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SaaS business metrics analysis - MRR, ARR, Churn, LTV, CAC, cohort analysis, and investor reporting
SaaS Metrics
Comprehensive SaaS metrics analysis covering MRR, ARR, Churn, LTV, CAC, cohort analysis, and investor reporting. Essential for SaaS founders, finance teams, and investors.
Overview
This skill enables:
Revenue metrics calculation (MRR, ARR, NRR)
Churn and retention analysis
Unit economics (LTV, CAC, LTV:CAC)
Cohort analysis and forecasting
Investor-ready reporting
Core Metrics Framework
1. Revenue Metrics
┌─────────────────────────────────────────────────────────────┐
│ MRR WATERFALL │
├─────────────────────────────────────────────────────────────┤
│ │
│ Starting MRR $100,000 │
│ + New MRR (new customers) +$15,000 │
│ + Expansion MRR (upgrades) +$8,000 │
│ + Reactivation MRR +$2,000 │
│ - Contraction MRR (downgrades) -$3,000 │
│ - Churn MRR (cancellations) -$7,000 │
│ ───────────────────────────────────────────── │
│ = Ending MRR $115,000 │
│ │
│ Net New MRR = $15,000 │
│ MRR Growth Rate = 15% │
│ │
└─────────────────────────────────────────────────────────────┘
Calculations:
mrr_metrics:
# Monthly Recurring Revenue
MRR: sum(all_active_subscriptions.monthly_value)
# Annual Recurring Revenue
ARR: MRR × 12
# MRR Components
new_mrr: sum(new_subscriptions_this_month)
expansion_mrr: sum(upgrades_this_month)
contraction_mrr: sum(downgrades_this_month)
churn_mrr: sum(cancelled_subscriptions_mrr)
reactivation_mrr: sum(reactivated_subscriptions)
# Net New MRR
net_new_mrr: new_mrr + expansion_mrr + reactivation_mrr - contraction_mrr - churn_mrr
# Growth Rates
mrr_growth_rate: (ending_mrr - starting_mrr) / starting_mrr × 100
mom_growth: (current_mrr - previous_mrr) / previous_mrr × 100
2. Churn Metrics
churn_metrics:
# Logo Churn (Customer Count)
logo_churn_rate:
formula: customers_lost / customers_start_of_period × 100
benchmark: <5% monthly for SMB, <2% for Enterprise
# Revenue Churn (MRR)
gross_revenue_churn:
formula: churned_mrr / starting_mrr × 100
benchmark: <3% monthly
# Net Revenue Churn (includes expansion)
net_revenue_churn:
formula: (churned_mrr - expansion_mrr) / starting_mrr × 100
target: negative (net expansion)
# Net Revenue Retention (NRR)
nrr:
formula: (starting_mrr - churn + expansion) / starting_mrr × 100
benchmark:
good: 100-110%
great: 110-120%
best_in_class: >120%
Churn Analysis Template:
## Churn Analysis - {Month}
### Summary
| Metric | Value | Benchmark | Status |
|--------|-------|-----------|--------|
| Logo Churn | 3.2% | <5% | ✅ |
| Gross Revenue Churn | 2.8% | <3% | ✅ |
| Net Revenue Retention | 108% | >100% | ✅ |
### Churn Breakdown
| Reason | Customers | MRR Lost | % of Total |
|--------|-----------|----------|------------|
| Price | 5 | $2,500 | 35% |
| Competitor | 3 | $1,800 | 25% |
| No longer needed | 4 | $1,500 | 21% |
| Product issues | 2 | $800 | 11% |
| Other | 2 | $600 | 8% |
### Cohort Performance
- Q1 2025 cohort: 95% retention at month 6
- Q4 2024 cohort: 88% retention at month 9
- Enterprise segment: 97% retention (best)
3. Unit Economics
┌─────────────────────────────────────────────────────────────┐
│ UNIT ECONOMICS │
