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

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

Customer Acquisition Cost (CAC) = sum of all sales & marketing expenses/ number of new customers added

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

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

Growth rate accelerates in the expansion stage ($2.5M – $10M ARR)

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

Negative Churn and Expansion Revenue

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

Software and online services are in a period of dizzying growth

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

More Growth Strategy Stats

Median annual gross dollar churn was 8%, 7%, 6% and 8% in 2016, 2015, 2014 and 2013

56% treat “Existing Customer Renewals” as high priority

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

Publicly-traded SaaS companies have an average Revenue Per Employee of $200,000

In 2017, IBM generated 37.8 billion U.S. dollars in global IT services revenue, making it the largest IT services company in the world in terms of net sales

All types of investment have grown, year-on-year, with the biggest growth during the seed stage of financing

In 2017, the world invested around 3.4 billion U.S. dollars in small hydropower technologies, down from 3.9 billion U.S. dollars in 2016.

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

SaaS IPOs have more than doubled over the last 12 years

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