Financial Analyst Metrics – Page 5

Gross Margin is a profitability ratio that measures Gross Profit as a percentage of total revenue. Typically, it is calculated as Gross Profit divided by Revenue. This metric is a key indicator of a company's financial health and operational efficiency.

Gross Monthly Recurring Revenue Churn Rate (Gross MRR Churn Rate) is the percentage of recurring revenue lost due to both cancellation and downgrades. Note that it is common to express this metric as a monthly rate, though it can also be expressed as Gross ARR Churn Rate.

Gross Profit is the revenue remaining after subtracting the Cost of Goods Sold (COGS). It shows how efficiently a company produces and sells its goods or services, and how much revenue is available to cover operating costs and generate net income.

Gross Revenue Retention (GRR) Rate is the percentage of recurring revenue retained from existing customers in a defined time period, including downgrades, and cancels. It does not include any expansion revenue. GRR is also commonly referred to as Gross Renewal Rate.

Growth in ARR Multiple Since the Previous Raise measures the percentage change in a company's ARR Multiple between its last funding round and the current period. ARR Multiple is the ratio of a company's valuation to its Annual Recurring Revenue (ARR).

Growth in Revenue Since the Previous Raise measures how much a company's revenue has increased since its last capital funding round. It shows how effectively raised capital translated into revenue growth.

Growth in Valuation Since the Previous Raise is the percentage increase in a company's valuation from one funding round to the next. It shows how much value the company created between raises.

Hype Factor is an efficiency metric that shows how efficiently a company converts capital raised into ARR. SaaS companies convert venture capital into two things: annual recurring revenue (ARR) and hype. ARR has direct value as every year it turns into GAAP revenue. Hype has value to the extent it creates halo effects that drive interest in the company that ultimately increase ARR.

The Invoices metric counts the number of invoices you have sent to your customers. It is helpful to track Invoices to keep a tab on what is owed to you.

Natural Rate of Growth measures the speed at which your company grows, purely based on organic sources of growth. This includes organic signups and incremental recurring revenue started in product without sales involvement.

Net Annual Recurring Revenue (ARR) Added measures the net change in ARR during a period by combining all sources of ARR growth (new customers and expansion) and all sources of ARR contraction (churn and downgrades). This metric provides a comprehensive view of revenue momentum and reveals which business functions are driving growth or creating drag.

Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn".