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Saa S Valuation Update January 2010


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Valuation analysis for pure play SaaS companies as of January 2010. Includes metrics on Enterprise Value, EV/Revenue, EV/EBITDA, Gross Margins, EBITDA MArgins, Revenue Growth Rates, and YoY Stock Market Returns

Saa S Valuation Update January 2010

  1. 1. SaaS Valuation Update January 2010 DevelopmentCorporate
  2. 2. Overview SaaS Valuation Update • There are few pure play public SaaS companies – 16 recognized by most analysts • Spread across multiple enterprise software markets • 4 Human Resources Related • 3 CRM • 2 each in Healthcare & Marketing • Public Relations, Spend Management, Customer Services, and Automotive Retail have one each • Median Valuation Metrics: • Enterprise Value/TTM Revenue: 3.12x • Enterprise Value/EBITDA: 26.6x • Gross Margin %: 68% • EBITDA %: 8.7% • TTM Revenue Growth Rate: 15.2% • YoY Stock Market Return: 72.3% NB all data cited in this report is based on Software Equity Group’s SaaS Index & reporting. Check out DevelopmentCorporate
  3. 3. Overview SaaS Valuation Update • Pure play SaaS is 3rd most valuable software category in terms of EV/Revenue • From an EV/EBITDA multiple perspective SaaS is 2nd most valuable category • SaaS has had highest TTM revenue growth rate of any category • 8 other software categories have had higher YoY stock market returns DevelopmentCorporate
  4. 4. Size Matters SaaS Valuation Update DevelopmentCorporate
  5. 5. EBITDA & Gross Margin % SaaS Valuation Consistent Update DevelopmentCorporate
  6. 6. Revenue Growth Rates SaaS Valuation Update Revenue growth rates are surprisingly not correlated with YoY stock market returns DevelopmentCorporate
  7. 7. EV Change Since Q309 SaaS Valuation Update HR & CRM firms have grown EV and YoY Stock Market Return significantly more than other verticals DevelopmentCorporate
  8. 8. About Us SaaS Valuation Update DevelopmentCorporate is a strategic corporate development advisory firm for enterprise and mid-market technology companies. We assist management teams, board of directors, and investors in updating their merger, acquisition, and divestiture strategies and then we provide tactical support for the implementation of those strategies. We also provide support for strategic initiatives such market assessments, competitive intelligence updates, product/service portfolio analysis, etc. Finally, we have significant experience in guiding large scale organizations through corporate restructurings to either take advantage of new market opportunities or respond to changes in market conditions. Twitter: @devcorporate Slideshare: DevelopmentCorporate