SaaS Metrics

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

Metric
Description

An often overlooked metric by early stage entrepreneurs and investors is the SaaS Quick Ratio, used to measure the growth efficiency of a company. Another way to think of it is as a health measure of company growth.

The Lifetime Value to Cost of Acquisition (LTV/CAC) Ratio tells you if the theoretical lifetime revenue you get from a customer is higher or lower than the sales and marketing costs needed to acquire that customer.

Churn is the enemy of any subscription company. Logo Churn, also called Customer Churn or Attrition, counts the number of customers who cancel or don't renew their subscription. This metric is often expressed as a percentage that describes the…

Net Burn 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…

Gross Monthly Recurring Revenue Churn Rate (Gross MRR Churn Rate) is the percentage of recurring revenue lost due to both cancellation and downgrades. Note that it is common to express this metric as a monthly rate, though it can also be expressed…

A True Trial is defined as a user who starts a trial and comes back a second time within the first 7 days. The True Trials metric is meaningful for any software company that offers prospects a trial before they choose to buy. Prospects who sign…

The Subscribers metric counts the number of paid or non-paid users who have periodic access to a product or service. Most often, this metric refers to a subscription-based business model, for example, newspapers, magazines, phone, internet service,…

Apdex is a measure of users' satisfaction with the response time of web applications or services. The Apdex Score is a value between 0 and 1, calculated based on three Apdex levels of user satisfaction: frustrated, tolerating, or satisfied.

Annual Recurring Revenue (ARR) is the sum of all subscription revenue expressed as an annual value. For most companies, ARR is the sum of all new business subscriptions and upgrades (sometimes called expansion), minus downgrades (or contractions)…

Monthly Recurring Revenue (MRR) Renewal Rate is a customer retention indicator. It shows the MRR renewal rate for existing customers and includes expansion MRR as well as downgrades and cancels.

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…

Average Revenue Per Account (ARPA) is the average revenue generated per account per year or month. It is used as an indication of revenue generation capability and the ability to meet targets. Executives and investors use this metric as an…

Average Revenue Per User (ARPU) is a company’s generated revenue that is averaged across all users and reported as a monthly or yearly value. ARPU is a top-level metric, that can easily be normalized and is often cited as a comparative measure…

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)…

The Customer Lifetime Value (LTV) metric indicates the total revenue a business can reasonably expect from a single customer account. It considers a customer's revenue value and compares that number to the company's predicted customer…

Customer Acquisition Cost (CAC) is the cost a business incurs to acquire a new customer. This includes the fully loaded costs associated with sales and marketing to attract a potential customer and to convince them to purchase.

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…

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