Jun
15
2018
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Adobe could be the next $10 billion software company

Adobe reported its Q2 FY’18 earnings yesterday and the news was quite good. The company announced $2.2 billion in revenue for the quarter up 24 percent year over year. That puts them on an impressive $8.8 billion run rate, within reach of becoming the next $10 billion software company (or at least on a run rate).

Revenue was up across all major business lines, but as has been the norm, the vast majority comes from the company’s bread and butter, Creative Cloud, which houses the likes of Photoshop, InDesign and Dreamweaver, among others. In fact digital media, which includes Creative Cloud and Document Cloud accounted for $1.55 billion of the $2.2 billion in total revenue. The vast majority of that, $1.30 billion was from the creative side of the house with Document Cloud pulling in $243 million.

Adobe has been mostly known as a creative tools company until recent years when it also moved into marketing, analytics and advertising. Recently it purchased Magento for $1.6 billion, giving it a commerce component to go with those other pieces. Clearly Adobe has set its sights on Salesforce, which also has a strong marketing component and is not coincidentally perhaps, the most recently crowned $10 billion software company.

Moving into commerce

Adobe CEO Shantanu Narayen speaking to analysts on the post-reporting earnings call sees Magento as filling in a key piece across understanding the customer from shopping to purchase. “The acquisition of Magento will make Adobe the only company with leadership in content creation, marketing, advertising, analytics and now commerce, enabling real-time personalized experiences across the entire customer journey, whether on the web, mobile, social, in-product or in-store. We believe the addition of Magento expands our available market opportunity, builds out our product portfolio, and addresses a key underserved customer need,” Narayen told analysts.

If Adobe could find a way to expand that marketing and commerce revenue, it could easily surpass that $10 billion revenue run rate threshold, but so far while it has been growing, it remains less than half of the Creative revenue at $586 million. Yes, it grew at an 18 percent year over year clip, but it seems as though there is potential for so much more there and clearly Narayen hopes that the money spent on Magento will help drive that growth.

Battling with Salesforce

Even while it was announcing its revenue, rival Salesforce was meeting with Marketing Cloud customers in Chicago at the Salesforce Connections conference, a move that presented an interesting juxtaposition between the two competitors. Both have a similar approach to the marketing side, while Salesforce concentrates on the customer including CRM and service components. Adobe differentiates itself with content, which shows up on the balance sheet as the majority of its revenue .

Both companies have growth in common too. Salesforce has been on quite a run over the last five years reaching $3 billion in revenue for the first time last quarter. Adobe hit $2 billion for the first time in November. Consider that prior to moving to a subscription model in 2013, Adobe had revenue of $995 billion. Since it moved to that subscription model, it has reaped the benefits of recurring revenue and grown steadily ever since.

Each has used strategic acquisitions to help fuel that growth with Salesforce acquiring 27 companies since 2013 and Adobe 13, according to Crunchbase data. Each has bought a commerce company with Adobe buying Magento this year and Salesforce grabbing Demandware two years ago.

Adobe has the toolset to keep the marketing side of its business growing. It might never reach the revenue of the creative side, but it could help push the company further than it’s ever been. Ten billion dollars seems well within reach if things continue along the current trajectory.

May
30
2018
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Salesforce keeps revenue pedal to the metal with another mammoth quarter

Salesforce just keeps on growing revenue. In another remarkable quarter, the company announced 3.01 billion in revenue for Q1 2019 with no signs of slowing down. That puts the CRM giant on a run rate of over $12 billion with the company’s most optimistic projections suggesting it could go even higher. It’s also the first time they have surpassed $3 billion in revenue for a quarter.

As you might expect Salesforce chairman and CEO Marc Benioff was over the moon about the results in the earnings call with analyst yesterday afternoon. “Revenue for the quarter rose to more than $3 billion, up 25%, putting us on $12 billion revenue run rate that was just amazing. And we now have $20.4 billion of future revenues under contract, which is the remaining transaction price, that’s up 36% from a year ago. Based on these strong results, we’re raising our full year top line revenue guidance to $13.125 billion at the high end of our range, 25% growth for this year,” Benioff told analysts.

