Importance of GMV Calculations to SaaS Companies
SaaS companies that generate revenue from payment processing services often report on Gross Merchandise Value (GMV) as one of their key metrics. GMV is different from the revenue on a SaaS company’s income statement. However, it is a useful proxy to track the dollar value of transactions being processed on the platform, and pricing for payment services is often based on a percentage of GMV. SaaS companies also use GMV to estimate their total addressable market (TAM) and the potential expansion revenue that can be generated from large accounts.
Variables Used in SaaS GMV Calculations
SaaS companies use slightly different approaches for their GMV calculations. Examples of some of the policy elections that SaaS finance teams take in adjusting GMV calculations include decisions on:
- Taxes and duties – Some SaaS companies include sales taxes, duties, and VAT in GMV, while others do not.
- Shipping and handling – Technology companies with physical products may include shipping and handling fees in GMV, while others only include the subtotal amounts.
- Refunds and credits – Some providers back out refunds and credits before reporting GMV, while others report on gross amounts.
- Mergers and acquisitions – GMV from recently acquired companies is often excluded due to the complexity of revising historical reports.
- Customer segments – SaaS companies focused on enterprise might exclude transactions from SMBs, while others will include all customers.
- Go-to-market models – SaaS providers focused on B2B Sales might exclude B2C and consumer transactions, while others might include all customer types.
TPV, GPV, and Other Alternative Names for GMV
It is also important to note that not every SaaS provider calls their metric GMV. While Gross Merchandise Value is a most common name, some SaaS vendors also use terms like
- Total Payment Volume
- Gross Transaction Volume
- Gross Payment Volume
Some SaaS companies, like Lightspeed, use multiple terms (GTV and GPV) to differentiate alternative approaches to the calculations.
Shopify reports to investors on gross payment volume (GPV)
SaaS GMV Calculation Examples
In this article, we will explore real-world case studies of SaaS Gross Merchandise Value calculation examples from e-commerce, CFOTech, and industry-specific application companies such as:
VTEX SaaS GMV Calculation
VTEX is a publicly traded e-commerce company based in Brazil. The VTEX platform provides retailers and brands with digital storefronts, marketplaces, and order management capabilities.
Gross Merchandise Value (GMV) is one of the most important metrics VTEX reports to its investors. VTEX includes VAT and shipping charges in its reporting. However, it excludes both B2B transactions and orders processed by small businesses. Also noteworthy is that VTEX reports GMV using the historical FX rates calculated from the average of the prior year. Additional details about how VTEX calculates GMV can be found in the following excerpt from their SEC filings.
How VTEX defines GMV
“The key metric we use to measure our performance, identify trends affecting our business, formulate our business plan projections and support our strategic decisions is GMV. Due to the seasonality of ecommerce and the foreign exchange effects resulting from the volatility of the currencies of the jurisdictions where we operate (particularly Latin America countries) vis-à-vis the U.S. Dollar (which is our functional currency), our management compares GMV on a year-over-year and foreign exchange neutral basis.
The foreign exchange neutral measures are calculated by using the average monthly exchange rates for each month during the previous year and applying them to the corresponding months of the current year, so as to calculate what our results would have been had exchange rates remained stable from one year to the next.
GMV is the total value of customer orders processed through our platform, including value added taxes and shipping. Our GMV does not include the value of orders processed by our SMB customers or B2B transactions. Due to our transaction-based subscription model, we believe that GMV growth is linked with our revenue growth and we track GMV as an indicator of the success of our customers, the performance of the platform and our market share.”
Source: VTEX Form 20-F for fiscal year ending December 31, 2024
AvidXchange Total Payment Volume Calculation
AvidXchange is a publicly traded CFOTech company that offers accounts payable automation solutions for middle-market companies. The company uses the term “total payment volume” to report on the dollar value of payments buyers make to suppliers through the company’s network. AvidXchange’s investor filings provide details on how the company thinks about TPV and its version of the gross merchandise value calculation.
