Numbers don’t lie, but they sure can confuse. Especially when your dashboard looks like a cockpit. CAC. LTV. ARR. CSAT. It’s easy to get lost in the alphabet soup.
But when you zoom out, only a few of these numbers actually move the needle.
These aren’t just figures for fundraising decks or all-hands meetings. The right metrics show whether your product sticks, whether customers come back, and whether your SaaS growth is real or just a mirage.
If you’re not sure where to start track, we’ve got you covered. These are the SaaS metrics that matter in 2025.
These are the bedrock metrics. If these are off, everything else will be too. Every SaaS company, whether you're bootstrapped or VC-backed, must have a handle on these.
CAC shows how much it costs to acquire a single paying customer. It’s one of the first questions any investor will ask, and for good reason.
Formula: CAC = Total sales and marketing spend / Number of new customers
This isn't just a marketing metric. It's an economic signal. If your CAC is increasing while revenue per customer stays flat, your business model is getting less efficient.
That’s a red flag.
How to use it smartly:
Healthy ranges:
LTV answers one of the most foundational questions in SaaS economics: How much revenue will a single customer generate before they churn?
Formula: LTV = Average Revenue Per Account (ARPA) × Gross Margin × Customer lifespan (in months)
This metric helps you understand the long-term value of a relationship. It's what gives you permission to spend aggressively (or cautiously) on acquisition. A high LTV means your customers are loyal, profitable, and likely finding real value in your product.
But here’s the catch: calculating LTV is part art, part science. If your churn is volatile or your ARPA fluctuates across cohorts, your LTV assumptions can be way off. That’s dangerous when you’re making big bets based on this number.
When LTV is high, you can invest more in paid channels, sales teams, or account-based marketing.
When LTV is low, you either:
Here are a few tips to follow when calculating LTV:
Founders often overestimate LTV by assuming ideal retention or ignoring discounting. Your investors will sniff this out in diligence. Be conservative and ready to defend it.
This ratio is your SaaS profitability check. It shows how efficiently you're turning customer acquisition spend into long-term value.
Formula: LTV:CAC = LTV / CA
It’s one of the first metrics investors look at because it captures both the cost to acquire and the revenue that the customer brings in. In short, it answers: Is this business economically sustainable?
These are the benchmarks you should be aware of:
High LTV:CAC sounds great until you realize it takes you 18 months to recover that CAC. That’s where CAC payback period comes in (more on that in the next section).
Here’s an insight to consider: If your LTV:CAC is 4, but it takes you 14 months to break even on CAC, you’re still cash-flow constrained. Use both metrics together for the full picture.
Here’s another tip for you. Pair LTV:CAC with burn rate and runway to build your growth strategy. A high LTV:CAC + a long payback period might mean you need more upfront capital.
CAC Payback answers the question: How long does it take to earn back what you spent to acquire a customer? Until that point, that customer is a cost center, not a profit center.
Formula: CAC Payback = CAC / (ARPA × Gross Margin)
This metric is crucial for understanding cash flow, especially in high-growth companies that invest heavily in SaaS marketing and sales.
You might have a great LTV:CAC ratio, but if it takes 18+ months to recover CAC, your growth is going to be cash-hungry and hard to sustain without funding.
Benchmarks:
Tips for calculating CAC payback:
This is where everything begins. The activation rate shows how many of your users reach the first critical milestone, often called the “aha moment,” which signals real value.
This is not signups. It’s not logins. It’s when they experience value.
Examples:
Users who don’t activate don’t stick around. It's that simple. If your activation rate is low, it doesn’t matter how many people you pour into the funnel. They’ll leak out before they pay.
Tips for boosting activation:
Activation is the highest-leverage metric in PLG SaaS. Improving activation by just 10–15% often leads to significant lifts in retention and revenue downstream.
TTV measures how long it takes a new user to experience meaningful value from your product. In other words, from sign-up to “oh wow, this is what I needed.”
The longer it takes for a user to realize value, the more likely they are to bounce. And in PLG models especially, TTV is directly correlated with churn.
Think of TTV as your friction tax. The longer the delay, the more users you lose.
Benchmarks:
Strategies to reduce TTV:
Map your onboarding flow like a funnel:
Tie team bonuses (especially in customer success or onboarding roles) to reducing TTV for new users. It forces alignment around product value and user experience.
Now we’re in the revenue engine. These metrics track the size, shape, and velocity of your business.
The king of SaaS metrics. MRR tells you how much predictable revenue you’re bringing in every month.
Formula: MRR = # of active paying customers × ARPA
Let’s break it down further:
Use MRR growth trends to:
Simply: ARR = MRR × 12
It’s MRR on a larger scale, but don’t confuse ARR with cash flow. ARR is about commitments, not collections.
ARR is especially valuable for:
Only count recurring revenue. One-time services and implementation fees don’t belong here.
If you're not growing revenue from existing customers, you're doing it wrong.
Expansion revenue includes:
It drives NRR (see below) and lowers reliance on constant new acquisitions.
Track expansion by cohort and build pricing that makes it easy to expand. Tools like Chargebee or Paddle help here.
The quiet killer.
Formula (customer churn): Churn Rate = (Customers lost / Customers at start) × 100
Formula (revenue churn): Churn Rate = (MRR lost / Starting MRR) × 100
Good churn benchmarks:
But don’t just track the number. Diagnose why people churn. Ask:
Use exit surveys. Even better, talk to churned users directly. It’s not comfortable, but it’s priceless.
