Hi I had a few questions regarding your CAC calculations. You mentioned in another post it was previous quarter's S&M expenses / net new ARR added in the current period * Gross Margin
1) Where did you get net new ARR of $191M? I found S&M of last quarter of $188M and gross margin of roughly 80% but could not find ARR, unless you calculated yourself.
2) Even so, when I make the calculation, it comes out to 188/(191*.80) = 1.23 which is not anywhere close to the 12 you calculated.
Regarding the calculation of net new ARR for Q4: if a company does not provide ARR data, and it's a SaaS company, ARR can be estimated from revenue as follows:
(737.7 - 690.0) / 3 * 12.
To calculate GAAP DDOG CAC Payback Period for 2024, it would be: 609,276/((2,684,275-2,128,359)/12*0.81) = 16.3 Months. (2023 S&M/(2024 Rev - 2023 Rev)/12*GM 2023)
Hello, I saw the post Brian shared—he likely made a mistake in the calculations. If calculated using GAAP metrics, the CAC Payback Period for $DDOG in 2024 would be 16.3, compared to 16.2 in 2023, However, using non-GAAP metrics, the CAC Payback Period is 13.17 in 2024 and 13.41 in 2023.
Personally, I use non-GAAP data to exclude SBC and other indirect S&M expenses, in order to get a more accurate view of performance.
Here’s how I calculated Quaterly CAC Payback Period for $DDOG:
S&M expense from the previous quarter (155.75) / (New MRR (15.9) * GM (81.71)) = 11.99 months.
Both S&M and gross margin values are non-GAAP.
New MRR is calculated as net new ARR (190.82) / 12.
If the company doesn’t provide ARR data, I use revenue as a proxy, since for SaaS companies, the majority of revenue typically comes from subscription-based contracts.
Hi I had a few questions regarding your CAC calculations. You mentioned in another post it was previous quarter's S&M expenses / net new ARR added in the current period * Gross Margin
1) Where did you get net new ARR of $191M? I found S&M of last quarter of $188M and gross margin of roughly 80% but could not find ARR, unless you calculated yourself.
2) Even so, when I make the calculation, it comes out to 188/(191*.80) = 1.23 which is not anywhere close to the 12 you calculated.
3) On a separate note I saw Brian another person on Finx post his CAC for DDOG with a negative trend - https://x.com/Brian_Stoffel_/status/1903098385785118828
"How long it takes (in subscription gross profit) for a new customer to payback the cost to get them (via sales and marketing)"
I'm aware everyone has their own interpretation of how best to calculate, but curious if you had any thoughts?
Regarding the calculation of net new ARR for Q4: if a company does not provide ARR data, and it's a SaaS company, ARR can be estimated from revenue as follows:
(737.7 - 690.0) / 3 * 12.
To calculate GAAP DDOG CAC Payback Period for 2024, it would be: 609,276/((2,684,275-2,128,359)/12*0.81) = 16.3 Months. (2023 S&M/(2024 Rev - 2023 Rev)/12*GM 2023)
Hello, I saw the post Brian shared—he likely made a mistake in the calculations. If calculated using GAAP metrics, the CAC Payback Period for $DDOG in 2024 would be 16.3, compared to 16.2 in 2023, However, using non-GAAP metrics, the CAC Payback Period is 13.17 in 2024 and 13.41 in 2023.
Personally, I use non-GAAP data to exclude SBC and other indirect S&M expenses, in order to get a more accurate view of performance.
Here’s how I calculated Quaterly CAC Payback Period for $DDOG:
S&M expense from the previous quarter (155.75) / (New MRR (15.9) * GM (81.71)) = 11.99 months.
Both S&M and gross margin values are non-GAAP.
New MRR is calculated as net new ARR (190.82) / 12.
If the company doesn’t provide ARR data, I use revenue as a proxy, since for SaaS companies, the majority of revenue typically comes from subscription-based contracts.