# Earn-out

**Earn-out:** An earn-out is deferred, contingent purchase price that a buyer pays a seller only if the practice reaches agreed performance targets after closing.

An earn-out is deferred, contingent purchase price that a buyer pays a seller only if the practice reaches agreed performance targets after closing.

Earn-outs bridge price gaps when buyer and seller disagree on future performance. They usually tie to collections or EBITDA over a set period and often coincide with the seller’s work-back, since the seller’s presence affects whether targets are met.

Source: DDSIntel glossary, https://ddsintel.com/glossary/earn-out

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