SaaS multiples in Q1 plummeted. Of the 78 publicly traded SaaS companies we follow, the median multiple was 3.65x revenue while the average was 5.91x.
Multiples for SaaS companies growing above the median of 15% are much stronger: 6.31x on median and 8.98x on average. The widening gap in the average and median of the entire dataset, as well as the large gap between higher growth and the entire dataset, show a major divergence between premium SaaS and overall SaaS. The data is below.
All data is from softwaremultiples.com. Additional observations are as follows:
The heyday of 2020 is long gone. 10% of companies are trading at 10x revenue or greater, whereas the peak was 60% in Q4 2020. Two companies trade above 20x whereas 35 traded above 20x in Q4 2020. Additionally, the gap between the average and median is 2.3x, meaning premium SaaS companies are getting higher valuations. The gap moves around a lot: in Q3 2023, it was non-existent at 0.8x but in 2020/2021 it was really wide at ~5.8x.
The stats for the entire dataset. The median SaaS business had trailing twelve month revenue of $1.2bln, EBITDA of $50mm, and positive operating cash flow of $300mm thanks to up-front collections on annual contracts. YOY growth is 15% on median. The median EBITDA margin is 3%. Debt is negligible. While 17 of the companies have negative EBITDA, only 1 has negative cash flow.
The stats for High Growth. High growth companies, which we define as those with growth above the median of 15% command significantly higher multiples as we noted above, but also look a bit different. Revenue on median was $1.2bln, similar to the entire data set, but median YOYG was a very strong 23% and the median EBITDA margin was 0%.
The trend. The chart below shows median revenue multiples we’ve collected since Q4 2014. The dotted line is a trendline. During the period shown, the median SaaS multiple has ranged from 3.65x (Q1 2026) to 14.1x (Q4 2020).
Removals. We’ve removed companies that continue to show extreme distress. They have a combination of distressed valuations, no growth, and/or no profitability. They should not be used to assess multiples for a healthy company going through M&A. More recent removals include LivePerson, Brightcove, Upland, Viant, ON24, ZipRecruiter, Yext, Secureworks, Instructure, Expensify, Fastly, Definitive Healthcare, Pubmatic, PagerDuty, and C3.
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