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Techcelerate Ventures

<p>Guide to SaaS Metrics  
Key Definitions and Formulas for Measuring Performance
MRR and ARR
Your monthly recurring revenue (MRR) and annual recurring revenue
(ARR) are important moving parts to track for a SaaS business, as they
are how much you make from subscription services on a monthly or
yearly basis.
To calculate MRR, multiply your average monthly subscription rate by
total number of subscribers, excluding one-time payments, metered
charges or discounts.
MRR Terms to Know
 New Business MRR: Only new conversions counted
 Expansion MRR: Upsold business
 Contraction MRR: Down-sold business
 MRR Churn: The rate of subscription loss
 Reactivation MRR: Return of a previously lost subscription
 Average Revenue Per Account (ARPA): Total MRR divided by
number of subscribers
Customer Churn Rate
This is the rate at which you're losing or 
gaining customers:
Number of  clients at the 
end of  period
Number of  clients at 
beginning of  period
= Churn Rate
MRR Churn Rate
The rate at which your monthly revenue 
increases or decreases:
Subscriber Lifetime Value
Average revenue per customer; helps 
determine your marketing budget:
MRR at end of  period
MRR at beginning of  
period
= MRR Churn
Average MRR per 
subscriber
Customer churn rate
= Lifetime Value
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</p>

<p>Key Definitions and Formulas for Measuring Performance</p>