Episode 122: Atlassian Gets Smashed, Behind the Scenes at the Catapult AGM, Public Servants Flying Business Class, Why Price Fixing Never Works, Lorikeet Raises and DroneShield
The guys discuss Atlassian's latest share price decline, Adir goes deep on running an AGM, public servants at the point end of planes, the case against fixing prices, and Aussie AI startup Lorikeet.
The Contrarians catchup
Catapult (ASX:CAT) had their AGM last week, which was “smooth sailing with nothing controversial” and the company’s first since cracking the ASX300. Approaching the ASX200, Adir explains how they calculate who makes the cut.
Adir discusses how Catapult transitioned from giving employees options to giving them shares - “We try to make them a bit more of a long-term incentive anyway, because I think incentivising people for short-term things is not the best.”
Adir read a couple books about German history, as well as ‘The Ordinary Business of Life’, Roger Backhouse. “And if that title is not bad enough, the subtitle is something like the history of economics over the last 2000 years.”
Adir on capitalism: “There is no better system than capitalism today, but it has essentially been elevated to a religion in the US, like most free market economies, and it is not good enough. It's not fair enough and just enough to be elevated to a religion. We should be very aware of its weaknesses and the fundamental injustices built into it.”
No bonus status credits for public servants
The Finance Department has warned airlines not to offer double status credit promotions to public servants after a review found some delayed bookings to take advantage of Qantas deals, skewing travel away from Virgin.
The $500M annual government travel review upheld status credit eligibility but urged lowest-cost fares. Virgin’s lobbying to ban credits failed, hurting its share of government travel, which dropped to 9%. MPs remain eligible, and business class travel was not banned despite high relative spend.
Adir: “What I thought you were going to rant about is that senior public servants have avoided the requirement to fly economy on flights less than three hours.”
Adam: “There was a rare example of a gun public servant who I tried to hire at one point, and the comparable role with us was a low $200K job. We're not huge payers across the board, but we're consistent as in there's not a huge gap between our lowest and our highest. Halfway through the conversation, she says she’s on $500K. This is the Victorian public service and we wonder why Victoria's bankrupt.”
DroneShield’s opportunity
Adir: “Where the world is today, Western militaries are in the learning phase of what can fight against drones, which are definitely the emerging dominant cheap weapon of the battlefield. And they're testing all sorts of different technologies, some are about detecting drones, some about protecting against drones, individual drones, swarms of drones, etc. This is an area that is in so much flux at the moment. I think it's going to be huge and it left me wondering if DroneShield will end up being the dominant player at the end of all of this.”
Atlassian gets smashed
Atlassian’s annual revenue rose 20% to $US5.2B ($7.9B) while net losses narrowed from $US300.5M to $US256.7M, bringing total losses since 2015 to $US3.5M. Shares fell 8% after news president Anu Bharadwaj will depart.
CEO Mike Cannon-Brookes said AI adoption is a “huge tailwind,” boosting premium plan upgrades, and forecast 18% revenue growth despite investor concerns and recent AI-driven job cuts.
Adir: “Can you get the next 20% growth without an increase of more than $300M in expenses? Now, some of that expense is going to be just variable costs. I think they could make this transition and my gut feel for the reason this transition has not been made to date is because of what we've discussed previously, that the interim step would be extremely destructive to valuation because the market would have to change its perception of what this business is, going from a blue sky business to a cash generator business or a profit generator.”
Adam: “It just beggars belief that these valuations are even at $44B. I know it's dropped a lot, but it's still nonsensical for a business that has lost $4B over the last seven years. I don't know why they're increasing R&D - the product isn't getting any better.”
AI agent boom powers Lorikeet to $200M valuation
Sydney AI start-up Lorikeet has doubled its valuation to over $200M in a $54M funding round led by US firm QED Investors, with backing from Canva’s founders and major VCs. Founded by ex-Stripe and Google staff, Lorikeet’s AI concierges outperform rivals like Decagon and Intercom, winning major global deals.
Revenue has grown 10x since launch last October, with two-thirds from overseas. Funds will fuel hiring, product development, and aggressive competition in the expanding enterprise AI market.
Adir: “It'll be great to watch this play out and it would be fantastic to have another massive Aussie startup winner globally.”
Five other stories worth following:
EY found 34% of 500 senior leaders had tested agentic AI, but only 14% had fully implemented it. Barriers include cybersecurity (35%), data privacy (30%), lack of regulation (21%), and company policy gaps (21%). Sixty-four percent cited fears of AI replacing humans as a broader adoption obstacle.
HistoSonics, valued at $2.25B with new funding including from Jeff Bezos, develops histotripsy — a focused ultrasound using short, high-amplitude pulses to create a “bubble cloud” that mechanically destroys and liquefies targeted liver tumours. The non-invasive treatment aims to provide a novel alternative for liver cancer therapy.
Instagram’s new opt-in location-sharing map drew privacy backlash. Users must manually enable sharing or tag locations, with “double consent” built in. Privacy settings allow users to block all sharing and avoid tagging locations entirely. Sharing locations and then removing access will continue to break hearts.
FORT Robotics raised $18.9M to expand its robotic safety platform. Its dynamic controller can send a halt command to up to 30 machines simultaneously, aimed at preventing accidents in robot-assisted workplaces. CEO Samuel Reeves stressed the growing importance of functional safety as automation becomes more prevalent.
Drones are increasingly central to modern warfare, with the Russia-Ukraine conflict highlighting their role. The US aims to reduce reliance on Chinese-made components, but China dominates supply chains. Skydio and Unusual Machines are pushing domestic production, though supply issues and performance challenges persist in real-world combat situations.