cloudedjudgement.substack.com · 2020-06-19 · 2176d

Clouded Judgement

The inaugural issue of Clouded Judgement analyzes SaaS valuation multiples at all-time highs (median 13.0x NTM revenue, 25.6x for high-growth companies) driven by COVID-19 tailwinds in remote work, security, and collaboration software. Analysis of JP Morgan's CIO survey reveals IT budgets shrinking 5% overall but cloud spend growing from 20% to 44% of budgets within 5 years, benefiting best-in-class SaaS providers. The article provides benchmarks on SaaS operating metrics including 73% median gross margin, 19% median NTM growth, and 117% median net revenue retention.

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

Metrics in this report

CAC Payback Period

29months

median

SaaS market overall

EV / NTM Revenue Multiple

13.0x

median

Overall SaaS market as of June 2020

EV / NTM Revenue Multiple

34.1x

median

Top 5 SaaS companies by valuation (Shopify, Datadog, Zoom, Coupa, Bill.com)

EV / NTM Revenue Multiple

25.6x

median

High-growth SaaS (>30% NTM growth)

EV / NTM Revenue Multiple

14.7x

median

Mid-growth SaaS (15-30% NTM growth)

EV / NTM Revenue Multiple

7.5x

median

Low-growth SaaS (<15% NTM growth)

Enterprise IT Budget Cloud Spend Allocation

20percent

current

Current state per JP Morgan CIO survey of >100 CIOs with $88B cumulative IT budget

Enterprise IT Budget Cloud Spend Allocation

44percent

target

Expected allocation within 5 years per JP Morgan CIO survey

Enterprise IT Budget Growth Rate

-5percent

average

Projected IT budget change for 2020 per JP Morgan CIO survey

Gross Margin

73percent

median

SaaS market overall

NTM Revenue Growth Rate

19percent

median

SaaS market overall

Net Revenue Retention

117percent

median

SaaS market overall

Operating Margin

-15percent

median

SaaS market overall