A growing resource of terms, metrics and calculations for your growing business.
ARR Growth Rate is the growth in annual recurring revenue during a specific time period, usually over 12 months. It indicates the velocity of your business's growth.
Annual Recurring Revenue is the annualised form of Monthly Recurring Revenue (MRR). ARR helps assess the amount of revenue a SaaS firm generates in a year.
Average Revenue Per User (ARPU) is the average revenue generated from a paying customer. It is usually calculated each month to analyse the value generated by a customer.
CAC Payback Period is a measure of how many months it takes a company to generate enough revenue to break even on the cost of acquiring a customer.
Churn Rate is the rate customers drop off their subscription plan over a defined period. It is often expressed as a percentage of the acquired customers.
Customer Acquisition Cost (CAC) is the average estimated amount of money that a firm must spend to acquire a paying customer.
General and Administrative expenses as a percentage of revenue is the proportion of revenue spent on G&A expenditures over a certain period.
Lifetime Value of a Customer is a measure of how much revenue a company is estimated to make from a customer over their relationship.
Monthly Recurring Revenue (MRR) is your company’s monthly average recurring revenue. This metric covers subscriptions charges, service agreements, and other recurring fees.
Net Revenue Retention (NRR) is the percentage of recurring revenue maintained from current customers during a specific period. It’s one of the most important metrics in SaaS.
Research and Development expenses as a percentage of revenue is the proportion of revenue spent on growth-related activities over a certain period.
Sales and Marketing expenses as a percentage of revenue is the proportion of revenue spent on growth-related activities over a certain period.
Unit Economics are simply the evaluation of financial performance of a single economic unit of value. Getting this metric right is critical for any business to be profitable.
