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> their revenue has increased more than their losses But "net loss" already takes revenue into account! "Loss" is not the same thing as "expenses". The revenu
by Radim 7y ago
> their revenue has increased more than their losses
But "net loss" already takes revenue into account! "Loss" is not the same thing as "expenses".
The revenue increased substantially, but so did expenses, resulting in a slight decrease in loss over the past 3 years.
At the current rate, the company would reach break-even profitability around the year 2070.
- canes123456 7y agoThat is not how SAAS economics works. You spend a lot money upfront and revenue is earned over years. They can stop investing in sales/marketing tomorrow and be profitable.
- viscanti 7y agoThey're investing in growth. It's unclear if that investment is good or bad, but looking at quarterly accounting numbers won't tell us. All we can see here is that they're investing more than they're making. If you created a business that simply bought $1M worth of Stocks (e.x. ETFs) and bonds, the first quarter when you made the initial investment you'd show a "loss" of $1m. You might sell those 10 years later for $2m (or maybe the value goes to $0). You wouldn't know if it was a good or bad investment until much later. Seeing a $1M quarterly loss from that first quarter of investing wouldn't give you any insight at all. To make matters worse here, the way that quarterly accounting works generally hides what are investments and what are actual losses. Some pre-profitable companies do better than others here but it's fairly difficult to understand what parts of spending are investments and what parts are just burning money when looking at quarterly accounting statements.
- rgbrenner 7y agoIf you created a business that simply bought $1M worth of Stocks (e.x. ETFs) and bonds, the first quarter when you made the initial investment you'd show a "loss" of $1m. No, that's not how accounting works. If you buy $1M in stocks, then you move the amount from one asset account (cash) to another asset account. You have $1M in assets both before and after, with no losses.
- dahdum 7y agoThey quadrupled their revenue while keeping their losses flat in just 3 years, for a sticky high margin enterprise product. With just modest revenue growth they'll be able to optimize towards profit whenever they choose.
- FPGAhacker 7y agoSince we are talking about net losses being flat, it means their expenses are going up as fast as their revenue.
- kgwgk 7y agoExpenses are growing "as fast as revenue" in millions, but "slower than revenue" in growth rate (percentage).