SaaS Valuation

Estimate enterprise value using ARR multiples from market comps. Input ARR and a revenue multiple to get a base valuation and ±1× sensitivity, with growth and margin fields to document context for stakeholders.

Context

Multiples vary with growth, margin, net dollar retention, and market conditions. Use sensitivity to frame a range and pair with comps.

What is SaaS valuation?

SaaS valuation often uses revenue multiples on ARR, adjusted for growth, gross margin, retention, and profitability. It provides a directional estimate for private market pricing.

How to use this calculator

Enter ARR and a market multiple from comparable companies or reports. Adjust ±1x to see sensitivity. Use growth and margin fields to document context and justify the chosen multiple.

Why it matters

A clear valuation range supports fundraising, M&A conversations, option pricing, and scenario planning with stakeholders.

Example

For ARR of $1.2M and an 8× multiple, enterprise value is ~$9.6M. Sensitivity shows $8.4M at 7× and $10.8M at 9×, framing negotiation bounds.

Assumptions & limitations

Multiples are market‑driven and can change rapidly. This model ignores debt, cash, and detailed DCF analysis; treat it as a quick triangulation.

Growth and quality factors

Higher growth, strong gross margin, and high NRR (e.g., 120%+) typically support higher EV/ARR multiples. Efficiency (e.g., burn multiple, Rule of 40) also influences ranges.

Multiples vs. DCF

Multiples quickly triangulate value using market comps; discounted cash flow (DCF) incorporates time value and profitability paths. Use both for a more robust view.

Sensitivity and ranges

Present ranges (e.g., 7–9×) rather than point estimates. Document assumptions on growth, margin, retention, and market conditions to contextualize where you land in the band.

Best practices

Build a comps set, adjust for your profile, check EV/ARR and EV/Revenue, and reconcile with DCF. Highlight cash and debt adjustments separately.