The metrics that matter.

The total predictable subscription revenue your business earns in a single month, normalised to a monthly value.

Your recurring subscription revenue expressed as an annual run-rate — simply MRR multiplied by twelve.

The average recurring revenue generated by each active customer over a period.

The average annualised recurring revenue of a single customer contract, normalised to a one-year value.

The total value of a customer contract over its entire term, including recurring and one-off charges.

The total value of contracts customers have committed to over a period, recognised at the moment of signing.

The total amount you have invoiced customers over a period, regardless of when that revenue is recognised.

Current MRR adjusted for known future changes — signed expansions and contractions and confirmed churn not yet reflected in billing.

Deferred revenue is cash collected for service not yet delivered — a balance-sheet liability you earn into revenue over the term.

Revenue recognition is the ASC 606 / IFRS 15 rule that books revenue when you deliver the service, not when cash lands.

Annual run rate annualises a recent period of revenue — latest month times twelve, or latest quarter times four — into a full-year figure.

Annual billing charges a year upfront, typically at a 15–20% discount, pulling cash forward and locking customers in for twelve months.

Discounting is any price below list; because subscription discounts recur, they shrink a customer's entire LTV, not just one month.

Usage-based billing charges customers in proportion to how much they consume — per API call, seat, or transaction — not a flat fee.

Reactivation MRR is recurring revenue from previously churned customers who return and start paying again — the fifth MRR movement.

The percentage of customers who cancel their subscription over a given period, usually a month.

The percentage of recurring revenue lost to cancellations and downgrades over a period.

The percentage of recurring revenue you retain from existing customers over a period, including expansion and after losses.

The percentage of recurring revenue you retain from existing customers before counting any expansion.

Recurring revenue lost when existing customers downgrade, remove seats, or drop add-ons without cancelling entirely.

The percentage of customers (logos) who cancel entirely over a period, counted as accounts rather than revenue.

Net dollar retention (NDR) is the percentage of recurring revenue an existing-customer cohort keeps over a period, expansion included.

Dunning is the automated retry-and-reminder process that recovers failed payments before an expired or declined card causes churn.

Involuntary churn is subscription revenue lost to failed payments, not cancellations, when an expired or declined card lapses the account.

Net promoter score (NPS) measures customer loyalty by subtracting the percentage of detractors from promoters, on a −100 to +100 scale.

Cohort analysis groups customers by when they signed up and tracks each group over time to reveal how retention truly behaves.

Customer retention rate (CRR) is the percentage of customers you keep over a period, excluding any new ones acquired during it.

Negative churn is when expansion from existing customers outweighs the revenue lost to downgrades and churn, so the base grows itself.

The total recurring revenue (or gross profit) you expect to earn from an average customer over their entire relationship with you.

The average cost of acquiring one new paying customer, including all sales and marketing spend.

The ratio of customer lifetime value to customer acquisition cost — the headline test of whether your growth pays for itself.

The number of months it takes for a customer to repay the cost of acquiring them, measured in gross-margin revenue.

A measure of growth efficiency comparing the MRR you gained to the MRR you lost in a period.

Additional recurring revenue earned from existing customers through upgrades, add-ons, and seat increases.

The overall change in MRR over a period after combining all five movements — new, expansion, reactivation, contraction, and churn.

A successor to the Rule of 40 that weights revenue growth more heavily than profit, reflecting how much more investors value durable growth.

Compound annual growth rate (CAGR) is the smoothed yearly rate at which revenue would have grown if it compounded steadily.

TAM, SAM and SOM size a market in three narrowing layers — total demand, the slice you can serve, and the share you can win.

Lead velocity rate (LVR) is the month-over-month percentage growth in your qualified leads — a leading indicator of future revenue.

A rule of thumb that a healthy SaaS company's revenue growth rate plus its profit margin should add up to at least 40.

A capital-efficiency metric measuring how much cash a company burns to add each pound of net new annual recurring revenue.

A sales-efficiency metric measuring how much new annual recurring revenue each pound of sales and marketing spend generates.

The percentage of revenue left after the direct cost of delivering your product, before sales, marketing, and overhead.

The rate at which a company spends its cash reserves, usually measured as net cash lost per month.

The number of months a company can keep operating at its current net burn before it runs out of cash.

Revenue per employee divides annual recurring revenue by headcount — the fastest read on how efficiently a SaaS turns people into ARR.

Free cash flow is operating cash flow minus capital expenditure — the real cash a business keeps to fund growth, repay debt, or hold.

Merchant of record (MoR) is the legal seller on the customer's statement, owning payments, sales tax and VAT, and chargebacks.

The charges a payment provider takes on each transaction — a percentage plus a fixed fee — that quietly reduce the revenue you actually keep.

EBITDA is earnings before interest, tax, depreciation and amortisation — a proxy for a SaaS business's core operating profitability.

Cost of goods sold (COGS) for SaaS is the direct cost of delivering the service — hosting, support and payment fees.

Free trial conversion rate is the share of trial users who become paying customers, dividing trials that convert by trials started.

Activation rate is the percentage of new sign-ups who reach a product's "aha" moment — the first action proving they got real value.

Time to value (TTV) is how long it takes a new customer to reach their first meaningful outcome with your product after signing up.