SaaS Benchmarking and Metrics - Software and …...2015 Software and SaaS Benchmarking Industry...

OPEXEngine

Software and SaaS Industry

Report & Benchmarks

2015OPEXEngine

9 Spring Street, Waltham, MA 02451www.opexengine.com

Copyright © 2015 All Rights Reserved reproduction without permission prohibited

�2015 OPEXEngine. All rights reserved. No part of this report may be reproduced without written permission of OPEXEngine, LLC. 2015 Software and SaaS Benchmarking Industry Report

Introduction Letter of Introduction

August 25, 2015 Dear Colleague, For the past nine years, OPEXEngine has conducted its annual benchmarking study of the small and mid-sized software industry. Hundreds of software companies have participated, and OPEXEngine’s benchmarking includes both public and private software companies, primarily located in the U.S. with 2014 revenues between $1M and $300M. Participating companies input their confidential data into our secure, web-based system, reflecting a broad set of measures that detail their businesses. About two-thirds of the participating companies have participated before in our software benchmarking and the rest were new this year. Over the past nine years of benchmarking the software and SaaS industries, approximately 47% of OPEXEngine’s benchmarking participants have IPO’ed or been acquired, or both. In 2015 we are partnering with the Software & Information Industry Association and its software advisory board to bring a broader range of companies into the benchmarking, as we have for the past four years. The SIIA is the principal U.S. trade association for the software and digital content industry. OPEXEngine’s benchmarking survey has been developed and refined each year through extensive consultation with a group of leading software CEOs and CFOs as well as with the SIIA’s software advisory board. The comprehensive benchmarks provide context for executives to manage their businesses more efficiently. We sort the benchmarks into an extensive range of peer groups to provide a better window into different operating models and stages, as well as by revenue size and average contract value. We look at the benchmark differences between public and private software companies. In addition, we look at SaaS companies in a separate grouping and include SaaS-specific metrics on recurring revenues (annual recurring revenues and monthly recurring revenues) cost of customer acquisition (CAC), customer lifetime value (CLV), expenses, hosting operations and customer benchmarks. See the appendix to this report to see all the benchmarks reported in this report. We recommend looking at a variety of peer groups to see where a more efficient use of resources affects performance or where similar companies are achieving better performance with the same model. In addition, it is extremely useful to analyze similar sales and marketing models, as that is typically the biggest expense driver of a software company and represents the biggest investment risk. We have observed in our benchmarking practice over the years that the most successful software companies are continuously metrics-driven and use benchmarking as a key management process and information tool.


Companies use benchmarking to out-perform their peers by:

x evaluating their performance against peers, x setting internal targets and performance expectations, x defining changing operational ratios in 2-5 year planning x understanding the latest changes in software business models and track to the most

successful companies, and x assessing their positioning vis-à-vis mergers and acquisitions, or preparing for a public

offering. The benchmarking participants use the data frequently and regularly throughout the year. The benchmarks provide context to make critical planning decisions for every department of the company. When making decisions based on data, instead of by executive wrangling and anecdotes, companies find the decision making process to be quicker and with much less friction. We hope that you will make benchmarking a part of your regular operating process by incorporating this data into regular operating reviews and sharing regularly with all members of the executive team. Please feel free to contact me directly at any time if we can help you better understand or interpret this report. We are always interested in feedback and comments on the benchmarking to improve it. Sincerely, Lauren Kelley, CEO and Founder, OPEXEngine [email protected] www.opexengine.com;

http://www.opexengine.com/


Report Format This report includes the following key sections: The Executive Briefing analyzes broad trends in the mid-sized software industry overall as well as trends that are specifically taking place for SaaS companies. The overview includes textual analysis as well as tables and graphs to help describe the results. The Company Demographics section provides a graphical summary of the demographics of companies included in this year’s benchmarking. 2015 Benchmarking Data for the Private and Public Software and SaaS Industry details the benchmarks by major financial and operating department categories for a variety of private and public sector peer groups. The report’s Appendix lists information about the benchmarking data and Individual Company Reports in OPEXEngine’s confidential Benchmark Engine™, the study’s methodology and about OPEXEngine.


EXECUTIVE BRIEFING Revenue Growth Rates Accelerating This year, both private and public software and SaaS companies recorded strong revenue growth rate overall. The leading companies in the 2015 benchmarking – the top 25 percent by annual revenue growth -- reported topline gains of almost 150 percent. This same quartile of top producers reported annual revenue gains of 100 percent last year.

Overall, private firms benchmarked an average of 55% annual revenue growth this year, as compared to 42% annual revenue growth benchmarked last year. This year’s average revenue growth rate for private software and SaaS firms is the highest reported since OPEXEngine began benchmarking the sector in 2006.

147.1%

69.2%

22.0%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0% 140.0% 160.0%

Top 25% fast growth

All VC-backed

Top 25% in profits

Y-o-Y Revenue Growth Rates for 3 Groups of Private Companies FY 14

Top 25% fast growth All VC-backed Top 25% in profits


Public companies with revenues under $300 million also recorded accelerated annual revenue growth rates for full year 2014. Annual revenue growth rates averaged 34.5% for this group of public companies, as compared to averaging 18.3% annual revenue growth in 2013 over 2012. The 2014 data may have been driven higher by inclusion of a number of new, fast growth entrants to the public markets with IPOs in 2014.

21% 27.80%

37.40% 30.50%

41.70%

55.10%

0%

10%

20%

30%

40%

50%

60%

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

Y-o-Y Private Software and SaaS Revenue Growth

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

12%

22%

37.50%

21.90% 18.30%

34.50%

0%

5%

10%

15%

20%

25%

30%

35%

40%

FY 09 FY 10 FY 11 FY 12 FY 13 FY 14

Y-o-Y Public Software and SaaS Revenue Growth

FY 09

FY 10

FY 11

FY 12

FY 13

FY 14


Sales and Marketing Spending Driving Revenue Growth The fastest growth private companies are spending more in Sales and Marketing than other firms to achieve the highest growth, while the most profitable firms in the 2015 benchmarking spent the least and had the lowest annual revenue growth.

Venture investment flows strong into sector Private software and SaaS companies took in a median of $35 million in venture capital in 2014, while the largest private companies (between $40-$90 million in revenues) took in a median of $80 million.

147.1%

53.3% 32.5%

229.5%

69.2%

40.5% 22.8%

168.9%

22.0% 17.7% 8.3%

92.2%

0.0%

50.0%

100.0%

150.0%

200.0%

250.0%

Y-o-Y revenue growth rateFY 14

Sales Marketing Operating Expense

Top 25% fast growth All VC-backed Top 25% in profits


West coast private company participants in the benchmarking have taken about 2.5 times as much investment capital as East coast-based companies ($64.5M versus $26.2M for East coast firms). Another way of looking at the benchmarks is that West coast firms have taken on average $2.07 in investment dollars for every dollar of revenue, while East coast firms have taken $1.02 in investment dollars to achieve a dollar of revenue at about a $30M run rate. Hiring and talent acquisition dominate 2015 operational considerations for SaaS companies Given fast revenue and customer growth, SaaS companies are hiring rapidly to support and prepare for future growth with the effect of slightly reducing revenue per employee as they hire in advance of growth. Private company employee revenue productivity has declined slightly since last year from $140,000 in last year’s benchmarking to about $132,000 per employee benchmarked this year for the private sector. Public companies under $300M benchmarked an average $225,000 per employee this year versus $233,000 per public company employee benchmarked last year. The focus on hiring and talent acquisition indicates an expectation of continuing strong growth by these companies for the foreseeable future. We are tracking several new metrics requested by our CFO customers. In G&A, we added separate Finance, Legal and HR headcounts, and developed new benchmarks for:

x # Finance headcount x # Legal headcount x # HR headcount x Company headcount per G&A heads x Company headcount per HR heads

$1.70 $1.96

$1.19 $1.45

$2.22

$0.00

$0.50

$1.00

$1.50

$2.00

$2.50

External capital invested per $ of revenue

Top 25% fastest growth companies, average $18M revenues

General VC-backed, average $26M revenues

A/B round, average $19M revenues

C/D round, average $24M revenues

More than $50M invested, average $37M revenues


x Customers per Legal heads x Legal Expense per Customer

SaaS Company G&A and Finance Headcount Benchmark by Revenue Size

This year’s benchmarking showed significant headcount increases at $20M for private companies, as well as added employee overhead for public companies. In addition, in the 2015 benchmarking, we added HR benchmarks on hiring, retention and exits, including:

x # of new hires in 2014 x Budgeted new hires for 2015 x Retention rate in 2014 x Turnover rate in 2014

