Investors love SaaS businesses because so long as you’re retaining the customer, the revenue is an annuity and in many cases a source of growth (when customers upgrade more often than they downgrade). For mission critical software, recession resilience tends to be very high (we saw this in 2008 and 2020). If customer acquisition costs can be held within reason and retention is strong, the business will eventually be profitable, and large. By way of example, the average and median operating margins for the profitable companies above is 16% and 14% respectively.
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