cloudedjudgement.substack.com · 2023-12-29 · 888d

Clouded Judgement: 2023 Year-End SaaS Valuation & Performance Analysis

This year-end analysis examines 2023 performance of ~80 cloud software companies, finding 14 with 100%+ returns and a median basket gain of 40%, contrasting sharply with 2022's downturn. The article benchmarks valuation multiples (EV/NTM Revenue), operating metrics (growth, margins, CAC payback, NRR), and top performers, revealing how high-growth SaaS companies command 16x multiples while the overall median sits at 6.5x. Key findings show consistent top performers (Snowflake, Cloudflare, Datadog, Zscaler) across multiple years, with multiple expansion of ~50% for top-10 companies since end-2022.

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Metrics in this report

10-Year Average EV/NTM Revenue Multiple

3.8multiple

average

Public SaaS companies, 10-year historical baseline

2023 YTD Top Performer Stock Return

174percent

Palantir, highest YTD return in 2023

CAC Payback Period

39months

median

Public SaaS companies in tracked index

EV/NTM Revenue Multiple (2021 Year-End Top 10)

12.4multiple

median

Top 10 highest-multiple SaaS companies, 2021 year-end

EV/NTM Revenue Multiple (2022 Year-End Top 10)

10.7multiple

median

Top 10 highest-multiple SaaS companies, 2022 year-end

EV/NTM Revenue Multiple (High Growth >30%)

16.0multiple

median

SaaS companies with >30% projected NTM growth

EV/NTM Revenue Multiple (Low Growth <15%)

4.3multiple

median

SaaS companies with <15% projected NTM growth

EV/NTM Revenue Multiple (Mid Growth 15-30%)

9.1multiple

median

SaaS companies with 15-30% projected NTM growth

EV/NTM Revenue Multiple (Overall Median)

6.5multiple

median

~80 public cloud software companies, 2023 year-end

EV/NTM Revenue Multiple (Top 5 Median)

16.12multiple

median

Top 5 highest-multiple SaaS companies, 2023 year-end

Free Cash Flow Margin

8percent

median

Public SaaS companies in tracked index

G&A Expense as % of Revenue

17percent

median

Public SaaS companies in tracked index

Gross Margin

75percent

median

Public SaaS companies in tracked index

LTM Revenue Growth Rate

20percent

median

Public SaaS companies in tracked index, 2023

NTM Revenue Growth Rate

14percent

median

Public SaaS companies in tracked index, 2023

Net Revenue Retention (NRR)

112percent

median

Public SaaS companies in tracked index

Operating Margin

-13percent

median

Public SaaS companies in tracked index

R&D Expense as % of Revenue

26percent

median

Public SaaS companies in tracked index

S&M Expense as % of Revenue

43percent

median

Public SaaS companies in tracked index

Snowflake EV/NTM Revenue Multiple

18.6multiple

Top-performing SaaS company, 2023 year-end