SaaS Metrics 101

OPEXEngine

Here’s a shout out to Dave Kellogg’s Key SaaS Metrics podcast, recently released on Aznaur Midov’s SaaShimi series. Dave does a terrific job explaining the current state of the art on important SaaS metrics. Dave writes regularly about SaaS metrics in Kellblog.

SaaS Metrics Refresher #7: Revenue Recognition

Chart Mogul

In this week's lesson, we're tackling the tricky process of converting bookings into revenue — also known as revenue recognition. Repeat after me: cash is not revenue! Revenue recognition is a critical piece of accounting for any business.

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Benchmarking WorkDay's S-1 - How 7 Key SaaS Metrics Stack Up

Tom Tunguz

Today, we’ll explore one of the enterprise behemoths, both in market cap and average revenue per customer: WorkDay. In 2009 and 2010, the company recognized more revenue from services than subscription. In 2011, the year of the IPO, services still accounted for 33% of revenues. Over time, subscription revenue will continue to increase compared to services revenue. Services revenue isn’t a money-maker.

Revenue backlog definition: SaaS subscription revenue backlogs

ProfitWell

One thing that can make operating a SaaS company tricky is the number of different revenue types you have to keep track of. And one of the types that a lot of companies miss is revenue backlog : the total unrecognized revenue across the term of a given subscription agreement.

My Final Verdict on Multi-Year, Prepaid Deals

Kellblog

Complexify SaaS metrics. Multi-year deals make metrics calculation and interpretation even more complicated. Under today’s rules, for reasons that I don’t entirely understand, deferred revenue seems to get written off (and thus never recognized) in a SaaS acquisition.

New ARR and CAC in Price-Ramped vs. Auto-Expanding Deals

Kellblog

GAAP rules define precisely how to take this from a GAAP revenue perspective – and with the adoption of ASC 606 even those rules are changing. GAAP revenue. $1M. GAAP unbilled deferred revenue. $5M. ASC 606 revenue. $2M. ASC 606 revenue backlog. $4M. When I look at this is I see: GAAP is being conservative and saying “no cash, no revenue.” That’s because ASC 606 also flattens out the uneven cash flows into a flat revenue stream.

Are You Counting Payments as Renewals?

Kellblog

It can lead to large long-term deferred revenues which can hinder certain M&A discussions. Think: large balance of cashless revenue from suitor’s perspective.).

The Biggest M&A Multiple in Software History

Tom Tunguz

We’ve analyzed AppDynamic’s growth and key metrics, because the business had filed its S-1 to go public. enterprise value/trailing twelve month revenue multiple, which is 41% higher than the next nearest acquisition, Salesforce/Demandware. AppDynamic’s revenue growth is compelling, and as the chart above shows, only SuccessFactors was growing as quickly at M&A. Absolute revenue, gross margin, net income margin, cash flow margin, deferred revenue.

Top 5 Must Have FinTech Solutions in 2020

SaaSOptics

What if I told you that we have 1 full-time finance team member managing revenue operations with over 80 employees and 650+ customers? One person to manage expense reports, commissions, billing and invoicing, cap tables, revenue recognition, deferred revenue and more.

The SaaS Finance Roundup

SaaSX

Touching on a broad spectrum of financing concepts from SaaS subscription models to new bookings, deferred revenue, unbilled AR and beyond – the author writes with a clear desire to help founders conquer the many SaaS financing hurdles.

SaaS Sales Tax and What You Need to Know [2020] | ProfitWell

ProfitWell

It's important for the operation of your business that you choose a subscription management platform that has the features needed to reliably capture revenue from your customers. Audit-proof revenue recognition.

The 14 best SaaS tools: analytics, accounting, pricing, and retention

ProfitWell

Subscription businesses rely on recurring revenue from subscribers, so retaining dedicated customers is crucial to keeping your business alive. Accounting software will keep all revenue assets organized. Will this tool uncover metrics I’d have otherwise not known?

The complete guide to SaaS revenue recognition with ASC 606

Chart Mogul

What's the difference between bookings and revenue? Revenue recognition. ASC 606 and its sister standard IFRS 15 bring a set of structured guidelines for recognizing revenue -- here's what every SaaS business needs to know to meet the deadline and get compliant. Deferred revenue.

Unprepared for SaaS Due Diligence?

SaaSX

So let’s take the position that some important samples like churn, revenue or COGS don’t true up. My top three ways to get yourself into this super-hot water are revenue, churn, and COGS. Consequences of being unprepared in SaaS revenue booking.

Churn 56

Balancing SaaS Growth and Profits to Maximize SaaS Company Valuation

OPEXEngine

Price/Revenue Ratio. Source: SEC filings – weighted average by company revenue. Many factors drive the high-growth of SaaS companies, including higher market adoption of SaaS and the structural advantages of the recurring subscription revenue model – see Why SaaS Companies Grow Faster. For SaaS companies, the investment is not recouped until after years of initial SaaS revenues. Deferred Revenue = Deferred Profits. revenue valuations.

Building a Roadmap for Early-Stage SaaS Growth [Webinar]

SaaSOptics

The first is really automating the order to cash to renewal process for these businesses as well as providing automated revenue recognition and deferred revenue calculations in an automated fashion. You’ll have the transactions to develop all of those those metrics.

Building a Roadmap for Early-Stage SaaS Growth [Webinar]

SaaSOptics

The first is really automating the order to cash to renewal process for these businesses as well as providing automated revenue recognition and deferred revenue calculations in an automated fashion. You’ll have the transactions to develop all of those those metrics.

Building a Roadmap for Early-Stage SaaS Growth [Webinar]

SaaSOptics

The first is really automating the order to cash to renewal process for these businesses as well as providing automated revenue recognition and deferred revenue calculations in an automated fashion. You’ll have the transactions to develop all of those those metrics.

How We Run Finance & Operations with Two People at ChartMogul

Chart Mogul

With all our revenue data captured in ChartMogul , the data it holds is the foundation for many of the reports our team produces regularly and on an ad-hoc basis. A bit later in the month, we prepare a revenue report for tax purposes. This is based not on MRR, but GAAP revenues.