Free tool
SaaS Valuation Calculator
Get a valuation range from your ARR, growth rate and margin — presented as a range, because that is what it is.
A defensible ARR-multiple range driven by growth and margin. Useful before a conversation about price, not instead of one.
- Annual recurring revenue
- Year-on-year growth
- Gross margin
Estimate valuation
Example
Annual recurring revenue $1,000,000 · Year-on-year growth 100%
$9,706,667 – $18,026,667
Estimated valuation
How it works
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1
Enter your numbers
Fill in annual recurring revenue, year-on-year growth and gross margin. Change a number and the answer updates.
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2
Press estimate valuation
One button. Change any input afterwards and the answer updates as you type.
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3
Read the result
You get estimated valuation, plus implied arr multiple, current arr, midpoint.
How SaaS companies get valued
Most software companies are valued on a multiple of annual recurring revenue. The multiple is not fixed — it is mostly a function of how fast the company is growing, adjusted for how much of each revenue dollar it keeps.
This calculator applies a growth-driven multiple, scales it by gross margin, and returns a range rather than a single figure, because the spread between a floor and a ceiling is the honest answer.
Growth drives the multiple
A company growing 20% a year and one growing 150% do not trade anywhere near each other, even at identical ARR. Growth is the dominant variable in public SaaS comparables, and private rounds broadly follow the same logic with more noise.
Gross margin matters as a modifier. A business at 85% margin keeps more of every dollar than one at 55%, and the market prices that difference — but no margin rescues a company that has stopped growing.
What this calculator cannot see
Net revenue retention is arguably the strongest single predictor of a premium multiple, and it is not an input here. A company with 130% NRR grows without acquiring anyone, and buyers pay for that.
Neither can it see customer concentration, competitive position, churn quality, the strength of your team, or whether a strategic acquirer wants exactly what you have built. Any of those can move the real number by several multiples in either direction.
How to use the number
Treat this as a sanity check, not a price. It is useful for knowing roughly which order of magnitude you are in before a conversation, and for noticing when an offer is far outside the range comparable companies trade at.
Valuation in a real transaction is set by what a specific buyer will pay on a specific day, and that is a negotiation, not a formula. Bring a banker or an experienced advisor to anything that matters.
What this does not do
- A heuristic from public comparables, not a valuation. Real prices are set by a specific buyer on a specific day.
- Cannot see net revenue retention, which is arguably the strongest single predictor of a premium multiple.
- Cannot see customer concentration, competition, churn quality or strategic fit. Any of those can move the real number by several multiples either way.