You guys are getting lost in the details. Forget about all those details and read what they said in the conference call:
Q - I get you’re not going to give us guidance right now for next year, how should we think about how you’re framing it, and the rate of investment against that opportunity? And along with that how would you characterize the ability to hire in this environment?
A - Right now we are SO EARLY in the opportunity that the way we think about the way we grow our team isn’t directly related to the way we think about the growth we’re going to get next year.
We really think of it in terms of HOW FAST we can grow them (!) while optimizing for both short-term and long-term growth. So WE ARE GROWING THE TEAM AS FAST AS WE CAN basically (!), and we think there’s enough opportunity to justify it.
And that’s true both on the R&D side and on the S&M side, and WE ARE VERY CONVINCED THAT THE OPPORTUNITY IS THERE (!)….
Saul here: (Caps were mine of course) How could they have been more positive, and how could anyone have read that and sold it down to $80 at one point yesterday? I guess the bots don’t read conference calls which gives us a big advantage.
However, remember that the yoy comparisons may not show it for the next two quarters. As they said several times (here are two)
However, while Q3 usage growth was back to pre-COVID levels, the slowdown experienced in Q2 will still be seen in our year-over-year comparisons for a number of quarters.
So the growth we did forego in Q2 is going to be with us in the year-to-year comparison a little bit.
Saul here again: To clarify, they say they are growing almost as fast as before, but that, because of the slowdown in Q2, the year over year numbers are coming off a lower base than they would have been for yoy comparisons, until they get four quarters under their belt.
They are saying that because of Q2 dropping the baseline, you can’t look at yoy revenue growth for this just reported quarter, Q4 or next Q1, but should look at sequential dollars of revenue growth. Then in Q2, year over year revenue growth should return to normal. But that’s just the way I interpret it.
Look at it this way, they grew revenue, in sequential quarters,
$17 million — Q1, hit for maybe $2 million in March, assuming they would have hit $19 million
$09 million — Q2, hit for maybe $9 million more (full pandemic panic)
$15 million — Q3, they are almost back in line
What they are saying is that because of the (say) $9 million that they lost in Q2, and perhaps $2 million in the last two weeks of March, this quarter looks light if you look yoy. However if you put that $11 million back into the base they’d be growing off, and imagine they were growing off a base $11 million higher, the yoy, instead of 155/96 = 61%, you get 166/96 = 73% revenue growth.
And that’s even though they were not quite all the way back as far as sequential dollars of growth, at $15 million, although it’s a lot better than Q2’s $9 million. And if they accelerate their sequential growth of revenue to $20 million in Q4, I won’t worry at all about the yoy percentages.
I hope that helps.