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SaaS Metrics

The core metrics every SaaS founder must track. MRR, ARR, Churn, CAC, LTV, and NRR are the language of SaaS investors.

Syntax

business-and-strategy
// Key metrics formulas

Example

business-and-strategy
// MRR (Monthly Recurring Revenue)
MRR = sum of all active subscription monthly fees

// ARR (Annual Recurring Revenue)
ARR = MRR × 12

// Customer Churn Rate
churnRate = (lost customers / start-of-period customers) × 100

// CAC (Customer Acquisition Cost)
CAC = total sales & marketing spend / new customers acquired

// LTV (Customer Lifetime Value)
LTV = ARPU / churnRate  // or ARPU × avg customer lifespan

// LTV:CAC Ratio (healthy = 3:1 or higher)
ltvCacRatio = LTV / CAC

// NRR (Net Revenue Retention)
NRR = (startMRR + expansion - contraction - churn) / startMRR × 100
// Healthy SaaS: NRR > 100% (expansion revenue offsets churn)