Alphabetically sorted.
ARPA (Average Revenue Per Account)
ARPA = Total Revenue / Total Number of Customers
ARR (Annual Recurring Revenue)
Burn rate
Burn rate = Cash amount / monthly operating expenses
CAC
CAC = (Total Sales and Marketing Expenses / Total Number of New Customers)
CAC Payback Period
Number of months required to recover the cost of acquiring a customer.
CAC Payback Period = CAC / Monthly Recurring Revenue per Customer
CAC-to-LTV Ratio
CAC-to-LTV Ratio = CAC / LTV
Churn
Churn refers to Customers or Revenue lost over a given period.
Customer Churn = Number of Customers Lost / Number of Customers at the Beginning of the Period
or
Revenue Churn = Revenue Lost / Revenue at the Beginning of the Period
Conversion rate
for self-service SaaS.
Conversion rate = (number of new customers / number of trials) * 100
can also be Lead-to-Customer rate in a more traditional SaaS business.
Expansion rate
Expansion rate = (number of customers who upgraded / number of customers) * 100
or based on revenues:
Expansion rate = (revenue from upgrades / revenue from existing customers) * 100
Gross Margin
Gross Margin = (Revenue - Cost of Goods Sold) / Revenue
Leads by Lifecycle Stage
Can be tweaked depending on stages tracked, but usually:
- raw leads (top of funnel)
- marketing qualified leads (MQL)
- sales qualified leads (SQL)
- opportunities
- closed won (bottom of funnel)
LTV
LTV = (Total Revenue / Total Number of Customers) * Lifetime
MRR / ARR
Monthly Recurring Revenue (MRR) and Annual Recurring Revenue (ARR) are the most common metrics used to measure the health of a SaaS business.
MRR = Total Number of Customers * Monthly Recurring Revenue per Customer
⬇︎
ARR = Total Number of Customers * Annual Recurring Revenue per Customer
Can be fine-tuned with:
New MRR / New ARR
New MRR = Total Number of New Customers * Monthly Recurring Revenue per Customer
⬇︎
New ARR = Total Number of New Customers * Annual Recurring Revenue per Customer
Churned MRR / Churned ARR
Churned MRR = Total Number of Churned Customers * Monthly/Annual Recurring Revenue per Customer
Net MRR / Net ARR
Net MRR = MRR - Churned MRR
MRR Growth Rate
MRR Growth Rate = (New MRR - Churned MRR) / MRR
NRR (Net Dollar Retention)
percentage reflecting how a business' monthly/annual recurring revenue (MRR/ARR) has grown or shrunk within a particular period.
Net Dollar Retention = (Starting MRR + Expansion MRR - Contracted MRR - Churned MRR) / Starting MRR
Median as 109%.
Above 120% is excellent.
Renewal rate
Can be done by customer, though not really relevant in a SaaS business with varying price points:
Renewal rate = (number of customers who renewed / number of customers) * 100
else, by revenue:
Renewal rate = (revenue from renewals / revenue from existing customers) * 100
Resources
