profitability for biotech companies such as this (00:45:59) - Potential risks to the current business model (00:49:22) - Lessons learned from studying Argenx Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are breaking down the vehicle auction giant, Copart. You may be unfamiliar with Copart but, at the time of this recording, the company has a $40 billion market cap. They operate in over 200 locations across the globe and they sell north of 3 million cars per year on behalf of their unique customer base. Copart is a unique story in a very concentrated industry where they likely have 50% market share. It's a story defined by evolution. Its founder, Willis Johnson, didn't merely adopt a junkyard mentality. He was born into it, molded by it. To break down Copart, I'm joined by Adam Mead, CEO and Chief Investment Officer of Mead Capital Management. We cover all the angles of this unique industry giant. Please enjoy this breakdown of Copart. Access Adam's Copart writeup for free here. Choose the October 2022 Copart issue and use the code "Breakdowns" for 100% off.  For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:32) - (First question) - An overview of Copart (00:04:16) - The size and scope of the market  (00:04:52) - The process of a vehicle entering into Copart’s system  (00:06:36) - The other side of the marketplace, who buys from Copart (00:08:16) - Selling cars whole or dismantling and how this has changed from the early days of the business (00:09:55) - An overview of Willis Johnson’s career, forming Copart and his involvement today  (00:13:26) - The financial structure of the business in the early days (00:14:59) - Copart’s differences from the competition  (00:18:42) - Biggest drivers of supply. Accidents, natural disasters, wear and tear   (00:22:12) - Cashflow flow through, the economics for Copart (00:24:08) - Associated costs with regards to the sale and movement of vehicles  (00:26:12) - Average inventory numbers throughout the year (00:27:32) - The margin profile of the business on a normalized basis (00:29:29) - A breakdown of the CapEx budget on a yearly basis (00:33:42) - The major drivers of growth for Copart  (00:37:16) - The buyback history, stated goal and philosophy on dividends (00:38:38) - Historical and potential future risks to the business   (00:42:00) - The insurance companies’ opinion of the business, net positive or net negative (00:43:37) - The framework investors use when valuing this business (00:47:17) - Lessons learned from the research and analysis of Copart  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Lululemon Athletica. The Canadian company, founded by Chip Wilson in 1998, has grown from a pop-up store in a yoga class to a $45 billion apparel business. Along the way, it pioneered the trend of athleisure and forever changed what women and men wear to work out in. To break down the business, I am joined by John Zolidis, president and founder of Quo Vadis Capital. We explore the origins of Lululemon’s direct to consumer growth strategy, how it has remained relevant in an industry known for fleeting success, and how its business model compares to apparel giants like Nike. Please enjoy this business breakdown of Lululemon.  For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:30) - (First question) - An overview of Lululemon (00:03:27) - Lululemon's success lies in branding, innovation, and community involvement (00:05:53) - Evaluating their growth story and investment potential (00:09:57) - Chip Wilson’s history and influence (00:16:53) - Management transitions, operational issues, and turnaround under new leadership (00:20:01) - Lululemon's success lies in its functional product and strong brand message (00:23:13) - Fending off competition through unique branding and customer engagement (00:26:31) - Lulu aims to grow men's business to complement women's dominance and reach (00:28:46) - China offers significant growth potential for Lululemon (00:32:35) - Focusing on vertical integration and limited wholesale channels (00:34:21) - Lulu's higher gross margins stem from product mix and DTC focus (00:37:08) - Increased capital expenditure is primarily allocated to store openings (00:40:18) - Mirror acquisition didn't meet expectations, unlikely to repeat such deals (00:42:30) - Significant risks for Lululemon's future (00:44:48) - Lessons learned from studying Lululemon Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down the vertical market software business, Toast. Toast is a software platform built specifically for restaurants. Their operating system gives restauranteurs all the tools they need to serve customers, from taking orders to allocating shifts. It was founded in 2011 and went public a decade later. Today, it’s used by nearly 80,000 restaurants across the US. To breakdown Toast, I’m joined by Will Schreiber, the co-founder and CEO of Bottle – an ecommerce platform built for subscription businesses. We cover the different ways that Toast minimises the complexities of operating a restaurant, how their deep vertical focus has helped them outcompete Square, and how much room there is for potential growth. Please enjoy this breakdown of Toast.