The EV/Sales multiple (or EV/Revenue) divides enterprise value by annual revenues. It is the default valuation multiple for companies that are not yet profitable or whose profitability is temporarily depressed — principally SaaS startups and scale-ups, fast-growth companies, and companies under restructuring whose EBITDA does not reflect normalised economic potential.

The EV/Sales multiple is particularly relevant for SaaS companies whose valuation is driven by recurring ARR quality rather than current profitability: a SaaS with 80% growth and 110% NRR can command 10x revenues even with negative EBITDA. Sector median EV/Sales multiples vary widely: B2B SaaS (4x to 12x depending on growth), technology services (1x to 3x), specialised distribution (0.3x to 0.8x), financial services (1x to 4x).

Example: a Franco-Swiss SaaS scale-up with ARR of CHF 3.6 million and total revenue (ARR + services) of CHF 4.2 million is valued at Series B. Retained EV/ARR multiple: 7x → EV = CHF 25.2 million. EV/Sales cross-check: CHF 25.2M / CHF 4.2M = 6.0x total revenue — consistent with comparable transactions of 5x to 8x for same-profile SaaS companies.

At Hectelion, we use the EV/Sales multiple as a complementary indicator in our Franco-Swiss startup and scale-up valuations, combining it with ARR multiples and DCF methods.