PricingNest

SaaS Metrics Cheat Sheet (MRR, ARR, LTV, CAC)

Definitions, formulas, and what to watch when you model pricing changes.

Quick checklist

  • Use consistent definitions across teams and reports.
  • Segment by plan or channel if metrics diverge.
  • Normalize annual contracts for MRR/ARR.
  • Use cohort churn for LTV and payback.
  • Recompute metrics after pricing changes.

Core metrics

  • MRR: normalized monthly recurring revenue.
  • ARR: MRR x 12 run-rate.
  • LTV: ARPA x gross margin x lifetime.
  • CAC: total acquisition cost per new customer.
  • CAC payback: CAC / gross profit per month.

Step-by-step

  1. Normalize revenue to monthly recurring values.
  2. Calculate churn and retention by cohort.
  3. Compute LTV and compare to CAC.
  4. Validate payback period against cash flow needs.
  5. Track changes after pricing or packaging updates.

Common mistakes

  • Mixing gross and net churn in LTV.
  • Using blended CAC across channels.
  • Including one-time fees in MRR.

Tools to use