We closely monitor public SaaS companies and read through ~70 Q3 earningscall transcripts to get a feel for their view of the state of the salesenvironment for SaaS. Below are directquotes from the companies and at the end is a summary.
Samsara (IOT) - “Despite the uncertain macroeconomic environment, oursolutions continue to resonate because they deliver clear and fast ROI for ourcustomers.”
Klaviyo (KVYO) - "We're seeing some softness in new customeracquisition. We're seeing some softness in expansion, but we are not seeingthat macroenvironment or the impact become either materially better ormaterially worse. It has been steady….."We are seeing strong growth acrossall channels….."The macro environment remains consistent with previousquarters, showing some softness in new customer acquisition and expansion,particularly in the SMB segment.”
Waystar (WAY) - “Our business model is working successfully, and ourteams are high-performing. We've seen our pipeline grow, especially in thehospital and health system market”…."We anticipate robust demand ashospitals expect utilization to pick up.”
Onestream (OS) - "While the macro-economic and geo-political stateof affairs continue to grab headlines, at OneStream, we saw a consistent marketenvironment relative to last quarter."
Sentinel One (S) - “Our third quarter performance exceeded our top andbottom line expectations, delivering industry-leading growth and marginimprovement….“Building on our third quarter outperformance, we are againraising our top and bottom line expectations for the fiscal year ‘24.”
Blend Labs (BLND) - “Despite mortgage rates remaining high around 7% onthe prevailing 30-year mortgage, we're seeing a positive sentiment shift in theindustry”….”our consumer banking business also continues to grow meaningfully,surpassing our previously shared growth target of 35% and reaching over 50%growth this quarter compared to the same time last year.”….“Our Q4 pipeline isalso strong.”
MongoDB (MDB) – "We continue to see strength in the enterprisesegment with an increasing number of large deals, and our new product offeringsare driving momentum across industries."…."The demand for our clouddatabase solutions remains robust, but we are observing longer sales cycles forlarger transactions, particularly in regions with tighter macroeconomicconditions."
Dropbox (DBX) - "As we’ve seen in previous quarters, the enterprisesegment continues to be our strongest area, and we are seeing consistent growthin our larger customers."…."In the SMB space, we’ve seen somepressure on new customer acquisition, but existing customers are expandingtheir usage, driven by stronger product adoption."
Zuora (ZUO) - "The enterprise demand remains strong, but we’re experiencing elongated sales cycles in certainverticals due to macroeconomic uncertainty."…."Our subscription management solutions continue to gain traction,but the SMB segment is showing signs of softness as budget constraints becomemore evident in the current environment."
Docusign (DOCU) - "The demand for digital signature and contractlifecycle management solutions continues to grow, especially in largeenterprise deals, though we are seeing some moderation in deal sizes and longersales cycles."…."We are seeing slower decision-making in certainindustries that are more sensitive to economic fluctuations, but our customerretention remains strong."
SmartSheet (SMAR) - "Our enterprise business continues to performwell, with large deal sizes and expansions in top customers, though we areseeing macro-related pressure on our higher-velocity transactions and SMBcustomer segments."….."Despite these challenges, we remain optimisticabout our ability to close significant deals, particularly in the enterprisesector, where demand for our work management solutions remains strong."
Zscaler (ZS) - "The environment remains highly competitive, andwe've seen longer sales cycles as customers continue to evaluate theircybersecurity strategies."…."Despite macroeconomic uncertainty, theneed for zero trust and secure access to cloud resources remains strong,driving demand for our solutions."
Crowdstrike (CRWD) - "We’re seeing an increasing focus on securitytransformation from large enterprises, which are committing to long-termstrategic security investments."…."While we see macro headwinds, therising sophistication of cyber threats continues to drive demand for advancedendpoint protection, positioning us well."
Pager Duty (PD) - "The enterprise sales cycle has slightlylengthened, with companies focusing more on ROI and quantifying the value ofour platform."…."Wecontinue to see strong demand for incident response and operational visibilitytools, especially among large enterprises undergoing digitaltransformation."
