The Sleep Well Portfolio consists of time-tested, market-leading companies. We screen them with a rigorous checklist and regularly track their theses to determine when to buy. So far, we have made one mistake, but are happy with the current 13 holdings. All about us here.
Hi all,
After a quiet July, August saw some very good earnings for our Sleep Well Portfolio. The purchases we made during the ‘SaaS-apolyse’ are now looking excellent. Veeva and Pro Medicus are in particular nearly a bagger in just a few months. Meanwhile, the ecommerce/fintech basket, Sea Limited and Mercado Libre, rallied steadily.
The AI narrative is turning from disruption to ‘value creation’.
You can read six core position reviews below, including (Wisetech, Pro Medicus, Cellebrite, Sea Limited, Mercado Libre, and Grab).
Veeva Systems, Fortinet, and CrowdStrike also reported very good Q2 earnings, and I’ll add my comments in this write-up.
AI’s ROI
In the last few months, there were doubts around the ROI of AI investments, and hyperscaler AI buildouts only went one direction: UP. Q2 results show some are already monetizing purpose-built AI agents, but others are only starting to use AI to improve internal efficiency.
Cellebrite AI - still early
Cellebrite’s AI product, Genesis, was only released in Q1 and opened for general use in Q2. It saw early uptake from 6 customers, with total ARR of $400,000. Less than 0.1% compared to the total ARR of $570M. Even smaller when considering the $12.5 billion four-year investigative AI addressable market that the new CEO, Shiven Ramji, cited in the Q2 earnings call. However, it is unlikely to accelerate in the near term given that Cellebrite’s clients are large agency buyers who have consistently elongated sales in the past 3 quarters, which is also why ARR guidance was lowered. Stock now trades at 24x FCF ex stock-based compensation for 15% growth.
Next,
Wisetech AI - still focusing internally
While the overall posture is to build AI capabilities into the deepest layers of CargoWise to automate import/export compliance, data entry, and exception management. So far, however, the impact is mostly internal and not expanded to customers (yet). Notably, AI was cited as having cut Wisetech's global workforce by 30%, helped write 90% of the new codes, and contributed $34M in annual run-rate savings. The company hopes its AI product will cut customers’ labor costs by 50% in 18-24 months. So AI monetization is either not an immediate push or an indication of an incredible market position. I still believe no other platform is as complete as CargoWise.
Veeva and CrowdStrike AI - clear signs
Among all sleep-well companies, I thought Veeva was the most AI-insulated business (mission-critical workflow of regulated data); AI was firmly on the product roadmap and acquisitions (e.g. Ostro, Copli, Yonalink)
In particular, Veeva created Falcon based on the Copli acquisition to automate "agentic labor" and handle repetitive, manual tasks in drug development.
Falcon has a lot of interest right now because it's very clear that that's high priority. Quick cost savings and compliance and efficiency. That's high on everybody's priority. I think there's a lot of interest in Falcon. We're the rate limiter right now. We have to get that product ready, start working with the early adopters, but interest in Falcon is very high.
As a result, the AI-fear we saw in Q1 was indeed overblown. My March purchase at $150/share (17x FCF) has now paid off handsomely at $290/share.
Now looking at Q2, it was another step in putting the AI fear to rest. Veeva posted the highest revenue growth in nine quarters! It’s business as usual.
In detail, I was pleased with R&D’s 19% YoY growth. Many new users adopted products across clinical, safety, and quality, despite AI. CRM also won big clients in Eli Lilly, Biogen, and Regeneron, reaccelerating growth despite the rollout of IQVIA+Salesforce CRM for life sciences solutions at the end of last year.
All in all, I feel lucky to have added more Veeva shares 6 months ago. Now, the multiple has bounced back to pre-AI SaaS-apocalypse level. So, I’ll be waiting till we see another multiple compression event to add more.
CrowdStrike - Security of AI
CrowdStrike also reported a reacceleration of growth.
Sales grew 26% to $1.47 billion, and adjusted operating margins expanded 350 basis points to 25.3%. Free cash flow margin stands at 26%, and the Falcon platform added a record $333 million in net new annual recurring revenue. ARR was also up 51%, and RPO grew 49%.
The underlying theme shows CrowdStrike’s consolidation strategy is working.
Falcon Flex grew 101% YoY. Non-endpoint solutions grew ARR by 39% YoY and now contribute 37% of total ARR. Customers with multiple modules continued to buy more modules, as shown below, making it harder to leave.
Cybersecurity is one of the clearest AI tailwinds, and CrowdStrike is poised to benefit.
“Ever since [Anthropic’s] Mythos, we have seen growth in our business, not measured by meetings or calls, but measured by ARR, and we do not see the threat landscape subsiding. Far from it. As demand for AI grows, so does our TAM, driving the need for CrowdStrike.”
“What we’re hearing from customers is they want to deploy more AI, but they’re being held back because of security, compliance, privacy, data protection type issues.” - CrowdStrike CEO George Kurtz
However, I can’t imagine buying more shares at the current ~130x free cash flow. The market is already pricing in a lot of perfection. In fact, CrowdStrike is a target for trimming in the coming weeks.
Portfolio summary of Aug 2026
Here is how the portfolio looks today:
After 9 months of me ‘looking wrong’, the last three months are starting to prove that the hardest thing in investing is actually the waiting, and even harder is slowly buying when everyone is selling. No one quite knows when the bottom hits, but you have to know what is a reasonable deal for you personally, i.e., what is your financial goal, what is enough, what is the risk, how long can you wait, how confident are you about the value of the business you are buying, etc.
As always, time will tell. I have survived the 2008, 2015, 2020, 2022, and 2025 down years. Market cycles are a feature of long-term investing, not a bug.
By 2037 (when my daughters will have full control of the Sleep Well Portfolio), none of this would matter. I continue to put aside some savings for them and own more winners - ‘winner keeps winning ’- in both bear and bull markets.
If you are new to SWI, check out our FAQ and Owner Manual.
If you are already an annual member, you can access the Sleep Well Portfolio and Thesis Tracker via the link below.
