Profit margins are one of the clearest signals of whether your SaaS business is sustainable. While growth often gets the spotlight, margins reveal how efficiently you turn recurring revenue into long-term profitability. A healthy SaaS profit margin depends on your stage. Early startups may run negative net margins while chasing growth, but gross margins should…
If you run a SaaS business, you’ve probably heard of ARR (Annual Recurring Revenue) and ACV (Annual Contract Value). They sound alike and are often used interchangeably, but they measure very different things. ARR tells you how much predictable revenue your company generates every year. ACV shows the average annual value of a customer contract….
In SaaS, growth isn’t measured by one-time deals — it’s measured by predictable, recurring revenue. That’s why Annual Recurring Revenue (ARR) has become one of the most important metrics for founders, finance teams, and investors. ARR shows the steady, contracted revenue your business can count on each year. It filters out one-off projects and highlights…
For SaaS founders, few numbers matter more than Customer Acquisition Cost (CAC). It shows exactly how much you spend to gain a new customer — and whether your sales and marketing engine is efficient. High CAC means you’re overspending to grow, making it harder to scale or raise capital. A well-managed CAC, paired with healthy…
Pricing is one of the most powerful growth levers in SaaS — yet it’s often overlooked. The structure of your pricing tiers determines not just how much revenue you earn today, but how smoothly customers upgrade, renew, and expand over time. If your tiers aren’t aligned with customer needs, you risk confusing buyers, slowing conversions,…
If you’re building a SaaS company, one of the biggest questions you’ll face is: what is my business worth? The answer often comes down to valuation multiples—a quick way investors compare your revenue and growth potential to others in the market. Unlike traditional businesses that are valued on profit, SaaS companies are usually measured using…
In today’s SaaS market, growth alone isn’t enough. Investors and boards now ask a tougher question: how efficiently are you growing? The answer lies in capital efficiency metrics—numbers that reveal how well your company turns cash into recurring revenue and long-term value. For CEOs, these metrics are more than financial jargon. They guide smarter decisions…
Every SaaS founder eventually faces the question: how much of my company am I willing to give up to grow? This is the essence of equity dilution—when new shares are issued and your percentage ownership shrinks. Dilution isn’t always negative. In many cases, raising capital at a higher valuation means your smaller slice of the…
Cash is the lifeline of every SaaS startup. No matter how strong your product is, running out of money ends the journey. That’s why your cash runway—the number of months your business can survive with its current funds—matters more than ever in 2025. For founders, the question isn’t just how much cash you have today,…
How to Calculate Payback Period for SaaS Customers If you’re running a SaaS business, you already know how expensive it can be to acquire new customers. Between marketing spend, sales salaries, and onboarding, the costs add up quickly. That’s why the payback period is such a critical metric. The payback period tells you how long…