Latest / What the Flux / Macquarie profits from oil shock | Google replaces Fitbit just 5 years after acquisition | Uber Australia rides its profits overseas

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Macquarie profits from oil shock | Google replaces Fitbit just 5 years after acquisition | Uber Australia rides its profits overseas · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brett and I'm Justin and it's Monday, the eleventh
• 0:09
  Speaker 2: of May week.
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  Speaker 1: Last Friday, we spoke about game stops fifty five point
• 0:12
  Speaker 1: five billion dollar bid for eBay, and then game Stops
• 0:15
  Speaker 1: CEO posted on x that he was selling stuff on
• 0:18
  Speaker 1: eBay to pay for eBay. I think baseball, trading cards
• 0:20
  Speaker 1: and video games. And it seems like eBay was so
• 0:23
  Speaker 1: angry by the offer and the tweets they've banned him
• 0:25
  Speaker 1: from the platform altogether.
• 0:26
  Speaker 2: This is getting personal ammed. Did you know ETFs have
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  Speaker 2: become one of the most popular investments for young Australians
• 0:32
  Speaker 2: to get into the share market, But active ETFs either
• 0:35
  Speaker 2: way that Australians can beat the market with specific investments
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  Speaker 2: in different industries. It might be tech, it might be
• 0:40
  Speaker 2: a different geography. In the Flux Academy this month, we
• 0:42
  Speaker 2: break down the rise of active ETFs and what it
• 0:45
  Speaker 2: actually means. So if you want to learn more about
• 0:47
  Speaker 2: active atfs that make sure to download the Flux app
• 0:49
  Speaker 2: and check out the Academy this month.
• 0:50
  Speaker 1: Three phenomenal stories Today Josie boy Let's do it for
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  Speaker 1: our first. Macquarie Group has posted a four point eighty
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  Speaker 1: five billion dollar annual profit, up thirty percent, after it
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  Speaker 1: turned the Iran oil shock into one of the biggest
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  Speaker 1: windfalls in the bank's history.
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  Speaker 2: Never let a global crisis go to waste, speed Man
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  Speaker 2: McCrary certainly didn't, so tell me all So.
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  Speaker 1: McQuary is one of Australia's most powerful investment and retail
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  Speaker 1: banking groups. Yep, it manages infrastructure, it trades commodities, and
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  Speaker 1: it lends money globally across more than thirty countries. And
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  Speaker 1: lately it's also been trying to become your friendly neighborhood
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  Speaker 1: bank with its aggressive chasing of mortgages and savings accounts.
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  Speaker 2: And now McQuary's announced a four point eighty five billion
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  Speaker 2: dollar and your profit, which is their second highest.
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  Speaker 1: Ever, up thirty percent from last year.
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  Speaker 2: And I'm guessing granny savings account wasn't the hero here.
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  Speaker 1: I No, the big driver was energy trading.
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  Speaker 2: Yes, their commodities team saw a forty nine percent jump
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  Speaker 2: in profit to four point two two billion dollars.
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  Speaker 1: You see, joys boit. When Iran closed a straight up
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  Speaker 1: homes suddenly every energy importer in Europe was scrambling for
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  Speaker 1: gas and McQuary actually owns physical gas storage in Europe,
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  Speaker 1: and some days during this period McQuary was pulling tens
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  Speaker 1: of millions in profit in a single day.
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  Speaker 2: Wow. But here' where it gets juicy, because in recent years,
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  Speaker 2: McQuary's been trying very hard to read ran itself as
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  Speaker 2: a stable and predictable business.
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  Speaker 1: That's why it's been building steadier businesses like retail banking
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  Speaker 1: and infrastructure asset management.
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  Speaker 2: So despite these strong results, it's a bit of a
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  Speaker 2: detour from the reliable model that mcquarie's attempted to build.
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  Speaker 1: So what's the key learning here?
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  Speaker 2: Boring income is often the most valuable income in the world.
