Software Index
State of the Market
In June, equity markets continued to demonstrate a notably improved sentiment. Global indices showed resilience, recovering from the “liberation day” tariff announcements, with the MSCI All Country World Index reaching new highs. Market concerns about trade-related economic contraction have largely diminished, particularly as domestic legal challenges to the tariff regime gain traction. Additionally, US-China trade negotiations have shown promising developments, suggesting continued trade relations between the nations, albeit with elevated barriers.
Market optimism has been reinforced by corporate earnings guidance. Despite subdued expectations for 2025 due to tariff uncertainties, companies maintain a positive outlook for 2026. This forward-looking confidence has particularly benefited the IT sector, contributing to the broader market’s positive sentiment.
Credit markets have garnered significant attention, particularly regarding treasury auctions. Following Moody’s downgrade of US sovereign debt in late May, a 20-year auction saw notably weak demand. This tepid response, coupled with the progression of the “Big Beautiful Bill” through the US House, suggests growing concerns about US debt sustainability. While subsequent auctions have shown improved demand, long-term treasury yields continue to serve as a crucial barometer of investor confidence in the government’s ability to address mounting debt challenges.
Economic indicators have remained relatively steady. May’s unemployment rate held at 4.2%, with private sector growth, particularly in healthcare and hospitality, offsetting government sector job losses. The Consumer Price Index saw a modest 0.1% increase, reaching 2.4% annually, with food and shelter costs being the primary drivers.
While markets have found some stability following recent volatility, several key factors will shape the summer outlook. Investors remain focused on upcoming Federal Reserve decisions, congressional debt-ceiling negotiations, evolving trade discussions, and the continuing impact of the AI revolution.
Median
NTM Rev Multiple
5.0x
Top 10*
NTM Rev Multiple
14.4x
Median
NTM Rev Growth
10%
Top 10*
NTM Rev Growth
21%
Median
Gross Margin
75%
Top 10*
Gross Margin
77%
*Median multiple, growth rate, and gross margin for the top 10 companies based on EV/NTM Revenue.
Valuation Trends
Index Leaders
Top 10 companies in the Software Index based on current EV / NTM Revenue Multiple.
|
Company
|
EV/NTM Rev
|
EV ($MM)
|
LTM Rev $MM
|
NTM Rev Growth
|
LTM Rev Growth
|
Gross Margin
|
Operating Margin
|
FCF Margin
|
|---|---|---|---|---|---|---|---|---|
| Palantir Technologies Inc. | 73.8x | 305,898 | 3,115 | 33.1% | 33% | 80% | 13% | 30% |
| Cloudflare, Inc. | 25.7x | 57,060 | 1,770 | 25.5% | 28% | 77% | -8% | 3% |
| CrowdStrike Holdings, Inc. | 23.8x | 113,911 | 3,954 | 21.1% | 29% | 75% | -1% | 33% |
| Samsara Inc. | 16.7x | 25,599 | 1,249 | 22.8% | 33% | 76% | -15% | 18% |
| ServiceNow, Inc. | 14.8x | 201,219 | 11,469 | 18.6% | 21% | 79% | 13% | 33% |
| Snowflake Inc. | 14.0x | 66,451 | 3,840 | 24.0% | 27% | 67% | -37% | 30% |
| The Descartes Systems Group Inc. | 13.4x | 9,662 | 651 | 10.6% | 14% | 76% | 29% | 31% |
