3Q17 SaaS Public Market EBITDA Margins

Our 3Q17 SaaS Public Market Snapshot includes operational and financial performance metrics for all publicly traded SaaS companies. This includes median EBITDA margin, TTM revenue growth, operating ratios, the Rule of 40% analysis, public market multiples by product category, and more…

SaaS Public Market EBITDA Margin Highlights:

  • The median public SaaS company EBITDA margin was -5.4% in 3Q17, and has been steadily trending toward positive territory since 4Q14. This quarter marks one of the highest EBITDA margins SaaS companies have posted in the past 13 quarters.
  • While the majority of the SEG SaaS Index continues to post GAAP losses (61.5% in 2Q17) due to revenue recognition requirements, approximately 77% of the index generated positive cash flow from operations (CFO) in Q3, up from 62% a year ago.
  • Select public SaaS companies posting negative EBITDA margin while generating positive CFO during Q3 include: Workday, HubSpot, Zendesk, Cornerstone OnDemand, Atlassian, and Proofpoint.

To view additional information on EBITDA margins, see page 7 in our 3Q17 SaaS Public Market Snapshot.

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