Software Index
State of the Market
CrowdStrike reported strong second-quarter fiscal 2027 results that underscored demand for cybersecurity platforms amid rising AI-related risks. Revenue reached $1.47B, up 26% year over year, while net new annual recurring revenue hit a record $333M, up 51% year over year. Ending ARR stood at $5.84B. Management raised full-year net-new-ARR growth guidance by more than 600 basis points. The results and outlook highlighted how elevated security threats linked to generative AI are driving platform adoption rather than displacing traditional software spending.
Markets have shown resilience over the past month even as external pressures have kept sentiment measured. The S&P 500 has traded near 7,580 in mid-September after reaching highs approaching 7,800 in mid-August, leaving year-to-date gains around 11%.
That caution is understandable given the mixed labor and inflation signals. August nonfarm payrolls increased by 162,000, well above consensus, while the unemployment rate held steady at 4.1%. The hiring rebound after softer summer readings suggests the labor market remains balanced, yet price data continue to show persistent upward pressure from energy costs.
Inflation stayed elevated at both the consumer and producer levels. The August Consumer Price Index rose 3.4% year over year, matching the prior month, with a 0.4% monthly increase led by gasoline, while core CPI eased slightly to 2.4% year over year. The Producer Price Index, however, jumped 5.4% year over year on energy costs; diesel prices alone rose 24.1% for the month as Middle East shipping disruptions continued working through supply chains.
Those disruptions stem directly from the ongoing U.S.-Iran conflict, now in its seventh month. Recent strikes on vessels near the Strait of Hormuz and Houthi control over the Red Sea have kept oil prices around $100 per barrel. Higher fuel expenses and longer transit times continue to feed into producer and consumer costs, even as some shipping persists under naval protection.
Against this backdrop, growth has moderated but remains positive. Real GDP expanded at a 1.5% annualized rate in the second quarter, supported by consumer spending and investment but weighed down by declining government outlays and rising imports. Third-quarter tracking estimates point to a stronger pace near 4.0%, driven by continued household outlays and capital spending.
On September 16, the Federal Reserve raised the federal funds rate by 25 basis points to a target range of 3.75%–4.00%, the first increase since 2023. The unanimous decision reflected elevated inflation and resilient activity. Officials signaled the possibility of further tightening this year, underscoring a commitment to returning inflation to the 2.0% objective while acknowledging solid domestic demand and productivity gains.
Looking forward, investors face a measured set of trade-offs. Steady consumer demand and investment continue to offer support, but energy volatility, rising input prices, the new higher rate path, and further geopolitical developments will shape sentiment through the autumn. Key near-term markers remain the next payrolls report and any easing or intensification of shipping disruptions in the Middle East.
Median
NTM Rev Multiple
3.9x
Top 10*
NTM Rev Multiple
16.5x
Median
NTM Rev Growth
10%
Top 10*
NTM Rev Growth
24%
Median
Gross Margin
76%
Top 10*
Gross Margin
74%
*Median multiple, growth rate, and gross margin for the top 10 companies based on EV/NTM Revenue.
Valuation Trends
Index Leaders
Top 10 companies in the Software Index based on current EV / NTM Revenue Multiple.
