Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Defining Success in the Subscription Economy: Metrics that Matter

• Discover the Key SaaS KPIs, their underlying drivers and why they matter

• Define the actions your company should take to more effectively manage your subscription business

• Discover why depth well beyond backward looking GAAP based financials is necessary to assess the financial health of a subscription-based business

After attending this event you will be able to:

Learning Objectives

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Welcome to Proformative

Ask, Share, Learn – Within the Largest Community of Corporate Finance Professionals

Defining Success in the Subscription Economy: Metrics that MatterDave Key, Managing Director, Cloud StrategiesMark Gervase, Cloud Financials Strategist, Intacct

Introductions

MARK GERVASECloud Financials Strategist

Intacct

DAVE KEYManaging Director

Cloud Strategies

• Subscription businesses are different

• Managing by metrics– Revenue management– Churn– Revenue acquisition cost– Bottom line metrics

• Actions to take

• Summary and additional resources

Today’s Agenda

“You can’t manage what you don’t measure”

W. Edwards Deming

Why Metrics?

• Profits & revenues are deferred

• Faster growth = lower profits

• Future recurring revenues are forecast from current customers in addition to new customer sales

Subscription Business Differences

High growth/Short-term losses

0% 20% 40% 60% 80% 100% 120% 140% 160% 180% 200%

-60%

-50%

-40%

-30%

-20%

-10%

0%

10%

20%

30%

40%

Growth vs. Profit for Public SaaS Com-panies

Annual Revenue Growth

Net

Incom

e

Zendesk

Marketo

(Size of Bubble = Price/Revenue Ratio)

Workday

Success Must Be Measured Differently

• Assess the metrics

• Analyze trends

• Benchmark against peers

Optimize the business

Steps to Subscription Optimization

• Revenue

• Churn

• Cost of Subscription Services

• Revenue Acquisition Costs

• “Bottom Line” Metrics

Key Focus Areas

Thank you for your interest in this presentation. View the on-demand webinar or download the full

presentation at:www.Proformative.com

Defining Success in the Subscription Economy: Metrics that Matter