Change in Cash and Liquidity Ratios for SaaS Vendors between Q2 and Q3
In this issue of News from the Operating Front, we take a look at cash and liquidity ratios for 10 publicly traded SaaS vendors. We thought it would be interesting to compare Q2 2008 results with those for Q3 2008 to see how companies are being affected by the changing economic conditions. Despite some seasonality in the differences between Q2 and Q3 numbers, it is interesting to compare different actions companies are taking to conserve cash and preserve liquidity.
Some interesting developments that emerged from this comparison are as follows:
All the sample companies grew revenue from Q2 to Q3, with the exception of DealerTrak, which sells a SaaS application to automotive dealers.
Most companies also increased operating expense slightly in Q3, reflecting normal operations concurrent with increased revenue, except Rightnow Technologies and DealerTrak.
Cash and cash equivalents for most of the companies appear to be in strong shape. One exception is Ultimate Software, with only $15M in cash and a quarterly operating loss of $4M at the end of Q3.
There seems to be a fair amount of movement in cash flows across investing and financing activities.
Overall, most companies look fairly well positioned to ride out an uncertain market in 2009.
We invite you to make your own conclusions when reviewing the report and feel free to share your thoughts about liquidity going into 2009 with us at lauren@opexengine.com.
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