Every week I’ll provide updates on the latest trends in cloud software companies. Follow along to stay up to date! Dispersion! This week was quite interesting, with a number of big moves after quarterly reports. Let’s start with one obvious point - Q1s have been rough! Forget the outlook / guide for a minute. Just looking at Q1 in a vacuum we can say the quarters have objectively been quite bad. One of my favorite metrics to look at is net new ARR added in a quarter. It’s a bit of a swag as not all companies report ARR (and where they don’t I’m calculating ARR as quarterly subscription revenue x4). If we look at the net new ARR added in Q1 vs the quarterly average net new ARR added across the 4 quarters in 2022 (graphed below), you’ll see only 7 companies added more in Q1 ‘23 than their quarerly average across 2022. For many companies the net new ARR added in Q1 was the lowest it’s been in ~2 years.
Great, that's quite helpful - but how to understand SNOW and NET's huge rally after reporting a relatively disappointing results? (SNOW guided down quite a lot…… for twice sequencially；NET also mentioned challenging macro environment. The "AI FOMO" still plays a significant role here?
Great, that's quite helpful - but how to understand SNOW and NET's huge rally after reporting a relatively disappointing results? (SNOW guided down quite a lot…… for twice sequencially；NET also mentioned challenging macro environment. The "AI FOMO" still plays a significant role here?
Great read. Thanks for putting together!