cloudedjudgement.substack.com · 2025-09-12 · 265d

Clouded Judgement: Q2 2025 Cloud Software Earnings Analysis

Q2 2025 marked the strongest quarter for cloud software in 3 years, with companies achieving the highest YoY net new ARR growth in 5 years and 98% beating Q2 estimates. Median SaaS valuations stand at 5.0x NTM revenue overall, with high-growth companies trading at 23.0x, while operating metrics show median 12% NTM growth, 76% gross margin, 108% net retention, and 32-month CAC payback periods. The article provides comprehensive benchmarking across valuation multiples, operating metrics, and Rule of 40 analysis for the public SaaS cohort.

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Metrics in this report

CAC Payback Period

32months

median

Public SaaS companies, gross-margin adjusted

EV/NTM Revenue Multiple

5.0multiple

median

Public SaaS companies, all growth rates

EV/NTM Revenue Multiple

23.0multiple

median

High-growth SaaS (>25% NTM growth)

EV/NTM Revenue Multiple

7.3multiple

median

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

EV/NTM Revenue Multiple

4.2multiple

median

Low-growth SaaS (<15% NTM growth)

FCF Margin

18percent

median

Public SaaS companies

G&A Spend as % of Revenue

16percent

median

Public SaaS companies

Gross Margin

76percent

median

Public SaaS companies

Guidance Raise vs Consensus

0.8percent

median

Q3 2025 guidance, public SaaS, highest since Q1 2022

LTM Growth Rate

14percent

median

Public SaaS companies

NTM Growth Rate

12percent

median

Public SaaS companies

Net Retention Rate

108percent

median

Public SaaS companies

Operating Margin

-3percent

median

Public SaaS companies

R&D Spend as % of Revenue

24percent

median

Public SaaS companies

S&M Spend as % of Revenue

37percent

median

Public SaaS companies