Cloud Ratings at 2025 Value Creation Summit

Value Creation Summit July 2025

PRESENTED BY

SUMMIT PARTNERS

Vetted Experts -> Today's Speakers

Guy Rubin Founder + CEO

Ryan Walsh Founder + CEO

Kai Mitsushio Investor Alliances

Sean Saint Head of Investment Research

Jaap Westrik Founder

Simulive Event → Speakers Answering Q&A Live In Chat

REVENUE FORECAST ATTAINMENT Missed 2024 Forecasts Unacceptable

Missed Beat

70%

63%

60%

60%

50%

40%

42%

42%

30%

32%

90% Confidence Level: “I should come in under my forecast once every 2.5 years (10 quarters).” - Dave Kellogg

25%

23%

20%

19%

10%

0%

Q1 2024

Q2 2024

Q3 2024

Q4 2024

+

Social Attribution: @CloudRatings + @SaaSletter

+28% Capacity Post Market Peak Poor Forecasts Drove GTM Overhiring In 2022 = Sales Net Hires / Fires

= Marketing Net Hires / Fires

Alto Model

+

2019

2020

2021

2022

2023

2024

‘25

Index Components: Proprietary to Cloud Ratings | Data Source: People Data Labs Social Attribution: @CloudRatings + @SaaSletter

Zendesk Case Study: Misses → $6.8 Billion Lost

Feb ‘22 Offer: $127 - $132 / share = $17.0 Billion

2023e Forecast: (9.5)% revision in 3 months

66% monthly bookings misses

Jun ‘22 Deal: $77.50 /share = $10.2 Billion

$6.8 Billion Lost

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Zendesk Case Study: Slowdown Was Foreseeable

Forward Demand Indicator (LHS)

Realized New Bookings (RHS)

Alto Model

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Alt Data Outperforms Channel Checks By 5x

R-SQUARE VS REVENUE ACROSS LAG 0 - LAG 6:

1.0

0.77 0.78 0.78 0.77

0.8

0.71 0.74

0.65

0.6

0.4

0.2

0.13 0.13 0.13 0.13 0.13 0.13 0.13

0.0

L-0 L-1

L-2 L-3 L-4 L-5 L-6 |

L-0 L-1

L-2 L-3 L-4 L-5 L-6

ALTERNATIVE DATA - TOP QUARTILE n = 125,000+ alternative data points from Tier 1 Alt Data suppliers, conducted by Cloud Ratings for Alto Model construction

SYSTEMATIC CHANNEL CHECKS n = 264 equity research systematic channel checks covering 7,500+ data points, conducted by a Tier 1 investment bank

Alto Model

Note: Reflects Proprietary + Confidential Cloud Ratings Work Product

Software Buyout Study

MISSED FORECASTS

LIMITED MARGIN EXPANSION

Social Attribution: @CloudRatings + @SaaSletter

Alto Model

SaaS Demand YTD 2025 via

Indexed To 1.0 at January 2024:

Broad Software - n=340 Macro Sensitive Subset

1.4

Start of Tariffs / “Liberation Week”

1.2

1.0

Today vs Pre “Liberation Week”: Broad Software = 0.0% Macro Sensitive = +5.5%

Normal Holiday Seasonality

“Human pipeline reviews can only take you so far. ‘Macro’ and ‘tariffs’ are perfect excuses for sellers , especially B and C Players . You need to be using data at scale - your sellers' email inboxes, your call recordings, your CRM - to *really* know if macro is impacting your net new business.” - Guy Rubin, Ebsta Founder + CEO

0.8

0.6

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Be Mindful Of Your End Market Volatility

STANDARD DEVIATION OF REVENUE GROWTH RATE - Q1 2022 TO Q4 2024

0%

10%

Transportation, Logistics, Supply Chain Tech

19%

15%

Public Sector Tech

15%

Media Tech

Restaurant, Hospitality + Leisure Tech

12%

Cybersecurity Property Tech

12%

10% 10%

Developer + Engineering Tech

10%

FinTech EdTech

7%

Marketing + Sales Tech

6%

Data, Infrastructure + Reporting Tech

5%

5%

E-commerce + Retail Tech

5%

HealthTech

HR, Legal + Back Office Tech

5%

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2025 GTM Yields + Conversions Are Concerning

