Statistic Info

We wanted to find out, so as part of our 2016 Sales Benchmarking Report, we took a close look at the Quick Ratios of the high-growth SaaS companies in our study. We sliced the data in every conceivable way to see what we could uncover about the optimal Quick Ratio for growing SaaS companies, and how the SaaS Quick Ratio evolves as companies grow.

InsightSquared

More SaaS + Software Stats

Analyzed by contract value, field sales are primarily evident for companies with median deals over $25K. Inside sales strategies are most popular for companies with $1K-$25K median deal sizes

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The statistic shows the worldwide IT spending on enterprise software from 2009 to 2020.

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

High-growth companies are 8X more likely to reach $1 billion in revenues than those growing less than 20%.

Account Churn Rate (ACR) = customers at beginning of month – customers at the end of month / customers at beginning of month

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

More Growth Strategy Stats

Growing faster has twice as much impact on share price as improving margins

If you are charging $500 per month, you can afford to spend up to 12x that amount (i.e. $6,000) on acquiring a new customer

Smaller SAAS companies reported more frequent use of third-party providers as their primary application delivery method, while the largest companies were more likely to use self-managed servers

Revenue per employee has been steadily increasing in SAAS companies. It serves as a great longitudinal measuring stick to understand the increasing or decreasing efficiency of the business

Sony’s PlayStation brand had accumulated approximately 38.57 million fans on the social network

Is your SaaS business viable?

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts

Best-in-class SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

The fastest growing SaaS companies raise an average of $9.5M in Series A funding

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)