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Clouded Judgement 3.22.24 - ERR vs ARR and the Conundrum of AI Revenue Streams Today

Clouded Judgement

Subscribe now ARR (Annual Recurring Revenue) vs ERR (Experimental Runrate Revenue) ARR (Annual Recurring Revenue) is one of the most popular SaaS (Non-GAAP) metrics. Many investors laugh (and some rightly so) at the fact that software companies’ valuations are often described as a multiple of revenue.

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A Look Back at Q4 '23 Public Cloud Software Earnings

Clouded Judgement

This has all resulted in the median stock price declining 5% YTD. It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 177
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The Relationship Between Margins and Acquisition Prices

Tom Tunguz

This is as true for their books business as their infrastructure business, AWS. Over sushi, a friend explained to me that this strategy might also extend to the way the company views acquisitions. Bezos has explicitly stated this strategy and it’s the one that has led to Amazon’s massive success in many different lines of business.

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The Most Common SaaS Sales Potholes and How to Avoid Them with Mark Roberge (Podcast #498 and Video)

SaaStr

However, even the savviest entrepreneurs might be unaware of some of the blind spots that could be costing revenue. . Says Roberge, “We’re using a sales comp plan that was invented in the 1980s, and it’s causing our customers to utilize their licenses at a lower rate, and it’s causing revenue contraction.”. When should you scale?

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Clouded Judgement 6.9.23 - Recap of Consumption Trends in Q1 '23

Clouded Judgement

Expansion revenue is still declining (we see this in falling net retention rates), but gross retention remains strong. Very healthy new business (new customer) acquisition. Revenue multiples are a shorthand valuation framework. New customer growth seems to be picking up. Overall Stats: Overall Median: 5.7x Top 5 Median: 15.6x

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Four Sales Compensation Tactics for Consumption-Based GTM with MongoDB’s SVP of Sales

SaaStr

Then, we moved to a more customer-friendly model with SaaS and subscription-based pricing. What’s evolved over the years and is driven by hyper-scalers like Google Azure, AWS, Twilio, and Stripe is the consumption-based model. The first might be market acquisition. There are still some complexities around SaaS-based approaches.

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SaaS companies quickly replacing subscriptions with usage-based pricing

OPEXEngine

Dive Brief: Usage-based pricing has grown 32% this year and now 45% of software-as-a-service (SaaS) companies use it all or in part, up from 34%, an OpenView survey shows. Pricing model growth. Usage-based pricing has been growing since at least 2018, when about a quarter of companies were using it, according to OpenView’s data.