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0 pointsotoburb5y ago0 comments

Two comments about the PS revenue numbers:

1) The growing divergence between the subscription and PS revenues strongly imply that a "land & expand" model is prevelant (2018 1.9x, 2019 2.3x, 2020 2.95x) where they are able to push subscriptions up 21-28% post-deployment.

2) PS margins were 9%-10% in 2018 and 2019, and then dropped to 5.4% in 2020. Good to know that management continues to view PS as a sales enabler that pays for itself (i.e. break even or at least single-digit margin) executing their primary mission to drive high-margin subscriptions.

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deepGem5y ago

Valid points. Land and expand is a great moat to have. Couple of other interesting points

Their contracts are non-cancellable 3 to 5 year contracts. So retention is almost guaranteed and in banks, beyond 5 years no one bothers to change the status quo. So this is a significant factor when it comes to predicting future revenue potential and profit potential.

On the costs front, hey have to pay a part of the subscription revenue to Salesforce. However, this cost grows linearly in proportion to revenue. The ratio has remained same throughout 3:1 (almost)

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0 pointsotoburb5y ago0 comments

Two comments about the PS revenue numbers:

0 comments

deepGem5y ago

Valid points. Land and expand is a great moat to have. Couple of other interesting points

On the costs front, hey have to pay a part of the subscription revenue to Salesforce. However, this cost grows linearly in proportion to revenue. The ratio has remained same throughout 3:1 (almost)

j / k navigate · click thread line to collapse