| Zscaler, Inc. | 13.4x | 40,881 | 2,547 | 19.8% | 25% | 77% | -5% | 29% |
| Shopify Inc. | 11.8x | 133,835 | 9,379 | 20.8% | 27% | 50% | 15% | 9% |
| Datadog, Inc. | 11.3x | 38,138 | 2,835 | 18.8% | 26% | 80% | 1% | 28% |
| Microsoft Corporation | 11.3x | 3,447,047 | 270,010 | 13.2% | 14% | 69% | 45% | 21% |
| ServiceTitan, Inc. | 10.8x | 9,755 | 772 | 16.6% | 26% | 65% | -29% | 12% |
| monday.com Ltd. | 10.6x | 13,639 | 1,037 | 24.4% | 32% | 89% | -1% | 27% |
| Manhattan Associates, Inc. | 10.5x | 11,303 | 1,051 | 2.2% | 9% | 56% | 26% | 28% |
| HubSpot, Inc. | 9.4x | 29,722 | 2,724 | 15.9% | 19% | 85% | -2% | 21% |
| Atlassian Corporation | 8.9x | 52,760 | 4,963 | 18.9% | 19% | 82% | -3% | 36% |
| Oracle Corporation | 8.9x | 556,069 | 55,783 | 12.5% | 6% | 71% | 31% | 13% |
| JFrog Ltd. | 8.4x | 4,368 | 451 | 15.3% | 22% | 76% | -20% | 32% |
| Dynatrace, Inc. | 7.7x | 15,147 | 1,699 | 15.4% | 19% | 82% | 11% | 28% |
| Waystar Holding Corp. | 7.7x | 7,928 | 975 | 6.3% | 18% | 67% | 18% | 30% |
| Clearwater Analytics Holdings, Inc. | 7.5x | 6,068 | 476 | 70.1% | 23% | 73% | 6% | 28% |
| Adobe Inc. | 7.3x | 176,038 | 22,037 | 8.8% | 11% | 89% | 37% | 39% |
| OneStream, Inc. | 7.3x | 4,469 | 515 | 18.7% | 27% | 63% | -69% | 40% |
| Klaviyo, Inc. | 7.0x | 8,598 | 1,007 | 22.4% | 34% | 76% | -9% | 17% |
| GitLab Inc. | 7.0x | 6,567 | 759 | 24.0% | 31% | 89% | -18% | -10% |
| Q2 Holdings, Inc. | 6.9x | 5,506 | 721 | 11.0% | 13% | 52% | -3% | 24% |
| Paycom Software, Inc. | 6.8x | 14,074 | 1,914 | 8.7% | 10% | 86% | 22% | 16% |
| SPS Commerce, Inc. | 6.7x | 5,263 | 670 | 17.2% | 19% | 68% | 15% | 19% |
| Qualys, Inc. | 6.7x | 4,442 | 622 | 6.8% | 9% | 82% | 31% | 38% |
| Constellation Software Inc. | 6.5x | 79,609 | 10,367 | 17.5% | 17% | 36% | 15% | 22% |
| Workday, Inc. | 6.3x | 61,562 | 8,696 | 12.7% | 15% | 76% | 7% | 28% |
| Paylocity Holding Corporation | 6.2x | 10,367 | 1,552 | 8.1% | 15% | 69% | 19% | 22% |
| C3.ai, Inc. | 6.0x | 2,787 | 389 | 19.5% | 25% | 61% | -83% | 16% |
| Salesforce, Inc. | 5.9x | 248,306 | 38,591 | 9.0% | 8% | 77% | 21% | 38% |
| Confluent, Inc. | 5.9x | 7,032 | 1,018 | 17.4% | 24% | 74% | -40% | 17% |
| MongoDB, Inc. | 5.8x | 13,068 | 2,006 | 13.2% | 19% | 73% | -11% | 12% |
| Okta, Inc. | 5.6x | 16,284 | 2,681 | 9.1% | 14% | 77% | 1% | 30% |
| DocuSign, Inc. | 5.5x | 17,105 | 2,977 | 5.3% | 8% | 79% | 8% | 39% |
| Asana, Inc. | 5.2x | 4,018 | 724 | 7.8% | 11% | 89% | -35% | 18% |
| Dayforce Inc. | 5.1x | 10,120 | 1,810 | 9.4% | 15% | 50% | 5% | 16% |
| Pegasystems Inc. | 5.0x | 8,107 | 1,643 | -1.9% | 14% | 76% | 17% | 27% |
| BlackLine, Inc. | 5.0x | 3,576 | 663 | 7.8% | 9% | 75% | 4% | 21% |
| Box, Inc. | 5.0x | 5,934 | 1,102 | 7.9% | 5% | 79% | 7% | 32% |
| Braze, Inc. | 5.0x | 3,433 | 593 | 16.1% | 26% | 69% | -21% | 16% |
| SentinelOne, Inc. | 4.8x | 5,063 | 864 | 21.3% | 28% | 75% | -38% | 25% |
| Elastic N.V. | 4.6x | 7,732 | 1,483 | 12.4% | 17% | 74% | -4% | 26% |
| Informatica Inc. | 4.6x | 7,891 | 1,655 | 3.0% | 2% | 81% | 10% | 35% |
| DigitalOcean Holdings, Inc. | 4.3x | 3,958 | 807 | 13.0% | 13% | 60% | 15% | 7% |
| International Business Machines Corporation | 4.3x | 285,030 | 62,832 | 6.5% | 1% | 57% | 16% | 19% |
