Top 20 SaaS KPIs to track in 2025: The best metrics to measure growth

In 2025, SaaS (Software as a Service) companies are facing increasing competition, with new players entering the market every day and customer acquisition costs rising. To stay ahead of the curve, tracking the right KPIs (Key Performance Indicators) has never been more critical. These metrics help businesses measure growth, identify potential issues, and make informed decisions that drive long-term success. SaaS KPIs are the backbone of any successful SaaS company. They are the key to understanding the health of your business, forecasting future growth, and aligning teams toward common goals. Whether you're a startup or an established company, knowing which metrics to track, and how to act on them, can be the difference between sustainable growth and missed opportunities.

This blog will explore the top 20 SaaS KPIs to track in 2025, offering insights into what they measure, why they matter, and how to leverage them to fuel growth.

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Why KPIs matter for SaaS companies

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Key Performance Indicators (KPIs) are essential for understanding how well a SaaS business is performing. For SaaS companies, KPIs provide crucial insights into customer behavior, revenue generation, operational efficiency, and overall growth. Tracking the right SaaS KPIs enables businesses to:

1. Measure customer acquisition and retention: Knowing how many customers are acquired, how long they stay, and how much revenue they generate helps in forecasting growth.
2. Identify trends and make data-driven decisions: Tracking KPIs provides visibility into trends and allows SaaS companies to make decisions based on data, not just gut feeling.
3. Optimize marketing and sales strategies: KPIs highlight the effectiveness of marketing campaigns, customer acquisition costs, and conversion rates.
4. Track financial performance: Metrics like MRR (Monthly Recurring Revenue) and ARR (Annual Recurring Revenue) help measure the financial health of your SaaS business.

Now, let’s dive into the top 20 SaaS KPIs you should be tracking in 2025.

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1. Number of customers /subscribers

Formula: Count of active paying customers in a given period.

Track this across categories:

• New one-time buyers
• Recurring buyers
• Monthly subscribers
• Annual subscribers

Why it matters:
Tracking the number of customers or subscribers is foundational to measuring SaaS success. This number forms the base for calculating other important KPIs like Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), and Average Revenue Per User (ARPU). A sudden drop in customer numbers can signal early churn, allowing you to act swiftly before it escalates. Additionally, segmenting customers based on behavior or subscription plans helps refine your marketing efforts and makes it easier to target high-value users.

Use case:
For example, if you notice that annual subscribers are consistently buying a particular add-on, you may want to consider bundling it as part of a premium tier. This could increase average order value (AOV) and incentivize customers to purchase more.

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2. Monthly recurring revenue (MRR)

Formula: Average Customer Lifespan = Sum of Customer Lifespans ÷ Number of Customers

Why it matters:
MRR is one of the most critical KPIs for SaaS businesses. It provides a predictable and stable income stream, allowing you to forecast growth and plan for scaling. With MRR, you can measure the impact of customer churn, new customer acquisition, and upsells on your revenue base. This makes it an essential metric for understanding how well your business is growing on a monthly basis.

Track this across categories:

• New customers
• Expansions or upsells
• Contractions or downgrades
• Churned customers

Use case:
For instance, if MRR shows a significant drop in a given month, it might indicate a loss of high-value customers or a problem with your pricing structure. Monitoring MRR regularly helps identify these patterns early.

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3. Customer lifetime value (CLV / LTV)

Formula: AOV = Total Revenue ÷ Number of Orders

Why it matters:
CLV is crucial because it tells you how much revenue you can expect from a customer over their entire relationship with your company. Understanding CLV helps you make decisions about how much to invest in customer acquisition (CAC) and how to maximize retention efforts. If CLV is high, it indicates that your customers are sticking around and continuously adding value, which is key to long-term SaaS business sustainability.

Use case:
For example, knowing the CLV can guide decisions on spending more in customer acquisition, as long as the CLV outweighs the cost to acquire those customers. If you have a 3:1 LTV:CAC ratio, this suggests healthy business growth and efficient resource allocation.