7.0 11.0

17.0

42.0

34.0

62.5

3.0 3.0 8.0 10.5 17.0 21.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Private SaaS <$10 Million

Private SaaS $10- $20 Million

Private SaaS$20-40 Million

Private SaaS$40-$90 Million

Public SaaS $80 -$125M

Public SaaS $125- $300M

G&A headcount Finance headcount


SaaS CFOs are increasingly responsible for detailed reporting on operating metrics outside of traditional financial metrics, especially in the areas of sales and marketing operations SaaS is a numbers driven business model and SaaS CFOs are increasingly responsible for reporting and analyzing operating and performance metrics beyond traditional P&L and financial metrics. CFO’s to date have expanded their focus primarily in the areas of top line growth, sales and marketing efficiency and customer profitability. We are also seeing more and more SaaS CFOs take on management responsibility for sales operations, and supplying the related detailed analysis of sales and marketing activity and productivity to the sales and marketing organizations. This year, we’ve added benchmarks for:

x Total # of Marketing Qualified Leads Generated in 2014 x Marketing $s per Marketing Qualified Leads x Total recognized revenue per quota-bearing individual sales contributor x Sales Cycle Duration x $ Bookings per Sales Rep

72.0 79.0

200.0

421.0

519.0

743.5

27.0 34.5 63.0 100.0 93.5 182.5

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

Private SaaS < $10Million

Private SaaS $10 -$20 Million

Private SaaS $20-40 Million

Private SaaS $40-$90 Million



Company headcount at end of 2014 New hires in 2014


Planned Benchmarks for 2016 While SaaS CFOs have increased their reporting in the areas of sales and marketing performance because of its impact on top line growth, one area that appears to be underserved is in the area of R&D and systems performance and efficiency. While SaaS companies by the nature of hosting and selling an on-line subscription are investing significantly in technology, most companies have not implemented regular reporting tying technology investments to business results. OPEXEngine will be developing key benchmarks analyzing R&D and IT efficiency and relationship to revenue growth and reporting on them in 2016.

$761,417

$1,674,277

$850,733 $993,965

$1,918,360

$3,199,072

$938,899 $702,314 $502,795

$854,757 $1,041,444 $1,214,763

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

Private SaaS <$10 Million

Private SaaS $10- $20 Million

Private SaaS$20-40 Million

Private SaaS$40-$90 Million


Public SaaS $125- $300M

Recognized revenue per sales rep New bookings per sales rep


COMPANY DEMOGRAPHICS

78%

22%

Public/Private

Private Companies Public Companies

55%

45%

Private Companies by Geography

East and Central West and Mountain

50% 50%

Public SaaS by Geography

East and Central West and Mountain


78%

10%

12%

Private Companies by Business Model

Private SaaS

Private on-premises license companies

Private hybrid companies

86%

14%

Public Companies by Business Model

Public SaaS Public Hybrid


65%

35%

Private Companies by Market

SMB Large Enterprise

62%

38%

Public SaaS by Market

Large Enterprise SMB


DETAILED BENCHMARKS FOR SOFTWARE AND SAAS COMPANIES

PRIVATE COMPANIES BY BUSINESS MODEL

Private Co – By Business Model

2015 OPEXEngine™. All Rights Reserved. Not for public distribution

All Private Companies

Primarily Perpetual License

Companies

Hybrid Companies

All Saas Companies

FINANCIALS

Average Recognized Revenue $27,403,255 $49,799,102 $18,880,964 $25,802,058

Income Statement as a % of Total Recognized Revenue

Revenue Detail:

Perpetual License Software Revenue (excluding any SaaS revenue)

5.0% 34.4% 10.8% 0.3%

Software as a Service Revenue 69.0% 5.0% 51.1% 80.2%

Services Revenue (Professional Services and Training, Excluding Maintenance)

15.2% 20.8% 17.2% 14.1%

Maintenance Revenue 7.2% 36.1% 19.7% 1.4%

Other Revenue 3.6% 3.8% 1.3% 4.0%

Total Recognized Revenue 100.0% 100.0% 100.0% 100.0%

2014 over 2013 YTY Revenue Growth Rate (Median)

37.7% 41.3% 19.4% 40.5%

2014 over 2013 YTY Revenue Growth Rate (Average)

55.1% 27.8% 28.3% 63.0%

Recurring Revenue

Total Annual Recurring Revenue (ARR)

$13,515,000 $7,338,000 $11,883,585 $17,767,428


Change in Annual Recurring Revenue from 2013 to 2014

43.1% 46.3% 25.5% 45.6%

Monthly Recurring Revenue (MRR) as of December 31 2014

$1,322,000 $620,500 $1,066,970 $1,795,088

Average MRR growth in 2014 3.0% * * 3.2%

Bookings/Billings

Total Bookings (1 year contract value of all contracts signed in 2014, including services and product) for all Revenue

80.3% 70.1% 76.4% 82.1%

% Change in Bookings from 2013 to 2014

24.7% 13.0% 25.4% 43.0%

Total Billings of Recurring Revenue

73.1% 5.5% 58.5% 77.0%

Dollar amount of investment capital taken over company's life

$34,900,000 * $8,950,000 $49,725,500

Profit Metrics (as a % of total recognized revenue)

Operating Income -26.8% 10.7% -1.6% -35.6%

Net Income Before Taxes -41.7% 8.6% -1.6% -43.5%

EBITDA -22.4% 14.6% 3.8% -33.9%

EBITDA (in dollars) -$4,954,365 $8,736,343 $630,483 -$6,300,000

Gross Margin Percentage on Product Sales

75.1% 74.8% 79.2% 74.4%

Gross Margin Percentage on Services

6.4% 48.2% -1.5% 1.7%

Overall Gross Margin Percentage on all Sales

61.2% 67.2% 66.1% 59.6%

Cost and Expense Detail (as a % of total recognized revenue)

Cost of Products (including software as a service costs)

19.1% 9.1% 15.7% 21.0%

Cost of Services 15.9% 21.9% 18.5% 14.7%

Total cost of revenue (cost of products + cost of services)

35.0% 31.0% 34.1% 35.6%

Research & Development 36.4% 23.3% 22.3% 40.3%

Sales 34.5% 27.8% 18.7% 37.9%

Marketing 18.1% 10.9% 9.9% 20.4%

General & Administrative 25.6% 14.5% 19.1% 28.1%

Total Expenses 148.7% 107.5% 109.0% 160.4%


Recognized Revenue by Geographic Area

(As a % of Total Recognized Revenue)

Americas 91.0% 93.7% 93.9% 90.1%

EMEA 6.5% 3.4% 5.7% 7.1%

Asia Pacific 2.8% 2.9% 0.5% 3.2%

Total 100.0% 100.0% 100.0% 100.0%

Balance Sheet Items

Cash & Cash Equivalents (As a % of Total Assets)

45.6% 34.3% 26.2% 50.1%

Accounts Receivable (As a % of Total Assets)

20.0% 22.9% 24.8% 18.8%

Deferred Revenue (As a % of Total Assets)

46.0% 24.8% 41.3% 49.5%

Cash & Cash Equivalents (in Dollars)

$11,159,509 $11,159,509 $3,845,974 $11,719,722

Cash Flow

Net Cash from Operations (in dollars)

-$4,401,000 $2,187,848 $222,746 -$4,743,951

Net Cash from Operations as % of Recognized Revenue

-14.1% 2.6% 1.4% -21.5%

Performance Measures

Asset Turnover (Net Sales/Total Assets)

1.1 1.1 1.4 1.0

Return on Assets (Net Profit Before Taxes as a % of Total Assets)

-35.0% 11.7% 0.4% -43.7%

Accounts Receivable Days 60.4 80.4 80.9 46.7

SALES & MARKETING


Sales Department

Total Sales Expenses (As a % of Total Recognized Revenue)

34.5% 27.8% 18.7% 37.9%

Sales headcount (FTE) 41.8 45.0 27.3 37.0

Total Sales Expense per Sales $178,755 $193,205 $155,152 $182,127


Employee

Sales Compensation & Benefits Expense (As a % of Total Sales Expenses)

77.3% 80.0% 80.9% 76.4%

Total Sales Compensation & Benefits Expense per Sales Employee

$132,866 $148,664 $119,165 $131,904

Total number of quota-bearing individual sales contributors as % of total sales headcount

