SaaS Valuations: Q2 2026
Windsor Drake's Q2 2026 read on SaaS valuations: how agentic AI is repricing the software model, valuation variation across segments, public versus private dynamics, the Rule of 40, the IPO window and the macro and capital backdrop.
- Sector
- SaaS
- Focus
- Valuations
- Published
- May 22, 2026
- Length
- 33 slides
- Reading time
- 8 minutes
Slide deck
33-slide deck. Desktop readers can page through the embedded viewer below. Mobile readers can open the direct PDF link.
Open slide deck PDF Key findings
- The public SaaS median EV/Revenue fell to 3.3x at 31 March 2026, down from 6.2x at year-end 2024, erasing roughly $1T in market value.
- Windsor Drake's broad private SaaS benchmark reset to ~3.5x in Q2 2026, reflecting stabilisation above the public trough, not recovery.
- AI-native and service-as-software platforms trade 8x–25x EV/Revenue; seat-priced horizontal applications have compressed to 2.2x–4.0x.
- Private equity held ~$3.7T of global dry powder and led ~57% of Q1 2026 SaaS transactions, a record sponsor share.
- Figma listed in July 2025 near a $68B valuation; ServiceTitan listed on Nasdaq in December 2024 at $71 per share.
- The Electronic Arts take-private, an all-cash deal at ~$55B and $210.00 per share, is the largest all-cash sponsor take-private in history.
- Median SaaS EBITDA margin is forecast to widen to ~22.6% in 2026, up from 20.0% in 2025, while revenue growth steps down to ~12.7%.
- Companies clearing Rule of 40 with NRR above 120% still transact at 7x–9x revenue; below the threshold, multiples compress toward 2x–4x.
Methodology
Valuation inputs are drawn from PitchBook, Morgan Stanley Research, S&P Global Market Intelligence, McKinsey & Company, Bain & Company, Goldman Sachs, EY, KPMG, the Federal Reserve, and SEC filings. Windsor Drake's ~3.5x broad-market benchmark and 2026 forecast scenarios are the firm's own synthesis of cited institutional data, calibrated against a proprietary index of 55 verified software and fintech transactions spanning 2019–2026.
Frequently asked questions
What is the current SaaS valuation multiple in 2026?
The public median EV/Revenue sat at 3.3x as of 31 March 2026, down from 6.2x at year-end 2024. Windsor Drake's working benchmark for the broad private SaaS market is ~3.5x.
Why have SaaS multiples fallen so sharply?
Agentic AI has reframed software from a productivity tool to a system that performs work autonomously, threatening seat-based revenue models. The Federal Reserve held rates at 3.50%–3.75% in April 2026, confirming this is a sector re-rating, not a cost-of-capital event.
Which SaaS segments still command premium valuations?
AI-native and service-as-software platforms trade 8x–25x, cybersecurity software 6x–13x, and data and cloud infrastructure 5x–11x. Seat-priced horizontal applications and front-office CRM tools have compressed to 1.8x–4.0x.
Is the SaaS IPO market open in 2026?
The listing window is open but selective, rewarding scale, profitability and a credible AI narrative. Figma listed near $68B in July 2025 and the 2026 pipeline is among the deepest in a decade, led by AI infrastructure and security.
Who is buying SaaS companies right now?
Private equity, holding ~$3.7T in dry powder, led ~57% of Q1 2026 SaaS transactions. Strategic software acquirers are buying AI capability, proprietary data and engineering talent rather than pure revenue.
How does the Rule of 40 affect SaaS valuations in 2026?
Companies scoring above 55 on the Rule of 40 with NRR above 120% still transact at 7x–9x revenue. Below the 40 threshold, multiples compress quickly toward 1.5x–4x.
Companies covered
Public and private companies referenced in this report.