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SaaS guide

SaaS metrics in plain English: MRR, churn and LTV

SAAS GUIDE MRR churn, LTV and payback inplain English Trendifico

Investors and founders check the same few numbers first. Here is what each one means and how to work it out.

MRR: monthly recurring revenue

All subscription revenue for one month. Annual plans count as one twelfth of their price. Work it out with the MRR and ARR calculator.

Try it here · MRR & ARR Calculator

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Monthly recurring revenue
$7,105
Annual run rate (ARR)
$85,260
Revenue per account
$47.37
Paying customers
150

Churn: the customers you lose

Customers who cancelled this month divided by customers at the start. 3% monthly churn sounds small, but it means losing about 31% of your customers in a year. Check yours with the churn rate calculator.

LTV: what a customer is worth

Monthly gross profit per customer divided by churn. At $60 a month, an 80% margin and 3% churn, LTV is $1,600. The lifetime value calculator also compares it to what you spend to win a customer.

CAC payback: how fast you earn it back

If winning a customer costs $400 and they bring in $48 of gross profit a month, payback takes about 8.3 months. Test your own numbers with the CAC payback calculator.

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