saas-metrics

What this skill does

# SaaS Metrics

Comprehensive SaaS metrics analysis covering MRR, ARR, Churn, LTV, CAC, cohort analysis, and investor reporting. Essential for SaaS founders, finance teams, and investors.

## Overview

This skill enables:
- Revenue metrics calculation (MRR, ARR, NRR)
- Churn and retention analysis
- Unit economics (LTV, CAC, LTV:CAC)
- Cohort analysis and forecasting
- Investor-ready reporting

---

## Core Metrics Framework

### 1. Revenue Metrics

```
┌─────────────────────────────────────────────────────────────┐
│                    MRR WATERFALL                             │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│  Starting MRR                          $100,000             │
│  + New MRR (new customers)              +$15,000            │
│  + Expansion MRR (upgrades)             +$8,000             │
│  + Reactivation MRR                     +$2,000             │
│  - Contraction MRR (downgrades)         -$3,000             │
│  - Churn MRR (cancellations)            -$7,000             │
│  ─────────────────────────────────────────────              │
│  = Ending MRR                          $115,000             │
│                                                             │
│  Net New MRR = $15,000                                      │
│  MRR Growth Rate = 15%                                      │
│                                                             │
└─────────────────────────────────────────────────────────────┘
```

**Calculations**:
```yaml
mrr_metrics:
  # Monthly Recurring Revenue
  MRR: sum(all_active_subscriptions.monthly_value)
  
  # Annual Recurring Revenue
  ARR: MRR × 12
  
  # MRR Components
  new_mrr: sum(new_subscriptions_this_month)
  expansion_mrr: sum(upgrades_this_month)
  contraction_mrr: sum(downgrades_this_month)
  churn_mrr: sum(cancelled_subscriptions_mrr)
  reactivation_mrr: sum(reactivated_subscriptions)
  
  # Net New MRR
  net_new_mrr: new_mrr + expansion_mrr + reactivation_mrr - contraction_mrr - churn_mrr
  
  # Growth Rates
  mrr_growth_rate: (ending_mrr - starting_mrr) / starting_mrr × 100
  mom_growth: (current_mrr - previous_mrr) / previous_mrr × 100
```

---

### 2. Churn Metrics

```yaml
churn_metrics:
  # Logo Churn (Customer Count)
  logo_churn_rate: 
    formula: customers_lost / customers_start_of_period × 100
    benchmark: <5% monthly for SMB, <2% for Enterprise
  
  # Revenue Churn (MRR)
  gross_revenue_churn:
    formula: churned_mrr / starting_mrr × 100
    benchmark: <3% monthly
  
  # Net Revenue Churn (includes expansion)
  net_revenue_churn:
    formula: (churned_mrr - expansion_mrr) / starting_mrr × 100
    target: negative (net expansion)
  
  # Net Revenue Retention (NRR)
  nrr:
    formula: (starting_mrr - churn + expansion) / starting_mrr × 100
    benchmark:
      good: 100-110%
      great: 110-120%
      best_in_class: >120%
```

**Churn Analysis Template**:
```markdown
## Churn Analysis - {Month}

### Summary
| Metric | Value | Benchmark | Status |
|--------|-------|-----------|--------|
| Logo Churn | 3.2% | <5% | ✅ |
| Gross Revenue Churn | 2.8% | <3% | ✅ |
| Net Revenue Retention | 108% | >100% | ✅ |

### Churn Breakdown
| Reason | Customers | MRR Lost | % of Total |
|--------|-----------|----------|------------|
| Price | 5 | $2,500 | 35% |
| Competitor | 3 | $1,800 | 25% |
| No longer needed | 4 | $1,500 | 21% |
| Product issues | 2 | $800 | 11% |
| Other | 2 | $600 | 8% |

### Cohort Performance
- Q1 2025 cohort: 95% retention at month 6
- Q4 2024 cohort: 88% retention at month 9
- Enterprise segment: 97% retention (best)
```

