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. Despite raising prices and selling more products, HubSpot ACV is basically flat at $11,365. Clearly, even SMBs are working to moderate spend, even as vendors increase pricing.

Scale 231

Scale Cloud Pricing Scaling 231

ChurnZero

JULY 8, 2022

Oh, by the way, what’s your customer retention?” It was clear that, barring any wildly outlandish figures, customer retention wasn’t a dealbreaker in their decision to invest. Net revenue retention (NRR) is taking center stage as the qualifying metric for determining the health of a SaaS business.

Technical Review 98

Technical Review Software Review Retention Metrics 98

Clouded Judgement

APRIL 19, 2024

Subscribe now Rubrik IPO Update This week Rubrik launched their IPO with an initial pricing range of $28 - $31 / share. 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. Revenue multiples are a shorthand valuation framework.

Cloud 141

Cloud Scale Subscription Payment Features 141

SaaStr

JULY 13, 2022

Co-founder and CEO of Insider , Hande Cilingir, talks about what it takes to write a successful revenue growth story. Contract processes, packaging, and pricing might change. However, the revenue forecast accuracy and the realization of that revenue each month are more important. Mistake 1: Not accepting your mistakes.

Scale 211

Scale Sales Hiring Revenue Marketplace as a Service 211

Intercom, Inc.

OCTOBER 7, 2020

. “Support isn’t just a cost center, but a strategic investment that increases customer retention and reduces churn” Indeed, if you look at the broader financial models of customer support, you’ll see that support isn’t just a cost center, but a strategic investment that increases customer retention and reduces churn.

Customer Support 196

Customer Support Investment Scale Retention 196

Clouded Judgement

MARCH 1, 2024

” I heard that a lot in 2021, and unfortunately not many call options hit… It’s hard to invest at 100x ARR and exit at 10x and make a return VCs aim for. Revenue multiples are a shorthand valuation framework. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue.

Cloud 311

Cloud AI Investment Metrics 311

Clouded Judgement

MARCH 15, 2024

Quarterly YoY growth is still decelerating, but the rate of change is starting to slow down Similarly, the median net retention is still falling FCF margins continue to expand, with the median FCF margin in Q4 hitting nearly 20% And finally, the CAC payback period. Revenue multiples are a shorthand valuation framework.

Cloud 161

Cloud Software Review Subscription Payment Features 161

Blulogix

FEBRUARY 19, 2024

This blog post delves into advanced strategies that can help subscription services foster deeper connections with their customers, thereby improving retention rates and fostering brand loyalty. Retention, on the other hand, focuses on maintaining these subscribers over time, turning them into loyal advocates for your brand.

Retention 52

Retention Engagement Strategy AI Search 52

Blulogix

FEBRUARY 9, 2024

How Recurring Revenue Sustains Modern Businesses Amidst Uncertainty By BluLogix Team The Vital Role of Recurring Revenue In an era marked by rapid technological advancements and shifting consumer preferences, recurring revenue models have become the lifeline for modern businesses.

Revenue 52

Revenue Business compliance B2B 52

Payrix

APRIL 24, 2024

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. Plus, software providers gain the addition of payments revenue and the ongoing retention of that additional revenue too. Ian Hillis That’s really helpful.

Payments 147

Payments Embedded Payments Merchant Services Payment Solutions 147

Clouded Judgement

FEBRUARY 9, 2024

Going in to this earnings season I expected a big driver of stock price performance to be how 2024 full year estimates change pre / post earnings. Since the macro feels more “stabilized” it felt fair to assume “are numbers going up or down” to be the question most correlated with stock price performance.

Cloud 195

Cloud Pricing Startup Revenue 195

Sixteen Ventures

AUGUST 14, 2022

The people in charge of your company – the Executives, Board, and Investors – want to improve a metric called NRR (Net Revenue Retention or NDR, Net Dollar Retention, if you prefer) for one very simple reason: it plays a direct role in the value of the company. What is NRR? Talk about efficient growth!

Customer Success 97

Customer Success Investment Sales Hiring Retention 97

Clouded Judgement

DECEMBER 21, 2023

net retention and CAC payback). 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 5, 2024

A favorite clip of mine is when Russ Hanneman is talking about how pre-revenue businesses are the best kind of businesses. Here’s part of his quote: “If you show revenue people will ask how much and it will never be enough…If you have no revenue you can say you’re pre revenue. This list goes on.

