ARR multiples: what is my company worth?

“What multiple will we get?” is the first question almost every founder asks. The short answer for a private B2B SaaS company in 2026 is: probably somewhere between 3x and 7x ARR. The useful answer is understanding which few metrics decide where in that range you land, and which of them you can still change before a sale.

How the multiple works

Buyers value recurring software businesses on enterprise value (EV) as a multiple of annual recurring revenue: EV = ARR × multiple. What founders and shareholders receive is equity value, so net debt, working capital adjustments and deal structure (earn-outs, escrows, rollover) all sit between the headline number and the cash.

Just as important: the multiple is applied to ARR the buyer accepts. Pilots, contracts under termination notice, services and usage spikes are usually stripped out. At a 5x multiple, every €1 million of ARR that gets reclassified takes about €5 million off the price.

Where the market is in 2026

The median EV/TTM revenue multiple in SaaS M&A was 4.0x in Q2 2026 (Software Equity Group). Aventis Advisors puts private SaaS transactions at 3.8x for 2025 and 3.1x for Q1 2026, against a 2015–2026 median of 4.5x. Public SaaS companies traded at a median 4.6x revenue at the end of August 2026, after falling as low as 3.2x in June.

Size matters a lot. FE International’s 2026 transaction data gives these typical ranges:

Larger companies get a further premium: according to Aventis, companies in the $50–100M range achieve roughly double the multiples of those in the $20–50M segment.

What moves you up the range

• Rule of 40: companies where growth plus EBITDA margin clears 40% trade at around 6.6x trailing revenue, against 2.3x for those below it (FE International). Only about 15% of public SaaS companies clear it today (Aventis).
• Net revenue retention above 120%, shown cohort by cohort rather than as one blended number.
• Gross margin of 75% or more. Below about 70%, buyers start to price the business as services.
• Low customer concentration: no single customer above roughly 10% of ARR.
• Clean, accrual-based financials and an ARR figure that rebuilds from the billing system.
• Real competition between several buyers, ideally both strategic and financial.

What moves you down

• Net revenue retention below 100%, or recent cohorts that retain worse than older ones.
• A customer above 15% of ARR without contractual protection.
• Heavy founder dependency in sales or product.
• Services or one-off fees counted as recurring revenue.
• Unaudited books, or numbers that do not reconcile.

A worked example

Take a company with €8 million ARR, growing 25% a year at a 10% EBITDA margin (Rule of 40 score: 35). Its size band suggests 3.5x to 5.5x, so an enterprise value of roughly €28–44 million. With 115% net retention, no customer above 8% of ARR and audited accounts, the case for the upper half is strong. With a 20% customer and retention under 100%, expect the lower end, or a structure with an earn-out.

This example is illustrative. Benchmarks describe the market, not your company; the price is set by the buyers you bring to the table.

What to do 12–18 months before a sale

• Rebuild ARR from the billing system and agree on a definition you can defend.
• Produce monthly cohort tables for retention and expansion.
• Reduce concentration and fix contracts with change-of-control or termination risks.
• Move towards the Rule of 40, even if it means slower but more efficient growth.
• Write down your AI story: where AI makes your product stronger and what it depends on.