Assumption Three: Not as Obvious Revenue growth rates decline And that rate is At a fairly predictable rate… Y/Y as revenue increases… independent of the growth rate* Obvious Not so obvious Not obvious at all We call this “Growth Persistence” It implies that the future growth of a SaaS company can be estimated from its past growth rate times Growth Persistence *Within a range of between 20% and 100%

The Mendoza Line For SaaS Growth - Page 11 The Mendoza Line For SaaS Growth Page 10 Page 12