Methodology
How I value an app before I make an offer
A multiple looks arbitrary until you know what it prices. This page is the reasoning behind the number I send: what the multiple is measuring, which factors move it, and why two apps earning exactly the same profit can be worth $50,000 apart.
Short answer
I price apps at around 6–36x monthly profit (average of the last 3 months). The multiple is a summary of risk: how likely that profit is to still be there, or be larger, a year or two after the sale. Steady revenue, organic downloads, recurring plans, a clean store history and low owner dependence move you toward the top; a recent drop, bought traffic, concentration and store problems move you toward the bottom. Apps with strong downloads but low profit are the exception and can reach up to 120x monthly profit.
What is the multiple actually measuring?
Not how good the app is. It measures how confident a buyer can be that next year’s profit looks like this year’s. Every factor below is a version of the same question: what happens to this revenue after the person who built it walks away?
That is also why the profit figure matters more than the revenue figure. I value proceeds minus costs: what Apple or Google actually pays out after its cut, minus what the app costs to run (ad spend, servers and APIs, tools, contractors), averaged over the last 3 months.
Which factors move the number?
Roughly in the order they matter when I price an app:
- Revenue trend. The single biggest one. Growing revenue means the market is still arriving; a decline means I have to price in where it stops.
- Where the users come from. Organic App Store search keeps delivering after the sale. Installs bought with ads only continue while someone keeps paying for them, so the app is valued closer to what it earns without the spend.
- The revenue model. Recurring subscriptions are steadier than one-time purchases or ads, and within subscriptions the plan mix matters: annual plans are worth more than weekly ones.
- Track record. Six months is the minimum that shows the revenue is real; three years of stable revenue is a different level of evidence.
- Owner dependence. An app that runs on a few hours a week transfers cleanly. One that needs the founder full-time is partly a job, and I can’t buy the founder.
- Concentration. Revenue spread across countries, keywords and channels survives a shock. Almost everything from one country, one keyword or one ad account does not.
- Code and technical state, including how recently the app has been updated for current iOS releases.
- Public App Store signals: the rating, how many ratings, and whether the listing is maintained.
- Margin. Two apps with the same profit but different cost bases are not the same asset; the one with the lower cost base has more room when something goes wrong.
One thing is not a factor but a cut: store history problems. Incentivized ratings, guideline warnings or a removal history reduce the multiple sharply, because they put the asset itself at risk.
Why two apps with the same profit sell for different prices
Three apps, all earning $5,000 a month from Apple with $2,000 of costs, so $3,000 monthly profit each. All three have a 4.6 rating from about 1,200 ratings and were updated last month. The only difference is the shape of the business:
| App | Shape | Multiple | Range |
|---|---|---|---|
| A | Growing, organic App Store search, mostly annual subscriptions, spread across countries, a couple of hours a week, modern code | about 30–35x | roughly $89,000–$105,000 |
| B | Flat, a mix of organic and paid traffic, monthly and annual plans, one main country, about five hours a week, modern code | about 24–29x | roughly $71,000–$86,000 |
| C | Declining slightly, grows on paid ads, mostly weekly plans, one country, more than ten hours a week, old code, live under a year | about 15–20x | roughly $44,000–$59,000 |
Produced by running the same model the app valuation calculator uses, so these are the numbers it would give. Rough ranges, not offers.
Same profit, about $50,000 between the ends. Nothing here is a judgment about which founder built the better app: A is simply easier to keep earning after the person who made it has moved on.
How much does one factor move it?
Take app B and change only the revenue trend, leaving everything else identical:
- Declining more than 20%: roughly 21–26x ($61,000–$76,000).
- Roughly flat: roughly 24–29x ($71,000–$86,000).
- Growing more than 20%: roughly 27–32x ($81,000–$96,000).
And if the same app had store history problems (incentivized ratings or policy warnings), it would fall to roughly 13–18x ($40,000–$55,000). That is the widest single swing on this page, which is why I ask about it early.
What could you change before selling?
Some factors are fixed by the time you decide to sell, and some are not. The ones sellers can realistically move in a few months: reducing how much of the revenue depends on continuous ad spend, shifting the plan mix toward annual, cutting costs that don’t produce revenue, updating the app so it isn’t visibly stale, and writing down how the app runs so it doesn’t depend on your memory. The calculator names the two or three with the largest effect for your specific app at the end of the result.
What can’t be priced from the outside?
- Subscription quality: trial conversion, renewals, refunds and cohort behavior. The plan mix is only a proxy, which is why I ask for the real numbers before the offer is final (more on subscription apps).
- Cost quality: whether ad spend can be cut without losing revenue, or whether an API price rise is coming.
- Code depth. The listing shows the last update date, not what is underneath it.
- Upside I can build: missing markets, an untested price, a listing nobody optimized. This is the part where a buyer who operates apps pays more than a buyer who doesn’t.
From a range to an offer
The range is where the conversation starts. The offer comes after I see the proceeds, the costs and the store account for myself, which takes a day or two for a prepared seller (the checklist is in app due diligence). If your app is one I buy at all, the fit rules are in my acquisition criteria, and the market context for these multiples is in how much is my app worth.
Questions about the method
Why a multiple of monthly profit and not annual?
Because small app deals move quickly and monthly profit is the number both sides can actually verify from App Store Connect. The two are the same thing at different scales: 6–36x monthly profit is roughly 0.5–3x annual profit. Marketplace reports usually quote annual multiples, which is why the numbers look so different at first glance: see how much is my app worth.
Why the average of the last 3 months?
It shows the app as it is now rather than as it was last year, and it smooths out one unusual month. A single good month is not a trend, and a single bad one is not a decline.
Do you pay for growth potential?
Partly. I pay mainly for the profit that is already there, because that is what I can verify. Upside I can create myself (an untuned paywall, missing localizations, a weak listing) is the reason I buy the app, not something I can pay full price for in advance.
What is the 120x case about?
Apps with strong downloads but very low profit. There the monthly profit is a bad measure of what the app is worth, because the demand is real and the monetization simply hasn’t been built. In that case I go above the 6–36x range, up to 120x monthly profit. There is no fixed download threshold.
Can I see what my app scores?
Yes. The free app valuation calculator runs this model on your numbers and shows the range, the factors that moved it, a confidence level, and the two or three changes that would raise it most. It takes about two minutes and needs no email.
Is the estimate the same as your offer?
No. It is a rough range, not an offer. A real offer comes after I have seen the actual proceeds, costs and store account, and it can land above or below the range once I know the things a calculator can’t see.