SaaStr

APRIL 19, 2024

EchoSign, which Adobe bought, had $12M in ARR, growing 100%, with 120% revenue retention and cash flow positive. Today that would be a dream, but in 2011, people didn’t understand the metrics around recurring revenue businesses, so investors weren’t sure it was a good business. You Want One-Third of Your Revenue Outside the U.S.

Engineering 254

Engineering Business Model Pricing Scaling 254

SaaStr

NOVEMBER 21, 2020

At least 100% net negative churn (i.e., 119% net revenue retention. Asana, 130% net revenue retention. Fastly, 130% net revenue retention. PagerDuty, 139% net revenue retention. Zoom, 140% net revenue retention. As It IPOs. As It IPOs.

Retention 337

Retention SMB SaaS Enterprise 337

SaaStr

JULY 9, 2023

Check out this week’s top blog posts, podcasts, and videos: Top Blog Posts This Week: 5 Interesting Learnings from MongoDB at $1.5 SaaStr 673: How To Boost Your Net Retention Revenue (NRR) to Over 140% with Insider’s CEO and CMO   3. SaaStr 672: Go to Market Strategies That Led To Divvy’s $2.5B

B2B 213

B2B Startup Retention Software 213

SaaStr

SEPTEMBER 2, 2023

. “Higher growth is generally associated with higher retention and vice versa. The higher a company’s retention, the easier it is to grow, as the company doesn’t have to replace as much lost revenue. T he impact of retention is also cumulative as it repeats and expands on itself year after year.

Startup 258

Startup SaaS SMB Banking 258

Valuize Consulting

DECEMBER 21, 2022

We’ve compiled our top 5 most-read customer success blog posts of the year that reflect the key priorities for the industry in 2022 and give us a glimpse into the trends that will be shaping the domain in 2023. In the recurring revenue world, the more your business grows and expands, the more churn you’ll experience. Read Article.

Customer Success 52

Customer Success Churn Subscription Payment Features 52

SaaStr

JANUARY 12, 2024

We still want to drive retention and growth and make money. No one would disagree that retention and expansion are important. Eventually, you can build a model to show you can create sustainable value in a company that’s not just based on a revenue multiple. The world has changed. There’s a lot of nuance. Never stop,” he said.

Sales Hiring 253

Sales Hiring Customer Success Scale AI 253

SaaStr

MARCH 27, 2024

Revenue Growth is Up Just 24%. HubSpot’s revenue growth of 24% (21% in constant currency) is basically equal to its net new customer count. Gross Retention in “The High 80s” So while NRR is down to about 100%, customers aren’t leaving. NRR Likely Down to Around 100%. GRR is more consistent.

Scale 249

Scale Cloud Scaling Pricing 249

SaaStr

SEPTEMBER 3, 2023

Recurring software revenue is now recognized as a great way to generate tons of cash for investors,” says Gerety. Do public markets understand recurring revenue and SaaS models?” Fast forward, and Box is over $1B in revenue. The magic of a SaaS model is: Very high logo retention. But that wasn’t always the case.

Sales Hiring 236

Sales Hiring Headcount Finance Technical Review 236

SaaStr

AUGUST 25, 2020

Q: What is more important, getting new customers or customer retention? It’s a trick question, of course — the crazy high net negative churn of top SaaS companies means that of course retention matters more than new customers. And yet … there’s no point in doing customer retention if you don’t have enough customers. ??.

Retention 292

Retention Scaling Churn Engineering 292

SaaStr

SEPTEMBER 19, 2022

In other words, customer success is any function or group creating conditions for future revenue. Annual contract value (ACV) builds companies, but net revenue retention sustains them. In that case, you need a function—customer success—that helps drive fast value and creates the conditions for net revenue.

Sales Hiring 245

Sales Hiring Customer Success Scaling Construction 245

SaaStr

OCTOBER 6, 2023

Net net, the leaders’ growth has plummeted by almost half. Still growing, but relying a lot on upsell and retention. And several of the high-fliers are growing faster than ever, over 100%. Still, averages are good to give us all a sense of overall “macro” impacts in SaaS. Here’s to an uptick in 2024!!

Cloud 211

Cloud Forecasting Retention SaaS 211

Valuize Consulting

DECEMBER 23, 2021

We’ve compiled our top 5 most-read CS & SaaS blog posts of the year that reflect the key priorities for the industry in 2021 and give us a glimpse into the trends that will be shaping CS in 2022. These 3 pillars are inextricably linked and, together, they form a powerful trifecta that drives Net Dollar Retention.

