Americas Benchmarking Software: Solid Fundamentals, but a Higher Bar for Software Outperformance

Software fundamentals remained healthy in 2Q, with modest growth normalization accompanied by another quarter of improving profitability and stable unit economics. Median ARR growth moderated to 21.3% from 22.3% against an approximately 1.5-point more difficult comparison, although the breadth of growth held up, with 20 of the 40 companies in our sample accelerating year-over-year ARR growth. Revenue upside improved to 2.4%, EPS upside increased to 14.2%, and CY26 revenue estimates moved higher across all four software categories, led by Infrastructure/Platform at 3.0%. Median gross margins modestly increased to 78.4%, while median EBIT margins expanded by approximately 110 basis points sequentially to 24.4%, approaching the highest levels in our dataset. Median CAC increased modestly to 2.12x, but the broader unit-economic picture remained stable, with LTV essentially unchanged sequentially and LTV:CAC improving year over year. That healthy fundamental picture has translated unevenly