So the news is mixed out there in SaaS and Cloud land:
On the positive side:
- Datadog blew out the quarter growing 25% at $2.2 Billion in ARR and had its best day ever, popping 30%
- Shopify exceeded expectations, growth reaccelerated to 31% (!) at an almost $7 Billion run rate, and it popped 20%
- Wix went from basically 0% growth 12-18 months ago to double-digit growth again
- HubSpot exceeded expectations, growing 24% at over $2.2 Billion in ARR
- Micorsoft is at an all-time high on the back of AI and Cloud growth
- Nasdaq overall is up a stunning 40% for the year, and the BVP Index of leading SaaS and Cloud stocks is up a more modest but still impressive 15% this year
But that doesn’t mean it’s actually any easier for them, or for most of us. And for many, their growth rates are still materially lower than in 18-24 months ago.
The underlying trends aren’t necessarily rosy per se. Few if any SaaS leaders are saying things are harder than 6 months ago. Almost everyone agrees that things have at least bottomed out.
And some are seeing a rebound for sure. Datadog noted it saw better usage growth in Q3 from existing customers than it did in Q2, and that the start to Q4 was the healthiest it had seen in some time.
Two top SaaS leaders were clear that things aren’t worse but they also aren’t any better than they were 6-9 months ago: HubSpot and ZoomInfo.
HubSpot had a great quarter, growing a stunning 24% at $2.2 Billion in ARR! Still, CEO Yamini Rangan noted things have not gotten any easier:
“What we are seeing in second half as customer trends is very similar to what we saw in the first half of 2023. It’s not gotten better and it’s not gotten worse.”
ZoomInfo was similarly direct. They’ve had a more challenging run, with growth materially slowing at $1.3 Billion in ARR. Founder CEO Henry Schuck was very direct on the macro impacts, that they haven’t seen any macro improvement at all yet:
Few SaaS and Cloud leaders are saying things are getting harder. Some have bounced off lows and are reaccelerating.
