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B2B SaaS Benchmark
2023 Report
PREPARED BY REVOPS SQUARED
Presented by
Special thanks to the 2023 B2B SaaS
Metrics Benchmark Partners
2
B2B SaaS Benchmarks, 2023 Report
During March – May 2023, RevOps Squared, now doing business as
BenchmarkitTM, in partnership with multiple partners spanning B2B SaaS
vendors, Venture Capital, M&A advisory firms, B2B SaaS Advisory Service
companies, CFO outsourcing companies and global B2B SaaS communities
collected data, in aggregate from 1,880 B2B SaaS companies
Our goal was to include “only” those submissions that were of the highest
integrity, and within two standard deviations from the mean whenever
possible. As a result, some participants’ metrics were not included, and
occasionally this resulted in collapsing company size and/or average
contract values into a consolidated segment to eliminate data sparsity
B2B SaaS and Cloud Key Performance Indicators collected include 17 B2B
SaaS metrics, grouped into five distinct categories: 1) Capital Efficiency; 2)
Operational Efficiency; 3) Customer Acquisition; 4) Customer Expansion and;
5) Customer Retention
All data is segmented into cohorts by using the following company
segmentation attributes: 1) Company Size; 2) Average Annual Contract
Value; 3) Distribution Model; 4) Target Customer Market; 5) Solution Type; 6)
Go-to-Market Motion; 7) Primary Financing Source; and 8) Company HQ
location
All data collected is anonymized, aggregated, and normalized to exclude any
outliers that are greater than two standard deviations from the mean. For
context, we have provided some historical benchmarks for 2019, 2020, and
2021.
For illustration purposes, we have also provided select elements of the more
granular, broader and context-based benchmarks that are available in an
interactive session at:
Before Benchmarkit, B2B SaaS benchmarks were collected and published
annually, in an executive report format only. This traditional approach was
valuable for annual planning, and for a single dimensional review
BenchmarkitTM enables you to evaluate how your enterprise value creating
performance metrics measure up to “like” company cohorts is an evolution
of B2B SaaS benchmarks. Cohort-based external benchmarks represent a
combination of factors that best reflect the benchmarks relevant to an
individual company which is critical to: 1) Prepare for a financing event; 2)
Present company performance to investors and board members; 3) Establish
measurable goals and KPI Performance that serves to align the executive
team
We appreciate our partners that helped make the benchmarks available, and
a special thanks to all the participating companies and executives who
invested their time to make this executive report and the benchmarks
available by cohort at
Any questions on the benchmarks, data capture process, or data analysis
can be directed to .
bit.ly/SaaSBenchmarksReport2023
bit.ly/SaaSBenchmarksReport2023 - go to menu,
select benchmarks - embedded SaaS Performance CY-23
ray@benchmarkit.ai
RevOps Squared 2023 Benchmark
Research Summary
3
B2B SaaS Benchmarks, 2023 Report
Benchmark Summary
Growth rates decreased in 202
Rule of 40 experienced a reduction in 202
CAC Payback Period saw a slight increase due to reduced
close rates in 2H’22 and lower new ARR
Net Revenue Retention was level to 2022, while Gross
Revenue Retention experienced a slight increase
Growth rates in 2022 decreased to a median of 30% for the
entire population. Growth rates decreased in 2H’22 due to
decreased win rates, longer sales cycles, and the
increasingly cautious capital environment
After experiencing a strong increase in 2021, the Rule of 40
decreased reflecting the reduced growth rates in 2022 and
the delayed, meaningful decrease in operating expenses
until 1H’23
CAC Payback Period is directly impacted by the velocity of
new ARR which experienced a reduction in 2H’22 and
operating expense reductions did not keep pace until late
Q4’22 and Q1’23
Net Revenue Retention Rates continued to be a top priority
in 2022, though it appears that expansion ARR experienced
the same reduced velocity and win rates in 2H’22 that
impacted New ARR.
39%
FY19
42%
FY21
23%
FY20
30%
FY 22
Growth Rate
16
18
19
17
CAC Payback Perio
(# of months)
25%
FY19
15%
FY20
42%
FY21
25%
FY22
Rule of 40
Net Revenue Retention &
Gross Revenue Retentio
Gross Revenue Retention
Net Revenue Retention
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B2B SaaS Benchmarks, 2023 Report
FY19 FY20 FY21 FY22
103%
87%
104%
87%
105%
87%
105%
89%
FY19 FY21
FY20 FY22
1
Rule of 40,
Growth Rate,
and EBITDA
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B2B SaaS Benchmarks, 2023 Report
50%
40%
30%
20%
10%
0
FY19 FY21
FY20 FY22
Rule of 40 FY19 - FY22
Rule of 40 Insight
Rule of 40 benchmarks for the entire population decreased
in 2022 across the majority of cohorts
Rule of 40 was driven by a decrease in growth rates versus
2021, and also by decreased EBITDA across the total
population of participants
EBITDA pressures increased in the scaling stages of
companies ($5M-$100M), and increased significantly in the
>$100M ARR cohort
In contrast, between January 2022 and June 2023 the Rule
of 40 correlation to public B2B SaaS companies Enterprise
Value:NTM Revenue multiples has experienced large swings
as measured by R-Squared:
Rule of 40 R2
January 2022 .14
July 2022 .38
January 2023 .44
June 2023 .17
25%
15%
42%
25%
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B2B SaaS Benchmarks, 2023 Report
Rule of 40
Rule of 40 insights cont
Rule of 40 is often artificially elevated by the higher growth
rates found in the <$5M ARR cohort. As such, Rule of 40 is
not an instructive metric for this cohort. Product-market fit
is the priority in this cohort, with an initial focus on customer
acquisition repeatability and then revenue growth efficiency
as companies scale from $5M-$10M and above
Rule of 40 is pressured in the “scale stage” of growth which
is reflected by the lower results in the $5M-$50M ARR
cohorts
Rule of 40 results in the $5M-$20M have the largest
variance between 25th percentile and 75th percentile which
highlights the increasing differences in those companies
which find the balance between product-market fit,
repeatable growth and, thus, growth efficiency.
