SaaS Metrics Model - David Skok

SaaS Metrics 2.0For companies that book primarily monthly contracts

Bookings Jan Feb Mar Apr May JunBookings $,000's (new custs) $ 121 $ 161 $ 123 $ 169 $ 157 $ 180 Value of all closed contracts during the month (with varying durations)Average Deal Size $'s $ 3,025 $ 3,833 $ 2,849 $ 3,674 $ 3,262 $ 3,458 Average size of deal for full durationAverage Contract Length Average duration of contract signed by the new customersAverage Months paid upfront 5.5 7.0 5.0 6.5 5.8 6.2 Average number of months paid upfront by new customersARPA (Average MRR) for new custs $ 550 $ 548 $ 570 $ 565 $ 563 $ 558 ARPA = Avg Revenue Per Acct - Avg MRR across the new customers ARPA - across the installed base $ 514 $ 491 $ 475 $ 459 $ 450 $ 438 Average MRR per customer across the installed base

MRR Jan Feb Mar Apr May JunNew MRR $ 22.0 $ 23.0 $ 24.5 $ 26.0 $ 27.0 $ 29.0 New MRR added from new customers signed in the monthChurned MRR $ (8.4) $ (11.2) $ (9.0) $ (8.9) $ (8.9) $ (8.8) Lost MRR from customers who churned in the month Expansion MRR $ 2.0 $ 2.5 $ 2.1 $ 1.3 $ 7.0 $ 3.4 Expansion MRR from the installed base of existing customersNet New MRR $ 15.6 $ 14.3 $ 17.6 $ 18.4 $ 25.1 $ 23.6

Starting MRR $ 400.0 $ 415.6 $ 429.9 $ 447.5 $ 465.9 $ 491.0 Ending MRR $ 415.6 $ 429.9 $ 447.5 $ 465.9 $ 491.0 $ 514.6 ARR (Annualized Run Rate) $ 4,987 $ 5,158 $ 5,370 $ 5,591 $ 5,892 $ 6,175 This is simply MRR x 12

Churn Metrics Jan Feb Mar Apr May JunTotal # of Customers 808 875 943 1,016 1,092 1,176 # of new Customers 40 42 43 46 48 52 # of churned Customers (24) (25) (25) (27) (28) (32)Net New Customers 16 17 18 19 20 20 # of new Customers - # of churned Customers

% Customer Churn 3.0% 3.1% 2.9% 2.9% 2.8% 2.9% # of churned Customers / Total # of Customers (from last month)% MRR Churn 2.1% 2.7% 2.1% 2.0% 1.9% 1.8% Churned MRR / Last month's Ending MRR% MRR Expansion 0.5% 0.6% 0.5% 0.3% 1.5% 0.7% Expansion MRR / Last month's Ending MRR% Net MRR Churn 1.6% 2.1% 1.6% 1.7% 0.4% 1.1% (Churned MRR - Expansion MRR)/Last months Ending MRR

Customer Engagement Score 121 120 125 126 130 135 The average Customer Engagement Score across the customer baseNet Promoter Score 28 27 29 32 33 35

Unit Economics (new customers) Jan Feb Mar Apr May JunLTV $ 21,738 $ 16,834 $ 22,519 $ 23,457 $ 24,572 $ 25,716 ARPA * Gross Margin % / %MRR Churn RateCAC $ 8,750 $ 8,571 $ 8,605 $ 8,261 $ 8,125 $ 7,692 Adjusted Sales & Marketing expense / # of new CustomersLTV to CAC Ratio 2.5 2.0 2.6 2.8 3.0 3.3 LTV/CACMonths to Recover CAC 19 19 18 18 17 17 CAC/(ARPA * GM%)

Summary Financial Metrics $000's Jan Feb Mar Apr May JunBillings (what's invoiced this month) $ 505 $ 515 $ 520 $ 490 $ 540 $ 560 Custs may be billed in advance of when revenue can be recognizedRevenue $ 416 $ 430 $ 447 $ 466 $ 491 $ 515 Revenue is typically recognized monthly, so may vary from BillingsCost of Goods Solds - COGS $ 71 $ 73 $ 76 $ 79 $ 83 $ 87 Gross Margin $ 345 $ 357 $ 371 $ 387 $ 408 $ 427 Gross Margin % 83% 83% 83% 83% 83% 83%

