It assumes a lot of costs are fixed, and do not scale with income. Software is weird like that. Double the 500k R / 250k P company without more expenses, and y

It assumes a lot of costs are fixed, and do not scale with income. Software is weird like that. Double the 500k R / 250k P company without more expenses, and you now have 1 M R / 750k P. Double the 1M R / 100k P and you now have 2 M R / 1.1 M P. Especially if a firm can come in and do a round of layoffs (Replace support with outsourced, fire marketing, replace devs with outsourced).. it would be pretty easy to get the margin really really high for a few years, which is all they may be looking for.