Sampford's CEO Survey Summary

Introduction

In the previous month’s blog, we continued to present the results of our bi-annual survey, where our PE respondents were showcased, highlighting some key insights and metrics to track. In case you missed it, that blog can be found here.

The final participant group that we’ll be examining are the Tech CEOs that provided their responses. Being the most active M&A advisory firm to Canadian tech companies, we’ve connected with a lot of prominent CEOs across North America, allowing for a diverse and thorough respondent pool to provide these insights.

Respondent Summary

With regards to the respondent base, the table below gives a high-level overview of the participants in the survey.

Some key points of note are the fact that the majority of respondents are Canadian, with Software being the most popular sector, and a relatively even spread among the other. While Canada and the USA have a lot of similarities among the tech industry, there are unique challenges and market characteristics that make this distinction important when looking at the responses to the questions. Additionally, the different sectors, size (employee count), and target customer will all differentiate the thoughts and opinions for these CEOs and should be considered when analyzing their responses.

Market Outlook

The first set of questions gathered input on how the respective CEOs view the market going forward in terms of performance, as well as the talent market among the tech landscape.

Market Performance

For both public markets (NASDAQ), and the economy as a whole, there was high optimism for the next 12-month (NTM) period. With interest rates on their way down, and the hope of easing geopolitical tension, there are tailwinds to support this optimism.

Tech Talent Market

Comparing the evaluation of the technology talent market is another intriguing aspect to examine. At the beginning of 2024 the majority of the participants were projecting a cool down in the market. These views have since been reversed to the majority anticipating that over the NTM period the talent market will remain the same, if not improve.

Overall, the market outlook for the coming years appears to have high optimism for favourable conditions.  

Company Outlook

The next set of questions involve company-specific traits such as past performance, and future projections among others.

LTM Revenue Performance

Compared to the market outlook, looking at the last twelve months (LTM) revenue performance shows less optimism. While two-thirds of respondents still recognized growth during a tough macroeconomic environment, the proportion of respondents that saw a decline jumped from 6% to 21%.

NTM Revenue Performance

Revenue expectations for the NTM remained very similar compared to in January. It will be interesting to see how these expectations are able to come to fruition throughout 2025 with the improved economic backdrop and strong market optimism.

NTM Headcount Expectations

We also asked CEOs about their headcount expectations for the NTM period. The results in July compared to January were mixed, as there were less growth projections, but also less expectations of declining headcount.

Operational Challenges

In addition, we presented a range or common operational challenges, and have provided the following chart showcasing which was indicated as the biggest challenge for the CEOs. Through both instances of the survey, Customer Acquisition / Marketing was the most significant challenge, with Product Development Time, and Recruiting Talent as the second and third largest challenges respectively. These operational challenges tie back to the respondent customer base of largely enterprise and SME customers, as tough economic conditions have led to a focus on profitability and oftentimes a reduction in spend from these larger clients. These changes can make acquiring new customers and marketing a product to be a substantial challenge.

Strategic Planning

The final two questions were related to strategic planning to give additional insight as to where these companies are currently positioned, and how that may have an influence on future strategic positioning.

Cash Runway Remaining

The condition of projected cash runway from respondents worsened slightly from January, to July. Overall, conditions were quite similar.

M&A or Capital Raises

There was a shift in the strategic planning regarding potential transactions. More companies are looking to raise capital, and M&A appetite slightly shifted more in favour of selling the company. The need for additional capital can be derived from the cash runway results, which would most likely be attributed to the plans to raise capital. The indication of looking to sell the business may be related to the expectation of improving macroeconomic conditions.

Conclusion

In conclusion, our CEO survey was able to provide a snapshot on the perspective of the North American tech landscape. Gathering their expectations of market outlook, evaluation of the company outlook, as well as their strategic planning are all incredibly useful data points.

We’d like to thank all the respondents that took the time to provide us with this information.

To see the full results of the CEO survey click here.

Thanks for reading, and if you have any questions regarding M&A or any related topics, do not hesitate to reach out!