Total Expenses $ 640 $ 650 $ 660 $ 670 $ 680 $ 690 Sales & Marketing $ 350 $ 360 $ 370 $ 380 $ 390 $ 400 Research & Development $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 General & Administrative $ 110 $ 110 $ 110 $ 110 $ 110 $ 110

EBITDA $ (295) $ (293) $ (289) $ (283) $ (272) $ (263) Based on GAAP recognized revenueBillings-based operating profit/loss $ (221) $ (223) $ (228) $ (263) $ (232) $ (225) Given that cash will be collected based on Billings, this is a useful way

to judge how the business is doing on cash basis

Cash & Deferred Revenue Jan Feb Mar Apr May JunChange in CashEnding CashDeferred Revenue Tracks what has been billed, but can't yet be recognized as revenue

Funnel Metrics Jan Feb Mar Apr May JunVistors to Web Site 4,700 5,178 4,574 4,923 5,000 5,170 Conversion from Visitors to Trials 5.0% 4.5% 4.7% 5.2% 4.8% 5.3%Trials in progress 235 233 215 256 240 274 Conversion from Trials to Purchase 17% 18% 20% 18% 20% 19%

Sales Metrics Jan Feb Mar Apr May JunNo of FTE Sales reps 6 6.5 7 7.5 8 8.5 FTE = Full Time Equivalent (equivalent # of fully productive reps)Quota per sales rep $ 4.2 $ 4.2 $ 4.2 $ 4.2 $ 4.2 $ 4.2 MRR value of new customers signedForecasted Sales Capacity $ 25.0 $ 27.1 $ 29.2 $ 31.3 $ 33.3 $ 35.4 # of FTE reps * quota (should translate into New MRR Bookings)Coverage ratio for plan 1.2 1.2 1.2 1.2 1.2 1.2 Forcasted Sales Capacity / Bookings plan

Productivity per FTE sales rep $ 3.7 $ 3.5 $ 3.5 $ 3.5 $ 3.4 $ 3.4 MRR value of new customers signed

Jan Feb Mar Apr May Jun

$(15.0)

$(10.0)

$(5.0)

$-

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

MRR Bookings

New MRR

Net New MRR

Expansion MRR

Churned MRR

Jan Feb Mar Apr May Jun $-

$50

$100

$150

$200

Bookings $,000's(from new custs)


$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

Average Deal Size $'s

Jan Feb Mar Apr May Jun -

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Average Months paid upfront

Jan Feb Mar Apr May Jun0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Churn and Expansion as % of MRR

% Customer Churn% MRR Churn% MRR Expansion

Axis

Title


$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

LTV and CAC

LTVCAC


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

LTV to CAC Ratio

Jan Feb Mar Apr May Jun 15

16

17

18

19

20

Months to Recover CAC


$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Ending MRR

Jan Feb Mar Apr May Jun110

115

120

125

130

135

140

Customer Engagement Score


5

10

15

20

25

30

35

40

Net Promoter Score

Jan Feb Mar Apr May Jun 4,200

4,400

4,600

4,800

5,000

5,200

5,400

Vistors to Web Site


4.2%

4.4%

4.6%

4.8%

5.0%

5.2%

5.4%

Conversion from Visitors to Trials


50

100

150

200

250

300

Trials in progress

Jan Feb Mar Apr May Jun14%

16%

18%

20%

22%

Conversion from Trials to Purchase


10

20

30

40

50

60

# of new Customers

Funnel Metrics (your key funnel stages will likely vary)

Unit Economics


1

2

3

4

5

6

7

8

9

No of FTE Sales reps

Jan Feb Mar Apr May Jun $3.2

$3.3

$3.4

$3.5

$3.6

$3.7

Productivity per FTE sales rep

Customer Engagement and Customer Happiness (both are churn predictors)

