SaaS metrics

Monthly Recurring Revenue (MRR / CMRR)

MRR (Monthly Recurring Revenue) is the predictable revenue a SaaS business receives every month from active subscriptions. CMRR (Committed MRR) extends this by including future contracted revenue and reflecting known churn immediately.

Annual Recurring Revenue (ARR / CARR)

ARR (Annual Recurring Revenue) annualizes your monthly recurring revenue to project yearly subscription income. CARR (Committed ARR) extends this by including contracted but not yet active revenue.

MRR Growth Rate

MRR Growth Rate measures the month-over-month percentage change in Monthly Recurring Revenue, showing how quickly your SaaS subscription business is growing or contracting.

Churn Rate

Churn rate measures the percentage of recurring revenue lost from customer cancellations over a given period. It is one of the most critical SaaS health indicators for any subscription business.

Net Revenue Retention (NRR)

Net Revenue Retention (NRR), also called Net Dollar Retention, measures the percentage of recurring revenue retained from existing customers, including the effects of upgrades, downgrades, and churn.

Gross Revenue Retention (GRR)

Gross Revenue Retention (GRR), also called Gross Dollar Retention, measures the percentage of recurring revenue retained from existing customers, excluding any expansion. It isolates the true impact of churn and downgrades.

Customer Acquisition Cost (CAC)

Customer Acquisition Cost (CAC) measures the total cost of acquiring a new SaaS customer, including all sales and marketing expenses. It is a fundamental input for evaluating growth efficiency and unit economics.

Customer Lifetime Value (LTV)

Customer Lifetime Value (LTV) estimates the total revenue a customer generates over their entire relationship with your SaaS business, accounting for gross profit margin and average customer lifetime.

CAC Payback Period

CAC Payback Period measures how many months it takes to recover the cost of acquiring a new SaaS customer. It is a key indicator of capital efficiency and growth sustainability.

Rule of 40

The Rule of 40 is a SaaS benchmark stating that a healthy company's combined revenue growth rate and profit margin should equal or exceed 40%. It balances growth against profitability.

Gross Profit Margin

Gross Profit Margin measures the percentage of SaaS revenue retained after subtracting the cost of goods sold (COGS). SaaS companies typically target gross margins of 70-85% or higher.

Cost of Goods Sold (COGS)

COGS (Cost of Goods Sold) represents the direct costs of delivering your SaaS product to customers, including hosting, customer support, and third-party services.