26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

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Survey results indicate that companies in the $7.5MM-$15MM range are among the fastest growers. The median growth in this range is much greater than the median of companies half their size. Interestingly, there was a similar bump-up last year, but for companies between $5MM-$7.5MM.

There doesn’t appear to be any relationship between median contract size and growth other than a bump-up for the <$1K and $15K-$25K groups (though this could be skewed by sparse data in those groups). Last year, the bump-up occurred for companies in the $100K-$250K AVC range.

More SaaS + Software Stats

Sustaining growth is really hard

The median annual unit churn for SAAS companies was 10% in 2016

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

It’s common for startups to grow rapidly, doubling or tripling in size year over year, until they hit $5M in ARR

Internet sales-driven companies have a much greater reliance on marketing, with 65% of the median company’s CAC budget devoted to marketing

55% of SaaS companies rate Customer Retention as the key metric to measure

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

Companies with longer contracts (2+ years) reported the lowest annual unit churn

More Growth Strategy Stats

SAAS companies that are focused mainly on enterprise sales have higher levels of professional services

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

As companies scale their growth engines, a slightly-above-average churn rate becomes harder and harder to offset with net new revenue growth, especially when the goal is to outpace it by 4x

After $10M in ARR, the median growth rate slows to just under 50%

80% of venture capital investments take place in the enterprise

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

The median monthly revenue churn for large SaaS companies is 0.75%, translating into an annual revenue churn rate of 10%

More than two thirds of SAAS companies experienced annual churn rates of 5% or higher

As of December 2018, there were total 105,000 employees in Lockheed Martin, as compared to 126,000 employees in 2015.

SaaS Bookings: Three Contributing Elements