SaaS metrics guide
SaaS Metrics Cheat Sheet
Most SaaS reporting fails in the same way: six numbers computed with six different definitions, so none of them reconcile. This page fixes the formulas and the benchmarks in one place, and each row links to the calculator that computes it from your own inputs.
Last updated 2026-10-20
The cheat sheet
| Metric | Formula | Healthy benchmark |
|---|---|---|
| MRR | Recurring revenue normalised to one month | Growing month over month without one-off revenue |
| Churn | Customers (or MRR) lost ÷ opening customers (or MRR) | Under 2% monthly for early-stage B2B |
| LTV:CAC | (ARPU × gross margin ÷ churn) ÷ CAC | About 3x |
| CAC payback | CAC ÷ (ARPU × gross margin) | Under 12 months |
| Quick ratio | (New + expansion) ÷ (churned + contraction) | 2 or above; 4+ is best-in-class |
| Runway | Cash ÷ net monthly burn | 12+ months minimum, 18 common |
MRR and ARR
MRR is recurring revenue normalised to one month; ARR is MRR × 12. The two errors that matter are booking annual plans at face value and including one-off services revenue. Both inflate the base and every ratio built on it.
Churn
Use the start-of-period denominator. A 3% monthly churn rate implies about 33 months of average lifetime, and lifetime is what turns ARPU into LTV. Report logo churn and revenue churn separately — they routinely differ by more than a factor of two.
LTV:CAC
LTV must use gross profit, not revenue. The revenue shortcut overstates LTV by 25% at an 80% margin. Three times is the conventional line; above 5x usually indicates underinvestment in growth rather than efficiency.
CAC payback
Payback is the cash-time version of the same inputs. A healthy LTV:CAC with a slow payback still drains the bank account. Under 12 months means growth is broadly self-funding.
Quick ratio
The quick ratio reduces the MRR waterfall to one number: new plus expansion over churned plus contraction. Omitting contraction is the most common way to overstate it.
Runway
Cash divided by net burn. Use net burn, handle the profitable case explicitly, and remember payback is a working-capital cost that shortens runway every time you grow.
How the six fit together
They are one chain, not six independent numbers:
MRR → ARPU
churn → lifetime
ARPU × lifetime × margin → LTV → LTV:CAC
CAC ÷ monthly gross profit → payback
waterfall → quick ratio
cash ÷ net burn → runwayIf two of the six disagree, the definitions differ. Fix the definitions before fixing the business. Benchmarks for all six are collected on the SaaS metrics benchmarks page.
Run the numbers yourself
MRR & ARR Calculator — free, no signup, results computed in your browser.
Open the MRR & ARR calculator →Frequently asked questions
What are the most important SaaS metrics?
MRR, churn, LTV:CAC, CAC payback, quick ratio and runway. MRR is the revenue input, churn sets lifetime, the pair produces unit economics, quick ratio reports on the whole engine, and runway constrains how long you have to fix anything.
What are good benchmarks for SaaS metrics?
About 3x LTV:CAC, under 12-month CAC payback, a quick ratio of 2 or above, under 2% monthly churn for early-stage B2B SaaS, and at least 12 months of runway. All vary by segment; compare within your own.
Do these formulas work for usage-based pricing?
Mostly. Committed minimums count as MRR; variable consumption above the minimum should be reported separately so the recurring base stays comparable. Churn and LTV need the same treatment — use committed revenue, not best-month revenue.
Related guides
- What Is a Good LTV:CAC Ratio?A good LTV:CAC ratio is about 3x for most B2B SaaS. See benchmarks by segment, why the ratio must use gross profit, and the mistakes that inflate it.
- Churn Rate FormulaThe churn rate formula is customers lost divided by customers at the start of the period. Includes revenue churn, Excel formulas, examples and benchmarks.
- MRR vs ARR: How to Calculate BothMRR is recurring revenue normalised to one month; ARR is MRR × 12. Learn the normalisation rules, what to exclude, and the mistakes that inflate both.
- Startup Runway: What It Means and How to Calculate ItRunway is cash divided by net monthly burn. Learn the formula, why net burn matters, the profitable-business case, and how much runway you should hold.
Maintained by The SaaS Metrics Calculators Editorial Team
Maintained by the site’s editors, with every formula unit-tested and every benchmark traced to a published source
Formulas and benchmarks last reviewed October 2026.
This page is educational. Every figure is computed in your browser from the inputs you supply, and nothing is checked against your own accounts — treat results as a planning aid, not as financial advice.