      cloudedjudgement.substack.com · 2024-04-11
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Clouded Judgement: A Look Back at Q4 '23 Public Cloud Software Earnings

This analysis examines Q4 2023 earnings performance across 62 public cloud software companies, finding modest signs of recovery (90% beat consensus, 56% guided above Q1 estimates) but cautious momentum overall. The article establishes VC-style benchmarks for key SaaS metrics—net revenue retention, CAC payback, growth, and FCF margin—and evaluates how hyperscaler infrastructure spending (AWS/Azure) has rebounded from the 2022-23 'cloud optimization' downturn.

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Metrics in this report

Companies Guiding Above Consensus (Q1 2024)

56percent

median

Public cloud software companies, Q4 2023 earnings (up from 51% prior quarter)

Gross Margin Adjusted CAC Payback (Private SaaS)

12months

best-in-class

Early-to-growth stage private SaaS companies

Gross Margin Adjusted CAC Payback (Private SaaS)

24months

minimum

Private SaaS companies at acceptable performance threshold

Net Revenue Retention (Enterprise SaaS)

130percent

best-in-class

Enterprise-focused SaaS companies

Net Revenue Retention (Enterprise SaaS)

115percent

minimum

Enterprise-focused SaaS companies at good performance threshold

Net Revenue Retention (SMB SaaS)

120percent

best-in-class

SMB-focused SaaS companies (e.g., Bill.com)

Q1 2024 Guidance Beat

0.1percent

median

Q4 2023 earnings calls for next-quarter guidance

Revenue Beat Magnitude

2.0percent

median

Q4 2023 public cloud software earnings (down from historical 4%)

Revenue Beat vs Consensus

90percent

median

Q4 2023 public cloud software companies