M&A & Due Diligence
What Is an Exit Multiple?
An Exit Multiple is the ratio of Enterprise Value to a profitability or revenue metric, most often Adjusted EBITDA and sometimes Revenue or ARR, and it is the valuation shortcut buyers and sellers anchor to. In 2026, mainstream DTC trades at 4 to 8x EBITDA, premium high-growth DTC at 8 to 14x, mainstream CPG at 6 to 11x, and Amazon FBA brands at 3 to 6x. Growth above 30 percent and EBITDA margin above 20 percent expand the multiple, while customer or channel concentration compresses it.
An Exit Multiple is the ratio of Enterprise Value to a profitability or revenue metric — most commonly Adjusted EBITDA, sometimes Revenue or ARR. It's the valuation shortcut buyers and sellers anchor to.
2026 multiple ranges by category
| Category | Multiple basis | Range |
|---|---|---|
| Premium DTC (high growth, high margin) | EBITDA | 8–14x |
| Mainstream DTC | EBITDA | 4–8x |
| Mainstream CPG | EBITDA | 6–11x |
| Amazon FBA brands | EBITDA | 3–6x |
| Subscription DTC | EBITDA or ARR | 6–12x EBITDA or 1.5–4x ARR |
| SaaS (where applicable) | ARR | 4–12x |
What drives multiple expansion
- Growth rate (30%+ commands premium)
- EBITDA margin (20%+ commands premium)
- Customer retention / subscription mix
- Channel diversification (less Amazon concentration is better)
- Clean accounting + audited financials
- Defensible IP / brand
- Recurring vs one-time revenue mix
What kills multiple
- Customer concentration (one customer >25% of revenue)
- Channel concentration (Amazon-only above 90%)
- Declining growth
- Margin compression trend
- Working capital sloppiness
- Messy cap table
The most common mistake
Anchoring to the high end of the range. The base case in the seller's head is the high end of the public-comp range; the buyer's base case is the low end. The negotiation is bridging these. Build the data — growth trajectory, margin defensibility, retention — that justifies the premium. Don't assume it.
Frequently Asked Questions
What drives higher multiple?
Growth, margin, retention, diversification, clean accounting.
What kills multiple?
Concentration (customer or channel), declining growth, margin compression, messy books.
EBITDA vs revenue multiple?
Profitable brands: EBITDA. High-growth lower-margin: revenue. SaaS: ARR.
Related Terms
- What are net proceeds?
- What is EBITDA margin?
- What is QofE?
- What is an earnout?
Browse the full ecommerce finance glossary for every metric and money term a DTC operator needs.
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