Before you can value your company, you need to know which tool applies. This piece settles one of the most common confusions in valuation: revenue multiple, EBITDA multiple, or both?
A revenue multiple (EV/Revenue) values your company as a function of sales. It is the right tool when you are not yet profitable, or when growth is the main story and the top line is what buyers are really paying for. The multiple is essentially a bet on the future: It assumes today's revenue becomes tomorrow's profit.
The limitation: It says nothing about whether those sales make money. A company on 5x revenue burning cash and one on 5x revenue earning a 30% EBITDA margin look identical on this metric, and they should not. In 2025 the median public SaaS company traded at about 5.3x revenue.
An EBITDA multiple (EV/EBITDA) values the company as a function of operating profit. It is the dominant framework in private equity and M&A for mature, cash-generative businesses, because it ties value directly to the cash the company produces.
The limitation: It is useless if you are not profitable. With negative EBITDA the multiple is meaningless, which is exactly why high-growth, pre-profit companies are valued on revenue instead. In 2025 the median public SaaS company traded at about 29.3x EBITDA, a big number, partly because the typical SaaS EBITDA margin is still only around 9%.
The two numbers look wildly different, but they are linked by one thing: your EBITDA margin. The relationship is exact.
So a company on 5x revenue with a 20% EBITDA margin is, by definition, on 25x EBITDA. Same company, same value, two yardsticks. This is why a thin-margin business can look cheap on revenue but eye-watering on EBITDA, and a fat-margin one the reverse. It is also why you can never compare a revenue multiple to an EBITDA multiple directly, the translation always runs through margin. See what both yardsticks say about your own company:
Enter your numbers and see what each yardstick says. Drag your EBITDA margin down and watch the EBITDA figure lose its meaning: near zero, or in a loss, only the revenue figure still holds.
Both use the 2025 public-SaaS median multiple (SEG 2026). They differ because each implies a different margin, which is exactly why you pick the one that fits your business.
Most of the time the choice is obvious. Match the metric to the stage:
| Your situation | Use |
|---|---|
| Pre-profit / still burning cash | Revenue multiple (EV/Revenue) |
| Growth is the main story | Revenue multiple (EV/Revenue) |
| Steady and profitable | EBITDA multiple (EV/EBITDA) |
| Mature, cash-generative | EBITDA multiple (EV/EBITDA) |
| Somewhere in between | Both, and compare the range |
When you are in the middle, running both gives you a range that is more informative than either alone, and it shows how different buyer types will see you: A growth investor reads you on revenue, a private-equity buyer on EBITDA.
Whenever you read about industry multiples, confirm which metric is being used. "Software trades at 5–8x" is incomplete. As the SEG 2026 data shows, 5.3x revenue and 29.3x EBITDA are both true of the same companies, and they mean very different things. A headline multiple without its denominator is just noise.
Using the wrong yardstick does not just give you an inaccurate number. It signals to buyers that you do not fully understand your own business.
Crispa gives founders the financial clarity to make bold decisions and optimize their valuation.
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