SweetValueLab
Write for us

Software Board

24 US software companies on one set of formulas: growth plus cash margin against the Rule of 40 line, what the market pays per dollar of revenue, and how much of the cash flow is really stock — with three lights: dilution, deceleration, cash burn. Ranges and signals, no calls. New to software numbers? Start with how to value a software company; the formulas are printed below.

How to read this board
Board median EV / revenue10.2×five-year median 11.8× · −14%
Median Rule of 405321 of 24 above the line
Median revenue growth18%a year ago 15% · accelerating
Median SBC / revenue11%FCF margin 30% → 16% ex-SBC
Lights on9 of 24prices Oct 16, 2026 · TTM through Aug 31, 2026

Growth against cash

revenue growth on FCF margin · 21 of 24 above the line
Line
burning cash0%20%40%60%80%−40%−20%0%20%40%60%Rule of 40Microsoft (MSFT) · growth +18% · FCF margin +20% · Rule of 40 38 · SBC 4% of revenueMSFTOracle (ORCL) · growth +22% · FCF margin −40% · Rule of 40 -18 · SBC 8% of revenueORCLSalesforce (CRM) · growth +11% · FCF margin +34% · Rule of 40 46 · SBC 8% of revenueCRMAdobe (ADBE) · growth +12% · FCF margin +42% · Rule of 40 54 · SBC 8% of revenueADBEIntuit (INTU) · growth +14% · FCF margin +40% · Rule of 40 54 · SBC 10% of revenuePalantir (PLTR) · growth +79% · FCF margin +55% · Rule of 40 133 · SBC 14% of revenuePLTRPalo Alto Networks (PANW) · growth +24% · FCF margin +38% · Rule of 40 63 · SBC — of revenueCrowdStrike (CRWD) · growth +24% · FCF margin +29% · Rule of 40 53 · SBC 23% of revenueCRWDServiceNow (NOW) · growth +22% · FCF margin +31% · Rule of 40 53 · SBC 15% of revenueNOWFortinet (FTNT) · growth +19% · FCF margin +41% · Rule of 40 60 · SBC 4% of revenueSnowflake (SNOW) · growth +32% · FCF margin +22% · Rule of 40 54 · SBC 30% of revenueSNOWDatadog (DDOG) · growth +32% · FCF margin +29% · Rule of 40 61 · SBC 21% of revenueDDOGCadence (CDNS) · growth +15% · FCF margin +29% · Rule of 40 43 · SBC 9% of revenueSynopsys (SNPS) · growth +46% · FCF margin +30% · Rule of 40 76 · SBC 10% of revenueWorkday (WDAY) · growth +13% · FCF margin +28% · Rule of 40 41 · SBC 16% of revenueAutodesk (ADSK) · growth +18% · FCF margin +36% · Rule of 40 54 · SBC 9% of revenueVeeva (VEEV) · growth +17% · FCF margin +47% · Rule of 40 64 · SBC — of revenueRoper (ROP) · growth +11% · FCF margin +32% · Rule of 40 43 · SBC 2% of revenueTwilio (TWLO) · growth +18% · FCF margin +20% · Rule of 40 38 · SBC 11% of revenueZscaler (ZS) · growth +25% · FCF margin +25% · Rule of 40 51 · SBC 25% of revenueCloudflare (NET) · growth +34% · FCF margin +15% · Rule of 40 49 · SBC 20% of revenueNETMongoDB (MDB) · growth +25% · FCF margin +24% · Rule of 40 49 · SBC 20% of revenueOkta (OKTA) · growth +11% · FCF margin +32% · Rule of 40 43 · SBC 16% of revenueVeriSign (VRSN) · growth +7% · FCF margin +62% · Rule of 40 69 · SBC — of revenueRevenue growth, trailing four quarters vs. the four before · y: FCF margin
Mega · revenue ≥ $20BLarge · $3–20BGrowth · < $3Ba light is onsize = enterprise valueAbove the line, growth and cash together clear it · the shaded band is burning cash