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  Speaker 1: Some businesses generate steady, predictable cash float like.
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  Speaker 2: A toll road that collects more or less the same
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  Speaker 2: fees every day, regardless of what's happening in the world.
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  Speaker 1: Whereas other income can be a little bit more volatile,
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  Speaker 1: like day trading oil and stocks.
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  Speaker 2: It can be massive when it hits, but you can't
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  Speaker 2: exactly pencil in into next year's budget spreadsheet.
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  Speaker 1: And this year more than fifty percent of McQuary's profit
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  Speaker 1: came from that volatile source, the energy trading, and also
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  Speaker 1: some asset sales as well.
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  Speaker 2: Which is funny because mccrary's CEO spent years trying to
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  Speaker 2: reduce exactly that kind of unpredictability.
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  Speaker 1: So yes, the headlines look quite incredible, but.
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  Speaker 2: For investors it slightly ruins the West Stable Now storyline
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  Speaker 2: they've been pitching for our second story.
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  Speaker 1: Google has quietly killed off the two point one billion
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  Speaker 1: dollar bit bit app and replace it with an AI
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  Speaker 1: health coach app for all devices.
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  Speaker 2: Two point one bill is kind of a rounding era
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  Speaker 2: for Google. So what's going on here?
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  Speaker 1: So Google is one of the world's most valuable companies,
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  Speaker 1: generating over three hundred and fifty billion bucks in revenue
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  Speaker 1: annually across search.
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  Speaker 2: And advertising and cloud and hardware and judgeboy.
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  Speaker 1: Google paid two point one bill for Fitbit back in
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  Speaker 1: twenty twenty one.
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  Speaker 2: After nearly two years of regulators stressing out about what
• 3:20
  Speaker 2: Google would do with all of that health data.
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  Speaker 1: But now, after all of that, Google has announced that
• 3:24
  Speaker 1: the fitbit app is gone and it will be replaced
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  Speaker 1: by the all new Google Health app.
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  Speaker 2: And like many other wellness apps, it gives you personalized
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  Speaker 2: weekly fitness plans. It's got health record summaries, sleep trend analysis.
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  Speaker 1: And a chatbot that can talk you through your biometrics.
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  Speaker 2: But here's the thing, b Man. Google is already behind
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  Speaker 2: Apple and Samsung and Jaomi and Huawei in the global
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  Speaker 2: smart watch.
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  Speaker 1: Market, or as we like to call it, the wrist
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  Speaker 1: computer market. So rather than fighting a hardware war it's
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  Speaker 1: already losing, Google wants to become the AI coach running
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  Speaker 1: on top of every other device because the wellness space
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  Speaker 1: and the longevity space are both growing very fast, fast.
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  Speaker 2: Than your QUARTERSOL levels after checking your screen.
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  Speaker 1: Time report, uh huh, and Google wants a slice.
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  Speaker 2: So what is the key learning here?
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  Speaker 1: Humans have always wanted to live forever, and now there's
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  Speaker 1: a billion dollar industry actually trying to make that happen.
• 4:10
  Speaker 2: Be Man. Longevity has become the latest craze in health.
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  Speaker 1: Yep, not just living longer, but looking good, tracking your
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  Speaker 1: rem sleep and taking fourteen supplements while doing it.
• 4:19
  Speaker 2: And be Man, we know the current live forever start
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  Speaker 2: A pack includes biohacking, personalized medicine, AI health coaching, diagnostics,
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  Speaker 2: CHO therapy IV drips, as.
• 4:27
  Speaker 1: We like to call it, the I Want to Live
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  Speaker 1: to one hundred and fifty economy.
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  Speaker 2: In fact, be Man, two hundred and thirty million people
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  Speaker 2: turn to chat Chevy take the health questions every single week.
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  Speaker 1: So jaz boy, it's no surprise that the longevity focus
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  Speaker 1: market is forecast to hit six hundred and ten billion
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  Speaker 1: bucks this year.
