Guide · Updated October 2026
How to value a SaaS business in 2026
Compare revenue quality, costs, retention, and transfer risk before agreeing a price.
Start with verifiable numbers
- Request monthly revenue, refunds, payment fees, and operating costs for at least the last 12 months.
- Separate recurring subscriptions from one-time sales. MRR is recurring monthly revenue; annualized MRR is MRR × 12, not a guarantee of future revenue.
- Compare payment-provider exports with bank receipts and customer records. A screenshot alone does not establish revenue authenticity.
Calculate a comparison multiple
- Asking price ÷ annual revenue gives a revenue multiple. For example, a 120,000 asking price and 40,000 annual revenue produce a 3× multiple when both use the same currency.
- Compare businesses with similar margins, age, growth, and customer concentration. An asking price is not evidence of a completed sale.
- Use operating profit as another comparison. Include hosting, support, contractors, refunds, and the cost of replacing the owner’s work.
Test whether revenue will continue
- Review churn, retention cohorts, unpaid invoices, discounting, and dependence on a few customers.
- Check acquisition channels and whether growth relies on advertising spend or a temporary promotion.
- Confirm ownership of code, domains, customer contracts, and transferable provider accounts before agreeing a price.
Record assumptions
- Build a base case and a downside case with explicit costs and retention assumptions.
- Agree what assets and transition support are included. Use independent professional advice for transaction terms and tax treatment when needed.
Use these guides as a starting point for your transaction checks. Provider requirements and the facts of each business determine the final handover.
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