Clouded Judgement
This article provides a comprehensive analysis of SaaS company valuations as of December 2021, examining the disconnect between revenue multiples and underlying financial performance across the top 10 highest-valued cloud software companies. The data reveals that while median SaaS multiples stand at 12.7x NTM revenue, the top 10 companies command 42.7x multiples despite median operating margins of -53% and negative FCF margins, highlighting significant valuation risk driven by growth expectations.
Metrics in this report
25months
median
SaaS companies with disclosed subscription revenue
12.7multiple
median
Overall SaaS market as of December 2021
42.7multiple
median
Top 10 highest-valued SaaS companies
4percent
median
Overall SaaS market
-7percent
median
Top 10 highest-valued SaaS companies
19percent
median
SaaS companies as percent of revenue
74percent
median
SaaS companies at scale
34percent
median
Overall SaaS market
24percent
median
Overall SaaS market
119percent
median
SaaS companies with disclosed subscription revenue
-19percent
median
Overall SaaS market
-53percent
median
Top 10 highest-valued SaaS companies
26percent
median
SaaS companies as percent of revenue
26.6multiple
median
High-growth SaaS companies (>30% NTM growth)
11.9multiple
median
Mid-growth SaaS companies (15-30% NTM growth)
5.5multiple
median
Low-growth SaaS companies (<15% NTM growth)
44percent
median
SaaS companies as percent of revenue