Clouded Judgement 10.9.20

Every week I’ll provide updates on the latest trends in SaaS valuations, earnings announcements, and highlight any significant news. Follow along to stay up to date!

Highlight of the Week - ServiceNow - “The Work Survey”

Great report from ServiceNow (link here) highlights just how early we are into digital transformations. Digital workflows will be the way of the future, yet 60% of execs say their companies still do not have a fully integrated system to manage digital workflows. Lots of runway for SaaS businesses enabling digital transformations!

Top 10 EV / NTM Revenue Multiples

Top 10 Weekly Share Price Movement

Update on Multiples

SaaS businesses are valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue. In the buckets below I consider high growth >30% projected NTM growth, mid growth 15%-30% and low growth <15%

Overall Stats:

  • Overall Median: 16.1x

  • Top 5 Median: 43.7x

  • 3 Month Trailing Average: 14.2x

  • 1 Year Trailing Average: 11.3x

Bucketed by Growth:

  • High Growth Median: 32.6x

  • Mid Growth Median: 17.2x

  • Low Growth Median: 9.5x

Operating Metrics

  • Median NTM growth rate: 19%

  • Median LTM growth rate: 31%

  • Median Gross Margin: 74%

  • Median Operating Margin (15%)

  • Median FCF Margin: 4%

  • Median Net Retention: 116%

  • Median CAC Payback: 32 months


  • Alteryx announced an increase in guidance for Q3 revenue (quarter ending September 30th). Current guidance is now $126M - $128M, up from $111M - $115M (previous guidance). They also announced Mark Anderson will become the new CEO. Mark is currently on the board of Alteryx, and previously served as President of Palo Alto Networks

  • Okta announced a host of updates at their Showcase virtual conference including 1) A new partnership with Salesforce, 2) the launch of their Customer Identity Workflows product that makes user identity extensible across the entire software stack with low-code options for developers through Okta Hooks or using drag and drop tooling for non-technical business units. 3) Updates to the Okta Devices SDK that allows developers to enable paswordless authentication through branded push notifications with biometric capabilities

  • nCino announced a $483M follow-on offering. The transaction was all secondary (shareholders were the ones selling, the company issued no new shares and received no proceeds). They originally targeted 5.5M shares, but upsized the offering due to demand to 6.7M shares, and priced at $72 / share

  • Atlassian released the results of a detailed study on the impact of remote work environments

  • Salesforce Ventures launched their second $100M Impact Fund

Comps Output

Rule of 40 shows LTM growth rate + LTM FCF Margin. FCF calculated as Cash Flow from Operations - Capital Expenditures