WEBVTT - Woolworths' e-commerce issues | Apple's got a problem | Meta’s doubling down on AI

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<v Speaker 1>This is what they flugs. I'm Brett and I'm justin.

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<v Speaker 1>As Monday, the fourth of November, new information has come

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<v Speaker 1>out Judy Boy via the ato's Tax Transparency Report. Get

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<v Speaker 1>this little one, three thousand, nine hundred and eighty five

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<v Speaker 1>entities that lodged tax returns in twenty twenty two to

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<v Speaker 1>twenty twenty three did not pay tax. There were a

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<v Speaker 1>number of reasons like tax offsets accounting uses, but it

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<v Speaker 1>all is also due to global profit shifting for some

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<v Speaker 1>big companies, not the ranking at you big tech companies.

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<v Speaker 2>Black fam As we kick off the new month, we're

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<v Speaker 2>very excited to launch our latest course in the Academy,

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<v Speaker 2>getting savvy with buying a property. Getting into the property

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<v Speaker 2>market can feel as complicated as learning how would you

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<v Speaker 2>break equations? So we've covered the ins and outs of

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<v Speaker 2>buying a property, including some hot hips. What to look

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<v Speaker 2>out for in the next six months.

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<v Speaker 1>Three highly beneficial stories today Jusy Boy, Let's do it

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<v Speaker 1>for our first. Woolworths has warned its investors that earnings

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<v Speaker 1>for the six months to December are looking likely to

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<v Speaker 1>be five percent below last year's results.

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<v Speaker 2>Not the ideal. First impression for Willie's new CEO, then

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<v Speaker 2>tell me what's going on here?

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<v Speaker 1>So juzy boy. We all know woo Works formerly the

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<v Speaker 1>Fresh Food People, formerly Safe Way.

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<v Speaker 2>Yeah, they're the biggest supermarket in Australia with roughly thirty

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<v Speaker 2>seven percent market.

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<v Speaker 1>Share, ahead of Coals with twenty eight percent market share.

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<v Speaker 2>And be Man Let's be honest. Willie has had a

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<v Speaker 2>loft to deal with over the past year.

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<v Speaker 1>Yep, between losing their reputation is the second most trusted

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<v Speaker 1>brand in Australia down to number thirty four.

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<v Speaker 2>Then the XEO resigned early after a bit of a

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<v Speaker 2>media bungle.

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<v Speaker 1>And there have been extensive inquiries into its price gouging

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<v Speaker 1>of customers by government committees.

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<v Speaker 2>But now be Man Woolly's new CEO has warned that

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<v Speaker 2>its earnings before interest in tax or it's EBERT for

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<v Speaker 2>the six months to December is expected to be down

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<v Speaker 2>down and.

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<v Speaker 1>Not in the Coals down down good kind of way,

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<v Speaker 1>Juzzy boy, Nope, Woolli's EBIT is expected to drop five

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<v Speaker 1>point six percent below last year's one point six billion

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<v Speaker 1>dollars and doze boit Woolies has been forced to discount

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<v Speaker 1>its goodies.

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<v Speaker 2>But interestingly, the growth of its e commerce business has

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<v Speaker 2>also been a key reason for its e bit struggling.

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<v Speaker 1>Interesting, so what is the key learning here?

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<v Speaker 2>When companies pursue new initiatives, they can unleash hidden costs

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<v Speaker 2>that come back to buys.

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<v Speaker 1>Yep, Woolies has done a really good job growing its

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<v Speaker 1>e commerce sales.

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<v Speaker 2>In the most recent quarter, it greuba over twenty three percent.

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<v Speaker 1>Meaning e commerce now accounts for fourteen and a half

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<v Speaker 1>percent of all of its sales. Sounds pretty good to me,

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<v Speaker 1>b man, it does sound pretty good. But here's the problem,

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<v Speaker 1>O Juzzy boy e commoce sales are less profitable than

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<v Speaker 1>those in physical supermarkets. How about that?

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<v Speaker 2>Yeah, for Woollies, they need to pick the stock, they

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<v Speaker 2>need to pack the stock, and they need to dispatch

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<v Speaker 2>it vir its logistics.

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<v Speaker 1>Are and that is a lot more expensive than having

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<v Speaker 1>a customer rock up to the shop and b.

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<v Speaker 2>Man, this is part of the reason. Why will the

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<v Speaker 2>share price drop more than six percent after the news?

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<v Speaker 1>For our second story, Apple has seen its quarterly sales

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<v Speaker 1>jump five percent after investors got their first peak on

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<v Speaker 1>how its iPhone sixteen sales are fairy.

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<v Speaker 2>Surely every person is just buying the iPhone sixteen to

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<v Speaker 2>get rid of sire.

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<v Speaker 1>So tell me what well, Apple needs zero introduction three

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<v Speaker 1>point five for trillion US dollar company.

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<v Speaker 2>Fair to say, value is around the same as the

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<v Speaker 2>annual GDP of India, a COFU with nearly one point

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<v Speaker 2>five billion people and juzzyboy.

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<v Speaker 1>Apple released its new iPhone sixteen in the US in

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<v Speaker 1>late September, but it's Apple Intelligence features still haven't been

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<v Speaker 1>rolled out.

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<v Speaker 2>And now, b Man. Apples announced that its revenue was

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<v Speaker 2>up six percent year over year to nearly ninety five

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<v Speaker 2>billion US dollars.

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<v Speaker 1>And juzbay overall iPhone revenue jumped six percent, So it

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<v Speaker 1>seems like iPhone nerds are chueuing up big time here.