Rule of 40 Formula
Year over Year Growth Rate (%) Free Cash Flow1
(%)
n=569
Rule of 40 by FY22 Revenue
1 EBITDA can be used in place of Free Cash Flow
25%
60%
-20%
20%
40%
-40%
0
ARR $5-20M $50-100M$1-5M $20-50M >$100M TOTAL
50%
-28%
42%
-9%
28%
5%
46%
25%
43%
29%
42%
-7%
30%
20% 23%
32% 31%
25%
Median
Total Median
asf
75th Percentile
25th Percentile
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B2B SaaS Benchmarks, 2023 Report
Rule of 40
Rule of 40 insights cont
The Rule of 40 is not as correlated to Annual Contract Value
(ACV) as it is to company size
The $5K-$10K ACV results were biased by the small number
of companies in the cohort, which exhibited a larger
deviation than in most segments
Based upon an R-Squared analysis, there was not a
significant correlation between ACV and Rule of 40
The Rule of 40 is a hallmark of a B2B SaaS company’s
enterprise value, which has traditionally been based upon a
multiple of the next twelve months (NTM) revenue, versus
the traditional price-to-earnings ratio used in more mature
industries and markets.
n=569
Rule of 40 by FY22 ACV
Median
Total Median
asf
75th Percentile
25th Percentile
9
B2B SaaS Benchmarks, 2023 Report
25%
60%
-20%
20%
40%
-40%
0
ACV $5K-10K $25K-50K<$5K $10K-25K >$100K TOTAL
50%
-10%
30%
23%
-36%
16%
42%
20%
30%
33%
25%
28%
50%
7%
25%
42%
-7%
25%
Rule of 40
Growth Rate Insight
Growth rates fell from the hyper growth levels in 2021 and is
closer to the reduced levels of growth experienced in 2020.
Growth rates decreased across every company size with a
median growth rate of 30% in 2022 versus 42% in 2021
Growth rates were most challenged in the $20M-$50M
cohort which represents the segment with the highest
growth efficiency metrics across the board
Analyzing the growth rate benchmarks should be done
based upon similar like companies that share your company
attributes — not just against competitors, rather all
companies with a similar size, annual contract value,
distribution model and target customers.
Company Growth Rate FY19-FY22
n=690
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B2B SaaS Benchmarks, 2023 Report
50%
40%
30%
20%
10%
0
FY19 FY21
FY20 FY22
39%
23%
42%
30%
Company Growth Rate
30%
Growth Rate Insights cont
Company growth rates across all segments faced
headwinds, including the pullback in SaaS spending in
2H’22 and continuing into 1H’23
Unlike 2021, in 2022 companies in the $50M-$100M range
did not see a re-acceleration of growth when compared to
those companies in the $20M-$50M ARR range
Measuring and optimizing CAC efficiency metrics in
combination with an increased focused on expansion ARR
as a percentage of total growth ARR is prudent in 2023
Growth rates returned in Q2’23 to be the top metric
impacting enterprise value after losing the top correlation
spot to Rule of 40 in Q4’22 as measured by R-Squared.
Growth Rate R2 to Enterprise Value
Q2 2022 .41
Q2 2023 .31
Rule of 40 R2 to Enterprise Value
Q4 2022 .44
Q2 2023 .17
Company Growth Rate by FY22 Revenue
120%
90%
60%
<$1M
ARR $5-20M $50-100M$1-5M $20-50M >$100M TOTAL
30%
0
100%
10%
100%
20%
57%
19%
50%
12%
58%
20%
34%
20%
75%
15%
50%
40% 32% 30%
24% 21%
30%
n=690
Median
Total Median
asf
75th Percentile
25th Percentile
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B2B SaaS Benchmarks, 2023 Report
Company Growth Rate
Planned 2023 Growth Rate Insight
It was widely reported that leading into 2023 companies
were aggressively planning for reduced growth rates and
reduced operating expenses to extend cash runways
It was interesting to see that even though it was common to
see reductions in Marketing and Sales expenses, that every
segment except for companies in the <$1M ARR and
>$100M ARR segments planned for similar or higher growth
rates in 2023
We will be launching a micro survey in July 2023 to capture
1H’23 actual growth rates. But across 1,880 companies that
participated in this year’s research, seeing level or higher
growth rates was the most surprising finding.
