Finance Metrics

The most important Finance metrics and KPIs. Learn about what metrics and KPIs are best for you, vote, and contribute your own.

Logo Churn

Logo Churn is the enemy of any subscription company. Logo Churn is the number or percentage of subscribers to a service that discontinue their subscription to that service in a given time period.

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MRR Growth Rate

Monthly Recurring Revenue (MRR) Growth Rate is the velocity at which MRR is being added to the business, expressed as a percentage. MRR Growth Rate is often cited as a monthly rate, but it's also possible to express it using an annual timeframe; for example, "we are targeting 10% MRR Growth for April", or "our MRR Growth Rate was 100% last year".

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Monthly Recurring Revenue

Monthly Recurring Revenue (MRR) is the sum of all subscription revenue expressed as a monthly value. For most companies, MRR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions) and cancelled subscriptions. Though not a Generally Accepted Accounting Principle (GAAP) value, it's the Revenue equivalent used by every SaaS company. MRR is used interchangeably with ARR.

Natural Rate of Growth

Natural Rate of Growth measures the speed at which your company grows, purely based on organic sources of growth. This includes organic signups and incremental recurring revenue started in product without sales involvement.

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Net Annual Recurring Revenue Added

Net Annual Recurring Revenue (ARR) Added is the net change of annual recurring revenue from new logo bookings, expansion bookings, downsell bookings, and churn during a period. This metric will let you evaluate your business from one time period to the next and understand how each component is affecting ARR.

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Net Burn

Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn".

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Net Financial Debt

Net Financial Debt is a company’s non-operational debt that considers cash and short-term securities against financial debt.

Net Income

Net Income is an accounting term that refers to the total revenue minus the total expenses for any given period. Net Income is one of the best ways to determine a business' profitability and is often referred to as the bottom line. For Net Income, expenses to be deducted include Cost of Goods Sold (COGS), all operating expenses, and tax and interest costs.

Net MRR Churn Rate

Net Monthly Recurring Revenue (MRR) Churn Rate is the percentage change in MRR due to expansions, cancellations and downgrades. A negative Net MRR Churn Rate occurs when expansions exceed downgrades and cancellations and is a strong positive indicator of company health. This metric is typically expressed as a monthly rate although it can also be an annual rate: Net Annual Recurring Revenue (ARR) Churn Rate.

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Net Operating Profit After Tax

Net Operating Profit After Tax (NOPAT) is a financial performance metric that calculates profit gained through core operations after taxes. This metric is used to measure operating efficiency without the impact of debt, because the calculation does not take tax benefits from debt into consideration. In other words, if a company has no debt, their NOPAT and net income after tax would be identical.

Net Present Value

Net Present Value is the difference between the present value of cash inflows and the present value of cash outflows, over a period of time. It is used to determine the viability of an initiative or investment.

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Net Profit

Net profit is the value that remains after all expenses are subtracted from the company’s total income. It is one of the best ways to determine a business' profitability and is often referred to as the bottom line.

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