Two metrics we use to compare software businesses are revenue per employee and operating expense (opex) per employee. In our view these are great measures of operational efficiency. What is a reasonable amount of rev/head and opex/head in SaaS? The data from the last 28 SaaS IPOs is below.
Headcount. The median headcount of these companies at IPO was 900 with the average coming in slightly higher at 1,181. The largest company was Docusign (2,255 employees) and the smallest was Datadog (474).
Revenue per head. Rev/head on median was $199k with a range of $47k to a whopping $595k. Interestingly, the company with $595k of revenue per head was Dropbox who has a very large consumer and SMB customer base. The company with $47k of revenue per head is the highly valued (arguably materially overvalued) Snowflake.
Opex per head. Opex/head on median was $191k with a range of $104k (Zoominfo) to $458k (again Dropbox).
The difference is small. The difference between revenue/head and opex/head is quite tight and indeed once you factor in COGS, 25 out of these 28 companies are not generating positive EBITDA.
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