PitchBook’s Q2 2025 SaaS Report: What Founders and CEOs Should Take Away
Insights and a founder's action plan for raising money or eyeing an exit in this environment
If you’re thinking about raising money, or eyeing an exit, the latest PitchBook Enterprise SaaS report provides key insights.
The SaaS landscape has changed, and the rules of the game aren’t going back to 2021. Valuations are lower. Growth expectations are tighter. Profitability isn’t just a nice-to-have; it’s the price of admission. PitchBook’s Q2 2025 report shows the median public SaaS multiple hovering around 3.8x revenue, less than half of where it was just two years ago.
But that doesn’t mean opportunity is gone. Quite the opposite. The report highlights a breakout quarter for tech IPOs and a renewed focus on operational efficiency. For late-stage founders, this is the blueprint for building a company investors will fight to back. For earlier-stage CEOs, it’s a reminder that every funding round now comes with sharper questions around unit economics, runway, and path to profitability.
So, what does this all mean for you as a founder? Here’s a breakdown of the key PitchBook insights and what they signal for private markets. And the steps you should be taking now to set your company up for success.
Key Takeaways from the Report
Valuation Trends
Median EV/TTM revenue multiples for public enterprise SaaS companies settled at 3.8x in Q2 2025, up slightly from 3.7x in Q1, but still far below 2022 levels (8.2x).
Forward revenue multiples remain weak, reflecting investor caution and broader macroeconomic uncertainty.
Revenue & Growth Outlook
Revenue growth is decelerating to high single-digit to low double-digit rates in 2025, compared to historical growth of 15–30%.
The HR/workforce management and marketing/customer engagement sectors will see the sharpest slowdowns, while analytics & BI shows modest growth resilience.
Profitability Emphasis
Gross margins are expected to rise to 76% in 2025, with the strongest improvement in ERP and CRM segments.
EBITDA margins increased to 21% in 2024, up from 17% in 2023, and are forecast to strengthen further in 2025 as companies prioritize operating efficiency.
IPO Market Recovery
Winners and Losers in Valuations
Block (+196%), Twilio (+75%), and Domo (+65%) saw major EV/TTM revenue multiple gains.
Sprout Social (-58%), Braze (-50%), and MongoDB (-42%) were among the biggest decliners.
Sector Divergence
Marketing/advertising SaaS will see margin pressure (-1% gross margin in 2025), while ERP, CRM, and analytics segments are projected to grow margins.
Implications for Startups
Lower Valuation Benchmarks
Public SaaS multiples anchor private valuations. With median multiples under 4x, late-stage startups will face lower funding rounds or structured terms (e.g., down rounds, higher liquidation preferences).
Shift Toward Profitability & Efficiency
Investors now prioritize gross margin strength, operating leverage, and positive EBITDA over aggressive top-line growth. Startups will need to demonstrate a clear path to profitability at scale.
IPO Market Reopening but Selective
The IPO recovery suggests public exits are possible but only for companies with compelling growth and profitability narratives. Early-stage founders should consider how their metrics and unit economics align with public comparables.
Segment-Specific Headwinds
Startups in HR, workforce management, and martech may face slower revenue multiples and funding appetite due to segment deceleration. Analytics and ERP-focused startups may benefit from relative resilience.
Founders & CEOs Action Plan
We are in a new and established SaaS market reality: valuations are lower, growth is slower, and profitability is the new currency. (Of course, there are exceptions!)
So, what should you do?
Founders and CEOs should realign their strategies to emphasize unit economics, cash efficiency (which is challenging in AI), and sustainable growth models.
Reset Growth Expectations
Plan for a lower-growth environment. Aggressive projections may no longer resonate with VCs or the public market without a strong distribution strategy and execution. (See Building Your PLG Company - the efficient growth playbook.)
Prioritize Margins and Cash Flow
Public comps highlight that 76% gross margins and 20%+ EBITDA are the new bar for quality SaaS businesses. Founders should pivot product and pricing strategies to optimize contribution margins. (See The AI Pricing Supernova - the pricing playbook.)
Rethink Valuation Narratives
If raising capital, align valuation expectations with the new reality (3–6x ARR multiples, not 8–10x). Strategic acquirers may be a better option for exits than IPOs in the near term.
The days of “grow at any cost” have been over for a while. CEOs need to think deeply about PLG strategies, retention levers, and cost-effective customer acquisition.
Prepare for a Longer Runway
With revenue multiples compressed, capital efficiency and burn reduction are paramount. Extending runway may be more valuable than chasing expensive growth.
If PitchBook’s report reinforces anything, it’s that clarity and execution win in this market. I work with SaaS founders and CEOs to translate market realities into actionable growth strategies - sharpening unit economics, building valuation-ready narratives, and driving profitable expansion. Whether you’re planning your next fundraise or positioning for an exit, I can help you cut through the noise and move faster toward the outcomes that matter.
Let’s build your next phase of growth - book a call and let’s talk!