SaaS Metrics School

By Ben MurrayBusiness Entrepreneurship Technology Management

SaaS Metrics School episodes

July 23, 2025RPO Explained: The Overlooked SaaS Metric That Signals Growth
RPO—Remaining Performance Obligations—might not be a term you hear often in private SaaS, but public companies are required to disclose it, and it’s becoming a critical forward-looking metric. In episode #300, Ben Murray breaks down the RPO concept, how it's calculated, and why it matters in understanding your future revenue.
Whether you’re preparing for due diligence or just want a stronger grip on your revenue story, understanding RPO can give you an edge.
What You’ll Learn
What “Remaining Performance Obligations (RPO)” means in SaaS
How RPO connects to deferred revenue and unbilled contract amounts
Why RPO is considered a forward-looking visibility metric
Real-world RPO definition from Snowflake
When RPO might apply to private SaaS companies — especially with multi-year deals
Why It Matters
A rising RPO often signals strong future revenue durability
Adds context to your SaaS metrics
Valuable in due diligence, PE conversations, and strategic exits
Resources Mentioned
Blog Post: Deep dive on RPO with real-world examples and use cases: https://www.thesaascfo.com/understanding-remaining-performance-obligations-in-saas/
4 min
July 18, 2025How SaaS Companies Turn Usage Revenue into ARR
How do usage-based SaaS companies convert transactional or variable revenue into Annual Recurring Revenue (ARR)? Episode #299 gives you a practical framework for presenting usage-based ARR to your Board, investors, and internal teams with clarity and confidence.
After manually reviewing hundreds of public filings and investor materials, Ben Murray breaks down the real-world methods used by companies like Confluent and Datadog to turn usage into ARR.
What You’ll Learn
The most common method for usage-based ARR
The second most common method
How these methods compare to traditional MRR x 12 for subscription models
Why ARR is often used as a North Star Metric and how transparency is improving across SaaS companies.
Resources Mentioned
Webinar Replay & Slide Deck (~59 slides):
Get definitions, examples, and real ARR formulas from leading SaaS companies: https://www.thesaasacademy.com/offers/zz3ZR2WL
Ben’s Research Process
“Over 100 hours of manual research. I tried using AI—OpenAI couldn’t handle it. I had to read the filings myself. These ARR methods are backed by real-world data from public SaaS companies.”
5 min
July 16, 2025Want a Private Equity Exit? Start Tracking This Metric
In episode #298 of SaaS Metrics School, Ben Murray dives deep into one of his favorite metrics: ROSE – Return on SaaS Employees. If you’re aiming to build a durable SaaS business or position your company for a private equity exit, this episode is a must-listen.
Ben explains why ROSE is far more insightful than traditional Revenue per FTE and how it helps evaluate organizational efficiency by factoring in the actual investment made in your people—including fully burdened employee and contractor costs.
🔍 What You'll Learn:
What the ROSE metric is and how to calculate it
Why ROSE is better than Revenue per FTE for SaaS businesses
What a “good” ROSE looks like
Real-world example of a SaaS company that exited to private equity
How ROSE contributes to achieving the Rule of 40
Why you need to track and forecast ROSE monthly
Call to Action!
Grab my ROSE Metric template and the high-performance example here: https://www.thesaasacademy.com/pl/2148690725
5 min
July 12, 2025How to Handle Reactivation MRR in GRR vs NRR
In episode #297, Ben Murray tackles a common SaaS metrics question: How should reactivations be treated when calculating gross and net revenue retention (GRR & NRR)?
Key takeaways:
Reactivated customers (e.g., those who churned quickly but later update payment info) should not be included in new revenue — doing so skews CAC and CAC payback metrics.
Gross Revenue Retention (GRR) only accounts for contraction and churn — reactivations don’t belong here.
Net Revenue Retention (NRR) is where reactivations should be recorded — they’re essentially recovered revenue from existing customers.
SaaS companies with high first-month churn (e.g., due to onboarding issues) may consider calculating an adjusted retention metric.