49% 57% 73% 48%

Total recognized revenue per quota-bearing individual sales contributor

$1,103,598 $2,258,269 $1,578,212 $946,364

Sales Cycle Duration 90.0 100.0 96.0 90.0

$ Bookings per Sales Rep $805,043 $1,155,624 $1,180,811 $741,725

$ Billings per Sales Rep $526,441 $40,250 $618,263 $600,122

Number of Channel Partners 3.0 10.0 0.0 4.0

Marketing Department

Marketing (As a % of Total Recognized Revenue)

18.1% 10.9% 9.9% 20.4%

Marketing headcount (FTE) 10.0 19.0 6.0 10.5

Total Marketing Expense per Marketing Employee

$289,193 $251,793 $266,632 $297,300

Marketing Compensation & Benefits Expense (As a % of Total Marketing Expenses)

39.1% 38.7% 34.0% 39.9%

Total Marketing Compensation & Benefits Expense per Marketing Employee

$104,074 $108,058 $85,652 $106,440

Marketing dollars per $ of bookings

$0.19 $0.21 $0.15 $0.22

Total # of Marketing Qualified Leads Generated in 2014

4200 * 580 6726

Marketing $s per Marketing Qualified Leads

$791 * $1,175 $575

Customer Metrics

Number of Customers at end of 2014

611 571 524 998

Net percent change in the number of customers at the end of 2014 from 2013

22.3% 21.0% 6.0% 25.0%

Recognized Revenue per Customer

$27,050 $58,698 $32,122 $19,239


Year End MRR per Customer $1,726 $1,087 $2,699 $1,474

ARR per Customer $19,195 $12,783 $32,681 $16,942

Operating Expense per Customer $28,272 $52,402 $34,651 $22,942

Business Model Metrics

Average Contract Value (ACV) $28,733.00 $74,000.00 $36,693.50 $20,042.50

Average Customer Acquisition Costs (CAC)

$26,726 $10,981 $27,482 $27,852

Average Customer Lifetime Value (total company gross margin)

$4,318 * $37,689 $4,288

Average Customer Lifetime Value (recurring revenue gross margin only)

$6,690 * $46,932 $6,326

CLV/CAC Ratio 21.3% * 125.8% 21.0%

CAC as a % of ARR 138.4% 390.2% 95.0% 136.9%

Months to Recover CAC 16.3 42.4 11.4 16.0

# of Customers per Sales FTE 22.5 14.4 22.5 29.1

# of Customers per Sales and Marketing FTE

18.3 11.5 17.7 22.2

Sales and Marketing Expense per Customer

$11,240 $13,928 $10,364 $10,457

Renewal Rates

Customer retention rate 82.0% * 88.9% 79.0%

Net Dollar Renewal Rate 92.1% * 92.6% 92.0%

SaaS


SaaS Revenues


$13,515,000 $7,338,000 $11,883,585 $17,767,428


43.1% 46.3% 25.5% 45.6%


$1,322,000 $620,500 $1,066,970 $1,795,088

Change/Growth Rate in Monthly Recurring Revenue from Dec. 31 2013 to Dec. 31 2014

38.0% 49.6% 24.0% 39.5%

Average MRR growth in 2014 3.0% * * 3.2%


Customers



$26,726 $10,981 $27,482 $27,852


$4,318 * $37,689 $4,288


$6,690 * $46,932 $6,326

CLV/CAC Ratio 21.3% * 125.8% 21.0%

CAC as a % of ARR 138.4% 390.2% 95.0% 136.9%


Customer retention rate 82.0% * 88.9% 79.0%

Net Dollar Renewal Rate 92.1% * 92.6% 92.0%

R&D and Hosting


R&D Department

Total Research & Development (R&D) Expenses as a % of Revenue

36.4% 23.3% 22.3% 40.3%

R&D Compensation & Benefits Expense (As a % of Total R&D Expenses)

86.7% 80.4% 81.7% 88.3%

Total R&D FTEs 50.0 84.0 32.0 53.0

R&D expense per R&D FTE $127,375 $116,436 $109,886 $139,390

R&D comp & benefits per R&D FTE

$96,296 $91,896 $91,453 $100,818

# new releases per year 4.0 2.0 4.0 4.0

R&D FTE/New Release 13.3 13.3 10.5 13.3

R&D Expense/new release $1,994,239 $2,239,500 $1,223,750 $2,159,988

Hosting and Datacenters

Total hosting expense (As a % of Total Recognized Revenue)

6.8% 1.9% 4.2% 7.8%

Third-party hosting expense (As a % of total hosting expense)

74.6% 49.0% 56.8% 80.4%

In-house hosting expense (As a % of total hosting expense)

23.2% 51.1% 35.1% 18.1%

Number of datacenters 2.0 1.0 2.0 2.0

Hosting expense per data center $368,992 * $380,650 $377,650


Professional and Customer Service


Professional Service Expense as a % of Recognized Revenue

13.7% 19.5% 15.4% 12.6%

Professional Service Compensation and Benefits as a % of total Profesional Services Expense

79.6% 72.2% 80.6% 80.6%

Professional Services FTEs 19.0 90.0 14.5 18.0

Professional Services Expense per Professional Services FTE

$121,514 $141,519 $128,936 $115,831

Professional Services Compensation and Benefits per Professional Services FTE

$100,616 $101,476 $107,896 $98,854

Customer Service Department 2014

Customer Service Expense as a % of Recognized Revenue

8.3% 7.8% 7.6% 8.4%

Customer Service Expense as a % of ARR

215.1% 342.2% 9.8% 234.6%

Customer Service FTEs 13.0 38.0 9.0 13.0

Total Customer Service Expense per Customer Service FTE

$100,000 $121,026 $118,610 $98,991

Customer Service Compensation & Benefits per Customer Service FTE

$70,398 $63,070 $83,207 $70,540

Customer Support Compensation & Benefits Expense (As a % of Total Customer Support Expenses)

79.9% 69.1% 71.1% 82.9%

G&A and HR


General & Administrative (G&A) Departmental Expenses

G&A expense as a % of revenue 25.6% 14.5% 19.1% 28.1%

G&A compensation and benefits as a % of total G&A expense

52.2% 69.2% 51.3% 50.1%

G&A Expenses per G&A FTE $261,480 $179,968 $251,792 $272,368


G&A Compensation and Benefits per G&A FTE

$133,395 $147,095 $131,483 $132,399

G&A Headcount

Total G&A FTEs 16.0 31.0 10.5 16.5

Total Finance FTEs 6.0 10.0 4.5 6.0

Total Legal FTEs 0.0 2.0 0.0 0.0

Total HR FTEs 4.0 5.0 3.0 4.0

Total Company FTEs per G&A FTE

10.4 10.6 10.3 10.3

Total Company FTEs per HR FTE 50.1 52.3 36.0 50.6

Total Customers per Legal FTE 874.5 398.0 * 1741.1

Legal Expense per Customer $198.1 * $208.2 $172.6

Total Company Expenses (total, including allocations in departmental expenses above)

Total Company Compensation and Benefits as a % of Revenue

95.0% 74.0% 67.5% 102.2%

Total Company Stock Option Expense as a % of Revenue

2.4% 3.8% 1.1% 2.4%

Total Company Travel and Entertainment Expenses as a % of Revenue

4.5% 4.4% 3.3% 4.7%

Total IT Expenses (including communications and email expense) as a % of Revenue

3.7% 3.0% 2.0% 4.1%

Total Facilities Expense as a % of Revenue

6.3% 3.4% 8.8% 6.3%

Total Company Legal Expense (in-house and 3rd party) as a % of Revenue

1.1% * 0.6% 1.3%

Total Company Legal Expense $395,375 * $159,171 $430,070

Human Resources

Recognized Revenue Per Employee

$131,860 $181,333 $176,578 $127,076

Billings Per Employee $80,681 $2,236 $105,285 $90,650

Number of Employees (FTEs) 175.0 355.0 107.3 187.0

Anticipated growth in headcount during 2015

31.5% 24.8% 39.2% 31.7%


Compensation & Benefits Expense Per Employee

$112,271 $101,156 $111,876 $113,243

Benefits Expense per Employee $8,140 $7,081 $7,566 $8,657

# of new hires in 2014 50.0 * * 50.0

Retention rate in 2014 80.0% * * 80.0%

Turnover rate in 2014 16.1% * * 17.4%

Operating Expenses Per Employee $126,266 $91,029 $124,864 $142,037

Operating Income Per Employee -$38,528 $18,106 -$3,593 -$51,626

EBITDA per Employee -$31,139 $27,681 $5,659 -$43,969

Sales & Marketing Spend per Employee

$51,317 $40,057 $44,751 $62,934

Travel and Entertainment Expenses Per Employee

$4,812 $6,922 $5,883 $4,320

IT Expenses (including communications and email expense) Per Employee

$3,843 $3,843 $2,738 $4,344

Facilities Costs Per Employee $5,170 $4,586 $5,588 $5,138

PROFILE




611 571 524 998

Which of the following best describes the size of your customers?

