PE Now Pays 11.7x EBITDA for SaaS, Barely Above Non-SaaS Deals

Private equity paid a median 11.7 times EBITDA for software-as-a-service companies in the first half of 2026, down from 20.4 times across 2025. The figure comes from the H1 2026 State of SaaS report, which accounting firm Forvis Mazars released on September 30 with PitchBook data. The full report puts a more telling number next to it. Non-SaaS PE deals had a median multiple of 11x. The report calls the SaaS premium the defining feature of the past decade, and in the first half, it shrank to about 6%.

PE Sponsors also did fewer deals. They closed 702 SaaS deals worth $58.8 billion in the half, against 788 deals worth $110.7 billion in the second half of 2025. Ricardo Martinez, the Forvis Mazars partner who leads its technology and software practice, said in the release that public investors are sending IPO candidates the same message: "growth alone is not enough." The swing looks sharper because the previous edition, covering the second half of 2025, found some of the strongest SaaS PE dealmaking in a decade. This one calls the first half of 2026 the end of a three-year dealmaking bull run.

The 11.7x figure is narrower than the headline makes it sound

Before building a plan on the number, be clear about what it measures. It's the global median EV/EBITDA multiple (enterprise value divided by EBITDA) on PE deals in PitchBook's SaaS category. The 20.4x it's compared with is the full-year 2025 median, so a half-year is being measured against a whole year. The report doesn't say how many of the 702 deals disclosed enough financials to produce a multiple, and private buyers don’t have to publish EBITDA. It's also an earnings multiple, which means it can't be compared with the revenue multiples most SaaS founders quote.

The deal mix changed too. Only five PE deals in the half topped $1 billion, compared with 29 in all of 2025. The average PE deal shrank to $256.2 million from $448.9 million as large buyouts gave way to add-ons. PitchBook reported in June that platform buyouts had fallen to 41% of PE software deal value, the lowest share in at least a decade. If the large platform deals that went missing were also the expensive ones, some of the drop reflects what got bought rather than a repricing of the same asset.

A second dataset hints at what kind of SaaS still sold. Software Equity Group's quarterly SaaS report puts the median private SaaS M&A deal at 4.0 times trailing revenue in the second quarter, down only slightly from 4.2 times. It measures revenue and includes strategic buyers as well as sponsors, so it isn't a like-for-like check. Still, buyers paid about the same per dollar of revenue while paying nearly half as much per dollar of EBITDA. The simplest explanation is that the companies getting deals done carried more EBITDA per dollar of revenue. Sponsors kept buying SaaS, but mostly where the cash was already visible.

Sponsors now value subscription revenue like any other company's sales

The SaaS premium was a bet that recurring revenue would keep compounding for years, and 20 times EBITDA paid for that future in advance. Pricing within one turn (one times EBITDA) of every other business says sponsors no longer give subscription revenue much extra credit for durability. The report names three possible reasons, which can all be true at once: discounts for AI disruption risk, a focus on cash generation, and a higher cost of capital. Financing is tighter too. Software's share of U.S. broadly syndicated loans for leveraged buyouts fell below 15% in the half, from nearly 35% in 2024. That leaves less of the debt that used to stretch those bids.

That changes how a GTM budget looks from the buyer's side. Under a premium multiple, a dollar of sales and marketing spend that bought future growth was worth paying for, because the buyer was capitalizing that growth. At 11.7x, the buyer pays for the earnings the company produces now, and the same dollar shows up first as a cost that reduced them. If a demand program pays back after the next sale, the next owner gets that growth without paying for it. For a CRO at a PE-owned or exit-bound company, that's the planning assumption that changed, even if nobody on the board has said so yet.

The report reaches the same conclusion from the capital side. It describes the most attractive SaaS profile in 2026 as a company that generates real cash and holds a defensible position, and it says the remaining value sits "not in the sector" but in the minority of companies positioned for long-term growth.

On October 5, Schneider Electric agreed to buy PTC, the industrial design software maker, for $205 a share in cash, or about $22.6 billion in equity value, a price the deal announcement puts at 21 times PTC's expected 2027 adjusted EBITA and 13 times once Schneider's projected synergies are counted. Jefferies analysts said in a note to investors that AI disruption fears let Schneider buy PTC "at a decade low valuation," according to Reuters. Schneider puts PTC's 2025 revenue at €2.4 billion with a roughly 40% adjusted EBITA margin, close to the cash-first profile the report calls most attractive, and it backs the price with an expected €250 million in yearly cost savings and about €800 million in revenue synergies. Those are forward multiples on Schneider's own adjusted EBITA measure, so they don't line up one-for-one with the PE medians above, but even a strategic buyer's math leans on synergies to bring that kind of software company down to the low teens.

Okta's re-rating shows growth still gets paid when cash comes with it

The strongest objection is that the public market is paying up for growth right now. Okta's stock roughly tripled from its April 10 low while revenue grew 11%, according to SaaStr's Jason Lemkin. On its August earnings call, CEO Todd McKinnon said new products made up about 30% of bookings. If a mature SaaS company can triple on low-double-digit growth, the argument goes, nobody should be telling CROs to plan around cash.

Okta's own quarterly numbers point somewhere narrower. In its second quarter of fiscal 2027, current remaining performance obligations (the contracted revenue due over the next 12 months) grew 14% while revenue grew 11%. Free cash flow margin rose to 28% from 22% a year earlier, and dollar-based net retention was 107%. What the market paid for was forward bookings outrunning revenue at a company that already produces cash. The Forvis Mazars data is consistent with that. Across the top 100 public SaaS companies, market value spans 38.3 times between the 95th and fifth percentiles, against 8.1 times in private markets. The premium survives for a few companies, and it attaches to evidence.

The second objection sits in the data itself. One half-year, a thin disclosure base and a deal mix tilted toward add-ons could be enough to drag a median down without anyone repricing anything. If that's what happened, the 20x world comes back as soon as large platform deals return, and plans rebuilt around cash will have left growth on the table.

What this means for CROs at exit-bound SaaS companies

Rank every GTM program by payback before the budget meeting, and mark any program whose payback lands after the expected sale date. The board will ask which of those it's funding, and it's better to have that list than to be handed it. Programs that pay back inside a year, such as expansion into accounts that already pay, land in the same earnings a buyer at 11.7x is capitalizing.

Report forward bookings next to revenue growth. Okta's spread between 14% cRPO growth and 11% revenue growth is the kind of evidence the public market rewarded, and a private board can read the same signal from contracted next-year bookings and the share coming from customers who already pay. Revenue growth on its own is the number this market has stopped paying a premium for.

Put AI cost-to-serve inside the margin you present. The report warns that adjusted metrics stripping out AI-related costs get extra scrutiny, and that sophisticated investors rarely take them at face value. A gross margin that already includes the compute behind your AI features holds up better in diligence; one that excludes it becomes a negotiation point late in a sale process.

My bet is that the second-half edition of this report shows the SaaS median staying within two turns of the non-SaaS multiple. If it climbs back toward 20 times, the first half was a deal-mix effect, and the cash-first plan was an overcorrection.

At 11.7x, the buyer pays for the earnings the company produces now, and the same dollar shows up first as a cost that reduced them.

Rank every GTM program by payback before the budget meeting, mark any that pays back after the expected sale date, and report forward bookings next to revenue growth.

By Business of GTM