Planned Growth Rate by Revenue
2022 Actuals
2023 Plan
60%
50%
40%
30%
20%
10%
0
50%
35%
32%
26%
24%
55%
40%
30%30%
17%
21%
45%
30%
<$1M
ARR $5-20M $50-100M$1-5M $20-50M >$100M TOTAL
n=690
35%
12
B2B SaaS Benchmarks, 2023 Report
Planned Growth Rate
2
Customer Acquisition
Benchmarks
13
B2B SaaS Benchmarks, 2023 Report
CAC Payback Period Insights
CAC Payback Period:
Sales and Marketing Expenses 12
New CARR Gross Margin
CAC Payback Period across the entire population increased to
17 months at median representing a one month increase from
last year’s benchmark
CAC Payback Period is specific to new customer logo
acquisition and is not impacted by existing customer
expansion ARR
CAC Payback Period is most highly correlated to annual
contract value and Sales and Marketing expenses
Due to the different mix of companies participating in each
year’s benchmarking research, it is important to analyze CAC
Payback Period by both ACV and company size.
CAC Payback Period FY19 - FY22
20
15
10
5
0
FY19 FY21
FY20 FY22
18 mo. 19 mo.
16 mo. 17 mo.
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B2B SaaS Benchmarks, 2023 Report
CAC Payback Period in Months
CAC Payback Period Insights Cont
CAC Payback Period should not be viewed as an average or
median across the entire population as Annual Contract Value
is the attribute that has the highest correlation to the median
result
Common wisdom that suggests the target CAC Payback
Period is “12-months” is outdated and void of the context that
makes this metric valuable
CAC Payback period should be evaluated in combination with
the New CAC Ratio, Customer Lifetime Value and Gross
Revenue Retention to determine the efficiency of acquiring
and then retaining a segment of customers
Segment-based analysis of CAC Payback Period by not only
ACV but also customer segment and geographic region will
give additional insights into a company’s customer acquisition
and associated retention efficacy.
CAC Payback Period by FY22 ACV
17
36
30
24
18
12
6
0
ACV <$5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
18
9
CAC Payback Period in Months
16
7
21
8
19
12
31
17
36
24
24
12
12
10
16 17
19
32
17
n=544
15
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
CAC Payback Period Insight
CAC Payback Period exhibits some level of correlation to
company size which is reflected in the CAC Ratios segmented
by company size
CAC Payback Period should always be calculated on a Gross
Margin adjusted basis
CAC Payback Period can fluctuate month over month in
enterprise and commercial markets if one month or one
quarter includes a few deals that are well outside of normal
ACV ranges, such as an elephant deal that is 2x–3x the
average ACV
CAC Payback Period is best measured over a rolling three, six
and twelve month time frame to normalize any single month
or quarter’s exceptions.
CAC Payback Period by FY22 Revenue
CAC Payback Period in Months
17
30
24
18
12
6
0
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
16
8
20
12
21
10
25
14
29
17
27
12
24
12
12 14
17 18
24 24
17
n=544
16
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
Customer LTV to CAC Ratio Insights
Customer LTV:CAC Ratio
Customer Acquisition Cost
ARPA Gross Margin Churn Rate
Common wisdom developed five to ten years ago suggested
that a 3X result is a target CLTV:CAC Ratio
Over the past three years, the benchmark across the total
population has ranged between 3.6x–4.2x
Company Size (ARR) nor Annual Contract Value (ACV) has a
material impact on this metric
A key to this metric is that at least one to two agreement
renewal cycles should have past to establish a more reliable
churn rate across renewal periods.
CLTV:CAC Ratio by FY22 Revenue
3.6
8
6
4
2
0
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
5.6
3.0
5.0
2.4
5.7
3.0
7.0
2.1
4.0
3.5
5.2
2.3
5.0
2.3
CLTV CAC Ratio
4.0
3.2
4.0 3.8 3.8 3.0 3.6
n=452
17
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
Customer LTV to CAC Ratio Insights cont
Customer Lifetime Value (CLTV) to Customer Acquisition Cost
(CAC) ratio is widely varied based upon ACV in this year’s
benchmark reports
Customer Lifetime Value is a multi-variable metric that
requires a granular understanding of Average Revenue Per
Account (ARPA), Average Customer Acquisition Cost, churn
rate and gross margin. This multi-variable structure makes the
CLTV:CAC Ratio a favorite of investors due to its inclusion of
acquisition, retention, expansion and product delivery efficacy
metrics
Understanding the two to three leading indicators that
directly impact the lagging indicators included in this metric is
critical to increasing a company’s CLTV:CAC Ratio.
n=542
CLTV:CAC Ratio by FY22 ACV
3.6
8
6
4
2
0
ACV $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
5.0
2.8
5.7
4.0
6.5
4.0
4.0
3.0
5.0
2.3
4.0
2.0
5.0
2.3
CLTV:CAC Ratio
3.2
5.0
5.8
3.5 3.0 3.5 3.6
18
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
CAC Ratio Definitio
CAC Ratio measures the efficiency of:
Acquiring new customer AR
Expanding existing customer AR
Growing ARR excluding down-sells and chur
The two CAC Ratios included in this report are:
CAC Ratio is an alternative revenue efficiency metric to the
SaaS Magic number as it provides a more granular and
segmented perspective on the efficiency of New Customer
ARR vs. Existing Customer Expansion ARR
It is interesting to note that “Blended CAC Ratio” slightly
decreased while “New CAC Ratio” increased which reflects
the findings in the Expansion ARR vs. New ARR as a
percentage of total growth ARR — where expansion ARR was
a higher contributor in 2022 at a lower cost.
