The median SaaS company is now valued at 11.7 times EBITDA, down from 20.4 times in the second half of 2025. That is the headline of the H1 2026 State of SaaS report from Forvis Mazars and PitchBook, published on 30 September. The press release says SaaS multiples have nearly converged with those of non-SaaS companies, which Forvis Mazars calls the end of the premium that defined the past decade.
At the same time, total SaaS M&A value hit a decade high. Both things are true, and understanding why matters if you plan to raise, sell or simply run a profitable software business.
The numbers
From the Forvis Mazars press release, covering the first half of 2026:
Global SaaS M&A value: $439.7 billion, a decade high, driven by AI-led strategic acquisitions.
Private equity SaaS deals: $58.8 billion across 702 deals, down from H2 2025.
Median EV/EBITDA: 11.7x, down from 20.4x in H2 2025.
PE and VC exits: about 1,458 in H1 2026, against 1,652 for the whole of 2025.
SaaS IPOs: 23 in H1 2026, with mixed performance after listing.
Private equity backdrop: fundraising on course for a third straight annual decline, dry powder near $4.4 trillion, and net cash flows negative since 2022.
How M&A can hit a record while multiples halve
The two headline figures describe different parts of the market. The M&A total is dominated by a small number of very large strategic acquisitions, which the report attributes to AI. Buyers are paying for specific AI capabilities, data or distribution, and a handful of big cheques moves the total a long way.
The median multiple describes the typical company. Private equity, which buys most mid-sized SaaS businesses, did fewer deals for less money, and the typical price per pound of earnings fell sharply. Ricardo Martinez of Forvis Mazars put it this way: investors are placing "greater emphasis on profitability, cash flow, and competitive differentiation."
Read the exit figure with care. The press release says exits slowed to about 1,458 and sets that against 1,652 for the whole of 2025, but it does not give a like-for-like half-year comparison, so the size of the slowdown is not clear from the release alone.
One caution: the press release gives headline figures only. It does not break multiples down by company size, growth rate or sector, and small, founder-run SaaS businesses usually trade on revenue or profit multiples set by different buyers from the ones PitchBook tracks.
What this means for founders
Profit is being priced, not promised. A multiple of 11.7x EBITDA rewards companies with earnings today. If your plan relies on a buyer paying for growth you have not yet turned into profit, that plan has become harder.
Differentiation carries a premium. The strategic buyers driving record M&A are paying for things they cannot easily build: proprietary data, a hard-to-copy workflow, or distribution in a niche. A generic tool with an AI feature bolted on is what the falling median is pricing.
Private equity is cautious. Less fundraising and negative net cash flows mean PE firms are choosier and slower. Expect longer diligence and more focus on retention and margins.
What to actually do
1. Know your own EBITDA. If you have never calculated it, do it this month: revenue minus operating costs, before interest, tax, depreciation and amortisation. Adjust for your own salary at a market rate, because a buyer will.
2. Track net revenue retention. Buyers paying for durability look at whether existing customers spend more over time. If yours is below 100%, fix churn before thinking about a sale.
3. Write down what is hard to copy. List the data, integrations or customer relationships a competitor could not reproduce in six months. That list is your valuation argument.
4. Get your inference costs under control. AI features that cost more to run than they add in price drag on the EBITDA buyers now focus on. Cache prompts, route cheap tasks to small models and measure cost per active user.
5. Reset your expectations. If you last checked valuations in 2025, halve your mental multiple and see whether a sale, or a raise, still makes sense.
Forvis Mazars is running a webinar on the report on 14 October, from 2pm to 3pm Eastern time.
The bottom line
The typical SaaS company is worth about half as much per unit of earnings as it was six months ago, even as a few AI-driven deals push total M&A to a ten-year high. The market is paying for profit, retention and things competitors cannot copy. Work out your real EBITDA, fix retention, and be clear about what makes your product hard to replace, because that is what buyers are now pricing.
This post is general information based on a published industry report, not financial or investment advice.