      cloudedjudgement.substack.com · 2023-05-19
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Clouded Judgement: Q1 2023 SaaS Earnings Reflections

Analysis of Q1 2023 public SaaS company performance reveals significant deterioration across core metrics: median net new ARR declined 24% versus 2022 average, YoY revenue growth compressed to 19%, and net retention dropped to 112% from 120%. Despite operational headwinds in bookings and expansion, SaaS companies achieved improved free cash flow margins approaching 10%, suggesting efficiency gains are offsetting growth deceleration.

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

Metrics in this report

CAC Payback Period

38months

median

Public SaaS companies

EV / NTM Revenue Multiple

5.8x

median

Public SaaS companies, May 2023

EV / NTM Revenue Multiple - High Growth

9.0x

median

SaaS companies with >30% projected NTM growth

EV / NTM Revenue Multiple - Low Growth

3.3x

median

SaaS companies with <15% projected NTM growth

Free Cash Flow Margin

10percent

median

Public cloud software companies, approaching this level in Q1 2023

General & Administrative Spend

18percent of revenue

median

Public SaaS companies

Gross Margin

75percent

median

Public SaaS companies

Net New ARR Growth

-24percent

median

Public SaaS companies, Q1 2023 versus 2022 quarterly average

Net Revenue Retention

11percent

median

Public SaaS companies, Q1 2023 (estimated)

Operating Margin

-21percent

median

Public SaaS companies

Research & Development Spend

27percent of revenue

median

Public SaaS companies

Sales & Marketing Spend

46percent of revenue

median

Public SaaS companies

Year-over-Year Revenue Growth

20percent

median

Public SaaS companies, Q1 2023