Brent Leary, an analyst who has been watching the CRM industry for many years, says CRM in general is a hot area and Salesforce has been able to take advantage. “With CRM becoming the biggest and fastest growing business software category last year according to Gartner, it’s easy to see with these number that Salesforce is leading the way forward. And they are in position to keep moving themselves and the category forward for years to come as their acquisitions should continue to pay off for them,” Leary told TechCrunch.

Bringing Mulesoft into the fold

Further Benioff rightly boasted that the company would be the fastest software company ever to $13 billion and it continued on the road towards its previously stated $20 billion goal. The $6.5 billion acquisition of Mulesoft earlier this year should help fuel that growth. “And this month, we closed our acquisition of MuleSoft, giving us the industry’s leading integration platform as well. Well, integration has never been more strategic,” Benioff stated.

Salesforce CEO Marc Benioff Photo: TechCrunch

Bret Taylor, the company’s president and chief product officer, says the integration really ties in nicely with another of the company’s strategic initiatives, artificial intelligence, which they call Einstein. “[Customers] know that their AI is only as powerful as data it has access to. And so when you think of MuleSoft, think unlocking data. The data is trapped in all these isolated systems on-premises, private cloud, public cloud, and MuleSoft, they can unlock this data and make it available to Einstein and make a smarter customer facing system,” Taylor explained.

Leary thinks there’s one other reason the company has done so well, one that’s hard to quantify in pure dollars, but perhaps an approach other companies should be paying attention to. “One of the more undercovered aspects of what Salesforce is doing is how their social responsibility and corporate culture is attracting a lot of positive attention,” he said. “That may be hard to boil down into revenue and profit numbers, but it has to be part of the reason why Salesforce continues to grow at the pace they have,” he added.

Keep on rolling

All of this has been adding up to incredible numbers. It’s easy to take revenue like this for granted because the company has been on such a sustained growth rate for such a long period of time, but just becoming a billion dollar company has been a challenge for most Software as a Service providers up until now. A $13 billion run rate is in an entirely different stratosphere and it could be lifting the entire category says Jason Lemkin, founder at SaasStr, a firm that invests in SaaS startups.

“SaaS companies crossing $1B in ARR will soon become commonplace, as shocking as that might have sounded in say 2011. Atlassian, Box, Hubspot, and Zendesk are all well on their way there. The best SaaS companies are growing faster after $100m ARR, which is propelling them there,” Lemkin explained.

Salesforce is leading the way. Perhaps that’s because it has the same first-to-market advantage that Amazon has had in the cloud infrastructure market. It has gained such substantial momentum by being early, starting way back in 1999 before Software as a Service was seen as a viable business. In fact, Benioff told a story earlier this year that when he first started, he did the rounds of the venture capital firms in Silicon Valley and every single one turned him down.

You can bet that those companies have some deep regrets now, as the company’s revenue and stock price continues to soar.  As of publication this morning, the stock was sitting at $130.90, up over 3 percent. All this company does is consistently make money, and that’s pretty much all you can ask from any organization. As Leary aptly put it, “Yea, they’re really killing it.”

May
23
2018
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Meet the speakers at The Europas, and get your ticket free (July 3, London)

Excited to announce that this year’s The Europas Unconference & Awards is shaping up! Our half day Unconference kicks off on 3 July, 2018 at The Brewery in the heart of London’s “Tech City” area, followed by our startup awards dinner and fantastic party and celebration of European startups!

The event is run in partnership with TechCrunch, the official media partner. Attendees, nominees and winners will get deep discounts to TechCrunch Disrupt in Berlin, later this year.
The Europas Awards are based on voting by expert judges and the industry itself. But key to the daytime is all the speakers and invited guests. There’s no “off-limits speaker room” at The Europas, so attendees can mingle easily with VIPs and speakers.

What exactly is an Unconference? We’re dispensing with the lectures and going straight to the deep-dives, where you’ll get a front row seat with Europe’s leading investors, founders and thought leaders to discuss and debate the most urgent issues, challenges and opportunities. Up close and personal! And, crucially, a few feet away from handing over a business card. The Unconference is focused into zones including AI, Fintech, Mobility, Startups, Society, and Enterprise and Crypto / Blockchain.

