OneStream's S-1 filing: Underscoring the importance of EPM technologies

OneStream recently filed for an IPO marking a significant step forward in its growth journey. Achieving impressive metrics in an uncertain economy, OneStream’s $480M ARR, 30%+ topline growth and +11% FCF Margins are no small feat. This not only points towards solid operational capabilities but also indicates that the markets continue to have an appetite for best-in-class performance management systems. In this blog, we dive deeper into what OneStream’s IPO filing might mean for the broader EPM ecosystem. 

The performance management (EPM / CPM) ecosystem is not new to large deals and M&A  - from Oracle’s $3.3B acquisition of Hyperion in 2007 to Workday’s $1.5B acquisition of Adaptive Insights in 2018 to the $10.7B buyout of Anaplan in 2022 - the EPM landscape has evolved, matured and created opportunities for investors, employees, partners and most importantly customers. However, we still continue to be amazed at how planning systems tend to be considered relatively ‘niche’ compared to the broader SaaS market. We believe this is partly due to the fact that most legacy EPM systems have not lived up to their potential. Instead, there are over a dozen solutions each of which have specialized in specific market segments or use cases.

Despite all of the noise that surrounds technology ecosystems, we believe the solutions that actually stand out are the ones that have achieved true product-market fit. Pigment is an example of a technology that, similar to OneStream, has found its footing in a highly competitive and fragmented EPM market and now has a robust customer base - primarily because of how delightful the product is. The developers (“model builders” or “architects”) love building in the tool and the users (Finance, HR, Sales, Operations, others) love using the tool which creates a strong synergistic bond ultimately leading to growth and naturally translating into solid financials which are then rewarded by the market at some point. Contact Amvent to learn more about Pigment's offerings or check out some of our other blogs for more detail. 

OneStream grew its customer base by 4x from 250 in 2018 to 1,000 in 2022 and ARR grew from $100M to $300M in that same period (ending Q1’24 at $480M). Growing revenue by 30%+ in a tough macroeconomic environment is definitely a positive signal but the looming question is how durable is this growth. Without getting into the specifics of OneStream, what we can definitely take away from their S-1 filing is that there continues to be a strong appetite for performance management solutions - one that is only going to grow as solutions like Pigment continue to revolutionize and transform the space. There are a few reasons why EPM systems tend to hold so much relevance and importance in organizations:

• Mission critical software: For any organization, planning is mission critical which by extension means planning systems play a crucial role in ensuring that plans are set, communicated and reported in the right manner. As businesses scale, the need to build more accurate and granular plans increases and this is only made possible by having the right tooling in place.

• Product Stickiness: With best-in-class EPM solutions (especially Pigment), we often see the usual land and expand motion. Starting with one specific use case (eg. OPEX modeling), customers tend to see organic traction as the product starts to speak for itself, leading to cross-functional teams expressing interest in building other use cases (topline modeling, workforce planning, sales performance management etc.). As the solutions get more and more embedded into various teams, the stickiness increases exponentially making EPM tools all the more valuable within an organization. 

• Automation and Efficiency gains: The right EPM tools can unlock enormous value for businesses by eliminating manual, redundant work and automating processes across teams. From integrating data across different source systems to creating centralized models that prevent hundreds of siloed spreadsheets to generating seamless reporting that eliminates the need to use multiple tools for the same task, the list goes on and on as long as the right tool is in place.

OneStream’s IPO filing marks another milestone in the EPM world underscoring the importance of planning technologies. At Amvent, we are excited to partner with Pigment to continue revolutionizing the space and help our customers plan better.