What is SaaS Revenue Growth Rate?  

SaaS Revenue Growth Rate is the average annual growth rate in a SaaS company’s revenue over a specific period, typically annually or quarterly. 

It is important for any SaaS company to track this metric as it provides essential information on whether or not the company is effectively utilizing its existing customers and also capable of attracting new customers in the future. 

For startups, high revenue growth is a prerequisite to attracting investors and completing investment rounds that will give rise to further office openings and increase their market share.  

To take into account other factors such as the cost of customer acquisition (CAC) and the rate of churn. This approach may influence the balance and level of growth and profit.

To calculate the SaaS revenue growth rate, follow these steps:

1. Determine the SaaS revenue for the period being considered and the previous period. 
2. Take the difference between the revenue from the current period and the revenue from the previous period, and then divide this difference by the revenue of the previous period and multiply by 100 to get the growth rate as a percentage: 

SaaS Revenue Growth Rate = ((Current Revenue – Previous Revenue) / Previous Revenue) * 100.

A ‘good’ SaaS growth rate is not a permanent fixed number and it depends on many factors such as:

• company’s stage
• market conditions
• ARR (Annual Recurring Revenue).   

Early-stage companies need very high growth rates, usually more than 80-100%, to show some form of market traction.  In contrast, mature companies may aim for growth rates of 20-40%.  

Tracking your SaaS revenue growth includes:

1. Create a structure or framework for tracking key business metrics such as Revenu mensuel récurrent (MRR), Revenu annuel récurrent (ARR), Valeur vie client (CLTV)et coût d'acquisition client (CAC). 
2. Keep an eye on complementary metrics such as MRR d'expansion (growth in revenue from existing customers) and churned ARR (revenue lost due to cancelled subscriptions) to get a better understanding of growth drivers and areas for improvement.
3. Use tools such as ChartMogul ou Baremetrics to create a revenue control and reporting framework, which will increase the accuracy and effectiveness of the data. 

For instance, if you notice high churned ARR in a particular customer group, it might be worth looking into the reasons for the churn and implementing effective retention strategies.

Seasonality refers to patterns in customer acquisition and revenue that are dependent on the time of year.  

One possible approach to this issue is to diversify your customer base across different industries and geographical locations. Understanding seasonal trends can affect forecasting and resource allocation, potentially impacting business planning. 

Predicting financial statements, however, continues to be a challenge due to unpredictable markets, making it crucial to analyze them and put into practice flexible strategies.