SAAS BUSINESSES: ADDBACK R&D TO ADJUSTED EBITDA?

In evaluating a software business, is it okay to add back research and development costs to calculate adjusted EBITDA? The thought process is that R&D will provide future revenue in the form of new features, and functionality. for the software to stay competitive...so to calculate current year free-cash-flow, R&D should be added back to earnings. Interested in commentary from folks who have financed a SaaS business.



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