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Looking At The Metrics Of SaaS’s Superstars

We’ve spent a lot of time over the years here at Crunchbase News looking at the value of revenue.

Things like this year’s enterprise value divided by revenue, trailing free cash flow margins, and run rate revenue growth (in percentage terms), along with gross margin.

As these are our favorite things, we pulled the numbers from every company on the list with a current enterprise value (a metric similar to market capitalization) of 20 times or greater than its expected 2019 “run rate revenue,” to use the officially listed term.

Then we simply averaged the metrics from each company that made the cut (not weighted by market cap or revenue scale, let’s be kind to ourselves on a Monday) to get aggregate results from the small cohort.

19 percent Run Rate Revenue Growth: 48 percent

So, if you had a 5 percent FCF margin and, say, 35 percent growth, you would earn an efficiency score of 40.

Summarizing, the most richly-valued public SaaS and cloud companies in revenue terms have FCF margins of around 20 percent, grow at about 50 percent, have very strong efficiency scores, and sport somewhat average gross margins.

The only surprise in the data was that final result; it was easy to presume that the SaaS companies with the strongest revenue multiples would sport higher average gross margins.

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