Clouded Judgement
This weekly cloud software market update analyzes valuation multiple compression following hawkish FOMC guidance on interest rate hikes in 2022-2023, showing cloud software stocks down across the board as growth asset prices decline with rising real rates. The article benchmarks current SaaS multiples against historical peaks, revealing that high-growth software remains 76% above pre-COVID levels while overall median multiples have normalized, and provides operational metrics across the public SaaS cohort including NRR, CAC payback, and Rule of 40 analysis.
Metrics in this report
25months
median
Public SaaS cohort customer acquisition cost payback
12.1xmultiple
median
Overall public SaaS cohort as of Dec 17, 2021
39.0xmultiple
median
Top 5 highest-valued SaaS companies by multiple
7.5xmultiple
median
Dec 17, 2021 snapshot
24.9xmultiple
median
SaaS companies with >30% projected NTM growth
5.3xmultiple
median
SaaS companies with <15% projected NTM growth
11.2xmultiple
median
SaaS companies with 15-30% projected NTM growth
18.0xmultiple
top-quartile
Dec 17, 2021 snapshot
4%percent
median
Public SaaS cohort free cash flow margin
19%percent of revenue
median
Public SaaS cohort G&A expense ratio
74%percent
median
Public SaaS cohort gross profit margin
33%percent
median
Public SaaS cohort last-twelve-months actual growth
24%percent
median
Public SaaS cohort next-twelve-months projected growth
119%percent
median
Public SaaS cohort expansion revenue retention
-19%percent
median
Public SaaS cohort operating profit margin
26%percent of revenue
median
Public SaaS cohort R&D expense ratio
44%percent of revenue
median
Public SaaS cohort S&M expense ratio