We keep close track of every SaaS IPO in the past five years (since MongoDB in October 2017). Those 67 companies have finally all issued their Q2 2022 earnings. Below we summarize key financials and metrics.

The Bridge Group is a SaaS sales consulting firm that we hold in high regard. They release outstanding sales data which can be found at their site, bridgegroupinc.com. We recently reviewed their “SaaS AE Metrics & Compensation Report” which compiles data from 287 executives at SaaS companies with median revenue…

The Great Recession lasted from Q4 2007 to Q2 2009 and was severe: unemployment increased from 5% to 10% in October 2009 and American households lost an estimated $16 trillion in net worth while. …

I recently read Losing the Signal by Jacquie Mcnish and Sean Silcoff. It’s a fantastic read if you want to learn how to avoid mismanaging your market position. Below are some of the passages we learned from. Blackberry had no security equal. “No other phone maker operated its own in-house…

Does SaaS scale? We’ve never seen anyone show the data that says it actually does. Below, we attempt to use two metrics to drive home the point that SaaS does indeed scale, getting more cash efficient as companies get bigger. The first metric we look at is historical cash efficiency…

I recently read How to Turn Down a Billion Dollars, The Snapchat Story by Billy Gallagher. The book is fantastic and full of lessons. It’s well worth the read, but below are some of the passages we learned from. Snapchat really started as a sexting app. “He wouldn’t have to…

It’s ok and even desirable to be unprofitable when you’re adding revenue at an acceptable cost and you’ve got 100%+ net dollar retention, meaning you never lose the customer and actually grow them over time. In order to measure the acceptable cost of new SaaS revenue, we look at new…

Two metrics we use to compare software businesses are revenue per employee and operating expense (opex) per employee. In our view these are great measures of operational efficiency. What is a reasonable amount of rev/head and opex/head in SaaS? The data from the last 73 SaaS IPOs is below (since…

The general rule of thumb for spending in SaaS is 40/40/20. In other words, 40% of operating expense should be on R&D, 40% should be on sales and marketing, and 20% should be on G&A. Rules of thumb are just generalizations, so we wanted to see what the data really…