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What are some good financial and operating metrics for a SAAS company?

I am interviewing for a position at a SAAS company and I know they will probably ask for what I might consider good metrics to use.

Can I get some suggestions on some key financial and operating metrics?

Thank you!

 

Answers

Topic Expert
Doug Thompson
Title: Director of Revenue
Company: Castlight Health
(Director of Revenue, Castlight Health) |

http://www.forentrepreneurs.com/saas-economics-1/

http://www.forbes.com/sites/jjcolao/2012/10/02/running-a-saas-business-answer-these-four-questions/

Topic Expert
Linda Wright
Title: Consultant
Company: Wright Consulting
(Consultant, Wright Consulting) |

I can't add anything else to Doug's suggestions, other than to kick the assumptions pretty well and at appropriate intervals.

Derek Quackenbush
Title: CFO
Company: Rising Data Solutions
(CFO, Rising Data Solutions) |

Go to www.forentrepreneurs.com. Great SaaS blog and some spreads you can download as samples. Big things to understand include customer acquisition cost (CAC), customer lifetime value, and time to recoup CAC--the challenge being that hitting the gas on growing a SaaS business can put you in real trouble if these fundamental metrics are out of whack. Good luck.

Ben Murray
Title: Vice President and CFO
Company: Cartegraph
(Vice President and CFO, Cartegraph) |

Lots of blogs out there about this especially David Skok's blog. At a minimum, I would be calculating MRR, ARR, CAC, ACS, and LTV.

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