Glossary term
EV/Revenue
Enterprise value divided by revenue; the default valuation metric for high-growth SaaS when EBITDA is negative.
EV/Revenue is enterprise value divided by total revenue, the default valuation multiple for high-growth software companies that are not yet profitable. It is used when EBITDA or earnings multiples are meaningless because the company is reinvesting all gross profit into growth. As SaaS profitability has come into focus, the market has shifted weight from EV/Revenue toward cash-flow-based measures. See FCF and SaaSpocalypse 101.