Quarterly insights: Software as a Service
Valuations reverse lower, 2025 growth expectations also down

Our SaaS universe’s average enterprise value multiple of 2024 estimated revenue was 6.4 at the end of the June quarter, down from 7.1 last quarter. For 2025 estimated revenue, the average multiple was 5.6, down from 6.1 last quarter.
Revenue growth in 2024 is now expected to be 13.4% on average, up from 13.0% last quarter. In 2025, revenue is expected to grow by 14.2% on average, down from 15.0% last quarter.
Correlations between enterprise value multiples of revenue and revenue growth rates have returned to more normal levels above 0.6 in the past two quarters.The six largest-capitalization SaaS companies outperformed our general universe. While the outperformance of these larger SaaS names may continue for a while based their relatively high current growth rates, longer-term we expect the growth advantage to return to smaller capitalization stocks that can maintain higher growth rates.
TABLE OF CONTENTS
- Overview of our analysis
- Correlations of valuation to growth remain higher
- Biggest SaaS names outperform
- M&A picks up
- SaaS stocks down 9.6% on average in June quarter
- SaaS M&A: Notable transactions include Darktrace and Squarespace
- SaaS private placements: Notable transactions include Cyberhaven, FloQast
Overview of our analysis
Our SaaS universe stocks declined 9.6% on average in the June quarter, underperforming the S&P 500’s 3.9% gain that helped boost it to record highs. Only four of the 98 stocks in our universe gained over 20%, and two of those were the subjects of acquisition offers. Twenty-five declined by more than 20% in the quarter, mostly due to soft guidance and worries about enterprise spending on software. The group’s average enterprise value multiple of 2024 estimated revenue was 6.4 at the end of the quarter, down from 7.1 last quarter. For 2025 estimated revenue, the average multiple was 5.6, down from 6.1 last quarter. Revenue growth in 2024 is now expected by analysts to be 13.4% on average, up from 13.0% last quarter. In 2025, revenue is expected to grow by 14.2% on average, down from 15.0% last quarter and likely reflecting the influence of softer guidance.

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