đź’» SaaS, But Make it Sassy

How Agentic AI is Shaking Up Software, $7.2M to Take On Docusign — Plus, Why Palantir is Down ~13% After a Strong Q1

Author

Katie Perry
May 06, 2025

Welcome to Tuesday Thursday Saturday! I share a snapshot of trending stories across business, tech, and culture three times a week. Subscribe and tell me what you want to hear about next! - KP

The Big Story: How AI is Reshaping SaaS

AI is rewriting the rules for one of the most durable (and underestimated) business models in tech. That’s right! Today, we’re talking about Software as a Service, or SaaS, pronounced “sass” — as in something I’ve been told I have an abundance of.

SaaS is the model behind nearly every digital tool you use at work. It means you access software through your browser instead of downloading it. You pay a subscription fee, and it updates automatically in the background. From Slack to Zoom to Salesforce, SaaS has become the default way software is built, sold, and used.

It’s not a new idea, but it’s entering a new phase — one shaped by AI, automation, and investor appetite for tools that don’t just “work,” but generate results.

Why SaaS Took Over (and Still Rules the Budget)

SaaS companies make money through recurring revenue, usually through monthly or annual subscriptions. That means every year starts with a reliable base of income. No need to resell the product every time (which costs money!). If customers stay happy and keep renewing, the revenue grows steadily over time. For investors, that predictability makes SaaS extremely attractive — like, Harrison Ford in Indiana Jones and the Temple of Doom attractive. It’s easier to forecast. The company doesn’t start from scratch each quarter like a one-time purchase business.

Even better? Many SaaS companies expand revenue inside existing accounts — adding seats, new features, or upgraded plans. That’s how a $50/month customer becomes a $500/month customer over time. If you’re a user of Hubspot, you will recall a day when you woke up and realized that your $199/mo subscription was rapidly approaching $2,000/mo. You wonder when that happened, and how, but also the tool is working as intended, so you go about your day. $HUBS ( â–Ľ 0.54% )  

It’s a glorious business model, so it’s no surprise that SaaS often commands premium valuations. Investors love models that are both sticky and scalable.

And it’s everywhere. Today, companies spend about $1,040 per employee per year on SaaS, and many run more than 125 different SaaS apps across teams and departments, per Gartner. SaaS often accounts for 25% to 35% of total IT spend. It is the very infrastructure on which modern businesses run.

Pro-tip: Follow the Rule of 40

On today’s Daily Rip Live (more on that below), my co-host Shay talked about a metric he looks at when evaluating tech and specifically SaaS players. You can steal this and use it in your own stock analysis.

The Rule of 40 is a quick way to evaluate how healthy and efficient a SaaS company is by adding its revenue growth rate and profit margin.

Rule of 40 = Revenue Growth (%) + Profit Margin (%)

If the total is 40% or more, it's generally considered strong. This metric helps investors see if a company is balancing growth and profitability; for example, a fast-growing but unprofitable SaaS company could still be attractive if the combined metric hits or exceeds 40.

Companies like Snowflake, Datadog, and ServiceNow have historically performed well on this metric. $SNOW ( â–˛ 0.41% )  $DDOG ( â–˛ 1.25% )  $NOW ( â–Ľ 0.55% )  

Not an Entirely New Concept

SaaS rose to prominence in the early 2000s when Salesforce launched its CRM as a purely web-based tool. It was a radical departure from the days of boxed software and enterprise contracts. Other companies followed, like NetSuite, Concur, Zoom — and thousands more — and the playbook solidified: recurring revenue, fast iteration, centralized updates.

The model worked. SaaS companies like ServiceNow, Adobe, and Snowflake have since gone public with multibillion-dollar valuations. Others, like Slack, were acquired for billions or are readying to IPO soon (Figma). For over a decade, SaaS was one of the most reliable business models in tech.

Will AI Kill SaaS, or Make It Smarter?

Some analysts are questioning whether SaaS has finally peaked. In a recent Forbes article, titled As AI Growth Explodes, Will SaaS Come Crashing Down?, Daniel Newman, a friendly face on the Daily Rip Live, asks whether AI agents — capable of performing tasks across tools — will reduce the need for traditional SaaS apps altogether.

HFS Research went even further: “Generative AI Kills SaaS.” Their argument? As agentic AI becomes more powerful, users won’t need five different tools to do five different things. Instead, they’ll tell an AI assistant what to do, and it will work across systems to deliver results, all without a traditional software interface.

This raises a good question: if AI can do the job, do we still need the tool?

SaaS Giants Are Evolving — Fast

Companies like Salesforce and ServiceNow are betting big that the answer is yes, but they are going to operate much differently.

Salesforce has launched Einstein 1, an AI layer that helps reps write emails, generate call summaries, and prioritize leads. ServiceNow has rolled out AI agents across IT, HR, and customer service — automating tasks that used to require human support.

And these are just some of the bigger names. There are a whole slew of startups innovating at the intersection of SaaS and agentic AI. One exciting company to watch is FloQast — they’ve been (somewhat quietly) building a competitor to NetSuite that is supercharged by AI. I’ve seen a demo, and it has the effect of turning an accountant into a superhero. Faster, cleaner financial accounting that is as smart as you are.

Companies like FloQast are demonstrating how SaaS is shifting from task manager to task executor.

How Big Are Investors Betting on SaaS?

