Estimate what a SaaS business could be worth. Enter ARR or MRR and a base revenue multiple, then the metrics buyers and investors look at most: growth, net revenue retention, gross margin and profitability. The calculator adjusts the multiple transparently and shows a valuation range, forward multiple and Rule of 40 score.
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Revenue
Enter revenue as
$
$
× ARR
Your assumption for a typical company; check recent comparable deals.
Metrics
%
%
Revenue kept from last year's customers incl. upsells, minus churn.
%
%
Negative if the company is burning cash.
Enter your values to see the result.
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How to use the SaaS Valuation Calculator
Enter ARR, or switch to MRR and enter monthly recurring revenue.
Set a base ARR multiple that reflects a typical company in today's market (5× is the default assumption).
Enter growth, NRR, gross margin and profit margin.
Read the estimated valuation and range, then check how each factor changed the multiple.
Use the growth table to see how much faster growth would be worth.
Example: $3M ARR, 40% growth, 105% NRR, 78% gross margin and a −5% margin (Rule of 40 score 35). With a 5× base: 5 × 1.30 × 1.05 × 1.04 × 1.00 × 0.85 ≈ 6.03× ARR, or about $18.1M, with a range of roughly $13.6M to $22.6M.
The weights are this tool's own transparent rules of thumb to show how each metric pushes value up or down. They are not taken from a market study.
Calibrate the base multiple with recent comparable deals or public SaaS indexes; this is the biggest single input.
Use clean ARR: exclude one-time fees, services revenue and unusual discounts.
Small SaaS businesses (under about $1M ARR) are often priced on profit (SDE) instead; try the website valuation calculator too.
Customer concentration matters: if one customer is a large share of revenue, expect a lower multiple.
Frequently asked questions
How are SaaS companies valued?
SaaS companies are most often valued as a multiple of annual recurring revenue (ARR), because recurring subscription revenue is predictable. The multiple rises with faster growth, higher net revenue retention, better gross margins and profitability, and falls for small, slow-growing or high-churn businesses. Smaller profitable SaaS businesses are also often valued on a multiple of profit (SDE or EBITDA).
What is a typical SaaS ARR multiple?
It varies widely with market conditions, size and quality. Small bootstrapped SaaS businesses have often sold for a few times ARR, while fast-growing companies with strong retention have commanded much higher multiples in strong markets. Because these levels change over time, this calculator lets you set the base multiple yourself; check recent public SaaS multiples or comparable private deals.
Why does net revenue retention matter so much?
NRR measures how revenue from existing customers changes over a year, including expansion, downgrades and churn. Above 100% means the customer base grows on its own even with no new sales, which makes future revenue more valuable and less risky. A company with 120% NRR is usually worth more than one with 90% NRR at the same growth rate.
What is the Rule of 40?
The Rule of 40 says a healthy software company's revenue growth rate plus its profit margin should be 40% or more. For example, 30% growth with a 10% EBITDA margin scores 40. Companies above 40 tend to receive higher valuation multiples, so the calculator adds a 10% premium at 40+ and a 10% discount below 20.
How is the multiple adjusted in this calculator?
Adjusted multiple = base × growth factor × NRR factor × gross margin factor × Rule of 40 factor × scale factor. The growth factor is 1 + (growth − 20) × 0.015, NRR is 1 + (NRR − 100) × 0.01, and gross margin is margin ÷ 75%, each within sensible limits. These are simple, transparent rules of thumb, not a market dataset, so use the result as a starting point.
What is the difference between ARR and MRR?
MRR is monthly recurring revenue from subscriptions; ARR is the annualized figure, normally MRR × 12. One-time fees such as setup or consulting revenue are not recurring and are normally left out of both.
Is this an official valuation?
No. It is an educational estimate for planning and negotiation. Real valuations depend on deal terms, competition, market conditions, customer concentration and due diligence. Nothing you enter is uploaded or stored outside your browser.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.