Statistic Info

As expected, many of the fastest growing companies are among the smallest. Eliminating them brings median growth rates down ~10 percentage points. Median growth rates are consistent with last year’s results. However, this year’s respondent pool was more evenly distributed.

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.

For Entrepreneurs.com

More SaaS + Software Stats

It’s 4x cheaper to upsell existing customers than acquire new customers: costing just $0.28 to acquire an additional dollar of revenue

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

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

The average company booking professional services revenue on new deals is equivalent to 16% of the first year subscription value. Professional services margins are approximately 22%

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business

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

The very best SAAS companies keep monthly revenue churn at around 0.58%, that’s only about 7% revenue churn a year

If your Net Revenue Churn is high (above 2% per month) it is an indicator that there is something wrong in your business; which may have a dramatically negative effect on your company’s growth. Source: Mckinsey

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

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

More Growth Strategy Stats

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

The median average contract length is 1.3 years and the average billing term is seven months in advance in 2016. Comparable to 2015, with average contract length shortening from 1.5 to 1.3 years and average billing period increasing by one month from 2015 to 7 months

For SaaS companies valued at over $1billion, the median amount of financing raised is $206million

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

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

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

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

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

The median SaaS business loses about 10% of its revenue to churn each year and that works out to about 0.83% revenue churn a month

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