<?xml version="1.0" encoding="UTF-8"?><rss xmlns:dc="http://purl.org/dc/elements/1.1/" xmlns:content="http://purl.org/rss/1.0/modules/content/" xmlns:atom="http://www.w3.org/2005/Atom" version="2.0" xmlns:itunes="http://www.itunes.com/dtds/podcast-1.0.dtd" xmlns:googleplay="http://www.google.com/schemas/play-podcasts/1.0"><channel><title><![CDATA[Arnau Garcia Rodríguez]]></title><description><![CDATA[Software engineer investing on the future.]]></description><link>https://arnaldfundamentals.substack.com</link><image><url>https://substackcdn.com/image/fetch/$s_!y1GN!,w_256,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa0f631d5-139d-4d86-8ec5-4779bc2f33ef_800x800.jpeg</url><title>Arnau Garcia Rodríguez</title><link>https://arnaldfundamentals.substack.com</link></image><generator>Substack</generator><lastBuildDate>Mon, 25 May 2026 22:16:55 GMT</lastBuildDate><atom:link href="https://arnaldfundamentals.substack.com/feed" rel="self" type="application/rss+xml"/><copyright><![CDATA[Arnau Garcia Rodríguez]]></copyright><language><![CDATA[en]]></language><webMaster><![CDATA[arnaldfundamentals@substack.com]]></webMaster><itunes:owner><itunes:email><![CDATA[arnaldfundamentals@substack.com]]></itunes:email><itunes:name><![CDATA[Arnau Garcia Rodríguez]]></itunes:name></itunes:owner><itunes:author><![CDATA[Arnau Garcia Rodríguez]]></itunes:author><googleplay:owner><![CDATA[arnaldfundamentals@substack.com]]></googleplay:owner><googleplay:email><![CDATA[arnaldfundamentals@substack.com]]></googleplay:email><googleplay:author><![CDATA[Arnau Garcia Rodríguez]]></googleplay:author><itunes:block><![CDATA[Yes]]></itunes:block><item><title><![CDATA[Hims & Hers: The Flywheel of Personalized Healthcare]]></title><description><![CDATA[Despite a 32% short interest and competition from Amazon, Hims & Hers&#8217; shift toward personalized care is building a moat that the market is missing.]]></description><link>https://arnaldfundamentals.substack.com/p/hims-and-hers-the-flywheel-of-personalized</link><guid isPermaLink="false">https://arnaldfundamentals.substack.com/p/hims-and-hers-the-flywheel-of-personalized</guid><dc:creator><![CDATA[Arnau Garcia Rodríguez]]></dc:creator><pubDate>Mon, 26 Jan 2026 09:30:50 GMT</pubDate><enclosure url="https://substack-post-media.s3.amazonaws.com/public/images/1c188d71-982a-497e-b052-0e4a8769f27f_1024x768.webp" length="0" type="image/jpeg"/><content:encoded><![CDATA[<p>Hims &amp; Hers provides personalized, accessible healthcare to 2.4 million customers across the United States. Their growth is driven by a deliberate strategy of <strong>destigmatizing healthcare</strong>, beginning with conditions patients were historically too embarrassed to discuss in person.</p><p>Launched in 2017, Hims initially focused on hair loss (offering treatments like Minoxidil and Finasteride) and sexual health (specifically erectile dysfunction). Because these were often viewed as &#8220;lifestyle&#8221; issues rather than medical necessities, they were rarely covered by insurance, leading to high out-of-pocket costs for consumers. Hims stepped in to fill that gap.</p><p>In 2018, the company launched Hers, expanding into birth control and female sexual health. This follows a strategy I highlighted in my previous post, <em><a href="https://open.substack.com/pub/arnaldfundamentals/p/lemonade-the-ai-engine-transforming?r=3smt5j&amp;utm_campaign=post&amp;utm_medium=web">Lemonade: The AI Engine Transforming Insurance</a></em>: <strong>start by serving customers overlooked by traditional systems, then layer on services to increase revenue per user over time.</strong></p><p>Since 2020, they have expanded into mental health, dermatology, weight loss (utilizing compounded GLP-1 medications) and the brand new low testosterone and menopause verticals.</p><p>Through these operations, Hims &amp; Hers is building a proprietary database of customer information and treatment outcomes. This data allows their AI to identify patterns and provide increasingly optimized care. This creates a powerful flywheel:</p><p><strong>Better AI &#8594; Faster, Cheaper Service &#8594; Happier Customers &#8594; More Data &#8594; Better AI</strong></p><p>By leveraging this flywheel, Hims &amp; Hers has become a textbook &#8220;Singularity Scaler.&#8221; They are currently investing in US-based peptide facilities to fully verticalize their supply chain, ensuring the long-term ability to deliver personalized medications at scale.</p><p>As Melissa Baird, COO of Hims &amp; Hers, puts it:</p><blockquote><p>The future of healthcare must be centered on the customer, which is why our operational structure is built to scale personalized care to more individuals at the highest standard of quality and safety, and with a focus on long-term consistency and availability.</p><p>We're building our supply chain to enable more Americans to access care, including personalized treatments designed around their needs. This acquisition is a reflection of our commitment to those goals and our ongoing investment in the customer from start to finish. </p></blockquote><h2>Financials</h2><p>Hims &amp; Hers is growing at a staggering pace. In their <strong>Q3 2025 Shareholder Letter</strong>, the company reported several landmark highlights:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Lh2g!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Lh2g!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 424w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 848w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 1272w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!Lh2g!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png" width="650" height="782" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:782,&quot;width&quot;:650,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:97523,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/184894930?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Lh2g!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 424w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 848w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 1272w, https://substackcdn.com/image/fetch/$s_!Lh2g!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F0ac80b91-7f68-488a-9c81-803ed04877b7_650x782.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption"><a href="https://s27.q4cdn.com/787306631/files/doc_financials/2025/q3/Hims-and-Hers_Q3-2025-Shareholder-Letter_Final.pdf">Financial Results - Q3 2025 hims &amp; hers Shareholder Letter</a></figcaption></figure></div><p>Revenue growth has exploded. In just four years, Hims &amp; Hers has transitioned from $271.9M (2021) to over <strong>$2.2B in TTM revenue</strong> by Q3 2025. Maintaining a <strong>76.8% CAGR</strong> at this scale is a rare feat, signaling a powerful product-market fit.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!96Rd!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!96Rd!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!96Rd!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png" width="1456" height="1032" 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srcset="https://substackcdn.com/image/fetch/$s_!96Rd!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!96Rd!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9c15a03c-65bf-4d00-b0e2-3e500a7c259b_1600x1134.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>The company officially turned net income positive in Q2 2024, followed by consistent positive Free Cash Flow (FCF). In Q3 2025 alone, they generated <strong>$79.4M in FCF</strong>.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!0vYm!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!0vYm!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!0vYm!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 848w, 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srcset="https://substackcdn.com/image/fetch/$s_!0vYm!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!0vYm!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!0vYm!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!0vYm!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F321b7adf-3e8e-47f2-9f48-e288d8032ef1_1600x1134.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>The telehealth market is becoming a battlefield. <strong>Amazon Pharmacy</strong> is aggressively attempting to acquire customers by compressing margins&#8212;a classic move from their &#8220;Shared Economies of Scale&#8221; playbook.</p><p>In this model, as a company grows and unit costs decrease, those savings are passed back to the customer through lower prices rather than being kept as profit. This creates a barrier to entry that few can survive. However, Hims &amp; Hers is fighting back with a different weapon: <strong>Specialization.</strong></p><p>While Amazon is a <strong>generalist</strong>, Hims &amp; Hers is a <strong>specialist</strong>. By focusing on specific, high-intent customer needs, they can deliver a superior outcome per dollar spent. We are seeing this play out in their financial strategy:</p><ul><li><p><strong>Intention Margin Compression:</strong> You might notice gross profits growing while margins slightly compress (74% in Q3 2025 vs. 79% in Q3 2024).</p></li><li><p><strong>Building the Moat:</strong> This is actually a defensive strength. By keeping margins lean while scaling, Hims &amp; Hers makes it harder for competitors to underprice them, effectively building a &#8220;moat&#8221; around their 2.5 million subscribers.</p></li></ul><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!NMZv!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!NMZv!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!NMZv!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png" width="1456" height="1032" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:1032,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:201754,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/184894930?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!NMZv!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!NMZv!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F80b68b0b-5efc-4ba4-b53b-97ec50a302bf_1600x1134.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>The long-term bull case for Hims &amp; Hers isn&#8217;t just selling pills; it&#8217;s the <strong>proprietary dataset</strong>. With over 64% of their users on personalized plans, they are gathering massive amounts of data on what treatments work for which biological profiles.</p><p>The ultimate goal? Training a proprietary AI on this dataset to provide medical advice and treatments that are:</p><ol><li><p><strong>More accurate</strong> than a general practitioner.