      cloudedjudgement.substack.com · 2023-06-20
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Clouded Judgement: Q1 2023 Public Cloud Software Earnings Analysis

Analysis of Q1 2023 earnings for 63 public cloud software companies reveals a market in bottoming phase with weak net new ARR growth (median -21% YoY), historically low consensus beat rates (1.7% vs. 4% historical), and valuation multiples at historical highs despite poor growth expectations. The author provides a framework for evaluating SaaS performance across key metrics including NRR, CAC payback, FCF margin, and growth, while cautioning that a potential recession could add incremental headwinds.

10 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

Forward Growth Rate Expectation

15percent

all-time low

Public software universe 1-year forward expectations

Gross Margin Adjusted CAC Payback

12months

best-in-class

Private SaaS companies

Gross Margin Adjusted CAC Payback

24months

maximum

Private SaaS companies (subpar if exceeded)

Historical Consensus Beat

4percent

average

Public cloud software (multi-year average)

Net Revenue Retention

130percent

best-in-class

Enterprise SaaS companies

Net Revenue Retention

115percent

minimum

Enterprise SaaS companies (good performance threshold)

Net Revenue Retention

120percent

best-in-class

SMB-focused SaaS companies

Revenue Consensus Beat

1.7percent

median

Public cloud software Q1 2023

SaaS Valuation Multiple Growth Adjustment

25percent

below average

Median multiple vs. long-term average (unadjusted)

YoY Net New ARR Growth

-21percent

median

Public cloud software Q1 2023 (Q1 2022 to Q1 2023)