The Guide to
SaaS Metrics

Table of Contents

Created by Equals.

The Guide to
SaaS Metrics

Table of Contents

Created by Equals.

Metrics to Measure

This guide is intended to be a single-stop reference for all the metrics that matter to your SaaS business. But before diving in, remember that no single metric can provide a complete picture of your business’s health. Each metric must be interpreted in the context of the others. And know that a change in one metric usually has a ripple effect. This interplay between metrics is what will enable a comprehensive understanding of your SaaS business and its potential value.

For example, let’s revisit the Triangle of Despair. Taking a step back, we can see that our initial Customer Acquisition Costs (CAC) form the triangle’s depth. The incremental revenue gained between periods aligns with the Average Revenue Per Account (ARPA), and the cumulative absolute value across every bar represents the cumulative Customer Lifetime Value (LTV).

Company cash flow with metrics
Businesses must optimize across multiple metrics to escape the Triangle of Despair.

This illustrates that a SaaS business must effectively manage all these dynamics to escape the Triangle of Despair. The critical question is: How quickly can despair turn into profitability? And how big is the prize outside the triangle?

Category Description Metrics
Unit Economics How profitable is each customer relationship over its lifetime?

Can we scale customer acquisition sustainably? 		Average Revenue Per Account (ARPA)
Lifetime Revenue (LTR)
Lifetime Value (LTV)
Customer Acquisition Cost (CAC)
LTV:CAC
Payback Period
ARR How is our recurring revenue growing, and what are the key factors driving changes in this growth? ARR
ARR Components (Gross New, Churn, Contraction, Expansion, and Restart ARR)
Retention How effectively are we retaining our customer base, and what are the reasons for customer loss or reduction in spend? Gross Logo Churn
Gross Dollar Churn
Net Dollar Churn
Gross Dollar Retention
Net Dollar Retention
Logo Retention
Engagement How frequently and deeply are users interacting with our product, and what does this imply about its value? DAU, WAU, MAU
DAU/WAU, DAU/MAU
A3x7
Investor Benchmarks How efficiently is our company using its resources to generate growth, and how does it compare to market expectations? ARR Multiple
Burn Multiple Magic Number
SaaS business performance metrics covered in this guide.

Let’s find out.

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ARPA: Average Revenue per Account