cloudedjudgement.substack.com · 2025-06-20 · 349d

Clouded Judgement: The Dropping Cost of Intelligence and SaaS Valuation Multiples

This article analyzes the dramatic 87% drop in AI token pricing and its implications for job creation and economic growth through creative destruction, then provides a comprehensive benchmarking analysis of top 10 SaaS companies' EV/NTM revenue multiples, growth rates, and operating metrics. The author argues that declining cost of intelligence will drive massive job creation rather than displacement, while presenting detailed valuation comparisons across the public SaaS landscape.

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Metrics in this report

AI Token Pricing Decline

87percent

O-series models (o1 to o3) from beginning to mid-2025

CAC Payback Period

72months

median

Public SaaS companies (GM-adjusted)

EV/NTM Revenue Multiple

5.3x

median

Overall public SaaS market

EV/NTM Revenue Multiple

14.8x

median

Top 10 SaaS companies

EV/NTM Revenue Multiple

20.7x

median

High-growth SaaS (>25% NTM growth)

EV/NTM Revenue Multiple

8.4x

median

Mid-growth SaaS (15-25% NTM growth)

EV/NTM Revenue Multiple

4.0x

median

Low-growth SaaS (<15% NTM growth)

FCF Margin

18percent

median

Public SaaS companies

G&A Expense Ratio

17percent of revenue

median

Public SaaS companies

Gross Margin

76percent

median

Public SaaS companies

NTM Growth Rate

11percent

median

Public SaaS companies

Net Dollar Retention

108percent

median

Public SaaS companies

Operating Margin

-4percent

median

Public SaaS companies

R&D Expense Ratio

24percent of revenue

median

Public SaaS companies

S&M Expense Ratio

38percent of revenue

median

Public SaaS companies