š® 3 'Future 50' Winners Visualized
Fast-growing companies primed to sustain momentum
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Investors are always on the hunt for companies with explosive growth potential. But when it comes to identifying long-term winners, the durability of growth is just as critical as its speed.
Thatās why I love reviewing the annual Future 50 list.
Curated by Fortune and Boston Consulting Group (BCG), this list spotlights 50 global companies with the highest potential for sustainable, long-term revenue growth. The methodology is rigorous, scoring 2,800 companies with a 'vitality score'āa blend of market potential (top-down) and inner strength (bottom-up).
And it delivers. Past cohorts have consistently outperformed in growth and market returns, featuring giants like NVIDIA, Intuit, and ServiceNow before their meteoric rise.
Many of the companies on the 2024 list are already featured in this newsletterāand several are key holdings in my portfolio.
While I wonāt cover the full list here (check it out on Fortune), Iāll spotlightĀ three winnersĀ from this yearās list. Letās examine their performance, explore what drives their growth, and see what sets them apart.
Today at a glance:
Atlassian: From Server, to Cloud, to AI.
Roblox: Bookings surge 10x in 6 years.
Klaviyo: Large Customers Rise.
Atlassian: From Server, to Cloud, to AI
In 2020, Atlassianāthe Australian software giant best known for its collaboration tools likeĀ JiraĀ andĀ Confluenceāannounced a transition to a cloud-first model and the eventual end of its legacy Server business. In the process, the company redefined its business model and revenue streams.
This strategic shift has propelled Cloud revenue to new heights, exceeding investor expectations in Q1 FY25 with a 31% Y/Y increase to $792 million. The successful transition to cloud-first operations (see visual) underscores Atlassianās adaptability and sustained growth in an evolving market.
Atlassian follows a SaaSĀ land-and-expandĀ approach. It offers free or low-cost entry-level products to ālandā new customers and then āexpandā their usage through upsells to premium features and cross-sells of other products.
Key facts you should know about Atlassian:
š» 300,000+ customers across software development, IT, and business teams, including 84% of Fortune 500 companies.
š¢ 524 enterprise customers generating $1M+ ARR, signaling deeper penetration into large organizations.
š¤ 10x AI usage growth in Atlassian Intelligence this year, driving upgrades to premium tiers and boosting customer productivity.
Product-led growth: Recent innovations include Atlassian Focusāa new enterprise strategy and planning solutionāand Advanced Editions, offering premium tiers for existing products.
What to make of the financials:
Profitability challenges: Atlassian reported an operating loss of $32 million (3% loss margin), slightly worse than a year ago. This reflects the companyās continued heavy investment in R&D (51% of revenue, +2pp Y/Y), a product-first approach that prioritizes long-term growth over short-term profitability. This strategy is consistent with Atlassianās approach over the past decade, during which it has typically operated near breakeven.
No more Server revenue: The end of the legacy Server segment partially accounted for the growth in cloud and data center revenue.
Data Center momentum:Ā Data Center revenue grew 38% year over year to $336 million, underscoring its role as a transitional solution for large customers who are not yet ready to migrate fully to the cloud. However, Atlassian is actively encouraging these customers to transition, positioning Data Center as a bridge to the cloud rather than a long-term solution
The road ahead for Atlassian:
Atlassianās strategic shift positions the company to capitalize on the growing demand for cloud-based collaboration tools and AI's transformative potential. However, challenges such as macro uncertainty, competitive pressures from legacy vendors, and profitability constraints remain.
Generative AI brings opportunities but also risks, including increased competition and potential cannibalization of human-driven workflows, which could slow paid seat growthāa core revenue driver.
Roblox: Bookings surge 10x in 6 years
From virtual concerts with millions of attendees to user-created games that rival established studios, Roblox has become a cultural phenomenon nearly two decades after launching on PC. The platform is transforming the landscape of social gaming and entertainment.
Founder-CEO David Baszucki explained:
āOur mission is to connect 1 billion people with optimism and civility. This is personal to me because I've had several people share with me that their kids are literally alive today because of the connections they've made on Roblox.ā
Roblox was already a top pick in the Future 50 ranking last year due to its unique value proposition. Today, over 3 million creators build experiences and games using Roblox Studio, the companyās powerful development tool.
The platform's thriving economy, fueled by the in-game currency Robux, rewards creators based on user spending, making it a serious business. For example, Uplift Games, a studio exclusively developing on Roblox, employs 60 people.
Two key flywheels drive the platformās growth:
Content viral loop: Better content attracts more users, which in turn incentivizes the creation of even more content.
Social network viral loop: As more people join and play together, the platform becomes more attractive to new users.
Exploring Robloxās universe:
ā¶ļø User Generated Content: Roblox's UGC model shows similarities with YouTube, empowering creators of all skill levels to build and share their vision.
š„½ A budding Metaverse: Beyond gaming, Roblox hosts virtual events and educational experiences, showcasing its potential as a digital world for socializing and connecting with friends.
š Aging up: While initially popular with younger audiences, Roblox is increasingly attracting older demographics. In Q3 2024, users over 13 represented 60% of the audience, up from 57% the previous year.
Key facts you should know about Roblox:
šØāš©āš§āš¦ 89 million Daily Active Users (DAUs), rising 27% Y/Y. Growth is particularly strong in the APAC region (up 37%), with Japan showing a remarkable 59% increase.
ā±ļø 20.7 billion hours engaged, up 29% Y/Y. Users spend more time on the platform, showing steadily increasing engagement.
šµ $1.1 billion in bookings in Q3, surging 34% Y/Y. Thatās the overall dollar amount users spend on the platform during the period. Since Roblox recognizes most bookings as revenue gradually over 27 months, itās a reliable early indicator of future revenue growth.
