It’s been a turbulent time in software, with valuations highly volatile and AI the dominant question behind that volatility. In a series of reports we’ll examine the fundamentals of the sector through the listed software universe, primarily US and EU/UK, to see what has actually shown up in the numbers.

The first report is on revenue trends. We looked at revenue performance across 101 listed software companies, 74 US and 27 EU/UK, up to and including the 2Q26 earnings season.

• Valuations are off the low but nowhere near where they were. US software trades at 4.0x NTM revenue, recovered from the March trough but still around a third below 2023.
• Revenue growth is recovering, and the recovery is broad. US median growth is 15.8%, up from a 12.9% trough in 2Q24, and 57% of companies are growing faster than a year ago.
• Scale has gone from being a drag on growth to a key indicator of acceleration. Above $5bn of revenue the median is 24% and it is 3.1% below $500m. Three years ago those two numbers were effectively the same (14.3% and 14.8%).
• And the new revenue is concentrated. The incremental revenue pool is about $10.5bn a quarter, with ten names taking 64% of it.
• Retention and new business contribute about equally overall, but the fastest growers have nailed the retention dynamics with their customers. The fastest quartile takes 23.2 points of growth from its installed base; the slowest takes -1.2.
• The most ominous signal is in future contracted revenue. RPO growth is at a series low of 17.6%. It is still ahead of revenue growth, but its lead has narrowed to 2.5 points from 7.4. That could be slowing bookings or shorter contract durations. Either way it is the number to watch over the next few quarters.

The full report is below. Do reach out at info@gemfieldpartners.com if you’d like to discuss any part of it.