SaaS Financial Model

SaaS Financial Model

The SaaS Financial Model provides a simple way to derive a 5-year financial plan for a Software as a Service (SaaS) internet company which can be used to derive a valuation and investor return. The Financial Model calculates DCF Value, Investor IRR, Breakeven, ARPU, Customer Lifetime Value and many more important key metrics to SaaS Businesses.

Highlights of the financial model template:

  • Executive Summary of key charts, key metrics, and key assumptions. Simply change the assumptions on the right and see immediately the effect on Subscribers, Revenues, Cash Flow, etc. on the left and their impact on key SaaS specific financial metrics
  • Monthly and Yearly financial projections for 5 years
  • Three tiers of subscription pricing (Basic, Standard, and Premium)
  • Discounts depending on payment terms (upfront) 1 year, 6 months or 3 months
  • Deferred revenue recognition model which can be switched on or off
  • Key Metrics
    • Number of Subscribers
    • Average Revenue Per Users (ARPU)
    • Customer Lifetime Value (CLV)
    • Monthly Recurring Revenues (MRR)
    • Enterprise Value and Equity Value based on DCF Valuation
    • Project IRR
    • Required Funding
    • Month when EBITDA breakeven is achieved
    • Month when Payback of investment is achieved (based on Free Cash Flows)
  • Revenue Streams
    • Subscription revenues
  • Costs Assumptions include
    • Acquisition costs per subscribers
    • Employee costs
    • Webhosting and all other costs
  • Financial Statements (Monthly and Yearly) – Income Statement, Balance Sheet, Cash Flow Statement
  • Valuation of the SaaS Business via the Discounted Free Cash Flow (DCF) Analysis
  • Calculation of the Project IRR via Calculation of Free Cash Flow to Firm (FCFF)
  • Payback period (FCFF) and required months till EBITDA breakeven
  • Debt schedule which models two layers of financial debt (junior and senior debt) – if needed
  • Amortization schedule for software development costs
  • Fixed asset depreciation schedule
  • Forecast of all relevant financial ratios
  • Calculation of required funding amount
  • Investor return and expected profit calculation based on a cash in / cash out consideration
  • Print-friendly layout including charts and graphs

The Executive Summary page gives the investor a comprehensive overview of the business plan of a SaaS business backed up by a solid financial model. We hope you like our financial model template and it saves you valuable time while providing a solid basis for decision making.

See also the article how to build a SaaS financial model or the explainer video below:

 

Compared to the previous version, the model has been updated to now also include a section about investor returns and a switch to play around with revenue recognition accounting. The model is available in two versions:

  • PDF DEMO Version
  • Excel Model with all cells editable and all formulas visible

Filetypes:

.pdf (Adobe Acrobat Reader)

.xlsx (Microsoft Excel)

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Executive Summary Page

  • Changing the key assumptions on the right allows you to immediately see the effect on the financials of your SaaS business on the left
  • Financial Ratios are immediately updated for your convenience
SaaS_Financial_Model_Template_Executive_Summary
SaaS Financial_Model_Template Executive Summary

 

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Summary The SaaS Financial Model provides a simple way to derive the financial forecast for a Software as a Service (SaaS) internet company. The Financial Model calculates the DCF Value, IRR, Breakeven, ARPU, Customer Lifetime Value and many more important key metrics to SaaS Businesses.
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