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Metrics Library

AI-powered operational metrics

empowering you to optimize decision making and anticipate trends.

"+/-" Transactions

Answers the question if the company had more Upsell Transactions than Churn/Downsell Transactions.

Example: Company XYZ's "+/-" Transactions in April 2023 was 2.

(Upsell Transactions of 4 - [Downsell Transactions of 1 + Churn Logos of 1])

Active Logos

The number of unique customers that have an active subscription (or had a transaction) at a specific point in time, or over a time period.

Example: Company XYZ had 125 unique customers in February 2023, and therefore had 125 Active Logos in that month.

Actual Customer Lifetime Value (CLV)

Average profit (or revenue) per customer over the entirety of the company relationship post-sale.

Example: Company XYZ has a customer that has been with them for 5 years, and pay $100 each year. This customer would pay $500 in total.

To look at the margin, subtract the COGS from the total amount the customer paid. It costs Company XYZ $5 a year to support this customer, so $25 over the course of 5 years. $500 - $25 = $475 Actual CLV.

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Average New Logo

Average profit (or revenue) per customer over the entirety of the company relationship post-sale.

Example: If Total New Logo ARR is $500,000 in January and the company signed 10 new customers, the Average New Logo is $50,000 in that month.

Average Upsell

The average additional ARR for each upsell transaction.

Example: If total upsell revenue in a given month is $20,000 across 100 upsell transactions, the Average Upsell is $200 that month.

Cash Burn

The difference between money coming into the company from customers compared to the money being spent to run the business.

Example: Company XYZ received $500k in total from customers in cash flow in April 2023. They spent as a company $600k in April. They have a Cash Burn of $100k in April.

Churn ARR

Churn ARR is the annualized value of the recurring portion of contracts for customers that went to $0 in Run Rate ARR (i.e are no longer customers).

Example: Company XYZ lost 3 customers that each had a contract that was $100k in ARR (Run Rate ARR) in Q2 2023. They therefore had $300k in Churn ARR in Q2 2023.

Churned Logos

The number of unique customers that cancelled their subscription (or did not transact) at a specific point in time, or over a time period. Churned Logos are no longer active customers.

Example: Company 123 lost 4 customers in July 2023, and therefore had 4 Churned Logos for the month.

Cost of Goods Sold (COGS)

Money spent on things needed to support the customers after they sign up. This is the total of all costs related to creating and delivering a product or service to your customers.

Example: Hosting expenses ($25,000) + Engineering Salaries ($17,000) + Customer Success (18,500) = $60,500 COGS for Q2 2023.

Customer Acquisition Cost (CAC)

Answers the question how many dollars in Sales and Marketing do you need to spend to acquire 1 customer. (Sales and Marketing Expenses/Number of Customers) - Time Constraint

Example: Company ABC spends $10,000 in January and acquired 5 customers, their CAC in January would be $2,000.

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Downsell ARR

Downsell ARR is the difference in what an existing customer was paying (initial contract value) compared to what they pay now (current contract value), for customers that pay less now.

Example: Customer B had an ARR of $55k and decided to renew their subscription at $47k. Therefore they contributed $8k in Downsell ARR.

Downsell Transactions

The number of transactions in which a logo decreased their ARR (or spent less in a given month than the prior month).

Example: Company XYZ had 2 customer transactions that decreased their contract value in April 2023, and therefore for that month had 2 Downsell Transactions.

Expected Customer Lifetime Value (CLV)

Average expected profit (or revenue) per customer over the expected length of the relationship post sale. This uses the Expected Gross Logo Retention, Average Deal Size, CAC, and COGS.

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Gross $ Retention

Compare the ARR from all customers you had 12 months ago to that same set of customers today. Expressed as a percentage, divide the ARR from those customers today by the ARR from 1 year ago, excluding upsell from any customer. This number will be between 0 and 100%.

Example: 1 Year ago (Q2 2022) Company XYZ had 100 total customers with $40M in Run Rate ARR. Today those same 100 customers have $50M in Run Rate ARR (Q2 2023). 10 of the customers had $10M in ARR in total and went to $0 in ARR. 20 of the customers went from $10M in ARR in total and went to $30M in ARR. The other 70 customers went from $20M in ARR and stayed at $20M in ARR. The Gross Retention for Q3 2023 would be $30M/$40M = 75% for Q2 2023.

