Cloud stocks go burst 🤯

And also: Earnings on Atlassian, Twillio, Block, BigCommerce, and more.

November 07, 2022

This is the Cloudly Update. Helping you stay above the Clouds.

Today there are a lot of comments on quarterly earnings reports from public cloud companies.

Cloud-software stocks and ETFs shed drastically over the last week. Stocks are paying a hefty price due to fears of businesses cutting on capital spending in the possible recession scenario.

Leading the race for the bottom were shares of Atlassian, 38.4% down this week, and Twilio, who caught a two-notch downgrade from B. of A. Securities analyst Michael Funk.

Cybersecurity stocks specifically were heading for their worst week in 2½ years. Cloudflare shares logged the worst week ever, with a 25.8% decline. Zscaler tumbled by 21.4%, and CrowdStrike dropped by 22.1%.

Atlassian, a leading provider of team collaboration and productivity software, recorded 31.5% year-on-year growth in Q1 revenue to $807.39 million vs. $806.42 million S&P Capital IQ Consensus. Non-GAAP EPS was $0.36, $0.02 worse than the S&P Capital IQ Consensus of $0.38.

Atlassian recorded a 50% subscription revenue increase (year-over-year) at $651 million.

GAAP operating margin was (4) %, and the non-GAAP operating margin was 18%. Cash flow from operations was $92 million, and free cash flow was $76 million.

Scott Farquhar, Atlassian's co-founder and co-CEO said, "We are proud of our Q1 results; we continue to have a line of sight to $10 billion in annual revenue."

The company issued downside guidance for Q2 and expects Q2 revenue in the range of $835-$855 million, much lower than the S&P Capital IQ Consensus of $879.58 million. They expect a Gross margin in the range of 80% to 81% on a GAAP basis and 83% to 84% on a non-GAAP basis.

by Deepa on 2022-11-06

Twilio, the customer engagement platform, delivered third-quarter results, with 33% year-over-year growth in revenue of $983 million. The company beat the market expectations of $973 million. Organic revenue grew 32% year-over-year. The company reported a loss of $0.27 per share, which is $0.08 better than the S&P Capital IQ Consensus of ($0.35).

GAAP loss from operations was $457.0 million vs. $232.3 million in Q3 2021. Non-GAAP loss from operations was $35.1 million vs. $8.2 million in Q3 2021. Twilio is facing short-term headwinds, but management promises solid long-term profitability.

There were more than 280,000 Active Customer Accounts as of September 30, 2022, compared to more than 250,000 Active Customer Accounts as of September 30, 2021.

The dollar-Based Net Expansion Rate was 122% for Q3 of 2022, compared to 131% for Q3 of 2021.

Twilio issues downside guidance for Q4 and sees EPS of ($0.11) -($0.06) vs. ($0.11) S&P Capital IQ Consensus. They see Q4 revenue of $995-$1.005 billion vs. $1.07 billion S&P Capital IQ Consensus.

BILL recorded revenue growth of 94.3% in Q1 to $229.92 million vs. $210.92 million S&P Capital IQ Consensus. Non-GAAP EPS was $0.14, $0.08 better than S&P Capital IQ Consensus.

An increase of 83% in Core revenue was seen at $214.6 million. Gross profit was recorded at $184.8 million, and non-GAAP gross profit was at $197.2 million.

Company issues upside guidance for Q2 and expects non-GAAP EPS of $0.12 to $0.14 vs. $0.08 S&P Capital IQ Consensus. Sees revenue of $241.5 to $244.5 million vs. $233.50 million S&P Capital IQ Consensus.

BILL issued upside guidance for FY23, sees non-GAAP EPS of $0.48 to $0.59 vs. $0.35 S&P Capital IQ Consensus. And expects revenue of $994.0 million to $1.007 billion vs. S&P Capital IQ Consensus of $967.87 million.

BILL, a leader in financial automation software for SMBs, will acquire Finmark, a leading financial planning software provider. The transaction has been approved by both company's Boards of Directors and is expected to close by the end of this calendar year.

Finmark provides automated tools to build financial forecasts based on integrated data and simplifies financial planning and cash flow management for SMBs.

