Does a spike in profit right before selling actually help or hurt my credibility with buyers?

It can genuinely go either way, and the difference comes down to whether the spike is explainable and sustainable. A profit increase driven by real, ongoing improvements — a new contract, a pricing change, cost reductions that will continue — strengthens your story and can support a higher price, since buyers are being asked to pay for earnings they can reasonably expect to continue. A spike with no clear explanation, or one that coincides suspiciously closely with your decision to sell, tends to invite scrutiny rather than confidence.

The nuance is that buyers' advisors are specifically trained to look for exactly this pattern, since a seller boosting short-term numbers before a sale, whether through aggressive one-time cost-cutting, deferred spending, or unusual timing of revenue, is common enough that due diligence treats a sudden improvement as something to explain, not simply accept.

The safest approach is being ready to explain any recent change in performance clearly and honestly, with documentation, whether it helps or complicates your story. A business lawyer and accountant can help you present a recent improvement in a way that builds credibility rather than one that looks, even unintentionally, like it was engineered for the sale.