</p></li><li><p><strong>Cheaper</strong> to deliver.</p></li><li><p><strong>Proactive</strong> rather than reactive.</p></li></ol><p>Management&#8217;s focus on tailored care is working. The fraction of subscribers on a <strong>personalized plan</strong> has surged to over <strong>nearly 50% year-over-year</strong>, now representing a significant majority of the platform's 2.47 million users.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Kyob!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Kyob!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 424w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 848w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 1272w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!Kyob!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png" width="1280" height="612" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:612,&quot;width&quot;:1280,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:409278,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/184894930?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Kyob!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 424w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 848w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 1272w, https://substackcdn.com/image/fetch/$s_!Kyob!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F11c11abc-1397-4377-9de1-ba600fc4046f_1280x612.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><h2>International expansion</h2><p>Hims &amp; Hers is officially taking their &#8220;personalized health&#8221; playbook worldwide. After seeing success in the US and UK, they are doubling down on the idea that affordable, direct-to-consumer healthcare isn&#8217;t just an American trend.</p><p><strong>The Highlights:</strong></p><ul><li><p><strong>Winning Europe:</strong> They recently bought ZAVA Global, which opened doors to 160 million adults across the UK, Germany, France, and Ireland. They just added Spain to the list, too.</p></li><li><p><strong>The &#8220;Generic&#8221; Opportunity:</strong> They&#8217;re heading to Canada next. The big move there is timing: they&#8217;re already chatting with manufacturers to be the go-to platform for generic <strong>semaglutide</strong> (the stuff in Ozempic/Wegovy) as soon as it hits the Canadian market in 2026.</p></li><li><p><strong>The $1 Billion Bet:</strong> Leadership sees international markets as a massive growth lever&#8212;we&#8217;re talking a <strong>$1 billion annual revenue opportunity</strong>.</p></li><li><p><strong>Expansion Mode:</strong> Keep an eye on Brazil and Australia next. They aren&#8217;t just looking to be a &#8220;player&#8221; in the space; they want to be the largest consumer health platform on the planet, period.</p></li></ul><p>They&#8217;ve got the cash and the blueprint, and they&#8217;re moving fast to consolidate the market before anyone else can.</p><h2>Proactive longevity platform</h2><p>For years, people went to Hims because they had a specific problem they wanted to fix. Now, the company is trying to flip the script. They want to be the place you go <em>before</em> you feel sick.</p><p>They are rolling out comprehensive blood testing. Instead of just getting a prescription, you&#8217;ll get data on your vitamins, hormones, and genetic risks. Hims invested in <strong>GRAIL</strong>, a company that does liquid biopsies (blood tests) to find cancer early. They want to take a test that used to be a luxury for the ultra-wealthy and make it accessible to everyone on their platform.</p><p>Set to launch in <strong>2026</strong>, Logevity moves them into &#8220;biohacker&#8221; territory. Think peptides, coenzymes, and metabolic boosters designed to help you live longer and recover faster.</p><p>They aren&#8217;t just middle-men anymore. They bought a massive <strong>peptide manufacturing facility in California</strong>. By making the meds themselves, they control the quality, the cost, and the R&amp;D.</p><p>Hims &amp; Hers was one of my first major investments and remains a core holding. Despite the stock's significant volatility over the past two years, I have consistently increased my position. You can see my specific buy orders plotted against the price action in the graph below.<br><br></p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!F3Ym!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!F3Ym!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 424w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 848w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 1272w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!F3Ym!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png" width="1456" height="713" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:713,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:109108,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/184894930?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!F3Ym!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 424w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 848w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 1272w, https://substackcdn.com/image/fetch/$s_!F3Ym!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F27bc5b9d-4152-449b-bf39-76d1dae2abd8_1938x949.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Hims &amp; Hers stock graph - Trading View</figcaption></figure></div><p>The stock has faced significant downward pressure over the last few months, largely driven by three &#8220;bear&#8221; narratives: <strong>growth deceleration</strong>, <strong>looming competition</strong> from Amazon, and the <strong>legal uncertainty</strong> surrounding Novo Nordisk and Eli Lilly&#8217;s actions against compounded GLP-1s.</p><p>Currently, the market sentiment is extremely skeptical, evidenced by a <strong>short interest of 32.57%</strong>. However, for long-term investors, this creates a unique setup. At a <strong>Price-to-Sales (P/S) ratio of roughly 3.1&#8211;3.4</strong> TTM, the stock is trading well below its historical median of 3.9, despite strong fundamentals.</p><p>The management team is not deterred by the noise. In the Q3 2025 Shareholder Letter, CEO Andrew Dudum reaffirmed the company&#8217;s aggressive long-term vision:</p><blockquote><p>&#8220;When we first shared our 2030 goals of at least <strong>$6.5 billion in revenue</strong> and <strong>$1.3 billion in adjusted EBITDA</strong>, it was with this clear vision in mind... Today, we&#8217;re delivering on that vision in a real way. The opportunities to accelerate our trajectory are materializing quicker than expected, and we&#8217;re leaning in.&#8221;</p></blockquote><h3>A Simple Valuation Model</h3><p>Even using a conservative &#8220;bear case&#8221; lens, the math is compelling:</p><ul><li><p><strong>Revenue Target:</strong> $6.5B by 2030.</p></li><li><p><strong>Estimated CAGR:</strong> Approximately 20&#8211;25%.</p></li><li><p><strong>Valuation Re-rating:</strong> If the stock simply returns to its historical P/S average of 3.9 as the legal clouds clear, we could see a market cap exceeding <strong>$21B by 2030</strong>.</p></li></ul><p>Based on the current market cap of approximately $6.7B, this represents a potential <strong>3X return over the next 4-5 years.</strong></p><p>While the volatility is high, Hims &amp; Hers is no longer the speculative startup it was two years ago. It has matured into a profitable, cash-flow-positive disruptor with a massive, growing data advantage.</p><p>My current list of &#8220;Singularity Scalers&#8221; includes:</p><ul><li><p><strong>Palantir (PLTR)</strong></p></li><li><p><strong>Duolingo (DUOL)</strong></p></li><li><p><strong>Lemonade (LMND)</strong></p></li><li><p><strong>Zeta Global (ZETA)</strong></p></li><li><p><strong>Hims &amp; Hers (HIMS)</strong></p></li></ul><p>I remain long and high-conviction. Markets often struggle to price companies that are aggressively reinvesting in themselves to build a long-term moat. If the price continues to decrease while these fundamentals remain this strong, I won&#8217;t hesitate to step in and accumulate more shares to lower my cost basis.</p><p>In the world of the Singularity Scaler, the biggest risk isn&#8217;t volatility&#8212;it&#8217;s missing out on the compounding power of the flywheel.</p><div><hr></div><p>Thanks for reading! Subscribe or leave a comment if you enjoyed this deep dive.</p><p>Next, I&#8217;ll be reviewing <strong>Q4 2025 earnings</strong> for my core holdings. Stay tuned! &#129395;<br></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://substack.com/@arnaldfundamentals/note/p-184894930&quot;,&quot;text&quot;:&quot;Leave a comment&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://substack.com/@arnaldfundamentals/note/p-184894930"><span>Leave a comment</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/subscribe?"><span>Subscribe now</span></a></p><div><hr></div><p>If you are interested, join <strong><a href="https://etoro.tw/3F2o8zv">eToro</a></strong> and follow or copy my trades at <a href="https://www.etoro.com/people/arnaugarcia9">arnaugarcia9</a> &#128293;</p>]]></content:encoded></item><item><title><![CDATA[PayPal: Fear Is Your Friend]]></title><description><![CDATA[How the market&#8217;s panic is creating a rare opportunity to invest]]></description><link>https://arnaldfundamentals.substack.com/p/paypal-fear-is-you-friend</link><guid isPermaLink="false">https://arnaldfundamentals.substack.com/p/paypal-fear-is-you-friend</guid><dc:creator><![CDATA[Arnau Garcia Rodríguez]]></dc:creator><pubDate>Mon, 05 Jan 2026 14:03:26 GMT</pubDate><enclosure url="https://substack-post-media.s3.amazonaws.com/public/images/f798fc76-e8ab-4415-91b4-cccfb0547fdc_1536x1024.png" length="0" type="image/jpeg"/><content:encoded><![CDATA[<p>My investment approach has always focused on identifying companies that are building disruptive technologies and are backed by strong, mission-driven cultures. Some examples from my portfolio include Palantir, Rocket Lab, Lemonade, and Robinhood.</p><p>While researching payment processors through my investment in dLocal, an emerging-markets payments platform, I came across PayPal and realized just how far market sentiment has drifted from the company&#8217;s actual fundamentals.</p><p>PayPal is one of the largest payment processors in the world, employing over 24,000  people and running a platform that handles well over a trillion dollars in annual payment volume.