JaminBall
JaminBall
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avatarJaminBall
11-02

Top 10 #SaaS #Cloud multiples

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Top 10 #SaaS #Cloud multiples
avatarJaminBall
11-01

Cloud Giants Update: AMZN, MSFT & GOOG

Cloud Giants Update: AWS ( $Amazon.com(AMZN)$ ): $110B run rate growing 19% YoY (last Q grew 19%)Azure ( $Microsoft(MSFT)$ ): ~$66B run rate (estimate) growing 34% YoY (last Q grew 33% cc) $Alphabet(GOOG)$ $Alphabet(GOOGL)$ Google Cloud (includes GSuite): $45B run rate growing 35% YoY (last Q grew 29%, neither are cc)ImageAggregate quarterly net new ARR by the hyperscalers Image $Amazon.com(AMZN)$ AWS at a $110B run rate growing 19% Quarterly YoY growth trends below.ImageQuarterly net new ARR addedImagePretty incredible commentary from Microsoft yesterday:"we're excited that on
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Cloud Giants Update: AMZN, MSFT & GOOG
avatarJaminBall
10-31

MSFT Azure Quarterly YoY growth trends

Azure at a ~$66B run rate growing 34% constant currency (33% overall)They recently restated Azure, so some of the historical comparisons won't be apples to apples. PowerBI and EMS are no longer included in Azure which represented ~$20B of run rate last QQuarterly YoY growth trends below $Microsoft(MSFT)$ ImageNot exact figures, but rough estimates on Azure AI Services quarterly run rate below (12pts of growth this Q). They only disclose the % of growth to a full round number (no decimal point), so definitely not exactImageBelow is an estimate of net new ARR added over the last few quarters.ImageYoY growth trends in net new ARR per quarterImage
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MSFT Azure Quarterly YoY growth trends
avatarJaminBall
10-26

Top 10 #SaaS #Cloud multiples on OCT26

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Top 10 #SaaS #Cloud multiples on OCT26
avatarJaminBall
10-20

Top 10 SaaS Cloud multiples

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Top 10 SaaS Cloud multiples
avatarJaminBall
10-17

Palantir isn’t just a company - it’s a founder factory

$Palantir Technologies Inc.(PLTR)$ isn’t just a company - it’s a founder factory. Palantir has produced a remarkable number of founders and technology leaders: from founding startups like Anduril (Brian Schimpf, Trae Stephens, and Matt Grimm) and Affirm (Max Levchin and Nathan Gettings) to leading consequential organizations such as OpenAI (Bob McGrew - Chief Research Officer) and Fox (Melody Hildebrandt - CTO).CobiBGantz and I dig into Palantir's unique culture and unpack the key ingredients that make it so:1. Uncompromising Talent Bar2. Mission Orientation3. Forward Deployed Engineering: Deliver Outcomes, Not Software4. Seek Truth: Solve Real Problems, Not Shiny Ones5. Define a Shared Enemy: United The Team6. Flat Structure: Direct Access To Lea
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Palantir isn’t just a company - it’s a founder factory
avatarJaminBall
10-12

Top 10 #SaaS #Cloud multiples

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Top 10 #SaaS #Cloud multiples
avatarJaminBall
10-05

Top 10 #SaaS #Cloud multiples

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Top 10 #SaaS #Cloud multiples
avatarJaminBall
10-04

In Q2 '24 top decile Cloud companies

In Q2 '24 top decile Cloud companies:- Beat estimates by >4%- Guided next quarter >2% above consensus- Grew >33% YoY- Gross Margin >83%- FCF Margin >29%- Net Retention >119%- CAC Payback <21 months $8x8(EGHT)$ $Box(BOX)$ $Blackline Inc.(BL)$ $Bilibili Inc.(BILI)$ $BigCommerce Holdings(BIGC)$ $Atlassian Corporation PLC(TEAM)$ $Asana, Inc.(ASAN)$ $AppFolio(APPF)$ $AmplitudeE, Inc.(AMPL)$
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In Q2 '24 top decile Cloud companies
avatarJaminBall
10-02

