Q: As a SaaS company should you include professional services in your ARR number?
Include professional services in your total revenue run rate.
But — break it out.
Here’s a great example from Qualtrics:
![](https://wordpress-1016567-4521551.cloudwaysapps.com/wp-content/uploads/2021/07/dear-saastr-should-i-include-professional-services-in-my-arr-calculation.png)
You can see here at a $723m run-rate, that $535m is from software / SaaS and $198m is from services. You can also see the relative ratio of the two, and that Qualtrics, while it does have substantial services revenue, is still primarily a software company.
Report is this way. It’s clear, fair and transparent. And still gives you credit for all your revenues
You can see Veeva, at $2B in revenues, does the same thing. Clearly and crisply:
![](https://wordpress-1016567-4521551.cloudwaysapps.com/wp-content/uploads/2021/07/dear-saastr-should-i-include-professional-services-in-my-arr-calculation.jpg)
Published on July 6, 2021