In a recent revelation, Databricks has announced that it recorded revenue of more than $1 billion in the financial year ended January 31. This is not surprising given the company’s history of rapid growth. However, the numbers are indeed impressive, especially considering we’ve been tracking this company for a while.
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Databricks has consistently demonstrated its ability to scale rapidly. It reached ARR of $600 million when it raised a massive round in August 2021, crossed the $800 million ARR threshold at the end of 2021, and last August, reached the $1 billion ARR milestone. However, as ARR is more of a forward-looking metric, the fact that Databricks managed to generate a full billion dollars in revenue is indeed a feat.
Today, we’re nearly half a year into the new financial year, and it’s essential to consider how this growth will continue. As we know, Databricks’ trailing revenues came to $1 billion last year, it is simple to infer that the company’s end-of-year annualized run-rate revenue and ARR were above the $1 billion mark.
Databricks’ ARR Multiple: A Closer Look
As we’ve discussed earlier, ARR is more forward-looking than an annualized quarter. This means that Databricks’ ARR multiple is now comfortably less than 38x. If the company’s ARR has reached $1.25 billion since then, its multiple would be around the 30x mark.
These figures grow even more attractive if we compare Databricks’ most recently reported 409a valuation of $31 billion instead of its last private valuation. Even at 30x, Databricks’ multiple would be quite a bit above the median revenue multiple of the most richly valued public software companies.
The Journey to Harmonization
Databricks is getting closer to harmonizing its historical valuation with current market norms. A little more growth and help from rising multiples, and the company could go public safely – especially if it targets a $31 billion market cap.
Databricks is more than a financial story; it’s been quite the journey. We’ll continue to monitor this company’s progress and see how its valuation aligns with the public markets.
Topics
- Databricks
- EC Enterprise Applications
- EC Market Analysis
- EC venture capital
- Enterprise
- Late-stage startup valuations
- Startups
- The Exchange
Alex Wilhelm is a senior reporter for TechCrunch covering the markets, venture capital and startups. He’s also the founding host of TechCrunch’s Webby Award-winning podcast Equity.
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