Ben’s Portfolio update end of January 2025

Ben’s Portfolio update end of January 2025

Returns and portfolio holdings:

Portfolio Notes
2020 63.6% Since May 12, 2020, when I started this portfolio with over 40 companies, mostly holding large cap tech & FAANG, but also some high-growth SaaS.
2021 13.1% Discovered Saul’s board in February 2021 and started concentrating to 16 companies through December 2021.
2022 -60.7% (Jul-Dec: -15.6% ) Concentrated a bit more through July 2022 from which point I started posting my monthly updates on Saul’s board, holding about 12 or fewer positions.
2023 77.8% First full year of Saul-style investing
2024 31.7%
2025 YTD Month
Jan 9.1% 9.1%

These are my current positions:

Jan 2025 Dec 2024 First buy*
Cloudflare 18.0% 15.5% 11/2/2020
Nvidia 17.5% 21.6% 5/13/2020
Snowflake 13.2% 12.0% 2/8/2021
Crowdstrike 11.6% 11.0% 5/13/2020
Datadog 10.6% 11.8% 5/13/2020
Axon 9.3% 9.4% 4/2/2024
Samsara 7.5% 6.3% 1/8/2024
Monday 5.6% 5.7% 9/13/2021
Zscaler 3.6% 3.5% 3/4/2021
TradeDesk 3.2% 3.4% 5/13/2020

*held through today

Expectations for upcoming earnings

In the following I summarize my expectations for the companies that are still due to report this earnings season. The goal of this exercise is to come up with reasonable earnings expectations. The goal here is not to be absolutely accurate, but to be able to identify when a company surprises in either a good or a bad way. That way it will be easier for me to identify if a change in conviction level is warranted. Also, just because a company exceeds or performs below my expectation with a single metric, that doesn’t necessarily mean my conviction has to change. Really, what this exercise does is it helps me to think about my companies holistically. Therefore, I think it is valuable to come up with these expectations before they report as it will help me to keep the companies (and myself) accountable and minimize any cognitive bias once the results are out.

A practical way for me to come up with those numbers is by asking a couple questions. For example “what revenue growth rate would continue the trends the company is currently following?” (Looking at revenue growth trends AND other metrics.) And then when I have a number in mind, I ask myself “If the company reaches less than this number, would I be negatively surprised?“; “If the company reaches more than this number, would I be positively surprised?” If the answer is yes to both questions I write it down below. Same goes for all other quantitative metrics below.


Nvidia:

  • Reporting Fiscal Q4 2025 on 2/26/25.
  • Revenue expectation: $40134M (14.4% QoQ, 81.6% YoY), implying a 7% beat; they beat Q1 guide by 8.5%, Q2 guide by 7.3%, Q3 guide by 7.9%.
  • Q1 new revenue guide: $42341M (5.5% QoQ, 63% YoY) which I would interpret as $45151M (12.5% QoQ, 73% YoY) roughly continuing the deceleration trend.
  • I would like to see GAAP gross margin around 73%.
  • I would like to see non-GAAP gross margin around 73.5%.

Snowflake:

  • Reporting Fiscal Q4 2025 around 3/1/25.
  • Product revenue expectation: $946M (5.1% QoQ, 28.2% YoY), implying a 4.1% beat; $45M net new product revenue.
  • Q1 new product revenue guide: $974M (3% QoQ, 23% YoY) which I would interpret as $1012M (7% QoQ, 28% YoY) and assuming a 4% beat and that revenue growth will seasonally accelerate QoQ.
  • NRR at 127% would be great after the last two quarters seem to have bottomed at 127% after several quarters of smaller getting deltas: In the last six quarters NRR dropped by 9% → 7% → 4% → 3% → 1% → 0%, to 127% in Q3.
  • I would like to see RPO around $8.02b and cRPO around $3.61b.
  • I would like to see total customer growth around 5.5% QoQ (~584 adds) and $1M+ customer growth around 5.5% QoQ (~30 adds).
  • I would like to see continued market place listings and stable edge customer growth strength.
  • I don’t have a good idea what to expect for OM, NM and FCFM because of increased expenses for GPUs and newly acquired employees. Just throwing out some numbers I would expect an operating income margin around 7%, a net margin around 9% and a free cash flow margin around 43%, so that they match their adjusted fcf margin guide of 26% for FY25.
  • I am looking for an initial upper FY26 product revenue guide of $4.2b - $4.3b (22% - 24% YoY). For comparison, their initial FY25 guide they gave in Q4 of FY24 was 21.9% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of November 2024

