Majority of SaaS Companies Saw Accelerated Growth in 2022, but with a Sharp December Decline, According to New Report from Financial Operations Platform Maxio

Maxio, the industry-leading financial operations platform for high-growth, software-as-a-service (SaaS) companies, today released its first Growth Index, which analyzes anonymized year-over-year billing data from the company's 2,000+ customers. The Growth Index was issued by the newly-launched Maxio Institute, a research and analytics arm of the company; the Maxio Institute will publish the Growth Index on a semi-annual basis moving forward.

The majority of Maxio customers are VC or PE-backed B2B SaaS companies with annual revenue between $1M to $100M. Maxio currently processes over $13B in billing and invoicing data within its platform and supports companies with product-led, sales-led and hybrid go-to-market models. Maxio's platform also supports a wide range of pricing models from classic subscription-based models to high-volume, usage-driven pricing models.

The Q1 2023 Growth Index analysis reveals that B2B software companies appear remarkably resilient in the face of current economic headwinds. The vast majority of companies in the analysis ? 82% ? grew year-over-year from 2021 to 2022. However, rates of growth for most customers declined over the course of 2022, with a substantial drop-off in December. The data suggests that Maxio customers who use a more self-service, product-led sales model saw a more pronounced growth-rate slowdown, with a 9.2% decline in revenue between 2021 and 2022. By comparison, Maxio customers who use a sales-led model saw revenue decline only 0.5% over the same period. These findings suggest that the go-to-market model selected by a B2B SaaS company has a meaningful impact on its growth rate.

"As more software companies take a closer look at their growth rate and profitability, these findings illustrate how impactful the go-to-market model can be on a company's growth trajectory," said Jon Cochrane, vice president of strategy at Maxio and director of the Maxio Institute. "Product-led companies, which tend to offer month-to-month agreements, may see increased customer churn throughout the year. Companies that offer sales-negotiated contracts, on the other hand, tend to have annual or multi-year agreements with customers, which may reduce macro impacts on revenue in the short term. With that said, we may see more churn for these customers in the coming months as these individual contracts come up for renewal, a trend that may level the disparate growth rates between product-led and sales-led companies."

"Despite ongoing macroeconomic adversity over the past year, the software industry has persevered, demonstrating remarkable grit and resilience. We at Maxio have navigated these headwinds alongside our customers," said Randy Wootton, Maxio chief executive officer. "We are excited to unveil these findings, based on anonymized billing data, which represent the true impacts of the past year across the software industry and illustrate many of our shared challenges. We look forward to sharing additional industry insights in the future through the Maxio Institute."

Additional key findings in the analysis include:

• Mid-market usage-driven businesses ? those who process between $10-20MM annually ? saw the most significant drop in growth between Q1 and Q4 at 39% decline. By comparison, sales-led companies only saw a decline of 3.6% during this same period of time.
• Companies with relatively low revenue were also disproportionately affected by slowing growth rates.
• Once Maxio customers exceed $1M in revenue, their businesses seem to become more resilient. Specifically, according to the analysis, more than 75% of Maxio platform customers who process over $1M annually grew YoY.

To access the full analysis, download the Maxio Growth Index.

Methodology

The Maxio Growth Index analyzes the anonymized billing data of 2000 Maxio customers from December 2021 to December 2022. The Index is segmented into eight cohorts based on customer billing volume, between <$1M to $100M in annual billing revenue.

About Maxio

At Maxio, we help B2B SaaS companies unlock their next stage of growth. Our financial operations platform is designed to meet the unique financial challenges of B2B SaaS, including billing, subscription management, revenue & expense recognition, and SaaS metrics & analytics. Today, Maxio serves more than 2000 customers and processes more than $13B in revenue for those customers.

For more information, please visit https://www.maxio.com/ or contact Dave Kart, Head of Marketing, at [email protected].