/business-metrics-calculator

Business Metric Definitions

Revenue metrics

MRR (Monthly Recurring Revenue) The predictable monthly revenue from active subscriptions. Excludes one-time fees, professional services, and usage overages unless contracted.

Components:

• New MRR — from new customers acquired this month
• Expansion MRR — upgrades, seat additions, upsells from existing customers
• Contraction MRR — downgrades from existing customers
• Churned MRR — lost from customers who cancelled

ARR (Annual Recurring Revenue) MRR × 12. A forward-looking measure of annualised subscription run rate, not a trailing 12-month total.

ACV (Annual Contract Value) Total contract value divided by contract length in years. Used for comparing deal sizes.

Retention and churn metrics

Logo Churn Rate (monthly) churned customers / customers at start of month Measures how many customers you lose, regardless of their size.

Revenue Churn Rate (monthly) churned MRR / MRR at start of month Weights churn by customer value.

Net Revenue Retention (NRR) (starting MRR + expansion MRR − contraction MRR − churned MRR) / starting MRR

100% means existing customer revenue is growing even without new customer acquisition. Benchmark: best-in-class SaaS > 120%.

Gross Revenue Retention (GRR) (starting MRR − contraction MRR − churned MRR) / starting MRR Upper-bound 100% (expansion excluded). Measures pure downside.

Unit economics

LTV (Customer Lifetime Value) ARPU × Gross Margin / Monthly Churn Rate

Where:

• ARPU = average revenue per user per month
• Gross Margin = (revenue − COGS) / revenue
• Monthly Churn Rate = monthly logo or revenue churn (decimal)

LTV represents the average total gross profit expected from a customer over their lifetime.

CAC (Customer Acquisition Cost) Total Sales & Marketing Spend / New Customers Acquired

Typically calculated over the same period (quarter or month). Fully-loaded CAC includes salaries, tools, and overhead attributable to S&M.

LTV:CAC Ratio LTV / CAC

• < 1: Destroying value per customer
• 1–3: Marginal; likely unprofitable
• 3–5: Healthy

• 5: Either very efficient or under-investing in growth

Payback Period CAC / (ARPU × Gross Margin) in months

How many months until a new customer repays their acquisition cost. Benchmark: < 12 months for high-growth; < 18 months for enterprise.

Engagement metrics

DAU / MAU (Daily / Monthly Active Users) Active is defined by the product — must be specified explicitly (login, any event, core action).

DAU/MAU Ratio (Stickiness) Proportion of monthly actives who return daily. > 20% is strong for consumer; > 10% is typical for B2B.

Session metrics

• Session length — average time per session
• Sessions per user per week — frequency signal
• Depth — pages/actions per session

Growth metrics

MoM Growth (current month value − prior month value) / prior month value

WoW / YoY Growth Same formula, different period. YoY removes seasonality effects.

Quick Ratio (New MRR + Expansion MRR) / (Contraction MRR + Churned MRR) Ratio > 4 = high-efficiency growth. Measures "quality" of growth — how much gross adds are offset by losses.