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Francis - Analyst Profile picture
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6 Dec, 4 tweets, 2 min read
I added well into my $ZS Scaler position today. Couple of reasons below:

+ Leader within the fastest-growing segments of enterprise security. (ZTA, SASE, ZIA)
+ Clearly differentiated, cloud-native moat
+ 71% billings growth and 62% YoY on $1B ARR on 30% FCF

Short thread (1/4) ImageImage
2/2: Brief overview of last earnings:

+ They've CAGR over 50%+ growth over the past 5-years.
+QoQ accel to 17%
+ They could easily CAGR 60%+ growth into 2022 due to new Govt contracts
+ 87% in >$1million customers
+ RPO grew 97%
+ FCF✅

I expect to see
3/3:
Clear leader in their industry with early penetration (25% of Fortune 2000) into $72B TAM.

Over 70% of companies are still on on-premise firewalls, but $ZS ZTA architecture way ahead of comps which is why growth has been durable.

4/4:
+ Sustainable growth especially against tough comps
+ High-margins
+ FCF

A clear leader within a fast-growing TAM is one of the reasons $ZS will never be cheap.

I might do a future full thread, but this is a very special company and it's one of my highest-conviction names.

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More from @InvestiAnalyst

Francis - Analyst Profile picture
8 Dec
$PATH Q3 2022 Report:

My review, recap, and analysis: strong sequential ARR, but an overall mixed report.

An ongoing thread: 1/ Image
2/2
 Quarterly revenue trend:

Current quarter revenue was beat by only 2.5%. It came in line and met expectations.

Q4 "21: 81% YoY
Q1 "22: 65%YoY
Q2 "22: 40%
Q3 "22: 50% YoY
Q4 guide is: 36% YoY (Yikes!)

Last 5-Qtr of Growth: -10% > 13% > 11% > now 13%.
Guide implies 28% QoQ
3/3: Full Year Revenue:

o FY 2022 Revenue of $886M, implies 46% YoY. If they beat around 5%, if you come to 51% YoY for Full Year. This is down from 81% in the last fiscal year.

Seasonally, they have a strong Q3 to Q4.

Overall, they seem to have do "ok" but growth is slowing.
Read 11 tweets
Francis - Analyst Profile picture
4 Dec
I went down a rabbit hole digging into one of the most successful and secretive hedge funds: Coatue Global Mgmt.

+ 483% since June 2013 with a 50% annualized return.
+ Top 1% of Tech L/S Hedge Funds
+ One of the most successful Tiger Cubs.

A thread on some interesting findings:
1/ I expect most people already know Coatue, but brief overview:

Phillipe Laffont (PL) is the Founder of Coatue Global. He worked for Julian Robertson (the legendary founder of the defunct Tiger Mgmt).

To learn more about Tiger, read @mariogabriele piece
2/ Phillipe Laffont was born as a rising star:

+ Obsessed with computers from a young age
+ He graduated from MIT with a Computer science degree
+ Worked for Mckinsey in Europe
+ Came back to New York to work for Tiger Global for 3+ yrs until 1999 when Tiger returned capital.
Read 34 tweets
Francis - Analyst Profile picture
4 Dec
Friday Musings:

Amidst this taper, my focus is Cloud, Security & AI/ML:
• $SNOW | $S
• $ZS*
• $DDOG*
• $PLTR* | $NET

Non-SaaS:
• $TOST | $DLO
• $GLBE
• $BILL*
• $AFRM*

*Existing positions
+Others: Watchlist

The internet has not broken yet.
Some quick thoughts 1/
2/ My priority is to focus on companies that can sustain 30-40% growth rates for a 3-5yr.

The market is looking for companies that have growth PLUS (optionality, product-lock-in, switching costs, mission-critical) to deduce the durability of a 3-yr CAGR to decide its multiple.
3/ Other things is looking for 30%+ CAGR Rev growth combined with lock-in, high land & expand DBNRR?

Alternatively, for non-SaaS companies. I'm looking for companies that are still relatively early in capturing their TAM and are showing qualities that they are market leaders?
Read 10 tweets
Francis - Analyst Profile picture
3 Dec
1/ $ASAN's Results (-16% What happened?):

Let's begin w/ positives:
• Current Q3, 70% YoY growth
• 50k Customer growth was 132% (highest since 2020)
• 5k & 50k Customers are sticky, spending more: DBNRR of 130% and 145% respectively to last Qtr

Where were the negatives? 1/6
2/ Reason the stock is down:

• Revenue of 70% YoY, slight deceleration
• Q4 Guide: 54% YoY, 5% sequential slowdown from 12% QoQ from Q1-Q2
• FY Guide: 64%, light
• FCF: -29% & high S&M/Operating exps remaining the same
+ This is unacceptable when yu trade for EV/S of 60+ :(
3/ $ASAN: It turns out this indicator in my thread came true.

Enterprise customers were more likely to Decrease their spending on $ASAN over the next couple of months which is why $ASAN likely had a slow guide.

Read 6 tweets
Francis - Analyst Profile picture
14 Nov
This is a phenomenal breakdown of today's Enterprise AI/ML stack (S/O: @BatteryVentures).

I'm constructive on the tailwinds within this space and I'm long: $CFLT, $CRWD, $AMPL, $PLTR.

The report below is a great read for any AI & Enterprise SaaS Enthusiast.

Thread Summary: 1/
2/ Today's Org has a fragmented data and AI environment. Here are the different job roles required to perform certain data tasks.

For example, 1) the ETL process is going to undergo some innovation. 2) More people will become data citizens IMO.

The visual below shows it.
3/ The Data Value Chain:

The picture below explains -
i) the lifecycle of machine learning in an organization,
ii) the different applications required, and
iii) how data flows through the modern organization.
Read 7 tweets
Francis - Analyst Profile picture
8 Nov
$PLTR: Palantir’s 3Q Report:

Below is a short thread of my article on the important metrics I’ll be tracking. I'm fairly neutral.

+ 3Q Rev beat: $396M; >35% YoY
+ FY guidance
+ Foundry & Gotham business lines
+ Ent. Product GTM.

Let me explain: 1/n

seekingalpha.com/article/446637…
2/
- Q3: 40% YoY would be Net $30M, 35% ideal
- Q4 Rev: $405M (>27% YoY) is a minimum.
- FY 2021: $1.6B which would be roughly 40% YoY would be great.
- Sadly, I expect high SBC Costs
- Gov't contracts should boost FY 21 based on recent contracts (Army, IDIQ)

Metrics below
3/ Enterprise Clients is a BIG PART of my thesis:

Acceleration in the commercial would be HUGE. In Q2, they added 20 net new clients (booked $925M of contracts (175% YoY): Could we get around 190+ in Q3?

I'll watch Billings, RPO Growth, and Total Contract Value, ideally $4.0B+>
Read 5 tweets

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