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  Speaker 2: Keep in mind, this is a segment that barely had
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  Speaker 2: a name five years ago.
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  Speaker 1: And the trends driving it aren't going away.
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  Speaker 2: And that's why every major tech company is piling in
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  Speaker 2: right now.
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  Speaker 1: And Google is willing to move past its two point
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  Speaker 1: one billion dollar investment in fitbit if it means getting
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  Speaker 1: ahead in the longevity space.
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  Speaker 2: For our third and final story, Uber made two point
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  Speaker 2: one billion dollars in gross profit in Australia last year
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  Speaker 2: and somehow ended up with just under nine mil in
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  Speaker 2: net profit.
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  Speaker 1: Somehow, these maths are just not adding up, juzzy boy,
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  Speaker 1: So what's going on hereky?
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  Speaker 2: So? Uber's the og of ride sharing and food delivery services.
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  Speaker 1: We all know the Uber stories starred in San Francisco.
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  Speaker 1: Uber went global very quickly, launched in Australia in twenty twelve, and.
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  Speaker 2: Since then, Uber's become the dominant player in Australia's ride
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  Speaker 2: sharing and food delivery scene. Thinking about all those ads
• 5:26
  Speaker 2: with Kim Kardashier and Magda Zubanski, Share, Rebel, Wilson and more.
• 5:29
  Speaker 1: Don't forget the Wiggles, Juzzy Boy huge part of the play.
• 5:32
  Speaker 2: Yeah you can't forget them and the Man. Last year,
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  Speaker 2: Australian spent a massive fourteen and a half billion dollars
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  Speaker 2: with Uber.
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  Speaker 1: That's rides, Uber e, it's orders, subscriptions, late night I
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  Speaker 1: deserve a little treat Berger.
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  Speaker 2: And from that mountain of spending, Uber generated over two
• 5:45
  Speaker 2: point one billion dollars in gross profit.
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  Speaker 1: Except then somehow a lot of it disappeared.
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  Speaker 2: Uber supposedly spent over two billion dollars on administrative expenses.
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  Speaker 1: Yep. So Uber Australia's final on that profit for the
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  Speaker 1: year just eight point seven million bucks.
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  Speaker 2: Wow. So what is key learning here?
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  Speaker 1: The real money in business isn't made where the sales happen.
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  Speaker 1: It's often made where the profits and up.
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  Speaker 2: Gross profit is what's left after the direct cost of
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  Speaker 2: delivering your product or service.
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  Speaker 1: Now, for Uber, that's the money left after paying drivers
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  Speaker 1: delivery partners.
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  Speaker 2: And that was two point one billion dollars last year.
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  Speaker 2: For that.
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  Speaker 1: The net profit is obviously what's left after everything else
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  Speaker 1: gets deducted.
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  Speaker 2: Think admenfees, marketing software, expenses, legal costs.
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  Speaker 1: And this is where the plot thickens because the biggest
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  Speaker 1: expense inside Uber Australia was these admin costs.
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  Speaker 2: Yeah, one point eight five billion dollars in service feed
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  Speaker 2: it will pay two related overseas Uber entities.
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  Speaker 1: In other words, Uber Australia made money then paid a
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  Speaker 1: huge chunk of it to other parts of Uber's global empire.
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  Speaker 2: Also known as transfer pricing.
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  Speaker 1: Which is why Uber reportedly paid just under fifteen million
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  Speaker 1: income tax.
• 6:41
  Speaker 2: Wow fx am if you're looking to learn more about
• 6:43
  Speaker 2: investing in the share market and winning prize at the
• 6:45
  Speaker 2: same time, The Flex Academy this month is all about
• 6:48
  Speaker 2: the rise in active ETFs. Make sure to download the
• 6:50
  Speaker 2: Flex app and check out the Academy this month.
• 6:52
  Speaker 1: Thanks for listening and we'll see you on Wednesday.