Nov 30, 2024
This S1 analysis from Meritech went viral due to the (compounding!) IPO ratchet that ServiceTitan are subject to after the Series H funding they took 18 months ago. About halfway down there’s some handy benchmarks for median/top decile pre-IPO performance in vertical SaaS, I’ve pocketed them for reference (maybe they’ll come in handy one day!), so I thought I’d reproduce them here:
| Performance by EV / ARR Percentile | Top Decile | Median | ServiceTitan |
|---|---|---|---|
| Financial Metrics | |||
| Implied ARR ($M) | $2,707 | $923 | $772 |
| % YoY Implied ARR Growth | 28% | 17% | 24% |
| Net Dollar Retention | 118% | 110% | 110% |
| Implied ARR / FTE ($K) | $589 | $356 | $269 |
| LTM Implied Payback Period (Months) | 20.5 | 31.5 | 21.4 |
| LTM Implied Magic Number | 0.8 | 0.5 | 0.8 |
| LTM Gross Margin | 81% | 78% | 70% |
| LTM Sales & Marketing % of Revenue | 23% | 30% | 27% |
| LTM Research & Development % of Revenue | 14% | 17% | 27% |
| LTM General & Administrative % of Revenue | 9% | 12% | 14% |
| LTM Operating Income / (Loss) Margin | 26% | 15% | 2% |
| LTM FCF Margin | 25% | 15% | (2%) |
| LTM Rule of 40 | 46% | 34% | 24% |
| Trading Metrics | |||
| 12-Month % Share Price Change | 69% | 20% | - |
| Market Capitalization ($M) | $71,096 | $5,746 | - |
| Implied ARR Multiple | 19.4x | 6.6x | - |
| NTM Revenue Multiple | 17.4x | 6.0x | - |
| Multiple of Money Return from IPO | 7.8x | 1.6x | - |
| IRR from IPO Price | 34% | 15% | - |