We believe resilience is the heartbeat of a business’s survival and growth, especially in times of uncertainty. When the road ahead is unclear, companies must rapidly assess which strategic levers to pull and which to set aside. That’s why we developed the ICONIQ Growth Resiliency Rubric — five critical metrics that can help guide SaaS companies in building resilience and agility in today’s challenging macroeconomic environment.

Powered by more than a decade’s worth of financial and operating data from over 100 enterprise SaaS companies¹, the scorecard below summarizes our latest benchmarks against the Resiliency Rubric by scale, which we believe serve as valuable goalposts for SaaS companies striving to maintain resilience. While these benchmarks are rooted in the economic context of the past decade, we continue to see many leading SaaS companies today meeting or exceeding historical median performance levels.

We'll dive deep into each of the five key metrics, explaining their significance and detailing how they can contribute to building resilience. We'll also explore how we’ve seen performance across these metrics shift in recent years, as companies have adapted to both market challenges and opportunities.

Quick Ratio

(New Logo ARR + Expansion ARR) / (Downsell ARR + Churn ARR) (Quarterly or Annualized)

The Quick Ratio can serve as a vital pulse-check on a company’s growth by directly comparing its ability to generate new ARR (New Logo ARR + Expansion ARR) against contraction (Downsell ARR + Churn ARR). This simple yet powerful metric can provide a snapshot of how effectively a business is scaling, making it potentially indispensable for leadership teams navigating the complexities of growth. As companies scale, the rate of growth tends to naturally slow. Meanwhile, churn increases as a function of a growing customer base. This means that the Quick Ratio will naturally decrease over time. However, we’ve seen that top quartile companies are able to maintain a Quick Ratio above ~3x even after reaching $100 million ARR. In other words, for every $1 of churned ARR, these companies are typically adding about $3 in recurring revenue. 

For companies with multiple products or customer segments, breaking out the Quick Ratio by each segment can also offer critical insights into specific areas of strength or concern. By examining this metric at a more granular level, leadership teams can pinpoint which products or customer segments are driving growth and which are contributing to contraction. We think this segmented approach allows businesses to triage problem areas such as heightened churn in certain verticals or suboptimal expansion rates in key segments. However, it’s important to recognize that the Quick Ratio only provides directional guidance rather than a comprehensive view of a company’s overall efficiency. While it can offer a clear picture of bookings growth relative to contraction, it doesn’t capture capital efficiency—the cost at which such growth is being achieved. For instance, a company with a high Quick Ratio may still be burning through capital at an unsustainable rate. Thus, it can be helpful to pair this metric with other metrics such as Net Magic Number, CAC payback, and Burn Multiple for a more holistic view on efficiency. Over the past few years, our data reveals a significant decline in median Quick Ratios across companies of all sizes. We believe this downward trend has been largely driven by a challenging macroeconomic climate, which has significantly slowed new logo growth and contributed to higher churn rates.

Topline Attainment

Actual Net New ARR as of Quarter End / Planned Net New ARR (Cumulative from beginning of year, relative to plan)

We view topline attainment as a critical indicator of both topline health and overall business predictability. This metric tracks the actual incremental dollars achieved to date against the original plan set at the beginning of the year. 

This metric can be crucial for leadership teams, as it reflects not only a company’s ability to meet its revenue targets but also its predictability. Consistent attainment close to 100% typically indicates that a company’s sales forecasting processes are well-calibrated, which tends to instill confidence in both internal stakeholders and external investors. High attainment can be a signal that leadership has a deep understanding of their customer base as well as market demand and can effectively translate that into financial outcomes. On the flip side, consistent under-attainment may signal problems in pipeline management, deal closure rates, or broader market challenges.

We think this metric becomes particularly critical leading up to an IPO - the ability to perform against the original forecast for the quarter (known as “beat and raise”) tends to have a significant impact on analyst sentiment and stock price. In the public markets, reliable topline attainment can translate to credibility, which directly impacts a company's valuation and long-term investor interest. Therefore, it may be helpful for companies to start implementing a “beat and raise” model 1-2 years before going public. We’ve seen that establishing a track record of exceeding revenue forecasts during this pre-IPO period can build a strong foundation for positive investor perception and post-IPO stock performance. More importantly, it can give companies time to test the rigor of their forecasting models and fine-tune their sales execution to align closely with planned outcomes. 

It’s worth noting that in recent years, topline attainment has generally declined, with median attainment hovering closer to 80-90%¹, as many companies face persistent headwinds and navigate increasingly unpredictable market conditions.

Burn Multiple

FCF / Net New ARR (Quarterly or Annualized)

Burn Multiple is a company’s Free Cash Flow³, which represents its Net Burn, divided by its Net New ARR in a given period - a metric that evaluates how much a company is burning in order to generate each incremental dollar of ARR.