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4. Average revenue per user (ARPU)

Formula: CLV = Average Order Value × Average Order Frequency × Average Customer Lifespan

Why it matters:
ARPU helps assess how much revenue you're generating per active user. This metric allows you to monitor the effectiveness of pricing changes, upsells, or additional features. ARPU can also be an indicator of customer satisfaction and the perceived value of your service. If ARPU increases, this often signals that your product is becoming more valuable to users, or your pricing structure is effective.

Use case:
If you’ve recently launched a new premium feature or tiered pricing model, tracking ARPU can tell you if users are upgrading or spending more on additional services. It’s a key indicator to measure the success of product expansion or feature rollouts.

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5. Churn rate

Formula: Total Revenue = (Units Sold × Price) + One-Time Fees

Why it matters:
Churn rate directly measures the percentage of customers who leave or cancel their subscription over a specific period. A high churn rate suggests that your SaaS product isn’t retaining users as effectively as it should. Reducing churn is critical for SaaS businesses because retaining existing customers is usually cheaper than acquiring new ones.

Use case:
If you see a high churn rate after implementing a new pricing model, it could be a sign that customers are not perceiving enough value in the product. A detailed analysis of the churned customer profiles can help identify issues and allow you to adjust strategies accordingly.

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6. Monthly recurring revenue (MRR)

Formula: MRR = Active Customers × ARPA (Average Revenue Per Account)

Why it matters:

MRR provides predictable, recurring monthly income — the core financial heartbeat of any SaaS business. It lets you track growth trends, forecast revenue, and understand the financial impact of churn, upgrades, and downgrades.

Use case:

If MRR drops unexpectedly in a given month, it may signal a rise in churn or a loss of high-value accounts. Monitoring MRR helps you quickly identify and react to changes in customer behavior.

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7. Annual recurring revenue (ARR)

Formula: ARR = Yearly Subscribers × Subscription Price Per Year

Why it matters:

ARR is a key long-term performance indicator that shows the predictable revenue your business can expect annually. It helps SaaS companies forecast growth, plan budgets, and make strategic decisions about hiring, expansion, and product development. Consistent ARR growth signals strong customer demand and business stability.

Use case:

If your ARR spikes after releasing an enterprise-grade plan, this may confirm that higher-value customers are willing to commit long term. This insight can support shifting more resources toward enterprise sales or onboarding.

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8. Average revenue per user (ARPU)

Formula: ARPU = MRR ÷ Active Users

Why it matters:

ARPU provides a snapshot of how much revenue each active customer contributes monthly. It helps measure the effectiveness of your pricing structure, the value customers perceive, and the success of upsells or premium tiers. Increasing ARPU often indicates customers are engaging more deeply with your product.

Use case:

If you introduce a new add-on and ARPU rises over the next two months, this suggests the add-on is resonating with users. You may decide to invest further in similar feature expansions.

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9. Net revenue retention (NRR)

Formula: NRR = (Starting MRR + Expansions – Contractions – Churn) ÷ Starting MRR × 100

Why it matters:

NRR measures how much recurring revenue you retain and grow from existing customers. A rate above 100% shows strong product-market fit because expansions and upsells outweigh churn. High NRR is one of the strongest signals investors look for when evaluating SaaS sustainability.

Use case:

If your NRR jumps from 105% to 125% after launching usage-based pricing, this indicates your customers are finding more value and increasing consumption—signaling that the new pricing model is working.

10. Gross profit

Formula: Gross Profit = Total Revenue – COGS (Cost of Goods Sold)

Why it matters:

Gross profit shows how much revenue remains after covering direct service costs. This helps evaluate operational efficiency and gives clarity on profitability before factoring in marketing, salaries, and overhead.

Use case:

If your gross profit drops after a product update, it may indicate increased infrastructure costs (e.g., server usage). This can help you assess whether the update needs optimization or cost-reduction strategies.

