Why are your business metrics important?

In the world of SaaS, great storytelling may get an investor’s attention — but great metrics are what ultimately drive valuation. And the latest industry data reinforces just how powerful the right numbers can be.

According to GLC Advisors’ Q2 2025 Software Report, investors continue to apply significant valuation premiums to SaaS businesses that demonstrate strong operating performance across a handful of critical metrics — particularly Net Revenue Retention (NRR) and the Rule of 40.

If you're aiming to maximise your valuation, these benchmarks matter more than ever.

Enterprise Value Multiples Reward High Performance

GLC’s report highlights a clear trend: SaaS businesses with stronger retention and efficiency metrics command meaningfully higher revenue multiples.

Enterprise Value / Revenue Multiples by Net Revenue Retention (NRR)

• >110% → 15.5x

• 100%–110% → 4.9x

• <100% → 2.3x

  
  

The top-performing cohort earns nearly 7x the valuation multiple of companies with sub‑100% NRR. That difference alone can transform the outcome of a fundraising round or an acquisition.

Enterprise Value / Revenue Multiples by Rule of 40

• >60% → 14.1x

• 40–60% → 10.7x

• 20–40% → 5.2x

• <20% → 3.1x

  
  

The Rule of 40 continues to be one of the most influential indicators of sustainable growth. The higher the combined growth‑plus‑profit score, the stronger the valuation.

And the spread is significant — businesses exceeding 60% see valuation multiples that are over 4.5x higher than those performing below 20%.

Key Takeaways From the Latest Data

1. The premium for top-tier NRR is surging

The valuation for companies with 110%+ NRR has jumped to 15.5x, up from 8.1x last quarter.This reflects just how much investors value expansions, upsells, and a sticky customer base.

2. Strong GRR + strong Rule of 40 = top valuations

SaaS businesses with 90%+ Gross Revenue Retention and strong Rule of 40 performance are commanding the most impressive multiples in the market.

3. Underperformance leads to valuation compression

Falling short on metrics like NRR, GRR, CAC payback, or operating efficiency has a direct and immediate impact on valuation.This isn’t theoretical — it shows up in the numbers.

In short: your metrics are not just operational indicators — they are valuation drivers.

If You’re Not Tracking These Metrics, You’re Already Behind

Most founders know the importance of metrics — but not all have the systems, dashboards, or models needed to track them accurately and present them clearly to investors.

That’s where we come in.

At GRAY Financial Modelling, we help businesses:

• Build investor‑grade financial models

• Create intuitive dashboards

• Identify the metrics that matter

• Understand how your metrics stack up against benchmarks

• Tell a clearer, stronger, more compelling growth story

Your metrics shouldn’t just be calculated — they should be communicated.

Want to Strengthen Your Metrics Story?

If you’re not already tracking these benchmarks — or if you’re not sure how your performance compares to the market — we can help.

👉 Get in touch to book a free discovery call. We’ll help you build the modelling and reporting structure needed to support a stronger strategy — and a stronger valuation.