Q2 SaaS Earnings & Market Moves: Palantir, ZoomInfo, Figma, and OpenAI

Q2 earnings season is in full swing, and SaaS companies are revealing a mix of explosive growth, recoveries, and market surprises. From Palantir’s record-breaking quarter to Figma’s IPO frenzy, here’s a closer look at the latest moves shaping the SaaS landscape.

Palantir: A Quarter for the Ages

Palantir delivered one of the most impressive quarters in recent tech history:

• 48% ARR growth year-over-year, adding $1.3B in net new ARR

• CAC payback of just 11 months

• U.S. commercial revenue +93%, U.S. government +53%

• Rule of 40: 94, net margins ~30–33%

• Q3 guidance: 50% ARR growth

Palantir’s performance is especially remarkable given the broader SaaS slowdown. The company has increased ARR growth for eight consecutive quarters, bucking the trend where most peers are seeing sharp declines.

ZoomInfo: Back in Positive Territory

After a rough stretch, ZoomInfo reported its first positive ARR growth in five quarters:

• ARR growth: 5% YoY, $61M net new ARR

• Operating margin improved to 18%, supported by a drop in G&A from 38% → 15% of revenue

• Free cash flow: 33%

Challenges remain. Go-to-market efficiency is still low, with CAC payback of 99 months, reflecting the difficulties in their SMB segment. However, the company is moving upmarket, reducing bad debt provisions, and improving net revenue retention (87% → 89%). Share price popped 6% after the announcement, trading at roughly 3× ARR.

Confluent: Growth Without the Momentum

Confluent added $185M in net new ARR, spending $526M on sales and marketing. ARR growth came in at 21%, with CAC payback of 47 months.

Key concerns:

• Net revenue retention declined from 118% → 114%

• Rule of X dropped from 55 → 46

• Quarter-over-quarter net new ARR decreased from $71M → $40M

While ARR growth remains positive, the trend of declining incremental ARR and slowing efficiency hit the stock hard - share price fell 38% post-earnings, now trading at ~5.5× ARR.

Procore: Slowing Customer Adds and Efficiency Challenges

Procore added 158M in net new ARR but spent $570M on sales and marketing, resulting in CAC payback of 55 months and 14% ARR growth.

• Net new customer adds have dropped significantly: 2,254 → 751 over two years

• Average contract value rose from $51K → $73K, partially offsetting declining customer adds

• Operating margin: –9% (down from –5%), Free cash flow margin: 3% (down from 16%)

The slowing top-line growth and weakening efficiency metrics highlight the challenge of scaling efficiently at ~$1.3B ARR. Market cap sits at ~$9.25B (~7× ARR).

Cloudflare: Growth With Scale

Cloudflare continues to impress, maintaining elevated ARR growth while most peers falter:

• ARR growth: 28%, $445M net new ARR, now over $2B ARR

• CAC payback: 28 months

• Net revenue retention: 114%

• ARR per employee: $444K

However, profitability slipped: operating margin fell from –9% → –13%, driven by lower gross margins and slightly higher G&A. Despite the losses, Cloudflare’s valuation remains strong at ~34× ARR.

Figma IPO: A Market Frenzy

Figma’s IPO was nothing short of spectacular:

• IPO price: $33/share; first trade: $85; peak: ~$122

• Raised $1.22B via 12.5M shares

• Market commentary claims “money left on the table” - theoretically, Figma could have priced at $90/share, raising ~$3B

Comparing to peers:

• CrowdStrike: 25× ARR

• Cloudflare: 36× ARR

• Palantir: 100× ARR+

Figma’s multiple ran hot initially but is expected to stabilize in the high teens to low 20s, more in line with comparable SaaS companies like Monday.com and Rubrik.

OpenAI: Funding and Growth Momentum

OpenAI raised $8.3B at a $300B valuation, bringing total funding to ~$40B. Revenue run rate has jumped to $12B, with projections to hit $20B by year-end.

• That’s up from $5.5B at the end of 2024

• Current multiple: 25× run rate revenue

With GPT-5 imminent, the company is poised for rapid adoption and further market disruption.

Key Takeaways

1. Exceptional performers: Palantir and Cloudflare showcase what strong SaaS execution looks like - growth plus efficiency.

2. Turnarounds: ZoomInfo’s recovery shows the power of strategic refocusing.

3. Market excitement vs. fundamentals: Figma IPO and OpenAI funding highlight the appetite for high-quality SaaS/AI assets, but multiples can get frothy.

4. Scaling challenges: Confluent, Procore, and Cloudflare demonstrate that sustaining ARR growth and operational efficiency simultaneously remains difficult.

As Q2 continues to unfold, these numbers set the stage for a critical period for SaaS investors and operators alike. Tracking ARR growth, net revenue retention, CAC efficiency, and free cash flow will be key to understanding which companies are genuinely winning in 2025.

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