Dear SaaStr: Are Any SaaS Companies Really Profitable?
SaaS companies can be quite profitable, but most these days that are able to raise capital tend to … take their time getting there.
But that’s not to say it can’t be done. Let’s look at a few amazing examples::
- Zoom generates $2 Billion in free cash flow on $4 Billion in revenue. More here.
- Atlassian generates $800m in free cash flow on $3 Billion in revenue. More here.
- Mailchimp got to $1 Billion in ARR without ever raising any capital at all. All on profits. More here.
- ZoomInfo generates $400m in free cash flow on $1 Billion in revenue. More here.
Now, the ones generating a ton of cash are special. Atlassian has a very small direct sales force. Zoom has a substantial sales force for bigger deals, but its self-service business is almost entirely viral. And ZoomInfo sells data, which if done right, really scales. But it does it with a full sales and marketing team.Also, note I’m focusing on free cash flow, not always GAAP profitability. That can take longer to reach scale.
But in any event, in many ways, these are the real heroes in SaaS.
(super profits image from here)
The post Yes, SaaS Can Be Insanely Profitable appeared first on SaaStr.
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Jason Lemkin, Khareem Sudlow
