Confirm recurring revenue
Remove services and non-recurring revenue from the ARR used in the model.
SaaS Valuation Calculator
Explore a directional SaaS valuation using annual recurring revenue, growth, profitability, retention, and a transparent base multiple.
Educational estimate, not financial advice
Estimate SaaS valuation
Use current trailing metrics and a conservative comparable-market multiple.
How SaaS valuation multiples work
A common directional approach values a SaaS company as a multiple of annual recurring revenue. The selected multiple reflects market conditions and company quality, including revenue growth, profitability, retention, concentration, gross margin, category strength, and execution risk.
This calculator adjusts a user-selected base multiple with simple, visible growth, EBITDA margin, and net retention factors. It is designed for scenario planning, not a formal appraisal. Actual transaction value depends on diligence, deal structure, buyer strategy, capital markets, and many qualitative factors.
Directional valuation formula
ARR × adjusted revenue multipleInterpret a SaaS valuation responsibly
Use a range of scenarios and support the base multiple with relevant, current comparable companies or transactions.
Select comparisons
Prioritize companies with similar scale, growth, margins, market, and retention.
Model a range
Test conservative, base, and optimistic multiples instead of relying on one number.
SaaS valuation FAQ
What is an ARR multiple?
An ARR multiple compares company value with annual recurring revenue. It is a shorthand benchmark, not a complete valuation method.
Why do growth and retention affect SaaS valuation?
Strong growth and retention can signal durable future recurring revenue, while weak retention increases uncertainty and replacement pressure.
Is this estimate suitable for fundraising or selling a company?
Use it for education and scenario planning only. Seek qualified financial, tax, legal, and transaction advice for real decisions.