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Knowledge Challenge
A friend thinks you can answer this question about Revenue Quality Analysis
Two companies are for sale at $50M revenue. Company X: 95% subscription, 78% gross margin, top-10 customers = 22%, 125% NRR, multi-year contracts. Company Y: 70% subscription/30% services, 55% gross margin, top-10 customers = 58%, 95% NRR, mostly annual contracts. Which would justify a higher valuation multiple, and roughly how much higher?