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11. Average gross margin (AGM)

Formula: AGM = (Revenue – COGS) ÷ Revenue × 100

Why it matters:

AGM reveals how efficiently your SaaS business converts revenue into profit. High margins (typically 70–90%) mean you have more flexibility to reinvest in marketing, product development, and customer acquisition.

Use case:

If AGM dips after introducing a low-cost plan, this may indicate your pricing is too low relative to operational costs. Adjusting the price or restricting resource-heavy features may restore balance.

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12. Gross margin per lifespan (GML)

Formula: GML = Average Gross Margin × Customer Value

Why it matters:

GML combines lifetime customer value with profitability, showing how much gross margin each customer contributes over their entire lifecycle. This helps determine whether your acquisition costs are justified and if customers provide sufficient long-term returns.

Use case:

If GML is high for enterprise clients but low for SMB clients, you may prioritize enterprise-focused features or expand your enterprise sales team to improve profitability.

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13. Net profit

Formula: Net Profit = Gross Profit – Operating Expenses

Why it matters:

Net profit reveals the true bottom line after accounting for all expenses. Even if revenue is strong, inefficient operations or excessive spending can reduce profitability. This KPI helps ensure your business is operating sustainably.

Use case:

If net profit remains low despite rising revenue, reviewing your operational expenses—such as marketing campaigns or hiring costs—can help you identify areas for optimization.

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14. Conversion rate (CR)

Formula: CR = (Conversions ÷ Unique Visitors) × 100

Why it matters:

Conversion rate measures how effectively your website or funnel turns visitors into paying customers. It helps evaluate landing pages, sales processes, and marketing campaigns. High conversion rates mean your messaging and product positioning are aligned with customer needs.

Use case:

If your trial-to-paid conversion rate increases after rewriting onboarding emails, this signals that your onboarding flow is more efficient, and you may scale those improvements across other product onboarding paths.

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15. Retention rate

Formula: Retention Rate = (Users at End of Period ÷ Users at Start) × 100

Why it matters:

Retention rate shows how effectively your SaaS product keeps users. High retention reduces acquisition costs, improves revenue predictability, and signals strong product-market fit. It’s one of the most important KPIs for long-term SaaS success.

Use case:

If retention rises after you introduce a customer success playbook, it suggests your users are finding consistent value and staying longer—validating your engagement strategy.

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16. Churn rate

Formula: Churn Rate = (Lost Customers ÷ Starting Customers) × 100

Why it matters:

Churn directly impacts your recurring revenue. High churn indicates problems with onboarding, product experience, pricing, or customer support. Monitoring customer churn and revenue churn helps you pinpoint where losses are coming from.

Use case:

If churn spikes after a price increase, analyzing customer segments can reveal whether specific cohorts are more price-sensitive, guiding future pricing decisions.

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17. Customer acquisition cost (CAC)

Formula: CAC = Total Sales & Marketing Spend ÷ New Customers

Why it matters:

CAC helps determine the cost of acquiring each new customer. It’s essential for evaluating the efficiency of your sales and marketing efforts and ensuring your customer acquisition strategies are sustainable.

Use case:

If CAC for paid social ads is rising while CAC for organic search remains low, reallocating your budget toward SEO and content marketing can improve cost efficiency.

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18. Cost per lead (CPL)

Formula: CPL = Total Ad Spend ÷ Total Leads

Why it matters:

CPL measures the cost efficiency of your lead generation efforts, especially in paid channels like Google Ads or LinkedIn. It helps you understand whether your marketing campaigns are delivering leads at a sustainable cost.

Use case:

If CPL drops significantly after optimizing ad targeting, this signals improved audience alignment and may justify increasing budget toward that campaign.

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19. Cost per acquisition (CPA)

Formula: CPA = Total Campaign Spend ÷ Conversions

Why it matters:

CPA helps measure how cost-effective your marketing campaigns are at converting leads into paying customers. It is crucial for understanding which channels deliver the highest ROI.