$2.00
$1.50
$1.00
$0.50
$0
CLTV:CAC Ratio FY19 - FY22
Blended CAC Ratio
Sales and Marketing Expenses
New Customer ARR Expansion ARR
New CAC Ratio
Sales and Marketing Expenses
New Customer ARR
$1.12
$1.36
FY19
$1.56
$1.35
FY20
$1.76
$1.32
FY22
$1.58
$1.36
FY21
Blended CAC Ratio
New CAC Ratio
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B2B SaaS Benchmarks, 2023 Report
CLTV:CAC Ratio
Blended CAC Ratio Insight
Blended CAC Ratio is the inverse of the SaaS Magic Number,
and only includes the expenses required to acquire one dollar
of new ARR from a new customer and a dollar of ARR growth
from an existing customer, thus not including the impact of
down-sells or churn
The Blended CAC Ratio provides an easy to understand
metric that tells you “how much Sales and Marketing
expense” is required to add $1 ARR from the combination of
new customer acquisition and existing customer expansion
Blended CAC Ratio is traditionally the highest as companies
traverse the growth phase of $20M-$50M ARR, often in
correlation to the need to expand into new customer
segments, geographic markets and/or introduce new
products
Due to the higher CAC Ratios experienced when first entering
new markets, calculating CAC Ratio on a segment by segment
basis, such as Enterprise vs SMB is required to understand
the efficiency of each market segment.
Blended CAC Ratio by FY22 Revenue
n=288
$1.32
$2.00
$1.80
$1.60
$1.40
$1.20
$1.00
ARR $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
$1.70
$1.32
$1.50
$1.03
$1.67
$1.21
$1.73
$1.26
$2.00
$1.11
$1.70
$1.04
$1.66
$1.21
$1.43 $1.48 $1.53
$1.32
20
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
Blended CAC Ratio
Blended CAC Ratio Insights Cont
Blended CAC Ratio is traditionally higher when the Average
Annual Contract Value (ACV) increases, which is reflected in
this year’s benchmarking research
The expense required to acquire a dollar of ARR in higher ACV
segments increases, which is typically off-set by higher
Customer Lifetime Value and higher retention rates
Since Blended CAC Ratio is a compound growth efficiency
metric, it is important to also calculate the New CAC Ratio
and Expansion CAC Ratio
CAC Ratio is not typically calculated on a Gross Margin
adjusted basis, but as a company scales to $50M ARR,
understanding the contribution for each dollar of growth ARR
after accounting for COGS is a next level metric to calculate.
Blended CAC Ratio by FY22 ACV
n=288
$1.32
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
ACV $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
$1.32
$1.00
$1.10
$0.50
$1.70
$1.22
$1.81
$1.29
$2.38
$1.66
$2.90
$1.53
$1.70
$1.04
$1.04 $1.03
$1.47 $1.58
$1.89
$1.70
$1.32
21
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
Blended CAC Ratio
New Customer CAC Ratio Insight
New CAC Ratio tells you how much Sales and Marketing
expense is required to add $1 ARR from new name customers
New CAC Ratio increased across the board in 2022, with a
median at $1.76, which is an increase of $0.16 (10%) over the
previous year
New CAC Ratio typically increases as companies cross $20M
ARR, often in correlation to the need to expand into new
customer segments, geographic markets, and/or introduce
new products
Due to the higher CAC Ratios when first entering and/or
scaling new markets, calculating the New CAC Ratio on a
segment-by-segment basis, such as Enterprise vs. SMB is
highly instructive to understand the efficiency of acquiring
new customer ARR in new markets.
New Customer CAC Ratio by FY22 Revenue
n=144
$1.76
$3.00
$2.50
$2.00
$1.50
$1.00
ARR $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
$2.21
$1.60
$1.76
$1.22
$2.11
$1.04
$2.93
$1.42
$2.45
$1.75
$2.78
$1.30
$2.00
$1.50 $1.61
$1.75
$1.97
$1.76
22
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
New Customer CAC Ratio
New Customer CAC Ratio Insights cont
The New CAC Ratio typically trends higher based upon the
Average Annual Contract Value (ACV)
This year, the $10K-$50K cohort has a lower New CAC Ratio
than the $5K-$10K ACV segment, which is reflective of the
challenges in the $5K-$10K ACV cohort
New CAC Ratio for higher ACV segments should be analyzed
in concert with Customer Lifetime Value (CLTV), Gross
Revenue Retention, Net Revenue Retention and CLTV:CAC
Ratio. This comprehensive approach provides a more rounded
picture to determine if increasing investments to acquire
higher ACV deals provides increased CLTV returns
Experimenting with lower cost customer acquisition methods,
including Product-Led Growth or simply lower cost, inside
sales or even full cycle Account Executives instead of the SDR
+ AE model can result in reducing the New CAC Ratio.
New Customer CAC Ratio by FY22 ACV
n=144
$1.76
$3.00
$2.50
$2.00
$1.50
$1.00
ACV $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
$1.87
$1.00
$1.91
$1.30
$2.05
$1.26
$2.32
$1.07
$2.80
$1.42
$2.61
$1.88
$2.78
$1.30
$1.45
$1.76 $1.68 $1.62
$1.73
$2.00
$1.76
23
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
New Customer CAC Ratio
SaaS Magic Number Insight
SaaS Magic Number is a traditional SaaS Performance Metric
that measures the overall efficiency of ARR growth.
