Revenue quality
When buyers talk about "quality of earnings," a lot of the weight sits on revenue quality, not just the EBITDA number.
A few things I look at early:
- How much of TTM revenue is recurring or contracted vs. one-off projects
- Whether growth came from price, volume, or a few large new accounts
- Customer churn and concentration behind the top line
- How cleanly revenue ties to bank deposits (timing gaps and deferred revenue show up here)
A deal can look strong on SDE and still be fragile if a big chunk of revenue isn't repeatable after close. That's usually where lenders get nervous too.
Searchers — what's the first revenue-quality check you run when a CIM lands?