</p><p>To illustrate this gap between perception and reality, let&#8217;s take a look at the following graph:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!tg13!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!tg13!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!tg13!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!tg13!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!tg13!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!tg13!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png" width="1456" height="1032" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:1032,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:214906,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:false,&quot;topImage&quot;:true,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/183371582?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!tg13!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 424w, https://substackcdn.com/image/fetch/$s_!tg13!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 848w, https://substackcdn.com/image/fetch/$s_!tg13!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 1272w, https://substackcdn.com/image/fetch/$s_!tg13!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F39c06d10-bea6-4e9f-8da5-db880e0c3895_1600x1134.png 1456w" sizes="100vw" fetchpriority="high"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>You can clearly see earnings and free cash flow per share trending up and to the right, even though the stock price is still down about 80% from its peak.</p><p>At current levels, PayPal is trading at a P/E of just 11.86, a free cash flow yield of roughly 10.2%, and a PEG ratio around 0.60. Taken together, these numbers make it look like the market is pricing PayPal as an ex-growth or even structurally broken business, despite its ability to generate strong and recurring cash flows.</p><p>A double-digit FCF yield suggests that investors are demanding a very high return to hold the stock, while a PEG below 1 implies that expected earnings growth isn&#8217;t fully reflected in the valuation. This kind of setup is usually associated with mature or declining companies.</p><p>But PayPal is still growing. In its Q3 2025 earnings presentation, the company reported total payment volume growth of 8% year over year, along with 7% revenue growth.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!RkCa!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!RkCa!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 424w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 848w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 1272w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!RkCa!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png" width="1456" height="629" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:629,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:193275,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/183371582?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!RkCa!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 424w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 848w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 1272w, https://substackcdn.com/image/fetch/$s_!RkCa!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F5626d06c-9b9a-4654-9430-5211daf0f148_1728x746.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>They&#8217;ve also taken advantage of the low share price and ramped up a sizable share buyback program, as you can see in the image below. Over the past five years, PayPal has repurchased roughly 20% of its outstanding shares.</p><p>In October 2025, they also announced a new quarterly dividend of $0.14 per share. Personally, I&#8217;m not a big fan of this move, as I&#8217;d rather see that cash used to buy back even more shares at what I see as very attractive prices.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!rk49!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!rk49!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 424w, https://substackcdn.com/image/fetch/$s_!rk49!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 848w, https://substackcdn.com/image/fetch/$s_!rk49!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 1272w, https://substackcdn.com/image/fetch/$s_!rk49!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!rk49!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png" width="1456" height="1104" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:1104,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:108848,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/183371582?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!rk49!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 424w, https://substackcdn.com/image/fetch/$s_!rk49!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 848w, https://substackcdn.com/image/fetch/$s_!rk49!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 1272w, https://substackcdn.com/image/fetch/$s_!rk49!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F24f015b0-6ced-4bd3-81f7-1a2d6d84cd3f_1522x1154.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption"><a href="https://www.macrotrends.net/stocks/charts/PYPL/paypal-holdings/shares-outstanding">caption...</a></figcaption></figure></div><p>Based on everything discussed so far, I already see PayPal as undervalued. In my view, the current core business alone should justify a higher share price. And on top of that, PayPal still has more to offer, with a clear plan to scale several new growth verticals:</p><h2>Agentic</h2><p>This is the vertical I&#8217;m most excited about, mainly because the TAM could be massive. The idea is to help merchants sell through AI platforms and enable AI agents to search, decide, buy, and pay on a person&#8217;s behalf.</p><p>PayPal has already announced partnerships with Google, Mastercard, OpenAI, and Perplexity, which gives some credibility to this strategy. If agentic commerce really takes off, PayPal could end up sitting right in the middle of those transactions.</p><p>McKinsey estimates that agentic commerce could drive up to $5 trillion in sales by 2030, which shows just how big this opportunity might be.</p><h2>Ads</h2><p>Enabling small businesses to create more effective marketing campaigns and unlock a new stream of ad revenue through PayPal Ads Manager. This platform allows merchants to leverage PayPal&#8217;s vast network and data to better target customers, increase conversion rates, and improve overall return on ad spend. Over time, this could become a meaningful high-margin revenue opportunity while also strengthening PayPal&#8217;s relationship with small businesses.</p><h2>Crypto</h2><p>They also allow users to pay with crypto and are rolling out their own stablecoin, PYUSD, which is fully backed by U.S. dollars. These reserves earn interest for PayPal, especially in a high-rate environment.</p><p>If PayPal ends up holding billions in reserves earning even 4&#8211;5%, that could mean tens or even hundreds of millions in annual income, with very little additional cost.</p><p>On top of that, stablecoins like PYUSD could reduce PayPal&#8217;s reliance on traditional payment rails such as ACH, card networks, and wire transfers. Using PYUSD for cross-border payments can help avoid interchange fees and FX spreads, lowering costs and potentially improving margins on international transactions.</p><p></p><p>All of these new verticals still have to prove that they can meaningfully show up in the financials, but in my view they could help speed up overall business growth and shift the narrative away from PayPal being seen as a stagnant dinosaur.</p><p>That said, the payments industry faces a structural challenge: a race to the bottom on take rates. Companies keep undercutting each other to attract merchants and consumers, which puts constant pressure on margins. For PayPal, the take rate &#8212; the percentage of transaction volume that turns into revenue &#8212; has been slowly declining over the years.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!0CdE!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!0CdE!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 424w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 848w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 1272w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!0CdE!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png" width="1456" height="487" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:487,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:72082,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/183371582?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!0CdE!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 424w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 848w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 1272w, https://substackcdn.com/image/fetch/$s_!0CdE!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F15092afd-f52a-4659-a050-f71e08c9fe9f_1884x630.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption"><strong>Paypal Holdings Inc (PYPL) - Transaction Take Rate </strong>1.64% for Q3 2025</figcaption></figure></div><p>Overall, the take rate squeeze is a <strong>key headwind for revenue growth and operating margins</strong> across the industry, and any evaluation of these companies must account for this secular pressure.</p><p>Regarding the workforce, I&#8217;m not a big fan of companies having such large teams, mainly because of the high costs involved. More employees mean higher salaries, benefits, and operational overhead, which can eat into margins. Many other tech and payments companies are moving toward automating processes wherever possible, using AI and streamlined systems to reduce manual work and boost efficiency. In my view, having tens of thousands of employees can become a disadvantage if it isn&#8217;t paired with strong automation and productivity improvements.</p><p>I&#8217;m not usually into investing in big, mature businesses, but I might take a shot at PayPal&#8217;s turnaround story. This is a bit new for me, since I&#8217;d probably sell the stock if it doubles from here.</p><p>I like to keep a concentrated portfolio. My goal is to grow wealth, and owning too many companies makes it hard to really follow what&#8217;s going on in each one. So for now, I&#8217;ll keep an eye on PayPal, open a small position, and see how things play out.</p><p>See you next time&#8212;and don&#8217;t forget to follow or share the post if you enjoyed it!</p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/subscribe?"