Customer Success 52

Customer Success Scale Leadership Retention 52

SaaStr

DECEMBER 21, 2023

Software Revenue Multiples On the chart below, the darker blue line shows the median revenue multiple for 100 software companies. For those unfamiliar with revenue multiples, it’s a valuation methodology for comparing relative valuations of businesses. No crazy spikes like in 2020-2021 for revenue multiples.

SaaS 256

SaaS Software Metrics Revenue 256

SaaStr

JANUARY 5, 2024

12,000 customers, very high net review retention (NRR) even with SMB customers. Why is Jason Worried for The First Time About SaaS: We are trading at 6x revenues in the public markets. Many will pull the chord and say, we have to do it. Who Will Be the First to Go Public: ServiceTitan. Growing 40-50% cashflow neutral.

SMB 305

SMB SaaS AI Software Review 305

SaaStr

MARCH 11, 2021

There are 3 general options: Your VP of Sales is responsible for net new revenue only. The VPS is responsible for closing $Xm in net new revenue this year, period. Post-sales, other than upsell which adds to net new revenue for this year, is someone else’s job. Maybe not. Where The Magic Is.

Sales Hiring 265

Sales Hiring Metrics Sales Churn 265

Totango

APRIL 9, 2024

Chris Dishman , SVP of Customer Success for Totango & Catalyst, hosted a roundtable discussion with industry leaders, including Rashmi Chari , Head of Global Customer Success for ThousandEyes, Kevin McIntyre , Chief Revenue Officer for Dealfront, and Madelyn DePrey , VP of Customer Success for Aircall.

Scale 106

Scale Sales Compensation Customer Success 106

SaaStr

AUGUST 7, 2023

ARR stands for Annualized Recurring Revenue, although its real-world definition has evolved over time. As you’ll learn further down in this article, ARR now means any type of software-related revenue with 100%+ Net Revenue Retention (NRR), even if it’s not truly recurring. The only thing that mattered was revenue.

Metrics 200

Metrics SaaS Sales Hiring Finance 200

SaaStr

MAY 30, 2022

Having high net revenue / dollar retention is the magic of SaaS. With 150% NRR, you can “hide” just 20%-30% or so new customer growth and it will be hard to see that slow growth in new customers in the revenue growth numbers. Second, measure logo retention as often as your do NRR. I see this so often.

Retention 276

Retention Customer Success Churn Trends 276

SaaStr

FEBRUARY 24, 2021

100% Client Spend Retention across 139,000 Customers. I would have expected lower than 100% net revenue retention from Upwork, given that much of the spend can be episodic. Net net, even from SMBs, Upwork manages 100% NRR, just as Shopify and Hubspot do from SMBs. 5 Interesting Learnings: 1.

Marketplace as a Service 268

Marketplace as a Service SMB Cloud Enterprise 268

SaaStr

NOVEMBER 26, 2019

10m ARR 100%+ growth 110%+ net revenue retention. And have 110%+ net retention. What matters is your momentum after $10m ARR, and not just the raw momentum (top line growth), but your momentum in retention. If you can retain 110% of your net revenue at $10m in ARR, growing 80%, you will get there.

Retention 225

Retention Innovation Revenue SaaS 225

SaaStr

FEBRUARY 24, 2023

Post $100M, they maintain a meaningful double-digit growth ($50M+ net new ARR). Adding to that, the net new ARR doesn’t flatline and increases by $15M-$20M every year. Their net dollar retention (NDR) is consistently above 120% post $10M ARR. When a company adds $10M net new ARR, it typically burns about $20M (2X).

Scale 214

Scale Sales Hiring Scaling Venture Capital 214

SaaStr

OCTOBER 29, 2020

And expansion revenue is higher than pre-Covid. 112% Net Revenue Retention. Zendesk doesn’t see the 140%+ net retention we see in the enterprise (big deal sizes) or in many B2D companies like Twilio, but it’s still above 110% for a business that is 60% Enterprise / 40% SMB. No excuses.

SMB 239

SMB Enterprise Retention Churn 239

SaaStr

DECEMBER 19, 2019

It will really, really show you how power laws kick in with recurring revenue models. International is 40% of revenues today and a growth accelerator. HubSpot has gone global with a fury since 2014, driving from 22% international revenue to 40%. But no big boost from net negative net churn. RingCentral ).

Outsourcing Services 329

Outsourcing Services Scale SMB Pricing 329

SaaStr

JUNE 10, 2020

And like retention, a marketing journey should also begin again once a customer closes. Customer Marketing is similar to Demand Gen, but with very different end goals — retention and net account growth. What % of your soft and hard budget for events goes to retention, and what % to lead gen? Or even longer.

Marketing 260

Marketing Retention Customer Success Content Marketing 260

SaaStr

JUNE 23, 2020

It turns out, as long as you have positive revenue retention, and keep at it, you’ll do just fine over time. In fact, if you can get to 60% growth, maybe even just 50% growth at $10m ARR, and keep your net revenue retention over 120%-130% … you will get there. Look at Zoom, Slack, Datadog, UiPath etc.

