Useful definitions, formulas, and examples of various metrics, financial terms, and accounting processes within the SaaS industry.
ACV is a key measure used to track the amount of revenue you generate from your SaaS subscriptions – it's a measure of how much money you can expect to receive.
ARR is pivotal a metric for SaaS companies, especially ones with longer-term contracts, used to measure the annual revenue generated by subscription services.
CAC is the total cost of all the marketing and sales activities that a business needs to undertake to attract a new customer.
COGS refers to the direct cost of producing and delivering a product or service.
Churn rate is a measure of the number of customers who end their subscription to a product or service over a given period of time.
Cohort analysis allows businesses to group their customers into "cohorts" based on a common characteristic, such as sign-up date and behavior.
The percentage of customers who leave a company during a specified time frame, and it is a critical calculation for companies to assess their customer retention
EBITDA stands for earnings before interest, taxes, depreciation, and amortization. This metric is used to measure a company's profitability and efficiency.
SaaS gross margin refers to the percentage of revenue that remains after the costs directly related to delivering and supporting the product.
Logo retention refers to the ability of consumers to recognize and remember a brand's logo over time.
Monthly active users (MAU) is the total number of users who have visited a website or application within a given month (30 days).
NRR is a SaaS metric used to measure the percentage of a company's recurring revenue that is retained from existing customers over a period of time.
Discover the ins and outs of the SaaS financial model in this comprehensive guide.
Total contract value (TCV) is a SaaS metric that is used to measure the total revenue a contract will generate over its term.
Tear sheets are an essential tool for investors looking to analyze and evaluate investment opportunities.
AOP planning is a tactical planning process that aims to align a company's resources with its strategy.
Committed Annual Recurring Revenue (CARR) is a revenue metric that measures the annual committed revenue generated by a business
Flux analysis, also referred to as variance analysis, is a technique deployed in accounting to track changes in financial indices over time.
Burn multiple is a term used to describe the ratio of a SaaS company's valuation to its annual burn rate.
Capital efficiency is a measure of a company's ability to generate revenue and growth while minimizing the amount of capital it needs to achieve that growth.
Cash flow forecasting involves estimating and predicting the future inflows and outflows of a business's cash.
Net operating income, commonly abbreviated as NOI, is a financial metric used in the real estate and business industries.
The Financial Close Process refers to the series of procedures that companies undertake to complete their accounting records after each accounting period.
The Rule of 40 is a metric used to evaluate the health of a SaaS business by measuring the balance between growth and profitability.
The SaaS Magic Number is a metric used to measure the efficiency of a SaaS business's sales and marketing efforts.
We're adding more terms! Keep checking back.