In Q1 2026, SaaS operating margins on median were -4%, and have settled there over the past few quarters. The data is below.
Margin has really improved. In Q1 2022, operating margin on median was -30%. Since then, the margin has improved trending to -4%.
Operating loss has also improved, generally. In Q1 2022, operating loss on median was a high of -$19.8mm. Operating loss in in Q1 2026 was a much lower -$5.9mm on median. All while revenue has increased materially.
Profitability. Out of the 44 active companies shown, 28 of them were unprofitable. That’s 64% of the dataset, which in an improvement versus Q1 2022, when 82% were unprofitable.
Operating margins are steadying in the lower negative single digits. We do not expect the sector to attain significant profitability on median nor should they: growth is far more valuable in SaaS than profitability, so long as that growth is cash efficient. We actually recommend to our companies to continue burning cash so long as they’re adding $0.75+ of high quality 100%+ NDR for every $1 of net loss.
Thank you for your readership. See more blogs and SaaS data at blossomstreetventures.com. Other resources we’ve built for founders include: SoftwareMultiples.com; softwareMRRcalculator.com; FounderInvited.com, and TwoFoundersTalk.com. Founders are always welcome to reach out to sammy@blossomstreetventures.com as well.
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