Datadog:

  • Reporting Fiscal Q4 2024 on 2/13/25 before the market opens.
  • Revenue expectation: $739M (7.1% QoQ, 25.3% YoY), implying a 3.9% beat.
  • Q1 new revenue guide: $739M (0% QoQ, 21% YoY) which I would interpret as $769M (4% QoQ, 26% YoY) expecting YoY growth will accelerate while QoQ growth seasonally down.
  • My Q4 revenue expectation implies about $21.6M raw sequential revenue increase (~2x than last Q1).
  • I would like to see RPO with more than 15% QoQ growth if duration is still down and more than 27% QoQ growth if duration up again (>$2.1b to >$2.3b).
  • I would like to see QoQ customer growth around 2.0% (~584 new) and for the $100k+ cohort, greater or equal to 1.7% QoQ (>=60 new). Greater or equal to 450 total $1M+ ARR customers would be good.
  • I would like to see continued multi-product adoption progress with 2+, 4+, 6+ and 8+ products cohort percentages of 84%, 50%, 27% and 13%.
  • I would like to see NRR greater or equal to 115% and management commentary that NRR is going up and improved over Q3.
  • I would like to see slightly expanding profitability margins (~0.5% expanded OM and NM from Q3), with around 34% FCF margin.
  • I am looking for an initial upper FY25 revenue guide of $3.2b - $3.25b (19% - 21% YoY). For comparison, their initial FY24 guide they gave in Q4 of FY23 was 21.0% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of November 2024

Zscaler:

  • Reporting Fiscal Q2 2025 around 02/28/25.
  • Revenue expectation: $656M (4.5% QoQ, 25% YoY), expectation from billings model and 3.5% beat.
  • Q3 new revenue guide: $666M (1.5% QoQ, 20% YoY) which I would interpret as $686M (4.5% QoQ, 24% YoY) as my expectation from billings model, assuming Q2 QoQ billings growth of 46% (seasonal!).
  • I would like to see Q2 billings of around $754M.
  • I would like to see RPO growth of around 3.2% QoQ (to $4.55b) and cRPO of about $2.23b.
  • I would like to see >100k ARR customer growth around 3.3% QoQ (~105 net adds).
  • I would like to see >1M ARR customer growth around 4.8% QoQ (~28 net adds).
  • I would like to see an operating income around $148M (22.6% margin).
  • Detailed thoughts: Ben’s Portfolio update end of December 2024

Crowdstrike:

  • Reporting Fiscal Q4 2025 around 3/8/25.
  • Revenue expectation: $1062M (5.1% QoQ, 25.6% YoY), implying a 3.0% beat this Q.
  • Q1 new revenue guide: $1115M (5% QoQ, 21% YoY) which I would interpret as $1147M (8% QoQ, 25% YoY), assuming QoQ growth will accelerate.
  • Net new ARR of more than $200M (31% QoQ and ARR +5% QoQ).
  • I would like to see around $6.29b RPO (16.5% QoQ, 36.8% YoY); cRPO around $3.59b (57% of RPO, 30% YoY).
  • I would like to see NRR greater or equal to 115%.
  • I would like to see about $215M operating income.
  • I would like to see about $246M net income.
  • I would like to see no multi-product customer decline.
  • I would like to see gross retention close to 97%.
  • I am looking for an initial upper FY26 revenue guide of $4.79b - $4.87b (21% - 23% YoY). For comparison, their initial FY25 guide they gave in Q4 of FY24 was 30.5% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of December 2024

Monday:

