SaaS Metrics Explained: Stripe Subscription KPIs

SaaS metrics can feel overwhelming. MRR, ARR, NRR, ARPU, LTV, CAC, quick ratio — the alphabet soup of subscription analytics. This guide cuts through the jargon and explains each metric in plain English: what it is, how to calculate it from Stripe data, and why it matters.

Revenue Metrics

MRR (Monthly Recurring Revenue)

What: The total predictable revenue from active subscriptions, normalized to monthly values.

Formula:Sum of (subscription amount ÷ billing interval in months) for all active subscriptions.

Why it matters: MRR is the north star metric for subscription businesses. It filters out one-time charges and billing interval differences to show your true recurring revenue run rate. See our MRR dashboard guide for how to track it in real time.

ARR (Annual Recurring Revenue)

What:MRR × 12. Your annualized recurring revenue.

Why it matters: Used for fundraising, valuation, and annual planning. SaaS companies are valued as a multiple of ARR. Our ARR tracking guide explains how to calculate and monitor it from Stripe data.

Net New MRR

What:New MRR + Expansion MRR − Churned MRR − Contraction MRR.

Why it matters: Shows whether your business is growing or shrinking in a given month. Positive net new MRR = growth.

Customer Metrics

ARPU (Average Revenue Per User)

What:MRR ÷ number of active subscribers.

Why it matters: Reveals whether you’re moving upmarket (rising ARPU) or attracting lower-value customers (declining ARPU). Essential for LTV calculation. Learn how to compute it in our ARPU calculation guide.

Churn Rate

What: Percentage of subscribers who cancel in a given month.

Formula:Canceled subscriptions ÷ active subscriptions at start of month × 100.

Why it matters: High churn undermines growth. Even 5% monthly churn means you lose nearly half your customers per year. Track both customer churn (headcount) and revenue churn (dollars). Our churn rate tracking guide covers both in detail.

LTV (Customer Lifetime Value)

What: The total revenue you expect from a customer over their lifetime.

Formula:ARPU ÷ monthly churn rate.

Example: $50 ARPU with 5% monthly churn = $1,000 LTV.

Why it matters: LTV tells you how much you can afford to spend acquiring a customer. A healthy business has LTV:CAC ratio of 3:1 or better.

CAC (Customer Acquisition Cost)

What:Total sales and marketing spend ÷ new customers acquired.

Why it matters:Combined with LTV, tells you whether your growth is profitable. CAC isn’t directly in Stripe data — it comes from your marketing spend.

Retention Metrics

NRR (Net Revenue Retention)

What: The percentage of revenue retained from existing customers, including expansion and churn.

Formula:(Starting MRR + Expansion − Churn − Contraction) ÷ Starting MRR × 100.

Why it matters: NRR above 100% means your existing customers generate more revenue over time even without new sales. Top SaaS companies target 110%+ NRR.

Gross Revenue Retention

What: Like NRR but without expansion revenue. Shows how much revenue you keep from existing customers, only accounting for losses.

Why it matters: Isolates the retention side without expansion masking churn problems.

Efficiency Metrics

Quick Ratio

What:(New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR).

Why it matters:Measures growth efficiency. A quick ratio of 4+ means you add $4 of MRR for every $1 lost. Below 1 means you’re shrinking.

Months to Recover CAC

What:CAC ÷ (ARPU × gross margin).

Why it matters: How long until a new customer becomes profitable. Under 12 months is good; under 6 is excellent.

Tracking These Metrics from Stripe

Most of these metrics can be derived from Stripe subscription data. StripeReport calculates the core metrics (MRR, ARR, ARPU, churn, revenue at risk, health score) automatically and delivers them daily via email and Slack.

For metrics that require non-Stripe data (CAC, marketing spend), you’ll need to combine StripeReport data with your marketing analytics.

Frequently Asked Questions

Which metrics should I track first?

Start with MRR, churn rate, and active subscribers. These three tell you the essential story: how much recurring revenue, how fast you’re losing customers, and how many customers you have. Add more metrics as you scale.

How often should I review these metrics?

MRR, revenue, and churn: daily (via automated reports). Growth rate and ARPU: weekly. LTV, CAC, and NRR: monthly.

Do investors care about all these metrics?

Investors focus on ARR, growth rate, churn rate, NRR, and unit economics (LTV:CAC). For seed-stage companies, ARR and growth rate are usually sufficient. Later stages require the full picture.