Tom Tunguz

JUNE 23, 2024

We corrected the trailing 12 months’ revenue at the time of IPO for inflation & plotted the data. Before 2018, only one company IPOed with more than $200m in revenue. In fact, the median revenue at IPO at $90m. Today, the median revenue at IPO is $189m (corrected for inflation), more than double.

Revenue 250

Revenue Finance Trends Startup 250

SaaStr

SEPTEMBER 29, 2024

Dear SaaStr: How Do I Set the Revenue Goals for Next Year? Here’s how to build them: The 3 Financial Plans You Need for The Year: C-90, C-60 and C-10 (Updated) The base plan, the plan I use for the overall sales and revenue goals, is the C-60 plan. The post Dear SaaStr: How Do I Set the Revenue Goals for Next Year?

Revenue 275

Revenue Banking Sales Marketing 275

SaaStr

MARCH 30, 2024

Dear SaaStr: What are The Most Common Mistakes Founders Make When They Are Just Starting to Scale Revenue? The post The 6 Most Common Mistakes Founders Make When They Are Just Starting to Scale Revenue appeared first on SaaStr. Let me list some of the ones I see most often going from say $1m to $10m in ARR: Chasing the Shiny Penny.

Scaling 306

Scaling Revenue Underperforming Technical Team Market Segmentation 306

SaaStr

SEPTEMBER 28, 2024

Kyle Norton CRO of Owner is kicking off a new podcast for Pavillion with revenue leaders, and we were lucky enough to be guest #001 here: It’s a great convo on many SaaStr themes — but from the perspective of a VP Sales / CRO. Never play the blame game As a revenue leader, it’s crucial we take accountability for sales performance.

Technical Review 296

Technical Review Sales Hiring Sales Recruiting Revenue 296

SaaStr

SEPTEMBER 27, 2024

The three growth tactics that worked for Rippling can be categorized into three different stages: Outbound Increasing closed-won revenue rates Serving customers and expanding revenue in the base Let’s start with outbound, where most of Rippling’s revenue comes from attribution-wise. As Account Managers, they only owned revenue.

Scale 317

Scale Sales Hiring Revenue Scaling 317

SaaStr

OCTOBER 4, 2024

In today’s dynamic SaaS landscape of hyperfuncational SaaS, the journey of building a product that customers adore, while simultaneously scaling revenue to nearly $1B, is still quite a feat. What matters is the dollars and amount of revenue that the campaign drove. click-through rate, they are a hero for driving actual revenue.

Revenue 312

Revenue Scale Underperforming Technical Team Sales Hiring 312

SaaStr

NOVEMBER 30, 2024

They know they’ll need an ever-expanding team to hit compound revenue targets—2 reps, then 4, then 8, then 16, and eventually 64 or more. The 90-Day Revenue Test While 30 days is enough to evaluate their hiring decisions, you should see clear revenue improvements within 90 days (or one full sales cycle).

Sales Hiring 306

Sales Hiring Sales Recruiting Sales Headcount 306

SaaStr

OCTOBER 25, 2024

A rough yardstick is that most enterprise-focused SaaS companies tend to get about 8%-10% of their revenues from professional services. A few data points: At $800m ARR, Qualtrics was still getting 25% of revenue from professional services. At $500m ARR, OneStream gets about 8% of its revenue from professional services.

Investment 298

Investment SaaS SMB Enterprise 298

Clouded Judgement

JUNE 14, 2024

So not only would Twilio be undercharging relative to the value I’m receiving, but Twilio would also be incurring incremental marginal costs that they’re not recognizing revenue for. Revenue multiples are a shorthand valuation framework. Overall Stats: Overall Median: 5.1x Top 5 Median: 14.1x Bucketed by Growth.

Cloud 342

Cloud Pricing AI Software 342

Clouded Judgement

JUNE 19, 2024

The charts below show the change in quarterly revenue YoY (so Q1 ‘24 rev - Q1 ‘23 rev) going back to 2017. Q1 Revenue Relative to Consensus Estimates Now let’s dive in to the financial results of Q1 starting with revenue. Beating consensus revenue estimates is the first aspect of a successful quarter.

