Q3 2022 Software Industry Trends

Q3 2022 Key Highlights

The largest deal in Q3 2022 was Adobe’s announced acquisition of Figma, a web-first collaborative design platform, for $20 billion. This was the highest value transaction ever made by Adobe, surpassing its acquisition of marketing automation software company Marketo in 2018 for $4.8 billion.

There were 437 financially sponsored transactions in the 1st 3 Quarters of 2022 with an aggregate value of $128.4 billion, representing 23 percent of the total volume and 34 percent of the total value, respectively.

Q3 2022 Key Trends

Total transaction volume in the 1st 3 Quarters of 2022 decreased by 14 percent over the 1st 3 Quarters of 2021, from 2,206 to 1,899.

Total transaction value in the 1st 3 Quarters of 2022 increased by 35 percent over the 1st 3 Quarters of 2021, from $280.7 billion to $377.6 billion.

Multiples & Value Trends

The median revenue multiple on a year-over-year basis declined by 28 percent, from 5.0x to 3.6x.

The median EBITDA multiple on a year-over-year basis improved by 13 percent, from 15.9x to 17.9x.

Top Ten Deals Through Q3 2022

The top ten deals by value have seen two new additions since our half year report: the previously mentioned Figma acquisition; and Vista Equity Partners’ announced acquisition of Avalara, a provider of automated tax compliance software for businesses, for $8.2 billion.

These two transactions, with an aggregate value of $28.2 billion, represented 42 percent of Q3 2022 transaction value.