This may be worth a look.
https://cloudedjudgement.substack.com/p/clouded-judgement-62…
Some excerpts:
Over the last 6 months we’ve seen a huge shift in what the public markets value. We’ve gone from “growth at all costs” to “show me the FCF.” And more recently it’s become “show me the FCF without adding back SBC!”
… around 2015 / 2016 we started to see proof points of SaaS businesses turning profitable…
As a path to profitability was laid out, that increased the multiple investors were willing to pay for software companies earlier in their lifecycle. Given all the doom and gloom out there I think it’s important to remember that this hasn’t changed!
what gets me so excited currently is that we’re seeing companies still in hyper growth mode, at a scale of ~$1B ARR+, hit mature FCF margins. Crowdstrike (>60% growth, ~30% FCF margins), Datadog (>80% growth, ~30% FCF margins), Snowflake (>80% growth, ~20% FCF margins), ZScaler (>60% growth, ~20% FCF margins), and ZoomInfo (~60% growth and >30% FCF margins) all have incredibly impressive profiles.