ARR Valuation Calculator
Estimate a SaaS valuation from ARR and a revenue multiple (ARR valuation).
Prefer an explanation? Read the guide.
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Tip: you can type commas (e.g., 10,000).
Example
Using the default inputs, the result is:
$14,400,000.00
- ARR
- $2,400,000
- Revenue multiple
- 6
Formula
Valuation = ARR x multiple
- Multiples vary widely by growth, margins, retention, and market conditions.
- This is a simple heuristic, not investment advice.
FAQ
What multiple should I use?
Use a range (e.g., 4x-10x) and sanity-check against growth rate, gross margin, and retention. Market conditions can move multiples significantly.
Is ARR the same as annual revenue?
Not always. ARR focuses on recurring run-rate and excludes one-time fees/services. Annual revenue may include non-recurring items.
How to interpret
How to use ARR valuation
- Model a range of multiples rather than a single number.
- Use ARR for recurring run-rate; use bookings/cash for planning.
- Tie the multiple to quality signals: growth, margin, churn, and NRR.
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