Weak earnings reports are on tap for this month and next as a soft macro environment and high input costs pressure margins.
What’s next for Software companies? Cautious outlooks for 2023 and 2024 and additional layoffs.
- More layoffs. Some companies will cut heads and announce those cuts on the March Q EPS call while other companies will wait until the September quarter before they execute another large round of layoffs.
- Weak macro. We don’t expect 2024 to be a robust year from a macro environment.
- Weak sales pipelines. Software CEOs are unlikely to see robust Sales pipelines for all of 2023. Therefore, it’s only a matter of time before CEOs begin to take a conservative approach to how they look at 2024 Revenue growth potential. Smart CEOs are already taking a conservative approach toward thinking about 2024 budgets.
- M&A as a strategic lever. It’s a great time for companies to use M&A as a strategic lever to further differentiate versus the competition, to enhance the customer value proposition and to incorporate more growth levers into the company.