We’ve confirmed 10 new speakers including:


Eileen Burbidge, Passion Capital


Carlos Eduardo Espinal, Seedcamp


Richard Muirhead, Fabric Ventures


Sitar Teli, Connect Ventures


Nancy Fechnay, Blockchain Technologist + Angel


George McDonaugh, KR1


Candice Lo, Blossom Capital


Scott Sage, Crane Venture Partners


Andrei Brasoveanu, Accel


Tina Baker, Jag Shaw Baker

How To Get Your Ticket For FREE

We’d love for you to ask your friends to join us at The Europas – and we’ve got a special way to thank you for sharing.

Your friend will enjoy a 15% discount off the price of their ticket with your code, and you’ll get 15% off the price of YOUR ticket.

That’s right, we will refund you 15% off the cost of your ticket automatically when your friend purchases a Europas ticket.

So you can grab tickets here.

Vote for your Favourite Startups

Public Voting is still humming along. Please remember to vote for your favourite startups!

Awards by category:

Hottest Media/Entertainment Startup

Hottest E-commerce/Retail Startup

Hottest Education Startup

Hottest Startup Accelerator

Hottest Marketing/AdTech Startup

Hottest Games Startup

Hottest Mobile Startup

Hottest FinTech Startup

Hottest Enterprise, SaaS or B2B Startup

Hottest Hardware Startup

Hottest Platform Economy / Marketplace

Hottest Health Startup

Hottest Cyber Security Startup

Hottest Travel Startup

Hottest Internet of Things Startup

Hottest Technology Innovation

Hottest FashionTech Startup

Hottest Tech For Good

Hottest A.I. Startup

Fastest Rising Startup Of The Year

Hottest GreenTech Startup of The Year

Hottest Startup Founders

Hottest CEO of the Year

Best Angel/Seed Investor of the Year

Hottest VC Investor of the Year

Hottest Blockchain/Crypto Startup Founder(s)

Hottest Blockchain Protocol Project

Hottest Blockchain DApp

Hottest Corporate Blockchain Project

Hottest Blockchain Investor

Hottest Blockchain ICO (Europe)

Hottest Financial Crypto Project

Hottest Blockchain for Good Project

Hottest Blockchain Identity Project

Hall Of Fame Award – Awarded to a long-term player in Europe

The Europas Grand Prix Award (to be decided from winners)

The Awards celebrates the most forward thinking and innovative tech & blockchain startups across over some 30+ categories.

Startups can apply for an award or be nominated by anyone, including our judges. It is free to enter or be nominated.

What is The Europas?

Instead of thousands and thousands of people, think of a great summer event with 1,000 of the most interesting and useful people in the industry, including key investors and leading entrepreneurs.

• No secret VIP rooms, which means you get to interact with the Speakers

• Key Founders and investors speaking; featured attendees invited to just network

• Expert speeches, discussions, and Q&A directly from the main stage

• Intimate “breakout” sessions with key players on vertical topics

• The opportunity to meet almost everyone in those small groups, super-charging your networking

• Journalists from major tech titles, newspapers and business broadcasters

• A parallel Founders-only track geared towards fund-raising and hyper-networking

• A stunning awards dinner and party which honors both the hottest startups and the leading lights in the European startup scene

• All on one day to maximise your time in London. And it’s PROBABLY sunny!

europas8

That’s just the beginning. There’s more to come…

europas13

Interested in sponsoring the Europas or hosting a table at the awards? Or purchasing a table for 10 or 12 guest or a half table for 5 guests? Get in touch with:
Petra Johansson
Petra@theeuropas.com
Phone: +44 (0) 20 3239 9325

May
10
2018
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Dropbox beats expectations for its first quarterly check-in with Wall Street

Dropbox made its debut as a public company earlier this year and today passed through its first milestone of reporting its results to public investors, and it more or less beat expectations set for Wall Street on the top and bottom line.

