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5 Metrics for Measuring Recurring Revenue - CFO Magazine

Updated: Nov 8, 2023

SaaS business models continue to increase in popularity in a variety of industries especially in Silicon Valley and the San Francisco Bay Area. According to recent research, over 90% of adults in the U.S. use online subscription services, spending over $850 in monthly subscription fees.

CFOs need to be careful in choosing and refining the right set of revenue metrics which accurately measure how a company is performing. Here is a short list of 5 possible metrics from a recent post on CFO Magazine:

1. Customer Lifetime Value (CLV)

2. Average Revenue Per User (ARPU)

3. Churn and Retention Rates

4. Customer Lifetime Value to Customer Acquisition Cost Ratio (CLV-to-CAC Ratio)

5. Annual Recurring Billings (ARB)

“Recurring revenue metrics are invaluable to a business and highly influential with investors and analysts. There are dozens of valuable metrics that can help CFOs boost recurring revenue results. These are just a starting point. Choose ones that fit the business model, pay attention to what they tell the company, and adjust accordingly, then repeat. Quarter and after quarter. Year after year.”

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