Why 115% Net Revenue Retention has UserTesting North of $60M in ARR

As you design your product, there is no way to know how customers will interact without live tests. You need to gather data and feedback from your ideal customer segments in order to create the best offering possible.

UserTesting is the fastest path to a great customer experience. Their software helps capture the critical human insight you need to confidently deliver what customers want and expect, in as little as two hours.

How much is UserTesting doing in MRR?

UserTesting operates on a both a pure-play SaaS model and a pay-as-you-go testing model. Overall, their SaaS offering drives a bulk of their revenue at this point in time with the average enterprise customer paying between $50k and $100k annually.

With 3k monthly subscriptions served today, UserTesting is currently between $60M and $70M in ARR, according to CEO Andy MacMillan. The company is aiming to grow revenue 40% year over year and is on track to do so this year; as of July 2018, MacMillan’s goal was to cross $80M in ARR by the end of 2018.

What is UserTesting’s churn?

In order to reduce churn, UserTesting recently began a strategic move upmarket and switched to annual deals. The company is exhibiting 84% gross revenue retention per year and is north of 115% net revenue retention annually right now. MacMillan noted that improving gross revenue retention will be a focal point for UserTesting in 2019 and beyond.

UserTesting measures customer acquisition in dollar based CAC. Today, MacMillan explained that they will spend between $1.50 and $1.70 to land a new dollar of ARR and receive payback within 18 to 20 months. Thanks to their strong retention and expansion numbers, UserTesting is able to be aggressive with acquisition efforts today.

How much has UserTesting raised?

UserTesting has raised $74M in total capital to date. The company’s team of 250 full-time employees is split between San Francisco, Atlanta, and remote locations.