SaaS Multiples down in Q1

Sammy Abdullah
3 min readApr 2, 2024

SaaS multiples had weakened in Q1 relative to Q4. Of the 109 publicly traded SaaS companies we follow, the median multiple was 5.72x revenue while the average was 7.27x. Multiples for SaaS companies growing above the median of 16% are far stronger: 8.66x on median and 10.21x on average. The data is below.

Additional observations are as follows:

The heyday of 2020 has not returned. 25% of companies are trading at 10x revenue or greater, whereas the peak was 60% in Q4 2020. Five companies trade above 20x whereas 35 traded above 20x in Q4 2020. Additionally, the gap between the average and median is 1.6x, meaning premium SaaS companies are getting slightly higher valuations, but that gap is tight relative to 2020 and 2021 when it was ~5.8x.

The stats. The median SaaS business had trailing twelve month revenue of $664mm, EBITDA of -$2mm, but positive operating cash flow of $98mm thanks to up-front collections on annual contracts. YOY growth is 16% on median. The median EBITDA margin is 0%. Debt is negligible. While 55 of the companies have negative EBITDA, only 23 have negative cash flow.

The trend. The chart below shows median revenue multiples we’ve collected since Q4 2014. During that period, the median SaaS multiple has ranged from 4.6x to 14.1x with an average of 7.9x.

Premium gets a premium. Premium SaaS businesses trade at premium multiples, but the number of premiums is shrinking. In the data set, 27 companies trade at greater than 10x+ revenue, 9 trade greater than 15x, and 5 trade greater than 20x.

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