Public SaaS multiples peaked at 15–20x NTM revenue in late 2021. As of the latest 2025 benchmark data, the median sits at 5–7x — and where you land in that range is almost entirely determined by your growth rate.
This isn't a broken market. It's a normalized one. After a decade of zero-interest-rate distortion, software multiples have re-anchored to fundamentals. Growth matters more than ever, but it has to be paired with efficiency. The free money era rewarded growth at any cost. Today's market rewards growth that compounds.
Public SaaS Multiples: The Full Breakdown by Growth Cohort
EV/NTM Revenue is the standard valuation metric for public SaaS. Here's how the cohorts cluster as of the latest available data, based on trailing data from BVP Nasdaq Emerging Cloud Index, Bessemer, and public filings:
| Growth Cohort (YoY ARR) | EV/NTM Revenue Range | Example Companies |
|---|---|---|
| 50%+ growth | 12–20x | Cloudflare, Snowflake, CrowdStrike |
| 30–50% growth | 8–14x | Datadog, MongoDB, HubSpot |
| 15–30% growth | 5–9x | Salesforce, ServiceNow, Zendesk |
| Under 15% growth | 3–6x | Box, Dropbox, legacy SaaS |
Based on BVP Emerging Cloud Index and public market data as of 2025. Ranges reflect 25th–75th percentile within each cohort.
What Drives Public SaaS Multiples Beyond Growth Rate
Growth rate explains maybe 60% of the multiple. The rest comes from four secondary drivers that separate premium SaaS from the pack:
Net Revenue Retention (NRR)
120%+ NRR is the threshold for premium multiples. Companies at 130%+ (Datadog, Snowflake) consistently command 2–3x more than their growth-rate peers. NRR below 100% is a red flag at any growth rate.
Rule of 40 Score
Growth % + FCF margin %. Anything above 40 signals capital efficiency. Companies consistently above 60 (Cloudflare, Veeva) earn a visible premium in EV/Revenue multiples vs. peers in the same growth cohort.
Gross Margin Profile
Best-in-class SaaS runs 75–85% gross margins. Below 65% signals either infrastructure-heavy architecture or professional services revenue masquerading as SaaS. Investors discount heavily for sub-70% GMs.
Category Position
Dominant category leaders (Salesforce in CRM, ServiceNow in ITSM) hold multiples above their growth rate would otherwise justify. Market leadership creates defensibility that discounted cash flow models reward.
Public SaaS Comps: Where Specific Companies Trade
Benchmarks are only useful when you can anchor them to real companies. Here's where key public SaaS names trade on EV/NTM revenue as of early 2025:
Security + networking platform premium
~18x
28% YoY
Cybersecurity category leader
~17x
32% YoY
130%+ NRR drives premium
~14x
24% YoY
Developer-led growth and Atlas expansion
~10x
22% YoY
SMB exposure creates discount vs. enterprise
~8x
19% YoY
Maturity discount; strong FCF offsets
~7x
9% YoY
Low growth; stable FCF story
~4x
6% YoY
Approximate figures based on public market data. Use the SaaS Valuations dashboard for live, updated multiples.
What the 2021–2025 Correction Actually Means
The narrative that "SaaS multiples are down 70%" is true but misleading. The correction wiped out the ZIRP premium, not the underlying value of software businesses.
Here's what actually happened: In 2021, investors were discounting future cash flows at near-zero rates, which inflated long-duration asset prices (SaaS, crypto, growth equity) dramatically. When rates moved from 0% to 5%, the discount rate on those future cash flows quadrupled — which mathematically collapses multiples even if revenues are growing exactly as projected.
A SaaS company that went public at 25x NTM revenue in 2021 and now trades at 8x hasn't failed. The math changed. That said, some of the 2021 cohort was genuinely overvalued — businesses with 30% growth but 60% gross margins and 150% S&M/revenue ratios that never had a credible path to profitability. Those have been punished most severely.
How Private SaaS Valuations Translate to Public Multiples
If you're a private SaaS founder or investor, public comps matter because they set the ceiling for your exit math. A private SaaS company typically carries a 20–40% discount to comparable public multiples — the illiquidity discount.
| Scenario | Public Comp Multiple | Private Valuation Range |
|---|---|---|
| 30% ARR growth, 120% NRR, Rule of 40+ | 10–14x NTM | 7–11x ARR |
| 20% ARR growth, 110% NRR, Rule of 40− | 6–9x NTM | 4–7x ARR |
| 50%+ ARR growth, pre-profitability | 12–18x NTM | 8–13x ARR |
| 10% ARR growth, FCF positive | 4–6x NTM | 3–5x ARR |
The market has repriced — but it hasn't broken.
As of the most recent benchmark data, a 25% ARR growth SaaS company with 120% NRR, 75% gross margins, and a Rule of 40 score above 40 is still a premium business. It will trade at 8–10x NTM revenue publicly and command 6–8x ARR in a late-stage private round. That's not a bad outcome — it's just not 2021. Stop benchmarking against a year that shouldn't have happened.
Track live SaaS valuation multiples on the SaaS Valuations dashboard at Value Add VC.
Live SaaS comps and EV/Revenue data are tracked on the SaaS Valuations Dashboard at Value Add VC. Originally published in the Trace Cohen newsletter.