kellblog.com · 2018-05-10 · 2947d

Understanding Billings vs. Revenue: SaaS Financial Metrics Explained

This article explains the difference between billings and revenue in SaaS companies, demonstrating how financial analysts use external metrics to estimate internal performance. The author argues that while billings helps investors see through revenue smoothing, it has significant limitations including dependence on contract duration and inability to distinguish between new sales and renewal strength.

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Metrics in this report

SaaS Revenue Valuation Multiple

2-4x

multiple relative to on-premises

SaaS companies vs on-premises software valuations