Interview prep · TMT
TMT interview questions
TMT interviews add a fluency test on top of the standard technicals: can you talk about technology, media, and telecom business models in their own language? The sector's center of gravity is recurring revenue, and the interview escalates along exactly that theme.
Expect the usual accounting and valuation set first, plus a genuine 'why TMT' — interviewers in a popular group screen hard for real interest. The sector layer then begins with the software vocabulary: ARR, churn and net dollar retention, CAC against customer lifetime value, and why high-gross-margin recurring revenue earns richer multiples. The hardest questions confront valuation where standard tools strain — companies with high growth and no profits, where revenue multiples, retention, and unit economics carry the argument — alongside media and telecom angles like subscriber economics and content investment.
The winning move is connecting metrics to value rather than defining them in isolation: explaining why strong retention compounds, why unit economics decide whether growth is worth funding, and when a revenue multiple is defensible rather than hopeful. That connection is what separates vocabulary from understanding.
TMT: what candidates ask
Do I need to know specific tech companies' metrics for a TMT interview?+
Having one or two companies you can discuss concretely — their model, rough growth profile, and why the market values them the way it does — makes your interest credible. But memorized figures date fast and are rarely the test. Interviewers probe whether you understand the frameworks: what a metric means, why it matters, and how it drives valuation.
Is TMT interview prep all about software and SaaS?+
Software tends to dominate because its metrics are the most distinct, but the group spans media and telecom too — subscriber economics, content spending, infrastructure capital intensity. A safe allocation is depth on the SaaS toolkit plus working familiarity with how the media and telecom sub-sectors differ, weighted by the team you are actually meeting.
How do TMT technicals differ from a generalist interview?+
The base is the same — statements, valuation, maybe M&A and LBO concepts — with a sector layer added: recurring-revenue metrics, unit economics, and valuing growth companies where earnings-based multiples fail. The distinctive TMT question is some version of 'how would you value a fast-growing, unprofitable company', so have that reasoning ready.
Every TMT question in the bank
All 84 published questions from TMT (Tech, Media & Telecom) — each links to its own page. Free ones show the full model answer.
6
- What is the difference between ARR and MRR, and how do they relate?
- What is the difference between logo churn and dollar churn, and why can they tell different stories?
- Why do investors value high-growth tech companies on EV/Revenue rather than earnings multiples?
- What are the two core levers of streaming revenue, and how do they interact? A service with 100M subscribers at $10 monthly ARPU generates how much annual revenue?
- How do you calculate ARPU for a wireless carrier? Quarterly service revenue is $3.0B on an average subscriber base of 25M.
- What is GMV, and how does take rate convert it to revenue? A marketplace does $1,000 of GMV at a 12% take rate.
36
- Walk me through bookings, billings, and revenue for a SaaS company that signs a $120k one-year deal on day one and bills the full amount upfront. How much revenue is recognized in month 1?
- Why does billings = revenue + change in deferred revenue for a subscription company?
- A SaaS cohort starts the year at $100 of ARR. During the year it loses $10 to churn and downgrades and gains $15 from upsells to those same customers. What are gross and net revenue retention?
- How do you calculate CAC and CAC payback? A company spends $600k of sales and marketing in a quarter and lands 100 new customers, each paying $500 per month at an 80% gross margin.
- How do you calculate LTV and LTV/CAC? A customer pays $12,000 per year, gross margin is 75%, annual churn is 15%, and CAC is $15,000.
- What is the Rule of 40, and does a company growing 25% with an 18% free cash flow margin pass it?
- Why do software companies typically run 70-85% gross margins, and what sits in SaaS cost of revenue?
- What is a land-and-expand strategy, and how does it show up in SaaS metrics?
- Break down net new ARR into its components. What would you look at beneath a headline ARR growth number?
- Why is upfront annual billing a working-capital advantage for SaaS companies?
- What are the dangers of relying on EV/Revenue multiples?
- What is a growth-adjusted revenue multiple, and how does it work in practice?
- How does the appropriate valuation multiple change as a tech company matures?
- Explain the margin-maturity framework for valuing an unprofitable software company.
- Why do many large tech companies have an enterprise value BELOW their market cap?
- What does 'NTM revenue' mean in SaaS comps, and why is the forward convention standard for high-growth companies?
- Explain linear TV's dual revenue stream - affiliate fees versus advertising - and why that model was so profitable.
- Walk me through the mechanics of cord-cutting and who in the media ecosystem is most exposed.
- What is windowing in film/TV distribution, and how has the logic evolved?
- Why is advertising revenue cyclical, and what does that mean for how ad-driven media businesses are valued?
- Why have sports rights kept inflating even as the pay-TV bundle declines?
- What is the strategic logic of combining content and distribution in media M&A, and what is the standard counterargument?
- Why do investors consider postpaid wireless subscribers higher quality than prepaid?
- Why is EBITDA minus capex the standard FCF proxy in telecom, and how does the math work for a carrier with $100 of revenue, a 40% EBITDA margin, and capex at 18% of revenue?
- Describe the tower company business model. Why do investors love it?
