For the fourth year in a row, I am working together with David Spitz and his team at Pacific Crest Securities, an investment banking firm (@dspitz and @PacCrestSec, respectively on Twitter) with a specific focus on SaaS, to survey SaaS companies in order to share benchmarking data and insights on the growth and operations of the companies in this space.
The survey probes business, operating and financial metrics across a wide variety of SaaS companies. We will be publishing the results, providing insights and analysis to help companies gauge performance and drive productive change–there’s nothing else like it.
The survey depends on participation from CEOs and CFOs of SaaS companies. The community here at forEntrepreners have been enthusiastic supporters of the survey in the past–taking the survey and sharing it with their networks. Thank you for all your support!
If you are the CEO or CFO of a SaaS company with monthly recurring revenue over $50,000, we would like to invite you to participate in this year’s survey.
The survey is ANONYMOUS AND CONFIDENTIAL, and usually takes less than 15 minutes. By submitting a completed survey and your email address (email address will not be linked to your submission of the survey), we will also share with you EARLY ACCESS TO RESULTS.
Here are a few highlights from the 2014 SaaS Survey:
How Fast Did / Will You Grow GAAP Revenues?
Historical rates for the group were 37% for 2013, while the median projected growth for 2014 is 42%. These rates remain very healthy, but both are lower than the 2013 survey’s results of 41% and 47% for 2012 historical growth and 2013 estimated growth.
CAC(1): How Much Do You Spend for $1 of New ACV from a New Customer? (Excluding companies <$2.5MM in Revenue)
Respondents, excluding the smallest companies, spent a median of $1.07 to acquire each dollar of new ACV from a new customer. This drops to $0.90 if we include the companies <$2.5MM in revenues. This result excluding the smallest companies is noticeably higher than the $0.92 and $0.90 we derived in the 2013 and 2012 surveys respectively. (With pressure on growth rates, it’s possible that companies are spending more to stay competitive. In the cost section to come later we see higher sales and marketing spend, particularly for the larger companies whose growth increased.)
What Percentage of New ACV is from Upsells to Existing Customers?
The median respondent gets 14% of new ACV sales from upsells,whereas larger companies rely more heavily on upsells. The $10MM – $15MM and $15MM – $25MM cohorts have a noticeably lower median % of new ACV from upsells compared to the 25% and 22% in the 2013 survey, respectively.
Subscription Gross Margins: “What is your gross profit margin on just subscription/SaaS revenues?”
Median subscription gross margins are 79% for the group (78% when removing the smallest companies from the group), which are very similar to 2013 and 2012 results.
Annual Gross Dollar Churn (Excluding Companies <$2.5MM in Revenue)
Annual gross dollar churn (without the benefit of upsells) is 6%. The results were virtually the same when including companies <$2.5MM in revenues. This result is lower than the 2013 result of 8%, but higher than the 5% we found in 2012.
For full results to the 2014 SaaS Survey click here.
We thank you again for your ongoing support to the forEntrepreneurs community, and in our effort to continue providing valuable data and insights to SaaS companies.