1️⃣ Cloudflare
+33.6% growth, FCF margin 16.2%, operating leverage improving. The market rewarded quality growth plus AI narrative exposure. This was a clean beat with expanding profitability. Hence the sharp +17% reaction.
2️⃣ Cisco
Raised revenue guidance, but margins guided down to 65.5%. In this tape, margin compression signals pricing pressure or cost creep. Investors care more about forward profitability than headline revenue. Hence the -7% move.
3️⃣ AppLovin: “Beat but Dip”
Revenue +66%, net income +84%, EBITDA +82% is objectively strong. The issue is valuation and narrative risk.
If “Clawdbot” is perceived as: • lowering SaaS switching costs
• compressing software pricing power
• automating ad optimisation
then multiples contract even if earnings rise. High-beta, high-multiple names get repriced first.
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Is Clawdbot a SaaS valuation killer?
Not yet fundamentally, but sentiment-wise, yes.
Markets are rotating toward: • infrastructure cash flow
• AI compute enablers
• durable margin profiles
and away from: • pure multiple expansion stories
• crowded AI app-layer trades
For AppLovin, the question is durability of ad algorithm advantage. If margins sustain above 40%+ EBITDA and growth stays >30%, dips likely get bought. If growth decelerates, valuation compresses fast.
In this environment, earnings strength is necessary but no longer sufficient. Durability now matters more than velocity.
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