In Q4 '23 top decile Cloud companies
In Q4 '23 top decile Cloud companies:
- Beat estimates by >5%
- Guided next quarter >2% above consensus
- Grew >33% YoY
- Gross Margin >86%
- FCF Margin >35%
- Net Retention >120%
- CAC Payback <17 months
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We're back to the pre-ZIRP trendline but consensus estimates have us growing well above on AI tailwinds.
Looking specifically at $Amazon.com(AMZN)$ AWS you can see the even bigger benefit from digital natives, the cost optimizations, and a slow ramp of consensus back to the pre-ZIRP trendline by YE24
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Contrast that to $Microsoft(MSFT)$ Azure which saw little benefit from ZIRP but is seeing an even greater tailwind from AI:
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$Alphabet(GOOG)$ $Alphabet(GOOGL)$ GCP is in between the two but looks more similar to Azure than AWS.
If you take the same look at Infrastructure Software on a cumulative basis we're back at the pre-ZIRP trendline and have been for a couple quarters: $Snowflake(SNOW)$ $Confluent, Inc.(CFLT)$ $MongoDB Inc.(MDB)$ $Datadog(DDOG)$ $Elastic N.V.(ESTC)$
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Caveating the lol consensus estimates and games companies and sell-side play with guidance in software, there's a vastly different set of expectations for the hyperscalers vs infra software names.
https://twitter.com/jaminball/status/1778438072725848559
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