SaaS Valuation Calculator.

The core formula has not changed: enterprise value = ARR × ARR multiple. What has changed is how buyers set the multiple. After the correction of 2022 and 2023, pricing moved away from growth at any cost. In 2026, buyers pay for growth that is efficient and durable.

This calculator starts from a growth-based multiple, then adjusts it for the eight factors buyers check in every data room: the Rule of 40, net revenue retention, logo churn, gross margin, ARR scale, customer concentration, contract terms and customer segment. The multiple bridge shows exactly how much each one adds or takes away.

ARR should be contracted, recurring subscription revenue only. Implementation fees, professional services and one-off licence sales are valued separately, usually at 1x or less, and inflating ARR with them is the fastest way to lose credibility in diligence.

Annual recurring revenue (ARR) is the yearly value of the subscription contracts in place today. For monthly plans, it is monthly recurring revenue multiplied by 12. For annual and multi-year contracts, it is the annualised contract value.

Count only revenue that renews without a new sale. Set-up fees, implementation, consulting and one-off licences are not ARR. Buyers rebuild ARR from your billing data in diligence, so the number you enter here should be the one you can show line by line.

Take a mid-market SaaS business with $5M ARR, 30% growth, a 10% EBITDA margin, 80% gross margin, 108% NRR, 8% annual logo churn, a largest customer at 6% of ARR and 80% of revenue on annual contracts.

Growth sets a base multiple of 4.8x. The Rule of 40 score is exactly 40, so it adds nothing. NRR of 108% adds 0.32x, the 80% gross margin adds 0.15x and the contract mix adds 0.30x. Churn, scale, concentration and segment are neutral at these levels.

The modelled multiple is 5.6x ARR, an enterprise value of about $27.9M, within a modelled range of $22.3M to $33.4M. Enter the same numbers above and you get the same result.

The Rule of 40 adds revenue growth to EBITDA margin. A business growing 30% with a 10% margin scores 40, the benchmark for a healthy SaaS company. It is the most quoted efficiency test in SaaS M&A because it lets buyers compare a fast-burning business with a slow, profitable one on one scale.

In this model, every point above 40 adds to the multiple and every point below takes it away, within limits. Public market data consistently shows companies above the Rule of 40 trading at a clear premium, and private buyers apply the same logic.

If you score below 40, the fix is rarely more growth. It is usually trimming sales and marketing spend that does not pay back within 18 months. A ten-point improvement in the year before a sale can move valuation more than any other lever you control.

A buyer is paying today for revenue it expects to collect for years. Churn shortens that stream. At 5% annual churn, the average customer stays around 20 years. At 20% churn, that falls to five. The same ARR is worth far less when it leaks out four times faster.

Net revenue retention matters even more. NRR above 110% means the customer base grows without new sales. Buyers treat that as a compounding asset and pay a premium. Before a sale, segment churn by cohort, plan and customer size, because buyers will do it themselves.

Growth-stage SaaS is priced on revenue because its profit is deliberately reinvested in sales and product. A revenue multiple lets the buyer price future cash flow instead of today's reinvestment decisions.

Mature SaaS is different. When growth falls below about 15% and the business runs at a 25% margin or better, private equity buyers switch to EBITDA. Expect 12x to 20x EBITDA for quality recurring revenue, depending on size and retention. The calculator shows the implied EBITDA multiple so you can see whether an ARR-based price works for a profit-focused buyer.

Software buyers expect gross margins of 75% to 85%. Below 70%, the business starts to look like services with software attached, and multiples compress. Heavy hosting costs, third-party data fees and bundled onboarding are the usual causes.

No customer should be more than 10% of ARR if you want the widest buyer pool. Annual contracts paid upfront are worth more than monthly plans, and enterprise customers on multi-year terms command the highest multiples. Compare your position with our SaaS sector multiples (opens in a new tab) and check which adjustments buyers accept in the EBITDA Add-Back Standard (opens in a new tab).

One model drives every figure on this page (version 2.0, October 2026). It starts from a base ARR multiple set by year-on-year growth, then adds or subtracts capped adjustments for the Rule of 40, net revenue retention, annual logo churn, gross margin, ARR scale, largest-customer share, contract terms and customer segment. The modelled range is the mid multiple 20% either side.

Logo churn and revenue churn are kept apart on purpose: logo churn is its own input, while revenue lost and gained from existing customers is captured by NRR. Buyer views apply typical pricing behaviour for strategic acquirers, growth equity, private equity buyouts and individual or search-fund buyers. Value levers re-run the same model with one metric improved.

Limits: the model assumes B2B SaaS with $1M to $50M ARR, clean recurring revenue and no unusual debt or working-capital items. It does not see founder dependence, product quality, competition or deal structure. Its benchmark assumptions are dated October 2026; compare them with our live SaaS sector multiples (opens in a new tab).

An online calculator gives you a defensible starting range. A real price comes from a competitive process: several qualified buyers, each with a reason to pay more than the others. Strategic acquirers pay for fit and synergies. Private equity pays for predictable cash flow and a clear growth plan.

Acquiry runs sell-side processes for SaaS founders across any market. Read the SaaS acquisitions guide (opens in a new tab), model how the price could be paid with the earnout modelling tool, or work out what you walk away with using the post-exit wealth modeller (opens in a new tab).