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SaaS companies
Updated over a week ago

Tips to consider when valuing a SaaS company.

  • Month & Annual Recurring Revenue:
    Monthly Recurring Revenue (MRR) is the recurring total revenue generated from all the active subscriptions in a particular month. Annual Recurring Revenue is the annualized form of MRR.

  • CLV:
    Total revenue expected from each subscriber until the subscription is terminated.

  • CAC:
    Total amount spent on acquire a new customer.

  • ARPU:
    Average Revenue per User = MRR/Total Number of Users.

  • CAC Payback Period:
    CAC/MRR * Gross Margin

  • CLV/CAC ratio:
    The ratio helps compare the cost spent on customer acquisition against the value they generate throughout their lifetime for the business.

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