Valuation and Value of Software Maintenance Revenue Stream

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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).

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  1. JamesD
    Jun 11, 2009 @ 03:47:08

    Thanks for the useful info. It’s so interesting

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