Tom Tunguz

OCTOBER 28, 2017

The two most important changes are changes to revenue and profitability. Today, all software revenue is recognized ratably over the contract period. If a business finds a 12 month contract for $12,000, the company record $1000 of revenue for each month. Under ASC 606, hosted revenue recognition doesn’t change.

Revenue 230

Revenue Benchmarks SaaS Finance 230

Tom Tunguz

JUNE 11, 2018

2018 is a blockbuster year for software M&A multiples. The prices companies fetch relative to their revenues surpass any of those in the past 7 years. Billion-dollar plus acquisitions in 2018 have commanded a median 17.7x trailing enterprise value to revenue multiple. EV/NTM revenues. The corporate tax holiday.

Software 173

Software Marketing Scale Acquisition 173

Tom Tunguz

MARCH 19, 2018

The company generated $297M of revenue in 2017 at a 73% gross margin, and grew by 58%. Salesforce is acquiring the business for an astounding 21x enterprise value to trailing twelve months revenue multiple - nearly 2x the next closest. A recent addition to the list of public software companies, Mulesoft is a tremendous business.

Acquisition 189

Acquisition Marketing Enterprise Revenue 189

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. It’s possible with some estimation.

Software Review 363

Software Review Finance Enterprise Acquisition 363

SaaStr

FEBRUARY 27, 2025

We are proud that the 2018-2024 SaaStr Annuals have featured over 50% women and multicultural speakers at each event. Be actively employed at a post-revenue B2B / AI / SaaS operating company. SaaStr is committed to having the most inclusive community in Cloud, SaaS and AI. We provide priority to less-represented women.

Venture Capital 223

Venture Capital Travel Cloud AI 223

SaaStr

NOVEMBER 10, 2021

Datadog isn’t leaving the smaller customers behind, but they are increasingly a smaller percentage of revenue. 100k+ customers have gone from 50% of revenue in 2016 to almost 80% today: #2. In 2018, most Datadog customers used 1 product. Today, most Datadog revenue comes from customers that use 4+ products.

Scale 362

Scale Cloud Enterprise Scaling 362

SaaStr

MAY 6, 2022

Ultimately — revenue multiples. Revenue multiples are how much VCs, investors, and ultimately, an IPO and public markets will value each dollar of revenue. Revenue multiples don’t affect customers, or even revenue itself. The Bear Case: Multiples are still elevated compared to the pre-2018 period.

SaaS 348

SaaS Azure Cloud AWS 348

Tom Tunguz

AUGUST 26, 2020

TTM Revenue, $M. Revenue Growth. Smartsheet went public in 2018. At the time of IPO, Asana generates more revenue, $162M in revenue to Smartsheet’s $111M. Asana is also growing faster, 86% annual revenue growth vs. SmartSheet’s 66%. S&M Spend / Revenue. R&D Spend / Revenue.

Payment Solutions 363

Payment Solutions Payments Outsourced Development Payment Services 363

Tom Tunguz

NOVEMBER 10, 2018

Qualtrics fetched 23x trailing twelve months revenue multiple. The only one greater is the Microsoft/Github acquisition, which is based on press reports of Github’s revenue. Let’s put the 2018 acquisition environment into context. Prices in 2018 are also the highest across this time frame.

Scale 162

Scale Acquisition Cloud Software 162

Predictable Revenue

APRIL 22, 2019

The post Collin’s 2018 Reading List appeared first on Predictable Revenue - The Outbound Success Company. Check out this list of Collin Stewart's favorite books. We help companies grow faster with Outbound Sales.

Revenue 133

Revenue Sales B2B 133

Tom Tunguz

DECEMBER 17, 2018

The five most popular posts of 2018 were: The Strategic Shift in Revenue for SaaS Startups as They Scale - or popular by any other post by a factor of 10, this post discusses the importance of focusing on renewals as a business reaches $10M, $20M and beyond in ARR.

Acquisition 157

Acquisition Interviewing Cloud Pricing 157

SaaStr

MARCH 11, 2022

Put differently, if you look at multiples of revenue for top SaaS and Cloud companies above from 2014-2022, you could come to one of (at least) two conclusions today: Conclusion #1: Q2’20-Q4’22 Cloud Revenue Multiples Were a Covid Anomaly. Was the “Covid Boost” in Cloud multiples just an anomoly?

Scale 327

Scale SaaS Cloud Pricing 327

SaaStr

APRIL 29, 2021

Shopify’s first quarter revenue: Q1 2021: $989 million Q1 2020: $470 million Q1 2019: $321 million Q1 2018: $214 million Q1 2017: $127 million Q1 2016: $73 million Q1 2015: $37 million Q1 2014: $19 million Q1 2013: $9 million. NRR of 110%+ since 2018 — sort of. 110% growth at $4B in revenues. Well, it’s murky.

