SaaS multiples just broke 7.0x

 

We monitor the revenue multiples of publicly traded SaaS companies closely, using these revenue multiples to drive our view on valuation.  Although one could argue it’s not optimal to use public companies to determine valuation on Series A+ companies (it’s not), in our view public market multiples are the only honest and transparent data.  Looking at M&A or the fundraising of peers is subject to too much selection bias (no one reports M&A or raises that weren’t spectacular) and outright exaggeration (when they do report it, they lie). 

 

Recently, public SaaS companies hit a new milestone they haven’t seen in a long time: the median and average revenue multiple is now ~7.0x.  Specifically, the average is 7.07x and median is 6.91x for the 74 publicly traded SaaS companies we follow.  The data is below. 

 

    TTM TTM  TTM    Market         Q2 2017 Q1 2017 Q4 2016 Q3 2016 Q2 2016 Q1 2016
Name Ticker Revenue EBITDA FCF   Cap Debt Cash EV Calc   EV/Rev EV/Rev EV/Rev EV/Rev EV/Rev EV/Rev
2U TWOU $239 -$20 -$14   $2,840 $15 $37 $2,818   11.78x 10.31x 8.59x 6.43x 8.91x 6.52x
Athenahealth, Inc. ATHN $1,150 $128 $169   $4,950 $280 $71 $5,159   4.49x 5.04x 4.29x 4.23x 5.07x 5.26x
Bazaarvoice, Inc. BV $203 -$3 $15   $400 $27 $85 $343   1.69x 1.69x 1.52x 1.77x 2.26x 1.27x
Benefitfocus, Inc. BNFT $248 -$6 -$9   $973 $112 $59 $1,026   4.13x 4.87x 3.84x 4.03x 5.54x 5.34x
Box, Inc. BOX $453 -$118 $7   $2,870 $83 $165 $2,788   6.16x 5.87x 5.04x 5.05x 5.27x 4.39x
BroadSoft, Inc.  BSFT $355 $24 $60   $1,550 $208 $368 $1,390   3.92x 3.61x 3.38x 3.68x 4.21x 4.10x
Castlight Health, Inc.  CSLT $115 -$49 -$26   $545 $6 $96 $454   3.94x 4.17x 2.97x 4.26x 3.47x 3.54x
Cornerstone OnDemand, Inc. CSOD $445 -$45 $41   $2,300 $243 $310 $2,233   5.02x 5.17x 4.86x 5.75x 6.51x 5.58x
Five9, Inc.  FIVN $180 $2 $5   $1,210 $46 $57 $1,199   6.66x 7.01x 5.58x 4.80x 5.58x 3.67x
Hortonworks, Inc. HDP $217 -$223 -$53   $1,140 $0 $72 $1,068   4.92x 3.89x 3.17x 2.62x 2.49x 3.85x
HubSpot, Inc. HUBS $318 -$35 $35   $2,760 $290 $492 $2,557   8.04x 8.59x 7.55x 6.41x 8.56x 7.32x
IntraLinks Holdings, Inc. IL --- --- --- --- --- --- --- ---   --- --- --- 2.78x 2.17x 1.72x
Jive Software, Inc. JIVE --- --- --- --- --- --- --- ---   --- --- 1.16x 1.19x 1.12x 0.93x
Lifelock LOCK --- --- --- --- --- --- --- ---   --- --- --- 3.24x 2.24x 1.66x
LivePerson Inc. LPSN $216 $8 $15   $816 $0 $54 $761   3.53x 3.43x 1.56x 1.68x 1.86x 1.47x
LogMeIN, Inc. LOGM $618 $128 $221   $5,860 $0 $286 $5,575   9.03x 9.48x 15.22x 7.16x 6.83x 4.64x
Marin Software, Inc. MRIN $86 -$12 $2   $77 $3 $33 $48   0.55x 0.17x 0.45x 0.56x 0.59x 0.47x
MobileIron, Inc. MOBL $172 -$50 -$1   $329 $0 $89 $240   1.40x 1.92x 1.80x 1.66x 2.03x 1.03x
New Relic, Inc. NEWR $285 -$47 $33   $2,620 $0 $227 $2,393   8.40x 8.93x 7.77x 6.09x 8.69x 6.56x