What you pay for growth

EV / revenue on revenue growth · the dashed line is the board median
0%20%40%60%80%0×10×20×30×40×board median 10.2×paying more ↑paying less ↓Microsoft (MSFT) · EV / revenue 12.0× · EV / gross profit 17.7× · growth +18%MSFTOracle (ORCL) · EV / revenue 7.0× · EV / gross profit 11.0× · growth +22%ORCLSalesforce (CRM) · EV / revenue 5.2× · EV / gross profit 6.7× · growth +11%CRMAdobe (ADBE) · EV / revenue 3.8× · EV / gross profit 4.2× · growth +12%ADBEIntuit (INTU) · EV / revenue 4.2× · EV / gross profit 5.2× · growth +14%Palantir (PLTR) · EV / revenue 76.2× · EV / gross profit 89.8× · growth +79%PLTR 76×Palo Alto Networks (PANW) · EV / revenue 22.7× · EV / gross profit 32.3× · growth +24%CrowdStrike (CRWD) · EV / revenue 43.0× · EV / gross profit 57.1× · growth +24%CRWD 43×ServiceNow (NOW) · EV / revenue 10.3× · EV / gross profit 13.7× · growth +22%NOWFortinet (FTNT) · EV / revenue 16.2× · EV / gross profit 20.1× · growth +19%Snowflake (SNOW) · EV / revenue 19.8× · EV / gross profit 29.5× · growth +32%SNOWDatadog (DDOG) · EV / revenue 22.0× · EV / gross profit 27.7× · growth +32%DDOGCadence (CDNS) · EV / revenue 15.2× · EV / gross profit 17.2× · growth +15%Synopsys (SNPS) · EV / revenue 10.1× · EV / gross profit 13.9× · growth +46%Workday (WDAY) · EV / revenue 4.7× · EV / gross profit 6.2× · growth +13%Autodesk (ADSK) · EV / revenue 6.5× · EV / gross profit 7.1× · growth +18%Veeva (VEEV) · EV / revenue 12.8× · EV / gross profit 17.0× · growth +17%Roper (ROP) · EV / revenue 6.1× · EV / gross profit 8.7× · growth +11%Twilio (TWLO) · EV / revenue 6.7× · EV / gross profit 13.8× · growth +18%Zscaler (ZS) · EV / revenue 9.4× · EV / gross profit 12.3× · growth +25%Cloudflare (NET) · EV / revenue 41.5× · EV / gross profit 57.2× · growth +34%NET 42×MongoDB (MDB) · EV / revenue 9.1× · EV / gross profit 12.5× · growth +25%Okta (OKTA) · EV / revenue 10.2× · EV / gross profit 13.0× · growth +11%VeriSign (VRSN) · EV / revenue 16.9× · EV / gross profit 19.1× · growth +7%Revenue growth, trailing four quarters vs. the four before · y: EV / revenue
Mega · revenue ≥ $20BLarge · $3–20BGrowth · < $3Ba light is onsize = enterprise valueUp-left pays for growth not yet shown; far right, high up is priced for it to continue · clipped at 40×

All 24 companies

grouped by scale · colours are thresholds, not a ranking · a row opens the company's card
CompanyPriceEV $BEV / RevEV / GPvs. 5y medianGrowthGross marginFCF marginRule of 40vs. line 40SBC / RevFCF ex-SBCShares YoYLights
Mega · revenue ≥ $20B
ADBEAdobe245.20983.8×4.2×−62% below+12%89%+42%54+14 pt8%+34%−8.1%
INTUIntuit325.15904.2×5.2×−58% below+14%81%+40%54+14 pt10%+31%−3.5%
CRMSalesforce240.702285.2×6.7×−18% below+11%77%+34%46+6 pt8%+26%−14.7%
MSFTMicrosoft529.053,99512.0×17.7×+1% above+18%68%+20%38−2 pt4%+16%−0.1%
ORCLOracle128.235047.0×11.0×−11% below+22%64%−40%-18−58 pt8%−48%+3.1%
Large · $3–20B
PLTRPalantir186.0346976.2×89.8×+235% above+79%85%+55%133+93 pt14%+41%+0.3%
SNPSSynopsys454.639510.1×13.9×−15% below+46%72%+30%76+36 pt10%+20%+18.9%
VEEVVeeva310.364412.8×17.0×+7% above+17%75%+47%64+24 pt——−1.3%
PANWPalo Alto Networks342.0026122.7×32.3×+79% above+24%70%+38%63+23 pt——+7.8%
DDOGDatadog247.118722.0×27.7×+30% above+32%80%+29%61+21 pt21%+8%+1.9%
FTNTFortinet169.1312216.2×20.1×+56% above+19%80%+41%60+20 pt4%+37%−4.3%
ADSKAutodesk239.90506.5×7.1×−31% below+18%91%+36%54+14 pt9%+27%−1.4%
SNOWSnowflake306.8410819.8×29.5×+3% above+32%67%+22%54+14 pt30%−8%+4.6%
CRWDCrowdStrike227.3923243.0×57.1×+1% above+24%75%+29%53+13 pt23%+6%+3.8%
NOWServiceNow141.9715110.3×13.7×−30% below+22%75%+31%53+13 pt15%+16%−0.9%
ZSZscaler207.38329.4×12.3×−27% below+25%77%+25%51+11 pt25%+1%+2.4%
CDNSCadence319.518915.2×17.2×−7% below+15%88%+29%43+3 pt9%+20%+0.8%
ROPRoper382.71506.1×8.7×−38% below+11%70%+32%43+3 pt2%+29%−5.4%
WDAYWorkday190.81484.7×6.2×−34% below+13%76%+28%41+1 pt16%+12%−7.4%
TWLOTwilio244.37376.7×13.8×+119% above+18%49%+20%38−2 pt11%+9%+0.0%
Growth · < $3B
VRSNVeriSign302.332916.9×19.1×+15% above+7%88%+62%69+29 pt——−3.1%
MDBMongoDB337.57259.1×12.5×−22% below+25%73%+24%49+9 pt20%+4%+1.1%
NETCloudflare296.3010441.5×57.2×+90% above+34%73%+15%49+9 pt20%−5%+2.0%
OKTAOkta187.263110.2×13.0×+76% above+11%78%+32%43+3 pt16%+15%−1.2%
24 of 24 shown · Rule of 40 = growth + FCF margin, in points · FCF ex-SBC = FCF margin − SBC / revenue · prices Oct 16, 2026 · financials TTM through Aug 31, 2026

Method and sources

the formulas the numbers use, verbatim

Rule of 40 = revenue growth + free-cash-flow margin, both in points. Revenue growth = the trailing four filed quarters ÷ the four before − 1; FCF margin = trailing FCF ÷ trailing revenue, from the cash-flow statement. The line is 40 by convention; the switch moves it to 30 or 50 and nothing else changes.

