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SaaS Operating Metrics
Feb 2026 · Actual vs Budget
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Income Statement
Feb 2026 · Actual vs Budget · ($000s)
⚠ Watch Item
Gross Margin Compression Accelerating
Gross margin came in at 68.2% vs a budget of 72.0% - a 380bps miss. This is the third consecutive month of margin compression. Root cause is hosting/infrastructure costs growing faster than revenue, driven by two enterprise customers with unusually high data processing needs onboarded in Q4 2025.
01Review enterprise customer contracts for infrastructure cost pass-through clauses
02Engage engineering to scope infrastructure optimization sprint (target: 200bps recovery by Q3)
03Adjust Q2 gross margin guidance to 69-70% range pending engineering assessment
✓ Strength
Net Revenue Retention Hits 112% — Expansion Engine Working
NRR of 112% vs budget of 108% means existing customers are growing faster than anticipated. Expansion MRR of $124K is being driven primarily by the mid-market segment upgrading to annual plans. Churn remains controlled at 1.1% monthly - well below the 1.5% budget assumption.
01Double down on mid-market expansion playbook — identify top 20 accounts with upgrade potential in Q2
02Consider accelerating annual plan incentive program given strong conversion rate
△ Monitor
CAC Payback Period Drifting — Sales Efficiency Declining
CAC payback period extended to 16.2 months vs budget of 14.0 months. New logo CAC increased 18% YoY driven by higher SDR headcount added in January and lower-than-expected outbound conversion rates in the first month of ramp. Pipeline coverage remains healthy at 3.4x but deal velocity has slowed.
01Allow new SDR cohort to fully ramp through Q2 before drawing conclusions on efficiency
02Review ICP targeting criteria — enterprise deals closing faster than mid-market this quarter
→ Context
Opex Running $180K Under Budget — Hiring Lag, Not Efficiency
Total Opex of $2.82M vs budget of $3.00M looks favorable but is primarily driven by 12 open headcount positions that have not been filled on schedule. Engineering and Product are running 6 heads light. This creates a false positive on EBITDA that will reverse as hiring catches up in Q2-Q3.
01Reforecast Q2-Q3 Opex upward by ~$300K/quarter to reflect hiring catch-up
02Flag to board that EBITDA beat in Feb is non-recurring — do not extrapolate
→ Summary
February 2026: The One-Line Summary
Revenue growth is healthy and retention is a genuine bright spot, but gross margin compression is the critical issue to resolve in H1. The EBITDA beat is misleading — it reflects hiring delays, not structural efficiency. The business is growing well but becoming slightly less profitable per dollar of revenue. The next 90 days should prioritize: (1) infrastructure cost containment, (2) hiring execution, and (3) protecting the NRR momentum through proactive customer success coverage.
MRR trend ($M) · Dashed = forecast