Statistic Info
In the past, we have benchmarked the revenue per employee of large publicly traded SaaS companies and determined that the average is about $200k of revenue per person. But, that analysis examined revenue per employee that only one point in time.
High-growth companies scale their teams very quickly. In fact, the companies in the sample set grew their teams by 56% annually over five years, which nets out to about 8.5x growth, from 204 employees to 1750 employees on the median.
Despite the massive growth of these organizations, the best companies are able to maintain or even accelerate their revenue per employee. In fact, increases in revenue per employee as a company scales is an incredibly positive sign of the health of the business. It indicates that the company is achieving economies of scale. Those economies of scale may exist as a consequence of a strong brand, monopoly-like characteristics within their market segment, improving sales efficiency, increases in contract size, better rates of customer upsells, etc. But in all cases, it’s a hallmark of a company whose economics are improving with time.
Tomasz Tonguz
More SaaS + Software Stats
SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer
The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8
At a 35% CAGR, it takes 10 years for a SaaS company to grow from $5M to $100M in ARR
Less than 20% of new revenue came from existing customers in the form of up-sell and expansion sales
Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013