OpenAI S2S API & LiveKit: Revolutionizing Real-Time Voice

OpenAI launching their speech-to-speech real-time voice API is a big deal. It's now possible to build experiences like Advanced Voice Mode. Go build with OpenAI and livekit!Here's why the speech-to-speech API matters so much. Historically models could only accept a text input, and only give a text output. In order to build a voice experience you needed to string together multiple tools. You'd use something like LiveKit to handle all of the network infrastructure and optimization. Then you'd use a speech to text provider to convert the audio file to text to feed into the model. The model runs inference and then spits out text, that is feed into a text-to-speech provider. That audio file is then sent over the network (LiveKit) and played out the speaker in the application. This creates two "
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OpenAI S2S API & LiveKit: Revolutionizing Real-Time Voice
avatarJaminBall
09-28

Top 10 SaaS Cloud multiples

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Top 10 SaaS Cloud multiples
avatarJaminBall
09-26

Inference pricing on GPT4 models has dropped nearly 90%

OpenAI has shared this chart a few times, but important to call out. Inference pricing on GPT4 family of models has dropped nearly 90% since it's release!This trend will continue. Business models that don't make sense now will in the future. Latent demand will be unlocked.ImageAnd history rhymes. $Amazon.com(AMZN)$ AWS has seen 60-100+ price reductions in their core S3 and EC2 products since inception. S3 alone has seen nearly a 97% price reduction!Imagehttps://x.com/jaminball/status/1839010468972867892
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Inference pricing on GPT4 models has dropped nearly 90%
avatarJaminBall
09-21

Clouded Judgement 9.20.24 - Rate Cuts Begin!

It finally happened! The Fed cut rates by 50bps. This represents the first rate cut since the start of the Covid pandemic, and one that has been highly anticipated. There was a little debate on if this cut would be 25bps or 50bps, but we ended up with 50bps. The target fed funds rate now has a range of 4.75% to 5%. The 10Y didn’t change at all, in fact it was slightly up (3.68% last week to 3.72% as of this writing). This goes to show the rate cut was no surprise to the market.This cut signals a transition from the Fed's aggressive inflation-fighting stance to a more balanced approach. The decision to implement a cut on the large end of expectations reflects the Fed's growing confidence that inflation is moving sustainably toward its 2% target. Fed Chair Jerome Powell stated, "We have gain
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Clouded Judgement 9.20.24 - Rate Cuts Begin!
avatarJaminBall
09-14

Clouded Judgement - 2024 Estimates

Q2 earnings season is now behind us. I’ll provide a more comprehensive recap later, but for now, let’s look at how the future outlook has changed after Q2 earnings. One metric I like to examine is how much companies adjust their full-year guidance. Generally, software companies follow a beat-and-raise model in their forecasts. The “raise” part reflects how much the future outlook (i.e., the guidance) changes. When we compare full-year guidance for 2024 from the Q2 call versus the Q1 call (~3 months ago), you’ll see in the graph below that, for the most part, full-year guidance didn’t change significantly. The median full-year “raise” was only 0.3%.Looking at Q2, the median “beat” (i.e., how much a company’s Q2 results exceeded consensus) was around 1.5%. So, while the median quarterly beat
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Clouded Judgement - 2024 Estimates
avatarJaminBall
09-07

Clouded Judgement - Kingmaking in the Era of AI

When too many kings vie for the crown, you’re left with a brutal game of thrones. Can anyone truly win in a game of thrones? And will the end justify the means?I’ve been thinking about this a lot recently. Right now, there is A LOT of king-making happening in venture capital rounds in the AI space. Just this week a couple month old company raised $1b dollars. This is not a commentary on that company or it’s prospects. It could be a great investment, and they have one of the best AI teams assembled. But the round dynamics, and many other rounds like it, remind me of king making rounds.What is a king making round? We saw a lot of these pop up around the Softbank Vision fund and later in the 2021 period. The idea is that you can use capital as a weapon to anoint a winner in a category, while
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Clouded Judgement - Kingmaking in the Era of AI
avatarJaminBall
09-01

