EV / Revenue Multiple: Definition, Formula & SaaS Benchmarks
What is EV / Revenue Multiple?
The EV/Revenue multiple (Enterprise Value divided by Revenue) measures how much investors pay for each dollar of annual revenue. It is the primary valuation benchmark for high-growth SaaS companies that are not yet profitable, and reflects the market's expectations for future growth and margin expansion.
Formula
EV/Revenue = Enterprise Value ÷ Annual Revenue (TTM)Worked Example
If a company has an enterprise value of $10B and trailing twelve-month revenue of $1B, its EV/Revenue multiple is 10x. A peer with $5B enterprise value and $1B revenue trades at 5x — a 50% discount, likely reflecting slower growth or lower margins.
What Good Looks Like
Thresholds derived from live data across 57 public SaaS companies tracked on SaaSDB.
Live Rankings
View full rankings →| Rank | Company | EV / Revenue Multiple |
|---|---|---|
| #1 | Sprout Social, Inc.(SPT) | 0.6x |
| #2 | Domo, Inc.(DOMO) | 0.8x |
| #3 | Five9, Inc.(FIVN) | 1.1x |
| #4 | Bandwidth Inc.(BAND) | 1.2x |
| #5 | Sprinklr, Inc.(CXM) | 1.4x |
| · · · | ||
| #53 | Palantir Technologies Inc.(PLTR) | 74.4x |
| #54 | DigitalBridge Group, Inc.(DBRG) | 29.4x |
| #55 | Shopify Inc.(SHOP) | 15.1x |
| #56 | Datadog, Inc.(DDOG) | 13.3x |
| #57 | DigitalOcean Holdings, Inc.(DOCN) | 11.3x |
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Frequently Asked Questions
What is a good EV/Revenue multiple for SaaS?
Multiples vary widely by growth rate. High-growth companies (>40% YoY) often trade at 10–20x or higher. Slower-growing companies (10–20% YoY) typically trade at 4–8x. Context always matters.
How does EV/Revenue differ from P/S ratio?
EV/Revenue uses enterprise value (market cap + net debt), while P/S uses market cap alone. EV/Revenue is preferred for SaaS because it accounts for capital structure — a company with significant cash on its balance sheet will have a lower EV/Revenue than its P/S.
Does a high EV/Revenue multiple mean a stock is overvalued?
Not necessarily. A high multiple reflects the market's expectation of future growth and profitability. Companies with durable growth, high gross margins, and strong NRR can sustain premium multiples for years.