SaaS Metrics Calculator
Calculate MRR, ARR, LTV, CAC ratio, churn impact and key SaaS health metrics.
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Frequently Asked Questions
What is a good LTV to CAC ratio for SaaS?
The benchmark LTV:CAC ratio for a healthy SaaS business is 3:1 or higher. A ratio of 1:1 means you spend as much to acquire a customer as they are worth — unsustainable. A ratio of 5:1 or higher suggests you may be underinvesting in growth. Most VCs look for 3x+ LTV:CAC before Series A. Improve the ratio by increasing LTV (reduce churn, expand revenue) or decreasing CAC (improve conversion rates, referral programs).
What is the Rule of 40 for SaaS?
The Rule of 40 states that a healthy SaaS company growth rate plus profit margin should equal or exceed 40%. Example: 30% YoY growth + 15% profit margin = 45% (passes). A high-growth startup at 80% growth + negative 40% margin = 40% (passes). Below 40 signals the company is neither growing fast enough nor profitable enough. It is a key metric for investors evaluating SaaS businesses.
What monthly churn rate is acceptable for SaaS?
Monthly churn benchmarks: excellent under 0.5%, good 0.5-1%, acceptable 1-2%, concerning 2-5%, problematic above 5%. Annual equivalents: 1% monthly = 11.4% annual, 2% monthly = 21.5% annual. Even small improvements in churn compound significantly over time. A SaaS business losing 5% of customers monthly loses over half its base annually.