SaaS Metrics Glossary
Thirty terms, defined the way an FP&A team would define them: what it means, the formula, a worked example, and what it gets confused with. Each definition is written to be quoted — cite us, we don’t mind.
A
- ACV (Annual Contract Value)The average annualised value of a customer contract.
- ARPU (Average Revenue Per User)MRR divided by active customers or accounts.
- ARR (Annual Recurring Revenue)MRR × 12; the annualised value of recurring subscriptions.
B
- Bookings vs Billings vs RevenueSigned value vs invoiced cash vs recognised revenue.
- Burn MultipleCash burned per dollar of net new ARR added.
C
- CAC (Customer Acquisition Cost)Sales and marketing cost to win one new customer.
- ChurnThe rate at which customers or revenue are lost per period.
- Cohort AnalysisTracking groups of customers from the same start period over time.
- Committed MRR (CMRR)MRR adjusted for known future changes: signed deals and notices.
- Contraction MRRMRR lost from customers who downgrade but stay.
D
- Deferred RevenueCash invoiced for service not yet delivered; a liability.
E
- Expansion RevenueAdditional MRR from existing customers: upgrades, seats, add-ons.
G
- Gross MarginRevenue minus cost of revenue, as a percentage.
- GRR (Gross Revenue Retention)Revenue retained excluding any expansion; capped at 100%.
L
- Land and ExpandEnter small, grow the account through expansion revenue.
- Logo ChurnCustomer-count churn, ignoring how much each pays.
- LTV (Customer Lifetime Value)Total revenue (or gross profit) expected from a customer.
M
- SaaS Magic NumberNew ARR generated per dollar of prior-quarter S&M spend.
- MRR (Monthly Recurring Revenue)The normalised monthly value of all active subscriptions.
N
- NDR vs NRRTwo names for the same metric: net revenue/dollar retention.
- NRR (Net Revenue Retention)Revenue retained from an existing cohort including expansion.
P
- CAC Payback PeriodMonths of gross profit needed to recover acquisition cost.
- PLG (Product-Led Growth)The product itself drives acquisition, conversion and expansion.
Q
- SaaS Quick RatioMRR gained divided by MRR lost in a period.
- SaaS Quick Ratio vs Accounting Quick RatioSame name, unrelated metrics — growth quality vs liquidity.
R
- RPO (Remaining Performance Obligations)All contracted revenue not yet recognised, invoiced or not.
- Rule of 40Revenue growth % plus profit margin % should exceed 40.
- Run RateA period's results extrapolated to a full year.
S
- Sales EfficiencyNew revenue generated per unit of sales (and marketing) cost.
T
- T2D3Triple, triple, double, double, double: the venture growth path.
Need the number, not the definition? Head to the calculators or the 2025/26 benchmark ranges.