| Freshworks Inc. | 4.2x | 3,549 | 752 | 11.9% | 20% | 84% | -14% | 29% |
| Workiva Inc. | 4.2x | 3,777 | 769 | 16.9% | 17% | 77% | -10% | 13% |
| Progress Software Corporation | 4.2x | 4,055 | 807 | 20.4% | 13% | 86% | 20% | 40% |
| Dropbox, Inc. | 4.0x | 9,954 | 2,542 | -2.8% | 1% | 82% | 23% | 33% |
| Amplitude, Inc. | 4.0x | 1,344 | 307 | 10.7% | 9% | 74% | -35% | 11% |
| Tenable Holdings, Inc. | 3.9x | 3,896 | 923 | 7.5% | 12% | 78% | 1% | 29% |
| VTEX | 3.8x | 967 | 228 | 12.3% | 8% | 75% | 5% | 8% |
| EverCommerce Inc. | 3.7x | 2,225 | 703 | -14.7% | 8% | 68% | 7% | 16% |
| AvidXchange Holdings, Inc. | 3.7x | 1,707 | 441 | 5.0% | 10% | 72% | -1% | 13% |
| ZoomInfo Technologies Inc. | 3.7x | 4,387 | 1,210 | -1.0% | -3% | 88% | 17% | 29% |
| Couchbase, Inc. | 3.6x | 833 | 209 | 9.8% | 16% | 88% | -38% | 17% |
| Appian Corporation | 3.5x | 2,451 | 634 | 10.6% | 13% | 76% | -6% | 11% |
| Zoom Communications Inc. | 3.5x | 16,851 | 4,699 | 3.1% | 3% | 76% | 18% | 39% |
| Twilio Inc. | 3.4x | 16,623 | 4,583 | 7.1% | 9% | 51% | 1% | 15% |
| Docebo Inc. | 3.0x | 713 | 223 | 8.5% | 17% | 81% | 8% | 19% |
| DoubleVerify Holdings, Inc. | 2.9x | 2,164 | 681 | 8.6% | 15% | 82% | 12% | 24% |
| PROS Holdings, Inc. | 2.7x | 985 | 336 | 10.1% | 8% | 67% | -4% | 12% |
| Sprout Social, Inc. | 2.6x | 1,206 | 418 | 10.6% | 18% | 78% | -13% | 21% |
| BILL Holdings, Inc. | 2.6x | 4,101 | 1,423 | 11.5% | 15% | 85% | -6% | 15% |
| Open Text Corporation | 2.5x | 12,643 | 5,220 | -1.8% | -11% | 76% | 19% | 57% |
| PagerDuty, Inc. | 2.4x | 1,198 | 476 | 6.0% | 9% | 83% | -10% | 30% |
| Enghouse Systems Limited | 2.3x | 869 | 350 | 8.8% | 8% | 65% | 19% | 25% |
| Jamf Holding Corp. | 2.2x | 1,553 | 643 | 10.0% | 11% | 80% | -7% | 14% |
| Sprinklr, Inc. | 2.1x | 1,741 | 796 | 2.9% | 9% | 72% | 3% | 7% |
| Upland Software, Inc. | 2.0x | 412 | 268 | -22.7% | -8% | 71% | -4% | 21% |
| Asure Software, Inc. | 1.9x | 269 | 123 | 12.4% | 5% | 68% | -10% | -7% |
| Five9, Inc. | 1.9x | 2,215 | 1,075 | 8.6% | 14% | 55% | -1% | 20% |
| Domo, Inc. | 1.9x | 595 | 317 | -0.1% | -1% | 74% | -17% | 17% |
| Yext, Inc. | 1.8x | 808 | 421 | 6.0% | 4% | 77% | -1% | 33% |
| Kaltura, Inc. | 1.6x | 293 | 181 | 0.4% | 2% | 68% | -9% | 13% |
| RingCentral, Inc. | 1.5x | 3,786 | 2,428 | 5.0% | 8% | 71% | 2% | 27% |
| Riskified Ltd. | 1.4x | 465 | 333 | 3.2% | 9% | 51% | -14% | 13% |
| BigCommerce Holdings, Inc. | 1.3x | 450 | 335 | 3.7% | 5% | 77% | -6% | 15% |
| Rackspace Technology, Inc. | 1.3x | 3,452 | 2,712 | -0.5% | -6% | 20% | -4% | 11% |
| Expensify, Inc. | 1.0x | 151 | 142 | 4.0% | -2% | 52% | 0% | 25% |
| eGain Corporation | 0.9x | 82 | 88 | 7.4% | -8% | 69% | 3% | 7% |
| ON24, Inc. | 0.5x | 63 | 145 | -6.2% | -8% | 75% | -32% | 22% |
| Top 10 Average | 21.9x | 99,265 | 4,081 | 21.5% | 26% | 74% | 0% | 24% |
| Top 10 Median | 14.4x | 61,756 | 2,975 | 21.0% | 27% | 77% | 0% | 29% |
| Overall Average | 6.7x | 73,084 | 6,853 | 11.1% | 13% | 73% | -1% | 22% |
| Overall Median | 5.0x | 5,384 | 949 | 10.1% | 13% | 75% | 0% | 21% |
Multiples by Growth Tranche
Valuation multiples are strongly correlated to expected growth. Scalar has selected the tranches based on current market conditions.
