SaaS, or Software as a Service appears to be the new exciting kid on the block, quite often speaking a completely foreign language. Who is this kid… and what is ARPU, CAC and CMR?
Here at Clare Capital we have been doing financial modelling for several New Zealand SaaS companies (both public and private), during which, we have had a bit of a crash course in the world that is SaaS and would like to pass on some of what we have learnt.
[For those that live and breathe SaaS, feel free to point out anything we misrepresent, for everyone else feel free to contact us for more information].
As a sequel to last week’s post about What is the right EV/Revenue multiple? We thought we would follow this up with the same EV/Revenue & ACMR graph – but relating to the six NZX-listed Tech companies. This also coincides with the release of Wynyard Group’s and SLI Systems’ financial statements earlier this week.
ACMR is Annualised Committed Monthly Revenue – which is the most recent monthly revenues annualised. While the size of the bubble represents the company’s overall Enterprise Value.
Chart 1 – NZ Tech companies
This is a question often asked, and is a difficult one to answer. To help visualise the relationship between Enterprise Value (EV), Revenue (ACMR) and the commonly used multiple, EV/Revenue we have created the following charts comparing online companies.
NB: ACMR = Annualised Committed Monthly Revenue, which is the most recent monthly revenues annualised.
Understanding the charts:
Along with each company’s position on the chart representing EV/Revenue multiple in relation to Revenue, the size of the bubble represents the company’s overall EV.
Chart 1 – Low to Mid range ACMR companies
Chart 2 – High ACMR companies