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Gross Logo Retention

Compare all customers you had 12 months ago to that same set of customers today. What percentage are still an active customer?

Example: Company XYZ's Gross Logo Retention in Q2 2023 was 90%.

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Gross Merchandise Value (GMV)

Relevant for marketplaces; This is the amount a customer spends in a marketplace in a given time period.

Example: In July 2023, customers of Company XYZ spent $3.2M in their marketplace, therefore their GMV for July 2023 was $3.2M.

In Quarter Upsell - Total Churn

The result of taking the Upsell ARR in a quarter and subtracting the Total Churn in that quarter

Example: Company XYZ's In Quarter Upsell - Total Churn in Q2 2023 was $700k.

(In Quarter Upsell of $1.0M - Total Churn of $300k)

Magic Number

For every $1 you spend in Sales and Marketing, how much will you get back in New Logo ARR.

Example: Company XYZ spent $150,000 in Sales and Marketing in Q2 2023 and had $100,000 in New Logo ARR. Their Magic Number (No Lag) would be 0.67.

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Monthly Recurring Revenue (MRR)

Some companies utilize MRR which would be all the ARR numbers, but divided by 12.

Example: Company XYZ's Run Rate MRR on 7/31/2023 was $250k.
($3.0M in ARR / 12 months)

Net $ Retention

Compare the ARR from all customers you had 12 months ago to that same set of customers today. Expressed as a percentage, divide the ARR from those customers today by the ARR from 1 year ago.

Example: 1 yr ago (Q2 2022) Company XYZ had 100 total customers with $40M in Run Rate ARR. Today those same 100 customers have $50M in Run Rate ARR (Q2 2023). The Net Retention is 125% for Q2 2023.

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New Logo ARR

New Logo ARR is the annualized value of the recurring portion of contracts from new customers who were not a customer before.

Example: In Q2 2023 Company XYZ added $2.0M in New Logo ARR.

New Logos

The number of unique new customers that signed up for a subscription (or made a transaction) at a specific point in time, or over a time period. New logos are new customers.

Example: Company ABC signed 80 new customers in Q3 2023, and therefore had 80 New Logos in that quarter.

Run Rate ARR

Run Rate ARR is the annualized value of the recurring portion of all the contracts you have active on a given date. Put simply, if you add no new customers, don't lose any customers, and don't upsell any customers this would be your revenue over the next year.

Example: Company XYZ's Run Rate ARR on 7/31/2023 was $7.3M.

Sales & Marketing Expenses

The money spent on the Sales and Marketing department to acquire new customers through headcount, events, ads, commissions, etc.

Example: LinkedIn Ads ($4,000) + Referral Program ($3,500) + Sales/Marketing Salaries ($14,500) + Events ($3,000) = $25,000 in Sales & Marketing expenses in Q1 2023.

Take Rate

The percentage of the Gross Merchandise Value (GMV) that the company gets to keep.

Example: Company XYZ received $320k from that GMV of $3.2M, so had a take rate of 10%.

Total Churn + Downsell

This is the sum of the Churn ARR and Downsell ARR for a given period.

Example: In Q2 2023 if Company XYZ had $300k in Churn ARR and $150k in Downsell ARR, the company would have $450k in Total Churn + Downsell ARR in Q2 2023.

Total New Business ARR

Total New Business ARR is the sum of New Logo ARR and Upsell ARR in a given period.

Example: Company XYZ added $2.0M in New Logo ARR and $1.0M in Upsell ARR and therefore added $3.0M in Total New Business ARR in Q2 2023.

Upsell ARR

Upsell ARR is the annualized value of the recurring portion of contracts from existing customers above whatever their existing ARR currently is.

Example: Customer A had a Run Rate ARR of $100k. They added more users and now have a Run Rate ARR of $120k. The $20k is Upsell ARR.

Upsell Transactions

The number of transactions in which a logo increased their ARR (or spent more in a given month than the prior month).

Example: Company XYZ had 4 customer transactions that increased their contract value in April 2023, and therefore had 4 Upsell Transactions in that month.