Large Enterprises 35.4% 50.0% 33.3% 34.2%

Small to mid-sized companies 64.6% 50.0% 66.7% 65.8%

Is your company public or private?

Public 0.0% 0.0% 0.0% 0.0%

Private 100.0% 100.0% 100.0% 100.0%

Percent of companies that are currently venture-backed

76.6% 33.3% 66.7% 81.6%


$34,900,000 * $8,950,000 $49,725,500


Revenue growth 37.7% 41.3% 19.4% 40.5%

Operating Profit -26.8% 10.7% -1.6% -35.6%

2015 Expectations

Expect more than 50% growth in 2015

35.4% 25.0% 16.7% 39.5%

Expect between 20-50% growth in 2015

43.8% 25.0% 50.0% 44.7%

Expect less than 20% growth in 2015

20.8% 50.0% 33.3% 15.8%

Expect zero or negative growth in 2015

0.0% 0.0% 0.0% 0.0%

Number of years since company was founded

12 25 15 10


PRIVATE SAAS BY REVENUE SIZE


Private SaaS < $10 Million

Private SaaS $10 - $20 Million

Private SaaS $20-40 Million

Private SaaS $40-$90 Million

FINANCIALS


Revenue Detail:


0.5% 0.4% 0.3% 0.7%

Software as a Service Revenue 82.6% 72.9% 81.7% 79.5%


12.7% 19.8% 13.8% 12.0%

Maintenance Revenue 3.4% 2.7% 0.4% 1.4%

Other Revenue 0.9% 4.1% 3.7% 6.5%

Total Recognized Revenue 100.0% 100.0% 100.0% 100.0%


97.1% 14.8% 37.7% 48.0%


139.5% 30.8% 44.2% 42.3%

Recurring Revenue


$6,000,000 $9,077,917 $24,668,839 $50,339,970


84.9% 27.7% 42.0% 47.0%


$500,000 $935,939 $2,250,943 $4,275,492

Average MRR growth in 2014 5.3% 1.9% 3.0% 3.3%


Bookings/Billings


103.0% 72.9% 66.6% 87.0%


100.0% 20.0% 43.0% 54.0%

Total Billings of Recurring Revenue 82.2% 69.9% 82.9% 80.4%


$24,000,000 $23,115,310 $59,500,000 $80,000,000


Operating Income -135.1% -21.0% -30.5% -26.8%

Net Income Before Taxes -138.8% -22.4% -42.6% -29.7%

EBITDA -115.6% -19.5% -15.1% -24.3%

EBITDA (in dollars) -$6,444,500 -$1,968,944 -$5,236,218 -$12,559,571


66.3% 77.1% 78.0% 75.7%

Gross Margin Percentage on Services 6.3% 4.8% -4.7% 14.8%


49.7% 53.7% 66.9% 67.4%



25.6% 17.5% 18.7% 21.1%

Cost of Services 16.2% 18.7% 12.1% 13.2%


41.8% 36.3% 30.8% 34.2%

Research & Development 77.0% 32.6% 28.5% 23.9%

Sales 51.9% 29.0% 35.9% 30.8%

Marketing 37.6% 11.0% 17.9% 13.0%


General & Administrative 45.9% 27.5% 21.5% 18.2%

Total Expenses 252.6% 130.0% 134.6% 122.9%



Americas 86.0% 94.9% 88.8% 92.0%

EMEA 8.7% 4.6% 8.6% 5.5%

Asia Pacific 4.7% 0.6% 2.6% 4.5%

Total 100.0% 100.0% 100.0% 100.0%

Balance Sheet Items


70.1% 44.4% 46.9% 32.5%


12.4% 27.3% 20.4% 14.3%


25.1% 77.5% 58.2% 29.7%

Cash & Cash Equivalents (in Dollars) $8,546,000 $3,777,644 $11,664,926 $12,892,459

Cash Flow

Net Cash from Operations (in dollars) -$4,641,000 -$395,077 -$4,582,642 -$9,638,346


