saa s valuation update january 2010
DESCRIPTION
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 ReturnsTRANSCRIPT
www.developmentcorporate.com DevelopmentCorporate
SaaS Valuation UpdateJanuary 2010
Overview
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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
http://www.softwareequity.com/research_flash_reports.aspx
Overview
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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
Size Matters
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SaaS Valuation
Update
EBITDA & Gross Margin % Consistent
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SaaS Valuation
Update
Revenue Growth Rates
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SaaS Valuation
Update
Revenue growth rates are surprisingly not correlated with
YoY stock market returns
EV Change Since Q309
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SaaS Valuation
Update
HR & CRM firms have grown EV and YoY Stock Market Return significantly
more than other verticals
About Us
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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.
www.developmentcorporate.comjohn.mecke@developmentcorporate.comTwitter: @devcorporateSlideshare: http://www.slideshare.net/Devcorporate