Introduction
Growth may spark initial buyer interest, but profitability closes deals. In OPEXEngine’s analysis of a cohort of SaaS companies in the 1-2 years before a strategic exit, one clear pattern emerged: EBITDA margin improvement is a defining signal of operational maturity and sustainability.
What We See in the Data
When tracking companies directly ahead of exit, we see a consistent profitability trajectory:
- Significant Margin Improvement: ~22 percentage points in the 1-2 years before exit.
- Primary Driver: Expense discipline, particularly in Sales & Marketing, without undermining top-line growth.
- Buyer Lens: Sustained margin improvement demonstrates leadership discipline and the ability to scale responsibly.
Exit Readiness Takeaway
EBITDA discipline is a multi-year story, not a last-minute lever. Companies that steadily improve margins in the 1-2 years before exit are rewarded with higher valuations, while sudden, last-minute cuts often raise buyer concerns.
FAQs
Is a 22-point margin improvement typical across all SaaS companies?
No. This reflects SaaS companies in OPEXEngine’s proprietary database, based on performance in the 1-2 years before successful exits.
Why do buyers prioritize EBITDA today?
With valuations under pressure, profitability is a differentiator. EBITDAproves efficiency and resilience.
How far ahead should companiesplan for margin improvement?
At least 18-24 months pre-exit, so improvements appear sustained and credible.
