Friends & Family Capital is pleased to share the Q1 2026 edition of “Seven Weeks in Seven Minutes.”

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This resource is a summary of condensed and actionable insights on what you need to know from the last seven weeks of earnings announcements.

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It is intended for our Founders, CFOs, and friends in the community.

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See below for the overview slides from the quarter. The full presentation is available for download here.

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We welcome your feedback to help shape the relevance for your business in future quarters.

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Key theme for the quarter: “Software Recovers in AI Narrative”

• Software has seen a recent recovery followed by the sell-off in January to March
• The launch of Anthropic Mythos impacts the cybersecurity landscape with defense as top-of-mind
• Two quarters or more of revenue acceleration is present amongst the coverage universe
• Companies increase layoffs and token usage spurred by adoption of AI use cases
• 88% of companies both beat estimates and had analysts raise estimates on revenue and EPS

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Software stocks declined 30%+ at their nadir 2026, driven by AI-related disruption narratives and broader market events. After March, sentiment improved across the software universe and stabilized. A variety of unknowns and considerations remain topical in the AI landscape and its impact on software firms.

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Anthropic Claude announcements have driven anxiety across software stocks. There appears to be correlation between such announcements and a subsequent sell-off in software as the market digests new AI products and potential disruption to incumbents.

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Our public company universe includes 40 companies. We selected these businesses as leading business-to-business software companies plus the technology stalwarts. The customers served by these companies are also relevant for the Founders we help as they build companies in the private markets.

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Market price moved up or down by 10% or more across several companies following their earnings.

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Below are the top ten movers and bottom ten movers in the Q1 earnings season based on one-day share price reaction following their earnings announcement.

Anthropic’s Mythos model, a frontier large language model, was widely discussed during the Q1 earnings season. Mythos is able to search and find bugs that make software platforms vulnerable to attacks at orders of magnitude quicker than traditional measures. Cybersecurity executives were notable in addressing Mythos on their respective earnings calls.

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Despite concerns amongst slowdown in software revenues, multiple software companies across different types of platforms experienced accelerating year-over-year growth in recent quarters.

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There is a debate whether new AI technology leads to layoffs. The one side of the debate argues over-hiring over the past few years is now being optimized, while the other side argues AI is the main driver of layoffs. Multiple companies in the coverage universe announced layoffs in Q1.

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Companies highlighted token usage in their earnings calls. Some companies note efficiency drivers for customers, while others note margin pressure due to investment in AI products and features.

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