Ben also highlights his new AI chatbot on TheSaaSCFO.com — trained on his blog content for instant SaaS finance answers.
Level up your SaaS knowledge here: https://www.thesaasacademy.com/
3 min
July 10, 2025This Public Company Restated Its Headline ARR Number
Have you ever seen a public company restate its ARR? In episode #296, Ben Murray dives into a real-world example from the London Stock Exchange—Celebrus Technologies—and unpacks why and how they updated their Annual Recurring Revenue (ARR) definition.
Key Highlights:
Financial restatements ≠ just GAAP: ARR, a non-GAAP metric, is increasingly being scrutinized as pricing and revenue models evolve.
Case Study: Celebrus Technologies
Old ARR definition: Included license revenue, cloud, support & maintenance, third-party software licenses, and project revenue (i.e. services).
New ARR definition: Focuses solely on Celebrus software licenses and managed services—excluding third-party licenses and project revenue.
Why the change?
To better align with how peers in their sector define ARR.
To give investors a “cleaner” view of core recurring software revenue.
Impact of the change: ARR restated downward and now reported at 18.8M (FY25).
Ben’s take: This is a positive trend. While managed services are still debatable as “recurring,” overall transparency in ARR definitions is improving across public SaaS companies.
Bonus Insight:
ARR restatements, especially when they lower reported revenue, are rare—but this signals a maturing investor focus on true recurring revenue quality.
Upcoming Webinar:
Join Ben Murray and Ray Rike on July 17 as they explore how public SaaS companies are defining and calculating ARR.
>> https://thesaascfo.webinarninja.com/live-webinars/10693368/register
🙏 If you found this episode valuable, please rate & review the show!
5 min
July 07, 2025Benchmarking Your CAC Payback: How Do You Compare to Top SaaS Performers?
In episode #295 of SaaS Metrics School, Ben Murray breaks down how to benchmark your CAC Payback Period accurately—and why generic social media posts can lead you astray.
Too many founders rely on simplified benchmark numbers, such as “12 months or less is good,” without understanding the nuances behind the data. Ben explains why ACV segmentation is critical, how top-quartile companies perform across different contract sizes, and where you can obtain customized benchmarks for your SaaS business.
Key topics include:
Why aggregate CAC Payback benchmarks are dangerous to follow blindly
How CAC Payback performance varies by Annual Contract Value (ACV)
Top quartile benchmarks from (Ray Rike’s database)
CAC Payback ranges
Why product segmentation matters—don’t combine CAC across SMB and enterprise lines
How to get free, custom benchmarks to evaluate your own performance
Remember: You can’t optimize what you don’t benchmark correctly.
Get free custom SaaS benchmarks: Benchmarkit.ai
Download my CAC Payback Period template: https://www.thesaascfo.com/how-to-calculate-cac-payback-period-with-variable-revenue/
5 min
July 05, 2025Adapting CAC Payback Period for Usage-Based SaaS Models
In episode #294 of SaaS Metrics School, Ben Murray dives into one of the most important metrics for SaaS operators and investors: CAC Payback Period—with a focus on adapting it for usage-based pricing models.
Whether you’re B2B, B2C, or AI-focused, CAC Payback is a must-have metric when you're investing heavily in go-to-market strategies. But how do you accurately calculate it when your business has subscription + usage revenue?
Ben walks through:
The standard CAC Payback formula and why it matters
How to define "customer" accurately to calculate CAC
How to adjust the denominator of the formula to include usage-based revenue
How to estimate usage revenue when there’s no clear minimum
Public company trends in reporting ARR in usage-based models
Practical judgment calls that SaaS CFOs must make when incorporating usage data
If you're only including subscription ARR in your CAC Payback, but you're generating significant usage revenue—you’re underestimating your efficiency.
Learn more: https://www.thesaascfo.com/how-to-calculate-cac-payback-period-with-variable-revenue/
Coming Up Next:
CAC Payback Period Benchmarks—why you can't just trust the averages you see online.
Enjoying the show? Leave a 5-star review and stay tuned for more SaaS finance insights.
5 min
