SaaS Financial Impact Research Report...SaaS Financial Impact Research Report The Impact of a...

SaaS Financial Impact

Research Report

The Impact of a Pandemic on

B2B SaaS Companies

Research conducted by:

RevOps Squared

&

The Sandhill Group

May 6, 2020

Between April 10, 2020 and April 30, 2020 RevOps Squared in partnership with the Sandhill Group

conducted research that includes data from 210 participants.

The goal was to understand how financial planning and 2020 forecasts within the SaaS industry have been

impacted by the pandemic.

All data was collected, aggregated, and anonymized to protect the confidentiality of all participants.

For all cohorts that did not include statistically relevant data, we excluded those from the cohort analysis.

Financial Impact Research - Participant Profile

Confidential and Proprietary Information - RevOps Squared 2020

54%

9%

11%

3%

9%

11%

3%CEO/Founder

CEO/Non-Founder

Chief Financial Officer

Chief Marketing Officer

Chief Revenue Officer

Board Member or Investor

Other - Write In

N = 210

Financial Impact Research - Participant Profile

Confidential and Proprietary Information - RevOps Squared 2020

6%

6%

6%

19%

19%

16%

13%

16%

By ACV

< $1K $1K - $5K $5K - $10K $10K - $25K

$25K - $50K $50K - $100K $100K - $250K > $250K

25.7%

28.6%14.3%

8.6%

14.3%

8.6%

Company Size

< $5M $5M - $20M $20M - $50M

$50M - $100M $100M - $250M > $500M

Target Market – By Customer Size

Confidential and Proprietary Information - RevOps Squared 2020

21.9%

37.5%

50.0%

59.4%

43.8%

< $10M (Small Business)

$10M - $100M (Mid-Market)

$100M - $1B (Commercial)

$1B - $10B (Enterprise)

> $10B (Enterprise and/or Strategic)

0% 20% 40% 60% 80%

Target Market (s)

2020 Financial Plan Modification

Confidential and Proprietary Information - RevOps Squared 2020

63.0%

18.5%

18.5%

0% 10% 20% 30% 40% 50% 60% 70%

Yes - Reduced

Yes - Increased

No - Work in Process

Updated 2020 Financial Plan?

2020 Financial Plan Modification

Confidential and Proprietary Information - RevOps Squared 2020

-22% -22%

-18%

-25%

-20%

-15%

-10%

-5%

0%

Q2-20 Q3-20 Q4-20

Forecasted Financial Plan Impact vs Original Plan

2020 Financial Plan Impact – By Company Size

Confidential and Proprietary Information - RevOps Squared 2020

-43%

-21%

-15%

-22%

-11%

-22%

-38%

-13%

-20%

-10% -10%

-18%

-50%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

< $5M $5M - $20M $20M- $50M $50M -$100M

$100M -$250M

> $250M Total

Financial Plan - Forecasted Impact (By Company Size)

Q2-20 Q3-20 Q4-20

▪ Smaller Companies (< $5M ARR)

forecasting much higher impact on

every quarter in 2020

▪ > $50M ARR companies forecasting

lower than industry average impact

▪ > $50M ARR forecast a 10% or less

impact on Q3 & Q4 Financial Plan

▪ > $250M ARR companies did not have

enough data for statistical significance

Financial Plan Forecast Impact – By ACV

Confidential and Proprietary Information - RevOps Squared 2020

-40%

-35%-33%

-21%

-27%

-18%

0%

-22%

-35%

-30%

-25%

-18%

-23%

-8%

-15%-18%

-25%-24%

-45%

-40%

-35%

-30%

-25%

-20%

-15%

-10%

-5%

0%

< $1K $1K - $5K $5K -$10K

$10K -$25K

$25K -$50K

$50K -$100K

$100K -$250K

> $250K Total

Financial Plan - Forecasted Impact (By ACV)

Q2-20 Q3-20 Q4-20

-20% -20%

-25%

▪ Impact much greater in lower ACV

solution companies (ACV < $10K)

▪ High correlation between ACV and

target market – customer size

▪ > 100K ACV Range has reduced

negative impact across multiple

dimensions

2020 New ARR Plan Modification

Confidential and Proprietary Information - RevOps Squared 2020

-54%

-46%

-38%

-60%

-50%

-40%

-30%

-20%

-10%

0%

Q2-20 Q3-20 Q4-20

New ARR Plan Impact

New ARR Impact - By Company Size

Confidential and Proprietary Information - RevOps Squared 2020

-72%

-54%

-40%-43% -45%

-50%

-54%-58%

-26%

-30%

-15%

-43%

-30%

-38%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

< $5M $5M - $20M $20M- $50M $50M - $100M $100M -$250M

> $250M Total

New ARR - Forecasted Impact(By Company Size)