Magic Number
Current Qtr ARR Previous Qtr ARR
Previous Qtr Sales and Marketing Expenses
Unlike the Blended CAC Ratio which measures the efficiency
of “New Growth” as measured by New Customer ARR Growth
and Existing Customer Expansion Growth without including
the impact of down-sells or churned ARR, the SaaS Magic
Number includes the impact of churned ARR and down-sell
ARR
The reason the Blended CAC Ratio is our preferred ARR
growth efficiency metric is it best enables executives to
understand how much Marketing and Sales investment is
required to acquire one dollar of new ARR or expansion ARR
The traditional SaaS Magic Number minimum threshold is
0.75, which says that $1.00 of Sales and Marketing
investment is required to generate $0.75 of ARR growth.
SaaS Magic Number by FY22 Revenue
n=296
1.20
0.57
2.0
1.5
1.0
0.5
0
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
0.80
1.16
0.52
1.78
0.60
1.20
0.57
1.10
0.73
0.88
0.50
2.00
0.71
0.80 0.80 0.84 0.80
0.57
0.80 0.80
24
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
SaaS Magic Number
SaaS Magic Number Insights cont
The majority of Customer Acquisition Cost efficiency metrics
exhibit a lower efficiency in high value ACV deals, and higher
efficiency for lower value ACV deals
In contrast, the SaaS Magic Number is NOT a customer
acquisition cost efficiency metric, it is an ARR growth
efficiency metric which is impacted by several non CAC
related input variables including
Churned ARR
Down-Sell ARR
Existing Customer AR
The traditional threshold is that the SaaS Magic Number
should be 0.75 or higher to justify incremental investments in
Sales – which essentially says that with $1.00 of Sales and
Marketing investment you can generate $0.75 of ARR growth.
SaaS Magic Number by FY22 ACV
n=296
0.80
2.0
1.5
1.0
0.5
0
ACV $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
2.00
0.80
1.20
0.57
1.50
0.63
0.90
0.52
2.00
0.57
1.07
0.60
1.20
0.57
1.00
0.70 0.73 0.71
0.88 0.80 0.80
25
B2B SaaS Benchmarks, 2023 Report
Median
Total Median
asf
75th Percentile
25th Percentile
SaaS Magic Number
3
Customer Retention
Benchmarks
26
B2B SaaS Benchmarks, 2023 Report
Net and Gross Revenue Retention
Insight
Gross Revenue Retention (GRR) had remained stable over the
last three years, but experienced a 2% increase this year to
89%
Net Revenue Retention across the primary participant cohort
in North America remained level at 105%. The total
population, which included a higher percentage of global
participants this year had a median NRR of 103%
In the following charts on NRR in this report, we use the
United States total population NRR of 105%, though the global
population highlighted NRR at 103%
Per the above, our analysis did highlight that NRR was level
year over year in North America (105%), but was lower in the
rest of world which was the primary contributor to the total
population NRR of 103%.
120%
100%
80%
60%
40%
20%
0
103%
87%
104%
87%
105%
87%
103%
89%
FY19 FY20 FY21 FY22
Gross & Net Revenue Retention FY19 - FY22
Gross Revenue Retention
Net Revenue Retention
27
B2B SaaS Benchmarks, 2023 Report
Gross & Net Revenue Retention
Gross Revenue Retention Insight
Gross Revenue Retention (GRR), also known as Gross Dollar
Retention (GDR) does not traditionally vary materially based
upon company size
However, in earlier stage companies (<$2.5M) we often find
retention rates are inflated due to the lack of 1-2 renewal
cycles being available – as such we suggest that the most
reliable GRR benchmarks begin at the $5M and above
segments
Measuring retention using a revenue based approach (GRR)
versus a logo based approach provides a better picture of
customer retention, especially in ACV levels greater
than $5K-$10K.
Gross Revenue Retention Rate by FY22 ARR
n=588
89%
120%
105%
90%
75%
60%
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
98%
88%
97%
85%
94%
79%
93%
79%
92%
83%
96%
81%
95%
81%
92% 92% 90%
85% 86%
91% 89%
Median
Total Median
asf
75th Percentile
25th Percentile
28
B2B SaaS Benchmarks, 2023 Report
Gross Revenue Retention Rate
Gross Revenue Retention Insights Cont
Gross Revenue Retention (GRR) is more correlated to average
annual contract value (ACV) than company size
ACV’s lower than $5K will typically produce a lower GRR result
than higher value solutions. Interestingly, ACVs between
$10K-$50K do not see a material difference in GRR
Gross Revenue Retention calculations should be calculated
using only those customers that have an agreement available
to renew (ATR). Including all agreements and associated ARR
that is not available to renew in the period of calculation will
produce an artificially inflated GRR calculation.
