Unfortunately I was in meetings yesterday and completely missed the PVTL reporting in the 4pm ish timeframe. But I read the conference call with a lot of interest, and the professional Pivotal team did not disappoint.
“RPO or Remaining Performance Obligation, represents the estimated value of our billed and unbilled subscriptions and services, and demonstrates the visibility associated with our revenue model. RPO was $800 million at the end of Q1 with approximately 50% expected to be realized in the next 12 months. We expect quarterly seasonality in RPO with variability from a peak in Q4, relative to the subsequent quarters.”
In the next twelve months there is already ~$400M of revenue committed (~50% of $800M)!
@FlyFisher This also jumped out at me in the conference call. Looks like they are doing what we would expect - blowing away this quarter’s numbers and sandbagging next quarter’s. Telegraphing that so clearly in the call was a bit odd, wasn’t it?
I was a little concerned at the continuing rate of customer growth measured in dozens. Revenue growth and stickiness is great, but I would expect that the addressable market for customers should be most large companies and most mid-sized companies around the world. I would hope that in the next year or two we will be counting customers in the thousands not the hundreds. The partnerships with management consulting companies might help a bit here, but they also are very skewed toward the very large companies.
Enterprise sales is not a strong point for me, but I think Pivotal would need to invest a lot in their sales force to get to these addressable customers - of course there is Saul’s point that they may already be growing as fast as they can digest the new growth. I would have loved to hear the management team’s opinion on this. I wonder if their dependence on VMWare/EMC/Dell sales forces is affecting their sales funnel? These are primarily hardware or hardware-linked-software sales, and Pivotal, as a pure software company, has a different target audience and a wider addressable market.
The analysts didn’t really understand the relationship between PAS and PKS, but I think Pivotal described it well. They are looking at PKS as helping them to address new markets, including companies that are closer to first movers in cloud technology, so this may also help to increase customers in certain segments.
Thanks to SteppenWulf for all his time laying out the bull case for PVTL and MDB! Getting his insight from a user’s perspective was extremely valuable for me in taking positions in both stocks.
@wouter28 - I’m glad if my long opinionated posts helped and am quite relieved I didn’t steer this community the wrong way. But of course I was just one guy talking about Pivotal and Mongo - I personally got lots of insights and things to think about from Saul, Tinker, Conehead, and many others - thanks all!