2025 Business Valuation Multiples by Industry & Size
When preparing for a business sale, one of the first questions owners ask is: “What is my business worth?” While every transaction is unique, looking at valuation multiples by industry and company size gives a practical benchmark.
This guide covers current 2025 multiples for SaaS, IT services, digital marketing agencies, accounting firms, and recruiting & staffing agencies, broken down by revenue bands. Multiples are expressed in terms of Annual Recurring Revenue (ARR) for SaaS or Adjusted EBITDA for services businesses.
Note on Adjusted EBITDA
When using EBITDA multiples, what buyers really evaluate is Adjusted EBITDA. This means financials should reflect the company’s true operating profitability by:
Adding back owner’s personal expenses that will not continue after a sale.
Normalizing for a market-based salary and benefits package for the leadership team.
Removing any one-time, non-recurring expenses or unusual income.
This process allows buyers to compare businesses on an apples-to-apples basis and ensures valuation reflects sustainable earnings, not discretionary accounting.
SaaS Valuation Multiples (2025)
Software-as-a-Service (SaaS) businesses provide cloud-based software delivered on a subscription basis. Their customers typically span industries such as finance, healthcare, marketing, and professional services. Revenue comes from recurring licenses, and strong customer support plus product updates are central to retaining clients.
| Revenue Band | Typical Multiple (ARR) | Notes |
|---|---|---|
| $3–5M ARR | 3.5–5.0× ARR | Higher multiples with 20%+ growth and low churn. |
| $5–10M ARR | 4.5–7.0× ARR | Buyers reward scale and strong product-market fit. |
| $10–20M ARR | 6.0–8.0× ARR | Strategic buyers and PE compete aggressively. |
SaaS businesses are valued on recurring revenue and rewarded for strong growth, low churn, and scalability. Buyers typically use ARR multiples, making SaaS one of the highest multiple categories in the lower middle market.
Perpetual License Software Valuation Multiples
Perpetual license software businesses generate revenue upfront from license sales, with recurring support/maintenance contracts providing stability. Buyers evaluate the balance between one-time license sales and the predictability of support agreements.
| Revenue Band | Typical Adjusted EBITDA Margin | Typical Multiple (EBITDA) |
|---|---|---|
| $3–5M Rev | 20–25% | 5.0–6.0× Adj. EBITDA |
| $5–10M Rev | 25–30% | 6.0–7.0× Adj. EBITDA |
| $10–20M Rev | 25–35% | 7.0–8.0× Adj. EBITDA |
Perpetual license software firms trade largely on EBITDA multiples, but buyers pay close attention to the recurring support contracts that follow license sales. Companies with high renewal rates, limited customer concentration, and stable support revenue command the higher end of the range.
IT Services & Consulting Firm Multiples
IT services firms help organizations manage technology infrastructure, implement systems, and provide ongoing technical support. Their customers include mid-sized businesses, corporations, and government agencies that rely on outsourced IT expertise. Services often include managed IT, cybersecurity, cloud migration, and custom software integration.
| Revenue Band | Typical Adjusted EBITDA Margin | Typical Multiple (EBITDA) |
|---|---|---|
| $3–5M Rev | 15–20% | 5–6× Adj. EBITDA |
| $5–10M Rev | 15–25% | 6–7× Adj. EBITDA |
| $10–20M Rev | 20–25% | 7–8× Adj. EBITDA |
IT services firms are judged on adjusted EBITDA, client diversification, and recurring contracts. Buyers place premiums on companies with strong utilization, a stable client base, and leadership that isn’t overly founder-dependent.
Digital Marketing Agency Valuation Multiples
Digital marketing agencies design and run online campaigns to help businesses attract and convert customers. They serve a wide range of clients from startups to established brands across industries such as e-commerce, professional services, and consumer products. Core offerings include SEO, paid advertising, content creation, and social media management.
| Revenue Band | Typical Adjusted EBITDA Margin | Typical Multiple (EBITDA) |
|---|---|---|
| $3–5M Rev | 10–15% | 4–5× Adj. EBITDA |
| $5–10M Rev | 15–20% | 5–6× Adj. EBITDA |
| $10–20M Rev | 15–25% | 6–7× Adj. EBITDA |
Marketing agencies are valued on adjusted EBITDA, but recurring retainers vs. project-based revenue heavily influence multiples. Agencies with sticky niches, recurring contracts, and lower owner reliance achieve stronger valuations.
Accounting Firm Valuation Multiples
Accounting firms provide financial services to businesses and individuals, with a strong focus on recurring compliance needs. Customers typically include small to mid-sized businesses that rely on help with bookkeeping, payroll, tax preparation, and audit support. Some firms also specialize in niche verticals like healthcare practices, law firms, or technology companies.
| Revenue Band | Typical Adjusted EBITDA Margin | Typical Multiple (Revenue) |
|---|---|---|
| $3–5M Rev | 20–30% | 1.0–1.5× Revenue |
| $5–10M Rev | 25–35% | 1.5–2.0× Revenue |
| $10–20M Rev | 30–40% | 2.0–2.5× Revenue |
Accounting practices are unusual in being valued on revenue multiples. Firms with high retention rates, recurring compliance services, and minimal partner concentration attract the most competitive valuations.
Recruiting & Staffing Agency Valuation Multiples
Recruiting and staffing companies connect employers with qualified talent. Their customers range from fast-growing startups to large enterprises across industries such as IT, healthcare, and manufacturing. Services often include temporary staffing, long-term contract placements, and permanent recruiting.
| Revenue Band | Typical Adjusted EBITDA Margin | Typical Multiple (EBITDA) |
|---|---|---|
| $1–3M Rev | 8–12% | 3.0–4.0× Adj. EBITDA |
| $3–5M Rev | 10–15% | 4.0–5.0× Adj. EBITDA |
| $5–10M Rev | 12–18% | 5.0–6.0× Adj. EBITDA |
Staffing and recruiting companies are valued on adjusted EBITDA, with contract staffing models trading higher than one-time placement businesses. Buyers reward firms with diversified client bases and scalable recruiting teams.
What Drives Multiples Higher or Lower?
While these tables provide reference ranges, actual deals close toward the low, mid, or high end depending on risk and growth factors:
Growth Rate: Consistent double-digit growth earns a premium.
Customer Concentration: High reliance on a few clients depresses multiples.
Recurring vs. Project Revenue: Buyers favor recurring models (subscriptions, retainers, contracts).
Churn & Retention: Low churn = stronger stability and higher value.
Owner Dependency: Businesses with strong management layers are worth more.
Team & Processes: Systems that reduce reliance on the founder increase buyer confidence.
Niche Positioning: Specialization in a profitable, defensible market segment drives competition.
Next Steps
If you’re considering selling in the next 12–36 months, knowing your valuation multiple range is useful — but the adjustments to EBITDA and details of your financials ultimately determine where buyers will value your company.
Request a confidential valuation to learn how your business compares in today’s market.
