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 very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

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

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

To establish a revenue or lead-commitment based on your funnel metrics and revenue-growth goals, work backward from the gross revenue amount that marketing is responsible for generating (generally around 40%)

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

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

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

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

56% treat “Existing Customer Renewals” as high priority

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More Growth Strategy Stats

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

In 2017, Foxconn Technology Group achieved revenue of 158.15 billion U.S. dollars.

Analysed 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

In 2018, the global tech spending is forecast to amount to 3,212 billion U.S. dollars.

The best SAAS businesses have a LTV to CAC ratio that is higher than 3, sometimes as high as 7 or 8

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

26% of SAAS companies with at least $15MM in 2015 GAAP revenue had a revenue growth rate + EBITDA margin of 40% or higher

The median annual contract value (ACV) was $25K, $21K, $21K, $20K in 2016, 2015, 2014 and 2013

The median startup spends 92% of first year revenue on customer acquisition, taking 11-months to payback their Customer Acquisition Cost

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