September 18, 2020

Kunal Kapoor talked about drivers of PB’s growth at the 2020 Annual Meeting, including increased use cases per user and increasing the number of users per firm. There has been a widening gap between license and revenue growth from 2018 through Q2 2020. Does that indicate that growth is primarily driven by increasing numbers of users at enterprise accounts with lower prices per additional user rather than increasing use cases per user?

Further penetration into existing accounts has represented an important area of growth for PitchBook in recent years. Oftentimes, a core user of the PitchBook Platform introduces it to a new team within the same firm, who ends up using the Platform in a different manner that is specific to that team’s workflow. That is how we define a new “use case” at PitchBook. As these accounts grow in size, we often convert them into enterprise accounts that offer enough licenses to cover every potential user within the firm. This is consistent with how other software-as-a-service firms treat enterprise relationships, and also helps to explain why license growth has been outpacing revenue growth in recent years. As such, expanding use cases at existing clients can be a strong signal that we are adding value, which ultimately helps to establish an even stronger relationship with the client, a phenomenon that supports our historically high revenue retention rates.

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