A new report by Jefferies focuses on the value of growth in the software space. According to analysts, “all growth is not created equal,” and the assumption that all growth is equally good for software companies could be a dangerous oversimplification.

New Subscription ACV growth

Analysts call the new subscription annual contract value (ACV) the single most important growth metric for software-as-a-service (SaaS) companies. New subscription ACV revenue is both highly recurring and highly profitable.

Jefferies sees relatively strong new subscription ACV growth at Constant Contact Inc CTCT 0.48%, Demandware Inc DWRE 0.3%, NetSuite Inc N 1.2% and Qualys Inc QLYS 0.53%.

Analysts see relatively weak new subscription ACV growth at Cornerstone OnDemand, Inc. CSOD 0.66%, Fleetmatics Group PLC FLTX 5.13%, LogMeIn Inc LOGM 0.43%, Proofpoint Inc PFPT 2.51%, RealPage, Inc. RP 0.26%, Salesforce.com, Inc. CRM 1.85% and SPS Commerce, Inc. SPSC 1.11%.

Cost Of Growth

According to Jefferies, new subscription ACV is often sold at a loss…

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