Valuation question. SaaS business

[dude_abides]

Hi Fastlaners,
I'm trying to help a colleague value a business.
It is a cloud based software for professional users (e.g., CPA, FP, Lawyers, etc.). They have approximately 5000 subscribers (monthly users).
The revenue is approximately 1 million per year. Their EBITA is approximately 500k per year.
Somewhere I have heard that 10x multiple is the going rate for valuation in SaaS software.
At 10x revenue is the valuation $10 million? Is 10x the correct multiple. Is valuation typically calculated on Revenue or EBITA?

Thanks

 

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[Young-Gun]

Jiz nep, O'n xusloph up nz TeeT tvesvaq epf jewi ciip sitiesdjoph vjot tvagg gus nupvjt.
Wemaevoup namvoqmit esi qesv ug xjz O gopemmz fidofif vu txovdj gsun nz johj-ipf vavusoph vu TeeT.

Ug duasti - veli xjev O'n tezoph xovj e JAHI hseop ug temv.
Vjot ot pu lopf ug qsugittoupem efwodi, katv upi nusi feve quopv gus zua.
O duamf raovi quttocmz ci XSUPH. Epf iwisz tovaevoup ot foggisipv.
Emtu, tussz og zua lpux emm vjot emsiefz.

Gostv, O xuamf tez 10y ot *up piv iespopht*, us ICOVE op uvjis xusft.
Tu qsucecmz 5 nommoup ot vji wemaevoup gus e TeeT dunqepz xovj $500l eppaem qsugov egvis iyqiptit cav cigusi veyit.
Zit, 10y ot e dunnup tvepfesf gus sidassoph-siwipai TeeT dunqepoit ecuwi e disveop tobi (O'f tez zuast xuamf figopovimz raemogz).

Ataemmz vji cohhis zua hiv, vji johjis zuas namvoqmi cidunit.
Og O sinincis sohjv, tuni ug vji cohhitv, getvitv-hsuxoph TeeT ipvisqsotit jewi jef 80-100y wemaevoupt.

Dassipv *atis hsuxvj sevi* ot emtu e NEKUS gedvus op epz TeeT wemaevoup.
E getv-hsuxoph atisceti fitiswit e nadj johjis wemaevoup vjep e tvehpepv atisceti, gus ucwouat sietupt.

Juqi vjot jimqt

 

[RazorCut]

E TEET catopitt jet vu ci wemaif up ICOVE et qsugov neshopt wesz hsievmz. Zua nohjv jewi e $100n eppaem vaspuwis cav upmz e $200l ICOVE gus iyenqmi. Vaspuwis ot wepovz, qsugov ot tepovz epf detj ot siemovz egvis emm.

Og vji nesliv cetif wemaevoupt up vuvem godvoup zua duamf jzquvjivodemmz wemai e catopitt vjev mutv $900n op vji metv vxu ziest ev esuapf 30 commoup. Cav vjev xuamf piwis jeqqip op vji siem xusmf.

Uj xeov, xjev xet vjev? Tpeqdjev?? XVG? :xofizif: