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Thanks for clarifying on the terminology. I work at a SaaS company so am familiar with the dynamics, but less so on the financial terminology side of things ;)

Thanks for clarifying on the terminology. I work at a SaaS company so am familiar with the dynamics, but less so on the financial terminology side of things ;) So basically, based on your estimates, they are still running negative despite that recurring revenue, and with their current COGS, there may not be an intercept point yet where they are profitable with current figures even as that recurring revenue continues to grow?

ChuckMcM 11y ago
Correct, the question, which we can't answer with available data, is what is the "marginal margin" or more clearly for each million dollars of increased revenue does the cost of revenue stay the same? Or go down? If it stays the same, and their over heads don't go down, then they need basically another year and a half of growth at their current rate to break even. On the outside looking in we can't know of course, somewhere though, there is a spreadsheet :-)