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%”

Statistic Info

~26% of respondents with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher – “The Rule of 40%”, a popular benchmark for top SaaS company performance.

The median results of those respondents meeting or exceeding “The Rule of 40%” showed that they tended to report lower churn and lower CAC ratios, be more enterprise-focused with larger contracts, rely more heavily on field sales and more often report a vertical focus.

More SaaS + Software Stats

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

Internet Sales strategies have a significantly lower CAC of just $0.42

The average company gets 16% of new ACV sales from up-sells and expansions, though companies with revenue between $10MM-$40MM are relying more heavily on up-sell and expansions

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

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

SAAS companies with >$250K median ACV book nearly 25% of their contracts at 3 years or longer

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

How To Make Pricing A Constant Process In Your Organization

Getting paid in advance is really smart idea if you can do it without impacting bookings, as it can provide the cash flow that you need to cover your cash problem

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

More Growth Strategy Stats

The 2015 median revenue growth rate was 44%, while the median projected growth rate for 2016 is 48%

The average SaaS company spends just 6 hours determining their pricing strategy

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

Non-renewal rates are higher than gross dollar churn rates and higher for shorter duration contracts. Source: ForEntrepreneurs

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

In 2019, spending on IT services is expected to amount to 1,016 billion U.S. dollars worldwide

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

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

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