Bookings Metrics

Jan Feb Mar Apr May Jun $535

$540

$545

$550

$555

$560

$565

$570

$575

Avg MRR(for new customers)


0.5%

1.0%

1.5%

2.0%

2.5%

% Net MRR Churn


$(15.0)

$(10.0)

$(5.0)

$-

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

MRR Bookings

New MRR

Net New MRR

Expansion MRR

Churned MRR


$20

$40

$60

$80

$100

$120

$140

$160

$180

$200



$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500



1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0



0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Churn and Expansion as % of MRR

% Customer Churn% MRR Churn% MRR Expansion

Axis

Title


$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Ending MRR

Bookings Metrics


$540

$545

$550

$555

$560

$565

$570

$575

ARPA (Average MRR) for new custs


$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500



1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0


Jan Feb Mar Apr May Jun 4,200

4,400

4,600

4,800

5,000

5,200

5,400

Vistors to Web Site


4.2%

4.4%

4.6%

4.8%

5.0%

5.2%

5.4%



50

100

150

200

250

300

Trials in progress


16%

18%

20%

22%



10

20

30

40

50

60

# of new Customers



$540

$545

$550

$555

$560

$565

$570

$575

ARPA (Average MRR) for new custs


$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

LTV and CAC

LTVCAC


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

LTV to CAC Ratio


16

17

18

19

20



10

20

30

40

50

60

# of new Customers

Unit Economics


1

2

3

4

5

6

7

8

9



$39.0

$40.0

$41.0

$42.0

$43.0

$44.0

$45.0



$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

Sales Capacity


115

120

125

130

135

140



5

10

15

20

25

30

35

40

Net Promoter Score



$20

$40

$60

$80

$100

$120

$140

$160

$180

$200



1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0



$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Ending MRR

Bookings Metrics


1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0



4.2%

4.4%

4.6%

4.8%

5.0%

5.2%

5.4%



16%

18%

20%

22%



Unit Economics


$39.0

$40.0

$41.0

$42.0

$43.0

$44.0

$45.0



SaaS Metrics 2.0 Scroll right to see the dashboard ---->For companies that book annual contracts

Bookings Jan Feb Mar Apr May JunBookings $,000's (new custs) $ 264 $ 276 $ 294 $ 312 $ 324 $ 348 Value of all closed contracts during the month (annualized)Average ACV (new contracts) $ 6,600 $ 6,571 $ 6,837 $ 6,783 $ 6,750 $ 6,692 Average ACV for new customersAverage Contract Term 1.3 1.4 1.4 1.5 1.4 1.6 Average duration of contract signed by the new customersAverage Months Paid Upfront 5.5 7.0 5.0 6.5 5.8 6.2 Average number of months paid upfront by new customersARPA - Avg MRR (for new Custs) $ 550 $ 548 $ 570 $ 565 $ 563 $ 558 Average Revenue per Account - Avg MRR (for the new customers)ARPA - across installed base $ 514 $ 491 $ 475 $ 459 $ 450 $ 438 Average MRR across the installed base

ACV Jan Feb Mar Apr May JunNew ACV $ 264.0 $ 276.0 $ 294.0 $ 312.0 $ 324.0 $ 348.0 New ACV added from new customers signed in the monthChurned ACV $ (100.8) $ (134.7) $ (108.3) $ (107.4) $ (106.2) $ (106.1) Lost ACV from customers who churned in the month Expansion ACV $ 24.0 $ 29.9 $ 25.8 $ 16.1 $ 83.9 $ 41.2 Expansion ACV from the installed base of existing customersNet New ACV $ 187.2 $ 171.3 $ 211.5 $ 220.7 $ 301.6 $ 283.2

Starting ARR $ 4,800 $ 4,987 $ 5,158 $ 5,370 $ 5,591 $ 5,892 Ending ARR $ 4,987 $ 5,158 $ 5,370 $ 5,591 $ 5,892 $ 6,175

