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10X Revenue is roughly the market price for SAAS model companies. The general perspective is that Gross Margin is frequently in excess of 80%; in that world, yo
by vessenes 16y ago
10X Revenue is roughly the market price for SAAS model companies. The general perspective is that Gross Margin is frequently in excess of 80%; in that world, you can spend marketing and sales dollars with abandon and still make money.
By the way, this is roughly how SalesForce is valued -- they turn a very small profit (100 or so P/E), and roughly an 8 to 10x P/R. I think of those prices as 'sold on the growth vision' but not egregious.
- r00fus 16y agoSo Zynga have $1B revenue/yr by your metric? I somehow doubt they're that high... so hence the more unrealistic multiple based on other unreal valuations (ie, comps).
- adamt 16y agoVenturebeat claims Zynga'a 2010 revenues were $850m (http://venturebeat.com/2011/02/17/zynga-funding-10-billion http://venturebeat.com/2011/02/17/zynga-funding-10-billion). Just shy if a billion but given growth quite conceivable that they did more than $250m in last quarter ($1B annualised) Interesting to compare and contrast market cap versus EA and Activison.