Squaring Databricks' 2021 Valuation After Crossing a $1 Billion Annual Run Rate

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Enterprise Software Company Hits Milestone After Recent Funding Round

Databricks, a leading enterprise software company focused on data and analytics, has announced that it has surpassed a $1 billion annual revenue run rate. This milestone comes after the company raised a massive $1.6 billion round last August at a valuation of $38 billion.

Historical Context

The company’s growth trajectory can be tracked through its regular disclosures of revenue numbers. Databricks previously announced that it had cleared the $600 million annual recurring revenue (ARR) mark in its Series H funding round. By the end of 2021, the company disclosed that it crossed $800 million in ARR.

Growth Rate and Valuation

The timing of the new number is somewhat vague, with Databricks confirming to TechCrunch that it surpassed the 10-figure revenue run rate milestone in recent months but unable to provide a more precise timeline. Despite this uncertainty, we can still analyze the company’s growth rate and valuation.

Using historical data from Databricks’ disclosed revenue results, we can infer its growth rate. However, due to the company’s limited disclosure, we must rely on estimates. Assuming an 80% pace of revenue growth in 2021, as previously reported by Databricks, we can estimate the company’s current annualized revenue run rate.

Mathematical Estimates

By applying the company’s present-day run rate growth rate to the ARR figure disclosed around the end of 2021, we can estimate that Databricks could reach around $1.44 billion in annual run rate terms by the end of 2022.

At this revenue pace, the company’s top-line multiple would decline to 26.4x at the end of 2022. This is comparable to Snowflake’s current revenue multiple, a company growing at a similar pace to Databricks today.

Valuation and Market Comparison

Databricks’ valuation can be compared to other companies in the enterprise software space. While the company has not announced plans for an initial public offering (IPO), its valuation is likely to remain under scrutiny as it continues to grow.

Conclusion

Databricks’ achievement of a $1 billion annual revenue run rate is a significant milestone for the company. As it continues to grow, its valuation and market position will remain under scrutiny.

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Squaring Databricks’ 2021 Valuation After Crossing a $1 Billion Annual Run Rate