At Spaceship we’re long-term investors, but we still keep an eye on what’s happening in the markets day to day. This week, we’re taking a look at some of the bigger movements in our Spaceship Voyager portfolios from the month of August 2024.
(These figures refer to 1-31 August 2024, converted in Australian dollars and are not annualised.)
Moving up
Affirm
Rose 49.68% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Affirm's a US-based Buy Now, Pay Later service that was built to empower consumers.
It charges customers simple interest and no fees, so they can pay off purchases at their own pace.
Why did Affirm stock go up?
Shoutout to Spaceship Universe Portfolio and Spaceship Earth Portfolio investors: it was a good month to have shares in Affirm.
In our 2024 Spaceship Voyager annual letter we talked about how our Investment Team sees Affirm as a contender for being the “modern-day American Express for younger users.”
Affirm continued its upward march and then rocketed at the end of August after blitzing market expectations in its earnings report.
Affirm announced:
- 48% increase in revenue from a year earlier
- A 19% increase in active customers
So why’s Affirm been killing it?
They’ve been turning competition into collaboration. In 2023 Apple announced a buy now pay later product that would enable US consumers to pay in four payments.
Less than a year later, Apple has integrated a third party competitor, Affirm into their app ecosystem, allowing installment plans from Affirm.
Affirm’s partnerships with Apple, Amazon, and Shopify have helped build customer adoption, as has plans to launch in the UK this year.
But in general, the company says it’s the focus on increasing customer engagement and expanding network reach that have been paying off.
Affirm is in the Spaceship Universe, Spaceship Earth, and Spaceship Galaxy portfolios.
Adore Beauty
Rose 25.68% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Adore Beauty is an online beauty store. It was founded by Australian entrepreneur Kate Morris in 1999, when she was aged 21 and hustling from her garage. It listed on the ASX in 2020.
Why did Adore Beauty stock go up?
Adore’s been kicking goals recently, announcing:
- A new CEO, previously at General Pants Co and David Jones with experience across e-commerce, retail, private label and loyalty program.
- An acquisition of Aussie skincare company Ikou
- Increases in revenue, active customers, and profit margins in its FY24 annual report
- A move into bricks and mortar retail. The company has signed leases for two concept stores based in Victoria, and it expects them to be profitable.
Adore’s brand awareness has also grown, increasing to 71% in its core demographic in August 2024, up from 62% during the same period last year.
And it still gives a free Tim Tam with every order.
Adore Beauty is in the Spaceship Universe Portfolio.
Zip Co
Rose 25.65% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Zip's an Australian company that's been around since 2013.
Its mission is to disrupt the broken credit card model by offering buy now, pay later payment solutions.
Why did Zip stock go up?
Zip announced a US partnership with global payment provider, Stripe.
This integration enhances the potential for greater Zip adoption internationally.
Eligible merchants can now activate Zip as a payment option with a single click, which is expected to attract new customers.
Zip is also eyeing a plan to link customers to home loans, describing this as an “obvious adjacency”.
Zip announced its FY24 result in late August, and it was a good one.
Its revenue increased 28.2% year over year, it grew its number of merchants by 9.6% vs FY23, and it increased its revenue margin.
Zip is in the Spaceship Universe Portfolio.
WiseTech Global
Rose 25.05% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Wisetech Global has a product called CargoWise which centralises logistics operations on a one-stop data platform.
This helps its customers, who are global shipping companies, keep visibility and control over their cargo.
Why did WiseTech Global stock go up?
WiseTech’s another Aussie company that announced its annual results.
Its main takeaway? Growth is reaccelerating.
It's rare to see a company grow faster as it gets bigger, and WiseTech’s revenue, net profit, organic revenue, and free cash flow have significantly increased vs. the year before.
Growing shipping complexity, stricter regulatory requirements, and enhanced compliance monitoring with sanctions are fueling increased demand.
Wisetech also has three new products in the works, and won a huge new contract with the 6th largest global freight forwarder which is called Nippon Express.
WiseTech Global is in the Spaceship Universe and Spaceship Galaxy portfolios.
Temple & Webster
Rose 19.36% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Temple & Webster was founded with a goal for being the first place Aussies would look when furnishing their homes.
That was in 2011, when four entrepreneurs decided to create a website that showcased editorial quality content to online retail - specifically, furniture and homewares.
It listed on the stock market in 2015.
Why did Temple & Webster stock go up?
It’s been a tricky time for Australians who are battling cost of living pressures: no such issues for Temple & Webster.
This online pure play retailer, which means it exists entirely online, announced record annual revenue with an increase of 26% year on year.
Repeat customers now make up 57% of all orders, and the company also says it’s saved millions of dollars by implementing generative AI tools including live chat and product recommendations.
Temple & Webster is in the Spaceship Universe Portfolio.
Moving down
Audinate
Fell 36.45% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Audinate is a leading provider of professional AV networking technology.
It's a Sydney business that was spun out of the CSIRO to become a global AV protocol that delivers uncompressed, multi-channel, low latency digital audio over an ethernet network.
Its flagship product Dante has been used to power some of the biggest music events in the world, including the Foo Fighters, the Killers, and Paul McCartney, while music product leaders such as Yamaha have adopted their AV technology.
Why did Audinate stock go down?
You know when you order meal delivery expecting it to be hot and take 20 minutes to arrive, and instead it arrives lukewarm having taken the scenic route?
