Important SaaS Metrics: 10 KPIs to Track in 2026

Frequently Asked Questions

What are the most important SaaS metrics?

The most important SaaS metrics depend on your growth stage, but MRR, NRR, CAC, LTV:CAC ratio, and monthly churn rate form the foundation for every B2B SaaS company. In 2026, gross margin and Rule of 40 have become especially critical as AI features increase compute costs and investors prioritize efficient growth over growth at all costs.

What SaaS metrics do investors look for?

Investors at Series A and beyond focus on NRR (above 110% is strong), LTV:CAC ratio (above 3:1), CAC payback period (under 18 months), and Rule of 40 score (above 40). They also look at MRR composition — specifically what percentage of new MRR comes from expansion versus new logos — because expansion-driven growth is more capital-efficient and predictable.

What is the Rule of 40 in SaaS?

The Rule of 40 states that a healthy SaaS company's combined revenue growth rate and profit margin should exceed 40%. For example, a company growing at 50% annually with a -5% EBITDA margin scores 45 and passes the Rule of 40. It is a single-number proxy for overall business health that balances growth ambition against financial sustainability.

How do you calculate MRR for a SaaS company?

To calculate MRR, sum all recurring subscription revenue collected in a single month. Exclude one-time fees, setup charges, and professional services. Break MRR into four components for deeper analysis: new MRR from first-time customers, expansion MRR from upgrades, contraction MRR from downgrades, and churned MRR from cancellations.

What is a good churn rate for SaaS?

A good monthly churn rate for SMB SaaS is 3–5%. For mid-market SaaS, target 1–2% monthly. Enterprise SaaS with annual contracts should aim for 1–2% annual churn. In 2026, the introduction of AI-priced tiers has increased involuntary churn from billing failures, so tracking voluntary versus involuntary churn separately is more important than ever.