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Hey {{first_name}} 👋, hope you had a great week! In the last issue, we discussed why tracking Cash Adjusted EBITDA (or Cash EBITDA) matters, and now we are moving with the next topic from Revenue, ARR and MRR content.

Let’s talk about ⬇️

Most SaaS founders think “If my gross margin is high, I’m in great shape.”
Wrong.

Gross margin tells you nothing about whether your product actually scales. After working with SaaS teams across multiple stages, I can tell you the truth:

Your Contribution Margin is the real signal.
Because it tells you the only thing that matters:

If your margin sucks, your product doesn’t scale. Full stop.

In reality, you only need 5 levers to get Contribution Margin under control.

1️⃣ Cut Variable CAC Waste

2️⃣ Reduce Product Delivery Costs (Support, Onboarding, CSM)

3️⃣ Optimize Cloud + Vendor Costs

4️⃣ Raise Prices When Retention Is Strong

5️⃣ Improve Retention or Expansion (NRR is the silent margin driver)

Most companies overspend on acquisition relative to what their product economics can sustain.

If CAC payback > 18 months → your contribution margin will always struggle.

Fix it by:

Example:
Revenue: $100
Variable CAC: $40 → You’ve burned 40% of contribution before onboarding even starts.

Founders love “white glove onboarding.” Until they see the margin impact.

If support + onboarding + CSM per customer is rising as you scale?
Your product isn’t productized — it’s a services company in disguise.

Fix it by:

Target: Support/Onboarding < 10–15% of revenue per customer.

Hosting, usage, and 3rd-party tools quietly destroy margins.

Fix it by:

Benchmark: Hosting should be < 5% of revenue for most SaaS.

If churn is low and NRR is healthy, you don’t have a cost problem — you have a pricing problem.

Raising price by 10–20% can improve contribution margin overnight, without touching cost.

Rule:
Before you cut costs, test pricing leverage.

Nothing improves contribution margin faster than more revenue from the same customer base.

Focus on:

Good SaaS = NRR 110–130% → contribution margin climbs automatically.

I'm Aleksandar, fractional CFO at Fiscallion, where we help founders like you achieve financial clarity, streamline reporting, and build investor-ready forecasts.

Ready to level up your finances?

Contribution Margin = (Revenue − Variable Costs) / Revenue

If you’re below 60–70% → your product isn’t scaling efficiently.
World-class SaaS hits 80%+.

If you want — I can go deeper on your specific case.

Hit reply, send me your MRR, CAC, churn, and support cost ballpark,
and I’ll tell you in one message exactly where your margin is leaking.

Chat soon,

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