EBITDA Multiples by Industry 2026: Complete Data Table

• Insurance agencies and IT managed services command the highest EBITDA multiples (7.0x-12.0x) due to recurring revenue models
• Pest control multiples increased 0.5x year-over-year, driven by private equity consolidation
• Businesses with 70%+ recurring revenue trade at a 1.5x-2.5x premium over project-based peers
• Owner-dependent businesses sell at a 1.0x-2.0x discount relative to management-run operations
• Deal volume in Q3-Q4 2025 increased 12% over the same period in 2024, according to IBBA Market Pulse data

EBITDA Multiples by Industry: 2026 Data Table

The following table reflects EBITDA multiples for SMB service businesses with enterprise values between $1M and $50M. All data is based on FISART's analysis of closed transactions from Q1 2024 through Q4 2025, supplemented by industry reports from GF Data, IBBA Market Pulse, and Capstone Partners.

What Drives EBITDA Multiple Differences

Five factors explain most of the variation in EBITDA multiples within any given industry.

Recurring Revenue Premium

Businesses with predictable, contracted recurring revenue trade at higher multiples. This is the single largest driver of valuation differences within an industry.

The data shows a clear pattern. Service businesses with less than 30% recurring revenue typically trade at the low end of their industry range. Businesses with 50-70% recurring revenue trade at or above the median. Businesses with 80%+ recurring revenue command premiums of 1.5x-2.5x above the industry median.

Recurring revenue reduces risk for the buyer. A pest control company with 3,000 monthly service agreements has a fundamentally different risk profile than one relying on seasonal call volume.

Owner Dependency Discount

Owner dependency is the most common reason a business sells below its industry median. If the owner is the primary technician, the primary salesperson, or the primary client relationship holder, a buyer faces transition risk.

FISART's transaction data shows that businesses where the owner works 50+ hours per week and holds the primary client relationships sell at a 1.0x-2.0x discount. Businesses with a general manager, department leads, and documented processes sell at or above the median.

The question a buyer asks is: "What happens to revenue if the owner leaves in 12 months?" If the answer is "revenue drops 30%+," the multiple drops accordingly. FISART quantifies owner dependency as part of every valuation engagement, so sellers know exactly where they fall on this spectrum before a single buyer asks the question.

Customer Concentration Risk

A business where one client represents more than 20% of revenue carries concentration risk. If that client represents more than 40% of revenue, many buyers will either discount the multiple by 1.0x-1.5x or structure the deal with an earn-out tied to retention.

The ideal profile is no single client above 10% of revenue, with the top 10 clients representing less than 40% of total revenue. Commercial cleaning and staffing agencies are the industries most frequently affected by concentration risk.

Growth Trajectory

Buyers pay more for businesses growing revenue and EBITDA year-over-year. A business growing at 15%+ annually will receive offers 0.5x-1.5x above a flat or declining peer.

The growth must be organic and sustainable. Revenue growth driven entirely by one large contract win or a one-time project does not command the same premium. Buyers discount growth that depends on factors the current owner controls but the next owner may not replicate.

Size Premium

Larger businesses within the same industry trade at higher EBITDA multiples. This is called the "size premium" and it is well documented in M&A data.

GF Data's 2025 reports confirm this pattern across all industries. Transactions between $10M and $25M in enterprise value averaged 6.5x-7.5x EBITDA. Transactions between $25M and $50M averaged 7.0x-8.5x EBITDA.

How to Read These Numbers

This section is for business owners encountering EBITDA multiples for the first time.

EBITDA Multiples Are a Starting Point

An EBITDA multiple is one input in a valuation, and the final sale price depends on many additional factors: deal structure, buyer type, competitive dynamics, and negotiation.

The multiples in this table represent what FISART has observed in closed transactions. They are backward-looking and reflect what buyers actually paid. Future transactions may differ based on market conditions, interest rates, and buyer demand.

SDE vs. EBITDA: Which Applies to Your Business

Two metrics are used to value SMB service businesses: Seller's Discretionary Earnings (SDE) and Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).

SDE adds back the owner's total compensation to net income, along with interest, taxes, depreciation, and amortization. SDE is the standard metric for owner-operated businesses generating less than approximately $1M in adjusted earnings. SDE multiples for SMB service businesses typically range from 2.0x to 4.0x.

EBITDA does not add back owner compensation. It assumes the business pays a market-rate manager to replace the owner. EBITDA is the standard metric for businesses generating approximately $1M or more in adjusted earnings, or for businesses already run by a management team.

If you are unsure which metric applies to your business, a general guideline: if you are the primary operator and your business generates less than $1M in adjusted earnings, start with SDE. If you have a management team in place or your business generates $1M+ in adjusted earnings, use EBITDA.

What "Enterprise Value" Means

The EBITDA multiples in this table produce an enterprise value, which is the total value of the business before adjusting for cash, debt, and working capital. The actual cash a seller receives at closing depends on the deal structure, including the balance sheet adjustment, any earn-out or seller note, and tax treatment.

Year-Over-Year Trends: 2024, 2025, and 2026

2024: Recovery and Recalibration

The Federal Reserve held the federal funds rate at 5.25%-5.50% through mid-2024 before beginning rate cuts in September 2024. High borrowing costs suppressed deal volume throughout the first half of the year.

EBITDA multiples remained stable for high-quality businesses during this period. Premium businesses with recurring revenue and management teams still received competitive offers. Businesses with weaker profiles saw fewer offers and longer time-to-close.

2025: Stabilization and Returning Volume

The Fed continued rate cuts through 2025, bringing the federal funds rate to approximately 4.25%-4.50% by year-end. Lower borrowing costs improved buyer economics, particularly for private equity firms using leverage.

Deal volume increased. IBBA Market Pulse Q3 2025 data showed a 12% increase in closed transactions over Q3 2024. GF Data's H1 2025 report described "small deal resilience."

EBITDA multiples ticked up 0.25x-0.50x in industries with heavy private equity activity: pest control, HVAC, veterinary, and IT managed services. Industries without significant PE buyer interest (landscaping, commercial cleaning, staffing) remained flat.

2026 Outlook

The current interest rate environment is more favorable for M&A than any period since 2021. Lower rates improve buyer returns on leveraged acquisitions, which increases the number of competitive offers for quality businesses.

FISART expects EBITDA multiples to remain stable or increase slightly in 2026 for industries with strong PE buyer pools. The supply of quality businesses for sale remains limited, which supports seller-favorable pricing. Businesses with $2M+ EBITDA, management in place, and recurring revenue will continue to receive the strongest offers.

The risk factor for 2026 is macroeconomic uncertainty. A recession or reversal in rate policy would reduce buyer confidence and deal volume.

What These EBITDA Multiples by Industry Mean for Your Business

The data above provides context, but every business is unique. Your specific multiple depends on the five factors outlined above: recurring revenue, owner dependency, customer concentration, growth trajectory, and size.

Three steps to move from these reference numbers to an actual estimate for your business:

1. Identify your industry range from the table above
2. Assess where you fall on the five value drivers
3. Get a data-driven valuation that accounts for your specific financial profile, market position, and buyer demand in your geography

A business that falls in the upper quartile on most value drivers will typically receive offers in the top third of the range. A business that falls in the lower quartile will receive offers in the bottom third or below the range.