Two IT firms with the same revenue can be worth very different amounts depending on how much of it is contracted, how long those contracts run, and how many clients leave each year.
Contracted monthly recurring revenue
MRR under signed agreement is the headline number in this category. Break-fix and project revenue is valued far more conservatively.
Contract terms and duration
Auto-renewing multi-year agreements with defined scope are worth materially more than month-to-month arrangements or handshake relationships.
Client churn and retention
Annual logo and revenue churn are underwritten directly. A low, well-documented churn rate is one of the strongest arguments for value.
Client concentration
Heavy revenue reliance on a few accounts is a risk buyers price, particularly where those agreements are short or informal.
Engineer and technician retention
Certified engineers and senior technicians are the delivery capacity. Their retention is both a value driver and a core diligence topic.
Tech stack and delivery maturity
Documented processes, ticketing and RMM systems, standardized client environments, and security posture determine how cleanly the business scales.