navisite and the role of the cfo
TRANSCRIPT
Business Decisions & Models from the SaaS CFO
Business speaks. We listen.
JUNE 27, 2012
A Time Warner Cable Company
ManagedCloud
Services
ManagedApplication
Services
ManagedHostingServices
For Enterprise Customers
The Premier Provider of:
2
Differentiated by… Best in class, high performance, enterprise class solutions In-depth managed hosting and application management
expertise Customized and hybrid application and infrastructure solutions Superior customer service with unparalleled service and support
level agreements
Role of the CFO Asking the tough questions – Don’t assume others really
understand what they are talking about. Coordinating various groups to build a strong and
representative model Are post sales operations costs sufficient? What is sales selling? Is there sufficient allowance for new features? Comprehensive financial plan?
Understanding operational issues and key concerns Cannibalism of existing business Sales commission – how to incent and reward sales Cash flow
A Time Warner Cable Company3
SaaS Investment Concerns
Payback Measures – How to measure whether it is a good return? CAPEX payback Customer Investment
Lender Issues – How are your covenants measured? Capex and fixed charge? EBITDA coverage?
Sales Tax – Is your service going to be treated as a sale? Evolving state treatment of software “rental”
A Time Warner Cable Company4
Evaluation Metrics in an Acquisition
Revenue and EBITDA Growth - “How are your competitors measured?”
Churn – “Why are you losing customers?”
Bookings – “How fast are you acquiring new customers?” Are you sufficiently outpacing churn How fast are you able to turn customers into revenue
Backlog – “How much monthly revenue has been sold but not delivered?” Do contracts cancel before revenue
Capacity – “Have you defined capacity of major inputs?” What is the additional runway with existing capacity before additional spend is
required?
Capital Equipment Required – “What is the need and why?”
A Time Warner Cable Company5