EV/NTM Revenue Multiple
High Growth (> 20%)
11.2x
|
|
Multiple
|
Growth
|
|---|---|---|
| Clearwater Analytics Holdings, Inc. | 7.5x | 70.1% |
| Palantir Technologies Inc. | 73.8x | 33.1% |
| Cloudflare, Inc. | 25.7x | 25.5% |
| monday.com Ltd. | 10.6x | 24.4% |
| Snowflake Inc. | 14.0x | 24.0% |
| GitLab Inc. | 7.0x | 24.0% |
| Samsara Inc. | 16.7x | 22.8% |
| Klaviyo, Inc. | 7.0x | 22.4% |
| SentinelOne, Inc. | 4.8x | 21.3% |
| CrowdStrike Holdings, Inc. | 23.8x | 21.1% |
| Shopify Inc. | 11.8x | 20.8% |
| Progress Software Corporation | 4.2x | 20.4% |
EV/NTM Revenue Multiple
Average Growth (10%-20%)
6.1x
|
|
Multiple
|
Growth
|
|---|---|---|
| Zscaler, Inc. | 13.4x | 19.8% |
| C3.ai, Inc. | 6.0x | 19.5% |
| Atlassian Corporation | 8.9x | 18.9% |
| Datadog, Inc. | 11.3x | 18.8% |
| OneStream, Inc. | 7.3x | 18.7% |
| ServiceNow, Inc. | 14.8x | 18.6% |
| Constellation Software Inc. | 6.5x | 17.5% |
| Confluent, Inc. | 5.9x | 17.4% |
| SPS Commerce, Inc. | 6.7x | 17.2% |
| Workiva Inc. | 4.2x | 16.9% |
| ServiceTitan, Inc. | 10.8x | 16.6% |
| Braze, Inc. | 5.0x | 16.1% |
| HubSpot, Inc. | 9.4x | 15.9% |
| Dynatrace, Inc. | 7.7x | 15.4% |
| JFrog Ltd. | 8.4x | 15.3% |
| MongoDB, Inc. | 5.8x | 13.2% |
| Microsoft Corporation | 11.3x | 13.2% |
| DigitalOcean Holdings, Inc. | 4.3x | 13.0% |
| Workday, Inc. | 6.3x | 12.7% |
| Oracle Corporation | 8.9x | 12.5% |
| Elastic N.V. | 4.6x | 12.4% |
| Asure Software, Inc. | 1.9x | 12.4% |
| VTEX | 3.8x | 12.3% |
| Freshworks Inc. | 4.2x | 11.9% |
| BILL Holdings, Inc. | 2.6x | 11.5% |
| Q2 Holdings, Inc. | 6.9x | 11.0% |
| Amplitude, Inc. | 4.0x | 10.7% |
| Sprout Social, Inc. | 2.6x | 10.6% |
| The Descartes Systems Group Inc. | 13.4x | 10.6% |
| Appian Corporation | 3.5x | 10.6% |
| PROS Holdings, Inc. | 2.7x | 10.1% |
| Jamf Holding Corp. | 2.2x | 10.0% |
EV/NTM Revenue Multiple
Low Growth (< 10%)
3.6x
|
|
Multiple
|
Growth
|
|---|---|---|
| Couchbase, Inc. | 3.6x | 9.8% |
| Dayforce Inc. | 5.1x | 9.4% |
| Okta, Inc. | 5.6x | 9.1% |
| Salesforce, Inc. | 5.9x | 9.0% |
| Enghouse Systems Limited | 2.3x | 8.8% |
| Adobe Inc. | 7.3x | 8.8% |
| Paycom Software, Inc. | 6.8x | 8.7% |
| DoubleVerify Holdings, Inc. | 2.9x | 8.6% |
| Five9, Inc. | 1.9x | 8.6% |
| Docebo Inc. | 3.0x | 8.5% |
| Paylocity Holding Corporation | 6.2x | 8.1% |
| Box, Inc. | 5.0x | 7.9% |
| BlackLine, Inc. | 5.0x | 7.8% |
| Asana, Inc. | 5.2x | 7.8% |
| Tenable Holdings, Inc. | 3.9x | 7.5% |
| eGain Corporation | 0.9x | 7.4% |
| Twilio Inc. | 3.4x | 7.1% |
| Qualys, Inc. | 6.7x | 6.8% |
| International Business Machines Corporation | 4.3x | 6.5% |
| Waystar Holding Corp. | 7.7x | 6.3% |
| PagerDuty, Inc. | 2.4x | 6.0% |
| Yext, Inc. | 1.8x | 6.0% |
| DocuSign, Inc. | 5.5x | 5.3% |
| RingCentral, Inc. | 1.5x | 5.0% |
| AvidXchange Holdings, Inc. | 3.7x | 5.0% |
| Expensify, Inc. | 1.0x | 4.0% |
| BigCommerce Holdings, Inc. | 1.3x | 3.7% |
| Riskified Ltd. | 1.4x | 3.2% |
| Zoom Communications Inc. | 3.5x | 3.1% |
| Informatica Inc. | 4.6x | 3.0% |
| Sprinklr, Inc. | 2.1x | 2.9% |
