B2B SaaS Metrics 2026: ARR, Churn, CAC, LTV & Unit Economics

Analyze the freemium model in SaaS, highlighting free basic features, premium upgrades, and its advantages and disadvantages through examples like Dropbox, Google Drive, and iCloud.

Explore freemium pricing varieties, from traditional freemium with feature limits to land-and-expand, freeware 2.0, ecosystem pricing, and the alternative product strategy, plus free tools that drive growth.

Explore the subscription business model in SaaS, highlighting recurring revenue, high gross margins, and low marginal costs, with examples like G Suite, HubSpot, and Shopify.

Compare free trial and freemium models, highlighting full-access trials versus feature-limited freemium, and explain when each drives paid conversions in SaaS and enterprise contexts.

Explore pay-as-you-go pricing in cloud computing, where bills rise with usage and cover EC2 instances and S3 storage, with on-demand, reserved, spot, and dedicated options.

Explore premium, flat rate, usage-based, tiered, and per-user pricing strategies, with examples like Base Camp, HubSpot, Zoho, and GitHub, highlighting each model's tradeoffs.

Explore flat rate pricing as a simple, single-price model with pros and cons, and compare it to tiered pricing that offers multiple packages and clear upselling paths.

Explore per-user pricing, charging by each user with examples from Asana, Trello, and Click Up. Weigh predictable costs and scalable revenue against adoption limits and churn risk.

Per active user pricing charges only for users who actively use the software, eliminating payments for unused seats, with Slack as a practical example; it may be costly for SMBs.

Examine pay-as-you-go and feature-based pricing, with freemium models and upgrade-driven value metrics like QuickBooks, while weighing revenue predictability and feature selection challenges.

Explore SaaS bookings and metrics, including ACV, total contract value, average contract length, CAK, CAK payback, churn, lifetime value, CAK to LTV ratio, and new, renewal, and upsell bookings.

Track SaaS bookings by aggregating data from CRM, Stripe, and contract systems. Differentiate enterprise and self served; monitor accounts receivable and revenue cohorts.

Understand bookings, billings, and revenue with practical examples. Record bookings at contract signing with total contract value, recognize revenue at service delivery, and billings at invoicing to reflect cash flow.

Clarify the differences between bookings, billings, and revenue using acv and annual vs monthly contracts. See how gaap revenue is allocated over time and why bookings can exceed realized revenue.

Master SaaS sales metrics by explaining annual contract value (ACV), total contract value (TCV), and contract length. Learn how multi-year deals, discounts, upsells, and downgrades affect bookings and revenue.

Compute annual contract value (ACV) by dividing total contract value over years; for example, 21,000 over four years equals 5,250 per year, then average the ACV across clients.

Calculate total contract value by multiplying monthly subscription fees by contract term length and adding any one-time cancellation fees; then derive annual contract value through retention analysis.

Calculate average contract length from the total months divided by contracts; distinguish acl from ecv and acv, and use acv and arr to benchmark contracts and guide sales decisions.

Calculate customer acquisition cost by dividing total sales and marketing costs by new customers, distinguish between blended and paid CAC to forecast growth and inform strategy.

Analyze how paid channels drive CAC by comparing sign-up and conversion rates, ad spend, and lifetime value (LTV) with insights from Facebook CTR, CPM, and MRR.

Reduce CAC in SaaS by optimizing conversion rates, A/B testing creatives, leveraging pricing and free trials, and using marketing automation to nurture leads and shorten the payback period.

Understand cash payback period, CAC, and LTV to assess how quickly software customer acquisition pays back costs, using monthly recurring revenue, average cost of service, and retention trends.

Calculate the CAC payback period in SaaS by linking customer acquisition cost to average monthly recurring revenue and gross margin, illustrated with a practical exercise.

Compute customer acquisition cost and lifetime value to assess the LTV to CAC ratio across four SaaS companies, showing how churn and margins affect profitability and healthy metrics.