How AvidXchange defines TPV
“We believe total payment volume is an important measure of our AvidPay Network business as it quantifies the demand for our payment services. We define total payment volume as the dollar sum of buyers’ AP payments paid to their suppliers through the AvidPay Network during a particular period.”
Source: AvidXchange SEC Form 10-K for fiscal year ending December 31, 2024
Bill.com Total Payment Volume Calculation
Bill.com is a publicly traded CFOTech company that offers accounts payable, accounts receivable, spend management, and expensing reporting solutions for small and medium businesses. Bill.com reports on the “total payment volume” of the dollar value of transactions customers process on the company’s platform. There are a few things to note about how Bill.com calculates TPV. The calculation does include payments that are reversed due to refunds, credits, and disputes. Additionally, Bill.com’s metric does not include transaction volume from recent acquisitions such as Divvy and Invoice2go.
How Bill.com defines TPV
“To grow revenue from customers we must deliver a product experience that helps them automate their back-office financial operations. The more they use the product and rely upon our features to automate their operations, the more transactions they process on our platform. This metric provides an important indication of the value of transactions that customers are completing on the platform and is an indicator of our ability to generate revenue from our customers. We define TPV as the value of Bill.com customer transactions that we process on our platform during a particular period. Our calculation of TPV includes payments that are subsequently reversed. Such payments comprised of less than 2% of TPV during fiscal 2022, 2021, and 2020. The TPV in the table above does not include transactions made by spending businesses using Divvy cards or by our Invoice2go subscribers.”
Source: Bill.com SEC Form 10-K for fiscal year ending June 30, 2024.
Toast Gross Payment Volume Calculation
Toast is a publicly traded vertical SaaS company that offers a full suite of business applications for restaurants and retailers. Toast’s applications include point-of-sale, mobile orders, digital storefront, marketing, payroll, and inventory management software. Toast reports on Gross Payment Volume to its investors. The company explains why GPV is important in its investor filings.
How Toast defines GPV
“Gross Payment Volume represents the sum of total dollars processed through the Toast payments platform across all restaurant locations in a given period. GPV is a key measure of the scale of our platform, which in turn drives our financial performance. As our customers generate more sales and therefore more GPV, we generally see higher financial technology solutions revenue.”
Source: Toast SEC Form 10-K for fiscal year ending December 31, 2024
PayPal Total Payment Volume Calculation
PayPal is one of the world’s largest fintech companies. Publicly traded on the NASDAQ, the company offers both business and consumer services such as peer-to-peer money transfers, online e-commerce purchases, and Buy Now Pay Later options via a collection of brands including Venmo, Braintree, and Xoom.
How PayPal defines TPV
“TPV is the value of payments, net of payment reversals, successfully completed on our payments platform or enabled by PayPal via a partner payment solution, not including gateway-exclusive transactions.”
Source: PayPal SEC Form 10-K for fiscal year ending December 31, 2024
Lightspeed Gross Payment Volume Calculation
Lightspeed is a publicly traded SaaS company that offers e-commerce and point of sale systems for restaurants and retailers. The company processes $100B of payments across over 150,000 customer locations.
Lightspeed reports on two GMV metrics – “gross transaction volume” (GTV) and “gross payment volume” (GPV). The difference is that Lightspeed is that GPV only includes the transactions for which Lightspeed is the principle in the transaction. In both GTV and GPV, the company includes VAT, duties, shipping and handling charges. However, refunds are netted out of the totals, as are the payments handled through the NuORDER solution. Additional details about how Lightspeed thinks about GTV and GPV, its version of the gross merchandise value calculation, are included in this excerpt from their SEC filings:
How Lightspeed defines GTV
“Gross Transaction Volume or ‘GTV’ means the total dollar value of transactions processed through our cloud-based software-as-a-service platform, excluding amounts processed through the NuORDER solution, in the period, net of refunds, inclusive of shipping and handling, duty and value-added taxes. We use this measure as we believe GTV is an indicator of the success of our customers and the strength of our platform. GTV does not represent revenue earned by us. We have excluded amounts processed through the NuORDER solution from our GTV because they represent business-to-business volume rather than business-to-consumer volume and we do not currently have a robust payments solution for business-to-business volume.”
