TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.</li>
<li>The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow's ability to bundle functionality for larger deals.</li>
<li>That said...the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.</li>
</ul>


ServiceNow acquired Era Software this week to extend its presence in the observability and log management space.
The deal is most threatening to DT/ESTC (we advocate as longs) and SPLK (short) because of ServiceNow's ability to bundle functionality for larger deals.
That said...the observability space remains one of the hottest in digital transformations, and the deal is on net, more validating than threatening to DT/ESTC.


Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Capital Markets

<ul><li>Splunk had a robust set of results with a top-line outperformance and it also exceeded the operating margin and earnings expectations for the quarter.</li><li>Positive consumer engagement was seen by the management with robust competitive win rates, good business momentum, and a high net retention rate.</li><li>In spite of the solid top and bottom line, the total ARR and cloud ARR came short of management expectations.</li></ul>

Splunk had a robust set of results with a top-line outperformance and it also exceeded the operating margin and earnings expectations for the quarter.Positive consumer engagement was seen by the management with robust competitive win rates, good business momentum, and a high net retention rate.In spite of the solid top and bottom line, the total ARR and cloud ARR came short of management expectations.

Splunk Inc: Enhancement Of The Partnerverse Program & Other Developments

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Private Capital Markets

Fat Projects Acquisition / Private Capital Markets

<ul>
<li>Avanseus Holdings plans to go public in partnership with <a href="https://www.smartkarma.com/entities/fat-projects-acquisition-corp" target="_blank" data-smartkarma-citation="entities:34628:1" rel="noopener">Fat Projects Acquisition Corp (FATP US)</a> The combined company is expected to trade on the Nasdaq under a new ticker symbol.</li>
<li>Fat Projects Acquisition Corp. values the combined companies at a pro forma EV of $135.7M. SPAC is focused on tech-led businesses in Southeast Asia and closed its IPO in 2021.   </li>
<li>Avanseus Holdings needs to access the capital markets to raise money and expand into new countries and industries, invest in R&amp;D and launch new products.</li>
</ul>


Avanseus Holdings plans to go public in partnership with Fat Projects Acquisition Corp (FATP US) The combined company is expected to trade on the Nasdaq under a new ticker symbol.
Fat Projects Acquisition Corp. values the combined companies at a pro forma EV of $135.7M. SPAC is focused on tech-led businesses in Southeast Asia and closed its IPO in 2021.   
Avanseus Holdings needs to access the capital markets to raise money and expand into new countries and industries, invest in R&amp;D and launch new products.


Avanseus: A Singapore-Based Startup and Provider of AI-Based Predictive Maintenance Software

<ul>
<li>Like PANW and SNOW, Elastic continues to power through macro headwinds seen by many other software companies.</li>
<li>Elastic has a Crowdstrike like dynamic, where it is capturing new workloads from incumbents, in the cloud. In this case, Symantec's share donator role is being played by Splunk.</li>
<li>In this tough volatile environment, we like an observability pair trade of Long ESTC / Short SPLK.</li>
</ul>


Like PANW and SNOW, Elastic continues to power through macro headwinds seen by many other software companies.
Elastic has a Crowdstrike like dynamic, where it is capturing new workloads from incumbents, in the cloud. In this case, Symantec's share donator role is being played by Splunk.
In this tough volatile environment, we like an observability pair trade of Long ESTC / Short SPLK.


Observability Pair Trade: Long Elastic / Short Splunk

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sumo-logic-inc" target="_blank" data-smartkarma-citation="entities:29265:1" rel="noopener">Sumo Logic Inc (SUMO US)</a>  surprised investors and reported solid 2QFY23 results pushing shares up over 10% during a regular trading session on Friday. </li>
<li>Provider of cloud-based machine data analytics reported revenue/non-GAAP EPS of $74.1M/($0.10), above consensus, and improved FY23 outlook.  </li>
<li>Management focused on delivering more efficient growth and reduced hiring plans. Customer metrics remained strong, with a dollar-based net retention rate of 115%.</li>
</ul>



Sumo Logic Inc (SUMO US)  surprised investors and reported solid 2QFY23 results pushing shares up over 10% during a regular trading session on Friday. 
Provider of cloud-based machine data analytics reported revenue/non-GAAP EPS of $74.1M/($0.10), above consensus, and improved FY23 outlook.  
Management focused on delivering more efficient growth and reduced hiring plans. Customer metrics remained strong, with a dollar-based net retention rate of 115%.


Sumo Logic. 2QFY23 Wrap: Rising From The Ashes?

United States

Splunk Inc. develops web based application software. The Company provides software that collects and analyzes machine data generated by websites, applications, servers, networks, and mobile devices. Splunk serves customers worldwide.

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Splunk Inc (SPLK US)

Observability: ServiceNow Acquisition Threatens Dynatrace and Elastic

The log management observability TAM has shown itself to be largely recession resistant based on the last two quarter's results for DT/DDOG...

Aaron Gabin

Splunk Inc: Enhancement Of The Partnerverse Program & Other Developments

Splunk had a robust set of results with a top-line outperformance and it also exceeded the operating margin and earnings expectations for the...

Baptista Research

Avanseus: A Singapore-Based Startup and Provider of AI-Based Predictive Maintenance Software

Avanseus, innovative Singapore-based startup, plans to go public via business combination with SPAC. The company sells AI-based predictive...

Andrei Zakharov

Observability Pair Trade: Long Elastic / Short Splunk

Elastic is another rare software company that has powered through tough macro this quarter. In this tough volatile environment, we like an...

Aaron Gabin

Sumo Logic. 2QFY23 Wrap: Rising From The Ashes?

Sumo Logic could report a solid 2QFY23 results despite macro uncertainty and turbulent market conditions. Revenue growth accelerated to 26% y/y and...

Andrei Zakharov

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