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:01:42) - (First question) - An overview of Toast (00:04:16) - Toast's origins and pivot to Point-of-Sale (POS) solutions (00:07:35) - Convincing restaurants to switch from antiquated systems to modern POS solutions (00:09:48) - The complexity of restaurant operations requires efficient POS systems (00:13:04) - An overview of the POS revenue model (00:17:16) - Addressable market and limiting it intentionally with pricing  (00:20:04) - How their tech expertise enabled them to build a hardware and software ecosystem (00:23:23) - The Toast network effect and their potential margin profile at full scale  (00:26:19) - Their revenue mix impacts its margin profile, with transaction revenue dominating (00:27:37) - How they aim to dominate the restaurant industry with comprehensive services (00:29:59) - APIs enable integration, yet in-house features may risk partner relationships (00:33:45) - The key risks for Toast moving forward (00:38:40) - Why expanding beyond restaurants could challenge Toast (00:41:02) - Third-party integrations may erode Toast's point-of-sale dominance (00:44:36) - Lessons learned from studying Toast Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down the biggest manufacturer of chip making equipment in the world, Applied Materials. Last week, we looked at the other leading equipment maker in the semi-industry, ASML, and while that business currently has a higher market cap, Applied Materials generated more revenue and profit last year. It earned $26 billion, spent $3 billion on R&D and currently has 17,300 patents. To explore the business behind those numbers, I’m joined by Dylan Patel, Chief Analyst at SemiAnalysis. Dylan takes us through the industry’s evolution, how Applied’s business differs to ASML, and how geopolitics is a double-edged sword. Please enjoy this breakdown of Applied Materials. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:33) - (First question) - An overview of the vital and diverse semiconductor industry (00:05:11) - The shift to specialization in semiconductors (00:09:04) - Geopolitical factors that impact the sector (00:12:16) - The dynamic evolution of Applied Materials (00:15:22) - What differentiates Applied Materials from their competitors (00:18:52) - Strong margins, growth, and efficient capital allocation drive their financials  (00:22:00) - The cyclical nature of the semiconductor industry (00:24:36) - Optimizing equipment for next-gen chips through collaboration with manufacturers (00:29:09) - How Applied Materials' specialization limits equipment changes for manufacturers (00:32:54) - Contributing factors to Applied Materials' continued growth (00:36:05) - Market share varies by equipment and processes (00:39:13) - Biggest risks for Applied (00:41:23) - AI's growing demand for semiconductors (00:43:20) - Lessons learned from studying Applied Materials Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are back covering the semiconductor value chain. ASML was once a forgotten subsidiary of Philips. Today, it's one of the most important technology companies in the world. To break down ASML, I'm joined by Tom Walsh, a portfolio manager at Baillie Gifford. Tom helps explain what's happening inside an extreme ultraviolet lithography machine, and how ASML came to pioneer this technology from the Netherlands. It was a non-traditional path to say the least. This breakdown pairs very well with our breakdowns on AMD, Qualcomm and Cadence. And I'd also highlight the Founders Podcast episode #8 on the Intel Trinity. Please enjoy this breakdown of ASML. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:44) - (First question) - The ASML back story (00:06:14) - A deep dive into what semiconductors and Lithography are   (00:08:04) - Alternate business directions ASML could have pursued  (00:19:39) - How large ASML is in the industry today (00:10:37) - A look into the management team over time (00:14:03) - Moore’s Law and the key components of chip production (00:15:09) - Overall size of the machines manufactured (00:16:14) - The evolution of UV light and its important role in the advancement of Lithography  (00:20:29) - Other competing companies within the field  (00:23:10) - A detailed look into the cost of production industry wide (00:24:04) - Unlocked innovations associated with the development technology  (00:25:32) - The life cycle of a lithography machine (00:27:04) - Revenue gained from new versus refurbished machines (00:27:27) - The cyclicality of the ASML machine revenue (00:29:32) - Potential production limitations due to capacity (00:31:00) - Margin profile and how ASML sets prices (00:32:33) - What the concentration of customers looks like (00:37:00) - Reasons why an acquisition has not taken place to date (00:38:42) - He explains where investor cash flow is directed (00:40:01) - An investors perspective on ASML opportunities  (00:42:24) - How milestones in new technology are regulated and measured (00:45:40) - Potential business risks (00:49:21) - Lessons he’s learned from studying ASML Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Jesse Pujji and today we are breaking down Roku. With all the hype about social media and smartphones, it’s easy to forget that the average American still spends over 5 hours a day watching TV. And while the streaming wars get most headline attention, the battle for the user interface of smart TVs also has billions of dollars at stake. Here, Roku has emerged as an unlikely frontrunner, ahead of Samsung, Google, Amazon and other giants. To breakdown Roku, I am joined by Joe Frankenfield, Portfolio Manager at Saga Partners. We cover Roku’s history, dive into its income statement, unpack why it is the leading Smart TV platform in the US, and what the future holds for it. Please enjoy this breakdown of Roku. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 60,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show notes (00:02:35) - (First question) - What is Roku: its scale and business model (00:04:37) - The history of Roku, major milestones, and the evolution of streaming (00:09:04) - The evolution of the content landscape after the inception of Roku’s device  (00:10:59) - The steps Roku is taking to become the choice provider for consumers (00:14:10) - A breakdown of Roku’s revenue streams (00:18:04) - Advertising versus subscription models (00:18:37) - Mental models for determining the size and scope of the company  (00:19:48) - How Roku acquires new customers, how marketing differs from old-school cable acquisition methods (00:21:20) - Reasons why Roku has won the majority market share (00:28:00) - Roku’s founder Anthony Wood’s importance to the business nowadays (00:29:04) - How Roku distributes its profits (00:31:14) - Roku’s acquisitions to date and the reason why the company has not yet been acquired by a bigger player (00:32:38) - Internal and external factors that could make or break Roku’s  growth expectations over the next 5 years (00:39:09) - The lessons that can be taken from the Roku story for platform builders and investors (00:41:37) - Learn more about Roku: Media in the Digital Age | We Now Disrupt this Broadcast | The Business of Media Distribution Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are breaking down the mobile gaming industry. It was several months ago that I was reading an industry report for our Business Breakdown on Electronic Arts. I was shocked to see that mobile gaming was now 50% of the overall gaming market. What really stood out to me was just how different the business model is. You have smaller game developers operating with a completely different monetization model. It's the same industry but with drastically different strategies. To break down the industry, I'm joined by Eric Seufert. Eric spent his early career in the heart of mobile gaming, notably as a Vice President at Rovio, which developed Angry Birds. Today, Eric is the creator of Mobile Dev Memo, a publication focused on mobile monetization. For this conversation, Eric details the history and inflection points for mobile gaming, what the market structure looks like today, and how regulation and privacy have impacted the business model and strategies.  For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 35+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:24) - (First question) The year mobile gaming took off and the leaders in game development at that time (00:04:34) - The evolution of mobile game publishers since 2012   (00:08:50) - Mobile gaming business models; why “freemium” has thrived   (00:14:04) - The 95% rule for freemium; revenue per user is not as important when working truly within a freemium model    (00:21:18) - The ratio of average user retention vs great user retention; and measuring retention using DX values  (00:24:19) - Comparing game revenue before and after the decline curve of user base at the 30 day mark (00:29:23) - How much in-game advertising revenue makes up in the total revenue for a game (00:34:22) - The current business model for mobile gaming; 25 good games vs 1 viral hit game (00:37:32) - Balancing in-game advertising between outside revenue and a developer’s gaming portfolio; determining high-potential players based on their immediate in-game behavior  (00:43:17) - Eco-system development or consolidation; The enduring theme that Eric expects to stick around for the next 3-5 years (00:47:18) - The overall health of the mobile gaming market; how the Digital Markets Act in Europe may lead to the fracturing of app stores and the benefits to the industry of that Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are breaking down First Citizens Bank. I'm joined by investors with plenty of experience investing in banks - Bill Nygren and Alex Fitch of Oakmark. First Citizens is a bank with 125 years of history but they don't operate like the bulge bracket Wall Street Banks. They don't even host quarterly conference calls. They have a playbook and they execute it, and their recent acquisition of Silicon Valley Bank fell into that playbook. In this conversation, Bill and Alex offer a really unique macro and micro view on bank investing and what stands out about First Citizens. Please enjoy this breakdown of First Citizens Bank.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:47) - (First question) - A primer on investing in banks (00:09:27) - The appeal of First Citizens Bank (00:15:18) - How they leverage acquisitions, including FDIC auctions, for a competitive edge (00:21:42) - How their risk management and protective measures foster resilience and growth (00:26:22) - The significant impact of prioritizing relationship-based and specialized lending (00:28:51) - Why they adjust risk parameters during the integration with other banks (00:30:38) - How they leverage loyal customers and low costs to achieve strong profitability  (00:33:21) - Rapid fund movement during the SVB event raises market change concerns (00:36:58) - Overview of bank investment opportunities (00:42:48) - The key drivers of their business model (00:47:43) - Rebuilding relationships with former depositors to retain SVB deposits (00:51:23) - Their emphasis on relationships and strategic acquisitions (00:53:30) - How the regulatory framework plays a key role in de-risking the banking system (00:57:00) - The key risks for First Citizens moving forward (00:58:39) - Why volatile interest rate changes impacted banks (01:00:08) - Lessons learned from studying First Citizens Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Dom Cooke and today we’re breaking down PayPal. PayPal has been at the forefront of digital payments since the early days of the internet. Founded by Peter Thiel, Elon Musk and others, who have since become household names, PayPal is a payments marketplace that facilitates transactions between merchants and consumers. It found product market fit as the trusted way to send money over the internet, was quickly acquired by eBay, and had its second founding moment in 2015 when it was spun off into a public company again. The platform serves 435 million consumers and merchants and processed $1.4 trillion of payments last year. To break down the business, I’m joined by Elliot Turner, managing partner and CIO at RGA Investment Advisors. We discuss the acquisitive history behind this business, how their portfolio of brands like Braintree, Venmo, and Honey operate within the ecosystem, and why VISA threatened to go nuclear on PayPal. Please enjoy this business breakdown of PayPal.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 55,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:40) - (First question) Important milestones leading to the genesis of PayPal (00:08:18) - eBay's acquisition of PayPal and the subsequent separation (00:12:13) - The size and scope of PayPal today (00:15:08) - Where PayPal fits within the overall payments ecosystem (00:18:33) - The various transaction types involved in their business economics (00:22:03) - How PayPal protects its users against fraudulent behavior (00:24:37) - PayPal’s business strategy of getting people comfortable with using digital money (00:27:31) - The value that driving customer engagement has on the bottom line (00:31:41) - How PayPal utilizes cash within its ecosystem (00:33:15) - Why Braintree has been such a success, and who they compete with (00:38:50) - How PayPal revenue is split into cash flow and profits (00:42:40) - What enables PayPal to maintain such a large advantage over its competitors  (00:46:03) - Identifying PayPal’s main competitors and partners (00:48:30) - The dynamics of PayPal's relationship with Apple (00:50:44) - How acquisition and R&D fosters their growth and innovation   (00:55:12) - Strategic