Our friends at Software Equity Group have released their Q3 Quarterly SaaS Report.
With SaaS deal activity surging to to record levels in 3Q25, they’re reporting that this last quarter has been the strongest SEG has ever tracked.
Year-to-date volume has surpassed 2,000 deals, putting 2025 on pace to exceed 2,500 total transactions, a new all-time high.
Here, we’ve pulled two noteworthy M&A highlights and 2 Public Market Highlights from the report.
(For the full report, click here.)
SAAS M&A HIGHLIGHTS
1. SaaS M&A hit an all-time high in 3Q25 with 746 transactions, +26% YoY in 2Q25.
The acceleration reflects buyer confidence, pent-up demand, and improved financing. An expanding SaaS universe and private equity firms selling businesses to return capital have boosted deal supply, supporting record activity and a durable baseline for future SaaS dealmaking.
2. Private equity remains the dominant force in SaaS M&A, accounting for 58% of total transactions in 3Q25.
Consistent with long-term trends since 2020. The market remains led by private equity, sustaining deal velocity while strategic buyers continue to pursue acquisitions aligned with businesses showing growth opportunities in AI.
SAAS PUBLIC MARKET HIGHLIGHTS
- The SEG SaaS Index™ continued to improve in 3Q25
The upper quartile alone gained almost +12% over the same period since April. The strong recovery over just five months highlights the resilience of leading SaaS companies, which continue to demonstrate durable revenue growth and expanding profitability despite intermittent macroeconomic shocks.
Notable outperformers this quarter included:
- Oracle (+33%)
- CS Disco (+20%)
- CrowdStrike (+19%)
- Domo(+16%)
2. Profitability leadership in 3Q25 remained concentrated in essential infrastructure and financial categories.
The SEG SaaS Index median EBITDA margin rose from 4.6% to 9.2% YoY, driven by categories such as ERP & Supply Chain (26.5%), Human Capital Management (23.8%), and Financial Applications (11.5%), which led the field with impressive EBITDA margins.
To download the full report, click here:
Clare Christopher is the editor at Sandhill.com