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.
- Both revenue and EBITDA valuation multiples rise for nearly all US software categories in Q2 2021, recovering from the dip last quarter. In Europe and the UK, valuation metrics continue to rise, with the UK EBITDA multiples diverging away from European multiples, now 40% higher.
- Revenue multiples for US Vertical reach an all time high, diverging from US Horizontal by 27%. US SaaS application software companies fail to recover to the highs reached at the end of 2020. In contrast, median revenue multiples for UK Small & Mid and European software companies have continued to increase and both reached all time highs in Q2 2021.
- EBITDA multiples rose in Q2 for every category except US vertical. Both UK Small & Mid and European software companies outperformed the US software companies both in terms of Q.o.Q. and Y.o.Y. growth, with the UK Small & Mid up 110% Y.o.Y. EBITDA margins and forecast annual revenue remained stable across most categories.
- The Enterprise Values Index rose across 3 of 5 the sub sectors with HR Tech, Fintech and Cybersecurity increasing in value. HR Tech continues to outperform other verticals and records the largest increase of the quarter. Fintech shows its largest increase moving to its highest level since January 2019.