Cloud 312

Cloud GCP(Google Cloud Platform) Software Azure 312

SaaStr

NOVEMBER 13, 2024

Just not as quickly as overall revenue growth. #4. A third of revenue is from outside the Americas. #5. But it’s clear that it’s still in the investing phase, and increasing spend in sales & marketing.

Scale 306

Scale SMB Scaling Enterprise 306

SaaStr

OCTOBER 16, 2024

Even With a Big Enterprise Push for Years, 60% of Revenue Still From Mid-Market and SMB RingCentral closed 20 $1M+ TCV deals last quarter. of revenue in 2021 to 15.7% 16,000 Channel Partners A very large percent of RingCentral’s revenue comes from the channel. Fast forward to today, it’s at: $2.43

Scale 289

Scale SMB Compensation AI 289

SaaStr

DECEMBER 4, 2024

Top 10 Customers Steady at 10% of Revenue Revenue concentration has always been a small issue at Twilio. It’s ended up being a tough road, with 91% revenue retention and 0% growth. This isn’t easy at scale. #2. NRR Up to 105%, From 101% Mathematically. Before the IPO it lost its largest customer, Uber.

Acquisition 275

Acquisition Scaling Retention Pricing 275

SaaStr

OCTOBER 12, 2024

Revenues Multiples Are Down Even the best public SaaS companies are worth ~10x revenue today. In 2021, they were often worth 40x revenue. And it also makes it harder to meet the “ask” of a startup that might want a much higher revenue multiple. In tech at least, there are two big issues: #1.

Acquisition 269

Acquisition Technical Review Revenue Startup 269

SaaStr

JANUARY 31, 2024

63% of Revenue from North America Global revenues are slowly creeping up as a percent of total. #7. 440,000 in Revenue Per Employee ServiceNow is very efficient, handily exceeding the $300,000 or so average revenue per employee for the average public SaaS company. And a few other interesting learnings: #6.

Enterprise 317

Enterprise Scaling Churn Engineering 317

SaaStr

DECEMBER 13, 2023

Revenue Growth Has Materially Slowed, From 48% a Year Ago to 19% Today. It came from big cuts, especially in sales & marketing, which in just 1 year went from 26% of revenues to 21%. In 2021, just 10% of their revenue was from outside the U.S. 72% of nCino’s revenue is from existing customers. #8.

Scale 347

Scale Banking Acquisition Cloud 347

Clouded Judgement

MARCH 1, 2024

Revenue multiples are a shorthand valuation framework. Multiples shown below are calculated by taking the Enterprise Value (market cap + debt - cash) / NTM revenue. EV / NTM Rev / NTM Growth The below chart shows the EV / NTM revenue multiple divided by NTM consensus growth expectations. Overall Stats: Overall Median: 6.2x

Cloud 311

Cloud AI Investment Metrics 311

SaaStr

OCTOBER 29, 2023

Consider opening a full European office, even just 1–2 folks, once you have $1m-$2m in revenue in Europe. Even in my first year at Adobe Sign / EchoSign, we had 10%+ of our revenue in Europe. And 28;9% of its revenue is in Europe / EMEA. If you can get 10, you can (of course) get 100. That’s enough to justify the hire.

Sales Hiring 304

Sales Hiring SaaS B2B Revenue 304

USIO

MAY 16, 2024

Increased Revenue: Offering seamless payment solutions can boost conversion rates and customer retention. Ask about revenue share opportunities. For B2B software companies and some B2C, there can be revenue share depending on the volumn being processed. Why should my software company consider integrating payments?

Payment Services 263

Payment Services Payments Merchant Services Payment Solutions 263

SaaStr

MARCH 10, 2024

Because beyond WFH, RTO, and all the tactical changes of the past few years, the biggest structural one really is — The March To $400,000 in Revenue Per Employee. In fact, almost every SaaS leader at scale is hitting $300,000 in Revenue Per Employee at the pre-IPO phase. That means $300k-$400k in revenue per employee.

