EBITDA Margin

What is EBITDA Margin?

EBITDA Margin expresses your EBITDA as a percentage of revenue. It answers: for every dollar of revenue, how many cents flow through to operational profit before depreciation, amortization, interest, and taxes?

Why EBITDA Margin Matters

Revenue growth means nothing if margins are collapsing. A SaaS company growing 100% year-over-year with shrinking EBITDA margins is burning cash to buy growth. Investors want to see margin expansion or at least stability as you scale.

For ecommerce, EBITDA margin reveals whether your unit economics actually work at scale. High revenue with razor-thin margins is a treadmill, not a business.

Benchmark Ranges

Mature SaaS companies target 20-30% EBITDA margins. High-growth SaaS often runs negative while investing in growth. Ecommerce typically sees 5-15% EBITDA margins depending on category and fulfillment model.

Your ecommerce brand has:

• Revenue: $5,000,000
• EBITDA: $750,000

EBITDA Margin = ($750,000 ÷ $5,000,000) × 100 = 15%

For every dollar in sales, you keep 15 cents in operational profit before depreciation and financing costs.