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%”

From For
Statistic in SaaS & Tech Growth Strategy

~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

55% of SaaS companies rate Customer Retention as the key metric to measure

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

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

How to Reduce Churn

SaaS IPOs have more than doubled over the last 12 years

Cloud-hosted applications have a 99% uptime

To generate a single dollar of new customer revenue, Field Sales strategies have an average Customer Acquisition Cost (CAC) of $1.14

The fastest growing SAAS companies averaged $250k in MRR and were only losing around 3.2% of that revenue each month to churn

As with unit churn, companies with longer contracts (2+ years) tend to report lower annual dollar churn

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

More SaaS & Tech Growth Strategy Stats

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

The top 50% of the fastest growing SaaS businesses generate much higher upsells than their competitors. The larger the business, the greater the impact of upselling

73% of organizations indicated nearly all their apps will be SaaS by 2021

More than 1/2 of SAAS companies increased their spending on customer retention last year

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

The largest SaaS companies (>$75million yearly revenue) attribute 2.5x as much new revenue to upselling than the smallest SaaS companies (<$1.25million): 28% versus 11%

Cloud-hosted applications have a 99% uptime

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

56% treat “Existing Customer Renewals” as high priority

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less