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SaaS Metrics

A list of popular SaaS Key Performance Indicators and Metrics.

 

Net Monthly Recurring Revenue (MRR)

monthly recurring revenue chart

Description
MRR is a measurement of the total predictable revenue you expect to make on a monthly basis.

Net MRR = New MRR + Expansion MRR – Churned MRR

  • New MRR – MRR from new customers
  • Expansion MRR – MRR from gained from existing customers when they upgrade their subscriptions
  • Churned MRR – MRR lost from existing customers when they downgrade or cancel their subscriptions

Popular resources for MRR: 

 


SaaS Quick Ratio

Description
“The Quick Ratio of a SaaS company is the measurement of its growth efficiency. How reliable can a company grow revenue given its current churn rate? That’s the question the Quick Ratio metric answers.

To calculate your Quick Ratio you simply divide new MRR by lost MRR. The higher the ratio, the healthier the growth is at the company.” (From BareMetrics)

Quick Ratio = (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR)

Popular resources for Quick Ratio: 

 


Customer Acquisition Costs (CAC)

LTV to CAC ratio chart

Description
Cost to acquire a customer.

CAC = Cost of Sales & Marketing / New Customers

 


Customer Lifetime Value (LTV)

Description
A prediction of the net profit attributed to the entire future relationship with a customer.

LTV = (Average Customer Revenue x Gross Margin %) / Customer Churn Rate

 


LTV:CAC Ratio

Description
Measures the cost of acquiring a customer to the lifetime value. An ideal LTV:CAC ratio is 3 (your customer’s lifetime value should be 3x the cost to acquire them).

LTV:CAC = Customer Lifetime Value / Customer Acquisition Costs

Popular resources for CAC & LTV: 

 


Churn Rates

Logo/Customer Churn

Description
Percentage of customers you have lost from existing customers in a period.

 

Revenue Churn

Description
Percentage of revenue you have lost from existing customers in a period.

Popular resources for Churn:

 

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