cloudedjudgement.substack.com · 2025-11-28 · 188d

Clouded Judgement: Q3 2025 SaaS Earnings Check-In

Analysis of Q3 2025 cloud software earnings showing record net new ARR additions ($3,810M) and solid year-over-year growth (23%), with SaaS companies broadly performing well across the industry. The article provides detailed valuation multiples, operating metrics, and benchmarks across 80+ public software companies, revealing a median EV/NTM revenue multiple of 4.6x overall with significant dispersion between high-growth (15.2x) and low-growth (3.6x) companies.

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Metrics in this report

CAC Payback Period

32months

median

SaaS companies on gross profit basis

EV/NTM Revenue Multiple

4.6multiple

median

Overall SaaS industry

EV/NTM Revenue Multiple

15.2multiple

median

High-growth SaaS companies (>22% NTM growth)

EV/NTM Revenue Multiple

6.6multiple

median

Mid-growth SaaS companies (15-22% NTM growth)

EV/NTM Revenue Multiple

3.6multiple

median

Low-growth SaaS companies (<15% NTM growth)

Free Cash Flow Margin

19percent

median

SaaS companies with positive FCF

G&A % Revenue

15percent

median

SaaS companies

Gross Margin

76percent

median

SaaS companies across all growth rates

LTM Growth Rate

14percent

median

Overall SaaS industry

NTM Growth Rate

12percent

median

Overall SaaS industry

Net New ARR

3810millions USD

median

Q3 2025 for ~80 public SaaS companies

Net Retention Rate

108percent

median

SaaS companies

Operating Margin

-2percent

median

Overall SaaS industry

Operating Margin

-14percent

median

Top 10 SaaS companies by valuation

R&D % Revenue

24percent

median

SaaS companies

Sales & Marketing % Revenue

37percent

median

SaaS companies