“There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and in miseries. On such a full sea are we now afloat. And we must take the current when it serves or lose our venture.” -Shakespeare
AYX, DDOG, ROKU and even ZS, are among many SaaS companies that have now released their Q4 quarterly earnings. I have NOT yet seen any (or heard on the calls I’ve been on) SaaS companies that missed their earnings estimates or are slowing down their growth, and almost all seem to be accelerating their revenue growth and reporting sustained net customer retention rates, and blistering customer acquisition and RPOs (similar to bookings, this is “Remaining Performance Obligations” and is the amount of revenue already contractually obligated to be paid to the SaaS company from its customer (and sometimes collected already too) but still deferred and NOT recognized as revenue in the quarter. As this number grows, it does extremely well for future quarters and years, depending on the length of the contracts, which are typically 1-3 years. I track this number and for AYX, it grew over 80% to $340.1m in Q4!! Wouldn’t it be nice at the end of an amazing year for your company to know that you will start the next year with… oh… 75-80% of the revenues you will need to sell top just repeat your last years performance ALREADY in the bag and virtually guaranteed for the following year. That is the power of the SaaS model and the “tide” we are currently surfing. Cheers!
