US EBITDA multiples reach record highs but revenue multiples down across the board

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.

Report highlights

  • US SaaS revenue multiples have been peaking since March 2019 but are showing signs of a potential downturn occurring in Q4 2019, supported by their 7% drop in multiples since Q2. However, their median EBITDA margin has been outperforming the other categories, rising 1.4% versus their average 2% decline.
  • US Horizontal revenue multiples took a nose dive, falling 11% from last quarter; effectively ending the period, from Q3 2018, in which it was consistently above US Vertical.
  • UK Small & Mid revenue multiples have been stagnant since 2015 and their EBITDA multiples have been slowly falling; not recovering from their 7x plunge in Q4 2018.
  • European companies did not experience a decline themselves, instead growing 0.6%, despite the bear-ish market, where there was an average fall of 7% in revenue multiples across the other 4 categories.

Silverpeak Benchmark Report Q3_2019

US SaaS multiples blast previous high out of the water

Welcome to the latest edition of the Silverpeak Benchmark report – Application Software, 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.

Report highlights

  • US SaaS median revenue multiples have continued to rise, surpassing their previous quarter end, 8.2x, by 7%; whilst also reaching an all time high of 9.4x during the quarter
  • UK Small & Mid median revenue multiples were recovering, closing 6.7% higher than the previous quarter; however, they are still 10% lower than the same quarter last year (3.9x)
  • European companies continue to have the lowest valuations, with no sign of this trend changing any time soon

Silverpeak Benchmark Report Q2_2019_Final