How Lightspeed defines GPV
“Gross Payment Volume or ‘GPV’ means the total dollar value of transactions processed, excluding amounts processed through the NuORDER solution, in the period through our payments solutions in respect of which we act as the principal in the arrangement with the customer, net of refunds, inclusive of shipping and handling, duty and value-added taxes. We use this measure as we believe that growth in our GPV demonstrates the extent to which we have scaled our payments solutions. As the number of Customer Locations using our payments solutions grows, particularly those with a high GTV, we will generate more GPV and see higher transaction-based revenue. We have excluded amounts processed through the NuORDER solution from our GPV because they represent business-to-business volume rather than business-to-consumer volume and we do not currently have a robust payments solution for business-to- business volume.”
Source: Lightspeed MD&A for three months ending June 30, 2024
Payoneer Volume Calculation
Payoneer is a large fintech provider that is publicly traded on the NASDAQ. The company specializes in cross-border payments and multi-currency offerings to enable international commerce. Payoneer is best known for its use by freelancers, affiliate marketers, and ecommerce storefronts on sites such as Fiverr, Upwork, and Amazon.
How Payoneer defines Volume
“Volume refers to the total dollar value of transactions successfully completed or enabled by our platform, not including orchestration transactions. For a customer that both receives and later sends payments, we count the volume only once. Volume serves as a key metric for overall business activity, as growing volume is one of the primary drivers for our revenue growth.”
Source: Payoneer SEC Form 10-K for fiscal year ending December 31, 2024
Billtrust Total Payment Volume Calculation
Billtrust is one of the largest privately held CFOTech companies specializing in customer-facing functions like accounts receivable. Billtrust uses “total payment volume” to report on the dollar value of customer payment transactions it processes. The company uses segment reporting to track the volume through cards versus ACH/wire transfers. Below is an excerpt from Billtrust’s investor filings, before it was taken private, that explains how it thinks about total payment volume.
“Total Payment Volume (“TPV”) is the dollar value of customer payment transactions that Billtrust processes on its platform during a particular period. TPV is further disaggregated between “TPV – Card”, which includes payments through our software, portals, gateways, and third party processors, and includes our Payment Facilitator (“PayFac”) customers. “TPV – ACH/Wire” includes payments made via our software, portals, gateways, and our business payments network that are processed via automated clearing house (ACH) or wire transfers. To grow payments revenue from customers, Billtrust must deliver a software platform that both simplifies the process of accepting electronic payments and streamlines the reconciliation of remittance data. Additionally, as Billtrust increases the digital delivery of invoices, it increases the probability that they will be paid electronically by Billtrust’s customers’ end customers. The more customers use the Billtrust software platform, the more payments transactions they are likely to process through Billtrust’s various products. This metric provides an important indication of the dollar value of transactions that customers are completing on the platform and is helpful to investors as an indicator of Billtrust’s ability to generate revenue from its customers.”
Source: Billtrust SEC Form 10-K for fiscal year ending December 31, 2021
Block Gross Payment Volume Calculation
Block is a large publicly traded financial technology company. The company was originally called Square which is still the name of its flagship point-of-sale hardware product line. In recent years, Block has expanded into Buy Now Pay Later services (e.g., Afterpay), peer-to-peer payments, and cryptocurrency services.
Block Gross Payment Volume (“GPV”)
“GPV includes Square GPV and Cash App Business GPV. Square GPV is defined as the total dollar amount of all card and bank payments processed by sellers using Square, net of refunds. Cash App Business GPV is comprised of Cash App activity related to peer-to-peer transactions received by business accounts, and peer-to-peer payments sent from a credit card. GPV does not include transactions from our BNPL platform because GPV is related only to transaction-based revenue and not to subscription and services-based revenue.”
Source: Block SEC Form 10-K for fiscal year ending December 31, 2024
