YOY Growth fell to 15% on median. During the 6 quarters of the recession, year over year growt on median fell to 15%, but it is remarkable to see these companies still grew. Only 6 companies showed at least one quarter of YOY negative growth. Calidus Cloud performed the worst, but their story was about transitioning from a services & license business model to subscription. Additionally, they were doing shorter and less expensive on-demand implementations, which they knew would shrink service revenue. Adobe was also undergoing shifts in business model for some of their segments, specifically “platform revenue.” Setting aside these underperformers, it’s remarkable to see companies like LivePerson, LogMeIn, Salesforce, and Ultimate Software grow straight through the recession.
Operating margin improved. Operating margin actually improved as many SaaS companies showed an ability to cut costs. In the 4 quarters prior to the recession, median operating margin was 3%. During the recession, operating margin on median was 9%, and continued to improve after the recession. The recession actually forced the companies to improve their operations.
Sammy is the Managing Partner and Co-Founder of Blossom Street Ventures. Visit us at blossomstreetventures.com and email directly at email@example.com://blossomstreetventures.com/metrics/