Software Company Valuation Multiples: 2026
The whole software market, not only the subscription part of it. Across 58 listed software businesses, including perpetual licence, on-premise, engineering and design, vertical and services-heavy models, the median is 4.7x EV/Revenue on a 0.33x to 22.1x range, computed from market capitalisation and reported balance sheets on 21 August 2026. Introduces The Mix Illusion: the share of revenue that is not software correlates with the multiple at -0.09 on ranks, and the four mix bands sit within 0.4x of one another, so the revenue-model discount owners concede before a process begins is not present in the prices. Growth, category and scale sort the distribution instead.
- Sector
- SaaS
- Focus
- Valuations
- Published
- August 21, 2026
- Length
- 24 slides
- Reading time
- 13 minutes
Slide deck
24-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
- Across 58 listed software businesses the median is 4.7x EV/Revenue, quartile band 3.0x to 7.6x, full range 0.33x to 22.1x.
- Non-software revenue share, being services, hardware and transaction fees, correlates with EV/Revenue at -0.09 on ranks across the 50 constituents that disclose a revenue split.
- The four mix bands are flat: 4.9x below 5% non-software revenue, 4.7x at 5 to 20%, 4.5x at 20 to 40% and 4.7x above 40%.
- Licence-and-cloud hybrids clear a 5.2x median against 4.7x for cloud-native businesses, on lower growth and 12 points less gross margin.
- Gross margin correlates with the multiple at only +0.20: Adobe runs 89.4% gross margin and clears 4.4x while Manhattan Associates runs 55.8% and clears 10.7x.
- Growth is the variable that prices: median 2.0x below 5% growth, 3.8x at 5 to 10%, 5.6x at 10 to 20% and 8.6x above 20%.
- Category outranks delivery model: engineering and design software clears a 7.8x median against 3.6x for horizontal application software.
- Nine of the seventeen largest software acquisitions of 2026 to 21 August had targets that were not pure subscription businesses, including NCR Atleos at $6.6B on FY2025 revenue of $4.354B.
Methodology
Every multiple is Windsor Drake's own computation from primary market data, not licensed from a vendor table: enterprise value is market capitalisation plus total debt less cash, struck between 19 and 21 August 2026, over trailing twelve month revenue from each company's most recently reported quarter. Revenue mix is taken from each company's own disaggregation-of-revenue disclosure; eight constituents report a single undifferentiated revenue line and are excluded from the mix analysis while remaining in the medians. 62 companies screened, 58 included; four excluded and each named with its reason. Framework: The Mix Illusion. This is one cross-section on one day, and within vertical software the cloud-native cohort does clear a higher median, which is stated rather than suppressed.
Frequently asked questions
What multiple does a software company trade at in 2026?
Across 58 listed software businesses the median is 4.7x EV/Revenue, with a middle half between 3.0x and 7.6x. That set deliberately includes licence, on-premise, vertical and services-heavy businesses rather than pure subscription software only.
Does perpetual licence or on-premise revenue lower the multiple?
Not in this data. Companies carrying material licence and maintenance revenue clear a 5.2x median against 4.7x for cloud-native businesses. The licence-heavy names that trade poorly are almost all growing below 5%, which is the variable actually doing the work.
How much does a large professional services line cost me?
Measurably nothing, across this set. Constituents earning more than 40% of revenue from services, hardware or transaction fees clear a 4.7x median, identical to those earning under 5% from those sources. Services depress gross margin, and gross margin correlates with the multiple at only 0.20.
Then why is my adviser applying a services discount?
Usually because the comparable set was built from public SaaS screens, which exclude the businesses this page covers. A discount applied against a comparable set that excludes your business model is an artefact of the screen, not a market price.
What actually moves my multiple?
Revenue growth, what the software is for, and scale. Growth separates a 2.0x median from an 8.6x median. Engineering and design software clears 7.8x against 3.6x for horizontal application software. Businesses above $5B of revenue clear 6.2x against 3.3x below $1B.
Do private companies trade at these multiples?
No. Listed multiples are the ceiling and the reference, not the outcome. Private software transactions clear at a discount that widens with customer concentration, owner dependence and the absence of audited accounts. Use the public set to establish the shape of the argument.
Is there a buyer for a licence and services software business right now?
Yes, and the 2026 record favours it. Nine of the seventeen largest software acquisitions of 2026 to date had targets that were not pure subscription businesses, including NCR Atleos, CSG Systems, Dayforce and Hexagon's design and engineering unit.
Companies covered
Public and private companies referenced in this report.
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Cite this report
Software Company Valuation Multiples: 2026. Windsor Drake Market Intelligence, 2026. windsordrake.com/market-intelligence/reports/software-company-valuation-multiples-2026. Windsor Drake Market Intelligence data is free to use with attribution to Windsor Drake (windsordrake.com).