Rule of 40 is a long standing metric used by investors to determine the health and enterprise value of a SaaS company, that is misunderstood far too often - so CAC and Growth dedicated an episode to how the Rule of 40 is calculated and how it impact company valuations including:

• Calculation formula
• Best variable for the operating profitability component
• Balance of growth and profitability yielding the highest valuation multiples
• When does the Rule of 40 become valuable versus a vanity metric

If you are a SaaS operator or a public SaaS company investor, this episode covers and important topic and is a great listen!

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Presenting performance metrics at a board meeting is a critical skill for every SaaS CEO, CFO and executive team member - Dave "CAC" Kellogg and Ray "Growth" Rike share a few best practices during this episode including:

• First slide provides a holistic executive summary
• Second slide establishes the foundation for every other slide
• The importance of showing trends and establishing context
• Mistakes to avoid

This episode encapsulates much of the content from two different presentations shared at SaaStr annual 23' and SaaS Metrics Palooza 23'

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SaaS metric benchmark trends over the last decade highlights the challenges associated with the rapid expansion and evolution of the B2B SaaS industry. Some of the significant changes that every SaaS industry stakeholder should understand include:

• Expansion as a % of Revenue Growth
• Gross Churn Rate
• Net Revenue Rate
• Customer Acquisition Cost Ratio (cost of acquiring a $ of Growth ARR - New and Expansion)
• Rule of 40
• ARR per FTE

Matt Harney - at Cloud Ratings did a great job at putting this report together and we highly recommend everyone take a look at: cloudratings.com/saas-benchmarks-historical/ to follow along with Dave "CAC" Kellogg and Ray "Growth" Rike as they break down the top findings and insights from this SaaS Metrics Benchmarks longitudinal report.

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Dave "CAC" Kellogg and Ray "Growth" Rike discuss all things Bookings, Total Contract Value, Annual Contract Value, Billings and revenue including:

• Bookings vs Total Contract Value vs Annual Contract Value
• Billings - more than an invoice?
• Revenue - CARR, ARR and GAAP

B2B SaaS companies regularly use the above terms, but unfortunately not always consistently defined, calculated and/or utilized.

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Dave "CAC" Kellogg and Ray "Growth" Rike dive deep into the ICONIQ | GROWTH 2023 - The New Era of Efficient Growth Report to discussed several key report components including:

• Enterprise Five Metrics
• Resiliency Rubric
• Trade-off between Growth and Efficiency
• Expansion vs New Logo contribution to New ARR
• Operating Expenses as a % of Revenue
• Benchmark utilization cautions, concerns and insights

Go grab the ICONIQ | Growth Report - take it for a read while listening to this episode to see if some of the key points Dave and Ray make resonate with your own personal perspectives.

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Dave "CAC" Kellogg and Ray "Growth" Rike continue their discussion on the importance of measuring revenue retention. This week they cover Net Revenue Retention (NRR) - a top three B2B SaaS Metric. '

During this episode they cover many aspects of how to calculate and use Net Revenue Retention including:

• Cohort method versus formula method
• The impact of Usage-Based Pricing on the NRR calculation
• NRR benchmarks using a Good, Better, Best framework
• Ideas on how to optimize and increase NRR

In addition, Dave and Ray answer three audience submitted questions - fulfilling their goal to address the questions that the B2B SaaS industry has about everything SaaS!

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On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss four SaaS metrics from the Klaviyo S-1 including:

• Annual Recurring Revenue (ARR)
• CAC Payback Period
• Gross Revenue Retention (GRR)
• Net Revenue Retention (NRR)

This conversation covers many of the nuances of SaaS metrics and uncovers the lack of a standard way that even the best companies define and calculate SaaS metrics

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On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss Gross Revenue Retention (GRR), aka Gross Dollar Retention (GDR), and the different nuances to consider when calculating this metric.

In addition, Dave and Ray discuss why this metric is important, how to calculate GRR and how to use the results to inform decision making.

The Metrics brothers discuss the following nuances of calculating Gross Revenue Retention

• The definition of GRR
• Cohort vs Formula Method
• What to exclude and include in GRR
• How is GRR impacted by Product Led Growth and/or Usage-Based Pricing environments
• How does Churn and GRR compare...are they the same thing?
• GRR vs NRR - which is most important?

If you love the nuances and details of SaaS Metrics - this is a thought provoking episode that highlights the nuances to consider when calculating Gross Revenue Retention

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On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss Customer Lifetime Value, and the different input variables required to calculate this compound, multi-variable metric.

The Metrics brothers discuss the following nuances of calculating Customer Lifetime Value

• The basics - CLTV or LTV
• Revenue or Gross Profit
• Which number to use for churn in the formula (GRR, Logo Churn, all ARR or only available to renew ARR)
• Which number to use for the Average Revenue Per Account (ARPA) - new customers only or all customers

If you love the nuances and details of SaaS Metrics - this is a thought provoking episode that highlights the important of gaining alignment of the CLTV and CAC metrics in your B2B SaaS company

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On this episode, Dave "CAC" Kellogg and Ray "Growth" Rike discuss in detail how Usage-Based Pricing (UBP)  impacts the calculation of Customer Acquisition Cost and it's efficiency derivatives including CAC Ratio and CAC Payback Period.

They discuss the three primary different types of Usage-Based Pricing Models including:

• Pure usage-based or consumption-based pricing with no minimum commitments
• Minimum commitment agreement that includes up to #x units and then overage $/unit over the minimum
• Annual Subscription agreement to the platform and a $/unit of usage in addition to the annual subscription

Each of the above models can impact what is consider Annual Recurring Revenue (ARR), Variable Recurrring Revenue (VRR) and/or pure variable revenue - and that will accordingly impact the CAC efficiency metric calculation methodology.

If you love the nuances and details of SaaS Metric and how emerging GTM models impact traditional metrics calculations - this episode is for you!

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