What is your guesstimate for SAS 2023 revenue and why?
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93% of the way to being a $3 billion dollar company.
It looks like numbers are now showing $2.946B, but only 103% of 2023 TOR numbers. 200M more TOR than last year.
"Atlas this morning is showing $2.911B TOR, which is 106% of 2022 TOR numbers."
"...Most likely SAS was going to spend a billion over some period of time anyway. People read into the announcement that it is a billion MORE than they would have spent. This is just a marketing message..."
More stringing folks along. Show us the balance sheet, Jim.
I don't believe in the $1B in AI investment announcement either. It's all PR and marketing to not lose face. In order to compete in the AI space with other companies, SAS needs to have top talents and SAS no longer has them. They all (or at least most) left already. The bad management remains but the top talents have flown the coop.
Precisely, these are salaries and overhead they've already allocated for existing/planned AI initiatives.
Most likely SAS was going to spend a billion over some period of time anyway. People read into the announcement that it is a billion MORE than they would have spent. This is just a marketing message.
I worked with you guys and we probably know each other. So many of us were “hard-core” and a few were among the best in the world at what they do. We had a lot of good camaraderie, mutual support and no one was adverse to working long hours. Most of these positions require a PhD level background, and at least five years of internal development experience to come up to speed.
SAS has lost all of us, mostly to West Coast tech or startups. It’s all very sad because with some management/strategy tweaks and considerably better compensation, most of us probably would’ve stayed. In any case SAS spent the human and financial capital that could’ve made this happened, just not on things that would’ve made the difference our cadre was making.
"This massive financial investment by SAS was announced nearly a year ago:
https://www.sas.com/hu_hu/news/press-releases/2023/may/one-billion-investment-ai-industry-solutions.html
It will be interesting to see if the ROI from this investment can move the SAS revenue needle."
I don't believe this for a second. I was there during the last "billion dollar investment in AI" in 2019. I worked in the AI/ML division and what did I see? Every time we lost a headcount, no backfills. Raises and bonuses nonexistent for many people. Not sure where the billion dollars was, but it certainly wasn't for "AI".
This massive financial investment by SAS was announced nearly a year ago:
https://www.sas.com/hu_hu/news/press-releases/2023/may/one-billion-investment-ai-industry-solutions.html
It will be interesting to see if the ROI from this investment can move the SAS revenue needle.
$2.9B TOR is my guess
They will claim TOR growth, but it’s going to be less total revenue.
SAS revenue has been flat since Viya was released. Could one reason for flat revenue be the result of Viya driving more existing customers away from SAS than Viya has attracted to SAS?
Been watching this thread closely and so far no one has guessed revenue growth.
"JMP is properly commingled. For most of its history, JMP has used SAS facilities, SAS staff, and SAS code"
One thing is certain. JMP's profitability would look bleaker without the (free?) use of SAS facilities, SAS staff, and SAS code.
Touche'!
I don't want to argue. If I liked arguing, I would have kept working at SAS :-)
"JMP is properly commingled. For most of its history, JMP has used SAS facilities, SAS staff, and SAS code."
Let's argue about that. Then let's argue about what SAS should do in the next game.
JMP is properly commingled. For most of its history, JMP has used SAS facilities, SAS staff, and SAS code.
SAS real estate and SAS software have always been two separate companies. AFAIK commingling their funds would not be illegal, but would make it difficult to sell them separately.
Broadcom may never have seen the books. They could have said, $3B annual sales is worth $5-10B to us. That could have ended the discussion right there.
Are Prestonwood Country Club and Cary Academy also a part of the commingle of SAS?
"All these years a bunch of stuff has been commingled -- SAS and JMP and the Umstead and An"
One reason to commingle could be to obscure the lack of profit for those entities. Without SAS revenues, those other specified entities could not afford such a lavish lifestyle.
@4plq+1qmkF9Xr You lost me at “For the lastttttttt time ...”. Dramatic much?
For the lastttttttt time ... all this IPO cr-p is the company finding an excuse to get its disastrous accounting in order. All these years a bunch of stuff has been commingled -- SAS and JMP and the Umstead and An or whatever it's called these days, some of JHG's kids' businesses even. it definitely could not stay that way if there was to be any prayer of anyone buying out this company.
Guessing Broadcom got a look at the books and ran screaming in the other direction. After that happened a bunch of people were hired in the finance dept to make sure everything is accounted for the way a normal, ethical and compliant business would do ... that's what is meant by "being brought up to speed with GAAP" which stands for generally accepted accounting principles. It was vey long overdue. But all it means is that if JHG gets lucky and someone comes calling with an interest in buying SAS, the books will be wide open and transparent as they should be.
It is also true that as a private company, SAS can literally state whatever profit numbers it once publicly and to employees. The truth is irrelevant, as all the little accounting tricks that companies do all the time. I absolutely believe that it will not be called out in anyway that this year's numbers are not an apples to apples comparison with previous years' data. They don't have to so they won't.
I am of the mind that on paper it will look like steady "growth" but it would be almost impossible to know the truth. Sure people are making deals still, but expenses and staff have to be cut now for the company to appear even slightly profitable. new revenue just is not there. and no one is signing up to pay a fortune for Viya. even banks and dr-g companies don't want it.
