Today, we are breaking down Rolls-Royce. A fair warning to those expecting to hear about luxury automobiles, that division was split from this business in the 1970s. But as we discuss the history of Rolls-Royce on this episode, you will hear how the DNA of this company still ties together from its early 1900s origins.

Our guest is Graeme Forster from Orbis Investments. Graeme walks us through the core business of Rolls-Royce in the aerospace market, the evolving duopoly of the wide-body aircraft engine manufacturers, and the ups and downs of properly capturing the economic opportunity. I really appreciated Graeme's intellectual honesty in discussing Rolls, and I expect you will, too. Please enjoy this Breakdown on Rolls-Royce

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Follow us on Twitter: @JoinColossus | @ReustleMatt | @domcooke | @zbfuss 

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn About Finley

(00:04:54) Overview of Rolls-Royce

(00:08:35) History and Evolution of Rolls-Royce

(00:10:44) Rolls Royce's Aerospace and Defense Ventures

(00:11:57) Challenges and Nationalization

(00:14:43) Current Business Segments and Market Position

(00:20:57) Service Agreements and Profitability

(00:27:41) Engineering Excellence vs. Commercial Strategy

(00:31:26) The Aerospace Business Ecosystem

(00:33:11) Rolls-Royce's Margin Profile

(00:35:13) Challenges and Changes in Management

(00:37:28) Cost Structure and Revenue Optimization

(00:38:32) Engine Performance and Development

(00:40:04) Market Dynamics and Competition

(00:49:13) Future of Nuclear Reactors

(00:52:46) Capital Allocation and Management

(00:56:08) Lessons from breaking down Rolls-Royce

Today, we are replaying one of our favorites, breaking down the industrial conglomerate AMETEK. AMETEK is a great pairing with last week's episode on Jack Henry. These are two businesses with very long track records executing a playbook.

AMETEK is one of eight companies that Mark Leonard and his team at Constellation Software studied as they built their own empire. And it's one well worthy of a discussion as you'll hear. 

To break down AMETEK, I'm joined by Nael Fakhry, Co-CIO of the Osterweis Capital Management Growth and Income Strategy. Nael has spent a significant amount of time around AMETEK from the early 2000s until today. Please enjoy this breakdown on AMETEK.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com.

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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: @bizbreakdowns | @zbfuss | @ReustleMatt |

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn about Finley

(00:02:52) An Overview of Ametek

(00:04:17) Ametek's Diverse Product Range 

(00:11:09) Ametek’s history: From Bankruptcy to Industrial Dominance

(00:20:22) Ametek's Growth Model: Innovation, Acquisitions, and Global Expansion

(00:25:23) Understanding Ametek's Finances

(00:29:37) Exploring Revenue Growth and Margin Expansion

(00:30:10) Incremental Margins and Cyclical Nature of the Business

(00:31:07) Operational Excellence

(00:33:35) Decentralized Approach

(00:35:21) The Role of Acquisitions

(00:36:33) Challenges and Risks

(00:38:45) Capital Allocation

(00:45:55) Evaluating Cyclical Business Performance and Resilience

(00:48:27) Dividend Policy

(00:49:44) Valuation and Growth Sustainability

(00:53:41) - Key Lessons

Today, we are breaking down Jack Henry. If you're not familiar with it, Mark Leonard of Constellation Software once referred to this business as their ‘gold standard.’ Jack Henry is a true best in class operator within the vertical market software space. 

To break down the business, I'm joined by Bob Desmond, Portfolio Manager and Head of Claremont Global. Jack Henry sells full operating system software that powers small and mid-sized banks. Like many great vertical market software businesses, M&A has been a piece of the puzzle, but Jack Henry puts a very deliberate focus on organic growth particularly in their core product. The stock has appreciated 480x since its IPO in the mid-eighties, but more recently, has been essentially flat over the past five years, and we get into great business dynamics versus stock dynamics. Please enjoy this Breakdown of Jack Henry.

