Revenue Metrics & Financial Terms

The value of contracted recurring revenue normalized over one year from subscription-based customers.

The average annualized revenue per contract, typically calculated by dividing a contract’s Total Contract Value (TCV) by its term length in years.

The average amount of revenue generated per active customer or account over a specific time period (usually monthly or annually).​

Measures how quickly a company is using its cash, which is critical for B2B SaaS leaders because it directly determines runway and how aggressively the team can invest in growth.

Churn Rate measures the percentage of customers or recurring revenue lost in a given period, indicating the rate at which customers cancel or reduce their subscriptions.

The total cost incurred to acquire a new customer, including all sales and marketing expenses

An estimate of the total revenue a business can expect from a single customer over their entire relationship, net of acquisition and servicing costs.​

Additional recurring revenue generated from existing customers through upsells, cross-sells, add-ons, seat increases, or plan upgrades, excluding any revenue from newly acquired customers.

The percentage of recurring revenue retained from an existing customer cohort over a period, after churn and downgrades, but excluding any expansion, upsell, or cross-sell revenue.​ Also called Gross Dollar Retention (GDR) or Gross Renewal Rate.

Compares the Customer Lifetime Value (LTV) to the Customer Acquisition Cost (CAC) to gauge the efficiency and profitability of customer acquisition efforts in B2B SaaS businesses.​

Measures the percentage of customer accounts (“logos”) that cancel or fail to renew their subscription over a given period, regardless of how much revenue each one contributes.​ Also called customer churn.

Predictable monthly revenue from subscriptions, a key metric for tracking revenue health.

Measures the percentage of recurring revenue retained from an existing customer cohort over a period, after accounting for expansion, downgrades, and churn, but excluding new customer revenue. Also called Net Dollar Retention (NDR).

The percentage of recurring revenue lost from existing customers due to cancellations, non-renewals, or downgrades over a specific period.​

The revenue your company has earned under its contracts but failed to bill, collect, or recognize correctly, i.e., money that should be in your accounts but isn’t.​

The full revenue expected from a customer contract over its entire term, including all recurring subscription charges and one-time fees such as onboarding, implementation, or training.​