Every SaaS founder knows they should be tracking metrics. But which ones? How often? And what does "good" actually look like? After working with thousands of SaaS companies at every stage, we've distilled the 20 metrics that matter most — and how to actually use them to make better decisions.
We've organized them into five categories: Growth, Revenue, Product, Customer Success, and Efficiency. You don't need to track all 20 from day one — but you should know which ones matter at your stage.
Growth Metrics
1. Monthly Recurring Revenue (MRR)
The single most important metric for any subscription business. MRR is the normalized monthly revenue from all active subscriptions. Calculate it by summing the monthly value of every active subscription.
Why it matters: MRR gives you a real-time pulse on business health. Track New MRR (from new customers), Expansion MRR (from upsells), Contraction MRR (from downgrades), and Churned MRR separately to understand what's driving growth.
Benchmark: At Series A, investors typically want to see $50K–$200K MRR with clear month-over-month growth.
2. MRR Growth Rate
The percentage increase in MRR month-over-month. Good SaaS companies grow MRR 10-20% month-over-month in early stages, settling to 3-8% at scale.
3. Customer Acquisition Cost (CAC)
Total sales and marketing spend divided by the number of new customers acquired in a given period. If you spent $50,000 on S&M in April and acquired 100 customers, your CAC is $500.
Benchmark: CAC should be recovered within 12 months. CAC payback period = CAC / MRR per customer.
4. CAC Payback Period
How many months it takes to recover the cost of acquiring a customer from their subscription revenue. Calculate as: CAC / (ACV * Gross Margin). Aiming for under 12 months for SMB, 18-24 months for enterprise is typical.
Revenue Metrics
5. Annual Recurring Revenue (ARR)
MRR × 12. ARR is the standard metric for SaaS companies with annual contracts and the primary valuation metric at most fundraising stages.
6. Average Revenue Per User (ARPU)
MRR divided by total number of active customers. Track changes in ARPU over time — rising ARPU typically indicates successful upselling; falling ARPU may indicate downmarket movement.
7. Net Revenue Retention (NRR)
NRR measures how much revenue you retain from existing customers, including expansion. An NRR above 100% means your existing customer base is growing even without new customer acquisition. This is one of the most important metrics for SaaS valuation.
Formula: (MRR at end of period from customers who were customers at start) / (MRR at start of period) × 100
Benchmark: Best-in-class SaaS: 120%+. Good: 110%+. Acceptable: 100%+. Below 100% is a red flag.
8. Gross Revenue Retention (GRR)
Similar to NRR but excludes expansion revenue. GRR measures pure churn impact. GRR tells you how well you retain customers at the current spending level.
Product Metrics
9. Daily/Monthly Active Users (DAU/MAU)
The ratio of DAU to MAU (stickiness) tells you how habitually users engage with your product. A DAU/MAU ratio above 20% is good; above 50% is exceptional.
10. Feature Adoption Rate
Percentage of users who have used a specific feature at least once. Track this for your core features to identify activation bottlenecks and untapped value.
11. Time to Value (TTV)
How long it takes a new customer to experience their first meaningful outcome with your product. Faster TTV correlates strongly with higher retention. Obsess over this metric during onboarding optimization.
Customer Success Metrics
12. Churn Rate
The percentage of customers or revenue lost in a given period. Monthly customer churn below 2% is good for SMB SaaS; below 0.5% is typical for enterprise.
13. Net Promoter Score (NPS)
A measure of customer satisfaction and likelihood to recommend. Survey customers asking "How likely are you to recommend us to a friend or colleague?" on a 0-10 scale. Calculate: % Promoters (9-10) minus % Detractors (0-6).
Benchmark: SaaS average NPS is around 30. Above 50 is excellent.
14. Customer Lifetime Value (LTV)
The total revenue you expect to receive from a customer over the entire relationship. Simple calculation: ARPU / Monthly Churn Rate. The LTV:CAC ratio should be at least 3:1 for a healthy SaaS business.
15. Customer Health Score
A composite score that predicts how likely a customer is to churn, renew, or expand. Good health scores typically incorporate: login frequency, feature usage, support ticket volume, NPS score, and payment history.
Efficiency Metrics
16. Gross Margin
Revenue minus cost of goods sold (COGS), divided by revenue. For SaaS, COGS typically includes hosting, support, and third-party tools. Best-in-class SaaS achieves 75-85% gross margins.
17. The Rule of 40
Revenue growth rate + profit margin should equal at least 40%. This is the most commonly used efficiency benchmark for growth-stage SaaS companies. Companies above 40 are considered healthy; above 60 is exceptional.
18. Magic Number
Measures the efficiency of your go-to-market spend. Formula: (ARR this quarter - ARR last quarter) × 4 / S&M spend last quarter. A magic number above 1.0 means you're generating strong return on S&M investment.
19. Burn Multiple
Net cash burned / Net new ARR added. If you burned $500K and added $250K in new ARR, your burn multiple is 2x. Below 1.5x is excellent; above 2.5x is a warning sign.
20. Payback Period by Channel
Calculate CAC payback period separately for each acquisition channel. This reveals which channels are most efficient and where to double down versus cut spending.
Which metrics matter at your stage?
Not all of these metrics are equally important at every stage. Here's a rough guide:
- Pre-product market fit: Time to Value, Feature Adoption, NPS, Qualitative customer feedback
- Post-PMF, pre-Series A: MRR Growth, CAC, Churn Rate, NPS, DAU/MAU
- Series A–B: NRR, LTV:CAC, Rule of 40, Magic Number, Gross Margin
- Series C+: All of the above, plus ARR by segment, cohort retention curves, NRR by tier
The biggest mistake founders make isn't tracking the wrong metrics — it's tracking too many too early. Pick the 3-5 that matter most at your stage, instrument them perfectly, and build the culture of reviewing them weekly. That discipline compounds over time into a genuine competitive advantage.
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