Forecasting for Different Revenue Types

On-demand reference for the revops-forecasting skill.

New Business

• Most variable, least predictable
• Requires category-based + stage-weighted methods
• Pipeline coverage should be 3.5-4x due to lower close rates
• Segment by deal size: SMB vs. Mid-Market vs. Enterprise
• Apply longer-period trends (quarterly, not monthly) for accuracy

Expansion Revenue

• More predictable than new business (existing relationships, known accounts)
• Use account-level health scores and usage data as leading indicators
• Pipeline coverage can be lower (2.5-3x) because conversion is higher
• Track trigger events: contract anniversaries, usage thresholds, team growth

Renewal Revenue

• Most predictable; use run-rate models as the baseline
• Focus forecasting energy on at-risk accounts (low health score, support tickets, declining usage)
• Assume 90-95% GRR as the base; forecast the exceptions (90-95% = 75th percentile performance; median 84%; align to your segment) (Optifai; The SaaS CFO, 2026)
• Early warning: any account with a health score below threshold 90+ days before renewal