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<v Speaker 2>Slow down there, b Man, because despite all the backslabs

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<v Speaker 2>and the high fives around these results, Apple still needs

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<v Speaker 2>to take stock and look in its rearview mirror.

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<v Speaker 1>I feel like you're alluding to something here. Why is that?

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<v Speaker 2>Well, it's because Apple services business, which generated nearly twenty

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<v Speaker 2>five billion US dollars, is facing some pretty big challenges

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<v Speaker 2>right now.

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<v Speaker 1>Yep, Disney has joined Netflix and they're Spotify as well.

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<v Speaker 1>They're all skipping the App Store when it comes to

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<v Speaker 1>their own new subscriptions.

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<v Speaker 2>And They're pushing customers to sign up directly through their

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<v Speaker 2>website to avoid the thirty percent commission that Apple charges

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<v Speaker 2>in the app Store's war juzzy boys.

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<v Speaker 1>So what is the key learning here?

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<v Speaker 2>Not all revenue streams are created equally.

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<v Speaker 1>Good news for Apple that it's seen a growth in

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<v Speaker 1>its iPhones recently, but.

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<v Speaker 2>Its services division is what a lot of Apple investors

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<v Speaker 2>are currently drawn to and excited by.

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<v Speaker 1>That's, of course, the division that includes revenue from Apple

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<v Speaker 1>TV plus iCloud, and of course the App Store.

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<v Speaker 2>In fact, the man Apple's gross margin for its services

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<v Speaker 2>business this quarter was seventy four percent.

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<v Speaker 1>And Judy boy, don't followf your chair over there. That's

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<v Speaker 1>almost double the approx. Forty percent margin for all of

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<v Speaker 1>Apple's hardware products.

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<v Speaker 2>And that's why Apple's been pushing services hard for that

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<v Speaker 2>particular reason.

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<v Speaker 1>Here's the thing. As companies like Netflix and Disney, they

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<v Speaker 1>funnel users elsewhere. Apple services revenue has just started to

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<v Speaker 1>slow down.

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<v Speaker 2>In fact, its services revenue was behind its forecast for

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<v Speaker 2>the last quarter.

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<v Speaker 1>So despite these positive results, Apple investors will be keeping

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<v Speaker 1>a very close eye on this one.

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<v Speaker 2>For our third and final story, Meta shares have dropped

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<v Speaker 2>four percent after its quarterly update warned that AI investments

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<v Speaker 2>were expected to ramp up.

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<v Speaker 1>Half bought, half man Zuckerberg has clearly not made investors happy.

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<v Speaker 1>What is going on?

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<v Speaker 2>We no mata as the massive tech company that's behind

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<v Speaker 2>some of the bigger social media platforms. Your facebooks, your Instagram's,

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<v Speaker 2>You're WhatsApps.

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<v Speaker 1>Do not forget threads, juzzy boy man.

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<v Speaker 2>It hard to imagine b Man. This one point four

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<v Speaker 2>trillion US dollar company started as an online student directory.

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<v Speaker 1>And twenty years later, it's trying to replace smartphones with

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<v Speaker 1>the metaverse.

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<v Speaker 2>And now b man. Metas announced its quarterly results of

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<v Speaker 2>just over forty billion US dollars in sales or a

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<v Speaker 2>nineteen percent increase your own year, which was way more

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<v Speaker 2>than investors had expected, but as daily active users only

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<v Speaker 2>increased by five percent, which was less than investors were

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<v Speaker 2>hoping for, and as a result, Metas shares actually dropped

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<v Speaker 2>over four percent and be Man. On top of these results,

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<v Speaker 2>Meta also announced that spending on its AI and its

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<v Speaker 2>metaverse is going to ramp.

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<v Speaker 1>Up, and half man, half bot Zuckerberg gave serious airtime

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<v Speaker 1>to the positive outcomes from its investments in AI.

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<v Speaker 2>So what is the key learning here.

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<v Speaker 1>Highlighting success stories is a key way in which companies

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<v Speaker 1>justify investments to the share market.

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<v Speaker 2>One thing that's stuck out in metas quarterly update was

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<v Speaker 2>the amount of airtime that it gave to how AI

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<v Speaker 2>investments have performed so far.

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<v Speaker 1>They claim Meta Ai was on track to be the

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<v Speaker 1>most used AI assistant in the universe, with over five

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<v Speaker 1>hundred million monthly active users.

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<v Speaker 2>It seems like a bit of a stretch to me

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<v Speaker 2>and b Man. Beta also claim that AI driven recommendations

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<v Speaker 2>have led to an increasing time spent on Facebook and Instagram.

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<v Speaker 1>Sounds like Metas buttering up investors with these AI success stories.

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<v Speaker 2>Definitely does b Man, especially given that Meta's capital expenditure

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<v Speaker 2>could reach up to fifty billion US dollars in twenty

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<v Speaker 2>twenty five.

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<v Speaker 1>So if investors are going to see billion spent on

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<v Speaker 1>non core business investments, you can bet they'll want to

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<v Speaker 1>see payoffs sooner rather than later.

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<v Speaker 2>Flox Am if you're looking to buy properties at six

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<v Speaker 2>twelve months or you've currently got a property, the Flux

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<v Speaker 2>Academy this month is perfect for you. It explains everything

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<v Speaker 2>from house deposits to getting pre approved, what's in a

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<v Speaker 2>mortgage and first home buyers, costs and schemes. Make sure

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<v Speaker 2>to download the Flux app and check out the Academy

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<v Speaker 2>this month. Thanks for listening and it would set you

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<v Speaker 2>on Wednesday,