Mess.
Still hoping VRBP comes soon.
"So why all the games around going public if they never will? Is there another end game?"
They dangle the imaginary carrot so they don't lose more staff or scare off prospective employees.
An IPO will give heirs assets to borrow against to fund their lifestyles. From what I understand, corporate debt repayment is not taxed the way income is. A simple sale will not provide this capability. But then again, I could be completely wrong.
@3vdp+1qmkF9Xr "Is there another end game?"
An alternative is that the owners are doing reasonable and conscientious estate planning.
An IPO, by definition, will sell at the highest price the market will bear. That may well be higher than any private offer. So the owners will IPO, rather than leave to their heirs a software company that cannot be divided.
The boys in Vegas really should take bets on this. There are enough of us watching the game :-)
I hope so!
That is a great post! So why all the games around going public if they never will? Is there another end game?
Responding to: "The original statement "Atlas this morning is showing $2.911B TOR, which is 106% of 2022 TOR numbers" made no sense because how would $2.911B for 2023 be 106% of 2022 numbers which was $3.1B."
I'm not at SAS anymore, but I understand the way they were recognizing revenue and displaying it in Atlas fundamentally changed last year. What they showed in Atlas for '22 and before would be different than '23 because of what they were actually measuring/displaying. TOR (Total Operating Revenue) is the total revenue generated by a company's "primary business activity" (i.e., software and services in SAS's case). Non-operating revenue includes things like interest income from investments. Since SAS has been an S-Corp from its inception, they likely used to include investment income that flowed through the SAS balance sheet in order to 'juice' the numbers each year (think real estate, equity investments, the hotel, etc.).
While that is not unethical, or shady for a private company, it certainly misrepresented how much money SAS was making selling software and services.
When you take those things out of the revenue number, and just look at TOR, SAS simply doesn't make as much doing those things in isolation as the old totals would imply. And, SAS won't be going back to update the old published numbers because, while it's not an apples-to-apples comparison of TOR to Rev, they aren't going to admit how much less they've been making off software sales the prior 30+ years.
The bottom line is: SAS doesn't make as much off software and services as they've let everyone think for YEARS, and the company is therefore not worth nearly as much as one would expect when you look at "$3B+" numbers for the last 10+ years. Investors are sophisticated enough to understand this, and will have learned the details after reviewing the company's books. That's why they haven't had a buyer at the price JG wants--the price multiple isn't what he thinks it should be, and PE/banks/Wallstreet firms won't entertain him on that point.
IF they IPO, it will be for a LOT less value than what JG thinks he should get--which is why I think he won't follow through with it.
@2xlv+1qmkF9Xr
If the poster is no longer an employee of SAS, they wouldn't know what Atlas is or have access to it to check what the truth is.
The original statement "Atlas this morning is showing $2.911B TOR, which is 106% of 2022 TOR numbers" made no sense because how would $2.911B for 2023 be 106% of 2022 numbers which was $3.1B.
Closing those last minute Viya sales will take that total WAY over the top!
@2omy+1qmkF9Xr Or you could just look in Atlas if an employee rather than asking if the poster is making sh-t up. They aren’t. 2023 not closed out yet and will take a couple weeks to settle.
This page https://wraltechwire.com/2021/05/18/the-state-of-sas-after-5-years-of-flat-revenue-growth-may-be-returning-in-2021/ says that 2019 revenue was $3.1 billion.
Here is an inflation page. https://www.usinflationcalculator.com/inflation/current-inflation-rates/
- 1 x 1.014 x 1.07 x 1.065 x 1.031 = 3.1 x 1.191 = 3.692
So in order to have inflation-adjusted growth, 2023 revenue needs to exceed $3.692 billion. Anything less means that inflation-adjusted revenue declined.
Did I do that right???
"Atlas this morning is showing $2.911B TOR, which is 106% of 2022 TOR numbers."
Is this $2.911B for 2023 legit or you're just making it up. I think it's too soon for SAS to figure out the real numbers yet. Give them another week or two.
2022 revenue was $3.1B, so if 2023 revenue was $2.911B then that's a decrease not an increase over 2022.
"I think they have to do accounting according to SEC regulations for something like 3 years before they IPO"
What date did SEC compliant accounting commence?
See? Nothing to worry about.
Given inflation is that still "growth"?
Atlas this morning is showing $2.911B TOR, which is 106% of 2022 TOR numbers.
Revenue has been constipated at $3B since Viya was released.
Speculating that V9 sales declined more in 2023 than Viya sales increased. That will be the "reward" for SAS discouraging new sales of V9 in 2023.
So my guess is $3B optimistically but closer to $2.65B once reality is becomes factored.
Like others-, I'll guess $3b and they'll quietly adjust down in a month or two (internally). I bet it was really closer to $2.7-2.8b
SAUplift was something like 7% someone did so that'll make up for some of the lost customers.
I agree as well about the cloud rev- nothing to be overly excited about
“But are they required to disclose real numbers to employees?”
No. They can tell employees whatever they want.
But are they required to disclose real numbers to employees? Certainly not the press.
I think they have to do accounting according to SEC regulations for something like 3 years before they IPO, so at some point (whenever they're able to start that) is when we'll start to get the truth, I guess.