SAN FRANCISCO, Aug. 11, 2020 /PRNewswire/ -- KeyBanc Capital Markets Inc. (KBCM), the corporate and investment banking unit of KeyCorp (NYSE: KEY), today released results from its Technology Group's 11th annual Private SaaS Company Survey (formerly known as the Pacific Crest Securities Private SaaS Company Survey), the benchmarking report by which the Software-as-a-Service industry measures financial and operating performance. This year's survey, which had over 500 private SaaS company respondents, focused on the impact of COVID-19.
One key finding is that top-line median 2020 growth expectations have been cut roughly in half, compared to last year's growth and initial 2020 estimates entering the year. The median 2020 growth rate outlook for companies with annual recurring revenues (ARR) of at least $5 million is approximately 20%, a major decline from the 36% median growth achieved in 2019 and the nearly 40% original outlook for 2020. Even the fastest growing companies are seeing a significant slowdown, with the top quartile growers in 2019 seeing a median reduction of ARR growth from 96% in 2019, to 41% now expected for 2020.
The vast majority of companies in the survey have reduced their 2020 forecasts by at least 5%, with only 13% of respondents expecting zero impact or a positive tailwind. Notable positive outliers include SaaS businesses that accelerate work-from-home, virtual and e-commerce operations, as well as those serving the Infrastructure Software, DevOps and Security sectors.
"These results are startling, perhaps, but not surprising. An economic crisis of this magnitude simply must take a toll, even if there are counter-balancing opportunities," said David Spitz, managing director of KBCM's Technology Group and primary author of the survey. "For most, the net impact is negative near term, but importantly, these businesses are still showing tremendous relative growth in an otherwise incredibly difficult economic environment. The data show where the pockets of strength are, by category, where the challenges are, and how different companies are responding operationally."
In the midst of COVID-19, the KBCM Private SaaS Company Survey establishes operational and financial benchmarking data for executives and investors in SaaS companies, from go-to-market selling strategies, customer retention rates and customer acquisition costs, to operational management, growth and margin structures. To view the full survey results and to hear a deeper analysis of the findings, visit us at www.key.com/saassurvey.
About the KBCM Technology Group Private SaaS Company Survey The KBCM Technology Group Private SaaS Company Survey was first developed by Pacific Crest Securities in 2010 to provide benchmark performance metrics for SaaS companies. Pacific Crest was acquired by KBCM in 2014 and rebranded as KBCM Technology Group, combining the technology specialist approach of Pacific Crest with the expanded capabilities and broader resources of KBCM and its parent, KeyCorp (NYSE: KEY). More than 500 senior executives from SaaS companies around the world participated anonymously and confidentially in the 2020 survey. Responses were submitted online between June and July 2020 with 2020 year-to-date results current through May 31, 2020. KBCM cannot verify accuracy of responses. Observations and commentary contained herein relate solely to the survey results and cannot necessarily be applied elsewhere. For more information about the KBCM Technology Group, please visit us online.
About KeyBanc Capital Markets KeyBanc Capital Markets is a leading corporate and investment bank providing capital markets and advisory solutions to dynamic companies capitalizing on opportunities in changing industries. Our deep industry expertise, broad capabilities and unique ideas are seamlessly delivered to companies across the Consumer & Retail, Diversified Industries, Healthcare, Industrial, Oil & Gas, Real Estate, Utilities, Power & Renewables, and Technology verticals. With over 800 professionals across a national platform, KeyBanc Capital Markets has more than $32 billion of capital committed to clients and an award-winning Equity Research team that provides coverage on over 600 publicly-traded companies.
About KeyCorp KeyCorp's roots trace back 190 years to Albany, New York. Headquartered in Cleveland, Ohio, Key is one of the nation's largest bank-based financial services companies, with assets of approximately $171.2 billion at June 30, 2020. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of more than 1,000 branches and approximately 1,400 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit https://www.key.com/. KeyBank is Member FDIC.