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<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 info@feinternational.com / Twitter / Facebook / LinkedIn </p>