Each quarter we look at the S&M spend as a percent revenue of every SaaS company that has IPO’d since October 2017; we prefer to look at these ‘newer’ SaaS companies as opposed to the OG’s like Salesforce as we believe they’re more representative of private SaaS companies. The data is below and can also be found on our site at blossomstreetventures.com.
Two observations stand out:
S&M as a percent of revenue fell to 35%. SaaS companies are continuing to reduce their S&M spend as a percent of revenue. Interestingly though, in spite of the reduction, revenue at these companies has grown nicely to 21% YOY as of Q2 2026 versus 15% YOY in Q2 2025. Companies are growing faster but spending less for the growth.
Back in 2022, coming off covid, the figure was consistently 46%. That is much higher than today’s 35%, as SaaS really could do no wrong during covid and even slightly after it. At the end of 2022 however, we started to see SaaS companies rationalize the S&M spend, with a focus on profitability. They have consistently brought the S&M spend as a percent of revenue down, and it’s the single biggest driver of profitability improvement since 2022.
The average and median are close. That means there are not a lot of outliers here, and the reduction in S&M spend as a percent of revenue is an industry-wide trend.
Actual S&M dollars have increased. In Q2 2022, these SaaS companies on median spent $84mm on S&M. In Q2 2026, the median spend was $106mm. So, revenue is growing faster than S&M spend.
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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