Q2-20 Q3-20 Q4-20

▪ < $5M companies forecasting

greatest impact on New ARR

▪ Q2-20 Impact on New ARR is

largest across all cohorts

▪ Q4-20 New ARR forecasted

down by 38% against plan

New ARR Impact - by ACV

Confidential and Proprietary Information - RevOps Squared 2020

-60%-65% -64%

-43%

-68%

-62%

-38%

-60%

-54%-53% -54%-51%

-32%

-60%

-48%

-20%

-50%-46%

-48%

-40% -40%

-26%

-53%

-37%

-25%

-40% -38%

-80%

-70%

-60%

-50%

-40%

-30%

-20%

-10%

0%

< $1K $1K - $5K $5K -$10K

$10K -$25K

$25K -$50K

$50K -$100K

$100K -$250K

> $250K Total

New ARR - Forecasted Impact(By ACV)

Q2-20 Q3-20 Q4-20

▪ New ARR forecast down an average 46%

across Q2 - Q4

▪ Each quarter showing an average 8%

decreased negative impact on New ARR

▪ $100K - $250K ACV shows lowest impact

on New ARR across all quarters

▪ > $250K ACV is forecasted to perform

lower vs average across all 3 quarters

▪ $10K - $25K ACV is forecasted to

perform better “on average” across all 3

quarters – LESS FRICTION?

Have you Reduced # Employees

Confidential and Proprietary Information - RevOps Squared 2020

25.90%

74.10%

Has Company Reduced Staff

Yes No

45%

55%

Concerned - Future Layoff's

Yes No

Staff Reductions – By Cohort

Confidential and Proprietary Information - RevOps Squared 2020

50.0% 50.0%

33.3% 33.3%

20.0%

25.0%

20.0%

0%

10%

20%

30%

40%

50%

60%

$1K - $5K $5K -$10K

$10K -$25K

$25K -$50K

$50K -$100K

$100K -$250K

> $250K

% Companies Reducing Staff - By ACV

40.0%

20.0%

27.50%

18.80%

40.0%

0.0%0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

< $5M $5M - $20M $20M -$50M

$50M -$100M

$100M -$250M

> $250M

% Companies Reducing Staff - By ARR

Average %Average %

Average Employee Impact – By Cohort

Confidential and Proprietary Information - RevOps Squared 2020

33%

25%

20%

14%

15%

10%

20%

8%

17%

0% 10% 20% 30% 40%

< $1K

$1K - $5K

$5K - $10K

$10K - $25K

$25K - $50K

$50K - $100K

$100K - $250K

> $250K

Total

% Employees – By ACV ($)

Average %

27%

16%

17%

20%

10%

5%

17%

0% 5% 10% 15% 20% 25% 30%

< $5M

$5M - $20M

$20M- $50M

$50M - $100M

$100M - $250M

> $250M

Total

% Employees - By Company Size ($)

• Smaller ACV companies experience greater impact

• One $100K - $250K company skewed segment due to target

industry – if excluded impact was 10%

• Average staff reduction was 17%

• > $100M ARR companies have much less impact

• $50M - $100M skewed negative by target industry

• $5M - $20M faired slightly better than average

Average %

Employee Impact – Most and Least Impacted Departments

Confidential and Proprietary Information - RevOps Squared 2020

83.3% 83.3%

66.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Marketing Sales G&A

Largest Impact - By Department1

Companies with lay-offs – Departments impacted most often

83.3% 83.3%

16.7% 16.…

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

ProductDevelopment

ProductManagement

Marketing G&A

Smallest Impact - Department Level1

Companies with lay-offs – Departments impacted least often

1Companies with employee reductions – which departments were most commonly impacted

Cash on Hand - Details

Confidential and Proprietary Information - RevOps Squared 2020

52%36%

12%

Comfortable with Cash on Hand

In a Good Position

Would like to top off

No - Not in a Good Position

20% 20%

16% 16%

24%

4%

0%

5%

10%

15%

20%

25%

30%

> 24 Months 24 Months 18 Months 12 Months 6 Months 3 Months

Target Cash on Hand (Months)

Fund Raising Activity

Confidential and Proprietary Information - RevOps Squared 2020

20%

16%

64%

0% 20% 40% 60% 80%

Yes - No Term sheet in hand(Equity Round)

Yes - Debt Only

No

Active Fund Raising Going on (March/April)

20%

20%

20%

40%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00%

Increased Valuation Only

0% - Flat Round

1% - 10% Reduction

11% - 20% Reduction

Valuation Sensitivity

COVID-19 FINANCIAL

IMPACT RESEARCH

B2B SaaS Organizations

Confidential and Proprietary Information - RevOps Squared 2020

Questions?

Contact Information:

Ray Rike, CEO and Founder

RevOps Squared

Email: rayrike@revopssquared.com

Phone: (415) 754-9510