changes adopted by PayPal to recover from the COVID period (00:56:42) - Speculation on who could replace Dan Schulman as PayPal’s CEO (00:58:52) - His thoughts on potential growth opportunities for PayPal’s next CEO (01:01:40) - Potential risks that PayPal may encounter in the future (01:04:10) - Lessons learned from studying PayPal Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Matt Reustle and today we are breaking down Restoration Hardware. The average person would call RH a furniture company but RH is a company where the CEO feels as important as the business, and CEO Gary Friedman has aspirations well beyond selling furniture. To break down RH, I'm joined by Drew Cohen of Speedwell Research. You may remember Drew from our breakdown of Floor & Decor. We cover how Gary Friedman took Restoration Hardware from the brink of bankruptcy and has built it into a brand with luxury aspirations. We go deep on the business model, why has RH been leaning into this in person experience despite a massive e-commerce boom, the reality of interior designers, inventory management, and orchestrating a supply chain when you sell monstrous couches. There's a lot to talk about here. It's a fascinating business with a fascinating person sitting at the middle of it. Please enjoy this breakdown of RH.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Stretch your research budget with flexible expert calls you can trust. At a fraction of the cost of traditional expert networks, Tegus customers pay only what an expert charges – with zero markups and no confusing call credits – netting an average 70% savings. Don’t want to conduct a full hour call? Tegus offers the ability to schedule 30-minutes, an offer you won’t find anywhere else. And they don’t stop there. With white-glove custom sourcing for every project and robust compliance measures, including a dedicated 50+ analyst team that vets every call transcript, Tegus ensures your privacy and protection. As the industry innovator for qualitative insights, Tegus helps you find the right experts you need at a quality and speed that can’t be matched. For a limited time, as a listener, you can trial Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:27) - (First question) - Restoration Hardware’s relevance in the market (00:04:37) - The origin story of Restoration Hardware (00:07:58) - Insight into Gary Friedman’s backstory and his entry into RH (00:09:52) - The current RH business model and how Gary has shaped that over time  (00:17:14) - Their unique marketing funnels  (00:19:47) - Their move into the luxury brand market (00:21:24) - Explaining how the product collections are made up (00:22:32) - Updated supplier relations model  (00:25:25) - Insight into the RH sales model (00:28:04) - Overview of the membership model and how it impacts the business (00:31:42) - Peers within the industry that are using similar business models (00:32:49) - Cyclical macro exposure sales growth over time (00:34:09) - Their operations and logistics model (00:39:03) - The impact of COVID-19 (00:40:15) - Expected working capital for RH and other furniture peers (00:42:36) - Peer group average margin growth (00:45:56) - Key decisions and investments that need to go right (00:48:41) - European housing sizes and issues with American furniture (00:49:52) - Capital allocation history within RH (00:51:15) - How RH stays in style as decor tastes change over time (00:54:02) - His overall insight towards Gary’s ideas and risky business experiments (00:55:37) - His capital structure perspective for the future  (00:58:09) - How RH is moving into the luxury market as other brands move out  (00:59:09) - Lessons learned from studying Restoration Hardware Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Zack Fuss, an investor at Irenic Capital, and today we’re breaking down Fair Isaac Corporation, commonly known as FICO. FICO is best known for its consumer credit scores product, which has become a common language across the world of consumer loans and banking. Less well known, but a major piece of the business, is FICO’s software offering that helps financial businesses with fraud detection, CRM, and loan origination. Between these two offerings – scores and software – FICO earned $1.3 billion last year. To break down the business, I’m joined by Dev Kantesaria, managing partner at Valley Forge Capital Management. In going through its history and business units, Dev explains why it would be tough to design a better business model than FICO. Please enjoy this breakdown of FICO.   For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.  ----- This episode is brought to you by Tegus, the modern research platform for leading investors. Tired of running your own expert calls to get up to speed on a company? Tegus lets you ramp faster and find answers to critical questions more efficiently than any alternative method. The gold standard for research, the Tegus platform delivers unmatched access to timely, qualitative insights through the largest and most differentiated expert call transcript database. With over 55,000 transcripts spanning 22,000 public and private companies, investors can accelerate their fundamental research process by discovering highly-differentiated and reliable insights that can’t be found anywhere else in the market. As a listener, drive your next investment thesis forward with Tegus for free at tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:40) - (First question) - What attracted him to FICO as a business (00:03:31) - An overview of their key products and the value they provide (00:06:01) - How FICO collaborates and competes with credit bureaus (00:11:23) - Their ability to sustain steady growth in a cyclical environment (00:12:48) - How FICO's software offerings complement their credit score business (00:14:13) - Who their competitors are (00:23:16) - The potential competitive risks of emerging A.I. technology (00:25:57) - Why the push for VantageScore in the mortgage industry created more competition for credit bureaus  (00:27:58) - The differences between their B2C and scores businesses  (00:30:38) - A breakdown of the software side of the business and its significance (00:34:26) - All about FICO’s Falcon Fraud Manager and Triad Customer Manager  (00:39:20) - FICO’s capital-light business model in detail (00:41:59) - The aspects of the business that investors often overlook or underestimate (00:45:18) - Lessons learned from studying FICO  Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Dom Cooke and today we’re breaking down Bayern Munich. Bayern is Germany’s most successful football club and one of the world’s biggest. Most importantly, it makes a great case for being the best-run club in football. It has an enterprise value close to €3 billion, no debt, has been profitable for 3 decades, and is majority owned by fans. Plus, it has a trophy cabinet to rival any club worldwide. Bayern has won a record 32 national Bundesliga titles, including the last ten in a row, and has won the prestigious Champions League, six times. To break down the business behind the club, I’m joined by Marie Schulte-Bockum, a football journalist and Munich resident. Please enjoy this Business Breakdown of FC Bayern Munich. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- This episode is brought to you by Tegus. Tegus is the modern research platform for leading investors, and provider of Canalyst. Tired of calculating fully-diluted shares outstanding? Access every publicly-reported datapoint and industry-specific KPI through their database of over 4,000 driveable global models handbuilt by a team of sector-focused analysts, 25+ industry comp sheets, and Excel add-ins that let you use their industry-leading data in your own spreadsheets. Tegus’ models automatically update each quarter, including hard to calculate KPIs like stock-based compensation and organic growth rates, empowering investors to bypass the friction of sourcing, building and updating models. Make efficiency your competitive advantage and take back your time today. As a listener, you can trial Canalyst by Tegus for free by visiting tegus.co/patrick. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt | @domcooke Show Notes (00:02:38) - (First question) - Overview of Bayern Munich (00:05:37) - How Bayern’s been able to maintain such consistent success writ large (00:12:39) - What the 50+1 rule is and its implications for German football clubs (00:17:24) - Major differences between the Bundesliga and other European leagues (00:22:30) - What it takes to run a high performance team like Bayern Munich (00:28:39) - Driving profits and the three major revenue buckets for Bayern Munich (00:35:48) - Germany’s influence being the biggest economy in the European Union (00:38:40) - How important European football is to every major club and broadcasting revenue (00:43:20) - Whether Bayern are buyers, builders, or borrowers in regards to their team  (00:51:15) - Overview of their expenses and the size of their wage bill  (00:53:43) - What financial fair play is and how it protects football clubs (00:57:27) - How they’ve managed to cultivate one of the biggest fanbases in the world (01:02:14) - Potential risks for Bayern Munich’s continued success (01:04:18) - League-level discussions around sharing revenue equitably  (01:05:34) - Lessons for builders and investors when studying Bayern Munich’s story  Learn more about your ad choices. Visit megaphone.fm/adchoices