How they make money … Great visually-engaging financial analysis … making sense of revenue streams and profit structures of some of the largest companies

October 31, 2022

It’s not easy to understand corporate financials.

The traditional metrics tend to hide what is really going on – the different sources of revenue, particularly as brands diversify into many types of services to complement their products – and then how profits are actually derived, or not.

Here are some fabulous visually-engaging financial analysis by Bertrand Seguin, a 37 year old French investor, who spent 12 years at Japanese gaming company Bandai Namco explaining finance to his bosses. They utilise what is known as a Sankey diagram to illustrate revenue and cost flows in ways that spark interest and conversation.

In his newsletter, which you can sign up to, he goes further and interprets the latest financial reporting, forthcoming IPOs and much more, to help make sense of the underlying health of organisations.

Apple is a money machine, now more valuable, market cap $2.4 trillion, than the rest of the “FAANGs” (Meta, Alphabet, Amazon, and Netflix) together.

Microsoft‘s reinvention has been impressive in recent years, driven by the cloud. It’s acquisition of Activision Blizzard will continue the revolution.

Alphabet’s dominance of search advertising sustains its model, but needs to look beyond this to new business models as markets evolve.

Amazon generates huge revenues but little profits, but that is the sign of a relentless innovator, able to focus on the future.

Disney had a great pandemic, as its streaming services rapidly caught up with Netflix. It is no in the driving seat of convergent media again.

Shopify, Tobi Lutke’s digital retail business, has come a long way since his first snowboarding shop which was more focused on community than sales.

Meta is a business in a mess, having lost 60-70% of its value in the last 12 months, with rapid decline in Facebook activity and advertising, and  self-indulgent dreams of its founder.

Visa is the most valuable financial services company in the world, more valuable than any bank. Payment systems in general are driving the real innovation in finance.

These are just examples, from the most recent financial reports. Seguin continues to generate more, and also to add much deeper, interesting commentary in his regular reports. Here are a few more of his diagrams:

 



You’ll find much more similar analysis, and interpretation, on his website and in his newsletters.


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