      cloudedjudgement.substack.com · 2021-04-09
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Clouded Judgement

Morgan Stanley's Q1 CIO survey shows software spending rebounding to +4.8% growth in 2021, with Digital Transformation, Cloud Computing, and DW/BI/Analytics as top priorities. The article provides detailed SaaS valuation multiples analysis, showing median EV/NTM revenue of 15.6x overall and 24.7x for high-growth companies, with operating metrics and benchmarks for public SaaS companies.

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

Metrics in this report

5-Year Average EV/Sales Multiple

7.3x

average

SaaS historical baseline

Average SaaS EV/Sales Multiple

12x

Current (April 2021)

CAC Payback Period

21months

median

Public SaaS companies (gross-margin adjusted)

EV/NTM Revenue Multiple - High Growth

24.7x

median

SaaS companies with >30% projected NTM growth

EV/NTM Revenue Multiple - Low Growth

6.4x

median

SaaS companies with <15% projected NTM growth

EV/NTM Revenue Multiple - Mid Growth

15.3x

median

SaaS companies with 15-30% projected NTM growth

EV/NTM Revenue Multiple - Overall Median

15.6x

median

Public SaaS companies (Q1 2021)

Free Cash Flow Margin

9percent

median

Public SaaS companies

G&A Spend % of Revenue

18percent

median

Public SaaS companies

Gross Margin

74percent

median

Public SaaS companies

Historical Software Budget Growth Average

4.0percent

average

10-year pre-2020 average

LTM Revenue Growth Rate

29percent

median

Public SaaS companies

NTM Revenue Growth Rate

24percent

median

Public SaaS companies

Net Revenue Retention

117percent

median

Public SaaS companies

Operating Margin

-12percent

median

Public SaaS companies

R&D Spend % of Revenue

25percent

median

Public SaaS companies

S&M Spend % of Revenue

43percent

median

Public SaaS companies

Software Spending Growth Forecast

4.8percent

target

Morgan Stanley CIO survey Q1 2021