Revenue (chiffre d'affaires) is the total income generated from a company's core operating activities — product sales, service fees, subscriptions, licences — before any deductions. It is the starting point of every income statement and the denominator of all margin ratios. In financial due diligence, revenue quality analysis covers: recognition policy (IFRS 15 compliance), concentration risk (top 5 clients as % of revenue), revenue type (recurring vs one-off), geographic diversification and contract structure (multi-year vs spot). Revenue manipulation is one of the most common forms of financial statement fraud.

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Example: a Swiss SaaS company reports CHF 6.5 million ARR growth but due diligence reveals that CHF 1.2 million relates to non-recurring implementation fees recognised upfront rather than SaaS subscription revenue. The recurring ARR is restated to CHF 5.3 million — a 18% reduction that reduces the EV/ARR multiple from 8.5x to 7.0x on the corrected base, a material impact on the acquisition price.

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Hectelion analyses revenue quality, recognition policies and concentration risk as core components of every quality of earnings review.