SaaStr

DECEMBER 3, 2023

Non-Recurring Revenue Doesn’t Count, At Least Not as Much. If your revenue from any stream can go down in a given month or quarter, it’s not recurring. Pass-Through Revenue Simply Doesn’t Count. Is it OK to recognize pass through revenue as “revenue”? Loss-making Hardware Revenue Doesn’t Count.

SaaS Payments 230

SaaS Payments Metrics Payments SMB 230

Clouded Judgement

MARCH 22, 2024

Subscribe now ARR (Annual Recurring Revenue) vs ERR (Experimental Runrate Revenue) ARR (Annual Recurring Revenue) is one of the most popular SaaS (Non-GAAP) metrics. Many investors laugh (and some rightly so) at the fact that software companies’ valuations are often described as a multiple of revenue.

AI 183

AI Revenue Cloud Technical Advisors 183

Clouded Judgement

APRIL 11, 2024

It looks at the YoY dollar change in quarterly revenue from the hyperscalers (just looking at Azure / AWS because the data goes back further) going back a few years. Q4 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q4 starting with revenue. net retention and CAC payback).

Cloud 177

Cloud Software Azure AWS 177

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. They’re at $700M in revenue and growing 50%. But that wasn’t always the case.

Sales Hiring 253

Sales Hiring Headcount Finance Technical Review 253

SaaStr

NOVEMBER 1, 2023

are realtively low, as a huge amount of their payments revenue goes out to the payment processors. 15% Customer Growth Leads to 48% Revenue Growth Always helpful to me to see this math broken out. 15% Customer Growth Leads to 48% Revenue Growth Always helpful to me to see this math broken out. Much less than revenue grew.

Payment Services 314

Payment Services Payments SaaS Payments Payment Solutions 314

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 215

Metrics SaaS Sales Hiring Finance 215

SaaStr

JULY 3, 2023

In a recurring revenue model, you want to make every accretive hire you can. So if you can hire a VP of Demand Gen today and they can bring in even just $200k in additional revenue in the next 12 months from improving the funnel, BDR management, demand gen campaigns, webinars, events, whatever … hire them today! Don’t wait.

Sales Hiring 248

Sales Hiring Marketing SaaS Engineering 248

Clouded Judgement

DECEMBER 21, 2023

Q3 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q3 starting with revenue. Beating consensus revenue estimates is the first aspect of a successful quarter. The formula to calculate this is: (Q3 ’23 revenue) / (Q3 ’22 revenue) - 1.

Cloud 177

Cloud Software Benchmarks Retention 177

Clouded Judgement

APRIL 19, 2024

NTM revenue multiple. Their GAAP revenue grew 5% in 2023, and 29% in Q4 ‘23 YoY. For context, full year GAAP revenue in 2023 was $628m. I lay out all of these numbers to hopefully portray that the business is growing much faster than the 5% 2023 revenue growth would suggest. Overall Stats: Overall Median: 5.7x

Cloud 141

Cloud Scale Subscription Payment Features 141

SaaStr

JULY 14, 2023

It took Daniel Dines from UiPath 10 years to get to $1M in revenue, and then he went from $1 to $100M in 2-3 years. Q: When Should You Reduce Non-Recurring Professional Services From A Software Company? One audience member generates recurring software revenue and non-recurring professional services 50/50.

Sales Hiring 244

Sales Hiring Scale Customer Success SaaS 244

Tom Tunguz

JANUARY 23, 2024

There was a recurring theme when delegating: Identify the time-consuming & repetitive tasks by coloring or labelling your calendar, or calculating at the end of the week or month. A board delegating tasks to a CEO will agree on revenue goals & burn targets, not the details of the implementation.

ChatGPT 205

ChatGPT AI Metrics Revenue 205

Stax

FEBRUARY 21, 2024

So, of course when it came to revenue-driving activities, Ford knew that success in marketing—and business—wasn’t about how much your marketing spend is, but how efficiently you spend it. Enter the SaaS Magic Number, which measures the return on sales and marketing spend in generating new subscription revenue.

SaaS Payments 88

SaaS Payments Payments Payment Services Stax 88

Stax

FEBRUARY 26, 2024

We can see this trend in action in the realm of payment processing with the advent of recurring payments, also known as automatic payments. So, let’s dive into the realm of recurring payments and how they can benefit your business. Learn More What are Recurring Billing and Payments? How Do Recurring Payments Work?

