KPIs for SaaS Companies
These are the KPIs a subscription software company tracks for growth, retention and efficiency. Most of them depend on a clear definition of an active subscription.
The KPIs to track
Monthly Recurring Revenue (MRR)
Monthly recurring revenue is the predictable subscription revenue you expect each month, normalised to a monthly amount.
Formula and SQL query on the Monthly Recurring Revenue (MRR) page.
Annual Recurring Revenue (ARR)
Annual recurring revenue is your recurring subscription revenue annualised, usually MRR multiplied by twelve.
Formula and SQL query on the Annual Recurring Revenue (ARR) page.
Customer churn rate is the percentage of customers who cancel during a period, out of those you had at the start.
Formula and SQL query on the Customer Churn Rate page.
Net revenue retention shows how much recurring revenue you keep from existing customers after churn, downgrades and expansion.
Formula and SQL query on the Net Revenue Retention (NRR) page.
CAC payback period is how many months of gross profit from a new customer it takes to recover the cost of acquiring them.
Formula and SQL query on the CAC Payback Period page.
The LTV to CAC ratio compares what a customer is worth over their lifetime with what it costs to acquire them.
Formula and SQL query on the LTV to CAC Ratio page.
The SaaS magic number compares the revenue growth in one quarter with the sales and marketing spend of the quarter before.
Formula and SQL query on the SaaS Magic Number page.
The Rule of 40 adds a company's revenue growth rate to its profit margin as a quick check on the balance between growth and profitability.
Formula and SQL query on the Rule of 40 page.
Where the data usually lives
The billing system (subscriptions, invoices), the product database, the CRM and the finance system.
Measurement mistakes to avoid
- MRR should be normalised to monthly; annual plans entered at full value make months look like spikes.
- Discounts, credits and trials need an explicit rule for whether they count in MRR.
- Logo churn and revenue churn answer different questions; report both.
Questions to ask your data
You can type these as plain questions. SchemaChat turns each one into SQL against your connected database or uploaded file, runs it, and shows the SQL and the figures it used so you can check the answer before you share it. Check that the result matches how your business defines each KPI.
- What is our MRR and how did it change by component this month?
- What is net revenue retention for the last four quarters?
- How long does it take to pay back customer acquisition cost?
- Which plans have the highest churn?