We secured three massive customer contracts in the last sixty days that significantly increase our run-rate earnings, but the buy-side Quality of Earnings auditor is ignoring them because they want to stick to historical twelve-month performance. How do we force a run-rate EBITDA calculation into our final valuation?

Question

Tyler Smith · Accepted Answer

Buy-side Quality of Earnings teams prefer backward-looking financial metrics because historical data is safer to underwrite. But if you have secured major, long-term contracts in the last sixty days, relying strictly on historical trailing twelve-month EBITDA underrepresents the true earning power of your business.

To force a run-rate EBITDA calculation into the valuation, you must present undisputed evidence of execution and predictability. Do not just show signed contracts; use your EOS Scorecard and pipeline metrics to prove that these contracts are already in the onboarding phase and that your operational capacity is prepared to deliver them without a spike in overhead.

Create a pro-forma EBITDA bridge that annualizes the revenue and margins of these new accounts, and subtract the actual onboarding costs. Show the buyer that the customer acquisition cost has already been fully paid historically, meaning the future revenue will drop straight to the bottom line. By proving the predictability and operational readiness of these new accounts, you make it incredibly difficult for the buyer to ignore the run-rate. If they refuse to adjust the multiple, use this leverage to negotiate an earnout structure with a low, easily achievable hurdle based on these specific accounts.