Momentive, the maker of SurveyMonkey and GetFeedback, reported Q3 of 2022. The company recorded EPS at $0.04, in line with the S&P Capital IQ Consensus of $0.04. 5.7% year-over-year growth in revenue was reported to be $121.4 million. The S&P Capital IQ Consensus was $121.02 million.

Sales-assisted channel revenue, which was 39% of total revenue, was $46.7 million, an increase of 24% year-over-year.

GAAP gross margin was 82.5% and non-GAAP gross margin was 84.1%. GAAP operating margin was negative 13.4% and non-GAAP operating margin was 7.6%.

In their $200 million stock repurchase program, Momentive repurchased approximately 6.6 million shares for approximately $83.5 million. And $116.5 million share repurchase authorization remained as of September 30, 2022.

Company issues downside guidance for Q4, sees Q4 revenue of $120-$122 million vs. $124.23 million S&P Capital IQ Consensus. Momentive’s restructuring plan of approximately $4.0 to $5.0 million will be paid in Q4.

For the full-year 2022, Momentive expects $479 million - $481 million in revenue and approximately 7% non-GAAP operating margin.

Block reported earnings of $0.42 per share, $0.19 better than the S&P Capital IQ Consensus of $0.23. Their revenue grew 17.6% year-over-year to $4.52 billion, beating market expectations of $4.47 billion.

Gross profit grew 38% year-over-year to $1.57 billion, up 46% on a three-year compound annual growth rate (CAGR) basis. Excluding the BNPL platform, gross profit was $1.42 billion, up 25% year-over-year and 42% on a three-year CAGR basis.

The cash ecosystem delivered a gross profit of $774 million, an increase of 51% year-over-year. Excluding BNPL, it was 37% year-over-year growth.

Cash App generated $2.68 billion in revenue and $774 million in gross profit. Excluding bitcoin and the BNPL platform, Cash App revenue was $817 million, up 41% year-over-year and 73% on a three-year CAGR basis. BNPL contributed $105 million in revenue and $75 million in gross profit to Cash App in Q3 2022.

On a year-over-year basis, Cash App revenue and gross profit grew 12% and 51%, respectively. And on a three-year CAGR basis, it grew 106% and 84%, respectively.

BigCommerce, a leading Open SaaS eCommerce platform, reported a loss of $(0.15) per share, but it was $0.06 better than the S&P Capital IQ Consensus of $(0.21). Revenue rose 22.1% year-on-year to $72.39 million vs. $69.62 million S&P Capital IQ Consensus.

GAAP net loss was ($30.3) million vs. ($21.7) million in Q3 2021. Non-GAAP net loss was ($11.2) million compared to ($4.2) million in Q3 2021. GAAP gross margin was 76% vs. 79% in Q3 2021. Non-GAAP gross margin was 77% vs. 80% in Q3 2021.

Total annual revenue run-rate as of September 30, 2022, was $305.3 million, up 20% year-on-year.

The number of enterprise accounts was 5,560, up 16% compared to Q3 2021. The average revenue per account (ARPA) of enterprise accounts was $38,885, up 17% compared to Q3 2021.

Company issues downside guidance for Q4 and sees Q4 revenue of $72.4-74.2 million vs. $76.19 million S&P Capital IQ Consensus.

For the full year 2022, the company expects total revenue between $279.1 million and $280.9 million. And non-GAAP operating losses between $49.9 million and $51.9 million.

Paylocity, a leading provider of cloud-based HCM and payroll software solutions, recorded a 39% increase in total revenue to $253.3 million. GAAP net income was $30.4 million or $0.54 per share. GAAP operating income was $7.1 million, and non-GAAP operating income was $55.1 million.

Company expects approximately 32% growth in Q2 2023 and fiscal year 2023 and sees revenue between $257.0 million to $261.0 million and $1.122 billion to $1.127 billion respectively.

Sprout Social records Q3 revenue at $65.3 million, up 33%, and ARR at $271.3 million, up 33% year-over-year. Non-GAAP net loss per share was ($0.02) vs. ($0.03) in Q3 2021.

In Q4 the company sees net loss per share of ($0.02) and total revenue between $69.8 million and $69.9 million. Expects non-GAAP operating margin improvement of more than 300 bps year-over-year.

For 2022, Sprout Social sees a non-GAAP net loss per share of ($0.10) and total revenue between $254.0 to $254.1 million.

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