Cloud 161

Cloud Scale Pricing Revenue 161

Chart Mogul

SEPTEMBER 6, 2023

You’re likely tracking all your global metrics to keep apprised of your business’ performance – ARR, churn, LTV, retention rates, etc. Segmentation allows you to peel the onion layer by layer to … You’re likely tracking all your global metrics to keep apprised of your business’ performance – ARR, churn, LTV, retention rates, etc.

Revenue 52

Revenue Churn Pricing Operational efficiency. 52

Blulogix

MARCH 21, 2024

By BluLogix Team Mastering the Art of Complex B2B Recurring and Subscription Billing: Elevating Customer Retention in B2B Subscriptions For B2B subscriptions, customer retention is a pivotal factor underpinning the long-term success and sustainability of businesses.

B2B 52

B2B Subscription Payment Features Retention 52

Blulogix

FEBRUARY 24, 2024

Revolutionizing Revenue: What is the Role of AI and Machine Learning in Agile Monetization? This blog post delves into how AI and ML are shaping the future of agile monetization, enhancing the way businesses approach billing, customer engagement, and revenue optimization.

Artificial Intelligence 52

Artificial Intelligence Machine Learning AI Search AI 52

Blulogix

FEBRUARY 17, 2024

The Art of Flexibility: How to Master Dynamic Pricing Models in Subscription Billing By BluLogix Team Adapting to the Pulse of the Market for Maximized Revenue In today’s rapidly evolving digital marketplace, static pricing models are becoming a relic of the past.

Subscription 52

Subscription Payment Features Pricing Marketplace as a Service 52

FastSpring

AUGUST 3, 2022

I spoke with FastSpring’s former VP of Revenue Operations about this, and you can stream our entire conversation at the bottom of this piece. As for internal data, on a high level, you should be consistently monitoring your net retention rate, bookings, and average deal size. I’ve also expanded on some of the strategies we discussed.

Scale 108

Scale Revenue Sales Compensation 108

Clouded Judgement

DECEMBER 1, 2023

” Quarterly Reports Summary Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Revenue multiples are a shorthand valuation framework.

AWS 293

AWS Cloud AI Search Cost optimization & reporting 293

SaaStr

SEPTEMBER 29, 2022

Free user retention. Stage 2: Prove free user retention. But this should come at last, where you focus on metrics such as paid user percentage or net dollar retention. They invest development resources for non-technical people to quickly run and analyze these experiments. “We Pricing by design creates friction.

Technical Review 232

Technical Review Technical Advisors Scale Compensation 232

Clouded Judgement

JANUARY 26, 2024

Many public software companies don’t report ARR, so I’ll take the quarterly subscription revenue and multiply it by 4 to approximate ARR. ServiceNow has been investing, innovating and preparing for this wave for years, which is why we're catching it so early. The Gen AI investments are coming. Top 5 Median: 17.7x

Cloud 161

Cloud Marketplace as a Service AI Subscription 161

Clouded Judgement

DECEMBER 22, 2023

Subscribe now Revisiting the “Is Software Expensive” Question The current median revenue multiple for the software universe is 6.4x, which is ~17% below the long term average multiple of 7.8x. So on a pure revenue multiple basis the software universe looks “slightly cheap.” Follow along to stay up to date!

Cloud 177

Cloud Subscription Payment Features Metrics 177

Clouded Judgement

JANUARY 19, 2024

.” If we look historically at the period from 2015-2020 (ignoring 2021 IPOs) the rough medians were ~$200m ARR (minimum was $100m ARR), 50% YoY growth, and >120% net retention. The answer is they may, but just at a different price / valuation. Revenue multiples are a shorthand valuation framework. Top 5 Median: 16.8x

Cloud 177

Cloud Scale Compensation Metrics 177

Clouded Judgement

APRIL 12, 2024

On top of that, the median NTM revenue multiple has only fell 1% from the start of the year to today. Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months.

