seekingvalue

It's not whether you're right or wrong that's important, but how much money you make when you're right and how much you lose when you're wrong.

[seekingvalue @seekingvalue2]

TL:DR - mgmt/board spent over half a BILLION dollars over 8 quarters to add $24m of Net New ARR??

Over the course of 2024+2025, company has spent ~$1.2B in OPEX. If you assume half of the investment (~$600M) was allocated to growing Net New ARR, what does management have to show for it?

ARR as of 2023: $806M
ARR guide Q1'26: $830M (down $10m q/q)
Net New ARR: +$24M

[seekingvalue @seekingvalue2]

@beTochMam The opposite...with an NDR of 117% (rev growth with existing customers only) it's difficult to see a path to revenue deceleration to 14% in Q4. The SMB/MM biz (20%) would need to implode.

My broader point was that if you strip away SMB biz, you have a tier 1 asset ripe for M&A

[seekingvalue @seekingvalue2]

75% of Gitlab's ARR ($750m), total ~$1B ARR, comes from 1,519 customers (~$500k ARR per logo), aka the enterprise biz.
With NDR at 117%, likely higher for enterprise biz, the $1,118m FY'27 rev guide doesn't pencil since Q4 would imply 14% y/y growth for total rev... $GTLB $MSFT

[seekingvalue @seekingvalue2]

Makes me wonder whether a strategic acquiror be willing to pay 7x ARR for the enterprise biz alone + AI optionality of the DevSecOps platform

[seekingvalue @seekingvalue2]

@midwit_capital Agreed, esp while sitting on $1.3B in cash (just awful governance)

[seekingvalue @seekingvalue2]

About darn time! New CEO at $RPD Rapid7 Corey Thomas FINALLY stepping down $TENB $QLYS $PANW $OKTA $ZS $CRWD

Wael Mohammed previously served as CEO of Forescout Technologies, Operating Partner at Advent International, and Chairman of the Board at Cysiv... https://t.co/b1hQyKdSB9

[seekingvalue @seekingvalue2]

@longshorteqt Even if selling the business is the goal, wouldn't I want a legitimate CEO in place? The stock would rally with a new face. Corey has lost all credibility with Wall Street (doesn't know how to forecast even w/ 13 yrs exp). JANA gave him 2 years to turn ship around and he blew it.

[seekingvalue @seekingvalue2]

@nmarathe_rtc @sequoia Agreed. Sadly, the BOD Chairman is best friends with Corey (CEO) from $MSFT days, should have been fired years ago. Jana would sell in a heartbeat but PE debt markets are tight atm. That said, still SO much room to cut. A -2% top line grower has no business spending $300m on S&M

[seekingvalue @seekingvalue2]

If services are the new software per @sequoia, beaten down names like $RPD Rapid7 (D&R security services $460m ARR, 55% of total @ 7% y/y growth) must surely be trading below their intrinsic value? How much $ can the right owner unlock with AI is the ?..🤔 https://t.co/2PrdDMd3o1

[seekingvalue @seekingvalue2]

Have an idea for your 1st PE fund @dsundheim: Rapid7 $RPD. The co has a lavish 150k sq ft HQ at TD Garden (home of @celtics) spends $22m/yr on rent = (6% of it's market cap) so easy $ by relocating to Miami. Fire 1/3 of the 2,600 FTEs & collect $300m in FCF on $500m equity check

[seekingvalue @seekingvalue2]

@P_Remarks @sytses @BATMongoose Ah, the lead was buried in the last bullet. Missed it, nothing ever gets by you sir! 🫡🫡🫡

[seekingvalue @seekingvalue2]

I've been buried at a new gig but have to break the silence. The UNTHINKABLE happened - @sytses converted all Class B shares to Class A. The read through - I've grinded 15yrs and am ready for the public markets (i.e. activist) to decide Gitlab's fate $GTLB $TEAM $MSFT $DDOG $NOW

[seekingvalue @seekingvalue2]

@sytses @BATMongoose Genuinely surprised @P_Remarks hasn't been louder about this development!!

[seekingvalue @seekingvalue2]

@sytses Per the recent proxy, there were 16.4m Class B shares outstanding but after Sid's conversion of 15.1m shares into Class A, there will be ~1m Class B shares left. I wonder who will step up now that Gitlab is fair game and still trading at ~2x 2027 Revenue... @BATMongoose

[seekingvalue @seekingvalue2]

$GTLB Gitlab still has a pulse, @bstaples is not going down without a fight. Starting to like this guy... $TEAM $MSFT $GOOG Anthropic OpenAI

[seekingvalue @seekingvalue2]

How on God's green earth is $Domo DOMO on this list? 😂😂😂

[Jason ✨👾SaaStr.Ai✨ Lemkin @jasonlk]

These GRR numbers are less impressive when you realize ServiceNow + Workday contracts both default to 3 year terms on initial contracts

And Workday proposes 5+ years on renewals (!)

Long dated contract terms can hide a lot of decay. And encourage a lot of status quo-ism.

Even ServiceNow has even reported they are finally getting pressure here to do more 1 year deals.

[seekingvalue @seekingvalue2]

Same could be said about the iPhone (not for the small guys 😅)? I'm not an end user but I like where @bstaples head is at $GTLB $APPL $TEAM $MSFT

[Matt Slotnick @matt_slotnick]

a prolific poster awakens

[seekingvalue @seekingvalue2]

Starboard over here trying to save SaaS while Orlando (@thomabravo) talks his book at conferences and Jose (Clearlake) snags a baseball team. Robert Smith (@Vista_Equity ) where you at?

[First Squawk @FirstSquawk]

ACTIVIST STARBOARD VALUE BUILDS STAKE IN AI SOFTWARE MAKER DYNATRACE — WSJ

[seekingvalue @seekingvalue2]

@Kellblog Something looks off here - $GTLB Gitlab trades ~2x NTM (I guess that's a premium in this market???) $PD trades at ~4x EBITDA (Rev multiple for 0% growth is irrelevant)...Also $OS Onestream was taken out by HG for 8x NTM @Redpoint @Kellblog

[seekingvalue @seekingvalue2]

Why I dont watch the #NBA anymore...this has to be some form of tanking right? Higher odds of lottery pick if you get knocked out in the first round? - just hold the ball and let the opponent foul you? A joke https://t.co/k5sKNqCA4a

[NBA @NBA]

DOWN 6.
UNDER 30 SECONDS.
WITHOUT POSSESSION.

THE LAKERS FOUND A WAY TO WIN AN ABSOLUTE THRILLER LAST NIGHT AND GO UP 3-0 🚨

[seekingvalue @seekingvalue2]

Get fat on management fees and buy a sports franchise. José Feliciano living the dream dream. Now makes sense why Clearlake has let their $BL Blackline position flounder (10% stake @ ~$70 cost basis since 2022) $SAP $ORCL $CRM $NOW $WDAY $IBM https://t.co/thoYwogVgE

[seekingvalue @seekingvalue2]

Tough tape. $GTLB bringing down legendary funds, just brutal. Semis enjoy the dance until the music stops, well deserved $TEAM $MSFT $CRM

[Tyler Neville @Tyler_Neville_]

This market structure has brought legends down, because of course, it’s a centralized ponzi instead of a decentralized free market like they grew up trading.

It’s why Jane Street makes $39 bln a year front-running orders and arbing relative volatile while guys like Ricky Sandler can’t just buy great undervalued businesses anymore to help grow them.

Market structure has perverted true investment & innovation.

Capital markets were supposed to be about funding new ideas to grow an economy, not arbitrage everything in an absurd cycle of relative oblivion to appease giant bureaucratic incentives.