What’s the right level for SaaS businesses in G&A? The answer is of course “as low as possible”, but realistically there is a necessary baseline of SaaS spend. Below is G&A as a percent of revenue in 2024 and 2023 for SaaS companies that have gone public since October 2017 (72 companies), and are still public (60 in 2024 and 62 in 2023). Observations follow:
G&A is hovering at 20%. The median spend on G&A as a percent of revenue has been 20% in 2024 and 2023. The average is nearly identical.
Profitable companies saw it increase. Interestingly, SaaS companies that were profitable in 2024 actually saw an increase in G&A, from 15% of revenue in 2023 to 18% in 2024. Not surprisingly, unprofitable SaaS saw a decrease, we suspect because unprofitable SaaS companies may be more diligent about cutting expenses to achieve profitability.
Obviously keep G&A spend as low as you can, but recognize that 20% of revenue on G&A seems to be a very normal baseline. Make that your goal.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Email the author at sammy@blossomstreetventures.com.
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