The company reported more revenue and beat expectations for earnings that Wall Street set, bringing in $316.3 million in revenue and appearing to pick up momentum among its paying user base. It also said it had 11.5 million paying users, a jump from last year. However, the stock was largely flat in extended trading. One small negative signal — and it definitely appears to be a small one — was that its GAAP gross margin slipped slightly to 61.9% from 62.3% a year earlier. Dropbox is a software company that’s supposed to have great margins as it begins to ramp up its own hardware, but that slipping margin may end up being something that investors will zero in on going forward. Still, as the company continues to ramp up the enterprise component of its business, the calculus of its business may change over time.

This is a pretty important moment for the company, as it was a darling in Silicon Valley and rocketed to a $10 billion valuation in the early phases of the Web 2.0 era but began to face a ton of criticism as to whether it could be a robust business as larger companies started to offer cloud storage as a perk and not a business. Dropbox then found itself going up against companies like Box and Microsoft as it worked to create an enterprise business, but all this was behind closed doors — and it wasn’t clear if it was able to successfully maneuver its way into a second big business. Now the company is beholden to public shareholders and has to show all this in the open, and it serves as a good barometer of not just storage and collaboration businesses, but also some companies that are looking to drastically simplify workflow processes and convert that into a real business (like Slack, for example).

Here’s the final scorecard for the company:

  • Q1 revenue: $316.3 million, compared to Wall Street estimates of $308.7 million (up 28% year over year.)
  • Q1 earnings: 8 cents per share adjusted, compared to Wall Street estimates of 5 cents per share adjusted.
  • Paying users: 11.5 million, up from 9.3 million in the same period last year.
  • GAAP gross margin: 61.9%, down from 62.3% last year in the same period last year.
  • Non-GAAP gross margin: 74.2%, up from 63.5% in the same period last year.
  • Free cash flow: $51.9 million, down from $56.5 million in the same period last year.

(The GAAP and non-GAAP comparison is typically related to share-based compensation, which is a key component of employee compensation and retention.)

Dropbox was largely considered to be a successful IPO, rising more than 40% in its trading debut. That does mean that it may have left some money on the table, but its operating losses have been largely stable, even as it looks to woo larger enterprise customers as it — which is a bit of a taller order than its typical growth amid consumers that’s heavily driven by organic growth. Those larger enterprise customers offer more stable, and larger, revenue streams than a consumer base that faces a variety of options as many companies start to offer free storage. The company is now worth well over that original $10 billion valuation as a public company. Dropbox says it has more than 500 million users.

Since going public, the stock has had its ups and downs, but for the most part hasn’t dipped below that significant jump it saw from day one. Keeping that number propped up — and growing — is an important part of growing a business as a public company as it waves off more intense scrutiny and pressure for change from public shareholders, as well as offering competitive compensation packages for incoming employees in order to attract the best talent. It’s also good for morale as it offers a kind of grade for how the company is doing in the eyes of the public, though CEOs of companies often say they are committed toward long-term goals. The company’s shares are up around 11% since going public.

While there have been a wave of enterprise IPOs this year, including zScalar and Pluralsight’s upcoming IPO, Dropbox was largely considered to be a potential gauge of whether the IPO window was still open this year because of its hybrid nature. Dropbox started off as a consumer company based around a dead-simple approach of hosting and sharing files online, and used that to build a massive user base even as the cost of cloud storage was rapidly commoditized. But it also is building a robust enterprise-focus business, and continues to roll out a variety of tools to woo those businesses with consistent updates to products like its document tool Paper. Last month, the company started rolling out templates, as it looked to make traditional workflow processes easier and easier for companies in order to capture their interest much in the same way it captured the interest of consumers at large.

Mar
20
2018
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Oracle’s cloud biz heading in the wrong direction right now

Oracle announced its quarterly earnings last night, detailing that its cloud business grew 32 percent to $1.6 billion in the quarter. That might sound good at first blush, but it’s part of three straight quarters of reduced growth — a fact that had investors jittery over night. It didn’t get better throughout the day today with Oracle’s stock plunging over 9 percent as of this writing.

When you consider that enterprise business is shifting rapidly to the cloud, and that the cloud business in general is growing quickly, Oracle’s cloud numbers could be reason for concern. While it’s hard to nail down what “cloud” means when it comes to technology companies’ earnings because it varies so much in how each one counts infrastructure, software, or platform; the general trend from Oracle seems contrary to the eye-popping growth numbers we have seen from other companies.