Gross Revenue Retention Rate by FY22 ACV
n=588
100%
90%
80%
70%
60%
ACV $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
89%
95%
81%
98%
85%
96%
83%
95%
81%
94%
79%
90%
81%
95%
78%
81%
87% 88% 89% 91%
94%
89%
Median
Total Median
asf
75th Percentile
25th Percentile
29
B2B SaaS Benchmarks, 2023 Report
Gross Revenue Retention Rate
4
Customer
Expansion
Benchmarks
30
B2B SaaS Benchmarks, 2023 Report
Net Dollar Retention Insight
Net Revenue Retention (NRR), also known as Net Dollar
Retention (NDR) measures how much ARR there is in a cohort
of customers at the end of an accounting period versus at the
beginning of the accounting period, when their agreement is
available to renew (on not) versus their ARR from a previous
period
Net Revenue Retention is typically an annualized calculation,
and should be calculated on a rolling three, six and twelve
month period
NRR is not materially correlated to company size, as it is with
other variables including go-to-market motion (Product-Led
Growth vs. Sales-Led Growth) and pricing model (pure
subscription versus Usage-Based Pricing)
NRR calculations need to account for the impact of certain
variable such as the ramp time in Usage-Based Pricing
models, requiring a consistent policy for when new customer
ARR ends and existing customer expansion ARR begins.
Net Dollar Retention Rate by FY22 Revenue
n=588
Median
Total Median
asf
75th Percentile
25th Percentile
105%
120%
110%
100%
90%
80%
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
105%
94%
110%
92%
112%
95%
117%
100%
110%
100%
110%
95%
100% 100% 103% 104%
109%
108%
105%
31
B2B SaaS Benchmarks, 2023 Report
Net Dollar Retention Rate
Net Dollar Retention Insights Cont
Net Revenue Retention exhibits a higher correlation to Annual
Contract Value (ACV) than to company size
As ACV increases, the opportunity for expansion is more
prevalent, though not as correlated as GTM motion and
pricing
Another factor in Net Revenue Retention is the breadth of the
product portfolio, the pricing has built- in escalators based
upon usage or product feature
Net Revenue Retention had increased over the past three
years, but remained level in North America in 2022
Net Dollar Retention Rate by FY22 ACV
n=588
Median
Total Median
asf
75th Percentile
25th Percentile
105%
120%
110%
100%
90%
80%
ACV <$1K $1-5K $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
103%
87%
109%
93%
115%
95%
110%
98%
120%
100%
110%
100%
110%
95%
98% 100%
105% 104%
106% 105% 105%
32
B2B SaaS Benchmarks, 2023 Report
Net Dollar Retention Rate
Expansion ARR to Total Growth ARR
Insight
Expansion ARR as a percentage of Total Growth ARR was a
new benchmark last year, so this is only our second year
publishing this benchmark.
Expansion %
Expansion ARR
New ARR Expansion ARR
In 2021, this benchmark represented the historical benchmark
of 30% while this year has increased by 3% to 33% (a 10%
YoY increase)
Moreover, we are seeing that larger companies can gain
operating leverage and increase NRR with their median
contribution of expansion ARR being 42% in the $20M-$50M
cohort and 45% in the $50M-$100M cohort
As expansion ARR is often 2x–3x more efficient to acquire,
expansion ARR is a top priority in this period of the increased
importance of growth efficiency.
Expansion ARR to Total Growth ARR by FY22 Revenue
n=516
Median
Total Median
asf
75th Percentile
25th Percentile
33%
80%
60%
40%
20%
0
ARR <$5M $5-20M $20-50M $50-100M >$100M TOTAL
34%
8%
47%
18%
54%
25%
69%
34%
63%
20%
50%
10%
25%
34%
42% 45%
30% 33%
33
B2B SaaS Benchmarks, 2023 Report
Expansion ARR to Total Growth ARR
5
Operational
Efficiency
Benchmarks
34
B2B SaaS Benchmarks, 2023 Report
72%
Total Gross Margin Insight
Total Gross Margin, which represents the blend of
Subscription Gross Margin and Services Gross Margin is a
hallmark of the cash generation potential of a SaaS business
model
Though services can often stand alone in the value delivered
during the initial deployment of a SaaS solution, especially
technical integrations, data preparation, onboarding and
training, it is often delivered at lower margin levels to increase
the percentage of available budget for ARR
Total Gross Margin is typically lower than Subscription Gross
Margin due to the impact of professional services and the
mix
We did not collect enough “Professional Services Margin”
data this year to publish a separate benchmark, but suffice it
to say that Total Gross Margin at 72% was almost 10% lower
than Subscription Gross Margin, highlighting the downward
pressure of Professional Services margin.
90%
80%
70%
60%
50%
ARR $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
Gross Margin, Total by FY22 Revenue
Median
Total Median
asf
n=448
75th Percentile
25th Percentile
80%
65%
81%
67%
72%
65%
81%
74%
79%
50%
80%
65%
70% 72% 68%
78% 77%
72%
35
B2B SaaS Benchmarks, 2023 Report
Gross Margin, Total
Subscription Gross Margin Insight
Subscription gross margin, which is calculated by dividing the
Gross Profit specific to subscription revenue by the total
subscription GAAP revenue is a hallmark of the potential for
cash generation in the SaaS business model
Subscription Gross Margin is traditionally stable across
company size, though can be dramatically different based
upon the scale of revenue in Usage-Based Pricing model
companies with high compute resources. This is often the
case in big data, machine learning, and AI-centric solutions.
