Understanding and tracking SaaS metrics is crucial for building a sustainable subscription business. This calculator helps you compute the most important key performance indicators (KPIs) that investors, board members, and management teams use to evaluate SaaS company health.
MRR is the predictable total revenue your business generates each month from all active subscriptions. It's the foundational metric for any SaaS business because it represents the core value of your recurring business model.
Types of MRR:
ARR is simply MRR multiplied by 12, representing the yearly value of your recurring revenue. This metric is especially important for enterprise SaaS companies and is often used in company valuations.
Churn rate measures the percentage of customers who cancel their subscription within a given period. There are two types:
Low churn is critical for SaaS success. Even small improvements in churn can dramatically impact long-term revenue.
LTV represents the total revenue you can expect from a customer over their entire relationship with your company. It's calculated by dividing the average revenue per user by the churn rate.
A high LTV indicates strong customer retention and monetization.
CAC is the total cost of acquiring a new customer, including marketing, sales, and related expenses. Understanding CAC helps you determine sustainable growth strategies.
This ratio compares customer lifetime value to acquisition cost. It tells you whether your customer acquisition is profitable and sustainable.
| Metric | Poor | Average | Good | Excellent |
|---|---|---|---|---|
| Monthly Churn Rate | >5% | 3-5% | 1-3% | <1% |
| LTV:CAC Ratio | <1:1 | 1:1 - 2:1 | 3:1 - 5:1 | >5:1 |
| Net Revenue Retention | <90% | 90-100% | 100-120% | >120% |
| Monthly Growth Rate | <2% | 2-5% | 5-10% | >10% |
The calculator provides a health score based on your metrics compared to industry benchmarks:
A popular benchmark for SaaS companies is the "Rule of 40," which states that a healthy SaaS company's growth rate plus profit margin should equal or exceed 40%. For example:
Tracking SaaS metrics is essential for making data-driven decisions about your business. Use this calculator regularly to monitor your key metrics, identify trends, and make informed decisions about product, pricing, and growth strategies. Remember that context matters - early-stage companies will have different benchmark expectations than mature enterprises.