SaaStr Workshop Wednesdays: State of SaaS with Altimeter Capital Speaker: Jamin Ball Partner @ Altimeter Capital

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4. Introduction
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
● I’m a partner at Altimeter Capital
● We invest in both public and private markets
● Today I’ll discuss the “State of SaaS” as it relates to valuations, business
performance, and macro

5. Software Revenue Multiples
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

6. Growth Has Slowed
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
Using 2015 - 2020 (up until Covid) as the period of “long term average)
● Median multiple down
22% from long term
average (6.1x vs 7.8x)
● Median growth rate
down 49% from long
term average (13% vs
27%)
● 10Y is up 93% from
long term average (4.3%
vs 2.2%)

7. Software Growth Adjusted Revenue Multiples
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
Using 2015 - 2020 (up until Covid) as the period of “long term average)
● Growth adjusted
multiples are up 62%
from long term average
(0.45x vs 0.28x)

8. Software FCF Multiples
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
● FCF multiples are
down 8% from the
long term average
(36.7x vs 40.1x)

9. Recap on Software Multiples
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

10. Recent Software Performance
Source: Data set includes 70+ public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

11. Net New ARR Growth Starting to Rebound
Source: Data set includes 70+ public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

12. Additional Performance Metrics
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

13. Market Rewarding Efficient Growth
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
R^2 = 0.7
R^2 = 0.5
As of 9/10/21 Current

14. Rate Expectations Starting to Come Down
Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.

15. Dispersion: Not All Software Created Equal
Source: Data set includes 98 public software companies. Data sourced from Bloomberg, Pitchbook and company filings. As of 12/1/23
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
Historical Dispersion
Covid Anomaly
New Normal?

16. Takeaways
For illustrative purposes only. There is no assurance that any trends will continue or that any such trends will be profitable.
● Valuations today appear expensive relative to growth, profitability and interest
rates. I don’t expect a “bounce back” in public valuations
● Interest rates have been a headwind to valuations since the end of 2021. As
we head into 2024 it appears that rates will start to become a tailwind to
valuations (ie rates projected to fall)
● Current debate is do we have a hard or soft landing in 2024 (ie are rates
declining because economic growth is expected to deteriorate, or because
inflation is coming down and rates this high are no longer needed)