David Rosenthal: belief

Transcript context

…You might say, wait, if they have 50% net income margins, what is their gross margin? Because is it SaaS level good at 75%–85%? Their gross margins are 98%. There are no variable costs in this business. There are no cost of goods sold. It's crazy. I think with 50% net income margins, this is literally the most profitable large-scale company in the world. I don't know of any other businesses of this size or even 5 or 10 times smaller that have over a 50% net income margin, including MasterCard, which is 43%. Just to throw some numbers out for people that are not looking at financial statements all the time, Microsoft, 34% net income margins. Microsoft sells software, they ship bits. Apple, 25%. They have an incredibly marked-up product that is differentiated wildly by brand, 25% net income margins. Google has a monopoly in a market of information. What are the costs involved in that business? Twenty-one percent net income margins. Wow, I would have thought Google will be higher. As we were talking in my mind, I was like, well, Google's probably the only one that can come close, but wow, Microsoft is higher. I didn't realize that. It's nuts.…

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