Proofpoint, Inc. PFPT $442 -$33 $135   $4,020 $378 $429 $3,968   8.97x 8.36x 8.44x 8.93x 9.85x 8.10x
Qualys, Inc. QLYS $212 $52 $83   $1,940 $0 $279 $1,661   7.85x 6.08x 5.54x 5.00x 6.25x 4.99x
RealPage, Inc. RP $611 $91 $156   $3,300 $396 $325 $3,371   5.52x 5.50x 5.12x 4.52x 4.16x 3.67x
RingCentral, Inc. RNG $433 -$13 $32   $3,050 $0 $167 $2,883   6.66x 6.10x 4.99x 4.00x 4.72x 4.00x
salesforce.com, Inc.  CRM $9,390 $464 $2,420   $68,230 $2,580 $3,500 $67,310   7.17x 0.65x 7.18x 6.22x 6.65x 8.03x
ServiceNow, Inc. NOW $1,630 -$32 $546   $19,770 $1,140 $1,690 $19,220   11.79x 0.81x 10.38x 9.50x 10.68x 10.09x
Splunk, Inc. SPLK $1,070 -$284 $212   $9,730 $81 $1,080 $8,731   8.16x 7.24x 7.64x 7.15x 8.66x 9.26x
SPS Commerce, Inc. SPSC $207 $23 $28   $964 $0 $159 $806   3.90x 4.04x 4.51x 5.71x 6.39x 4.66x
The Ultimate Software Group, Inc. ULTI $861 $62 $183   $5,520 $10 $111 $5,419   6.30x 8.08x 7.36x 7.15x 8.32x 8.55x
Veeva Systems Inc. VEEV $617 $155 $223   $7,830 $0 $725 $7,105   11.51x 14.18x 12.02x 10.15x 10.88x 9.37x
Wix.com Ltd. WIX $336 -$39 $66   $3,110 $1 $185 $2,926   8.71x 7.32x 10.61x 6.72x 7.11x 4.25x
WorkDay, Inc. WDAY $1,850 -$230 $374   $21,610 $548 $2,100 $20,058   10.84x 11.47x 0.12x 8.46x 12.37x 11.95x
Zendesk, Inc. ZEN $364 -$87 $37   $2,820 $0 $240 $2,580   7.09x 7.88x 7.74x 6.64x 10.18x 8.36x
Secureworks SCWX $456 -$25 $6   $1,020 $0 $98 $922   2.02x 1.79x 1.41x 1.83x 2.27x 3.37x
Appfolio, Inc. APPF $124 $5 $21   $1,570 $0 $32 $1,538   12.39x 10.15x 8.00x 7.73x 7.01x 5.43x
Atlassian Corporation TEAM $620 -$16 $199   $7,990 $0 $550 $7,440   12.00x 12.13x 11.62x 9.48x 12.55x 9.65x
Twilio TWLO $337 -$35 $1   $2,830 $0 $289 $2,541   7.55x 7.70x 7.73x 8.34x 23.42x ---
Instructure INST $134 -$47 -$33   $965 $0 $26 $939   7.03x 7.37x 5.31x 4.71x 7.06x 5.28x
Mindbody, Inc MB $160 -$9 $4   $1,250 $15 $224 $1,041   6.52x 6.21x 7.26x 6.25x 5.91x 4.06x
Shopify SHOP $509 -$34 $3   $11,910 $0 $932 $10,978   21.57x 19.60x 14.57x 10.36x 12.58x 9.40x
Xactly XTLY --- --- --- --- --- --- --- ---   --- 4.88x 3.50x 3.44x 4.85x 3.39x
Nutanix NTNX $846 -$310 $0   $3,710 $0 $349 $3,361   3.97x 3.25x 3.80x 6.48x --- ---
Apptio APTI $174 -$22 -$1   $696 -$1 $124 $571   3.28x 3.54x 2.22x --- --- ---
Blackline BL $148 -$13 -$2   $1,760 $0 $107 $1,653   11.14x 13.97x 11.58x --- --- ---
Coupa Software COUP $159 -$34 $3   $1,680 $0 $208 $1,472   9.25x 9.51x 7.76x --- --- ---
Okta OKTA $205 -$92 -$31   $2,810 $0 $213 $2,597   12.66x 10.28x --- --- --- ---
Alarm.com ALRM $298 $47 $34   $2,090 $73 $69 $2,094   7.03x 6.41x --- --- --- ---
Alteryx Inc AYX $106 -$21 $4   $1,130 $0 $153 $977   9.19x 10.58x --- --- --- ---
Amber Road AMBR $76 -$11 -$2   $204 $23 $11 $216   2.83x 3.52x --- --- --- ---
Appian Corporation APPN $146 -$26 -$1   $1,380 $0 $78 $1,302   8.92x 8.54x --- --- --- ---
Blackbaud BLKB $757 $132 $159   $3,990 $388 $18 $4,360   5.76x 6.27x --- --- --- ---
