No Mercy / No Malice: One Ring to Rule Them All

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0:49Always wear your seatbelt. Star Wars The Mandalorian and Grogu, now streaming on Disney+. Read PG-13. The Colonel's cooked up a new$10 bucket of the day just for you. Monday, 10 wings for$10. Tuesday, 8-piece fried chicken for$10. Wednesday, 8 tenders for$10. Thursday, 10 wings for$10. Friday, 24 nuggets for... Ooh, you guessed it, didn't you? $10. The$10 bucket of the day deal. Every weekday, only at KFC. It's finger-lickin' good. Prices and participation vary while supplies last. Not available on third-party ordering platforms. Tax Extra. I'm Scott Galloway, and this is No Mercy, No Malice. Aura filed to go public last week.

1:38The firm has a compelling mix of revenue that includes growing hardware and subscription businesses. Also, it has the greatest share of health interface than any of its big tech rivals. One ring to rule them all, as read by George Hahn.

2:03George Hahn:I have worked out four times a week for the past 40 years, prioritize my sleep, and mostly eat well. I do these things so I can regularly sleep too little and consume too much alcohol and dessert. Just the same, in June, I wrote that at the end of their life, nobody says they wish they'd done a better job optimizing their VO2 max. I'm wary of reducing daily activities to numbers on a dashboard. But as an investor, I'm bullish on companies that are able to tap into the wellness trend and capture a significant share of the health interface, or SOHI, SOHI. Case in point, I believe Aura, which has built a moat filled with 42 billion hours and counting, of longitudinal first-party user data will be well-received when the firm goes public later this month.

3:06George Hahn:Disclosure, I'm not an investor, and this isn't investment advice, but I will likely be joining the Fellowship of the Ring and buying shares in the IPO. The world's most valuable companies appeal to human instincts. Apple, number two, is a luxury brand tapping into our desire to procreate by signaling wealth, status, and sex appeal. Google, a.k.a. Alphabet, number three, is so good at targeting our curiosity by answering questions such that it's become synonymous with omniscience, i.e. a higher power. Amazon, number five, exploits our hunter-gatherer instincts by promising unlimited supplies and frictionless consumption.

3:54George Hahn:Meta, number ten, capitalizes on our need for social connection and belonging. Each of these companies uses real-time data receptors and artificial intelligence, making their products more valuable the more we use them. Finally, they turn first-party data into moats via vertical integration, controlling the entire customer experience and owning the relationship. Excluding meta, they further lock in customers via recurring revenue bundles, i.e. rundles. Aura offers one of the few ways for a retail investor to play the growing but highly fragmented$7 trillion health and wellness market. But what jumps out are the attributes the company shares with the big four above.

4:51George Hahn:Rings are rich in symbolism, speaking volumes about the wearer and their social status. An aura ring sends a strong message to potential mates, signaling health and wealth, and taps into fears of mortality by promising its wearer longevity. As aura investor and enthusiast Gwyneth Paltrow told Inc. in 2022, I think we're getting very smart as a species, and we understand that there are certain things that we have to do in order to have longevity. One of those things on the longevity to-do list? Measure everything, everywhere, all at once. Similar to the Apple Watch, the Oura Ring tracks 50-plus health and fitness metrics.

5:39George Hahn:Unlike the watch, which a wearer often removes at night for charging, the ring goes more than a week on a single charge and is worn nearly continuously. According to the company's S1 filing, the median subscriber wears their ring 23 hours per day. By manufacturing the device, continuously collecting data, and adding a thick layer of technology and innovation, Aura may be collecting more real-time first-party data on wellness than any business in the world. CEO Tom Hale positions the company's product not as a wearable, but as a health intelligence platform. The big four are in the health and wellness space to varying degrees, but their SoHi is limited by their business models.

6:34George Hahn:Engagement time is a decent proxy for SoHi. Amazon and Meta track users on their respective platforms and, with permission, across the web, but their insights are derived from the content we consume and the things we purchase. Apple uses privacy as a wedge to decouple its brand from the data-harvesting practices of its competitors, a strong PR strategy that throttles what the company knows about its customers. Apple supplements it so high with iPhones and watches, but neither device has a 23-hour-per-day lock on the user. And AirPods outsell Apple Watches by more than 2 to 1, making the watch an also-ran wearable inside the company's ecosystem.

7:23George Hahn:Meanwhile, a ring has a greater proximity to blood flow than a wristwatch, making it the more accurate tool for measuring vitals. Google comes closest to Aura's So High as it tracks users online, on Android phones, and via their Fitbits Google acquired the fitness tracker in 2021 Aura's S1 boasts something missing from Silicon Valley IPOs A profitable business Let's start by acknowledging that hardware is hard After Apple, which is rumored to be working on a ring, and Samsung, which released one two years ago, the drop-off is steep for big tech. Between 2017 and 2021, Amazon lost$25 billion developing its devices business.

