$PATH Q3 2022 Report:
My review, recap, and analysis: strong sequential ARR, but an overall mixed report.
An ongoing thread: 1/
My review, recap, and analysis: strong sequential ARR, but an overall mixed report.
An ongoing thread: 1/
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
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.
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.
4/4: ARR: $PATH wants us to focus on ARR.
+ My expectation was 3Q ARR of 57%. They beat slightly, hit 818M ARR which was 58% YoY.
This was 3.2% beat and QoQ of 13%.
+ Q4 2022 ARR Guide was $903M, >55% (Met). but down from:
- FY 2020 OF 109%
- FY 21 which was 66%.
Not good.
+ My expectation was 3Q ARR of 57%. They beat slightly, hit 818M ARR which was 58% YoY.
This was 3.2% beat and QoQ of 13%.
+ Q4 2022 ARR Guide was $903M, >55% (Met). but down from:
- FY 2020 OF 109%
- FY 21 which was 66%.
Not good.
5/5: Net New ARR was the bright side!
+ $92M Net new ARR accelerated to 42% this Q3. This is up from 33% in Q2!
It sequential grew from 14% > 11% and now, 25%.
There must have been a huge deal they won... Hope they discuss it on the CC.
+ $92M Net new ARR accelerated to 42% this Q3. This is up from 33% in Q2!
It sequential grew from 14% > 11% and now, 25%.
There must have been a huge deal they won... Hope they discuss it on the CC.
6/6: Bottom-line operating margins look good!
+ Gross margins decelerated to 80%
+ SBC declined from 100% > 47% > now, 43%
+ FCF margins around -3% (similar to last Qtr -2%)
+ N-GAAP Losses: -4%
+ Gross margins decelerated to 80%
+ SBC declined from 100% > 47% > now, 43%
+ FCF margins around -3% (similar to last Qtr -2%)
+ N-GAAP Losses: -4%
7/ They announced new partnerships with $SNOW, $CRWD, $AYC. and big channel partnership with $PWC. Most seem like fluff.
$PATH's partner ecosystem has always been their strongest strength but unfortunately, its not yet showing in the numbers the way I want.
$PATH's partner ecosystem has always been their strongest strength but unfortunately, its not yet showing in the numbers the way I want.
8/ $PATH is a leader within their industry
I highlighted in my tweet last month. Across all the leading market researchers, $PATH is still the leader. However, $MSFT Low-Code/NC CEO (Chris Lamana) taking share. See @AznWeng:
I highlighted in my tweet last month. Across all the leading market researchers, $PATH is still the leader. However, $MSFT Low-Code/NC CEO (Chris Lamana) taking share. See @AznWeng:
https://twitter.com/AznWeng/status/1443207879935266821?s=20
https://twitter.com/InvestiAnalyst/status/1458417785311223821?s=20
9/ Past Quarterly Analysis:
I've followed $PATH very closely over the past year. This was my Q2 2022 Analysis. I've noticed the sequential growth slowdown.
I've followed $PATH very closely over the past year. This was my Q2 2022 Analysis. I've noticed the sequential growth slowdown.
https://twitter.com/InvestiAnalyst/status/1435298452393578502?s=20
10/ My original thread and the full investment thesis into $PATH early in the year:
https://twitter.com/InvestiAnalyst/status/1402749939726225408?s=20
11/ For now, I'm underwhelmed. There appears to be a strong ARR happening this Q3, but in a strong SaaS taper, $PATH is not hitting enough.
I might exit & revisit in Q4. I'll update this thread later when I evaluate the call, DBNRR & Customer growth to make a final decision...
I might exit & revisit in Q4. I'll update this thread later when I evaluate the call, DBNRR & Customer growth to make a final decision...
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