Merchant Services 309

Merchant Services Payment Methods SaaS Payments Payments 309

Predictable Revenue

MAY 20, 2019

The post The Cold Call and Cold Email: Part 1 of Predictable Revenue’s Outbound Sales Learnings from 2018 appeared first on Predictable Revenue. For the topic of our first e-book, we decided to, well, start at the beginning: the cold and the cold email.

Sales 169

Sales Revenue B2B Management 169

Intercom, Inc.

JANUARY 2, 2019

In 2018, we doubled the size of our R&D teams to continue building best in class products with non-stop innovation. In 2018, we set out on our own path to make our mark where we felt others had fallen short. Read on to hear more about what we shipped in 2018: . We strive to let our product do the talking.

Technical Review 141

Technical Review Engagement Branding Communication 141

SaaStr

JUNE 24, 2021

SproutSocial is a great one to track NRR because they have a pretty even (by revenue) mix of customers small, medium and large. For Sprout Social, a $10k a year customer is a bigger customer, and the fastest growing segment, up 44%. SMB, Mid-Market and “Enterprise” are all about equal segments of revenue: #3.

Social Media 325

Social Media SMB Cloud Scale 325

Sales Enablement, SaaS and Growth

FEBRUARY 5, 2018

This data is less than a year old, so sales enablement professionals should feel comfortable using it throughout 2018. 2018 Sales Enablement Statistics My hope is that this blog post will be a small step towards something that will have a big impact, and is frankly long overdue.

Sales Enablement 146

Sales Enablement Sales Hiring Sales Venture Capital 146

SaaStr

DECEMBER 20, 2023

Canva: – Almost $2B ARR – Growing 40%+ – Profitable And … 4,000 employees That's about $500k in revenue per employee That's where software really makes money — Jason ✨Be Kind✨ Lemkin  ?? 4,000 Employees, So About $500,000 in Revenue Per Employee That’s very efficient.

AWS 307

AWS B2C Scaling AI 307

SaaStr

AUGUST 9, 2020

And I’m also going to throw in a few small moments from running “SaaStr Inc” now to almost $20m in annual revenue, and investing in a handful of awesome unicorns. No matter what, we’d never be able to get to $1m in revenue fast enough, let alone profitability. And again, Dec 31, 2018 and Dec 31, 2019.

Sales Hiring 357

Sales Hiring SaaS Revenue Churn 357

SaaStr

NOVEMBER 19, 2020

Subscriptions can fuel payments and merchant revenue. It’s now bigger than Shopify’s SaaS revenue, by far: 3. Both Shopify and Zendesk have added rich enterprise offerings over time, but despite the larger ACVs of bigger customers, SMBs have kept up as a percent of revenue. It works for Zoom and Slack, too.

Payments 363

Payments Merchant Services Payment Solutions Scale 363

Tom Tunguz

JULY 18, 2022

In 2018 at Saastr, Jason Lemkin & I talked about private equity becoming an increasingly aggressive buyer of venture-backed software companies. The software & infrastructure youth of a decade ago are ageing & growing into these revenue ranges. Market multiples have compressed by 50-70%.

Startup 356

Startup Retention Pricing Software 356

Tom Tunguz

DECEMBER 12, 2021

This chart shows the median and the 75th percentile of enterprise value/forward revenue multiple for the basket of public stocks which were public at that moment in time. But let’s look at the most recent five years. Correction Year.

SaaS 361

SaaS Cloud Enterprise Software 361

SaaStr

MARCH 28, 2025

Too many expect a material amount of revenue too quickly. 40% of HubSpot’s and Shopify’s revenue comes from partners. In the enterprise, most of ServiceNow’s revenue does. Treat this like a sales pipelinetrack leads, co-selling efforts, and revenue generated from these partnership. Its not a quick win.

Scale 141

Scale Sales Hiring SMB Enterprise 141

Tom Tunguz

JUNE 1, 2024

Weaker revenue projections tend to cause sell-offs. Top quartile companies in 2024 grow at the same rates as bottom quartile companies in 2018. Future revenue ramps have been the dominant driver of software valuations for the vast majority of the last decade. Covid catalyzed $100b in new software revenue bookings in 2022.

Software 316

Software Marketing Revenue Business 316

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 329

SaaS Travel Churn Revenue 329

Predictable Revenue

JUNE 3, 2019

The post Sales enablement: Part 3 of Predictable Revenue’s outbound sales learnings from 2018 appeared first on Predictable Revenue. Without the wide-ranging support of the sales enablement function, the day-to-day of an SDR would be significantly more difficult.

