EBITDA vs Revenue

EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Revenue represent fundamentally different financial measurements within a business. Revenue is the total income generated from selling goods or services before any expenses are deducted, essentially measuring the top-line sales performance. EBITDA, however, measures operational profitability by starting with revenue and then subtracting operating expenses (excluding interest, taxes, depreciation, and amortization), providing insight into a company's core operational efficiency and earning potential independent of capital structure, tax environments, and non-cash expenses.

A growing technology company would focus on Revenue when demonstrating market adoption, sales momentum, or market share gains to investors during early growth stages. For instance, a SaaS startup might emphasize its 100% year-over-year revenue growth to show product-market fit and scaling potential. By contrast, the same company would highlight EBITDA when proving business model viability and operational efficiency as it matures, particularly when approaching profitability or preparing for acquisition. If two similarly-sized competitors both generate $10 million in revenue, but one has an EBITDA of $2 million while the other has $500,000, investors would likely view the first company as having a more efficient operating model despite identical revenue figures.