Part 2: Profitability Trends – Margin Expansion Continued in 2024
Operational Discipline Pays Off
As interest rates rose over the past two years, investors have become more selective when allocating their funds. Despite slower top-line growth, SaaS companies improved their EBITDA margins by an average of ~5 percentage points (ppts) in 2024 – matching the gains seen in 2023.
SaaS leaders are no longer chasing “growth at all costs” – they’re engineering for sustainable growth and long-term profitability.
OPEXEngine’s updated 2025 SaaS benchmarks show this trend across company sizes.
Both private and public firms made progress, signaling that this isn’t just investor pressure – it’s a strategic reset.
Notably, margin improvement didn’t come at the expense of product innovation. Most companies preserved their R&D spend even as they made targeted cuts elsewhere.
We’re witnessing the rise of a more mature SaaS model – one that balances ambition with discipline. And in today’s environment, that balance is a competitive advantage.
See the full analysis and Bessemer Venture Partners (BVP) Nasdaq Emerging Cloud Index insights in our new report: https://www.opexengine.com/resource/brief-on-2025-saas-sector-operating-trends
