SaaStr

AUGUST 5, 2021

CAC payback – 76% GM – 18% FCF Margin $DDOG. . – $234M rev (+67% YoY) vs $212M consensus (10% beat) – $247M next Q guidance vs $225M consensus (10% raise) – Last Q YoY growth was 51% – >130% net retention – 7 months GM adj. — Jamin Ball (@jaminball) August 5, 2021.

SaaS 337

SaaS AWS Cloud Scaling 337

SaaStr

AUGUST 7, 2023

Jason Lemkin, Founder of SaaStr, and co-founders and CEOs, Eran Zinman and Roy Mann of the wildly successful monday.com chat with Startup For Startup about ARR, NRR, CAC, and what it takes to beat the odds in a tougher environment. How Is CAC Calculated In SaaS? Read More: What’s The Right CAC These Days? The takeaway?

Metrics 211

Metrics SaaS Sales Hiring Finance 211

SaaStr

AUGUST 4, 2022

CAC payback – 81% GM – 15% FCF Margin. Datadog quarter: – $406M rev (+74% YoY) vs $378M consensus (7% beat) – $412M next Q guidance vs $409M consensus (1% raise) – >130% net retention – 9 months GM adj. Q2 beat by $28m, but only raised FY guidance by $10m $DDOG.

Venture Capital 307

Venture Capital AWS Cloud Scale 307

SaaStr

DECEMBER 13, 2023

A VC will look across their portfolio and find a company with the best CAC, another with the best CAC payback period, the best rule of 40, and then ask you to beat them on all four. The strategy to actually improve business is on the top, and the overall goals to run the business are seeded underneath. #12: 12: Piecemealing.

Metrics 318

Metrics Sales Hiring Benchmarks SaaS 318

SaaStr

MARCH 27, 2023

Then they really invest in recovering the CAC as soon as possible. Having a long CAC payback can actually mean that the faster you grow, the more money you burn. Not just right now, but months down the line of adding new people to a team, launching new products, acquiring a competitor, entering new geographies, etc.

SaaS Payments 225

SaaS Payments Technical Review Software Review Venture Capital 225

SaaStr

SEPTEMBER 13, 2023

So there are two points for the need for the burn multiple… #1 Why come up with this new metric as opposed to CAC and CAC payback? If a finance team misattributed certain expenses, it made CAC look great. No one could calculate it accurately.

SaaS Payments 241

SaaS Payments Payment Solutions AI SaaS 241

SaaStr

SEPTEMBER 14, 2020

During these phases, make sure to calculate your CAC payback. You must figure out payback on a monthly basis. This is crucial to analyzing a period back, and finding out how much it costs to acquire a customer. To find this, divide by the gross margin. This is important today since there is so much uncertainty in COVID.

Technical Review 322

Technical Review Cloud Software Review Technology 322

Baremetrics

OCTOBER 26, 2021

What is CAC for Shopify Partner Apps? Use Baremetrics to calculate CAC for Shopify Partner Apps CAC for Shopify Partner Apps How do you calculate CAC for Shopify Partner Apps? Baremetrics can calculate CAC for Shopify Partner Apps Why do you need to calculate CAC for your Shopify Partner Apps?

Payment Solutions 98

Payment Solutions Payments Payment Methods SaaS Payments 98

SaaStr

NOVEMBER 5, 2021

a 16-18 month payback period) … since this is in part what the capital is for. I see these SaaS businesses not make adjustments for these costs, and time and time again almost run out of money even with a seemingly decent CAC and Magic Number. It doesn’t even include rent, benefits, etc. or so (e.g., It can be gamed.

Scale 279

Scale SaaS Acquisition Benchmarks 279

SaaStr

DECEMBER 4, 2023

So i f deals take longer to close, you’re spending more money and paying people longer, so your customer acquisition costs are increasing, payback takes longer to materialize, and your LTV to CAC goes down. The sales cycle is important because it cascades into a bunch of critical metrics for you and investors, including revenue.

SaaS Payments 241

SaaS Payments Payment Services Payments Payment Features 241

Clouded Judgement

FEBRUARY 3, 2023

I also want to mention – I use this blog as somewhat of a personal journal. FCF calculated as Cash Flow from Operations - Capital Expenditures GM Adjusted Payback is calculated as: (Previous Q S&M) / (Net New ARR in Q x Gross Margin) x 12. Every week I’ll provide updates on the latest trends in cloud software companies.

Cloud 130

Cloud Azure AWS Generative AI 130

SaaStr

SEPTEMBER 27, 2023

Companies need to pay more attention to factors like: Burn multiple CAC efficiency The most important metric right now is likely the burn multiple. One metric to look at is the CAC payback period — how long it takes to recoup a dollar. Now, investors care much more about healthy and sustainable growth.