|
Company
|
EV/NTM Rev
|
EV ($MM)
|
LTM Rev $MM
|
NTM Rev Growth
|
LTM Rev Growth
|
Gross Margin
|
Operating Margin
|
FCF Margin
|
|---|---|---|---|---|---|---|---|---|
| Palantir Technologies Inc. | 43.3x | 438,795 | 6,156 | 64.7% | 79% | 85% | 43% | 35% |
| CrowdStrike Holdings, Inc. | 35.0x | 232,373 | 5,396 | 23.0% | 24% | 75% | -2% | 37% |
| Cloudflare, Inc. | 33.2x | 108,010 | 2,512 | 29.7% | 34% | 73% | -8% | 27% |
| Snowflake Inc. | 17.5x | 113,253 | 5,033 | 28.3% | 31% | 67% | -26% | 35% |
| Datadog, Inc. | 16.5x | 81,408 | 3,967 | 24.4% | 32% | 80% | 0% | 27% |
| JFrog Ltd. | 16.4x | 11,529 | 600 | 17.0% | 26% | 78% | -10% | 34% |
| MongoDB, Inc. | 11.1x | 34,097 | 2,602 | 18.3% | 24% | 72% | -4% | 20% |
| Shopify Inc. | 10.9x | 184,319 | 13,269 | 27.6% | 33% | 48% | 18% | 12% |
| Samsara Inc. | 10.8x | 22,591 | 1,731 | 21.4% | 30% | 76% | -1% | 14% |
| Manhattan Associates, Inc. | 10.7x | 12,881 | 1,126 | 7.2% | 6% | 56% | 25% | 29% |
| DigitalOcean Holdings, Inc. | 9.9x | 14,226 | 1,011 | 41.5% | 21% | 57% | 15% | 0% |
| Microsoft Corporation | 9.8x | 3,818,875 | 331,839 | 17.9% | 18% | 68% | 47% | 6% |
| ServiceNow, Inc. | 8.8x | 154,747 | 14,732 | 19.9% | 22% | 75% | 12% | 35% |
| Okta, Inc. | 8.3x | 28,005 | 3,073 | 9.9% | 11% | 78% | 8% | 34% |
| Figma, Inc. | 8.0x | 13,053 | 1,281 | 27.6% | 43% | 79% | -124% | 68% |
| The Descartes Systems Group Inc. | 7.9x | 6,527 | 754 | 10.1% | 13% | 77% | 31% | 36% |
| Zscaler, Inc. | 7.7x | 28,793 | 3,174 | 18.1% | 25% | 77% | -4% | 35% |
| ServiceTitan, Inc. | 7.6x | 8,982 | 1,014 | 16.1% | 24% | 71% | -14% | 16% |
| Qualys, Inc. | 7.6x | 5,789 | 703 | 8.9% | 10% | 83% | 34% | 35% |
| Navan, Inc. | 7.2x | 6,883 | 765 | 25.8% | 35% | 72% | -25% | 0% |
| Atlassian Corporation | 6.6x | 49,145 | 6,572 | 13.8% | 26% | 86% | 4% | 26% |
| Oracle Corporation | 6.4x | 570,576 | 67,357 | 32.6% | 17% | 66% | 33% | -32% |
| Netskope, Inc. | 6.3x | 5,827 | 753 | 22.9% | 31% | 69% | -95% | 37% |
| Dynatrace, Inc. | 6.2x | 14,780 | 2,096 | 14.4% | 18% | 82% | 13% | 26% |
| GitLab Inc. | 5.7x | 6,549 | 1,005 | 14.9% | 25% | 87% | -5% | 31% |
| Twilio Inc. | 5.5x | 34,596 | 5,572 | 13.7% | 18% | 49% | 6% | 17% |
| SentinelOne, Inc. | 5.3x | 6,921 | 1,099 | 19.2% | 21% | 73% | -26% | 27% |
| C3.ai, Inc. | 5.2x | 1,165 | 250 | -10.4% | -36% | 31% | -195% | -11% |
| Salesforce, Inc. | 5.0x | 242,928 | 43,938 | 10.3% | 11% | 77% | 22% | 42% |
| Paycom Software, Inc. | 5.0x | 11,373 | 2,141 | 7.1% | 9% | 88% | 30% | 20% |
| Waystar Holding Corp. | 4.7x | 6,308 | 1,206 | 11.5% | 19% | 69% | 24% | 30% |
| Elastic N.V. | 4.5x | 9,377 | 1,802 | 14.9% | 16% | 76% | -1% | 29% |
