Because gross-profit already reflects the cost of delivery, this multiple compares a hardware reseller and a software vendor on something closer to like-for-like. It is the standard fix for the distortions in ev-sales.
It is particularly useful for marketplaces and payments companies, where gross-vs-net-revenue presentation makes the top line almost arbitrary but the gross profit line is comparable.
Example: Northwind Tools trades at $2.86B over $370M of gross profit, 7.7 times. A rival reporting gross revenue looks far cheaper on EV/Sales but sits at 8.1 times gross profit, so it is actually dearer.
Related: gross-profit, ev-sales, gross-vs-net-revenue, take-rate, valuation-multiple