Speedwell Research's News Update and Weekly Recap
New Appfolio Report, Meta & Coupang Dialogue, Perimeter Solutions Business Recap, and Airbnb Podcast Feature
Welcome to Speedwell Research’s Newsletter. We write about business and investing. Our paid research product can be found at SpeedwellResearch.com. You can learn more about us here.
This is a weekly recap, where we summarize recent content you may have missed.
Table of Contents:
Speedwell Releases & Upcoming
Spotlight
Coverage Updates
Sharing Links
1. Speedwell Releases & Upcoming.
Research.
This week, we released our 66-page extensive research report on Appfolio (NASDAQ: APPF, $8bn market cap). Appfolio is a vertical market SaaS company that has compounded revenues at a 30%+ CAGR for the past decade. Learn more about them here!
We released a business recap on Perimeter Solutions.
You can find this business recap along with others we have done (Floor & Decor, APi Group, and Dream Finders Homes) at Speedwellresearch.com
In case you missed it, we have released 5 business updates so far this earnings season. We released business updates on Coupang, Airbnb, Meta, Evolution, and CoStar Group.
The Synopsis Podcast.
We released a dialogue episode discussing Meta and Coupang’s latest earnings and made some comments on Airbnb’s big new summer announcement.
Upcoming.
Podcast
Our next company podcast episode will be on Airbnb!
Be sure to follow the podcast to be the first to know when a new episode drops!
Research
We are excited to announce that our next research report will be on LVMH. LVMH, the luxury juggernaut, is currently down -21% YTD and -43% from its highs, so it’s an exciting time to learn and understand about Bernard Arnault’s luxury powerhouse.
Coverage
Copart will release fiscal 3Q25 earnings next week
Become a Speedwell Member today to get access to all of our research updates and our in-depth research reports!
Feature.
Drew was on the Chit Chat Stocks Podcast to talk about the latest updates on Airbnb.
2. Spotlight.
Below are select quotes from our various writings and podcast.
Dialogue. Meta and Coupang 1Q25 Update, AI Everything, Growth Vectors, and Forex.
Tariff Impact on Meta: “If you actually see economic headwinds in people are spending less money is they're just buying less stuff in general and so there's a lower conversion rates on everything basically. And so that could actually impact them. They're at the point that they're big enough that they are going to feel an economic slowdown.”
Crazy CapEx: “CapEx spend is is really crazy. It's $64 to 72 billion they're guiding for the year. If you remember in our original Meta company deep dive podcast we were talking about them spending, you know, $30 to 35 billion in CapEx and people were freaked out at how much that is. So it's kind of crazy. Now we're talking about double that amount.”
Meta Search?: “There's some sort of contention on whether or not they're going to get fully into search. I think it's kind of inevitable that they eventually will. The question is whether or not they will get that consumer touch point that Google has now, and that ChatGPT has also been able to build up— where you think of a question you think of searching something you go right to ChatGPT you go right to Google.”
CapEx Headwind: “Right now CapEx is running at over three times D&A. And so if you're looking at their margins, just mathematically, they're going to compress overtime as more of that CapEx runs it through the P&L. And so basically every quarter you get another tranche of CapEx that is this more than three times elevated level of CapEx that is now being depreciated and so that will be about a four year period of that bleeding into the P&L, depressing margins. And so if they could overcome that with revenue growth, that’s great, but it's definitely a headwind.”
Securing the Next Platform Shift: “From an IRR perspective, if you're thinking of the 100 billion plus, they will have spent on it over time. Is that going to necessarily be the strongest IRR? Not necessarily, but at the same time, could it ensure their business last into another platform? Yeah.”
The Power of Adding More Selection: “By simply adding more selection, because that is sort of a very high confidence vector of growth, all you have to do is just have to offer people more items and they're going to spend more on your platform.”
1P & 3P Equilibrium: “The market naturally finds this dynamic of sort of profit dollars that are in equilibrium that make the most sense for the third party merchant versus the first party.”
Don’t Overlook Forex: “We can always like overlook that in the business analysis and we think over the long term these sort of factors will adjust themselves out, but that's not always the case.”
PRM 1Q25 Business Recap.
Capital Deployment: “Most important to the future of Perimeter Solutions is how they deploy incremental capital. They invested capital into 3 areas: internal capex, stock repurchases, and M&A, all of which they expect to generate a 15% or higher return on.”
IMS Platform Acquisition: “We call this a platform acquisition because they are going to continue to do more bolt-on acquisitions in this area. This quarter they did their first one for $10mn.”
IMS Key Differentiators: “While PCB may seem like a commoditized industry, they emphasis that their products benefit from two competitive differentiators. The first is design IP and production know how. Their second factor insulating them from competition is the fact that IMS is focused on small, niche markets that cannot support much volume.”
Read the PRM Business Recap here.
3. Coverage Updates.
CSU
CSU reported 1Q25 earnings earlier this week
1Q25 revenues grew +13% y/y to $2.65bn
Overall organic growth was 2% y/y
Deployed $133mn in capital
We are releasing a business recap on CSU in the coming days! If you want to be the first to read the recap follow us on X/Twitter
AXON
Axon was at 53rd Annual JP Morgan Global Technology, Media, and Communications Conference. Here are 3 takeaways from this event.
Not Impacted by DOGE or Government Spending Cuts: “So DOGE, we've been relatively unaffected by. As far as most of our federal dollars, the vast majority, high 90%, still intact and feeling really good about customer sentiment and customer happiness with our products… I think what we're hearing on Capitol Hill is there's probably going to be some more funding for state and local law enforcement post-dodge cuts that this administration certainly supports public safety in the police in a way that should lead to opportunity for our customers to have a little more powder in the keg to buy more technology.”
Fast Sales Adoption: “We think we show up really well in the in the field day-to-day for police officers and getting our products their hands, only helps in sales process. So even in a 30-day trial, cops are starting to see those time savings really manifest themselves. And certainly, that's leading to far faster adoption than we've seen in a lot of our legacy products.”
2 Growth Vectors Enabled Axon to Deliver Double-Digit Growth: “We've grown by 30-plus percent for three straight years, 25-plus percent for seven years. And all of that growth at all points has been driven by two simple concepts; we need to be very effective at selling new products to our existing customer base, and we need to be very effective at selling existing products to new customer bases.”
For more info on Axon, become a Speedwell Member today! Or if you just want to buy the Axon report, click the link below.
4. Sharing Links.
A Letter a Day: Chris Hohn and Christian Sinding Conversation at Norges Bank Investor Conference (link)
Aswath Damodaran on The Difference Makers-The Value of People (link)
Michael Mauboussin on AI Beneficiaries: Investing in Second-Order Effects (link)
And a special thank you to Matthew Harbaugh for helping put this weekly recap together!
The Synopsis Podcast.
Follow our Podcast below. We have four episode formats: “company” episodes that breakdown in-depth each business we write a report on, “dialogue” episodes that cover various business and investing topics, “article” episodes where we read our weekly memos, and “interviews”.
Speedwell Research Reports.
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