Channing Hamlet explains why predictable revenue matters more than the work itself. Companies that shift from one-off services to long-term contracts reduce volatility and become worth more, even when nothing else changes.
The other value driver that we spend a lot of time looking at is predictability of a business and have they built sort of recurring and predictable revenue streams. There's a lot of companies that have service businesses. They might have a technology or product they sell and then they have a service business along with it. Historically, service businesses would provide service when the customers wanted it. A lot of companies have now gone towards like long-term service contracts, so they have a predictable and stable revenue. They're doing the same thing, they have the same people, the same technology, same process, etc., but they they've built a stable revenue stream instead of like a volatile up and down revenue stream, that's worth more.
