Clouded Judgement

MARCH 1, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Revenue multiples are a shorthand valuation framework. Given most software companies are not profitable, or not generating meaningful FCF, it’s the only metric to compare the entire industry against. Top 5 Median: 19.6x

Cloud 311

Cloud AI Investment Metrics 311

Clouded Judgement

DECEMBER 21, 2023

Q3 earnings season for cloud businesses is now behind us. Subscribe now Is Software Rebounding? Commentary from the cloud providers seems to be that the major macro headwinds around optimizations and new deal scrutiny have started to abate. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 177

Cloud Software Benchmarks Retention 177

Clouded Judgement

FEBRUARY 2, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Cloud Giants Report Q4 ‘23 Two quotes from the Amazon and Microsoft earnings call really stood out to me this week. Sometimes they’re classic cloud migrations. Follow along to stay up to date!

Cost optimization & reporting 161

Cost optimization & reporting Cloud Azure AWS 161

Clouded Judgement

SEPTEMBER 1, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Are Software Companies Over or Undervalued? Today I wanted to dig in to this question and its implications: “Are software companies fairly valued today?” Follow along to stay up to date!

Software Review 183

Software Review Cloud Software Revenue 183

Tom Tunguz

OCTOBER 23, 2023

Yesterday, both Google and Microsoft announced their earnings for their cloud businesses. ” “Higher-than-expected AI consumption contributed to revenue growth in Azure.” “In Azure, we expect revenue growth to be 26% to 27% in constant currency with an increasing contribution from AI.

AI Search 298

AI Search AI Cloud Azure 298

Clouded Judgement

JANUARY 12, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. I pulled some data from Pitchbook that you can see below (screen was for US based companies that they categorize as “software”). Revenue multiples are a shorthand valuation framework. Follow along to stay up to date!

Cloud 284

Cloud Venture Capital Acquisition Metrics 284

Clouded Judgement

MARCH 15, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Revenue multiples are a shorthand valuation framework. Given most software companies are not profitable, or not generating meaningful FCF, it’s the only metric to compare the entire industry against. Top 5 Median: 19.0x

Cloud 161

Cloud Software Review Subscription Payment Features 161

Clouded Judgement

SEPTEMBER 15, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Software Setup Currently, interest rates seem to be the primary driver of software valuations. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Top 5 Median: 14.7x

Software Review 130

Software Review Cloud Software AWS 130

Clouded Judgement

NOVEMBER 3, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Some of these drops rival one of the worst ever software earnings reaction of Tableau in 2016! On Thursday the software index (WCLD) was up ~3%! Pure revenue multiples are trading at a 31% discount to their long term average (5.4x

Software Review 161

Software Review Cloud Software Azure 161

Clouded Judgement

JUNE 16, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Growth Adjusted Software Multiples The last 6 weeks (since the start of May) has been quite the run for software companies. Fast forward to today and the: Median NTM Revenue Multiple is 6.0x The Nasdaq is up 12%.

Cloud 130

Cloud Software Revenue Subscription 130

Clouded Judgement

DECEMBER 22, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Revisiting the “Is Software Expensive” Question The current median revenue multiple for the software universe is 6.4x, which is ~17% below the long term average multiple of 7.8x. Top 5 Median: 16.1x

Cloud 177

Cloud Subscription Payment Features Metrics 177

Clouded Judgement

OCTOBER 27, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. I believe one of the bigger reasons software has held up despite the run up in the 10Y to 5% is the expectation for re-acceleration (ie numbers / forecasts going up). Quite different then the expectation for acceleration in software in 2024.

Cost optimization & reporting 152

Cost optimization & reporting Cloud Azure AWS 152

Tom Tunguz

FEBRUARY 2, 2023

I’m watching public company earnings to identify early weaknesses in the software market. So far in the first month of the year, AWS year-over-year revenue growth is in the mid-teens. Google: [We] are pushing Google Cloud to Profitability. Yesterday, Google & Amazon announced earnings which completes the picture.

GCP(Google Cloud Platform) 289

GCP(Google Cloud Platform) Cloud AWS Sales Hiring 289

Clouded Judgement

APRIL 19, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. NTM revenue multiple. Their GAAP revenue grew 5% in 2023, and 29% in Q4 ‘23 YoY. Their GAAP revenue grew 5% in 2023, and 29% in Q4 ‘23 YoY. For context, full year GAAP revenue in 2023 was $628m.

Cloud 141

Cloud Scale Subscription Payment Features 141

Clouded Judgement

DECEMBER 1, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Is this a sign that software headwinds have bottomed? Amazon and Snowflake have both made comments recently that Cloud Optimizations are starting to play second fiddle to net new workload growth. Follow along to stay up to date!

AWS 293

AWS Cloud AI Search Cost optimization & reporting 293

Clouded Judgement

JANUARY 5, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now 10Y Rising The start of the year has not been kind to software stocks! In the basket I track and discuss in Clouded Judgement (~80 companies), no one is up on the year. Follow along to stay up to date! Bucketed by Growth.

Cloud 152

Cloud Trends Subscription Payment Features 152

Clouded Judgement

JULY 21, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Are Software Companies Bad Businesses? There was some talk last week on the All-In podcast about software companies. The gold standard for all public software companies is GAAP net income in the fullness of time.

Cloud 130

Cloud Software Sales Hiring Scale 130

Clouded Judgement

DECEMBER 29, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now 2023 Top Performers In 2023, there were 14 cloud software companies that were up 100%+ this year (in the index I track of ~80 total)! Revenue multiples are a shorthand valuation framework. Bucketed by Growth.

