cloudedjudgement.substack.com · 2023-12-08 · 909d

Clouded Judgement: Q3 2023 SaaS Earnings Preview & Valuation Analysis

Q3 2023 software earnings show stabilizing growth trends with green shoots emerging, as median YoY growth decelerates to lower single digits but new ARR growth turns positive for the first time in months. CAC payback periods remain elevated at 39 months median despite headcount reductions, while cloud optimization headwinds appear to be abating. SaaS valuation multiples correlate strongly with growth expectations, with high-growth companies trading at 14.6x NTM revenue versus 3.8x for low-growth peers.

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

Metrics in this report

CAC Payback Period

39months

median

Public SaaS companies, Q3 2023

EV / NTM Revenue Multiple (High Growth)

14.6times

median

Companies with >30% projected NTM growth

EV / NTM Revenue Multiple (Low Growth)

3.8times

median

Companies with <15% projected NTM growth

EV / NTM Revenue Multiple (Mid Growth)

8.4times

median

Companies with 15-30% projected NTM growth

EV / NTM Revenue Multiple (Overall)

5.9times

median

All public SaaS companies

EV / NTM Revenue Multiple (Top 5)

16.0times

median

Top 5 highest-valued public SaaS companies

Free Cash Flow Margin

8percent

median

Public SaaS companies, Q3 2023

G&A Spend

17percent

median

G&A as % of revenue, public SaaS, Q3 2023

Gross Margin

75percent

median

Public SaaS companies, Q3 2023

Net Revenue Retention

112percent

median

Public SaaS companies, Q3 2023

Operating Margin

-14percent

median

Public SaaS companies, Q3 2023

Quarterly Revenue Growth Rate

14percent

median

NTM growth for public SaaS cohort, Q3 2023

R&D Spend

26percent

median

R&D as % of revenue, public SaaS, Q3 2023

Sales & Marketing Spend

42percent

median

S&M as % of revenue, public SaaS, Q3 2023