Learn how to drive user engagement and activation in SaaS by defining a key action, implementing onboarding, personalized setup with templates, quick wins, and ongoing engagement monitoring through support resources.

Define product stickiness and how daily active users and monthly active users reveal retention, then improve it through user experience, retention, and engagement to boost recurring revenue in SaaS.

Compute door to MOU ratio, i.e., daily active users over monthly active users, to measure product stickiness; groceries hover around 15-30%, while social apps like Instagram or WhatsApp show higher.

Understand how the product engagement score blends adoption, stickiness, and growth to diagnose performance and guide improvements, including DAU/MAU measurement and converting passives to promoters.

Discover how net promoter score is the difference between promoters and detractors, using example counts (85 promoters, 40 passives, 25 detractors) to yield an NPS of 60, a good score.

Define activation rate as the action proving a user gains value, tailoring it to your product with examples like first payments or product demos, then convert it to a percentage.

Compute click through rate from clicks and impressions; track time spent and page views; compute conversion rate and revenue from order value; explain hype factor with capital raised and ARR.

Explore how customer lifetime value (cltv) is calculated using gross margin, arpu, and retention, and how cac, cohort analysis, and three approaches guide acquisition and retention decisions.

Discover why customer lifetime value (CLTV) matters and how monitoring CAC and CLTV boosts retention, brand loyalty, and growth through annual pricing, usage, reengagement, and upsell and cross-sell.

Learn to compute the LTV to CAC ratio by using revenue, gross margin, and retention (1 over churn) and assess whether 3:1 is ideal for SaaS growth.

Calculate LTV and CAC for a SaaS product by deriving average revenue per account, gross margin, retention, discount rate, and sales and marketing costs, and assess LTV to CAC ratio.

Learn how unit economics analyze cost and revenue at the unit level to determine profitability, CAC, LTV, and payback, guiding SaaS business models and long-term sustainability.

Analyze cash flow, expenses, retention, churn, and revenue metrics like MRR, ARR, and free cash flow to assess profitability and unit economics.

Discover how monthly recurring revenue (MRR) is calculated as active customers times revenue per customer, and how new, expansion, churned, and net MRR drive annual recurring revenue.

Analyze monthly recurring revenue health using quick ratio, combining new MRR and expansion MRR while accounting for churned MRR, contraction, reactivation, and upgrades to gauge growth.

Learn to analyze monthly recurring revenue (mrr) across months, including new, expansion, churn, and contraction, to calculate net new mrr, total mrr, and arr.

Learn to calculate monthly recurring revenue, ending committed monthly recurring revenue, and revenue run rate using churn, acquisition, ARPU, expansion, and contraction concepts with practical SaaS examples.

Discover how to compute ending MRR by adding beginning MRR, new MRR, and expansion MRR, then subtract churn and contraction, and understand expansion MRR and net MRR churn rate.

Explore how the quick ratio measures growth efficiency in a SaaS business by analyzing net MRR components—new, expansion, reactivation, contraction, churned, and retained MRR—and its balance with churn.

Calculate the SaaS quick ratio by dividing the combined new and expansion MRR by churn and contraction losses to gauge whether revenue growth outpaces losses; higher ratios indicate stronger growth.

Compute the BVP efficiency score by dividing net new annual recurring revenue (new ARR plus expansion minus churn) by net burn, underscoring how lower burn drives higher efficiency.

Learn how to compute annual recurring revenue (ARR) from MRR, including opening revenue, new ARR, expansion, contraction, and churn, and map SaaS growth from garage to unicorn.

Explore how cohort-based retention analysis tracks how users come back over days, weeks, and months. Learn how features like a playlist and communities boost retention in SaaS products using analytics.

Explore how retention drives growth by comparing gross and net revenue retention, churn, and upsell dynamics. Learn unit-based and dollar-based retention concepts with practical examples of revenue and logo churn.

Explore how retention shapes revenue by comparing net revenue retention and gross revenue retention, including how expansion, churn, and new MRR affect ending revenue from existing customers.

