March 31, 2025
In this episode of SaaS Conversations, Katherine Zhang, CEO and General Manager of OPEXEngine by Bain & Company, shares expert insights on building a high-impact RevOps function.
Reporting of the Remaining Performance Obligation (RPO) SaaS metric began with the adoption of ASC 606. In this guest post from Eric Mersch, he explains how this SaaS metric is calculated as the sum of Deferred Revenue and Backlog and why it has become an important indicator of SaaS financial performance.
Customer acquisition cost (CAC) is arguably one of the most important metrics for fast-growing B2B SaaS companies. It measures how much it costs to acquire a new customer and is a key factor in determining the profitability of a business. In this blog post, we will discuss how B2B SaaS CFOs can effectively calculate and monitor these costs, while identifying ways to establish if their financial efforts are in line with relative sources.
Recruiting, hiring and retention of productive employees is critical for SaaS companies. An area that I don't think gets enough attention from any company is the qualification and interview process for new hires. Especially in 2022's competitive, inflationary environment, improving this process is both cost-effective and necessary for almost every company. Dave Kellogg, an amazingly thoughtful CEO and advisor provides interviewing best practices - focusing both on what the organization needs to do to prepare and then the interview process itself.
In the right situations, a Product Led Growth Model can be a viable strategy for software companies. However, it’s important to be aware of the potential pitfalls so you can avoid them and maintain your focus on what’s best for your product and customers. In this guest post by Chris Mele, he evaluates the PLG model, and how software companies can do due diligence before implementing a Product-Led Growth Strategy.
R&D is the backbone of any SaaS company, yet to many CFOs, it is still a black box. Most companies track R&D as a % of revenue, and maybe a few metrics about activity, but few CFOs can answer the question of what’s the ROI on their R&D investment. Perhaps even more importantly, what are the levers for improving R&D ROI? How can Finance and Engineering management work together to diagnose weak areas, and shift R&D resources to produce better outcomes for the company?
Private equity blew the doors off in 2021: over a trillion dollars was invested last year by global private equity firms and almost a trillion dollars was returned in exits. The technology and specifically the software and SaaS sector represented 25% of the value invested and 31% of the number of deals. According to new Bain & Company research, over 50% of software deals returned 2.5x or more to investors. Bain also predicts that SaaS and software multiples will continue to be high in 2022 – read more here from Bain’s research on how Private Equity keeps winning in Software.
In the first 10 years of the SaaS industry, US SaaS companies didn’t need to go overseas to build highly valuable companies. But that dynamic has changed in lockstep with the growth of the SaaS market. Gartner forecasted that global spending on SaaS applications is easily going to exceed $1Trillion by the end of the decade—if not sooner – and expanding SaaS markets around the world is a big part of that growth.
Over the last three years, start-ups have raised funding every 15 months. As your SaaS company grows in complexity and expectations, you reach a point where manual processes waste time away from analysis, and you struggle to collect and act on your growing range of financial and operating data. At this point, you need to build a FinOps Tech Stack that scales and informs the path to IPO.
Like the benchmarking of any key metric, you will drive operational efficiency and better use of your resources, when you see the variance between your company and your peers at the same stage and with a similar business model. You can then also compare your current metrics against the benchmarks for companies that have already achieved your future goals in order to plot out how to get to your goals.In addition, it is important to understand how you compare to the current performance of peers and leading companies in order to communicate your strategy with investors, stakeholders, and key players within your company.
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