><span>Subscribe now</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/p/paypal-fear-is-you-friend?utm_source=substack&utm_medium=email&utm_content=share&action=share&quot;,&quot;text&quot;:&quot;Share&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/p/paypal-fear-is-you-friend?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://substack.com/@arnaldfundamentals/note/p-183371582&quot;,&quot;text&quot;:&quot;Leave a comment&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://substack.com/@arnaldfundamentals/note/p-183371582"><span>Leave a comment</span></a></p><div><hr></div><p>If you are interested, join <strong><a href="https://etoro.tw/3F2o8zv">eToro</a></strong> and follow or copy my trades at <a href="https://www.etoro.com/people/arnaugarcia9">arnaugarcia9</a> &#128293;</p>]]></content:encoded></item><item><title><![CDATA[Lemonade: The AI Engine Transforming Insurance]]></title><description><![CDATA[How an AI-native insurer is disrupting a $10T industry]]></description><link>https://arnaldfundamentals.substack.com/p/lemonade-the-ai-engine-transforming</link><guid isPermaLink="false">https://arnaldfundamentals.substack.com/p/lemonade-the-ai-engine-transforming</guid><dc:creator><![CDATA[Arnau Garcia Rodríguez]]></dc:creator><pubDate>Wed, 03 Sep 2025 09:40:17 GMT</pubDate><enclosure url="https://substack-post-media.s3.amazonaws.com/public/images/40dd88c9-a021-40f4-b9d0-061dc3994829_861x646.png" length="0" type="image/jpeg"/><content:encoded><![CDATA[<p>For decades, traditional insurers have operated on a simple principle: <strong>keep as much of the customer&#8217;s money as possible</strong>. Claims often feel like battles, with insurers incentivized to delay, deny, or underpay. This misalignment creates frustration and distrust. Lemonade flips that model on its head. By using AI and a unique business structure, Lemonade processes claims instantly, takes a flat fee, and even donates leftover premiums to charities chosen by customers &#8212; <strong>aligning its incentives with theirs</strong>.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Kqw1!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Kqw1!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 424w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 848w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 1272w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!Kqw1!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png" width="891" height="463" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:463,&quot;width&quot;:891,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:57585,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:false,&quot;topImage&quot;:true,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!Kqw1!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 424w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 848w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 1272w, https://substackcdn.com/image/fetch/$s_!Kqw1!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F9b6bbbca-cf79-44a1-b173-bc6d70561943_891x463.png 1456w" sizes="100vw" fetchpriority="high"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>Lemonade is an <strong>AI-first</strong> insurance company that focuses on delivering <strong>better outcomes for consumers while scaling efficiently</strong>. Unlike legacy US insurers like State Farm, Allstate, and GEICO, which are slowed down by <strong>bureaucracy</strong>, <strong>slow claims</strong> processes, and <strong>outdated tech systems</strong>, Lemonade moves fast and leverages data at its core.</p><p>In many ways, Lemonade is more like a data science company that happens to sell insurance. This is because CEO Daniel Schreiber and his cofounders spotted a <strong>huge market opportunit</strong>y and a rare chance to disrupt an <strong>industry that hadn&#8217;t changed much in over a century</strong>.</p><p>They offer Renters, Homeowners, Car, Pet, and Life insurance. They started with Renters insurance in 2016 for a reason: low-end disruption. Here&#8217;s how it works:</p><p>A startup enters at the low end of a market &#8212; where incumbents over-serve customers with expensive, bloated offerings. The startup provides a simpler, cheaper, and <strong>more convenient solution for price-sensitive or overlooked customers</strong>. Over time, it moves upmarket to compete with &#8212; or even displace &#8212; the <strong>incumbents</strong>.</p><p>Some examples of this strategy include:</p><ul><li><p><strong>Toyota</strong>, which sold affordable, fuel-efficient cars for budget-conscious consumers.</p></li><li><p><strong>Netflix</strong>, which started by renting DVDs by mail to niche movie lovers, cheaper than Blockbuster.</p></li><li><p><strong>Robinhood</strong>, which offers zero-fee trading for first-time investors.</p></li><li><p><strong>Hims and Hers</strong>, which began with treatments for hair loss and erectile dysfunction &#8212; low-stigma, high-demand areas underserved by traditional healthcare.</p></li></ul><p>From my point of view, <strong>free cash flow per share tracks culture over time</strong>. Lemonade has consistently focused on AI-driven efficiency to provide the best possible experience for its customers &#8212; fast claims, instant onboarding, friendly UX, and even a charity giveback program.</p><p>You can get a sense of Lemonade&#8217;s tech-focused culture by reading this <a href="https://x.com/shai_wininger/status/1927830854685860304">thread from Lemonade&#8217;s co-founder </a><strong><a href="https://x.com/shai_wininger/status/1927830854685860304">Shai Wininger.</a></strong></p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!qD-7!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!qD-7!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 424w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 848w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 1272w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!qD-7!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png" width="593" height="308" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:308,&quot;width&quot;:593,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:54176,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!qD-7!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 424w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 848w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 1272w, https://substackcdn.com/image/fetch/$s_!qD-7!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F163c5b9b-b102-4df1-a269-e6686efda96e_593x308.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>Ultimately, the goal is to deliver the <strong>best outcomes for customers</strong>. This is reflected in reviews on Trustpilot:<br></p><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!9a_o!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!9a_o!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 424w, https://substackcdn.com/image/fetch/$s_!9a_o!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 848w, https://substackcdn.com/image/fetch/$s_!9a_o!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 1272w, https://substackcdn.com/image/fetch/$s_!9a_o!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!9a_o!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png" width="572" height="231" 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https://substackcdn.com/image/fetch/$s_!9a_o!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 848w, https://substackcdn.com/image/fetch/$s_!9a_o!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 1272w, https://substackcdn.com/image/fetch/$s_!9a_o!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff8b22b7a-5e0f-4f6c-bfa1-52282ea3d4e6_572x231.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a></figure></div><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!y02J!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!y02J!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 424w, https://substackcdn.com/image/fetch/$s_!y02J!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 848w, https://substackcdn.com/image/fetch/$s_!y02J!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 1272w, https://substackcdn.com/image/fetch/$s_!y02J!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!y02J!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png" width="564" height="218" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/45825c2e-a645-4611-9658-da51a758e309_564x218.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:218,&quot;width&quot;:564,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!y02J!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 424w, https://substackcdn.com/image/fetch/$s_!y02J!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 848w, https://substackcdn.com/image/fetch/$s_!y02J!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 1272w, https://substackcdn.com/image/fetch/$s_!y02J!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F45825c2e-a645-4611-9658-da51a758e309_564x218.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a></figure></div><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!be55!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!be55!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 424w, https://substackcdn.com/image/fetch/$s_!be55!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 848w, https://substackcdn.com/image/fetch/$s_!be55!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 1272w, https://substackcdn.com/image/fetch/$s_!be55!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!be55!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png" width="570" height="234" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:234,&quot;width&quot;:570,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!be55!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 424w, https://substackcdn.com/image/fetch/$s_!be55!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 848w, https://substackcdn.com/image/fetch/$s_!be55!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 1272w, https://substackcdn.com/image/fetch/$s_!be55!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F87a29721-c069-4ff7-ad7f-12710382fa35_570x234.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a></figure></div><p>The difference in user feedback compared to other insurers is striking. I encourage you to read the comments yourself.</p><h2>Proprietary Data Moat</h2><p>In general, my investment theses are based on this concept defined by <strong><a href="https://x.com/alc2022">Antonio Linares</a></strong>:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!21LF!