Technology
Technology Guides
Free guides to software companies, hardware makers and chip companies: how filers define net retention, what stock pay does to free cash flow, why suppliers fund some hardware makers, and where margins sit through the chip cycle.
28 free guides · 19 company profiles · 3 primers, each with an Excel model
Software
Net retention, the Rule of 40, stock pay and a reverse DCF
11 guides · 6 profiles
Guides 11
Net Revenue Retention: How Filers Define It
Why two retention figures can share a label and measure different things: cohort, period, ARR or revenue basis, and customer threshold.
Gross vs Net Revenue Retention
Gross retention is capped at 100% and ignores expansion; net adds upsell and usage growth. Attrition and renewal rates are gross-style measures.
Usage-Based Pricing and Net Retention
Under consumption pricing, revenue moves with customer use, so net retention reflects optimisation as well as seats. Snowflake as the worked case.
Rule of 40: Which Margin Goes In
Growth plus margin depends on which margin you choose: FCF, FCF after stock pay, or operating margin. The 40% bar is shown on a fictional company.
Stock Pay as a Share of Revenue in Software
Stock-based compensation is a real operating cost under ASC 718. Across six filers it ranges from nil to over a third of revenue.
Software FCF Before vs After Stock Pay
Reported free cash flow adds stock pay back. A consistent valuation either charges that cost or counts the dilution, never neither.
RPO and cRPO in Software
ASC 606 requires disclosure of contracted revenue not yet recognised. Current RPO is the next twelve months; contract length moves RPO without changing demand.
Current Share of RPO by Software Company
The share of RPO due within a year is a read on contract duration. Ranked across five filers; Constellation discloses no split.
Licence-to-Cloud Transitions and the Revenue Dip
Upfront licence revenue becomes ratable cloud revenue, so reported revenue and margin can dip before recovering. SAP as the worked case.
Reverse DCF for Software Stocks
Start from a price and solve for the growth it implies. Worked on a fictional SaaS company; most sensitive to terminal margin and retention.
Vertical Software Acquirers: Return on Acquired Capital
Serial acquirers of mission-critical software grow by reinvesting cash. Value turns on reinvestment rate times return on acquired capital.
Company research 6
Technology Hardware
The product cycle, working capital and mid-cycle margins
8 guides · 7 profiles
Guides 8
Negative Cash Conversion Cycles in Hardware
How DIO, DSO and DPO combine into the cash conversion cycle, why some hardware brands run negative, and what one day of sales is worth on filed revenue.
Cash Conversion Cycle by Hardware Company
Seven hardware filers ranked by cash conversion cycle with DIO, DSO and DPO beside each figure, including why the short Jabil cycle follows receivables sold.
Purchase Commitments vs Inventory in Hardware
Inventory sits on the balance sheet; purchase commitments sit off it and can dwarf it. Filer definitions differ, and write-downs follow a demand drop.
EMS Economics: Thin Margins and ROIC
Contract manufacturers can earn a return on capital with single-digit gross margins when capital turns fast. Jabil FY2025 as the worked case.
Mid-Cycle Margins for Hardware Companies
A single year misleads for a cyclical hardware maker. How to average gross margin across a full cycle, with Seagate FY2016-FY2026 as the worked case.
Gross Margin Ranges in Hardware Since FY2016
Hardware filers ranked by the width of their annual gross margin range since FY2016, an operating read of cyclicality with windows labelled where they differ.
Hardware Product vs Services Gross Margin
Services earn a far higher gross margin than hardware products, so mix moves the company margin. Filed product and services margins from four filers.
PC and Smartphone Replacement Cycles
PC and smartphone shipments follow refresh cycles. Shipment history, replacement lives, and how to turn a cycle into a unit curve in a model.
Company research 7
Semiconductors
The chip cycle, capital intensity and margins through the cycle
9 guides · 6 profiles
Guides 9
The Semiconductor Inventory Cycle
Chip revenue swings harder than end demand because customers build and drain inventory. WSTS history, Nvidia charges and Texas Instruments capacity.
Days of Inventory by Chip Company
Ranked days of inventory for six chip filers from year-end balances, with DSO, DPO and fiscal year. Business model explains most of the spread.
Peak vs Mid-Cycle Margins for Chip Companies
A terminal year at peak margin overstates value. Filed margin swings and a worked mid-cycle example on a fictional chip company.
The Memory Pricing Cycle
DRAM and NAND are priced on bit supply against bit demand, so margins swing furthest. Micron filings show the trough and the peak.
The Wafer Fab Equipment Cycle
Equipment spend follows chipmaker capex, so it lags and leads the chip cycle. SEMI history and ASML backlog, bookings and service share.
Capital Intensity in Semiconductors
Capex to revenue sets what a chipmaker must earn. Spend reaches capacity about two years later; TSMC and Intel are the worked cases.
Capex to Revenue by Chip Company
Ranked capex as a share of revenue for six chip filers. Business model sets the order from foundry and IDM down to fabless and equipment.
Fabless vs Foundry vs IDM vs OSAT
Four chip business models defined by who owns which assets, with margin and capex profiles from Nvidia, TSMC and Intel filings.
Fab Utilisation and Gross Margin
Depreciation is fixed, so a few points of utilisation move gross margin sharply. TSMC billing utilisation and Intel margin decline as worked cases.
Company research 6
The Technology library: all three primers with their Excel models, £159 (£210 bought separately). Compare the Technology primers