PAYC,TEAM, MSFT and AMZN have all reported. Between their CCs and various reports i’ve read here are some of my thoughts.
1). TEAM is a beast,. They are playing the long game, acquiring customers, willing to take sort term hits for long term gain. they have tons of cash, tons of fcf, and are maintaining very solid growth despite what is happening. They will be able to hire good talent, acquire companies etc. I don’t regret my position.
PAYC is a beast but in a much tougher spot than TEAM. PAYC will survive, they will also be able to hire and acquire, but I’m not sure they will be able to grow for a while. PAYC said for each 1% of unemployment they lose about 1% of revenue. I’d expect them to be in the single digit revenue growth for next quarter and possibly even slightly negative. I sold my position before the earnings. I’ll keep them on my watchlist but for now I think there are better places for my money.
our companies that focus on cloud enterprise are going to kill it. Ddog comes to mind, Okta a little less so but should still do well.
companies that get paid by headcount are seeing decreased headcounts especially in the smb space. So far Enterprise headcount has stayed strong. Both TEAM and PAYC have mentioned that. I’m not sure how AYX is going to fit, no worries long term, not sure what to think short term. I expect the WFH(work from home) trend to be more powerful than the reduction in headcount trend hence companies like WORK, ZM will still see amazing growth. I haven’t been able to get a solid read on enterprise vs SMB for CRWD. Does anyone know? I think CRWD benefits from need for security as the WFH movement takes hold.
usage based billing companies in the cloud are seeing huge increases in demand. ESTC, DDOG, OKTA, maybe NET.
Long term winners are more important to me than short term trends. I think WFH is going to be a huge short term explosion AND a long term trend. WFH ties nicely into cloud and digital transformation.
I don’t have much to say about most of your post, but I can’t see why WFH would make any difference for CRWD. An endpoint is an endpoint irrespective of whether it’s on or off campus. I think nearly the same argument could be made for OKTA. So far as I can see, physical location is irrelevant.
However, layoffs most likely will make a difference. If a user is no longer a user and their device is no longer an endpoint so far as the enterprise is concerned, that would constitute a reduction in users. I’m not exactly sure how these services are sold. If it’s seats, reduction in force will make a difference.
I feel like I missed out on Atlassian (TEEM) for personal opinion reasons. I really hate using their products. They are so old and clunky feeling. I gave up when they took months to roll out a new interface because they seemed to start over and came out with it as a replacement without a lot of critical existing features. Even trying to test the new version was impossible without spending a lot of extra manpower. I posted a number of issues and the response was always something like “it is early you can not do that”. Well then why make it an option for new users in the admin/setup area with no warning that it is in beta?! Rants aside, I keep expecting some new thing to come along and kill it… but then again…AWS is still a thing too and they can barely communicate between all the various product teams, or maintain consistent documentation. It is probably why they rely on training specialists on the client side, and make a whole certification program out of it. I suppose Atlassian is similar in that it is still a gold standard and has some easy integrations if you are a little more technical. Many businesses will have integrated deeply (development workflows, issue/disaster response protocols and such) so maybe it will take more than just a better product to come along to dislodge these deeply entrenched customers.
I’m still using Confluence every day though (and it still messes up mid-edit all the time, but might be marginally better about it than it used to be…the newer collaborative features, akin to GoogleDocs, are huge though).
Perhaps I should shut up and buy some shares.