cloudedjudgement.substack.com · 2021-04-02 · 1889d

Clouded Judgement: SaaS Valuation Multiples and Treasury Correlation Analysis

This article analyzes the correlation between 10-year Treasury yields and SaaS cloud valuation multiples, documenting a -0.95 correlation since February 2021 as rates rose above 1%. The author provides detailed benchmarking data on the top 10 highest-valued SaaS companies, median operating metrics across the SaaS cohort, and a comprehensive methodology for calculating SaaS valuation multiples by growth bucket.

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Metrics in this report

10-Year Treasury Yield

1.4percent

February 5, 2021 (peak cloud multiples)

10-Year Treasury Yield

1.7percent

March 19-26, 2021 (trough in cloud multiples)

10-Year Treasury Yield

1.35%percent

February 5, 2021 (SaaS multiple peak)

10-Year Treasury Yield

1.75%percent

March 19, 2021 (SaaS multiple compression)

CAC Payback Period

21months

median

Public SaaS companies

CAC Payback Period

21months

median

Public SaaS cohort GM-adjusted basis (April 2021)

EV/NTM Revenue Multiple

31.3multiple

median

Top 10 cloud SaaS companies by valuation

EV/NTM Revenue Multiple

35.7multiple

average

Top 10 cloud SaaS companies by valuation

EV/NTM Revenue Multiple

15.0multiple

median

Overall SaaS market cohort

FCF Margin

15percent

median

Top 10 cloud SaaS companies

FCF Margin

9%percent

median

Public SaaS cohort (April 2021)

G&A Expense Ratio

18%percent of revenue

median

Public SaaS cohort (April 2021)

G&A as % of Revenue

18percent

median

Public SaaS companies

Gross Margin

74percent

median

Top 10 cloud SaaS companies

Gross Margin

74%percent

median

Public SaaS cohort (April 2021)

High-Growth SaaS Multiple (>30% growth)

25.0multiple

median

By NTM growth bucket

High-Growth SaaS Valuation Multiple

25.0xmultiple

median

SaaS companies with >30% NTM growth (April 2021)

LTM Revenue Growth

29%percent

median

Public SaaS cohort (April 2021)

Low-Growth SaaS Multiple (<15% growth)

6.4multiple

median

By NTM growth bucket

Low-Growth SaaS Valuation Multiple

6.4xmultiple

median

SaaS companies with <15% NTM growth (April 2021)

Mid-Growth SaaS Multiple (15-30% growth)

14.4multiple

median

By NTM growth bucket

Mid-Growth SaaS Valuation Multiple

14.4xmultiple

median

SaaS companies with 15-30% NTM growth (April 2021)

NTM Revenue Growth

23percent

median

Public SaaS companies

NTM Revenue Growth

23%percent

median

Public SaaS cohort (April 2021)

Net Revenue Retention

117percent

median

Public SaaS companies

Net Revenue Retention

117%percent

median

Public SaaS cohort (April 2021)

Operating Margin

-18percent

median

Top 10 cloud SaaS companies

Operating Margin

-12%percent

median

Public SaaS cohort (April 2021)

R&D Expense Ratio

25%percent of revenue

median

Public SaaS cohort (April 2021)

R&D as % of Revenue

25percent

median

Public SaaS companies

S&M Expense Ratio

44%percent of revenue

median

Public SaaS cohort (April 2021)

S&M as % of Revenue

44percent

median

Public SaaS companies

SaaS Valuation Multiple

15.0xmultiple

median

Public SaaS cohort as of April 2021

SaaS Valuation Multiple

36.4xmultiple

median

Top 5 highest-valued SaaS companies (April 2021)

SaaS Valuation Multiple

17.0xmultiple

average

3-month trailing average (Jan 2021)

SaaS Valuation Multiple

14.2xmultiple

average

1-year trailing average (April 2021)