Churn Metrics Jan Feb Mar Apr May JunTotal # of Customers 808 875 943 1,016 1,092 1,176 # of new Customers 40 42 43 46 48 52 # of churned Customers (24) (25) (25) (27) (28) (32)Net New Customers 16 17 18 19 20 20 # of new Customers - # of churned Customers

% Customer Churn 3.0% 3.1% 2.9% 2.9% 2.8% 2.9% # of churned Customers / Total # of Customers (from last month)% ACV Churn 2.1% 2.7% 2.1% 2.0% 1.9% 1.8% Churned MRR / Last month's Ending MRR% ACV Expansion 0.5% 0.6% 0.5% 0.3% 1.5% 0.7% Expansion MRR / Last month's Ending MRR% Net ACV Churn 1.6% 2.1% 1.6% 1.7% 0.4% 1.1% (Churned MRR - Expansion MRR)/Last months Ending MRR

Renewal rate (# of Custs) Slightly different to Churn, as it measures Renewal against contractsRenewal rate (ACV $'s) that are up for renewal. (Churn is against the whole customer base)

Customer Engagement Score 121 120 125 126 130 135 The average Customer Engagement Score across the customer baseNet Promoter Score 28 27 29 32 33 35

Unit Economics (new customers) Jan Feb Mar Apr May JunLTV $ 21,738 $ 16,834 $ 22,519 $ 23,457 $ 24,572 $ 25,716 ARPA * Gross Margin % / %MRR Churn RateCAC $ 8,750 $ 8,571 $ 8,605 $ 8,261 $ 8,125 $ 7,692 Adjusted Sales & Marketing expense / # of new CustomersLTV to CAC Ratio 2.5 2.0 2.6 2.8 3.0 3.3 LTV/CACMonths to Recover CAC 19 19 18 18 17 17 CAC/(ARPA * GM%)

Summary Financial Metrics $000's Jan Feb Mar Apr May JunBillings (what's invoiced this month) $ 505 $ 515 $ 520 $ 490 $ 540 $ 560 Custs may be billed in advance of when revenue can be recognizedRevenue $ 4,987 $ 5,158 $ 5,370 $ 5,591 $ 5,892 $ 6,175 Revenue is typically recognized monthly, so may vary from BillingsCost of Goods Solds - COGS $ 848 $ 877 $ 913 $ 950 $ 1,002 $ 1,050 Gross Margin $ 4,139 $ 4,282 $ 4,457 $ 4,640 $ 4,891 $ 5,126 Gross Margin % 83% 83% 83% 83% 83% 83%

Total Expenses $ 640 $ 650 $ 660 $ 670 $ 680 $ 690 Sales & Marketing $ 350 $ 360 $ 370 $ 380 $ 390 $ 400 Research & Development $ 180 $ 180 $ 180 $ 180 $ 180 $ 180 General & Administrative $ 110 $ 110 $ 110 $ 110 $ 110 $ 110

EBITDA $ 3,499 $ 3,632 $ 3,797 $ 3,970 $ 4,211 $ 4,436 Based on GAAP recognized revenueBillings-based operating profit/loss $ (221) $ (223) $ (228) $ (263) $ (232) $ (225) Given that cash will be collected based on Billings, this is a useful way

to judge how the business is doing on cash basis

Cash & Deferred Revenue Jan Feb Mar Apr May JunChange in CashEnding CashDeferred Revenue Tracks what has been billed, but can't yet be recognized as revenue

Funnel Metrics Jan Feb Mar Apr May JunRaw Leads / Enquiries 3,611 3,429 5,200 5,357 4,684 4,400 Conversion Raw Leads to MQLs 1.8% 2.1% 1.5% 1.4% 1.9% 2.0%Opportunities 65 72 78 75 89 88 Conversion: Oppties to Win 62% 58% 55% 61% 54% 59%Win/Losss ratio 75% 82% 65% 79% 85% 78%

