Valuation Lab · Calculator
Delivery revenue for a services firm is available capacity times utilization times realized rate: ten delivery staff at 1,800 hours, 70% utilization and $150 per hour produce $1.89M; at 80% utilization, $2.16M. This calculator builds revenue from that capacity, keeps recurring managed contracts in a separate pool so hours are never double counted, deducts compensation, subcontractors and overhead, and values adjusted EBITDA inside the 2026 IT services & MSP band for the earnings size. The cost of the idle bench is reported explicitly.
Consulting, implementation and outsourcing firms are bought for their people and their contracts, and priced on the earnings those two things reliably produce. The tool makes the capacity arithmetic visible because that is where most valuation arguments in this sector are won or lost: two firms with the same revenue and different utilization have very different earnings and therefore very different prices.
Disclosed IT-services transactions cleared at a 5.9x median EV/EBITDA below $5M of deal value and 13.0x above $500M (Mergermarket data via Aventis). Size, recurring contracts and profitability explain the spread; the utilization curve on this page shows how far the third of those alone can move a firm.
The interactive calculator loads here. The published example scenario below is the same model (2026.09.22-1) evaluated at the example inputs.
Indicative enterprise value, EV / adjusted EBITDA (IT services & MSPs, $1M-$3M EBITDA): $2.7M. $2.3M to $3.1M at 4.5x to 6.0x; selected 5.3x
Delivery revenue = 18,000 available hours x utilization x rate = $1.9M; recurring contracts $300K use their own margin pool. Cost of the idle bench at current utilization: $300K per year. Band: Windsor Drake EBITDA multiples by industry, Aug 2026 (analyst ranges informed by GF Data Q1 2026, BizBuySell Q2 2026, NYU Stern Jan 2026); Aventis/Mergermarket IT-services deal medians run 5.9x (<$5M deals) to 13.0x ($500M+).
Revenue: $2.2M · Adjusted EBITDA: $516K · Idle bench cost: $300K · Revenue per head: $219K
| Line | Value |
|---|---|
| Available hours | 18,000 |
| Billed hours | 12,600 |
| Delivery revenue | $1.9M |
| Recurring contract revenue | $300K |
| Delivery compensation | -$1.0M |
| Subcontractors | -$95K |
| Recurring delivery cost | -$180K |
| Gross profit | $916K |
| Overhead | -$400K |
| Adjusted EBITDA | $516K |
| Band | 4.5x to 6.0x ($1M-$3M EBITDA) |
| Enterprise value | $2.7M |
| Equity value | $2.7M |
Project delivery and recurring-service revenue are separate pools, so hours are never counted twice.
| Input | Value |
|---|---|
| Delivery headcount | 10 |
| Available hours per person per year | 1,800 |
| Billable utilization | 70% |
| Realized billing rate per hour | $150 |
| Fully loaded compensation per delivery head | $100,000 |
| Subcontractor cost (% of delivery revenue) | 5% |
| Recurring / managed contracts (annual, separate pool) | $300,000 |
| Overhead (annual, excl. delivery) | $400,000 |
| Recurring contract gross margin | 40% |
| Owner compensation normalization (+) | $0 |
| Selected EBITDA multiple (0 = band midpoint) | 0x |
| Excess cash | $0 |
| Debt | $0 |
The chart holds headcount, rate and costs constant and moves utilization from 50% to 95%. Below the utilization at which EBITDA turns negative there is no meaningful multiple. Most firms sit between 65% and 80%; each five points of utilization at a $150 rate is worth about $135,000 of revenue per ten delivery staff, almost all of which falls to EBITDA because the bench is already paid for.
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Adjusted EBITDA times a band that runs 4.5x-6.0x at $1M-$3M of EBITDA up to 7.0x-9.5x above $10M in Windsor Drake’s 2026 ranges; disclosed deals show 5.9x at the smallest size band and 13.0x at the largest.
Headcount x available hours x utilization x realized hourly rate. Ten staff at 1,800 hours, 70% and $150 produce $1.89M.
The compensation carried by unbilled hours. At 70% utilization, 30% of delivery compensation is unbilled; the calculator reports the annual figure.
If managed contracts are the majority of revenue, use the MSP calculator, which forecasts them monthly with retention. Here they are a separate annual pool alongside project delivery.
Enterprise value is quoted cash-free and debt-free; equity value adds excess cash and subtracts debt and debt-like items, before fees, taxes, escrow, rollover and earn-outs. Every method states its denominator, period (trailing twelve months unless labelled), currency (USD) and treatment of cash and debt. Results are ranges under stated assumptions, not statistical confidence intervals. Company inputs stay in the browser and are never transmitted. Benchmark snapshot 2026.09.22-1; model 2026.09.22-1; changes are recorded in the Valuation Lab changelog in the Windsor Drake repository.
Benchmark: IT services valuation multiples · Related: MSP valuation calculator · IT services M&A advisory · Business valuation calculator · All valuation tools