EV = last close × the newest quarter's diluted shares + total debt − cash & short-term investments. EV / revenue, EV / gross profit and EV / FCF divide it by the trailing figures. Five-year history: for each of the last twenty quarters, the EV at that quarter's close, shares and balance sheet ÷ that quarter's trailing revenue; the 25th / 50th / 75th percentiles, and "vs. 5y median" = current ÷ median − 1.

SBC / revenue = stock-based compensation (cash-flow statement) ÷ revenue; FCF ex-SBC = FCF margin − SBC / revenue, the cash margin if the shares handed out had been paid in cash. Shares YoY = the newest diluted count ÷ four quarters earlier − 1, buybacks netted. Deceleration compares growth with the same measure a year earlier (quarters 5–8 ÷ 9–12).

Colours (never a sort key): growth ≥25% / 10%–25% / <10% · FCF margin ≥25% / 0%–25% / <0% · Rule of 40 ≥40 / 25–40 / <25 · SBC ≤8% / 8%–20% / >20% · shares ≤0% / 0%–3% / >3%. Lights are on or off, no score: dilution = SBC above 20% of revenue or the share count up more than 5% in a year; deceleration = growth more than 10 points below a year earlier; cash burn = trailing FCF below zero.

TTM = the four newest filed quarters. An income quarter missing a required line, or with gross profit above revenue or negative, is dropped and the rest annualized (× 4/n); two failures and the company shows "data unavailable". Cash-flow quarters are checked separately (FCF must reconcile to operating cash flow + capex within 2%) and annualized on their own count; a zero or negative SBC line blanks the SBC figures only. Universe: US-listed software companies, the 24 largest by market cap; marketplaces, ad tech, payments, outsourced services, bitcoin treasuries and GPU clouds excluded. Excluded by rule: UBER (marketplace: take-rate economics, not subscription software); ADP (outsourced payroll services priced on employees paid, not software seats); APP (ad-tech: revenue is advertising spend passed through an auction); MSTR (bitcoin treasury: the equity prices the coin, not the software); XYZ (payments: transaction volume, not subscription software); CRWV (GPU cloud: capex-driven infrastructure, not software margins); STRC (bitcoin treasury: the equity prices the coin, not the software); STRK (bitcoin treasury: the equity prices the coin, not the software); ABNB (marketplace: take-rate economics, not subscription software); TTD (ad-tech: revenue is advertising spend passed through an auction); PAYX (outsourced payroll services priced on employees paid, not software seats); STRF (bitcoin treasury: the equity prices the coin, not the software); NBIS (GPU cloud: capex-driven infrastructure, not software margins).

This run: every company had four usable quarters. Sources: FMP quarterly statements and EOD prices. Quantitative summary of public data, not investment advice; metrics are approximations, company-reported figures prevail.

The weekly

The week's 13F filings, insider trades and earnings, plus new research on the site. One email a week, no account.

Questions

Why not P/E for software companies?

Half the board has no meaningful GAAP earnings and the other half's are shaped by stock-based compensation and acquired-intangible amortization. Revenue, gross profit and cash flow are what the business actually shows, so the board prices on those: EV to revenue and gross profit, and the Rule of 40, which adds growth to the cash margin.

What is the Rule of 40, and why can the line move?

Revenue growth plus free-cash-flow margin, both in percentage points. Forty is the convention for a software business earning its multiple: a company can be growing fast and burning cash, or growing slowly and very profitable, and clear the same bar. The switch moves the line to 30 or 50 to show how much the picture depends on where the bar is drawn; nothing else changes.

Why subtract stock-based compensation from free cash flow?

Stock paid to employees is an expense settled in shares instead of cash. Free cash flow that only exists because salaries were paid in stock is not cash the shareholder keeps; the shares dilute instead. FCF ex-SBC is the cash margin if that stock had been paid in cash, and the dilution light comes on when SBC exceeds 20% of revenue or the share count grows more than 5% in a year.

Which companies are on the board, and how often does it update?

US-listed software companies, the twenty-four largest by market cap, grouped by revenue scale; marketplaces, ad tech, payments, outsourced services, bitcoin treasuries and GPU clouds that FMP files under software are left out because they are not priced as software. Prices refresh every night, financials when a new quarter is filed; a quarter that fails the row checks is dropped and the rest annualized, and the page says so.

Points above or below the line, and a multiple above or below a company's own five-year median, describe two numbers on a day and are not investment advice. The longer version, with a worked example: How to value a software company: the Rule of 40, EV/revenue and the cost of stock.