What happens when public SaaS companies don’t meet heightened investor expectations? – TechCrunch

Late last week we discussed how, this deep into the earnings cycle, it appeared that public SaaS and cloud companies had largely made it through the Q2 gauntlet Sure, through last week there was a report or two that wasn’t stellar, but by and large the results had been good and Saa…

Curated via Twitter from TechCrunch’s twitter account….

Late last week we discussed how, this deep into the earnings cycle, it appeared that public SaaS and cloud companies had largely made it through the Q2 gauntlet unscathed.

What happens when public SaaS companies don’t meet heightened investor expectations?

What happens when public SaaS companies don’t meet heightened investor expectations?

So, I don’t think that today’s news changes the general market dynamic towards public SaaS companies, and thus SaaS startups.

Yesterday, a few public SaaS and cloud companies were dinged sharply by investors after reporting their earnings and I want to talk about why.

Friend of the column Jamin Ball compiled a list of the SaaS companies reporting yesterday, including MongoDB, Guidewire, SmartSheet, CrowdStrike, PagerDuty and Zuora.

Sure, through last week there was a report or two that wasn’t stellar, but by and large the results had been good and SaaS valuations were happily near all-time highs.

My hunch: many SaaS companies that investors expected to accelerate during this period of more-rapid-than-anticipated digital transformation are not, or at least not enough to match market hopes.

Public valuations are updated far more often than private valuations, so the stuff we’re seeing today in SaaS stocks won’t show up in SaaS startup valuations for a bit.

But I wonder if the same expectation/reality gap that we can discern in a number of recent SaaS results could hit startups as well, with boards that were expecting more than will be delivered in time.

Overall, SaaS and cloud valuations are still strong. Zoom crushed the period.

Link to original article….

Leave a Reply

Leave a comment
%d bloggers like this:
scroll to top