Valuation and Value of Software Maintenance Revenue Stream
A rule of thumb for the acquisition value of a revenue stream from software maintenance is 3 to 4 times trailing twelve months revenue (3-4x revenue multiple). This assumes that the maintenance stream has a high renewal rate (typically in the 85% to 90% range) with high gross margins (80% or higher).
Tags: Maintenance, Multiple, Revenue, Rule of Thumb, Software, Valuation
June 11th, 2009 at 3:47 am
Thanks for the useful info. It’s so interesting