cloudedjudgement.substack.com · 2024-01-26 · 860d

Clouded Judgement: Q4 Earnings Season Kicks Off with ServiceNow

ServiceNow's Q4 2023 earnings report signals a stabilization in net new ARR growth after 2023's deceleration, with quarterly net new ARR additions rising to $596M and YoY growth at 26%. The article provides detailed SaaS valuation benchmarks, operating metrics, and multiples analysis across the top 10 public cloud software companies, with ServiceNow notably profitable and trading at 14.3x NTM revenue with 20% growth.

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Metrics in this report

CAC Payback Period

39months

median

Public B2B SaaS companies (GM-adjusted)

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

14.7x

median

High-growth SaaS companies

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

4.4x

median

Low-growth SaaS companies

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

9.2x

median

Mid-growth SaaS companies

EV/NTM Revenue Multiple (Top 10 SaaS)

15.9x

average

Top 10 public SaaS companies by market cap

Free Cash Flow Margin

8%percent

median

Public B2B SaaS companies

G&A as % of Revenue

17%percent

median

Public B2B SaaS companies

Gross Margin

75%percent

median

Public B2B SaaS companies

Net Revenue Retention

112%percent

median

Public B2B SaaS companies

Operating Margin

-13%percent

median

Public B2B SaaS companies

R&D as % of Revenue

26%percent

median

Public B2B SaaS companies

S&M as % of Revenue

43%percent

median

Public B2B SaaS companies

ServiceNow Net New ARR (Q4 2023)

596millions USD

Quarterly net new ARR addition

ServiceNow YoY Net New ARR Growth (Q4 2023)

26%percent

Year-over-year growth in quarterly net new ARR