Subscribe to Colossus Review

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn About Finley

(00:05:42) Jack Henry's Business Model and Market Position

(00:06:22) Colossus Review Announcement

(00:07:04) Deep Dive into Jack Henry's Operations

(00:09:43) Jack Henry's History and Culture

(00:12:44) Customer Focus and Competitive Advantage

(00:16:23) Growth Strategy and Market Dynamics

(00:19:37) Technology and Innovation at Jack Henry

(00:24:08) Customer Integration and Market Share

(00:34:50) Revenue Uplift and Customer Benefits

(00:38:57) Financial Metrics and Margins

(00:40:35) Cash Flow and Dividend Growth

(00:41:53) Cyclicality and Resilience

(00:48:04) Fintech Competition and Partnerships

(00:53:20) Customer Base and Market Shifts

(00:56:17) Risks and Cybersecurity Concerns

(00:59:22) Valuation and Long-Term Growth

(01:02:14) Key Lessons from Jack Henry

This is Zack Fuss. Today, we are breaking down APi Group, a leading provider of life safety and specialty services to buildings and construction projects. While not necessarily a household name, APi's services play a vital role in the buildings where we live and work. 

With over 100 acquisitions under their belt, they've strategically built a business that exceeds a billion dollars in EBITDA and sports a market cap exceeding $10 billion dollars.  The evolution of the business has come via an intentional shift from one-off construction projects to a recurring revenue model, generating a steady stream of income by providing essential services like inspections and maintenance of fire systems, elevators, security cameras, and more. 

To help us break down APi, I am joined by Adam Wyden and Chadd Garcia. Adam is the founder and portfolio manager of ADW Capital, and Chadd is a portfolio manager at Ave Maria Mutual Funds. Chadd and Adam will share their insights on the company's competitive advantage and go to market strategy, including its unique decentralized management structure and its strong culture. 

Please enjoy this breakdown of APi Group.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn about Finley

(00:05:34) Overview of API Group's Business

(00:08:54) Specialty Services Division

(00:10:59) API Group's Financial Profile and Growth

(00:17:18) Company Culture and Management Structure

(00:23:12) Capital Allocation and Strategic Acquisitions

(00:29:37) Understanding Stock Gains and Share Issuance

(00:30:51) SPACs and Martin Franklin's Reputation

(00:31:19) Challenges and Successes in Acquisitions

(00:32:55) Focus on Inspection and Service Work

(00:35:04) The Chubb Acquisition and Its Impact

(00:37:10) Financial Profile and Capital Allocation

(00:42:09) Valuation and Market Perception

(00:46:47) Lessons from API Group Investment

This is Zack Fuss. Today, we are breaking down Kaspi, a leading financial technology company based in Kazakhstan best known for its super app. Kaspi plays a central role in the lives of millions of Kazakh citizens by offering a seamless ecosystem that combines payments and digital wallets, e-commerce, and financial services. 

Its success is often attributed to its ability to solve pain points specific to the Kazakh market, such as low financial inclusion and limited access to traditional banking infrastructure. To break down Kaspi, I'm joined by the company's CEO and co-founder, Mikhail Lomtadze.  Over the past 23 years, Mikhail helped to transform Kaspi from a small traditional retail bank to the dominant platform it is today. He ultimately brought Kaspi public on the London Stock Exchange in 2020, and more recently listed the business on the Nasdaq Exchange in the US. 

We discuss the unique challenges of building a super app in an emerging market, how Kaspi differentiates itself from the global tech giants, and the company's ambitions to expand its footprint beyond its current borders.

Please enjoy this Breakdown on Kaspi.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Learn about Finley

(00:06:26) Mikhail's Background and Journey

(00:08:48) Kazakhstan's Economic Landscape

(00:13:05) Caspi's Mission and Evolution

(00:15:51) Building a Super App

(00:21:53) Focus on Payments

(00:24:50) E-commerce and Marketplace Expansion

(00:28:02) Entering the Grocery Market

(00:29:51) E-commerce Growth and Grocery Expansion

(00:30:10) FinTech Synergy and Competitive Advantages

(00:33:16) Kazakhstan Market Penetration and Growth Opportunities

(00:34:20) Vertical Expansion and Service Innovation

(00:35:28) Acquisition and International Expansion

(00:38:21) Company Culture and Product Development

(00:51:37) Super App Business Model and Market Strategy

(00:55:20) Lessons From Kaspi

Today's episode is the third in our three-part miniseries on video game consoles. Here, we are breaking down Nintendo. Our guest is Ryan O'Connor, the founder of Crossroads Capital. He has a wealth of knowledge about Nintendo, and you will hear it throughout this episode. 