Payment Services 88

Payment Services Payment Features Merchant Services Payment Methods 88

Totango

FEBRUARY 9, 2024

Similarly, to be successful, an enterprise needs to be able to prevent churn and increase revenue growth. In football terms, gross retention, or gross revenue retention (GRR), is like the defense, determined to block any attempts by the opposing team (churn) to breach your end zone (revenue stream). Calculate it!

Retention 109

Retention Underperforming Technical Team Software Review Churn 109

SaaStr

SEPTEMBER 19, 2021

Recurring revenue certainly has pros and cons. The biggest pro is it recurs With even 120% NRR, you basically double in 4+ years even with no new customers. Actual recurring and recognized revenue is, has, and always will be, what matters. Second Order Revenue grows each year in significance.

Sales Hiring 278

Sales Hiring Scale Headcount Acquisition 278

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 274

Engineering Business Model Pricing Scaling 274

Stax

MARCH 6, 2024

For businesses offering subscriptions, memberships, retainers, and other recurring services, recurring billing is a powerful solution to streamline processes and ultimately enhance revenue generation. Users are used to recurring charges, and businesses are primed to take advantage. Learn More What is Recurring Billing?

Merchant Services 88

Merchant Services Payment Services Payment Methods Payment Features 88

SaaStr

APRIL 18, 2021

It means it’s really, really hard to get revenues going. You close a customer for $120 in annualized revenue, you only get to recognize $10 of that a month. Tons of work, tiny revenues to start. Get the revenues going, even if they are small. 120% NRR: Your revenue doubles in 5 years even with no new customers.

SaaS 325

SaaS Travel Churn Revenue 325

SaaStr

MAY 14, 2021

So it’s hard to dig even deeper inside yourself to get that last 10-15% of additional, much-harder-to-achieve revenue out of the ether. Because in recurring revenue, growing 10-15-20%+ more this year than even your stretch plan will pay huge dividends 3-4 years down the round. So I want to help. Don’t hesitate.

Sales Hiring 286

Sales Hiring Scale Engineering Customer Success 286

Stax

JANUARY 28, 2024

The most potent benefit of the subscription-based business model is that companies are guaranteed a fixed revenue stream—if they can retain their customers or subscribers. Subscription billing and recurring billing are the backbone of any subscription business model. Recurring billing is a perfect fit for subscription businesses.

Payment Features 88

Payment Features Payment Methods Payment Solutions SaaS Payments 88

Tom Tunguz

JANUARY 26, 2021

The valuation multiples on annual recurring revenue are the highest across startup categories. Unlike the public markets, which typically use enterprise-value-to-forward-revenue multiples, the venture industry standardized on market-cap-to-forward-ARR. One of the key terms is ARR, which is annual recurring revenue.

SMB 278

SMB Trends Startup Subscription 278

Clouded Judgement

SEPTEMBER 12, 2023

We will see this show up in revenue figures in a quarter or two. Regardless, as we round into Q3 we’ll start to “lap” the first tough quarters so it wouldn’t surprise me to see a number of companies accelerate their YoY revenue growth. ” Source: company filings Let’s get into some high level data.

Cloud 169

Cloud Software Benchmarks Retention 169

SaaStr

FEBRUARY 8, 2022

Knowing which metrics matter and how to analyze them to increase your revenue and hit organizational sales goals is essential. . Since they sell ads, value also means how many recurring clients contribute to a significant chunk of their yearly revenue by assessing six-month or year-based account value. Let’s look at them: Value.

Scale 257

Scale Sales Hiring Compensation Sales 257

SaaStr

MAY 8, 2021

Monthly invoices can make things even worse, of course. Let SMBs pick annual or monthly, at least as an experiment. You are robbing a bit of a long-term revenue stream if your over-discount to get an annual deal done now. A multi-year pre-paid contract can be even more magical, and give you months of extra cash in a start-up.

SaaS Payments 290

SaaS Payments Payment Services Scale Payments 290

SaaStr

DECEMBER 21, 2022

Document Cloud revenue was $2.38 Adobe – Adobe Reports Record Q4 and Fiscal 2022 Revenue [link]. in revenue in 2021, about $8B dropped to operating income and well over that in free cash flow. 59% of revenue from Americas, 41% from Rest of World. Adobe is almost 100% subscription revenue based now.