| Paylocity Holding Corporation | 4.4x | 8,362 | 1,771 | 6.8% | 11% | 69% | 22% | 21% |
| Q2 Holdings, Inc. | 4.3x | 3,990 | 846 | 9.6% | 14% | 57% | 10% | 23% |
| Workday, Inc. | 4.3x | 47,954 | 10,155 | 10.1% | 13% | 76% | 12% | 31% |
| Adobe Inc. | 4.3x | 117,835 | 25,198 | 10.1% | 11% | 89% | 37% | 37% |
| Dropbox, Inc. | 4.2x | 10,513 | 2,532 | -1.0% | 0% | 80% | 27% | 34% |
| Box, Inc. | 4.1x | 5,517 | 1,234 | 8.9% | 10% | 80% | 10% | 31% |
| Zoom Communications, Inc. | 4.1x | 21,020 | 4,993 | 4.0% | 5% | 78% | 24% | 40% |
| Tenable Holdings, Inc. | 3.9x | 4,325 | 1,044 | 6.9% | 10% | 78% | 5% | 26% |
| International Business Machines Corporation | 3.9x | 277,566 | 69,095 | 3.9% | 8% | 58% | 18% | 19% |
| Workiva Inc. | 3.9x | 4,331 | 966 | 15.9% | 20% | 80% | 3% | 18% |
| Braze, Inc. | 3.8x | 3,529 | 787 | 18.6% | 27% | 66% | -15% | 24% |
| Amplitude, Inc. | 3.6x | 1,610 | 374 | 18.5% | 18% | 72% | -27% | 19% |
| Appian Corporation | 3.6x | 3,204 | 795 | 12.6% | 21% | 72% | 4% | 15% |
| SPS Commerce, Inc. | 3.6x | 2,908 | 772 | 5.3% | 10% | 70% | 16% | 23% |
| Constellation Software Inc. | 3.5x | 51,746 | 12,641 | 18.3% | 18% | 37% | 16% | 23% |
| DocuSign, Inc. | 3.4x | 12,023 | 3,286 | 8.4% | 8% | 80% | 11% | 38% |
| Via Transportation, Inc. | 3.2x | 1,959 | 492 | 24.8% | 29% | 40% | -18% | -5% |
| EverCommerce Inc. | 3.1x | 1,967 | 598 | 5.1% | 4% | 78% | 10% | 20% |
| Progress Software Corporation | 3.1x | 3,121 | 1,004 | -0.8% | 16% | 86% | 19% | 34% |
| Klaviyo, Inc. | 3.1x | 5,141 | 1,390 | 20.6% | 29% | 74% | -2% | 20% |
| HubSpot, Inc. | 3.0x | 11,932 | 3,449 | 14.0% | 21% | 83% | 4% | 19% |
| Pegasystems Inc. | 2.9x | 5,762 | 1,736 | 12.7% | 4% | 76% | 11% | 29% |
| Freshworks Inc. | 2.9x | 3,003 | 904 | 14.0% | 16% | 85% | 4% | 29% |
| BlackLine, Inc. | 2.6x | 2,118 | 732 | 10.0% | 9% | 76% | 6% | 19% |
| RingCentral, Inc. | 2.6x | 7,066 | 2,584 | 4.4% | 5% | 72% | 7% | 26% |
| Asana, Inc. | 2.5x | 2,189 | 809 | 8.4% | 9% | 89% | -17% | 24% |
| Docebo Inc. | 2.5x | 709 | 259 | 11.6% | 12% | 80% | 13% | 17% |
| DoubleVerify Holdings, Inc. | 2.4x | 1,978 | 769 | 9.0% | 8% | 82% | 13% | 21% |
| BILL Holdings, Inc. | 2.3x | 4,158 | 1,653 | 10.7% | 13% | 84% | 1% | 14% |
| ZoomInfo Technologies Inc. | 2.2x | 2,600 | 1,258 | -6.2% | 3% | 87% | 23% | 31% |
| monday.com Ltd. | 2.2x | 3,440 | 1,367 | 15.6% | 24% | 89% | 3% | 21% |
| Open Text Corporation | 2.1x | 10,932 | 5,246 | -1.6% | 2% | 77% | 23% | 29% |
| PagerDuty, Inc. | 2.1x | 1,059 | 495 | 0.9% | 2% | 85% | 7% | 24% |
| Five9, Inc. | 2.1x | 2,772 | 1,204 | 10.4% | 9% | 55% | 7% | 22% |
| Asure Software, Inc. | 1.9x | 319 | 155 | 7.7% | 24% | 68% | -1% | 6% |
| Yext, Inc. | 1.8x | 812 | 445 | -0.1% | 2% | 75% | 1% | 8% |