We discuss the history of the brand and business, including how it revitalized the industry in the 1980s, some of its strategic decisions, and how the Nintendo Switch is a new economic opportunity for the business. That ties into the console thesis, which we have discussed in the previous two episodes.

Please enjoy this Breakdown of Nintendo.

Gaming Consoles Part 1: The Thesis

Gaming Consoles Part 2: Sony

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:02:52) Episode Overview: Nintendo Breakdown

(00:03:58) Nintendo's Business Transformation

(00:06:57) The Origins of Nintendo

(00:09:14) The Video Game Crash of 1983

(00:12:18) Nintendo's Revival Strategy

(00:15:23) The NES Era and Quality Control

(00:19:57) Modern Nintendo: Digital and Third-Party Ecosystem

(00:25:40) Nintendo's Focus on Younger Generations

(00:33:36) The Shift to a Recurring Revenue Model

(00:39:43) Revenue Model of Nintendo Switch

(00:40:11) Backward Compatibility and AI Enhancements

(00:41:59) Nintendo Switch Online: The Netflix of Games

(00:45:20) Nintendo's Business Model Transformation

(00:51:24) Digital vs. Physical Game Sales

(01:01:19) Nintendo's IP and Cinematic Universe

(01:08:53) Management and Shareholder Relations

(01:14:10) Risks and Future Outlook

(01:15:40) Key Lessons from Nintendo's Evolution

This is the second episode of our multi-part series on the video game console market. If you've yet to listen to Episode One, Sia Kamalie is the founder and fund manager at Skycatcher. Join me in breaking down the video game console market and his thesis for why it's an inflecting opportunity. 

In this episode, we go micro and Sia is back to break down Sony. Sia and I spend a lot of time talking about catalysts and some of the dynamics that are happening under the hood of this massive conglomerate. Please enjoy this Breakdown on Sony.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

—--

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:04:50) Series Overview: Video Game Console Market

(00:05:43) Deep Dive: Sony's Business Segments

(00:06:43) Sony's Entertainment Powerhouses: PlayStation and Crunchyroll

(00:08:39) Sony's Strategic Shifts and Financials

(00:13:06) Crunchyroll: The Netflix of Anime

(00:14:18) Crunchyroll's Market Position and Growth Potential

(00:16:30) Synergies Between Sony's Business Lines

(00:19:09) Sony's Blockchain and NFT Ventures

(00:21:05) Sony's Financial Outlook and Growth Strategy

(00:29:12) Sony's M&A Activities and Gaming IP

(00:42:08) Emerging Markets and Gaming

(00:47:06) Sony's Management and Future Prospects

(00:48:31) Lessons From Breaking Down Sony

Today's episode is the first in a multi-part series on the video game console market. Our guest is Sia Kamalie, the founder and fund manager at Skycatcher. Skycatcher describes itself as focused on capturing asymmetry at the internet frontier, and Sia has very strong conviction that the video game console market is entering a major paradigm shift with an app store model set to hit its inflection point.

We start with an overview of the video game console market, laying out its size and current state. In episodes two and three, we explore this theme in even more depth when we cover the names most exposed to it: Sony and Nintendo. 

On these episodes, we always recommend doing your own research. We invited Sia on to lay out his thesis, so this one is particularly geared towards that investment opportunity. Please enjoy this Breakdown of the video console market.  

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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This episode is sponsored by Finley - modern debt capital management software for borrowers and lenders. Ask around and you'll find that nearly every operator or investor has experienced the operational nightmare of managing debt capital. Finley works by translating unstructured credit agreements into code, which gets all parties on the same page and helps them streamline the credit management lifecycle--think covenant reporting, interest and fee tracking, and portfolio analysis. Join the forward-thinking finance leaders, investors, and bank executives already modernizing their debt capital operations with Finley. Learn more and request your demo at finleycms.com. 

