Jamin Ball Article on Cloud Performance

Good morning, everyone –

Jamin Ball is a Partner at the VC firm of Altimeter Capital in San Fransisco, CA. He writes a great, free newsletter called “Clouded Judgement” (https://cloudedjudgement.substack.com/). Every Friday morning, he sends out an update with a bit of analysis on what is going on in the cloud market and also provides financial summaries of how some companies are performing. I’m always interested to see his chart for top 10 EV/S values b/c I usually own a handful of them.

Yesterday, he wrote a great article on how cloud stocks performed during the last earnings season. The article analyzed 70 cloud companies’ results. Here is the article:


Here is a summary of some interesting points

  • He named the “Q1 Big Winners” “who he believe[d] really stood out (from a financial perspective)” as DDOG, ZI, S, Gitlab, SNOW, BILL, ZS, and CRWD.
  • Of all the companies he analyzed, 99% of them beat consensus estimates. That speaks highly of the strength of the cloud. Gitlab had the largest beat. DDOG had the fifth largest beat.
  • Guidance was a little trickier. 42 of the companies beat guidance, while 21 missed.
  • YoY growth was dominated by S at number one, with SNOW in second, DDOG in fourth, Bill in sixth, and ZS in ninth.
  • SNOW finished seventh in FCF margin, DDOG finished ninth, and CRWD finished eleventh.
  • SNOW’s net dollar retention rate towered over everyone else; it finished number one at 174% with second at 138% (uipath). S finished sixth and DDOG finished ninth.
  • The chart for “Change in 2023 Consensus Revenue Estimates” had upward estimates for S at number one, DDOG at number three, ZI at number four, ZS at number eight, NET at number ten, and CRWD at number twelve. SNOW had a small one percent downward estimate for 2023.

My overall take is that the cloud businesses many of us own were very healthy during Q1. My personal belief is that, if we can maintain this strength through Q2, we are past the trough and climbing back to the peak.

Thanks for reading.

Hang in there,

Long DDOG, CRWD, SNOW, ZS, and NET (of the companies discussed in this post).

No financial advice in this post – Everybody must do their own due diligence.