SaaS operating continued to stabilize in Q4 2025. Every quarter we look at the operating income and margin of every SaaS company that has IPO’d since October 2017. 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 -2% as of Q4 2025.
Press enter or click to view image in full sizeOperating loss has also improved, generally. In Q1 2022, operating loss on median was a high of -$19.8mm. Operating loss in in Q4 2025 came in at a much lower -$4.3mm on median. All while revenue has increased materially.
Press enter or click to view image in full sizeProfitability. Out of the 47 active companies shown, 25 of them were unprofitable. That’s 53% of the dataset, which in an improvement versus Q1 2022, when 82% were unprofitable.
Operating margins are steadying in the mid 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 the readership. Visit blossomstreetventures.com for more blogs and SaaS data. Email the author at sammy@blossomstreetventures.com or connect on LinkedIn.
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