Sales Enablement 133

Sales Enablement Sales Revenue B2B 133

SaaStr

MARCH 31, 2021

Revenue grew nicely at first from $1m to $3.5m 2018: $155m rev. Customer count growing 33%, revenue growing 65% — the “Golden Ratio” for future growth. Fast, but revenue grew much faster (65%). That means both halves of the revenue engine are humming. ARR uses to mean true recurring revenues.

Outsourcing Services 362

Outsourcing Services Outsourced Development Payment Features Cloud 362

Predictable Revenue

JUNE 24, 2019

The post How to perfect sales operations: part 6 of Predictable Revenue’s outbound sales learnings from 2018 appeared first on Predictable Revenue. We'll also cover the three main principles for governing day to day sales operations and Zendesk's sales stages!

Sales 138

Sales Government Revenue Marketing 138

SaaStr

MAY 18, 2022

RingCentral gets almost half its revenue through channel partners — and it’s their fastest-growing segment. While the slide below is one quarter dated, it still illustrates the point that RingCentral gets almost half its revenue from channel partners — and it’s growing 50%, far faster than overall growth.

SMB 312

SMB Enterprise Scaling Revenue 312

SaaStr

JUNE 1, 2022

Certainly, public SaaS revenue multiples are way down, and that’s impacted many things, including making VC fundraising substantially harder than in the go-go days of 2021. Salesforce Growth: 2023 $31.8B (guidance) 2022 $26.5B 2021 $21.25B 2020 $17.1B 2014 $4.1B. Thank you Ohana! pic.twitter.com/CMhrBXgHSF.

Sales Hiring 346

Sales Hiring Acquisition Cloud Enterprise 346

SaaStr

JANUARY 16, 2023

We are proud that the 2022 SaaStr Annual featured a combined 60% women and multicultural speakers and have had over 60% women and multicultural speakers at each SaaStr Annual since 2018, and we hope to do even better in 2023! Be an employee at a post-revenue B2B or SaaS operating company. Being as inclusive a community as possible.

Travel 338

Travel Innovation B2B Revenue 338

SaaStr

JANUARY 2, 2020

If you can get to $10m ARR, with positive revenue retention, you can indeed get to $300m ARR. So riding this wave alone should 2x your revenue, maybe even 4x it. But I do know that if you hit $10m ARR with 100%+ net revenue retention, and happy customers … well, it can be you, too. VCs may mock this. But hold on.

Retention 313

Retention Cloud Churn Revenue 313

SaaStr

OCTOBER 15, 2022

Let’s all be clear, 2021 was insane: * SPACs worth billions with no revenue * Multiples magically tripled * Fintechs with 10% GMs worth same as 80% GMs * #5 in market got same premium as #1 * Growth stage seen as free money * Seed VCs bought in $3B-10B rounds vs sell. Let’s look at 2018-202 0.

Startup 274

Startup Cloud Growth Marketing Enterprise 274

SaaStr

JANUARY 11, 2023

7% of Revenue from Professional Services — down from 12% in 2018. Just under 7% of their revenues come from services. #4. Without that, the company would likely be a fraction of its current ARR. #3. Docebo doesn’t do proserv for all customers, but it also doesn’t shy away from it for larger customers.

Scale 350

Scale Pricing Scaling Enterprise 350

SaaStr

MAY 11, 2022

And while its core Defense Business has slowed down substantially for now, its Commercial Business, while just 15% of revenues today, is accelerating. But I would have expected revenue to grow even more, when combined with 124% NRR. #4. Government Revenues Plummeted, While Commercial Kicked Into High Gear.

Government 312

Government Scaling Cloud Revenue 312

SaaStr

MARCH 10, 2024

Because beyond WFH, RTO, and all the tactical changes of the past few years, the biggest structural one really is — The March To $400,000 in Revenue Per Employee. In fact, almost every SaaS leader at scale is hitting $300,000 in Revenue Per Employee at the pre-IPO phase. That means $300k-$400k in revenue per employee.

SMB 293

SMB Cloud Startup Scaling 293

SaaStr

JANUARY 26, 2020

Aaron Levie and Karen Appelton, his ex-head of partnerships came to the 2018 SaaStrAnnual.com to talk partnerships and one point on “free” deeply resonated with me. If you tighten the “choke” on free, then this quarter, your paid revenue will go up. It also can create a ton of leads that sales can’t close.

Cloud 345

Cloud Revenue Branding Sales 345