Metric guides
Startup metrics, defined and calculated
What each number means, how to calculate it from the tools you already use, and the mistakes that distort it. Sondola tracks every one of these, with the source and period attached.
Revenue
MRRMRR, or monthly recurring revenue, is the normalized monthly value of every active paid subscription at the end of a month.sum of (recurring price ÷ billing months) for every active paid subscription at month endARRARR, or annual recurring revenue, is the yearly value of every active subscription at the end of a period.month-end MRR × 12Net new ARRNet new ARR is the change in annual recurring revenue over a period.new ARR + expansion ARR − contraction ARR − churned ARRSubscriber churn rateSubscriber churn rate is the share of paying subscribers lost during a month.paid subscribers lost in month ÷ paid subscribers at start of month × 100Net revenue retentionNet revenue retention, or NRR, measures how much recurring revenue a group of existing customers generates now compared with 12 months ago.(starting ARR + expansion − contraction − churned ARR) ÷ starting ARR × 100ARPUARPU, or average revenue per user, is the revenue earned per paying user in a period.revenue in period ÷ paying users in periodTrial to paidTrial-to-paid conversion is the share of free trials that become a first paid subscription period.trials started in a period that reached a first paid period ÷ trials started in that period × 100
Growth efficiency
Blended CACBlended customer acquisition cost, or blended CAC, is the average cost of acquiring one new paying customer.total sales and marketing spend ÷ new paying customersCAC paybackCAC payback is the number of months it takes for a new customer's margin to repay the cost of acquiring them.CAC ÷ monthly contribution margin per customerLTV to CAC ratioThe LTV to CAC ratio compares the value a customer brings in with the cost of acquiring them.12-month LTV per customer ÷ CACMagic numberThe SaaS magic number measures sales and marketing efficiency.net new ARR in quarter ÷ prior-quarter sales and marketing spendBurn multipleBurn multiple is net burn divided by net new ARR in the same period.net burn ÷ net new ARR, for the same month
Cash and margin
Net burnNet burn is the amount of cash a company loses in a month after counting the money it brings in.operating cash out − operating cash in, per monthRunwayRunway is how long a company's cash on hand will last at its current net burn.cash on hand ÷ monthly net burnGross marginGross margin is the share of revenue left after paying the direct costs of delivering the product.(revenue − cost of revenue) ÷ revenue × 100
Product
DAU / MAUThe DAU/MAU ratio, often called stickiness, is the share of monthly active users who use a product on a typical day.average daily active users in month ÷ monthly active users × 100D30 retentionDay 30 retention is the share of new users who are still active about 30 days after they first used a product.new users active on day 30 or later ÷ new users in the group × 100
AI costs
AI spendAI spend is everything a company pays for AI in a month: model API bills from providers such as OpenAI, Anthropic or Google, AI services on its cloud bill, and AI tools the team uses.model API costs + AI tool subscriptions, for the monthAI cost as a share of revenueAI cost as a share of revenue is a company's AI spend in a month divided by its revenue in the same month, shown as a percentage.AI spend ÷ revenue × 100, for the same monthInference efficiency ratioThe inference efficiency ratio compares revenue with the cost of running the AI models that serve customers, called inference.revenue ÷ product AI cost, for the same month
Every one of these, with its source attached
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