Clouded Judgement - Incrementalism vs Transformative Leaps

Over the last 5-10 years, software markets have become increasingly crowded. Simultaneously, venture markets have expanded dramatically, contributing to this overcrowding. In a world without venture capital (or other sources of external financing for startups), each company would have to grow solely based on the merits of their product and sales. Growth would be slower, but market share would likely be more concentrated among leading companies (though one could also argue for more fragmentation among a smaller number of players). It would be harder for inferior companies to compete. On the flip side, this might lead to slower innovation cycles as “incumbents” face less pressure from a smaller number of challengers.In a world where venture markets are flush with cash, it’s common for five o
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Clouded Judgement - Incrementalism vs Transformative Leaps
avatarJaminBall
08-24

Clouded Judgement 8.23.24 - Don't Wait

Two weeks ago I wrote about the growing number of private zombies. A common question I got after that post was “what should I do if I’m in that position?” A couple thoughts below. Most importantly - don’t wait. Don’t hope for things to improve. Hope is not a strategy. It’s a lottery ticket. I think there are 3 concrete things to do:Figure out if you’re a short / long term zombie: Turnarounds are hard, but they do happen. There may be some idiosyncratic reasons your market turned on you, but you expect it to turn back. There’s no need to panic at the “bottom,” but it’s also very important to be realistic about your chances of revivalGet closer with your existing investors. At some point you will want to raise more money. It may be a down round. Or you’re hoping to raise a flat round to “val
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Clouded Judgement 8.23.24 - Don't Wait
avatarJaminBall
08-23

A couple charts to summarize software earnings so far

1: Aggregate net new ARR added (just for the companies who've reported so far, looking at that groups net new added for the last few quarters / years). Generally we don't dip down from Q1 to Q2...Image2. After a few quarters of YoY growth in net new ARR added, we dropped off dramatically in Q2Image3. 87% of companies have come in ahead of Q2 consensus, with a median beat of 1.8%. "Not getting better not getting worse"Image4. 51% of companies have guided Q3 above consensus, with the median guide coming in right at consensusImage5. We've now had 9 quarters in a row without any real guidance raises. On average, companies are "beating but not raising"Image6. Comparing full year guides from this quarter vs last quarter, the median company kept full year guidance constant
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A couple charts to summarize software earnings so far
avatarJaminBall
08-17

Clouded Judgement 8.16.24 - The Great Services-To-Software Rotation

There's a lot of debate right now about the economic impact of GenAI. Some critics argue that it's deflationary—that by making it possible to do more with less, GenAI will shrink markets, particularly in software. They contend that AI agents, capable of handling infinite workloads, will ultimately reduce the need for software spend. I believe this view is (dramatically) missing the bigger picture .In reality, GenAI is poised to drive an epic shift from services spend (both internal and external services) to software spend. And that shift will dramatically expand the size of software markets (and the equity value created). I’m certainly not the first (or thousandth..) to have this view, but I wanted to flesh out why.Let’s discuss why this matters.Consider a hypothetical budget scenario. Tod
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Clouded Judgement 8.16.24 - The Great Services-To-Software Rotation
avatarJaminBall
08-16

GenAI Likely to Boost Software Markets

Lots of conversation / debate around GenAI, and if it'll shrink markets / create deflationary software forces (because you can do more with less). I really disagree with these takes for one main reason - GenAI will create an epic services-to-software rotation which will greatly INCREASE the size of software markets. I don't really think this is that controversial of a take My favorite quantitative example that lays out how big some of these services markets can get comes from the Mulesoft S1 back in 2017:"We estimate our current market opportunity to be $29 billion...Separately, Forrester estimates an additional $394 billion will be spent in 2017 on systems integration project work [services], which does not include the spending on custom-coded integrations by internal development teams."A
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GenAI Likely to Boost Software Markets

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