Let’s say you have two software businesses that are nearly identical, but one is sold on subscriptions and the other transactional. (For whatever reason it’s impossible for the latter to move to a subscription model)
How much more would you pay for the SaaS business? Let’s assume it has solid retention stats (>90% gross)
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really hard to say without knowing margins. I would imagine because the subscription is recurring (and transactional is not), I would be paying a higher multiple of FCF on it.
Look at EV/ARR vs EV/Revenue comps
Is it actually recurring, or the "recurring" that every business pretending to be SAAS is lying to the market about?
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