| Upland Software, Inc. | 1.8x | 340 | 198 | -2.9% | -21% | 76% | 12% | 24% |
| Sprinklr, Inc. | 1.8x | 1,524 | 871 | 0.0% | 8% | 66% | 6% | 15% |
| Rackspace Technology, Inc. | 1.6x | 3,996 | 2,702 | -4.8% | 0% | 19% | -2% | 9% |
| VTEX | 1.5x | 416 | 253 | 6.7% | 10% | 79% | 12% | 16% |
| Riskified Ltd. | 1.5x | 630 | 368 | 16.6% | 10% | 51% | -6% | 14% |
| Enghouse Systems Limited | 1.5x | 492 | 356 | -5.4% | -4% | 63% | 18% | 18% |
| eGain Corporation | 1.4x | 127 | 92 | -1.2% | 5% | 74% | 11% | 11% |
| Kaltura, Inc. | 1.3x | 249 | 181 | 3.8% | 0% | 72% | 1% | 24% |
| Expensify, Inc. | 1.2x | 169 | 138 | -0.5% | -4% | 49% | -10% | 14% |
| Sprout Social, Inc. | 1.2x | 615 | 482 | 5.0% | 12% | 77% | -6% | 22% |
| Domo, Inc. | 0.9x | 280 | 318 | -1.5% | 0% | 75% | -10% | 17% |
| Commerce.com, Inc. | 0.6x | 208 | 347 | -3.0% | 3% | 77% | 3% | 10% |
| Top 10 Average | 20.5x | 123,925 | 4,239 | 26.2% | 32% | 71% | 3% | 27% |
| Top 10 Median | 16.5x | 94,709 | 3,285 | 23.7% | 30% | 74% | -2% | 28% |
| Overall Average | 6.0x | 86,790 | 8,798 | 12.0% | 15% | 72% | 2% | 23% |
| Overall Median | 3.9x | 6,068 | 1,165 | 10.4% | 13% | 76% | 6% | 23% |
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%)
10.3x
|
|
Multiple
|
Growth
|
|---|---|---|
| Palantir Technologies Inc. | 43.3x | 64.7% |
| DigitalOcean Holdings, Inc. | 9.9x | 41.5% |
| Oracle Corporation | 6.4x | 32.6% |
| Cloudflare, Inc. | 33.2x | 29.7% |
| Snowflake Inc. | 17.5x | 28.3% |
| Figma, Inc. | 8.0x | 27.6% |
| Shopify Inc. | 10.9x | 27.6% |
| Navan, Inc. | 7.2x | 25.8% |
| Via Transportation, Inc. | 3.2x | 24.8% |
| Datadog, Inc. | 16.5x | 24.4% |
| CrowdStrike Holdings, Inc. | 35.0x | 23.0% |
| Netskope, Inc. | 6.3x | 22.9% |
| Samsara Inc. | 10.8x | 21.4% |
| Klaviyo, Inc. | 3.1x | 20.6% |
EV/NTM Revenue Multiple
Average Growth (10%-20%)
4.3x
|
|
Multiple
|
Growth
|
|---|---|---|
| ServiceNow, Inc. | 8.8x | 19.9% |
| SentinelOne, Inc. | 5.3x | 19.2% |
| Braze, Inc. | 3.8x | 18.6% |
| Amplitude, Inc. | 3.6x | 18.5% |
| Constellation Software Inc. | 3.5x | 18.3% |
| MongoDB, Inc. | 11.1x | 18.3% |
| Zscaler, Inc. | 7.7x | 18.1% |
| Microsoft Corporation | 9.8x | 17.9% |
| JFrog Ltd. | 16.4x | 17.0% |
| Riskified Ltd. | 1.5x | 16.6% |
| ServiceTitan, Inc. | 7.6x | 16.1% |
| Workiva Inc. | 3.9x | 15.9% |
| monday.com Ltd. | 2.2x | 15.6% |
| GitLab Inc. | 5.7x | 14.9% |
| Elastic N.V. | 4.5x | 14.9% |
| Dynatrace, Inc. | 6.2x | 14.4% |
| Freshworks Inc. | 2.9x | 14.0% |
| HubSpot, Inc. | 3.0x | 14.0% |
| Atlassian Corporation | 6.6x | 13.8% |
| Twilio Inc. | 5.5x | 13.7% |
| Pegasystems Inc. | 2.9x | 12.7% |
| Appian Corporation | 3.6x | 12.6% |