Use case:

If CPA for influencer marketing is lower than CPA for display ads, shifting resources toward influencer partnerships can help improve acquisition efficiency.

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20. Return on investment (ROI)

Formula: ROI = (Net Profit ÷ Investment Cost) × 100

Why it matters:

ROI evaluates the profitability of any investment—whether in marketing, product development, hiring, or tools. It helps prioritize initiatives that generate the highest returns and eliminate low-performing efforts.

Use case:

If a specific ad campaign delivers a 300% ROI while another produces only 20%, reallocating your marketing spend can significantly increase overall profitability.

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Bonus: How to use SaaS metrics to fuel growth

Tracking these SaaS KPIs is only part of the equation. The real value comes from turning these insights into action. Here’s how you can use these metrics to drive growth:

1. Build real-time dashboards: Use tools like Looker Studio or Tableau to create dashboards that offer real-time visibility into key metrics, making it easier to act on the data as it comes in.
2. Segment data: By segmenting your data, by channel, cohort, geography, or pricing tier, you can gain deeper insights into what’s working and what’s not.
3. Automate reporting: Automating your reporting helps ensure that key team members see the metrics without having to wait for monthly reports.
4. Share metrics company-wide: Create a culture of accountability by making key performance metrics visible across the organization, helping everyone understand their role in achieving growth.
5. Refine regularly: As your business grows, revisit your KPIs. What worked when you had 10 customers may not be relevant when you have 10,000.

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Data engineering for KPI tracking

Tracking SaaS KPIs effectively hinges on building systems that are both reliable and scalable. Without the right data infrastructure, even the best KPIs lose accuracy and meaning. Below is an engineered approach to ensuring your KPI tracking is consistent, automated, and trustworthy.

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Choosing the right data sources and tools

The first step in precise KPI tracking is connecting dependable data sources, such as Salesforce for CRM or Stripe for payments, to your analytics platforms. Integrating these sources ensures unified visibility into customer behavior, revenue performance, and product engagement.

To help teams select the right data components, here’s a structured comparison:

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Maintaining high data quality

Poor data quality can skew results and misinform strategic decisions. Automated validation processes, covering input accuracy, transformation integrity, and final KPI verification, can reduce KPI-related errors by up to 85%, according to AWS.

A strong data quality framework should include:

• Input validation (duplicate handling, format checks)
• Transformation accuracy checks (ETL/ELT integrity)
• Regular KPI audits against historical ranges
• Automated anomaly detection

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Automation and scalable systems

Cloud platforms like Amazon Redshift, Snowflake, and BigQuery are designed for massive datasets and are ideal for KPI-heavy SaaS environments.

A scalable automated KPI system should include:

• Real-time data integration for up-to-date dashboards
• Warehousing to unify historical + live data
• Scheduled KPI calculations (MRR, churn, CAC, etc.)
• Automated alerting for KPI deviations or unusual trends
• Visualization layers (Tableau, Looker) for fast decisions
  

These components allow GTM teams, finance, and product leaders to move from reactive to proactive decision-making, supported by fully trusted, fully automated data pipelines.

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Conclusion

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In 2025, tracking the right SaaS KPIs is more important than ever. With fierce competition and growing customer expectations, the companies that will thrive are the ones that understand their metrics and use them to drive strategic decisions. From core financial metrics like MRR, ARR, and LTV to operational KPIs like customer acquisition cost and churn rate, these 20 SaaS KPIs will provide you with a roadmap for growth. By monitoring these metrics, you can not only improve your current processes but also forecast future success with greater accuracy, no matter where your SaaS business is in its journey.

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Choosing a technology partner isn’t just about solving today’s challenges - it’s about building a foundation that evolves with your business. If you’re ready to elevate your digital products, streamline your processes, and create software that drives long-term success, Codelevate is ready to help you get there.

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