ZoomVideo (ZM) - "The market has shifted towards more cost-consciousdecision-making, and customers are seeking more flexible solutions, leading toincreased interest in our core platform."…"We are experiencing amixed environment, with some sectors showing stronger growth while others facemore budget scrutiny as economic uncertainty persists."
Fastly (FSLY) - "We’ve observed an uptick in demand for edgecomputing solutions as more companies look to improve application performanceat scale."….."However, we’re also seeing pressure on customerbudgets, especially in the more price-sensitive sectors, which has led to somedeal pushouts and longer decision-making cycles."
UiPath (PATH) - “But I would caution and say, you know, customers, as Isaid earlier on, are very thoughtful in how they want to spend, where they wantto spend, and where -- how they're going to fund it, which benefits us andbenefits us in a way that we actually approach customers. I don't see asignificant change in that spending.”
Alkami (ALKT) - “What I would say is the demand for digital banking hasremained consistent from a low interest rate environment, to a high interestrate environment, to the recent interest rate changes”
DoubleVerify (DV) - “Additionally, the industry has seen brand spendingsoften ahead of the election as political dollars crowd out ad spend and thereis uncertainty around how quickly traditional ad spending rebounds after theelections”…“We’ve driven strong revenue growth despite facing several headwindsthis year. To recap, six large customers scaled back on ad spend that had ourmost premium products attached to it.”
ZipRecruiter (ZIP) – “Economic challenges and a labor market downturn areexpected to continue affecting hiring rates, and a projected 21% YoY decline inQ4 2024 revenue.”
Procore (PCOR) - “Taking a step back, the business is going through twodistinct transitions. The first is a challenging and mixed construction demandenvironment, which began in 2023. The second is a go-to-market operating modelshift, which began in the third quarter. Both of these represent near-termheadwinds to revenue growth, but we believe these impacts are temporary.”
Sprinklr (CXM) - “Given the macro environment, we are experiencing ahigher level of down sales, as large customers right-size their software spend.As such, we are mindful that this cycle of renewals may be one of the morechallenging quarters to get through and is factored into the guidance numbers.”
Backblaze (BLZE) – “"We are seeing some early churn and delayed dealclosures, particularly within the SMB segment, indicating a cautious spendingenvironment."
Expensify (EXFY) - “Macroeconomic conditions, especially fluctuations intravel expenses, continue to impact overall spending patterns and new customeracquisitions.”
Weave (WEAV) - "We are seeing steady demand from small andmedium-sized businesses, but competition has intensified, especially in keyverticals”….. "Despite a challenging market, revenue grew aswe focused on enhancing the customer experience and expanding our featureset."
Braze (BRZE) - "We saw growth across all regions, driven by both newcustomer wins and expansion within our existing customer base”….. "Revenuefrom international markets accounted for 44% of our total, reflecting ourgrowing global footprint despite economic headwinds.”
Hashicorp (HCP) - "Deal volumes remain high, and customer interestin self-managed offerings has increased, particularly in the financial servicessector."…."We believe the market is stabilizing, and our pipelinelooks promising as enterprises continue their cloud migrations.”
Certara (CERT) – “We have also experienced a lengthened decision-makingprocess among many of our larger customers and have seen more discreetengagements compared with years past. This backdrop has made us more cautiousabout predicting second-half growth.”
ON24 (ONTF) - “Despite the headwinds of ongoing macro uncertainty andsoftness in marketing budgets, our third quarter results underscoredstabilization in our business performance and our ability to consistentlyachieve our profitability targets.”…..“However, recognizing that marketingbudgets are still under pressure, we believe at this stage, it is prudent toapply conservatism to our core ARR outlook.”
Dynatrace (DT) - "The observability market opportunity is growing,the demand environment remains healthy, and our pipeline continues to grow at afaster pace than our reported ARR growth rate."…. "Weare seeing increased demand in large strategic deals where customers arelooking to make broader observability architecture decisions, driven by thegrowing complexity of managing fragmented tools."