Scaling 360

Scaling Retention Revenue SaaS 360

SaaStr

APRIL 24, 2021

So many startups these days are claiming they have “ARR” from revenue that … doesn’t recur. Doesn’t ARR stand for Annual Recurring Revenue? ARR now really means revenue with 100%+ Net Revenue Retention. 50% revenue from software (recurring), 50% from payments (not-recurring).

Merchant Services 359

Merchant Services SaaS Payments Payment Solutions Payment Services 359

SaaStr

FEBRUARY 11, 2021

The top one was that pre-IPO investors are now more interested in GRR — gross revenue retention before churn — than NRR. But … Kyle’s point, and Wall Street’s, is that high NRR can also mask low net new account growth. That means the vast majority of new revenue is coming from existing customers.

Scale 262

Scale Scaling Engineering Churn 262

SaaStr

NOVEMBER 2, 2021

Let’s call that at least a 2x multiplier in Second Order Revenue. Go long if you have happy customers and Net Negative Churn — Go Very Long. But if you have happy customers and net negative churn (i.e., your accounts grow each year in dollar terms, net of churn) — they you can go so very long.

Scale 295

Scale Churn Retention Acquisition 295

SaaStr

DECEMBER 2, 2020

But Slack is growing revenue at 140% and its customer base is up almost as much, at 35%. Some deceleration in net retention. But net retention, while strong, has declined from 135% to 125% over the past 5 quarters. 1,000+ $100k ACV Customers, 49% revenue from Big Customers. This one is a bit unexpected.

SMB 246

SMB Enterprise Cloud Retention 246

Payrix

APRIL 24, 2024

Part 2 – Selling payments to net new customers and your existing software user base. Andy suggests that there is an immediate and discernible value-add for software companies to embed payments as a means for retention of SaaS revenue. Part 3 – How value-added services contribute to the payments experience for customers.

Payments 162

Payments Embedded Payments Merchant Services Payment Solutions 162

SaaStr

FEBRUARY 27, 2024

To give a sense of the magnitude of this change, you can see the median net magic number for public SaaS companies dropped from.7x That means generally spending $3 in sales and marketing to generate $1 in net new ARR. All the resources supporting the revenue generation should be a guardrail. Why has this decline happened?

VP of Engineering 230

VP of Engineering Scale Marketing Benchmarks 230

SaaStr

DECEMBER 27, 2020

Those of us who’ve been around a while think of New Relic as a freemium and almost SMB tool, but today 77% of their revenue comes from accounts greater than $100k. New Relic’s net negative churn / net dollar retention has dropped to 98% in the last quarter, despite a record 77% of revenue being from the enterprise.

Scale 308

Scale Outsourced Development SMB Cloud 308

SaaStr

DECEMBER 10, 2019

110% Net Revenue Retention and 8 2% Customer Retention from 81,000+ SMB Customers. But that also proves that’s no excuse to drop below 100%+ net revenue retention. Bill.com manages 110% Net Revenue Retention on 82% Customer / Logo retention. If you want to.

Payment Services 214

Payment Services Payments Payment Methods SMB 214

SaaStr

JUNE 11, 2020

They were earlier to mass-scale recurring revenue services on the web than B2B was. But they need to be repurposed, because our B2C friends assume a lot higher churn and turnover, and much lower revenue per customer, than most B2B applications. We’ve learned: Net revenue retention probably matters more.

Metrics 206

Metrics Customer Lifetime Value B2C B2B 206

SaaStr

JULY 26, 2022

Net net, most true SMB SaaS products often churn on the order of 3% per month almost no matter what you do. Be relentless about building features that increase retention. I don’t see enough SaaS SMB company relentlessly talking about the impact of new features on retention. And we’ll get to that in a moment.

SMB 359

SMB Churn Payment Services SaaS 359

SaaStr

SEPTEMBER 29, 2022

Dear SaaStr: How Do I Do My Retention Negotiation in an Acquisition? A few thoughts on retention compensation when you are acquired. Second, understand there are both carrots and sticks that acquirers can employ, and that the retention may involve a combination of both. Extra payments if your business hits $YYm in revenues.

Acquisition 260

Acquisition Retention Payments Compensation 260

SaaStr

MARCH 20, 2021

Traditionally, that has meant even 100% Net Revenue Retention can be tough when 20%-30% of your customers may be out of business in a given year! Bill.com: 110% NRR from small businesses , and 82% logo retention. A few thoughts: Yes, SMBs churn at a higher rate than enterprises, both gross and net.

SMB 249

SMB Churn Retention Enterprise 249