How to track and report on key saas metrics
Regularly reviewing your performance data is the best way to understand if your software business is growing, stalling, or losing money.
To keep your SaaS business healthy, you must track five core metrics—MRR, ARR, Churn, CAC, and LTV—on a monthly basis to ensure your revenue is growing faster than your costs. Reviewing these figures consistently allows you to move from guessing how your business is doing to making data-driven decisions about where to invest your time and money.
The 'Big Five' metrics explained
Before you can report on your business health, you need to understand what these acronyms mean in a British business context:
| Metric | What it is | Why it matters |
| MRR | Monthly Recurring Revenue | The total predictable revenue you expect every 30 days. |
| ARR | Annual Recurring Revenue | Your MRR multiplied by 12; the yearly value of your current subscribers. |
| Churn | Customer Attrition | The percentage of customers who cancel their subscription each month. |
| CAC | Customer Acquisition Cost | The total amount you spend on marketing and sales divided by the number of new customers gained. |
| LTV | Lifetime Value | The total amount of money you expect to earn from a single customer before they churn. |
How to track your metrics
- Use automated billing data: The easiest way to track these is by connecting your billing provider (like Stripe or Paddle) to a dedicated SaaS analytics tool. This removes human error and provides real-time dashboards.
- Maintain a 'Source of Truth' spreadsheet: If you are just starting out, a simple spreadsheet can work. Record your total active subscribers, total revenue, and total marketing spend on the last day of every month.
- Calculate your LTV to CAC ratio: This is a vital health check. A healthy SaaS usually aims for an LTV that is at least 3 times higher than the CAC (3:1). If your CAC is higher than your LTV, you are losing money on every customer you sign up.
Setting up your monthly review
Reporting is only useful if you actually look at the data. Block out one hour on the first Monday of every month to produce a simple 'SaaS Health Report'. Focus on the trends rather than just the raw numbers. For example, is your churn rate increasing month-on-month? If so, your growth will eventually stall, no matter how many new customers you find.
Tip: Don't get distracted by 'vanity metrics' like website hits or social media followers. While they feel good, they don't pay the bills. Stay laser-focused on MRR and Churn to understand the true viability of your business.
Strategic decision making
Use your monthly report to guide your strategy. If your CAC is low and your LTV is high, it is a signal that you should spend more on marketing to grow faster. Conversely, if your churn is high, you should stop spending money on ads and focus entirely on improving your product until customers start staying longer.
Created by hatch. • Updated on April 29, 2026