- What is convergence in telecom, and why do operators push fixed-mobile bundles?
- Why do telecom operators trade at low EV/EBITDA multiples compared with tech companies?
- How is spectrum treated on a carrier's balance sheet, and why is it such a strategically important asset?
- Explain the difference between fabless, foundry, and IDM business models in semiconductors.
- Compare the margin structure of a hardware company to a software company, and explain why the difference exists.
- What is a razor-and-blades business model? Give tech examples and explain the valuation implications.
- What are design wins in semiconductors, and why do they create such strong revenue visibility and switching costs?
- What does the DAU/MAU ratio measure, and what does a 50% ratio tell you?
- Why do network effects push internet marketplaces toward winner-take-most outcomes, and what limits this?
- Why do you want to work in TMT coverage specifically?
- How does day-to-day work in TMT coverage differ from a generalist or industrials seat?
42
- What is the SaaS magic number, and what does it tell you? Walk through an example.
- How does usage-based pricing versus seat-based pricing change what NRR means for a software company?
- What is RPO, how does it differ from deferred revenue, and why do analysts watch cRPO?
- Why is stock-based compensation such a big issue in software, and what is the debate about excluding it from FCF?
- What are the limitations of using calculated billings as a growth proxy for a SaaS company?
- The textbook LTV formula divides gross profit by churn. What happens to that formula when a company's NRR exceeds 100%, and how do practitioners handle it?
- Not all ARR is created equal. How would you assess the QUALITY of a company's reported ARR?
- Why does churn compound against a SaaS company's growth as it scales?
- Why does NRR above 100% command such a valuation premium in software?
- A software company reports 68% blended gross margin. Its peers are at 78%. What is the most likely explanation, and how do you handle it in comps?
- How do you build a DCF for a company that will not be profitable for years?
- A SaaS company trades at 10x revenue. Walk me through the implied steady-state math you would use to sanity-check that multiple.
- How does capitalizing software development costs affect EBITDA, and why does it create comparability problems?
- Should you add back stock-based compensation when calculating EBITDA or FCF for a tech company? Argue both sides.
- When is EV/Gross Profit a better multiple than EV/Revenue for tech companies?
- In a DCF for a high-growth tech company, the terminal value is 85% of total value. Is the DCF useless? How do you handle terminal value dominance?
- What typically happens to a tech company's valuation when it 'graduates' from revenue multiples to earnings multiples, and why is that transition dangerous?
- How would you construct a comp set for a software company - and why might a growth/margin cohort beat a sector cohort?
- How do you value a pre-profit tech company facing genuinely binary outcomes, and how does scenario weighting work?
- How does content amortization work for a streamer, and why are amortization curves accelerated rather than straight-line?
- A growing streamer spends $10B of cash on content this year but amortizes only $8B. Why the gap, and what does it mean for earnings versus cash flow?
- Walk me through the economics of a studio shifting from wholesale licensing to direct-to-consumer streaming.
- How would you think about valuing a music catalog?
- A streaming service is considering a 15% price increase. Walk me through the churn math that determines whether it pays off.
- Why can an ad-supported streaming tier priced well below the premium tier still be economically attractive?
- Explain the operating leverage in a streaming business - why is content largely a fixed cost, and what does that imply for the path to profitability?
- Show me why a change in monthly churn from 2% to 1% is so valuable for a subscription business.
- Why is a second tenant on a cell tower 'nearly pure margin'? Illustrate with numbers.
- Walk me through fiber economics: why is fiber-to-the-home so capital-hungry upfront, and what makes it attractive at scale?
- What leverage levels are normal in telecom, and why can towers carry so much more debt than carriers?
- Why do analysts separate service revenue from equipment revenue when analyzing a wireless carrier?
- How are tower companies valued, and why do metrics like AFFO show up alongside EV/EBITDA?
- A carrier is debating investing in retention versus acquisition. Frame the tradeoff like an investor.
- Why are semiconductors so cyclical, and how do inventory dynamics amplify the cycle?
- Conceptually, how do wafer costs and yield drive semiconductor unit economics?
- Why are semiconductor companies valued on P/E or EV/EBIT rather than revenue multiples, and what is the through-cycle adjustment?
- What does foundry-level capex intensity imply for the economics and valuation of chip manufacturers?
- Explain gross versus net revenue recognition for a marketplace versus first-party e-commerce, and the trap it creates in comps.
- Build the unit economics of a single delivery-marketplace order: $50 average order value, 20% take rate, $6 of delivery cost, and $2 of payments and support costs.
- Break an ad-supported platform's revenue into its drivers. With 100M DAU, 50 minutes per user per day, one ad per minute, and a $10 CPM, what is daily and annual ad revenue?
- Why do bankers and buyers discount revenue synergies so heavily in tech M&A?
- How do acquirers structure deals for talent-driven tech targets, and why do retention packages and earnouts matter so much?
Take the Top 50 questions with you.
The 50 most-asked IB interview questions with worked model answers — one email, free, no mailing list.
Free tier: 20 cards + 10 daily reps + ALL drills — no credit card required.