cloudedjudgement.substack.com · 2020-10-23 · 2050d

Clouded Judgement

Weekly SaaS valuation and earnings update featuring Morgan Stanley's Q3 CIO survey showing modest software spend growth expectations for 2021 (+2.1% vs -2.5% in 2020) despite elevated sector valuations. Provides comprehensive benchmarking of top 10 SaaS companies by EV/NTM revenue multiples (median 46.9x), operating metrics (73% median gross margin, -19% median operating margin), and earnings calendar for Q3 2020. Highlights valuation divergence between high-growth (33.8x) and low-growth (9.2x) SaaS cohorts amid macro uncertainty.

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Metrics in this report

CAC Payback

29months

median

Public SaaS companies

EV/NTM Revenue Multiple

15.8x

median

Public SaaS companies, October 2020

EV/NTM Revenue Multiple

44.2x

median

Top 5 highest-valued SaaS companies, October 2020

EV/NTM Revenue Multiple

33.8x

median

High-growth SaaS (>30% NTM growth)

EV/NTM Revenue Multiple

16.3x

median

Mid-growth SaaS (15-30% NTM growth)

EV/NTM Revenue Multiple

9.2x

median

Low-growth SaaS (<15% NTM growth)

FCF Margin

4percent

median

Public SaaS companies

G&A Expense Ratio

17percent

median

Public SaaS companies

Gross Margin

73percent

median

Public SaaS companies

LTM Growth Rate

31percent

median

Public SaaS companies

NTM Growth Rate

19percent

median

Public SaaS companies

Net Revenue Retention

117percent

median

Public SaaS companies

Operating Margin

-16percent

median

Public SaaS companies

R&D Expense Ratio

25percent

median

Public SaaS companies

S&M Expense Ratio

43percent

median

Public SaaS companies

Software Spend Growth

-2.5percent

actual

2020 YTD per Morgan Stanley CIO survey

Software Spend Growth

2.1percent

target

2021 expected per Morgan Stanley CIO survey

Software Spend Growth

4.1percent

average

3-year historical average