Revenue Multiple
A multiplier applied to revenue to estimate business value (e.g., 3x annual revenue).
A revenue multiple is a valuation method that multiplies a business's revenue (usually ARR or trailing-12-month revenue) by a factor to estimate its total value. Common multiples: micro-SaaS (2-5x ARR), growing SaaS (5-10x ARR), high-growth SaaS (10-20x+ ARR), content sites (24-48x monthly revenue), e-commerce (2-4x annual profit). The multiple depends on growth rate, margins, market size, customer concentration, and competitive moat.
Related Terms
SaaS Valuation
The process of determining the fair market value of a software-as-a-service business.
SDE (Seller's Discretionary Earnings)
Net profit plus owner salary and one-time expenses -- the true cash flow to the owner.
EBITDA
Earnings Before Interest, Taxes, Depreciation, and Amortization -- a measure of operating profitability.