-118.2% -3.9% -13.9% -20.7%



0.6 1.0 1.6 1.1


-48.9% -33.4% -35.2% -22.2%

Accounts Receivable Days 49.7 76.3 43.8 35.7


SALES & MARKETING


Sales Department


51.9% 29.0% 35.9% 30.8%

Sales headcount (FTE) 14.0 14.5 52.0 67.0

Total Sales Expense per Sales Employee

$155,463 $170,734 $184,665 $183,344


73.3% 76.4% 77.6% 78.8%


$119,662 $126,926 $139,560 $129,050


44% 42% 48% 55%


$761,417 $1,674,277 $850,733 $993,965

Sales Cycle Duration 57.2 100.0 90.0 60.0

$ Bookings per Sales Rep $938,899 $702,314 $502,795 $854,757

$ Billings per Sales Rep $541,250 $511,631 $575,572 $674,557

Number of Channel Partners 17.0 0.0 5.0 15.0



37.6% 11.0% 17.9% 13.0%

Marketing headcount (FTE) 6.0 4.0 14.0 24.0


$264,030 $298,197 $311,223 $289,193



38.4% 42.9% 39.2% 37.2%


$103,089 $103,771 $124,770 $93,872

Marketing dollars per $ of bookings $0.34 $0.22 $0.25 $0.15


2467 540 10992 10891.5


$546 $1,220 $581 $538

Customer Metrics

Number of Customers at end of 2014 455 214 2,000 7,385


34.0% 18.0% 33.0% 20.3%

Recognized Revenue per Customer $20,081 $76,010 $13,461 $7,616

Year End MRR per Customer $2,183 $6,595 $950 $672

ARR per Customer $26,198 $58,720 $9,300 $8,060

Operating Expense per Customer $28,196 $100,385 $25,400 $10,975




$26,726 $55,076 $22,990 $10,717


$4,254 $10,657 $4,293 $1,591


$9,804 $18,850 $6,326 $2,203

CLV/CAC Ratio 15.9% 28.4% 26.3% 21.0%

CAC as a % of ARR 136.9% 143.1% 198.6% 106.1%



# of Customers per Sales FTE 15.6 13.0 46.2 36.5


13.9 6.9 28.9 31.3


$13,130 $23,924 $6,254 $5,215

Renewal Rates

Customer retention rate 80.0% 84.0% 85.0% 73.0%

Net Dollar Renewal Rate 93.0% 93.6% 91.4% 90.2%

SaaS


SaaS Revenues


$6,000,000 $9,077,917 $24,668,839 $50,339,970


84.9% 27.7% 42.0% 47.0%


$500,000 $935,939 $2,250,943 $4,275,492


67.0% 24.5% 37.0% 39.5%

Average MRR growth in 2014 5.3% 1.9% 3.0% 3.3%

Customers



$26,726 $55,076 $22,990 $10,717


$4,254 $10,657 $4,293 $1,591



$9,804 $18,850 $6,326 $2,203

CLV/CAC Ratio 15.9% 28.4% 26.3% 21.0%

CAC as a % of ARR 136.9% 143.1% 198.6% 106.1%


Customer retention rate 80.0% 84.0% 85.0% 73.0%

Net Dollar Renewal Rate 93.0% 93.6% 91.4% 90.2%

R&D and Hosting


R&D Department


77.0% 32.6% 28.5% 23.9%


80.0% 119.1% 75.8% 80.4%

Total R&D FTEs 34.0 31.0 67.0 81.0

R&D expense per R&D FTE $142,250 $107,409 $144,576 $145,634

R&D comp & benefits per R&D FTE $118,665 $93,600 $98,470 $119,229

# new releases per year 2.0 1.5 10.0 4.0

R&D FTE/New Release 12.0 22.0 6.7 29.7

R&D Expense/new release $1,126,965 $2,655,176 $1,067,703 $3,523,987



11.1% 4.8% 7.9% 6.3%


99.1% 85.3% 68.8% 69.5%


0.9% 9.9% 28.6% 27.1%


Number of datacenters 1.5 2.0 2.0 2.0

Hosting expense per data center $161,000 $204,233 $850,638 $917,362




14.5% 16.2% 10.7% 9.3%


83.9% 79.5% 76.9% 85.4%

Professional Services FTEs 4.0 17.0 20.0 38.0


$88,556 $121,515 $119,099 $115,823


$88,717 $95,679 $99,928 $105,918



11.4% 8.1% 7.6% 6.4%


10.4% 14.2% 648.0% 6.1%

Customer Service FTEs 7.0 8.0 15.0 30.0


$81,549 $113,762 $99,871 $73,789


$75,621 $80,263 $70,489 $62,220


87.5% 90.0% 75.2% 81.6%

G&A and HR




G&A expense as a % of revenue 45.9% 27.5% 21.5% 18.2%


47.3% 47.7% 50.4% 56.0%

G&A Expenses per G&A FTE $247,634 $354,815 $280,484 $265,184


$122,116 $146,297 $133,395 $138,721

G&A Headcount

Total G&A FTEs 7.0 11.0 17.0 42.0

Total Finance FTEs 3.0 3.0 8.0 10.5

Total Legal FTEs 0.0 0.0 1.0 1.5

Total HR FTEs 1.0 1.0 4.2 9.0

Total Company FTEs per G&A FTE 10.2 10.4 11.1 10.0

Total Company FTEs per HR FTE 46.8 57.2 50.0 46.6

Total Customers per Legal FTE * * 2235.8 2038.8

Legal Expense per Customer $97.7 $1,169.3 $117.5 $168.1



158.5% 87.5% 85.1% 75.4%


3.2% 1.5% 1.6% 2.9%


7.2% 3.9% 3.6% 4.2%



5.5% 3.2% 4.0% 3.2%


11.5% 6.3% 4.5% 3.4%


1.1% 1.9% 0.8% 1.3%

Total Company Legal Expense $131,791 $379,119 $289,412 $846,315

Human Resources

Recognized Revenue Per Employee $89,213 $127,160 $134,295 $155,436

Billings Per Employee $68,627 $83,553 $120,055 $121,355

Number of Employees (FTEs) 72.0 79.0 200.0 421.0


39.0% 42.8% 36.5% 29.6%


$113,109 $111,480 $116,192 $104,919

Benefits Expense per Employee $7,308 $6,191 $12,095 $8,394

# of new hires in 2014 27.0 34.5 63.0 100.0

Retention rate in 2014 78.0% 85.0% 74.0% 76.5%

Turnover rate in 2014 16.8% 16.1% 18.5% 14.8%

Operating Expenses Per Employee $126,266 $116,741 $146,402 $159,537

Operating Income Per Employee -$81,457 -$24,716 -$42,856 -$35,629

EBITDA per Employee -$87,897 -$36,462 -$23,363 -$30,260


$50,226 $46,692 $69,705 $73,007


$4,418 $4,221 $4,166 $5,179


$2,588 $4,588 $4,190 $3,045

Facilities Costs Per Employee $5,325 $6,408 $5,036 $5,363


PROFILE



Number of Customers at end of 2014 455 214 2,000 7,385


Large Enterprises 55.6% 44.4% 30.8% 11.1%

Small to mid-sized companies 44.4% 55.6% 69.2% 88.9%


Public 0.0% 0.0% 0.0% 0.0%

Private 100.0% 100.0% 100.0% 100.0%


88.9% 55.6% 84.6% 88.9%


$24,000,000 $23,115,310 $59,500,000 $80,000,000

Revenue growth 97.1% 14.8% 37.7% 48.0%

Operating Profit -135.1% -21.0% -30.5% -26.8%

2015 Expectations

Expect more than 50% growth in 2015 77.8% 33.3% 30.8% 11.1%



0.0% 55.6% 46.2% 77.8%

Expect less than 20% growth in 2015 22.2% 11.1% 23.1% 11.1%


0.0% 0.0% 0.0% 0.0%


7 13 11 9


PRIVATE SAAS COMPANIES BY REVENUE SIZE PRIVATE COMPANIES BY TOP QUARTILE FOR PROFITS, REVENUE GROWTH AND ALL VENTURE-BACKED


Private Co – Net Profit – Top 25%

Private Co - Sales Growth - Top 25%

Private Co - All Venture-Backed

FINANCIALS

Average Recognized Revenue $31,767,656 $18,687,107 $25,485,259


Revenue Detail:


11.0% 0.6% 3.5%

Software as a Service Revenue 48.7% 85.3% 76.8%


19.0% 10.4% 12.5%

Maintenance Revenue 19.3% 0.5% 3.3%

Other Revenue 2.0% 3.2% 3.9%

Total Recognized Revenue 100.0% 100.0% 100.0%


14.8% 100.1% 47.0%


22.0% 147.1% 69.2%

Recurring Revenue

Total Annual Recurring Revenue (ARR) $9,590,047 $10,842,940 $17,767,428


23.1% 82.0% 49.5%


$825,133 $1,031,510 $1,795,088

Average MRR growth in 2014 3.0% 6.2% 3.3%

Bookings/Billings



55.3% 104.3% 91.9%


20.0% 80.0% 50.0%

Total Billings of Recurring Revenue 69.1% 87.3% 75.0%


$5,650,000 $31,643,254 $49,450,999


Operating Income 10.7% -103.6% -46.9%

Net Income Before Taxes 9.4% -109.5% -52.0%

EBITDA 14.6% -75.4% -39.5%

EBITDA (in dollars) $2,862,432 -$9,339,000 -$6,669,310


78.5% 65.5% 73.9%

Gross Margin Percentage on Services 33.0% -15.2% -7.6%


69.3% 53.1% 59.0%



13.1% 28.3% 21.8%

Cost of Services 17.0% 13.3% 14.3%


30.1% 41.5% 36.1%

Research & Development 19.5% 64.7% 42.5%

Sales 17.7% 53.3% 40.5%

Marketing 8.3% 32.5% 22.8%

General & Administrative 16.7% 41.3% 28.2%

Total Expenses 92.2% 229.5% 168.9%



Americas 90.1% 87.9% 90.3%

EMEA 6.8% 8.8% 7.1%

Asia Pacific 2.7% 3.4% 3.1%

Total 100.0% 100.0% 100.0%

Balance Sheet Items



30.9% 66.5% 52.7%


29.2% 12.4% 16.7%


38.0% 27.6% 43.0%

Cash & Cash Equivalents (in Dollars) $4,686,551 $12,890,247 $11,934,641

Cash Flow

Net Cash from Operations (in dollars) $2,187,848 -$4,743,951 -$4,827,451


7.5% -57.0% -27.6%



1.6 0.6 0.9


12.3% -62.8% -46.2%

Accounts Receivable Days 76.3 75.7 52.5

SALES & MARKETING


Sales Department


17.7% 53.3% 40.5%

Sales headcount (FTE) 28.0 44.0 45.4


$155,246 $149,737 $175,384


81.3% 78.9% 76.3%


$121,967 $119,842 $129,050


45% 49% 49%


$2,190,993 $661,104 $942,857

Sales Cycle Duration 100.0 51.1 69.0

$ Bookings per Sales Rep $949,476 $730,400 $827,589

$ Billings per Sales Rep $385,239 $486,948 $556,927

Number of Channel Partners 0.0 30.0 5.5




8.3% 32.5% 22.8%

Marketing headcount (FTE) 7.0 8.5 12.0


$230,263 $279,615 $297,300


44.2% 35.7% 37.6%


$103,771 $88,080 $112,360

Marketing dollars per $ of bookings $0.12 $0.23 $0.22


870 3907 5652


$1,380 $518 $601

Customer Metrics

Number of Customers at end of 2014 567 848 1,060


15.0% 48.0% 34.0%

Recognized Revenue per Customer $56,530 $14,054 $23,138

Year End MRR per Customer $1,840 $1,536 $1,643

ARR per Customer $21,381 $18,432 $18,731

Operating Expense per Customer $48,268 $24,834 $25,752


Average Contract Value (ACV) $35,000.00 $15,737.50 $22,282.50


$15,881 $17,847 $26,726


$10,657 $2,990 $4,254


$11,891 $4,254 $6,326

CLV/CAC Ratio 70.0% 18.4% 20.0%

CAC as a % of ARR 170.7% 121.0% 133.0%

Months to Recover CAC 20.2 12.5 14.6

# of Customers per Sales FTE 22.7 20.6 22.7


17.1 16.6 18.4


$11,758 $10,014 $10,837


Renewal Rates

Customer retention rate 95.7% 74.0% 78.0%

Net Dollar Renewal Rate 97.0% 83.5% 88.0%

SaaS


SaaS Revenues

Total Annual Recurring Revenue (ARR) $9,590,047 $10,842,940 $17,767,428


23.1% 82.0% 49.5%


$825,133 $1,031,510 $1,795,088


18.5% 80.0% 45.0%


Customers



$15,881 $17,847 $26,726


$10,657 $2,990 $4,254


$11,891 $4,254 $6,326

CLV/CAC Ratio 70.0% 18.4% 20.0%

CAC as a % of ARR 170.7% 121.0% 133.0%




R&D and Hosting


R&D Department


19.5% 64.7% 42.5%



86.1% 77.5% 87.1%

Total R&D FTEs 33.0 51.5 54.5

R&D expense per R&D FTE $116,436 $143,993 $142,301

R&D comp & benefits per R&D FTE $96,264 $104,367 $112,268

# new releases per year 2.0 4.5 4.0

R&D FTE/New Release 12.9 14.3 13.3

R&D Expense/new release $1,344,225 $1,804,768 $2,036,976



3.6% 11.1% 8.5%


67.4% 88.8% 74.6%


32.6% 7.2% 23.1%

Number of datacenters 2.0 1.0 2.0

Hosting expense per data center $125,924 $230,221 $453,876




13.7% 12.9% 13.0%


81.5% 79.3% 77.8%

Professional Services FTEs 15.0 15.0 18.0


$117,314 $97,781 $122,920


$99,973 $83,480 $103,320



6.9% 11.3% 7.9%


119.3% 10.4% 246.4%

Customer Service FTEs 8.0 11.0 11.5



$111,431 $71,908 $98,991


$66,957 $61,400 $75,436


69.9% 82.4% 83.3%

G&A and HR



G&A expense as a % of revenue 16.7% 41.3% 28.2%


51.9% 55.3% 52.2%

G&A Expenses per G&A FTE $250,692 $252,998 $260,152


$113,424 $125,568 $132,399

G&A Headcount

Total G&A FTEs 13.0 16.5 17.0

Total Finance FTEs 5.0 5.5 7.0

Total Legal FTEs 0.0 0.0 0.0

Total HR FTEs 4.0 3.5 4.0

Total Company FTEs per G&A FTE 10.4 10.0 10.4

Total Company FTEs per HR FTE 57.6 45.3 46.8

Total Customers per Legal FTE 510.5 600.0 1838.0

Legal Expense per Customer $123.9 $149.3 $195.2



62.1% 146.3% 106.0%


1.8% 3.3% 2.6%


3.3% 6.2% 4.9%


4.1% 4.0% 3.7%



6.8% 9.8% 6.1%


0.7% 1.4% 1.3%

Total Company Legal Expense $214,132 $263,201 $429,433

Human Resources

Recognized Revenue Per Employee $172,452 $101,008 $121,135

Billings Per Employee $85,778 $45,204 $83,553

Number of Employees (FTEs) 135.0 178.5 187.0


21.9% 42.8% 37.5%


$95,341 $113,243 $115,893

Benefits Expense per Employee $5,720 $8,119 $10,016

# of new hires in 2014 37.0 49.5 58.5

Retention rate in 2014 79.2% 80.5% 80.0%

Turnover rate in 2014 15.3% 16.7% 15.4%

Operating Expenses Per Employee $91,029 $122,437 $146,229

Operating Income Per Employee $21,130 -$80,381 -$53,881

EBITDA per Employee $27,681 -$81,872 -$51,446

Sales & Marketing Spend per Employee $41,782 $56,241 $71,655


$5,964 $4,610 $4,806


$5,552 $2,509 $3,063

Facilities Costs Per Employee $5,789 $5,202 $5,202

PROFILE



Number of Customers at end of 2014 567 848 1,060


Large Enterprises 33.3% 41.7% 33.3%

Small to mid-sized companies 66.7% 58.3% 66.7%



Public 0.0% 0.0% 0.0%

Private 100.0% 100.0% 100.0%


27.3% 100.0% 100.0%


$5,650,000 $31,643,254 $49,450,999

Revenue growth 14.8% 100.1% 47.0%

Operating Profit 10.7% -103.6% -46.9%

2015 Expectations

Expect more than 50% growth in 2015 0.0% 91.7% 47.2%

Expect between 20-50% growth in 2015 58.3% 0.0% 41.7%

Expect less than 20% growth in 2015 41.7% 8.3% 11.1%

Expect zero or negative growth in 2015 0.0% 0.0% 0.0%


18 8 9


PUBLIC COMPANIES, FASTEST GROWTH PUBLIC COMPANIES AND MOST PROFITABLE PUBLIC

COMPANIES 2015 OPEXEngine™. All Rights Reserved. Not for public distribution

All Public Companies

Public Co - Net Profit - Top 50%

Public Co - Sales

Growth - Top 50%

FINANCIALS



Revenue Detail:


2.2% 3.3% 0.0%

Software as a Service Revenue 77.0% 70.4% 85.0%


10.6% 9.3% 13.2%

Maintenance Revenue 3.5% 4.9% 0.0%

Other Revenue 6.8% 12.2% 1.8%

Total Recognized Revenue 100.0% 100.0% 100.0%


24.1% 18.0% 57.0%


34.5% 25.6% 55.0%

Recurring Revenue


$109,135,357 $112,000,000 $111,077,400


40.0% 30.0% 53.0%


$10,022,094 $10,203,336 $10,842,000



Bookings/Billings


76.5% 41.1% 101.2%


40.0% 30.0% 50.0%

Total Billings of Recurring Revenue 88.0% 72.1% 88.7%


Operating Income -3.1% 22.5% -17.3%

Net Income Before Taxes -1.6% 15.3% -21.9%

EBITDA 7.5% 20.0% -14.2%

EBITDA (in dollars) $10,551,425 $42,078,000 -$20,374,651


63.3% 55.9% 71.8%

Gross Margin Percentage on Services

10.9% 16.8% 1.7%


59.9% 54.4% 65.6%



24.2% 23.3% 24.2%

Cost of Services 9.6% 9.6% 10.4%


33.8% 32.9% 34.6%

Research & Development 16.1% 10.1% 21.8%

Sales 21.4% 14.7% 28.7%

Marketing 14.5% 7.2% 21.2%

General & Administrative 15.7% 12.5% 17.5%

Total Expenses 101.5% 77.3% 123.8%



Americas 79.7% 83.9% 70.7%


EMEA 12.8% 12.1% 18.7%

Asia Pacific 4.7% 4.0% 5.6%

Total 100.0% 100.0% 100.0%

Balance Sheet Items


36.5% 34.7% 49.2%


10.4% 8.4% 11.9%


21.4% 11.5% 29.9%

Cash & Cash Equivalents (in Dollars) $72,825,500 $58,983,594 $109,583,000

Cash Flow

Net Cash from Operations (in dollars)