SMB 297

SMB Cloud Startup Scaling 297

SaaStr

NOVEMBER 1, 2023

are realtively low, as a huge amount of their payments revenue goes out to the payment processors. 15% Customer Growth Leads to 48% Revenue Growth Always helpful to me to see this math broken out. Having 110%+ NRR means your revenue will grow significantly faster than your new logo count. #7. Much less than revenue grew.

Payment Services 337

Payment Services Payments SaaS Payments Payment Solutions 337

SaaStr

JANUARY 17, 2024

But the bigger ones are the ones driving revenue growth at scale. And 51% of their revenue now comes from $100k+ deals. #2. That’s been critical to them maintaining revenue growth. #5. Smartsheet like most other SaaS and Cloud leaders held the line on costs and expenses, but still grew revenue. The result?

Airlines 295

Airlines Technical Review Entertainment Government 295

SaaStr

OCTOBER 27, 2024

VCs can only invest in folks that can hit $100m+ in revenue or more in 7–10 years. It’s just too competitive today. No one wants to fund a “great business guy” without an A+ CTO there as well. #6. Not growing quickly enough. If you’re not even close to that pace, 99% of VCs won’t invest. No, It’s Not Any Harder to Get Funded Today.

CTO 315

CTO Investment Revenue Marketing 315

SaaStr

JULY 20, 2024

Let’s use net dollar or net revenue retention as an example. Secureframe has everyone on their customer success team calculate their book of business by hand to see their net revenue retention, so that they truly understand what goes into the calculation, what impacts it, and how they can better take action on it. What does this mean?

Sales Recruiting 299

Sales Recruiting Sales Hiring Scale Engineering 299

SaaStr

JANUARY 5, 2024

Some businesses set up a revenue target that is out of an individual rep’s control. It’s important to think about where the business is before you swing the pendulum all the way down to the revenue side of SDR work. Brex did this, but it’s dependent on where you’re at.

Sales Hiring 312

Sales Hiring Sales Recruiting Scale Outbound Sales Team 312

SaaStr

NOVEMBER 8, 2024

So we ran a similar survey , and it showed similar results — so far at least: As you can see above, only 3% of you have generated real revenue from AI SDRs. Tons of B2B companies deploying AI SDRs already, but few deals closed so far. 83% of you haven’t gotten anything from AI SDRs.

AI 328

AI B2B Engineering Customer Support 328

Tom Tunguz

JUNE 1, 2024

Weaker revenue projections tend to cause sell-offs. Future revenue ramps have been the dominant driver of software valuations for the vast majority of the last decade. Some context is helpful : during the same period, total software revenue across the public companies grew from $124b to $592b. In 2016, valuations fell 57%.

Software 277

Software Marketing Revenue Business 277

SaaStr

JUNE 12, 2024

The deals weren’t cheap, but they are all at billions in revenue growing faster that Salesforce’s core. 4: 33% of Revenue Outside North America; APAC Growing Fastest # 5. They’ve held it to slower growth than overall revenues to get more efficient. But they haven’t cut expenses here per se.

Compensation 302

Compensation Scale AI Acquisition 302

SaaStr

NOVEMBER 6, 2024

Revenue growth is up 21% overall, and subscription growth is up 33% — at almost $5 Billion in ARR. Raising Guidance and Growth Rate for Cloud Revenue To +24% a Year That’s pretty darn impressive growth at almost $5B in ARR, and just as importantly, they’re raising their prediction here. #2. Wall Street is happy.

Enterprise 288

Enterprise Pricing AI Cloud 288

SaaStr

AUGUST 28, 2024

Only 20% of Revenue from “SaaS”, 80% From Transactions and Float (Fintech) Bill started off 100% SaaS, and slowly and deliberately added payments. Fast forward to today, and only 20% of its revenue is from software subscriptions. A reminder and a challenge to not settle for < 100% NRR from SMBs. At least at scale. #2.

Payments 294

Payments Payment Solutions SMB Acquisition 294