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Software and SaaS

Enterprise software company financial model, built free.

A three-statement Excel model for an enterprise software vendor (licence and maintenance), built from your own figures and checked to balance.

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  • Usually ready within the hour

We use generative AI in parts of our process, so mistakes can occur. Every model should be checked by a person before it is relied on. Read more

The business

Sells perpetual or term licences with annual maintenance and support, plus implementation services, and is often part-way through moving customers to subscription or cloud delivery.

See the sampleHow the model works

In short

  • 01

    Three linked statements

    Income statement, balance sheet and cash flow, linked in every period.

  • 02

    Valued two ways

    Discounted cash flow and trading multiples, side by side.

  • 03

    Monthly to annual

    Monthly, quarterly, half-yearly or annual periods, for up to 30 years.

  • 04

    Checked every period

    A Checks sheet shows the balance sheet balances and the cash reconciles.

The sample

The sample, as Excel draws it.

Built by the same system and checks as yours, on illustrative figures: every sheet as Excel draws it, or live.

Annual · 10 years · Low detail
Enterprise software company sample model.xlsx
The Summary sheet of the sample enterprise software company model

Illustrative figures: the sample describes no real business. The live preview shows values; your model’s Excel file has every formula.

How it works

How the model works for an enterprise software company.

  1. How it earns revenue3 formulas
    Recurring revenue and ARR · All product plans
    Subscription revenueOpening ARRClosing ARRshare of the year
    Recurring revenue and ARR · All product plans
    New customer ARRNew customersfrom new customers and sales and marketingARR per new customer
    Recurring revenue and ARR · All product plans
    Net expansion ARRPrice increase on the installed baseUpsell and cross-sell (net of contraction)
  2. What drives its costs3 formulas
    Cost of revenue · All product plans
    Cost of revenueHosting and infrastructureCustomer support and successFixed platform and support overhead
    New customers and sales and marketing · All product plans
    Sales and marketingCustomer acquisition spend (new logos)Account management and renewals
    New customers and sales and marketing · All product plans
    Customer acquisition spend (new logos)New customersCustomer acquisition cost (CAC)
  3. What it invests in3 formulas
    Corporate fixed assets
    Capital expenditureRevenuefrom statementsCapex as % of revenueAdditional planned capex
    Corporate fixed assets
    DepreciationDepreciation of the opening asset baseDepreciation of new capex
    Corporate fixed assets
    Closing net book valueOpening net book valueCapital expenditureDepreciation
  4. How it is funded3 formulas
    Debt
    RepaymentsScheduled repaymentsPrepayments from an equity raise and the cash sweep
    Debt
    Closing balanceOpening balanceDrawdownsRepayments
    Debt
    Interest expenseOpening balanceAll-in interest rateshare of the year
  5. How profit becomes cash3 formulas
    Billings and deferred revenue · All product plans
    Closing deferred revenueClosing ARRfrom recurring revenue and ARRShare of ARR billed in advanceBilling term invoiced in advance
    Billings and deferred revenue · All product plans
    BillingsSubscription revenue (recurring revenue and arr)from recurring revenue and arrClosing deferred revenueOpening deferred revenue
    Working capital
    Trade receivablesRevenuefrom statementsDebtor daysDays in period
What it covers

21 parts, each one tested.

Every part is a tested building block with its own checks: yours is put together from the ones your business needs.

  • CPI forecastConsensus curve with long-run anchor
  • Exchange rate (US dollar)Exchange rate by financial year
  • Operating expensesHeadcount build by function
  • Working capitalFull working capital
  • Income taxCorporate rate with tax losses
  • Corporate fixed assetsStraight-line over remaining life
  • DebtAmortising term loan
  • Equity raisingDistribution reinvestment plan
  • Discounted cash flow valuationDCF on free cash flow to the firm
  • Multiples valuationEV / EBITDA multiple
  • Key-metric summaryLast-twelve-month and run-rate metrics
  • Covenant tests and headroomLVR, gearing and ICR for property
  • Case selectionStackable stress toggles
  • R&D and capitalised developmentGross R&D × capitalisation rateResearch and development expense after capitalisation, with the capitalised software asset and its amortisation.
  • SaaS metricsStandard SaaS metricsThe ARR bridge across all plans and the headline SaaS KPIs — net new ARR, ARR growth, NRR, GRR, CAC payback and the Rule of 40.
  • Headcount plan by functionHiring plan by functionEmployees and staff cost by function (cost of revenue, sales and marketing, R&D, G&A).
  • New customers and sales and marketingNew customers per period × CACNew paying customers (logos, subscribers, gross adds) won each period for a plan, and the sales and marketing spent winning them (acquisition cost) and keeping them (account management). Carrying the spend per plan keeps new customers and the spend that wins them consistent; its roll-up lands in operating expenses.
  • Customer base and churnConstant churn rateCustomer roll-forward for a plan — opening customers + new customers − churned customers = closing customers.
  • Recurring revenue and ARRARR bridge on ARPA with price increases and net expansionThe ARR bridge for a plan (opening ARR + new-customer ARR + net expansion − churned ARR = closing ARR) and the subscription revenue recognised from it. Pricing (ARPA, seats, tiers, price increases) and net expansion (upsell, cross-sell, contraction) are part of each method.
  • Billings and deferred revenueBilled in advance (billing mix) with deferred revenueInvoicing of subscriptions and usage and the deferred revenue that results from billing in advance.
  • Cost of revenueCost per customer plus fixed platform costDirect cost of serving a plan's customers — hosting, customer support and success, app-store fees, royalties and (for telcos) wholesale access — so that gross margin can differ by plan. Use this in any model with product plans.
Key numbers

The numbers it tracks.

  1. 01licence revenue
  2. 02maintenance base and renewal rate
  3. 03cloud ARR
  4. 04subscription mix of bookings
  5. 05recurring revenue share
  6. 06EBITDA margin
  7. 07free cash flow
Used for

What it is used for.

Also used for
  • Scenarios and sensitivities
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The sample is built on illustrative figures and describes no real business. Models are calculations prepared from the information you provide. They are not financial advice and must be independently verified. See our terms.