<$25m ARR

$25-$100m ARR

$100-$250m ARR

>$250m ARR

1 - Marketing Targeting:

(HIGHER IS BETTER)

0% 1% 2% 3% 0% 1% 2% 3% 4% 5%

3%

3%

2%

2%

2%

2% 2%

2%

2%

2%

1%

1%

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025

2 - Sales Execution:

(HIGHER IS BETTER)

4%

4%

3% 4%

3%

2%

2% 3%

2%

2% 3%

2%

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025

3 - Full Funnel Performance:

(HIGHER IS BETTER)

0% 2% 4% 6% 8% 0%

9% 8%

8% 10% 8%

6%

6% 6% 5%

5% 4% 6%

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025 //

2023 2024 2025

Social Attribution: @CloudRatings + @SaaSletter

Insufficient Pipeline Coverage

PIPELINE COVERAGE

PIPELINE COVERAGE RATIOS

Stated / Required

Stated Coverage

Required Coverage

5x

110%

110%

4x

102%

4.1x

3.9x

3.8x 3.7x

100%

3.6x

3.6x

NEGATIVE MARGIN FOR ERROR ZONE

3x

90%

87%

2x

80%

1x

0x

70%

2023

2024

2025

2023

2024

2025

Social Attribution: @CloudRatings + @SaaSletter

Reasons For Misses → Summit Action Items

Summit Action Items + Partner Capabilities:

0%

20%

Pipeline & Deal Flow

34%

Sales Execution & Performance

19%

Market & Economic Conditions

17%

Internal Operations & Resources

12%

Go-to-Market Strategy & Execution

8%

Leadership & Strategy

6%

4%

Product Market Fit

Other Factors 2%

Cloud Ratings Analysis of Pavilion Pulse Reports Social Attribution: @CloudRatings + @SaaSletter

Vetted Experts -> Today's Speakers

Guy Rubin Founder + CEO

Ryan Walsh Founder + CEO

Kai Mitsushio Investor Alliances

Sean Saint Head of Investment Research

Jaap Westrik Founder

Book Partner Introduction Via Matt Harney:

“The forecast is analytics, judgment, and trust all rolled up in one. If companies keep missing forecasts , it’s hard not to lose trust . It’s hard to let the team lean forward on growth, product, and acquisitions…” MANAGING PARTNER

TIER 1 GROWTH EQUITY FIRM

Social Attribution: @CloudRatings + @SaaSletter

“ I don't hold my investment team accountable unless I can see something in the data that would have reflected a sales pipeline issue .

As a PE board member, I have only one shot to make a voluntary change at a leadership level before I begin to lose the confidence of my investment committee . If I'm going to pull the trigger, I need to be 100% confident and have exhausted all options. The primary communication issue is the inability of the executives to demonstrate, quantitatively and qualitatively , why the strategy board members' ( typically spreadsheet folks ) perspectives are inaccurate. Their expectations need to be acknowledged and addressed to build consensus and alignment.”

MANAGING PARTNER TECH CROSSOVER FIRM

Social Attribution: @CloudRatings + @SaaSletter

About Us

ROI STUDIES

QUADRANTS

INDICES

MEDIA

NEWSLETTER

SAAS DEMAND INDEX

METHODOLOGY: PUBLIC DATA ENHANCED WITH PRIVATE VENDOR DATA VIA ANALYST RFI

SAAS EMPLOYMENT INDEX

OPERATOR PODCAST

B2B AI INTEREST INDEX

INVESTOR PODCAST

PARTNERSHIP: ENHANCED WITH G2 DATA FOR ROI + IMPLEMENTATION + CUSTOMER MIX

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