cloudedjudgement.substack.com · 2020-12-30 · 1982d

Clouded Judgement: Qualtrics S-1 Benchmarking & IPO Valuation Analysis

This article provides a comprehensive analysis of Qualtrics' S-1 filing, benchmarking its financial metrics against public SaaS peers and predicting an IPO valuation of $14B-$15B. The analysis reveals Qualtrics trades at a scale disadvantage relative to high-growth competitors, with below-average profitability, FCF margin, and CAC payback despite solid 25% NTM growth and 72% gross margins. Key findings include elevated S&M spend, negative FCF margins, and valuation multiples that should discount from mid-growth SaaS comparables due to profitability headwinds.

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Metrics in this report

FCF Margin (adjusted)

-14percent

Qualtrics LTM after adjusting for acquisition and IPO costs

Gross Margin

72percent

median

Qualtrics vs. public SaaS peers; top quartile is ~78%, median ~73%

LTM Revenue

723millions USD

Qualtrics; larger scale than typical SaaS IPO

NTM Revenue Growth

25percent

target

Qualtrics projected growth; positions company in high-end mid-growth bucket

SaaS Revenue Multiple - High Growth

30x NTM revenue

average

Companies growing >30% NTM in current market conditions

SaaS Revenue Multiple - Low Growth

7x NTM revenue

average

Companies growing <15% NTM in current market conditions

SaaS Revenue Multiple - Mid Growth

18x NTM revenue

average

Companies growing 15-30% NTM in current market conditions

Subscription Revenue

75percent

Percentage of Qualtrics total revenue for nine months ended Sept 30, 2020

TAM

60billions USD

Qualtrics total addressable market estimate for 2020