Latest / What the Flux / Xero's revenue numbers add up | Webjet explores demerger | Nvidia's in an AI gold rush

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Xero's revenue numbers add up | Webjet explores demerger | Nvidia's in an AI gold rush · What the Flux

• 0:05
  Speaker 1: This is what the flucks.
• 0:06
  Speaker 2: I'm justin and I'm harsh deep and it's Friday, the
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  Speaker 2: twenty fourth of May.
• 0:10
  Speaker 1: A g When BHP first tried to acquire Anglo American
• 0:13
  Speaker 1: for sixty billion dollars, it is clearly a mega low
• 0:17
  Speaker 1: ball opper. Oh yeah, because now they've made a third
• 0:19
  Speaker 1: bid of seventy three point nine billion bucks and Anglo
• 0:22
  Speaker 1: American has still rejected the opper. Ouch, I got a fee.
• 0:25
  Speaker 1: BHP may just come back for one more time. Get
• 0:28
  Speaker 1: it still done?
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  Speaker 2: I guess we'll find out. As part of the federal budget,
• 0:31
  Speaker 2: every household will get a what discount on the energy bills?
• 0:35
  Speaker 1: Good question?
• 0:36
  Speaker 2: If you knew it was three hundred dollars, then you
• 0:38
  Speaker 2: would have been in a chance to win our prize
• 0:40
  Speaker 2: as part of our weekly game Twisteps. And it's on
• 0:43
  Speaker 2: again today, so flax fam make sure to download the
• 0:45
  Speaker 2: Flux app and have your notifications turned on because it
• 0:48
  Speaker 2: is dropping today at a random time.
• 0:51
  Speaker 1: Three energetic stories today, HD, let's get into it for
• 0:54
  Speaker 1: our first zero. The accounting software platform has seen its
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  Speaker 1: revenue spike more than twenty twenty two percent, but AI
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  Speaker 1: is not going to revolutionize this business.
• 1:04
  Speaker 2: What do you mean, I thought AI was a problem
• 1:06
  Speaker 2: and solution to all corporate world problems these days, tell
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  Speaker 2: me more so.
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  Speaker 1: Zero is the new Zealand based accounting software that launched
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  Speaker 1: back in two thousand and six.
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  Speaker 2: It took on the likes of myob and Quicken in
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  Speaker 2: the accounting space by building a software that lived in
• 1:20
  Speaker 2: the cloud.
• 1:20
  Speaker 1: Sounds pretty basic these days, but back then the cloud
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  Speaker 1: was just when you flew a plane and nothing to
• 1:25
  Speaker 1: do with tech.
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  Speaker 2: But since listing on the AX in twenty twelve, Zero
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  Speaker 2: has grown its market value by two thousand, eight hundred
• 1:32
  Speaker 2: and thirty one percent.
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  Speaker 1: At now, HD zero is continuing on its growth path
• 1:36
  Speaker 1: after announcing its revenue jump twenty two percent for the
• 1:39
  Speaker 1: year to March roll.
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  Speaker 2: On top of that, its number of monthly churned subscribers
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  Speaker 2: was less than one percent. But then came the interesting part.
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  Speaker 2: Go on, Well, the CEO was asked about the potential
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  Speaker 2: for generative AI in the Zero business and she said
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  Speaker 2: she didn't want to use the word AI just for the.
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  Speaker 1: Sake of it, and AI can't yet do your taxes.
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  Speaker 2: But it goes against the grain of many other CEOs
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  Speaker 2: who were dropping generative AI just to ride.
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  Speaker 1: The HIVE, So what is the key learning here?
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  Speaker 2: When it comes to new technologies, sometimes it's hard to
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  Speaker 2: distinguish between visionary leaders and visionary sales pitches HG.
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  Speaker 1: Many CEOs right now are aligning with the next Big
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  Speaker 1: Thing AI.
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  Speaker 2: And that's even if the technology isn't yet a core
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  Speaker 2: part of the business.
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  Speaker 1: Get this, AHD. In the three months between December and
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  Speaker 1: March this year, one hundred and seventy nine of the
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  Speaker 1: top five hundred public companies in the US mentioned AI
• 2:28
  Speaker 1: as part of their earnings update.
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  Speaker 2: And the average number of times AI was mentioned on
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  Speaker 2: their earnings call was thirteen and HG.
• 2:34
  Speaker 1: Often companies can see a significant short term increase in
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  Speaker 1: their market value and investor interest just by mentioning this
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  Speaker 1: next big thing AI. YEP.
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  Speaker 2: The S and P five hundred companies that mention AI
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  Speaker 2: on their earnings call have seen a better average stock
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  Speaker 2: price performance over the past twelve month compared.
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  Speaker 1: To those who didn't mention AI on the earnings calls.
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  Speaker 2: But if the promise of AI isn't implemented, it can
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  Speaker 2: lead to distrust amongst investors.
• 2:58
  Speaker 1: For our second story, web Jet, the online travel bookings company,
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  Speaker 1: has announced a record net profit after tax and now
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  Speaker 1: it's thinking about breaking up with itself.
• 3:07
  Speaker 2: Wow. Talk about a comeback post COVID. Nobody knews that
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  Speaker 2: even survived, tell me.
