Glossary · Business

SaaS Metrics

A set of key performance indicators specific to subscription-based software businesses.

SaaS (Software as a Service) metrics are a standardized set of KPIs used to measure the health, growth, and efficiency of subscription-based software businesses. Core SaaS metrics include: MRR/ARR (recurring revenue), Churn Rate (customer/revenue loss), CLV (customer lifetime value), CAC (customer acquisition cost), CLV:CAC ratio (unit economics), Net Revenue Retention (expansion minus churn), Gross Margin (revenue minus cost of goods sold), Burn Rate (cash consumption), Runway (months of cash remaining), and Rule of 40 (growth rate + profit margin should exceed 40%). These metrics provide a comprehensive framework for evaluating SaaS business performance, guiding investment decisions, and benchmarking against industry standards.

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