Scale 282

Scale Cloud Subscription Payment Features 282

SaaStr

JANUARY 15, 2021

25% of revenue from professional services may sound high, but it’s a fairly standard ratio in true enterprise software. And isn’t services revenue a friction-full waste of time anyway? I mean, it’s not recurring. And you’ll get the same SaaS ARR multiple on those extra services revenues.

Revenue 328

Revenue Pricing Enterprise SaaS 328

User Pilot

MARCH 25, 2024

It uses revenue and operating costs to determine the company’s value. Revenue-based valuations are more suitable for SaaS startups because it doesn’t take into account upfront investment which affects SDE or EBITDA negatively. The multiple depends on numerous factors, like sustainability and transferability of revenue and growth.

SaaS 94

SaaS Customer Lifetime Value Acquisition Metrics 94

Stax

FEBRUARY 28, 2024

This includes subscription management, revenue recognition, dunning management, integrations with other business systems, fraud prevention, and more. This includes subscription management, revenue recognition, dunning management , integrations with other business systems, fraud prevention, and more.

Payments 88

Payments SaaS Payments Payment Services Merchant Services 88

SaaStr

MAY 3, 2021

And you must have someone with recurring revenue experience. Accounting for recurring revenue companies is really nothing like that of non-recurring revenue companies, especially in modeling, deferred revenue, etc. But these days … the best SaaS companies are growing faster than ever.

Part-Time VPE 278

Part-Time VPE Sales Hiring Sales Recruiting Outsourcing Services 278

Stax

JANUARY 29, 2024

As industry leaders in billing software, our mission is to help our customers work more efficiently, recover more revenue, and effortlessly collect invoices. TL;DR A billing platform is a comprehensive system facilitating subscription management, recurring billing, revenue recognition, payment gateways, analytics, and dunning processes.

Stax 88

Stax Payments Payment Services Payment Features 88

SaaStr

SEPTEMBER 12, 2022

In SaaS, the revenue recurs. It’s more about things I worry about after : Founders’ understanding of market doesn’t get deeper. I really worry when 9–12 months later, the founders do not understand their market better. Too slow to hire VPs. You will have rough months and quarters. Probably even a rough year or two. A bit more here.

Startup 295

Startup Scaling SaaS Revenue 295

Tom Tunguz

OCTOBER 18, 2020

Most high-growth software investors value public companies on enterprise value to forward revenue multiple. But investors in private companies use a different metric, enterprise value to forward annual recurring revenue (ARR).The The public markets project revenue for the next 12 months. What conclusions could we draw?

Software Review 363

Software Review Finance Enterprise Acquisition 363

User Pilot

OCTOBER 4, 2023

Net monthly recurring revenue (MRR) growth enables you to calculate the change in your company’s recurring revenue on a month-to-month basis. As we will see in this article, there are several key factors that affect monthly revenue. A similar concept is ARR, annual recurring revenue.

Metrics 91

Metrics Customer Lifetime Value Churn Retention 91

User Pilot

FEBRUARY 28, 2024

There are various metrics to track the customer path, such as: Awareness stage metrics Acquisition stage metrics Activation stage metrics Adoption stage metrics Retention stage metrics Revenue stage metrics Referral stage metrics To create a successful customer path, follow the steps below: Conduct user path analysis to identify the happy path.

Customer Lifetime Value 93

Customer Lifetime Value SaaS Software Review Acquisition 93

Clouded Judgement

APRIL 12, 2023

.” This is not an indication of who I think will preform the strongest in the future, but a look-back on who preformed the best in Q4 (based on a formula I use that factors in many different financial variables) Q4 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q4 starting with revenue.

Cloud 161

Cloud Software Benchmarks Retention 161

SaaStr

FEBRUARY 17, 2021

That’s the power of recurring revenue. 43% of Revenue Outside the U.S / North America. This may be in part due to Wix’s original Israeli roots, but an impressive 43% of revenue is outside the U.S. While Wix’s actual churn is a bit unclear, this is a super interesting presentation of CLTV. Impressive.

Payment Methods 297

Payment Methods Payment Solutions Payments SMB 297

Kellblog

OCTOBER 13, 2022

Is it MRR (monthly recurring revenue)? Specifically, what does “recur” mean? Why does the phrase “recurring revenue” appear exactly zero times in Snowflake’s 10-Q ? What Does Recur Mean? In the annual world, “recur” seemed pretty clearly defined.

Metrics 132

Metrics SaaS Payments SaaS Payment Features 132