Episode 128: CSL and Reece Blame WFH for Woes, SiteMinder Deep Dive, Qantas Roars, Nvidia Delivers (for now), Blackbird, Sydney v Melbourne and KPop Demon Hunters
The guys destroy CSL and Reece's WFH excuse, Adir breaks down SiteMinder's surge, Qantas' record result, Nvidia's grey skies looming, Blackbird's class of 2015, Sydney v Melbourne, and KPop.
The Contrarians catchup
Happy 16th birthday to Adir’s daughter! (She reads the newsletter).
If you listened to the midweek “Ask Us Anything” episode, you might still be recovering from the news that Adir deleted LinkedIn from his phone. Adam: “I think Microsoft had a profit downgrade.”
Some casual Adir wisdom: “The best relationships are those where each party thinks they’re lucky to have the other person.”
The guys asked LinkedIn, “How often should we feature a guest on the podcast?” with “Every month or two” dominating with 83% of votes.
Adir discusses Monopoly For Millennials, a modernised version where fun destinations and experiences replace traditional real estate.
Adam’s latest quiz (Adir: “Oh, God”): Countries that shop online the most as a percentage of sales. Listen in for the full order (Australia is #12).
Adir’s advice on Nvidia:” “Short Nvidia, long the rest of the market. Whatever the index falls, Nvidia is going to fall much more when the crash comes. This party can't continue forever on AI chip purchasing, so that has to come to an end.”
Blackbird's class of 2015
Blackbird, a decade‑old Australian venture capital fund, has informed investors that one of its oldest funds now faces lower-than-expected returns, just a year before its scheduled payout.
The decline stems from significant write‑downs in its portfolio, particularly affecting promising space start‑ups. This setback has delayed and diminished expected investor returns, as valuations adjust downward across key investments.
Adir: “If what you're getting for your risk is 7.5% or less over 10 years, then obviously that's not a sustainable industry. The VC returns in this country have been driven by Canva. Nothing else matters.”
Adam: “I find it weird that you're being paid to get market performance. I don't mind paying more on the upside. I'd rather pay 30% above. Pretty much every VC in the last 10 years has struggled to get any money out. So now is probably the best time to invest in VC because now it's off. You don't want to be investing in hot assets.”
CSL and Reece blame WFH for woes
CSL chairman Brian McNamee criticised Victoria’s work‑from‑home culture as a contributing factor to R&D setbacks in its Melbourne labs, saying there is “something fundamentally wrong” with how innovation is being executed locally. He argued that remote work hindered collaboration and productivity, impacting the team’s ability to translate scientific breakthroughs into treatments.
Adir: “And what's the most absurd part about this whole story? This government's gonna win the next election. If you were to over promise and under deliver to the extent that the Victorian government has, you would not be the CEO anymore, you would be out. Why doesn't that happen in politics? Because there are so many options for investors of where they can put their money, but for voters, they've only got two options.”
Adir: “What I don't get is them standing up and blaming work from home. This is the most pathetic CEO and chairman behaviour. If you want people to work from the office, make them work from the office. Don't blame moron politicians, you have control over your business.”
The Contrarians were right about inflation
Australia’s annual inflation unexpectedly surged to 2.8% in July - up from 1.9% the previous month - primarily driven by a 13% spike in electricity costs, as energy rebates expired and new tariffs began. The sharp increase has reduced expectations for an imminent Reserve Bank interest-rate cut.
Adir: “Energy policy in Australia has been unbelievably successful in alienating every single possible constituency. If you want clean energy, you're angry because it's too slow. If you want nuclear, you won't even get into conversation. If you want coal and gas, you're alienated. If you want cheap energy, forget about that. Absolutely nobody is happy with energy policy in Australia.”
Qantas roars
Qantas reported a 15% lift in underlying pre-tax profit to $2.39B in FY25, fuelled by strong domestic and international travel demand. Jetstar’s record earnings and resilient passenger appetite drove the result, reinforcing Qantas’ financial growth momentum despite higher operating costs.
Adam: “I don't think there's a better example of switching costs for a consumer business than this in Australia.”
Adir: “You had an airline that was okay before COVID, but they had this competitor in Virgin. Then COVID came, and the airline industry stopped, there was no travel. That should hurt an airline badly, but the Australian taxpayer solved that problem for Qantas. So they didn't have to suffer the down. Then the up came tearing back and they got all of the benefit of that up. And in the meantime, that competitor went broke and relaunched targeting a different kind of customer. I mean, it's been a dream six years for Qantas.”
SiteMinder deep dive
SiteMinder shares jumped 26% after FY25 free cash flow of $4.7M far outstripped estimates, marking its first positive year. Revenue rose 18% to $224M, while losses narrowed to $24.5M. Underlying EBITDA surged to $14.3M, ARR hit $273M, and hotel subscribers grew 13% to 50,000, highlighting strong momentum.
Adir: “In software businesses, a significant chunk of your employees are doing development. Not research and development, which you're not supposed to capitalise, but writing software that is creating an asset to monetise. Instead of just saying that's an expense, you put it on the balance sheet, it becomes an asset, and then over a few years, you amortise it as an expense each year, as if it was a physical asset being worn down with wear and tear.”
The Contrarians get all contrarian on us as they go deep into whether SiteMinder properly calculates their underlying EBITDA.
Five other stories worth following:
Eighteen major ASX-listed companies are launching over $6B in share repurchases this month, more than double last year’s $2.8B, marking one of the most aggressive rounds of capital return to shareholders in recent memory.
In Q2, Nvidia posted record revenue of US$46.7B, a 56% year‑on‑year jump, driven by AI data centre demand. Notably, two unnamed clients, “Customer A” and “Customer B,” contributed 23% and 16% respectively, underscoring potential revenue concentration risks.
After rolling out voice-AI ordering at over 500 US drive‑thru options, Taco Bell is now reassessing the strategy. Viral pranks, like gimmicky “18,000 water cups” orders, and customer frustrations have prompted a more selective and hybrid use of AI where it adds value.
Following the financial windfall from the British & Irish Lions Tour, Rugby Australia is now debt-free and financially positioned to fund operations through to the 2027 World Cup. Attention is shifting to establishing a sustainable “Future Fund” for long-term rugby development.
High-quality AI tools are spawning thousands of digital avatars, “AI influencers”, offering brands scalable, cost-effective marketing alternatives. The creator economy, valued at around US$250B in 2023, is being reshaped. Yet questions—around ethics, authenticity, and the future of real human influence—remain.