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SaaS Financial Impact Research Report...SaaS Financial Impact Research Report The Impact of a...
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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: [email protected]
Phone: (415) 754-9510