Gross Margin, Subscriptions by FY22 Revenue
n=448
Median
75th Percentile
Total Median
25th Percentile
asf
79%
90%
80%
70%
60%
50%
ARR <$1M $5-20M $20-50M $50-100M >$100M TOTAL
80%
70%
83%
72%
81%
79%
83%
70%
88%
73%
84%
50%
76% 78% 80% 76% 79% 79%
36
B2B SaaS Benchmarks, 2023 Report
Gross Margin, Subscriptions
34%
Sales and Marketing Expense Insight
Sales and Marketing expenses decreased across the entire
population from 36% last year to a median of 34% in this
year’s benchmarks
The $20M-$50M ARR segment experienced the greatest
reduction from 54% in 2021 to 35% at median, highlighting
increased focus on efficiency in 2H’22
In companies that scale above $50M ARR, the Sales and
Marketing expenses will typically increase as a % of revenue,
but need to be viewed in context of both Growth Rate and the
Rule of 40
As such, Sales and Marketing expenses as a percentage of
revenue should be viewed in context of Customer Acquisition
and Customer Expansion efficiency metrics such as the CAC
Ratio, CAC Payback Period and CLTV:CAC Ratio in context of
profitable growth as measured by the Rule of 40.
70%
60%
50%
40%
30%
20%
10%
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
Sales and Marketing Expenses
(% of Revenue)
by FY22 Revenue
Median
Total Median
asf
n=476
75th Percentile
25th Percentile
30%
13%
70%
15%
62%
25%
40%
21%
65%
34%
45%
25%
56%
19%
20%
32%
37% 35%
42% 42%
34%
37
B2B SaaS Benchmarks, 2023 Report
Sales and Marketing Expenses (% of Revenue)
34%
Sales and Marketing Expense Insights
Cont.
Sales and Marketing expenses as a percentage of revenue
does not have a high correlation to the Average Annual
Contract Value (ACV)
A more interesting and granular view of this metric is the mix
of Sales expenses versus Marketing expenses based upon
ACV, which we did not collect in this research
Lower ACV solutions will typically see a higher percentage of
Marketing Expenses, where as in larger ACV solutions,
beginning at $10K ACV the percentage of Sales expenses
compared to the total Sales + Marketing Expenses will be in
the 68-74% range.
70%
60%
50%
40%
30%
20%
ACV <$5k $5-10K $10-25K $25-50K $50-100K >$100K TOTAL
Sales and Marketing Expense
(% of Revenue)
by FY22 Revenue
Median
Total Median
asf
n=476
75th Percentile
25th Percentile
56%
19%
53%
21%
45%
21%
65%
22%
63%
21%
56%
14%
55%
20%
34%
43%
35% 35% 36% 34% 34%
38
B2B SaaS Benchmarks, 2023 Report
Sales and Marketing Expenses (% of Revenue)
31%
R&D Expense Insight
Research and Development (R&D), often referred to as the
development or engineering department, is foundational to
any early-stage SaaS company
As such, for any company with less than $1M ARR, R&D as a
percentage of revenue is not as relevant, especially in
technical-led founder companies, where their salary can have
a significant impact
As companies scale to $50M ARR and above, the R&D
investment is normally in the 21-30% range. In this year’s
research that did not happen until >$100M
This year’s benchmarks show an overall increase in R&D at
median for every segment from $20M-$100M, possibly
highlighting the increased investment in Product-Led Growth
and/or new products to increase Net Revenue Retention
rates.
0%
10%
20%
30%
40%
50%
ARR $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
R&D Expenses (% of Revenue) by FY22 Revenue
Median
Total Median
asf
n=340
75th Percentile
25th Percentile
23%
43%
10%
31%
30%
44%
15%
38%
20%
45%
25%
43%
34%
31%
34%
38%
25%
31%
39
B2B SaaS Benchmarks, 2023 Report
R&D Expenses (% of Revenue)
24%
G&A Expense Insight
General and Administrative expenses as a percentage of
revenue are typically higher in the early stage of a SaaS
company’s evolution, especially when the founder/CEO is
taking a salary
G&A at 24% of revenue at median is consistent with last year’s
benchmarks and reflects the larger percentage of <$20M ARR
companies in the population mix
As companies scale to each subsequent levels of ARR, G&A
will typically normalize in the 14-20% range
One potential impact to G&A as a percentage of revenue is
when expenses such as office, travel, and benefits are
captured in G&A versus at the department level.
50%
40%
30%
20%
10%
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
G&A Expenses (% of Revenue) by FY22 Revenue
Median
Total Median
asf
n=336
75th Percentile
25th Percentile
35%
15%
15%
11%
23%
13%
22%
12%
36%
20%
50%
15%
30%
12%
14%
21%
29%
15%
22%
13%
24%
40
B2B SaaS Benchmarks, 2023 Report
G&A Expenses (% of Revenue)
6
Capital Efficiency
Benchmarks
41
B2B SaaS Benchmarks, 2023 Report
ARR to Capital Raised Insight
Annual Recurring Revenue to Capital Raised is an investor-
centric metric that provides insight into capital efficiency. This
metric should be evaluated in context of the stage of growth,
and the growth rate
The ultimate goal is to have an ARR to Capital Raised ratio
above 1.0 and in a VC-backed company this most often is
reached at the $50M and above range, depending on growth
rates targeted and achieved
In high or hyper growth companies, the return on capital as
measured by ARR to Capital Raised will play a secondary role
to growth rates and Enterprise Value to Revenue multiples
Though there are fairly stable and predictable benchmarks for
ARR to Capital Raised, this is not a metric that operators
should invest a lot of time in regards to operating decisions
beyond Cash Runway and the Burn Multiple.
