SaaS multiples in Q3 made a big jump from Q2, as the ridiculous SaaSpocalypse narrative is ending. Of the 74 publicly traded SaaS companies we follow, the median multiple was 4.5x revenue while the average was 8.4x.
Multiples for SaaS companies growing above the median of 16% are much stronger: 8.0x on median and 13.0x on average. The data is below, and all data is from softwaremultiples.com.
Additional observations are as follows:
The 2020 multiples are a distant memory. 20 of companies are trading at 10x revenue or greater, whereas the peak was 60% in Q4 2020. Six companies trade above 20x whereas 35 traded above 20x in Q4 2020.
The stats for the entire dataset. The median SaaS business had trailing twelve month revenue of $1.4bln, EBITDA of $100mm, and operating cash flow of $300mm thanks to up-front collections on annual contracts. YOY growth is 16% on median. The median EBITDA margin is 9%. Debt is negligible.
The trend. The dotted lines below are trendlines. During the period shown, the median SaaS multiple has ranged from 3.63x (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, Asana, and C3.
Visit https://www.softwaremultiples.com/ for real time multiples updated daily.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.