      onlycfo.io · 2025-04-28
      · 402d
    

Bullish: Vertical & Compound Software

The article argues that vertical software and compound software (multi-product platforms built on shared data) are better positioned to succeed in 2025 than point solutions, supported by public market data showing vertical software stocks declining only 12% versus 21% for broader cloud. Vertical software companies trade at a 53% premium revenue multiple to the broader market, suggesting investor confidence in superior revenue durability and future FCF margins.

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Metrics in this report

Cloud Stock Market Decline

-21percent

BVP Nasdaq Emerging Cloud Index, January 28 - April 28, 2025

ServiceTitan Stock Performance

19percent

January 28 - April 28, 2025 (103 to 122)

Vertical Software Revenue Multiple Premium

53percent

median

Vertical software companies versus broader cloud market, April 2025

Vertical Software Stock Market Decline

-12percent

average/median

Public vertical software companies, January 28 - April 28, 2025

nCino Stock Performance

-34percent

January 28 - April 28, 2025 (35 to 23)