Learn how time to first value drives the aha moment faster, using a golden feature to move users from visitor to loyal customer, optimizing activation, retention, and growth in SaaS.

Discover how SaaS onboarding creates a time-limited aha moment by guiding signups through setup, sprint planning, and data-driven activation. Compare two user journeys and measure time to value.

Learn to measure time to value with Mixpanel, map e-commerce funnels, and identify golden features for products like Asana and Zoom, plus practical acquisition strategies.

Explore net promoter score (NPS) to gauge customer loyalty by rating 0 to 10, classify users as promoters, passives, or detractors, and calculate NPS as promoters minus detractors.

Explore how churn rate measures customer loss and drives SaaS growth, with revenue, user, account, and logo churn, plus strategies like retention, upselling, and preventing a leaky bucket.

Explore how small monthly churn compounds into high annual churn and why churn is not linear, revealing onboarding, value, usage, and competition as key drivers and models for lifetime value.

Calculate annual SaaS churn by tracking beginning and ending users across months, applying churn rates to derive a 43% annual churn and contrasting gross and net revenue churn with expansion.

Learn to predict churn for a subscription SaaS using tenure, feature usage, support tickets, and customer satisfaction, and design data-driven, targeted retention strategies.

Analyze SaaS break-even and time to profitability by comparing customer acquisition cost with ARR and recurring service costs, and explore churn scenarios that affect cash flow and growth.

Virality can overcome churn when growth outpaces churn, demonstrated by a viral coefficient above one driving compounding customer gains; focus on new acquisitions that outpace churn.

Explain the viral coefficient as initial customers divided by referrals per customer, using 20 and 10 to yield 2x, with four-year growth and a 20% conversion rate.

learn how to relate retention to churn and use simple formulas with beginning, new, and churned customers to calculate ending customers and retention rate.

Compute net negative churn by subtracting churned MRR from expansion MRR and dividing by beginning period MRR, showing expansion exceeding churn (e.g., negative 5%).

Explore sales performance in SaaS by benchmarking metrics such as average deal size, sales cycle, close rate, cost per lead, roas, cpc, ctr, and funnel metrics.

Learn how SaaS sales vary by price and complexity, from self-service to enterprise, with ICP, strategic trial plans, prospecting, lead scoring, engagement, onboarding, and inbound/outbound marketing.

Explore how inbound and outbound marketing generate leads and guide the customer life cycle through a sales funnel and content strategy, using HubSpot as an example.

Explore inbound and outbound sales by mapping the customer life cycle from awareness to expansion, and show how marketing, prospecting, sales, and customer success drive each stage.

Build a rule-based lead score model that assigns points to profile and behavioral data, prioritizes leads, and moves them from visitor to customer through mql and sql.

Compute the lead velocity rate from month-to-month changes in qualified leads divided by prior month's qualified leads, and compute the sales conversion rate as total sales divided by qualified leads.

Calculate cost per lead for outbound and inbound marketing by dividing spend by leads; $4,500 yields 45 leads at $100 CPL; $1,200 yields 400 leads at $30 CPL.

Learn how to plan sales capacity in saas by modeling quarterly ramped smb account executives, incorporating hires and churn, applying a $80,000 quota and 60% productivity to estimate new arr.

Calculate revenue per employee from 2018–2021 data (thousands), showing 2019 and 2021 figures, and discuss quota attainment with 60% efficiency and a 2 million quota vs 1.2 million ARR.

Learn practical strategies for revenue growth through upselling and cross-selling in SaaS, including premium vs standard plans, seat expansion, and calculating upsell and cross-sell revenue and rates.

Explore measuring referral rates in SaaS with Q1–Q2 data, calculating non-referral and referral sales, gross and net sales, and how referral discounts affect growth and profit.

Explore how SaaS financial statements—income statement, balance sheet, and cash flow—reveal revenue, expenses, net income, and cash flow across operating, investing, and financing activities.