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!21LF!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 424w, https://substackcdn.com/image/fetch/$s_!21LF!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 848w, https://substackcdn.com/image/fetch/$s_!21LF!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!21LF!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!21LF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg" width="1240" height="400" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:400,&quot;width&quot;:1240,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;Imagen&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="Imagen" title="Imagen" srcset="https://substackcdn.com/image/fetch/$s_!21LF!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 424w, https://substackcdn.com/image/fetch/$s_!21LF!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 848w, https://substackcdn.com/image/fetch/$s_!21LF!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!21LF!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F309d3879-e5ab-4de6-8955-70c3b6a3a19f_1240x400.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>From my point of view, Lemonade is the prime instance of this AI-leveraging class of company , since every interaction - quotes, claims, customer chats - generates rich, high-quality data. This data improves AI accuracy<strong> </strong>for risk assessment, fraud detection, and customer service. The more customers Lemonade serves, the more data it collects, which makes its algorithms smarter and harder for competitors to replicate.</p><p><strong>Better AI &#8594; faster, cheaper service &#8594; happier customers &#8594; more customers &#8594; more data &#8594; Better AI</strong></p><p><br>This flywheel allows Lemonade to continuously lower prices for the right customers (benefiting from <strong>shared economies of scale</strong>), enhance the claims experience, and expand into new insurance lines while scaling efficiently.</p><h2>Key Metrics</h2><p><br>Lemonade is a $3.7B market-cap company operating in a $10T TAM that has seen little disruption.</p><p>Here are some graphs from <strong><a href="https://www.lemonade.com/investor-relations-bo/wp-content/uploads/2025/08/LMND-Shareholder-Letter-Q2-2025-FINAL.pdf">Lemonade&#8217;s Q2 2025 Shareholder Letter</a></strong> highlighting its strength:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!hyr7!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!hyr7!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 424w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 848w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 1272w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!hyr7!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png" width="995" height="470" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/e89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:470,&quot;width&quot;:995,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:89626,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!hyr7!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 424w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 848w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 1272w, https://substackcdn.com/image/fetch/$s_!hyr7!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fe89f25c6-b333-4d0d-83ce-2a5f01c7dc01_995x470.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>In-Force Premium (IFP), the sum of premiums Lemonade can expect if all existing customers keep their policies for a full year, continues to grow while OPEX remains flat, demonstrating the efficiency and results of being AI-native. OPEX is expected to grow very slowly as the company scales, while IFP accelerates.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!-3Ge!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!-3Ge!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 424w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 848w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 1272w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!-3Ge!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png" width="663" height="360" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/f5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:360,&quot;width&quot;:663,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:39276,&quot;alt&quot;:&quot;&quot;,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" title="" srcset="https://substackcdn.com/image/fetch/$s_!-3Ge!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 424w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 848w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 1272w, https://substackcdn.com/image/fetch/$s_!-3Ge!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff5ce5194-5d71-43d9-b54e-969ff7211b92_663x360.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p></p><p>Regarding reinsurance, the company announced ceded earned premium related to their quota share program as a percentage of gross earned premium will gradually ramp down from 55% to 20% over the next several quarters. By reducing premium cessions related to quota share reinsurance, we keep more of the business on our books, <strong>thereby retaining more revenue and gross profit</strong>.</p><p>Here&#8217;s an example of $1,000 policy P&amp;L impact in various Quota Share (QS) reinsurance structures:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!ClOa!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!ClOa!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 424w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 848w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 1272w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!ClOa!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png" width="494" height="411" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/f674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:411,&quot;width&quot;:494,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:30743,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!ClOa!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 424w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 848w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 1272w, https://substackcdn.com/image/fetch/$s_!ClOa!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff674aa76-d2f4-4a34-a2cd-8650431b2c8d_494x411.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>A key metric for insurance companies is the <strong>gross loss ratio</strong>, which shows how much of an insurer&#8217;s premium income goes toward paying claims and handling claim costs. This metric continues to improve:</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!bieY!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!bieY!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 424w, https://substackcdn.com/image/fetch/$s_!bieY!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 848w, https://substackcdn.com/image/fetch/$s_!bieY!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 1272w, https://substackcdn.com/image/fetch/$s_!bieY!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!bieY!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png" width="693" height="353" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:353,&quot;width&quot;:693,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:40106,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!bieY!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 424w, https://substackcdn.com/image/fetch/$s_!bieY!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 848w, https://substackcdn.com/image/fetch/$s_!bieY!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 1272w, https://substackcdn.com/image/fetch/$s_!bieY!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F6bfcb8d0-8b2e-46fe-9bc2-b7b02afa6888_693x353.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><div class="captioned-image-container"><figure><a class="image-link image2" target="_blank" href="https://substackcdn.com/image/fetch/$s_!VfcZ!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!VfcZ!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 424w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 848w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 1272w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!VfcZ!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png" width="1019" height="170" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:170,&quot;width&quot;:1019,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:43723,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:&quot;https://arnaldfundamentals.substack.com/i/172593957?img=https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png&quot;,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!VfcZ!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 424w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 848w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 1272w, https://substackcdn.com/image/fetch/$s_!VfcZ!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3d8468c4-53e0-44f7-afde-fdd6eceef899_1019x170.png 1456w" sizes="100vw" loading="lazy"></picture><div></div></div></a></figure></div><p></p><p>The business keeps improving and is nearing profitability &#8212; it&#8217;s never been this solid, yet sentiment keeps deteriorating. That&#8217;s why I consider it an asymmetric bet.</p><p>As presented during the 2024 Investor Day, Lemonade is guiding for <strong>positive Adjusted EBITDA in 2026</strong> and <strong>positive adjusted net income in 2027</strong> (see image below). If achieved, this would mark a major turning point toward sustainable profitability.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!iyu5!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!iyu5!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 424w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 848w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 1272w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!iyu5!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png" width="1456" height="902" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:902,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" title="" srcset="https://substackcdn.com/image/fetch/$s_!iyu5!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 424w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 848w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 1272w, https://substackcdn.com/image/fetch/$s_!iyu5!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48b829a7-bbc0-4e3a-944e-03d97f882714_1600x991.