HI Red, Thank you for the thoughtful and inform
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Posted On: 03/30/2021 7:40:01 PM
HI Red,
Thank you for the thoughtful and informative post in reply to my questions. I particularly agree with the following statement of yours:
"To me: SaaS Recurring Revenue Year Over Year"
(In terms of what numbers are most relevant for a company like this)
Having said that, I am wondering if you knew of any reasons why a particular quarter of SAAS recurring revenue would be less than the immediately preceding one? This was the case in 2020 Q3 to Q4. Given that this revenue is recurring (of course with some churn, but being replaced with more new revenue), one would think that a growing company would have consistent quarter over quarter increases. It also does appear that 2021 Q1 will be higher than Q4, but still lower than the prior Q3.
I can think of a few reasons why we saw this decrease in our case, but given that you have more knowledge in your little finger than I have in my entire body, I am curious for your views.
All I can come up with is some combination of:
- the way that SAAS revenue hits the books given the accounting rules
- one particular large client had most of their revenue hit in the 3rd quarter
- this client had a particularly large churn that impacted all future revenue quarters
- due to COVID, the new clients that were hitting revenue were not as plentiful
Thank you for the thoughtful and informative post in reply to my questions. I particularly agree with the following statement of yours:
"To me: SaaS Recurring Revenue Year Over Year"
(In terms of what numbers are most relevant for a company like this)
Having said that, I am wondering if you knew of any reasons why a particular quarter of SAAS recurring revenue would be less than the immediately preceding one? This was the case in 2020 Q3 to Q4. Given that this revenue is recurring (of course with some churn, but being replaced with more new revenue), one would think that a growing company would have consistent quarter over quarter increases. It also does appear that 2021 Q1 will be higher than Q4, but still lower than the prior Q3.
I can think of a few reasons why we saw this decrease in our case, but given that you have more knowledge in your little finger than I have in my entire body, I am curious for your views.
All I can come up with is some combination of:
- the way that SAAS revenue hits the books given the accounting rules
- one particular large client had most of their revenue hit in the 3rd quarter
- this client had a particularly large churn that impacted all future revenue quarters
- due to COVID, the new clients that were hitting revenue were not as plentiful
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