Industry Trends
Even with continued uncertainty in the broader market, M&A activity in the Software & Technology industry stayed strong in Q2 2025.
Notable sectors included Application Software and IT Services, where several large acquisitions highlighted firms' continuing push for digital growth.
Market Dynamics
- Software & Technology EV/Revenue multiples rebounded from Q1, driven by the easing of inflationary pressures and resilient earnings from leading sector participants.
- BI & Analytics saw the strongest tailwinds from the continued competitive rise of AI, with Q2 2025 seeing particularly robust growth driven by escalating data processing demands.1
- Platform EV/Revenue multiples increased 19% in Q2 2025, primarily driven by improved sentiment, stronger earnings visibility, and growing demand for scalable AI infrastructure solutions.1
- Tighter capital markets led investors to seek stable, cash flow positive businesses. In particular, private equity activity in the space increased due to the recurring and highly predictable revenue streams of software businesses.2
- Recent tariffs on semiconductor subcomponents can significantly raise production costs across the supply chain, forcing semiconductor companies to choose between absorbing additional expenses or passing it on to the consumer.3
Sources: Capital IQ as of 6/30/2025, EY1, Zuora2, McKinsey3
Learn More
Reach out to Dinan Capital Advisors Managing Director Will Downing for more report insights.
