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SaaS Metrics Definitions and Formulas

This reference explains recurring-revenue, retention, efficiency, and sales metrics. Use it to understand a calculation before comparing it with your organization’s source records.

Core recurring-revenue metrics

ARR annualizes recurring contract value. MRR expresses recurring value monthly. NRR includes expansion from an existing cohort; GRR excludes expansion. Definitions and period choices must be applied consistently.

Efficiency and retention metrics

Rule of 40 combines growth and a chosen profit-margin measure. LTV/CAC, CAC payback, burn multiple, churn, and pipeline metrics depend on the inputs and methodology your team selects; benchmarks are context, not guarantees.

Next step

Use the calculators for a transparent worked formula, then review the result with the records and accounting policies that apply to your business.