SaaS businesses don’t scale from acquisition alone. They scale through retention and expansion. These are the levers that determine how much momentum you actually keep.
This shows how much revenue you retain and grow from your existing customers.
Formula: NRR = (Starting MRR + Expansion – Churn – Contraction) / Starting MRR × 100
NRR Benchmarks:
NRR is the clearest signal of product-market love. If it’s >100%, you can grow without adding new customers.
Unlike NRR, GRR excludes expansion. It’s the cleanest view of raw retention.
Formula: GRR = (Starting MRR – Churn – Contraction) / Starting MRR × 100
Healthy GRR:
Track GRR across different segments (plan size, industry, etc.) to see where you're most vulnerable.
A fast way to measure whether your revenue growth is outpacing your losses.
Formula: Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)
Benchmarks:
Quick Ratio = Growth Momentum. You want this to trend up month over month.
Borrowed from Superhuman’s playbook, this metric asks: “How would you feel if you could no longer use this product?”
Scoring:
If >40% say “very disappointed,” you’ve likely nailed product-market fit. If it’s below 25%? Keep iterating. The market is telling you something’s missing.
SaaS businesses can burn cash for years while chasing scale. But if your fundamentals are shaky, the whole thing collapses fast.
Formula: Burn Rate = Operating Expenses – Monthly Revenue
Types:
Healthy burn rate depends on stage:
Investors want to know: how long can you survive without raising again?
Formula: Runway = Cash on hand / Net burn rate
Healthy runway:
If runway <6 months and you're not profitable or raising, you're in red-alert territory.
This tells you how effectively you're converting sales and marketing into recurring revenue.
Formula: Magic Number = (New ARR × 4) / Sales & Marketing Spend (previous quarter)
Benchmarks:
Use this with CAC payback to triangulate sales efficiency. Don’t let a high Magic Number fool you into starving your pipeline.
These metrics don’t live in your P&L, but they’re just as important. They show how your users feel and how likely they are to stick around or bring others.
Ask customers to rate satisfaction on a scale (usually 1–5 or 1–10) after a key interaction like support, onboarding, and feature use.
CSAT tips:
This measures how easy it was for the customer to complete a task like signing up, solving an issue, or completing a setup.
Lower effort = better experience = higher retention.
Ask: “On a scale from 1–7, how easy was it to [complete X]?”
This score shows the likelihood a customer would recommend you.
Formula: % Promoters (9–10) – % Detractors (0–6)
Use NPS to:
Your NSM is the one metric that best reflects real value delivery.
Examples:
Find your NSM. Make it a rallying cry for your team. Use it to prioritize features and experiments.
Let’s get honest: not all metrics are helpful. And some? Downright dangerous when misunderstood.
Founders chasing growth often cherry-pick numbers that look good on a pitch deck but tell the wrong story. Here’s where SaaS companies most often misstep, and how to avoid it.
Customer Acquisition Cost (CAC) looks innocent enough. But without context, it can mislead you.
Let’s say your CAC is $400. Sounds reasonable… until you realize your LTV is $700 and your payback period is 18 months. Now you’re underwater.
Where founders go wrong:
What to do instead:
Let’s talk about signups. Or traffic. Or downloads. They’re fine. But without context, they’re just noise.
“We had 3,200 new signups last month!”
Okay, but how many of those activated? How many converted to paying users? How many churned in week one?
Real metrics > vanity metrics:
NPS is useful if you do something with it. But most companies don’t.
They collect it quarterly, stare at the number, and move on.
What NPS actually needs:
Early-stage SaaS often sees spikes in MRR. Feels good. But then, two months later, a wave of churn quietly wipes out that progress.
Why it happens:
Fix it with:
If your expansion MRR is < churned MRR for 3+ months in a row, you’re growing in reverse.
Some founders brag about a Magic Number over 2. But that could be a red flag.
A very high Magic Number might mean you’re not investing enough in sales and marketing. It could signal underutilized growth capacity.
Use Magic Number with CAC Payback together:
A user logging in daily doesn’t always mean they’re getting value. It could mean they’re stuck. Or confused. Or trapped in a bad workflow.
Better indicators:
Pro Metric to Track: DAU/WAU Ratio (stickiness)
Not every SaaS is built the same. The metrics that matter most will vary depending on your go-to-market motion.
PLG relies on the product itself to drive growth. Think: Calendly, Loom, Figma.
Metrics to track:
Use tools like Heap, FullStory, and Amplitude to track in-app behavior and optimize flow friction.
If you rely on SDRs, demos, and AEs, your model is sales-led. Think: Salesforce, Gong, HubSpot.
Key metrics to track:
Invest in attribution modeling early. This helps identify which marketing efforts are actually driving SQLs and revenue.
Companies like Notion, Miro, and ClickUp use both motions.
Hybrid SaaS metrics strategy:
You can’t optimize what you don’t track. And you can’t trust metrics if the plumbing behind them is leaky, bloated, or inconsistent.
Here's how to track the right metrics the right way, without losing your mind.
SaaS metrics are more than numbers. They’re early warning systems and growth accelerators. They tell a story, but only if you pay attention.
If there’s one takeaway here, it’s this: know your numbers better than anyone else. Not because investors expect it but because your company needs it.
Track what matters. Ignore what doesn’t. And use your metrics to make smarter, bolder decisions every single week.
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