July 02, 2025CARR Is the New ARR? A SaaS Operator's Guide to This Hot Metric
In episode #293, Ben dives into Contracted Annual Recurring Revenue (CARR)—a once obscure metric that's now becoming a standard in financial dashboards and valuation discussions. Ben explains how CARR differs from ARR, breaks down the formula, and shares how it’s being used in real-world enterprise SaaS settings. He also shares why defining ARR is more complicated than it seems—especially with variable and usage-based revenue models.
Key Topics Covered
What is CARR (Contracted ARR) and how it differs from traditional ARR
Why CARR is becoming more widely used in valuation discussions and financial reporting
The CARR formula
How Ben approaches CARR discussions with CFOs, consultants, and within The SaaS Academy
The evolving complexity of ARR definitions, especially in hybrid subscription/usage models
Resources Mentioned
Blog: How to Define ARR in Subscription & Usage Models
SaaS Academy – Courses & Community
Shoutout Offer
Enjoyed the episode? Leave a 5-star review, send Ben a screenshot, and get a shoutout in his newsletter!
5 min
June 27, 2025Should You Target 80% Gross Profit in SaaS? Let’s Break It Down
Gross profit is a core metric in SaaS—and 80% is the benchmark often thrown around. But is that still realistic in today’s landscape? In episode #292 of SaaS Metric School, Ben Murray walks through real benchmarking data from Ray Rike’s benchmarks at Benchmarkit.ai and explains how gross profit should evolve as your business scales. He also dives into how to set up your SaaS P&L correctly and what to include in COGS vs. OpEx.
What You’ll Learn:
What gross profit benchmarks actually look like today
What is our north star GP%?
How gross profit changes as you scale
Common COGS setup mistakes in SaaS businesses
What to do if your gross profit is trending in the wrong direction
Benchmarks Mentioned:
Bottom quartile
Median
Top performers
Key Insight:
Don’t blindly shoot for 80% at every stage. Under $2M ARR? It’s okay to be lower. But once you’re in the $10–20M+ range, that 80% benchmark becomes more important—and achievable.
Resources:
👉 Learn how to properly set up your SaaS P&L and COGS categories at: https://TheSaaSAcademy.com
ARR Webinar: https://thesaascfo.webinarninja.com/live-webinars/10693368/register
How to Calculate ARR: https://www.thesaascfo.com/how-to-define-and-calculate-arr/
4 min
June 26, 2025How Much Should You Invest in Sales and Marketing This Year?
In episode #291 of SaaS Metrics School, Ben Murray breaks down one of the most important—and often debated—questions in SaaS finance:
💰 How much should we invest in sales and marketing this year?
Ben explores how to frame your sales and marketing spend using two key concepts:
Sales & Marketing as a % of Revenue (OpEx Profile)
Cost of ARR (Net New Annual Recurring Revenue Cost)
You'll hear current SaaS benchmarks from Ray Rike’s latest data set, which shows how spending evolves from early-stage startups to companies with $100M+ in revenue. Ben explains why high spend isn't bad—as long as there's ROI—and how to use GTM efficiency metrics to stress-test your budget and forecasts.
Key Topics Covered:
Sales & marketing spend benchmarks by revenue tier
Understanding your OPEX profile: R&D, S&M, and G&A as % of revenue
Why spend ratios alone don’t tell the full story
How to use the Cost of ARR to validate GTM efficiency
Why growing is NOT scaling, and why that matters for every SaaS operator
The two-metric combo every SaaS CFO should use
🎯 Takeaway: Don’t fly blind. Use these benchmarks and efficiency metrics to create informed, ROI-driven sales and marketing budgets.
📬 Join the Community: https://www.thesaasacademy.com/offers/dzSx6W32
Stay updated on new SaaS finance episodes, templates, benchmarks, and industry events by joining Ben’s newsletter: https://mailchi.mp/df1db6bf8bca/the-saas-cfo-sign-up-landing-page
⭐ Enjoying the show?
Leave a 5-star review and help spread the word to more SaaS founders, CFOs, and GTM leaders.
5 min

About SaaS Metrics School

From the publisher's feed

Ben Murray brings you actionable SaaS metrics lessons that he has learned through years of being in the SaaS CFO trenches. Whether you are new to SaaS or a SaaS veteran, learn the latest SaaS and AI metrics, finance, and accounting tactics that drive financial transparency and improved decision-making.