Despite macro-economic headwinds and stock pricing pressure, large SaaS platforms have succeeded in continuing to drive top-line revenue growth while embarking on a transition to profitability.

General Commentary & Highlights

• Challenging market conditions: Not one of our selected equities delivered a positive return over the last 3 months.
• Shift to profitability: Companies are responding to investors’ increased emphasis on profits by shifting priorities to efficient, profitable growth. 
• Secular growth trends: All selected equities continue to deliver top-line growth despite slowing investment.
• Potential bargain hunting: Broad-based weakness across sectors creates potential bargains amid those growing top-line and driving improving operating leverage.
• Wide range of performance: 5 of the 13 selected equities with at least 3 years in public markets have outperformed the S&P 500 over that period. Those 5 have on average more than doubled the S&P’s return over that period, returning c.84% vs. c.36%.

Restaurant & Retail

• Toast: continued its breakneck expansion, adding a record 28K net locations in 2024, while doubling down on efficiency and delivering its first year of GAAP profits. The company plans to expand into enterprise, international, and retail in 2025 and beyond.
• Shift 4: introduced Unified Commerce, enabling “one platform, one integration” for worldwide commerce. Combined with the recent acquisition of Global Blue, this unlocks an estimated $80M cross-sell opportunity across 400K merchants.
• Lightspeed: is doubling down on North American retail and European hospitality. Payments penetration increased to 38% (vs. 29% last year). 
• Block: is restructuring its org to improve development velocity and predictability.

E-Commerce

• Shopify: reported its highest GMV growth in the last three years, driven by continued strength in International and offline. Offline GMV reached a cumulative $100B since inception. B2B grew 140% YoY in 2024, though it remains a small portion of total GMV. 
• WIX: delivered $57M of transaction revenue in Q4 (+23% YoY), driven by a meaningful step-up in take rates from further building out Wix Payments platform (GPV +12% YoY).
• GoDaddy: grew annualized gross payment volume by 55% in 2024 to $2.6B.

B2B

• Bill: continues its effort to enter the mid-market by enhancing its platform functionality (e.g., procure-to-pay, tools for multiple entities, embedded 1099 reporting). Total payment volume grew 13% YoY, while card payment volume grew 23% YoY.  
  
• Avidxchange: announced significant progress in virtual card automation across the front book and back book; goal is to reach 80% virtual card automation in the next two years, which should contribute to continued gross margin expansion.
  
• Intuit: total online payment volume grew 18% YoY. 

Other Verticals

• ServiceTitan: continued to demonstrate success, growing total revenue 29% YoY. Gross transaction volume grew 26% YoY to $17.0Bin fiscal Q4 2025. The company remains focused on expanding enterprise capabilities, penetrating the commercial sector, and capitalizing on the roofing industry’s demand for specialized solutions. 

Please do not hesitate to contact Peter Taylor at Peter@FlagshipAP.com or Tim Gallagher at Tim@FlagshipAP.com with comments and questions.