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>Here&#8217;s the full presentation if you&#8217;re interested.</p><div id="youtube2-eNMB4a3_H9o" class="youtube-wrap" data-attrs="{&quot;videoId&quot;:&quot;eNMB4a3_H9o&quot;,&quot;startTime&quot;:null,&quot;endTime&quot;:null}" data-component-name="Youtube2ToDOM"><div class="youtube-inner"><iframe src="https://www.youtube-nocookie.com/embed/eNMB4a3_H9o?rel=0&amp;autoplay=0&amp;showinfo=0&amp;enablejsapi=0" frameborder="0" loading="lazy" gesture="media" allow="autoplay; fullscreen" allowautoplay="true" allowfullscreen="true" width="728" height="409"></iframe></div></div><p>Lemonade is my biggest conviction so far. Over the past few years, I&#8217;ve picked several big winners, including Rocket Lab Corporation (10x), Palantir Technologies (7x), Hims &amp; Hers Health (3x), and Robinhood Markets (3x). I hope Lemonade proves to be equally lucrative.</p><div><hr></div><p>I hope you enjoyed reading through my Lemonade thesis and don&#8217;t forget to share and subscribe! See you next time!</p><p><strong>Not financial advice.</strong></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/subscribe?"><span>Subscribe now</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/p/lemonade-the-ai-engine-transforming?utm_source=substack&utm_medium=email&utm_content=share&action=share&quot;,&quot;text&quot;:&quot;Share&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/p/lemonade-the-ai-engine-transforming?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><div><hr></div><p>If you are interested, join <strong><a href="https://etoro.tw/3F2o8zv">eToro</a></strong> and follow or copy my trades at <a href="https://www.etoro.com/people/arnaugarcia9">arnaugarcia9</a> &#128293;</p>]]></content:encoded></item><item><title><![CDATA[AMD: AI At The Edge]]></title><description><![CDATA[An exploration of AMD embedded technology and the power of hardware customization with FPGAs.]]></description><link>https://arnaldfundamentals.substack.com/p/amd-ai-at-the-edge</link><guid isPermaLink="false">https://arnaldfundamentals.substack.com/p/amd-ai-at-the-edge</guid><dc:creator><![CDATA[Arnau Garcia Rodríguez]]></dc:creator><pubDate>Mon, 24 Feb 2025 08:53:31 GMT</pubDate><enclosure url="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp" length="0" type="image/jpeg"/><content:encoded><![CDATA[<p>AMD (Advanced Micro Devices, Inc.) has experienced a significant downtrend in its stock price and shareholder sentiment, currently trading at nearly 50% below its ATH. </p><p>This decline is partly attributed to a decrease in revenue from its gaming and embedded segments. However, when examining the company&#8217;s performance across its business segments, there are notable growth areas. The <strong>embedded</strong> segment has seen an impressive <strong>CAGR of 127.1%</strong>, while the <strong>data center segment</strong> has also performed strongly, with a <strong>CAGR of 63.2%</strong>. On the whole, <strong>AMD&#8217;s top-line</strong> grew from $22.68 billion in 2023 to $25.8 billion in 2024, reflecting a <strong>year-over-year increase of 13.69%</strong>.</p><p> </p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!7R-G!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!7R-G!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 424w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 848w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!7R-G!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg" width="1456" height="1031" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:1031,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;Image&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:false,&quot;topImage&quot;:true,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="Image" title="Image" srcset="https://substackcdn.com/image/fetch/$s_!7R-G!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 424w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 848w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!7R-G!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F58f120c5-d60b-4808-8f97-730d039d34b0_1600x1133.jpeg 1456w" sizes="100vw" fetchpriority="high"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>While the market is primarily focused on data center growth, the embedded sector is a <strong>hidden catalyst</strong> that could give AMD a strong <strong>moat</strong> in the AI at the edge industry and reverse the bad sentiment about the stock. Here&#8217;s why:</p><p>AMD&#8217;s acquisition of <strong>Xilinx</strong>, completed in 2022, is highly relevant as it strengthens the company&#8217;s position in several rapidly growing sectors. Xilinx, a leader in field-<strong>programmable gate arrays (FPGAs)</strong> and adaptive computing, enhances AMD&#8217;s ability to offer more <strong>customizable</strong>, high-performance solutions.</p><p>This is because unlike traditional fixed-function processors (such as CPUs or GPUs), FPGAs can be <strong>reconfigured</strong> after <strong>manufacturing</strong> to perform specific tasks with high efficiency. Thus, companies are able to <strong>tailor hardware to specialized workloads</strong>.</p><p>Here&#8217;s why FPGAs enhance customization:</p><ol><li><p><strong>Reprogrammability</strong> &#8211; Unlike ASICs (Application-Specific Integrated Circuits), which are designed for a fixed function, FPGAs can be reprogrammed multiple times to adapt to evolving requirements. </p></li><li><p><strong>Optimized Performance</strong> &#8211; By designing hardware specifically for a task, FPGAs can achieve better performance per watt compared to traditional processors executing software-based implementations.</p></li><li><p><strong>Latency reduction</strong> &#8211; Custom FPGA designs can minimize latency by executing computations directly in hardware rather than relying on software-based processing.</p></li></ol><p>By i<strong>ntegrating Xilinx&#8217;s FPGAs with AMD&#8217;s EPYC</strong> <strong>processors</strong>, the company can provide flexible, scalable systems for diverse workloads, from high-performance computing to real-time data processing. This combination positions AMD to better compete against Intel and Nvidia, especially in markets that demand hardware programmability and low latency. This is what Lisa Su, Chair and CEO, said in a press release announcing the completion of AMD&#8217;s acquisition of Xilinx:</p><blockquote><p>Xilinx offers <strong>industry-leading FPGAs</strong>, adaptive SoCs, AI inference engines and software expertise that enable AMD to offer the strongest portfolio of <strong>high-performance and adaptive computing solutions</strong> in the industry and capture a larger share of the approximately $135 billion market opportunity we see across cloud, edge, and intelligent devices.</p></blockquote><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Q-D3!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Q-D3!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 424w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 848w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 1272w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!Q-D3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp" width="533" height="354.7232142857143" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:969,&quot;width&quot;:1456,&quot;resizeWidth&quot;:533,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;AMD Is Leaves Intel in Dust With Superior Chips, Xilinx Megadeal - Bloomberg&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="AMD Is Leaves Intel in Dust With Superior Chips, Xilinx Megadeal - Bloomberg" title="AMD Is Leaves Intel in Dust With Superior Chips, Xilinx Megadeal - Bloomberg" srcset="https://substackcdn.com/image/fetch/$s_!Q-D3!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 424w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 848w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 1272w, https://substackcdn.com/image/fetch/$s_!Q-D3!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F3986adbe-b10c-4f05-ac91-5dc783360687_3376x2247.webp 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Lisa Su, AMD&#8217;s Chair &amp; CEO</figcaption></figure></div><p>AMD has strategically positioned itself as the leader in AI at the edge by enabling the deployment of AI algorithms and models directly on local edge devices such as sensors, industrial equipment, and IoT devices. As the future of AI shifts from training to inferencing&#8212;the phase where its true potential drives real-world applications&#8212;AMD is poised to be a key player, offering powerful solutions to support the growing demand for inferencing workloads.</p><p>Real-world examples of inferencing in action are already shaping industries. Tesla's Robotaxi is one such example, where AI models are deployed on edge devices in autonomous vehicles to make real-time decisions. Similarly, Meta is using inference for content offerings, analysing user interactions in real-time to deliver personalized content. <strong>Meta's collaboration with AMD</strong> has played a crucial role in this process, as the companies have partnered to optimize AI workloads using AMD's powerful <strong>MI300X</strong> GPUs.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!xfpg!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!xfpg!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 424w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 848w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!xfpg!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg" width="478" height="358.5" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/aff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:600,&quot;width&quot;:800,&quot;resizeWidth&quot;:478,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;Meta AMD MI300X Grand Teton&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="Meta AMD MI300X Grand Teton" title="Meta AMD MI300X Grand Teton" srcset="https://substackcdn.com/image/fetch/$s_!xfpg!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 424w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 848w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!xfpg!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Faff6fa79-ad70-4356-9868-6935d60ff41c_800x600.