Private Equity

EBITDA

Earnings Before Interest, Taxes, Depreciation, and Amortization. The core profitability metric private equity uses to value companies.

Definition

A measure of a company's operating performance that strips out non-operating expenses and non-cash charges. PE firms buy and sell companies on EBITDA multiples, and every AI initiative inside a PortCo is ultimately judged by its EBITDA impact.

Why it matters

If an AI program cannot trace its outcome to EBITDA expansion, cost reduction, revenue lift, or margin growth, it does not survive a value creation review.

Where Sophizo applies this

Sophizo deploys EBITDA inside revenue and AI engagements with growth-stage operators and PE-backed portfolios.

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Related terms in Private Equity

IRR
Internal Rate of Return. The annualized return a PE fund generates on the capital it puts to work.
TVPI
Total Value to Paid-In. The total value a fund has created, realized plus unrealized, divided by the capital LPs have contributed.
DPI
Distributions to Paid-In. Cash actually returned to limited partners, divided by the capital they contributed.
GP
General Partner. The private equity firm itself, the entity that raises and manages the fund and makes investment decisions.
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