tomtunguz.com – In ServiceNow’s Q1 Investor presentation are the first semblances of SaaS metrics in public company reporting. If you sift through the 40+ public SaaS businesses, you won’t find mention of annual recurring revenue, churn, account expansion, or cash collection cycles in most of them – even though these are the the metrics the management teams employ to evaluate and steer their businesses.
ServiceNow hasn’t published metrics on ARR or payback period, which for most public investors are still esoteric terms. Instead they frame their growth in three parts, familiar to SaaS operators everywhere: land + expand + retain. The image above shows Q1’s triptych of new customer additions, expansion as a percentage of new quarterly bookings and quarterly dollar revenue retention.
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