Sales Metrics Jan Feb Mar Apr May JunNo of FTE Sales reps 6 6.5 7 7.5 8 8.5 FTE = Full Time Equivalent (equivalent # of fully productive reps)Quota per sales rep $ 4.2 $ 4.2 $ 4.2 $ 4.2 $ 4.2 $ 4.2 MRR value of new customers signedSales Capacity $ 25.0 $ 27.1 $ 29.2 $ 31.3 $ 33.3 $ 35.4 # of FTE reps * quota (should translate into New MRR Bookings)Coverage ratio for plan 1.2 1.2 1.2 1.2 1.2 1.2 Forcasted Sales Capacity / Bookings plan

Productivity per FTE sales rep $ 44.0 $ 42.5 $ 42.0 $ 41.6 $ 40.5 $ 40.9 MRR value of new customers signed


$(200.0)

$(100.0)

$-

$100.0

$200.0

$300.0

$400.0

ACV Bookings

New ACV

Net New ACV

Expansion ACV

Churned ACV


$100 $200 $300 $400



1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Average Months Paid Up-front


0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

Churn and Expansion as % of ACV

% Customer Churn% ACV Churn% ACV Expansion

Axis

Title


$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

LTV and CAC

LTVCAC


0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

LTV to CAC Ratio


16

17

18

19

20



$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Ending ARR


115

120

125

130

135

140



5

10

15

20

25

30

35

40

Net Promoter Score


1,000

2,000

3,000

4,000

5,000

6,000

Raw Leads / Enquiries


0.5%

1.0%

1.5%

2.0%

2.5%

Conversion Raw Leads to MQLs


10

20

30

40

50

60

70

80

90

100

Opportunities


52%

54%

56%

58%

60%

62%

64%

Conversion: Oppties to Win


10

20

30

40

50

60

# of new Customers


Unit Economics


1

2

3

4

5

6

7

8

9



$39.0

$40.0

$41.0

$42.0

$43.0

$44.0

$45.0



Bookings Metrics


$540

$545

$550

$555

$560

$565

$570

$575

ARPA - Avg MRR (for new Custs)


0.5%

1.0%

1.5%

2.0%

2.5%

% Net ACV Churn


$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

$40.0

Sales Capacity


10%20%30%40%50%60%70%80%90%

Win/Losss ratio

Win/Losss ratio

Customer Lifetime Value Charts

Simple CalculationInitial Cohort Size 100Churn Rate 3%

Time in Months 1 2 3 4 5 6 7 8 9 10 11 12 13Cohort Size 100 97 94 91 89 86 83 81 78 76 74 72 69

Initial ARPC 100Monthly ARPC growth 5Monthly Customer Churn 3.0%

Time in Months 1 2 3 4 5 6 7 8 9 10 11 12 13Cohort Size 100 97 94 91 89 86 83 81 78 76 74 72 69Cohort Payment 10000 ### ### ### ### ### ### ### ### ### ### ### ###

1 6 11 16 21 26 31 36 41 46 51 56 61 66 710

102030405060708090

100

Cohort Size

Months

1 5 9 13 17 21 25 29 33 37 41 45 49 53 57 61 65 69$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

Cohort Payment

Months

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3167 65 63 61 60 58 56 54 53 51 50 48 47 45 44 43 41 40

14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 3167 65 63 61 60 58 56 54 53 51 50 48 47 45 44 43 41 40

### ### ### ### ### ### ### ### ### ### ### ### ### ### ### ### ### ###

32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 4739 38 37 36 34 33 32 31 30 30 29 28 27 26 25 25

32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 4739 38 37 36 34 33 32 31 30 30 29 28 27 26 25 25

9919 9810 9699 9585 9470 9353 9234 9114 8993 8871 8749 8625 8501 8377 8253 8129

48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 6324 23 22 22 21 21 20 19 19 18 18 17 17 16 16 15

48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 6324 23 22 22 21 21 20 19 19 18 18 17 17 16 16 15

8004 7880 7756 7632 7509 7386 7264 7143 7022 6902 6783 6665 6548 6432 6317 6203

64 65 66 67 68 69 70 71 7215 14 14 13 13 13 12 12 12

64 65 66 67 68 69 70 71 7215 14 14 13 13 13 12 12 12

6091 5979 5869 5760 5652 5545 5440 5336 5234

Documents

SaaS Metrics Model - David Skok