How to determine which metrics you report on
You are what you report
The SaaS world version of the old “You are what you eat” adage is “You are what you report.”
As a metrics aficionado, I’ve always been fascinated with the game theory behind what companies choose to disclose, and even more so, what they purposefully do not.
For public companies, there are a set of tried and true metrics that you have to report on for Securities and Exchange Commission requirements. And then there’s the other stuff that provides color.
And more specifically, there are metrics that you both disclose and GUIDE towards - meaning you provide a forward looking estimate of where you think you’ll land for the quarter and fiscal year.
What you typically guide (FORWARD looking):
GAAP Revenue (topline)
Non-GAAP Operating Income and Operating Margin (bottom line)
Non-GAAP Fully Diluted Earnings per Share (your bottom line divided by the total number of shares outstanding)
What you disclose (BACKWARD looking)… typically a selection of…
Non-GAAP Gross Margin
ARR
ARR Additions
Remaining Performance Obligation
Billings
Total Customers
Customers over $100K in ARR
Net Dollar Retention
Operating Cash Flow
Non-GAAP Free Cash Flow
Comparing What 20 Tech Companies Report On
Here’s a comparison of what 20 tech companies Disclose and Guide to:
The blue boxes with yellow check marks are Guided, while the grey boxes with black check marks are results they Disclosed. If it’s blank, it means they don’t talk about it publicly.
Some notes on the comparison:
Metric was either reported in Earnings Release or Earnings Presentation (deck)
Asana counts customers as those with > $5,000 in ARR
Jfrog, Zscaler, UiPath disclose customers > $100K as well as >$1M in ARR
Monday.com discloses customers > $50K in ARR
Okta guides to FCF Margin for the full year, but not quarterly
Snowflake Guides to Product Revenue
Snowflake guides to Operating Cash Flow and Non-GAAP FCF on an annual, but not quarterly basis
Snowflake provides customers > $1M in trailing 12 months revenue, rather than ARR
Tenable and Zscaler guide to unlevered FCF on an annual, but not quarterly basis
Tenable and Zscaler guide to Billings on an annual, but not quarterly basis
Zoom reports on Enterprise customers, which are those their sales team has made a deal with (not self serve)
ZoomInfo and Elastic disclose customers >$100K ACV (rather than ARR)
Next, let’s go over:
When you stop reporting on a metric
What you should guide to
Giving more guidance annually vs quarterly
Metrics for additional context
How this applies to private companies