AI 200

AI Underperforming Technical Team Cloud Strategy 200

Baremetrics

SEPTEMBER 26, 2021

Most SaaS companies keep track of their customer acquisition cost (CAC) and customer lifetime value (LTV), but how about your CAC:LTV ratio or months to recover CAC? Cost of customer acquisition (CAC) v. CAC payback period/months to recover CAC vi. CAC-to-LTV ratio Churn i. Customer churn ii.

Metrics 95

Metrics SaaS Payments SaaS Customer Lifetime Value 95

The Angel VC

MARCH 23, 2016

I received a lot of great feedback on the template and the original post remains one of the most viewed posts on this blog up to this day. Please note that the CAC data and "CAC payback time" calculation are based on pretty crude simplifications. A solid planning of CAC payback times, CAC/LTV ratios etc.

SaaS Payments 217

SaaS Payments Headcount SaaS Payment Methods 217

OPEXEngine

JULY 26, 2022

Yet, it is important to track Magic Number in conjunction with underlying or contributing KPIs like the CAC or expansion CAC, the CAC payback period, and Net Dollar Retention Rate. These are metrics that every management team should also be watching and analyzing. Alignment among stakeholders in these times is critical.

Marketing 52

Marketing SaaS Benchmarks Metrics 52

User Pilot

JANUARY 8, 2024

This is particularly important in SaaS, where the CAC payback period is anything from a few months to over one year. For instance, use educational blog posts for awareness, case studies for consideration, and product demos for decision-making. You must communicate the value of accessing the gated content.

Acquisition 105

Acquisition Strategy Social Media Underperforming Technical Team 105

OPEXEngine

AUGUST 31, 2021

Although any CFO would like to pair low customer acquisition costs (CAC) with high lifetime value (LTV), instances in which these metrics move in opposite directions aren’t necessarily bad. That assumes a company spends 1x on CAC and 1-2x on general and administrative (G&A) costs. More important is the interplay between them.

Metrics 52

Metrics SaaS Acquisition Business Model 52

OPEXEngine

DECEMBER 7, 2021

Companies with the best net dollar retention (NDR) and customer acquisition costs (CAC), two other closely watched SaaS metrics, also tend to rely on usage-based pricing. There’s a similar difference in CAC performance, with usage-pricing companies generating payback in five months vs. nine months for subscription companies.

Subscription 52

Subscription Payment Features Pricing SaaS 52

The Angel VC

NOVEMBER 29, 2013

Therefore you’ll have to focus on the relationship between your CLTV and your CACs (customer acquisition costs), your CLTV/CAC ratio, which measures the ROI on your sales and marketing investments. If you want to read more about SaaS metrics, I highly recommend David Skok’s blog and Joel York’s blog , as well as Jason M.

Scale 190

Scale Startup SaaS Customer Lifetime Value 190

Chart Mogul

JULY 6, 2023

If you want, you can learn more about churn basics and benchmarks on our blog. This is good news for your LTV:CAC ratio, CAC payback period, and of course LTV. What is net negative churn? Simply put, negative churn is the good, and only, kind of churn you want.

Benchmarks 52

Benchmarks Churn SaaS Customer Lifetime Value 52

OPEXEngine

MAY 22, 2020

For diagnostics purposes, compound metrics, like LTV/CAC or CAC payback period, for example, don’t tell you what you need to fix – is your CAC too high, or your retention and/or SaaS gross margin too low? CAC : Customer Acquisition Cost. LTV : Lifetime Value.

Metrics 52

Metrics SaaS Deferred Revenue Benchmarks 52

SaaStr

DECEMBER 22, 2023

But there’s a single metric that can reflect market demand, product market fit, how well a GTM engine is executing, and the quality of the product- and that is the CAC (customer acquisition cost) payback period. If you achieve all of the above, you can shrink the CAC payback period. The takeaway?

Scale 274

Scale Scaling Strategy Sales Hiring 274

OpenView Labs

APRIL 10, 2020

As we process through this new environment, the Airbnb deal in particular is a great reminder that the metrics we’re accustomed to evaluating in SaaS – revenue growth, gross margin, CAC payback, retention – might not look as good as they once did and that will scare a lot of investors off. This blog from Gavin Baker.

Marketing 52

Marketing Benchmarks Government Trends 52

OpenView Labs

DECEMBER 13, 2019

We had some of the top PLG leaders from organizations like Zapier, Dropbox, Atlassian, Expensify, Calendly, SendGrid, GitLab and more contribute to our blog and our podcast. Interested in submitting an article for our blog? 2019 was the year of the End User and the rise of Product Led Growth. Check it out!

Sales Hiring 52

Sales Hiring Benchmarks AWS Scale 52

OpenView Labs

MAY 8, 2020

The rise of the pro forma metric has been well documented and we’re all accustomed to non-GAAP metrics—ARR, retention, CAC payback, etc. OpenView Partner Blake Bartlett’s Recession Planning Framework is now available in blog form ! They’re incredibly effective compared to GAAP measures for SaaS. Financial resources.