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  Speaker 1: More so she. Webjet is the Australian online travel agency
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  Speaker 1: that started back in nineteen ninety eight.
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  Speaker 2: It's been known to help consumers compare and book flights, hotels,
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  Speaker 2: and car hire, but.
• 3:22
  Speaker 1: During the COVID years, Webjet's consumer business got whacked.
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  Speaker 2: It was forced to raise more than seven hundred and
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  Speaker 2: fifty million dollars in shares and convertible notes after April
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  Speaker 2: twenty twenty because travel went to a complete holt.
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  Speaker 1: But at the same time it began building up the
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  Speaker 1: B to B side of its business called webbeds.
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  Speaker 2: This is where it acts as a room inventory conduit
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  Speaker 2: between hotels and customers like tool operators and.
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  Speaker 1: As she now. Webjets announced a net profit of over
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  Speaker 1: one hundred and twenty eight million bucks wow twelve months
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  Speaker 1: to March this year.
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  Speaker 2: That's almost double its net profit from the year before.
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  Speaker 1: And its consumer business is kind of now the forgotten
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  Speaker 1: child because it's B to B platform earned three times
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  Speaker 1: that of the B two C unit, and.
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  Speaker 2: Now webjet is talking about splitting its business into two
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  Speaker 2: separate ASX listed companies.
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  Speaker 1: Tell me, I she what is the key learning here?
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  Speaker 2: Sometimes the sum of a company's parts can be greater
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  Speaker 2: than the.
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  Speaker 1: Whole, especially when those parts operate under fundamentally different business models.
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  Speaker 2: You see, while both of Webjet's businesses are in the
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  Speaker 2: travel industry, it's B to B business. Webbeds serves a global.
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  Speaker 1: Market and that's got a huge growth trajectory and a
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  Speaker 1: much larger addressable market.
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  Speaker 2: As opposed to webjet and trip Ninja, which largely serve
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  Speaker 2: the Australian consumer market.
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  Speaker 1: And as when these two businesses are combined under the
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  Speaker 1: one ASX listed umbrella, it can dilute their overall valuation.
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  Speaker 2: That's why splitting them into two distinct entities could unlock
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  Speaker 2: significant value for both businesses, but particularly Webbeds.
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  Speaker 1: For our third and final story, in Videos released its
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  Speaker 1: first quarter results with an astronomical jump in profit of
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  Speaker 1: a six hundred.
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  Speaker 2: That just doesn't sound real, tell us what's going on here?
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  Speaker 1: Just okay? Well? In Video has been one of the
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  Speaker 1: most t talked about tech companies in the last year
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  Speaker 1: thanks to chips. Computer chips.
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  Speaker 2: That is, in Video started with manufacturing game chips, but
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  Speaker 2: ten years ago decided to dabble in AI chips.
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  Speaker 1: And boy boy did that bet payoff, because since then
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  Speaker 1: it's become the biggest chip maker worldwide and now does.
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  Speaker 2: In Videos just announced its first quarter results which smashed expectations.
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  Speaker 1: We're talking to jumping profit from just over two billion
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  Speaker 1: US dollars in the same period last year to almost
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  Speaker 1: fifteen billion.
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  Speaker 2: US dollars just to casual six hundred and twenty eight
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  Speaker 2: percent increased and no big deal.
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  Speaker 1: But with the AI boom still booming, in Vidia has
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  Speaker 1: been cashing in on the enormous demand for AI data
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  Speaker 1: centers and therefore it's AI chips.
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  Speaker 2: In fact, the major tech giants Amazon, Google, Meta, and
• 5:41
  Speaker 2: Microsoft have all been spending big on data centers today
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  Speaker 2: and plan to spend more in the near future.
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  Speaker 1: And while in Video's manufacturing is still catching up to
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  Speaker 1: the chip demand, it's got a toe the line between
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  Speaker 1: matching demand and overshooting.
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  Speaker 2: It the old Bullwep effect.
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  Speaker 1: Yep, So what is the key learning here?
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  Speaker 2: The Bullwep effect is when the supply of a PRODUCTDUT
• 6:00
  Speaker 2: is so short that customers on the wait list over
• 6:03
  Speaker 2: order the products.
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  Speaker 1: And right now many tech companies are waiting for big
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  Speaker 1: shipments of Nvidia's AI chips.
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  Speaker 2: But once AI chips supply and demand a more imbalance,
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  Speaker 2: buyers may get more chips than they.
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  Speaker 1: Need and then they pull back just as new AI
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  Speaker 1: chip makers are producing even more products.
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  Speaker 2: So AI chip makers need to strike the right balance
• 6:21
  Speaker 2: between capitalizing on high demand and also avoid excess inventory.
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  Speaker 1: Kind of reminds me of what's happening in the electric
• 6:27
  Speaker 1: vehicles industry, Foxman. If you want to win fifty bucks
• 6:29
  Speaker 1: to kick off your weekend, make sure you download the
• 6:32
  Speaker 1: Flux app and play our weekly game, quick Sticks. It'll
• 6:34
  Speaker 1: be the best start of the weekend you could possibly have.
• 6:36
  Speaker 2: Thanks for listening and we'll see you on Monday.