Focused Compounding Ep 480. A-Z on IGV: Value Hunt in Software (F-M)
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May 29, 2026 A tour of software names from F to M with valuation debates and monopoly risk worries. Conversations cover cybersecurity platforms, SaaS growth versus differentiation, and niche vertical software economics. Topics include mining and licensing models, IoT and marketing SaaS cash concerns, and contrasts between large platform stability and risky balance-sheet bets.
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FICO's Price Hike Risk To Its Monopoly
- Fair Isaac (FICO) shows exceptional margins and growth but valuation has collapsed ~50% Y/Y.
- Geoff Gannon warns rapid price hikes since 2022 likely drove margins higher and risk regulatory or customer backlash that damages franchise goodwill.
Margin Jump Signals Price Overhang
- Margin expansion at FICO appears driven by price increases, not volume, lifting gross margins ~10 percentage points.
- Geoff highlights sudden margin jumps as evidence of aggressive markup that can trigger political and customer reaction.
Avoid 2021 IPO Hype Without Cashproof
- Treat cloud-native contact center and many 2021 IPOs skeptically when cash metrics and profitability lag growth.
- Andrew flags FIVN and peers that collapsed from 2021 highs as examples to avoid without deeper diligence.