Oracle against the world

Oracle’s cloud revenue broke down as follows: SaaS, up 33 percent to $1.2 billion, and platform and infrastructure revenue combined up 28 percent to $415 million. To put those figures into context, consider that last quarter Alibaba reported overall cloud revenue of $533 million,which was up a whopping 104 percent year over year.

Looking purely at Infrastructure services, Canalys reported that in the third quarter of 2017, Microsoft grew at around 90 percent year over year, while Google grew around 75 percent YoY. Even market leader Amazon, which controls over 30 percent of the market, had around a 40 percent growth rate, fairly remarkable given its size.

All of that suggests that Oracle, which came to the cloud late, should be on a higher growth trajectory than it’s currently showing.That’s because it’s generally easier to grow from a small number than it is from a big number to bigger number (as Amazon has had to do).

The company’s on-prem software revenue continues to grow (which includes lucrative license and maintenance revenue from existing customers), and still accounts for the vast majority of its top line. However, at this point, you would think Oracle would want to see that revenue growth shifting away from on-prem and towards its cloud business.

What’s worse is that co-CEO Safra Catz predicted in the earnings call with analysts that the cloud growth could dive even further next quarter. “Cloud revenues including SaaS, PaaS and IaaS [all cloud business combined] are expected to grow 19% to 23% in USD, 17% to 21% in constant currency,” she told analysts this week.

Oracle co-CEO Safra Catz Photo: KIMIHIRO HOSHINO/AFP/Getty Images

Looking for a brighter future

Chairman Larry Ellison tried to point to the fully automated cloud database product announced at Oracle OpenWorld last fall as a proof point of a brighter cloud future, but so far the numbers are not bearing that out. It’s worth noting that he did also indicate that more automated cloud products are on the way.

Oracle has spent the last several years putting a lot of cloud pieces together, and as Catz pointed out, they don’t have to invest further to handle additional capacity in their SaaS business, but with the numbers heading in the wrong direction that may not be the problem.

Oracle certainly has enterprise credibility, and that should bode well for its cloud business, but as a late comer to the market we should be seeing much brisker overall growth than this. Over time that may happen, but for now Wall Street was not happy with Oracle’s results and the firm probably has to show more from its cloud products before they can change investors’ minds.

Mar
01
2018
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Box shares fall over 20% on slowed growth

 Cloud storage provider Box started out the day Thursday down over 20% on the stock market. Shares traded as low as $19.11 in early hours of trading, down from a previous close of $24.07.
The company reported quarterly earnings after the bell on Wednesday, and while its losses of six cents per share surpassed analyst expectations of negative eight cents, investors were concerned about the… Read More

Feb
27
2018
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Square’s bets beyond a register brought in $253M last year as it posts a largely positive fourth quarter

 Square posted a largely successful fourth quarter that showed continuing growth with its Cash App — with users spending around $90 million on its Cash card in December, putting it on a potentially $1 billion run rate. That would offer another significant avenue for Square to snap up additional customers as it looks to chip away at the alternatives available for directly sending cash… Read More

Feb
01
2018
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Google’s Diane Greene says billion-dollar cloud revenue already puts them in elite company

 It has long been believed that the big three in the cloud consisted of AWS, Microsoft and Google, with IBM not doing too badly either. But in its earnings call with analysts today, the company revealed it’s pulling in a billion dollars a quarter in combined cloud revenue. That’s a figure that Google’s Diane Greene says already puts her company on elite footing. Read More

Jan
31
2018
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Microsoft’s Azure revenue nearly doubled year-over-year in its second quarter

 Microsoft posted a relatively good second quarter this year that continued the ongoing process of its growth into a major cloud entity, in addition to saying it would be taking a significant charge as part of changes to U.S. tax law. Read More

Jan
18
2018
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IBM’s year-over-year revenue didn’t decline in the last quarter

 Here’s a surprise: After 22 quarters of consecutive year-over-year revenue declines, IBM today reported that its revenue increased from Q4 2016 to Q4 2017. The company reported revenue of $22.5 billion for the last quarter, up from $21.77 billion a year ago. Read More

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