Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Q1 Earnings Season We’re on the eve of Q1 earning season. Next week we get all 3 hyperscalers reporting (AWS from Amazon, Azure from Microsoft, and GCP from Google). If we look at the trends in their most recent quarters YoY growth rates (below) you’ll see the deceleration has been meaningful.
I agree, Jamin, that this is key for Q1 earnings. "What I’ll be watching closely is who re-affirms their guide from 3 months ago, vs who lowers (or raises) the full year guide."
That said, even if a company reaffirms their 2023 guidance, it is still up for debate because we do not know when we will have a recessionary slowdown, how deep or shallow it will be, how long or short it will be.
Cloud companies sell to businesses in all industries - retail, manufacturing, healthcare, financial etc. Many of these are recession prone verticals that are themselves trying to better forecast their business trajectory over the next 12-18 months. When the customers themselves are unsure of the future path, then the software vendors will be kept guessing and making their own best predictions.
Hi Jamin, thanks for your great work. Could you please deduct stock-based compensation to the FCF? Otherwise it can be really misleading and it will show real profitability
Excellent analysis and point of view. It's similar for private companies, Q1 is all about settling in to the replan for the fiscal. Bad Q1 numbers might be forgiven as an adjustment period but Q2 guidance should be solid. If Q2 doesn't go so well then we're in for a lot more pain in startup land too I think.
I agree, Jamin, that this is key for Q1 earnings. "What I’ll be watching closely is who re-affirms their guide from 3 months ago, vs who lowers (or raises) the full year guide."
That said, even if a company reaffirms their 2023 guidance, it is still up for debate because we do not know when we will have a recessionary slowdown, how deep or shallow it will be, how long or short it will be.
Cloud companies sell to businesses in all industries - retail, manufacturing, healthcare, financial etc. Many of these are recession prone verticals that are themselves trying to better forecast their business trajectory over the next 12-18 months. When the customers themselves are unsure of the future path, then the software vendors will be kept guessing and making their own best predictions.
Always enjoy your writings. Cheers!
Hi Jamin, thanks for your great work. Could you please deduct stock-based compensation to the FCF? Otherwise it can be really misleading and it will show real profitability
Excellent analysis and point of view. It's similar for private companies, Q1 is all about settling in to the replan for the fiscal. Bad Q1 numbers might be forgiven as an adjustment period but Q2 guidance should be solid. If Q2 doesn't go so well then we're in for a lot more pain in startup land too I think.