cloudedjudgement.substack.com · 2025-08-15 · 293d

Clouded Judgement: The Return of Software

The article argues that despite AI disruption concerns, enterprise software will not disappear but must evolve by integrating AI capabilities. The author analyzes current SaaS valuation multiples, operating metrics, and benchmarks across public cloud software companies, revealing median EV/NTM revenue of 4.7x and significant valuation dispersion based on growth rates.

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Metrics in this report

CAC Payback Period

40months

median

Public SaaS companies

EV / NTM Revenue

4.7multiple

median

All public SaaS companies

EV / NTM Revenue

30.5multiple

median

High-growth SaaS (>25% NTM growth)

EV / NTM Revenue

6.7multiple

median

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

EV / NTM Revenue

3.8multiple

median

Low-growth SaaS (<15% NTM growth)

FCF Margin

18percent

median

Public SaaS companies

G&A Spend as % Revenue

16percent

median

Public SaaS companies

Gross Margin

76percent

median

Public SaaS companies

LTM Growth Rate

14percent

median

Public SaaS companies

NTM Growth Rate

11percent

median

Public SaaS companies

Net Retention Rate

108percent

median

Public SaaS companies

Operating Margin

-4percent

median

Public SaaS companies

R&D Spend as % Revenue

24percent

median

Public SaaS companies

S&M Spend as % Revenue

38percent

median

Public SaaS companies