Our friends at Software Equity Group have released their SEG Annual SaaS Report, delivering unparalleled insights into the SaaS landscape, combining analysis of over 118 publicly traded SaaS companies with a detailed review of more than 2,100 SaaS M&A transactions in 2024—the second-most active year on record. The SEG SaaS Index™ ended 2024 up 3% despite macroeconomic headwinds. With inflation stabilizing at 3.2% and anticipated interest rate cuts in 2025, SaaS businesses are well-positioned to capitalize on improving conditions.
Here are three highlights from their report:
2,107 TOTAL SAAS M&A DEALS IN 2024
The SaaS industry recorded the second-highest number of deals on record, with SaaS transactions making up 61% of all software M&A activity, reflecting sustained strength in the market
26.6% UPPER QUARTILE STOCK PRICE INCREASE IN 2024
The upper quartile of companies in the SEG SaaS Index™ achieved an impressive average stock price increase of 26.6%, highlighting the strong performance of top-tier SaaS businesses in the public market.
11.7x MEDIAN EV/TTM REVENUE MULTIPLE FOR HIGH RETENTION COMPANIES
Companies with net retention rates above 120% achieved a premium valuation of 11.7x EV/TTM revenue, a 109% premium over the Index median of 5.6x, highlighting the critical role of retention in valuation performance.
Download SEG’s full report to uncover the key trends, benchmarks, and insights that can help you navigate the ever-evolving SaaS market, here.