5 Interesting Learnings from Databricks at $3 Billion in ARR

So SaaS is back.  Perhaps Databricks isn’t really SaaS, it’s Cloud + AI/Cloud infrastructure.  But close enough for purposes of this post.  The meta point is after a tough late 2023 and into 2024, SaaS, Cloud and more is back:

• In some cases, AI is the driver (Databricks, Palantir).
• In others, AI is a boost (Salesforce, Asana, HubSpt) to buying that has bounced off lows after Q3’24.
• In some cases, like vertical SaaS and B2B2C, it’s a combination of the strength of the economy plus automation (Samsara, ServiceTitan, Shopify, Klaviyo).

No matter what, we’ve got our mojo back.  Not entirely, but in large part:

And Databricks is just a jaw-dropping.  It’s growing a stunning 60% at $3 Billion in ARR, and not slowing down!  And it will be cash-flow positive in 2025.  That’s about as good as it gets.

5 Interesting Learnings:

#1.  Growing Faster at $3B ARR (60%) Than at $1.5 Billion in ARR (50%)! 

This is pretty crazy, and the AI accelerant thrown on their model.  At $1.5 Billion ARR, AI was beginning to help accelerate Databricks, and growth was a stunning 50%.  Fast forwad to today, at $3B ARR, it’s growing even faster than at $1.5 Billion ARR.  Wow.

A great deep dive with their CRO on how they did it here:

#2. 500+ customers consuming at over $1 million annual revenue run-rate

Like Snowflake, Databricks is very enterprise.  500 of its 10,000 customers pay $1m a year or more.

#3.  Will Be Cash-Flow Positive Next Quarter

This is pretty impressive, and sets Databricks up for a strong IPO whenever it’s ready.  It’s one thing to burn massive amounts of cash in the era of the AI Wars.  But not Databricks.  It will be cash-flow positive in 2025.

#4.  Raising $10 Billion, But in Large Part a “Mini IPO” for Employees

A large part of its Series J at a stunning $62 Billion valuation is so employees can sell some of their shares, and also pay the taxes on some of them as well.

#5.  A Huge, Huge Win for Andreessen Horowitz

Wonder how A16Z can keep raising multi-billion fund after fund?  Being the first investor in Databricks is one example.  A16Z may in the end make $10 Billion off being the first investor.  See, also, Samsara.

And a classic SaaStr deep dive with CEO and co-founder Ali Ghodsi here … just before AI really took off for them: