Generally, because all the sales & marketing cost (which makes up a big share of most large SaaS companies' expenses) is front-loaded, while the revenue is spre

Generally, because all the sales & marketing cost (which makes up a big share of most large SaaS companies' expenses) is front-loaded, while the revenue is spread out over time. When you spend, say, $10k to acquire a customer, and they pay you $25k for a perpetual license, you're cash-flow positive in year 1. When, instead, the customer pays you 10k a year and stays on average 4 years, the model is a lot more profitable over the long-term, but will cost money in year 1. Combine that with large growth rates, and the need for cash investment grows accordingly (even if the business model as a whole is perfectly sound).