8:18George Hahn:Over the past decade, Meta has spent$100 billion on VR and AR product development and acquisitions, with little to show for it beyond a mothballed Metaverse. The company's best effort in hardware has been its partnership with Ray-Ban, which tripled sales of Meta's glasses to 7 million units last year. Aura's hardware business is profitable, with a gross margin of 55 % for the first nine months of FY26. There's room for improvement, however, as that margin fell from 65 % in FY24 to 52 % in FY25 due to battery issues with some models. The firm claims those issues have been resolved. Meanwhile, there's plenty of potential to increase market share as Aura registered less than 2 % of global wearable shipments last year.

9:20George Hahn:The hardware is the starting point of Aura's flywheel, however, as 94 % of activated rings convert to paid subscriptions at either$5.99 per month or$69.99 per year. The gross margin on subscriptions was 89 % for the first nine months that ended June 30, 2026, or as fiscal year ends September 30. The number of subscribers doubled year-on-year to 5 million with a 12-month retention rate of 87 % as of June 2025, on par with Netflix and Spotify. Overall, company revenue grew by 74 % year-on-year to$1.4 billion. And while the revenue mix is shifting toward subscriptions, Aura has two profitable growing lines of business.

10:22George Hahn:Aura is reportedly seeking to raise$3 billion at a$16 billion valuation. Put another way, it's asking investors to assign an 11x revenue multiple, appropriate for a high-margin subscription software business, to a company that gets 77 % of its revenue from hardware. In mixed revenue scenarios, markets typically find the inferior part of a business and assign that part's lower multiple to the whole enterprise. But if we exclude the hardware business, two times revenue multiple at a$2 billion valuation, that means Aura thinks its subscription business is worth$14 billion. In order to justify a 43x multiple, Aura needs to continue doubling its paid subscriptions year on year until it reaches approximately 25 million subscribers.

11:26George Hahn:The elephant in the room? Peloton. With a tighter gross margin, especially on hardware, the company needed hockey stick subscriber growth to justify its$46 billion valuation at the peak of the pandemic. For a brief, quarantined moment, Peloton lived up to its narrative, increasing subscribers 6x from 2020 to 2022. Since then, subscriber growth has flatlined, reducing Peloton's market cap to one-third of what it was at the IPO The good news for Aura is that it has a strong organic growth engine With 40 % of new subscribers coming from word of mouth Aura also benefits from being the first consumer health wearable to be approved as an HSA or FSA purchase meaning an estimated 70 million Americans can pay for an Aura ring or a subscription with pre-tax dollars.

12:31George Hahn:To buy an Apple Watch with either an HSA or FSA, a consumer needs a doctor's note. The challenge for Aura is that it'll have to broaden its customer base. Nearly three-quarters of its customers are women, and 73 % of its subscribers are under 45. Those demographics are likely driven by Aura's most compelling use case to date. Its fertility tracker is three times more accurate than manual tracking via a calendar. Leaning into sleep tracking, another Aura strength, opens the door to a wider pool of potential customers. Consider sleep apnea, a chronic condition that affects 84 million Americans, 59 % of whom are men, and contributes to an estimated 38 ,000 cardiovascular -related deaths annually.

13:28George Hahn:A 2025 study determined that aura rings are comparable to medical sleep studies in detecting apnea. Further positioning the ring as both a fitness and wellness AI advisor, as well as an early warning system for diseases that affect large numbers of people, is key to owning a greater SOHI. This is doable, but will require continued investments in R &D to create new offerings, as well as sales and marketing to acquire more customers. Aura didn't say how it plans to deploy the$3 billion raised via IPO, but it did acknowledge a$924 million loss attributable to repaying early investors. Management will say it's cleaning up the cap table, but that nearly$1 billion could have bought a lot of new customers outside the demographic groups where the company is already strong.

14:34George Hahn:Every era picks proxies for its anxieties. In the 1980s, it was money. In the 2000s, followers were a proxy for the social terror that accompanied the disruption of communities and institutions. Today, it's wellness. A yoga babble buzzword designed to cauterize the open wounds of a society where wealth flows from earners, the young and poor, to owners, the wealthy and old. Reversing those flows feels beyond our control, so we double down on the variables we can adjust. We're building a multi-trillion dollar industry on the idea that if we just optimize hard enough, we can inoculate ourselves from suffering the consequences of collective failure.

15:26George Hahn:The great American export used to be optimism, wrapped in a package of shared sacrifice. Increasingly, it's the belief that if you can't fix the world around you, at least you can fix yourself. Maybe.

15:48George Hahn:Life is so rich.

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