Scribd Logo
Upload

Welcome to Scribd!

  • 4K views

    Renewals Rates Support Sheet, r1.1

    Uploaded by

    ramblingman
    The document analyzes SaaS renewal rates using various metrics such as count-based, ARR-based, and bookings-based renewal rates as well as a leaky bucket analysis. It also discusses calculating renewal rates when annual price increases are capped versus actual increases and shows the impact on NPV over time with different renewal rates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd

    Renewals Rates Support Sheet, r1.1

    Uploaded by

    ramblingman
    4K views9 pages
    The document analyzes SaaS renewal rates using various metrics such as count-based, ARR-based, and bookings-based renewal rates as well as a leaky bucket analysis. It also discusses calculating renewal rates when annual price increases are capped versus actual increases and shows the impact on NPV over time with different renewal rates.

    Original Description:

    Supporting spreadsheet for Kellblog post on Calclulating SaaS Renewals Rates

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    The document analyzes SaaS renewal rates using various metrics such as count-based, ARR-based, and bookings-based renewal rates as well as a leaky bucket analysis. It also discusses calculating renewal rates when annual price increases are capped versus actual increases and shows the impact on NPV over time with different renewal rates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    4K views9 pages

    Renewals Rates Support Sheet, r1.1

    Uploaded by

    ramblingman
    The document analyzes SaaS renewal rates using various metrics such as count-based, ARR-based, and bookings-based renewal rates as well as a leaky bucket analysis. It also discusses calculating renewal rates when annual price increases are capped versus actual increases and shows the impact on NPV over time with different renewal rates.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 9
    At a glance
    Powered by AI
    The key takeaways are around tracking SaaS renewal rates using different methodologies like count-based, ARR-based, bookings-based as well as performing leaky bucket analysis.

    The key metrics tracked in the leaky bucket analysis are starting ARR, new ARR, churn ARR and ending ARR.

    Renewal rates are calculated based on customers, seats, ARR, and bookings.

    SaaS Renewals Rate Analysis Copyright 2005-2013 Dave Kellogg and licensed under a Creative Commons Attribution-Noncommercial-Share Alike

    3.0 Unite Revision 1.1 Original Contract Date Seats A Price A Price A, subtotal Annual increase cap Renewal Date Seats A Price A Seats B Price B

    7/30/2012 100 $ 1,200 /seat/year 120,000 3%

    (252,300)

    Price A, subtotal Price B, subtotal Total price, 1 year Total price, 3 year Three year discount, % Three year discount, $ Bookings (TCV) ARR ARR from A ARR from B

    Bookings (TCV) ARR

    120,000 120,000

    cial-Share Alike 3.0 United States License

    6/30/2013 80 1,225 /seat/year 40 1,200 /seat/year

    Renewals Rates Count-based, customers Count-based, seats, gross Count-based, seats, net ARR-based, gross ARR-based, net Bookings-based, gross Bookings-based, net Leaky Bucket Analysis Starting ARR New ARR Churn ARR Ending ARR

    100% 120% 80% 103% 69% 310% 208%

    98,000 48,000 146,000 438,000 15% 65,700 372,300 124,100 83,300 40,800

    120,000 40,800 (36,700) 124,100

    Notes: Gross = including expansion Net = excluding expansion Bookings = TCV because we are assuming a prepaid deal

    SaaS Renewals Rate Analysis Copyright 2005-2013 Dave Kellogg and licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unite Here are the key metrics I would track Leaky Bucket Anaysis Starting ARR New ARR Churn ARR Ending ARR Renewals Rates Customers, count-based Seats, count-based, gross ARR-based, gross ARR-based, net Bookings-based, gross

    ommercial-Share Alike 3.0 United States License

    SaaS Renewals Rate Analysis Copyright 2005-2013 Dave Kellogg and licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unite

    Here is a supplement that shows the nuance of annual price upflifts. Arguably, if the contract imposes an increased price ease as opposed to a cap, renewals rates should be calculated off what' Since the differences are relatively small and since most contracts impose a cap as opposed to an actual increase, few people Annual increase cap Multi-year discount Initial price 3% 15% 1,200 Year 1 1,200 1,200 1,020 1,020 Year 2 1,200 1,236 1,020 1,051 Year 3 1,200 1,273 1,020 1,082 Total 3,600 3,709 3,060 3,153

    Flat price Increased price at annual cap Three-year price with discount off flat Three-year price with discount off increased

    cial-Share Alike 3.0 United States License

    d be calculated off what's contractually owed. tual increase, few people calculate it this way.

    % of Flat 100% 103% 85% 88%

    % of Increased 97% 100% 83% 85%

    Copyright 2005-2013 Dave Kellogg and licensed under a Creative Commons Attribution-Noncommercial-Share Alike 3.0 Unite Revision 1.1 Renewal Rate Discount Rate 85% 3% Year 1 100 535 474 641 544 Year 2 85 Year 3 72 Year 4 61 Year 5 52 Year 6 44 Year 7 38

    Value Sum (10 years) NPV (10 years) Sum (20 years) NPV (20 years)

    Value could be either a stream of revenue starting with 100 units or a count of customers decaying with the renewal rate

    Renewal Rate 75% 80% 85% 90% 95% 100%

    Year to Cut in Half 4 5 6 8 15 n/a

    Conclusions/Observations NPV in 10 year 85% renewal scenario is 474 Median lifetime is 6 years NPV in 10 years 90% renewal sceneario is 570 Median lifetime is 8 years

    mercial-Share Alike 3.0 United States License

    Year 8 32

    Year 9 27

    Year 10 23

    Year 11 20

    Year 12 17

    Year 13 14

    Year 14 12

    Year 15 10

    Year 16 9

    ing with the renewal rate

    enewal scenario is 474

    renewal sceneario is 570

    Year 17 7

    Year 18 6

    Year 19 5

    Year 20 5

    You might also like