Cloud 141

Cloud Subscription Payment Features Revenue 141

Clouded Judgement

DECEMBER 8, 2023

” Here’s a summary of the quarter in 5 charts: Quarterly Growth rates: Still decelerating, but not as quickly Net Retention: Down from historical averages, but starting to level off. Revenue multiples are a shorthand valuation framework. As you can see, the rebound has been even stronger! Top 5 Median: 16.0x

Cloud 161

Cloud Software Review Headcount Trends 161

Clouded Judgement

DECEMBER 29, 2023

And below are the top performers from 2022 and 2021 Top 10 EV / NTM Revenue Multiples This year, only 1 company had a top 10 multiple for every day of the year - Snowflake. Revenue multiples are a shorthand valuation framework. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue.

Cloud 189

Cloud Software Review Subscription Payment Features 189

SaaStr

DECEMBER 5, 2022

Startups often begin with a bootstrapping phase with little to no outside investment. Yet, funded startups can learn a lot from the bootstrapped ones to grow smoothly and generate revenue. Lever #1: Tactical retention. Hooking in new customers is exciting, but customer retention is where your business will make money.

Payments 130

Payments SaaS Payments Payment Solutions Venture Capital 130

Clouded Judgement

MARCH 8, 2024

One of these was recognizing $40m of revenue in 2023 from unused Atlas commits, and a new sales comp structure that moves incentives away from up front commits (and thus means they expect to recognize $0m in revenue this upcoming year from up front commits). Revenue multiples are a shorthand valuation framework.

Cloud 161

Cloud Revenue Subscription Payment Features 161

Clouded Judgement

NOVEMBER 24, 2023

Quarterly Reports Summary Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Revenue multiples are a shorthand valuation framework.

Cloud 161

Cloud Subscription Payment Features Metrics 161

Clouded Judgement

SEPTEMBER 12, 2023

net retention and CAC payback). 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.

Cloud 169

Cloud Software Benchmarks Retention 169

User Pilot

OCTOBER 5, 2023

TL;DR The CAC payback period measures the time it takes for a company to recover the money invested in new customer acquisition. This metric helps SaaS companies choose the most effective customer acquisition channels , diagnose inefficiencies in customer retention strategies , and inform pricing decisions. What is CAC payback?

SaaS Payments 104

SaaS Payments Customer Lifetime Value Payment Solutions Acquisition 104

Clouded Judgement

JANUARY 12, 2024

The ZIRP period created a lot of confusion given software buying was happening at a break neck pace - and it was easy to think you had differentiated product market fit because your business momentum (ie revenue) suggested you did. Revenue multiples are a shorthand valuation framework. Overall Stats: Overall Median: 5.9x

Cloud 284

Cloud Venture Capital Acquisition Metrics 284

CustomerSuccessBox

MARCH 25, 2022

Then while considering customer acquisition cost (CAC) why miss out on customer retention cost (CRC)? About customer retention cost. It is the cost spent on the retention of customers by the total active customers. Customer retention cost (CRC) = Annual cost on customer retention / No of active customers.

Retention 52

Retention Customer Lifetime Value Acquisition Churn 52

Clouded Judgement

FEBRUARY 16, 2024

Quarterly Reports Summary Top 10 EV / NTM Revenue Multiples Top 10 Weekly Share Price Movement Update on Multiples SaaS businesses are generally valued on a multiple of their revenue - in most cases the projected revenue for the next 12 months. Revenue multiples are a shorthand valuation framework.

Cloud 161

Cloud AWS Metrics Subscription 161

Clouded Judgement

SEPTEMBER 8, 2023

Q2 benefited from an “easy comp” (since Q1 was so light), so we’ll see how this trend continues (or doesn’t) in Q3 Moving on to Q2 YoY revenue growth. Partly due to larger layoffs, as well as stronger bookings And finally - net retention. Not surprising, net retention continued to fall.

Cloud 169

Cloud Software Review AWS Trends 169

OpenView Labs

FEBRUARY 9, 2021

This is why we’re seeing more and more SaaS companies—Datadog, Twilio, AWS, Snowflake, and Stripe, to name a few—find success with product led growth paired with usage-based pricing. Usage-based pricing will be the key to successful monetization in the future.”. Usage-based pricing is in all layers of the tech stack.

Scale 98

Scale Pricing Scaling AWS 98