SSEBITDA: A steady-state profit metric for evaluating SaaS company profitability

Summary

This article introduces SSEBITDA (Steady-State EBITDA), a financial metric designed for SaaS companies to measure true profitability by stripping out growth-related spending on sales and marketing. It argues that traditional EBITDA and GAAP accounting can mask whether a company is fundamentally profitable underneath its growth investments. The metric helps founders and investors determine if a business is strategically trading short-term profits for growth or simply building a permanently unprofitable enterprise. The article provides a detailed methodology for calculating SSEBITDA, including adjustments for customer acquisition costs, R&D capitalization, and other growth expenditures.

Source

bskySSEBITDA: A steady-state profit metric for evaluating SaaS company profitabilitylongform.asmartbear.com