ARR to Capital Raised Ratio by FY22 Revenue
n=348
Median
Total Median
asf
75th Percentile
25th Percentile
0.69
5.0
4.0
3.0
2.0
1.0
0
ARR $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
2.0
0.21
3.47
0.10
5.0
0.09
0.98
0.16
1.86
0.90
2.5
0.19
0.70 0.38 0.65 0.31
1.10
0.69
42
B2B SaaS Benchmarks, 2023 Report
ARR to Capital Raised Ratio
Burn Multiple Insight
The Burn Multiple, first introduced by David Sacks at Craft
Ventures, is a capital efficiency metric that measures how
much capital is being consumed to grow each dollar of ARR.
Burn Multiple
Net Burn
Net New ARR
Companies that have a burn multiple under 1.0x are typically
viewed as the most capital efficient growth companies, while
those in the 1.0 – 1.5 are still considered good. A burn multiple
above 1.5 is a point of caution and above 2 is typically a
concern to investors
It is rare to find VC-backed companies with a negative burn
multiple and when it does, it is in a rare “bootstrapped”
company that achieves growth rates and the scale typically
found in venture-backed B2B SaaS companies.
Burn Multiple by FY22 Revenue
Median
Total Median
asf
n=280
75th Percentile
25th Percentile
1.4
-8.0
-4.0
0
4.0
8.0
ARR <$1M $1-5M $5-20M $20-50M $50-100M >$100M TOTAL
0.5
3.0
1.0
4.5
0.4
2.0
-0.3
8.0
-8.0
00.5
3.0
1.6 1.4 1.4 1.1
-2.7
1.4
43
B2B SaaS Benchmarks, 2023 Report
Burn Multiple
7
Benchmark Participan
Company Profile
44
B2B SaaS Benchmarks, 2023 Report
Participant Company Profile
Company Profile: Primary GTM Motion Company Profile by Revenue
Sales-led
Product-led <$1m
$1-5m
>$100m
$5-20m
$50-100m
$20-50m
32%
68% 10%
2%
8%
13%
27% 25%
45
B2B SaaS Benchmarks, 2023 Report
Participant Company Profile
Company Profile by ACV
Company Profile by Target Customer
Company Profile by Product Category
>$100k
$50-100k
$25-50k
$10-25k
$5-10k
$1-5k
<$1k
3%
15%
17%
16%
11%
13%
7%
All Target Markets
Mid-market + Commercia
+ Enterprise
SMB + Mid-market
+ Commercial
Commercial
Mid-market + Commercial
39%
5%
9%
4%
16%
SMB 10%
Security
eCommerce
Infrastructure
Horizontal Application
Vertical Industry Application
3%
6%
9%
38%
45%
Company Profile by Pricing Model
Hy
b
rid
,
Su
b
scription
+
U
sage Based
U
sage-
b
ased
P
ricing
Su
b
scription-
b
ased
P
ricing
2
6%
10%
64%
46
B2B SaaS Benchmarks, 2
0
2
3
Report
Participant Company Profile
Company Profile: Region of World
86%
3%
6%
1%
1%
2%
1%
United States
Canada
Europe
Asia
Latin America
Australia & NZ
Middle East
47
B2B SaaS Benchmarks, 2023 Report
8
Interactive
Benchmarking Platform
Overview
48
B2B SaaS Benchmarks, 2023 Report
How to use SaaSKPIBenchmarks.com
SaaSKPIBenchmarks.com
The largest and most comprehensive set
of benchmarks for B2B SaaS companies.
View how your company metrics measure
up to your like-company cohort based on
8 different company profile attributes.
Four steps to see how your company measures up.
49
B2B SaaS Benchmarks, 2023 Report
Step 1: Go to SaaSKPIBenchmarks.com
Step 3: View benchmarks for like-company cohohrt
Step 2: Provide your company profile attributes
Step 4: Overlay your metric(s) value on charts
50
B2B SaaS Benchmarks, 2023 Report
RevOps Squared, now doing business as Benchmarkit™ conducted industry
benchmark research on SaaS Performance Metrics with the explicit
permission and approval by all survey and research participants
Benchmarkit™ has worked with multiple partners to syndicate our research.
The material contained herein is based on sources considered to be reliable;
however, Benchmarkit™ does not guarantee or warrant the accuracy or
completeness of information. This document is for informational purposes
only
This communication is intended solely for the use by the recipient. The
recipient agrees not to forward or copy the information to any other person
outside of their organization without the express written consent of RevOps
Squared LLC dba as Benchmarkit™
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and available additional data and/or advisory services as to how this
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please send all inquiries to
The above report has been re-produced specifically for the Mosaic
audience. We want to share a special thanks to Ray Rike and the rest of the
RevOps Squared and Benchmarkit team for including us in this years report
and allowing us to re-package and reshare this with you—our audience
Be sure to check out for more information.
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Disclosures
51
B2B SaaS Benchmarks, 2023 Report
