Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! We’re through Q1 ‘23, and just like everyone expected the Nasdaq is up ~15% YTD, and up 20% from it’s low… What a start to the year! How Will AI Effect Software Business Models?
First of all, thanks for the great work you're doing :) One question to the figures - for the revenue multiples, why are the hyper growth LTM & NTM rev multiples lower than those for high growth companies? Is that a mistake and if not, what is the reason?
Thanks Jamin, great work. I recently did a deep dive on $ESTC. With the strong they're generating in observability and cybersecurity, risk-reward looks attractive imo. Have a read if you’re interested. Happy to discuss.
"The only way for software companies to avoid this gross margin compression when incorporating AI features is to raise prices."
Software companies may also end up cutting operating expense from somewhere else.
Hello Jamin,
First of all, thanks for the great work you're doing :) One question to the figures - for the revenue multiples, why are the hyper growth LTM & NTM rev multiples lower than those for high growth companies? Is that a mistake and if not, what is the reason?
Thanks for the clarification & be well,
Ales @Credo Ventures
Thanks Jamin, great work. I recently did a deep dive on $ESTC. With the strong they're generating in observability and cybersecurity, risk-reward looks attractive imo. Have a read if you’re interested. Happy to discuss.