SaaS Metrics Library
A reference for key SaaS metrics, their explanations, and calculation formulas.
| Metric | Explanation | Formula | Data Readiness | Action |
|---|---|---|---|---|
| ARR | Annual Recurring Revenue – committed recurring revenue from subscriptions, normalized to a year. | Sum of all subscription revenue annually | High | |
| MRR | Monthly Recurring Revenue – normalized recurring revenue on a monthly basis. | Sum of all subscription revenue monthly | High | |
| NRR | Net Revenue Retention – measures expansion, contraction, and churn within existing customers. | ((Starting MRR + Expansion - Contraction - Churn) / Starting MRR) | Medium | |
| GRR | Gross Revenue Retention – similar to NRR but excludes expansion revenue. | ((Starting MRR - Contraction - Churn) / Starting MRR) | Medium | |
| Bookings | Total value of customer contracts signed in a given period. | Sum of new, renewal, and expansion contract values | High | |
| Billings | Revenue invoiced in a period, regardless of service delivery. | Total invoices issued during the period | High | |
| Revenue (GAAP) | Revenue recognized per GAAP accounting standards. | Portion of billings recognized as earned revenue | High | |
| ACV | Annual Contract Value – the annualized value of a customer contract. | Total contract value / contract duration (in years) | Medium | |
| TCV | Total Contract Value – includes multi-year deals and one-time fees. | Sum of recurring + non-recurring contract components | Medium | |
| Deferred Revenue | Revenue received but not yet earned; sits as a liability on balance sheet. | Sum of prepaid contracts not yet recognized | High | |
| Revenue Backlog | Expected future revenue from signed contracts not yet billed/recognized. | Sum of committed revenue yet to be recognized | Medium | |
| Gross Margin | Revenue minus COGS, expressed as a %. | (Revenue - COGS) / Revenue | High | |
| EBITDA | Earnings before interest, taxes, depreciation, and amortization. | Operating Profit + Depreciation + Amortization | High | |
| Cash Burn | Net cash outflow from operations over a period. | Total cash expenses - revenue | High | |
| Runway | How long the company can operate at current burn rate. | Cash / Monthly Burn Rate | High | |
| ARR per FTE | Efficiency metric showing revenue per employee. | ARR / Total Full-Time Employees | Medium | |
| CARR | Committed ARR – includes signed-but-not-yet-live ARR, excludes churn. | New Logo ARR + Upsell ARR – Churned ARR – Downsell ARR | Low |