Current EBITDA Multiples (2025–2026)
Multiples vary significantly based on company size, growth rate, and the specific "stickiness" of the technology:
Multiples vary significantly based on company size, growth rate, and the specific "stickiness" of the technology:
- Small B2B SaaS ($0–$1M EBITDA):
- Low Growth/High Churn: 2.7x – 3.1x EBITDA.
- High Growth/Low Churn: 5.1x – 8.1x EBITDA.
- Micro-Cap / Owner-Operated (<$1M ARR): Often valued on a "profit generated" basis rather than revenue, typically trading between 2x and 4x profit.
- Lower Middle Market ($1M–$3M EBITDA):
- Standard Performers: 4.5x – 5.0x EBITDA.
- High Performers: 8.3x – 14.0x EBITDA.
- Sector-Specific Averages:
- Advertising & Marketing (Broad): ~5.46x EBITDA.
- AdTech (Specific): Often lower due to platform risk, averaging ~7.0x EBITDA.
- Marketing Agencies (for comparison): Typically 5x – 9x EBITDA, with "best-in-class" reaching 8x–12x.
- The "AI Premium": Companies that effectively leverage AI for operational efficiency or product enhancement are seeing valuation boosts of 15% to 24%. Buyers are specifically looking for a "clear AI roadmap" rather than just hype.
- Rule of 40 Dominance: The "Rule of 40" (Growth % + EBITDA Margin %) is the primary benchmark. Companies exceeding this threshold often command valuations double those that fall below it.
- Retention is Non-Negotiable: Net Revenue Retention (NRR) above 120% can lead to multiples more than double the industry median (e.g., 11.7x vs. 5.6x).
- Strategic Shift to "Outcomes": There is a massive trend toward "Outcome-based Marketing." Acquirers are targeting firms that can tie advertising spend directly to transactions or specific KPIs, moving MarTech from "discretionary expense" to "cost of goods sold".
- Selective Private Equity: PE firms are highly active but selective, focusing on "buy-and-build" strategies where they roll up smaller niche platforms to create scale.