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption"><em>Meta AMD MI300X Grand Teton</em></figcaption></figure></div><p>Another example is <a href="https://www.yahoo.com/tech/amd-chips-powering-newest-starlink-152536546.html?guccounter=1">the recent collaboration with SpaceX</a>. AMD's Versal custom chips, developed initially by Xilinx<strong> </strong>before being acquired by AMD, are now being used by <strong>SpaceX</strong> to power the <strong>newest Starlink satellites</strong>, delivering connectivity from space. Regarding this subject, this is what Lisa said in the Q3 2024 earnings call:</p><blockquote><p>Our Versal portfolio is also being adopted broadly across multiple aerospace customers, &#8230; . As one example, SpaceX recently launched their latest generation broadband satellites powered by Versal AI Core adaptive SoCs."</p></blockquote><p>In summary, I believe AMD's embedded segment revenue will <strong>grow rapidly</strong> in the coming years, driven by the company's <strong>strategic positioning in AI at the edge</strong> and its ability to deliver <strong>customizable hardware solutions</strong> for <strong>inference</strong> workloads.</p><div><hr></div><p>Here&#8217;s the analysis of AMD potential growth in the embedded segment. Thank you so much for reading the article, and don&#8217;t forget to share and subscribe if you enjoyed it!</p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/subscribe?"><span>Subscribe now</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/p/amd-ai-at-the-edge?utm_source=substack&utm_medium=email&utm_content=share&action=share&quot;,&quot;text&quot;:&quot;Share&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/p/amd-ai-at-the-edge?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><p></p>]]></content:encoded></item><item><title><![CDATA[Rocket Lab: The Space Platform]]></title><description><![CDATA[As the space economy shifts from government to commercial players, Rocket Lab USA Inc. rises as a challenger to SpaceX's dominance.]]></description><link>https://arnaldfundamentals.substack.com/p/rocket-lab-the-space-platform</link><guid isPermaLink="false">https://arnaldfundamentals.substack.com/p/rocket-lab-the-space-platform</guid><dc:creator><![CDATA[Arnau Garcia Rodríguez]]></dc:creator><pubDate>Fri, 24 Jan 2025 20:14:13 GMT</pubDate><enclosure url="https://substackcdn.com/image/fetch/f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg" length="0" type="image/jpeg"/><content:encoded><![CDATA[<p>The space industry is growing at a fast pace, along with new use cases that need specialized companies to offer them. This context is promoting the emergence of companies dedicated to various space services, including satellites, launches, space infrastructure, defense and security.</p><p>The global space economy is expected to grow to $1.8 trillion by 2035, as highlighted in this McKinsey article: Space: <a href="https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/space-the-1-point-8-trillion-dollar-opportunity-for-global-economic-growth">The $1.8 trillion opportunity for global economic growth</a>. Below, you can see a graph showing the expected CAGR from 2023 to 2035, in both <strong>reach (</strong>space technology helping companies across industries<strong>)</strong> and <strong>backbone (</strong>satellites, launchers, and services like broadcast television or GPS<strong>).</strong></p><p></p><p></p><p>The leading company in the sector, as you may know, is <strong>SpaceX</strong>. Valued at approximately $350 billion, it has developed high-capacity rockets such as the Falcon 9 and operates a satellite constellation called Starlink. The <strong>Falcon 9</strong> has a payload capacity of 23 tons, making it specialized in delivering large payloads.</p><p>On the other hand, Rocket Lab (<strong>RKLB</strong> from now on) is a public space company dedicated to providing end-to-end space services and is specialized on small satellite launch services. Next, we will discuss the qualitative characteristics on which I have built my investment thesis and that, in my opinion, give the company a strong <strong>moat</strong>.</p><h2>Leadership</h2><p>One of the biggest assets of RKLB is its founder, president, and CEO, <strong>Sr. Peter Beck</strong> (SPB). Born in New Zealand, he founded RKLB in June 2006 and owns the 10% of the company nowadays. After listening to several interviews, you can easily decipher he is a sharp-minded individual with big aspirations, great engineering skills and an overwhelming personality. Truly one of a kind.</p><p><em>&#8220;The space business is going to start to look a little blurry about what is a space business and what is a services business&#8221; - </em>SPB</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!srZj!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!srZj!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 424w, https://substackcdn.com/image/fetch/$s_!srZj!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 848w, https://substackcdn.com/image/fetch/$s_!srZj!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 1272w, https://substackcdn.com/image/fetch/$s_!srZj!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!srZj!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp" width="414" height="258.6514285714286" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:656,&quot;width&quot;:1050,&quot;resizeWidth&quot;:414,&quot;bytes&quot;:32756,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/webp&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!srZj!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 424w, https://substackcdn.com/image/fetch/$s_!srZj!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 848w, https://substackcdn.com/image/fetch/$s_!srZj!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 1272w, https://substackcdn.com/image/fetch/$s_!srZj!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F041c78c6-58db-43b1-ac11-e53075c5dcb1_1050x656.webp 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Sir Peter Beck. Photo: Supplied / Rocket Lab</figcaption></figure></div><p>I would love to share with my readers one of the best interviews he&#8217;s had: &#8216;<a href="https://www.youtube.com/watch?v=B0bXJgDD8lk">Is Neutron almost ready? Peter Beck interview</a>&#8217; by Markets with Madison. It&#8217;s a great summary of the current situation of the company and what he expects to happen next.</p><h2>Business model</h2><p>The fanciest part of the business is rockets. The company has focused on providing access to space for small satellites using the Electron rocket, which has been launched 58 times as of the time of writing. It is a two-stage rocket made of carbon composite and uses LOX and Kerosene as propellants. The rocket is specialized in delivering satellites to precise and unique orbits. Its first stage is reusable, enabling more frequent launches without increasing production costs and helping to reduce overall launch expenses.</p><p>It is important to highlight the world&#8217;s largest 3D printer, which is used to print carbon composite components. This enables Rocket Lab to manufacture its own components without relying on third parties, reducing costs and avoiding issues that could cause delays in space programs.</p><p><em>&#8220;We&#8217;re combining our proprietary flight-proven carbon composite technology, additive manufacturing, and autonomous robotics to design and build large-scale aerospace components at a pace that will support not only Neutron&#8217;s launch cadence, but support Electron and carbon composites structures for our spacecraft customers too.&#8221; </em>- SPB</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!LQXy!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!LQXy!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 424w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 848w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!LQXy!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg" width="1456" height="819" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/a5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:819,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:217355,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/jpeg&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!LQXy!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 424w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 848w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!LQXy!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Fa5aa3baf-dc95-44f1-a08d-08cbb441f0bc_1920x1080.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a></figure></div><p>In the picture below, you can see that ELECTRON is, indeed, <strong>the fastest commercially developed rocket to reach 50 launches</strong>, surpassing Falcon 9. This achievement is yet another example of the company&#8217;s exceptional execution excellence.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!la9Q!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!la9Q!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 424w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 848w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!la9Q!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg" width="800" height="634" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:634,&quot;width&quot;:800,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;Rocket Lab successfully launches its 50th Electron rocket &#8211; Spaceflight Now&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="Rocket Lab successfully launches its 50th Electron rocket &#8211; Spaceflight Now" title="Rocket Lab successfully launches its 50th Electron rocket &#8211; Spaceflight Now" srcset="https://substackcdn.com/image/fetch/$s_!la9Q!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 424w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 848w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!la9Q!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F659acfaa-15db-48cd-b6eb-1d1e2d4e5b44_800x634.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">A graph of commercially-developed, orbital-class rockets and how quickly they reached or approached 50 launches. Graphic: Rocket Lab</figcaption></figure></div><p>The company offers other launching services, such as <strong>HASTE</strong> (Hypersonic Accelerator Suborbital Test Electron) which provides reliable, high-cadence flight test opportunities needed to advance hypersonic and suborbital system technology development. This enables RKLB to provide services to military and defense customers.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!bjyD!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!bjyD!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 424w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 848w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!bjyD!