If you run a subscription business, your biggest blind spot isn't what you invoice today, it's what you'll invoice next month. Your P&L looks backwards. SaaS KPIs look forwards.
This guide explains which eight metrics every subscription business should know, how to calculate them, and what a healthy value looks like for SMEs.
Why SaaS KPIs for SMEs
Scale-ups using Stripe have been tracking MRR, churn and NRR for years. For SMEs on Exact Online that remained out of reach, not because the data was missing, but because the tooling was.
- Predictability. You know a month ahead what you'll invoice, as long as no one cancels.
- Early warning. Churn spikes in January can still be turned around. In April they're history.
- Evidence-based decisions. A price rise, a new tier, an upsell campaign, you only know if it works when you measure the right numbers.
This guide in one sentence
Eight KPIs, one source (Exact Online), one dashboard. The rest is interpretation.
1. MRR, Monthly Recurring Revenue
MRR is the predictable monthly revenue from all active subscriptions, normalised to one month. An annual contract for €1,200 counts as €100 MRR per month, not €1,200 at once.
Formula
MRR = Σ (monthly value of each active subscription)
Example: 120 customers at €99/month + 30 customers on a €1,188 annual contract → MRR = (120 × 99) + (30 × 99) = €14,850
2. ARR, Annual Recurring Revenue
Formula
ARR = MRR × 12
When to use: ARR for annual reports and strategy. MRR for monthly operational decisions.
3. Churn rate
Customer churn
% customers cancelled
Customers who cancelled / customers at start of month × 100. Fairer picture when you have many different plan sizes.
Revenue churn
% MRR lost
Cancelled MRR / MRR at start of month × 100. More important, shows whether you're losing large or small customers.
What is a healthy churn rate?
Watch out with annual contracts
With annual contracts you often only see churn at renewal, cancellations cluster in one or two months of the year. Always look at a rolling 12-month average.
4. NRR (Net Revenue Retention)
Formula
NRR = (starting MRR + expansion − contraction − churn) ÷ starting MRR × 100
Example: €100k MRR last year, same customers are €112k today → NRR = 112%
>110%
Excellent, business grows itself via upsells
100-110%
Healthy, expansion offsets churn
<100%
Leaky bucket, dependent on new sales
5. ARPA, Average Revenue Per Account
Formula
ARPA = MRR ÷ number of active customers
Example: €84,000 MRR / 450 customers = €187 ARPA
6. LTV, Customer Lifetime Value
Formula (simplified)
LTV = ARPA ÷ customer churn
Example: €187 ARPA / 2.4% monthly churn = €7,792 lifetime value per customer
7. Cohort retention
A cohort is a group of customers who joined in the same period. Cohort retention measures how well your January 2024 customers are sticking around compared to January 2025 customers.
8. MRR Breakdown
| Component | What it is |
|---|---|
| New MRR | MRR from new customers this month+ in your dashboard |
| Expansion MRR | Existing customers who upgraded+ in your dashboard |
| Existing MRR | Existing MRR continuing unchangedbaseline |
| Contraction MRR | Existing customers who downgraded− in your dashboard |
| Churned MRR | MRR from cancelled customers− in your dashboard |
"Two businesses with identical MRR growth can have completely different health. The breakdown shows which."
Where to start
- MRR. One number. Know this before anything else.
- Churn rate (revenue, not customer). Tells you whether your foundation is leaking.
- NRR. Tells you whether your business survives without new sales.
Rule of thumb
A KPI you don't look at at least monthly doesn't influence decisions. Look at fewer numbers, but look at them more often.
See these 8 KPIs for your business, direct from Exact Online.
RecurBoard automatically calculates everything in this guide from your subscription management. 45-day free trial, no credit card required.