ARR Valuation Calculator
Estimate a SaaS valuation from ARR and a revenue multiple (ARR valuation).
ARR valuation is a quick heuristic: enterprise value is often discussed as ARR multiplied by a revenue multiple.
Multiples vary widely based on growth, margins, retention, and market conditions. This calculator helps you model a point estimate and a range.
Prefer an explanation- Read the guide.
Need definitions- Browse the glossary.
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Used for a valuation range. Set 0 to disable.
Used for a valuation range. Set 0 to disable.
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
- Multiple (low, optional)
- 4
- Multiple (high, optional)
- 10
How to calculate
- Enter ARR (clean recurring run-rate).
- Enter a base revenue multiple for a point estimate.
- Optionally enter a low/high multiple to produce a valuation range.
- Use the range for scenario planning rather than relying on a single number.
Formula
Valuation = ARR * multiple
- Multiples vary widely by growth, margins, retention, and market conditions.
- This is a simple heuristic, not investment advice.
Benchmarks
- Ranges are more realistic than point estimates; market multiples can change quickly.
- Use consistent ARR definitions (recurring only) to avoid inflating valuations.
- Pair valuation scenarios with unit economics (payback, burn multiple) to sanity-check sustainability.
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.
Common mistakes
- Mixing enterprise value and equity value (this is an EV-style heuristic, not per-share equity value).
- Using ARR that includes one-time items or services revenue (definition mismatch).
- Picking a multiple without checking growth, retention, and margin context.
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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Quick checks
- Keep time units consistent (monthly vs annual) across inputs and outputs.
- Segment by cohort/channel/plan before trusting a blended average.
- Use the related guide to avoid common definition and denominator mismatches.