Statistic Info

One way of measuring the efficiency of a company’s revenue model is to benchmark revenue per employee. Google and Facebook, the two most efficient companies, generate $1M per revenue per employee per year.

Setting aside those exceptional cases and focusing instead on SaaS companies, the typical average revenue per employee is about $190k to $210k per year.

Tomasz Tonguz

More SaaS + Software Stats

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

The metrics that matter for each sales funnel, vary from one company to the next depending on the steps involved in the funnel

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

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

Gross dollar churn among companies with an internet go-to-market strategy saw a meaningful increase, up from 8% in 2015

Improve Your Pricing Schedule And Turn More Profit

In all SaaS businesses there will likely come a moment where they realize that not all customers are created equal

54% treat upselling and add-on sales as high priority

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

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

More Growth Strategy Stats

Net-revenue churn improves with larger Average Contract Value (ACV), likely due to more structural churn among SMB customers and higher switching costs associated with larger contracts

The median TTM revenue growth rate + adj. EBITDA margin for publicly traded SaaS companies was ~37%, implying that just under one half met or exceed “The Rule of 40%”

SaaS companies in the $7.5MM-$15MM range are among the fastest growers

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

Three uses for the SaaS Guidelines

High-growth companies generate 60% fewer sales opportunities than low-growth companies

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

Customer’s lifetime value (LTV)= average revenue per user (ARPU) / monthly churn rate

Cloud-hosted applications have a 99% uptime

The average Quick Ratio of fastest growing SaaS companies (those with a CAGR of over 50%) is 3.9: generating $3.9 in revenue for every $1 lost to revenue churn