A Cautious Market by Cledara's COO
As we progress through 2024, the SaaS industry continues to
navigate a landscape of uncertainty. This sentiment is underscored
by recent Q2 earnings reports, where 56% of publicly traded SaaS
companies have lowered their guidance for Q3 2024 earnings.
This cautious outlook contrasts with the market's earlier optimism,
which was fueled by expectations of multiple expansion due to
declining interest rates. However, the Sapphire Broad Software
Index shows that the median NTM revenue multiple for software
companies has declined from 5.6x in December to 4.7x in June
2024.
At Cledara, our own data reflects this cautious sentiment among
SaaS buyers. The Cledara SaaS Momentum Index, which measures
the trend in SaaS spending, has dropped to 102.05 as of July 2024,
down from 110.19 a year ago. While the index still indicates that
more companies are increasing their SaaS spend than decreasing
it, the marginal growth suggests a tightening market.
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