SaaSpocalypse: FCF Screen Highlights Resilience of SaaS Leaders

The VictoryShares Free Cash Flow ETF (VFLO) has been tracking an index that highlights the resilience of software-as-a-service (SaaS) companies in the face of AI disruption fears. By focusing on free cash flow, or FCF, the index has identified mature SaaS leaders like Adobe (ADBE), Salesforce (CRM), and Intuit (INTU) as consistent cash generators.

VFLO's Index pairs an expected FCF yield metric with a growth filter to isolate profitable software companies at a discount. This approach has allowed the fund to hold companies whose enterprise values were low relative to their expected FCF, pushing back on the disruption thesis.

The Index evaluates expected FCF rather than relying strictly on backward-looking data. It measures the average of trailing 12-month results and 12-month forward projections against enterprise value to derive expected FCF yield. By filtering for firms with high FCF yields and strong projected growth rates, the Index selects companies whose cash generation has held up across prior technology cycles.

As of August 31, 2026, Adobe ranked as VFLO's top holding at 3.96%, followed by Salesforce at 3.92% and Intuit at 3.25%. Despite broad market anxiety over AI displacement, these companies have maintained market positions underpinned by deep customer integration and recurring revenue streams.