| Docebo Inc. | 2.5x | 11.6% |
| Waystar Holding Corp. | 4.7x | 11.5% |
| BILL Holdings, Inc. | 2.3x | 10.7% |
| Five9, Inc. | 2.1x | 10.4% |
| Salesforce, Inc. | 5.0x | 10.3% |
| The Descartes Systems Group Inc. | 7.9x | 10.1% |
| Workday, Inc. | 4.3x | 10.1% |
| Adobe Inc. | 4.3x | 10.1% |
| BlackLine, Inc. | 2.6x | 10.0% |
EV/NTM Revenue Multiple
Low Growth (< 10%)
2.5x
|
|
Multiple
|
Growth
|
|---|---|---|
| Okta, Inc. | 8.3x | 9.9% |
| Q2 Holdings, Inc. | 4.3x | 9.6% |
| DoubleVerify Holdings, Inc. | 2.4x | 9.0% |
| Qualys, Inc. | 7.6x | 8.9% |
| Box, Inc. | 4.1x | 8.9% |
| Asana, Inc. | 2.5x | 8.4% |
| DocuSign, Inc. | 3.4x | 8.4% |
| Asure Software, Inc. | 1.9x | 7.7% |
| Manhattan Associates, Inc. | 10.7x | 7.2% |
| Paycom Software, Inc. | 5.0x | 7.1% |
| Tenable Holdings, Inc. | 3.9x | 6.9% |
| Paylocity Holding Corporation | 4.4x | 6.8% |
| VTEX | 1.5x | 6.7% |
| SPS Commerce, Inc. | 3.6x | 5.3% |
| EverCommerce Inc. | 3.1x | 5.1% |
| Sprout Social, Inc. | 1.2x | 5.0% |
| RingCentral, Inc. | 2.6x | 4.4% |
| Zoom Communications, Inc. | 4.1x | 4.0% |
| International Business Machines Corporation | 3.9x | 3.9% |
| Kaltura, Inc. | 1.3x | 3.8% |
| PagerDuty, Inc. | 2.1x | 0.9% |
| Sprinklr, Inc. | 1.8x | 0.0% |
| Yext, Inc. | 1.8x | -0.1% |
| Expensify, Inc. | 1.2x | -0.5% |
| Progress Software Corporation | 3.1x | -0.8% |
| Dropbox, Inc. | 4.2x | -1.0% |
| eGain Corporation | 1.4x | -1.2% |
| Domo, Inc. | 0.9x | -1.5% |
| Open Text Corporation | 2.1x | -1.6% |
| Upland Software, Inc. | 1.8x | -2.9% |
| Commerce.com, Inc. | 0.6x | -3.0% |
| Rackspace Technology, Inc. | 1.6x | -4.8% |
| Enghouse Systems Limited | 1.5x | -5.4% |
| ZoomInfo Technologies Inc. | 2.2x | -6.2% |
| C3.ai, Inc. | 5.2x | -10.4% |
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 (43.3x, 64.7% NTM Growth) have been excluded to enhance visual meaning of this chart.
Enterprise Software Operating Metrics
Last updated Q2 2026
Median
Net Dollar Retention
109.0%
Median
ARR Growth
13.8%
Median
Payback Period
30 months
Top 10*
Net Dollar Retention
121.0%
Top 10*
ARR Growth
29.6%
Top 10*
Payback Period
23 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$96.0B
- Series B$53.0B
- Series C$310.0B
- Series D$347.0B
Average
Pre Money Valuation
- Series A$445.0B
- Series B$248.0B
- Series C$3,914.0B
- Series D$9,950.0B
Average
Post Money Valuation
- Series A$559.0B
- Series B$307.0B
- Series C$4,261.0B
- Series D$10,517.0B
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.
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Data Sources: S&P Global Market Intelligence and PitchBook Data, Inc.
Enterprise Software Operating Metrics provided by Public Comps.