  • Reporting Fiscal Q4 2024 on 2/10/25 before the market open.
  • Revenue expectation: $269M (7.1% QoQ, 32.8% YoY), implying a 3% beat.
  • Q1 new revenue guide: $277M (3.0% QoQ, 28% YoY) which I would interpret as $285M (6% QoQ, 31% YoY), expecting QoQ growth will slightly decelerate.
  • I would like to see raw sequential revenue increase around $17.8M.
  • I would like to see around 270000 total customers, around 59860 customers with 10+ users (1100 net adds), around 3105 customers in the $50k+ cohort (198 net adds) and around 1149 customers in the $100k+ cohort (69 net adds).
  • I would like to see CRM accounts growth around 16.5% QoQ (to 28816, 4081 net adds).
  • I would like to see Dev accounts growth around 16% QoQ (to 3654, 504 net adds).
  • I would like to hear an update on their new Service product with good traction.
  • I would like to see that NRR greater or equal to 111%, NRR10+ greater or equal to 115%, NRR50k greater or equal to 115% and NRR100k greater or equal to 115%.
  • I would like to see operating margin around 15% (~$40M operating income), net margin around 19.5% and FCF margin around 32% with FCF of around $85M.
  • I am looking for an initial upper FY25 revenue guide of $1.22b - $1.23b (25.5% - 26.5% YoY). For comparison, their initial FY24 guide they gave in Q4 of FY23 was 27.7% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of November 2024

Samsara:

  • Reporting Fiscal Q4 2025 around 3/6/25.
  • Revenue expectation: $348M (8.1% QoQ, 26.0% YoY, 35.7% adjusted YoY), implying a 3.9% beat.
  • Q1 new revenue guide: $371M (6.5% QoQ, 32% YoY) which I would interpret as $381M (9.5% QoQ, 36% YoY).
  • I would like to see net new ARR around $108M.
  • I would like to see RPO around $2.72b (12% QoQ) and cRPO around $1.3b.
  • I would like to see core customer NRR around 115%.
  • I would like to see large customer NRR around 120%.
  • I would like to see around 200 new $100k+ ARR customers (2500 total, 35.5% YoY) and around 120 total $1m+ ARR customers, as well as more than 20500 total core customers.
  • I would like to see around $37M operating income, corresponding to a 10.6% operating margin.
  • I am looking for an initial upper FY26 revenue guide of $1.57b - $1.61b (25.5% - 29% YoY). For comparison, their initial FY25 guide they gave in Q4 of FY24 was 27.1% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of December 2024

The Trade Desk:

  • Reporting Fiscal Q4 2024 on 2/12/25.
  • Revenue expectation: $766M (22% QoQ, 26.4% YoY), implying a 1.3% beat.
  • Q1 new revenue guide: $609M (-20.5% QoQ, 24% YoY) which I would interpret as $620M (-19% QoQ, 26% YoY).
  • I would like to see a net margin of around 34% and $260M net income.

Cloudflare:

  • Reporting Fiscal Q4 2024 on 2/6/25.
  • Revenue expectation: $459M (6.7% QoQ, 26.6% YoY), implying same 1.6% beat as last Q.
  • Q1 new revenue guide: $472M (2.9% QoQ, 25% YoY) which I would interpret as $480M (4.5% QoQ, 27% YoY) expecting QoQ growth to seasonally decelerate, but stay at Q4’s YoY growth rate.
  • I would like to see NRR around 110%.
  • Total customer growth around 5% QoQ (~11000 net adds) would be fantastic.
  • I would like to see large customer growth around 6% QoQ (~200 net adds).
  • I would like to see RPO grow around 12% QoQ to $1.68b.
  • I would like to see cRPO grow around 12% QoQ to $1.18b.
  • I would like to see operating income around $70M.
  • I would like to see a FCF margin around 14%.
  • I am looking for an initial upper FY25 revenue guide of $2.07b - $2.09b (24% - 25% YoY). For comparison, their initial FY24 guide they gave in Q4 of FY23 was 27.4% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of November 2024

Axon:

  • Reporting Fiscal Q4 2024 around 2/27/25.
  • Revenue expectation: $582M (6.9% QoQ, 34.7% YoY), implying a 3% beat.
  • Q1 revenue expectation: $620M (6.5% QoQ, 35% YoY), assuming similar QoQ growth as last Q1. Note: they don’t give quarterly guides besides for Q4s.
  • I would like to see greater or equal to $62M net new ARR.
  • I would like to see RPO around $9.2b.
  • I would like to see NRR around 123%.
  • I would like to see adjusted EBITDA around $145M.
  • I am looking for an initial upper FY25 revenue guide of $2.59b - $2.63b (24% - 26% YoY). For comparison, their initial FY24 guide they gave in Q4 of FY23 was 24.1% YoY.
  • Detailed thoughts: Ben’s Portfolio update end of December 2024

Wrap up

Another round of earnings reports is incoming shortly and I expect significant volatility if just because almost all of our companies will give their dreaded initial new FY guides. While I have certain expectations here (detailed above), I think it is important to keep in mind how un-certain those initial guides will be. Many companies have historically guided very conservatively in their first new FY guides and the market has often punished them for that. And while that could be a buying opportunity for long-term minded investors, I think it is more important to look beyond those uncertain initial guides and focus on what really matters: The company’s execution from top to bottom line. Are revenue growth and related forward looking metrics falling off a cliff or trending nicely? Are profitability margins expanding or do they see pressures? Does the narrative connecting top and bottom-line make sense or are there issues? Those are the questions we want to be answering in the coming months when our companies report new numbers. So, as we brace for the upcoming earnings season, let’s remain vigilant and discerning. By focusing on the core fundamentals and the long-term trajectory of our investments, we can navigate through the noise and make informed decisions. Remember, it’s not just about the initial guidance but the overall health and strategic direction of the companies we invest in. Here’s to a season of insightful analysis and prudent investing.

I am wishing you all a great February!
Ben


Past recaps

July 2022: Ben’s Portfolio end of July 2022 - Saul’s Investing Discussions - Motley Fool Community
August 2022: Ben’s Portfolio end of August 2022 - Saul’s Investing Discussions - Motley Fool Community
September 2022: Ben’s Portfolio update end of September 2022
October 2022: Ben’s Portfolio update end of October 2022
November 2022: Ben’s Portfolio update end of November 2022
December 2022: Ben’s Portfolio update end of December 2022
January 2023: Ben’s Portfolio update end of January 2023
February 2023: Ben’s Portfolio update end of February 2023
March 2023: Ben’s Portfolio update end of March 2023
April 2023: Ben’s Portfolio update end of April 2023
May 2023: Ben’s Portfolio update end of May 2023
June 2023: Ben’s Portfolio update end of June 2023
July 2023: Ben’s Portfolio update end of July 2023
August 2023: Ben’s Portfolio update end of August 2023
September 2023: Ben’s Portfolio update end of September 2023
October 2023: Ben’s Portfolio update end of October 2023
November 2023: Ben’s Portfolio update end of November 2023
December 2023: Ben’s Portfolio update end of December 2023
January 2024: Ben’s Portfolio update end of January 2024
February 2024: Ben’s Portfolio update end of February 2024
March 2024: Ben’s Portfolio update end of March 2024
April 2024: Ben’s Portfolio update end of April 2024
May 2024: Ben’s Portfolio update end of May 2024
June 2024: Ben’s Portfolio update end of June 2024
July 2024: Ben’s Portfolio update end of July 2024
August 2024: Ben’s Portfolio update end of August 2024
September 2024: Ben’s Portfolio update end of September 2024
October 2024: Ben’s Portfolio update end of October 2024
November 2024: Ben’s Portfolio update end of November 2024
December 2024: Ben’s Portfolio update end of December 2024

68 Likes

Could you explain how you are up in Nvidia 17.5% when it is down 12.67% for January? The low for the month was $116.25.

Edit: Oh those are position sizes correct?

1 Like

That’s the percentage of his portfolio. It had dropped from 21.6% to 17.5% most likely from the drop you pointed at.

Drew

4 Likes

Thanks Drew. That makes sense.

2 Likes