Cloud 189

Cloud Software Review Subscription Payment Features 189

Clouded Judgement

MARCH 10, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Growth Deceleration of Consumption Companies So far, 2023 guides have not been pretty for consumption software companies. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Top 5 Median: 11.8x

Cloud 244

Cloud Trends Subscription Payment Features 244

Clouded Judgement

MARCH 8, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. They don’t expect that aggregate $80m of revenue from 2023 to repeat in 2024. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Subscribe now 2024 Guides - Are they Conservative?

Cloud 161

Cloud Revenue Subscription Payment Features 161

Clouded Judgement

APRIL 12, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. What’s maybe most interesting about the rise in the 10Y is the relatively little impact it’s had on software valuations. The average YTD performance of my index of ~80 software companies is only down 5%. Bucketed by Growth.

Cloud 141

Cloud Subscription Payment Features Revenue 141

Clouded Judgement

FEBRUARY 23, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. The second part is a nuanced point - the median cloud software stock is down 2% year-to-date. Revenue multiples are a shorthand valuation framework. Revenue multiples are a shorthand valuation framework.

Cloud 152

Cloud Metrics Revenue Subscription 152

Clouded Judgement

SEPTEMBER 12, 2023

Q2 earnings season for cloud businesses is now behind us. We will see this show up in revenue figures in a quarter or two. Regardless, as we round into Q3 we’ll start to “lap” the first tough quarters so it wouldn’t surprise me to see a number of companies accelerate their YoY revenue growth.

Cloud 169

Cloud Software Benchmarks Retention 169

Clouded Judgement

FEBRUARY 9, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. After a few software companies have reported we can start to look at the data behind “are numbers going up.” Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Top 5 Median: 19.5x

Cloud 195

Cloud Pricing Startup Revenue 195

Clouded Judgement

FEBRUARY 10, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. ” Were 2023 Software Estimates Already De-Risked To Start The Year? Another topic I’ve discussed at length here is the question of “are forward estimates too high” for software companies. Hard Landing?

Cloud 268

Cloud Software Review Technical Review Systems Review 268

Clouded Judgement

JUNE 20, 2023

Q1 earnings season for cloud businesses is now behind us. The question on everyone’s mind - when will we see software re-accelerate? The real headwinds to software (tougher expansion, longer sales cycles / procurement, slower new business, budget crunches / RIFs, etc) started last August.

Cloud 161

Cloud Software Benchmarks Scale 161

Clouded Judgement

APRIL 12, 2023

Q4 earnings season for cloud businesses is now behind us. Less than half of the software universe is guiding above consensus, and the median guide has gone from ~2.5% Beating consensus revenue estimates is the first aspect of a successful quarter. At the same time, forward guides are also weakening.

Cloud 161

Cloud Software Benchmarks Retention 161

Clouded Judgement

DECEMBER 8, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Q3 ‘23 Earnings Summary Preview The vast majority of all software companies have now reported Q3. Let’s see if this trend continues in Q4, but I think we’re starting to get to the end of the software recession.

Cloud 161

Cloud Software Review Headcount Trends 161

SaaStr

SEPTEMBER 20, 2023

Discover Bessemer Venture Partners’s annual State of the Cloud report, going through trends, benchmarks, and metrics that underpin the Cloud economy. The past twelve months have been relatively turbulent for Cloud founders. What does this mean for Cloud companies? What does this mean for Cloud companies?

Cloud 233

Cloud Payments Software Review Payment Solutions 233

Clouded Judgement

APRIL 14, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Net New ARR Slowdown It’s no secret that cloud software businesses have seen headwinds over the last couple quarters. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Their takeaway?

Cloud 169

Cloud Subscription Payment Features Trends 169

Clouded Judgement

NOVEMBER 24, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Quarterly Reports Summary Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months.

Cloud 161

Cloud Subscription Payment Features Metrics 161

Clouded Judgement

MAY 19, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Reflections on Software Performance in Q1 Software stocks have enjoyed quite the run this year. Medium and high growth software companies have seen a median stock price performance this year of 21% and 26% respectively.

Cloud 161

Cloud Subscription Payment Features Retention 161

Clouded Judgement

FEBRUARY 16, 2024

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now January Green Shoots A couple key software players have given us commentary in their Q4 earnings report (quarter ending December) that January (the first month of Q1) saw some green-shoots. Follow along to stay up to date!

Cloud 161

Cloud AWS Metrics Subscription 161

Clouded Judgement

AUGUST 4, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Subscribe now Cloud Giants Update “What we're seeing in the quarter is that those cost optimizations, while still going on, are moderating and many maybe behind us in some of our large customers. Follow along to stay up to date!

Cloud 130

Cloud Azure Cost optimization & reporting AWS 130

Clouded Judgement

OCTOBER 20, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Hyperscaler Preview Next week Amazon, Microsoft and Google report earnings and we’ll see Q3 data for AWS, Azure and Google Cloud. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date!

Cloud 161

Cloud Azure AWS Software Review 161

Clouded Judgement

AUGUST 18, 2023

Every week I’ll provide updates on the latest trends in cloud software companies. Now let’s look at some Q2 software earnings data starting with net new ARR trends. Revenue multiples are a shorthand valuation framework. Follow along to stay up to date! Overall Stats: Overall Median: 5.7x Top 5 Median: 13.2x

Cloud 243

Cloud Software Review Subscription Payment Features 243

Tom Tunguz

OCTOBER 27, 2022

I’m watching public company earnings to identify early weaknesses in the software market. Google Cloud Platform. Infrastructure revenue growth averaged 33% this quarter, which is astounding considering we’re talking about businesses that sum to more than $50b of revenue per quarter. Microsoft Azure.

Cloud 228

Cloud GCP(Google Cloud Platform) Azure AWS 228