Clouded Judgement: Q1 2023 Cloud Software Consumption Trends

Analysis of Q1 2023 earnings from six major cloud software consumption-driven companies (Mongo, Azure, Datadog, Confluent, AWS, Snowflake) reveals consumption headwinds have stabilized but not reversed, with mixed guidance changes and divergent trends between enterprise and SMB segments. MongoDB and Azure showed relative strength while AWS and Snowflake faced intensifying headwinds, particularly from larger customers reducing workloads and optimization efforts. SaaS valuations remain driven by revenue multiples with high-growth companies trading at 8.5x NTM revenue while low-growth companies trade at 3.3x, reflecting persistent growth-to-valuation correlation despite profitability challenges.