$16,028,000 $32,871,000 $3,619,000


12.9% 15.8% 2.8%



0.5 0.5 0.5


-1.2% 4.2% -9.0%

Accounts Receivable Days 55.3 37.4 102.5

SALES & MARKETING


Sales Department


21.4% 14.7% 28.7%

Sales headcount (FTE) 155.0 126.0 153.0


$199,944 $203,362 $230,594



76.1% 72.2% 77.5%


$157,571 $124,952 $197,251


49% 49% 49%


$2,077,446 $4,203,020 $1,959,768

Sales Cycle Duration 90.0 180.0 90.0

$ Bookings per Sales Rep $1,183,084 $1,041,444 $2,405,693

$ Billings per Sales Rep $1,293,398 $884,896 $1,724,834

Number of Channel Partners 10.0 0.0 18.0



14.5% 7.2% 21.2%

Marketing headcount (FTE) 45.5 29.0 55.0


$429,383 $526,724 $416,723


33.3% 27.8% 38.0%


$169,877 $154,943 $171,721

Marketing dollars per $ of bookings $0.14 $0.18 $0.20


$8,874 $560 $8,997


$1,357 $749 $3,488

Customer Metrics


1,985 1,770 1,631



22.0% 19.0% 32.0%

Recognized Revenue per Customer $58,518 $65,974 $113,506

Year End MRR per Customer $3,392 $4,421 $5,675

ARR per Customer $39,345 $49,099 $68,104

Operating Expense per Customer $51,688 $46,532 $133,732




$51,005 $27,260 $101,000


$24,737 $47,729 $33,617


$26,110 $65,415 $33,579

CLV/CAC Ratio 42.5% 175.1% 34.1%

CAC as a % of ARR 101.2% 74.1% 163.9%


# of Customers per Sales FTE 30.8 63.2 7.4


27.9 63.2 5.2


$10,325 $3,517 $67,282

Renewal Rates



SaaS


SaaS Revenues


$109,135,357 $112,000,000 $111,077,400



40.0% 30.0% 53.0%


$10,022,094 $10,203,336 $10,842,000


34.5% 25.0% 61.0%


Customers



$51,005 $27,260 $101,000


$24,737 $47,729 $33,617


$26,110 $65,415 $33,579

CLV/CAC Ratio 42.5% 175.1% 34.1%

CAC as a % of ARR 101.2% 74.1% 163.9%




R&D and Hosting


R&D Department


16.1% 10.1% 21.8%


83.8% 83.5% 83.3%

Total R&D FTEs 167.0 159.0 175.0

R&D expense per R&D FTE $169,792 $133,065 $190,766

R&D comp & benefits per R&D FTE $132,579 $112,779 $170,489

# new releases per year 5.0 6.0 7.0


R&D FTE/New Release 19.9 18.6 19.9

R&D Expense/new release $4,387,833 $3,052,302 $4,387,833



8.1% 4.4% 12.2%


53.9% 59.1% 59.0%


46.1% 40.9% 41.0%

Number of datacenters 3.0 3.0 3.0

Hosting expense per data center $2,916,923 $1,400,000 $6,928,333




8.7% 9.2% 10.0%


73.1% 66.9% 86.0%

Professional Services FTEs 59.0 54.3 62.5


$181,164 $114,903 $220,002


$143,485 $102,066 $187,220



4.8% 4.2% 5.0%


8.9% 11.6% 5.4%

Customer Service FTEs 43.0 39.0 40.0


$81,530 $99,172 $75,300



$71,491 $81,530 $71,491


80.8% 73.1% 85.6%

G&A and HR



G&A expense as a % of revenue 15.7% 12.5% 17.5%


56.6% 49.5% 64.3%

G&A Expenses per G&A FTE $476,169 $469,951 $506,055


$218,285 $180,524 $254,386

G&A Headcount

Total G&A FTEs 49.5 34.0 56.0

Total Finance FTEs 18.0 18.0 20.0

Total Legal FTEs 5.5 4.0 8.0

Total HR FTEs 12.0 12.0 15.0

Total Company FTEs per G&A FTE 10.5 10.5 10.5

Total Company FTEs per HR FTE 58.1 99.0 35.1

Total Customers per Legal FTE 550.0 758.5 203.9

Legal Expense per Customer $1,193 $606 $1,830



58.2% 40.7% 70.8%


8.2% 4.5% 12.5%



3.3% 2.3% 4.5%


2.7% 2.7% 3.1%


3.0% 2.0% 3.7%


1.9% 1.4% 2.2%

Total Company Legal Expense $2,953,612 $2,139,685 $3,756,530

Human Resources

Recognized Revenue Per Employee $224,513 $272,122 $215,686

Billings Per Employee $171,838 $63,948 $189,830

Number of Employees (FTEs) 601.0 590.0 590.0


23.9% 16.2% 40.0%


$108,152 $106,838 $136,932

Benefits Expense per Employee $10,236 $9,426 $10,829

# of new hires in 2014 118.5 156.0 152.5

Retention rate in 2014 82.5% 86.5% 80.0%

Turnover rate in 2014 10.7% 10.7% 7.0%

Operating Expenses Per Employee $169,331 $121,717 $192,216

Operating Income Per Employee -$6,976 $54,212 -$34,440

EBITDA per Employee $17,589 $28,840 -$24,969


$88,753 $35,915 $112,470


$6,615 $4,075 $11,595


$5,580 $6,118 $6,710

Facilities Costs Per Employee $5,354 $4,945 $6,435


PROFILE




1,985 1,770 1,631


Large Enterprises 57.1% 57.1% 71.4%

Small to mid-sized companies 42.9% 42.9% 28.6%


Public 100.0% 100.0% 100.0%

Private 0.0% 0.0% 0.0%

Revenue growth 24.1% 18.0% 57.0%

Operating Profit -3.1% 22.5% -17.3%

2015 Expectations

Expect more than 50% growth in 2015

15.4% 14.3% 33.3%


46.2% 28.6% 66.7%

Expect less than 20% growth in 2015 38.5% 57.1% 0.0%


0.0% 0.0% 0.0%


13 12 10


PUBLIC SAAS COMPANIES BY REVENUE SIZE 2015 OPEXEngine™. All Rights Reserved. Not for public distribution

Public SaaS - $80 Million to $125

Million

Public SaaS - $125 Million to $300

Million

FINANCIALS

Average Recognized Revenue $108,434,739 $164,404,219


Revenue Detail:


1.6% 0.0%

Software as a Service Revenue 79.3% 84.7%


6.2% 12.9%

Maintenance Revenue 2.5% 0.3%

Other Revenue 10.5% 2.1%

Total Recognized Revenue 100.0% 100.0%


18.3% 54.0%


27.5% 44.9%

Recurring Revenue

Total Annual Recurring Revenue (ARR) $90,118,548 $130,813,823


30.0% 50.0%


$7,918,598 $11,262,032

Average MRR growth in 2014 5.0% 7.0%

Bookings/Billings


87.1% 69.8%


% Change in Bookings from 2013 to 2014 30.0% 50.0%

Total Billings of Recurring Revenue 88.0% 90.9%


Operating Income -3.7% -9.9%

Net Income Before Taxes -8.3% -1.6%

EBITDA 3.4% 7.5%

EBITDA (in dollars) $3,651,777 $12,951,044

Gross Margin Percentage on Product Sales 61.1% 73.3%

Gross Margin Percentage on Services 15.7% 3.4%

Overall Gross Margin Percentage on all Sales 55.0% 68.2%



26.3% 23.0%

Cost of Services 7.4% 9.2%


33.7% 32.1%

Research & Development 16.0% 16.3%

Sales 18.6% 25.4%

Marketing 18.2% 11.9%

General & Administrative 14.0% 17.9%

Total Expenses 100.6% 103.6%



Americas 87.4% 69.9%

EMEA 9.6% 17.5%

Asia Pacific 2.1% 7.6%

Total 100.0% 100.0%

Balance Sheet Items


36.5% 42.2%


Accounts Receivable (As a % of Total Assets) 9.0% 12.1%

Deferred Revenue (As a % of Total Assets) 26.4% 14.7%

Cash & Cash Equivalents (in Dollars) $58,983,594 $100,744,500

Cash Flow

Net Cash from Operations (in dollars) $14,625,000 $11,630,667


13.6% 7.0%


Asset Turnover (Net Sales/Total Assets) 0.5 0.6


-8.1% -1.2%

Accounts Receivable Days 32.8 72.7

SALES & MARKETING


Sales Department


18.6% 25.4%

Sales headcount (FTE) 108.0 187.5

Total Sales Expense per Sales Employee $155,092 $199,944


80.4% 75.4%


$131,143 $169,692


54% 44%


$1,918,360 $3,199,072

Sales Cycle Duration 72.0 180.0


$ Bookings per Sales Rep $1,041,444 $1,214,763

$ Billings per Sales Rep $1,701,900 $1,425,516

Number of Channel Partners 18.0 10.0



18.2% 11.9%

Marketing headcount (FTE) 45.0 45.0


$624,065 $429,383


29.9% 33.8%


$166,705 $171,753

Marketing dollars per $ of bookings $0.20 $0.14


$10,000 $1,780

Marketing $s per Marketing Qualified Leads $832 $4,559

Customer Metrics

Number of Customers at end of 2014 3,001 662


20.0% 31.5%

Recognized Revenue per Customer $31,962 $228,135

Year End MRR per Customer $2,265 $16,176

ARR per Customer $28,356 $187,827

Operating Expense per Customer $46,532 $198,853


Average Contract Value (ACV) $47,335.00 $172,029.09

Average Customer Acquisition Costs (CAC) $27,260 $180,410


$14,461 $210,879


$16,358 $215,162


CLV/CAC Ratio 34.1% 187.2%

CAC as a % of ARR 106.1% 94.1%

Months to Recover CAC 11.3 10.8

# of Customers per Sales FTE 47.8 3.6

# of Customers per Sales and Marketing FTE 46.0 3.1

Sales and Marketing Expense per Customer $4,780 $78,893

Renewal Rates

Customer retention rate 86.6% 94.5%

Net Dollar Renewal Rate 90.2% 107.8%

SaaS


SaaS Revenues

Total Annual Recurring Revenue (ARR) $90,118,548 $130,813,823


30.0% 50.0%


$7,918,598 $11,262,032


24.0% 55.5%

Average MRR growth in 2014 5.0% 7.0%

Customers


Average Customer Acquisition Costs (CAC) $27,260 $180,410


$14,461 $210,879


$16,358 $215,162

CLV/CAC Ratio 34.1% 187.2%

CAC as a % of ARR 106.1% 94.1%

Months to Recover CAC 11.3 10.8


Customer retention rate 86.6% 94.5%

Net Dollar Renewal Rate 90.2% 107.8%

R&D and Hosting


R&D Department


16.0% 16.3%


84.2% 83.4%

Total R&D FTEs 99.0 187.5

R&D expense per R&D FTE $180,279 $153,309

R&D comp & benefits per R&D FTE $159,695 $123,025

# new releases per year 4.0 5.0

R&D FTE/New Release 16.2 31.0

R&D Expense/new release $3,104,481 $4,825,348



10.6% 5.7%


33.4% 72.2%


66.6% 27.8%

Number of datacenters 3.0 3.0

Hosting expense per data center $3,861,216 $1,830,454




7.1% 7.7%


* 87.7%

Professional Services FTEs 54.0 61.5



* $202,965


* $165,081



6.0% 3.0%

Customer Service Expense as a % of ARR 6.4% 3.5%

Customer Service FTEs 50.0 35.0


$72,782 $113,294


$63,817 $104,136


77.9% 89.1%

G&A and HR



G&A expense as a % of revenue 14.0% 17.9%


51.5% 61.6%

G&A Expenses per G&A FTE $482,387 $532,202


$219,533 $226,295

G&A Headcount

Total G&A FTEs 34.0 62.5

Total Finance FTEs 17.0 21.0

Total Legal FTEs 4.0 8.0

Total HR FTEs 8.0 13.0

Total Company FTEs per G&A FTE 11.0 9.6

Total Company FTEs per HR FTE 52.6 57.6

Total Customers per Legal FTE 717.5 145.1

Legal Expense per Customer $397 $5,064




63.3% 52.1%


6.5% 10.9%


3.3% 3.5%


2.7% 2.8%

Total Facilities Expense as a % of Revenue 2.5% 3.6%


1.6% 2.1%

Total Company Legal Expense $1,924,008 $3,811,616

Human Resources

Recognized Revenue Per Employee $215,686 $252,731

Billings Per Employee $163,960 $190,962

Number of Employees (FTEs) 519.0 743.5

Anticipated growth in headcount during 2015 21.2% 35.0%


$104,181 $127,379

Benefits Expense per Employee $10,418 $10,442

# of new hires in 2014 93.5 182.5

Retention rate in 2014 75.0% 85.0%

Turnover rate in 2014 15.2% 10.7%

Operating Expenses Per Employee $171,925 $173,532

Operating Income Per Employee -$7,957 -$20,217

EBITDA per Employee $8,674 $18,374

Sales & Marketing Spend per Employee $112,470 $88,753


$5,556 $8,544


$4,642 $7,993

Facilities Costs Per Employee $5,210 $6,270


PROFILE



Number of Customers at end of 2014 3,001 662


Large Enterprises 42.9% 83.3%

Small to mid-sized companies 57.1% 16.7%


Public 100.0% 100.0%

Private 0.0% 0.0%

Revenue growth 18.3% 54.0%

Operating Profit -3.7% -9.9%

2015 Expectations

Expect more than 50% growth in 2015 0.0% 33.3%

Expect between 20-50% growth in 2015 66.7% 33.3%

Expect less than 20% growth in 2015 33.3% 33.3%

Expect zero or negative growth in 2015 0.0% 0.0%

Number of years since company was founded 12 14


REPORT APPENDIX

ABOUT THIS REPORT This report is based on a comprehensive, confidential benchmarking which tracks comparative financial ratios and operating metrics by all participants overall and by public and private companies. All firms participating in the benchmarking survey automatically receive access to their confidential Individual Company Report, which is hosted in the OPEXEngine Benchmark Engine™. This interactive tool presents the participating company's own ratios and data computed in a manner consistent with those appearing in this report and displays the data alongside industry comparatives that users deem most appropriate. (Representative screen shots from a sample Individual Company Report are illustrated below). As shown below, users are able to select data aggregates that they feel are most appropriate to their business, and that information will be reported alongside their own statistics.

Sample Individual Company Report

“Your Firm’s” Financial Ratios and Operating Metrics Compared to the Appropriate Industry Norms

All figures can be graphed and exported to Excel or PDF.


HOW TO USE THE BENCHMARKING DATA This report and the benchmarking portal have been designed to help business-to-business software and SaaS companies compare their own performance and operations to that of similar companies. The statistics in this report represent broad performance “yardsticks” against which a company's performance and business practices can be assessed. Most Benchmarks Reported as Median Figures Most of the results included in this study are reported on the basis of medians rather than arithmetical averages or means. Unlike the mean, the median is not distorted by a few unusually high or low values that may exist in the sample due to special circumstances. The “median” value represents the mid-point of the data for a particular measure, with one-half of the firms reporting figures above it and one-half below. Each median was computed independently based on the companies that reported for that item. As a result, mathematical relationships do not always exist when different ratios are used together in the calculation.

Smallest Number Largest Number Reported Typical Reported È È È

Lower 25% of Reported Figures

Middle 50% of Reported Figures (or Middle Range)

Upper 25% of Reported Figures

Ç Median We did not use numbers if they were not reported in accordance with the survey instructions and definitions. In cases where the data reported was considered inadequate for the computation of a meaningful figure, blank spaces appear in the tables or an insufficient data (*) notation is included. Every Benchmark is Computed Separately Each benchmark is computing separately, meaning that each benchmark is an independent benchmark. So, for example, one company’s operating expense ratios will add up to 100% of total operating expense, the benchmark for Sales and Marketing expense, plus the benchmark for R&D expense, plus the benchmark for G&A expense, etc. will not necessarily add up to 100 as each expense ratio is computed as an individual benchmark. SURVEY METHODOLOGY This survey was fielded during the spring and summer of 2015 to collect information about financial performance and key business metrics. The benchmarks included in this report are generated from OPEXEngine’s nineth annual operating survey and covers data from fiscal year 2014. OPEXEngine primarily benchmarked Business-to-Business Software Companies that achieved recognized revenue between $1 million and $300 million in 2014. Respondents participated via


an online, secure survey form hosted on OPEXEngine’s secure server. All responses were transmitted directly to OPEXEngine’s server, and no one outside of OPEXEngine and its direct agents ever had access to the confidential data submitted for this survey. Once the responses were collected, a confidential company identification code was assigned to each participant. The data were then edited by OPEXEngine’s financial analysts for accuracy and consistency. Statistical processing was performed on all data to insure statistical validity and to produce the financial ratios and operating statistics contained in this report.

DISCLAIMER The statistical information contained in this report is believed to be representative of the companies responding to the survey. All reasonable efforts were taken by OPEXEngine and its agents to assure data comparability within the limitations of accounting reporting procedures. However, the data used in this report are not necessarily based on audited financial statements and the statistical validity of any given number varies depending upon sample sizes and the amount of consistency among responses for that particular ratio. OPEXEngine and its agents, therefore, make no representations or warranties with respect to the results of this study and shall not be liable to clients or anyone else for any information inaccuracies, or errors or omissions in contents, regardless of the cause of such inaccuracy, error or omission. In no event shall OPEXEngine or its agents be liable for any consequential damages. ABOUT OPEXENGINE OPEXENGINE is the trusted leader in Software and SaaS benchmarking. The survey and metrics have been developed and refined each year since 2006 through consultation with leading software CEOs and CFOs. 47% of OPEXEngine’s clients over the past 8 years have either been acquired, acquired another company, or IPO’ed.

Data-driven companies use OPEXEngine benchmarks to identify the best models for fast growth and transition thru M&A and IPO.

OPEXEngine donates 5% of its income to children’s charities.

For more information about our benchmarking, see www.opexengine.com or call at: 617-674-4218.

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