/saas-revenue-growth-metrics

Example: Healthy SaaS Metrics

Company: ProjectHub (mid-market project management SaaS) Stage: Growth stage, Series B funded Customer Base: 200 accounts, 20,000 users Period: Monthly snapshot

Revenue Metrics

MRR/ARR

Starting MRR: $2,000,000
+ New MRR: $100,000 (10 new accounts)
+ Expansion MRR: $80,000 (upsells + usage growth)
- Churned MRR: $30,000 (5 accounts churned)
- Contraction MRR: $10,000 (3 accounts downgraded)
Ending MRR: $2,140,000

MRR Growth Rate: 7% MoM
ARR: $25.7M

ARPA/ARPU

ARPA = $2,140,000 / 200 accounts = $10,700/month
ARPU = $2,140,000 / 20,000 users = $107/month
Average seats per account = 100 users

Revenue Components

New MRR: $100K (5% of total)
Expansion MRR: $80K (4% of total)
Churned MRR: $30K (1.5% of total)
Contraction MRR: $10K (0.5% of total)

Retention & Expansion Metrics

Churn Rate

Logo Churn: 5 / 200 = 2.5% monthly (~26% annual)
Revenue Churn: $30K / $2M = 1.5% monthly (~17% annual)

Analysis: Revenue churn < logo churn = losing smaller customers, which is healthy.

NRR

Starting ARR: $24M
Expansion: $960K (annual)
Churned: $360K (annual)
Contraction: $120K (annual)
Ending ARR: $24.48M

NRR = $24.48M / $24M = 102%

Quick Ratio

Gains = $100K + $80K = $180K
Losses = $30K + $10K = $40K
Quick Ratio = $180K / $40K = 4.5

Analysis

✅ Strengths

Strong growth:

• 7% MoM MRR growth
• Healthy mix: 5% new + 4% expansion

Excellent retention:

• 2.5% logo churn (below 5% threshold)
• 1.5% revenue churn (better than logo)
• 102% NRR (growing without new logos)

Efficient expansion:

• $80K expansion MRR (4% of base)
• Expansion-driven NRR
• Average expansion per account: $400/month

Sustainable growth:

• Quick Ratio 4.5 (gains far exceed losses)
• Revenue churn declining (was 2% six months ago)
• Newer cohorts retain better than older cohorts

📊 Opportunities

Expansion room:

• NRR at 102% is good, but room to grow to 110-120%
• Only 40% of customers have expanded (could push to 60%)
• Cross-sell opportunity: 30% of customers don't use integrations add-on

ARPU optimization:

• $107/user is solid for mid-market, but enterprise segment shows $200/user potential
• Could introduce premium tier for advanced features

Reduce churn:

• 2.5% logo churn is acceptable but not excellent
• Analysis shows 70% of churn happens in first 90 days (onboarding problem)
• Fix: Improve onboarding, aim for <2% logo churn

Actions Recommended

1. Scale acquisition aggressively — Unit economics are strong (see saas-economics-efficiency-metrics for CAC/LTV)
2. Improve onboarding — Reduce early churn from 5% to 3% in first 90 days
3. Expand cross-sell — Push integrations add-on to 30% of base without it (potential +$30K MRR)
4. Test premium tier — 20 enterprise customers show willingness to pay 2x for advanced features
5. Monitor cohort retention — Continue tracking that new cohorts retain better than old

Cohort Retention Trend (Positive Signal)

Analysis: Newer cohorts retaining better = product improvements working. Safe to scale acquisition.