The 10 SaaS Metrics That Matter Most in 2025 (And the Ones You Should Ignore)

asantos31
7 days ago
5 min read

If you're running or scaling a SaaS company in 2025, knowing which metrics to track is more important than ever. The SaaS industry has evolved, and so have investor expectations, customer behavior, and benchmarks for success. Whether raising capital, optimizing operations, scaling, or preparing for an exit, tracking the right SaaS KPIs (and ignoring the wrong ones) is critical to your company's growth and valuation.

This guide outlines the 10 most important SaaS metrics in 2025, common mistakes founders make when tracking metrics, and how to prioritize them based on your company's stage, from Seed to Series B and beyond.

Why SaaS Metrics Matter More Than Ever in 2025

The SaaS landscape is shifting fast. As capital becomes more selective and AI reshapes product expectations, investors and strategic buyers are no longer impressed by vanity metrics or growth at all costs.

Instead, they want data-driven clarity and capital-efficient growth.

Founders need to monitor key SaaS performance indicators that demonstrate the following:

Customer retention and expansion
Scalable and repeatable acquisition strategies
Healthy unit economics
Predictable revenue growth

Let's explore the 10 SaaS metrics that matter most in 2025 with real-world examples and strategic insights.

The 10 SaaS Metrics That Matter in 2025

1. Net Revenue Retention (NRR)

Why it matters: NRR measures how much recurring revenue you retain and expand from existing customers. It reflects customer satisfaction, upsell success and product stickiness.

Formula:
(Starting MRR + Expansion – Churn – Downgrades) ÷ Starting MRR
2025 Benchmark:
125%+ for enterprise SaaS
100%+ for SMB SaaS

Example: If your starting MRR is $100,000, and you expand $30,000 while losing $10,000 to churn, your NRR = (100K + 30K - 10K) ÷ 100K = 120%

Companies like Snowflake and Datadog have maintained 130 %+ NRR, directly supporting their premium valuations.

2. Customer Acquisition Cost (CAC)

Why it matters: CAC shows how much it costs to acquire a paying customer. It's critical for budgeting, marketing ROI, and deciding when to scale.

Formula:
Total Sales + Marketing Spend ÷ # of New Customers
Best practice in 2025: Separate blended CAC (organic + paid) and paid CAC (ads only) to optimize the marketing mix.

3. Lifetime Value (LTV)

Why it matters: LTV estimates how much revenue a customer will generate throughout their lifecycle. Combined with CAC, it tells you how profitable your customer acquisition is.

Formula:
ARPU x Gross Margin% % x Customer Lifetime

LTV: CAC Benchmark:

3:1 is considered healthy

< 1:1 is unsustainable

Example: If your ARPU is $300/month, the margin is 80%, and the average customer stays 18 months:

LTV = $300 x 0.80 x 18 = $4,320

4. Churn Rate (Customer and Revenue)

Why it matters: Churn slowly kills SaaS businesses. A high churn rate undermines your valuation and cash flow, even if you're growing fast.

Formula (Logo Churn):
Lost Customers ÷ Total Customers at the Start of the Month

Target Churn (2025):

<5% annually (enterprise)

<3% monthly (SMB SaaS)

5. Monthly Recurring Revenue (MRR) & Annual Recurring Revenue (ARR)

Why it matters: These are your most fundamental revenue KPIs.

MRR = Sum of all active subscriptions per month
ARR = MRR x 12

Tip: Break down MRR by new, expansion, contraction, and churn to get insight into your growth engine.

6. Burn Multiple

Why it matters: Burn multiple reflects capital efficiency, which is how much you spend to generate each $1 of new ARR.

Formula:
Net Burn ÷ Net New ARR

Benchmarks:

<1.5 = efficient
2–3 = average
3 = inefficient (especially in a capital-constrained market)

According to a 2024 report by Bessemer Venture Partners, companies with a burn multiple under 1.5 are the top performers when raising a Series B or preparing for acquisition.

7. Rule of 40

Why it matters: The Rule of 40 helps balance growth and profitability — a key investor benchmark.

Formula:
Revenue Growth % + Profit Margin %

Target:

40% combined is considered strong

(Ex: 30% YoY growth + 10% EBITDA margin = 40)

8. CAC Payback Period

Why it matters: This tells you how long it takes to recover your CAC from customer revenue.

Formula:
CAC ÷ Monthly Gross Profit per Customer

Target (2025):

<12 months (Enterprise SaaS)

<6 months (SMB SaaS)

9. Lead Velocity Rate (LVR)

Why it matters: LVR is a leading indicator of future revenue, unlike lagging metrics like ARR.

Formula:
(This Month's Qualified Leads – Last Month's) ÷ Last Month’s x 100

Why it's underrated: LVR helps teams make proactive pipeline decisions, which is especially important for PLG (product-led growth) SaaS models.

10. Gross Margin

Why it matters: SaaS companies are valued like software companies, not service firms. High gross margins show scalability and operational leverage.

Benchmark:

75% is standard

85% is top-tier

Example:

If you make $500,000 in revenue and your COGS is $100,000, your Gross Margin is 80%.

SaaS Metrics You Can Ignore in 2025

Not all metrics are created equal. These vanity metrics don't reflect business health and can distract your team or mislead investors:

Website traffic (without conversion data)
Free trial signups (without activation)
Social followers
Total downloads (if you're not tracking retention or engagement)
Gross revenue (without clarity on recurring revenue)

How to Prioritize SaaS Metrics Based on Stage

Seed Stage (Pre-revenue – $1M ARR)

Focus on Retention, activation, and product-market fit
Top metrics: NRR, Churn, CAC, LTV, Lead Velocity Rate

Series A–B ($1M–$10M ARR)

Focus on a Scalable GTM strategy, unit economics
Top metrics: CAC, CAC Payback, MRR growth, Burn Rate, Churn

Growth Stage (>$10M ARR or preparing for exit)

Focus on: Efficiency, profitability, expansion
Top metrics: Rule of 40, NRR, Gross Margin, Expansion MRR, EBITDA

Tools for SaaS Metrics Tracking in 2025

To simplify tracking:

ChartMogul – Best for ARR/MRR visibility
ProfitWell – Free tracking for retention, LTV, and churn
Baremetrics – Visual dashboards for recurring revenue
KPI Sense – Financial modeling for investor readiness

Final Thoughts

In 2025, thriving SaaS companies will track the right metrics, interpret them correctly, and act on them decisively. Forget the fluff, real growth comes from precise data and strong execution.

Whether bootstrapped or venture-backed, these 10 metrics give you a framework to build a scalable, fundable, and sellable SaaS business.

Want help scaling your SaaS company with the right metrics and strategy?

Let's talk. Contact Into the Next to discuss how our Fractional CFO or Exit Planning Services can help!