
- 08 April 2020
- Insights
COVID-19 triggers a significant market decline
Welcome to the latest edition of the Silverpeak Benchmark report – Application Software Sector, a review of key company valuation metrics in the US, UK and European application software sectors. By reviewing sector median averages, our aim is to provide a set of software industry benchmarks against which individual company performance can be measured.
This quarter, we’ve also created a COVID-19 index, analysing its impact on the Enterprise Value of various sub-sectors within our data set.
Report highlights
- The unprecedented COVID-19 pandemic has resulted in a U-turn of last quarter’s growing revenue multiples, which has also amplified the decline of EBITDA multiples across all categories. Europe, UK Small & Mid and US Vertical revenue multiples have all sunk to pre-2015 levels.
- US Horizontal revenue multiples have fallen dramatically since their immense growth of 22% last quarter. But, for the first time since mid-2017, US Horizontal EBITDA multiples are now higher than US SaaS multiples, despite having a 3% lower median EBITDA margin.
- US SaaS revenue multiples have crashed by 28%, to a similar level to Q2 2017, despite only a 1% decline in forecast revenue. In practice, most revenue guidance has been suspended. The multiples fall was amplified for EBITDA multiples, where they now lie at 23.7x, plummeting 40% since last quarter.
- Proportionate falls in revenue multiples have been greatest in the US. However, reduction in forecast growth is greatest for UK Small & Mid and Europe, both reducing by 1/3 to c.10%.

6 of 10 multiples reach record highs in Q4
READ MORE
US revenue multiples at record highs
READ MORE
UK cross-border Software & IT Services (SITS) deals dwindle
READ MORE
Bullish technology market catalyses strong recovery in multiples for US players
READ MORE
Silverpeak Benchmark Report FLASH APRIL 2020 UPDATE
READ MORE
Revenue growth forecast doubles from Q3 to Q4 for UK and European software
READ MORE