SaaS margin trends over 9 quarters

Sammy Abdullah
2 min readApr 5, 2023

How have EBITDA margins trended over the past 9 quarters? We looked at trailing twelve month margins for every SaaS company we follow to find out. The data and observations are below.

Negative trend. The median margin has gotten worse over time, going from 0% in Q1 2021 to -12% in the latest quarter (Q1 2023).

Half don’t generate EBITDA. The data set includes 117 companies, of which 65% are unprofitable. The trend of unprofitability has grown over time, as only 53% were unprofitable in Q1 2021.

It’s ok to be unprofitable so long as you’re adding ARR at an efficient rate (at least $0.70 of new ARR for every dollar of burn) and have 100%+ net dollar retention. That’s the model the majority of these SaaS companies have, and it’s a good one. We’ll see how margins trend going forward as companies cut costs and go through layoffs.

Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at and email directly at We invest in companies with run rate revenue of $3mm to $30mm, with year over year growth of 20% to 100%+ depending on revenue. We lead or follow in growth rounds and special situations like inside rounds, small rounds, rushed rounds, corralling investors with our term sheet, cap table clean up, and extensions. We can commit in 3 weeks and our check is $1mm to $4mm. Also visit for always up-to-date SaaS metrics.