---

### 3. Unit Economics

```
┌─────────────────────────────────────────────────────────────┐
│                   UNIT ECONOMICS                            │
├─────────────────────────────────────────────────────────────┤
│                                                             │
│  Customer Lifetime Value (LTV)                              │
│  ────────────────────────────                               │
│  ARPU × Gross Margin %                                      │
│  ─────────────────────── = LTV                              │
│     Churn Rate                                              │
│                                                             │
│  Example:                                                   │
│  $100 ARPU × 80% margin / 3% churn = $2,667 LTV             │
│                                                             │
│  ═══════════════════════════════════════════════════════    │
│                                                             │
│  Customer Acquisition Cost (CAC)                            │
│  ────────────────────────────────                           │
│  Sales & Marketing Spend                                    │
│  ─────────────────────────── = CAC                          │
│    New Customers Acquired                                   │
│                                                             │
│  Example:                                                   │
│  $50,000 S&M / 50 customers = $1,000 CAC                    │
│                                                             │
│  ═══════════════════════════════════════════════════════    │
│                                                             │
│  LTV:CAC Ratio = $2,667 / $1,000 = 2.67x                   │
│  CAC Payback = $1,000 / ($100 × 80%) = 12.5 months         │
│                                                             │
└─────────────────────────────────────────────────────────────┘
```

**Benchmarks**:
```yaml
unit_economics_benchmarks:
  ltv_cac_ratio:
    poor: <1x
    acceptable: 1-2x
    good: 2-3x
    great: 3-5x
    excellent: >5x
  
  cac_payback_months:
    enterprise: <18
    mid_market: <12
    smb: <6
    consumer: <3
  
  gross_margin:
    saas_typical: 70-85%
    infrastructure: 50-70%
    services_heavy: 40-60%
```

---

### 4. Cohort Analysis

```yaml
cohort_analysis:
  # Define cohorts by signup month
  cohort_definition: signup_month
  
  # Track retention over time
  retention_matrix:
    columns: [Month_0, Month_1, Month_2, ..., Month_12]
    rows: [Jan_cohort, Feb_cohort, Mar_cohort, ...]
    values: active_customers / initial_customers × 100

  # Track revenue retention
  revenue_cohort:
    values: current_mrr / initial_mrr × 100
    
  # Cohort LTV calculation
  cohort_ltv:
    formula: sum(all_revenue_from_cohort) / initial_cohort_size
```

**Cohort Table Example**:
```
Retention by Cohort (% of customers still active)

         Month 0  Month 1  Month 2  Month 3  Month 6  Month 12
Jan '25   100%     92%      87%      84%      78%      65%
Feb '25   100%     94%      89%      86%      80%       -
Mar '25   100%     93%      88%      85%       -        -
Apr '25   100%     95%      90%       -        -        -
May '25   100%     94%       -        -        -        -
Jun '25   100%      -        -        -        -        -

Average   100%     94%      89%      85%      79%      65%
```

---

## Quick Ratio

```yaml
quick_ratio:
  formula: (new_mrr + expansion_mrr) / (contraction_mrr + churn_mrr)
  
  interpretation:
    "<1": Shrinking (losing more than gaining)
    "1-2": Sustainable growth
    "2-4": Good growth efficiency
    ">4": Excellent (hypergrowth potential)
  
  example:
    new_mrr: 15000
    expansion_mrr: 8000
    contraction_mrr: 3000
    churn_mrr: 7000
    quick_ratio: (15000 + 8000) / (3000 + 7000) = 2.3
```

---

## Investor Reporting Template

### Monthly Metrics Dashboard

```markdown
# {Company} - Monthly Metrics Report
## {Month Year}

### Key Metrics Summary
| Metric | Current | Previous | Change | Benchmark |
|--------|---------|----------|--------|-----------|
| ARR | $1.38M | $1.20M | +15% | - |
| MRR | $115K | $100K | +15% | - |
| Net New MRR | $15K | $12K | +25% | - |
| NRR | 108% | 105% | +3pp | >100% ✅ |
| Logo Churn | 3.2% | 3.5% | -0.3pp | <5% ✅ |
| LTV:CAC | 2.7