Scale 52

Scale Marketing Payments Payment Solutions 52

SaaStr

NOVEMBER 9, 2022

If you try to scale up without first proving the viability of your unit economics—CAC payback, gross margins, and so forth—you’re just turning a small, bad business into a big, bad business. Business model. If the metrics are heading in the wrong direction, slow down. Customer experience.

Underperforming Technical Team 46

Underperforming Technical Team Business Scale Business Model 46

SaaStr

JANUARY 5, 2023

Fundamental metrics (like ARR, CAC Payback, or Burn Rate) will never stop being important; they’re industry standards for a reason. They then overhauled their pricing and packaging to grow alongside their infrastructure and customers. . Looking back vs. looking forward.

Sales Hiring 44

Sales Hiring Acquisition Forecasting Outsourced Development 44

OpenView Labs

OCTOBER 30, 2019

Editor’s Note: This article first appeared on Companyon Ventures’ blog here. . At Companyon Ventures, we created the Platform Team to help our portfolio companies identify and implement operational best practices faster and more effectively at the early stages of their evolution.

Benchmarks 40

Benchmarks SaaS Metrics Retention 40

Point Nine Land

JUNE 18, 2023

Everything you always wanted to know about cohort analysis (but were afraid to ask) Back in 2012, I wrote a blog post titled “Know your user cohorts” , which began like this: “One of the most important tools to better understand the usage of a web application — or a service, a game or a mobile app, it doesn’t matter — is a cohort analysis.

SaaS Payments 128

SaaS Payments Payment Services Payments SaaS 128

Aaron Beashel

OCTOBER 31, 2016

Here they’ll find a beautifully designed website with clear messaging built on in-depth buyer personas, and a blog and Resources section with the highest-quality educational content available in our industry. Scale blogging to 3x per week. All of these initiatives are driving prospects back to our highly-optimized website.

Scale 100

Scale Underperforming Technical Team B2B Marketing 100

Aaron Beashel

MAY 5, 2014

People like Sean Ellis , Neil Patel , Chris Hexton , Peep Laja and many others choose to share their knowledge of online marketing via blog posts and eBooks and it is all available for us to learn completely free as long as we have the desire. raise awareness of your product and drive traffic to the website.

Engineering 100

Engineering Scale SaaS Acquisition 100

SaaStr

MAY 12, 2023

Using multi-input, far-future metrics like LTV and IRR A million blog posts will tell you that LTV is important. There’s all sorts of rules about how LTV : CAC should be bigger than 3 and all that. You’re just getting less actually done, while killing your team. Do less, better. This makes the error greater than the signal.

Engineering 253

Engineering Sales Hiring Interviewing Scale 253

Intercom, Inc.

NOVEMBER 7, 2018

Payback Periods. What is Customer Acquisition Cost (CAC)? How Customer Acquisition Cost (CAC) works day-to-day. All of these factors should be accounted for in your CAC calculations to make sure you’re doing an honest accounting of what it’s costing you to acquire a customer. How to calculate LTV/CAC and why it’s useful.

Acquisition 202

Acquisition Scale Advertising Customer Lifetime Value 202

SaaStr

OCTOBER 1, 2020

CAC ration. LTV to CAC ratio. CAC payback period. Flawed churn rates impact LTV and LTV/CAC ratios. One main way Kellogg likes to think of SaaS companies is “a leaky bucket full of ARR”. Once you can see and understand the ARR engine of a company, then calculate core SaaS economic metrics. Lifetime value.

Churn 250

Churn Retention Acquisition Benchmarks 250

OPEXEngine

JULY 6, 2021

If, however, a business spent five dollars to acquire one dollar of recurring revenue, the payback on the capital invested is much less attractive, resulting in a lower valuation compared to a more capital-efficient business. Some of the most common include the Rule of 40, customer acquisition cost (CAC) payback period, and retention rates.

Software Review 52

Software Review Retention Enterprise Technical Review 52

OPEXEngine

MARCH 30, 2021

If, however, a business spent five dollars to acquire one dollar of recurring revenue, the payback on the capital invested is much less attractive, resulting in a lower valuation compared to a more capital-efficient business. Some of the most common include the Rule of 40, customer acquisition cost (CAC) payback period, and retention rates.

Software Review 52

Software Review Retention Enterprise Technical Review 52

Baremetrics

NOVEMBER 10, 2019

Say, your customer acquisition efforts are starting to pay off, and you need to keep an eye on your Customer Acquisition Cost (CAC). If you still have questions, I have a more comprehensive post coming up in Flightpath’s blog on how to forecast cash from annual plans in SaaS. Let’s begin with Customer Acquisition Cost , or CAC.

Deferred Revenue 111

Deferred Revenue SaaS Payments Sales Hiring Payment Services 111