SaaS Metrics Glossary

24 metrics, defined the exact way investors and boards expect to hear them — so your reporting doesn't get "well, that's not quite how we calculate it" pushback in a board meeting.

Revenue Metrics

1. MRR — Monthly Recurring Revenue Sum of all recurring subscription revenue normalized to a monthly amount. Excludes one-time fees, professional services, and usage overages unless contractually committed.

2. ARR — Annual Recurring Revenue ARR = MRR × 12 The headline number boards track quarter over quarter.

3. ACV — Annual Contract Value ACV = Total Contract Value ÷ Contract Term (in years) Used to compare deal sizes across contracts of different lengths on an apples-to-apples basis.

4. TCV — Total Contract Value TCV = ACV × Contract length (years) The full value of the contract, used for bookings reporting.

Retention & Churn Metrics

5. NRR — Net Revenue Retention NRR = (Starting ARR + Expansion − Contraction − Churn) ÷ Starting ARR × 100 Excludes new-logo revenue. The single most-watched retention metric by investors — 100%+ means your existing base is growing revenue even with zero new sales.

6. GRR — Gross Revenue Retention GRR = (Starting ARR − Contraction − Churn) ÷ Starting ARR × 100 Same as NRR but excludes expansion, and is capped at 100% — isolates how much revenue you'd have with no upsell at all. Boards use GRR and NRR together: GRR shows retention health, NRR shows retention-plus-growth.

7. Logo Churn Rate Logo Churn Rate = Customers Lost in Period ÷ Customers at Start of Period

8. Logo Retention Rate Logo Retention Rate = 1 − Logo Churn Rate

9. Revenue Churn Rate Revenue Churn Rate = Revenue Lost in Period ÷ Revenue at Start of Period

Acquisition & Efficiency Metrics

10. CAC — Customer Acquisition Cost CAC = Total Sales & Marketing Spend ÷ New Customers Acquired (same period)

11. CAC Payback Period CAC Payback (months) = CAC ÷ (Average MRR per new customer × Gross Margin %) How many months it takes for a new customer to "pay back" the cost of acquiring them. Under 12–18 months is considered healthy for most B2B SaaS.

12. LTV — Customer Lifetime Value LTV = (Average Revenue per Account × Gross Margin %) ÷ Revenue Churn Rate

13. LTV:CAC Ratio LTV:CAC = LTV ÷ CAC Target ≥3:1. Below 1:1 means you're losing money on every customer over their lifetime; above 5:1 can actually signal you're under-investing in growth.

14. Magic Number Magic Number = (Current Quarter Revenue − Previous Quarter Revenue) × 4 ÷ Previous Quarter S&M Spend Measures sales & marketing efficiency at converting spend into new revenue. Above 0.75 is generally considered efficient enough to justify increased S&M investment.

15. Rule of 40 Rule of 40 = Revenue Growth Rate % + Profit Margin % A combined score investors use to judge whether a company is balancing growth and profitability — should be ≥40.

16. Burn Multiple Burn Multiple = Net Burn ÷ Net New ARR How much cash it costs to generate a dollar of new ARR. Under 1.5x is considered efficient for growth-stage SaaS; over 2–3x draws investor scrutiny.

Sales & Pipeline Metrics

17. Gross Margin Gross Margin = (Revenue − COGS) ÷ Revenue

18. SaaS Quick Ratio Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR) Above 4 is considered strong growth efficiency; below 1 means you're losing MRR faster than you're adding it.

19. Pipeline Coverage Ratio Pipeline Coverage = Open Pipeline $ ÷ Quota $ Typical healthy range: 3–4x.

20. Win Rate Win Rate = Closed-Won Opportunities ÷ (Closed-Won + Closed-Lost Opportunities)

21. Sales Cycle Length Sales Cycle Length = Average number of days from Opportunity Created to Closed-Won

22. Average Sales Price (ASP) ASP = Total Revenue Closed ÷ Number of Deals Closed

23. Expansion Revenue Rate Expansion Revenue Rate = Expansion ARR ÷ Starting ARR

24. ARR per Employee ARR per Employee = Total ARR ÷ Total FTE Count A capital-efficiency metric investors use to compare how leanly a company is scaling relative to peers.