What is my app actually worth?

The default frame for subscription apps. A buyer offers a multiple of Annual Recurring Revenue — typically 2–6×, sometimes higher for exceptional assets. The multiple is not fixed: it is an output of the metrics below. What compresses it is churn, concentration, or dependency on paid acquisition. What expands it is growth rate, net revenue retention above 100%, and organic traffic.

For profitable apps, buyers shift to an earnings-based frame. EBITDA multiples for indie software sit between 4–12×, determined by growth, margin quality, and defensibility. SDE — Seller's Discretionary Earnings — adjusts for owner salary and personal expenses; it is the relevant metric for solo-built apps under roughly $500k annual revenue.

Normalisation matters. An app generating $20k reported EBITDA might show $80k after adding back a founder's $60k salary. At a 5× multiple, the difference is $300k at exit. Identifying and documenting legitimate addbacks is one of the most direct ways to increase transaction value before going to market.

Without recurring revenue, buyers look at trailing twelve months of net revenue and apply a lower multiple — typically 1.5–3×. The focus shifts to non-financial signals: app store rating, active user count, DAU/MAU, and whether the codebase is maintainable. The asset is the user base and brand; buyers price it accordingly.

Strategic buyers are not constrained by financial models. A company acquiring an app to fill a product gap, accelerate a roadmap, or block a competitor will pay what the opportunity is worth to them — which can be 2–3× what any financial analysis produces.

NRR measures what happens to a paying cohort over time — accounting for upgrades, downgrades, and cancellations. It is the single most important indicator of subscription business quality, and the metric most likely to shift a revenue multiple materially.

• Below 90%the business shrinks even without accounting for new customers — a structural problem.
• 90–100%baseline, acceptable.
• Above 100%the existing base grows through upgrades even before new customers are counted.
• Above 110–120%the profile that attracts premium multiples, because the business compounds without needing to acquire its way to growth.

Monthly churn is a headline figure; cohort curves are what buyers actually examine. A 3% monthly churn figure — roughly 30% annual loss — looks very different depending on whether that churn is front-loaded (new users leaving in month one) or spread evenly. Front-loaded churn with a stable long-term cohort is a different risk profile to steady ongoing loss, and an experienced buyer will price them differently.

Involuntary churn — payment failures — is examined separately. Above 20% of total churn, it signals either a lower-quality subscriber base or a failure in payment recovery processes. Buyers will discount for this at signing, even though it is often fixable post-acquisition.

Daily Active Users divided by Monthly Active Users. A daily habit app (meditation, productivity, fitness) should sit at 40–60%+. A monthly tool might naturally sit at 10–15%. Anything below 10% in a category that expects regular use is a red flag. Buyers will benchmark against category norms, not apply a universal threshold.

LTV:CAC above 3:1 is considered healthy; above 5:1 is strong. The composition matters as much as the ratio. Apps where the majority of acquisition is organic — App Store search, word of mouth, editorial features — command a meaningful premium because organic traffic has no marginal cost and is durable. Apps dependent on paid social for the majority of new users carry channel concentration risk: if CPMs rise or the algorithm changes, the growth engine stalls.

For subscription apps, buyers want to see how revenue from a signed cohort evolves over 12–24 months. A flat or rising curve signals that the product delivers enough value to hold — and expand — subscribers. A steeply declining curve after month three signals that reported MRR is held up by acquisition volume rather than retention quality.