šŗšø Bookings are concentrated in North America (62%) and Europe (19%).
The October 2023 launch on PlayStation, which doubled the platformās console footprint, has contributed significantly to the recent surge in users and bookings. To further incentivize development on the platform, especially from traditional console studios, management recently announced a 70% revenue share for products priced at $49.99 or more. This move aims to attract more high-quality content and expand Roblox's appeal to a broader audience.
Short seller shenanigans: In October, Roblox faced scrutiny when Hindenburg Research released a short report alleging inflated metrics and inadequate child safety measures. The report also highlighted the company's continued lack of profitability as a public company. This report likely impacted investor confidence and put pressure on the stock. Ultimately, it was more sizzle than steak.
What to make of the financials:
Profitability challenges: Operating margin is still deep in the red (30% loss), with significant expenses related to infrastructure scaling, trust and safety initiatives, and AI development. Controlling these costs will be crucial for achieving profitability.
Advertising potential:Ā Partnerships with DoubleVerify and Shopify are laying the groundwork for brands and developers to integrate ads and merchandise. The untapped opportunity is gigantic, as users spend an average of well over two hours per day on Roblox.
Virtual economy enhancements: Improved search and discovery algorithms have driven a 30% increase in payers to 19 million and a 6% rise in bookings per DAU.
Record free cash flow of $218 million (+266% Y/Y): Management highlighted efficient infrastructure costs and controlled personnel expenses as drivers of operating leverage and cash flow margins.
Stock-based compensation: SBC accounted for 29% of revenue and 23% of bookings, continuing to dilute investors (~3% annually). While it's a common practice, especially in tech companies, Roblox is an outlier here. This level of dilution can be a concern for long-term investors as it reduces the value of existing shares.
Guidance gets a boost: Management raised its full-year bookings forecast to $4.36 billion in the mid-range ($50 million raise), implying a 24% growth year-over-year. It would be an acceleration from 23% year-over-year in FY23.
The road ahead for Roblox:
Roblox's future hinges on its ability to balance rapid growth with operational discipline. While its innovative approach to UGC and its expanding user base are potent assets, addressing concerns around profitability, content moderation, and shareholder dilution will be crucial for long-term success. The company's ability to navigate this balancing act will ultimately determine its longevity.
Klaviyo: Large Customers Rise
Klaviyo is a leader in marketing automation, empowering e-commerce businesses to engage customers through personalized email, SMS, and push notifications. With seamless integrations into platforms like Shopify, Klaviyo enables brands to centralize consumer data and orchestrate highly targeted, data-driven campaigns.
In recent years, Klaviyo has expanded its focus to include larger enterprises, evolving from a tool for small businesses to a key player in the marketing tech stack. Its strong upmarket sales execution demonstrates growing penetration among global brands and large organizations.
Key facts you should know about Klaviyo:
š§ 157,000+ customers rely on Klaviyoās platform, including global brands like The Body Shop and Authentic Brands Group, to deliver personalized, omnichannel communications.
š¢ 2,619 customers generating over $50,000 in ARR, surging +191% in the past two years, underscoring strong upmarket momentum and deeper enterprise adoption.
š¤ AI-driven innovation enhances campaign creation and segmentation with tools like Klaviyo AI, helping marketers improve engagement and maximize customer lifetime value.
What to make of the financials:
Revenue growth: Q3 FY24 revenue rose 34% Y/Y to $235 million, driven by an expanding customer base and increasing ARPU (average revenue per user). Large customers are key contributors to ARR growth.
Strong retention:Ā The 110% dollar-based net retention (DBNR) highlights solid customer engagement and successful account expansion strategies.
Profitability challenges: While Klaviyo boasts a healthy 77% gross margin, operating expenses accounted for 82% of revenue, resulting in a $13 million operating loss (-6% margin). Sales and marketing are the main operating expenses (43% of revenue) and are critical to drive growth.
Regional momentum: Klaviyo is gaining traction internationally, with APAC and EMEA regions leading adoption growth, complementing robust US performance.
The road ahead for Klaviyo:
Klaviyoās growing focus on large customers and global expansion positions it as a key player in marketing automation. Its tight integration with Shopify and other platforms provides a strategic advantage, particularly as e-commerce rebounds post-pandemic.
However, challenges loom. Sustaining high DBNR while achieving profitability will require careful execution. Klaviyo also faces fierce competition from rivals like HubSpot and Intuitās Mailchimp, who invest heavily in AI-driven personalization.
Is there a specific public company from the Future 50 ranking youād like us to visualize on How They Make Money? Let us know, and weāll bring it to life!
That's it for today!
Stay healthy and invest on!
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Disclosure: I own NVDA, INTU, RBLX, and TEAM in theĀ App Economy Portfolio. I share my ratings (BUY, SELL, or HOLD) with App Economy Portfolio members.Ā
Author's Note (Bertrand here šš¼): The views and opinions expressed in this newsletter are solely my own and should not be considered financial advice or any other organization's views.
When you talk about top 50 companies (future) , there is a need to "disclose" projections of the business plan, ie. what are the target revenues/earnings for the next 2-3-5 yrs (and beyond). This is missing. Based on current P&L it's not that obvious that B-E point is near-by (would be good to show projected cash flows, i.e. CAPEX, OPEX, and Revenues for the next 5 yrs). Who finances these featured companies so far? (VC?, banks? private investors?) . How do they raise cash? How much debt do they carry on their books? What's the ownership? How much equity are they going to raise via share dillution, etc. What do the executives do in terms of share ownership ? Another question: Do you review JOBY Aviation?