      cloudedjudgement.substack.com · 2020-10-30
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Clouded Judgement: Q3 2020 SaaS Earnings & Valuation Multiple Analysis

Weekly analysis of Q3 2020 SaaS earnings season showing broad acceleration in cloud infrastructure providers (AWS, Azure, GCP) and strong performance from companies like Twilio, Five9, and Shopify, with detailed valuation multiple benchmarking revealing median 15x NTM revenue multiples expanding significantly for high-growth cohorts (33x median) versus mid- and low-growth peers. The article tracks comprehensive operating metrics including median NRR of 117%, CAC payback of 26 months, and gross margins of 73% across public SaaS companies, positioning these as market benchmarks for investor comparison.

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Metrics in this report

CAC Payback Period

26months

median

Public SaaS companies

Free Cash Flow Margin

4percent

median

Public SaaS companies

General & Administrative Expense Ratio

17percent of revenue

median

Public SaaS companies

Gross Margin

73percent

median

Public SaaS companies

LTM Revenue Growth Rate

31percent

median

Public SaaS companies

NTM Revenue Growth Rate

20percent

median

Public SaaS companies

Net Revenue Retention

117percent

median

Public SaaS companies

Operating Margin

-15percent

median

Public SaaS companies

Research & Development Expense Ratio

25percent of revenue

median

Public SaaS companies

Sales & Marketing Expense Ratio

43percent of revenue

median

Public SaaS companies

Valuation Multiple (NTM Revenue)

15x revenue

median

Overall SaaS market (Oct-20)

Valuation Multiple (NTM Revenue)

33x revenue

median

High-growth SaaS (>30% growth)

Valuation Multiple (NTM Revenue)

15x revenue

median

Mid-growth SaaS (15-30% growth)

Valuation Multiple (NTM Revenue)

8x revenue

median

Low-growth SaaS (<15% growth)