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg" width="440" height="293.3333333333333" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:800,&quot;width&quot;:1200,&quot;resizeWidth&quot;:440,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!bjyD!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 424w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 848w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!bjyD!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F254e7971-2969-4cef-a269-44afa3073180_1200x800.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Electron first stage being recovered</figcaption></figure></div><p>The company has three launch pads. The first two are at Mahia (New Zealand) and the other is at Wallops Island (Virginia, US). This means the company can launch from both hemispheres, providing greater flexibility to choose the best window for a launch.</p><p>However, rocket services are not the company&#8217;s biggest revenue stream. As you can see in the graph below, space systems accounted for almost the 80% of the revenue in Q3 2024. I attribute this success to the SPB&#8217;s vision on the profitability of the company and all its acquisitions.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!Rwlm!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!Rwlm!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 424w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 848w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!Rwlm!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg" width="1220" height="1263" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:1263,&quot;width&quot;:1220,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:&quot;Image&quot;,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="Image" title="Image" srcset="https://substackcdn.com/image/fetch/$s_!Rwlm!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 424w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 848w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!Rwlm!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2F48f47b99-b985-479b-ab55-876835e91ff1_1220x1263.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Revenue and GAAP / Non-GAAP Gross margin review. Source: Q3 2024 earnings</figcaption></figure></div><p>Here&#8217;s the list of acquisitions:</p><ol><li><p><strong>Sinclair Interplanetary</strong> (April 2020): Satellite hardware.</p></li><li><p><strong>Advanced Solutions Inc. </strong>(October 2021): Space software and mission simulation capabilities.</p></li><li><p><strong>Planetary Systems Corporation </strong> (December 2021): Designs and manufactures satellite separation systems.</p></li><li><p><strong>SolAero Holdings, Inc.</strong> (January 2022): Solar power solutions for spacecraft.</p></li></ol><p>These acquisitions have allowed Rocket Lab to expand its offerings from launch services to satellite components and mission support systems. Consequently, revenue has grown significantly as you can see in the next revenue chart.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!9hhU!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!9hhU!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 424w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 848w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 1272w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!9hhU!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png" width="1456" height="832" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/f91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:832,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:121351,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:&quot;image/png&quot;,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!9hhU!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 424w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 848w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 1272w, https://substackcdn.com/image/fetch/$s_!9hhU!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ff91aaba7-4910-48d7-8f08-3691801f4b3a_1638x936.png 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Rocket Lab USA Revenue - Quarterly. Source: https://stockanalysis.com/stocks/rklb/revenue/</figcaption></figure></div><p></p><h2>What&#8217;s coming</h2><p>Exciting times are coming for Rocket Lab. On 1 March 2021, the company announced a medium-lift, two-stage launch vehicle called <strong>Neutron</strong>. It is made of carbon composite and is designed to be capable of delivering a payload up to 13 tonnes. It is expected to start operating this year and will focus on capitalizing on the mega-space constellations delivery market. This could lead to a Rocket Lab proprietary constellation that could reduce costs by self-delivering to lower orbit with Neutron.</p><div class="captioned-image-container"><figure><a class="image-link image2 is-viewable-img" target="_blank" href="https://substackcdn.com/image/fetch/$s_!ZHYV!,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg" data-component-name="Image2ToDOM"><div class="image2-inset"><picture><source type="image/webp" srcset="https://substackcdn.com/image/fetch/$s_!ZHYV!,w_424,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 424w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_848,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 848w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_1272,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_1456,c_limit,f_webp,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 1456w" sizes="100vw"><img src="https://substackcdn.com/image/fetch/$s_!ZHYV!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg" width="1456" height="819" data-attrs="{&quot;src&quot;:&quot;https://substack-post-media.s3.amazonaws.com/public/images/faef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg&quot;,&quot;srcNoWatermark&quot;:null,&quot;fullscreen&quot;:null,&quot;imageSize&quot;:null,&quot;height&quot;:819,&quot;width&quot;:1456,&quot;resizeWidth&quot;:null,&quot;bytes&quot;:null,&quot;alt&quot;:null,&quot;title&quot;:null,&quot;type&quot;:null,&quot;href&quot;:null,&quot;belowTheFold&quot;:true,&quot;topImage&quot;:false,&quot;internalRedirect&quot;:null,&quot;isProcessing&quot;:false,&quot;align&quot;:null,&quot;offset&quot;:false}" class="sizing-normal" alt="" srcset="https://substackcdn.com/image/fetch/$s_!ZHYV!,w_424,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 424w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_848,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 848w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_1272,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 1272w, https://substackcdn.com/image/fetch/$s_!ZHYV!,w_1456,c_limit,f_auto,q_auto:good,fl_progressive:steep/https%3A%2F%2Fsubstack-post-media.s3.amazonaws.com%2Fpublic%2Fimages%2Ffaef4989-48ab-4322-8d91-17fa4d3056ea_2400x1350.jpeg 1456w" sizes="100vw" loading="lazy"></picture><div class="image-link-expand"><div class="pencraft pc-display-flex pc-gap-8 pc-reset"><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container restack-image"><svg role="img" width="20" height="20" viewBox="0 0 20 20" fill="none" stroke-width="1.5" stroke="var(--color-fg-primary)" stroke-linecap="round" stroke-linejoin="round" xmlns="http://www.w3.org/2000/svg"><g><title></title><path d="M2.53001 7.81595C3.49179 4.73911 6.43281 2.5 9.91173 2.5C13.1684 2.5 15.9537 4.46214 17.0852 7.23684L17.6179 8.67647M17.6179 8.67647L18.5002 4.26471M17.6179 8.67647L13.6473 6.91176M17.4995 12.1841C16.5378 15.2609 13.5967 17.5 10.1178 17.5C6.86118 17.5 4.07589 15.5379 2.94432 12.7632L2.41165 11.3235M2.41165 11.3235L1.5293 15.7353M2.41165 11.3235L6.38224 13.0882"></path></g></svg></button><button tabindex="0" type="button" class="pencraft pc-reset pencraft icon-container view-image"><svg xmlns="http://www.w3.org/2000/svg" width="20" height="20" viewBox="0 0 24 24" fill="none" stroke="currentColor" stroke-width="2" stroke-linecap="round" stroke-linejoin="round" class="lucide lucide-maximize2 lucide-maximize-2"><polyline points="15 3 21 3 21 9"></polyline><polyline points="9 21 3 21 3 15"></polyline><line x1="21" x2="14" y1="3" y2="10"></line><line x1="3" x2="10" y1="21" y2="14"></line></svg></button></div></div></div></a><figcaption class="image-caption">Neutron delivering payload. Source: Rocket Lab</figcaption></figure></div><p>An unimaginable number of new use cases could arise as the space economy and technology continue to grow, similar to what happened with the beginning of the internet. In its early stages, the internet was primarily used for military and research communications, file sharing, and a few other niche purposes. Nowadays, it is one of the pillars of our civilization. From my point of view, something similar could happen with space as it becomes <strong>democratized</strong> and more players are able to take part.</p><p>Rocket Lab has spent over two decades developing a <strong>platform</strong> to provide space services to customers. As their landing page states, it is an <strong>end-to-end</strong> space company dedicated to helping its customers take their ideas to orbit by providing launch services, complete spacecraft designs and manufacturing, satellite components, flight software, and more.</p><div><hr></div><p>Here&#8217;s the deep dive on Rocket Lab. This is the first time I publish one of my research papers, and it makes me really happy to share it with all of you. Thank you so much for reading the article, and don&#8217;t forget to share and subscribe if you enjoyed it!</p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/p/rocket-lab-the-space-platform?utm_source=substack&utm_medium=email&utm_content=share&action=share&quot;,&quot;text&quot;:&quot;Share&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/p/rocket-lab-the-space-platform?utm_source=substack&utm_medium=email&utm_content=share&action=share"><span>Share</span></a></p><p class="button-wrapper" data-attrs="{&quot;url&quot;:&quot;https://arnaldfundamentals.substack.com/subscribe?&quot;,&quot;text&quot;:&quot;Subscribe now&quot;,&quot;action&quot;:null,&quot;class&quot;:null}" data-component-name="ButtonCreateButton"><a class="button primary" href="https://arnaldfundamentals.substack.com/subscribe?"><span>Subscribe now</span></a></p><div><hr></div><p>If you are interested, join <strong><a href="https://etoro.tw/3F2o8zv">eToro</a></strong> and follow or copy my trades at <a href="https://www.etoro.com/people/arnaugarcia9">arnaugarcia9</a> &#128293;</p>]]></content:encoded></item></channel></rss>