We read through the Q3 earnings call transcripts of 65 publicly tradedSaaS companies we follow. We pulled allthe quotes and comments regarding their financial performance, and then like acollege kid we dumped that data into ChatGPT and asked for a synopsis. Below are the key themes, and don’t worry, wecleaned up the writing so it doesn’t sound like AI:
Enterprisefocused SaaS is holding up better than SMB. There is a clear distinction betweenenterprise-focused companies and those that are focused on consumer or seat-basedmarkets. Large-cap platforms continue are showing durable demand amongenterprise buyers. Salesforce, for example, grew revenue 10% year-over-year,driven by expansion in multi-cloud deals, with 70% of top customer winsinvolving five or more clouds. Atlassian reported strong momentum in largeaccounts, closing twice as many $1 million-plus ACV deals compared to lastyear, while free cash flow expanded even as quarterly collections normalized.Workday sustained steady subscription growth across verticals, supported byhigh retention and a record $25 billion backlog. Nutanix delivered a Rule of 40score of 48, fueled by 18% full-year revenue growth, 30% free cash flowmargins, and an expanding base of Global 2000 customers, while simultaneouslyleveraging AI to automate hybrid cloud operations and secure sensitiveworkloads.
Datadog grew revenue 28% year-over-year, with net retention rebounding toaround 120% and large customer adoption driving nearly 90% of ARR. SentinelOnesurpassed $1 billion in ARR, with record new business, multi-product adoption,and stronger international growth, while improving operating margins by 500basis points. Okta reported double-digit growth, driven by Customer Identity,larger deal sizes, and improved go-to-market execution. Monday.com highlightedrecord enterprise additions and strong adoption of its CRM product, whileGitLab emphasized expansion through usage-based consumption and disciplinedcustomer engagement. You get thepoint.
Consumer and SMB-focused SaaS companies faced a more mixed environment,reflecting ongoing headwinds in discretionary spending and seat-basedsubscription models. Dropbox and monday.com saw slower adoption in smalleraccounts, while Smartsheet and Freshworks reported more moderate growthcompared to their enterprise segments. Several companies noted pressure on newcustomer acquisition and smaller deal sizes, though retention remainedrelatively stable among existing SMB customers. At the same time, some SMB-focusedplatforms benefited from targeted product expansions and workflow automationfeatures, which helped offset softness in volume growth. Tools that incorporateAI for productivity, such as collaborative platforms and CRM add-ons, sawpockets of stronger engagement, suggesting that even smaller customers areincreasingly seeking efficiency and intelligence in their workflows. Productinnovation and AI-enabled features allowed some SMB focused companies tosustain steady, if more measured, performance.
Usagebased did well. Usage-basedand consumption-driven models performed. Twilio delivered its fourthconsecutive quarter of double-digit revenue growth, supported by net expansionof 108% in its communications business. CrowdStrike and SentinelOne highlightedflexible licensing as a catalyst for larger multi-product deals. JFrog saw netdollar retention of 118%, fueled by security adoption and higher data usage,while Zoom’s AI Companion extended engagement across millions of users, frommeeting summaries to post-meeting tasks, reinforcing the value of AI-drivenproductivity tools.
Verticaland specialized SaaS did well. Veevasurpassed $3 billion in run-rate revenue, driven by strong CRM adoption andgrowth in its Crossix and R&D platforms, while Appian grew cloudsubscription revenue 21%, supported by rising productivity ratios. Alarm.comexceeded a $1 billion annualized revenue run rate through steady SaaS growth,and Blend Labs extended its recovery with strong consumer banking demand.DevRev and C3.ai emphasized embedding AI to accelerate knowledge graphs,agentic automation, and enterprise adoption, while Nutanix and Salesforcedemonstrated how AI enhances operational efficiency and customer outcomes atscale.
Profitabilityand cash flow improvements were a theme.Twilio, The Trade Desk, Datadog, and Workday reported strong free cash flowgeneration. Companies such as Kinaxis, Freshworks, and Five9 expanded marginsthrough disciplined execution. SentinelOne improved operating margins, whileDropbox and Backblaze balanced modest growth with capital returns, includingshare repurchases. Even as AI adoption and enterprise expansion drive growth,SaaS providers remain attentive to operational efficiency and long-termprofitability.
Notall updates were uniformly positive. Dropbox experienced modest revenue declines tied toreduced investment in FormSwift, and Backblaze saw lower net retention due toprior price adjustments. C3.ai acknowledged execution missteps and leadershiptransitions, though highlighted strong adoption through partner-ledengagements. While enterprise and AI-focused SaaS is thriving, there are casesof underperformance.
Bifurcationis happening. Platforms with multiproduct portfolios, usage-basedpricing, strong enterprise consumption, and embedded AI capabilities continueto expand revenue and improve profitability. More consumer-oriented orseat-based models face softer demand, but all providers remain focused onbalancing growth with profitability, and investing in AI.
If you want the full list of quotes to run your analysis, email us.
Thank you for your readership. Seemore blogs and SaaS data at blossomstreetventures.com. Email the author atsammy@blossomstreetventures.com.