Some Folks in SaaS Are Still Doing Really, Really Well. E.g., MongoDB, HashiCorp, Monday, GitLab, Okta and More.

So look, very few, if any, SaaS or Cloud companies are out there saying times are easier now than 12 months ago.  Probably none.  Everyone from Amazon to HubSpot to Salesforce is saying is tougher.  At least, more scrutiny on spend.  More stakeholders to sell to.  NRR down a smidge.  Salesforce even said it just didn’t know how it would do next year, and for now, suspended guidance.

But it should be at least a little harder.  CIOs and SMBs went on a huge “digital transformation” spend wave in 2021 and into early 2022 that was, in many ways, a one-time reaction to how the world changed post-Covid.  With the world reset, interest rates higher, and softness in ad spend, there’s no way things can be quite as easy and good as they were at the start of 2021.

And so they aren’t — for anyone.  Overall, growth rates have come down for most public SaaS companies since 12 months ago.

But the thing is, the underlying trends that power SaaS and Cloud are still here and as strong as ever.  CIOs are still moving more and more of their budget and workloads to SaaS.  eCommerce, after a rough post-lockdown phase, reaccelerated this holiday season.  And there are still many categories of software and businesses just beginning to move to SaaS and Cloud.

And even with the current macro issues, Gartner still predicts public cloud spend will increase a stunning 20.7% next year.

These trends pushing SaaS and Cloud forward are often far stronger for many vendors than the real tailwinds we are now seeing from interest rates and budget scrutiny.

Let’s take a look at a few that are still growing at epic rates today:

#1.  HashiCorp, growing a stunning 52% (!) at $500,000,000 in ARR.  That’s just as high as it was growing at $400m in ARR — pretty darn impressive.  More on HashiCorp here.  And NRR still remains an epic 134%.

#2.  SentinelOne — growing a jaw-dropping 106% (!) at almost $500m in ARR.  Whoa.  Cybersecurity remains on fire, even today.  While their stock price has taken a bit of a hit, this growth rate really shows there are no excuses in security today.  The budgets are there.

#3. MongoDB — growing at an incredible 47% at $1.3 Billion in ARR.  Goodness.  That’s just epic growth at well above $1B in ARR.   And it’s faster than Mongo was growing at $700m ARR.  Faster.  It was “merely” growing 39% at $700m in ARR,  More on that here.

#4.  GitLab — growing 69% (!) at $500,000,000 in ARR.  Another jaw-dropper.  A smidge down from 75% at $400m in ARR, but still mighty fast growth.

#5.  Samsara is growing 49% at $680,000,000 in ARR.  Wow.  Yes, down materially from 72% at $500m, but still fantastic growth.

#6.  Okta is growing 37% at almost $2B in ARR.  Fire!  Okta had a few small bumps but is back to just incredible growth.  That’s not much slower than at $1B in ARR, when it was growing 42%.  More on that here.

#7.  Monday.com is growing 68% (!) at $550m in ARR.  No SMB deceleration here!  Not much, at least.  Monday’s growth has slowed a little bit, but in absolute terms, the growth is just incredible even now.

#8.  Atlassian is still growing 31% at $3.2B in revenue, a bit slower than 37% at the start of the year — but still strong growth.  Yes, deals are slowing down and things aren’t as easy at Atlassian as they were.  But they are still good by any historical standards.

#9.  Cloudflare is growing 47% at $1 Billion in ARR!  A great proxy for Cloud overall.  And that’s basically as fast as they were growing at $500m in ARR.  Yes, some deals are harder to close today.  But the overall trends in Cloud and SaaS still benefit Cloudflare.

#10.  Shopify growing 22% at $5.5 Billion in ARR.  While the crazy days of growth of Shopify during lock-down are behind us, faster growth has resumed for Shopify, up from 16% in Q2.  eCommerce is up from its low point earlier in the year.

So no one is saying times aren’t, in many ways, tougher.  You have to sell harder.  You have to sell smarter, and to more stakeholders.  The days of just order taking in SaaS are behind us.

But also, excuses are what you make of them.  The best in SaaS and Cloud are all still growing.  Some, faster than ever, like MongoDB,  Some, not quite as fast as before, but still very fast, like Monday and Atlassian.  And others like Okta and Cloudflare are just doing what it takes to grow just as fast as when they were half their size.

How about you?

Published on December 9, 2022

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