SaaS Startup Profitability Template (Sapphire)

	B	D	E	F	G	H	I	J	K	L	M	N
1
2
3
4
5	Inputs (expand rows)
6	Starting ARR ($M)	10
7	Starting YoY Growth Rate	150%
8	Growth Persistence	75%
9	Outer years growth	25%
10	Gross Margin	77%
11	Magic Number	1.0
12	Outer years Magic Number	0.8
13	Depreciation as % of Revenue	2%
14	Capex as a % of Revenue	2%
15	Capitalized Software as % of Revenue	2%
16
17
19	$M	Year 0	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6	Year 7	Year 8	Year 9	Year 10
20
21	ARR	10	25	53	98	160	236	320	405	506	633	791
22	Net New ARR	-	15	28	45	62	76	84	85	101	127	158
23	YoY Growth (75% growth persistence)	-	150%	113%	84%	63%	47%	36%	27%	25%	25%	25%
24
25	GAAP Revenue	6	16	36	72	125	196	275	357	446	570	712
26	GAAP Revenue as % of ARR	55%	63%	68%	74%	78%	83%	86%	88%	88%	90%	90%
27
28	Gross Profit	4	12	28	56	96	151	212	275	343	439	548
29	Gross Margin	77%	77%	77%	77%	77%	77%	77%	77%	77%	77%	77%
30
31	S&M (based on Magic Number)		15	28	45	62	95	105	107	127	158	198
32	R&D		8	14	25	37	49	69	89	111	142	178
33	G&A		5	9	14	25	35	47	61	71	85	107
34	S&M as % of revenue		95%	78%	62%	50%	48%	38%	30%	28%	28%	28%
35	R&D as % of revenue		50%	40%	35%	30%	25%	25%	25%	25%	25%	25%
36	G&A as % of revenue		30%	25%	20%	20%	18%	17%	17%	16%	15%	15%
37	Total OpEx		28	52	85	124	179	220	256	309	386	483
38
39	Operating Income		(15)	(24)	(29)	(28)	(28)	(9)	18	34	53	66
43
46	Income Before Taxes		(15)	(24)	(29)	(28)	(28)	(9)	18	34	53	66
47
48	Provision for Income Taxes		0	0	0	0	0	0	0	2	5	7
49	Tax Rate		0%	0%	0%	0%	0%	0%	2.5%	5.0%	10.0%	10.0%
50
51	Net Income		(15)	(24)	(29)	(28)	(28)	(9)	18	32	47	59
52
53
54
55
56	(*)”The SaaS Startup Profitability Template” provided by Sapphire is for informational purposes only and is in no way intended to constitute investment advice. Although Sapphire has provided and described various assumptions within the model, many other factors may impact any practical outcome that is estimated therein. While Sapphire has used reasonable efforts to present observations from analysis using the internal model presented, Sapphire makes no representations or warranties as to the accuracy, reliability, or completeness of observations presented within this article, analysis, or the model itself. All metrics and observations presented within this article must be considered academic and hypothetical in nature and are in no way guaranteed in actual practice. Such observations are subject to change at any point and do not in any way represent official statements by Sapphire. Further information available upon request.
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106