In times of uncertainty, capital efficiency can be a key differentiator between companies that can thrive and those that may struggle to survive. The Burn Multiple helps companies and investors assess how effectively a business is converting its capital investment into long-term, sustainable growth. The higher the Burn Multiple, the more the company is burning to achieve each unit of growth. The lower the Burn Multiple, the more efficient the growth is. Generally, the Burn Multiple should decrease as the company matures. Eventually, for a company to become profitable, Net Burn must reach 0, which implies that the Burn Multiple should also approach 0 over time. Furthermore, Burn Multiple is not just about cash flow; it can also offer a window into operational rigor. Companies with a low burn multiple are likely operating leaner and focusing on areas of the business that deliver the highest return on investment. This may involve cutting back on discretionary expenditures, optimizing sales processes, and focusing GTM efforts on high-ROI channels.

Lastly, one of the more nuanced applications of the Burn Multiple is its use as a proxy for assessing the strength of product-market fit. Investors may use this metric to gauge whether a company is forcing its product into the market or if there is genuine demand pulling the product forward. For example, in a given quarter, if a company generates $10M in net new ARR but burns $40M to do so, the high Burn Multiple suggests that the company is working harder than it should to acquire customers. Conversely, a company that achieves the same $10M in net new ARR with only $10M of burn may be seeing stronger organic demand, a sign that the market is naturally pulling the product.

Our data shows that median Burn Multiples peaked in 2022 but have been gradually improving as companies appear to be reducing spending and focusing on efficiency. However, for most companies in our portfolio, Burn Multiples have not yet returned to historical norms².

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Customer Acquisition Cost (CAC) Payback

(Sales & Marketing Expenses in Period) / (Gross New Customers x ARPU) x Gross Margin (Quarterly or Annualized)

The CAC Payback period measures the amount of time it takes for a company to break even on the sales and marketing investments it makes to acquire a new customer. Specifically, it shows how long it takes for each new customer to generate enough gross profit to cover the initial acquisition costs. The shorter the CAC Payback period, the quicker a business typically recoups its investments and begins generating profit from its customer base, which means it can reinvest that capital into further growth sooner. 

CAC Payback can be difficult to standardize across companies because of variability in sales motions, target customer segments, and business models. Even across the companies in our dataset, we see various flavors of CAC that sometimes incorporate gross margin, include or exclude expansion, use different time periods of sales & marketing expense based on the sales cycle, etc. For businesses with longer sales cycles (typically over 3 months), it may make sense to offset sales and marketing expenses by a quarter (or the appropriate length of the sales cycle) to reflect a more accurate payback period. Because of these nuances, we think each company should consider its unique business model, target customer, and sales motion when interpreting CAC Payback, ensuring the metric is viewed within the right benchmarking context and aligned with the specific nuances of its business.

For example, Product-Led Growth (PLG) companies generally experience much shorter payback periods compared to their Sales-Led Growth (SLG) counterparts. PLG companies often benefit from viral product adoption, lower-touch sales models, and self-service funnels, which significantly reduces the cost of customer acquisition. In contrast, SLG companies tend to have longer payback periods due to higher upfront investments in sales teams and more complex, high-touch sales cycles. These longer cycles often require more resources and time to convert leads into paying customers, driving up the CAC Payback period.

As a rule of thumb, we typically consider a CAC Payback period of 12-18 months to be exceptional. However, in today’s challenging environment, where customer acquisition has become more difficult, we are seeing median CAC Payback periods extending beyond 30 months for early-stage companies and stabilizing around 20 months for late-stage companies¹.

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Productivity Ratio

Average ARR per FTE / Average OpEx per FTE

The last metric in the ICONIQ Growth Resilience Rubric is what we’ve coined the “Productivity Ratio.” This metric looks at the ratio between ARR per FTE and OpEx per FTE; in other words, how much revenue is being generated per employee vs how much spend is being invested per employee. 

The Productivity Ratio can help inform business decisions around hiring or reductions in force and can highlight the tradeoffs between headcount growth, revenue growth, and profitability. Companies can use this metric to evaluate whether additional headcount will drive proportional revenue growth or simply add to the cost base without significantly boosting productivity. For instance, companies may decide to hire more aggressively in roles that typically have a direct and measurable impact on ARR, such as sales, engineering, or customer success. On the other hand, if the Productivity Ratio is lagging, leadership might consider more strategic investments in automation, training, or process optimization to enhance productivity without expanding headcount.

As companies scale past $100M in ARR, the Productivity Ratio generally surpasses 1x, at which point the average ARR being generated per FTE starts to outpace operating expenses. Companies with a Productivity Ratio under 1x may find it helpful to look at not only people costs (i.e. payroll, headcount, onshore vs offshore mix) but also the may benefit from investing in learning and development (L&D) programs, training, and performance management systems that help employees become more efficient and effective in their roles. 

Over the past four years, despite the decline in other metrics within the ICONIQ Growth Resiliency Rubric, the Productivity Ratio has remained relatively stable¹. This implies that most companies have generally maintained operational efficiency on a per FTE basis and continue to generate strong revenue per employee relative to their expenses.

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We hope recent trends across these five metrics, and the “why” behind them, are helpful in guiding business decisions and ensuring adaptability to changing circumstances. Regularly monitoring and fine-tuning the metrics in the ICONIQ Growth Resiliency Rubric, can help leadership teams develop a comprehensive understanding of their organization’s financial health, operational efficiency, and overall scalability.