SaaS economics, in five lessons
This is the unit-economics curriculum. Five calculators, in order, that teach you how a SaaS business actually makes money. You'll measure recurring revenue with MRR/ARR, find the leak with churn rate, learn what each customer costs you with CAC, work out what each one is worth with LTV, and finally check whether the math adds up using ROI and payback period.
Suggested learning order
Start with how revenue gets counted. Then look at what's leaking out, what new revenue costs you, what it's worth, and how long until you break even.
- 1
MRR/ARR Calculator
Predict your path to $10M ARR with precision
- 2
Churn Rate Calculator
Measure customer and revenue churn with NRR analysis
- 3
CAC Calculator
Stop burning cash on unprofitable customer acquisition
- 4
LTV Calculator
Discover if each customer makes or breaks your unit economics
- 5
ROI & Payback Period
Justify feature investments with ROI and payback period calculations
All SaaS calculators
Predict your path to $10M ARR with precision
5 min · beginner
Discover if each customer makes or breaks your unit economics
8 min · intermediate
Stop burning cash on unprofitable customer acquisition
5 min · beginner
Uncover the $1M hidden in your churn data
20 min · advanced
Measure customer and revenue churn with NRR analysis
10 min · intermediate
Model price points and tier mix to see the ARPU your plan really runs on
5 min · intermediate
Go deeper in the Learning Hub
Frequently asked questions
Five do most of the work. MRR or ARR for recurring revenue, churn rate for how fast customers leave, CAC for what it costs to win one, LTV for what they're worth over time, and ROI plus payback for whether the spend is paying back. Vanity numbers like total signups or app downloads don't tell you if the business works. These five do.
MRR, churn, and new customer counts: weekly. CAC: monthly, since you need a full attribution window to read it. LTV: quarterly, because the inputs (churn, ARPU, gross margin) only change slowly. ROI and payback: per channel, every quarter. Daily tracking on most of these is noise. Slow metrics need slow review.
Traditional finance looks at one period at a time. Revenue this quarter, costs this quarter, profit this quarter. SaaS metrics treat customers as long-lived assets. You spend cash up front to win them, then earn it back over months or years. So SaaS uses MRR (a forward-looking run rate), LTV (lifetime cash from a customer), and CAC payback (how long until you break even). Same business, different math.
3:1 is the standard target. Below 1:1 means you lose money on every customer. Between 1:1 and 3:1 means you're growing but the unit economics are tight. 3:1 to 5:1 is healthy. Above 5:1 you might be underspending on growth. The ratio is most useful when you track it over time, not as a one-shot snapshot.
MRR is monthly recurring revenue. ARR is annual. For a pure monthly-billing business, ARR is just MRR times 12. The reason both exist: MRR is sensitive to short-term moves, so it's the right number for product and growth teams. ARR smooths out monthly noise and is the number boards and investors care about. Most SaaS dashboards show both.
They do. Early stage you're tracking absolute MRR growth, gross MRR added, and whether anyone is sticking around at all. CAC and LTV are unstable because the sample is small. Growth stage you're tracking net revenue retention, payback period, and LTV:CAC ratio. The metric set narrows as the business gets predictable. If you're early and trying to read net retention with 50 customers, you're going to get noise.
Ready to dive into a calculator?
Start with the first lesson in the curriculum or explore the full toolkit.