├─────────────────────────────────────────────────────────────┤
│ │
│ Customer Lifetime Value (LTV) │
│ ──────────────────────────── │
│ ARPU × Gross Margin % │
│ ─────────────────────── = LTV │
│ Churn Rate │
│ │
│ Example: │
│ $100 ARPU × 80% margin / 3% churn = $2,667 LTV │
│ │
│ ═══════════════════════════════════════════════════════ │
│ │
│ Customer Acquisition Cost (CAC) │
│ ──────────────────────────────── │
│ Sales & Marketing Spend │
│ ─────────────────────────── = CAC │
│ New Customers Acquired │
│ │
│ Example: │
│ $50,000 S&M / 50 customers = $1,000 CAC │
│ │
│ ═══════════════════════════════════════════════════════ │
│ │
│ LTV:CAC Ratio = $2,667 / $1,000 = 2.67x │
│ CAC Payback = $1,000 / ($100 × 80%) = 12.5 months │
│ │
└─────────────────────────────────────────────────────────────┘
Benchmarks:
unit_economics_benchmarks:
ltv_cac_ratio:
poor: <1x
acceptable: 1-2x
good: 2-3x
great: 3-5x
excellent: >5x
cac_payback_months:
enterprise: <18
mid_market: <12
smb: <6
consumer: <3
gross_margin:
saas_typical: 70-85%
infrastructure: 50-70%
services_heavy: 40-60%
4. Cohort Analysis
cohort_analysis:
# Define cohorts by signup month
cohort_definition: signup_month
# Track retention over time
retention_matrix:
columns: [Month_0, Month_1, Month_2, ..., Month_12]
rows: [Jan_cohort, Feb_cohort, Mar_cohort, ...]
values: active_customers / initial_customers × 100
# Track revenue retention
revenue_cohort:
values: current_mrr / initial_mrr × 100
# Cohort LTV calculation
cohort_ltv:
formula: sum(all_revenue_from_cohort) / initial_cohort_size
Cohort Table Example:
Retention by Cohort (% of customers still active)
Month 0 Month 1 Month 2 Month 3 Month 6 Month 12
Jan '25 100% 92% 87% 84% 78% 65%
Feb '25 100% 94% 89% 86% 80% -
Mar '25 100% 93% 88% 85% - -
Apr '25 100% 95% 90% - - -
May '25 100% 94% - - - -
Jun '25 100% - - - - -
Average 100% 94% 89% 85% 79% 65%
Quick Ratio
quick_ratio:
formula: (new_mrr + expansion_mrr) / (contraction_mrr + churn_mrr)
interpretation:
"<1": Shrinking (losing more than gaining)
"1-2": Sustainable growth
"2-4": Good growth efficiency
">4": Excellent (hypergrowth potential)
example:
new_mrr: 15000
expansion_mrr: 8000
contraction_mrr: 3000
churn_mrr: 7000
quick_ratio: (15000 + 8000) / (3000 + 7000) = 2.3
Investor Reporting Template
Monthly Metrics Dashboard
# {Company} - Monthly Metrics Report
## {Month Year}
### Key Metrics Summary
| Metric | Current | Previous | Change | Benchmark |
|--------|---------|----------|--------|-----------|
| ARR | $1.38M | $1.20M | +15% | - |
| MRR | $115K | $100K | +15% | - |
| Net New MRR | $15K | $12K | +25% | - |
| NRR | 108% | 105% | +3pp | >100% ✅ |
| Logo Churn | 3.2% | 3.5% | -0.3pp | <5% ✅ |
| LTV:CAC | 2.7x | 2.5x | +0.2x | >3x ⚠️ |
| CAC Payback | 12.5mo | 13mo | -0.5mo | <12mo ⚠️ |
### MRR Waterfall
Starting MRR: $100,000
New: +$15,000 (12 customers)
Expansion: +$8,000 (25 upgrades)
Reactivation: +$2,000 (5 returns)
Contraction: -$3,000 (15 downgrades)
Churn: -$7,000 (18 cancellations)
═════════════════════════════
Ending MRR: $115,000
### Customer Metrics
| Segment | Customers | MRR | ARPU | Churn |
|---------|-----------|-----|------|-------|
