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%

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Professional services play a minor role for most companies, with the median company booking P.S. revenues on new deals equivalent to 16% of first year subscription contract value. Median P.S. margins are approximately 22%. These results are consistent with last year’s results.

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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

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

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

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

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

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

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

51% of large (revenue >$2.5million) SaaS companies use field sales as their primary method of distribution

SaaS businesses face significant losses in the early years (and often an associated cash flow problem)

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

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

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

Even if a software company is growing at 60% annually, its chances of becoming a multibillion-dollar giant are no better than 50/50

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

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

Improve Your Pricing Schedule And Turn More Profit

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

Three uses for the SaaS Guidelines

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