SaaS finance reference
SaaS KPI Glossary
A plain-English glossary for the SaaS finance metrics used across Aura Revenue calculators and guides. Use it to check definitions, formulas, and common interpretation limits before building a forecast.
MRR
Monthly Recurring Revenue
MRR is the predictable monthly subscription revenue from active recurring customers. It excludes one-time setup fees, consulting, hardware, and non-recurring services.
Sum of recurring subscription revenue normalized to one month
Learn moreARR
Annual Recurring Revenue
ARR annualizes recurring revenue. It is useful for scale context, but ARR run rate is not a guarantee that the business will collect that amount over the next year.
ARR = MRR x 12
Learn moreRevenue Churn
Churned recurring revenue
Revenue churn measures lost recurring revenue as a percentage of the starting recurring base. It can include cancellations and, in simple models, downgrades.
Revenue churn rate = Churned MRR / Starting MRR
Learn moreNRR
Net Revenue Retention
NRR shows whether an existing customer cohort grows or shrinks after expansion, contraction, and churn. It excludes revenue from new customers.
NRR = (Starting MRR + Expansion - Contraction - Churn) / Starting MRR
Learn moreGRR
Gross Revenue Retention
GRR measures retained recurring revenue before expansion. It is stricter than NRR because expansion cannot hide downgrade or cancellation pressure.
GRR = (Starting MRR - Contraction - Churn) / Starting MRR
Learn moreCAC Payback
Customer acquisition cost payback
CAC payback estimates how many months of gross profit are needed to recover the cost of acquiring a customer.
CAC payback = CAC / monthly gross profit
Learn moreRule of 40
Growth and profitability score
The Rule of 40 combines growth and profitability into one directional SaaS efficiency benchmark. It needs context and should not be used alone.
Rule of 40 score = Revenue growth rate + Profit margin
Learn moreBurn Multiple
Capital efficiency ratio
Burn multiple estimates how much net burn is required to create one dollar of net new ARR during the same period.
Burn multiple = Net burn / Net new ARR
Learn moreExpansion MRR
Recurring revenue expansion
Expansion MRR is additional recurring revenue from existing customers. It can improve NRR and make growth less dependent on new customer acquisition.
Expansion MRR = upgrades + added seats + usage growth + add-ons
Learn moreNet New MRR
Monthly recurring revenue movement
Net new MRR explains the monthly change in recurring revenue after additions, expansion, downgrades, and churn.
Net new MRR = New MRR + Expansion MRR - Contraction MRR - Churned MRR
Learn moreUse the glossary with calculators
Definitions are easier to understand when they are tied to numbers. Use the calculators below to test how these metrics change under different assumptions.
Important disclaimer
Aura Revenue provides educational forecasting tools and examples only. Outputs are estimates based on user-provided assumptions and should not be treated as financial, legal, tax, accounting, or investment advice.