About the SaaS Valuation Calculator
This SaaS valuation calculator gives a quick, rules-of-thumb estimate of what a subscription software company is worth. SaaS businesses are usually valued as a multiple of annual recurring revenue (ARR), and the multiple rises or falls with growth, retention and profitability. Enter your ARR, growth rate, profit margin, net revenue retention and a market baseline multiple.
The calculator starts from the baseline multiple you choose, then adjusts it: faster growth and stronger net revenue retention push it up, and a weak Rule of 40 score pulls it down. It is designed for founders preparing for a raise or sale, operators tracking value creation, and anyone curious how metrics translate into valuation.
Treat the result as a starting point, not an appraisal. Real deals depend on market conditions at the time, company size, competition, deal structure and buyer appetite. Update the baseline multiple to reflect current public or private comparables. The growth, NRR and Rule of 40 adjustment tiers used here are MoneyDeck’s own simplified heuristic, not a published valuation method, and the 10× default baseline is only a placeholder for you to replace.
With the default inputs, the estimated valuation is $25,200,000.00. Change any value above to recalculate instantly.
How to use the saas valuation calculator
- 1Enter your current ARR (monthly recurring revenue × 12).
- 2Enter year-over-year ARR growth and your profit margin (negative if burning cash).
- 3Enter net revenue retention from your existing customers.
- 4Set a baseline ARR multiple that reflects current comparable companies.
- 5Review the estimated valuation and see which metric moves the multiple most.
Formula and method
The baseline multiple is multiplied by three factors. Growth factor: 1.5 above 100% growth, 1.2 above 60%, 1.0 above 30% and 0.7 at 30% or below. NRR factor: 1.2 above 120%, 1.05 above 100%, 0.85 at 100% or below. Rule of 40 factor (growth + margin): 1.15 above 60, 0.75 below 20, otherwise 1.0.
These tiers are a simplified heuristic that mirrors how investors generally reward growth and retention; they are not a published standard. The result is ARR multiplied by the adjusted multiple. Change the baseline to match current comparables for your stage and market.
- ARR
- Annual recurring revenue (MRR × 12)
- Baseline multiple
- Typical EV/ARR multiple for comparable companies
- NRR
- Net revenue retention from existing customers
- Rule of 40
- Growth % + profit margin %
Worked examples
$2M ARR growing 80% with 115% NRR
Growth above 60% lifts the 10× baseline to 12×, and 115% NRR adds 5% to reach 12.6×. The Rule of 40 score is exactly 60, so no extra premium applies. 12.6 × $2M ≈ $25.2M.
Profitable, slower-growth SaaS
At 25% growth the 8× baseline is cut to 5.6×. NRR of 105% adds 5% to reach 5.88×, and the Rule of 40 score of 45 is neutral. $5M × 5.88 ≈ $29.4M.
Hypergrowth with best-in-class retention
Growth over 100% (×1.5), NRR over 120% (×1.2) and a Rule of 40 score of 110 (×1.15) take the 10× baseline to 20.7×, valuing $1M of ARR at about $20.7M.
Frequently asked questions
How are SaaS companies valued?+
Most SaaS companies are valued as a multiple of ARR or forward revenue. The multiple depends mainly on growth rate, net revenue retention, gross margin, profitability and market conditions; mature profitable companies may also be valued on EBITDA or free cash flow.
What ARR multiple should I use as a baseline?+
Use recent comparables for companies of similar size and growth. Public SaaS multiples change with interest rates and sentiment, and small private companies usually sell at a discount to public peers, so check current data rather than old rules of thumb.
Why does net revenue retention affect valuation?+
High NRR means existing customers grow their spend over time, so revenue compounds even without new sales. That makes future revenue more predictable and more valuable, which investors reward with a higher multiple.
What is the Rule of 40 and why does it matter?+
The Rule of 40 says growth rate plus profit margin should be at least 40%. It balances growth and efficiency, and companies well above 40 have historically commanded higher multiples.
Is this the same as a formal business valuation?+
No. This is a quick heuristic estimate. A formal valuation, such as a 409A for stock options or an M&A valuation, uses detailed financials, discounted cash flows and comparable transactions.
Results are estimates for educational purposes and are not financial advice. Rates, fees and terms vary — confirm with your lender or a licensed advisor before making decisions.