Health Catalyst (HCAT) - "We are encouraged to see health systemoperating margins steadily improving and stabilizing. This improving end marketcontributes to our robust pipeline and our continued confidence in ourexpectation that our top-line growth will accelerate back to double digits in2025."
Datadog (DDOG) - "Overall, the business environment for Datadog hasremained stable and similar to what we have seen throughout2024."…."Our customers overall are growing their cloud usage, whilesome are continuing to be cost conscious."
Cloudflare (NET) - "In Q3, the IT spending environment remainedconsistent with prior quarters with customers closely scrutinizing every deal,emphasizing cost efficiency, and seeking meaningful ROI."….. "Fromeverything we've seen in the crystal ball, North America is -- has leveled offto slightly improved."
Sprout Social (SPT) - "Our pipeline shows strength in size, healthand trajectory, despite the market conditions."
Zoominfo (Z) - "We are seeing really strong demand in the upmarket,particularly in the midmarket and enterprise segment. In midmarket, we'reseeing strong demand for Copilot, and in enterprise and strategic segments,we’re seeing a lot of demand for DaaS and OperationsOS."…."The SMBsegment, particularly the lowest end of SMB, continues to be challenged,particularly from a net retention perspective."
Jfrog (FROG) - "We are seeing some of our largest customers planningcloud migrations, but these are taking longer to execute due to today’schallenging macroeconomic conditions, requiring us to maintain a conservativeapproach to pipeline forecasts."…. "We continue to experience strong demand forour platform in strategic deals, driven by cloud growth and security, thoughthe sell cycle for large deals remains extended due to the size and scope ofthe projects."… "Customers are increasingly prioritizingconsolidation of their software supply chain tools into a single platform,aligning with JFrog's end-to-end offerings in DevOps, DevSecOps, andMLOps."
Asana (ASAN) - "Deal cyclescontinue to be longer and budgets continue to be a significant factor."…."Weare seeing signs of stabilization, especially for new business which includesexpansion."
CONCLUSION
The big themes are below.
-Many companies report “longer sales cycles”, particularly for largedeals (e.g., MongoDB, Zscaler, JFrog, and Asana). They’re seeing tighter budgets, cautiousspending, and prolonged decision-making processes.
-The SMB segment is under pressure, with signs of softness in newcustomer acquisition and budget constraints (e.g., Klaviyo, Zuora,Dropbox). Some companies note earlychurn and difficulties retaining SMB customers (e.g., Backblaze, Zoominfo).
-The enterprise segment often shows strong growth, with steady orincreasing demand for solutions that deliver clear ROI (e.g., Crowdstrike,SentinelOne, Dynatrace). Companies with largeor strategic customers (e.g., Smartsheet, MongoDB, Dynatrace) highlightconsistent or growing pipelines, even in challenging conditions.
-Customers across industries are increasingly focused on ROI andcost-effectiveness, prioritizing solutions that deliver measurable value (e.g.,PagerDuty, Cloudflare, Fastly).
-Demand for cloud migration solutions remains strong, despite extendedtimelines for implementation (e.g., JFrog, Crowdstrike, Datadog). Companies offering solutions aligned withcritical trends like digital transformation and data security see resilience.
-Healthcare and financial services show promising pipelines (e.g.,Waystar, Hashicorp), while construction and advertising face demand constraints(e.g., Procore, DoubleVerify).
-While some companies report stabilizing conditions (e.g., Asana,Datadog), others remain cautious, noting unpredictability in renewal cycles andoverall demand (e.g., Sprinklr, Certara).
The software sales environment is defined by cautious optimism, withenterprise and strategic deals providing a stable foundation while SMB andprice-sensitive sectors face headwinds. Companies focusing on value-drivensolutions and ROI-driven platforms are best positioned.
Thank you for your readership. Seemore blogs and SaaS data at blossomstreetventures.com. Email the author atsammy@blossomstreetventures.com.