Callidus Software CALD $228 -$8 $31   $1,680 $0 $172 $1,508   6.61x 6.45x --- --- --- ---
Channel Advisors ECOM $118 -$5 $5   $295 $1 $58 $238   2.01x 1.85x --- --- --- ---
Cloudera CLDR $310 -$360 -$82   $2,220 $0 $395 $1,825   5.90x 7.21x --- --- --- ---
Ebix EBIX $321 $114 $84   $1,940 $326 $81 $2,185   6.80x 6.55x --- --- --- ---
Ellie Mae ELLI $394 $82 $114   $2,950 $0 $334 $2,617   6.65x 6.70x --- --- --- ---
Everbridge Inc EVBG $89 -$11 $9   $712 $0 $45 $667   7.49x 7.50x --- --- --- ---
FireEye FEYE $730 -$161 -$7   $3,070 $761 $871 $2,960   4.05x 3.45x --- --- --- ---
HealthStream HSTM $238 $24 $47   $752 $0 $116 $637   2.67x 2.67x --- --- --- ---
J2 Global JCOM $990 $384 $262   $3,570 $1,240 $331 $4,479   4.53x 5.08x --- --- --- ---
Kinaxis KXSCF $126 $22 $33   $1,510 $0 $150 $1,360   10.83x 11.18x --- --- --- ---
Medidata Solutions MDSO $509 $77 $106   $4,650 $271 $367 $4,554   8.95x 8.60x --- --- --- ---
Mimecast MIME $203 $5 $35   $1,630 $14 $112 $1,532   7.54x 7.88x --- --- --- ---
Mulesoft MULE $235 -$54 $1   $2,570 $0 $256 $2,314   9.85x 10.92x --- --- --- ---
NantHealth NH $98 -$116 -$84   $490 $193 $93 $590   6.01x 5.68x --- --- --- ---
Paycom Software PAYC $383 $74 $100   $4,490 $35 $68 $4,457   11.64x 11.46x --- --- --- ---
Paylocity Holding PCTY $300 $19 $62   $2,440 $0 $103 $2,337   7.79x 7.89x --- --- --- ---
Q2 Holdings QTWO $173 -$17 -$4   $1,680 $0 $79 $1,601   9.28x 9.43x --- --- --- ---
Tabula Rasa Healthcare TRHC $109 $2 $7   $498 $1 $3 $497   4.56x 2.63x --- --- --- ---
Talend TLND $126 -$25 $5   $1,140 $0 $95 $1,045   8.26x 8.57x --- --- --- ---
The Trade Desk TTD $252 $64 $40   $2,360 $27 $116 $2,271   9.03x 9.65x --- --- --- ---
Upland Software UPLD $83 $9 $9   $438 $72 $57 $453   5.48x 6.90x --- --- --- ---
Workiva WK $192 -$32 $19   $875 $20 $73 $823   4.28x 4.10x --- --- --- ---
Yext YEXT $145 -$52 -$23   $1,190 $0 $127 $1,063   7.31x 7.42x --- --- --- ---
Zix ZIXI $63 $14 $15   $274 $0 $30 $244   3.86x 4.32x --- --- --- ---
Adobe Systems Inc ADBE $6,530 $2,140 $2,590   $72,530 $1,890 $4,930 $69,490   10.64x --- --- --- --- ---
Microsoft Corp MSFT $89,950 $30,430 $39,510   $570,540 $88,800 $129,210 $530,130   5.89x --- --- --- --- ---
Mongo DB --- --- --- --- --- --- --- --- ---   --- --- --- --- --- ---
                                 
                                 
Average   $1,826 $443 $670   $12,731 $1,397 $2,156 $11,972   7.07x 6.78x 6.08x 5.42x 6.63x 5.26x
Median   $250 -$11 $20   $2,015 $1 $139 $1,960   6.91x 6.70x 5.43x 5.71x 6.32x 4.66x

 

Although the table below goes back to Q1 2016, frankly we haven’t seen multiples this rich since before 2008.  Now that multiples are at a 10+ year high, it’s a great time to raise money or sell your business if you’ve been considering it.  


 

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