Annual Recurring Revenue (ARR)
MetricsThe total amount of recurring revenue that a SaaS business expects to receive annually from its current customer base, calculated by multiplying Monthly Recurring Revenue (MRR) by 12.
Plain-English definitions of the metrics, frameworks, and acronyms that actually matter for developer-first growth.
By Daria Dovzhikova · Updated May 2026
15 terms
The total amount of recurring revenue that a SaaS business expects to receive annually from its current customer base, calculated by multiplying Monthly Recurring Revenue (MRR) by 12.
The total cost of acquiring a new customer, including all sales and marketing expenses divided by the number of customers acquired in a given period.
The predicted net profit attributed to the entire future relationship with a customer, typically calculated as average revenue per user times gross margin divided by churn rate.
The amount of recurring revenue that a business can expect to receive every month from its current subscribers or customers.
The percentage of customers who stop using a service during a given time period, calculated as (customers lost / total customers at start) × 100.
The degree to which a product satisfies strong market demand, often measured through customer retention, growth rate, and user satisfaction metrics.
The systematic process of increasing the percentage of website visitors who complete a desired action, such as signing up for a trial or making a purchase.
A go-to-market strategy where the product itself is the primary driver of customer acquisition, conversion, and expansion.
A single metric that best captures the core value your product delivers to customers and drives sustainable business growth.
Additional revenue generated from existing customers through upselling, cross-selling, or increasing usage of the product.
The percentage of new users who complete key actions that indicate they've experienced the core value of your product during their initial usage period.
A controlled experiment methodology where two versions of a webpage, app, or feature are compared to determine which performs better for a specific goal.
A behavioral analytics technique that groups users based on shared characteristics or experiences within a defined time period to track their behavior over time.
A pricing strategy where basic product features are provided free of charge, while advanced features require a paid subscription.
A customer satisfaction metric that measures the likelihood of customers to recommend your product to others, scored from -100 to +100.
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