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.
- In contrast UK Small & Mid revenue multiples, which are now below Europe, are still down 40% Y.o.Y. while its median forecast annual revenue growth saw a significant decrease of two thirds to 1.7%.
- European revenue and EBITDA multiples look to have both recovered strongly in Q3. There was an uplift of 31% in the median EBITDA multiple in Europe to 20x, exceeding the 24-month average. Europe also showed the largest relative increase in median forecast revenue growth increasing to 7.5%.
- EBITDA multiples have increased to levels above the 24-month average for US Horizontal, Europe and UK Small & Mid. US SaaS and US Vertical EBITDA multiples are well below their peak, but were constant Q.o.Q, The median EBITDA margin has not changed significantly in Q3 for any category.
- HR Tech continues to outperform other sub-sectors in our Enterprise Value growth index. Other subsectors remained stable across the quarter, but median values showed signs of a downward trend in September.