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Friends & Family Capital is pleased to share the Q4 2025 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: “Markets Trend to Extremes”

• A broad indiscriminate selloff occurred across the software sector during the Q4 earnings season
• Analyst questions focused on AI impact to software and the necessity of systems of record
• Share repurchase announcements were prevalent for software companies given the dramatic selloff
• RPO growth accelerates as compared to revenue growth given multi-year and new deal structures
• 70% of companies both beat estimates and had analysts raise estimates on revenue and EPS

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Software stocks have declined ~20% in 2026, driven by AI-related disruption narratives and broader market events, with sentiment weakening through January and February before stabilizing. The sell-off reflects heightened uncertainty around competitive dynamics and durability of growth in an AI-driven landscape.

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Analysts are increasingly focused on how AI will reshape software, raising questions around revenue durability, shifts to usage-based pricing, evolving competitive threats, and impacts on customer acquisition. Overall, AI is seen as both a growth driver and a source of disruption across business models.

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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 Q4 earnings season based on one-day share price reaction following their earnings announcement.

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Following a broad software selloff, companies are ramping share repurchases, signaling confidence in undervalued stock prices and prioritizing capital return. The buybacks reflect both opportunistic deployment of cash and a belief in underlying business strength despite recent market weakness.

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RPO growth is significantly outpacing revenue growth across several companies, driven by larger, longer-duration contracts and increased AI-related demand. This suggests strong forward-looking demand and backlog expansion, even if near-term revenue hasn’t yet caught up.

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