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.
We have revised and expanded the constituent companies in the data set for Q3 2019 and have reset the historical data.
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 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.
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