Emerald City Capital

Technology and SaaS // searching for great businesses // not investment advice

[SoftwareIQ @software__iq]

We're launching a new product capturing the SI ecosystem. Augment your channel checks with real hiring data from the partner ecosystem!

We capture hiring tagged to providers across on-shore/near-shore markets. Track weekly growth of new practices and health of the partner ecosystem, by role, geography and partner.

We cover tagging across public and private coverages. Evaluate total SI trends, ServiceNow partner health and new ecosystems around OpenAI, Anthropic.

Now available in beta for our Pro subscribers. Send us feedback, or try it out today! First of many upcoming product announcements!

[SoftwareIQ @software__iq]

Every week, we evaluate a disruption thesis in SaaS using real data.

This week’s topic: newspapers vs. SaaS, based on a great deck from @loganbartlett and @Redpoint.

The chart omits key leading indicators for newspapers volume which declined well ahead of earnings. Additionally, enterprise customers are fundamentally different from consumers with typically much lower churn rates.

Still we can measure total customer count as a rough analogue for SaaS. This primarily captures down-market motion which is an incomplete view for the total business but can be a great leading indicator of market shifts.

At the industry level, customer growth averages in the mid-single digits, while the bottom quartile of SaaS companies is flat to negative. Note that this data series may be affected by rounded disclosures across companies.

[SoftwareIQ @software__iq]

Major release for SoftwareIQ.

This release moves us closer to our vision of a complete platform for software industry research combining a holistic fundamental KPI database with differentiated alternative datasets purpose-built for investment research.

We’re adding hiring data sourced directly and processed with software-role business logic to isolate true software hiring signals from broader noise, along with developer metrics across GitHub and package usage to track product momentum and adoption more systematically in an increasingly AI-driven market.

As AI speeds up software markets, alternative data paired with fundamentals offers clearer visibility into industry trends, winners, and losers.

Thank you to our subscribers and everyone who has supported the journey! Check it out and start a trial today!

[Emerald City Capital @capital_emerald]

@TheJordanRachel @rabois Cool - does it come with a global pandemic?

[Emerald City Capital @capital_emerald]

@laurenbalik Right but timing of rev rec is not a smoking gun or a basis for investment. You have the full picture of RPO and unearned which looks relatively healthy (but slowing). Unless there is evidence of misstatements of contracts there is nothing here.

[Emerald City Capital @capital_emerald]

@StockJabber Those are actually pretty standard terms

[Emerald City Capital @capital_emerald]

$WCLD turning green on the day 😳

[Emerald City Capital @capital_emerald]

Full position now in $TWLO and $MQ. Funded with exchanges. Chips are down let’s see how this plays out

[Emerald City Capital @capital_emerald]

As ERP transition to S/4HANA in the cloud spend per customer increases 2x+ according to mgmt. Accelerating cloud and recurring revenue should cause a significant rerating in the stock

[Emerald City Capital @capital_emerald]

Pair trade idea long $SAP / short $COUP. With Q4 pre release SAP trades at nearly 12x cloud revenue (lazily ignoring on prem revenue). SAP leader in business spend with accelerating growth in cloud. Organic growth of SAP Cloud may actually be faster. Coupa trades nearly 15x rev!

[Emerald City Capital @capital_emerald]

Really though I think SAP is just fundamentally too cheap. Mission critical software poised to benefit from digitization and sustainability. Effectively cloud business is priced relatively fairly to HR and business spend cloud ignoring core erp..

[Emerald City Capital @capital_emerald]

Exec shake-up at $ESTC puzzling... Very poorly handled, no signaling, announced mid quarter. Uncertainty makes one question the thesis. Stock is cheap but tough call here

[Emerald City Capital @capital_emerald]

@x3nophan3s @ExitMultiple This belongs at $80

[Emerald City Capital @capital_emerald]

Opened position in Marqeta $MQ. Sub $6B EV this looks interesting. Forward price to GP well under 20x with non-linear growth potential

[Emerald City Capital @capital_emerald]

$NYT acquisition of The Athletic. Leader in paid sports content, acquisition price seems reasonable plus balance sheet has been underutilized. Stock in the low $40s getting more interesting

[The New York Times @nytimes]

The New York Times reached a $550 million deal to buy The Athletic, an online sports news outlet with 1.2 million subscriptions. https://t.co/gVJ0oygqnD

[SouthernValue @SouthernValue95]

Concise summary of the $DISCK / $WBD bull case by BofA:

[Corey Hoffstein 🏴‍☠️ @choffstein]

I think about this way too much.

[Emerald City Capital @capital_emerald]

@LibertyRPF Pretty standard practice will only affect small and midsized companies. Really about lowering churn vs capturing price. Enterprises do not buy month to month for any SW