—---

Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:06:54) Overview of the Video Game Console Market

(00:14:52) The Shift to Software and Digital Purchases

(00:19:02) Nintendo and Sony: Current Trends and Future Prospects

(00:29:23) In-Game Purchases and Subscription Models

(00:33:58) Nintendo's Iterative Console Cycle

(00:34:47) Sony's Lifetime Value and Revenue

(00:35:56) Profit Margins and Software Sales

(00:40:26) Console vs. Mobile and PC Gaming

(00:47:44) The Rise of eSports

(00:50:41) Gen Z and the Future of Gaming

(00:54:28) Emerging Markets and Console Growth

(00:56:37) Valuation and Market Potential

(00:59:08) Lessons From The Video Game Console Market

This is Zack Fuss. Today, we're breaking down Arm Holdings. Arm designs the architecture powering billions of devices, from smartphones and data centers to IoT devices and automotive systems. In this episode, we'll explore Arm's unique value proposition and how it thrives as a licensing giant in a market dominated by leading-edge manufacturers.

To break down Arm, I am joined by Jay Goldberg, who is the CEO and lead analyst at D2D Advisory, a technology and strategy consultancy. We discuss its business model, the partnerships that drive its growth, and its role in enabling companies like Apple, NVIDIA, and Qualcomm. We will also unpack Arm's business history, including its acquisition by SoftBank, its failed takeover by NVIDIA, and its IPO earlier this year. Arm currently sports a $150 billion market cap with sales approaching $5 billion, a rather robust 30x revenue multiple. Please enjoy this Breakdown of Arm.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Introduction to Business Breakdowns

(00:00:52) Introduction to Arm

(00:02:27) Arm's Business Model Explained

(00:05:05) CPU vs GPU Dynamics

(00:07:33) Arm's Competitive Landscape

(00:08:52) Historical Growth and Market Expansion

(00:14:06) RISC vs CISC: Architectural Approaches

(00:18:38) Arm's Licensing and Partnership Model

(00:22:12) Arm's Chip Design Evolution

(00:22:39) The Critical Role of Software

(00:23:34) Arm's Compatibility and Ecosystem

(00:23:41) Dramatic Recent History

(00:24:12) SoftBank's Acquisition and Nvidia's Interest

(00:25:15) Nvidia's Ambitious Bet

(00:26:25) SoftBank's Wake-Up Call

(00:27:02) Arm's Market Penetration

(00:28:07) Arm's Ubiquity in Electronics

(00:29:22) Influential Figures in Arm's Success

(00:30:33) Arm's Financials

(00:33:32) Risks and Competitive Threats

(00:40:16) Future Opportunities and Lessons

(00:41:10) Conclusion and Final Thoughts

Today, we are breaking down the global luxury group Kering. You know Kering from its brands Gucci, YSL, Bottega Veneta, Balenciaga, and the list goes on. It's a luxury house similar to LVMH, but LVMH over the past five years is up over 40% and Kering is down over 60%.

To break down Kering, I am joined by Jonathan Eng, portfolio manager at Causeway. We cover the owners and operators of Kering, the Pinault family. We also discuss wholesale distribution versus retail distribution and brand margin profiles. But Kering's core brand, Gucci, is different from much of what you see in luxury, and we spent a significant amount of time diving into it. What makes Gucci more cyclical than understated luxury? Where do we stand with Gucci today? And how does Jon think about all of this as an investor tapping into his historical context in the space? Please enjoy this breakdown of Kering.

For the full show notes, transcript, and links to the best content to learn more, check out the episode page here.

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Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes.

Editing and post-production work for this episode was provided by The Podcast Consultant (https://thepodcastconsultant.com).

Show Notes

(00:00:00) Welcome to Business Breakdowns

(00:00:53) Overview of Kering and Its Brands

(00:02:13) Kering's Business Strategy and Challenges

(00:05:02) Historical Context and Family Influence

(00:07:09) Comparing Kering and LVMH

(00:10:27) Financial Performance and Market Dynamics

(00:18:05) Impact of Creative Directors and Brand Evolution

(00:21:28) Modern Analytical Approaches in Luxury Market

(00:23:29) Exploring Kering's Development Centers

(00:24:36) Decentralized Decision-Making in Luxury Brands

(00:25:04) Wholesale vs. Retail: Control and Margins

(00:27:33) Strategic Store Locations and Investments

(00:28:51) Geographical Brand Preferences

(00:30:19) Balenciaga's Advertising Fallout

(00:33:46) M&A Landscape and Future Growth

(00:37:41) Valuation and Market Position

(00:43:06) Operational Gearing and Risks

(00:43:58) Key Lessons from Studying Kering