That’s basically what happened with Audinate last month.
In its company earnings report, Audinate’s CEO told the market the business expected flat or negative growth for the next year or so, before growth kicks back in during FY26.
This was a pretty big decline from what the market had been expecting, which was closer to 20% annual growth.
The return of chip supplies last year enabled Audinate to catch up and fulfill customer orders.
However, the reduction in the sales backlog, customer over-ordering, and shorter lead times have resulted in flat growth expectations.
We continue to hold the stock because, despite recent disappointing results and likely more time required for sales to recover, the bigger picture is the audio market is shifting from point-to-point cabling to Audinate’s networking and software solutions.
Audinate is in the Spaceship Universe and Spaceship Galaxy portfolios.
Megaport
Fell 22.15% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Megaport was founded in Australia. It uses global reach, a Software Defined Network (SDN), and an online hub to help its customers connect to the cloud, make use of their data, and connect to other services.
Why did Megaport stock go down?
Megaport, a leader in connectivity reported its FY24 results and there weren’t any huge shockers, with their FY24 revenue falling within the expected range.
However they did note that their net retention rates had decreased, largely caused by price increases last year, which did not result in customer churn or switching but reduced the extent to which customers were upgrading their product suites.
Nonetheless, it’s been a huge year for Megaport, with the company rebuilding its C-Suite, launching new products, and signing its largest deal ever.
We intend to allow the new management more time to address the sales go-to-market strategy, as we expect Megaport to benefit from enhanced network and AI connectivity.
Megaport is in the Spaceship Universe and Spaceship Galaxy portfolios.
Airbnb
Fell 19.13% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Airbnb was born in 2007 when three travellers paid two hosts to sleep on air mattresses in their living room.
The hosts were Brian Chesky and Joe Gebbia, and they became founders of Airbnb, which grew to match millions of hosts with more than a billion guests across hundreds of countries.
Why did Airbnb stock go down?
Airbnb reported quarterly growth in key metrics including the number of nights and experiences booked, as well as how much that was worth to the business (gross booking value).
The growth was slower than expected, however, which led to the stock price falling.
It also predicted future earnings that were lower than the market hoped for, which also contributed.
The market is also concerned about competition as Booking.com is rapidly ramping up their alternatives listing.
We still believe Airbnb is a high quality business that is at a reasonable valuation.
While top line growth has been moderate at 11% and competition is high, Airbnb has been focussing on the quality of listings, launched Icons to drive engagement, kept the sales, marketing and support costs lower, and is a highly profitable, asset-light business with a 41% free cash flow margin.
We believe Airbnb will continue to be a dominant player in the travel market particularly with the younger demographic, and the present valuation is prospective.
Airbnb is in the Spaceship Universe, Spaceship Earth, and Spaceship Galaxy portfolios.
Birkenstock
Fell 18.78% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Birkenstock is a footwear brand that’s been around for more than 250 years. It listed on the stockmarket in 2023.
Why did Birkenstock stock go down?
Birkenstock reported quarterly results that were slightly lower than the market expected.
The company’s Boston Clogs have outperformed, being responsible for a lot of the company’s growth this year.
Expansion into other shoe categories, such as closed toe shoes (their non sandal business) which are priced higher, continued to grow at twice the rate of overall sales and are now 25% of revenue.
Birkenstock has been around for 250 years and its CEO, Oliver Reichert, said it’s “committed to its medium- and long-term targets to mid- to -high-teens revenue growth.”
We believe the long-term investment thesis remains unchanged, like the brand the company is unique, there are few 250-year-old brands that are growing with the margin profile of Birkenstock.
Birkenstock is in the Spaceship Universe and Spaceship Galaxy portfolios.
Snowflake
Fell 15.70% (from 1-31 August 2024, converted in Australian dollars and are not annualised.)
Snowflake has been around since 2012. It became a public company in 2020.
Snowflake makes it easy for its customers to store their data on public clouds.
It created a Data Cloud for organisations to manage their data more efficiently, so they can unlock more insights and analytics from it.
Why did Snowflake stock go down?
While Snowflake reported a good result, it didn’t do enough to address its competition concerns.
Snowflake’s major competitor is named Databricks.
Databricks is a private company, and is perceived to be outperforming due to its positioning in AI and unstructured data
While we acknowledge these concerns, we believe both companies can coexist successfully.
Although they have operated separately in the past, Snowflake, a leader in structured data, and Databricks, specializing in unstructured data like audio and video files, are increasingly converging.
We are impressed with Snowflake’s new CEO, who joined the company after selling to Snowflake his AI search startup, he previously led Google's advertising products.
He has been in the role since February this year he updated the market on Snowflake’s quarterly growth, calling out the new product announcements, capabilities, and, impressively, the two nine-figure deals the company signed this quarter.
Snowflake is in the Spaceship Universe and Spaceship Galaxy portfolios.
Some of our Spaceship Voyager portfolios invest in Affirm, Adore Beauty, Zip Co, WiseTech, Temple & Webster, Audinate, Megaport, Airbnb, Birkenstock, and Snowflake at the time of writing.
Important! We’re sharing with you our thoughts on the companies in which Spaceship Voyager invests for your informational purposes only. We think it’s important (and interesting!) to let you know what’s happening with Spaceship Voyager’s investments. However, we are not making recommendations to buy or sell holdings in a specific company. Past performance isn’t a reliable indicator or guarantee of future performance.
