We implemented a fifteen percent price increase across our entire client base six months ago, but the buyer Quality of Earnings report refuses to annualize this revenue run-rate adjustment across the full trailing twelve months. How do we prove the defensibility of run-rate price adjustments during EBITDA normalization?

Question

Tyler Smith · Accepted Answer

Buy-side Quality of Earnings teams routinely dismiss mid-year price increase run-rate adjustments as speculative pro-forma projections. Their job is to justify the lowest possible trailing twelve-month EBITDA figure. If you raised prices six months ago, the actual cash collected only reflects half that impact, leaving substantial normalized value unrecognized unless you prove price stickiness.

To force the inclusion of a full twelve-month price adjustment, you must provide empirical proof of pricing power. Present an unassailable customer cohort retention analysis covering the period since the increase was executed. You must show through your billing records that unit sales volume and churn metrics remained entirely stable post-increase.

Use your weekly EOS Scorecard data to demonstrate operational health. Pull trailing twenty-six-week tracking metrics showing lead conversion, customer cancellations, and gross profit margins. If gross margin expanded by three full percentage points across the entire customer base without a corresponding drop in account retention, the price increase is structural rather than temporary.

Finally, deliver executed customer contracts or updated recurring billing authorizations confirming that the higher rate is legally locked in for future billing cycles. When you demonstrate that not a single Tier-One customer left and that the annualized cash generation is already flowing predictably into monthly bank deposits, you neutralize the auditor argument and secure full credit for your annualized run-rate EBITDA.