SaaS Metrics – Page 6

Subscriber Growth Rate is the percentage change in an application's subscriber base from one period to the next. It signals whether a product is gaining or losing traction. The time period can be a week, a month, a quarter, or a year.

Subscribers counts the number of paid or non-paid users with active, periodic access to a product or service. The metric applies to subscription-based business models including SaaS, media, telecommunications, and entertainment, and captures total access holders at a point in time regardless of payment status.

The Rule of 40 is a SaaS financial metric that balances revenue growth versus profit margins. It’s a rule of thumb to quickly determine the health and/or attractiveness of your SaaS company.

Time to Value (TTV) measures the elapsed time from when a user selects a product to the moment they first realize tangible benefit from it. Value is typically defined as completing setup and achieving a meaningful first outcome, not just finishing onboarding.

Total Addressable Market (TAM) is a measure of the maximum revenue opportunity available if a product or service captured 100% of its target market.

Total Funding is the cumulative amount of external capital a company has raised across all financing rounds, from seed through late-stage investment.

Trial Conversion Rate measures the percentage of users that have converted to a paid account from a trial period. Commonly referred to as Free Trial to Paid Conversion Rate, this metric indicates product value by measuring the number of users that find enough value in the product to pay for it. Trial Conversion Rates vary based on the type of trial you use. In SaaS, the standard practice is to either have a freemium product or a free trial period that usually spans a couple weeks.

A True Trial is a trial user who returns to the product at least once within the first 7 days of signing up. True Trials measures early engagement quality for software companies that offer free trials, isolating users who give the product a genuine evaluation from those who sign up and never return. Tracking True Trials lets teams assess lead quality and conversion potential weeks before final conversion data is available.

Viral coefficient is the number of new users or customers the average existing customer generates through referrals or sharing. A viral coefficient above 1 means each customer brings in more than one additional customer, compounding growth over time. It is used to measure organic growth momentum and to predict future customer acquisition velocity.

Weekly Active Accounts measures the number of unique accounts with at least one user who has interacted with an application or platform in a week. An active account may include one or more users, who may each have varying degrees of activity.

Weekly Active Users (WAU) is the count of unique users who interact with an application or platform at least once in a given week. WAU tracks weekly engagement and includes both new and returning users.

Weighted Annual Contract Value (WACV) calculates the average contract dollar value with a weighted average proportional to the value of the contract. Essentially, higher value contracts are assigned more importance when calculating the total average contract value of a business. This approach is helpful to companies that have widely varying customer concentration by accurately calculating an ACV that is not skewed by contracts with low dollar value.