Understand cash flow statement for SaaS, covering operating, investing, and financing activities, and learn how free cash flow, revenue, cost of goods sold, gross profit, marketing spend, and ROI relate.

Evaluate burn rate and capital efficiency to inform product-market fit and scalable growth. Apply the SaaS magic number to measure sales efficiency and guide marketing strategies like cross-selling and SEO.

Compute the SAS magic number from quarterly revenue changes using (current quarter revenue minus prior quarter revenue) times four divided by prior quarter sales and marketing spend.

Explain the rule of 40 in SaaS, where growth rate plus ebitda margin should total 40 for sustainable performance. Explore weighted variations that adjust growth or margins.

Apply the rule of 40 by adding annual recurring revenue growth rate and ebitda margin to reach 40. Compare four profiles to illustrate the balance of growth and margins.

Learn how to assess profitability in SaaS from unit-level metrics like lifetime value and CAC to company-level EBITDA, including MRR, churn, retention, and net-dollar retention.

Explore accounts receivable and its impact on cash flow, learn to calculate turnover ratio and aging, and apply strategies to improve collections and credit policy.

Understand account payable aging and the turnover ratio to assess cash flow and liquidity, track vendor invoices by 30, 60, 90-day buckets, and optimize payments.

Explore burn multiple and how net burn relative to net new annual recurring revenue reveals cash efficiency, sustainable growth, and how CAC, CLTV, and logo retention influence SaaS performance.

Learn how capital efficiency metrics like cash conversion score, burn multiple, RoCE, high ratio, and the Bessemer efficiency score reveal how VC-backed software startups optimize ARR, IRR, and cash flow.

Learn to compute average order value, ARPU for existing and new accounts, GMV for ecommerce, and related metrics like average selling price, units sold, commissions, and total order value.

Compute attrition rate by dividing employees who left in a period by the average headcount, then multiply by 100. The lecture demonstrates calculations with quarterly data, churn, and new hires.

Master product metrics across acquisition, signup, engagement, monetization, retention, feedback, usage, operational metrics, and finance using a practical Excel sheet and Mixpanel to drive SaaS growth.

Analyze how finance, SaaS, retail and e-commerce, and media measure reach, activation, active usage, engagement, and retention, using metrics like ARPU, ARR, MRR, DAU/MAU, and retention windows.

Define the north star metric as the single long-term driver of customer value. Illustrate with examples like monthly active users, time spent, and weekly satisfied orders.

Understand how Mixpanel tracks events and event properties to map the user journey, analyze product usage, and inform feature prioritization, acquisition, and retention strategies.

Explore Google Analytics, a popular marketing analytics tool, using a demo account to study user demographics, traffic sources, and key metrics like acquisition and engagement.

Discover how to set up Mixpanel, track user events, and analyze event and user properties to understand cart and purchase journeys and inform product and marketing decisions.

Learn how Mixpanel enables SaaS product managers to measure engagement, acquisition, and retention with boards, funnels, events, and dashboards for cross-functional growth insights.

Explore how customer success metrics interlink with sales and business metrics to create a seamless, 360-degree customer experience across marketing, sales, and product.

Measure three key customer support metrics: NPS, CSAT, and CES, to assess onboarding, satisfaction, and renewal. Translate customer feedback into a great experience to boost loyalty, retention, and revenue.

Explore customer effort score (ces), a single-question metric that predicts future purchases and guides improvements in onboarding, response time, and mobile experience after customer interactions.

Explore how time to first value (ttfv) and onboarding boost ces scores by delivering fast value within one to two minutes, guiding the SaaS customer lifecycle from acquisition to expansion.

Learn how to measure customer satisfaction with CSAT, a single-question score assessing overall satisfaction with a product or specific features, including best timing and trade-offs.

Combine CBS and C set to compute the net promoter score (NPS) and categorize respondents as promoters, passives, or detractors, guiding product decisions for SaaS growth.

Compare csat, ces, and nps to measure customer satisfaction, effort, and advocacy, and understand their advantages and disadvantages for improving SaaS growth.

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