| Manhattan Associates, Inc. | 10.5x | 2.2% |
| Kaltura, Inc. | 1.6x | 0.4% |
| Domo, Inc. | 1.9x | -0.1% |
| Rackspace Technology, Inc. | 1.3x | -0.5% |
| ZoomInfo Technologies Inc. | 3.7x | -1.0% |
| Open Text Corporation | 2.5x | -1.8% |
| Pegasystems Inc. | 5.0x | -1.9% |
| Dropbox, Inc. | 4.0x | -2.8% |
| ON24, Inc. | 0.5x | -6.2% |
| EverCommerce Inc. | 3.7x | -14.7% |
| Upland Software, Inc. | 2.0x | -22.7% |
EV/NTM Revenue Multiple - Top Quartile
NTM Revenue Multiple and NTM Growth Rate for the top quartile of companies in the Scalar Software Index, ordered by NTM Growth Rate.
* PLTR (73.8x, 33.1% NTM Growth) have been excluded to enhance visual meaning of this chart.
Enterprise Software Operating Metrics
Last updated Q1 2025
Median
Net Dollar Retention
109.0%
Median
ARR Growth
13.4%
Median
Payback Period
34 months
Top 10*
Net Dollar Retention
113.0%
Top 10*
ARR Growth
24.0%
Top 10*
Payback Period
30 months
*Median multiple, growth rate, and gross margin for the top 10 companies based on EV/NTM Revenue.
Pre- & Post- Money Deals
Averages for the trailing 6 months of successful software and SAAS fundraising, including rounds Series A through Series D.
Average
Deal Size
- Series A$20.1B
- Series B$65.8B
- Series C$114.5B
- Series D$139.1B
Average
Pre Money Valuation
- Series A$57.2B
- Series B$323.5B
- Series C$1,399.9B
- Series D$1,178.9B
Average
Post Money Valuation
- Series A$70.3B
- Series B$387.9B
- Series C$1,534.2B
- Series D$1,308.0B
The data for the Scalar Software Index is collected based on market data on the last trading day of the previous month.
Metric definitions:
- EV/NTM Rev: Enterprise value to next twelve months revenue.
- EV $MM: Enterprise value, calculated as the market value of equity plus net debt and minority interest, in millions of USD.
- LTM Rev $MM: The last twelve months revenue in millions of USD.
- NTM Rev Growth: The expected growth rate of revenue for the next twelve months.
- LTM Rev Growth: The growth rate of revenue over the last twelve months.
- Gross Margin: The percentage calculated from gross profit over revenue.
- Operating Margin: The percentage calculated from operating income (EBIT) over revenue.
- FCF Margin: The percentage calculated from unlevered free cash flow over revenue.
The information contained in this newsletter is for general information purposes only. The information is provided by Scalar and while we endeavor to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the newsletter or the information, products, services, or related graphics contained in the newsletter for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this newsletter.
Every effort is made to keep the newsletter up and running smoothly. However, Scalar takes no responsibility for, and will not be liable for, the newsletter being temporarily unavailable due to technical issues beyond our control.
Data Sources: S&P Global Market Intelligence and PitchBook Data, Inc.
Enterprise Software Operating Metrics provided by Public Comps.