Thread by @jasonlk

So Justworks is going public at a $1B run rate (!)

Or is it $100m ARR?

It shows the complexity of many payroll and SaaS HR apps:

The "SaaS" business is at a $110m ARR run rate with OK gross margins of 60%

But the $1B+ of benefits and insurance "ARR" it also has only have a 5% gross margin

A reminder how much revenue quality matters

We see a lot of fintech and payroll / HR apps valued at SaaS-like multiples in private rounds on >all< their revenue, not just the "SaaS" part

Justworks IPO'ing at $2B valuation is 20x SaaS ARR -- pretty reasonable for a strong SaaS company

But it's just 2x total revenue

So is Justworks an 11% margin company at $1B ARR?

Or a 60% margin SaaS company at $110m ARR?

It's confusing