SaaS Metrics Calculator
Calculate key SaaS business metrics: MRR, ARR, churn rate, customer LTV, CAC, and LTV:CAC ratio.
Benchmark your startup health against industry standards.
SaaS (Software as a Service) businesses rely on a distinct set of financial metrics that differ fundamentally from traditional one-time-sale businesses. The recurring nature of subscription revenue makes these metrics essential for understanding business health.
Monthly Recurring Revenue (MRR): MRR = Σ (Active Subscribers × Monthly Plan Price)
Or broken into components: MRR = New MRR + Expansion MRR − Churned MRR − Contraction MRR
Annual Recurring Revenue (ARR): ARR = MRR × 12 (Only valid if business is stable — not for rapidly growing or declining companies)
Churn Rate (monthly): Churn Rate = Customers Lost This Month ÷ Customers at Start of Month × 100%
Revenue Churn: Revenue Churn = MRR Lost to Cancellations ÷ MRR at Start of Period × 100%
Customer Lifetime Value (LTV): LTV = ARPU ÷ Monthly Churn Rate Where ARPU = Average Revenue Per User per month
Customer Acquisition Cost (CAC): CAC = Total Sales & Marketing Spend ÷ New Customers Acquired
LTV:CAC Ratio — the gold standard SaaS health metric: LTV:CAC = LTV ÷ CAC
- Below 1:1 → losing money on every customer
- 1:1 to 3:1 → marginal or acceptable
- 3:1 → healthy benchmark
- Above 5:1 → potentially under-investing in growth
Worked example: MRR = $50,000. Monthly churn = 2%. ARPU = $50. CAC = $300. LTV = $50 / 0.02 = $2,500 LTV:CAC = $2,500 / $300 = 8.3:1 — excellent health. ARR = $50,000 × 12 = $600,000
Payback period = CAC / ARPU = $300 / $50 = 6 months — how long to recoup acquisition cost. Industry target is under 12 months.