| Enterprise | 45 | $45K | $1,000 | 1.5% |
| Mid-Market | 120 | $36K | $300 | 2.8% |
| SMB | 350 | $34K | $97 | 4.5% |
| **Total** | **515** | **$115K** | **$223** | **3.2%** |
### Runway & Burn
- Cash Balance: $2.5M
- Monthly Burn: $85K
- Runway: 29 months
- Revenue/Burn Ratio: 1.35x
### Goals vs Actuals
| Goal | Target | Actual | Status |
|------|--------|--------|--------|
| New Customers | 15 | 12 | 🔴 80% |
| Net New MRR | $12K | $15K | 🟢 125% |
| NRR | 105% | 108% | 🟢 103% |
| CAC Payback | 12mo | 12.5mo | 🟡 96% |
### Next Month Outlook
- Pipeline: $45K in qualified opportunities
- Expected closes: 8-10 customers
- Projected MRR: $125-130K
- Key risks: Enterprise deal slip, holiday slowdown
Forecasting Model
Bottom-Up Revenue Forecast
forecast_model:
# Starting point
base_mrr: 115000
# Growth assumptions
assumptions:
new_customers_monthly: 15
avg_new_customer_mrr: 1250
expansion_rate: 2% # of existing MRR
contraction_rate: 0.5%
logo_churn_rate: 3%
# Monthly calculation
monthly_forecast:
new_mrr: new_customers × avg_mrr
expansion_mrr: existing_mrr × expansion_rate
contraction_mrr: existing_mrr × contraction_rate
churn_mrr: existing_mrr × churn_rate
ending_mrr: |
starting_mrr
+ new_mrr
+ expansion_mrr
- contraction_mrr
- churn_mrr
12-Month Projection
Month Starting New Expansion Churn Ending Growth
Jan $115,000 $18,750 $2,300 $3,450 $132,600 15.3%
Feb $132,600 $18,750 $2,652 $3,978 $150,024 13.1%
Mar $150,024 $18,750 $3,000 $4,501 $167,274 11.5%
...
Dec $285,000 $18,750 $5,700 $8,550 $300,900 5.6%
Annual Summary:
- Starting ARR: $1.38M
- Ending ARR: $3.61M
- Growth: 162%
Segmentation Analysis
segment_analysis:
by_plan:
- name: Starter
mrr: 20000
customers: 300
arpu: 67
churn: 6%
- name: Professional
mrr: 45000
customers: 150
arpu: 300
churn: 3%
- name: Enterprise
mrr: 50000
customers: 50
arpu: 1000
churn: 1.5%
by_industry:
- tech: {mrr: 60000, churn: 2.5%}
- finance: {mrr: 30000, churn: 2%}
- retail: {mrr: 25000, churn: 5%}
by_company_size:
- 1-50: {arpu: 100, churn: 5%}
- 51-200: {arpu: 350, churn: 3%}
- 201+: {arpu: 1200, churn: 1.5%}
Output Example
Request: "Calculate SaaS metrics for my company"
Output:
# SaaS Metrics Analysis
## Executive Summary
Your SaaS business is showing healthy growth with some areas for optimization.
### Strengths ✅
- Net Revenue Retention of 108% (above 100% benchmark)
- Quick Ratio of 2.3x (good growth efficiency)
- Enterprise segment showing 97% retention
### Areas to Improve ⚠️
- LTV:CAC ratio at 2.7x (target: >3x)
- CAC payback at 12.5 months (target: <12 months)
- SMB segment churn at 4.5% (target: <4%)
### Recommendations
1. **Reduce CAC**: Focus on lower-cost acquisition channels
2. **Improve SMB retention**: Add onboarding sequences
3. **Expand enterprise**: Higher ARPU, lower churn
4. **Increase expansion revenue**: Upsell/cross-sell programs
### Key Metrics at a Glance
| Metric | Value | Status |
|--------|-------|--------|
| ARR | $1.38M | 📈 +15% MoM |
| NRR | 108% | ✅ Healthy |
| LTV:CAC | 2.7x | ⚠️ Improve |
| Runway | 29 months | ✅ Safe |
SaaS Metrics Skill - Part of Claude Office Skillsdon't have the plugin yet? install it then click "run inline in claude" again.