Q3 2023 Software Industry Trends

Q3 2023 Key Highlights

The largest deal in Q3 2023 was Cisco’s announced acquisition of Splunk, a cybersecurity and observability leader, for $29.9 billion.

There were 399 financially sponsored transactions in the 1st 3 Quarters of 2023 with an aggregate value of $89.33 billion, representing 25 percent of the total volume and 51 percent of the total value, respectively.

Q3 2023 Key Trends

Total transaction volume in the 1st 3 Quarters of 2023 decreased by 18 percent over the 1st 3 Quarters of 2022, from 1,925 to 1,581.

Total transaction value in the 1st 3 Quarters of 2023 decreased by 67 percent over the 1st 3 Quarters of 2022, from $422.46 billion to $141.15 billion.

Multiples & Value Trends

The median revenue multiple on a year-over-year basis declined by 8 percent, from 3.7x to 3.4x.

The median EBITDA multiple on a year-over-year basis fell by 24 percent, from 17.9x to 13.6x.

Top Ten Deals Through Q3 2023

The top ten deals by value have seen four new additions since our half year report: the previously mentioned Splunk acquisition, TPG Capital and Francisco Partners’ acquisition of New Relic, Thales’ acquisition of Imperva, and Thoma Bravo’s acquisition of NextGen Healthcare.