One of my clients, Agree.com, just raised a $7.2M seed round to take on one of the original SaaS giants: DocuSign. The news broke today in TechCrunch, and it’s been a blast working with the team for the last six months.

Ditch Docusign. Quit QuickBooks. And get with Agree!

Agree is rethinking how contracts get signed — and paid. Instead of signing in one tool and invoicing in another, Agree lets users sign, send, and get paid in a single flow. E-signature is free; they monetize billing, AR automation, and integrations on the back end. They basically fintech-ified e-signature.

Agree grew from 0 to 20,000 users in under six months (now above 30K), earned Product Hunt’s Product of the Month award, and continues to ship new AI-powered features every month. The entire team is under ten people, but as CEO Marty Ringlein puts it, “We’re able to compete head-to-head with DocuSign’s 7,000 employees.”

Is SaaS Still Worth Watching?

Even if you’re not in tech, the space is fascinating right now. SaaS might sound like a back-office concern, but it quietly runs the world, and it’s changing fast.

There’s even an entire conference dedicated to it: SaaStr, happening in San Francisco next week. I’ll be there with the Agree gang. If you’re going, come say hi — we’ll be hosting pre-conference beers at Fieldwork Brewery and will be around the venue throughout the event. Oh, and there’s also a putting green at our booth. Just sayin’!

If you’ve ever thought SaaS was boring … think again!

Daily Rip Live: Mikal Bridges Also Stole My Heart, Palantir Drops 13%, and DoorDash Goes Shopping

Catch us LIVE every weekday M-Th at 9 AM EST!

Every weekday, Shay Boloor and I run down the biggest market news and events LIVE on Stocktwits’ morning show, The Daily Rip Live. It’s only Tuesday, and it’s already been a wild week in the markets. We’ve got more major earnings, big economic news drops coming (including Fed commentary on Wednesday!), and ongoing tariff drama. Here’s what we covered this morning:

  • 1:54 | Triumph for the Nasty Knicks! Knicks in 4! BRING YOUR SHORTY! $LFG ( 0.0% )  

  • 3:15 | Palantir reports earnings — and their 200X multiple catches up. $PLTR ( â–Ľ 11.78% )  

  • 8:45 | Palantir’s commercial revenue is up 70%+ YoY with customers like Walmart, Walgreens, and BP. $WMT ( â–˛ 0.01% )  $WBA ( â–Ľ 0.09% )  $BP ( â–Ľ 2.33% )  

  • 17:50 | Datadog Q1 results: raises guidance, adds 3,500 customers (up 13% YoY); moves they need to make to get ahead of the agentic AI boom. $DDOG ( â–˛ 1.25% )  

  • 24:45 | DoorDash makes two acquisitions worth a combined $5B — Deliveroo and SevenRooms. Uber is next to report earnings (Thursday). $DASH ( â–Ľ 7.25% )  $UBER ( â–˛ 0.32% )  

  • 30:00 | Robots … with eyeballs?! This is a thing in LA, apparently. $SERV ( â–Ľ 3.31% )  

  • 33:40 | The Trade Desk rising! Unpacking what “connected TV” means and why advertisers keep moving budget to more targeted, attributable channels. $TTD ( â–˛ 1.26% )  

  • 38:45 | Ford, Ferrari share out earnings and tariff impacts. In market for a Ferrari? It’s gonna cost you about $50K more than before. $F ( â–˛ 3.54% )  $RACE ( â–˛ 0.86% )  

  • 55:00 | Film tariffs - to be continued tomorrow! Why tariffing services could present a big danger to the U.S. and our services-led economy.

Now Here’s a Chart

Palantir — pronounced PAL-ANT-EAR — builds software that helps governments and businesses make sense of huge amounts of data so they can make smarter decisions faster. It’s also a hugely popular stock among retail investors, and has been ripping so far in 2025 despite the rest of the market doing, well, not so hot. The company reported earnings yesterday, and despite meeting expectations, the stock fell — mostly because it’s currently trading at a 200X multiple. $PLTR ( â–Ľ 11.78% )  

A quick aside for my non-finance friends: This means that investors are paying 200 times what the company earns (or expects to earn) in profit per share, which is a sign that the stock is considered expensive and that investors are betting on big future growth. Put a different way, it's like paying $200 today for $1 of annual profit, hoping that $1 will grow a lot over time.

Back to the chart, though. Palantir is commonly known for the role it’s playing in the new age of defense. The U.S. government and its allies are among some of Palantir’s biggest customers. But take a look at how their commercial revenue is growing — use cases include supply chain management for retailers like Walmart, oil discovery for companies like BP, and even fraud detection for finserv companies.

PLTR's commercial growth is up 71% YoY (vs. 45% growth among government customers).

Reading List

🎧 Now playing: â€śFifth of May” - Zach Bryan (one day late!)

Tuesday Thursday Saturday is written by Katie Perry, owner of Ursa Major Media, which provides fractional marketing services and strategy in software, tech, consumer products, professional services, and other industries. She is also the co-host of Stocktwits’ Daily Rip Live show.

Disclaimer: The contents here reflect recaps and summaries of pre-reported or published data, news, and trends. I have cited sources and context for the information provided to the best of my ability. The purpose of the newsletter is to inform and educate on larger trends shaping business and culture — this is NOT investment advice. As an investor, you should always do your own research before making any decisions about your money or your portfolio.