cloudedjudgement.substack.com · 2022-01-28 · 1588d

Clouded Judgement: Cloud SaaS Valuation Multiple Compression & Fundamental Performance Disconnect

Cloud software multiples have compressed significantly from August 2021 peaks but remain elevated for high-growth companies, while underlying business fundamentals have actually strengthened with improved margins and net retention metrics. The article provides detailed valuation benchmarking and operating metrics across public SaaS companies, revealing a disconnect between multiple normalization and operational durability.

17 metrics· Cited 0× in the knowledge base ·Open source ↗

Metrics in this report

CAC Payback Period

25months

median

Public SaaS companies

Enterprise Value / NTM Revenue Multiple

9.4multiple

median

Overall public SaaS companies

Enterprise Value / NTM Revenue Multiple

30.5multiple

median

Top 5 highest-valued SaaS companies

Enterprise Value / NTM Revenue Multiple

17.9multiple

median

High growth SaaS (>30% NTM growth)

Enterprise Value / NTM Revenue Multiple

8.7multiple

median

Mid growth SaaS (15-30% NTM growth)

Enterprise Value / NTM Revenue Multiple

4.2multiple

median

Low growth SaaS (<15% NTM growth)

Free Cash Flow Margin

4percent

median

Overall public SaaS companies

Free Cash Flow Margin

-10percent

median

Top 10 highest-valued SaaS companies

General & Administrative Spend

19percent of revenue

median

Public SaaS companies

Gross Margin

74percent

median

Public SaaS companies

LTM Revenue Growth

34percent

median

Public SaaS companies

NTM Revenue Growth

24percent

median

Public SaaS companies

Net Revenue Retention

119percent

median

Public SaaS companies

Operating Margin

-19percent

median

Overall public SaaS companies

Operating Margin

-44percent

median

Top 10 highest-valued SaaS companies

Research & Development Spend

26percent of revenue

median

Public SaaS companies

Sales & Marketing Spend

44percent of revenue

median

Public SaaS companies